Opinion ID: 797443
Heading Depth: 3
Heading Rank: 2

Heading: State Law Governing the City's Transfer of Public Property

Text: 18 Under state law, a city's legislative body has the power to dispose of public property for the benefit of the municipality. Utah Code Ann. § 10-8-2(1)(a)(iii). The Utah Supreme Court has interpreted this statutory provision to require that municipalities sell or otherwise dispose of public property in good faith and for an adequate consideration. Sears v. Ogden City, 533 P.2d 118, 119 (Utah 1975) (holding that a city may not dispose of its property by gift), aff'd on rehearing, 537 P.2d 1029. The court has also held that adequate consideration requires the receipt of a present benefit that reflects the fair market value of the property. Mun. Bldg. Auth. of Iron County v. Lowder, 711 P.2d 273, 282 (Utah 1985); see also Salt Lake County Comm'n v. Salt Lake County Attorney, 985 P.2d 899, 910 (Utah 1999) (holding that adequate consideration requires a specific benefit stated in present market value terms). Hence, a future benefit will not supply adequate consideration for a city's transfer of property, nor will a benefit that is of uncertain value. Price Dev. Co., L.P. v. Orem City, 995 P.2d 1237, 1247 (Utah 2000). Furthermore, Utah case law suggests that a city's disposal of park property is subject to additional limitations: [P]roperty such as streets, alleys, parks, public buildings, and the like, although the title is in the city . . . is held in trust for strictly corporate purposes, and, as a general rule, cannot be sold or disposed of so long as it is being used for the purposes for which it was acquired. McDonald v. Price, 45 Utah 464, 146 P. 550, 551 (1915). 19 In addition to these substantive requirements, the Utah Supreme Court has held that a city's transfer of public property must be supported by documentation demonstrating the fairness of the transfer: 20 [W]hen a legislative body enters into a transaction where public money or property is given in exchange for something, the good faith legislative judgment that the net exchange is for fair market value flowing to the entity needs to be supported by documentation within the legislative record of an independent determination of the value of the exchange. 21 Price Dev. Co., 995 P.2d at 1249. Such documentation attaches a presumption of validity to the transaction, the strength of which is in direct proportion to the thoroughness of the evaluation of the transaction entered into and to the independence and skill of the evaluators. Id. a. Transfer of the Plot to the Lions Club 22 The transfer from Duchesne City to the Lions Club by quitclaim deed in August 2003 was clearly invalid under state law. As an initial matter, no presumption of validity attaches to the transaction because no documentation exists demonstrating the transaction's fairness. The City contends, however, that the properly executed and recorded quitclaim deed creates a presumption of validity. The City is correct that, under Utah law, recorded documents governing title to real property do create certain presumptions, Utah Code Ann. §§ 57-1-13; 57-4a-4, including the presumption that any necessary consideration was given, id. § 57-4a-4(1)(e). But this more general statute must be interpreted in conjunction with the specific statutes and case law governing transfers of real property by municipalities. And, as noted above, a municipality's transfer of public property enjoys a presumption of validity only when supported by underlying documentation of the independent determination of the value of the exchange. Price Dev. Co., 995 P.2d at 1249. 23 Moreover, the presumption of a valid transaction may be rebutted by clear and convincing evidence of the transfer's invalidity. Gold Oil Land Dev. Corp. v. Davis, 611 P.2d 711, 712 (Utah 1980). In this case, the record contains clear and convincing evidence that the City's transfer to the Lions Club was invalid. The deed purported to transfer the parcel of property from the City to the Lions Club in return for $10 and other considerations. The contract for sale of the property states that the transfer is in exchange for consideration of work for the cleaning and beautification of Duchesne City. Neither document supports a conclusion that the consideration is a specific, present benefit reflecting fair market value. In addition, the same person represented entities on both sides of the transaction; Clinton Park signed the contract on behalf of the City, in his capacity as mayor, and on behalf of the Lions Club, in his capacity as president of the local chapter. This fact raises considerable doubt that the transfer was made in good faith. See, e.g., Utah Code Ann. § 70A-1-201(19) (`Good faith' means honesty in fact in the conduct or transaction concerned.). Because the sale to the Lions Club was not made in good faith and for an adequate consideration, Sears, 533 P.2d at 119, it is invalid under state law. 24 Because the sale to the Lions Club was invalid, the plot of land with the Ten Commandments monument remained part of a public forum. The next question is whether the City's reasons for prohibiting Summum's speech satisfy the appropriate First Amendment standard. The City concedes it excluded Summum's speech based on its subject matter and the speaker's identity. In addition to exclusions based on viewpoint or subject matter, exclusions based on the speaker's identity trigger strict scrutiny when the forum at issue is public. See Cornelius, 473 U.S. at 808, 105 S.Ct. 3439 (noting that exclusion of speech from a public forum requires a finding of strict incompatibility between the nature of the speech or the identity of the speaker and the forum's function); see also Police Dep't of Chicago v. Mosley, 408 U.S. 92, 96, 92 S.Ct. 2286, 33 L.Ed.2d 212 (1972) ([W]e have frequently condemned . . . discrimination among different users of the same medium for expression.). To survive strict scrutiny, the City must demonstrate that the exclusion is necessary to serve a compelling state interest and the exclusion is narrowly drawn to achieve that interest. Cornelius, 473 U.S. at 800, 105 S.Ct. 3439. 25 The City does not assert any compelling interest for this restriction. 3 Rather, the City asserts that no constitutional right exists to erect a permanent structure on public property. We do not need to address that proposition in its most general application, however, because in any event it does not apply when the government allows some groups to erect permanent displays, but denies other groups the same privilege. Indeed, the cases cited by the City acknowledge this distinction. See, e.g., Lubavitch Chabad House, Inc. v. City of Chicago, 917 F.2d 341, 347 (7th Cir. 1990) (First Amendment jurisprudence certainly does mandate that if the government opens a public forum to allow some groups to erect communicative structures, it cannot deny equal access to others because of religious considerations . . . .); see also Summum v. Pleasant Grove City, ___ F.3d ___, 2007 WL 1128876 (10th Cir.2007) (holding that a content-based exclusion of a permanent display in a public park violated the First Amendment). Indeed, we have held that similar restrictions on speech may violate the First Amendment even under the less exacting standard of review applied to speech restrictions in nonpublic forums. 4 Summum v. City of Ogden, 297 F.3d 995, 1011 (10th Cir.2002); Summum v. Callaghan, 130 F.3d 906, 921 (10th Cir.1997). Viewing the relevant, undisputed facts in the light most favorable to the City, we therefore conclude that Summum's free speech rights were violated prior to the property's transfer to the Cole daughters and affirm the District Court's grant of summary judgment in favor of Summum on this issue. 5 26 b. Transfer of the Plot to the Cole Daughters 27 Summum's request for prospective injunctive relief depends, in part, on the validity of the City's transfer of the property to the Cole daughters. After Clinton Park, in his capacity as president of the Lions Club, transferred the property back to the City, the city council passed ordinances governing the disposition of real property owned by the City and vacating the 10' × 11' parcel of property with the Ten Commandments monument. The council also passed a resolution authorizing the mayor to transfer the property to the Cole daughters. In July 2004, Clinton Park, as mayor, signed a quitclaim deed transferring the property to the Cole daughters for $250 and other considerations. 28 The value of the exchange is apparently based on a Duchesne County tax appraisal, which lists the Duchesne Lions Club as the owner. This alone is not enough to determine whether the sale was in good faith and for adequate consideration under state law. The record lacks any supporting documentation of an independent determination of the value of the exchange, Price Dev. Co., 995 P.2d at 1249, or a detailed showing of the benefits to be obtained from the transfer, Salt Lake County Comm'n, 985 P.2d at 910. The county tax appraisal does not contain this detailed showing, as it is not intended to evaluate the City's transfer of the property to a private owner. Moreover, the record contains no discussion of whether the City could dispose of park property when the property's purpose had not changed. See McDonald, 146 P. at 551 (noting general rule that property held in trust for strictly corporate purposes may not be sold or disposed of so long as it is being used for the purposes for which it was acquired). 29 The District Court simply assumed the sale was valid based on the City's assertions and did not conduct an analysis of the transfer under state law. But based on our review of the record, a genuine issue of material fact exists concerning the validity of the City's transfer. We therefore reverse the District Court's grant of summary judgment in favor of the City on Summum's claim for injunctive relief. Because a determination of the sale's validity is important to a determination of the property's forum status, the District Court must first decide whether the sale meets the requirements of state law. Once this issue is decided, the court may then decide the constitutional issue of the property's forum status, applying an analysis consistent with this opinion. In addition, even if the District Court determines on remand that the land upon which the Ten Commandments monument rests is no longer part of the traditional public forum of Roy Park, Summum may still be entitled to prospective injunctive relief entitling it to place its monument on other locations that remain in the traditional public forum of Roy Park, unless the court determines that the City's ordinance purporting to close all of Roy Park to permanent displays is a valid time, place, or manner restriction under the analysis articulated in Ward v. Rock Against Racism, 491 U.S. 781, 798-800, 109 S.Ct. 2746, 105 L.Ed.2d 661 (1989).