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Abandonment of nonconforming use need not be established, but abandonment is evidence of discontinued use

June 3rd, 2013

by Gary Taylor

Moyer v. City of Des Moines Zoning Board of Adjustment
(Iowa Court of Appeals, May 29, 2013)

Don Moyer owns Hawkeye Motors, Inc. By 1997, Hawkeye Motors held title to multiple parcels of property on the corner of East 14th Street and Washington Avenue in Des Moines, including the lot located at 1433 East 14th Street (Lot 1433). Lot 1433 spans 20,500 square feet over two parcels and contains a 1652 square foot building originally built for auto repair.  From the time Hawkeye Motors purchased the property until 2006, the company either sold vehicles from Lot 1433 or leased the property to other tenants to sell or repair used cars. The lot was originally zoned as C-2, 2, which allowed used vehicle display. The city later rezoned Lot 1433 as C-1, a “neighborhood retail commercial district” that prohibits used vehicle display. On August 23, 2001, the city granted the property a legal nonconforming status for used auto sales and issued a certificate of occupancy to Hawkeye Motors to utilize the property as a “used automobile sales lot.”

Moyer held a used car dealer’s license issued to Hawkeye by the Iowa Department of Transportation that included Lot 1433, but allowed the license on the lot to lapse in 2004. In January 2006, Moyer leased Lot 1433 to Diaz Tinting, Inc. The city issued Leonardo Diaz a certificate of zoning compliance, which on January 10, 2006, authorized “building reuse from used cars to detailing and tinting.” The certificate provides: “No change of use may be made at this location unless a new Certificate of Occupancy is granted for such use and no change in this building or land may be made without first consulting the Zoning Enforcement Office.” In March 2007, Hawkeye Motors sold Lot 1433 on contract to Don and Gloria Moyer (his wife) personally, and issued the deed to the couple in 2011. During a property inspection by the city in January 2009, the enforcement officer discovered cars were being sold and repaired on Lot 1433. The city notified the Moyers six days later, and again in May 2009, that this parcel lost its legal nonconforming use status and consequently the auto sales and repair activities were unauthorized. The Moyers did not appeal either determination.  An April 24, 2010 inspection of Lot 1433 found continued illegal auto repair, and the city again notified the Moyers of “illegal business operations….”  When the Diaz Tinting lease ended one year later Moyer asked the city for a letter to the DOT stating that Lot 1433 was properly zoned for displaying and selling used cars. The city denied Moyer’s request. Moyer appealed the city’s denial, but the zoning board of adjustment upheld the city’s refusal.  Moyer appealed.

The Iowa Court of Appeals made the following statements regarding nonconforming uses on its way to upholding the decision of the zoning board of adjustment:

  • Sometimes intent to abandon may be inferred from a failure to apply for a license to carry on the nonconforming use.  [The same may be inferred] from amending the licensed use of the property.
  • Because [the Des Moines Ordinance] sets a time frame for determining when discontinuation of a property’s former use triggers the loss of its nonconforming designation, the city need not prove the owner’s intent to abandon. But intent to abandon presupposes discontinued use. Therefore, while proof of intent is not necessary to establish abandonment, an inference of the owner’s intent to abandon is relevant to nonuse.

The court concluded that because Moyer was without a dealer’s license to sell vehicles on the property, and his tenants had a certificate permitting the property’s repurpose to detailing and tinting, the board of adjustment could properly infer discontinued use as a used car display lot for at least six months [required under the ordinance] between 2006 and 2009.  Moyer attempted to distinguish between his 2001 “Certificate of Occupancy” and Diaz’s 2006 “Certificate of Zoning Compliance,” arguing that the latter could not revoke the former, and therefore could not be used as evidence of abandonment; however, the Des Moines zoning officer explained that the purpose of the Certificate of Zoning Compliance is “to document the change in use mostly for office use.” Both forms read substantially the same, including the requirement that “this certificate must be posted in a conspicuous place on the premises.” The court found that the board was entitled to rely on the 2006 certificate as circumstantial evidence the property no longer served as a used car lot.

Iowa Court of Appeals, Non-Conforming Uses , ,

County’s actions did not constitute a taking: The continuing saga of Francis v. Bremer County

January 14th, 2013

by Gary Taylor

J.D. Francis, Inc. v. Bremer County Board of Supervisors
(Iowa Court of Appeals, January 9, 2013)

Prior history of this case was discussed in this blog here.  The present case includes some interesting facts about the dispute not disclosed in the prior opinion from 2009, namely:

On June 20, 2006, Anhalt and Francis requested the land be rezoned to “R-1” single-family residential. The 34.5 acres had an average corn suitability rating (CSR) of 53.60, a rating that classified it as “prime” agricultural land that should be preserved for agricultural use under the Comprehensive Land Use Plan (CLUP). Following a public hearing, the Bremer County Planning and Zoning Commission unanimously recommended denial of the rezoning request….[and] the board of supervisors voted unanimously to deny the request, finding “that good agricultural farm land not be taken out of production and because of many other environmental concerns….The following day, Francis and Anhalt submitted a revised rezoning request, which excluded approximately four acres of productive farmland included in the original request. Excluding those acres dropped the CSR of the remaining 30.75 acres to 49.5. However, approximately half—or 15.46 acres—of that parcel had a CSR of fifty or higher….[On this request] the commission voted four to one to deny [and the] board of supervisors voted unanimously to deny.

More background.  In December 2009, after the Iowa Court of Appeals issued the decision linked above, the board of supervisors amended its CLUP to exclude planned residential developments on certain designated land. Francis’s property was included in this redesignation. Francis filed an action in the United States District Court for the Northern District of Iowa, alleging the board’s 2006 rezoning denials were an unconstitutional taking. He later amended his complaint to allege the December 2009 CLUP amendment was also an unconstitutional taking. The complaint was dismissed in March 2011 because the issue was not ripe for consideration; the court noted Francis had failed to seek compensation through state procedures by instituting an inverse condemnation action.

Present case.  On December 9, 2011, Francis filed the present case for inverse condemnation in state district court, alleging that the board’s denials of the rezoning request was arbitrary, and further that the CLUP amendment resulted in a taking of at least half of the value of the property in question without adequate compensation.  The court found the board was entitled to judgment as a matter of law because the board’s actions did not constitute a taking that requires compensation. Francis appealed.

The Court of Appeals first ruled that the doctrine of res judicata prevents J.D. Francis, Inc. from relitigating the issue of whether the board acted arbitrarily in denying its rezoning requests. The question of whether the board’s denial was arbitrary was litigated and decided by the district court when it granted summary judgment in favor of the board on Francis and Anhalt’s 2006 action. That ruling was later affirmed by the Court of Appeals.

As for the takings claim, the Court of Appeals observed that, unlike cases cited by Francis as supporting his claim, there was no rezoning that led to a diminution of value; rather, the board simply refused to rezone the land to increase its economic viability. Furthermore, the plaintiff purchased the land after the board denied both rezoning requests. Even the CLUP amendment, which occurred after purchase and limits the likelihood that the land will be rezoned to residential, does not amount to a taking. The property remains economically viable as agricultural land, just as it did prior to the plaintiff’s purchase. Under these circumstances, the Court of Appeals agreed with the district court’s finding that the board’s actions did not constitute a taking.

Iowa Court of Appeals, Rezoning, Takings , , ,

Letter to council member insufficient to give notice of charges for removal from office

December 10th, 2012

by Gary Taylor

Clark v. City of Sidney
(Iowa Court of Appeals, November 29, 2012)

Clark was elected by popular vote to the city council of the City of Sidney in November 2009 as one of its five at-large members. Regular meetings were held the second Monday of each month, and special meetings at other times. From January 2010 through September 13, 2010, Clark attended five of nine regular meetings and five of ten special meetings.  In June 2010, the attorney for the City sent Clark a letter asserting his failure to attend the last three regularly scheduled meetings rose to the level of “willful or habitual neglect or refusal to perform” his duties under Iowa Code section 66.1(1). This same letter noted that, should Clark continue to be absent, he may be asked to step down or the City may take action to remove him. Despite this warning, Clark failed to attend three subsequent meetings.  In August 2010, Clark received another letter from counsel for the City of Sidney, informing him that a hearing would take place at the September regular meeting of the Council “on written charges filed with the Council of the City of Sidney to remove you as City Council member for the willful or habitual neglect or refusal to perform your duties as a City Council member, for willful misconduct or maladministration as a City Council member and for intoxication as a City Council member.”  The letter was filed with the Council, but no written charges were prepared and filed.

Clark attended the September regular meeting with an attorney. His attorney objected to the removal hearing, stating both he and Clark had “no idea what the complaints” against him were. The mayor, who ran the meetings but did not vote, responded that these complaints were regarding Clark’s attendance and misconduct at a local establishment. No witness was put under oath and the statements were made in a question and answer format. Clark presented several witnesses including his wife, father-in-law, and mother. He stated he missed one meeting due to the death of his father and another due to a no-contact order which forbade him from having contact with another council member’s son and immediate family, which arose out of an altercation between the son and Clark at a local bar. Clark also stated that he could not attend special meetings because their timing conflicted with his work. The City presented no independent witnesses and no written evidence, although the other council members made statements concerning Clark’s failure to attend meetings, with lesser attention paid to the misconduct and intoxication allegations. Following this, a vote of the five council members occurred. The vote was 4-1 in favor of Clark’s removal, with Clark himself casting the lone dissenting vote. Clark appealed his dismissal to the district court through a writ of certiorari, which was dismissed.  He then appealed to the Court of Appeals.

Clark contended the August letter filed with the city council did not comply with the statutory requirements under Iowa Code section 66.29 which states:

Any city officer elected by the people may be removed from office, after hearing on written charges filed with the council of such city for any cause which would be ground for an equitable action for removal in the district court, but such removal can only be made by a two-thirds vote of the entire council.

The district court found that “[o]ther than the letters from the city attorney, there were no other written charges or specifications filed against Mr. Clark.” The city clerk testified the August 2010 letter to Clark from the city attorney was filed with her, and that she stored it with the other city council filings and gave a copy to the mayor. She told Clark before the September hearing that no charges were filed. The letter specifically noted the hearing was “on written charges filed with the Council.” The August letter itself, therefore, was not intended by the council or their attorney to be “written charges.” Observing that the statute requires written charges to be filed and that a court must give a removal statute strict construction, the Court of Appeals found that Clark was required to receive notice of the details of the charges before the council’s hearing in this case. The August certified letter received by Clark restated the language of the removal statute, failed to set forth any specific information regarding the grounds for removal, and referred to written charges filed with the city council that did not exist. The August letter did not fulfill the City’s statutory duty to provide Clark with notice prior to removal.  The Court of Appeals reversed the district court’s decision and remanded the case for entry of an order sustaining the writ of certiorari.

Iowa Court of Appeals, Notice , , ,

Monona County’s rezoning of property along Loess Hills Scenic Byway did not constitute illegal spot zoning

November 25th, 2012

by Gary Taylor

Woodward and Johnson v. Monona County Board of Supervisors
(Iowa Court of Appeals, November 15, 2012)

Cory Bumann purchased 2.8 acres of land in rural Monona County with the intent of constructing a bar and restaurant to serve tourist traffic coming to enjoy the Loess Hills. The land is located at the corner of the paved county road L-20 – which is a segment of the Loess Hills Scenic Byway – and the gravel road 153rd Street. Across county road L-20 (approximately 1/2- to 3/4-mile away), but not accessible directly by L-20, is the Timber Ridge Winery and Vineyard, which is owned by other members of the Bumann family. Timber Ridge does not have a bar or restaurant, but serves breakfast for approximately 400 guests on the weekends in the summer.  Timber Ridge also bike and ATV trails, and a campground.  The land that is the subject of this litigation is connected to Timber Ridge, across L-20, by a dirt path.

Bumann requested rezoning of the land in question from agriculture to a classification that would allow for a bar and a restaurant.  The county planning and zoning commission was unable to reach a recommendation, and forwarded a “split recommendation” to the board of supervisors.  on May 25, 2010 the board of supervisors approved the rezoning request.  Woodward and Johnston (plaintiffs), area landowners, challenged the decision as a case of illegal spot zoning.  The district court agreed and invalidated the rezoning.  Monona County appealed the decision.

After noting that a board of supervisor’s decision regarding a rezoning carries with it a strong presumption of validity, the Court of Appeals reviewed the relevant Iowa caselaw pertaining to spot zoning:

Spot zoning occurs when an ordinance creates a small island of property with restrictions on its use that are different from those imposed on surrounding property…. While spot zoning is not favored, it is not automatically illegal…. Spot zoning is valid if it passes a three-pronged test.  The court must determine (1) whether the new zoning is germane to an object within the police power; (2) whether there is a reasonable basis for making a distinction between the spot zoned land and the surrounding property; and (3) whether the rezoning is consistent with the comprehensive plan.

The district court found that the rezoning decision passed the first and third prongs, but failed the second.  The Court of Appeals confined its review to the second prong; plaintiffs did not challenge the district court’s conclusions with regard to the other two.

The Court of Appeals noted that to determine whether there is a reasonable basis for making a distinction between the spot zoned land and the surrounding property it must look at several factors:

Size of spot zoned and uses of surrounding property.   The county zoning administrator testified that the closest commercially zoned property was two to five miles away. The land surrounding the property on all sides was zoned for agriculture, but Timber Ridge had a special use permit to allow recreational uses such as a private campground and dirt-bike riding.  Plaintiffs land was farmland and timberland, but the county comprehensive plan did not identify the Loess Hills region as prime agricultural land.  One county supervisor testified that Timber Ridge at one time had a restaurant and bar that has since closed down.  Another supervisor testified that he considered the rezoned property and Timber Ridge to be similar in that they were gathering places.

Changing conditions of the area.  It was unclear from evidence at trial whether the extensive tourism promotion of the Loess Hills region was a recent occurrence, but the comprehensive plan specifically designating the Loess Hills as such was adopted in 2007.  L-20 had been paved for 20-25 years, and Timber ridge had been located in the area for much longer than that.

Uses to which subject property has been put.  Plaintiffs testified that the land in question previously had been used for row crops, but other testimony contradicted that.  It was recognized that the land was not prime agricultural land, but also that the site would have to be leveled for a bar to be constructed.

Suitability and adaptability for various uses.  County supervisors testified that the property’s location along the Scenic Byway on a paved road, its proximity to Timber Ridge, and favoring a location that was not prime agricultural land made this property suitable for a restaurant.

The district court found that the second prong was not satisfied because the paving of L-20 and the proximity to Timber Ridge were not recent occurrences, and that any land bordering L-20 would be equally suited for a restaurant and bar; however, the Court of Appeals pointed out that the district court is only to look to see if there has been a sufficient showing to reasonably support the board of supervisor’s judgment. The court is not to supersede the county’s discretion just because the court would reach a different conclusion.  Finding that there was a reasonable basis to support the county’s rezoning decision, the Court of Appeals reversed the district court.

Iowa Court of Appeals, Rezoning, Spot Zoning ,

Greyhounds are dogs “normally associated with domestic enjoyment” under Dubuque County zoning code

October 4th, 2012

by Gary Taylor

Zenner v. Dubuque County Board of Adjustment
(Iowa Court of Appeals, October 3, 2012)

In July 2003 when the Zenners planned to purchase property in Dubuque County, they requested a variance from the 500-foot setback requirement for kennels. They wanted to build the kennels with a 200-foot setback from the surrounding residences.  After consulting with the county attorney, the Dubuque County Zoning Administrator advised the Zenners that the Kennel would not be allowed in the A-1, Agriculture district.  The district allows kennels, except that “no kennel shall be allowed to harbor, breed, train, buy, sell, exchange or offer for sale any animal to be used solely for attack purposes nor any animal not normally associated with domestic enjoyment.”  The ordinance also lists examples of the types of animals prohibited: “Such ban shall include but shall not be limited to jungle cats, venomous snakes or other reptiles larger than four feet in length, pit bulls, coyotes, wolves, foxes, skunks, deer or other similar wild animals.”  Undaunted, the Zenners went ahead with their plans, purchased the property, and built a kennel that violated the setback requirements for kennels.  Learning of this, the zoning administrator notified the Zenners that they were in violation of the ordinance.  The Zenners appealed the violation to the Dubuque County Zoning Board of Adjustment, which upheld the zoning administrator’s violation.  The district court upheld the decision. An appeal to the Iowa Court of Appeals resulted.

Starting its analysis by noting that a court “construes zoning restrictions strictly in order to favor the free use of property,” the Court of Appeals concluded that the county attorney misinterpreted the county’s zoning ordinance.  The county attorney based his conclusion that the kennel was raising greyhounds  “not normally associated with domestic enjoyment” on the fact that the dogs were for commercial sale. However, the Court pointed out that the zoning ordinance identifies another type of kennel – “kennel, hobby” – that does not include commercial activity or breeding or sale for a consideration.  The implication is that use of the word “kennel” by itself could not be meant to exclude commercial kennels.  “Following the county attorney’s analysis could lead to a determination that any kennel raising dogs for show instead of as pets would not be permitted because it would be ‘a non-exempt commercial use.’”

To further support this conclusion the Court pointed to the existence of Iowa Code 99D.27 – which requires dog tracks to maintain a racing dog adoption program – as “evidence public policy and law in Iowa considers greyhounds to be normally associated with domestic enjoyment.”  The Court also noted that the only dog listed in the banned animals is “pit bull.”  According to the Court greyhounds “possess [none] of the characteristics associated with the litany of prohibited animals.”

The Court of Appeals found in favor of the Zenners, reversing the district court.

Iowa Court of Appeals, Zoning board of adjustment, Zoning ordinance interpretation , , ,

Two houses on acreages in Linn County do not qualify for ag. exemption to county zoning

April 25th, 2012

by Gary Taylor

Lang, et al., v. Linn County Board of Adjustment
(Iowa Court of Appeals, April 25, 2012)

The agricultural exemption to county zoning in Iowa – Iowa Code 335.2 – reads in part:

Except to the extent required to implement section 335.27, no ordinance adopted under this chapter applies to land, farm houses, farm barns, farm outbuildings or other buildings or structures which are primarily adapted, by reason of nature and area, for use for agricultural purposes, while so used.

This case is a consolidation of two cases, both involving houses built in the late 1990s on separate parcels (one parcel of 6.52 acres, the other approximately 35 acres) that were originally part of a larger 49-acre parcel.  After addressing the standard the court uses to review decisions by boards of adjustment (“A board’s action must be upheld if supported by any competent and substantial evidence.”) the court got to the substantive facts of the case.

House 1 – The Lang House.  House 1 was occupied by the Langs, and sits on 6.52 acres.  The Langs argued their activities of living in the house and growing trees, berries, asparagus, grapes, apples, tomatoes, and farm fish, as well as participating in government farm programs, qualified as “agricultural purposes” under the statute for both the house and the land.  The court noted that the only proof the Langs offered of an agricultural purpose—defined in prior caselaw as “the art or science of cultivating the ground, harvesting of crops and rearing and management of livestock”—was their assertion through an agricultural exemption sheet on which they listed the following activities as “commercial production”:

1. Trees, 4 to 5 acres, 80% for commercial production
2. Raspberries, 0.1 acres, 10% for commercial production
3. Blackberries, 0.1 acres, 10% for commercial production
4. Asparagus, Apples, 1.0 acres, 75% for commercial production
5. Grapes, tomatoes, 0.2 acres, 15% for commercial production

The Langs did not offer any additional evidence to support “commercial production,” such as tax returns or other financial records.  They argued that the Linn County Zoning Board of Adjustment (ZBA) improperly applied a “minimum acreage test” for the land, and since the legislature removed the “primary means of livelihood test” from the statute in 1963 the only question the ZBA should be asking is whether the Langs were “engaged in agriculture.”  In response the court simply stated that it did not read the ZBA’s findings to apply a minimum acreage test. The court also

Recognizing that Iowa case law has not defined the term “farm house” for purposes of the exemption, the court cited with approval a 1997 Attorney General opinion stating that a “farm house” is one in which the occupants, “are engaged in agriculture on the land where the house [is] located.”

While we appreciate that the Langs have participated in land conservation and tree planting projects, as well as growing some fruits and vegetables, the Langs failed to demonstrate to the ZBA those activities were sufficient to prove they were using House 1 and the 6.52-acre parcel for agricultural purposes. Similarly, although the Langs’ property has some of the attributes that a small farm or small agricultural enterprise may have, the Langs simply did not demonstrate that they cultivated the ground, harvested crops, or reared and managed livestock to an extent warranting an agricultural exemption …. Without that showing, they could not substantiate that House 1 and the 6.52-acre parcel were “primarily adapted, by reason of nature and area, for use for agricultural purposes.  We recognize that small-scale agricultural production should not be discouraged. However, at some point a line has to be drawn to determine what qualifies under the statute as “agricultural use” and what is more akin to a rural acreage. The Board, after considering all of the evidence submitted by the Langs, drew that line and determined House 1 and the 6.52-acre parcel were not used for “agricultural purposes” under the statute.

House 2 – The Tenant House.  House 2 was originally intended for use by the Langs’ son, so he could assist with farm operations after completing college. When the Langs’ son did not occupy the house, the Langs decided they would rent it to other tenants.  The Tiernans (the original tenants) kept work logs of their activities related to the acreage.  The logs showed that over a 21-month period the tenants averaged at most 3.7 hours per day toward caring for the land, trees, and fish production, and 2.6 hours per day if tasks not clearly related to these activities were removed.  The court affirmed that under the statue, the key consideration is whether House 2 and the land are “primarily adapted, by reason of nature and area, for use for agricultural purposes.” The Langs argued that the ZBA applied the language in such a way that it amounted to the “primary means of livelihood” test, which the legislature removed in 1963. The court disagreed, noting that the ZBA considered, among other things, the amount of time devoted to the performance of the work duties and that the ZBA was looking at whether the tenants were “primarily engaged” in agriculture, not whether their primary livelihood was being made from agricultural activities on the land. Because the facts provided a basis for the ZBA’s decision, the court refused to overturn the decision.

Justice Tabor issued a dissenting opinion, disagreeing first with the majority’s characterization of the case as one that simply requires finding substantial evidence to support the ZBA’s decision.  She instead would look at the district court’s interpretation of the ag exemption, which the court of appeals is not required to give deference.  She viewed statements from the Linn County Zoning Administrator – that “the county has honored the exemption for years and now the property is reduced to a 6-acre tract with a pond and some berries” – as an implicit application of a minimum acreage test which the ZBA followed.  She noted that in a June 8, 2004 contempt ruling, Judge Newmeister found that Daryl Lang “carries on two agricultural purposes on the parcel he owns in Linn County. He grows trees and he has a fish farm,” and thus the focus of the ZBA’s analysis should have been “whether the Langs’ use of their property had changed since the county recognized the original forty-eight-acre tract as falling under the agricultural exemption.”  She went on to observe:

The majority decision gives a nod to smaller farms, recognizing that “small-scale agriculture should not be discouraged.” The decision goes on to say that some line drawing must be done between what qualifies as an “agricultural use” and “what is more akin to a rural acreage.” I agree that the size of the acreage is a relevant factor in determining whether the property is used for agricultural purposes, but I disagree that a board of adjustment can draw an arbitrary line that parcels of less than ten acres cannot be “primarily adapted” for agricultural purposes. Now that the conventional view of Iowa agriculture as the production of corn, soybeans, cattle, and hogs is being challenged by the emergence of Community Supported Agriculture involving smaller farms growing fruits, vegetables, and livestock, it is critical that county boards of adjustment do not employ a litmus test for the number of acres necessary to qualify for an agricultural exemption….Had the board applied the proper legal test, it is likely that the crops listed on the Langs’ agricultural exemption information sheet would have satisfied the statute’s requirement that the land be “primarily adapted” for agricultural purposes.

Agricultural Uses/Agricultural Exemption, Iowa Court of Appeals, Zoning board of adjustment , ,

Documents insufficient to extend HOA covenants beyond 21 years

March 12th, 2012

by Gary Taylor

Chipman’s Subdivision HOA v. Carney and Carney
(Iowa Court of Appeals, February 29, 2012)

In the 1960s, Carroll and Daisy Chipman developed fifteen lots (Chipman’s Subdivision) in rural Johnson County.  E.R. Carney and Kathy Mickalson Carney purchased three lots located in the subdivision in December 1997. In 2010, Chipman’s Subdivision Homeowners Association, Inc. (HOA) commenced a small claims action against the Carneys, claiming the Carneys owed association dues in the amount of $1820 pursuant to covenants originally recorded in 1969 and revised in 1986 and 2003. A member of the HOA board of directors testified that the HOA sought to recover dues under the 1969 covenants, which were amended in 1986 and again in 2003. The document entitled “Protective Covenants and Restrictions” was recorded on April 8, 1969, and specified that any change to the covenants required a majority vote by current lot owners. A document entitled “Covenant” was recorded on January 27, 1986, and stated the intent to establish a homeowners association for the express purpose of “maintenance, repair, upkeep and management of the roads within the Chipman’s Subdivision.”  Further, it set forth a “dues structure,” requiring a new resident to pay a one-time fee equal to one-half the annual dues and all residents to pay ten dollars per month. Five property owners signed the document. The document entitled “Revised and Restated Covenants and Restrictions” was recorded on May 22, 2003, and stated that pursuant to the 1969 covenants the majority of homeowners adopted the revised and restated covenants set forth. One provision extended the obligation to pay dues from only the owners who had a home in the subdivision to those who owned lots in the subdivision. The HOA director testified the Carneys owed dues for the maintenance and repair of the common road in the subdivision.  E.R. Carney testified he purchased the lots in 1997 from a real estate attorney who had informed him the 1969 covenants had expired and the HOA had no legal authority. Carney argued that the covenants recorded in 1969 had expired on April 8, 1990, pursuant to the twenty-one year limitations period set forth in Iowa Code 614.24, and that the document recorded in 1986 was insufficient to extend the covenants.  The district court found the 1986 document was valid and ruled in favor of the HOA.

The Court of Appeals, however, agreed with the Carneys that the 1986 document was inadequate to extend the limitations period.  Specifically the 1986 document did not meet the requirements of Iowa Code 614.24. It did not set forth the nature of the interest as a use restriction previously created, nor did it identify the 1969 covenants that created the use restriction or the date the 1969 covenants were recorded. The 1986 document was not indexed in the claimant’s book.  Finally, the 1986 document was not acknowledged or notarized. The district court found that because the documents were recorded, they were enforceable; however, the recording of a document does not demonstrate its validity.  As the covenants expired because of the invalidity of the 1986 document, the 2003 covenants could not extend the limitations period. The HOA was therefore precluded from recovering the dues it claimed were owed.

Covenants and deed restrictions, Iowa Court of Appeals, Property law , , ,

Discontinued nonconforming use could be resumed within 1 year

December 12th, 2011

by Gary Taylor

C. Line, Inc., vs. Malin and the City of Davenport
(Iowa Court of Appeals, December 7, 2011)

In February 1997, C. Line opened an adult cabaret business in Davenport called “Chorus Line.” In 2001, the City  adopted an ordinance providing for the licensing and regulation of “adult entertainment” businesses.  Two years later C. Line filed a petition in federal court claiming the ordinance was unconstitutional. This lawsuit was resolved in August 2004 when the parties entered into a consent decree that issued a license to C. Line, allowed for the sale of C. Line without loss of the license, and declared C. Line to be a pre-existing nonconforming use.

In 2008 C. Line voluntarily closed Chorus Line, and the business was evicted from its location by a forcible entry and detainer petition granted in favor of the landlord.  The following year the ownership of C. Line was transferred to Nadeem Mazhar, who applied to the city for a license to reopen the adult cabaret business in the same location as before, based on the pre-existing nonconforming use stipulation in the consent decree.  Dr. John’s Lingerie Boutique opened in the same building, however, in August 2008 under a retail business license.  Dr. John’s sells lingerie, shoes, and hosiery as well as novelties, movies, and magazines of a sexual nature.  Malin, the Davenport city administrator, performed a site inspection for the C. Line application, and after observing Dr. John’s advertising and merchandise, a letter – under the signature of the city’s chief financial officer – was issued denying C. Line’s adult cabaret license as violating the Davenport Municipal Code section prohibiting two adult entertainment businesses from being located on the same lot or within 500 feet of each other.  C. Line appealed under city administrative procedures that provided for the city administrator (Malin) to act as the hearings officer.  C. Line filed objections to Malin acting as the hearing officer and moved that he recuse or disqualify himself, but the objections were denied.

The city called one witness, an inspector, at the administrative appeal.  The inspector testified that by his observations Dr. John’s was an “adult store.”  He did not make any square footage measurements or county any inventory.  C. Line called several witnesses.  Among them, the store manager for Dr. John’s testified that at no point in time has the City of Davenport required the store obtain an adult entertainment business license. She further stated that several of the lingerie and novelty items could be found at similar retail stores, like Victoria’s Secret and Spencer Gifts.  The chief financial officer testified that he never inspected Dr. John’s and was basing the denial letter solely on information obtained from the Malin.

Following the conclusion of the hearing the Malin performed a follow-up inspection of Dr. John’s, and based upon his measurements, calculations, and direct observations of the store’s space and displays, the Malin concluded that Dr. John’s was an “adult store” and upheld the denial of C. Line’s adult cabaret license application. Malin made no attempt to address C. Line’s argument that it was a legal preexisting nonconforming use.  C. Line appealed to district court, and after a litany of procedural moves the district court ruled for C. Line on the ultimate land use issue.  Although appeals and cross appeals were filed, this brief focuses on the nonconforming use issue.

Pre-existing nonconforming use. It was undisputed that the express words of the consent decree provided C. Line with an adult cabaret license and the status of a preexisting nonconforming use. As such, C. Line was permitted to continue until legally abandoned. The court cited Davenport Municipal Code section 17.46.020, concerning abandonment:  “In the event that a nonconforming use of any building or premises is discontinued or its normal operation stopped for a period of one year, the use of the same shall thereafter conform to the regulations of the district in which it is located.”  The city argued the nonconforming use was abandoned either when C. Line ceased operations in November 2008 or when the forcible entry and detainer petition was granted in December 2008.  The court noted, however, that the city’s ordinance does not require any subjective intent, but effectively extinguishes nonconforming uses based solely on discontinuance of the use for a specified period of time.  Since C. Line voluntarily ceased operations in November 2008 and was evicted in December 2008, but sought to reopen in July 2009, C. Line did not stop using the site as an adult cabaret for over one year and did not lose its status as a legal nonconforming use under the Davenport Municipal Code.  The nonconforming use did not become the landlord’s upon eviction either, as the city suggested.  Although possession may have been transferred from C. Line in December 2009, C. Line reestablished possession of the land prior to the one-year expiration date.  This argument was premised on a finding that the nonconforming use “leapfrogged” to Dr. John’s, which was incorrect because Dr. John’s was not an adult store and the city had never recognized it as such.

Iowa Court of Appeals, Non-Conforming Uses ,

Use of roadway by mobile home park residents went beyond scope of easement

November 17th, 2011

by Gary Taylor

113th Avenue Road Fund Assn. v. I & R Properties, Inc.
(Iowa Court of Appeals, November 9, 2011)

Plaintiff 113th Avenue Road Fund Association (the association) is a voluntary, unincorporated group of lot owners in a subdivision called BJ Mahoney‟s Second Subdivision in Scott County. Plaintiff Sandra K. Moore is the former association president and owns Lot 1 in the subdivision.The defendant, I & R Properties, Inc. (I & R), owns lots 13, 14, and 15 in the subdivision and operates a trailer park—the Lake Canyada Mobile Home Park—“partially on, and adjacent to, the subdivision.” (although I & R denied owning the lots and affirmatively stated that Lake Canyada L.L.C. is the record title holder of the property. The district court observed, “the legal relationship between I & R Properties and Lake Canyada is not clear. . . . [but] I & R Properties is at least the resident manager and authorized agent of Lake Canyada L.L.C.”).

I & R and Lake Canyada use residential buildings on lots 13 and 14, located on 113th Avenue, as an office for the mobile home park and as a residence for the park‟s manager. Several mobile home residents use 113th Avenue as their ingress and egress to their mobile homes. In addition, I & R cut a roadway through lot 15, which connects with 113th Avenue. The crude roadway provides the occupants of approximately 235 trailer lots with a shortcut to 113th Avenue so that they may access Lake Canyada’s business office.  The sixty-six-foot-wide roadway was first recorded in a 1948 plat of the B.J. Mahoney‟s Second Subdivision, and the Mahoneys recorded an affidavit in 1964 reaffirming their dedication of the roadway for the use of “all of the owners of lots” in the 1948 plat. On June 30, 1986, the owners of the land adjoining the road signed an agreement for continued maintenance and access to and from their properties. That agreement stated that 113th Avenue is designated “as a private road for residential use for all owners and residents of the Lots in said Auditor’s Plat of B.J. Mahoney’s Subdivision and B.J. Mahoney’s 2nd Subdivision. The owners of the following adjoining lots to the described road state that each party has the right to use the described road for residential use to Ingress and Regress.” In 1986, Dean Harding managed Hawkeye Real Estate Investments and signed the agreement for Lots 13, 14, and 15.  Over the years, several disagreements arose between trailer park management and subdivision landowners concerning the meaning of the agreement, and the use and maintenance of 113th Avenue.  The latest disagreement resulted in this lawsuit over the interpretation of the agreement.  The district court ruled that I & R could not use lots 13, 14, and 15 for commercial purposes, and that the association could erect blockades to prevent trailer park residents from using 113th Avenue.  I & R appealed.

The parties agreed that the district court went beyond the scope of pleadings in restricting the use of lots 13, 14, and 15.  However, they still disagreed about the scope of the 1986 agreement concerning use of the road.  I & R recognizes the 1986 agreement referenced “residential use” of the road, but argued that phrase “cannot fairly be construed to ban traffic related to the operation of the park as a place where persons reside. The Court of Appeals disagreed.  The testimony about 113th Avenue reveals that the lots adjoining the private road were held and used by about twenty people for their own residences in 1986, as opposed to any commercial or business endeavors. The notion that more than two-hundred occupants of mobile homes may use I & R’s easement to transact business at the manager’s office and to gain a quicker connection to a public road was not contemplated by the lot owners who signed the 1986 agreement for access and maintenance of the private road.  The agreement did not contemplate that I & R could open the private road to hundreds of customers who rented trailer lots from the company. That commercial use of the road by non-residents has created an unintended burden on common holders of the easement.  The agreement’s reference to proportional responsibility for the maintenance costs also supports the conclusion that the signatories did not anticipate opening 113th Avenue to non-residents who would benefit from their use of the private road without contributing to its upkeep.

The Court of Appeals found that I & R violated the 1986 agreement by allowing the different type of use of 113th Avenue by their tenants. It affirmed the district court’s declaration that I & R’s roadway on Lot 15 should be closed to through traffic to 113th Avenue, the north end of 113th Avenue should be closed to access from the mobile home park, and I & R should be prohibited from interfering with the association’s enforcement of the agreement.

Easements, Iowa Court of Appeals , ,

Court finds little special benefit to justify special assessment for road project

August 4th, 2011

by Gary Taylor

Belling, et al v. City of Urbandale
(Iowa Court of Appeals, July 13, 2011)

Plaintiffs own residential acreages of various sizes along 156th Street in Urbandale. The area has experienced development over the past ten years, including the addition of a nearby elementary school. In response to the growth in the area, the City initiated a project to replace a section of 156th Street and to build new sidewalks.  The roadway project consisted of replacing the existing two-lane, twenty-four-foot wide sealcoated asphalt road with a four-lane divided parkway made up of a twenty-eight-foot wide green median between two twenty-six-foot wide sections of road. The sidewalk project added a four-foot wide sidewalk on the east side of the street and an eight-foot wide multi-use path on the west.

The only construction cost included in the roadway assessment was the cost of paving a thirty-one foot wide street. The assessment did not include other construction costs, such as grading, subgrade preparation, storm sewers, water mains, sanitary sewers, or street lights. The special assessment for the new road was spread among the property owners by the use of the modified Flint Formula, which “focuses on the frontage size and depth of the abutting property, and assigns benefit points for each tract.?  The total costs of the project were $5,991,715.77. The city assessed $1,337,726.81, approximately twenty-two percent of this cost, to the abutting landowners who were plaintiffs in the suit.

Plaintiffs brought an action against the City, contending the assessments exceeded the special benefits they received from the project. The plaintiffs testified at trial that they received very little benefit from the project. Each plaintiff also testified about numerous negative impacts of the project, including increased noise, trash, traffic, and maintenance (primarily snow removal and mowing); decreased safety, privacy, and accessibility, and potential liability. The plaintiffs testified this project produced a great public benefit for the surrounding neighborhoods and nearby school but provided very little special benefit to their properties.

The plaintiffs’ expert witness, a former engineer for the City of Des Moines, testified the City’s use of a modified version of the Flint formula in spreading assessments – referred to as the Urbandale Curve – was improper due to the irregular topographical features, size, and shape of the properties involved. He criticized the strictly mathematical approach of the formula for failing to properly account for special and general benefits. He stated bare land does not benefit unless it can be subdivided in some way, and that owners of large lots, like the plaintiffs, received no more or less special benefit than people who lived on smaller lots and incurred smaller assessments.

The City presented evidence that the Flint formula has for decades been the preferred method of spreading assessments among property owners in Iowa.  The Urbandale Community Development Director testified as to the benefits of the paving, including increased property value for the plaintiffs in “at least the amount of the assessment.” The Urbandale City Engineer testified the City used a modified version of the Flint formula, which was an accepted engineering practice. Another engineer who reviewed the assessments in this case found nothing improper in actions taken by the City.

The district court concluded the assessments were excessive and reduced them, finding the plaintiffs had proved the assessments exceeded the special benefit to their properties. The court reduced the roadway assessments by seventy-five percent and the sidewalk assessments by fifty percent. The district court also provided, “Each assessment shall be further reduced by 10% if paid in a lump sum within 90 days of the exhaustion of all appeals.” The City appealed.

Iowa Code 384.61 provides: ”The total cost of a public improvement . . . must be assessed against all lots within the assessment district in accordance with the special benefits conferred upon the property, and not in excess of such benefits.”  The Court of Appeals looked to previous cases which have established the factors to be used in differentiating between special benefits conferred uniquely on abutting landowners, and general benefits accruing to the community at large.  Those factors include:

the present and future use of the abutting property, the increase in the market value occasioned by the improvement, the size and shape of the property, the proximity of the property to the improvement, the amount of property fronting the improvement, the needs of the property owners served by the improvement, and the primary purpose behind the improvement.

The Court looked at these factors in order, finding that (1) each of the properties was at its best use; (2) the record contains no evidence that the improvement resulted in an increased market value for any of the properties; (3) the parcels at issue varied in size and shape, but all parcels were along 156th Street and were fairly large in size; (4) the land was on an asphalt sealcoated road before the paving project, and thus the project had little effect to reduce noise, dust, and maintenance costs, but did improve the aesthetic value, fire and police access, and ease in snow and ice removal; and (5) the primary purpose of the improvement was clearly to afford a general benefit to the public because the new road was considered an arterial road and was designed to handle heavy traffic from the community as a whole. The Court concluded that even after the city discounted the cost of the project in assessing the abutting landowners the assessments still exceeded the special benefits conferred on the properties.

The Court reviewed the use of the Urbandale Curve method of assessing properties and found it consistent with caselaw.  Noting first that any method of assessing special benefits will necessarily draw arbitrary lines between special and general benefits, the Court went on to state that the city must “examine each affected parcel and its particular features to determine whether the assessment exceeded the special benefits conferred on the land….A practical overview of all the surrounding circumstances must be considered.”  The Court concluded that failure to do so resulted in excessive assessments on some properties. For example the owner of a single family residence should not have been assessed the same amount a nearby townhome/condominium development. “Certainly, the project conferred more benefits on an entire townhome/condominium development than it did on a single-family residence.”  The Court further observed that the potential special benefits identified by the City in effect confer very little, if any, benefit on bare land. The Court concluded it was appropriate for the district court to reduce each roadway assessment by seventy-five percent.  Following the same line of reasoning the Court also affirmed the portion of the district court’s judgment that reduced the sidewalk assessments by fifty percent.

Iowa Court of Appeals, special assessments , ,