Posted by: Patricia Salkin | June 24, 2013

Idaho Supreme Court Rules State Takings Claim Not Filed Timely and Federal Takings Claim Not Ripe

Alpine Village Co. (“Alpine”) filed an application in June of 2006 to develop a mixed use residential and commercial property in the City of McCall (“City”).  The City had recently passed Ordinance 819, which required developers of residential property to include some affordable community housing as part of the development.  In order to satisfy this requirement, Alpine purchased an apartment complex called the Timbers.  In December of 2007, Alpine and the City entered into an agreement for the development of Alpine Village. Shortly thereafter, the local district court declared that Ordinance 819 was an unconstitutional tax after a third party filed a complaint for same.  The City then passed Ordinance 856, which repealed both Ordinance 819 and a related Ordinance 820.  As a result, in July of 2008, Alpine and the City were forced to amend their development agreement and remove the restrictions imposed by Ordinance 819.

In November of 2010, Alpine wrote a letter to the City demanding payment for the damages it incurred by purchasing the Timbers.  In December that same year, Alpine filed a complaint in the district court alleging that the City’s enforcement of Ordinance 819 was an unlawful taking under the U.S. Constitution, the Idaho Constitution, and 42 U.S.C. §1983.  In September of 2011, the City moved for summary judgment and Alpine cross-moved for summary judgment. The district court ultimately granted the City’s motion and denied Alpine’s cross-motion.  The court held that Alpine failed to comply with the notice requirements of the Idaho constitution regarding the inverse condemnation claim.  As for the federal claims, the court found that the constitutional claim was unripe for review and the §1983 claim was time-barred by the Idaho Code.

On appeal, the Supreme Court of Idaho first addressed the state law claims.  It determined that Alpine did in fact fail to comply with the Idaho Code’s notice requirements.  The relevant statute provides that all claims against political subdivisions and their employees must be filed within 180 days from the date the claim arose or the date it reasonably should have been discovered.  All parties agreed that the November 2010 letter from Alpine was the first notice of the action given to the City.  As such, the action must have arisen 180 days earlier – by May 2010 – in order for the notice requirement to have been satisfied.  The court determined that the absolute latest date of accrual of the action would be December 2007, when the development agreement was entered into between the parties.  Since December 2007 is a much earlier date than the required 180 days, the court held that Alpine did not file its claims timely under the Idaho Code.

With regard to the notice requirement, the district court held that it was a jurisdictional, not procedural, bar on Alpine’s state claims.  As such, it did not address Alpine’s constitutional and equitable arguments.  On review, the supreme court concluded that the bar was not jurisdictional but procedural.  Since the district court has general subject matter jurisdiction, and there was nothing to indicate a lack of jurisdiction regarding this issue, the court could have addressed the issues.  The fact that Alpine failed to comply with the notice requirement was a procedural bar from asserting the claims against the City.

Alpine argued that the application of the notice statute was a violation of its right to equal protection under the Idaho Constitution.  The Idaho Constitution guarantees the same rights and benefits to all persons in “like circumstances” or “similar situations.” According to Alpine, the parties affected by Ordinance 819 were similarly situated to those affected by the related Ordinance 820, and Alpine was treated differently than those affected by Ordinance 820.  The City waived the notice requirement and refunded parties that paid fees under Ordinance 820, which it did not do for Alpine.  The Supreme Court of Idaho determined that Alpine was not similarly situated to those that paid fees under Ordinance 820.  The court explained that the fact that the City provided different solutions to Alpine (releasing the restrictions placed on the Timbers) and to those who paid fees under Ordinance 820 (returning the money) demonstrates that the two were not in similar situations.  Thus, the City did not violate Alpine’s equal protection rights.

Alpine further argued that the City should not be able to use the notice statute as a bar based on the doctrine of quasi-estoppel.  This doctrine precludes a party from changing its position to the detriment of another party where it would be unconscionable to allow the first party to maintain its position.  The court concluded that the City’s application of different solutions to those affected by the different ordinances did not constitute a “change of position” relative to Alpine.  As such, the court held that the doctrine of quasi-estoppel was not applicable here.

 

Next, the Supreme Court of Idaho addressed Alpine’s federal law claims.  With regard to the Constitutional unlawful taking claim, the court agreed with the district court’s determination that the issue was unripe for review.  The federal ripeness test for claims of government takings requires that (1) a final decision was rendered by the government entity  charged with implementing the regulation and (2) if the state provides a way of obtaining compensation, then the claimant must have first used this procedure and been denied compensation. The Supreme Court of Idaho found no evidence of a final decision here.  Alpine never directly challenged the development agreement, so the City never had an opportunity to render a decision.  In turn, the issue before the court was unripe for review. Likewise, the issue was unripe since Alpine failed to satisfy the second prong of the ripeness test.  The state of Idaho has a statute, Local Land Use Planning Act (“LLUPA”), which provided Alpine with a means of seeking compensation before filing in federal court.  LLUPA provides for the review of regulations and ordinances in order to avoid the unlawful taking of property.  Since Alpine failed to seek review under this act, the appellate court determined that this rendered the issue unripe for review.

Finally, the Supreme Court of Idaho addressed the issue of attorneys fees.  The Idaho Code states that in cases involving a government entity as a party, the prevailing party will be entitled to attorneys fees if its adversary acted “without a reasonable basis in fact or law.”  The court found that Alpine’s claims had no reasonable basis in fact or law and as such, the City was entitled to attorneys fees as the prevailing party.

Alpine Village Co. v. City of McCall, 2013 WL 2663852 (Idaho 6/14/2013)

The opinion can be accessed at: http://www.isc.idaho.gov//opinions/39580.pdf


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