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Nandan, LLP v. City of Fargo

Supreme Court of North Dakota

March 30, 2017

Nandan, LLP, Plaintiff and Appellant
v.
City of Fargo, a municipal corporation, Defendant and Appellee and Border States Paving, Inc., Plaintiff

         Appeal from the District Court of Cass County, East Central Judicial District, the Honorable Steven L. Marquart, Judge.

         AFFIRMED.

          Joseph A. Turman for plaintiff and appellant.

          Jane L. Dynes (argued) and Ronald H. McLean (on brief) for defendant and appellee.

          OPINION

          VandeWalle, Chief Justice.

         [¶ 1] Nandan, LLP appealed from a summary judgment and an order denying its N.D.R.Civ.P. 60(b) motion for relief from judgment, ruling that road and utility repairs were incidental to the repair of a water and sewer system damaged by a landslide in Fargo, and that the City of Fargo was therefore not required to pass a resolution of necessity to create an improvement district to fund the repairs. We affirm, because Nandan failed to raise a genuine issue of material fact precluding summary judgment.

         I

         [¶ 2] On May 31, 2012, a landslide occurred along 32nd Street North in Fargo near where Nandan and Border States Paving, Inc., owned property. The landslide damaged a water main and storm sewer; the street; and Drain No. 10, which is owned, operated, and maintained by the Southeast Cass Water Resource District. The road and adjacent water and sewer lines are owned by Fargo. Fargo created an improvement district to fund repairs to the drain, water main, and sanitary sewer systems on a portion of the drain without adopting a resolution of necessity. Fargo later entered into a joint powers agreement with the District which set forth the parties' obligations for the repairs.

         [¶ 3] After Border States and Nandan's protests to their special assessments were rejected by the city, they sued Fargo alleging the city improperly created the improvement district because it did not adopt a resolution of necessity and provide a right to protest. The district court granted Fargo's N.D.R.Civ.P. 12(b)(6) motion to dismiss for failure to state a claim upon which relief could be granted, concluding Nandan and Border States had no right to protest under N.D.C.C. § 40-22-06 because the city let the bids for project construction, or under N.D.C.C. § 40-22-15 because the project constituted a water or sewer improvement for which a resolution of necessity was not required.

         [¶ 4] On appeal, we affirmed the district court's decision in part, reversed in part, and remanded for further proceedings. See Nandan, LLP v. City of Fargo, 2015 ND 37, 858 N.W.2d 892. We held that Fargo was not required to adopt a resolution of necessity and provide a right to protest under N.D.C.C. § 40-22-06 because the city bid out the project and entered into the construction contract. Nandan, at ¶ 21. However, we reversed the court's holding that N.D.C.C. § 40-22-15 did not provide a right of protest and remanded for further proceedings, stating:

According to the statements in the exhibits attached to the amended complaint, the improvement district included street repairs, utilities and other items not specifically included in the description of a water or sewer improvement under N.D.C.C. § 40-22-01(1) (under which a resolution of necessity would not be required under N.D.C.C. § 40-22-15). It is also unknown from the pleadings whether the other repairs were incidental to the water and sewer repairs. See N.D.C.C. § 40-22-01 (stating a municipality may include items of work and materials which in its judgment are necessary or reasonably incidental to the completion of an improvement project). If the other repairs were incidental to the water and sewer repairs under N.D.C.C. § 40-22-01, a resolution declaring the improvements were necessary would not be required under N.D.C.C. § 40-22-15. If the other repairs were a type of improvement as described in N.D.C.C. § 40-22-01(2) through (5), and were not incidental to the water and sewer repairs, a resolution of necessity would have been required to create the improvement district, and Border States would have had a right to protest the creation of the improvement district under N.D.C.C. § 40-22-17. In viewing the pleadings in a light most favorable to Border States, we cannot conclude with certainty that Border States' amended complaint fails to state a claim upon which relief can be granted. We hold the district court erred in concluding N.D.C.C. § 40-22-15 did not provide Border States a right to protest the creation of the improvement district. We therefore reverse that part of the district court's judgment and remand for further proceedings.
In its order granting Fargo's motion to dismiss, the district court concluded Border States did not have a right to protest the project under N.D.C.C. § 40-22-15. Without further analysis or explanation, the district court apparently concluded the project constituted a sewer or water improvement as described in N.D.C.C. § 40-22-01(1). On remand, the district court must analyze N.D.C.C. § 40-22-01 and consider any additional evidence offered by the parties in deciding whether the project constituted a sewer or water improvement. Specifically, the district court must decide whether the other repairs funded by Improvement District No. 6237 were incidental to the water and sewer repairs or whether they were a type of improvement described in N.D.C.C. § 40-22-01(2) through (5).

Nandan, at ¶¶ 30-31. After our decision was rendered, Border States stipulated to dismissal from the action.

         [¶ 5] On remand, Fargo moved for summary judgment against Nandan, arguing the street repairs and utility work performed were incidental to the water and sewer repairs under N.D.C.C. § 40-22-01. Fargo provided evidence of the costs of various categories of repairs made during the project. Fargo also provided affidavits from a city engineer and a District engineer who worked on the project. Nandan argued that the work completed on Drain No. 10 was not part of the city's storm sewer system under N.D.C.C. § 40-22-15. The court noted the definition of a water or sewer improvement under N.D.C.C. § 40-22-01(1) and said:

It is undisputed that Cass County Drain 10 is part of the City of Fargo's storm sewer system. The city directs storm water through culverts, pipes and channels to Drain 10 through which the storm water is then directed north and east of the Red River. In fact, Nandan concedes that Drain 10 is a water and sewer improvement under this definition. It argues, however, that the project at issue should not be considered a City of Fargo project.

         The court further noted the issue whether the Drain No. 10 improvement project is a city project was not part of this Court's remand, and the specific remand required only a determination whether "the street repairs and utility work [were] incidental to the water and sewer repairs?" The court said:

Here, the Court concludes that there are no genuine issues of material fact. It is undisputed that the road repairs on 32nd Street North were incidental to the work necessary to repair the water and sewer systems that were damaged by the landslide. Therefore, this project qualifies as a water or sewer improvement pursuant to N.D. Cent. Code § 40-22-15, and therefore, a resolution of necessity was not required.

         [¶ 6] Nandan moved for relief from judgment under N.D.R.Civ.P. 60(b)(6). The district court once again rejected Nandan's argument that Drain No. 10 cannot constitute a water or sewer project under N.D.C.C. § 40-22-01(1). The court ruled that, under N.D.C.C. § 40-22-01(2) through (5), Drain No. 10 "does not constitute the improvement of a street system, improvement of boulevards, was not acquired land for flood control, and was not land acquired for parking." Finding no genuine issues of material fact that any ...


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