Tuesday, February 22, 2011

5 Year Anniversary

Today marks the 5 year anniversary of Justice Clarence Thomas last speaking during an oral argument at the U.S. Supreme Court. It's remarkable actually that a sitting just has gone this long without uttering a single word of record during the arguments.

Friday, February 18, 2011

Martin v. Camas County, Idaho--Idaho Supreme Court


The Court's February 17, 2011 decision in Martin v. Camas County, Idaho, is a 5-0 decision affirming the district court's finding that Martin lacked standing to sue for a declaratory judgment.

George Martin sued Camas County for declaratory relief seeking both preliminary and permanent injunctions against zoning amendments passed in 2008. The district court denied the preliminary injunction, finding the absence of irreparable harm. The district court then granted Camas' motion for summary judgment, finding that Martin lacked standing to bring the complaint for declaratory relief. Not surprisingly, Martin appeals. Standing is a legal question; so the Court exercises free review.

The first issue Martin asks the court to consider involves judicial notice of separate proceedings. In those proceedings the district court entered orders in favor of Martin, though standing was not directly addressed by the district court in the separate case. Martin urges the court that since the separate case preceded the current appeal, that the doctrine of collateral estoppel prevents the court from reaching the standing issue.

Martin is clearly wrong. Standing is jurisdictional and courts are always required to ensure their own jurisdiction. Notwithstanding the matter of judicial notice, district courts always have the right to ascertain and rule upon standing in each individual case. The Idaho Supreme Court rules that "the district court in the case at hand would have been free to reach its own independent determination" regarding standing. Therefore, any harm caused by the failure to take judicial notice is deemed harmless error because the court had to decide standing separate and apart from the other case.

The Idaho Supreme Court then affirms the district court's decision that Martin lacked standing. In order to bring a declaratory relief claim in this context, a party must have their "rights status or other legal relations" affected by a municipal ordinance. The Court first considers whether Martin has suffered, or will suffer, a distinct, palpable harm.

Martin claims that he has suffered two harms. First he argues that the upzoning of property in which he has no interest decreases the value of his property. Second, he argues that the zoning amendments prevent Martin from developing his own properties in the same way he had developed them prior to 2007 and 2008.

The Court rejects Martin's arguments. The court notes, "Martin cites no authority in support of his arguments that a comprehensive county-wide change in zoning designations . . . constitutes an injury to a property owner, absent some resultant and traceable harm." After distinguishing the present case from Ameritel Inns, Inc. v. Greater Boise Auditorium District, 119 P.3d 624 (2005), Martin argues, essentially, that increased competition will result because of the zoning amendments. The Court rejects the argument, stating that "[t]his Court has never held that increased competition alone is sufficient to confer standing." In Ameritel, the Court found that there was evidence of a negative impact as a result of increased competition and that Ameritel's taxes were being used to promote the passage of a bond. Martin has no such evidence in this case. His claim of harm through increased competition is "thoroughly speculative and cannot be said to be specific or distinct and palpable."

Martin next argues that "the proximity between the properties he holds an interest in and other parcels which were upzoned results in an injury." He relies on Butters v. Hauser, 960 P.2d 181 (Idaho 1998), for the argument. However, in Butters, the Butters showed a pecularized harm as a result of the conditional use permit. The Court never cites what that harm is but uses that language from the Butters decision to distinguish this case from Butters.

Here, Martin "has failed to show that he has suffered or is likely to suffer any injury; he merely speculates that increased competition will decrease the future value of his property." Martin also "fails to explain what that distinct injury is . . . ."

Martin next argues that a generalized injury is enough to bring this type of suit. He is wrong, yet again. The Court comments that "Martin has cited to no cases where taxpayer or ratepayer standing has been granted for a challenge grounded in statute rather than a constitutional provision." Since Martin's property is not directly or particularly affected by the rezoning amendments, he cannot have standing.

Martin's arguments about his inability to develop his properties as he had prior to the 2007 or 2008 amendments also lack merit. The Court finds that he has no authority for the proposition that "a residential density designation in a comprehensive plan creates a vested or enforceable property right."

The last issue is one that the Idaho Supreme Court has really started taking parties to task on: attorney fees. The Court reiterates that if a party seeking fees fails to discuss the basis for the attorney fees in the argument section of the brief, even though Rule 35(b)(5) provides a separate section for a discussion of attorney fees apart from the Argument portion of the brief, then the Court will not award fees. So for everyone drafting appellate briefing and claiming fees, pay heed to the Court's guidance.

Thursday, February 17, 2011

Vickers v. Lowe--Idaho Supreme Court


The Idaho Supreme Court's decision in Vickers v. Lowe came out on February 8, 2011, and is a 5-0 decision. Vickers is an appeal from a petition for judicial review of agency action. In this case Idaho Department of Transportation (the Court shortens it to ITD), issued a conditional encroachment permit in Canyon County. The Court affirms the issuance of the permit.

Dr. Edward Savala (Savala) owns approximately 8 acres abutting an east-west stretch of Highway 55. Savala applied for a right of way encroachment in December 2005 to upgrade his residential approach to a commercial approach. Due to a preexisting ditch rider approach, Savala sought a variance from the spacing rules of ITD.

Vickers, Savala's neighbor, objected on the basis that a variance would negatively impact the safety of the road. Eventually, Savala got his conditional permit granted. The permit required Savala to submit final plans to ITD among other things. ITD issued a Final Order concluding that Savala's encroachment would not degrade safety or traffic flow. Vickers sought judicial review of the order. The district court affirmed the ITD and awarded attorney fees under Section 12-117.

The Court considered four separate questions in the appeal. First, the court considered whether ITD had authority to grant conditional permits without reviewing final plans. Second, the court reviewed whether ITD's grant of the conditional permit was based on substantial evidence. Third and Fourth, the court considered whether attorneys fees were appropriate below and on appeal.

Vickers argued that ITD lacked express authority to issue conditional permits because it had not reviewed final plans. The Court however states that administrative agencies have "implied" powers that are "reasonably necessary" to carry out the powers expressly granted by the Legislature. The Court states that ITD has the implied power to decide how and when a developer may build an encroachment. Vickers lacks any legal authority when ITD does not impliedly have the power to act in the manner in which it did. The Court finds ITD does have the implied power to conditionally approve encroachment applications despite the absence of final plans.

The Court next finds that ITD's affirmation of the conditional permit was based on substantial evidence. A lot of this has to do with the evidence adduced during the two-day hearing before ITD. ITD heard evidence regarding the safety of the proposed new encroachment. It heard evidence from engineers about the "intersection sight distance" necessary to comport with the guidelines and regulations for highway safety.

ITD also heard evidence about how Savala's variance would not worsen highway functionality. The concern here was about the ditch rider approach that was within 1000 feet of Savala's variance. Evidence was presented that ditch rider approaches generate "exceptionally" low volumes of traffic. The evidence presented to ITD supported the finding of non-degradation of the highway safety or operations.

The district court awarded fees to ITD based on Idaho Code Section 12-117. The Court vacates the award finding that "courts are no longer permitted to award fees in administrative judicial proceedings" under 12-117 based on an amendment to that statutory section. There's little explanation from the Court other than the conclusory statement that such an award is no longer allowed.

So, what's the lesson from this case? First, if you challenge an agency finding through a petition for judicial review, you better not count on getting your fees awarded. Second, the Court is going to apply a fairly lenient and deferential standard to agency findings. This is consistent with the U.S. Supreme Court ruling in Chevron, Third, the Court is willing to imply powers to state agencies when those powers are reasonably necessary to the agency's purpose. So just because the enabling statute doesn't say an agency can do something does not mean that the agency cannot do it anyway.

Wednesday, February 16, 2011

Statewide Construction v. Pietri et al--Idaho Supreme Court

Just over a week ago, the Idaho Supreme Court decided Statewide Construction, Inc. v. Pietri et al. The opinion is authored by Justice Burdick and it is a 5-0 decision. The case called upon the Court to construe Idaho Code Section 55-313.

The facts are straightforward enough. Statewide owned a parcel of property located in Valley County, Idaho. The appellants owned adjacent parcels of property, each of which hold express easements over Statewide's property for ingress and egress.

In May 2005, Statewide applied for a permit to develop its parcel into a subdivision. The permit was issued and required Statewide to provide a new roadway for access to the lots in the proposed subdivision. So, Statewide dedicated a 70 foot easement and built a new road. The new road was located over 300 feet away from the original easement but was intended to replace the original easement for the adjacent properties. The appellants never consented to the relocation of the easement. Statewide filed a declaratory relief action and requested summary judgment. The district court granted Statewide's motion, finding that Idaho Code 55-313 allowed for relocation of an easement without the dominant owner's consent.

The Court considered three questions on appeal:
  1. Whether Idaho Code 55-313 prohibits a landowner from relocating a private access road where the private access road enters onto a public roadway.
  2. Whether Idaho Code 55-313 permits a servient estate holder to unilaterally move an expressly granted easement without the consent of the dominant holder (when the easement is for motor vehicle use), and if so whether the statute violates the federal and state constitutions, respectively.
  3. Whether there are genuine issues of material fact as to the appellants injury under 55-313
Question 1 is an issue of statutory construction. The Court follows the longstanding rule of construing statutes to effectuate the expressed intent of the legislature. Section 55-313's language allows for the relocation of an easement when the access "is less than a public dedication." The Court finds that the phrase "less than a public dedication" is unambiguous. The appellants fail to argue that the original easement has been dedicated to the public. Therefore, the easement is within the scope of Idaho Code 55-313.

The Court next finds that if the legislature intended for unilateral relocation to constitute per se injury, it would have required consent by the dominant holder, as it had done in other statutory provisions (Idaho Code Section 42-1207 and 18-4308). The Court finds that the statute contains an "obvious" implication that consent is not required for relocation of an easement. The Court states that "there would be no reason for that statute to have been enacted" if it required consent from all interested parties. So long as the relocation does not injure the interested parties, relocation is acceptable without the consent of the dominant estate holder.

The Court next considers the argument that the relocation is effectively a taking under the Fifth Amendment of the United States Constitution and Article I, Section 14 of the Idaho Constitution. The Court notes that relocation provides the same benefit as the original easement, therefore no easement has been vacated. The Court also finds that the appellants lack authority for the proposition and decline to engage in a takings analysis.

Finally, the Court rules that there are no material issues of fact as to whether the appellants have been injured by the relocation of the easement. There is no evidence of an impediment to use, no safety hazard, and only a minor, incidental economic loss to an easement holder that is not associated with the purpose for which the easement is held.

The lesson here is that there has to be some sort of substantive injury other than inconvenience in order to recover as a dominant estate holder of an easement for motor vehicle access. The case is fairly narrow in its application but every time the Court engages in statutory construction, it's important to pay heed.

Monday, February 14, 2011

City of Eagle v. Idaho Department of Water Resources--Idaho Supreme Court


The decision of City of Eagle v. Idaho Department of Water Resources (IDWR) came down on February 7, 2011. It's a 5-0 decision affirming the district court's dismissal of Eagle's petition for judicial review.

In 2005, Eagle applied to appropriate water for municipal use. IDWR eventually approved the appropriation but placed "certain limitations and conditions" on it. Those limitations and conditions are never described in the decision. The order confirming the appropriation, but imposing the limitations, was issued on July 3, 2008. It was not served on Eagle or another party to the proceedings. IDWR reserved the order on July 16, 2008, and properly served all parties. IDWR sent a letter along with the order and informed Eagle that "for purpose of filing an appeal, the date of service referred to in the enclosed order is now July 16, 2008." On August 11, 2008, Eagle filed a petition for judicial review of the IDWR order but the district court dismissed the petition as untimely, "holding that the [28] day appeal period began to run on July 3, 2008." The Idaho Supreme Court affirms the district court.

The Court's reasoning is based on the applicable statutory language in effect at the time. Idaho Code Section 67-5273(2) provided, in part, that "[a] petition for judicial review of a final order . . . must be filed within twenty-eight (28) days of the issuance of the final order . . . or, if reconsideration is sought, within twenty-eight (28) days after the decision thereon." Since the order was issued on July 3, 2008, even though it was not properly served, the time period began to run on July 3rd rather than July 16th, which was the date of service.

(The statute has since been amended to state that an appeal must be filed within 28-days of the service date rather than the issuance date of the order.)

Eagle argued that IDWR re-issued the order on July 16, 2008, when it properly served the order. The Idaho Supreme Court rejects the argument on the basis that the order that was served on July 16, 2008, contains no language that would give rise to the conclusion that the order had been re-issued. The Court also dismisses Eagle's argument that IDWR's own letter suggested that the order had been reissued because the letter said that Eagle should use July 16, 2008 as the starting date for calculating the deadline for any appeal. The Court states "IDWR's statement in the ltter concerning the appeal period appears to be nothing more than the result of IDWR's erroneous belief that the appeal period begins when an order is served." The Court, relying on the statutory language, notes that it is issuance of the order and not service that triggers the appellate timeline.

The Idaho Supreme Court also rejects Eagle's argument that IDWR "misled" Eagle about the appeal time period. The Court distinguishes the cases relied upon by Eagle (Petersen v. Franklin County, 938 P.2d 1214 (Idaho 1997) and In re Quesnell Dairy, 152 P.3d 562 (Idaho 2007)) because the agencies in those cases failed to clarify that their orders were final and therefore appealable. In this case, there was no dispute that the order was final, appealable, and issued on July 3, 2008, which is the triggering date under the applicable statute.

Eagle raised a final issue of estoppel. The Court holds that "[e]stoppel is not appropriate where jurisdiction is at issue." Since the district court lacked jurisdiction over the petition to review, estoppel is not a proper defense.

The decision is the right one but it's pretty harsh given the conflicting statements provided by IDWR, who as an agency of the state should have things worked out to the point that it knows and strictly follows the law. However, that's probably the idealist in me. Clearly, Eagle's attorneys should have read the statute and known that the statute that applied required a petition to be filed within 28-days of the issuance date. Eagle had ample time to put a petition together and to have it filed. Eagle just waited too long.

The lesson from the appeal is simply to file the notice of appeal or petition for review as soon as possible and not to wait until the last minute. The Court has really muddied the waters lately on what is actually an appealable order, a final judgment, and when a party's appellate time truly begins. I have heard justices say that the Court is trying to clarify things for the local bar but the decisions use ambiguous language to the point where it's difficult to know exactly when and what the Court means.

Setting aside the issues about what is a final, appealable order, file the notices and petitions as soon as possible. If they're premature, then that means they're on time once a final order is entered. Then, at the very least, you've preserved the appeal and avoided malpractice.

Wednesday, February 9, 2011

The Litigation Privilege


So, please forgive a minor deviation from the routine here. A partner at my firm, Lance Schuster, recently published an article in the Idaho State Bar Magazine. Here is a link to the magazine. Lance's article starts on page 38. The article discusses the Idaho Supreme Court Case of Taylor v. McNichols, which addresses the litigation privilege and expands it. It's a nice little write up and it's always good to be published. Nice job, Lance.

Monday, February 7, 2011

Adams v. Aspen Water, Inc.--Idaho Supreme Court


Adams v. Aspen Water, Inc. is an appeal from the Industrial Commission, which is reviewed under a free review standard for issues of law. Factual determinations won't be disturbed by the Court if they are supported by substantial and competent evidence.

The case involves Matthew Adams, an employee of Aspen Water. As part of Adams' employment he'd install, service, and maintain water softening systems. On November 3, 2008, Adams took an early lunch and then after lunch, he went to the local DMV to renew his driver's license. Adams waited for a long time at the DMV, a not too surprising turn of events, and then left work at 2 pm that afternoon. Adams never received permission from Aspen Water to visit the DMV at either time during the day. Aspen Water then fired him the next day for employment-related misconduct.

Adams applied for unemployment benefits. The Department of Labor found that he was not eligible because he was terminated for misconduct. The Appeals examiner concluded that Adams had been terminated for reasons unrelated to employee misconduct. Adams had presented evidence of Aspen Water's financial distress and that Aspen Water had allowed its employees to run personal errands without prior approval. Aspen Water then appealed to the Industrial Commission which found that Adams was terminated for employment-related misconduct. Adams then appealed to the Idaho Supreme Court.

The Court found that the Commission properly applied the standard of behavior test for employment cases. The test requires the employer to prove by a preponderance of the evidence that (1) the employee's conduct fell below the standard of behavior expected by the employer and (2) that the employer's expectations were objectively reasonable under the circumstances.

Aspen met the first prong before the Commission because it presented evidence that it subjectively expected its employees to seek permission to run errands on company time. Adams had taken three hours for his visits to the DMV. This was abnormal. An employer has an objective and reasonable expectation that its employees will show up for work and stay at work. The Court found that the expectation "is a fundamental expectation shared by employers in every field of work." The expectation was reasonable and the Court found that Aspen had not altered this expectation by its course of conduct, i.e., it did not allow errands of the duration taken by Adams in this case. Short, personal errands had been permitted; long, personal errands had not been permitted without prior approval.

Adams also argues that Aspen should have given him a warning rather than terminating him given the progressive disciplinary procedures outlined in the employee handbook. The Court refuses the argument on the basis that choosing a different disciplinary hierarchy is irrelevant to the consideration of whether an employee's action is employment-related misconduct.

Three of the justices concur with Justice Jim Jones. Justice Burdick, interestingly, dissents without opinion. I'd personally be interested in what Justice Burdick's rationale is for dissenting. It appears that Adams made some compelling arguments about Aspen not always expecting its employees to acquire prior approval to run personal errands. I'd have liked to know Justice Burdick's thoughts on those arguments and whether he felt like the Industrial Commission was going out of its way to avoid giving Adams unemployment benefits.

Thursday, February 3, 2011

Curtis-Klure, PLLC v. Ada County Highway District--Idaho Supreme Court Decision

The Idaho Supreme Court issued several decisions yesterday. The first one that i am going to tackle is Curtis-Klure, PLLC v. Ada County Highway District. The Idaho Supreme Court unanimously affirms the district court's grant of summary judgment.

The facts are simple. Thomas Curtis and Jack Klure practiced dentistry together as Curtis-Klure, PLLC dba Maple Grove Dentistry. The practice leased a property for its practice from Dr. Curtis, who owned the property along with his wife. Dr. Klure owned no interests in the property where the practice was located. Dr. Curtis also owned interests in two other lots (Lots 16 and 17) near the location of the practice (Lot 19).

The practice was located on the northeast quadrant of the intersection of Maple Grover Road and Ustick Road. ACHD sought to widen the roads in 2005. ACHD contacted Dr. Curtis to try and negotiate the purchase of portions of 16 and 17. Dr. Curtis countered and offered to sell ACHD all of his interests in Lots 16, 17, and 19. ACHD then offered to purchase those lots at a certain price.

In 2007, Dr. Klure moved his practice from Lot 19 to a new location. Dr. Curtis and Curtis-Klure then entered into a settlement agreement with ACHD, settling all claims against ACHD and in which ACHD purchased the property. In June 2007, Dr. Curtis moved his practice from Lot 19. The lawsuit by Dr. Klure and Curtis-Klure (collectively Klure) followed.

Klure sued for business damages under Idaho Code Section 7-711(2). The statute provides for damages only if the state condemns property. The Idaho Supreme Court affirms the district court's finding that no condemnation took place. To condemn property, the state has to show (1) that the proposed use is authorized by law and (2) that the taking is necessary for such use. The purchase of the properties was never found to be necessary for the construction project. Thus, no condemnation.

Klure argued that a "purchase under threat of condemnation" is the same as judicial condemnation. However, the purchase of the property was a legitimate deal and was not purchased under threat of condemnation. No order of condemnation had been issued by the County Commissioners. The Court concludes, "The mere fact that ACHD had the power of condemnation did not transform its offer to purchase into either a threat of condemnation or an attempted condemnation."

ACHD sought fees under 12-121. The Court rejects ACHD's request because ACHD failed to support its claim with any argument in the briefing.