IN THE SUPREME COURT OF IOWA
No. 21–1015
Submitted February 22, 2023—Filed June 9, 2023
JAMES A. STOGDILL, CHRISTOPHER DETERMAN, MATHEW D. JOHNSON, ALESHA SMITH, and KIRK YENTES,
Appellants,
vs.
CITY OF WINDSOR HEIGHTS, IOWA, and MUNICIPAL COLLECTIONS OF AMERICA, INC.,
Appellees.
Appeal from the Iowa District Court for Polk County, Heather Lauber and
Celene Gogerty, Judges.
Plaintiffs appeal from an order granting defendants’ motion for summary
judgment in challenge to municipality’s use of an income tax refund offset
program to enforce civil penalties issued pursuant to an automated traffic
enforcement system. AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED.
McDonald, J., delivered the opinion of the court, in which all justices
joined.
Claire M. Diallo (argued), James C. Larew, and Deborah Svec-Carstens of
Larew Law Office, Iowa City, for appellants.
Michael C. Richards (argued) and Katelynn T. McCollough of Dentons
Davis Brown, P.C., Des Moines, for appellee City of Windsor Heights. 2
Jessica L. Klander (argued) of Bassford Remele, P.A., Minneapolis,
Minnesota, for appellee Municipal Collections of America, Inc. 3
McDONALD, Justice.
The plaintiffs filed this suit to challenge a municipality’s attempts to collect
automated traffic citation fines not reduced to a judgment in a municipal
infraction proceeding. The plaintiffs filed suit against the municipality and the
municipality’s collection agent. The district court dismissed all of the plaintiffs’
claims. For the reasons set forth below, we affirm in part, reverse in part, and
remand for further proceedings.
I. The City’s Automated Traffic Enforcement Program.
The City of Windsor Heights uses “an automated traffic enforcement
system for making video and/or photographic images of vehicles that fail to obey
red light traffic signals . . . or fail to obey speed regulations.” Windsor Heights,
Iowa, Mun. Code § 60.02.08 (2017). Pursuant to the ordinance, the city must
mail notice of an automated traffic citation to the vehicle owner within thirty
days of the police department’s determination that a violation occurred. Id.
§ 60.02.08(3)(A). It is the vehicle owner—rather than the driver—that is liable for
the citation. Id. § 60.02.08(2)(A), (B). Fines for violations of the ordinance
generally range from $65 to $160, with some additional fines assessed for
excessive speeding. See id. § 60.02.08(3)(B), (C). Any violation of a city ordinance
is a municipal infraction. Id. § 4.01. Thus, a violation of the city’s automatic
traffic enforcement (ATE) ordinance is a municipal infraction.
A vehicle owner receiving an automatic traffic citation may either pay the
citation, contest the citation, or ignore the citation. Id. § 60.02.08(4). To contest
the citation, the vehicle owner can submit a form to the city requesting “an 4
administrative review to be held at the Police Department before an impartial
administrative appeals board.” Id. § 60.02.08(4)(A). The administrative appeals
board shall either uphold or dismiss the citation and shall send notice of its
decision to the vehicle owner. Id. If the board upholds the citation, the vehicle
owner can either pay the fine or request the city file a municipal infraction
citation in the small claims division of the district court. Id. § 60.02.08(4)(A), (B).
The vehicle owner can also bypass the administrative appeals board process
altogether and simply request the city file a municipal infraction citation, in lieu
of the automatic traffic citation, in the small claims division of the district court.
Id. § 60.02.08(4)(B). The vehicle owner must request the city pursue a municipal
infraction within thirty days of receiving the board’s decision, if the owner elects
the board process, or within thirty days of notice of the citation, if the owner
bypasses that process and requests the city pursue a municipal infraction. Id. If
the vehicle owner ignores the citation and does nothing, then the city can take
action. Id. § 60.02.08(6).
The city’s ordinance provides several enforcement mechanisms against a
vehicle owner that does not pay an automated traffic citation, whether the owner
contested the citation or not. The city may attempt further collection efforts by
issuing a second notice of the automatic traffic citation. Id. § 60.02.08(6)(A).
Under the ordinance, if the owner does not pay within thirty days of receiving
the second notice, the owner “shall be deemed guilty of the violation and be held
liable for the fine amount plus any additional service fees.” Id. The city may then
refer these allegedly guilty vehicle owners to a private collection agency. Id. 5
§ 60.02.08(6)(B). The city may also “[r]efer the Vehicle Owner to the State’s
income offset billing program for payment.” Id. § 60.02.08(6)(C). Finally, the city
may file a municipal infraction and seek a judgment in the district court. Id.
§ 60.02.08(6)(D).
The ordinance states that a private contractor may provide services in the
management and operation of the ATE system. Id. § 60.02.08. Here, the city
contracted with Municipal Collections of America, Inc. (MCA) to collect certain
debts and fines, including automated traffic citations. Under the contract, the
city was not required to pay MCA any fees unless MCA successfully collected
fines. With respect to automated traffic citations, the contract provides that the
city will add a 25% “cost of collection” fee to citations referred to MCA. The
contract then provides that MCA keeps 20% of the full balance recovered, while
the remaining 80% is remitted to the city.
At issue in this case is the income offset program. The income offset
program is authorized pursuant to statute. See Iowa Code § 8A.504 (2019). The
statute allows the department of administrative services to “establish a debt
collection setoff procedure for collection of debts owed to the public agency.” Id.
§ 8A.504(1)(a). This includes money owed to a “political subdivision of the state,”
such as the city. Id. § 8A.504(1)(c). Use of the setoff procedure is limited to only
those liabilities “in the form of a liquidated sum due, owing, and payable.” Id.
§ 8A.504(1)(d)(3). Generally speaking, with respect to the collection of ATE
penalties, the setoff procedure begins when the city refers the name of a vehicle
owner to the department of administrative services. See id. § 8A.504(2)(b). If the 6
vehicle owner is entitled to receive an income tax refund, the department
provides notice to the owner that the refund will be offset by the unpaid amount
of the ATE penalty. See id. § 8A.504(2)(f). The vehicle owner can either consent
to the offset, pay the ATE penalty to the city directly and receive their full income
tax refund, or contest the offset. See id. § 8A.504(2)(h).
The city entered into a memorandum of understanding with the
department of administrative services to avail itself of the income offset program.
The memorandum provided that only debts “in the form of a liquidated sum due,
owing and payable” were eligible for placement in the program. The
memorandum further provided that “[a]ll applicable remedies with regard to
such a debt and claim must be exhausted . . . as a condition precedent for
eligibility to participate in the offset program.” It was the city’s obligation to
develop and maintain a system for reporting eligible debts to the department.
According to the memorandum of understanding, the department charged an
administrative fee of $7 for each debt placed in the offset program.
II. Background and Procedural Posture.
The procedural posture of this case is long and somewhat complicated. We
discuss it at length to provide necessary context for resolving this appeal. Five
plaintiffs—James A. Stogdill, Christopher Determan, Mathew D. Johnson,
Alesha Smith, and Kirk Yentes—filed this suit against the City of Windsor
Heights and MCA on December 19, 2019. The plaintiffs asserted the following
claims: (1) the city’s collection efforts, including use of the income offset program,
violated the statute of limitations set forth in Iowa Code section 614.1(1); (2) the 7
city’s ATE ordinance was an unlawful property tax not authorized by the general
assembly, in violation of Iowa Code section 364.3(4); (3) the city’s ATE ordinance
and the city’s use of the income offset program was preempted by Iowa Code
section 364.22; (4) the city’s use of the income offset program to enforce
automatic traffic citations not reduced to a judgment constituted unjust
enrichment; (5) the city’s use of the income offset program to enforce automatic
traffic citations not reduced to a judgment constituted conversion; (6) the city’s
attempts to collect automatic traffic citations violated the Iowa Debt Collection
Practices Act, Iowa Code §§ 537.7101–.7103; (7) the agreement between the city
and MCA to collect ATE penalties constituted a civil conspiracy; and (8) the city’s
use of the income offset program violated their rights to due process under
article I, section 9 of the Iowa Constitution.
The defendants filed several dispositive motions in the district court,
including pre-answer motions to dismiss followed by two different motions for
summary judgment. In several different rulings on each of the motions, the
district court dismissed all of the plaintiffs’ claims. Only two of the original five
plaintiffs—Determan and Smith—seek appellate review. We set forth the facts
and circumstances surrounding only their claims.
A. Plaintiff Christopher Determan. On May 18, 2018, the city issued a
notice of violation to Determan arising out of an alleged speeding violation on
May 15. The fine was $65. The notice provided payment was due on June 17.
The notice further provided that “[f]ailure to pay the penalty or contest liability
by the due date is an affirmation of responsibility to pay the listed fine amount 8
and will result in this penalty being forwarded to collections and or submitted to
the Iowa Income Tax Offset program.” The notice provided Determan four ways
to contest the violation. First, he could request an in-person administrative
review. Second, he could request an administrative review by mail if he lived
more than 150 miles outside the city. Third, he could request a civil infraction
suit be filed in the district court. Fourth, if he no longer owned or possessed the
vehicle on the date of the violation, he could directly contest liability with the
“Violation Processing Center.”
Determan completed the form to request an administrative review. On
June 26, the city denied Determan’s request for an administrative review
because the request was “received too late.” That same day, the city sent a second
notice of violation to Determan. The second notice of violation contained the
following notice:
Please be advised that your failure to address the first Notice of Violation prior to its posted due date has resulted in an expiration of your administrative review option. This 2nd and Final Notice is considered debt due and owing to the City of Windsor Heights. Failure to pay the fine prior to the due date on this second notice OR make request for a municipal infraction citation to be filed . . . will result in a finding of “liable” and will subject you to formal collection procedures and additional associated fees.
After receiving this second notice, Determan objected to the city’s contention that
his request for an in-person administrative review was not timely. The city
relented and scheduled an administrative review. The administrative review
occurred on August 16, and Determan was found liable. The city issued him a
notice stating that he had been found liable, that the amount of the fine was
$65, and that the fine was due on September 15. The notice provided that the 9
decision could be appealed by requesting the filing of a civil infraction suit in the
district court.
At this point, the proceedings against Determan came to an end. Determan
did not appeal the decision. Determan never paid the fine. The city never referred
Determan to collections or the income offset program. During the course of
proceedings in this case, in support of its motion for summary judgment, the
city filed an affidavit from the mayor of Windsor Heights stating the city will not
proceed against Determan. The city specifically disclaimed “any right to proceed
with any action in relation to an automated traffic enforcement (ATE) citation
issued to Defendant CHRISTOPHER DETERMAN as a result of a violation on
May 15, 2018.” The affidavit also stated, “The City will not pursue any fines,
collections, or actions connected to ATE citation in the future.”
B. Plaintiff Alesha Smith. On March 23, 2017, the city issued a notice of
violation to Smith arising out of an alleged speeding violation occurring on
March 17. The fine was $65. The notice provided payment was due on April 22.
As with Determan, the notice provided that “[f]ailure to pay the penalty or contest
liability by the due date is an affirmation of responsibility to pay the listed fine
amount and will result in this penalty being forwarded to collections and or
submitted to the Iowa Income Tax Offset program.” And, as with Determan, the
notice provided that Smith could contest the violation the same four ways. Smith
took no action.
On May 1, the city sent Smith a delinquency notice. The notice stated that
her administrative options for contesting the violation had expired but that she 10
could request a court proceeding. The notice also stated the fine was “considered
debt due and owing” to the city. In response, Smith made a written request for a
hearing. On May 8, the city rejected Smith’s request for a hearing on the ground
her request was “received too late.” The letter rejecting Smith’s request provided
her with options to pay the penalty online, by phone, by mail, or by MoneyGram.
The letter did not provide a way to contest the violation.
At some point, the city referred Smith to the income offset program. On
February 27, 2018, the city sent her notice that her income tax refund of $320
was being held because she owed “$88.00, plus any additional charges, to the
City of Windsor Heights.” The notice of offset provided Smith could appeal the
amount of the debt by filing a notice of appeal to MCA or the city within fifteen
days of the notice. The notice also stated Smith could contest the validity of the
offset process by filing a written protest with the department of administrative
services. The notice also stated, “DO NOT contact the Department of
Administrative Services if you wish to dispute the amount in question, do not
believe you owe the money, or believe you have paid the debt. Contact the City
of Windsor Heights.”
In response to this notice, Smith sent a letter to the department of
administrative services. In the letter, she contested the violation. The letter
provided, “I am contesting this ticket because the person driving the car when
the ticket was issued by the camera was not me, but someone test driving my
car to buy it.” The letter went on to state Smith sold the car on March 20, 2017,
three days after the alleged violation. Smith received no response from the 11
department. On April 1, she received her income tax refund. The tax refund had
been offset by $88.
C. District Court Proceedings. The city and MCA first moved to dismiss
Stogdill, Yentes, and Johnson’s claims on the grounds that their claims were
barred by the applicable statute of limitations and on the grounds that their
claims arising under the debt collection practices act failed to state a claim upon
which relief could be granted. The district court granted this motion, dismissed
all claims asserted by Stogdill, Yentes, and Johnson, and dismissed plaintiffs’
count six alleging a violation of the debt collection practices act.
The city and MCA then filed motions for partial summary judgment as to
Smith. The defendants argued that all of Smith’s claims were barred by the
applicable two-year statute of limitations. See Iowa Code § 670.5 (“[A] person
who claims damages from any municipality . . . shall commence an action
therefor within two years after the alleged wrongful death, loss, or injury.”). The
district court granted the motions in part and denied them in part. The petition
was filed on December 19, 2019. In the district court’s view, the date of injury
for Smith’s procedural due process claim was the date of offset, April 1, 2018,
and her procedural due process claim was thus not time-barred. The injury for
all other claims, in the district court’s view, was the date of the alleged violation,
March 17, 2017, and all other claims were thus time-barred.
Following the district court’s ruling on this motion, the defendants filed a
motion to enlarge or amend. Defendants argued there was ambiguity in the
ruling regarding the status of the other plaintiffs’ claims. The district court 12
granted the motion and held that the only claims remaining were (1) all of
Determan’s claims, and (2) Smith’s procedural due process claim.
The defendants then filed additional motions for summary judgment. The
city argued that Determan lacked standing to assert any claim because he never
paid the ATE penalty and because he was never referred to the income offset
program. The city further argued Smith’s procedural due process claim failed as
a matter of law. MCA argued that Determan’s claims against MCA failed as a
matter of law because Determan’s account was never sent to MCA for collections.
MCA further argued that Smith’s procedural due process claim failed as a matter
of law because MCA (1) was not a state actor, and (2) was not involved in
establishing the city’s income offset program procedures.
The district court granted the city’s motion for summary judgment. As to
Determan, the district court concluded he did not have standing to pursue any
claim relating to payment of the ATE penalty or use of the income offset program
because Determan never paid the penalty and was never referred to the program.
The district court concluded, however, that Determan did have an “injury-in-fact
as far as the ATE ordinance and its appeals process” and “[t]herefore, Plaintiff
Determan has standing to bring any remaining claims that involve the ATE
ordinance, Notices of Violation, and the administrative review process for alleged
violations of the ATE ordinance.” The district court then went on to address the
merits of his claims. The district court held that Determan’s claim that the
defendants violated the statute of limitations failed as a matter of law because
all collection efforts directed toward Determan occurred within one year of the 13
alleged violation. See Iowa Code § 614.1(1) (providing actions to enforce payment
of penalty under ordinance must be brought within one year). With respect to
the rest of his claims, the district court held that (1) the city’s ATE ordinance
was not an unlawful tax, (2) the city’s ATE ordinance was not preempted by Iowa
Code section 364.22, and (3) Determan’s claims for unjust enrichment,
conversion, and procedural due process failed as a matter of law because he had
not paid the ATE penalty and because the city specifically disclaimed “any right
to proceed with any action” against him based on the challenged violation.
As to Smith, the district court held that Smith was provided with
constitutionally sufficient process. The district court reasoned that Smith was
provided with multiple opportunities to contest the fact of the violation and the
amount of the penalty prior to being referred to the income offset program. The
district court also explained that Smith was provided notice of offset and an
opportunity to contest whether she owed the debt. However, contrary to the
directions in the notice, Smith mailed her letter of contest to the department
rather than the city. The district court concluded that although Smith
“unfortunately committed an error in her attempt to contest the fine, this does
not change the fact that the City did provide adequate opportunity.”
The district court also granted MCA’s motion for summary judgment. The
district court held Determan could not assert a claim against MCA because his
account was never referred to MCA for collections and he never paid any money
to MCA. With respect to Smith, the district court further reasoned that MCA was
merely a vendor with respect to mailing notices of violation. MCA did not 14
administer the income offset program, had no access to the income offset
program, and was not involved in the city’s referral of accounts to the department
of administrative services for offset.
III. Determan’s Claims.
Determan appeals the district court’s ruling on two separate issues. He
contends the district court erred in concluding the city’s use of the income offset
program did not violate the statute of limitations. He also contends the district
court erred in concluding the city’s ATE ordinance is not an unlawful property
tax. He specifically states he does not appeal the ruling dismissing his state law
preemption, conversion, conspiracy, unjust enrichment, and due process claims.
At the outset, we question whether Determan has standing to raise any claims.
The city never referred Determan to the income offset program, and the city has
disclaimed any future right to enforce or collect the fine from him. Determan
contends he has standing because he seeks declaratory relief and because the
city could try to enforce the citation at some later date. We assume without
deciding that Determan has standing, and we address his claims on the merits.
See, e.g., P.M. v. T.B., 907 N.W.2d 522, 544 (Iowa 2018); Ostergren v. Iowa Dist.
Ct., 863 N.W.2d 294, 297–98 (Iowa 2015); LSCP, LLLP v. Kay-Decker, 861 N.W.2d
846, 864 (Iowa 2015).
A. Statute of Limitations Claim. The district court did not err in
dismissing Determan’s claim for violation of the statute of limitations. The
statute of limitations is wholly inapplicable to the city’s out-of-court collection
efforts. We begin with the plain language of the relevant statute. State v. Boone, 15
989 N.W.2d 645, 649 (Iowa 2023). The statute provides, “Actions may be brought
within the times herein limited, respectively, after their causes accrue, and not
afterwards, except when otherwise specially declared.” Iowa Code § 614.1. The
statute then goes on to provide that those actions “to enforce the payment of a
penalty or forfeiture under an ordinance” must be brought “within one year.” Id.
§ 614.1(1). As the text indicates, the statute of limitations applies only to
“[a]ctions.” Id. § 614.1; see Downing v. Grossmann, 973 N.W.2d 512, 518 (Iowa
2022) (“A statute of limitations governs how much time a plaintiff has to bring a
cause of action after it accrues.”). In this context, an “action” denotes a “judicial
proceeding.” Action, Black’s Law Dictionary (11th ed. 2019).
What the text denotes, context confirms. See Com. Bank v. McGowen, 956
N.W.2d 128, 133 (Iowa 2021) (“In determining the fair and ordinary meaning of
the statutory language at issue, we consider the language’s relationship to other
provisions of the same statute and other provisions of related statutes.”); State
v. Mathias, 936 N.W.2d 222, 227 (Iowa 2019) (“When the legislature does not
define the term, we look to the context in which the term appears and give it its
ordinary and common meaning.”). Chapter 614, governing the limitations of
actions, is set forth in title XV, subtitle 3 of the Iowa Code. Title XV relates to the
judicial branch and judicial procedures, and subtitle 3 relates to civil procedure.
As indicated by its placement in the Code, the statute of limitations relates to
court proceedings. In addition, when the word “action” is used within title XV, it
refers to court proceedings. See, e.g., Iowa Code §§ 611.1 (“Every proceeding in
court is an action, and is civil, special, or criminal.”), .2 (“A civil action is a 16
proceeding in a court of justice . . . .”), .4 (“[P]laintiff may prosecute an action by
equitable proceedings in all cases where courts of equity . . . had jurisdiction
. . . .”); id. §§ 613.8 (providing state consent to “any suit or action . . . in any of
the district courts of Iowa”), .11 (waiving immunity from suit and consenting to
jurisdiction “of any court in which an action is brought against the state
department of transportation”); id. § 614.14(5)(a) (setting forth limitations on
actions “in any court” relating to interests in real estate).
The statutory text and context are confirmed by precedents. In Dean v.
Iowa-Des Moines National Bank & Trust Co., this court directly addressed the
statute of limitations and concluded that, in this context, “an action is a
proceeding in court.” 281 N.W. 714 (Iowa), modified on reh’g, 290 N.W. 664 (Iowa
1940). Iowa’s courts have repeatedly concluded that “action” refers to court
proceedings. See, e.g., Jones & White v. Park, 262 N.W. 801, 802 (Iowa 1935)
(“An action is a proceeding in court.” (quoting Box v. Chi., R.I. & P. RY., 78 N.W.
694, 696 (Iowa 1899))); Dille v. Plainview Coal Co., 250 N.W. 607, 612 (Iowa 1933)
(same); Nkanta v. Wal-Mart Stores, Inc., No. 12–0475, 2012 WL 5954530, at *6
(Iowa Ct. App. Nov. 29, 2012) (same); see also Christiansen v. Emp. Appeal Bd.,
No. 11–1715, 2012 WL 4513853, at *4 (Iowa Ct. App. Oct. 3, 2012) (“Our Iowa
case law recognizes that the word ‘action’ is a term of art and applies to
proceedings in court.”).
Determan also misapprehends the nature of a statute of limitations.
Determan contends the city violated the statute of limitations when it sought to
collect an ATE penalty more than one year after the alleged traffic violation. He 17
seeks damages for the alleged violation, including repayment of any funds
obtained, costs, and attorney fees. A party cannot violate the statute of
limitations. The statute of limitations is not a cause of action; the statute of
limitations is an affirmative defense to a cause of action. See Lasko v. Caliber
Home Loans, Inc., No. 20–17181, 2022 WL 728820, at *1 (9th Cir. Mar. 10, 2022)
(affirming dismissal of cause of action for violation of statute of limitations on
ground that statute of limitations is not a cause of action); Bank of N.Y. Mellon
v. DeSelms, No. EDCV 18–1044 PSG (MRWx), 2019 WL 8198310, at *7 (C.D. Cal.
Mar. 25, 2019) (“[T]he statute of limitations provides an affirmative defense, not
a cause of action.”); Miller v. Coxe, 45 S.E. 940, 942 (N.C. 1903) (stating it is a
“well-settled rule that the statute of limitations can be used only ‘as a shield, and
not as a sword’—as a defense, and not a cause of action”). As an affirmative
defense, the statute of limitations can be waived. See, e.g., Porter v. Good
Eavespouting, 505 N.W.2d 178, 182 (Iowa 1993) (“Because the limitations
defense was not raised, the defendant waived it.”). When a party brings an action
beyond the limitations period, the party does not violate the statute of
limitations. There is nothing that prohibits a party from bringing an action
beyond the relevant limitation period. The action may be barred and dismissed
if the defendant timely raises and proves the limitations defense, but the party
bringing the action has not violated any statute.
B. Illegal Property Tax Claim. Determan contends the district court erred
in concluding the city’s ATE ordinance is not an illegal property tax. According
to Determan, the ATE ordinance “has no relation to safety” because the 18
ordinance fines the vehicle owner rather than the driver. Although the ATE
ordinance has no relation to safety, Determan argues, the ordinance has
generated millions of dollars for the city. Thus, according to Determan, the ATE
ordinance is an unauthorized, de facto “revenue-generating personal property
tax imposed in a manner that is inconsistent with the City’s police powers.” We
disagree and conclude the district court did not err in dismissing this claim.
This court has defined a tax as “a charge to pay the cost of government
without regard to special benefits conferred.” In re Shurtz’s Will, 46 N.W.2d 559,
562 (Iowa 1951). “In other words, taxes are for the primary purpose of raising
revenue.” Home Builders Ass’n of Greater Des Moines v. City of West Des Moines,
644 N.W.2d 339, 346 (Iowa 2002). The express purpose of the Windsor Heights
police department’s ATE system is unrelated to revenue:
It is the policy of the Windsor Heights Police Department to operate Automated Traffic Enforcement (ATE) program . . . for the purpose of efficiently utilizing the resources of the Department; to reduce speeding violations and traffic collisions, property damage, personal injuries, and deaths; to reshape the motoring behaviors of the community; and to address neighborhood complaints of flagrant violators.
In addition, this court has already concluded that ticketing vehicle owners was
a rational way to advance a municipality’s public safety objectives:
Even if we were to employ a more rigorous rational basis review, we think it is permissible under the Iowa due process clause for an ATE ordinance to allow a city to make a prima facie case of liability based upon vehicle ownership and photographic evidence that the vehicle was involved in a violation of the ordinance. The asserted governmental interest in public safety is certainly “realistically conceivable” with “a basis in fact.” [The plaintiff] has developed no record suggesting that the asserted City interest is insubstantial or empirically unsustainable. As presented in this case, this means the chosen methods used by the City to advance the public interest in 19
safety, clearly reasonably fit the City’s legitimate objective in public safety.
City of Sioux City v. Jacobsma, 862 N.W.2d 335, 348 (Iowa 2015) (quoting Racing
Ass’n of Cent. Iowa v. Fitzgerald, 675 N.W.2d 1, 7–8 (Iowa 2004)).
While the ATE system does generate revenue for the city, revenue
generation does not negate the city’s stated purpose of promoting safety. See
Behm v. City of Cedar Rapids, 922 N.W.2d 524, 552 (Iowa 2019) (“It is, of course,
true that the ATE system generates revenues for Cedar Rapids,” but “[j]ust as a
tax on tobacco has the potential of deterring youth smoking, Cedar Rapids may
rationally believe that the impositions of fines for speeding violations generally
deters speeding.”). The district court did not err in rejecting Determan’s claim
that ATE penalties are an illegal property tax.
C. Conclusion With Respect to Determan. We conclude the district court
did not err in dismissing all of Determan’s claims against the city and MCA. We
affirm the district court’s rulings as to Determan.
IV. Smith’s Claims.
Smith challenges the district court’s dismissal of her claims. She contends
the district court erred in holding her claims were barred by the two-year
limitation period set forth in Iowa Code section 670.5. Smith further contends
the district court erred in dismissing her claim that the city’s use of the income
offset program violated her right to due process as protected by article I,
section 9 of the Iowa Constitution.
A. The City’s Defense Under Iowa Code Section 670.5. We first address
the district court’s ruling regarding the limitations period. Iowa Code 20
section 670.5 provides that “a person who claims damages from any municipality
or any officer, employee or agent of a municipality for or on account of any . . .
injury . . . shall commence an action therefor within two years after the alleged
wrongful” injury. Pursuant to this statute, the district court dismissed all of
Smith’s claims except her procedural due process claim. In the district court’s
view, the date of injury for all of her claims, other than procedural due process,
was the date of the alleged traffic violation—March 17, 2017. The district court
concluded Smith’s claims were time-barred because the petition was filed more
than two years later—December 19, 2019. With respect to the due process claim,
the court concluded the date of injury was the date Smith’s tax refund was offset.
The date of offset—April 1, 2018—was within the two-year limitations period.
“Although frequently referred to as a statute of limitations, section 670.5
is a statute of creation.” Venckus v. City of Iowa City, 930 N.W.2d 792, 807 (Iowa
2019). “Chapter [670] created a new right of action—one that was not available
at common law nor available elsewhere by statutory authority, and therefore,
while cases interpreting other limitation statutes are helpful, they do not control
here.” Id. (alteration in original) (footnote omitted) (quoting Montgomery v. Polk
County, 278 N.W.2d 911, 914 (Iowa 1979) (en banc)). This statute “bars any claim
not filed within the requisite time period as measured from the date of injury
rather than date of accrual.” Id.
The district court erred in dismissing Smith’s claims. Smith filed her
petition on December 19, 2019. She is not barred from pursuing claims where
her injury arose within two years of that date. She undoubtedly suffered an 21
injury on April 1, 2018, when her income tax refund was offset to pay the ATE
penalty plus the additional costs. All of her claims relate, at least in part, to the
income offset. To the extent Smith’s claims assert an injury relating to the city’s
use of the income offset program, Smith’s claims are not barred by section 670.5.
Smith’s challenges to conduct occurring prior to the income offset are
time-barred.
B. Procedural Due Process Claim. Smith contends the district court erred
in dismissing her claim that the city’s use of the income offset program violated
her right to procedural due process. “A party claiming a violation of procedural
due process must first show an impairment of an interest in life, liberty, or
property by government action.” Behm, 922 N.W.2d at 566. “Once a protected
interest has been established, the next question is what procedural minima must
be provided before the government may deprive the complaining party of the
protected interest.” Id. “Ordinarily, the procedural minima include two
components—notice and an opportunity to be heard on the issue.” Id.
Here, Smith was provided with notice and an opportunity to be heard.
“Notice must be reasonably calculated to apprise interested parties of the
pendency of the action and afford them an opportunity to present their
objections.” Meyer v. Jones, 696 N.W.2d 611, 614 (Iowa 2005) (quoting
Hutcheson v. Firstar Bank (In re Est. of Borrego), 490 N.W.2d 833, 837 (Iowa
1992)). The original notice of violation provided Smith with different options to
contest the violation, including the right to request the city proceed with a
municipal infraction proceeding. We have already held that it does not violate 22
due process to require a party to request the city proceed with a municipal
infraction proceeding:
There is, however, at least one complication. The ATE ordinance puts the burden on a vehicle owner to request a hearing in small claims court. Is a requirement that a citizen take affirmative action to obtain a hearing before a small claims court consistent with due process? We think it is. The amount at stake is relatively small, and the burden of requesting a hearing is not heavy. Further, the ordinances provide a vehicle owner with the opportunity for a prior administrative hearing to challenge the automated traffic citation in an informal proceeding.
Behm, 922 N.W.2d at 569 (citations omitted). Smith did not timely avail herself
of any of these options.
Smith argues that even if she did not avail herself of these options, the city
nonetheless violated her right to due process by referring her account to the
income offset program without first reducing the fine to a judgment in a
municipal infraction proceeding pursuant to Iowa Code section 364.22. At first
glance, her argument has some appeal. Iowa Code section 364.22 sets forth the
processes and procedures required for a municipality to enforce a municipal
infraction. This court has had several occasions to discuss the interplay between
ATE programs and section 364.22. We have held that section 364.22 does not
preclude a city from collecting a voluntary payment of ATE penalties without first
filing a municipal infraction. See Rhoden v. City of Davenport, 757 N.W.2d 239,
241 (Iowa 2008). We have also held that section 364.22 does not preclude a
municipality from offering an informal administrative hearing where vehicle
owners can contest alleged ATE violations as additional process beyond what is
required under section 364.22. See City of Cedar Rapids v. Leaf, 923 N.W.2d 23
184, 198 (Iowa 2018). However, in Weizberg v. City of Des Moines we held “that
to the extent a municipality seeks to assert the coercive power of government to
enforce payment of a penalty for a municipal infraction, a municipality must
pursue a municipal infraction under Iowa Code section 364.22.” 923 N.W.2d
200, 220 (Iowa 2019). And in Behm v. City of Cedar Rapids, we could not have
been clearer that “no liability arises until the city takes the affirmative step of
filing an enforcement action in district court and obtains a judgment against the
defendant.” 922 N.W.2d at 562. In other words, there is no debt due and owing
in the absence of a judgment from the district court. See id. at 564 (“[N]o liability
of any kind attaches to a vehicle owner without the filing of a municipal
infraction.”); id. at 565 (stating the relevant statutes do “not provide for any
liability to arise until the [municipality] takes the affirmative step of filing an
enforcement action in district court and obtains a judgment against the
defendant”). We reiterated this point in Weizberg, stating “that no enforceable
obligation will arise unless the [municipality] files a municipal infraction in small
claims court and obtains a judgment.” 923 N.W.2d at 215 n.4.
On closer inspection, however, the fact that the city referred Smith’s
account to the income offset program without first obtaining a judgment does
not necessarily establish a due process violation. The government’s failure to
comply with a statute or ordinance does not necessarily establish a due process
violation. See id. at 214 (“The failure to follow such a procedure or ordinance
cannot give rise, in and of itself, to a due process violation.”); Behm, 922 N.W.2d
at 568 (“A mere violation of a statute does not give rise to a due process 24
violation . . . .”); see also Womack v. Carroll County, 840 F. App’x 404, 407 (11th
Cir. 2020) (per curiam) (“[T]he mere violation of a state statute outlining a
required procedure does not necessarily equate to a due process violation.”). “[I]n
all cases, the focus of the analysis must be on the critical question of whether
the process that was provided comported with the basic requirements of notice
and an opportunity to be heard.” Weizberg, 923 N.W.2d at 214.
Here, Smith was given additional notice and an opportunity to contest
payment of the citation. Critically, the notice of offset provided Smith with an
opportunity to contest whether she owed the debt. The notice provided, “DO NOT
contact the Department of Administrative Services if you wish to dispute the
amount in question, do not believe you owe the money, or believe you have paid
the debt. Contact the City of Windsor Heights.” The city’s notice did afford Smith
the opportunity to contest the fact that she did not “owe the money.” Smith did
not avail herself of the opportunity. Smith did not follow the notice instructions;
she sent her letter of contest to the department instead of the city. And she sent
that notice one day too late. Smith’s failure to request a hearing to contest
liability as directed in the notice defeats her procedural due process claim.
C. Conclusion with Respect to Smith. In sum, as to Smith, we hold the
district court erred in dismissing Smith’s claims against the city as time-barred
by Iowa Code section 670.5. Specifically, we conclude the district court erred in
dismissing the following claims against the city on the ground they were
time-barred: (1) violation of the statute of limitations, (2) imposition of an
unlawful property tax, (3) preemption under Iowa Code section 364.22, (4) unjust 25
enrichment, (5) and conversion. As with Determan, however, Smith’s claims for
violation of the statute of limitations and imposition of an unlawful property tax
fail as a matter of law even though not time-barred, and the district court should
dismiss those claims after remand. We express no opinion on the merits of any
of the remaining claims or any potential defenses to the remaining claims. We
affirm the district court’s dismissal of Smith’s procedural due process claim.
V. Claims Against MCA.
Finally, we address the district court’s grant of summary judgment in favor
of MCA as to all claims. The district court concluded that MCA could not be liable
for the operation of the city’s ATE program, including its use of the income offset
program. We agree with the district court.
The actionable conduct at the heart of Smith’s claim is the submission of
her debt to the income offset program. Smith fails to acknowledge that MCA plays
no role in the referral of ATE penalties to the income offset program. MCA’s sole
role here was to send letters on behalf of the city. MCA was acting merely as a
collection agent or third-party vendor for the city. MCA did not create or
authorize the ATE program. MCA played no part in the city’s decision to send a
particular account to the income offset program. If MCA’s letter did not result in
the collection of an ATE penalty, MCA transferred the account back to the city.
MCA’s involvement ended there. Once an account was transferred back to the
city, the city alone decided whether to refer an account to the income offset
program. There is no basis to impose liability on MCA for the city’s use of the
income offset program. See Vroegh v. Iowa Dep’t of Corr., 972 N.W.2d 686, 26
707–08 (Iowa 2022) (finding third-party health plan administrator was not
“agent” of state liable for discretionary choices within plan).
VI. Disposition.
For these reasons, we affirm in part and reverse in part the district court.
The case is remanded for proceedings consistent with this opinion.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.