Case Title: Western Petroleum, LLC v. Williams Cty. Bd. of Commissioners

Citation: 

Docket Number: 20160089

State: north-dakota

Court: North Dakota Supreme Court

Date: 2016-12-20T00:00:00Z

Document:
IN
THE SUPREME COURT STATE OF NORTH DAKOTA 2016 ND
249Western Petroleum, LLC andMaxum Petroleum Operating
Company, Inc.,d/b/a Pilot Logistics Services, Appellantsv.Williams County
Board of Commissioners, AppelleeNo. 20160089Appeal from the
District Court of Williams County, Northwest Judicial District, the Honorable Joshua B. Rustad, Judge.REVERSED AND
REMANDED.Opinion of the Court by Crothers,
Justice.Christopher P. Parrington, 220 South
Sixth Street, Suite 1750, Minneapolis, MN 55402, for appellants.Randall J. Bakke (argued) and Shawn A. Grinolds (appeared), P.O. Box 4247, Bismarck,
N.D. 58502-4247, for appellee.Western Petroleum v. Williams
Cty. Bd. of Comm'rsNo. 20160089Crothers,
Justice.[¶1] Western Petroleum, LLC, and Maxum Petroleum
Operating Company, Inc., doing business as Pilot Logistics Services, appeal from a district court
order affirming their appeal of the Williams County Board of County Commissioners' decision to
penalize Pilot for violating the county's temporary housing regulations. We reverse and remand
because the Board unreasonably interpreted the regulations.I[¶2] In September 2011 the Williams County Board of County Commissioners
adopted temporary housing regulations relating to the use of "man camps" or "crew housing
facilities" in the county. The use of temporary housing on property within the county is
prohibited without a conditional use permit. The civil penalty for violating the temporary housing
regulations is $1,000 per violation. The regulations state a separate violation is committed each
day a violation is committed.[¶3] In September 2011 the Board
granted Western Petroleum a conditional use permit for temporary housing units on its property.
The permit allowed Western Petroleum to use up to 40 RVs for one year and up to seven mobile
homes for two years. Pilot Logistics acquired Western Petroleum and its property in February
2012. Western Petroleum did not transfer the permit to Pilot, nor did Pilot renew the RV permit
when it expired in September 2012 and for the mobile homes in September 2013.[¶4] In 2014 the Board became aware that Pilot continued to use the property for
temporary housing after Western Petroleum's permit expired. Pilot was out of compliance on 40
RVs since September 6, 2012, and on seven mobile home units since September 6, 2013. Pilot
also had two two-story framed houses on the property that were not permitted under Western
Petroleum's conditional use permit.[¶5] At its July 8, 2014, meeting
the Board assessed a $29,635,000 penalty against Pilot for violating the temporary housing
regulations during the period of noncompliance until June 10, 2014. The Board calculated the
penalty by treating each non-permitted use as a violation subject to a $1,000 penalty per day. The
Board calculated the $1,000 penalty on a per housing unit, per day basis. From September 6,
2013, to June 10, 2014, the Board found Pilot committed 49 violations each day subject to the
$1,000 penalty for having 40 RVs, seven mobile homes and two two-story framed houses on the
property.[¶6] The Board also offered Pilot a reduced penalty of
$1,885,000 if paid within 10 days. Pilot did not pay the reduced penalty and the Board imposed
the full penalty of $29,635,000. The district court affirmed the Board's decision, concluding the
penalty against Pilot was supported by the evidence and was not an unreasonable interpretation
of the temporary housing regulations.II[¶7] Pilot
argues the Board acted in an arbitrary, capricious and unreasonable by penalizing Pilot
$29,635,000 for violating Williams County's temporary housing regulations.[¶8] Our standard of review in an appeal from the decision of a board of county
commissioners or other local governing body under N.D.C.C. § 28-34-01 is very
deferential and limited. Dahm v. Stark Cty. Bd. of
Cty. Comm'rs, 2013 ND 241, ¶
8, 841 N.W.2d 416. This Court independently determines whether the local body's decision
was appropriate and will affirm unless the local body acted arbitrarily, capriciously or
unreasonably. Id.[¶9] We interpret ordinances under the same rules applicable to statutes. Hentz v. Elma Twp. Bd., 2007 ND 19, ¶ 9, 727 N.W.2d 276. "Words used in any
statute are to be understood in their ordinary sense, unless a contrary intention plainly appears."
N.D.C.C. § 1-02-02. In construing an ordinance, we ascertain the governing body's intent
by giving the ordinance's language its plain, ordinary and commonly understood meaning. Hentz, at ¶ 9. The interpretation of an ordinance is a
question of law, fully reviewable on appeal and a governing body's failure to correctly interpret
its ordinance constitutes arbitrary, capricious and unreasonable conduct. Gowan v. Ward Cty. Comm'n, 2009 ND 72, ¶ 5, 764 N.W.2d 425. This Court gives
deference to a governing body's reasonable interpretation of its own ordinance, however, an
interpretation contradicting clear and unambiguous language is not reasonable. Mertz v. City of Elgin, 2011 ND 148, ¶ 4, 800 N.W.2d 710.[¶10] The primary issue here is the Board's interpretation and application of the
civil penalty provision of the temporary housing regulations. Pilot argues the Board unreasonably
interpreted the civil penalty provision of the regulations by calculating the penalty on a per
housing unit, per day basis. We agree the Board did not reasonably interpret the
regulations.[¶11] The temporary housing regulations require a
conditional use permit for temporary housing facilities or camps on property within Williams
County. Having a temporary housing facility without a permit violates the regulations.[¶12] Under the temporary housing regulations it is "unlawful for any person or
organization . . . to violate any provision of these regulations." The civil penalties provision of
the regulations states:"Violations of any provision of these regulations
may be enforced through civil proceeding by the State's Attorney or other proper county
authorities. Any person or organization . . . who violates, causes or, with knowledge, permits a
violation of any provision of these regulations shall be subject to a civil penalty of one thousand
dollars ($1,000.00) per violation." A separate violation is committed each
day any provision is violated.[¶13] The Board treats each
non-permitted use under the regulations as a violation and calculates the $1,000 penalty on a per
housing unit, per day basis. The Board argues this interpretation is reasonable because in
applying for a conditional use permit the regulations require an applicant to submit a site plan
indicating the number and types of proposed housing. The Board argues each temporary housing
unit represents a structure subject to the Board's statutory authority to regulate. See
N.D.C.C. § 11-33-01 (granting counties authority to regulate the location and use of
buildings and structures and the use or occupancy of land).[¶14] The
district court agreed with the Board's interpretation of the civil penalties
provision:"The Board's interpretation of the civil penalty provisions to
apply to each temporary housing unit is reasonable because each CUP [conditional use permit]
for temporary housing presented to the Board is based on the applicant's specific request for
particular types of temporary housing units (such as RVs, skid units, mobile homes, modular
units, and combinations thereof or other types of housing) and a specific number of temporary
housing units. Based on the circumstances, the Board then either grants a CUP for the particular
types of temporary housing units and for the specific number of units requested, grants a CUP for
a lesser number of units, or denies the CUP. Because the granting of a CUP is expressly tied to
specific types of temporary housing units and a specific number of each type of unit, it is the
non-permitted use of even a single temporary housing unit over and above the number granted by
the CUP which constitutes a violation of the Regulations and the Zoning Ordinance. Therefore,
each use of a temporary housing unit over and above the CUP limit or each use of a unit without
a CUP constitutes a separate violation of the Regulations and the Zoning Ordinance. Under
Appellants' interpretation of the Regulations and Zoning Ordinance, the assessable civil penalty
would be the same regardless of whether a single non-permitted temporary housing unit was
utilized on the property, or whether one hundred non-permitted temporary housing units were
utilized on the property. Such an interpretation makes no sense and would be
inequitable."[¶15] The temporary housing
regulations require an applicant for a conditional use permit to indicate the number of proposed
housing units; however, the Board does not issue a separate permit for each housing unit on the
property. The Board issues a single permit regardless of the number of housing units on the
property. The regulations also require an applicant to provide any other information as requested.
Under the Board's interpretation it could require an applicant to indicate how many beds will be
in the housing units or how many employees will be living in the units. Under the Board's
interpretation, it then could penalize a violator $1,000 per day on a per bed or per employee
basis. Such an interpretation is not reasonable. See Sorenson v. Felton, 2011 ND 33, ¶ 14, 793 N.W.2d 799 (statutes must be
interpreted to avoid absurd results).[¶16] The plain language of the
regulations state it is unlawful to violate any of its provisions. The penalty for violating the
provisions is $1,000 per violation. The Board penalized Pilot for violating the conditional use
permit provision. Pilot violated that provision by operating a temporary housing facility without a
conditional use permit. The Board did not penalize Pilot for violating any other provisions, such
as not paying real property taxes or crew housing permit fees or not providing adequate services
and facilities in the temporary housing camp. Under the clear and unambiguous language of the
regulations, Pilot is subject to a $1,000 penalty per day for violating the conditional use permit
provision. The Board's interpretation contradicts the clear and unambiguous language of the
regulations and is not reasonable.(1)[¶17] Because the Board
unreasonably interpreted the temporary housing regulations, we need not address Pilot's
remaining arguments. III[¶18] The district court's
order is reversed and remanded to the Board to recalculate the penalty against Pilot.[¶10]  Daniel J.
CrothersLisa Fair McEversCarol Ronning KapsnerDale V. SandstromI concur in
the result. Gerald W. VandeWalle, C.J. Footnote:Footnote:Footnote:1.
In September 2015 the Board repealed the Temporary Housing Regulations and adopted the
Williams County Zoning Ordinance and Subdivision Regulations. The regulations now plainly
state each temporary housing unit in violation shall be subject to a $1,000 civil penalty per
day.