Opinion
No. ED75920
Opinion Filed: June 30, 2000 Motion for Rehearing and/or Transfer to Supreme Court Denied: August 24, 2000. Application for Transfer Denied: October 3, 2000.
APPEAL FROM THE CIRCUIT COURT OF CAPE GIRARDEAU COUNTY, HON. WILLIAM L. SYLER.
Mary Eftink Boner, 709 E. Main, Jackson, MO 63755-0290, for Respondent.
Walter S. Drusch Jr, Lowes Drusch Law Office, 2913 Independence, Cape Girardeau, MO 63703, for Appellant.
Before Mary Rhodes Russell, P.J., Mary K. Hoff, J., and Sherri B. Sullivan, J.
Randolph and Mary Farrar (collectively Appellants) appeal a Special Judgment ordering them to pay the City of Jackson a special tax bill in the amount of $6,185.09, including interest, attorney fees and court costs, for the paving of Gloria Street. We affirm.
On July 15, 1996, the Board of Aldermen for the City of Jackson (the City or Respondent) passed a resolution for the paving of Gloria Street. The resolution was published in the local newspaper, the Cash Book Journal. On July 30, 1996, the City sent a letter to property owners on Gloria Street notifying them of the paving project. Mary Farrar testified that she received a letter from the City informing her and her husband of the Gloria Street paving project and that neither she nor her husband contacted any city official regarding the project. The Board of Aldermen passed Ordinance 3551 to improve Gloria Street according to the plans prepared by the City Engineer, and Ordinance 3562 awarding the Gloria Street contract to Fronabarger Concreters, Incorporated (Fronabarger).
Following completion of the project, Fronabarger submitted a final report. On February 3, 1997, the Board of Aldermen passed Ordinance 3603 levying a special assessment for the completed paving of Gloria Street. Tax bills, including a tax bill against the property owned by Appellants, were prepared. Appellants' tax bill in the amount of $5,539.35 was issued on February 3, 1997, to Fronabarger. The tax bill indicates that an interest rate of 6.273% begins to accrue 60 days after the date of issuance. Mary Lowry, Clerk for the City, signed Appellants' tax bill. Fronabarger assigned the tax bills, including Appellants', to Boatmen's Bank. Boatmen's Bank received assignment from the City on the condition that if the bank does not collect on a tax bill, the City must buy the tax bill back and collect the amount due. On July 10, 1997, the City bought back Appellants' tax bill from Nations Bank in the amount of $5,633.94, which included the amount of the original tax bill plus interest.
Subsequently Nations Bank and presently Bank of America.
The City found it necessary to retain legal services in order to collect the tax bill against Appellants' property. On October 10, 1997, the City filed a Petition to Enforce Special Tax Bill. The case was tried on July 2, 1998, July 21, 1998, and September 2 and 3, 1998. A Special Amended Tax Bill was passed by motion and issued on July 20, 1998. This Amended Tax Bill contained the mayor's signature, a reference to the enabling statute and a more complete description of the property. These items were not contained in the original tax bill. The court entered its Special Judgment on Tax Bill on February 16, 1999, granting the City judgment in the principal amount of $5,539.35 plus interest at the tax bill rate of 6.273% per annum from and after April 4, 1997, plus court costs in the amount of $584.47 and attorney's fees in the amount of $5,939.78. Appellants timely filed their notice of appeal.
Murphy v. Carron, 536 S.W.2d 30, 32 (Mo.banc 1976), sets forth the standard for upholding a judgment in all civil nonjury cases:
. . .the decree or judgment of the trial court will be sustained by the appellate court unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law. Appellate courts should exercise the power to set aside a decree or judgment on the ground that it is "against the weight of the evidence" with caution and with a firm belief that the decree or judgment is wrong.
Appellants present eight points on appeal. In their first point, Appellants assert that the trial court erred in allowing and upholding the new tax bill and approving the procedures utilized by the City prior to the actual paving of Gloria Street and the issuance of both of said tax bills in that Section 88.700 RSMo (1994), which applies specifically to paving projects for fourth class cities, requires that the Board of Aldermen shall by resolution declare what improvements are necessary to be done and requires the resolution to be published in a local paper. Appellants claim this publication and a letter to Appellants and other abutting property owners on Gloria announced more rigid standards to successfully protest against the project than are provided by statute. The property owners were advised in both the newspaper publication and in the letter from the City Administrator that in order to successfully protest, it would take a majority of the owners of the property and those owners must also own a majority of the front feet abutting the property. Appellants maintain that the applicable statute, Section 88.700, does not specify that the protestors must also own a majority of the front feet abutting the property.
All further statutory references are to RSMo (1994), unless otherwise indicated.
Section 88.700 provides in pertinent part as follows:
Street Improvements — declaration of necessity — taxpayers' protests (fourth class cities)
When the board of aldermen shall deem it necessary to pave, macadamize, gutter, curb (when such is set out in the street beyond the sidewalk) or otherwise improve any street, avenue, alley or other highway, or any part thereof, within the limits of the city for which a special tax is to be levied as herein provided, the board of aldermen shall, by resolution, declare the work or improvements necessary to be done, and cause the resolutions to be published in some newspaper published in the city for seven consecutive insertions in a daily paper or two consecutive insertions in a weekly paper. If a majority of the owners of the property liable to taxation therefor, residing in the city at the date of the passage of such resolution, shall not, within ten days from the date of the last insertion of the resolution, file with the city clerk their protest against, then the board of aldermen may cause the improvements to be made, and to contract therefor, and to levy the tax as herein provided. The findings of the board that a majority of such owners have not filed protest shall be conclusive and final. . . .
Paragraph four (4) of the Resolution provides for protest:
That if a majority of the resident owners of the land that would be liable for the costs of improvements, at the date of passage of this resolution, who own a majority of the front feet abutting on the above-described streets and avenues proposed to be imposed, shall not, within ten days after the last publication of the resolution, file. . . .
The letter from the City Administrator provides for protest as well:
As an affected property owner, you have the right to protest this project. If requested by three (3) property owners, the Board of Aldermen must hold a public hearing. These requests must be in written form and submitted to the City Clerk within ten (10) days of the last date of publication of the resolution in a local newspaper. However, if there is no protest against the improvements by a majority of property owners with a majority of front footage, the Board is empowered to proceed. (emphasis supplied).
Cases cited by Appellants as to their first point concern resolutions that failed to give some practical information as to the nature and character of the proposed work. See Phoenix Brick Construction Co. v. Gentry County, 166 S.W. 1034 (Mo. 1914) andDelmar Inv. Co. v. Lewis, 196 S.W. 1137 (Mo.banc 1917). Such is not the case here.
Statutes authorizing proceedings for the enforcement of tax bills for public improvements against adjoining property, which are proceedings in invitum, must be strictly followed. Hinerman v. Williams, 224 S.W. 1017, 1017-18 (Mo.App. 1920). There must be compliance with statutory requirements as to the form and contents of the notice in order that the municipal authorities may have jurisdiction to make the improvement. 64 C.J.S. Municipal Corporations § 980. One of the principal objects of resolutions for public improvements and their publication is to advise the property owners affected of what is contemplated by the proposed improvement, so that they may have an opportunity to arrest the proceedings by a majority protest. Hinerman, 224 S.W. at 1017.
In the instant case, the criteria for protest set out in the publication and in the letter is additional and on its face more stringent than that contained in the statute. Not only do the majority of landowners have to protest, as set out in the statute, but those majority of landowners must own a majority of the land at issue. However, this more stringent criteria is not necessarily in conflict with the statute, but rather is additional to the requirements set out in the statute. The fact that an ordinance enlarges on the provisions of a statute by the exaction of additional requirements creates no conflict with the statute, unless the statute is preclusive. Kansas City v. Troutner, 544 S.W.2d 295, 298 (Mo.App. 1976). In this case, the statute is not preclusive.
We find the resolution in the instant case sufficiently advised Appellants of the planned paving of Gloria Street and their opportunity to protest. It complied with the statutory requirements set out in Section 88.700. Its additional criteria for protest did not result in noncompliance with the statute. Point I is denied.
In Point II, Appellants state that the trial court erred in granting judgment upon the new tax bill for the Gloria Street paving project because there were gross inequities and grossly unequal treatment in the method and amount of payment of the tax bills for this project in that all of the abutting owners on Gloria Street paid fifty-five dollars and ninety-five cents ($55.95) for each foot of paving on their respective sides of the street except for Margaret Puchbauer (Puchbauer), an abutting property owner. Appellants argue that Puchbauer received a tax bill for twenty-eight thousand dollars ($28,000.00), although in essence, she paid nothing in that the satisfaction of her tax bill was traded for property which was characterized as .23 of an acre and which was worthless according to the appraiser hired by the City. Additionally, Appellants state, the street itself had for many years run through this property. Appellants argue that this amounts to a denial to them of equal protection of the law as accorded by the State of Missouri in Article 1, Section 2 of the Constitution of 1945, and the tax bill upon which the City's cause of action was brought should be declared void and unenforceable.
In considering equal protection claims, the Court of Appeals first looks to see if the legislation creates a suspect classification or impinges on a fundamental right.Mullenix-St.Charles Properties, L.P. v. City of St. Charles, 983 S.W.2d 550, 559 (Mo.App.E.D. 1998). A suspect classification is one whose purpose or effect is to create classes, such as those based on race, national origin, or illegitimacy which, because of historical reasons, command extraordinary protection in a government by the majority. Id. A fundamental right under this analysis is a right explicitly or implicitly guaranteed by the constitution such as the right to free speech, to vote, to travel interstate, as well as other basic liberties. Id. Appellants are not members of a suspect class and do not claim they have been denied a fundamental right.
Legislation that does not create a suspect classification or impinge upon a fundamental right will withstand an equal protection challenge if the classification bears some rational relationship to a legitimate state purpose. Id. Thus, to prevail, the challenger has the burden to show that a legislatively created classification is not rationally related to a legitimate state interest. Id. If the legislative judgment is at least debatable, the issue settles on the side of validity.Id.
Appellants assert the class at issue is comprised of the property owners adjoining Gloria Street. The record shows that the cost of the paving project was uniformly assessed against the property owners by tax bills at $55.95 per foot of their property adjoining Gloria Street. There is no arbitrariness in the tax bills or in the legislation that created the tax bills. Appellants assert that the arbitrariness comes from Puchbauer's not having to pay her tax bill of $28,108.13. However, that resulted from a separate transaction between Puchbauer and the City. The City purchased the land from Puchbauer that it needed for the street-paving project in exchange for the cost of her tax bill. This transaction has nothing to do with the uniform assessment of tax bills against the properties adjoining Gloria Street, including Appellants'. Appellants have no interest in the transaction between Puchbauer and the City. Therefore, we find that Appellants cannot maintain an equal protection argument concerning the transaction between Puchbauer and the City. Furthermore, there was no arbitrariness in the assessment of the tax bills against the "class," as each member was taxed at a uniform rate. Point II is denied.
In Point III, Appellants argue that the trial court erred in granting judgment against Appellants on the paving project because Section 88.812 was ignored in that none of the ordinances for this project specified how the tax bills were to be repaid as required by the statute. Appellants assert they are entitled to judgment in their favor because this omission amounts to a substantial departure from the statutory requirements and the process is void.
Section 88.812 states that special assessments for improvements are levied and collected as a special tax "and a special tax bill shall issue therefore and be paid in the manner provided by ordinance." Ordinance 3551, passed by the City Board of Aldermen providing for the improvement of Gloria Street, states that "the work shall be paid for with special tax bills issued against the abutting property owner as provided by law." Section 88.812 also provides that "all the tax bills shall become due and payable sixty days after the date of issue thereof, except in the case of tax bills payable in installments as herein provided;. . . ." Ordinance 3351 asserts that the method of repayment includes the options as provided by law. The City argues that it is not necessary for the ordinance to recite the statutory language but may merely adopt that language by reference, as was done here. The use of incorporation by reference in a legislative enactment constitutes a valid method of legislation. Lafayette Park Baptist Church v. Board of Adjustment of the City of St. Louis, 599 S.W.2d 61, 64 (Mo.App.E.D. 1980). However, we recognize that mere reference to "as provided by law" is somewhat vague, in comparison to the reference discussed in Point VI, infra, which mentions the specific statute.
We find that although the ordinance may not have been as specific as it could have been, Appellants were specifically informed in their letter from the City Administrator of the terms of repayment. Additionally, the Amended Tax Bill contained a specific reference to Section 88.812. Therefore, Appellants cannot argue that they were prejudiced by the ordinance's reference to repayment "as provided by law," because they were otherwise specifically informed of the terms of repayment.
Appellants assert that they are entitled to judgment in their favor because the omission in the ordinance amounts to a substantial departure from the statutory requirements and therefore the process as a whole is void. However, Appellants also state in the conclusion of their argument that "since neither the ordinance specifies the manner of repayment as required by Section 88.812 nor does the tax bill itself, the entire proceedings regarding this project are void. . . ." The tax bill, as amended, does reference Section 88.812. Therefore, underLafayette Park Baptist Church, 599 S.W.2d at 64, this statutory reference in the Amended Tax Bill is sufficient. Point III is denied.
In Appellants' Point IV, they argue that the trial court erred in granting judgment upon the new tax bill issued by the City in that neither the original nor the new tax bill issued by the City states the duration of the lien against the real estate as required by Section 88.822 and as a result, because of this departure from the statutory requirement, the tax bill is void.
The special tax bill issued by the City against Appellants' property states, ". . . this special tax bill bears interest at the rate of 6.273% per annum from April 4, 1997, and is a special lien against the land herein described as set forth in Mo. Rev. Stat. Section 88.812 (1994)." Section 88.812 states that ". . . every special tax bill shall be a lien against the lot or tract or parcel of land described in said special tax bill for a period of ten years after date of issue. . . ." Appellants argue that the City violated Section 88.822 because the tax bill did not "give the time that the lien continues" as required by that section. However, the tax bill included the statute that states the length of the lien. As stated in the discussion of Point III, the use of incorporation by reference in a legislative enactment constitutes a valid method of legislation. Lafayette Park Baptist Church, 599 S.W.2d at 64. Point IV is denied.
Point V asserts that Appellants were prejudiced by the allowance of the amended tax bill since the original tax bill was void due to the lack of the mayor's signature. Appellants also argue the trial court erred in allowing the City to amend its petition on July 21, 1998, to permit the City to introduce a new tax bill issued the night before, when the trial had already commenced on July 2, 1998. Appellants contend the allowance of this amendment: (1) exceeded the court's discretion and the parameters governing the allowance of amendments to petitions, especially during trials when the cause of action is totally transformed from one cause of action to another; and (2) violated the rules of pleading which require that in a cause of action on a written instrument, the pleader must set the written instrument out in full or attach it to the pleading or set out its legal content in accord with Civil Rule 55.22.
Appellants argue that the tax bill was fundamentally flawed because it was not signed by the mayor as required by Ordinance 3603. However, that defect was cured by the City's amendment of the tax bill to include the mayor's signature.
It is within the discretion of the trial court to decide whether to grant leave to amend and the Court of Appeals shall not disturb that decision unless there is an obvious and palpable abuse of discretion. Manzer v. Sanchez, 985 S.W.2d 936, 939 (Mo.App.E.D. 1999). City authorities must issue amended or new tax bills for street improvement so as to correct errors, not affecting the substantial rights of the parties. Clay County Bank v. Health Culture Co., 139 S.W.2d 1049, 1054 (Mo.App. 1940). The error may be corrected by interlineation or by issuing a new tax bill in lieu of the erroneous one. Section 88.814. Furthermore, a correction of a tax bill for street improvements can be made after the filing of a suit on a tax bill. Clay County Bank, 139 S.W.2d at 1054. In the instant case, the errors in the original tax bill were corrected by issuing an amended bill, not a new bill, as Appellants contend. The bill was amended: (1) to expand the description of the property to which the tax bill attached; (2) to add reference to the Missouri statute section regarding the lien against property; and (3) to be signed by the mayor. None of these amendments affected the parties' substantial rights. No new cause of action was established by the amendments. Appellants were not prejudiced.
Appellants also claim that Respondent should have attached a copy of the amended tax bill to the pleadings. However, by pleading the legal effect of the amended tax bill in the pleadings, Respondent complied with Rule 55.22, which provides: "When a claim or defense is founded upon a written instrument, the same may be pleaded according to legal effect, or may be recited at length in the pleading, or a copy may be attached to the pleading as an exhibit." Point V is denied.
In Point VI, Appellants argue the following. The trial court erred in granting judgment upon the new tax bill against Appellants because the City was not a party in interest with regard to the new tax bill. The initial tax bill was fatally defective by not having the mayor's signature as required by ordinance. The new tax bill states that it is payable to Fronabarger and it was never tendered or given to that firm or assigned to the City, although the City brought suit upon that new tax bill. Further, the enabling ordinance states that the tax bills are to be payable to the contractor and engineer. However, the tax bill at issue is payable only to the contractor, Fronabarger. Missouri case law states that tax bills are tantamount to promissory notes and the City is therefore not a party in interest to the tax bill sued upon.
Contrary to Appellants' assertion, the City is the holder of the tax bill because it paid the debt it represents. Upon completion of the street improvements, the City issued its tax bills and submitted them to the contractor in payment for his work. The contractor then took the tax bills to Boatmen's Bank and assigned them to the bank so that he could receive his funds. If the bank is unable to collect a tax bill from the property owner, the City buys the tax bill from the bank, which is what happened in the case of Appellants' tax bill. After Appellants continued to refuse to pay the tax bill, the City amended the tax bill pursuant to Section 88.814. As holder of the amended tax bill, the City is the proper party in interest to the suit against Appellants for non-payment.
Furthermore, the City is not obligated to transfer the amended tax bill to the contractor, as Appellants contend, because he has already been paid. Also, there is no evidence that the engineer has not been paid.
Finally, contrary to Appellants' contention in their argument of Point VI, an amended tax bill accrues interest sixty (60) days after the original issuance of the tax bill. See City of Higginsville v. Alton R. Co., 171 S.W.2d 795, 804 (Mo.App. 1943) (emphasis supplied). It does not accrue interest sixty (60) days after the date the amended tax bill is issued. Point VI is denied.
In Point VII, Appellants maintain the trial court erred in allowing the amendment of the City's petition on July 21, 1998, and permitting the introduction of a new tax bill upon which payment was not due until sixty (60) days after its date of issue on July 20, 1998, because that payment due date was weeks beyond the close of the trial on September 3, 1998.
Appellants claim that since the new tax bill (as amended) was issued on July 20, 1998, interest did not start to run nor was payment even due until after the trial was over on September 3, 1998. Therefore, Appellants claim the trial court erred in allowing the amendment of the tax bill because of this irregular result. This point is based upon Appellants' argument that the amended tax bill is a brand new bill, which has been rejected for the reasons stated in the discussion of Point V. For this reason and the additional reasons stated in the discussion of Points V and VI, this argument is rejected. Point VII is denied.
Finally, in Point VIII, Appellants claim that the trial court erred in finding in Point 4 of its judgment as follows: "4. A reasonable attorney fee incurred by the City in the prosecution of foreclosing the tax bill is 5,939.78." Appellants argue there was no written agreement between the City and the attorneys in accord with Section 432.070 and attorney's fees therefore should be denied.
Section 432.070 provides that no city shall make any contract unless it shall be in writing, including the consideration, which shall be dated and subscribed by the parties thereto. In support of their argument, Appellants present the testimony of the City Clerk to the effect that she was not aware of a contract between the City and its counsel or of what the hourly fees were. Accordingly, Appellants maintain they should not have to pay attorney's fees. However, the City presents testimony of the City Administrator to the effect that the City retained the services of its counsel to bring the lawsuit, and that the agreed upon hourly rate was $60.00 per hour. Additionally, Section 88.814.2 provides: "the court shall fix and allow a reasonable attorney fee to the plaintiff's attorney for his services in the prosecution of said action and tax the same as costs in the proceeding." (emphasis added). Accordingly, the language of Section 88.814.2 mandates the assessment of Respondent's attorney's fees. Point VIII is denied.
The judgment of the trial court is affirmed pursuant to Rule 84.16(b).