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SPCM, LLC v. City of Minot

Supreme Court of North Dakota

July 12, 2017

Paving District 476 Group, SPCM, LLC, Schuler Repair, Feland Brothers Properties, LLC, Hudye Group LP, and Northern Plains Apartments, LLC, Plaintiffs and Appellants
City of Minot, Defendant and Appellee

         Appeal from the District Court of Ward County, North Central Judicial District, the Honorable Todd L. Cresap, Judge. AFFIRMED.

          Lynn M. Boughey, Bismarck, N.D., for plaintiffs and appellants.

          Bradley Wiederholt (argued), Randall J. Bakke (on brief), and Wade A. Davison (appeared), Bismarck, N.D., for defendant and appellee.


          Tufte, Justice.

         [¶ 1] Paving District 476 Group; SPCM, LLC; Schuler Repair; Feland Brothers Properties, LLC; Hudye Group LP; and Northern Plains Apartments, LLC (collectively "landowners") appeal from an order dismissing their complaint against the City of Minot. We affirm, concluding the City's alleged failure to give the landowners notice of the full extent of the proposed improvements did not violate the landowners' constitutional due process rights and the landowners' action to invalidate the assessments for failure to follow statutory procedural requirements is barred by N.D.C.C. § 40-22-43.


         [¶ 2] The City received a petition to make improvements to 36th Avenue Northeast. An engineer's report was completed. The cover sheet of the report stated the project "would reconstruct 36th Ave NE from 2nd St NE to 10th St NE to a two lane urban roadway." The report stated, "The proposed improvements will include the construction of an urban street section on 36th Ave NE between 2nd St NE and 13th St NE and new lighting west of 2nd St NE to Broadway." The report included the estimated cost of the project, including the work between 10th Street and 13th Street.

         [¶ 3] On October 1, 2012, the City Council approved Resolution No. 3109, declaring work necessary for an improvement in Paving District No. 476. The resolution stated the owners of the property liable to be specially assessed for the improvements would have thirty days to file written protests and a hearing would be held to hear protests.

         [¶ 4] In a letter dated October 5, 2012, the City informed property owners about the creation of the paving district and the proposed street improvements to install "an urban street section from 2nd St to 10th St consisting of storm sewer, curb and gutter, asphalt paving, and street lighting." The letter advised property owners that the costs for the project would be assessed to each property owner proportionate to and not exceeding the benefits they derive from the improvements. The letter also advised property owners that they had thirty days to protest the improvements and a public hearing would be held on December 3, 2012.

         [¶ 5] The resolution, including a map of the special assessment district, was published in the Minot Daily News on October 6 and 12, 2012. The published resolution stated the Engineer's Report with an estimate of the probable cost of the work was on file and open for public inspection in the City Auditor's office. On December 3, 2012, a public hearing on the resolution was held. On November 4, 2013, the City Council adopted Resolution 3250 awarding the sale of warrants to finance the improvements.

         [¶ 6] In June 2015, the City sent property owners in the special assessment district letters informing them of the amount of the proposed assessment to their properties and that a public hearing would be held. On June 7, 2015, a "Notice of Costs, Benefits, Assessments and Date of Public Hearing for Paving District" was published in the Minot Daily News. The notice included maps of the special assessment district and the amount of the proposed assessment for each property. On June 22, 2015, the special assessment commission held a public hearing.

         [¶ 7] At a July 6, 2016, meeting, the City Council approved the special assessment commission report for the paving district. Several property owners attended the meeting and spoke before the council, raising concerns about a change in the area being improved and about paying for improvements to properties outside city limits. The minutes from the meeting indicate the city engineer explained the district was created and always indicated it was going to 13th Street Northeast, but a mistake was made when notices were sent out stating improvements went to 10th Street Northeast; the scope of the project did not increase; the cost estimates included improvements to 13th Street Northeast; and notices were not resent with the corrected information because the costs remained the same.

         [¶ 8] On October 28, 2015, the landowners sued the City, seeking a judgment declaring the assessments invalid and the assessments be held in abeyance until they did not include the area between 10th and 13th Streets and enjoining the City from certifying future assessments. They claimed the assessments are invalid because they did not receive proper notice, the City violated their due process rights by expanding the improvements beyond the original parameters and failing to give notice the improvements included the expanded area, and they were assessed for improvements between 10th Street and 13th Street which do not benefit their properties and constitute a gift to third parties.

         [¶ 9] The City moved to dismiss the complaint, arguing the landowners failed to meet jurisdictional time limitations under N.D.C.C. §§&nbs p;40-22-43, 40-26-01, and 28-34-01 and the landowner's constitutional claims are barred by Serenko v. City of Wilton, 1999 ND 88, 593 N.W.2d 368.

         [¶ 10] After a hearing, the district court granted summary judgment and dismissed the complaint. The court concluded the landowners were barred from bringing the action because they failed to appeal or commence the action within the thirty-day time limit under N.D.C.C. § 40-22-43 and any statutory ...

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