Opinion ID: 2455113
Heading Depth: 1
Heading Rank: 7

Heading: Whether the District had the authority to include Mountain Cement's property within the District's boundaries without Mountain Cement's written consent?

Text: [¶ 14] This issue was the subject of Claim I of the Complaint, in which Mountain Cement sought a declaration from the district court that neither Mountain Cement nor its predecessors in interest to the lands included within the District had consented to that inclusion, and that, therefore, those lands are not included in the District. The district court dismissed this claim under W.R.C.P. 12(b)(6) for failure to state a claim upon which relief can be granted, so we will review that decision using the appropriate standard set forth above. [¶ 15] Mountain Cement contends that the Board's inclusion of Mountain Cement's property within the district was void ab initio because it violated the provisions of Wyo. Stat. Ann. § 41-10-102(c) (LexisNexis 2009), which provisions are the same as when originally enacted in 1959 Wyo. Sess. Laws, ch. 188, § 2 at 261, and which read as follows: (c) No tract of twenty (20) acres or more shall be included in any district without the written consent of each person having legal (as distinguished from equitable) title to the tract. [¶ 16] As mentioned above, no corporate officer or director or other representative with actual authority to do so ever gave written consent to inclusion of Mountain Cement's property in the District. See supra ¶ 5. Mountain Cement also avers that written consent similarly was not obtained from the legal owners of the Dodge property and the Silva property now owned by Mountain Cement and included in the District. [¶ 17] The district court dismissed Claim I on two grounds raised by the District. First, the district court found that Mountain Cement's Complaint violated the provisions of Wyo. Stat. Ann. § 41-10-107(g) (LexisNexis 2009), which was in effect at the time the District was organized in 1992. That statutory section provides as follows: (g) A resolution of the board of county commissioners establishing the district shall be considered final and no petition in error nor other appeal shall lie therefrom. The resolution of the board of county commissioners shall finally and conclusively establish the regular organization of the district against all persons except the state of Wyoming, in an action in the nature of a writ of quo warranto, commenced by the attorney general within thirty (30) days after the resolution declaring the district as organized and not otherwise. The organization of the district shall not be directly or collaterally questioned in any suit, action or proceeding except as expressly authorized in this subsection. [¶ 18] In reaching its conclusion, the district court reasoned as follows: At the end of the day, however, this Court is persuaded that the statute that prohibits direct or collateral attacks against the organization of a district in any suit, action or proceeding reflects the Wyoming Legislature's intent to shield a district from suit on the grounds that said districts must have the ability to pursue financing, incur indebtedness, and construct projects without fear of persons having the later ability to opt out of the District whenever they are unhappy with the District's decisions. The formation of water and sewer districts is very much a front-loaded procedure geared toward establishing conclusive finality to the proceedings once a district is formed. And, frankly, the organization of a district very much includes the membership of that district and the consequent boundaries of the district. The ability to challenge the district's boundaries or membership many years in the future, as is the case here, would greatly hinder a district's ability to secure financing. That is exactly what Mountain Cement is attempting to do in the case at bar and exactly what the statute prohibits. For that reason, the Court concludes that Mountain Cement is estopped from challenging the formation of The District, including its inclusion therein. [¶ 19] The District's fall back position on this issue, in the event the district court did not accept its argument based upon § 41-10-107(g) was that the Complaint was barred by the ten-year statute of limitations found in Wyo. Stat. Ann. § 1-3-109 (LexisNexis 2009). That statute provides that [a]n action for relief, not hereinbefore provided for, can only be brought within ten (10) years after the cause of action accrues. The district court agreed with the District, opining that Mountain Cement had imputed knowledge of its inclusion in the District by July 1992, at the latest, when notices were published including Mountain Cement's property in the District, and more likely had actual knowledge of such when Mountain Cement's plant manager signed the Petition on April 23, 1992. [¶ 20] We will affirm the district court's dismissal of Claim I under W.R.C.P. 12(b)(6), for several reasons. First, a motion to dismiss under W.R.C.P. 12(b)(6) is an appropriate vehicle in which to raise the issue of the passage of a period of limitations. See, e.g., Corkill v. Knowles, 955 P.2d 438, 440-41 (Wyo.1998); Gillis, 934 P.2d at 1254-55; and Boller v. Western Law Assocs., P.C., 828 P.2d 1184, 1186 (Wyo.1992). Second, § 41-10-107(g) unambiguously forbids any petition in error [or] other appeal from a board's resolution establishing a water district, and unambiguously states that the organization of the district shall not be directly or collaterally questioned in any suit, action or proceeding except an action in the nature of a writ of quo warranto, commenced by the attorney general within thirty (30) days after the resolution.... Third, there is no inherent right to appeal from administrative action; rather, any such right is limited as described in the statute. Holding's Little Am. v. Bd. of County Comm'rs of Laramie County, 670 P.2d 699, 702 (Wyo. 1983) (and cases cited therein); United States Steel Corp. v. Wyo. Envtl. Quality Council, 575 P.2d 749, 750 (Wyo.1978); 2 Am.Jur.2d Administrative Law §§ 405, 409 (2004). [¶ 21] This case is quite similar to State ex rel. Speer v. District Court for Sierra County, 79 N.M. 216, 441 P.2d 745 (1968), wherein the holder of bonds issued by a sanitation district sought an order directing the court to proceed no further in an action considering the validity of the formation of the district. The opinion written by the New Mexico Supreme Court is broad and instructive, and we will quote at length therefrom: Although relator advances four reasons for making the writ permanent, we perceive that we need only notice and discuss one. Our attention is directed to the following appearing in § 8, Ch. 80, N.M.S.L. 1943 (now, with minor changes, § 75-18-8(H), N.M.S.A.1953): If an order be entered establishing the district such order shall be deemed final and no appeal or writ of error shall lie therefrom, and the entry of such order shall finally and conclusively establish the regular organization of the said district against all persons except the State of New Mexico, in an action in the nature of a writ of quo warranto, commenced by the attorney general within thirty days after said decree declaring such district organized as herein provided, and not otherwise. The organization of said district shall not be directly or collaterally questioned in any suit, action or proceeding except as herein expressly authorized. Respondent would avoid the literal application of the section by an argument that it could not have been the intention of the legislature in adopting the quoted language to thereby deprive courts of their inherent power to vacate a judgment obtained by fraud on the court. In this connection it might be observed that he is proceeding as if Rule 60(b) (§ 21-1-1(60)(b), N.M.S.A. 1953) were applicable. A reading of the rule discloses that final judgments may be reopened because of fraud only if the motion to do so is made within a year after entry of the judgment. However, specific provision is made for courts to entertain independent actions for relief from judgments because of fraud upon the court. The Freedmans and Recreations Unlimited are evidently relying on this provision in making their attack on the 1961 order holding the district to be legally organized. In support of their argument they cite those holdings by this court to the effect that we will not adopt an interpretation of a statute which will make its application unreasonable and absurd. See Montoya v. McManus, 68 N.M. 381, 362 P.2d 771 (1961); Hahn v. Sorgen, 50 N.M. 83, 171 P.2d 308 (1946); Nye v. Board of Com'rs of Eddy County, 36 N.M. 169, 9 P.2d 1023 (1932). What they fail to do is to show wherein the statute is ambiguous or requires interpretation and, further, how a holding that it limits the time for attack on the ground of fraud results in absurdity or unreasonableness. In our view, neither is true. How the language could have been made much clearer is difficult to imagine. It says specifically that the order establishing the district is final and not appealable, and finally and conclusively establishes that the district has been regularly organized, subject only to attack by the state through quo warranto during a period of 30 days. No exception is made for claims of fraud. If this were not enough, it adds that with this single exception the organization of the district may not be directly or collaterally brought into question. Againno mention of an additional exception for fraud. Neither do we agree that to give the statute this effect is in any sense unreasonable or absurd. To the contrary, the reasons for doing so are cogent and compelling. These we perceive to be to make possible the borrowing of money with assurance to the lenders that they are dealing with a qualified borrower which, in turn, would have the effect of reducing the rate of interest which would have to be paid on money obtained for public improvements. That this is a proper consideration was recognized by this court in Oliver v. Board of Trustees of Town of Alamogordo, 35 N.M. 477, 480, 1 P.2d 116, 118 (1931), where we find the following said:    Independently of said section, the right would exist in any interested party to resort to equity to stay the threatened action, if facts warranting the exercise of equitable jurisdiction were shown to exist. And but for said section such right would inhere, not alone for the thirty-day period limited in the act, but for the normal statutory period of limitation applicable to such a suit, unless lost by the existence of facts creating an equitable estoppel. Short periods of limitations on the right to attack proceedings such as these are present almost invariably in legislation of this kind. 5 McQuillin, Municipal Corp. (2d Ed.) pp. 826 and 854. The reason therefor is well stated by the court in the case of Edmonds v. Town of Haskell, 121 Okl. 18, 247 P. 15, 19 [(1926)], where it said: `This statute has a twofold purpose, and a twofold effect, viz: That of stabilizing and maintaining the credit of a town in the commercial world, and thereby benefitting property owners by maintaining a sound credit for their town, and on the other hand it carries assurance to contractors and investors in town securities that the legal obligations of the town must be met.' Such provisions are usually designated in the decisions as statutes of limitations. Plagman [ n ] v. City of Davenport, 181 Iowa 1212, 165 N.W. 393 [(1917)], and McKone v. City of Fargo, 24 N.D. 53, 138 N.W. 967 [(1912)].    More directly in point is In re Dexter-Greenfield Drainage District, 21 N.M. 286, 310, 154 P. 382, 389 (1915), where we also find acceptance of a literal application of a short limitation period for review and the reasons therefor, in the following: The above and foregoing review of the drainage law and of the proceedings of this case are sufficient to show that the appellant in this case undertook to raise the question of the sufficiency of the petition at a time long after the time provided for by the statute. The act provides a full and fair opportunity for all interested parties to appear and raise the very question which the appellant undertook to raise at another and later time. Undoubtedly, from a practical standpoint, it was the intention of the Legislature to have these questions determined before the expenditure of large sums of money in the making of the survey and preparation of the plans, profiles, and specifications, as provided in section 39 above referred to. We are of the opinion that the orders of the court entered in this proceeding, finding at the conclusion of the hearing provided by law for that purpose that the petition was sufficiently signed, as above indicated,    and the same could not be attacked in any method whatever, except as provided by the statute, to wit, by appealing from the order sustaining the petition within 30 days from the entry thereof, and that any other method of attack, whether in the same proceeding, or in any other proceeding, constitutes a collateral attack, and is unavailable. Further, after citing and quoting from People v. Waite, 213 Ill. 421, 72 N.E. 1087 (1904); O'Neill v. Yellowstone Irrigation District, 44 Mont. 492, 121 P. 283 (1912), and Miller v. Perris Irrigation District, 85 F. 693 (C.C.S.D.Cal.1898), to which cases we also refer, the court had the following to say, at page 312 of 21 New Mexico Reports, at page 390 of 154 Pac.:    It is the law that confers the jurisdiction, and not the court, and public policy requires that where the jurisdiction of the court, as provided by statute, is based upon the ascertainment and determination of certain facts, and a full and fair opportunity is given to all parties interested to be heard thereon, and a right of appeal afforded final determination of those facts, constitutes res adjudicata and cannot be inquired into at any other time, or by any other method than that provided by the statute. If this were not true, and the practice adopted by the appellant in this case were allowed, parties could remain silent until vast amounts of money were expended in the construction of these drainage districts, and then come forth and raise these facts and cause a possible waste of this money, when they might just as well have raised it before the expenditure. . . . . Burns v. District Court of the Eighteenth Judicial District, 144 Colo. 259, 356 P.2d 245 (1960), is a recent case we have found and is of particular interest because the limitation period and method for attacking organization of a recreation and park district in Colorado is in almost identical language to that contained in § 75-18-8(H), supra. The action was an original proceeding in the nature of certiorari in the Supreme Court to obtain review of the District Court's action in establishing the district and sought a declaration that it was null and void. The decree establishing the district was entered October 30, 1959. Thereafter, before the passage of 30 days, a request was made for the attorney general to institute quo warranto proceedings. He refused. The petition in certiorari was filed on December 29, 1959. The limitation statute was held to effectively prevent the petitioners from attacking the organization through certiorari. The announced reason was the need for accelerating contract negotiations and the taking of other action looking to accomplishing the purposes of the district, free of the fear of subsequent attack of the district's legal existence. Although the attacks on the organization were not based on alleged fraud, they were not materially different in that they asserted shortcomings in the form of the petitions, failure to take evidence, defects in the notice, and other similar matters. The Colorado court announced no exceptions to the application of the statute. . . . . Although our decision is based on the fact that the action was not commenced within the time provided by the applicable statute, we should observe that quo warranto by the attorney general is the only method for getting a review and determination of the court's action in entering its order pursuant to § 75-18-8(G), supra. Id. at 747-50; see also Luke v. Cataldi, 883 A.2d 1114, 1119 (Pa.Commw.Ct.2005) (conditional use permit not considered void ab initio where challenge to permit not timely presented); State ex rel. Condon v. City of Columbia, 339 S.C. 8, 528 S.E.2d 408, 411-12 (S.C.2000) (90-day period of limitations in annexation statutes applies because more specific statute of limitations prevails over any general one; thus, even a quo warranto action is barred if untimely filed); State ex rel. King v. Village of Praethersville, 542 S.W.2d 578, 580-81 (Mo.Ct.App.1976) ( quo warranto proceedings dismissed under theory of laches despite fact that incorporation of a village was unquestionably improper, where village had existed for 22 years and had become a recognized governmental entity). [¶ 22] We agree entirely with this reasoning and find that it applies with equal logic to Mountain Cement's belated attempt to have the district court declare the Board's decision void ab initio. Mountain Cement's argument could have been presented to the Board before it declared the District to be organized, and the argument could have been presented to the attorney general in seeking a quo warranto proceeding. Alternatively, Mountain Cement could have filed a petition with the Board, pursuant to Wyo. Stat. Ann. § 41-10-107(b) (Michie 1983), to have its property excluded from the District prior to issuance of the Board's order establishing the District. [6] [¶ 23] Mountain Cement's allegation that the Board's action was ultra vires and therefore void ab initio is nothing more than an attack upon the Board's determination of the validity of the Petition seeking formation of the District. That allegation is barred not only by the strict period of limitation found in § 41-10-107(g), but also by the quo warranto requirement of the same statutory section. [¶ 24] Because we affirm the district court's dismissal of Claim I of Mountain Cement's Complaint on the above ground, we need not consider the issue of whether the period of limitations found in § 1-3-109 was also exceeded.