Opinion ID: 901103
Heading Depth: 1
Heading Rank: 4

Heading: Value of the Territory

Text: [¶ 7.] The applicants first contend that the circuit court erred in declaring it proper for the city to use the insured value of the public hanger. To address this argument, we review the language of SDCL 9-4-1. Voluntary annexation under that statute requires that the petition must be signed: (1) by not less than three-fourths of the registered voters, and (2) by the owners of not less than three-fourths of the value of the territory sought to be annexed. [4] SDCL 9-4-1. The applicants do not challenge the first element. [5] Rather, they dispute whether the second requirement was met, regarding the value of the territory. They insist that the term value in SDCL 9-4-1 means only the assessed value of real property subject to voluntary annexation, and therefore, the circuit court erred when it upheld the city's decision to include the insured value of the public airport hanger in the total value of the annexed territory. On this precise point, the statute is silent. [¶ 8.] Accordingly, we must ascertain the meaning of the term value as used in SDCL 9-4-1. Statutory wording is given its ordinary meaning, unless it appears from the context that another meaning is intended. Douville v. Christensen, 2002 SD 33, ¶ 11, 641 N.W.2d 651, 654. When a statutory term is not defined, we construe it according to its accepted usage. Spearfish ETJ Planning Comm'n, 1997 SD 105 at ¶ 13, 567 N.W.2d at 885. The ordinary meaning of the term value is the monetary worth or price of something; the amount of goods, services, or money that something will command in an exchange. Black's Law Dictionary 1549 (7th ed.1999). [¶ 9.] Several courts have declared that in voluntary annexations the assessed value of the property must be used. But those cases all dealt with statutes that included the word assessed or some variation of it. City of Phoenix v. State, 58 Ariz. 8, 117 P.2d 87 (1941); Thain v. City of Palo Alto, 273 Cal.App.2d 400, 78 Cal.Rptr. 240 (1969); Johnson v. City of Spokane, 19 Wash.App. 722, 577 P.2d 164 (1978). In contrast, SDCL 9-4-1 does not expressly state that the value of the territory must be the assessed value. If the Legislature had intended to limit value to assessed value, it certainly could have done so. Without specific statutory direction, therefore, we think the question comes down to a matter of reasonableness. [¶ 10.] With certiorari review limited to the question whether the city had jurisdiction and whether it regularly pursued its authority, we ask, did the city act in excess of its jurisdiction or in an irregular pursuit of its authority? Given the broad scope of the word value in SDCL 9-4-1, only an unreasonable application of the statute would constitute an act in excess of jurisdiction. Thus, the city's action will be sustained unless in [its] proceedings [it] did some act forbidden by law or neglected to do some act required by law. Save Centennial Valley Ass'n, Inc. v. Schultz, 284 N.W.2d 452, 454 (S.D.1979) (citing State v. State Bd. of Assessment and Equalization, 3 S.D. 338, 53 N.W. 192 (1892)). [¶ 11.] First, was it reasonable to include the value of the county owned hanger for purposes of SDCL 9-4-1? We conclude that it was. Lawrence County, as a body politic, has the right to petition the City of Spearfish to include its property within the city limits. After it is determined that the owner of the property in question may properly petition for voluntary annexation, SDCL 9-4-1 directs the city to consider the value of Lawrence County's territory (the airport) seeking annexation. [6] The term territory, as used in SDCL 9-4-1, is synonymous with the term area and the real property within that area. Real property consists of land; that which is affixed to the land; that which is incidental or appurtenant to land; and that which is immovable by law. SDCL 43-1-3. Accordingly, it was proper for the city to consider the value of the airport land and the value of the airport hanger affixed to the land. See Johnson, 19 Wash.App. 722, 577 P.2d 164 (city owned property was included in the valuation for property seeking annexation); Thain, 273 Cal.App.2d 400, 401, 78 Cal. Rptr. 240 (`value of the territory' means the value of land and improvements thereon). [¶ 12.] Second, was it reasonable to use the insured value of the county owned hanger? Or, put another way, how should the property value of the Lawrence County Airport be reasonably determined? Again, the statute is silent on how the property should be valued. Given this, any reasonable method of valuation would seem appropriate. Of course, the city could have had the hanger appraised by the county assessor. See Johnson, 19 Wash.App. 722, 577 P.2d 164 (even though city's property was exempt from tax, the county assessor could assess the property for valuation purposes). Or it could have had a private appraisal. But nothing in our law mandates a particular type of appraisal in this instance. Absent a showing that the building was underinsured, its insured value reflects the cost of replacement should it be totally destroyed. [¶ 13.] We conclude that for the purposes of SDCL 9-4-1, the insured value of the hangar was a reasonable valuation. Our scope of review is limited to whether the city had jurisdiction and whether it regularly pursued its authority. Spearfish ETJ Planning Comm'n, 1997 SD 105 at ¶ 6, 567 N.W.2d at 883. In our view, the city acted within its authority. [¶ 14.] Next, the applicants contend that the city's use of the insured value of the public airport hanger to determine value for purposes of SDCL 9-4-1 violates their constitutional rights. They believe that the two different valuation methods (i.e. the insured value of the public hanger and the assessed value of the real property for tax purposes) used by the city to determine the value of the annexed territory violates their equal protection and due process rights. The valuation of applicant Esling's land included the value of both the land and the improvements as calculated by the county assessor for tax purposes. SDCL 10-6-35. [¶ 15.] Under traditional equal protection analysis, it is clear from the test in City of Aberdeen v. Meidinger, 89 S.D. 412, 415, 233 N.W.2d 331, 333 (1975), that SDCL 9-4-1 does not implicate any legitimacy, gender, suspect classes, or fundamental rights and should be reviewed under the rational basis test. Under the first prong of the Meidinger test, SDCL 9-4-1 applies equally to all people. Lyons v. Lederle Laboratories, A Div. of American Cyanamid Co., 440 N.W.2d 769, 771 (S.D. 1989). The statute is inclusive of all petitioners who are owners of property within the annexed territory and uses a single standard: value. No arbitrary classification exists. Likewise, the second prong of the Meidinger test has been met. The method used to ascertain value bears a rational relationship between the classification and some legitimate government interest. The city was presented with a voluntary petition to annex territory it deemed to be contiguous and within the natural path of community growth. Under SDCL 9-4-1, the city was then required to confirm that the petition met the minimum value and voter requirements. In determining value, the city relied on independent evidence of value for the territory seeking annexation. Clearly, the city's actions bore a rational relationship to a legitimate government purpose. We find no violation of equal protection rights. [¶ 16.] Although the applicants do not specify whether they suffered a denial of procedural or substantive due process rights, we conclude that neither has been violated. Procedural due process protects certain substantial rights, such as life, liberty, and property, that cannot be deprived except in accord with constitutionally adequate procedures. Tri County Landfill Ass'n, Inc. v. Brule County, 2000 SD 148, ¶ 13, 619 N.W.2d 663, 668 ( Tri County II ) (citations omitted). Procedural due process is flexible and requires only such procedural protections as the particular situation demands. Id. (citations omitted). [¶ 17.] Applicant Esling received a personal letter containing the annexation petitions and his attorney attended the public hearing before the Planning Commission. Likewise, all notices of hearing were duly published, and notice to the applicants was clear, public, timely, and unequivocal. None of the applicants were deprived of life, liberty, or property. Applicant Esling, for example, continues to own his property, which was formerly zoned agricultural and is currently zoned as an AG Agricultural Conservation District within the City of Spearfish and is under a Rural Service District for property tax purposes. [¶ 18.] Similarly, no substantive due process violation has been shown. A violation of substantive due process occurs when `certain types of governmental acts [breach] the Due Process Clause regardless of the procedures used to implement them.' Tri County Landfill Ass'n, Inc. v. Brule County, 2002 SD 32, ¶ 10, 641 N.W.2d 147, 151 (2002) ( Tri County III. ) Substantive due process analysis begins with an examination of the interest allegedly violated. Id. at ¶ 13, 641 N.W.2d at 151-52. Under Tri County III, the applicants are unable to show that they have a protected property interest in not being annexed. The applicants cannot validly argue that they have been deprived of county zoning jurisdiction, because they have no protected property interest in a particular zoning law. Furthermore, even if applicant Esling had a protected property interest, he has not demonstrated that the city's use of assessed value for his property and insured value for the public hanger was truly irrational. Id. at ¶ 11, ¶ 20, 641 N.W.2d at 151, 153. To sustain a substantive due process claim founded on a zoning dispute, the applicants must show that the government's action was `sufficiently outrageous' or `truly irrational.' Id. at ¶ 11, 641 N.W.2d at 151 (citations omitted). We conclude that Esling and the other applicants were afforded full due process and equal protection under the law.