Title: LAFALIER v. THE LEAD-IMPACTED COMMUNITIES RELOCATION ASSISTANCE TRUST

State: oklahoma

Issuer: Oklahoma Supreme Court

Document:

LAFALIER v. THE LEAD-IMPACTED COMMUNITIES RELOCATION ASSISTANCE TRUST  LAFALIER v. THE LEAD-IMPACTED COMMUNITIES RELOCATION ASSISTANCE TRUST 2010 OK 48 Case Number: 107833 Decided: 06/22/2010 THE SUPREME COURT OF THE STATE OF OKLAHOMA Johnny and Patty Lafalier and Missy Beets, individually and on behalf of residents and property owners and former residents and property owners of Picher, Oklahoma, Plaintiffs/Appellants, v. The Lead-Impacted Communities Relocation Assistance Trust, Defendant/Appellee. ON APPEAL FROM THE DISTRICT COURT OF OTTAWA COUNTY, The Honorable J. Dwayne Steidley, Presiding ¶0 The plaintiffs filed a petition in the district court of Ottawa County alleging that the Lead-Impacted Communities Relocation Assistance Trust, the purpose of which is to administer relocation assistance funds under 27A O.S.Supp.2008, §§ 2201-2207, had undervalued their property and that the Trust had violated the Open Meeting Act, 25 O.S.2001, §§ 301-314. The plaintiffs also alleged that AFFIRMED IN PART; REVERSED IN PART; REMANDED TO THE DISTRICT COURT WITH INSTRUCTIONS. John Wiggins, Emily N. Kitch, Wiggins Sewell & Ogletree, and Jeff D. Marr, Marr Law Firm, Oklahoma City, Oklahoma, for the appellants. Scott D. Boughton, Assistant Attorney General, Oklahoma Attorney General's Office, Oklahoma City, Oklahoma, for the appellee. TAYLOR, V.C.J. ¶1 The questions presented in this appeal are (1) whether section 2205 of the Lead-Impacted Communities Relocation Assistance Act I. LEAD-IMPACTED COMMUNITIES RELOCATION ASSISTANCE ACT AND TRUST AGREEMENT ¶2 The geographical area around and including Picher is known as the Tar Creek Superfund Site (Tar Creek). ¶3 The 2004 legislation created a relocation assistance plan for renters and property owners with children six years of age and under. ¶4 The assistance program is funded, in part, by the Oklahoma Department of Environmental Quality (ODEQ) making grants from appropriated monies to a public trust. ¶5 Section 2205 of the Act provides: A. Neither the enactment of this act nor the grant of funds to a trust shall create any property right or right in action. The courts shall have no jurisdiction to entertain any action against a recipient trust, the State of Oklahoma, their officers or agents founded on a claim that the claimant should have received different or better treatment from the trust. B. The determinations made by the trust pursuant to this relocation assistance program including, without limitation, determinations as to what constitutes the most affected area of the site, the area of greatest subsidence risk, the average rental cost of comparable housing, the average cost of comparable properties, the eligibility of any person for assistance, and the determination of the proper amount of such assistance, if any, shall be committed to the sole discretion of the trust based on the information available to it and shall not be subject to judicial review. ¶6 At least in part due to a tornado which hit Picher on May 10, 2008, damaging a large number of houses and completely destroying others, the Legislature again amended the Act. Any person eligible to receive assistance under the provisions of the Lead-Impacted Communities Relocation Assistance Act prior to May 10, 2008, shall remain eligible to receive the same amount of assistance adjusted for the amount of any private insurance payments for storm related damage if applicable. Any property valuation or other type of relocation assistance assessment made for the purposes of the Lead-Impacted Communities Relocation Assistance Act shall be based on the value of property as it existed no earlier than January 31, 2006, and not later than May 10, 2008, and comparable to property elsewhere in the county. The trust shall be authorized to enact or amend any of its procedures or deadlines as necessary to implement the provisions of this subsection. ¶7 In September of 2004, the Secretary of the Environment, as trustor, and the trustees signed the Lead-Impacted Communities Relocation Assistance Trust (Trust) agreement, and the Governor accepted the beneficial interest in the Trust on behalf of the State of Oklahoma (State). The Trust agreement generally follows along the Act's lines and includes general trust provisions. II. THE PARTIES AND OTHERS INVOLVED WITH THE TRUST ¶8 At the time the petition was filed in the district court, the plaintiffs Johnny and Patty Lafalier had signed a contract with the Trust for the purchase of their property and were in the process of receiving relocation assistance. Their property was damaged by the tornado, and they received private insurance for the damage. At the time the petition was filed, the plaintiff Missy Beets had transferred ownership of her property to the Trust and had received relocation assistance. The plaintiffs sought class action certification, but, at the time the petition in error was filed, the class had not been certified. ¶9 Larry Roberts is the Trust's operations manager and its only employee. J.D. Strong is the Secretary of the Environment. In Executive Order 2007-07, Governor Henry designated the Secretary of the Environment as having "responsibility" for the Trust. After the enactment of the 2006 amendments, the Trust contracted with Cinnabar Service Company to provide the appraisals and retained Van Tuyl and Associates to review the appraisals. III. HISTORY ¶10 On April 2, 2009, the plaintiffs filed a petition in the district court in Ottawa County, Oklahoma, stating two causes of action: (1) The Trust had willfully violated the Open Meeting Act by allowing J.D. Strong and representatives of Cinnabar and Van Tuyl into its executive sessions with the result that their properties were undervalued, and (2) the plaintiffs were treated unequally due to the deduction of insurance proceeds from the relocation assistance offer pursuant to title 27A, section 2203(M) of the 2008 Oklahoma Statutes. The plaintiffs sought (1) class certification, (2) the appointment of an administrator to audit the Trust, to reappraise the properties, to fairly compensate the plaintiffs, to compensate for past under-payments, and to oversee the Trust's future management, (3) reimbursement of amounts deducted for private insurance or FEMA payments, (4) an order finding title 27A, sections 2203(M) and 2205 of the Oklahoma Statutes unconstitutional, (5) an order for disclosure of all minutes and other records from executive sessions which violated the Open Meeting Act, and (6) attorney fees and costs. The Trust responded asserting the affirmative defenses of sovereign immunity and estoppel, among other things. ¶11 The Trust filed a motion for summary judgment arguing (1) that title 27A, section 2205 is constitutional, (2) that under section 2205, the plaintiffs cannot contest the deduction of insurance payments authorized by section 2203(M), (3) that the Trust did not violate the Open Meeting Act by allowing J.D. Strong, Larry Roberts, and representatives of Cinnabar and Van Tuyl into its executive sessions, and (4) that the plaintiffs are estopped from challenging the Trust's offers because they accepted the relocation assistance benefits. ¶12 The district court granted judgment in the Trust's favor. The trial court found that title 27A, section 2205 shields the Trust from suit by invoking the government's sovereign immunity. IV. SUMMARY JUDGMENT, STANDARD OF REVIEW, PRESUMPTION OF CONSTITUTIONALLY ¶13 Under Rule 13(a) of the Rules of District Courts, ¶14 Summary judgment settles only questions of law. ¶15 Even though the moving party must show that there is no dispute of fact and that they are entitled to judgment as a matter of law, there is a presumption that every statute is constitutional. V. TITLE 27A, SECTION 2205 OF THE OKLAHOMA STATUTES ¶16 The district court found that the State had invoked the doctrine of sovereign immunity in title 27A, section 2205 and, thus, the plaintiffs' claims, other than the one regarding violations of the Open Meeting Act, were "immune from suit." We do not agree that section 2205 is an invocation of the State's sovereign immunity. In section 152.1 of the Governmental Tort Claims Act, ¶17 In contrast to the title 51, section 152.1, the Legislature has created a number of statutory restrictions to judicial review of agency decisions, including withholding a cause of action. A. ARTICLE II, SECTION 6 OF THE OKLAHOMA CONSTITUTION ¶18 Article II, section 6 of the Oklahoma Constitution provides: "The courts of justice of the state shall be open to every person, and speedy and certain remedy afforded for every wrong and for every injury to person, property, or reputation; and right and justice shall be administered without sale, denial, delay, or prejudice." This Court has consistently ruled that this constitutional provision is a mandate to the judiciary and not a substantive limitation on the Legislature. ¶19 In St. Paul Fire & Marine Insurance Co. v. Getty Oil Co., ¶20 Public protection falls within the Legislature's authority, as does the authority to define what constitutes an actionable wrong unless constitutionally forbidden, i.e., the Legislature cannot completely cut off an existing or vested right. B. ARTICLE II, SECTION 7 OF THE OKLAHOMA CONSTITUTION ¶21 In addition to relying on Article II, section 6, the plaintiffs contend that they have a vested right to due process under Article II, section 7. Article II, section 7 provides: "No person shall be deprived of life, liberty, or property, without due process of law." Section 2203(D) of the Act provides: "Participation in the assistance program shall be voluntary. No person shall be required to relocate under the provisions of this act." The plaintiffs submit, without evidentiary support, that they are being forced from their property because services are being discontinued and the area is a health hazard. C. ARTICLE V, SECTION 60 OF THE OKLAHOMA CONSTITUTION ¶22 Before the district court, the plaintiffs also relied on Article V, section 60 of the Oklahoma Constitution as requiring a judicial inquiry into how the Trust is spending the money. "The Legislature shall provide by law for the establishment and maintenance of an efficient system of checks and balances between the officers of the Executive Department, and all commissioners and superintendents, and boards of control of State institutions, and all other officers entrusted with the collection, receipt, custody, or disbursement of the revenue or moneys of the State whatsoever." requires the Legislature to provide for an efficient system of checks and balances between the Executive Department's officers and all commissioners, superintendents, State institutions' boards of control, and all other officers entrusted with the collection, receipt, custody, or disbursement of the state revenues or moneys. ¶23 In response to this mandate, the 1907-1908 Legislature defined the duties and powers of the State Examiner and Inspector ¶24 Like its enactment of the 1907-1908 act, the Legislature provided for a system of checks and balances for public trusts with the enactment of title 60, sections 176.1(B)(2) and 180.1 of the Oklahoma Statutes. Section 176.1(B)(2) provides that a public trust having the State as its beneficiary must deliver "to the State Auditor and Inspector, annual audits as provided in Section 180.1 of Title 60 of the Oklahoma Statutes." Section 180.1 requires "[t]he trustees of every trust created for the benefit and furtherance of any public function with the State of Oklahoma . . . as beneficiary . . . must cause an audit to be made of, including, but not limited to, the funds, accounts, and fiscal affairs of such trust, such audit to be ordered within thirty (30) days of the close of each fiscal year of the trust." The Legislature complied with the requirements of Article V, section 60 when it enacted title 60, sections 176.1(B)(2) and 180.1. Article V, section 60 requires a system of checks and balances within the Executive Department, which the Legislature has provided, but nothing in Article V, section 60 of the Oklahoma Constitution requires a judicial inquiry of a public trust's discretionary acts as the plaintiff argues. Title 27A, section 2205 does not implicate Article V, section 60 of the Oklahoma Constitution. D. ARTICLE V, SECTION 46 OF THE OKLAHOMA CONSTITUTION ¶25 The plaintiffs argued before the district court that section 2205 violates Article V, section 46 of the Oklahoma Constitution. The provision of section 46 upon which the plaintiffs rely provides: "The Legislature shall not, except as otherwise provided in this Constitution, pass any local or special law . . . [r]egulating the practice or jurisdiction of, or changing the rules of evidence in judicial proceedings or inquiry before the courts . . . ." The plaintiffs argue that this provision requires that they "must have equal access to the courthouse." ¶26 Article V, section 46 is an unequivocal mandate to the Legislature. ¶27 A general law relates to all persons or things of a class, and a special law relates to particular persons or particular things within a class. VI. TITLE 27A, SECTION 2203(M) OF THE OKLAHOMA STATUTES ¶28 We have found title 27A, section 2205 of the Oklahoma Statutes to be constitutional against the plaintiffs' challenges, but section 2205 does not ban all claims against the Trust. Section 2205 bans claims that claimants "should have received different or better treatment from the trust." ¶29 The plaintiffs attack title 27A, section 2203(M) as unconstitutionally treating those with insurance dissimilarly from those without insurance in violation of the plaintiffs' rights to equal protection and in violation of Article V, section 59 of the Oklahoma Constitution. Article V, section 59 prohibits the Legislature from enacting a special law where a general law can be made applicable. The Fourteenth Amendment to the United States Constitution prohibits states from denying "to any person within its jurisdiction the equal protection of the laws." U.S. Const. amend. XIV, § 1. Article II, section 7 of the Oklahoma Constitution is this State's counterpart. A. EQUAL PROTECTION ¶30 Neither the Fourteenth Amendment to the United States Constitution nor Article II, section 7 of the Oklahoma Constitution prohibits all legislative classifications. ¶31 Plaintiffs have failed to show that title 27A, section 2203(M) is drawn upon an inherently suspect classification or impinges upon the plaintiffs' fundamental rights so as to be subject to heightened review. ¶32 Although not explicitly articulated, section 2203(M)'s obvious objective is to provide sufficient funds to those in the risk area, whether receiving insurance payments or not, to allow them to relocate while avoiding appraisal and reappraisal problems caused by damage or destruction to property from the tornado. Under section 2203(M), the Trust can avoid reappraising property after the tornado by allowing an insurance payment to substitute for a property's diminution in value caused by damage from the tornado, and assistance recipients should still have sufficient funds to relocate elsewhere in the county. We do not find the legislative classification is so arbitrary or lacks a sufficient relationship to this legislative purpose as to violate the Equal Protection Clause. B. ARTICLE V, SECTION 59 OF THE OKLAHOMA CONSTITUTION ¶33 Plaintiffs also attack title 27A, section 2203(M) as a violation of Article V, section 59 of the Oklahoma Constitution. Article V, section 59 provides: "Laws of a general nature shall have a uniform operation throughout the State, and where a general law can be made applicable, no special law shall be enacted." Section 59 does not prohibit all special laws but prohibits a special law only when a general law will accomplish the legislative goal. The first prong of a section 59 analysis is the same as the Article V, section 46 analysis discussed above. ¶34 If the statute is a general law under the first prong, we need not proceed further with the analysis under section 59. ¶35 Under the third prong, we must determine if the statute is reasonably and substantially related to a valid legislative objective. VII. THE OPEN MEETING ACT ¶36 Title 27A, section 2203(J) makes the Trust subject to the provisions of the Open Meeting Act. The plaintiffs complain that the Trust has violated the Open Meeting Act ¶37 The current Open Meeting Act was enacted in 1977, ¶38 Section 303 of the Oklahoma Open Meeting Act An executive session for the purpose of discussing the purchase or appraisal of real property shall be limited to members of the public body, the attorney for the public body, and the immediate staff of the public body. No landowner, real estate salesperson, broker, developer, or any other person who may profit directly or indirectly by a proposed transaction concerning real property which is under consideration may be present or participate in the executive session. (Emphasis added.) ¶39 The plaintiffs contend that the first sentence of section 307(D) defines the outer limits of the persons who may attend an executive session and the second sentence places a further limitation on those persons named in the first sentence. In other words, if a member of the public body, its attorney, or its immediate staff may profit from the proposed transaction, then they must be excluded from the executive session. The Trust takes the position that the second sentence is expansive in that all those named in the first sentence may attend the executive session and anyone else who does not stand to profit from the executive session may also attend. ¶40 Section 307(D) uses the phrase "shall be limited." Here, we deem "shall" as mandatory, ¶41 Section 307(D)'s second sentence excludes any landowner, real estate salesperson, broker, developer, or any other person who may profit from the purchase or appraisal of the real property under discussion. As we construe section 307(D), any person allowed to attend the executive session in the first sentence is excluded if the person stands to profit from the transaction. This is the only plausible construction of section 307(D), and the only construction which honors both sentences of section 307(D). The Trust's position would make unnecessary section 307(D)'s first sentence because, under its position, anyone not standing to profit from the proposed transaction could attend the executive session. We cannot acquiesce in the Trust's construction of section 307(D). "A statute must be read to render every part operative and to avoid rendering parts thereof superfluous or useless." ¶42 Section 307(D) does not include J.D. Strong, who is the Secretary of the Environment, and the appraisers as persons who are allowed to attend the Trust's executive sessions. A secretary in a governor's cabinet is appointed by the Governor with the advice and consent of the state senate. ¶43 The district court incorrectly found that the Trust had not violated the provisions of the Open Meeting Act. Therefore, it did not address whether the violations were willful such that the minutes and records of the executive sessions should be immediately made public under title 25, section 307(F)(2). Thus, the question of the Trust's willfulness is a determination for the district court on remand. VIII. SUMMARY ¶44 The plaintiffs have failed to show that title 27A, sections 2203(M) and 2205 are unconstitutional. We agree with the plaintiffs that the Trust has violated the Open Meeting Act, specifically section 307(D), by allowing the Secretary of the Environment and the appraisers' representatives to attend its executive sessions held for the purpose of discussing appraisals and purchases of real property. The plaintiffs have also asked for access to the executive session records. Access to the records is allowed under title 25, section 307(F)(2) if the Trust's violation of the Open Meeting Act are willful. This is a question for the district court on remand. ¶45 Even though we disagree with the district court's decision that the State invoked its sovereign immunity in title 27A, section 2205, we find that the Trust is entitled to judgment on the issues of the constitutionality of title 27A, sections 2203(M) and 2205. AFFIRMED IN PART; REVERSED IN PART; REMANDED TO THE DISTRICT COURT WITH INSTRUCTIONS. EDMONDSON, C.J., TAYLOR, V.C.J., and HARGRAVE, OPALA, KAUGER, WATT, COLBERT, and REIF, JJ., concur. WINCHESTER, J., (by separate writing), concurs in part and dissents in part. FOOT