Town of Lincoln v. City of Whitehall
Town of Lincoln v. City of Whitehall
Opinion of the Court
*119¶ 1 The Town of Lincoln appeals a grant of summary judgment in favor of the City of Whitehall concerning a grassroots annexation procedure known as "direct annexation by unanimous approval."
¶ 2 Under the undisputed facts here, we first conclude the circuit court properly dismissed all of the Town's claims other than the statutory contiguousness claim. Based upon the interplay between various provisions of the direct annexation statute-namely, WIS. STAT. § 66.0217(6)(d)1., (6)(d)2., and (11)(c) -we conclude a town is limited in a court action to challenging contiguity and county parallelism, the latter of which is not at issue here. Given this statutory bar, the court properly concluded that only the Town's challenge to contiguity remained viable.
*407*120¶ 3 We also conclude the circuit court properly granted summary judgment on the Town's contiguousness claim. Contiguity between the annexed territory and the annexing municipality is satisfied, at a minimum, in instances where there is a significant degree of physical contact between the two. That is plainly the case here, where the annexed territory shares an approximately three-quarter-mile border with the City.
¶ 4 We further conclude summary judgment in the City's favor was appropriate to the extent statutory contiguity also requires that the annexed territory not be arbitrarily selected for inclusion. Because the petition at issue was owner initiated, the relevant case law instructs that a town can challenge arbitrariness only if the annexation is of an exceptional shape, or if the annexing municipality is itself either a petitioner or the "real controlling influence" behind the annexation. We conclude, as a matter of law, that the annexed territory here is of an "unexceptional shape" that does not warrant further scrutiny of the territory's boundaries. Further, based on the record evidence before us, no factfinder could reasonably conclude the City was either a petitioner or the "real controlling influence" directing the annexation proceedings. Consequently, we affirm.
BACKGROUND
¶ 5 In 2015, the City of Whitehall's common council passed four annexation ordinances detaching territory from the Town of Lincoln. The annexation was the initiative of Whitehall Sand and Rail, LLC, which was interested in locating a sand mine to the northwest of the City's then-current borders and desired to have it within the City limits. Whitehall Sand and Rail selected the property to be included in the *121annexed territory, and then it approached the property owners with offers to purchase their land, contingent on annexation.
¶ 6 The annexation was to occur in four phases, with the territory in each phase the subject of a separate ordinance.
¶ 7 Each of the ordinances was adopted pursuant to a method of annexation known as "direct annexation by unanimous approval." This is a grassroots annexation method that requires "all of the electors residing in the territory and the owners of all of the real property in the territory" to petition the city or village for direct annexation. WIS. STAT. § 66.0217(2). Such annexation petitions are presented to the municipality *122on a "take it or leave it" basis. See *408Town of Lyons v. City of Lake Geneva ,
¶ 8 The Town here sought review of the annexation from the Wisconsin Department of Administration (the Department), as was its right under WIS. STAT. § 66.0217(6)(d). The Department concluded the annexation violated statutory contiguity because the territory was in an impermissible configuration. Specifically, the Department concluded the annexation was a "balloon-on-a-string" configuration because phase two was a "long and narrow corridor of territory which primarily serves to connect the much larger territory" in phases three and four.
¶ 9 After receiving the Department's favorable findings, the Town invoked its right to commence this declaratory judgment action seeking a court declaration that the annexation ordinances were invalid and unenforceable. In addition to challenging the annexed territory's contiguity to the City, the Town made several other claims, including that: (1) the annexation petitions were procedurally defective because they were not signed by all the owners of the real property in the territory; (2) the ordinances were arbitrary and violated the "rule of reason," a judicially created method of reviewing a municipality's exercise of its annexation power; and (3) the City, not the individual petitioners, was the real controlling influence behind the annexation petitions.
¶ 10 The City filed a motion to dismiss all of the Town's claims except its contiguousness claim, asserting *123the Town was barred from challenging those matters under WIS. STAT. § 66.0217(11)(c). The circuit court agreed that para. (11)(c) barred all but the Town's contiguousness claim. The City then filed a motion for summary judgment, asserting statutory contiguity was satisfied as a matter of law because the annexed territory shared an approximately three-quarter mile border with the City and the territory was of an unexceptional shape. The court granted that motion as well, concluding all that was required to satisfy contiguity was that the territory was physically touching an existing City boundary. The Town now appeals.
DISCUSSION
I. The circuit court properly granted the City's motion to dismiss.
¶ 11 We first review whether the circuit court properly granted the City's motion to dismiss all of the Town's annexation challenges except for its contiguousness challenge. A motion to dismiss tests the legal sufficiency of the complaint. Data Key Partners v. Permira Advisers LLC ,
¶ 12 It is undisputed the Town had a right to challenge the annexed territory's contiguity to the City after receiving a favorable review of that issue from the Department. As we explain, the circuit court correctly *124observed that many of the allegations in the Town's complaint go to the issue of contiguity, including its assertions that the annexation resulted in arbitrary boundary lines, that the annexed territory was "something akin to a balloon on a string configuration," and that the municipal *409boundaries were "gerrymandered." The Town's contiguousness challenge was the subject of the City's later summary judgment motion. Our review of the motion to dismiss concerns all other matters raised in the Town's complaint.
¶ 13 The City argues the statutory scheme contained in WIS. STAT. § 66.0217 significantly constrains a town's ability to challenge an owner-initiated annexation ordinance. It reaches this conclusion by a plain-language interpretation of the direct annexation statute, which interpretation is bolstered by the amendment history of that section. Statutory interpretation begins with the statute's language; if the meaning of the statute is plain, we ordinarily stop the inquiry. State ex rel. Kalal v. Circuit Court for Dane Cty. ,
¶ 14 The current version of WIS. STAT. § 66.0217 significantly circumscribes a town's ability to litigate a direct annexation by unanimous approval. Under para. (11)(c), "no action on any grounds, whether procedural or jurisdictional, to contest the validity of [a direct] annexation [by unanimous approval] may be brought by any town." The statute allows for a single exception: a town may make a court challenge to an *125annexation to the extent permitted under subd. (6)(d)2. We therefore turn to that subdivision and its related provisions.
¶ 15 WISCONSIN STAT. § 66.0217(6)(d)2. permits a town to challenge an annexation in the circuit court only if the Department "finds that an annexation violates any requirement" specified in subd. (6)(d)1. Section 66.0217(6)(d)1., in turn, provides that the Department may, at the request of a town affected by an annexation, review two things: (1) whether the territory to be annexed is contiguous to the annexing authority; and (2) whether the annexation satisfies para. (14)(b), which requires that some part of the annexing city or village be located in the same county as the territory to be annexed. We refer to these requirements, respectively, as contiguity and county parallelism. If the Department finds a violation of either requirement, the town has forty-five days from receipt of the Department's findings to file a court action challenging the annexation.
¶ 16 The City and the Town dispute which matters may be litigated in a court action subsequent to the Department's review. The Town argues that once the Department has found an annexation deficient for either reason specified in WIS. STAT. § 66.0217(6)(d)1., the annexation may be challenged on any basis. In other words, the Town's position is that it is not limited to challenging contiguity or county parallelism in a court action, but rather it may assert the annexation is invalid for any reason. The City argues a town can litigate in a court challenge only the two matters the Department has been authorized to consider under subd. (6)(d)1.
*126¶ 17 Based upon a plain-meaning interpretation of WIS. STAT. § 66.0217 's relevant provisions, we conclude a town, when commencing a court action under subd. (6)(d)2., is limited to challenging contiguity and county parallelism, the only two matters on which the Department may opine under subd. (6)(d)1. This interpretation is the only reasonable one that is faithful to our canons of statutory construction. Specifically, we must interpret statutory language "in the context in which it is used; not in isolation but as part of a whole; in relation to the language of surrounding or closely-related statutes; and reasonably, to avoid absurd or unreasonable results."
*410Kalal ,
¶ 18 The Town's alternate interpretation produces absurdity. Specifically, the Town never explains why the legislature would allow a town to litigate a broad set of challenges to the validity of an annexation under WIS. STAT. § 66.0217(2), while simultaneously limiting the matters the Department can consider during its threshold review. Nothing in subd. (6)(d)2. suggests the Department's findings regarding contiguity or county parallelism should open the door for a town to challenge a direct annexation by unanimous approval on some other basis, not otherwise statutorily enumerated. The Town's interpretation produces the nonsensical result that a town's court challenge, which is contingent on the Department's findings on only two topics, may invoke matters that the Department never even considered. It also would produce the odd result that only towns successful before the Department on a *127challenge to contiguity or county parallelism could challenge the validity of an annexation on different grounds, while other towns could never bring such a challenge, even if it were valid.
¶ 19 The history of the amendments to WIS. STAT. § 66.0217 supports our conclusion that the scope of circuit court review under subd. (6)(d)2. is the same as the scope of the Department's review under subd. (6)(d)1. Paragraph (11)(c) was enacted in 2003 and, as originally written, barred without exception a town from contesting the validity of a direct annexation by unanimous consent. See 2003 Wis. Act 317, § 3. Thus, in Town of Merrimac v. Village of Merrimac ,
¶ 20 Both Town of Merrimac and Darboy Joint Sanitary District were decided under the version of WIS. STAT. § 66.0217(11)(c) in effect between 2003 and 2010. In 2012, the legislature revised the annexation statute again, this time enacting the provisions currently located in para. (6)(d). 2011 Wis. Act 128, § 1. At that time, the legislature also carved out the exception to para. (11)(c)'s general bar on town actions contesting the validity of direct annexations by unanimous consent. 2011 Wis. Act 128, § 2. This amendment history supports the view that the exception contained in para.
*128(11)(c) is to be narrowly construed as responsive to the issues raised by the towns in Town of Merrimac and Darboy Joint Sanitary District . In other words, we find it significant that the new exception in para. (11)(c) was apparently tailored to allow town challenges only to the contiguousness and county parallelism issues raised in those cases.
*411¶ 21 The Town nonetheless asserts that WIS. STAT. § 66.0217(11)(c) does not bar its challenge to the annexation on the basis that the petition lacked the necessary signatures of all of the electors and property owners in the territory to be annexed. The Town argues this is a "threshold issue" concerning what procedures and standards govern the annexation. The Town reasons that if the petition did not satisfy the formal requirements of subsec. (2), it was not, in fact, a petition for direct annexation by unanimous approval, and therefore para. (11)(c) does not impose any restrictions whatsoever on the nature of a town's challenge.
¶ 22 We conclude WIS. STAT. § 66.0217(11)(c) bars the Town's challenge to the sufficiency of the petition for direct annexation by unanimous approval. While there is some merit to the tautological notion that subsec. (2) contains "threshold" requirements regarding the sufficiency of the petition actually being one of *129unanimous consent, that notion does not mean the legislature has permitted towns to raise such a challenge. Rather, such matters are to be considered by the annexing authority when deciding whether to adopt an ordinance. If the petition is in some way lacking-because, for example, it is missing a required signature-the annexing authority lacks the power to adopt the annexation ordinance. Cf. Town of Medary v. City of La Crosse ,
¶ 23 The Town also argues that, despite WIS. STAT. § 66.0217(11)(c), its claim that the City annexation ordinances violated the "rule of reason" survives. The rule of reason is a judicially created doctrine that allows courts to invalidate arbitrary or capricious exercises of a municipality's annexation authority.
*412Town of Menasha v. City of Menasha ,
¶ 24 The City argues that, given the enactment of WIS. STAT. § 66.0217(11)(c) and related provisions, the rule of reason is now largely defunct as it relates to a town's ability to challenge a direct annexation by unanimous approval. The City's position is that para. (11)(c) bars a town from attacking an annexation ordinance under the rule of reason, just as that provision bars any other challenge that does not concern the matters addressed under para. (6)(d)-namely contiguity and county parallelism. As a result, the City *131contends the circuit court properly dismissed the Town's rule-of-reason claim.
¶ 25 We agree with the City that WIS. STAT. § 66.0217(11)(c) bars a town from bringing a general challenge to a direct annexation by unanimous approval under the rule of reason. The rule was established long before para. (11)(c) was enacted, see Town of Fond du Lac v. City of Fond du Lac ,
¶ 26 However, the rule of reason is not wholly abrogated by the current version of WIS. STAT. § 66.0217(11)(c). Obviously, that provision places no limitations upon the types of challenges parties other than towns may bring. Even in cases brought by towns, the bar applies only to attempts to invalidate a direct annexation by unanimous approval under subsec. (2). Moreover, as we shall explain, there appears to be some overlap between the rule of reason's first factor and the contiguousness inquiry, the latter of which may still be challenged by a town under para. (11)(c). Thus, to the extent the arbitrariness of boundary lines *132is relevant to a determination of contiguity, the rule of reason's first factor retains some vitality even under para. (11)(c).
¶ 27 In all, we conclude that under the current version of WIS. STAT. § 66.0217(11)(c), a town is generally barred from contesting the validity of an annexation. The sole exceptions to this rule are contained in subd. (6)(d)2., which permits a court action on either of the two issues identified in subd. (6)(d)1.-contiguity or county parallelism-provided the town first obtains a favorable finding from the Department on those matters. Thus, the circuit court properly dismissed all of the Town's claims except for its challenge to the annexed territory's contiguity to the City. We next consider whether the circuit court properly granted summary judgment on that issue.
II. The circuit court properly granted summary judgment to the City on the Town's contiguousness claim.
¶ 28 WISCONSIN STAT. § 66.0217(2) prohibits annexation "by a city or village under this subsection unless the territory to *413be annexed is contiguous to the annexing city or village." "The term 'contiguous' is not statutorily defined and a substantial amount of case law has arisen with respect to the term's meaning and application." Town of Delavan v. City of Delavan ,
¶ 29 Annexation ordinances enjoy a presumption of validity, and the party attacking an ordinance's validity bears the burden of overcoming this presumption with proof that the ordinance is invalid. Town of Pleasant Prairie v. City of Kenosha ,
¶ 30 Our analysis of the case law yields the following rules that apply to a town's challenge to contiguity in a direct annexation by unanimous approval under WIS. STAT. § 66.0217(2). Statutory contiguity is generally satisfied by a significant degree of physical contact between the annexed territory and the municipality's boundary, or when any separation between the two boundaries is de minimis. Town of Delavan ,
¶ 31 In a direct annexation, property owners and electors, not the municipality, usually decide for themselves what the boundaries of the annexed area should be. Therefore, a direct annexation by unanimous approval is generally not susceptible to an arbitrariness *134challenge. Town of Lyons ,
¶ 32 We begin with the meaning of "contiguous" under WIS. STAT. § 66.0217(2). Again, there is no single, precise definition of the term. Town of Delavan ,
¶ 33 However, the absence of physical touching does not necessarily destroy contiguity. Our supreme court has held that annexed territory was "close enough" to the city limits despite a twenty-three-foot *135gap where a public road was located between the two. Town of Lyons ,
¶ 34 The annexed territory here plainly satisfies WIS. STAT. § 66.0217(2) 's physical contiguousness requirements. Phase one borders the City for approximately three-quarters of one mile, thereby giving physical contiguity to the entirety of the annexed area. Given these undisputed facts, we conclude the City was entitled to summary judgment on the matter of physical contiguity. There was a "significant degree of physical contact" so as to satisfy the statutory requirements.
¶ 35 The Town argues this contact does not end the contiguousness inquiry, for even if the annexed territory is physically contiguous to the annexing municipality, an annexation may be declared invalid on the grounds of arbitrariness. The Town primarily relies upon Town of Mt. Pleasant as arguably being analogous to the present case. There, the 145-acre annexed area was located to the southwest of the then-existing city limits and was connected to the city "only by a corridor approximately 1,705 feet long, and varying in width from approximately 306 feet to 152 feet." Town of Mt. Pleasant ,
¶ 36 Using the rule of reason's first factor as the standard-i.e., whether the boundaries were fixed in an arbitrary or capricious fashion, or in a way that constituted an abuse of discretion-the Town of Mt. Pleasant court held as follows:
Shoestring or gerrymander annexation is not a rare phenomenon. The tendency of subdividers to reach far out into the countryside for vacant land, and their desire to attach it to the city of services, is natural; however, this can lead to annexations which in reality are no more than isolated areas connected by means of a technical strip a few feet wide . Such a result does not coincide with legislative intent, and tends to create crazy-quilt boundaries which are difficult for both city and town to administer.
Id. at 46,
¶ 37 In dissent, Justice Wilkie, joined by Justice Fairchild, criticized the court for "engraft[ing] onto the statute the additional requirement that a proposed annexation is subject to review under the 'rule of reason' to determine whether the proposed boundary lines are 'reasonable in the sense that they were not fixed arbitrarily, capriciously, or in abuse of discretion.' " Id. at 47-48,
*415Id. at 48,
*137¶ 38 As even the Town admits, the Town of Mt. Pleasant rule "has been somewhat modified over time." As it relates to direct annexations by unanimous approval, Justice Wilkie's dissent has largely won the day. In Town of Lyons , our supreme court held: "Where property owners initiate direct annexation, we do not think the municipality may be charged with arbitrary action in the drawing of boundary lines." Town of Lyons ,
¶ 39 More specifically, there appear to be only two circumstances under which the alleged arbitrariness of an annexation's boundaries may still be challenged as violating WIS. STAT. § 66.0217(2) 's contiguousness requirement. The first is "where the annexing municipality itself is one of the petitioning landowners or where the municipality otherwise is shown to be the real controlling influence in the proceedings." Town of Pleasant Prairie ,
¶ 40 The Town argues both circumstances exist here. First, it contends the City was the "real controlling influence" behind the annexation's design and configuration, such that it-not the property owners-should be charged with any arbitrariness in the boundaries. " 'Influencing' the proceedings, in this context, means more than providing mere technical assistance or recommendations to the petition signers; rather, it means conduct by which the annexing authority dominates the petitioners so as to have effectively selected the boundaries." Town of Menasha ,
¶ 41 The Town contends it is "undisputed that the boundaries were not established by the annexation *139petitioners," but rather "by the City ... and Whitehall Sand and Rail." In truth, there is no evidence that would support a determination that the City so dominated the annexation proceedings that it effectively selected the annexation boundaries. The City's mayor testified that Whitehall Sand and Rail approached the City about annexing property for a sand mine and transload facility in 2011 or 2012. At that point, the City advised Whitehall Sand and Rail that it would have to persuade property owners to go along with the annexation. Between 2013 and 2015, Whitehall Sand and Rail entered into purchase agreements with the annexation petitioners. The purchase agreements variously required that the property be annexed or that the property owner support annexation for the transaction to be finalized.
¶ 42 Both the City's mayor and its administrator testified that Whitehall Sand and Rail and the property owners determined what property was included in the proposed annexation territory. The City's mayor testified that at no time did the City solicit or encourage property owners to include their property in the proposed annexation. It appears undisputed that Whitehall Sand and Rail selected the properties to be included and then identified them on a plat map for the City.
¶ 43 The only arguable evidence of any City involvement in setting the boundaries occurred after the annexation petitions had been received. At that time, the mayor objected to the exclusion of certain property in phase one, which would have created an "island" that was, in the mayor's opinion, impermissible. See Town of Fond du Lac ,
¶ 44 The Town observes the City had an economic incentive to support annexation. Yet, the mere fact that a municipality benefits from an owner-initiated annexation does not alone demonstrate control over the process so as to make the boundaries effectively selected by the municipality. See Town of Lafayette ,
¶ 45 There also is no evidentiary basis to find Whitehall Sand and Rail acted as an extension of the *141City in this case. Indeed, the Town-despite attempting to combine the two entities in claiming it is "undisputed" that they, together, selected the boundaries-develops no such argument. There is no evidence, and no reasonable inference from the evidence presented, that the City controlled the annexation process. Negotiations on a development agreement between the City and Whitehall Sand and Rail did not commence until after the annexation, and in fact no development agreement had been signed as of 2016.
¶ 46 As to the second possible basis for challenging the arbitrariness of this annexation's boundaries, we conclude the annexed territory here was not of an "exceptional shape" demonstrating shoestring, gerrymandered or crazy-quilt municipal boundaries. The Town states this court "can draw its own conclusions regarding the arbitrariness of the annexed properties by merely looking at the four annexation maps." The alleged "exceptional shape" of the annexed territory is not obvious to us. Indeed, the general shape appears similar to an area of the City's existing territory extending to the southwest. We do not perceive a "crazy quilt" here, nor does the shape appear to us to have created an obviously gerrymandered "island." While the shape of the annexed territory is admittedly irregular, mere irregularity is insufficient to demonstrate arbitrariness. Town of Medary ,
¶ 47 To elaborate, our understanding of existing law is that, to the extent an arbitrariness/exceptional shape analysis still applies to owner-initiated annexations, see supra n.7, the analysis is designed to protect against only the most egregious configurations. Specifically, annexations cannot add territory that represents an "island"-either in actuality or in essence-apart from the municipality's existing territory. See, e.g. , Town of Mt. Pleasant ,
¶ 48 A comparison of the annexed area in this case to the annexed area in Town of Mt. Pleasant is instructive. The 145-acre annexation there was connected to the city by a long, narrow corridor approximately 1,700 feet long that varied in width between about 150 and 300 feet. Id. at 43,
¶ 49 Further, the only portion of the annexed territory here arguably resembling a "string" is in phase two. But even that phase consists of nearly 300 acres and, most importantly, is over 1,000 feet wide at its narrowest point. Phase two was initially even larger, but the Town's chairperson requested that Whitehall Sand and Rail remove two properties from the annexation petition, those of the Town clerk and treasurer, because the chairperson did not want to lose those staff members. Under these circumstances, we conclude as a matter of law that the annexation here was not of an "exceptional shape" warranting further scrutiny.
CONCLUSION
¶ 50 In sum, we conclude that the Town is limited by WIS. STAT. § 66.0217(11)(c) to challenging the *144annexed territory's contiguity to the City. The circuit court therefore properly granted the City's motion to dismiss all but that claim. As to the contiguousness claim, the annexation satisfies physical contiguity. Because this is an owner-initiated annexation, we will not review the alleged arbitrariness of the boundaries unless the City was the "real controlling influence" behind the annexation or unless the annexed territory is of an exceptional shape. The Town has shown neither to be the case here. Accordingly, the circuit court properly granted the City's summary judgment motion on the Town's contiguousness claim.
By the Court. -Judgment affirmed.
This appeal was advanced for decision under Wis. Stat. Rule 809.20 (2015-16). All references to the Wisconsin Statutes are to the 2015-16 version unless otherwise noted.
Whitehall Sand and Rail filed a motion to intervene in this lawsuit, which was denied.
This method was apparently at the request of the Whitehall Electric Utility, which wanted to assure it would be able to provide electricity to Whitehall Sand and Rail. The ordinances were passed on the same day, and the parties agree they are to be analyzed as if they constituted a single annexation.
We note that the 2012 amendments to
We note that contiguity is also a
Additionally, the Town suggests that the type of annexation here can be reclassified as a direct annexation by one-half approval under
For example, we have relied on the following definitions: "touching along boundaries often for considerable distances"; "next or adjoining with nothing similar intervening"; "NEARBY, CLOSE: not distant"; and "CONTINUOUS, UNBROKEN, UNINTERRUPTED: touching or connected throughout." Town of Campbell v. City of La Crosse ,
We acknowledge that in Town of Campbell v. City of La Crosse ,
The Town also argues the annexation divides certain properties that were originally subject to a single legal description, such that those properties are now partly inside the annexed territory and partly outside the annexation boundaries. Yet, in a direct annexation by unanimous approval, such matters are left to the discretion of the petitioning landowners, who have the right to act in their best interests as they see them. See Town of Campbell ,
Reference
- Full Case Name
- TOWN OF LINCOLN v. CITY OF WHITEHALL, Defendant-Respondent.
- Cited By
- 3 cases
- Status
- Published