Case Title: BALCOCK v TOWN OF MELSTONE MONTA

Citation: 

Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1980-02-20T00:00:00Z

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No. 14650 IN THE SUPREME COURT OF THE STATE OF MONTANA 1980 JOHN BALOCK, JR., and HEATHER J. BALOCK, Plaintiffs and Appellants, THE TOWN OF MELSTONE, MONTANA et al., MARGAEET REIGHARD , ROBERT HAGSTROM, and MUSSELSHELL COUNTY, Defendants and Respondents. Appeal from: District Court of the Fourteenth Judicial District, Honorable Nat Allen, Judge presiding. Counsel of Record: For Appellants: K. Robert Foster, Lewistown, Montana For Respondents: John L. Pratt, County Attorney, Roundup, Montana Submitted on briefs: January 16, 1980 Decided : FEB 2 $ 1-@j M r . J u s t i c e John Conway Harrison d e l i v e r e d t h e Opinion of t h e Court. Appellants f i l e d t h i s a c t i o n i n t h e D i s t r i c t Court of t h e Fourteenth J u d i c i a l D i s t r i c t i n Musselshell County. ~ p - p e l l a n t s requested t h e D i s t r i c t Court t o e n j o i n t h e respondents from t a x i n g c e r t a i n p r o p e r t y they owned a t t h e r a t e s p r e v a i l i n g f o r p r o p e r t y l o c a t e d i n t h e town of Melstone and t o refund Melstone c i t y t a x e s on t h e property p a i d under p r o t e s t . The Honorable Nat Allen heard t h e case s i t t i n g without a jury. Judge Allen concluded t h a t a p p e l l a n t s ' p r o p e r t y was w i t h i n t h e boundaries of t h e C i t y of Melstone and denied t h e r e l i e f prayed f o r by a p p e l l a n t s . This appeal followed. The town of Melstone incorporated i n 1913. The a r e a included i n t h e o r i g i n a l p l a t of t h e town i s shown on t h e map, a t t a c h e d t o t h i s opinion f o r c l a r i f i c a t i o n . The a r e a o r i g i n a l l y incorporated a s t h e town of Melstone i s enclosed by t h e d o t t e d l i n e on t h e map. Over t h e y e a r s , t h e t a x a s s e s s o r a p p a r e n t l y only taxed t h e s e c t i o n s of Melstone included i n t h e a r e a marked o f f i n t o l o t s and blocks a s i n s i d e t h e C i t y of Melstone. P r i o r t o 1976, t h e map used by t h e County Assessor t o determine i f a p i e c e of p r o p e r t y was i n t h e C i t y of Melstone f o r t a x purposes included o n l y t h e a r e a marked o f f i n l o t s and blocks. The a r e a i s marked by t h e double s o l i d l i n e on t h e a t t a c h e d map. I n 1973 a p p e l l a n t s John and Heather Balock purchased a p i e c e of p r o p e r t y i n s i d e t h e c i t y l i m i t s of Melstone as included i n t h e o r i g i n a l p l a t of t h e town b u t o u t s i d e t h e a r e a t r a d i t i o n a l l y considered i n s i d e Melsone by t h e County Assessor f o r t a x purposes. The approximate l o c a t i o n of t h e p r o p e r t y i s marked by x ' s on t h e a t t a c h e d map. Before purchasing t h e p r o p e r t y , M r . Balock went t o t h e County A s s e s s o r ' s O f f i c e t o see i f t h e p r o p e r t y was taxed a s being w i t h i n t h e C i t y of Melstone. The Musselshell County A s s e s - s o r t o l d M r . Balock t h a t t h e p r o p e r t y was o u t s i d e t h e c i t y l i m i t s of Melstone. The County Assessor a l s o showed M r . Balock t h e map of Melstone then being used t o determine i f p r o p e r t y was w i t h i n t h e c i t y l i m i t s . That map only included t h e p a r t of Melstone t h a t had been marked o f f i n t o streets and blocks. The map d i d n o t i n c l u d e t h e p r o p e r t y M r . Balock w a s about t o purchase. I n 1976, t h e town of Melstone r e a l i z e d t h a t a p o r t i o n of t h e a r e a included i n t h e o r i g i n a l p l a t of t h e c i t y w a s n o t being taxed a s a p a r t o f t h e c i t y . The County Commissioners decided t o r e c t i f y t h e s i t u a t i o n . The 1976 t a x assessment n o t i c e s r a i s e d t h e r a t e s of t h e a r e a i n s i d e t h e o r i g i n a l town p l a t b u t n o t p r e v i o u s l y taxed a t c i t y rates t o t h e c i t y rates. T h i s included t h e p r o p e r t y purchased by t h e Balocks i n 1973. Including t h e p r o p e r t y i n t h e c i t y f o r t a x purposes caused t h e t a x e s on t h e p r o p e r t y t o go from $700 t o $800 p e r y e a r t o approximately $1,500 p e r year. The Balocks p a i d t h e i r i n c r e a s e d t a x e s under p r o t e s t and f i l e d an appeal w i t h t h e S t a t e Tax Appeals Board. The Appeals Board dismissed t h e c a s e f o r l a c k of j u r i s d i c t i o n . The Balocks then i n i t i a t e d t h i s s u i t i n D i s t r i c t Court. A p p e l l a n t s r a i s e t h e following i s s u e s on appeal: Did t h e D i s t r i c t Court err i n concluding t h e Balocks' p r o p e r t y was w i t h i n t h e town of Melstone f o r t a x purposes? Did t h e ~ i s t r i c t Court err i n f a i l i n g t o f i n d t h a t t h e r e q u i r e d procedures f o r reassessment w e r e n o t followed by t h e town of Melstone? The d o c t r i n e of acquiescence i s a long e s t a b l i s h e d t e n a n t of common law. See 2 McQuillin, Municipal Corporations 5 7.09, pp. 294-297 (3rd rev. ed. 1979). The b a s i c premise of t h e d o c t r i n e i s t h a t long acquiescence between p a r t i e s a s t o municipal boundaries e v e n t u a l l y e s t a b l i s h e s those boundaries. 2 McQuillin, supra a t 294. The r a t i o n a l e f o r t h e d o c t r i n e has been c i t e d by v a r i o u s c o u r t s a s e s t o p p e l and l a c h e s . La Porto v . V i l l a g e of Philmont (1976), 39 N.Y.2d 7, 346 N.E.2d 503, 505; Scotch P l a i n s Township v. Town of Westfield (1964), 83 N . J . Super. 323, 199 A.2d 673, 676. The United S t a t e s Supreme Court uses t h e acquiescence d o c t r i n e i n s e t t l i n g boundary d i s p u t e s between s t a t e s . Ohio v. Kentucky (1973), 410 U.S. 641, 651, 93 S.Ct. 1178, 1184, 35 L.Ed.2d 560, 568; Michigan v. Wisconsin (1926), 270 U.S. 295, 308, 4 6 S.Ct. 290, 294, 70 L.Ed. 595, 601. Other c o u r t s have a p p l i e d t h e d o c t r i n e t o settle boundary d i s p u t e s between a d j o i n i n g c i t i e s , C i t y of Whiting v. C i t y of E a s t Chicago (1977), 266 Ind. 12, 359 N.E.2d 536, and t o determine i f d i s p u t e d a r e a s should be included i n o r excluded from municipal c o r p o r a t i o n s . La Porto, supra, 346 N.E.2d 503. - Perhaps because of t h e p a u c i t y of a u t h o r i t y on t h e d o c t r i n e , no c a s e s e t t i n g o u t t h e elements of acquiescense could be found. F a c t o r s considered by v a r i o u s c o u r t s i n determining t h e a p p l i c a b i l i t y of t h e d o c t r i n e include: whether o r n o t p r o p e r t y i n t h e d i s p u t e d a r e a was taxed by t h e c i t y , G r i f f i n v. Town of Pine B l u f f s (Wyo. 1962), 368 P.2d 132; Leary v. Mayor and Aldermen of J e r s e y C i t y (3rd C i r . 1913), 208 F. 854, 856; t h e e x e r c i s e of personal and c i v i l r i g h t s such a s v o t i n g by r e s i d e n t s of t h e d i s p u t e d a r e a , La - Porto, supra, 346 N.E.2d a t 505; S t a t e ex rel. C i t y of Minot v. W i l l i s (1908), 18 N.D. 76, 118 N.W. 820, 822; t h e r e c o r d s on f i l e p e r t a i n i n g t o t h e boundaries of t h e m u n i c i p a l i t y , G r i f f i n v. Town of Pine B l u f f s (Wyo. 1 9 6 1 ) , 366 P.2d 993; Town of Stephens C i t y v. Zea (1963), 204 Va. 82, 129 S.E.2d 1 4 ; p r o v i s i o n of municipal s e r v i c e s t o t h e d i s p u t e d t e r r i t o r y , C i t y of - Whiting supra, 359 N.E.2d a t 539; and t h e e x e r c i s e of p o l i c e and r e g u l a t o r y powers over t h e p r o p e r t y , -- C i t y of Whiting, supra. The presence o r absence of any one of t h e s e f a c t o r s does n o t n e c e s s a r i l y r e q u i r e o r preclude t h e a p p l i c a t i o n of t h e d o c t r i n e . Courts consider t h e t o t a l i t y of t h e circumstances i n determining i f t h e d o c t r i n e should apply. C i t y of Whiting, 359 N.E.2d a t 539. The t h r e s h o l d q u e s t i o n w e f a c e i s whether o r n o t t o adopt t h e acquiescence d o c t r i n e i n Montana. W e r e c e n t l y recognized t h e d o c t r i n e i n Gregory v. C i t y of Forsyth, No. 14584, decided February, 1980. The common law i s t h e law i n Montana where it does n o t c o n f l i c t w i t h Montana s t a t u t e s . Section 1-1-108, MCA. O n t h e b a s i s of Gregory and s e c t i o n 1-1-108, MCA, w e should adopt t h e acquiescence d o c t r i n e i n s o f a r a s it does n o t c o n f l i c t with Montana s t a t u t e s . The n e x t l o g i c a l s t e p i n analyzing t h e problem h e r e would be t o consider t h e elements of t h e acquiescence d o c t r i n e i n l i g h t of t h e f a c t s involved i n t h i s case. However, one important c a v e a t t o s e c t i o n 1-1-108, MCA makes t h i s s t e p unnecessary. The s e c t i o n states i n p a r t : " I n t h i s s t a t e t h e r e i s no common law i n any c a s e where t h e law i s d e c l a r e d by s t a t u t e . " This language has been i n t e r p r e t e d i n t h e c o n t e x t of t h e i n c l u s i o n of property w i t h i n a c i t y on a p r i o r occasion i n Pool v. Town of Townsend (1920), 58 Mont. 297, 191 P. 385. I n Pool, t h e p l a i n t i f f sought an i n j u n c t i o n r e s t r a i n i n g t h e town of Townsend from e n f o r c i n g t h e payment of a s p e c i a l improvement t a x l e v i e d on p r o p e r t y he owned. A t t h e t i m e t h e C i t y sought t o impose t h e t a x , t h e p r o p e r t y had n o t been p r o p e r l y annexed i n t o t h e c i t y . The C i t y argued t h a t , even though t h e proper procedure had n o t been followed i n annexing t h e d i s p u t e d property, a common law d e d i c a t i o n and acceptance of t h e streets and a l l e y s i n t h e a r e a including t h e p r o p e r t y brought t h e p r o p e r t y w i t h i n t h e town l i m i t s . The Court r e j e c t e d t h e C i t y ' s argument. I n s o doing, t h e Court c i t e d language from a s i n c e repealed s t a t u t e i d e n t i c a l t o t h e above-quoted language i n s e c t i o n 1-1-108. Based on t h e d i r e c t i v e of t h e s t a t u t e n o t t o apply t h e common law where superceded by s t a t u t e , t h e Court reasoned t h a t : " I f , then, t h e Codes provide t h e means by which an a d d i t i o n becomes a p a r t of a c i t y o r town and s u b j e c t t o i t s j u r i s d i c t i o n , t h e means s o provided must be held t o be e x c l u s i v e . " Pool, supra, 58 Mont. a t 304. (Emphasis added.) The Court went on t o hold t h a t s i n c e annexation proce- d u r e s w e r e provided f o r i n t h e Code, t h e p r o p e r t y could n o t be included i n t h e Town of Townsend u n l e s s t h o s e procedures w e r e followed. Gregory, supra, a f f i r m s P o o l ' s conclusion and r a t i o n a l e . Greqory and Pool r e j e c t a common law method of i n c l u d i n g p r o p e r t y i n a m u n i c i p a l i t y and e s t a b l i s h annexation a s t h e e x c l u s i v e means of bringing property i n t o a town o r c i t y . The n e g a t i v e i n f e r e n c e l o g i c a l l y drawn from t h a t r u l e i s t h a t Montana's de-annexation s t a t u t e s , i.e. s e c t i o n s 7-2- 4801 t o 7-2-4810, MCA, provide t h e e x c l u s i v e means f o r excluding p r o p e r t y from m u n i c i p a l i t i e s . Under t h i s a n a l y s i s , t h e common law d o c t r i n e of acquiescence cannot be a p p l i e d i n t h i s case t o supercede t h e annexation s t a t u t e s and t h e d i s p u t e d p r o p e r t y should be considered a p a r t of t h e town of Melstone. W e reach t h i s same conclusion by applying t h e acquies- cence d o c t r i n e . I n Gregory w e s a i d , ". . .'The r u l e a s t o ---- establishment - of municipal boundaries & acquiescence does n o t apply where t h e period of acquiescence i s s h o r t o r where t h e boundary involved - i s c l e a r l y otherwise than claimed.' 2 McQuillin, supra, 5 7.09 a t 308 (emphasis added)." Gregory Opinion a t p. 8. H e r e , a s i n Gregory, t h e boundaries i n d i s p u t e a r e c l e a r . None of t h e p a r t i e s d i s p u t e t h e f a c t t h a t i n 1913 t h e Town of Melstone incorporated and included w i t h i n its boundaries t h e p r o p e r t y now owned by t h e Balocks. N o one contends t h e p r o p e r t y has been de-annexed from Melstone s i n c e t h a t t i m e . The d i s p u t e h e r e c e n t e r s around t h e e f f e c t on t h e Balock p r o p e r t y of t h e mistaken b e l i e f t h a t t h e p r o p e r t y was o u t s i d e t h e town. That b e l i e f has no e f f e c t on t h e p r o p e r t y ' s s t a t u s , even applying t h e d o c t r i n e of acquiescence where t h e boundaries a r e c l e a r . W e t h e r e f o r e a f f i r m t h e judgment of t h e D i s t r i c t Court on t h i s i s s u e . Moving t o a c o n s i d e r a t i o n of t h e second i s s u e , v a r i o u s s t a t u t e s a p p l i c a b l e t o t h i s s i t u a t i o n and i n e f f e c t a t t h e t i m e a p p e l l a n t s i n i t i a t e d t h i s s u i t r e q u i r e d n o t i c e t o taxpayers by o f f i c i a l s before changing p r o p e r t y t a x a s s e s s - ments. S e c t i o n 84-602, R.C.M. 1947, which was repealed i n 1977, r e q u i r e d w r i t t e n n o t i c e t o a taxpayer by t h e County Board of E q u a l i z a t i o n of i t s i n t e n t i o n t o i n c r e a s e o r lower h i s assessment s o a s t o e q u a l i z e t h e assessment of t h e p r o p e r t y t o conform w i t h i t s t r u e value. The County Board of E q u a l i z a t i o n was a l s o r e q u i r e d t o n o t i f y i n t e r e s t e d persons b e f o r e d i r e c t i n g t h e County Assessor t o t a x p r o p e r t y t h a t had escaped assessment under pre-1977 law. s e c t i o n 84- 609, R.C.M. 1947. The S t a t e Board of ~ q u a l i z a t i o n was s u b j e c t t o s i m i l a r n o t i c e requirements. S e c t i o n 84-710, R.C.M. 1947, repealed i n 1977, r e q u i r e d n o t i c e before any change i n assessment. S e c t i o n 84-711, R.C.M. 1947, which was amended i n 1977, r e q u i r e d t h e S t a t e Board t o g i v e n o t i c e before r e a s s e s s i n g p r o p e r t y previously a s s e s s e d i n c o r r e c t l y . These s t a t u t e s c l e a r l y i n d i c a t e a p p e l l a n t s should have been n o t i f i e d before t h e County r e a s s e s s e d t h e i r property. The Court must t h e r e f o r e r e v e r s e t h i s c a s e u n l e s s t h e Court f i n d s a p p e l l a n t s waived t h e i r r i g h t t o n o t i c e . Here it can be argued t h a t a p p e l l a n t s waived such r i g h t by appearing b e f o r e t h e S t a t e Tax Appeals Board t o c o n t e s t t h e i r p r o p e r t y reassessment. I f t h e s t a t u t e a u t h o r i z i n g a change i n p r o p e r t y a s s e s s - ment r e q u i r e s n o t i c e before t h e E q u a l i z a t i o n Board can change an assessment, t h e n o t i c e i s a p r e r e q u i s i t e t o t h e j u r i s d i c t i o n of t h e E q u a l i z a t i o n Board t o change t h e a s s e s s - ment of t h e property. Montana O r e Purchasing Co. v. Maher (19051, 32 Mont. 480, 487, 81 P. 13, 14-15; Western Ranches, Ltd. v. C u s t e r County (1903), 28 Mont. 278, 281, 72 P. 659, 660. An appearance by a p a r t y t o challenge a change without n o t i c e does n o t c o n s t i t u t e waiver of t h e n o t i c e requirement. Western Ranches, Ltd., supra, 28 Mont. a t 282. I f , however, t h e a p p l i c a b l e s t a t u t e r e q u i r e s n o t i c e a f t e r t h e p r o p e r t y has been r e a s s e s s e d , n o t i c e i s n o t considered j u r i s d i c t i o n a l . An appearance by a taxpayer under t h i s type of s t a t u t e does c o n s t i t u t e a waiver of t h e n o t i c e requirement i f t h e tax- payer has a chance t o p r e s e n t t h e m e r i t s of h i s case. Anaconda Copper Mining Co. v. R a v a l l i County (1919), 56 Mont. 530, 532-535, 186 P. 332, 333-334. Here t h e a p p l i c a b l e s t a t u t e s r e q u i r e d n o t i c e before re- assessment. The n o t i c e i s j u r i s d i c t i o n a l under t h e above cases. The appearance by appellants to contest the reassess- ment does not constitute waiver of the jurisdictional notice requirement. The reassessment should therefore be considered void as entered without jurisdiction and the District Court reversed on this issue. As a practical matter, finding the improper procedure was followed by the respondents does not prohibit the collec- tion of the disputed taxes. Section 15-8-601, MCA allows the Department of Revenue to reassess property erroneously assessed within the preceding ten years. The section sets up procedural guidelines for correcting past improper assess- ments. The respondents here can follow the statutory proce- dures and collect the taxes on appellants' property for the years in question. To summarize, Montana's annexation and de-annexation statutes provide the method for including or excluding property into or from cities and towns. That procedure is exclusive under Gregory and Pool, supra. Appellants should not, therefore, be permitted to de-annex their property from Melstone under any other procedure. Neither does the doctrine of acquiescence allow the exclusion of the property since the boundaries of Melstone are clear. Gregory, supra. The District Court should be affirmed on this issue. Appellants did not receive proper notice of the reassessment of their property. The lack of notice is a jurisdictional defect rendering the reassessment void. Appellants' appearance in this matter did not represent a waiver of the notice require- ment. See Montana Ore Purchasing =. and Western Ranches, Ltd., supra. This defect warrants reversal. - The judgment of the District Court is reversed. W e concur: %&&&- Chief J u s t i c Q . 8 9 J u s t i c e s