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Town of Lincoln v. City of Whitehall

Court of Appeals of Wisconsin, District III

April 17, 2018

Town of Lincoln, Plaintiff-Appellant,
City of Whitehall, Defendant-Respondent.

          APPEAL from a judgment of the circuit court for Trempealeau County: No. 2015CV112 CHARLES V. FELTES, Judge.

          Before Stark, P.J, Hruz and Seidl, JJ.

          HRUZ, J.

         ¶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."[1] The Town sought a declaratory judgment that annexation ordinances passed by the City detaching territory from the Town were invalid. The circuit court concluded the Town, under the facts of this case, was statutorily barred from challenging the ordinances on any basis except the requirement that the annexed territory be contiguous to the annexing municipality. The court subsequently granted the City's summary judgment motion on the Town's contiguousness claim.

         ¶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(2)(d)1., (2)(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.

         ¶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.


         ¶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 annexed territory, and then it approached the property owners with offers to purchase their land, contingent on annexation.[2]

         ¶6 The annexation was to occur in four phases, with the territory in each phase the subject of a separate ordinance.[3] Phase one consisted of approximately 277 acres extending northward from the City's northern boundary, where the annexed territory and the City shared a border of approximately three-quarters of one mile. Phase two consisted of 292 acres, arranged in a ribbon approximately one-fourth mile wide, extending northwesterly from the northwestern corner of the phase one territory. Phase three consisted of approximately 380 acres, connected to phase two at its southern edge for approximately one-fourth mile before expanding both to the north and to the west. Finally, phase four consisted of approximately 300 acres located to the west of phase three; phases three and four shared a boundary of approximately one-half mile.

         ¶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 on a "take it or leave it" basis. See Town of Lyons v. City of Lake Geneva, 56 Wis.2d 331, 338, 202 N.W.2d 228 (1972). Subject to certain filing requirements and a statutory requirement that the annexed territory be "contiguous" to the annexing authority, the municipality may adopt an annexation ordinance by a two-thirds vote of its governing body. Sec. 66.0217(2).

         ¶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 the 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.


         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, 2014 WI 86, ¶19, 356 Wis.2d 665, 849 N.W.2d 693. We accept the complaint's factual allegations as true, but legal conclusions are not accepted and are insufficient to withstand a motion to dismiss. Id., ¶18. Whether a complaint states a claim upon which relief can be granted is a question of law we review de novo. Id., ¶17.

         ¶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 observed 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 boundaries 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., 2004 WI 58, ¶45, 271 Wis.2d 633, 681 N.W.2d 110. The legislative history of a particular provision may be consulted to confirm or verify a plain-meaning interpretation. Id., ¶51.

         ¶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 annexation 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 ...

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