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City of Topeka v. Imming

Court of Appeals of Kansas

March 11, 2015

CITY OF TOPEKA, KANSAS, Plaintiff-Appellee,
v.
CHRISTOPHER IMMING, Defendant-Appellant and JAYHAWK RACING PROPERTIES, LLC, Intervenor-Appellee,

Page 958

Appeal from Shawnee District Court; LARRY D. HENDRICKS, judge.

Affirmed.

SYLLABUS

BY THE COURT

1. Ratification is a principal's affirmance of an agent's prior act, thereby giving the act the same legal effect it would have if the act had been performed by an agent acting with authority.

2. A principal who receives notice of an unauthorized act of an agent must promptly repudiate the agent's action or it is presumed that the principal has ratified the act.

3. In dealing with cities, there must be some affirmative act to ratify or some action taken by the governing body that is consistent with ratification in order to ratify some unauthorized act of an agent of the city.

4. The four-part test to determine if an ordinance is legislative or administrative as directed in McAlister v. City of Fairway, 289 Kan. 391, 212 P.3d 184 (2009), is applied.

5. Ordinances subject to referendum or election under another statute cannot be the subject of an initiative and referendum petition.

Robert E. Duncan, II, of Topeka, for defendant-appellant.

Catherine P. Logan and Mark A. Samsel, of Lathrop & Gage LLP, of Overland Park, for plaintiff-appellee City of Topeka.

Kevin M. Fowler, John C. Frieden, and Eric I. Unrein, of Frieden, Unrein & Forbes, LLP, of Topeka, for intervenor-appellee Jayhawk Racing Properties, LLC.

Before HILL, P.J., ARNOLD-BURGER and SCHROEDER, JJ.

OPINION

Page 959

[51 Kan.App.2d 248] Hill, J.

The only question we must answer in this appeal is whether Christopher Imming is entitled to a court order compelling the City of Topeka to either repeal Ordinance No. 19915--an ordinance calling for the City to buy Heartland Park of Topeka--or hold a municipal election and let the voters decide the issue. Because the law creating STAR bonds--the method chosen by the City to finance its purchase--permits a referendum election only in cases where a protest petition is filed and Imming's petition is not a protest petition, we hold he is not entitled to a writ of mandamus compelling an election or repeal of the ordinance.

Racing begins at Heartland Park in 1988.

Heartland Park is a race track that was built in 1988 as a City-owned property. It was intended for racing events for Indy cars, sports cars, AMA motorcycles, and NHRA drag races. The NHRA drag strip has been financially successful, but for many reasons not pertinent to this appeal, the road course has received minimal usage. This lack of use resulted in bankruptcy and the closure of the facility in the fall of 2002. At that time, the track and its assets were purchased by a private individual. The management of the

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facility was subsequently transferred to Jayhawk Racing Properties, LLC.

In order to stimulate economic growth and development or redevelopment in various districts, the legislature enacted the Sales Tax and Revenue Bond Act now found in K.S.A. 2014 Supp. 12-17,160 et seq. The law permits cities to issue sales tax and revenue bonds for these purposes. Hence, these bonds are often labeled as STAR bonds. The sale of STAR bonds must be approved by the Kansas Secretary of Commerce. K.S.A. 2014 Supp. 12-17,164(b).

After the law was enacted, the City designated Heartland Park as a major motor sports complex and, at the same time, established the geographical boundaries of the park as a redevelopment district. At that time, a STAR bond project plan for the redevelopment of the area was approved by the City and the Secretary of Commerce, and over $10 million of STAR bonds were sold to finance the project.

[51 Kan.App.2d 249] Then, in June 2014, the City decided to acquire the reversionary interests to Heartland Park owned by Jayhawk Racing. Jayhawk Racing agreed to cancel its management contract and transfer its reversionary rights to the real estate at Heartland Park in exchange for the City's promise to pay Jayhawk Racing $2,392,117 for that interest. And the City would satisfy the debts Jayhawk Racing owed to CoreFirst Bank and Trust and some others. About the same time, the City, Jayhawk Racing, and CoreFirst all acknowledged that Jayhawk Racing was in default on various loans made by CoreFirst. They signed an agreement that calls for payment of the debts through the issuance of new STAR bonds by the City. The parties call the documents reflecting these agreements the " Memorandum of Understanding" and the " Work Out Agreement."

To implement these agreements, the Topeka City Council adopted Ordinance No. 19915 on August 12, 2014. Basically, the Ordinance approved the Memorandum of Understanding and the Work Out Agreement. The Ordinance also amended the Heartland Park of Topeka STAR bond project plan by more than doubling the size of the redevelopment district and called for the issuance of $5 million of new STAR bonds.

Then, on October 8, 2014, Christopher Imming filed a petition with the Topeka City Clerk entitled, " A Petition for a New City of Topeka, Kansas Ordinance Relating to Heartland Park Topeka Redevelopment District and Additional Bond Authority." Citing K.S.A. 12-3013 as authority, the petition called for either the repeal of Ordinance No. 19915 or submission of the question of repeal to the voters at a municipal election. Imming collected 3,587 valid signatures on his petition.

Imming's petition produced a reaction at city hall. At the Council meeting on October 21, 2014, the Council discussed Imming's petition. The record of that meeting reveals that Council member Chad Manspeaker moved to suspend the Council rules to add to the agenda a resolution relating to the petition and proposed ordinance Imming filed with the City Clerk on October 8, 2014. The pertinent part of that resolution states:

" NOW THEREFORE BE IT RESOLVED BY THE COUNCIL OF THE CITY OF TOPEKA KANSAS that in light of the significant opposition by Topeka residents [51 Kan.App.2d 250] to the Heartland Park ordinance, the city attorney is directed not to pursue any litigation challenging the purported petition and/or proposed ordinance including any declaratory judgment action."

Manspeaker's motion to suspend the rules failed on a vote of 6-3. The next day, the City Manager filed the petition seeking declaratory judgment. Imming filed an answer and counterclaim on October 31, 2014. In his counterclaim, Imming sought a writ of mandamus contending that his petition was valid and the City's governing body was obliged by law to act on the petition. Imming claimed that the City could either adopt an ordinance repealing Ordinance No. 19915 or submit the question of whether to repeal the ordinance to the City's qualified voters.

The declaratory judgment action filed against Imming asked the Shawnee County District Court to declare Imming's petition to be an invalid attempt at initiative and referendum. The City attacked Imming's petition

Page 961

in five ways. It alleged that Imming's petition was invalid as an initiative petition because it did not comply with the statutory requirements of K.S.A. 2014 Supp. 25-3602(b)(4). Secondly, Imming's petition was invalid as an initiative petition or a protest petition because it included more than a single point. The City also argued that Imming's petition was invalid as a protest petition under the STAR bonds referendum statute because it failed to comply with the requirements found in K.S.A. 2014 Supp. 25-3601(c). The fourth attack alleged that Imming's petition was invalid as an initiative petition because it sought to use the initiative statute to require an election on an administrative ordinance. And finally, the City alleged that the initiative and referendum law could not be used to set aside Ordinance No. 19915 because the ordinance is subject to referendum under the specific STAR bond referendum statute. Since Imming's petition did not comply with the STAR bond referendum statute, then in the City's view, the petition should be declared a nullity.

The law commands swift court determinations in cases such as this. K.S.A. 2014 Supp. 25-3601(e) requires a court to decide any action which challenges the validity of an initiative and referendum within 20 days of filing. Realizing this, the parties filed motions for summary judgment.

[51 Kan.App.2d 251] Jayhawk Racing moved to intervene, and the district court allowed the company to intervene in the lawsuit both as a matter of right and by permission. It joined the other parties and filed a motion for summary judgment, aligning itself with the arguments raised by the City.

Imming moved to dismiss the City's petition for declaratory judgment, alleging that the City had no standing to sue because its lawsuit was never authorized by the City Council and it was beyond the authority of the City Manager to file such an action. The court denied this motion.

The district court decided this case by ruling on the parties' motions for summary judgment. The court granted Imming summary judgment on three points. Basically, the court denied the contentions that Imming's petition was technically invalid. But the court did rule in the City's favor by finding that Ordinance No. 19915 is administrative in character and, therefore, exempt from the initiative and referendum law in Kansas. The court also decided that because there is a method in the STAR bond statute for filing a protest petition and obtaining a referendum election on the issuance of STAR bonds, then Ordinance No. 19915 could not be the subject of initiative and referendum because it was subject to a different kind of election. In other words, this ordinance was one of the statutory exceptions to the initiative and referendum statute.

Imming raises four issues in this appeal. First, Imming contends the district court erred when it denied his motion to dismiss the City's petition for declaratory judgment. Secondly, he contends that the district court erred when it decided that Ordinance No. 19915 was administrative. Next, Imming contends that the court incorrectly ruled that the proposed ordinance was subject to referendum under the STAR bond law and, therefore, not available for initiative and referendum. Finally, Imming ...


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