Iowa Court Finds Drainage District Improperly Annexed Land

On February 5, 2020, the Iowa Court of Appeals found that trustees of a drainage district improperly annexed and reclassified land into their district. The ruling affirmed the district court's order vacating the annexation.

Background

A county board of supervisors created the Mule Slough Drainage District in 1904. The West Benton Drainage District was formed around 1910 and located to the west of the Mule Slough Drainage District. The Missouri Valley Drainage District was established in 1923. It was to the northeast of the Mule Slough Drainage District. In 1924, Missouri Valley built a diversion ditch causing some water to drain through the ditch and pass through Mule Slough before ultimately draining into the Missouri River. In 2013, the Mule Slough and West Benton Drainage Districts installed pumping stations. Those two districts later combined in 2017 and retained the Mule Slough name. Later that year, the Mule Slough Trustees (Trustees) sought to annex the portion of the Missouri Valley Drainage District that drained through the Mule Slough Drainage District.

The Trustees hired an engineer to prepare an annexation report. The report found the creation of the diversion ditch caused the water to be unnaturally diverted to Mule Slough. The report stated that nearly 13,000 acres of land in the Missouri Valley Drainage District were “materially benefited” by Mule Slough’s facilities and that the trustees of Mule Slough should pursue annexation of the benefiting parcels of land. A Classification Commission report determined which landowners benefited from Mule Slough and how much each landowner should pay to assist in the costs of the pumping stations.

After these reports were approved, Mule Slough gave public notice it was seeking to annex land in the Missouri Valley. The Trustees voted to accept the annexation and reclassification of the property. Eventually, thirteen property owners and the Missouri Valley Trustees filed this lawsuit claiming the Trustees did not follow proper annexation procedures so the annexation and reclassification should be set aside. After the suit was filed, the Trustees sent a letter to the affected landowners seeking retroactive consent of the annexation. The letter stated if the Trustees received no response, then they would consider that landowner to have given their approval. The Trustees stated that nearly 85% of the landowners did not object.

The district court found that the Trustees failed to follow the required statutory procedure to annex and reclassify land, that there was no legal basis for the Trustees’ theory of “self-annexation” or “retroactive consent,” and that there was no evidence the 2013 pumping stations provided a benefit. Therefore, both the annexation and reclassification were vacated. The Trustees appealed.

Plaintiff Trustees

The Trustees claimed that the Missouri Valley Trustees could not be plaintiffs in the case because they had no authority over Mule Slough and did not own any land impacted by the annexation. The court found that the Missouri Valley Trustees had an interest in the annexed land because they had the right to make objections and appeal the annexation.

Annexation

Iowa law allows a board of supervisors to annex land next to a current drainage district if the land benefits or would benefit from the drainage district. Iowa Code § 468.119. If the board of supervisors believes such land to exist, it must adopt a resolution of necessity.  If a drainage district has a pumping station, then no land can be annexed into it after the improvements to the land are substantially completed unless one-third of the landowners have either petitioned for it or consented to the action in writing. Iowa Code § 468.356. If the land is already part of an existing drainage district, then the land may be annexed either by 1) a petition proposing the land be included in the drainage district and signed by at least 20% of the landowners whose land is impacted or 2) consent of the proposed land’s board of supervisors. Iowa Code § 468.119.

In this case, the Trustees claimed it should be able to bypass the statutory requirements to annex land based on the theories of equity, unjust enrichment, the natural flow of water, or prescriptive rights. However, both the creation of a drainage district as well as annexation of land for a drainage district requires strict compliance with the law. Hicks v. Franklin County Auditor, 514 N.W.2d 431, 435 (Iowa 1994). Here, the Trustees sent a letter to the impacted landowners stating that if they did not respond, their lack of response would be considered an acceptance of the annexation. This, the court found, was not sufficient.

In this case, there was no written consent from the landowners as required. The court found the Trustees did not strictly comply with the requirements set forth in either section 468.119 or 468.356.[i] In response, the trustees argued the court should decline to follow the literal terms of the statutes because it would lead to absurd results. However, the court found that the statutes set forth the procedure to meet the goal of annexing land. Additionally, the trustees did not adopt the required resolution of necessity. 

Finally, the trustees argued that the decision should only apply to the plaintiffs and no other landowners. However, when a court order sets aside the establishment of a drainage district for errors in the proceedings and that becomes final, then the board must rescind its order and any progress made in establishing the drainage district. The Court of Appeals ruled that the entire annexation had to be vacated because the trustees did not follow proper procedure and they did not show why the proper statutory provisions should not be followed.