Fred M. Hector, Individually and on behalf of all Landowners specifically assessed for Special Assessment Project 5314, Plaintiff and Appellant
City of Fargo, a municipal corporation, Defendant and Appellee
Appeal from the District Court of Cass County, East Central Judicial District, the Honorable Steven L. Marquart, Judge.
Jonathan T. Garaas (argued), Fargo, N.D., for plaintiff and appellant.
Jane L. Dynes (argued) and Ronald H. McLean (on brief), Fargo, N.D., for defendant and appellee.
Dale V. Sandstrom, Carol Ronning Kapsner, Daniel J. Crothers, William W. McLees, D.J., Gerald W. VandeWalle, C.J. The Honorable William W. McLees, D.J., sitting in place of Maring, J., disqualified. The Honorable Lisa Fair McEvers was not a member of the Court when this case was heard and did not participate in this decision.
[¶1] Fred Hector appeals from a summary judgment dismissing his action against the City of Fargo for claims involving special assessments against his land. He argues the district court erred in granting Fargo summary judgment, because N.D.C.C. § 40-26-07 authorizes his action to judicially establish Fargo's special assessments are void to the extent the assessments exceed Fargo's actual costs of improvements and his claims are not barred by administrative res judicata. Res judicata precludes relitigation of claims that were raised, or could have been raised, in prior actions between the same parties and means a valid, existing final judgment from a court of competent jurisdiction is conclusive with regard to claims raised or those that could have been raised in the prior action. We conclude N.D.C.C. § § 40-26-01 and 40-26-07 authorize a court to review issues about a municipality's special assessments in the context of the adequate legal remedy of an appeal and the issues raised by Hector in this
action are res judicata. We affirm the judgment.
[¶2] In Hector v. City of Fargo, 2012 ND 80, ¶ ¶ 1, 58, 815 N.W.2d 240, we affirmed Hector's appeal from a district court judgment affirming his appeal from the Fargo City Commissioners' decision approving special assessments against his land for Improvement District 5314 along Interstate 29 and 52nd Avenue in south Fargo. In that appeal, Hector raised sixteen issues and subissues, which we consolidated into four related subjects involving his claims that:
the total amount assessed for an improvement project was improperly calculated and should have been based on the City's true costs for the project, the method used to determine the amount assessed against his property was improper, the [Special] Assessment Commission failed to comply with certain statutory requirements and the [Fargo] City Commission failed to properly review the [Special] Assessment Commission's decision.
Hector, at ¶ 1. We concluded Hector failed to establish Fargo's special assessments exceeded its true costs for the improvement project or Fargo converted federal funds for other uses, Fargo complied with the applicable statutory provisions for special assessments and the assessments did not improperly exceed the amount estimated in a resolution of necessity and an engineer's report, Fargo did not improperly include certain costs in the total costs for the project, and Fargo's special assessments against Hector's land were not arbitrary, capricious, or unreasonable. Id. at ¶ ¶ 14, 24, 26, 28, 35, 37, 46, 49, 51, 54, 57, 58.
[¶3] On November 9, 2009, when Hector appealed the Fargo City Commissioners' decision to the district court, he also brought this separate action against Fargo, alleging claims for statutory and equitable reassessment of the project benefits under N.D.C.C. § 40-26-07, fraud and deceit, violation of fiduciary duties, and denial of federal civil rights. Hector's separate action was continued pending resolution of his appeal, and after our decision in the appeal, the district court granted Fargo's motion for summary judgment, concluding his claims were previously decided (res judicata).
[¶4] A district court has original jurisdiction of causes, except as otherwise provided by law, and appellate jurisdiction as provided by law under N.D. Const. art. VI, § 8, and the issues in this appeal involve the scope of a district court's jurisdiction over special assessments under N.D.C.C. § 40-26-07. Hector's appeal from the judgment dismissing his action is timely under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const. art. VI, § § 2 and 6, and N.D.C.C. § 28-27-01.
[¶5] Hector argues special assessments exceeding the costs of improvements are invalid to the extent of the excess under Hector, 2012 ND 80, ¶ 37, 815 N.W.2d 240, and he claims he initiated this action under N.D.C.C. § 40-26-07 to establish Fargo's assessments are void because they exceed Fargo's " real" or " actual" construction costs for Improvement District 5314. He argues: (1) his action is not barred by res judicata or collateral estoppel because Fargo's real or actual construction costs for the improvement district, as certified by the City Auditor in October 2009, could not be challenged in the prior appeal; (2) he can challenge the special assessments in this action under N.D.C.C. § 40-26-07 for fraud, breach of a fiduciary duty, or other grounds justifying
equitable relief; (3) he has a claim against Fargo for proper application of federal highway funds under federal statutory and constitutional provisions; and (4) he raised material issues of fact to be resolved by a jury.
[¶6] The district court decided Hector's action by summary judgment, which " 'is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law.'" Schmitt v. MeritCare Health Sys., 2013 ND 136, ¶ 7, 834 N.W.2d 627 (quoting Wenco v. EOG Res., Inc., 2012 ND 219, ¶ 8, 822 N.W.2d 701).
[¶7] The district court ruled Hector's claims in this action were previously decided and thus barred by the doctrine of res judicata. In Ungar v. North Dakota State Univ., 2006 ND 185, ¶ ¶ 10-11, 721 N.W.2d 16 (citations omitted), we discussed principles of res judicata and collateral estoppel:
The doctrines of res judicata and collateral estoppel bar courts from relitigating claims and issues in order to promote the finality of judgments, which increases certainty, avoids multiple litigation, wasteful delay and expense, and ultimately conserves judicial resources. The applicability of res judicata or collateral estoppel is a question of law, fully reviewable on appeal.
" Although collateral estoppel is a branch of the broader law of res judicata, the doctrines are not the same." Res judicata, or claim preclusion, prevents relitigation of claims that were raised, or could have been raised, in prior actions between the same parties or their privies. Thus, res judicata means a valid, existing final judgment from a court of competent jurisdiction is conclusive with regard to claims raised, or those that could have been raised and determined, as to their parties and their privies in all other actions. Res judicata applies even if subsequent claims are based upon a different legal theory. Collateral estoppel, or issue preclusion, forecloses relitigation of issues of either fact or law in a second action based on a different claim, which were necessarily litigated, or by logical and necessary implication must have been litigated, and decided in the prior action.
[¶8] The issues raised by Hector in this action and the effect of his prior appeal require us to consider the procedures for challenging special assessments, including the scope of a district court's authority under N.D.C.C. § 40-26-07. Our analysis of those issues requires a brief description of the statutory procedures for imposing special assessments, including statutes for judicial challenges.
[¶9] This Court has said the statutory scheme for special assessments for improvement districts creates two separate processes, with N.D.C.C. ch. 40-22 governing the creation of an improvement district and bidding projects and N.D.C.C. ch. 40-23 governing the individualized assessment of property for specific projects within the district. Serenko v. City of Wilton, 1999 ND 88, ¶ 13, 593 N.W.2d 368. In Serenko, at ¶ 6, this Court considered several landowners' action alleging that Wilton failed to comply with notice requirements for creating an improvement district under N.D.C.C. § 40-22-15 and that Wilton acted arbitrarily in assessing their property under N.D.C.C. ch. 40-23. This Court summarized the statutory scheme for special assessments:
Upon determining street improvements are necessary in a particular area, the
City creates an improvement district setting the boundaries of the project. N.D.C.C. § § 40-22-08 and 40-22-09. The City then passes a resolution of necessity, which must be published in accordance with N.D.C.C. § 40-22-15. The project may not proceed if the owners of a majority of the property in the improvement district file written protests within thirty days. N.D.C.C. § § 40-22-17 and 40-22-18. If less than a majority of landowners file protests, the City may secure bids on the project and let the contract. See N.D.C.C. § § 40-22-18 to 40-22-36. The City's special assessment commission then sets the assessments on individual properties within the improvement district, and publishes the assessment list and notice of hearing of objections. See N.D.C.C. § § 40-23-07 to ...