Morgan v. Sisters School District 6

301 P.3d 419, 353 Or. 189, 2013 WL 179480, 2013 Ore. LEXIS 5
CourtOregon Supreme Court
DecidedJanuary 17, 2013
DocketCC 08-CV-0423AB; CA A142252; SC S059465
StatusPublished
Cited by34 cases

This text of 301 P.3d 419 (Morgan v. Sisters School District 6) is published on Counsel Stack Legal Research, covering Oregon Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Morgan v. Sisters School District 6, 301 P.3d 419, 353 Or. 189, 2013 WL 179480, 2013 Ore. LEXIS 5 (Or. 2013).

Opinion

*190 LANDAU, J.

At issue in this case is whether plaintiff has standing under the Uniform Declaratory Judgments Act, ORS 28.020, to seek a declaration that defendant Sisters School District #6 and its Board of Directors (board) lacked authority to enter into a particular form of financing arrangement without a vote of the people. Plaintiff alleged that he has standing because his “status as a taxpayer and voter within the district will or may be adversely affected [.]” More specifically, plaintiff alleged that entering into the challenged form of financing arrangement might, in some unspecified way, “jeopardize the districtHs ability to provide for the daily operation of the district” and, if that should come to pass, increase the likelihood that the district will have to seek additional financing to cover its obligations.

The trial court concluded that those allegations were insufficient to satisfy the requirement of ORS 28.020 that only persons “whose rights, status or other legal relations are affected” by the challenged ordinance have standing. The Court of Appeals likewise concluded that the harm that plaintiff alleges is too attenuated and speculative to satisfy the standing requirement of the Uniform Declaratory Judgments Act. Morgan v. Sisters School District #6, 241 Or App 483, 251 P3d 207 (2011). We agree and affirm.

The relevant facts are uncontested. On March 12, 2007, the board adopted Resolution No #FY 06-07-06, which authorized the issuance and negotiated sale of “Full Faith and Credit Obligations, Series 2007” in an amount not to exceed $2.1 million. The resolution stated that the obligations were to be issued as “certificates of participation” under ORS 271.390, which authorizes public bodies to issue that type of obligation to fund the acquisition or improvement of certain property, secured by any or all “lawfully available funds of the public body or council of governments” — in essence, the full faith and credit of the governmental unit. The stated purpose of the obligation was to finance the cost of improvements to district property, including classrooms, furniture, fixtures, building system upgrades, and the like. On May 22, 2007, Wells Fargo Bank, acting as escrow agent, issued the certificates of participation for purchase by investors.

*191 One year later, in May 2008, plaintiff filed a complaint for declaratory and injunctive relief against the district and the board. Plaintiff alleged that the obligations that had been denominated “certificates of participation” actually were bonds, which, under ORS 328.205 to 328.230, may be issued only after approval by a majority of the electors in the school district. Plaintiff alleged that his “status as a taxpayer and voter within the district will or may be adversely affected by the actions of the school district as alleged in paragraph 16(e) and 16(f)” of his complaint. In those paragraphs, he alleged:

“(e) The issuance of‘bonds’ without the approval of the electorate, may jeopardize the district[’]s ability to provide for the daily operation of the district.
“(f) The issuance of the ‘bonds’ by the district without voter approval increases the likelihood that the district will have to seek voter approval of additional bonds either as local option bonds or general obligation bonds. ORS 328.205 et seq. is intended to initially require voter approval and thus avoid the prospect of spending too much money in the form of full faith and credit obligations and then seeking voter approval.”

In his prayer for relief, plaintiff requested that the court declare that the certificates of participation at issue actually are bonds and that “the district wrongfully failed to obtain the approval of the voters within the school district” before issuing those bonds. Notably, plaintiff did not ask for a declaration that the certificates of participation are invalid. Nor did he request an order that the matter be put to a vote. He asked that the court prohibit the district from making any further payments on the obligations; that is, he requested that the court order the district simply to default on the obligations.

Plaintiff moved for summary judgment, arguing that the certificates of participation issued by the district were bonds that should not have been issued without prior voter approval.

Defendants filed their own motion for summary judgment that responded to plaintiff’s arguments on the merits, but they also requested dismissal of the action for *192 want of justiciability. Pointing to the allegations of standing in paragraphs 16(e) and 16(f) of the complaint, defendants argued that, at best, plaintiff had alleged only a remote possibility that the issuance of the certificates of participation would affect him in any way. Such a remote possibility of harm, defendants argued, was not sufficient to establish the concrete stake in the outcome of a case that the law requires.

Plaintiff responded that he need only allege a “potential impact” to proceed on a taxpayer standing theory and that he had made such an allegation by arguing “ultimate facts, which, if established, would demonstrate that plaintiff would be required to pay proportionately more taxes for the same or less educational services.”

The trial court denied plaintiff’s motion for summary judgment, granted defendants’ motion, and entered judgment dismissing the case. In a memorandum opinion, the trial court explained that plaintiff lacks standing because the “potential impact” of the district’s actions that plaintiff had described is “attenuated and speculative.”

Plaintiff appealed, assigning error to the trial court’s denial of his motion for summary judgment and to the granting of defendants’ motion. He argued that the trial court had erred in concluding that he lacks standing and that the court should have ruled in his favor on the merits. On appeal, plaintiff’s arguments on standing were rather more elaborate than those advanced before the trial court. He argued that he has standing both as a voter and as a taxpayer. Regarding his standing as a voter, plaintiff argued that he alleged that he is a voter within the school district and that he had been deprived of the right to vote on the issuance of the financial obligations that are at issue. That, he contended, is all that the law requires to establish standing. As for his standing as a taxpayer, he argued that documents in the summary judgment record show that the certificates of participation that the district issued require it to pay as much as $240,400 per year in principal and interest payments until 2022. According to plaintiff, “[i]f the district was unable to make its payments of principal and interest [,]” then the purchasers of those certificates of participation *193

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Cite This Page — Counsel Stack

Bluebook (online)
301 P.3d 419, 353 Or. 189, 2013 WL 179480, 2013 Ore. LEXIS 5, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morgan-v-sisters-school-district-6-or-2013.