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The Lamar Company, LLC v. City of Columbia, Missouri

Court of Appeals of Missouri, Western District, First Division

December 6, 2016

THE LAMAR COMPANY, LLC, Appellant,
v.
CITY OF COLUMBIA, MISSOURI, ET AL., Respondents.

         Appeal from the Circuit Court of Boone County, Missouri The Honorable Gary M. Oxenhandler, Judge

          Before Thomas H. Newton, Presiding Judge, Cynthia L. Martin, Judge and Edward R. Ardini, Jr., Judge

         The Lamar Company, LLC ("Lamar") appeals from the entry of summary judgment in favor of the City of Columbia ("City") and individual defendants Timothy Teddy ("Teddy") and Shane Creech ("Creech") in Lamar's lawsuit for declaratory judgment, breach of contract, and mandamus, premised on the enforceability of a 1998 settlement agreement. Because the 1998 settlement agreement was void ab initio, [1] we affirm.

         Factual and Procedural Background[2]

         Lamar is an outdoor advertising company. Lamar acquired Whiteco Metrocom, Inc. ("Whiteco"), another outdoor advertising company, in 1999. As Whiteco's successor, Lamar assumed Whiteco's rights and obligations described in a May 1998 Stipulation for Settlement Agreement ("Agreement") between Whiteco and City.

         The Agreement resolved a 1994 lawsuit filed by Whiteco[3] after City denied four applications for permits to erect new billboards. Whiteco claimed that denial of the applications was arbitrary and capricious, and that City's billboard ordinances[4] were unlawful in light of the Missouri Billboard Act, [5] which describes authorized restrictions on outdoor signs erected within 660 feet of the nearest edge of the right-of-way of any highway. Following the entry of partial summary judgment in favor of Whiteco on the issue of liability, Whiteco and City entered into the Agreement. Pursuant to the Agreement:

• Whiteco agreed to dismiss its lawsuit with prejudice, and agreed not to challenge the validity or constitutionality of current City billboard regulations, or future regulations so long as they are less restrictive.
• Whiteco agreed to waive its claim for damages.
• City agreed to issue permits for three new billboards subject only to compliance with City's electrical and wind load requirements and state statutes.
• Whiteco and City agreed that forty-two of Whiteco's billboards (thirty-nine existing billboards and the three new billboards promised by the Agreement) would be subject to a "cap and replace" agreement. Whiteco would be permitted to rebuild in the same location, or remove and relocate to a new location, any of the forty-two billboards identified in the Agreement, subject only to compliance with state statutes and City wind load and electrical requirements. Whiteco could apply to build additional billboards beyond the forty-two described in the Agreement, but those applications would be subject to compliance with City's then existing billboard ordinance.

         In July 1998, shortly after the Agreement was executed, Whiteco's applications for three new billboards were approved by City. In February 2005, after Lamar acquired Whiteco, City approved Lamar's application to remove and relocate one of the forty-two billboards described in the Agreement.

          On May 6, 2014, Lamar applied for permits to either rebuild in the same location, or to remove and relocate to new locations, eight of the forty-two billboards described in the Agreement. On May 27, 2014, and June 2, 2014, City denied the applications in writing, because the proposed billboards did not meet the requirements of City's billboard ordinance.[6] On June 17, 2014, Lamar requested an appeal to City's Board of Adjustment. Lamar's request was "based on a settlement agreement executed by [City] in 1998 which exempts permits to replace 42 signs owned by Whiteco [] from all city ordinances but windload [sic] and electrical requirements." In other words, Lamar argued that the Agreement required City to approve its applications. Lamar's request for an appeal did not challenge the determination that Lamar's applications failed to meet the requirements of City's billboard ordinance. City denied Lamar's request for an appeal because determining the enforceability of the Agreement exceeded the scope of matters that could be heard by City's Board of Adjustment.

         On June 24, 2014, Lamar filed suit against City, Teddy, and Creech. An amended petition was filed on November 24, 2014 (hereinafter "Petition"). The Petition sought a declaratory judgment that the Agreement is valid and enforceable, and entitled Lamar to the permits for which it had applied; a judgment for breach of contract (the Agreement) with a remedy of specific enforcement; a judgment for breach of contract (the Agreement) with a remedy of monetary damages; and a writ of mandamus compelling Teddy (City's Community Development Director) and Creech (City's Building and Development Manager) to issue the applied for permits should the Agreement be declared valid and enforceable. The Petition did not challenge City's determination that Lamar's permit applications did not meet the requirements of City's billboard ordinance.

         City and the individual defendants asserted an affirmative defense that the Agreement was void ab initio because it impermissibly contracted away City's police powers. Lamar filed an avoidance to this affirmative defense, alleging that City was equitably estopped from denying the validity and enforceability of the Agreement.[7]

         City[8] filed a motion for summary judgment as to all counts in the Petition which argued that the Agreement was ultra vires and void ab initio because it impermissibly contracted away City's police powers. City's motion also argued that the doctrine of equitable estoppel could not be relied on to enforce a void municipal contract. Lamar filed a motion for partial summary judgment on the issue of liability which argued that City was equitably estopped to deny the validity and enforceability of the Agreement, and that City's denial of Lamar's permit applications was a breach of the Agreement that entitled Lamar to a writ of mandamus compelling issuance of the permits.

         Following argument on the competing summary judgment motions, the trial court entered its judgment ("Judgment") concluding that the Agreement violated section 432.070[9] because it exceeded the scope of City's powers by contracting away police powers. The Judgment concluded that the Agreement was therefore void ab initio. The Judgment further concluded that the doctrine of equitable estoppel could not be relied on to enforce a void municipal contract. Finally, the Judgment found that mandamus could not lie against the individual defendants because the Agreement was void.[10] The trial court granted City's motion for summary judgment, denied Lamar's motion for partial summary judgment, and entered judgment in favor of City and against Lamar on all of Lamar's claims. The effect of the Judgment was to resolve all issues as to all parties.[11]

         Lamar filed a motion for new trial or in the alternative to alter or amend the judgment. The Judgment was amended to correct an exhibit reference, [12] but Lamar's motion was denied in all other respects. Lamar then filed this timely appeal.

         Summary of Points on Appeal

         Lamar raises four points on appeal. The points respectively argue that it was error for the trial court to conclude that the Agreement was void ab initio because: (1) the Agreement was lawful when enacted, was supported by consideration, and was approved in writing as contemplated by section 432.070; (2) the Agreement addressed matters not necessary to the exercise of City's police powers such that refusing to enforce the Agreement unlawfully impaired a contract; (3) City is equitably estopped from denying the validity and enforceability of the Agreement, having accepted the benefits of the Agreement, and because to conclude otherwise would result in a manifest injustice; and (4) controverted facts and an absence of material uncontroverted facts demonstrate no support in the record for the conclusion that the Agreement hinders public health, welfare, or safety, or for the conclusion that there was a "significant variance" between City's billboard ordinance and the eight applications filed by Lamar.

         Standard of Review

         Before addressing the merits of Lamar's points on appeal, we address our standard of review, a subject that is contested by the parties. Lamar contends that our standard of review is de novo, as we are reviewing the trial court's grant of summary judgment. City argues that Lamar's motion for new trial converted the proceeding to a court-tried case which we review only for abuse of discretion.[13]

         City's argument originates from a misreading of the Missouri Supreme Court's decision in Central Trust & Investment Co. v. SignalPoint Asset Management, LLC, 422 S.W.3d 312 (Mo. banc 2014). In Central Trust, a trial court entered summary judgment in favor of SignalPoint on Central Trust's tort claims. Id. at 319. Central Trust filed a motion for reconsideration based on newly discovered evidence, which was denied. Id. Central Trust appealed, arguing that the grant of summary judgment was erroneous, and that denial of its motion for reconsideration based on newly discovered evidence was erroneous. Id. at 316-17. The Supreme Court treated the motion for reconsideration as tantamount to a motion for new trial. Id. at 325. The Supreme Court observed that "[a] party can move for a new trial following the entry of summary judgment; the motion is considered a motion for new trial in a court-tried case." Id. (citing Taylor v. United Parcel Serv., Inc., 854 S.W.2d 390, 393 (Mo. banc 1993)).[14] The Supreme Court also observed that "a circuit court's judgment overruling a new trial motion [is reviewed for] abuse of discretion." Id. (citing Badahman v. Catering St. Louis, 395 S.W.3d 29, 39 (Mo. banc 2013)).

         Though Central Trust held that appellate review of the denial of a motion for new trial in a court-tried case is for abuse of discretion, it did not hold that every claim of error raised on appeal following the denial of a motion for new trial in a court-tried case is subject to review for abuse of discretion. Specifically, Central Trust did not hold that a trial court's grant of summary judgment is subject to review for abuse of discretion if the non-movant files an unsuccessful motion for new trial. In fact, the Supreme Court reviewed Central Trust's claim of error involving the grant of summary judgment employing the settled de novo standard of review described in ITT Commercial Finance Corp. v. Mid-Am Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993), and reiterated in Goerlitz v. City of Maryville, 333 S.W.3d 450, 452-53 (Mo. banc 2011). Central Trust, 422 S.W.3d at 319-20. Central Trust observed that:

The trial court makes its decision to grant summary judgment based on the pleadings, record submitted, and the law; therefore, this Court need not defer to the trial court's determination and reviews the grant of summary judgment de novo.

Id. at 319 (quoting Goerlitz, 333 S.W.3d at 452).

         In this case, Lamar has not appealed the trial court's denial of its motion for new trial. Lamar has appealed the Judgment's grant of City's motion for summary judgment. It borders on frivolous to contend that our standard of review of the grant of summary judgment is varied by the procedural fortuity of an unsuccessful motion for new trial. Rather, regardless whether a non-movant files an unsuccessful motion for new trial, where the grant of summary judgment is challenged on appeal, our standard of review requires us to determine whether the trial court properly applied the law to uncontroverted facts to enter judgment as a matter of law-an obvious question of law that is subject to de novo review.

         As such, our standard of review in this appeal is de novo. In conducting de novo review of the trial court's grant of summary judgment, we abide by the following standards:

Summary judgment is only proper if the moving party establishes that there is no genuine issue as to the material facts and that the movant is entitled to judgment as a matter of law. [ITT Commercial Fin., 854 S.W.2d at 376.] The facts contained in affidavits or otherwise in support of a party's motion are accepted "as true unless contradicted by the non-moving party's response to the summary judgment motion." Id. Only genuine disputes as to material facts preclude summary judgment. Id. at 378. A material fact in the context of summary judgment is one from which the right to judgment flows. Id.

A defending party . . . may establish a right to summary judgment by demonstrating: (1) facts negating any one of the elements of the non-movant's claim; (2) "that the non-movant, after an adequate period for discovery, has not been able and will not be able to produce sufficient evidence to allow the trier of fact to find the existence of any one" of the elements of the non-movant's claim; or (3) "that there is no genuine dispute as to the existence of the facts necessary to support movant's properly pleaded affirmative defense." Id. at 381. Each of these three methods individually "establishes the right to judgment as a matter of law." Id. . . .

"The record below is reviewed in the light most favorable to the party against whom summary judgment was entered, and that party is entitled to the benefit of all reasonable inferences from the record. However, facts contained in affidavits or otherwise in support of the party's motion are accepted as true unless contradicted by the non-moving party's response to the summary judgment motion." Hammack v. Coffelt Land Title, Inc., 284 S.W.3d 175, 177-78 (Mo. App. W.D. 2009) (internal quotations and citations omitted). See also ITT Commercial Fin., 854 S.W.2d at 376.

Central Trust, 422 S.W.3d at 319-20 (quoting Goerlitz, 333 S.W.3d at 452-53). "In addition, the non-movant must support denials with specific references to discovery, exhibits, or affidavits demonstrating a genuine factual issue for trial." Id. at 320 (citing Rule 74.04(c)(2), (c)(4)). "Facts not properly supported under Rule 74.04(c)(2) or (c)(4) are deemed admitted." Id.

         Having settled the disagreement over our standard of review, we proceed with our discussion of the merits of Lamar's points on appeal.

         Point One

         Lamar argues that it was error to conclude that the Agreement was void ab initio because the Agreement was lawful when enacted, was supported by consideration, and was approved in writing as contemplated by section 432.070.

         The trial court found that the Agreement was void ab initio pursuant to section 432.070 because it "bargains and contracts away [City's] police powers and is therefore beyond the scope of its powers." Section 432.070 provides:

No county, city, town, village, school township, school district or other municipal corporation shall make any contract, unless the same shall be within the scope of its powers or be expressly authorized by law, nor unless such contract be made upon a consideration wholly to be performed or executed subsequent to the making of the contract; and such contract, including the consideration, shall be in writing and dated when made, and shall be subscribed by the parties thereto, or their agents authorized by law and duly appointed and authorized in writing.

Section 432.070 thus imposes three requirements: a contract must be within the scope of the governmental entity's powers, for proper consideration, and duly authorized and in writing. The statutory requirements with respect to contracts with municipalities are "mandatory, not merely directory." Donovan v. Kansas City, 175 S.W.2d 874, 881 (Mo. banc 1943) (addressing predecessor to section 432.070, R.S.A. section 3349).

By statutory prohibition . . . municipal contracts not within the scope of the municipality's powers, contracts not expressly authorized by law, and contracts, including the consideration, not in writing, dated when made and subscribed by the parties or their authorized agents are placed on the same legal footing. Under the statute it is as much ultra vires for a Missouri municipality to incur a liability in the nature of a contractual obligation in the absence of a writing as to incur a liability not within the scope of its corporate powers or one not expressly authorized by law.

Id. at 882.

         "Due to the fact that municipalities represent the public, the courts unhesitatingly should enforce compliance with all mandatory provisions of the statutes intended to protect municipalities and their inhabitants." St. Charles Cty. v. A Joint Bd. Or Comm'n, 184 S.W.3d 161, 165 (Mo. App. E.D. 2006). Thus, a contract which fails to satisfy any one of the mandatory requirements described in section 432.070 is "outside the object of its creation . . . and therefore beyond the powers conferred upon it by the Legislature, " and "is not voidable only, but wholly void, and of no legal effect." Id. at 166 (quoting Donovan, 175 S.W.2d at 879); see also Gill Constr., Inc. v. 18th & Vine Auth., 157 S.W.3d 699, 708 (Mo. App. W.D. 2004) (holding that a contract made in violation of section 432.070 is void rather than voidable).

         City's motion for summary judgment did not contend that the Agreement was void because it failed to satisfy the consideration or writing requirements described in section 432.070. Correspondingly, the Judgment neither addressed nor found that the Agreement was void because it failed to satisfy the consideration or writing requirements described in section 432.070. Lamar's discussion of these requirements in its first point on appeal is superfluous, as neither requirement is implicated by the Judgment. In fact, a cursory review of the summary judgment record reveals that these statutory requirements were satisfied, and have never been challenged.

         Instead, City's motion for summary judgment, and the Judgment, implicate only the statutory requirement that a contract "shall be within the scope of [a city's] powers or be expressly authorized by law." Section 432.070. City argued, and the trial court agreed, that the Agreement exceeded the scope of City's powers because it contracted away City's police powers by requiring City to authorize the replacement or relocation of billboards without regard to its zoning ordinances. City argued, and the trial court agreed, that as a result, the Agreement was void ab initio.

         The law in this regard is settled. "A city cannot surrender or contract away its governmental functions and [police] powers." Lodge of the Ozarks, Inc. v. City of Branson, 796 S.W.2d 646, 650 (Mo. App. S.D. 1990) (citing Stewart v. City of Springfield, 165 S.W.2d 626, 629 (Mo. banc 1942)). "Police power is the exercise of the sovereign right of a government to promote order, safety, health, morals, and the general welfare of society, within constitutional limits." Marshall v. Kansas City, 355 S.W.2d 877, 883 (Mo. banc 1962) (quotation omitted). "The police power is an essential attribute of government without which constitutional guaranties of personal and property rights would be ineffective and meaningless." Id. "The police power of [a] city cannot be bargained away by contract, but must at all times be available for use to meet such public needs as may arise." North Kansas City Sch. Dist. v. J.A. Peterson-Renner, Inc., 369 S.W.2d 159, 165 (Mo. 1963). "If an existing contract should have the effect of interfering [with the proper exercise of the police power], it must necessarily give way to an appropriate exercise of the police power." State ex rel. Kansas City v. Pub. Serv. Comm'n, 524 S.W.2d 855, ...


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