Opinion ID: 2028325
Heading Depth: 2
Heading Rank: 1

Heading: Conversion and Presumption of Validity

Text: The most contentious and complicated issue in this case is a thorny matter of statutory interpretation: namely, is Cedar Rapids' request to annex the Pruss property entitled to a presumption of validity because it was converted from Pruss's denied application for voluntary annexation? This question involves the juxtaposition of two sections of Iowa's city development statute, which taken together involve three discrete legal principles. Iowa Code section 368.6 establishes (1) a presumption of validity for applications for voluntary annexation; section 368.7 provides (2) a denied voluntary annexation request shall be converted into an involuntary annexation petition, but (3) this transformation shall not prejudice the status of the applicant. Pruss argues a converted petition is still entitled to a presumption of validity, because if the presumption of validity did not survive the conversion, so to speak, he would be prejudiced. The Committee, in line with the district court, takes a narrower view. Because of the complexity of the statute, we think it is best to work through the analysis to be applied in this case step-by-step, and in stride with the actions of the Board and the Committee. We begin with the Board's initial decision in 1997 to deny the Pruss application for voluntary annexation, while it tabled the contemporaneously filed Hiawatha petition for involuntary annexation which contained common territory. Iowa's city development statute provides: If one or more applications for a voluntary annexation and one or more petitions for an involuntary annexation or incorporation for a common territory are submitted to the board within thirty days of the date the first application or petition was submitted to the board, the board shall approve the application for voluntary annexation, if the application meets the applicable requirements of this chapter, unless the board determines by a preponderance of the evidence that the application was filed in bad faith, or that the application as filed is contrary to the best interests of the citizens of the urbanized area, or that the applicant cannot within a reasonable time meet its obligation to provide services to the territory to be annexed sufficient to meet the needs of the territory. Iowa Code § 368.7(4) (emphasis added). Elsewhere the statute forbids the creation of an island of unincorporated territory. See id. § 368.7(3); see also id. § 368.1(10). In this respect, the Board properly denied the Pruss application for voluntary annexation, because it would have created an island of unincorporated territory, and thus did not meet the applicable requirements of the chapter. After the Pruss application was denied, the Board notified Cedar Rapids that it might resurrect the denied Pruss application by converting it into an involuntary petition. The relevant portion of the statute states: If an application for voluntary annexation is not approved pursuant to this section, the board shall cause the conversion of the application to a petition pursuant to section 368.13 and shall proceed under section 368.14A. The conversion of an application to a petition shall not prejudice the status of the applicant. Id. § 368.7(4); see id. § 368.13 (The board may request a city to submit a plan for city development or may formulate its own plan for city development. A plan submitted at the board's initiation must include the same information as a petition and be filed and acted upon in the same manner as a petition.). Cedar Rapids passed a resolution authorizing the filing of a request to convert Pruss's denied application for voluntary annexation into an involuntary annexation, and it was so converted. The Board then formed a special local committee to weigh the two competing involuntary annexation requests. See id. § 368.14A (providing for the formation of a special local committee to adjudicate competing involuntary petitions). At issue before the special local committee was whether the Cedar Rapids petition was entitled to a presumption of validity. With little explanation, the Committee ruled it was not. The district court affirmed. For the reasons that follow, we agree. Iowa's city development statute manifests a preference for voluntary annexation of land when both voluntary and involuntary annexations compete. Hiawatha I, 609 N.W.2d at 501 (citation omitted). This preference is demonstrated in at least two respects in the statute. First, the legislature did not require applications for voluntary annexation to undergo many of the costly procedures which are required of petitions for involuntary annexation, such as public hearings and elections. [2] Gorman v. City Dev. Bd., 565 N.W.2d 607, 609 (Iowa 1997); City of Waukee v. City Dev. Bd., 514 N.W.2d 83, 87-88 (Iowa 1994) ( Waukee I ); City of Des Moines, 473 N.W.2d at 200; see, e.g., Iowa Code § 368.11 (listing contents of petitions). Second, applications for voluntary annexation are explicitly afforded a presumption of validity. Iowa Code § 368.6; see Hiawatha I, 609 N.W.2d at 501. This presumption results from a stated legislative desire to give due consideration to the wishes of the residents of territory to be annexed, and to the interests of the residents of all territories affected by an annexation. Iowa Code § 368.6. The legislature expressly assumed a voluntary annexation of territory more closely reflects the wishes of the residents of territory to be annexed.... Id. The presumption of validity, however, is not a nebulous concept simply inscribed in general terms in the Code. The presumption is specifically borne out in section 368.7, which outlines the procedures for the voluntary annexation of territory. The Board is required to approve such an annexation unless a preponderance of the evidence shows the application was filed in bad faith, the annexation is contrary to the best interests of the urbanized area, or services cannot be sufficiently provided in a reasonable period of time. Id. § 368.7. Likewise, an application for voluntary annexation must be denied if it runs afoul of other aspects of the statute, such as the prohibition against the creation of islands of unincorporated territory. See id. (application must meet applicable requirements of this chapter). If proved, these four conditions  three specific, one general  defeat the presumption of validity for a voluntary annexation. Otherwise the application must be approved. When read in context with legislative intent as expressly stated in Iowa Code section 368.6, the statute plainly strikes a balance between the wishes of the residents of the territory under consideration for annexation against other important public policy concerns. Pruss's application for voluntary annexation of his land to Cedar Rapids was denied because it ran afoul of public policy insofar as it would create an island of unincorporated territory. The legislative aversion to islands simply outweighs the legislative desire to comply with the wishes of the residents of the territory in question. Pruss now argues this conversion should not prejudice his application in any respect and his application for annexation, although converted, should still therefore be afforded a presumption of validity. At the outset, we note it is difficult to understand what form such a presumption would take. Indeed, the only statutorily prescribed mechanics for carrying out such a presumption is embedded in the four defeasibility conditions set forth above  three specific, one general  which, of course, only apply to voluntary applications. The Cedar Rapids petition for involuntary annexation, albeit converted from Pruss's application for voluntary annexation, is not itself a voluntary application. Although Pruss often complains it is nonsensical to refer to the converted annexation request as an involuntary petition because, in truth, he is the only landowner and he consents to annexation to Cedar Rapids, his argument mistakenly equates the legislature's use of the voluntary and involuntary nomenclature as an immutable characterization of the consent or lack thereof of the residents of the land sought to be annexed. In truth, the terms are merely short-hand appellations used by the legislature to describe the form of the action, and do not necessarily reflect the wishes of all the residents of the land in question. While it is true these appellations generally correspond to the preferences of the residents, the correlation is not perfect. The distinction is readily apparent upon a close inspection of the statute: in some voluntary annexations, for example, up to twenty percent of the landowners might not consent. See id. § 368.7 (providing for so-called 80/20 annexation wherein voluntary annexation may be permissible if no more than twenty percent of landowners object). We implicitly recognized this important distinction in Hiawatha I, 609 N.W.2d at 500 (carefully using the terms consenting and nonconsenting). [3] If accepted, Pruss's argument that converted involuntary petitions must be afforded a presumption of validity would destroy the statutory framework at issue, which simply puts failed voluntary applications on a level playing field with involuntary applications, for the policy reasons announced above. In many respects, then, Pruss's argument is the converse of an argument leveled in our first case decided under the new city development statute, City of Des Moines. In that case, we rejected an argument which would have eviscerated the distinction between voluntary and involuntary annexations and resulted in the imposition of all the technical elements of involuntary annexation procedure, including a public hearing and an election, in certain voluntary annexations. See City of Des Moines, 473 N.W.2d at 200. We rejected such an interpretation because it would have render[ed] meaningless the distinction between voluntary and involuntary annexations and thwart[ed] the legislative scheme of distinguishing between [the two]. Id. at 201. The same basic principle applies here; we will not adopt an interpretation of the statute which eviscerates the distinction between voluntary and involuntary annexations. The better interpretation of the statutory language that [t]he conversion of [a denied] application to a petition shall not prejudice the status of the applicant is that conversion should not prejudice the applicant's status as a valid participant in the process. That is, the mere fact of the prior denial should not be held against the applicant. In the present case, Pruss was not prejudiced; although the Cedar Rapids involuntary petition was filed well after the competing Hiawatha petition (and was thus assigned a new file number, etc. ), it was nonetheless considered as if filed contemporaneously with it. See Iowa Code § 368.11 (Within ninety days of receipt of a petition, the board shall initiate appropriate proceedings or dismiss the petition. The board may combine for consideration petitions or plans which concern the same territory.... The combined petitions may be submitted for consideration by a special local committee pursuant to section 368.14A.). As the trial judge wrote: [T]he requirement that the status of the applicant not be prejudiced can only mean that a converted petition will be considered to have been timely filed and procedurally correct, and that the Committee, in later considering the converted petition with competing petitions, will not hold the fact that the application originally was not approved against the applicant.... Nothing in the statute or the administrative code grants such a preference to a converted petition. Rather, Pruss and Cedar Rapids were only entitled to have their Petition considered timely filed and procedurally correct, and to be given fair and equal consideration in spite of the fact that their annexation request earlier had been disapproved. We agree with this analysis in principle, although we reserve the right to determine its precise contours in a case where it is a determinative issue. In this case, we hold the Cedar Rapids petition for involuntary annexation was not entitled to a presumption of validity and therefore Pruss was not prejudiced within the meaning of the conversion section of Iowa's city development statute when the Board made its decision without applying such a presumption. [4]