DENHAM SPRINGS ECONOMIC DEV. v. Taxpayers

927 So. 2d 328
CourtLouisiana Court of Appeal
DecidedAugust 25, 2005
Docket2005 CA 1684
StatusPublished

This text of 927 So. 2d 328 (DENHAM SPRINGS ECONOMIC DEV. v. Taxpayers) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DENHAM SPRINGS ECONOMIC DEV. v. Taxpayers, 927 So. 2d 328 (La. Ct. App. 2005).

Opinion

927 So.2d 328 (2005)

DENHAM SPRINGS ECONOMIC DEVELOPMENT DISTRICT
v.
ALL TAXPAYERS, PROPERTY OWNERS AND CITIZENS OF THE DENHAM SPRINGS ECONOMIC DEVELOPMENT DISTRICT, and Nonresidents Owning Property or Subject to Taxation Therein, and All Other Persons Interested in or Affected in Any Way by the Issuance of Not to Exceed $50,000,000 Denham Springs Economic Development District Sales Tax Increment Bonds (Bass Pro Shops Project) in One or More Series, the Means Provided for the Payment and Security Thereof and Related Matters.

No. 2005 CA 1684.

Court of Appeal of Louisiana, First Circuit.

August 25, 2005.

*329 Fred Chevalier, William Schuette, Baton Rouge, Counsel for Plaintiff/Appellee Denham Springs Economic Development District.

Cheryl M. Kornick, K. Todd Wallace, New Orleans, Counsel for Defendants/Appellants A. Ponder Jones and Beverly Bonneval.

Before: PARRO, DOWNING, GAIDRY, McCLENDON, and WELCH, JJ.

McCLENDON, J.

Two defendants, A. Ponder Jones and Beverly Bonneval (individual defendants), appealed a judgment in favor of the plaintiff, Denham Springs Economic Development District (the District), holding that the individual defendants' challenge to a resolution proposing a bond issuance, and related proceedings, was untimely. We reverse in part, and affirm the remainder of the judgment.

PROCEDURAL AND FACTUAL BACKGROUND

The District, which comprises seventy-five (75) acres of vacant property, is contained within the City of Denham Springs in Livingston Parish. It was created as a *330 political subdivision of the state in 2003, pursuant to LSA-R.S. 33:9038.2 to facilitate economic growth in the area. The Bass Pro Project (the Project) envisions the creation of a twenty-seven acre retail outlet, including a restaurant, related infrastructures and public improvements, and a Bass Pro Shops retail store. The Project is to be funded through the issuance of revenue bonds secured by the pledge of local government sales tax increments, in accordance with LSA-R.S. 33:9038.1 et seq. After payment of the revenue bonds in full, Bass Pro Shops would have the option of purchasing the retail store for a nominal fee. See Denham Springs Economic Development District v. All Taxpayers, 04-1674, p. 1 (La.2/4/05), 894 So.2d 325, 327.

The legal proceeding at issue in this case springs from a bond resolution (the Bond Resolution) adopted by the District on March 8, 2005, and published on March 13, 2005. On May 26, 2005, the District filed a motion for judgment, naming as defendants, "all taxpayers, property owners and citizens of the Denham Springs Economic Development District, and nonresidents owning property or subject to taxation therein, and all other persons interested in or affected in any way by the issuance of not to exceed $50,000,000.00 Denham Springs Economic Development District Sales Tax Increment Bonds (Bass Pro Shops Project) in one or more series, the means provided for the payment and security thereof and related matters." See LSA-R.S. 13:5123. In the motion for judgment, the District sought judicial validation of the bonds and the means of securing and paying them, as described in the Bond Resolution. After the filing, the court ordered the publication of the motion for judgment and the accompanying court order as required by LSA-R.S. 13:5124. A hearing was scheduled for June 17, 2005.

On June 1, 2005, the individual defendants filed an answer and a peremptory exception raising the objection of no cause of action. On June 10, 2005, the trial court ordered the second publication of the motion for judgment, with a copy of the order. Another hearing was scheduled for June 28, 2005. On June 17, 2005, the individual defendants requested a continuance to allow time for a deposition of a non-party to the suit, Bass Pro, and filed a separate motion for an expedited hearing on the motion for a continuance. The trial court ordered that the motion be heard by telephone conference on June 22, 2005. After the hearing, the trial court denied the motion to continue.

On June 24, 2005, the District filed a "Motion To Strike All Challenges To Bonds & For Entry of Final Judgment," and attached a certificate of service attesting that counsel of record were sent a copy on the same date, by fax or hand delivery. The motion to strike essentially claimed that the thirty-day time limit, provided in LSA-Const. art. VI, § 35(B) and LSA-R.S. 33:9038.4 L for a challenge to the validity of a bond resolutions and related proceedings, was a peremptive period that had already run before the individual defendants filed their answer. Thus, the individual defendants' right to challenge was extinguished. Based on the alleged loss of the right to challenge, the District asserted that the court must enter a final judgment recognizing the validity of the Bond Resolution and of all proceedings relating to the bonds, their issuance, security, payment, and authorization.

At the June 28, 2005 hearing, the individual defendants initially objected to hearing the motion to strike and for final entry of judgment, based on lack of formal service of the motion and notice of a requisite show cause hearing. In response, the District noted that the trial was noticed for *331 that day, and argued that the motion based on untimeliness could "be made orally at trial," and therefore did not require any additional notice. Finding that the motion could dispose of the case, the trial court decided that it would hear the motion to strike.

At that hearing, on the issue of peremption, the individual defendants acknowledged that they were not challenging the District's right to pledge its own money to the Project or to issue bonds secured by the District's money. Rather, the challenge was to the ability of other taxing entities to agree to cooperate in the project and pledge their tax monies to secure the bonds. Further, the individual defendants asserted that the time limit for challenging the Bond Resolution was not applicable to a tax election that had not been held, or to a cooperative endeavor agreement that was not yet finalized, at the time that the thirty-day time limit had run. They also argued that the thirty-day time limitation on challenges to bond resolutions did not apply to their challenge, which was based on the constitutionality of Chapter 27 of Title 33 of the Louisiana Revised Statutes, entitled "Cooperative Economic Development Law."

Finding that the individual defendants failed to challenge the Bond Resolution and all related matters contained in the Bond Resolution within the time limit allowed by the constitution and statutory law, the trial court granted the motion to strike the challenges. By a final judgment dated July 12, 2005, the trial court conclusively recognized the validity of the "Bonds, the validity of the tax, any lease or other means provided for the payment of such Bonds and the validity of all pledges of revenues and of all covenants and provisions contained in the instrument or proceedings authorizing or providing for the issuance of such Bonds . . . ."

The Individual defendants appealed. They assigned the following errors:

1. The trial court erred in hearing and granting a contradictory motion that had not been set for hearing by rule and that had not been served on Appellants.
2.

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