Jack Allen OLSON, et al., Plaintiffs and Respondents, v. SALT LAKE CITY SCHOOL DISTRICT, et al., Defendants and Appellants.
No. 19055.
Supreme Court of Utah.
Aug. 12, 1986.
724 P.2d 960
ZIMMERMAN, Justice
The ordinance places all property owners in the same class and treats them equally. Each is required to sign and agree to pay for water service to their premises. It is reasonable to impose that obligation upon property owners rather than tenants because it is the most effective means of insuring payment for water service.7 The property owners are the most logical and reasonable persons to bear that responsibility because they are the most stable and it is they who benefit from the ability to rent the premises.
Also, the ordinance does not discriminate against tenants. All landlords are placed in one category and are required to be responsible for the payment of water service. It is not the City which places tenants, such as plaintiffs, in a separate category. Rather, it is the landlords who require tenants to be responsible for their water service. The City should not be denied the mоst effective means of payment for providing water service, and placing the burden on the property owner clearly serves that means. The ordinance therefore encompasses a legitimate purpose and objective and does not create an unconstitutional classification to achieve that objective.
The judgment of the trial court is affirmed. No costs awarded.
STEWART, HOWE, DURHAM and ZIMMERMAN, JJ., concur.
James B. Lee, James M. Elegante and Byron W. Milstead, Salt Lake City, for defendants and аppellants.
ZIMMERMAN, Justice:
This appeal arises from an order of the Tax Division of the Third Judicial District Court permanently enjoining appellants, Salt Lake City School District, its clerk and superintendent, and the Salt Lake City Board of Education as a body and as individuals (collectively referred to as the “District“), from utilizing monies held in a Salt Lake City School District line item reserve fund established to cover unexpected contingencies. The trial court held that the District exceeded its statutory authority by including the line item reserve fund in the budget for 1981-82, and the five preceding fiscal yeаrs when the District already had access to an undistributed reserve fund to cover unexpected contingencies, which was specifically authorized by section 53-20-2 of the Utah Code.
This suit was filed in July of 1981 by a number of individual plaintiffs and business entities who alleged that they were property owners and taxpayers in Salt Lake City. In addition, one of the plaintiffs is the Utah Taxpayers Association (“the Association“), a non-profit entity primarily composed of business persons and business entities interested in taxation issues. The lead plaintiff in this action, Jack Olson, is the chief exеcutive of the Association; many of the named plaintiffs are members of the Association.1
The matter was submitted upon a stipulated rеcord, and on January 20, 1983, the district court ruled for the plaintiffs. The court found that for each fiscal year from 1976-77 through 1981-82, the District had adopted a budget containing two reserves. The first was a funded “undistributed reserve” authorized by section 53-20-2 to meet unexpected contingencies not otherwise provided for by specific accounts in the budget.2 None of the funds in the undistributed reserve had ever been used. A second funded line item reserve was also included in each of these budgets, and its funds were used to meet unexpected contingencies not related to the line item for which it was budgeted.3 The court concluded that as a matter of law, the District was entitled to maintain only the statutorily authorized undistributed reserve for unexpected contingencies. Accordingly, the court permanently enjoined the District from adopting a budget that included “any reserve, however designated, which serves to meet unexpected contingency expenditures not otherwise provided for by specific accounts in the budget, and which reserve is in addition to that reserve authorized by section 53-20-2, Utah Code Ann.” The court also ordered thе District to use the statutorily authorized reserve to meet unexpected contingencies. Finally, in an attempt to qualify its order for immediate appeal under
At the outset, we note that acquiescence of the parties is insufficient to confer jurisdiction and that a lack of jurisdiction can be raised at any time by either party or by the court. See, e.g., Heath Tecna Corp. v. Sound Systems International, Inc., 588 P.2d 169, 170 (Utah 1978); Utah Restaurant Association v. Davis County, 709 P.2d 1159, 1160 (Utah 1985); Kennedy v. New Era Industries, Inc., 600 P.2d 534, 534-35 (Utah 1979). In Pate v. Marathon Steel, 692 P.2d at 767-68, we noted that a ruling is not appealable under Rule 54(b) unless three requirements are met: (i) there must be multiple claims or parties; (ii) the trial court must determine that there is “no just reason” to delay the appeal; and (iii) the judgment or order appealed from must be final, i.e., it must wholly dispose of the claim or the party. Id.; accord Williams v. State, 716 P.2d at 807.
As we noted in Pate, not every order is “final” and thus appealable under Rule 54(b). 692 P.2d at 767-68. The only orders that are “final” within the meaning of the rule are those that (i) are entered in cases where there are multiple parties or multiple claims for relief, and (ii) “wholly” dispose of one or more, “but fewer than all,” of the claims or parties. 692 P.2d at 768. If an order meets both requirements of finality, the district court can then choose to certify it for immediate appeal on the ground that there is no just reason for delay. A district court cannot, however, make a non-final order appealable. An order is either final or it is not. The terminology used in describing it cannot change its fundamental character. Id., n. 2; see, e.g., Little v. Mitchell, 604 P.2d 918 (Utah 1979); cf. Wheeler Machinery v. Mountain States Mineral Enterprises, Inc., 696 F.2d 787, 789 (10th Cir.1983) (decided under
The order appealed from here is not final within the meaning of Rule 54(b), except as to the Utah Taxpayers Association. Although plaintiffs prayed for several different kinds of relief, they asserted but one legal claim: that the District‘s use of the line item reserve to cover the costs of unexpected contingencies nоt otherwise provided for in the budget was unlawful. Based on this single claim, plaintiffs sought declaratory, injunctive, and monetary relief. The final disposition of a claim for relief necessarily includes a determination of the remedy to which the claimant is entitled. As the United States Court of Appeals for the Second Circuit has said in considering the federal analogue to our Rule 54(b),
“Finality,” for purposes of the application of Rule 54(b), is generally understood as that degree of finality required to meet the appealability requirements of
28 U.S.C. § 1291 . [Citations omitted.] This, in turn, is usually dеfined as a judgment “which ends the litigation on
In the present case, the court granted the dеclaratory and injunctive relief requested by all plaintiffs, but specifically reserved the questions of entitlement to a tax refund for later determination. The reservation of that issue means that the underlying claim for relief has not been wholly disposed of as to any of the parties who have sought a refund under the amended complaint. See n. 1, supra. Therefore, we dismiss the appeal as to all of the individual plaintiffs who seek tax refunds as part of their requested relief. As to the Utah Taxpayers Association, which cannot recover monetаry damages on behalf of its members, id., the order is final because it wholly disposes of the Association‘s claim. That portion of the appeal is properly before us.6
We turn to the merits. The issue is whether the District, in creating a line item reserve fund and then using that fund for unexpected contingencies,7 acted in excess of its authority. When it enacted section 53-20-2 of the Code, the legislature authorized the District “to adopt a budget containing an amount known as the undistributed reserve.” The trial court found that the disputed line item reserve adopted by the District was a funded reserve above and beyond the reserve authorized by section 53-20-2. The District contends that the line item reserve at issue was not a funded reserve at all, but merely an accounting method used to facilitate the processing of uncertain revenues.
In reviewing a trial court‘s finding of fact, this Court considers the evidence in the light most favorable to the trial court.
The trial court next concluded that the legislature intended the statutory reserve to be the exclusive repository for monies set aside to cover unexpected contingencies and that use of the nonstatutory reserve for unexpected contingencies was therefore unlawful. The District objects, contending that nothing in either the explicit wording of the statute or the legislative history indicates that the statutory reserve is to be exclusive. The District also аrgues against an interpretation of exclusivity by highlighting its maintenance of various other reserves for specific purposes, notably for self-insurance and inventory, which the District claims are indistinguishable from the contested line item reserve.
The District accurately points out that section 53-20-2 does not explicitly state that a school district may establish only one undistributed reserve. The statute provides, however, that the statutory reserve “shall not exceed five percent of the [district‘s] maintenance and operation budget. ...” The imposition of an upper limit on the reserve evidences a legislative intent to authorize but a single undistributed reserve. If a school district could establish multiple reserves to meet unexpected contingencies with unlimited funds in each, the express upper ceiling on the statutory reserve would be rendered meaningless because a school district could circumvent that limit simply by establishing a second, nonstatutory reserve. We cannot presume that the legislature intended such a result.8
The legislative history also supports the conclusion that the legislature intended to authorize the establishment of only one reserve to meet unexpected contingencies. The undistributed reserve fund was first authorized by the legislature in 1971. 1971 Utah Laws ch. 129. In the legislative debate preceding passage of the amendment, Senator MacFarlane, one of the bill‘s co-sponsors, stated that the amendment was necessary to provide statutory authority for school districts to maintain any undistributed reserve fund at all. Debate SB No. 115 (Feb. 24, 1971). If the legislation was designed to formalize a district‘s limited authority to maintain such reserves, which authority was ambiguous before thе bill‘s passage, then, the logical implication is that the statutory reserve is an exclusive one. Cf. 2A Sutherland‘s Statutory Construction § 47.23 (4th ed. 1984).
Perhaps most important in defining legislative intent, however, is the rationale underlying the authorization of an undistributed reserve. We are persuaded that the dominant purpose of the statutory reserve is the restoration of sound practices to school district budgeting. Prior to receiving statutory authorization to establish reserves, school districts resorted to padding individual segments of the budget to cover unknown future costs. This practiсe not only reduced the pressure on districts to carefully estimate their needs when preparing an itemized budget, but also effectively rendered the true budget inaccessible to public scrutiny. This state of affairs was expressly mentioned during the debate on the bill authorizing the reserve. Debate, SB No. 115 (Feb. 24, 1971). By providing for an exclusive reserve fund, the statute encourages more careful and accountable budgeting. This is the crux of the matter.
Finally, the District contends that the mandatory injunction requiring them to make expenditures from the statutory undistributed reserve is an improper remedy because it amounts to judicial interference with the District‘s right to tax, which interferenсe is prohibited by section 59-11-10 of the Utah Code.
While it is well settled that mandamus may not issue to compel a public official with unlimited discretion to act in a certain way, courts have long recognized that where the law imposes limitations on the exercise of that discretion, mandamus is available to enforce those limitations. See 52 Am.Jur.2d Mandamus § 79 at 401 (1970). Section 53-20-2 restricts the District‘s discretion in budgeting for unexpected contingencies. If the District acts within the limits of discretion conferred on it by law—that is, if it creates an undistributed reserve that meets the requirements of sеction 53-20-2—mandamus will not issue. But, where, as here, the District exceeds its statutory authority, mandamus provides appropriate relief. See Huidekoper v. Hadley, 177 F. 1, 9 (8th Cir.1910).
Affirmed.
HALL, C.J., and HOWE and DURHAM, JJ., concur.
STEWART, Justice (dissenting):
I submit that this case should be dismissed because the plaintiffs failed to join the State Superintendent of Public Instruction as a party defendant. I also believe that the majority errs in its construction of
I.
Neither the trial court nor this Court have any jurisdiction over this dispute because of the failure of the plaintiffs to name the State Superintendent of Public Instruction as an indispensable party defendant. Under the statutory scheme established by the Legislature, the State Superintendent of Public Instruction, an indispensable party, had the authority to review the budgetary procedures of the school districts and to determine whether they complied with the law. Section 53-3-4 stated that the State Superintendent‘s “decisions [concerning the school law] shall be held to be correct and final until set aside by a court of competent jurisdiction or by subsequent legislation.” Although this provision has now been repealed, it was in effect at the time of the proceedings in the lower court and when the challenged acts occurred. See Laws of Utah 1985, ch. 231, p. 628, amending § 53-3-4 to delete the above-quoted language.
Pursuant to § 53-3-4, the Superintendent of Public Instruction filed an affidavit, stating:
After reviewing
§ 53-20-2 Utah Code Ann. (1953) , it is my opinion that the Salt Lake City school district‘s budgetary actions and fiscal policies regarding the handling of fund balances and undistributed reserves have bеen in compliance with§ 53-20-2 Utah Code Ann. (1953) , during each year since the 1976-1977 school year until the present.
II.
The Court‘s resolution of the substantive issue in this case, the meaning of
The legislative purpose in enacting § 53-20-2 is clear on the face of the statute. It was to insulate a portion of a school board‘s budgeted funds from the contract negotiations for teachers’ salaries, the largest single noncаpital expense in a district‘s budget. Under the statute, “undistributed reserve” monies are not on the bargaining table in the negotiation of teachers’ salaries. Experience has demonstrated that when a school district budget has set aside funds for contingencies, salary negotiators tend to draw those monies into the bargaining process, thereby threatening the soundness of the district‘s budget. By excluding the “undistributed reserve” from the bargaining process, which always occurs after the budget has been fixed in June of each year, the statute assures that the school district will have the full amount of the contingency funds, especially for the purpose of offsetting an unexpected decline in revenues during the fiscal year, but also possibly to cover unanticipated increases in expenses.
Section 53-20-2 does not state that the “undistributed reserve” is the only fund that can be used for nonline item contingencies. That, however, is what the majority holds, with no support whatsoever in the language of the statute, even though the plaintiffs’ own expert witness conceded that sound budget-making required line item reserves in addition to the undistributed reserves. It is of no consequence that the Salt Lake City School Board has used line item contingency funds for some purpose other than the line item expense specified. No one has alleged in this case that the Board has misused one penny of public funds. Yet the plaintiffs seek a refund of taxes from the Board because of a budgeting practice which is sound and reasonable on its face and which the State Superintendent of Public Instruction has expressly found to be lawful.
The majority contends that the statutory limitation on the amount of the undistributed reserves implies that there can be only one budgeted reserve account for unforeseen contingencies and that line item reserves cannot be used for any purpose other than meeting an under-budgeted line item expense, such as salaries or maintenance. In effect, the majority opinion ignores the realities that school districts are prohibited by law from spending more money than they take in, and that a deficit may occur either because of underestimated expenses or overestimated revenues. A degree of flexibility in budgeting is therefore essential. A school district cannot be run like a commercial business. If there is a 10% shortfall in the tax revenues, or a 10% increase in heating and snow removal expenses because of an unusually cold winter, for example, the district cannot cut expenses by cutting production by 10%, i.e., refuse to teach 10% of the pupils in the district. Finally, it should be noted that conservative accounting practices are important factors in the ultimate determina-
The district in this case is not guilty of “padding,” as the majority suggests might happen. Perhaps the district would have been better advised to have sought a higher limit for the contingency reserve rather than doing as it did, but the State Superintendent of Public Instruction saw nothing wrong with the practice and that should be the end of the matter.
Notes
The posture of this suit immediately raises questions of taxpayer standing. Although the Utah courts have substantial discretionary authority to confer standing upon appropriate parties because they are not constrained by the case or controversy requirements contained in the federal constitution, that authority is not unbounded. This Court will not issue advisory opinions; but if an appellant does not meet the traditional test of standing, that appellant may be granted standing if there is no more appropriate appellant and “the issue is unlikely to be raised at all if the [appellant] is denied standing.” Kennecott Corp. v. Salt Lake County, 702 P.2d 451, 454 (Utah 1985), accord Jenkins v. Swan, 675 P.2d 1145, 1150-51 (Utah 1983). In appropriate cases, this Court may even grant standing where the issues are of “great public importance and ought to be judicially resolved.” Kennecott Corp. v. Salt Lake County, 702 P.2d at 454.
In the past, this Court has granted taxpayers standing to challenge the actions of political subdivisions for illegal expenditures and to challenge the illegal use of public funds. See, e.g., Brummitt v. Ogden Waterworks Co., 33 Utah 285, 295-96, 93 P. 828, 831 (1908); Jenkins v. Swan, 675 P.2d at 1152-53; see also Lyon v. Bateman, 119 Utah 434, 228 P.2d 818 (1951). This case is closely analogous to Brummitt and Jenkins in which we granted taxpayers standing. We find that applying the general principles enunciated in the cases noted, individual taxpayers in Salt Lake City would be granted standing on the basis that there are no more likely aрpellants and the issue is otherwise unlikely to be raised.
Under the test for associational standing enunciated in Utah Restaurant Association v. Davis County, 709 P.2d 1159, 1162-63 (Utah 1985), the Utah Taxpayers Association had standing to sue on behalf of its members for declaratory and injunctive relief. Therefore, the inclusion of over one hundred individuals and businesses as plaintiffs in the trial action was unnecessary to resolve the legal issues initially presented. As noted infra, however, the complaint was subsequently amended to include a claim for a refund of taxes paid, which the Association could not maintain. According to Utah Restaurant Association v. Davis, 709 P.2d at 1163, in order to obtain a refund, the individual taxpayers would have to be joined or the action would have to be prosecuted as a class action under
Rule 54(b) provides in relevant part:
[W]hen more than one claim for relief is presented in an action ... and/or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination by the court that there is no just reason for delay and uрon an express direction for the entry of judgment.
The dissent suggests that we still lack jurisdiction because the state superintendent of schools signed an affidavit endorsing the practice of maintaining an undistributed reserve in addition to the single statutorily authorized reserve. Under
The complaint was filed on July 20, 1981. Summons was served on the following day. A temporary restraining order against the District was entered on July 21, 1981. Over a week later, on July 29, 1981, the state superintendent‘s affidavit was signed and submitted to the district court, apparently in support of the District‘s motion to dissolve the restraining order. Thus, the superintendent‘s so-called “opinion” was not a formal administrative response to a school administrator‘s inquiry, as contemplated by section 53-3-4. Rather, it was an after-the-fact affidavit рrepared at counsel‘s request for litigation. Whatever the legislature intended in passing section 53-3-4, it certainly cannot have meant for that statute to be used to cover everything the superintendent might say at any time about school law in any forum.