Opinion
No. WD 63248
February 22, 2005
Appeal from the Circuit Court of Jackson County, The Honorable Justine Elisa Del Muro, Judge.
The City of Kansas City appeals from a judgment in mandamus directing that it grant a preliminary plat to Furlong Companies, Inc., and an award of damages against the City under 42 U.S.C. section 1983 arising from the denial of the plat. The City complains that the trial court improperly engaged in de novo case review applicable to uncontested case matters under the Administrative Procedure Act, Mo. Rev. Stat. Section 536.150 (2000). The City contends that the proper review under the MAPA was more limited under the contested case procedures of Mo. Rev. Stat. Section 536.130 (2000). We agree but reverse and remand with directions for the trial court to remand the matter to the City because it failed to make written findings of fact and conclusions of law as required in a contested case.
Facts
On October 1, 1999, Furlong filed with the City Development Department ("City Staff") an application for a preliminary plat for an undivided piece of property in south Kansas City. The property was zoned for Intermediate Business, High Buildings, and comprises approximately 2.76 acres. Furlong intended to subdivide the property into three lots for commercial development.
On November 3, 1999, Furlong met with City Staff to receive comments on the plat application. City Staff reviewed Furlong's application and suggested conditions that needed to be met prior to approval. On December 7, 1999, at a public hearing, the City Staff recommended to the City Plan Commission that it approve the preliminary plat application subject to the conditions. Furlong agreed to all of the conditions of approval set forth by the City Staff. Notwithstanding the City Staff's recommendation, the Plan Commission voted to deny Furlong's plat application. No sworn testimony was taken at the Plan Commission hearing, nor was Furlong provided with the opportunity to confront and cross-examine witnesses. Furlong made no objection to the manner in which the Plan Commission proceedings were held. The Plan Commission did not issue findings and conclusions as to why Furlong's application was denied.
Furlong received no answer to his request as to why the City Plan Commission denied his application. City Staff told Furlong that they could not discuss the denial of his application "for fear of litigation." Furlong attempted to submit a revised preliminary plat reflecting compliance with the aforementioned conditions, but City Staff refused to accept it. Furlong then requested that the plat application be submitted to the City Council and on February 3, 2000, a proposed ordinance reflecting Furlong's preliminary plat application was introduced to the City Council for first reading.
On March 1, 8, 15, and 22 of 2000, a subdivision of the full City Council, the Planning, Zoning Economic Development Committee (the "PZ Committee"), held public hearings regarding approval of Furlong's preliminary plat. During the course of those hearings, the City Council heard testimony from area residents both in favor of and in opposition to the plat application. Witnesses testifying during the proceedings before the PZ Committee were not sworn and Furlong was not allowed to cross-examine them. Furlong did not object to the manner of the proceedings. The City also requested a traffic study to analyze the effect of Furlong's proposed plat on the surrounding area. Furlong complied with the traffic study request and the study concluded that Furlong's plat would have little impact on the existing traffic system.
The PZ Committee is comprised of city councilpersons and acts as an advisory committee to the full City Council. It routinely reviews preliminary plat ordinance requests.
At the March 15, 2000, hearing the City requested more time and information in regard to the traffic study. On March 29, 2000, Furlong provided the PZ Committee with a revised, more comprehensive traffic study which also concluded that Furlong's proposed plat would have little impact on traffic in the surrounding area. At the March 29 meeting the PZ Committee voted the matter "off the docket," meaning that it would not be reviewed again for up to six months.
On April 13, 2000, the Chairman of the PZ Committee called Furlong's preliminary plat ordinance out of Committee for docketing before the entire City Council. The Chairman stated that the City's legal counsel had informed various Council members that there was no legal basis for rejecting Furlong's application. On May 4, 2000, the City Council voted not to approve Furlong's preliminary plat by a vote of 9 to 4. No formal hearing occurred before the full City Council, and no other procedures before the entire City Council appear in the record. No findings of fact or conclusions of law were issued in regard to the City's denial of Furlong's preliminary plat.
Furlong filed suit against the City on May 9, 2000, seeking an order of Mandamus compelling the City to approve his plat application and also seeking damages under 42 U.S.C. Section 1983. After hearing evidence on Furlong's Mandamus claim, the trial court entered an order of Mandamus against the City on November 29, 2000, compelling the City to approve Furlong's plat application immediately and without undue delay. In so doing, the trial court expressly found that the City's action in denying Furlong's preliminary plat application was unlawful, unreasonable, arbitrary and capricious. Subsequently the trial court heard evidence on Furlong's additional claims for damages pursuant to 42 U.S.C. Section 1983. After reviewing the evidence regarding damages the trial court awarded Furlong $224,871 in actual damages and $148,435.20 for costs and attorney fees.
Standard of Review
This court must affirm the judgment of the trial court unless there is no substantial evidence to support it, it was against the weight of the evidence, or it erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). The evidence is viewed in the light most favorable to the judgment, and all evidence and inferences to the contrary are disregarded. Patel v. Pate , 128 S.W.3d 873, 876 (Mo.App. 2004).
Discussion
Preliminarily, we address Furlong's Motion to Dismiss the City's appeal for procedural defects appearing in the City's brief in violation of Rules 84.04(c), 84.04(e) and 84.04(i). While some of the claims in Furlong's motion appear meritorious, appeals should be decided on the merits if possible. State v. Westcott , 121 S.W.3d 543, 545 n. 2 (Mo.App. 2003). This court retains the discretion to decide appeals, notwithstanding failure to comply with the rules of appellate procedure, when it prejudices neither respondent nor the court of appeals' review, Butterbaug v. Public Water Supply Dist. No. 12 of Jackson County, 512 S.W.2d 445, 447 (Mo.App. 1974), and when the issues presented are important. State v. Miller, 815 S.W.2d 28, 31 (Mo.App. 1991). Accordingly, we exercise our discretion to review the City's appeal in order to render a judgment on the merits.
I
This dispute between Furlong and the City Council is reviewable as an administrative action. The Missouri Administrative Procedures Act (Chapter 536) applies not only to state created agencies, but also to local governmental agencies created by "constitutional provision, statute, municipal charter provision or ordinance." State ex rel. Young v. City of St. Charles , 977 S.W.2d 503, 504 (Mo. banc 1998). Kansas City is a municipal corporation organized under the laws of the State of Missouri. Thus, the MAPA applies to this dispute. Id.; See also Byrd v. Board of Curators of Lincoln Univ., 863 S.W.2d 873, 875 (Mo. banc 1993). Similarly, actions that are delegated by municipality to a board or retained to itself to enforce are administrative and reviewable under the MAPA. Wrenn v. City of Kansas City, 908 S.W.2d 747, 749 (Mo.App. 1995). Thus, the administrative decision of the City Council is also reviewable under the MAPA.
Because we find that this was a contested case under MAPA we must first consider whether Furlong's petition properly sought judicial review under Section 536.130. Furlong's action is denominated a "Petition for Mandamus and for Damages." The parties do not raise the issue of whether Mandamus was an appropriate procedure for Furlong to challenge the denial of his plat application; however, compliance with statutory procedures for seeking relief from administrative decisions is a jurisdictional matter that the court of appeals must consider sua sponte. Wrenn, 908 S.W.2d at 749. Failing to comply with statutory provisions regarding judicial review of an administrative decision deprives the trial court of subject matter jurisdiction. Id. at 751.
Under Section 536.100 any party who has exhausted all administrative remedies and is aggrieved by a final contested case decision is entitled to judicial review under the MAPA unless some other provision for review is provided by statute. There is no other provision for judicial review of a preliminary plat denial in the Kansas City Code or pursuant to Missouri statute. Under Section 536.110, a petition must be filed within thirty days after the mailing or delivery of notice of the agency's final decision; Furlong's petition met this deadline. Additionally, Furlong's "Mandamus" petition fulfills the requirements of a petition for judicial relief by pleading facts in support of each essential element of a petition for judicial relief, See Thomas v. City of Kansas City, 92 S.W.3d 92, 97 (Mo.App. 2002) (the character of a pleading is determined from the facts stated in the petition and not by the name given to action). Most importantly, mandamus has specifically been held as an available remedy for enforcing ministerial duties including the approval of preliminary plats, once all administrative remedies have been exhausted. See State ex rel. Barth Dev. Co., v. Platte County, 884 S.W.2d 95 (App. W.D. 1994); Basinger v. Boone County , 783 S.W.2d 496, 498 (Mo.App. 1990). Accordingly, we find that Furlong's petition constitutes a petition for judicial review of an administrative decision.
The issue of Point I, stripped of all ambiguity, is how to classify Furlong's preliminary plat application: a contested or a noncontested case. The City argues on appeal that the trial court improperly treated Furlong's case as a noncontested case and, therefore, improperly conducted de novo review of Furlong's claim under Section 536.150. The City contends that this was a contested case and that the proper review of the City Council's actions should have been limited to the record upon which the City Counsel based its decision.
Furlong responds that the City's decision denying his plat application was properly considered a noncontested case by the trial court because contested case procedures were not followed. Furlong points to the fact that witnesses were not under oath, no opportunity was afforded for cross-examination, and the City made no findings of fact or conclusions of law in denying the application. Furlong argues that since the City did not follow all of the contested case procedures required by statute, that his case was properly considered noncontested and, therefore, de novo review was proper.
Distinguishing a contested from a noncontested case is an oft-misunderstood area of administrative law. The distinction is important because the General Assembly has mandated two different paths for judicial review of administrative decisions depending on whether the case is contested or noncontested. By statute, a contested case can only be reviewed after all administrative remedies have been exhausted and a final decision has been reached. Mo. Rev. Stat. Section 536.100 (2000). Judicial review of a contested case is to be on the administrative record below, Mo. Rev. Stat. Section 536.130 (2000), and within the scope mandated by Mo. Rev. Stat. Section 536.140 (2000). The MAPA requires various procedures to occur during a contested case administrative hearing. At such a hearing, witnesses should be sworn, the parties should be given the right to call and examine witnesses, introduce exhibits, and cross-examine opposing witnesses. Mo. Rev. Stat. Section 536.070 (2000). Additionally, judicial review is not appropriate unless findings of fact and conclusions of law accompany the administrative decision. Mo. Rev. Stat. Section 536.130 (2000).
Conversely, in noncontested cases, where there is typically no record of the administrative body's decision-making process, the General Assembly has provided in Section 536.150 for the circuit court to review the decision by making its own record. The statute says that the "decision may be reviewed by suit for injunction, certiorari, mandamus, prohibition or other appropriate action," and the circuit court is to, in effect, step into the shoes of the administrative body as decision maker. Id.
The key to distinguishing a contested from a noncontested case is whether the law required a hearing, nothing more. Yarber v. McHenry, 915 S.W.2d 325, 328 (Mo. banc 1995); Mo. Rev. Stat. Section 536.010(2) (2000). If the law required a hearing, then it is a contested case. Id. As stated succinctly in McHenry, "[t]he relevant inquiry is not whether the agency in fact held a contested case hearing, but whether it should have done so." Id. The "law" requiring a hearing, thus qualifying a case as contested, may derive from any statute, ordinance, or any state or federal constitutional provision. Id. Procedural formalities, or lack thereof, occurring at the administrative level have no bearing on classifying the nature of an administrative case. Id.
A host of cases issued after McHenry ignored McHenry's instruction and focused on how much procedural formality took place during the administrative hearing as a determining factor separating a contested from a noncontested case. These decisions generally impose the additional requirement of a minimum level of procedural formality in order to find that a case is contested. Furlong cites one of these cases, Cade v. State, 990 S.W.2d 32 (Mo.App. 1998), in support of his argument that a lack of procedural formalities rendered Furlong's case noncontested. Indeed, Cade states explicitly, "not every case requiring a hearing is a contested case." Id. The Supreme Court specifically rejected this reasoning in McHenry.
These cases include Lipic v. State, 93 S.W.3d 839 (Mo.App. 2002); Kline v. Bd. Of Parks Recreation Comm'rs, 73 S.W.3d 63 (Mo.App. 2002); Legal Communications Corp. v. St. Louis County Printing Publ'g Co., 24 S.W.3d 744 (Mo.App. 2000); Mosley v. Members of Civil Serv. Bd. for City of Berkeley, 23 S.W.3d 855 (Mo.App. 2000); Cade v. State, 990 S.W.2d 32 (Mo.App. 1999); Hayward v. City of Independence, 967 S.W.2d 650 (Mo.App. 1998); State ex rel. Maynes Constr. Co. v. City of Wildwood, 965 S.W.2d 949 (Mo.App. 1998); Wrenn v. City of Kansas City, 908 S.W.2d 747 (Mo.App. 1995).
In Hagely, [v. Board of Education of Webster Groves School District, 841 S.W.2d 663 (Mo. banc 1992], this court, in dicta, stated:
A hearing that is not held pursuant to the procedural format necessary under MAPA [Missouri Administrative Procedures Act, or Chapter 536] does not qualify as a contested case, even though the hearing is required by law. Id. at 668-69. However, as pointed out in Weber v. Firemen's Retirement System, 872 S.W.2d 477, 480 (Mo. banc 1994), this language was used to indicate that certain procedural advantages provided to the agency by the MAPA may be lost by the agency if it failed to follow contested case procedures. Id. at n. 3. In the context of the case at hand, Section 536.010(2) mandates that if a hearing is required by substantive law, it must be conducted according to contested case procedures. The relevant inquiry is not whether the agency in fact held a contested case hearing but whether it should have done so. (emphasis added)915 S.W.2d at 328.
Issues concerning whether procedural formalities required by statute were adhered to, whether the hearing was "adversarial" in nature, or the fact that no record was made, are not relevant when classifying the contested or noncontested nature of a case. Even depriving an aggrieved party of a statutorily required hearing altogether would have no bearing how to classify the case at issue. It is a contested case if the law required a hearing; all other cases are noncontested.
To the extent that the cases noted in footnote 1 supra hold otherwise, we decline to follow them. A majority of the court en banc has reviewed and approves of this holding.
To hold otherwise is illogical, if not absurd, and thwarts one of Chapter 536's primary purposes: to mandate what procedures must be followed in contested cases. Holding that a contested case is determined by what procedures an agency used in conducting a hearing renders the General Assembly's definition in Section 536.010(2) meaningless. If a hearing's formality, or lack thereof, determines whether a case is contested or noncontested, the court's response to a person demanding Chapter 536's procedures would be exasperating: "Only cases having formal procedures are contested cases. The agency did not give you formal procedures; therefore, your case is not a contested case, and you are not entitled to formal procedures." The circular absurdity of this reasoning is obvious.
When applying these principles to the case at bar, resolving the core issue becomes plain: if Furlong was legally entitled to a hearing for the preliminary plat application, then this is a contested case. As stated above, the "law" requiring a hearing, thus qualifying a case as contested, may derive from any statute, ordinance, or any state or federal constitutional provision. McHenry, 915 S.W.2d at 328. Neither party has directed this court to any statute, ordinance or constitutional provision that mandates a hearing in Furlong's situation.
Both parties refer to the City ordinances in their statement of facts, but neither mention is in reference to a hearing requirement nor are City ordinances referred to in either party's argument section.
Nonetheless, our review of the record reveals Chapter 66 of the City Code, Section 43, which controls the procedures used when a developer applies for preliminary plat with the city planning commission or the city council of Kansas City. Quoted in relevant part:
"(f) Submission to plan commission. . . . The hearing before the city plan commission shall be a public hearing as provided in this section."
"(g) Submission to city council. . . . The hearing before the city council shall be a public hearing as provided in this section."
KANSAS CITY, MO., CODE ch. 66, Section 43 (f) (g). These ordinances appear to clearly require a hearing to be held when a preliminary plat is submitted to the planning commission or the city council of Kansas City. Under McHenry this is "the only relevant inquiry" (i.e., that a hearing was required), when determining the contested or noncontested nature of a case. Since a hearing was required by law, this case is a contested case and the trial court erred in finding that it was noncontested.
A trial court is not entitled to hear a contested case de novo and is limited to matters that arose before the agency dealing only with questions of law on the face of the record. Shadow Lake of Noel, Inc. v. Supervisor of Liquor Control , 893 S.W.2d 835, 838 (Mo.App. 1995); Mo. Rev. Stat. Section 536.140 (2000). The trial court stated unambiguously in its mandamus order that " de novo review of [the City's] decision to deny preliminary plat approval is appropriate given that this administrative decision was noncontested." Therefore, because this was a contested case, the trial court's decision to review Furlong's case de novo was in error.
Furlong's argument that this case was properly considered noncontested because procedural formalities were not followed is without merit. As previously discussed, the fact that these procedures are not complied with does not affect the contested nature of the case as Furlong avers. Failure to follow the contested case procedures mandated by statute only means that the statute was not complied with and, at most, is grounds for asserting error. Moreover, these procedural requirements, otherwise necessary before a final contested case decision, may be waived. Mo. Rev. Stat. Section 536.060 (2000); See Weber v. Firemen's Ret. Sys. , 872 S.W.2d 477, 480 (Mo. banc 1994) (procedural requirements waived when no objection made).
In this case, hearings were conducted, testimony received, and a record made as required by the MAPA. The fact that some contested case procedures required by statute did not take place (i.e., witnesses were not sworn and no cross-examination) alone does not require reversal, because these requirements from the statute were waived when Furlong made no objection to the manner in which the hearings were conducted. Id.
Conversely, findings of fact and conclusions of law must be made in any contested case proceeding and cannot be waived; judicial review is inappropriate if no findings and conclusions exist to explain the agency decision. Id.; See also Conlon Group, Inc. v. City of St. Louis, 944 S.W.2d 954, 959 (Mo.App. 1997). As stated in Weber, "Section 536.060(3) only permits the waiver of procedural requirements before final decision. 872 S.W.2d at 480. Additionally, Section 536.130.1(3) provides that the decision, order and findings of fact and conclusions of law shall in every case be included" in the record for judicial review. Id. (emphasis from Weber). The failure to make findings of fact and conclusions of law need not be asserted in the petition in order to be preserved for review. Neosho R-V Sch. Dist. v. McGee , 979 S.W.2d 537, 540 (Mo.App. 1998).
No findings of fact or conclusions of law regarding the City's denial of Furlong's plat application appear in the record. This is particularly important in Furlong's case because the authority of a City Council to deny preliminary plats is limited. The approval of preliminary plats is a ministerial function and municipal officials do not have the authority to deny plats that meet statutory and ordinance requirements. State ex rel. Schaefer v. Cleveland, 847 S.W.2d 867, 873 (Mo.App. 1992). The record reveals that Furlong's plat was the only one denied by the City Council during the decade preceding Furlong's application. No findings of fact or conclusions of law were issued by the City explaining the use of this limited authority in denying Furlong's plat application. For that reason this case must be returned to the City for the written entry of findings of fact and conclusions of law.
Furlong's application was the only one out of 197 that was denied during this 10-year period.
The Damages Awarded Under 42 U.S.C. 1983
The City also appeals the judgment for damages and attorney fees awarded Furlong by the trial court under 42 U.S.C. 1983, after the trial court had conducted its noncontested case review and ordered the issuance of a plat. It appears that this claim and the damages alleged were based on the City's wrongful and arbitrary act of denying Furlong's preliminary plat application. In that sense the claim is dependent upon the ultimate determination by the trial court under contested case review procedures of the record and the City's findings of fact and conclusions of law. For that reason we do not address those claims since the circuit court may need to revisit that claim after the remand to the city and the circuit court's subsequent contested case review of that decision.
In summation, Furlong was legally entitled to a hearing concerning his plat application pursuant to the Kansas City Code. His case, therefore, was a contested case as defined by Section 536.010(2). The trial court misapplied the law by treating Furlong's case as a noncontested case and holding a trial de novo. Moreover, the City erred, as an administrative body, in not issuing findings of fact and conclusions of law on the reasons for rejecting Furlong's application for a preliminary plat.
This case is reversed and remanded to the trial court with instructions to remand it to the City for findings of fact and conclusions of law. The circuit court will hold both counts of the petition in abeyance until the City makes findings and conclusions and they are filed with the court for review under Section 536.150.
Patricia Breckenridge, Judge, and Joseph M. Ellis, Judge, concur.