Court Opinion

ID: 8245181
Source: CourtListenerOpinion
Date Created: 2022-10-16 09:28:43.071364+00
Date Added: 2024-06-11T16:42:40.805556
License: Public Domain

GILBERTSON, Chief Justice
(dissenting).
[¶ 19.] I dissent.
[¶ 20.] The circuit court’s letter to the parties, dated July 11, 2008, states that “[t]he prime issue presented is: Whether the City’s February 19, 2008, decision to settle the golf course lawsuit is a legislative act or an administrative act?” (Emphasis added.) The circuit court concluded that the 2008 Settlement Agreement was an administrative act. As a consequence of this conclusion, the circuit court held that the 2008 Settlement Agreement was not subject to referendum, and refused to enter a writ of mandamus. As a part of their argument that a writ of mandamus should have been granted, the Okersons appeal the legislative/administrative conclusion that ultimately led to the circuit court’s denial.2
[¶ 21.] “The circuit court has discretion in granting or denying a writ of mandamus,” and “[consequently, the standard of review on appeal is abuse of discretion.” Black Hills Cent. R. Co., 2003 SD 152, ¶ 9, 674 N.W.2d at 34. However, “[b]y defini*537tion, a decision based on an error of law is an abuse of discretion.” Credit Collection Servs., Inc. v. Pesicka, 2006 SD 81, ¶ 5, 721 N.W.2d 474, 476 (quoting State v. Vento, 1999 SD 158, ¶ 5, 604 N.W.2d 468, 469). In these cases, the predicate question of “whether the [ ] decision [ ] was legislative or administrative is a question of law which we review de novo.” Kirschenman v. Hutchinson County Bd. of Com’rs, 2003 SD 4, ¶ 2, 656 N.W.2d 330, 332 (citing Voeltz v. Morrell & Co., 1997 SD 69, ¶ 9, 564 N.W.2d 315, 316) (overruled on other grounds by Bechen v. Moody County Bd. of Com’rs, 2005 SD 93, 703 N.W.2d 662).
[¶ 22.] The circuit court determined that the 2008 Settlement Agreement was an administrative act, because “[t]he Terms of the Settlement Agreement ... when compared with the City’s 2002 decision to purchase/construct the golf course ... are consistent in all material respects.” Applying Wang, 469 N.W.2d 577, the circuit court concluded that “the legislative line was drawn six years ago (2002) — -not five months ago.” Therefore, the circuit court concluded that the 2008 Settlement Agreement, as an administrative act, was not subject to referendum. SDCL 9-20-19.
[¶ 23.] “The construction of a written contract is a question of law for the Court to consider.” Gul v. Ctr. for Family Med., 2009 SD 12, ¶ 8, 762 N.W.2d 629, 632 (citing Dirks v. Sioux Valley Empire Elec. Ass’n, 450 N.W.2d 426, 427-28 (S.D.1990)). Contrary to the circuit court’s conclusion, the two “contracts” made by the City of Hot Springs are materially different in how they pay for the golf course addition.
[¶24.] The 2002 Agreement provides, in relevant part:
I. ... The purchase price will be paid by the City paying to the [Simuneks] 50% of the added gross income from golfing fees, membership fees and other miscellaneous fees over the existing income adjusted annually for-inflation from those same items at the time the City takes over the golf course. The [Simuneks] will charge the City no interest.
(Emphasis added.)
[¶ 25.] The 2008 Stipulation Agreement provides, in relevant part:
4. [The City of Hot Springs] agrees to make a lump sum settlement on [ ] Simuneks claim ... by making a one-time payment of $625,000.00.... The parties further agree that the lump sum payment of $625,000.00 is contingent upon the [City] obtaining financing from a commercial, private or governmental lender. This Agreement is contingent upon payment on or before June 1, 2008, of the $625,000.00 by [City] to [Simuneks].... In the event payment hereunder is made after June 1, 2008, [Simuneks] shall be entitled to receive the annual payment of one-half of the increase in the golf course fees over and above the 2004 revenue received from golf course fees by the [City].3
(Emphasis added.)
[¶ 26.] Whereas the 2002 Agreement provides for interest free payments made out of the added gross income of the golf *538course, the 2008 Settlement Agreement permits the City to obtain funding for the lump sum payment from another, undefined source. Potentially, this undefined source will charge interest and require a defined payment amount. Most importantly, payments made to the undetermined lender apparently come from the City’s general fund, rather than out of the added gross income of the golf course. This is a completely different revenue source.
[¶ 27.] Under the 2002 Agreement, the users of the golf course paid for the addition through the fees they paid at the golf course. With a “no interest, no deadline” obligation to pay, the addition plan presented to the citizens in 2002, colloquially, “paid for itself.” Under the 2008 Settlement Agreement, every citizen of Hot Springs is required to pay for the addition through the City’s general taxes. The 2008 Settlement Agreement effectively shifts the burden of paying for the golf course from those who benefit from its use to the general population.
[¶ 28.] By authorizing the 2008 Settlement Agreement and the financing plan therein, the City has levied a tax upon its general population in order to pay for the golf course addition. The City, essentially, argues that this taxation evades the referendum process because the project itself had been approved in 2002 and this realignment of the revenue source is an administrative act necessary to carry out the 2002 Agreement. Through this method, the City appears to have found a loophole in funding major projects by getting initial public support through advertising the project as “no cost to non-users,” then later refinancing the project through a settlement agreement that places the cost of the project on all of its citizens.
[¶ 29.] The 2008 Settlement Agreement appropriates funding for the golf course in a wholly different manner from what was presented to, or anticipated by, the public under the 2002 Agreement. “In applying the ‘legislative’ versus ‘administrative’ distinction this Court will apply a liberal rule of construction permitting rather than preventing, citizens from exercising their powers of referendum.” Wang, 469 N.W.2d at 580 (citing 5 McQuillin, Municipal Corporations § 1655 and cases cited therein). “The [distinction] is rooted in realism.” Id. at 579. The 2008 Settlement Agreement, because it appropriates money from the City’s general fund or otherwise shifts the revenue source for this project, is a legislative act. In the words of SDCL 9-20-19, the 2008 Settlement Agreement hardly “puts into execution a plan already adopted” by the City. Therefore, it is subject to referendum. SDCL 9-20-19.
[¶ 30.] In construing SDCL 9-20-19, we so held in the factually similar case of Wang, supra. Therein the City adopted a master plan for an airport, which we held did not preclude the referral of the City’s subsequent decision to commence condemnation proceedings to build it. While condemnation was mentioned in the original master plan “if required,” the second decision to invoke it was determined by this Court to be a legislative, rather than an administrative, decision.
[¶ 31.] Initiative and referendum “was to act as an ostensible safety valve and remedy for whatever ills might evolve in representative government.” Baker v. Jackson, 372 N.W.2d 142, 144 (S.D.1985) (holding abrogated on other grounds by 1986 S.L. Ch. 73, § 1, codified at SDCL 7-18A-15.1, 9-20-18, and 9-20-19.). Here, when the good citizens of Hot Springs read of the “pay as you go” plan adopted in 2002 by their City Council little did they realize that was synonymous with a plan of digging into their pockets to the total of $625,000, be they taxpaying golfers, non-*539golfers or invalids. This dispute has festered in the City government and the courts since 2002. It is time to end this dispute by the safety valve of a public vote rather than let it continue to fester into the future.
[¶ 32.] The circuit court erred in the legislative/administrative determination as a matter of law. Because the circuit court erred as a matter of law, it abused its discretion when it applied this error to deny the writ of mandamus. See supra ¶ 20. I would remand to the circuit court for findings consistent with this opinion.

. I agree with the conference opinion that the Okersons did not raise the argument that the 2002 Agreement was void at the circuit court level, and that this argument should not be considered on appeal. However, the Oker-sons’ claim that the 2008 Settlement Agreement was a legislative rather than administrative act is presented more broadly than simply the invalidity of the 2002 Agreement. Therefore, the legislative/administrative determination is an issue properly before this Court.

. While it is unclear from the record, if the lump sum payment was made after June 1, 2008, the 2008 Settlement Agreement requires annual payments from the increase in golf course fees similar to what was required under the 2002 Agreement. If this occurred, the lump sum payment appears to be made in addition to what was already being paid under the 2002 Agreement. Furthermore, under the 2008 Settlement Agreement, these annual payments appear to be made in perpetuity and not limited by a "grand total” as under the 2002 Agreement.