858 N.W.2d 892
N.D.2015Background
- Landslide on May 31, 2012 along 32nd Street North near Border States’ facility damaged infrastructure; slide likely originated from Border States stockpile, rupturing water main and storm sewer, affecting Fargo-owned Drain No. 10 and 32nd Street North.
- Fargo created Improvement District No. 6237 on July 22, 2013 to fund repairs, with Fargo contributing about $600,000; assessment to property owners within the district, only Border States’ property to be assessed.
- City documents showed a checklist for projects; the “Adopt Resolution of Necessity” line was marked N/A for Improvement District No. 6237.
- Fargo entered a Joint Powers Agreement with the Southeast Cass Water Resource District on August 6, 2013, designating responsibilities for design, bidding, contracting, and construction; Water District would handle design, Fargo would handle bidding and construction.
- September 2013 Border States protested the district’s creation; City Engineer acknowledged receipt and staff deemed the district protestable; bids were awarded to Industrial Builders, Inc.
- Border States amended its complaint alleging lack of a mandatory resolution of necessity and inadequate notice, seeking judicial declaration that assessments were improper and protest rights were deprived.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 40-22-06 requires a resolution of necessity when a municipality contracts with another entity | Border States reads 60or any combination thereof 61 to include the municipality. | District court held no protest right since the City did not contract itself. | Partially controlled: no protest under 40-22-06; remanded on 40-22-15 issue. |
| Whether § 40-22-15 grants a right to protest when improvements are water/sewer related | Pleads that the project included non-water/sewer elements and thus required a resolution of necessity. | If project is solely water/sewer, no protest right; otherwise, protest rights apply. | Reversed in part: District erred in concluding no right to protest under 40-22-15; remanded for further analysis. |
| Whether Border States pleaded a state-law claim to protest that could survive a 12(b)(6) dismissal | Amended complaint plausibly states the project may include non-incidental items and thus require a resolution, entitling protest. | No adequate state-law protest rights under the cited statutes at the pleadings stage. | Remanded for further proceedings; failure to state claim reversed as to 40-22-15 analysis. |
Key Cases Cited
- Brandvold v. Lewis & Clark Pub. Sch. Dist. No. 161, 2011 ND 185 (2011 ND) (tests for 12(b)(6) dismissal, liberally construed pleadings)
- Vandall v. Trinity Hosp., 676 N.W.2d 88 (2004 ND) (pleadings review standard under 12(b)(6))
- Hale v. Ward Cnty., 848 N.W.2d 245 (2014 ND) (statutory interpretation and harmonization of provisions)
- Dakota Land Co. v. City of Fargo, 224 N.W.2d 810 (1974 ND) (jurisdictional requirements for improvement districts)
- Kirkham, Michael & Assocs. v. City of Minot, 122 N.W.2d 862 (1963 ND) (necessity resolutions under improvement statutes)
- Mitchell v. City of Parshall, 108 N.W.2d 12 (1961 ND) (necessity resolutions and improvements)