Arnegard v. Arnegard Twp.

908 N.W.2d 737

Cameron ARNEGARD and Mary Susan Arnegard, Plaintiffs, Appellants, and Cross-Appellees

v.ARNEGARD TOWNSHIP, Defendant, Appellee, and Cross-Appellant

No. 20170242

Supreme Court of North Dakota.

Filed March 22, 2018

Lisa M. Six (argued) and Garth H. Sjue (on brief), Williston, ND, for plaintiffs, appellants, and cross-appellees.

Scott K. Porsborg (argued) and Austin T. Lafferty (appeared), Bismarck, ND, for defendant, appellee, and cross-appellant.

Crothers, Justice.

[¶ 1] Cameron and Mary Susan Arnegard appeal from a judgment relating to a conditional use permit (CUP) obtained from Arnegard Township in McKenzie County. The Arnegards argue the district court erred in granting the Township’s motion in limine to exclude a buy-sell agreement; denying their motion to amend their complaint on a due process claim; granting summary judgment dismissing their breach of contract, actual fraud and equitable estoppel claims; dismissing their negligence and deceit claims by directed verdict; and determining no party prevailed in the action. The Arnegards also argue the district court abused its discretion by denying their motion to amend their complaint at trial. The Township cross-appeals, arguing the district court erred in granting judgment as a matter of law in favor of the Arnegards’ due process claim. We affirm the judgment in part, reverse the judgment in part and remand.

I

[¶ 2] On January 5, 2012 the Township established zoning ordinances, including a provision for conditional use permits. The ordinances limited conditional uses in agricultural-zoned property: one non-farm dwelling per forty acres; schools; oil, gas, mineral, and gravel exploration and production; water well drilling, animal feeding operations; radio and television towers; utilities; parks; animal hospitals; fire stations; grain cleaning plants; and stockyards. The ordinances prohibited any conditional use not specifically listed. The Township clerk filed copies of the zoning ordinances with the State and the County Auditor.

[¶ 3] On March 20, 2012 the Township amended the zoning ordinances, allowing applications for conditional use permits to build temporary workforce housing ("man camps") in agricultural-zoned areas:

"The Planning and Zoning Commission shall establish standards for Temporary Workforce Housing and may make additional requirements above and beyond those standards when conditional use permits are issued.

"Conditional use permits for Temporary Workforce Housing are valid for one year, and may be renewed at discretion of the Planning and Zoning Commission.

"Conditional use permit fee for Temporary Workforce Housing shall be $2000 per year, and said fee may be revised at any time without notice."

The Township published notice in advance of the March meeting via the McKenzie County Farmer newspaper and by postings at Arnegard City Hall and City of Arnegard’s post office. The text of the March amendment was not published, but the Township clerk retained copies. The January ordinances, without the March amendments, were posted to the McKenzie County website. The Township’s zoning commission adopted extensive development standards pursuant to the March amendments. The development standards were not directly amended into the zoning ordinances and did not mention the one-year automatic expiration of a CUP.

[¶ 4] The Arnegards own property within the agricultural zone of the Township. Following negotiations with Morgan Chase Management, the Arnegards applied for and received a CUP to construct man camps on their property. The CUP itself did not mention a one-year expiration date. The Arnegards received a copy of the zoning commission’s development standards, but claim they did not know about the March amendments. The Township Clerk filed the January ordinances and the March amendments with the State and the County Auditor. No one else requested or received copies of the ordinances or amendments.

[¶ 5] Throughout 2013 the Township addressed the Arnegards’ property at four meetings but did not notify them about the CUP’s automatic expiration. In May 2013 the Township transferred its zoning authority to McKenzie County by a joint powers agreement. In July 2013 the Arnegards’ development partner changed from Morgan Chase to Laramie Dawson. The Arnegards’ CUP expired by process of law in September 2013, although the Township voted not to renew the CUP in November 2013. In December 2013 the Township clerk notified the Arnegards of the expiration. The Arnegards served a complaint and demand for jury trial on the Township in March 2014 and filed with the district court on January 12, 2016. The district court ordered a multi-day jury trial to start September 20, 2016.

[¶ 6] The Township moved for summary judgment in March 2016, arguing the district court lacked jurisdiction to hear the case because the Arnegards failed to file an administrative appeal under N.D.C.C. § 28-34-01 and the Township was immune under N.D.C.C. § 32-12.1-03. The Arnegards responded, asserting the Township deprived them of due process by not providing notice of the amendments as required under N.D.C.C. § 58-03-10 for township bylaws. In June 2016 the district court denied the Township’s motion, finding genuine issues of material fact precluded summary judgment.

[¶ 7] At a pretrial conference on September 20, 2016, before empaneling the jury, the district court dismissed the Arnegards’ breach of contract, actual fraud, and equitable estoppel claims for lack of authority showing a CUP could be a contract. The Township moved for a directed verdict on the remaining deceit, negligence, and due process violation claims after the Arnegards presented their case. The district court granted a directed verdict in favor of the Township on the deceit claim for lack of evidence and on the negligence claim for lack of causation. The Arnegards moved to amend their complaint to include a claim for due process violations under 42 U.S.C. § 1983. The district court denied their motion to amend. The district court granted a directed verdict in favor of the Arnegards for the due process violation under the North Dakota Const., art. 1, § 12, citing Carey v. Piphus , 435 U.S. 247, 266, 98 S.Ct. 1042, 55 L.Ed.2d 252 (1978). Having dispensed with the Arnegards’ claims, the district court did not submit any issues to the jury.

[¶ 8] The district court awarded the Arnegards damages of $1.00. After post-trial briefing, the district court ruled no party prevailed in the action for awarding costs under N.D.C.C. § 28-26-06 because "both parties prevailed in some way, and therefore there is [sic] no prevailing parties." Judgment was entered on April 25, 2017.

[¶ 9] The Arnegards appeal from the judgment. The Township cross-appeals.

II

[¶ 10] The Arnegards’ claims ultimately arise from the validity and application of the Township’s zoning regulations. We must first determine whether the Township validly enacted the zoning regulations and amendments in January and March 2012. Second, we must interpret the ordinance to determine whether the Township granted a valid CUP and whether the CUP expired as a function of law after one year.

A

[¶ 11] Our standard of review for statutory interpretation is well-established.

"Statutory interpretation is a question of law, which is fully reviewable on appeal. The primary purpose of statutory interpretation is to determine the intention of the legislation. Words in a statute are given their plain, ordinary, and commonly understood meaning, unless defined by statute or unless a contrary intention plainly appears. N.D.C.C. § 1-02-02. If the language of a statute is clear and unambiguous, ‘the letter of [the statute] is not to be disregarded under the pretext of pursuing its spirit.’ "

Zajac v. Traill Cty. Water Res. Dist. , 2016 ND 134, ¶ 6, 881 N.W.2d 666 (citations omitted).

[¶ 12] Section 58-03-13, N.D.C.C., governs whether the Township validly enacted zoning regulations:

"The board or boards of township supervisors may establish, and from time to time change, the boundaries of township zoning districts and establish, amend, supplement, and enforce regulations and restrictions in the districts. No regulation, restriction, or boundaries become effective until after a public hearing at which parties in interest and citizens have an opportunity to be heard. At least fifteen days’ notice of the time and place of the hearing must be published in the official newspaper of the county and also in the official newspaper of the municipality in relation to which the zoning action is taken, if in the municipality an official newspaper other than the official newspaper of the county is published. The description of any land within any zoning district established by a zoning commission together with any regulations and restrictions established must be filed with the governing bodies of the township and municipalities concerned, and if amendments are made to the boundaries of the zoning district or the regulations or restrictions, the amendments must be filed in the same manner."

(Emphasis added.) The notice and filing requirements of § 58-03-13 are mandatory, and failure to follow the procedures by a township renders a purported zoning ordinance void. Homer Twp. v. Zimney , 490 N.W.2d 256, 259 (N.D. 1992).

[¶ 13] Here, the Township followed statutory procedure by publishing notices for both the January regulations and the March 2012 amendments in the official County newspaper, the McKenzie County Farmer. The Township also posted notices for both matters in Arnegard City Hall and the City of Arnegard’s post office. The Township held public hearings for both matters, and the parties do not dispute that citizens of the Township were afforded the opportunity to be heard. The Township Clerk retained copies of the January regulations and March amendments, and filed copies of the January regulations with the State and the County Auditor. Section 58-03-13, N.D.C.C., requires a public hearing, notice of...