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Miller v. Matanuska-Susitna Borough (9/6/2002) sp-5624
Miller v. Matanuska-Susitna Borough (9/6/2002) sp-5624
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
WILLIAM H. MILLER and )
BARBARA J. MILLER, ) Supreme Court No. S-9735
)
Appellants, ) Superior Court Nos.
) 3PA-98-599 & 3PA-99-347 CI
v. )
) O P I N I O N
MATANUSKA-SUSITNA )
BOROUGH, ) [No. 5624 - September 6, 2002]
)
Appellee. )
________________________________)
Appeal from the Superior Court of the State
of Alaska, Third Judicial District, Palmer,
Beverly W. Cutler, Judge.
Appearances: Kenneth D. Albertsen, Palmer,
for Appellants. Max D. Garner, Birch,
Horton, Bittner and Cherot, Anchorage, for
Appellee.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Bryner, and Carpeneti, Justices.
EASTAUGH, Justice.
I. INTRODUCTION
I. The Matanuska-Susitna Borough imposed a road
improvement special assessment against each of nine lots William
and Barbara Miller own in a newly formed local improvement
district. The superior court rejected the Millers administrative
appeal challenging the assessment. We affirm, because we
conclude that (1) the borough ordinance allocating paving special
assessments to residential lots on a per-lot basis does not
conflict with state law, and (2) a borough ordinance limiting
special assessments to twenty-five percent of the lots tax-
appraised value does not apply to this local improvement
district. We also reject the Millers argument that they were
public interest litigants who could not be held liable for part
of the boroughs appellate attorneys fees.
II. FACTS AND PROCEEDINGS
The Matanuska-Susitna Borough Assembly created Suburban
Country Estates Road Paving Local Improvement District No. 245 by
enacting Ordinance 97-139 in 1997.1 That ordinance provided that
the cost of the improvement shall be assessed equally against
each property within the road paving local improvement district.
The Millers own nine lots in this local improvement district.
The Millers lots had been zoned and platted for single-family
residential development, but are undeveloped. Each of their lots
had a 1997 tax-assessed value of $2,000 and a 1999 tax-assessed
value of $4,000. When the final cost of the road paving project
was calculated, the borough assessed $1,735.35 to property owners
for each parcel of property they owned within the local
improvement district; it assessed that amount for each of the
Millers nine lots.
At the public hearing on Ordinance 97-139 before it was
enacted, the Millers objected to the boroughs proposed per-lot
method of assessment. They argued that each lot owner should pay
a percentage of the paving costs commensurate with the
proportional value of each lot to the total value of all lots in
the local development district. After the assembly enacted the
ordinance notwithstanding their objections, the Millers filed a
superior court complaint seeking a declaratory judgment. Their
complaint, filed in 1998, alleged that the borough had acted
contrary to law when it assessed the costs on a per-lot basis and
had acted arbitrarily and unreasonably when it assessed each lot
equally even after it had acknowledged that the paving would not
equally benefit each lot in the local improvement district.
In 1999 the Millers filed in the superior court an
administrative appeal from the boroughs assessment, asserting
that the borough had erred in assessing the costs of the
improvement equally among lot owners and that this method of
assessment was contrary to law. The superior court consolidated
the Millers declaratory judgment action with their administrative
appeal.
At oral argument on cross-motions for summary judgment,
the parties represented to the superior court that they had
agreed to proceed with the action under the Alaska Rules of Civil
Procedure. But the court, concerned that the agreement
effectively jettison[ed] the limited appeal from a final
assessment afforded by state law, decided to treat the case as an
appeal of an administrative decision. The superior court
confined its review to the evidence in the record created below
plus Robert Ameens affidavit submitted by the Millers to show
that the assessed properties were unequally benefited. The
superior court affirmed the boroughs assessment against the
Millers and awarded the borough attorneys fees and costs totaling
$2,716.03.
The Millers appeal the denial of their administrative
appeal2 and the award of attorneys fees against them.
III. DISCUSSION
A. Standard of Review
Because the superior court acted as an intermediate
court of appeal, we independently review the boroughs decision.3
We employ the rational basis standard when reviewing questions of
law that involve the boroughs expertise, and when reviewing the
boroughs application of law to facts when that application
implicates administrative expertise or involves fundamental
policy determinations.4 Under the rational basis standard, we
defer to the boroughs determination as long as it is supported by
the facts and has a reasonable basis in law.5
The boroughs assessment determinations are presumed to
be correct, and are reversed only upon a showing of fraud or
conduct so arbitrary as to be the equivalent of fraud, or so
manifestly arbitrary and unreasonable as to be palpably unjust
and oppressive.6
When the superior court acts as an intermediate
appellate court, it has broad discretion to award reasonable
attorneys fees under Appellate Rule 508(e).7 The superior courts
decision should not be disturbed unless it is manifestly
unreasonable.8
B. Was the Boroughs Allocation Method Contrary to State
Law?
The Millers argue that the boroughs per-lot assessment
method violates state law because AS 29.46.060(a) mandates that
improvement costs be assessed against property in proportion to
the benefit received.9 In reply to the boroughs argument that it
adopted, in accordance with state law, a different but
permissible method of allocating costs for road improvements in
local improvement districts like the one at issue here, the
Millers contend that there is no rational basis for the boroughs
per-lot assessment method given disparities in the size of the
lots in their local improvement district.
Matanuska-Susitna Borough (MSB) Code 03.28.140(A)(2)
controls road paving special assessments like the Millers. It
allocates road improvement costs on a per lot basis thus equally
per lot to residential lots in road special assessment
districts:
ALLOCATION OF COSTS IN ROAD SPECIAL
ASSESSMENT DISTRICTS.
(A) Assessments for costs of road and
drainage construction and improvements shall
be allocated among the parcels within the
road special assessment district as follows:
. . . .
(2) Areas zoned residential or restricted to
residential use. For areas zoned residential
or within subdivisions where a majority of
the lots within the subdivision are
restricted to residential uses under recorded
conditions, covenants and restrictions, the
allocation of costs shall be assessed on a
per lot basis so that each lot is assessed
the same amount.
Subsection .140(A)(2) is one of the borough code
provisions describing the boroughs procedures for assessing
improvement costs and creating local improvement districts within
the borough.10 Subsection .140(A)(2) governs road improvement
special assessments and therefore encompasses road paving
assessments. Accordingly, we must decide whether subsection
.140(A)(2) contravenes state law governing special assessments.
Alaska Statutes 29.46.01011 and .02012 respectively
permit municipalities to assess private property benefited by
improvements and to adopt procedures for creating local special
assessment districts. Alaska Statute 29.46.020(c) requires
municipalities such as the borough to comply with the special
assessment procedures set out in AS 29.46.030-29.46.100 if the
municipality does not prescribe a procedure for special
assessments as permitted by section .020.13 The borough chose to
prescribe such procedures. By enacting MSB Code
03.28.140(A)(2),14 the borough exercised the authority AS
29.46.020(a) granted to it. It consequently substituted its per-
lot method of assessing a specific class of improvement costs
for road improvements benefiting residential lots for the
proportional benefit assessment method the legislature generally
adopted in AS 29.46.060(a).15 It therefore prescribed a procedure
for special assessments as permitted by this section,16 exempting
itself from having to comply with AS 29.46.060(a) with respect to
road improvement special assessment districts.
Although there are other possible ways to assess
landowners in a local improvement district,17 the per-lot method
the borough chose for road improvements benefiting residential
lots is presumptively valid.18 Accordingly, MSB Code
03.28.140(A)(2) does not violate AS 29.46.020 or .060.
C. Did the Millers Show that the Per-Lot Method Is
Irrational?
The Millers argue that the factual record does not
support the boroughs implicit conclusion that each lot benefited
equally; they consequently argue that this court should overturn
the assessments. To prevail, the Millers had to overcome the
presumption of correctness that attaches to the boroughs
conclusion that the paving project has conferred an equal benefit
on their land.19 To do so, the Millers had to show that the
benefit to their property was grossly disproportionately low
compared with the benefit conferred upon the other assessed
properties.20
In Kissane v. City of Anchorage, a territorial district
court held before statehood that benefit to property is not
limited to the immediate increase in property value to the
landowner.21 The district court held that costs could be assessed
to a landowner for increased public parking even though his land
was zoned for business but used only for residential purposes.
In City of Wasilla v. Wilsonoff, we held that property benefited
from installation of a water main because it provided a near-by
fire hydrant, even though the landowner testified that it would
be difficult to hoist a fire hose up an embankment to reach her
house and that fire insurance rates would not decrease for twenty
years.22 Similarly, in Weber v. Kenai Peninsula Borough, we
concluded that property benefited from installation of a gas line
even though the landowner had no intention of connecting to it.23
Here, the superior court concluded that the record from
the October 27, 1996 public hearing on the local improvement
district contained ample testimony by residents identifying the
benefits from the paving project. For example, residents
testified that reduced vehicle wear and tear and health benefits
from reduced dust would outweigh the cost of the project. In
addition, tax-assessment records indicate that the value of each
of the Millers lots increased by $2,000 during the two years
following the approval of the local improvement district.
Furthermore, the superior court correctly observed that [i]f the
[Millers] ever developed their lots, they or their successors in
interest would enjoy the benefit of cleaner air, smoother travel,
and increased value on par with all of the other landowners in
the [local improvement district].
The Millers supplemented the agency record with the
affidavit of real estate appraiser Robert Ameen. He stated:
4. Unless the various properties within a
paving local improvement district are each
valued identically, they usually do not
benefit equally from the road being paved.
5. A higher-valued property receives a
greater benefit from the paving than does a
lesser-valued property. The larger the
difference between the values of the various
properties within the local improving
district, the greater the disparity between
the benefit received by each property.
Accordingly, if the cost of paving is to be
allocated among the properties in accordance
with the benefit received, the cost should be
allocated proportionately based upon the
value of each individual property.
6. It is my understanding that the Borough
in this case allocated the costs of paving on
a pro-rata basis, assessing each lot an
identical portion of the total cost
irrespective of the value of the individual
property. Such an assessment is
disproportionate.
This evidence does not rebut the presumption of correctness that
attaches to the boroughs decision or the record evidence that
paving substantially benefited the Millers parcels. Ameens
affidavit merely concludes that paving will cause the market
value of properties of greater value to increase more than the
market value of lower valued properties. It does not rebut the
conclusion that the Millers lots will receive a substantial
benefit because paving will reduce dust and vehicle wear and tear
and will increase the monetary value of each lot. Neither the
evidence before the borough nor the Ameen affidavit undermines
the boroughs conclusion that the Millers have benefited from the
paving and that when and if they develop their property they will
benefit on par with the other property owners in the local
improvement district.
The Millers argue that the superior court could not
properly deny their cross-motion for summary judgment in reliance
upon the $2,000 increase in the post-improvement tax-assessed
value of their property. They contend that the borough was
required to submit additional evidence proving that the increased
tax valuation of their lots reflects a corresponding increase in
their fair market value. They also argue that the borough has
not shown that any increase in value is attributable to the
paving. But this argument misconstrues the procedural posture of
the Millers superior court case. Relying on our decision in
Balough v. Fairbanks N. Star Borough,24 the superior court treated
their case as if it were an appeal of an agency decision. The
court analogized the boroughs assessment determination to an
agency decision and the Millers lawsuit to an appeal from that
decision. Because the superior court treated the Millers action
as an administrative appeal, the civil rules did not require the
borough to introduce additional evidence to demonstrate equal
benefit to the properties. The relevant evidentiary record in
the superior court was the borough record and the supplemental
affidavit of Ameen.
The superior court did not err in concluding that the
Millers did not overcome the boroughs presumptively correct
finding of equal benefit.
D. Did the Twenty-Five Percent Limit Imposed by MSB Code
03.28.080(B) Apply to these Assessments?
The Millers argue in their opening brief that their
assessments were illegal because they exceeded the twenty-five
percent limit imposed by MSB Code 03.28.080(B).25 Citing AS
29.46.020(c), the Millers contend that state law requires a
borough to either follow state procedure for special assessments
or create its own procedure. They argue that because the
borough, by enacting subsection .080(B), adopted a procedure that
proscribes special assessments exceeding twenty-five percent of
the property tax value, the borough had to adhere to this
limitation. The borough argues in response that it permissibly
adopted a different procedure when the assembly enacted Ordinance
99-034. That ordinance confirmed the Suburban Country Estates
Road Paving Local Improvement District and exempted that local
improvement district from the twenty-five percent cap.26 The
Millers reply brief does not address the cap issue.
The superior court agreed with the borough. It held
that Ordinance 99-034, which specifically permitted assessments
exceeding the limit set by subsection .080(B), was a subsequent
legislative act that released the borough from the constraints of
a prior legislative act.
The superior court was correct. Boroughs act as
legislative bodies when they enact ordinances or code provisions.27
In its legislative capacity, the borough assembly enacted
procedures for special assessments. One such enactment was MSB
Code 03.28.080(B), which imposed the twenty-five percent
assessment limitation. But another was Ordinance 99-034, which
superseded the existing procedure with respect to this local
improvement district.
In Jefferson v. City of Anchorage,28 the Anchorage
City Council enacted an ordinance increasing the mayoral salary
at the beginning of the next mayoral term. This new ordinance
contravened an existing ordinance that only permitted a salary
increase within thirty days after a mayoral term began. We
concluded that there is no illegality when a new legislative
provision of equal dignity and authority supplants prior
legislation.29 That holding controls here.
These assessments were not subject to the twenty-five
percent limitation imposed by subsection .080(B).
E. Are the Millers Public Interest Plaintiffs Who Should
Not Be Assessed Attorneys Fees?
A superior court sitting as an intermediate appellate
court considers an award of appellate attorneys fees under Alaska
Rule of Appellate Procedure 508(e).30 This rule gives courts broad
discretion in awarding fees.31 Such fee awards must be justified
and reasonable.32
The Millers argue that the superior court erred in
awarding attorneys fees to the borough because the Millers were
public interest litigants, who were therefore exempt from
attorneys fees.33
It is an abuse of discretion to award attorneys fees
against an unsuccessful public interest plaintiff who raises a
claim in good faith.34 A four-part test determines public
interest litigant status: (1) Is the case designed to effectuate
strong public policies? (2) If the plaintiff succeeds, will
numerous people receive benefits from the lawsuit? (3) Can only
a private party have been expected to bring this suit? (4) Would
the purported public interest litigant have sufficient economic
incentive to file suit even if the action involves only narrow
issues lacking general importance?35 We review a trial courts
determination of a litigants public interest status under the
abuse of discretion standard. Such an abuse is regarded as
present only where the trial courts decision appears to be
manifestly unreasonable or motivated by an inappropriate purpose.36
The superior court concluded that the Millers did not
qualify as public interest plaintiffs because they had a
significant financial stake in this action that would only have
accrued to them. The Millers do not argue persuasively to the
contrary. Only they would have directly benefited had they
persuaded the superior court to impose their preferred assessment
scheme on the borough. Had they succeeded, other landowners in
the local improvement district would have been forced to shoulder
greater costs. The Millers appeal was in their private interest.
The Millers also briefly argue that the award was
excessive because it gave the borough thirty percent of its
actual fees. The Millers do not adequately brief this argument,37
and it is unavailing in any event. The superior court gave a
well-reasoned explanation for its attorneys fees award. It
explained that the Millers procedural approach to the case and
their dual filings took this matter over unnecessary ground
raising both parties fees in the process. The court also found
that the Millers appeal was knowingly risky in that they
attempted to have their assessment preference legislated . . . by
the court with almost no legal claim to do so. There is no
reason to think the superior court abused its discretion in
awarding attorneys fees against the Millers.
IV. CONCLUSION
We AFFIRM the superior court order denying the Millers
appeal from the boroughs final assessment. We also AFFIRM the
judgment awarding attorneys fees and costs to the borough.
_______________________________
1 Matanuska-Susitna Borough Ordinance No. 97-139 (1997).
2 The Millers also submitted a second motion for summary
judgment on January 10, 2000, the morning of oral argument on
their first motion. Their second motion asserted a new
substantive ground for summary judgment. The superior court
treated their second motion as an appeal of the administrative
agency decision, permitted the borough to respond, and disposed
of it in the same Memorandum and Order on Cross Motions for
Summary Judgment that the Millers are appealing to this court.
The superior court concluded that the argument in the second
motion had not been raised at the administrative level and
therefore had been waived. The Millers do not appeal the denial
of their second motion, and their briefs in our court do not
raise the substantive ground they argued in their second motion.
3 Weber v. Kenai Peninsula Borough, 990 P.2d 611, 613
(Alaska 1999) (citation omitted).
4 Id. (citation omitted).
5 Id. (citation omitted).
6 City of Wasilla v. Wilsonoff, 698 P.2d 656, 658 (Alaska
1995) (quoting Kissane v. City of Anchorage, 159 F. Supp. 733,
737 (D. Alaska 1958)).
7 Rosen v. State Bd. of Pub. Accountancy, 689 P.2d 478,
482 (Alaska 1984).
8 Cook Inlet Pipeline v. Alaska Pub. Util. Commn, 836
P.2d 343, 354 (Alaska 1982).
9 AS 29.46.060 reads in pertinent part: (a) At any time
after approval of an improvement plan, the governing body shall
assess the authorized percentage of the cost against property in
the district included in the plan in proportion to the benefit
received. . . .
10 See MSB Code 03.28.010 - .180.
11 AS 29.46.010 reads in pertinent part: (a) A
municipality may assess against . . . private real property to be
benefited by an improvement all or a portion of the cost of
acquiring, installing, or constructing capital improvements.
12 AS 29.46.020 reads in pertinent part:
(a) A municipality may prescribe by
ordinance the procedures relating to creating
special assessment districts, making local
improvements, levying and collecting
assessment, and financing improvements
. . . .
(c) To the extent that a municipality does
not prescribe a procedure for special
assessments as permitted by this section, the
municipality shall comply with the special
assessment procedures set out in AS 29.46.030
- 29.46.100.
13 AS 29.46.020(c).
14 MSB Code 03.28.140(A) reads in pertinent part: (2) . .
. For areas zoned residential or within subdivisions where a
majority of the lots within the subdivision are restricted to
residential uses under recorded conditions, covenants and
restrictions, the allocation of costs shall be assessed on a per
lot basis so that each lot is assessed the same amount.
15 AS 29.46.060 reads in pertinent part: (a) At any time
after approval of an improvement plan, the governing body shall
assess the authorized percentage of the cost against property in
the district included in the plan in proportion to the benefit
received. . . .
16 AS 29.46.020(c).
17 The borough itself generally follows the proportional
benefit method for assessing costs other than costs in road
special assessment districts. See MSB 03.28.080(A) (providing
generally for imposition of special assessment costs in
proportion to the benefit received). If MSB 03.28.140(A)(2)
does not apply, per MSB 03.28.140(A)(1), the borough assesses
road improvement costs in special assessment districts either by
lot size or frontage length.
18 City of Wasilla v. Wilsonoff, 698 P.2d 656, 657, 658
(Alaska 1985) (We agree with the city that its special assessment
determination carries with it a presumption of correctness. If
the apportionment of special assessments and the question of
benefits are matters upon which reasonable men may differ, the
determination by the municipal authorities will be sustained by
the courts. ) (quoting in part 2 Charles Antieau, Municipal
Corporation Law 14.46 (1985)); see also Weber v. Kenai Peninsula
Borough, 990 P.2d 611, 614 (Alaska 1999) (reiterating presumption
that municipal legislative assessment decisions are valid and
applying presumption to creation of assessment districts).
19 See Wilsonoff, 698 P.2d at 657.
20 We stated in Wilsonoff that [t]his presumption
favoring a city councils assessment determination concomitantly
places a heavy burden of proof on the challenging party. Id. at
658. We then approvingly quoted Professor Antieau: [A] property
owner seeking to overturn a special assessment against his
property has the burden of proving that the assessment was
grossly beyond benefit, disproportionate or otherwise illegal.
Id. (quoting 2 Charles Antieau, Municipal Corporation Law 14.46
(1985) (emphasis added in Wilsonoff)).
21 159 F. Supp. 733, 738 (D. Alaska 1958).
22 698 P.2d 656, 658 (Alaska 1985).
23 990 P.2d 611, 616 (Alaska 1999).
24 995 P.2d 245, 256 (Alaska 2000).
25 MSB Code 03.28.080(B) provides: The total amount of
assessments for an improvement may not exceed the allowable cost
of the improvement under A.S. 29.46.110. An assessment may not
exceed 25 percent of the assessed value for real property
taxation of the property assessed.
26 Matanuska-Susitna Borough Code Ordinance No. 99-034
(1999).
27 Griswold v. City of Homer, 925 P.2d 1015, 1019 & n.3
(Alaska 1996) (citing Concerned Citizens of S. Kenai Peninsula v.
Kenai Peninsula Borough, 527 P.2d 447, 452 (Alaska 1974)).
28 513 P.2d 1099, 1101 (Alaska 1973).
29 Id. at 1102.
30 Appellate Rule 508(e) states:
Attorneys Fees. Attorneys fees may be
allowed in an amount to be determined by the
court. If such an allowance is made, the
clerk shall issue an appropriate order
awarding fees at the same time that an
opinion or an order under Rule 214 is filed.
If the court determines that an appeal or
cross-appeal is frivolous or that it has been
brought simply for purposes of delay, actual
attorneys fees may be awarded to the appellee
or cross-appellee.
31 Agen v. State, Dept of Revenue, 945 P.2d 1215, 1221
(Alaska 1997).
32 Carr-Gottstein Props. v. State, 899 P.2d 136, 148
(Alaska 1995).
33 The Millers mistakenly cite Civil Rule 82 rather than
Appellate Rule 508.
34 Carr-Gottstein Props., 899 P.2d at 147 (citations
omitted).
35 Id. (citations omitted).
36 Valley Hosp. Assn, Inc. v. Mat-Su Coalition for Choice,
948 P.2d 963, 972 (Alaska 1997).
37 See Wirum & Cash, Architects v. Cash, 837 P.2d 692, 713-
14 (Alaska 1992) (Where a point is not given more than a cursory
statement in the argument portion of a brief, the point will not
be considered on appeal.) (citations omitted).
