Court Opinion

ID: 9383848
Source: CourtListenerOpinion
Date Created: 2023-03-31 14:06:43.9082+00
Date Added: 2024-06-11T17:17:48.531719
License: Public Domain

FILED
                                                                    IN THE OFFICE OF THE
                                                                 CLERK OF SUPREME COURT
                                                                        MARCH 31, 2023
                                                                  STATE OF NORTH DAKOTA

                  IN THE SUPREME COURT
                  STATE OF NORTH DAKOTA

                                   2023 ND 55

Senske Rentals, LLC, a North Dakota
Limited Liability Company, and
Sierra Investments, LLC, a North Dakota
Limited Liability Company,                        Petitioners and Appellants
      v.
City of Grand Forks, a political
subdivision of the State of North Dakota,          Respondent and Appellee

                                   No. 20220222

Appeal from the District Court of Grand Forks County, Northeast Central
Judicial District, the Honorable John A. Thelen, Judge.

AFFIRMED.

Opinion of the Court by McEvers, Justice.

DeWayne A. Johnston, Grand Forks, ND, for petitioners and appellants.

Jenna R. Bergman (argued), Minneapolis, MN, and Corey J. Quinton (on brief),
Fargo, ND, for respondent and appellee.
               Senske Rentals, et al. v. City of Grand Forks
                              No. 20220222

McEvers, Justice.

[¶1] Senske Rentals, LLC, appeals a district court’s order affirming the City
of Grand Forks Special Assessment Commission’s decision to specially assess
property for street improvements. We affirm.

                                         I

[¶2] Senske owns property in a subdivision affected by a City of Grand Forks
project designed to pave gravel roads, which required installation of a storm
sewer and other infrastructure. In February 2019, the City Council approved
plans for the project and created a special assessment district and a special
assessment commission. In May 2019, City engineers prepared a report and an
estimate of the cost of the project and provided notice to benefited property
owners. The estimated cost of the project was $3.5 million. In June 2019, the
City Council approved increasing the amount of the City’s share of the project,
from the usual policy of 15% for the City’s share of the pond cost to 50% of the
pond cost. Notice of the original assessment estimate was $0.98 to $1.36 per
square foot and was sent to property owners.

[¶3] A public meeting was held and property owners were asked for their
input on the project. Jim Senske, owner of Senske Rentals, wrote, “I am in
favor of this project in it’s [sic] entirety – been a long time coming – will be good
for this part of town.” Thereafter, construction bids were received but were 27%
higher than originally estimated by the City engineers. Property owners were
notified of the updated assessment range of $1.57 to $1.80 per square foot. The
Commission did not receive any comments or objections.

[¶4] The Commission held a public hearing on September 30, 2021, where
Jim Senske, on behalf of Senske, requested reconsideration of the assessment
amount. The City Council ultimately reduced costs and removed the
administrative markup, reducing the assessment to $1.41 per square foot,
which was 3.7% higher than the original estimate.

                                         1
[¶5] On October 18, 2021, another hearing was held. A City engineer provided
an in-depth explanation of the assessment determinations for the project. The
City Council and City Attorney heard arguments made by Senske’s attorney
that the policy did not fairly allocate costs and that the City should be
responsible for more of the costs. The City Council concluded the Commission
followed policy and its actions were not arbitrary, capricious, or unreasonable.
Senske appealed to the district court, which upheld the Commission’s
assessments. Senske appeals.

                                       II

[¶6] Senske requests this Court take judicial notice of multiple City of Grand
Forks’ published documents relating to the special assessment amount of the
project.

[¶7] A court may judicially notice an adjudicative fact “that is not subject to
reasonable dispute because it . . . can be accurately and readily determined
from sources whose accuracy cannot reasonably be questioned.” N.D.R.Ev.
201(b)(2). Facts that were not available to the district court below and are the
subject of reasonable dispute will not be judicially noticed by this Court. State
v. Vetter, 2019 ND 262, ¶ 6, 934 N.W.2d 543. Except for jurisdictional matters
and the taking of judicial notice, we generally consider only issues raised below.
Workforce Safety & Ins. v. Oden, 2020 ND 243, ¶ 54, 951 N.W.2d 187. This
Court has discretion whether to take judicial notice when no request was made
in the trial court. Id. at ¶ 56.

[¶8] The documents Senske requests we take judicial notice of relate to
information gathered nearly two years after the determination of the special
assessment amount. The documents were not presented to the district court,
the City Council, or the Special Assessment Commission. The documents are
now offered in support of Senske’s position that the special assessment was
excessive. “[W]e do not try special assessment cases anew or reweigh the
evidence.” Holter v. City of Mandan, 2020 ND 202, ¶ 9, 948 N.W.2d 858.
Therefore, we decline to take judicial notice of the City of Grand Forks’

                                        2
published documents, and will not consider them, because they are not in the
record.

                                     III

[¶9] Senske argues the Special Assessment Commission acted in an
arbitrary, capricious, and legally unreasonable manner by failing to comply
with the requirements of N.D.C.C. § 40-23-07 to determine the assessment to
its properties.

[¶10] In an appeal from a decision of a local governing body under N.D.C.C. §
28-34-01, our scope of review is the same as the district court, which is very
limited. Tibert v. City of Minto, 2006 ND 189, ¶ 8, 720 N.W.2d 921. We exercise
a limited review of challenges to special assessments in part because of the
separation of powers doctrine:

      The special assessment commission is in essence a legislative
      tribunal created by legislative authority to “(1) determin[e] the
      benefits accruing to the several tracts of land in an improvement
      district by reason of the construction of an improvement and (2)
      assess[ ] the costs and expenses thereof against each tract in
      proportion to the benefit received.” Accordingly, judicial review is
      limited to assuring that local taxing authorities do not act
      arbitrarily, capriciously, or unreasonably. Courts are not to act as
      a super grievance board, and we do not try special assessment
      cases anew or reweigh the evidence. Rather, we begin with the
      presumption that assessments for local improvements are valid,
      and the burden is on the party challenging the validity of the
      assessments to demonstrate they are invalid.

Holter, 2020 ND 202, ¶ 9 (quoting Bateman v. City of Grand Forks, 2008 ND
72, ¶ 10, 747 N.W.2d 117).

[¶11] Section 40-23-07, N.D.C.C., governs a special assessment commission’s
decision relating to benefits and assessments:

      The commission shall determine the amount in which each of the
      lots and parcels of land will be especially benefited by the
      construction of the work for which such special assessment is to be
                                       3
      made, and shall assess against each of such lots and parcels of land
      such sum, not exceeding the benefits, as is necessary to pay its just
      proportion of the total cost of such work, or of the part thereof
      which is to be paid by special assessment, including all expenses
      incurred in making such assessment and publishing necessary
      notices with reference thereto and the per diem of the commission.

[¶12] This Court has stated three requirements must be satisfied for a special
assessment to comply with N.D.C.C. § 40-23-07:

      The special benefit accruing to each lot or parcel of land from the
      improvement must be determined. The special assessment levied
      against each lot must be limited to its just proportion of the total
      cost of the improvement. The assessment against any lot or parcel
      of land must not exceed the benefit which has been determined to
      have accrued thereto.

Bateman, 2008 ND 72, ¶ 11.

[¶13] This Court looks at whether, on its face, the legislative act was arbitrary,
capricious, or legally unreasonable. Holter, 2020 ND 202, ¶ 12. In Ulvedal v.
Board of County Commissioners of Grand Forks County, 434 N.W.2d 707, 708-
09 (N.D. 1989), this Court stated:

      Several decades ago, this court addressed the proper role of courts
      in reviewing a tax assessment by a local governing body. Appeal of
      Johnson, 173 N.W.2d 475 (N.D. 1970). In that earlier appeal, also
      from an assessment of real estate in Grand Forks, this court
      surveyed how courts in other states approached review of
      assessments of property for tax purposes. We concluded that “it is
      not for the court to substitute its judgment for that of the lawfully
      designated taxing authorities, . . . ” Id. at 484. When “there is
      substantial evidence to support the appraisal made by the
      assessing     authorities     and      no    evidence      of    any
      discrimination,” Id. at 484, a decision of county commissioners
      should be upheld.

[¶14] In summary, a reviewing court may not reverse a local governing body’s
action simply because it finds some of the material considered more convincing.
Holter, 2020 ND 202, ¶ 12. A reviewing court can only reverse when there is
                                        4
such an absence of evidence or reason as to amount to arbitrary, capricious, or
unreasonable action. Id. As such, a municipality has broad discretion to
determine benefits and apportion assessments and costs to properties within
an improvement district. Id. at ¶ 13. There is no exact formula for quantifying
benefits. Id. An “assessment may be apportioned according to frontage, area,
value of, or estimated benefits to, the property assessed, or according to
districts or zones, or on any other reasonable basis that is fair, just, and
equitable.” Serenko v. City of Wilton, 1999 ND 88, ¶ 21, 593 N.W.2d 368
(quoting Cloverdale Foods Co. v. City of Mandan, 364 N.W.2d 56, 61 (N.D.
1985)).

[¶15] Here, the Commission determined the benefit and the City made
findings based on past practices, policies, and procedures. The findings include:

      The benefits received from the project are to allow drainage to
      public and private property to include streets, allows increased
      impervious surface areas caused by development, safely conveys
      storm water from the benefiting area and provides sanitary
      method of moving and holding storm water.

[¶16] The Commission found Senske’s properties, along with other commercial
properties, were benefited more than residential properties because
commercial properties have more run off than residential properties. The
Commission also reduced the benefit percentage regarding a pond in
determining the amount assessed against each lot. The record includes a
Benefit and Assessment chart that includes each affected property’s benefit
and percent benefited. The record does not include an exact formula
quantifying how the Special Commission determined the benefit to each lot or
parcel, other than following past practices. Where the record is silent as to how
benefit was determined, we presume the determination of benefit is consistent
with applicable ordinance and policy and the resulting assessment is valid, and
Senske has the burden to demonstrate the determination of benefit did not
comply with N.D.C.C. § 40-23-07. See Bateman, 2008 ND 72, ¶ 10 (relying on
Serenko, 1999 ND 88, ¶ 20). The record does not reflect Senske made a specific
argument on the method the Commission determined the benefit. Without an
adequate record, Senske has failed to meet the burden to demonstrate the City
                                       5
or the Special Commission acted arbitrarily, capriciously, or unreasonably in
determining the benefit. This Court will not substitute its judgment for that of
the Commission. See Ulvedal, 434 N.W.2d at 708-09.

[¶17] Senske also disagrees with the Commission’s method of assessment. The
Commission calculated the assessment amount by taking the cost of
construction and dividing it by the square footage of the property and assessed
it according to the lot frontage. After considering arguments made by Senske,
the City Council reduced costs and waived administrative markups. Senske
argues the complex nature of this project is not comparable to other projects
that lend themselves to a simple form of calculation. However, we have
routinely approved the use of formulas such as front footage area or value to
determine the benefits assessed to properties. See Holter, 2020 ND 202, ¶ 18.
This Court has previously rejected the same argument:

            We have rejected similar arguments in the past and upheld
      assessments based upon square footage of the property. Although
      the landowners and Serenkos may disagree with the special
      assessment commission’s choice of method, and with its conclusion
      their properties were substantially benefitted by the street
      improvement project, it is not our function to reweigh the evidence.
      The landowners and Serenkos have failed to meet their burden of
      demonstrating the commission acted arbitrarily, capriciously, or
      unreasonably.

Serenko, 1999 ND 88, ¶ 23 (citations omitted).

[¶18] We conclude Senske has not met his burden to show the assessments are
invalid or that the Commission failed to comply with the statutory
requirements under N.D.C.C. § 40-23-07.

                                       IV

[¶19] Senske also argues a constitutional taking occurred because the special
assessments are as much as the improved value of the parcels. Senske did not
raise this argument in the district court. Issues or contentions not raised in the
district court cannot be raised for the first time on appeal. Spratt v. MDU Res.

                                        6
Grp., Inc., 2011 ND 94, ¶ 14, 797 N.W.2d 328. We will not consider whether a
constitutional taking occurred for the first time on appeal.

                                        V

[¶20] The order of the district court is affirmed.

[¶21] Jon J. Jensen, C.J.
      Daniel J. Crothers
      Lisa Fair McEvers
      Jerod E. Tufte
      Douglas A. Bahr

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