Statute of limitations does not bar enforcement of a court decree

By Eric Christianson

TSB Holdings, LLC v. City of Iowa City
(Iowa Supreme Court, June 1, 2018)

In the 1980s Wayne Kempf and his partners purchased six parcels on the north side of Iowa City. Their plan was to build an office building and five apartment buildings on the four-acre tract. After the completion of the office building, they began construction of an apartment building. Following neighborhood protests, the city revoked the building permit and then downzoned the area to single family residential. This lead to a number court fights culminating with a 1987 order by the Iowa Supreme Court, which read in part:

Kempf shall be permitted to proceed with the development of apartment buildings, as shown by the record in this case, to the extent that such buildings conform to the ordinances in effect prior to the 1978 rezoning… The [C]ity shall be enjoined from prohibiting this use of the property by Kempf. Further development or redevelopment of the property beyond that contemplated by Kempf as shown by this record and noted in this opinion, whether carried out by Kempf or future owners, will be subject to the amended ordinances above designated.

Kempf completed one apartment building but did not develop the other properties. Over time Kempf and his partners sold the properties to various other parties. Eventually TSB Holdings purchased all of the properties subject to that order. In January of 2013 TSB Holdings submitted a site plan to the City of Iowa City showing the development of new apartment buildings based on the 1987 court order. The City denied this plan, stating that it did not comply with current zoning.

On April 18, TSB submitted a new site plan, which proposed construction of apartment buildings on only the three lots which had not been developed subsequent to the 1987 Kempf order. The city also denied this plan, viewing it as materially identical to the January 31 site plan. The Iowa City Board of Adjustment also failed to issue a variance to KSB.

TSB claimed that this was a violation of the 1987 court order and appealed the city’s decisions. A district court found in the City’s favor, concluding in part that TSB was not a successor to Kempf and that the order was no longer applicable. TSP appealed to the Iowa Supreme Court.

Among other issues the court examined three questions that were determinative of the case.

  1. Is TSB Holdings a successor of Kempf?
  2. Is the original 1987 court order unenforceable because of the stature of limitations?
  3. Has a use already been established on the properties?

Is TSB Holdings a successor of Kempf?

The district court had found that TSB was not a successor because TSB did not buy the lots directly from Kempf and the lots were sold piecemeal and not as a single package.  The Supreme Court found that in this case those points were irrelevant. The decision ran with the parcels regardless of ownership changes in the meantime.

Statue of limitations/repose

Among the most significant elements of this ruling is the question of whether court orders such as the one issued in Kempf are subject to a time limit. In a recent decision, Dakota, Minnesota & Eastern Railroad v. Iowa District Court, the Iowa Supreme Court interpreted Iowa Code 614.1(6) to say that that court orders are subject to a 20 year statute of repose. Therefore, an action to enforce a judgment more than 20 years after it was entered was untimely.

In this case, TSB argued that 614.1(6) was a statute of limitations rather than a statute of repose. A statute of limitations limits how long after an event causing some harm, the “cause of action,” one can bring a suit. A statute of repose on the other hand would prevent the bringing of a suit if that harm, occurs after a defined time period. The difference is somewhat technical, but here is determinative of the outcome. Does Iowa law say (1) that the court order itself expires after a 20-year period, or (2) does a plaintiff have 20 years to file suit after that court order is violated? Did the clock start ticking in 1987 when this order was issued or in 2013 when Iowa City rejected TSB’s site plan?

The Iowa Supreme Court overruled its own interpretation from Dakota and held that the limitations period in  614.1(6) runs from the date when the “cause of action” occurs. Court orders do not themselves “expire” after 20 years. In this case the “cause of action” occurred in 2013, when the City enforced its current zoning ordinance despite the 1987 court order. Therefore, the case is timely.

Has a use been established?

Another question relevant to this decision concerns which of the lots had been developed and are now subject to the current ordinance. The evidence showed that Lots 10, 49, and 51, had no buildings on them at the time TSB submitted this site plan. Iowa City argued that because of electrical easements and other work that had occurred on at least some of those parcels, they have already been “developed” and the order is moot. They further argued that developing Lots 10, 49, and 51 would require work to be done on the other lots which were clearly already developed and are now subject to current law.

The court was unconvinced that anything less than the construction of a building would be considered development on the affected lots. Further the court ruled that any development that would have to take place on the lots which already have buildings on them would be unaffected by the order. That potential development is therefore outside the scope of this ruling.

 

The Supreme Court overruled the district court’ rulings and held:

  1. KSB is a successor to Kempf and benefits from the order.
  2. The statute of limitations does not prevent the enforcement of the 1987 Kempf decision.
  3. A use had not been established on all of the parcels subject to the decree.

While this decision does clarify some matters of law, the future of this development is not yet settled.

Iowa’s Right-to-Farm law constitutional, but limited in its application

This post is a summary of an article by Kristine A. Tidgren that first appeared on The Ag Docket, from the ISU Center for Agricultural Law and Taxation. See the full version here.

Honomichl v. Valley View Swine, LLC
Iowa Supreme Court, June 22, 2018

 

Iowa’s agricultural nuisance law has perhaps become a little clearer, albeit no simpler to apply. On Friday, June 22, 2018, the Iowa Supreme Court issued a key ruling analyzing the constitutionality of Iowa’s embattled right-to-farm statute, Iowa Code § 657.11(2). The immunity statute at issue, states:

An animal feeding operation, […] shall not be found to be a public or private nuisance […] However, this section shall not apply if the person bringing the action proves that an injury to the person or damage to the person’s property is proximately caused by either of the following:

a. The failure to comply with a federal statute or regulation or a state statute or rule which applies to the animal feeding operation.

b. Both of the following:

(1) The animal feeding operation unreasonably and for substantial periods of time interferes with the person’s comfortable use and enjoyment of the person’s life or property.

(2) The animal feeding operation failed to use existing prudent generally accepted management practices reasonable for the operation.

The defendants in this case include the owner of two animal feeding operations in Wapello County. The units were constructed in compliance with DNR permits and setback requirement. The plaintiffs are neighboring homeowners who purchased their properties before the units were built. The units began their operations in the late summer of 2013. Several months later, plaintiffs filed their initial nuisance action. The defendants sought summary judgment, arguing that Iowa Code § 657.11(2) granted them immunity from such damage suits. The plaintiffs argued that the statute was unconstitutional, as applied to their case. The district court granted the plaintiffs partial summary judgment on that issue, and the Iowa Supreme Court agreed to hear the interlocutory appeal.

In an earlier decision Gacke v. Pork Xtra, L.L.C. (Iowa 2004), the Court found that while the law itself was a valid exercise of the state police power, it was unconstitutional as applied as it had denied the ability of the plaintiffs to sue for damages. In Gacke the court created the following three part test that courts should use to determine if plaintiffs have the right to sue. The plaintiffs must have:

  1. Received no particular benefit from the nuisance immunity granted to their neighbors other than that inuring to the public in general,
  2. Sustained significant hardship, AND
  3. Resided on their property long before any animal operation was commenced on neighboring land and had spent considerable sums of money in improvements to their property prior to construction of the defendant’s facilities.

 

Fast forward to 2018. Since Gacke, every district court that has faced the question has found Iowa Code § 657.11(2) unconstitutional “as applied.” The district court in Honomichl was no exception. The defendants in this case urged the court to reexamine and overturn the Gacke precedent. The plaintiffs asked the Court to declare the statute facially invalid or unconstitutional under all circumstances.

The Iowa Supreme Court upheld Gacke and clarified the procedure that should now be followed by courts in nuisance cases involving feeding operations. The Gacke factors, the court explained, require a fact-based analysis that will generally require a trial on the merits, or at least an evidentiary pretrial hearing. The Court stated that although it is possible that an as-applied constitutional challenge to the statute could be resolved in pretrial litigation, the proper procedure is as follows:

  • The trial court is to allow the CAFO to plead the affirmative defense, if applicable.
  • Plaintiffs asserting the unconstitutionality of the statute, as it applies to them, must then prove the existence of the three Gacke factors.
  • If the plaintiff is successful, the immunity will not apply.
  • If the plaintiff is unsuccessful in a pretrial hearing held for the specific purpose of determining the as-applied challenge, the plaintiffs may still rely on the other exceptions to the immunity found in the statute: The failure to comply with a federal  or state statute, regulation, or rule OR (1) The animal feeding operation unreasonable and for substantial periods of time interferes with the person’s comfortable use and enjoyment of life or property AND (2) The animal feeding operation failed to use existing prudent generally accepted management practices reasonable for the operation

 

It is now clear that district courts must engage in significant fact finding before they can declare that granting immunity from special damages to a defendant would violate a specific plaintiff’s constitutional rights. This can’t occur until after a trial or an evidentiary pretrial hearing. As such, the three-prong Gacke test essentially transforms the Iowa statute from an immunity provision into a rewrite of Iowa nuisance law for plaintiffs suing an animal feeding operation.

Posting unapproved minutes with ZBA decision does not start the clock for purposes of filing appeal

by Eric Christianson

Burroughs v. Davenport ZBA
(Iowa Supreme Court, May 25, 2018)

To operate a daycare in the City of Davenport one must obtain a special use permit from the Zoning Board of Adjustment (ZBA).  In March 2014, the ZBA granted Tiny Tots Learning Center a permit. Tiny Tots closed its doors in late 2014, and in July 2016 a new lessee of the premises, Mz Annie-Ru Daycare Center, opened at the same location. The new day care center supervises more children and is open for longer hours than Tiny Tots was. The Davenport Zoning Administrator determined the special use permit issued to Tiny Tots “run[s] with the land” and the new daycare center would not need to obtain another special use permit.

Burroughs along with other neighbors disagreed and appealed that decision to the Board of Adjustment. On October 13 the ZBA voted 4-0 to uphold the administrator’s decision that the special use permit continued to apply. After that hearing, staff advised the residents that they could file a petition to revoke the special use permit. They did so and on December 8 the board held a public hearing to determine if the permit should be revoked. The BOA voted 0-4 against revoking the permit. Shortly after both of these meetings city staff posted unofficial minutes to the city’s website; however, they were not officially approved until the subsequent meeting of the ZBA.

On January 25, Burroughs along with five other residents appealed these decisions to District Court claiming that the ZBA had acted improperly in refusing to revoke the permit. The City filed a motion to dismiss the case, asserting that the petition was untimely because it was not filed within thirty days of the challenged decisions.

Iowa Code 414.15 states:

Any person […] aggrieved by any decision of the board of adjustment […] may present to a court of record a petition […] Such petition shall be presented to the court within thirty days after the filing of the decision in the office of the board.

The district court granted the City’s motion. Considering the posting of the minutes online to be the “filing of the decision.” Because the minutes of the December 8 meeting were posted on December 19th. The appeal on January 25th was untimely.

The court concluded that the:

“thirty-day time period begins to run from the time the appealing party has either actual knowledge or is chargeable with knowledge of the decision to be appealed.”  Because it was “undisputed” that plaintiffs attended both the October 13 and the December 8 meetings, they had actual knowledge of the Board’s decisions as of those dates: “[T]he Court cannot hold that they did not have actual knowledge or chargeable knowledge of the decision which they witnessed firsthand.”

 

Burroughs and the other plaintiffs appealed this dismissal.

The Iowa Supreme Court considered four possibilities of when the decision was “filed” in this case:

  1. The time that the decision is made in a public meeting wherein the parties gain “actionable knowledge.”
  2. When the unofficial minutes of the meeting are posted to the city websites.
  3. When approved official minutes have been posted online.
  4. When a signed physical document is present in the offices of the BOA and available for public inspection.

Both parties had an initial and fallback opinion. The city argued that the decision was “filed” at the meeting when the vote was taken and the parties were aware of the action. If that was not accepted, then they argued that the posting of the unofficial meeting minutes online should be considered filing the decision.

The plaintiffs argued principally that that for a decision to be filed it had to be a physical signed document including findings of fact and available for public inspection at the board’s offices. By this argument neither the October 13th decision nor the December 8th decisions had ever been properly filed and thus could still be appealed. If the court did not accept this argument, then they argued that only the posting of the approved minutes online could be considered “filing.” This fallback position would only preserve the December 8th refusal to revoke the permit for appeal as the approved minutes containing that decision were not posted until January 6th.

The court gave a few principles that can be used to determine when a ZBA decision has been filed and, therefore, how long plaintiffs have to appeal.

First, a decision cannot be simply oral.  It must exist in some documentary form. Simply having knowledge of what the decision is is not sufficient.

Second, the decision can be filed in electronic rather than paper form. The plaintiffs in this case tried to argue that a public document must be physical. The court disagreed indicating that in fact most of the Court’s own documents exist only digitally.

Third, a document has been filed in the “office of the board” when it has been posted on the board’s publicly available website that the board uses as a repository for official documents. The “office of the board” does not have to be a single physical location as long as the documents are accessible to the public.

Finally, the thirty-day period is triggered when the board posts the decision on its public website.  However, what is posted must be an actual decision.  Proposed minutes that have not yet been approved do not constitute a decision, but approved minutes do.

The Supreme Court of Iowa reversed the District Court’s dismissal of the December 8th ZBA decision. The case is remanded back to district court for further proceedings on the legality of that decision.

Iowa Supreme Court overturns loss of nonconforming status for Des Moines mobile home park

by Eric Christianson

Des Moines v. Ogden
Iowa Supreme Court, March 16, 2018

Frank Ogden owns and operates a nonconforming mobile home park on the south side of Des Moines. The property consists of a narrow u-shaped access road with mobile homes around the interior and exterior of this road. The historical record is not clear, but its use as a mobile home park dates back to some time between 1947 and 1955. In 1953 the Des Moines zoning ordinance was modified prohibiting mobile home parks in the R-2 zone in place on the property. In 1955, the owner of the property obtained a certificate of occupancy for the operation of a mobile home park. That certificate of occupancy indicates that the mobile home park was a nonconforming use as to the R-2 zone.

The best record documenting historical use is an aerial photograph from 1963. The photograph depicts “thirty-nine concrete pads with mobile homes situated on them in close proximity to one another. The photograph also shows that some of the homes had additional structures attached to them.” More recent photographs of the property reveal that some residents have added porches, decks, and more living space to their mobile homes.

The city did not issue any warnings or citations regarding the use of the property as a mobile home park until 2014. In 2014, a zoning administrator notified Ogden by letter of numerous violations of the 1955 Des Moines Municipal Code, under which the original certificate of occupancy had been awarded. These included setback violations, failure to maintain the access road, and additions to trailers among other issues. The letter also warned that the park’s violations posed a threat to the health and safety of the occupants.

Ogden did not take any action to remedy the violations. In October 2014, the city sought an injunction to close the park for the above listed violations. At trial the Des Moines Fire Marshall testified that the proximity of the mobile homes and the narrow access road created potentially dangerous conditions for residents.

The trial court found that the issuance of the occupancy permit in 1955 is proof that the property was in compliance with the above regulations when the nonconforming use was established. The court held further that the certificate of occupancy should be revoked as the park poses a threat to “the safety of life or property”.

Ogden appealed to the Iowa Court of Appeals. The Iowa Court of Appeals found that the park had:

grown within its borders in the numbers and location of structures attached to the mobile homes resulting in a narrowing of open space on the roadways and between the homes. […] these changes over a half century have enhanced and intensified the non-conforming use to the point where it is a danger to life and property. […] Ogden’s use of the property is not a lawful intensification of an existing nonconforming use. The present congestion and crowding between structures and narrowing the roadway changes the nature and character of the 1955 non-conforming use and presents a danger to residents and neighbors of the park.

The appeals court affirmed the grant of the city’s request for an injunction against Ogden’s use of the property as a mobile home park. One judge dissented. Read more about that decision here.

Ogden appealed to the Iowa Supreme Court arguing several points:

  1. The actions of the City to enjoin his use of the mobile home park amount to an unconstitutional taking.
  2. It is not necessary for Ogden to discontinue his legal nonconforming use of the property as a mobile home park for the safety of life and property.
  3. The changes to the property did not expand his legal nonconforming use of the property beyond its authorized nonconforming use.
  4. The doctrine of equitable estoppel bars the City from seeking to enjoin his use of the property as a mobile home park.
  5. The district court erred by excluding the testimony of a resident of the mobile home park.

Unconstitutional Takings Because Ogden did not plead a defense on the basis of a taking at the district court level he waived his unconstitutional takings claim. The claim was not preserved. Iowa Supreme Court therefore did not rule on any regulatory takings claims.

Nonconforming Use The court began by citing its definition of a legal nonconforming use.

A nonconforming use is one “that lawfully existed prior to the time a zoning ordinance was enacted or changed, and continues after the enactment of the ordinance even though the use fails to comply with the restrictions of the ordinance.” City of Okoboji v. Okoboji Barz , Inc. […] (Iowa 2008) .

Discontinuance of nonconforming use for the safety of life or property For a city to obtain an injunction requiring compliance with a zoning ordinance it must establish (1) an invasion or threatened invasion of a right, (2) that substantial injury or damages will result unless the request for an injunction is granted; and (3) that there is no adequate legal remedy available.

The Iowa Supreme Court found that the City of Des Moines did not meet this burden. Apart from the testimony of the fire marshal during trial, the city offered little evidence of unsafe conditions on the property. The city had also never cited the property for violations of the fire code, and the first letter of notice of a zoning violation was not sent until 2014.

Nonconforming Use Defense In the case of an established nonconforming use, the burden lies on the city to prove that use exceeds the prior established use.  Property owners have some latitude to change their nonconforming use if those changes are not substantial and do not have adverse effects on the neighborhood. In this case, changes are compared to the state of the part when the certificate of occupancy was issued in 1955. Unfortunately there is no evidence as to the state of the park until the areal photograph from 1963. The City of Des Moines argues that the park must have been in compliance with setbacks and other regulations in 1955 otherwise the certificate would not have been granted. All of the violations visible in the 1963 areal photograph would have occurred between 1955 and 1963. The court finds this argument unpersuasive especially given the fact that the park was not cited for any zoning violations until 2014.

Taking the 1963 photograph as the best approximation of the nonconforming use recognized by the city in 1955. The number and location of the homes is similar to those located on the property today. The court notes that there are in fact less homes in the mobile home park today. The use of the property as a mobile home park today is then not “substantially or entirely different” from its original nonconforming use and is a protected legal nonconforming use.

Ogden’s Additional Claims Because the court found that Ogden’s use of the property as a mobile home park is a legal nonconforming use. The Court did not address equitable estoppel or the exclusion of the testimony of a resident.

 

The Iowa Supreme Court vacated the decision of the court of appeals and reversed the judgment of the district court. Ogden may continue his nonconforming use of the property as a mobile home park.

Iowa Supreme Court Rules that Cities May Take Possession of Abandoned Properties

Cby Eric Christianson

Eagle Grove v. Cahalan Investments
(Iowa Supreme Court, December 1, 2017)

Cahalan Investments purchased two residential properties in the City of Eagle Grove, one in 2002 and the other in 2011. Both properties have remained unoccupied and in deteriorating condition since their purchase. The properties were the subject of multiple complaints by neighbors and were found to be unfit for human occupancy.  In 2014 the city began an effort to clean up a number of nuisance properties, these properties were among those targeted. The city sent several letters to Cahalan advising them that they were in violation of the city’s nuisance ordinance. Cahalan made no effort to abate the nuisance and would later testify that they had no intention of making either property habitable in the foreseeable future

Iowa Code section 657A.10A allows cities to petition a district court to transfer ownership of abandoned properties to the city. The code details the following criteria that a court is to use when determining if a property has been abandoned.

a. Whether any property taxes or special assessments on the property were delinquent at the time the petition was filed.
b. Whether any utilities are currently being provided to the property.
c. Whether the building is unoccupied by the owner or lessees or licensees of the owner.
d. Whether the building meets the city’s housing code for being fit for human habitation, occupancy, or use.
e. Whether the building is exposed to the elements such that deterioration of the building is occurring.
f. Whether the building is boarded up.
g. Past efforts to rehabilitate the building and grounds.
h. The presence of vermin, accumulation of debris, and uncut vegetation.
i. The effort expended by the petitioning city to maintain the building and grounds.
j. Past and current compliance with orders of the local housing official.
k. Any other evidence the court deems relevant.

The code then states that if the court finds the property is abandoned, “the court shall enter judgment awarding title to the city.” In this case, the district court found that Cahalan’s properties were indeed abandoned under the definition set forth in the statute. In fact Cahalan Investments does not dispute this finding; however, Cahalan argued that awarding ownership of these properties to the city without compensation violated the takings clause of the US Constitution. In this case, the district court found Cahalan Investment’s argument convincing and did not award title to the City of Eagle Grove.

The City of Eagle Grove appealed the district court’s decision to the Iowa Supreme Court.

The Iowa Supreme Court revisited the question of whether awarding ownership to a city under Iowa Code section 657A.10 is constitutional.

Proving that a section of state code is unconstitutional is not easy. The court quotes an earlier decision stating that, “statutes are cloaked with a presumption of constitutionality. The challenger bears a heavy burden, because it must prove the unconstitutionality beyond a reasonable doubt.”

Takings jurisprudence is based primarily on the takings clause of the Fifth Amendment which states that, “private property [shall not] be taken for public use, without just compensation.” To determine if a governmental action has violated the takings clause, the court uses the following framework:

(1) Is there a constitutionally protected private property interest at stake? (2) Has this private property interest been “taken” by the government for public use? and (3) If the protected property interest has been taken, has just compensation been paid to the owner?

In this case, Cahalan’s case fails on the first question. The court cites an earlier ruling which states that “the State has the power to condition the permanent retention of [those] property right[s] on the performance of reasonable conditions that indicate a present intention to retain the interest[s].” Ownership of property comes with many rights, but is not absolute. Here the court is saying that in Iowa a property owner’s rights do not include allowing properties to remain abandoned. By doing so here, Cahalan has forfeited their rights.

By allowing the properties to persist in a condition unfit for human habitation, allowing the properties to remain vacant, and failing to make timely and reasonable efforts to remedy the public nuisances created by the properties after notification of the problems, Cahalan did not comply with the section 657A.10A(3) criteria. Thus it failed to “indicate a present intention to retain the interest.” See id. at 526, 102 S. Ct. at 790. We conclude the district court erred in concluding Cahalan holds a constitutionally protected private property interest in the abandoned properties for which just compensation is owed.

Finding that Cahalan Investment’s stake in the properties was not a constitutionally protected right is enough to decide the case, but for completeness the court did examine the second question as well.

Assuming that Cahalan did have a constitutionally protected private property right the court still found that takings jurisprudence supports the city’s actions. A taking occurs when the government denies a property owner “all economically beneficial or productive use” of property. In this case there is no dispute that Cahalan Investments has been deprived of all use of these two properties. Generally when that occurs, the government is required to pay just compensation. However, there is a public nuisance exception in takings jurisprudence. The state has the “power to abate nuisances that affect the public generally, or otherwise,” and this action, “is not a constitutional taking for which compensation is required.”

The court also examined whether the fact that Cahalan Investments purchased these properties before the enactment of this particular section of 657A would prevent it from being applied in this case. Here the court found that the state’s existing legislation as well as the principles of nuisance law already in place at the time of purchase were sufficient to hold that Cahalan never possessed the right to maintain properties in an abandoned state.

The Iowa Supreme Court reversed the finding of the district court that the city’s exercise of 657A constituted an unconstitutional taking and remanded the case back to district court.

Only the Board of Adjustment can approve Special/Conditional Use Permits

by Eric Christianson

Holland v. Decorah

Iowa Supreme Court, April 2, 2003

This is an older case, a classic of Iowa planning and zoning case law. However, the issue of the role of the zoning board of adjustment is one that still comes up quite frequently.

In the late 1990s Wal-Mart began planning a new location in Decorah, Iowa. The location selected was located in the floodplain of the Upper Iowa River. To build there, Wal-Mart had to place fill in the floodplain. First, Wal-Mart obtained the required permits from the Iowa Department of Natural Resources. Then, Wal-Mart applied to the Decorah City Council for a permit to place fill on the floodplain. The city’s zoning code contained among its permitted uses in the F-1 floodplain district:

Dumping of approved materials for landfill purposes, subject to prior approval of the city council and appropriate state agencies. [emphasis added]

Following this section of city code, Walmart’s representatives appeared before the city council on August 15, 2000 and requested approval to fill the property. After a heated and confrontational public comment period, the city council approved the request by a vote of four to three. The council’s vote was only to approve the fill. It did not change the zoning of the area or approve of a site plan.

Previously, Upper Iowa Marine, which owns adjacent land, had attempted to dump fill in the floodplain. They also applied for and obtained the proper permits from the Iowa Department of Natural Resources. Instead of presenting their request to the city council. They applied for a special exception to the zoning ordinance from the zoning board of adjustment. The board of adjustment found the application inconsistent with the comprehensive plan and denied the request.

A group of citizens in Decorah filed suit, arguing that Wal-Mart’s request should have been submitted to the board of adjustment as Upper Iowa Marine had done rather than the city council.

The case hinges on two main issues (1) the authority of the board of adjustment and the city council and (2) definition of a special use.

Iowa Code 414.7 states that a city council should appoint a board of adjustment so that it, “may in appropriate cases and subject to appropriate conditions and safeguards make special exceptions to the terms of the ordinances…”

Further on in 414.12 Iowa Code defines the powers of the board of adjustment including, “to hear and decide special exceptions to the terms of the ordinance…”

Courts in Iowa have been very clear that no other entity has this power. In The City of Des Moines v. Lohner in 1969 the court said that the power to make special exceptions are “placed exclusively in the board [of adjustment] and effectively restricted by statute.” Likewise in Depue v. City of Clinton in 1968 the court asked itself, “[I]s the jurisdiction of the board of adjustment, conferred by sections 414.7 and 414.12 and exclusive jurisdiction? We think the answer[ is] affirmative.”

It is clear then in Iowa case law that approving special uses is the exclusive jurisdiction of the board of adjustment. At issue is whether conditioning a permitted use on “prior approval of the city council” was essentially the same as a permitted use. Wal-Mart argued that the council’s grant of permission was not a special exemption because it was listed as a permitted use and the council had only a “limited, technical review.” Walmart argued that the city council was not examining whether the proposed change was consistent with the city’s comprehensive plan. Instead they were simply ensuring that the appropriate permit had been obtained from the Department of Natural Resources and that the fill material was free from waste materials.

In its reasoning, the court took special note of the contested nature of the public discussion period before the vote at the council meeting. During this meeting evidence and opinions were presented on both sides and one council member even attempted unsuccessfully to convene a task force to study the issue further.

The issuance of special-use permits is quasi-judicial or administrative. […]  The problems with allowing a political, legislative body such as a city council to rule on applications of this nature (in addition to lacking statutory authority) are apparent in this case.  The city council had no hearing procedures, notice requirements, or the type of guidelines that would govern the board of adjustment.

Even on the cold minutes of the meeting, it is apparent the council would have known by the time the discussion was concluded, if they did not already know, they had a tiger by the tail.  The residents were deeply divided on the issue, raising concerns about the environmental impact, the fairness of the proceedings (especially in view of the fact the board of adjustment had denied a similar permit), and the prospect of 120,000 cubic yards of fill being placed in the floodplain in the event the DNR appeal was successful or the construction plans were thwarted for some other reason.

In the end, the court concluded that whether or not dumping fill in the floodplain was a special or conditional use in Decorah’s code, the city council’s actions violated state code.

If it was a special use, is clear that the city council had no authority to allow it. Even if it is not, however, it would violate chapter 414 of Iowa Code which requires that zoning be done “in accordance with the comprehensive plan.” In fact, Decorah’s comprehensive plan expressly addresses protecting its floodplains as natural resources “for use as permanent open space.” In making a decision in direct opposition to the comprehensive plan, the application of the ordinance would still be illegal.

 

Historical Note:

Walmart had already completed construction on the $20 million building that their superstore would occupy at the time of this decision. The building had been sitting vacant since the previous fall awaiting the outcome of this lawsuit. Eventually, the parties settled. Wal-Mart agreed to make a donation to the Decorah library and to fund a study of the floodplain. Wal-Mart also agreed to lease their old building the the city for $1 a year with all proceeds from subleases going to fund the construction of a river trail. The Wal-Mart, much like confusion over roles in planning and zoning, is still with us today.

Field of Dreams site cleared for development of baseball complex and tourist attraction

by Gary Taylor

Residential and Agricultural Advisory Committee, LLC et al. v. Dyersville City Council
Iowa Supreme Court, December 9, 2016

The Dyersville City Council voted to rezone the area containing the site of the 1989 movie Field of Dreams from A-1 Agricultural to C-2 Commercial in order to facilitate the development of a  a 24-field baseball and softball complex, along with the farmhouse and original baseball field used for the movie which would continue to be maintained as a tourist attraction. Community members filed two writs of certiorari to challenge the rezoning on a number of grounds.  The District Court annulled the writs and found in favor of the city council.  This appeal followed.  The Iowa Supreme Court engaged in a 20-page recitation of the facts of the case on its way to its 44-page decision.  Only those relevant to the outcome of each challenge will be repeated here.

Quasi-judicial vs. legislative action.  The petitioners argued that the city council’s actions were quasi-judicial in nature rather than legislative, and therefore the council should have been required to conduct a more formal fact-finding proceeding and make findings of fact in support of its decision.  Quasi-judicial proceedings are also subject to greater judicial scrutiny when reviewed by an appellate court.  Petitioners relied on the Iowa Supreme Court’s decision in Sutton v. Dubuque City Council in support of their position. In contrast, the city council maintained that the action of  a legislative body in rezoning land is legislative in nature, which gives the legislative body wider latitude in the conduct of the proceedings.  Courts also give greater deference to legislative decisions made by city councils and county boards of supervisors.

In ruling on this issue the Iowa Supreme Court reviewed Sutton and several other past cases.  It recognized that in its Sutton decision the Court set forth three factors in determining whether zoning activities are quasi-judicial (versus legislative) in nature (1) [when the rezoning] occurs in response to a citizen application followed by a statutorily mandated public hearing; (2) [when] as a result of such applications, readily identifiable proponents and opponents weigh in on the process; and (3) the decision is localized in its application affecting a particular group of citizens more acutely than the public at large.   Recognizing that the Court “cited these factors with approval” in Sutton, it noted that at the time it chose not to hold that all public zoning hearings should be classified as adjudicatory.  It stated:

The Sutton Case dealt with a different situation than many of our previous zoning cases because it involved PUD zoning.  We noted the ‘quasi-judicial character of municipal rezoning is particularly evident in matters involving PUD zoning.’  We discussed the distinction between traditional rezoning and PUD zoning:

Creating zoning districts and rezoning land are legislative actions, and…trial courts are not permitted to sit as ‘super zoning boards’ and overturn a board’s legislative efforts….The [PUD] concept varies from the traditional concept of zoning classifications.  It permits a flexible approach to the regulation of land uses. Compliance must be measured against certain stated standards….Since the board was called upon to review an interpretation and application of a n ordinance…and the ordinance was not challenged per se, the board’s decision was ‘clearly quasi-judicial’.

Rather than follow Sutton, the Court found the present case to be “much more analogous” to the case of Montgomery v. Bremer County Board of Supervisors.  In Montgomery, the county Board rezoned two parcels of land from agricultural to industrial after two rezoning petitions were filed.  In Montgomery, the Court found that the zoning decision of the supervisors was “an exercise of its delegated police power,” and held that “the generally limited scope of review applicable to the case [was] to determine whether the decision by the Board to rezone [was] fairly debatable.”   In making the analogy, the Court observed:

The city council [in the present case] was acting in a legislative function in furtherance of its delegated police powers.  The council was not sitting ‘to determine adjudicative facts to decide the legal rights, privileges or duties of a particular party based on that party’s particular circumstances.  The [decision] was not undertaken to weigh the legal rights of one party (the All-Star Ballpark Heaven) versus another party (the petitioners).  The council weighed all of the information, reports, and comments available to it in order to determine whether rezoning was in the best interest of the city as a whole.

The Court held that the proper standard of review “in this case is the generally limited scope of review” utilized to “determine whether the decision…is fairly debatable.”  A decision is “fairly debatable” when “reasonable minds may differ, or where the evidence provides a basis for a fair difference of opinion as to its application to a particular property.”  If a rezoning decision is “fairly debatable” then a court will decline to substitute its judgment for that of the city council or board of supervisors.

Impartiality of the city council.  The Court noted that, while it was true that several council members viewed the rezoning and the project as an opportunity for the city, each council member attended all meetings, read reports, listened to citizens speak for and against the project, asked questions, and investigated issues and concerns.  Nothing in the record demonstrated that any council member had any conflict of interest.  Several members participated in an economic development bus trip to Des Moines to discuss the project with legislators and state officials, but the Court found that mere participation in such activities for the potential benefit of the city does not establish partiality or bias. “Rather, this is more akin to the council members upholding their public duty by performing their due diligence in determining what state aid might be available to help with the project before any formal action was taken.  The council make its decision based on what it believed was best for the community after a full and open discussion of the issues over many months.”

Decision was arbitrary, capricious, unreasonable. A decision is arbitrary, capricious, or unreasonable when it is not authorized by statute, or is unsupported by the facts.  For the reasons cited above, the Court declined to find in favor of the petitioners on these grounds.

Inconsistent with comprehensive plan.  Under Iowa Code 414.3, zoning regulations “shall be made in accordance with a comprehensive plan.”  The Court referred to its prior decision in Iowa Coal Mining Co. v. Monroe County for the principle that “compliance with the comprehensive plan requirement merely means that the zoning authorities have given ‘full consideration the problem presented, including the needs of the public, changing conditions, and the similarity of other land in the same area.'”  The Court referred to the boilerplate language found in every plan that says rezonings should be made with consideration of the unique character of the area, the suitability of the land for the proposed use, the conservation of buildings or value, and the encouragement of the most appropriate use of the land.  It noted that the Field of Dreams site is a unique parcel of land, and that the council considered the distinctiveness of the land and whether the proposed rezoning would be the best use of the site for the benefit of the community as a whole.  The city’s community builder plan also specifically addresses the importance of preserving the site in order to maintain and increase tourism.

Illegal spot zoning. To determine whether illegal spot zoning has occurred, a court must consider (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.  Noting again the uniqueness of the Field of Dreams site, the Court refused to find this to be a case of illegal spot zoning even though the result is an island of commercial development surrounded by agriculturally zoned properties.

200-foot buffer zone.  Under Iowa Code 414.5, if 20% or more of the landowners immediately adjacent to the property proposed to be rezoned protest the change, then the city council must approve the rezoning by a four-fifths vote.  The rezoning applicants left out of the rezoning request a 200-foot buffer zone along the three sides of the perimeter of the property  (leaving it as A-1 Agricultural).  The petitioners challenged the use of this 200-foot buffer as a way to prevent nearby property owners from objecting to the project and thereby triggering the requirement of a unanimous vote.  While the Court acknowledged that “at first blush the buffer zone can appear to be unfair,” the Court concluded that the buffer in fact provides a benefit to adjacent landowners by addressing their expressed concerns about hunting and farming operations directly adjacent to the ballfields.  The Court also noted that other courts have validated the use of buffer zones to avoid supermajority requirements.  Regardless, even if the 200-foot buffer was improper, the rezoning was adopted by 4-1 vote of the city council.

Incorrect legal description.  While the notice of the original ordinance (Ordinance 770) contained errors in the legal description, the council corrected the legal description in the ordinance that ultimately rezoned the property (Ordinance 777).  No new notices were published, however, for Ordinance 777.  The Court does not require complete accuracy when providing notice.  Neither Iowa Code nor the city ordinances require the publication of a complete legal description.  The purpose of the notice requirement is to give the public reasonable notice of the pending action.  The public was well aware of the ongoing proceedings, and no one was confused or misled by the inaccuracy of the legal description.

Equal Protection.  Petitioners argued that all neighboring landowners were similarly situated, yet the 3-sided 200-foot buffer prevented those neighbors along the buffer from exercising the same right to object as the neighbors along the side of the property without the buffer.  The Court found that the council’s decision met the rational basis test required by the Equal Protection clause in this case.  The buffers, as described above, served a legitimate purpose of protecting the neighboring properties on the three sides.

Due Process.  Petitioners and the public in general were given adequate notice.  Further, they were heard in multiple public hearings.  All community members wishing to speak were allowed to do so.

Based on all preceding points, the Iowa Supreme Court affirmed the rezoning of the Field of Dreams property.

Iowa Supreme Court broadens application of Open Meetings Act by including “agent or proxy” of public body

by Gary Taylor and Hannah Dankbar

Hutchison, et al., v. Douglas Shull and The Warren County Board of Supervisors
Iowa Supreme Court, March 18, 2016

On March 4, 2014 the Warren County Board of Supervisors held a public meeting to unanimously approve an annual budget that included all county employees’ salaries, with raises.  Before, during, and after that time, however, members of the Warren County Board of Supervisors met with the County Administrator individually to discuss a restructuring of county government, which included the termination of a number of employees.  These meetings went as far back as January 2014.  On March 25 and 26 the County Administrator, one Board member and the County Attorney met with each employee who was terminated to give them notice of the restructuring and offer them a severance package, the details of which had been worked out through the individual conversations between the County Administrator and the Board members.

On April 16 six employees who were eliminated brought suit the employees who were eliminated brought suit against the County, claiming that the Board, the County, and the individual supervisors violated Iowa’s Open Meeting Law.  Then, on April 18 the Board provided notice for their next meeting which included consideration of the restructuring and the severance agreements. The meeting that day lasted about 20 minutes- the Board passed both resolutions and did not allow for public comment.

The Warren County District Court found that because a majority of the Board of Supervisors was never together in one place to discuss the restructuring, the Board did not explicitly violate Iowa’s open meetings law.  The Board members had testified, however, that they understood the law and used the various one-on-one meetings between the Administrator and the individual supervisors to work around it.  The terminated employees appealed to the Iowa Supreme Court.

The Supreme Court first reiterated that ambiguities regarding the Open Meetings Law (OML) should be resolved in favor of openness.  To do so it found it necessary to resort to common law rules of “agency” to interpret OML.  “To do otherwise would undermine the clear purpose of the statute.”  After examining the common law, the Supreme Court determined that the relevant statutory definition of “meeting” in the OML should be effectively read to now say:

“all in-person gatherings at which there is deliberation upon any matter within the scope of the policy-making duties of a governmental body by a majority of its members, including in-person gatherings attended by a majority of the members by virtue of an agent or a proxy.”

Deliberation is the province of elected bodies.  An elected body cannot use agents to deliberate.  The Court was troubled by the use of the County Administrator to “conduct ‘shuttle diplomacy’ [which] worked so well they managed to implement the restructuring…without deliberating a single detail of the reorganization during a public meeting.”

The Supreme Court remanded the case back to the trial court in light of their revised interpretation of “meeting” in the OML.  It directed the district court to determine whether an agency relationship legally existed between the County Administrator and one or more of the Supervisors.

Three justices dissented, raising the following points:

  • The decision could have unintended consequences for well-meaning government actors. It arguably overrules a 35-year old case in which the Iowa Supreme Court rejected the idea that serial phone conversations with less than a majority of a board could violate the open meeting law.
  • The Iowa legislature twice considered, but failed to pass, legislation that would have addressed serial gatherings of elected officials. This is evidence that they did not intend to include such gatherings within the meaning of the existing statute.
  • Other jurisdictions have “resoundingly rejected” the majority’s interpretation of a “meeting.”
  • The interpretation will chill necessary and appropriate private consultations by public officials that precede open meetings.
  • The majority’s new agency theory rests on a legal fiction that treats the county administrator as a supervisor.

 

Links to law presentations from 2015 APA-Iowa Annual Conference

The powerpoint presentations from the 2015 APA-Iowa Annual Conference held in Sioux City on October 14-16 are now available here.

Thursday afternoon session on Signs and Cell Towers, by Peter McNally, Dustin Miller and Gary Taylor

Iowa APA 2015 Cell Towers
Iowa APA 2015 Signs

Friday morning AICP Law session by Gary Taylor

Iowa APA 2015 Law session

Under Iowa law, two or more corporations may form multiple housing cooperative

by Gary Taylor

City of Iowa City v. Iowa City Board of Review
Iowa Supreme Court, May 15, 2015

Iowa Code 499A.1(1) provides in relevant part:

Any two or more persons of full age, a majority of whom are citizens of the state, may organize themselves for the following or similar purposes: Ownership of residential, business property on a cooperative basis.  A corporation is a person within the meaning of this chapter.

In May 2012 the Iowa City Board of Review sent notices to 18 properties indicating the board changed the classification for those properties from commercial to residential for property tax purposes.  They were reclassified because they had been recently organized into multiple housing cooperatives.  The City of Iowa City filed a notice of appeal with the district court, objecting to the Board’s reclassification.  All parties agreed that two Iowa corporations organized each of the multiple housing cooperatives for the purpose of owning residential property in a cooperative. The City argued that the Board’s reclassification was improperly because (1) two natural persons, not two corporations, must organize multiple housing cooperatives under the Iowa Code, and that (2) the Iowa Code requires a one-apartment-unit-per-member ownership ratio for a multiple housing cooperative to be properly organized.  The district court granted summary judgment in favor of the Board and the City appealed.

Need for natural persons to organize cooperatives.  In Krupp v. Jasper County Board of Review the Iowa Supreme Court held that the proper test for determining if a property could be classified as residential is whether the multiple housing cooperative was properly organized, not the actual use of the property.  After examining the language of Section 499A.1(1) the Iowa Supreme Court concluded that a natural person need not be one of the organizers of a multiple housing cooperative.  The phrases “persons of full age, a majority of whom are citizens of the state” and “a corporation is a person within the meaning of this chapter” are not inconsistent with each other.  The Court said that “the intent of the General Assembly … was to put the same restrictions on corporate organizers as it did on persons who organized multiple housing cooperatives; [that is] the corporate organizers must have the authority to organize a multiple housing cooperative and a majority of the corporate organizers must be Iowa corporations. Had the General Assembly intended to adopt the City’s position…[it] would have said a corporation could organized a multiple housing cooperative only with two or more natural persons….”

One-apartment-unit-per-member ownership ratio.  The City read Iowa Code 499A.11 to require this ratio.  It reads in part

The cooperative has the right to purchase real estate for the purpose of erecting, owning, and operating apartment houses or apartment buildings. The interest of each individual member in the cooperative shall be evidenced by the issuance of a certificate of membership. The certificate of membership is coupled with a possessory interest in the real and personal property of the cooperative, entitling each member to a proprietary lease with the cooperative under which each member has an exclusive possessory interest in an apartment unit and a possessory interest in common with all other members in that portion of the cooperative’s real and personal property not constituting apartment units, and which creates a legal relationship of landlord and tenant between the cooperative and member. The certificate of membership shall be executed by the president of the cooperative and attested by its secretary in the name and in the behalf of the cooperative.

The Court stated that Section 499A.11 is not an organizational statute; rather Section 499A.1 is the statute that states the requirements that must be satisfied to organize as a multiple housing cooperative.  The Court refused to glean a one-apartment-unit-per member ratio requirement from Section 499A.11, instead finding that it requires only a coupling of ownership and membership interests.  “Put another way, while section 499A.11 certainly requires that each apartment be linked with a corresponding membership interest, there is nothing prohibiting one person from holding ownership and corresponding membership interest in more than one apartment unit.”

The Iowa Supreme Court affirmed judgment for the Iowa City Board of Review.

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