Adjoining landowners in annexation case need not exhaust administrative remedies before going to court

by Gary Taylor

William and Sharon Oglesby, et. al. v. City of Coralville
(Iowa Court of Appeals, November 25, 2009)

District court had jurisdiction to review claim of inadequate notice of city action on annexation.

Scanlon Properties submitted an annexation request to the City of Coralville for property it owns along North Liberty Road, as well as a half mile of the right-of-way of North Liberty Road that connects the city to the Scanlon property.  The property is in the two-mile extraterritorial area of North Liberty.  On the same day the city council voted to approve the annexation, several owners of property adjacent to the half mile stretch of North Liberty Road (the plaintiffs in this case) filed a petition in district court contending the city had failed to provide them the notice of annexation required under Iowa Code 368.7(1)(b) and (d).  At a district court hearing held two weeks later the city asserted the plaintiffs did not have standing to bring their claims and had failed to exhaust administrative remedies.  The district court found that the city was required to give plaintiffs notice before taking action to annex the land, and issued a temporary injunction to prevent the city from taking further action on the annexation “until such time as [the city] complies with all statutory notice requirements.” 

After two years of procedural wrangling the plaintiffs moved for summary judgment to obtain a final resolution of the case, stating that the city council action approving the annexation was void since the statutorily-required notice was not provided.  The city cross-moved for summary judgment asserting the plaintiffs were not entitled to notice, did not have standing, and had not yet exhausted all available administrative remedies.   The district court agreed with the plaintiffs, and further determined that since the city council action was void, there was no decision to be reviewed by the City Development Board (CDB) and thus there were no administrative remedies to exhaust.

The Court of Appeals affirmed the ruling of the district court, granting summary judgment in favor of the plaintiffs which voided the annexation.  After noting that the annexation required CDB review under Iowa Code 368.7(3) because of its proximity to North Liberty, the court reviewed the purposes of CDB review.  It noted that the CDB is not “an all-purpose enforced of chapter 368’s requirements.”  The CDB’s review of annexations within the extraterritorial area of another city does not include review to ensure compliance with the landowner notification requirements.  Thus, in the ordinary course of events the CDB will not even have information about the extent to which landowners were notified before the city acted.  The court concluded that resort to the CDB to rectify a failure by the city to give notice is “permissive only, and not exclusive of the judicial remedy.”  This being the case, there is no requirement that the administrative remedy of CDB review be exhausted before resort to the judicial system for resolution.  It did not help the city’s case that “in a classic Catch-22” the city argued simultaneously (1) before the district court that plaintiffs had not exhausted their administrative remedies, and (2) before the CDB that the plaintiffs did not have standing to appear in the CDB proceedings.   “An administrative remedy would hardly be adequate for the plaintiffs if it expressly disallowed them from appealing the administrative decision.”

Finally the court dismissed the city’s claim that the plaintiffs were not entitled to notice because they do not “own” North Liberty Road (although the city did concede the plaintiffs held legal title to the land over which the road passes, they argued that legal title was immaterial because plaintiffs did not “control” the land).  Regardless of the resolution of this technicality, the court concluded that plaintiffs would be entitled to notice as owners of land adjacent to the road if they, in fact did not “own” the road.

Raze order must be served on wife as well as husband

by Gary Taylor

State of Wisconsin ex rel Borst v. City of New Richmond
(Wisconsin Court of Appeals, November 14, 2009)

Service of raze order on husband does not constitute service on wife under Wisconsin statute.

A warranty deed lists both Vernon and Carolyn Borst as owners of a commercial building in the City of New Richmond, Wisconsin.  Vernon was personally served with what the parties have construed as a “raze order” from the New Richmond Building Inspector.  The order informed Vernon that his building was being condemned and, because the repairs would be excessive and “not a reasonable option,” Vernon was directed to raze the building and clean up the premises within 120 days. Vernon appealed to the New Richmond Board of Appeals and was given two weeks to remove excess items from his property, and sixty days to return to the Board with an “engineered plan” for repairs to bring the property into compliance.  When Vernon failed to reappear before the Board, his appeal was denied. 

The Borsts argued Carolyn’s due process rights were violated by the City’s failure to serve her with the raze order as required under Wis. Stat. 66.0413(1)(d), which requires service “on the owner of record of the building that is subject to the order or on the owner’s agent.” The trial court found in favor of the city, citing Wis. Stat. 66.0413(1)(e), which provides:  “If a raze order … is recorded with the register of deeds …, the order is considered to have been served, as of the date the raze order is recorded, on any person claiming an interest in the building or the real estate as a result of a conveyance from the owner of record unless the conveyance was recorded before the recording of the raze order.”

The Wisconsin Court of Appeals interpreted this subsection differently, so as to only apply in situations where a conveyance is made from the owner of record during condemnation proceedings.  Since that was not the case here the city could not rely on the notice filed recorded with the register of deeds.  Furthermore, the Court of Appeals found that personal service on Vernon could not be construed as service on Carolyn.  Constructive notice will not suffice, and the Wisconsin Supreme Court has previously held that a marital relationship did not make the husband an agent authorized to accept service of summons on behalf of his wife.  The Court of Appeals reversed the lower court and remand the matter with directions to vacate the raze order.

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