Category: public roads and highways

A path is not a street

Gary Taylor

by Gary Taylor and Luke Seaberg

Cornbelt Running Club v. City of Riverdale

Iowa Court of Appeals, March 2, 2022

The City of Riverdale fenced and gated a portion of a public right of way adjacent to South Kensington Street to prevent bicyclists and runners from using a five-foot-wide asphalt-paved path within the right of way as a short cut between two recreational trails.

In the above diagram, the path is the dark strip ending in a triangle and the fence is the line bisecting the dark strip.

Cornbelt Running Club (Club) sued the city, claiming the fence amounted to an improper closure of a street, thereby creating a public nuisance under Iowa Code 657.2(5), which states:

The following are nuisances:
….
5. The obstructing or encumbering by fences, buildings, or otherwise the public roads,
private ways, streets, alleys, commons, landing places, or burying grounds

Iowa Code 657.2

The city countered that a fence is only a nuisance if, in the context of this case, it crosses a street, and the path is not a street because it is not open to vehicles. Relying on its interpretation of state statutes defining “street,” “public roads,” and others the district court concluded that the path was not, in fact, a street, and therefore no nuisance could exist. The Club appealed.

The Court of Appeals determined the following statutory definitions were relevant to the case:

“Road” or “street” means the entire width between property lines through private property or the designated width through public property of every way or place of whatever nature if any part of such way or place is open to the use of the public, as a matter of right, for purposes of vehicular traffic.

Iowa Code 306.3(8)

“Vehicle” means every device in, upon, or by which any person or property is or may be transported or drawn upon a highway. “Vehicle” does not include:
a. Any device moved by human power, including a low-speed electric bicycle….

Iowa Code 321.1(90)

The Court of Appeals concluded that the district court was correct. Te paved path was not a street because it was not open to the public as a matter of right for vehicular traffic; therefore, the fence across the path could not be deemed a nuisance. The Club argued that previous cases found sidewalks to be part of a street, but the Court distinguished those cases as addressing sidewalks that ran alongside streets, which was not the case here.

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Intent must be “clear and unequivocal” to result in dedication of land to the public

Gary Taylor

by Gary Taylor

McNaughton v. Chartier and the City of Lawton
Iowa Supreme Court, June 24, 2022

In 1999 McNaughton entered into an easement agreement with the Chartiers to allow a small part of a road to pass through McNaughton’s property. The road was used to access the Chartiers’ business from Highway 20, and the dedication amounted to a 23’ x 80’ strip. The agreement provided that it was a “‘private’ easement granted for the use and benefit of the parties . . . and [was] not to be construed as an easement for the use and benefit of the general public.”

Shortly thereafter the city of Lawton paved and completed other improvements to the access road (now Char-Mac Drive). The paved portion covers 13’ x 60’ of the easement. During the early 2000s the city repeatedly asked McNaughton to dedicate the paved portion to the city but McNaughton refused. The reason he gave was that the city failed to maintain the paved portion of the easement. Language was included in the agreement between McNaughton and the Chartiers that the Chartiers “shall be obligated to take all action necessary to ensure that the town of Lawton becomes contractually obligated to maintain the easement area….” It is unclear whether this happened, but McNaughton testified that the city removed snow only a few times and generally failed to maintain the road.

When the Chartiers sold their property, they discovered that McNaughton had never recorded the easement agreement with the county. The Chartiers asked McNaughton to sign a Clarification of Easement essentially assigning the easement to the purchasers and offered him $15,000 but he refused, and thereafter made various escalating offers ($100,000, then $160,000, then $410,000, then in exchange for 50 acres of farmland) to the Chartiers to either sign the easement or sell his entire property. They refused. McNaughton sued, claiming purchaser had no rights under the easement because of failure to assign them.

The District Court found McNaughton had “dedicated the concrete portion of the easement to the City” because, among other things, the public had used the easement as the parties had agreed and because McNaughton had “never attempted to restrict the use of the concrete portion of the easement area.” Alternatively, the district court found that the easement was appurtenant to the Chartier’s property and passed to the purchaser upon sale. The Court of Appeals disagreed with both conclusions of the district court, as did the Supreme Court.

The Supreme Court observed that a grantor’s intent to dedicate land to the public for public use must be clear and unmistakable, and must be accomplished through “deliberate, unequivocal, and decisive acts and declarations of the owner, manifesting a positive and unmistakable intention to permanently abandon his property to the specific public use.” “Mere permissive use of a way, no matter how long continued, will not amount to a dedication.” The Court found that the language in the original agreement; that the easement was “not to be construed as an easement for the use and benefit of the general public” established just the contrary. Furthermore, language in the easement that “[t]he easement rights granted herein may not be assigned by Chartier to any other party or parties without the express written consent of McNaughton or his successors or assigns” served to negate the district court’s conclusion that the easement passed to the purchasers upon sale.

The specific language in an easement must be given effect. McNaughton wins.

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Minnesota Appeals Court rules against impact fees for road construction

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by Eric Christianson

Harstad v. City of Woodbury
(Minnesota Court of Appeals, September 18, 2017)

The City of Woodbury, Minnesota is a growing suburb of Saint Paul. To reduce the public burden of road construction to new subdivisions, the city passed an ordinance in 2016 which provides that the city may not approve a proposed subdivision if it is deemed “premature.” The city may deem a subdivision “premature” if streets “to serve the proposed subdivision” are not “available,” which is defined as streets “existing or readily extended and funded” as “consistent with the phasing in the comprehensive plan.”

However the city provides that a new development without existing road infrastructure may be deemed mature if the developer is willing to “pays its own way” and “all associated costs” for “public infrastructure” will “be the sole responsibility of the developing property owner.” To determine these associated costs, the city has allocated undeveloped land into three phases, each of which has an estimated associated cost per acre associated for “increased traffic and trips that are generated” by expected development in that area. This fee is referred to as a “major roadway assessment” or MRA and is used as the starting point for a negotiated agreement with developers.

Martin Harstad, of Harstad Hills Inc., submitted an application to to develop 77 acres of phase – two land into a 183 – home residential community called “Bailey Park on July 23, 2015. The city informed Harstad about certain deficiencies in the application. Harstad remedied the majority of them and was then informed by the city that the remaining deficiencies where relatively unimportant. This is significant because once the city receives a complete application under Minnesota law, if it does not deny that application with cause, it is automatically approved. After receiving the cost estimate from the city for the major roadway assessment, Harstad challenged the ability of the city to collect this fee in court. He also made a takings claim, arguing that the city had deprived him of use of his property without compensation. Finally he claimed that his application had already been approved as the statutory period that the city had to deny the claim had elapsed.

The district court found for the city on the latter two claims. The permit was not entirely complete, therefor the statutory period had never begun. The court also found that Harstads takings claims were immature as the permit had never been fully submitted nor had the fee been collected. The court did however find that the city had no power to collect fees to pay for road infrastructure.

The City of Woodbury appealed this decision to the Minnesota Court of Appeals.

The Minnesota Court of Appeals focused its analysis on the question of the power of Woodbury to collect a “major roadway assessment.” The City of Woodbury is a statutory city; thus, it “has no inherent powers beyond those expressly conferred by statute or implied as necessary in aid of those powers which have been expressly conferred.”

The city argues it has express authority to impose the MRA under the plain language of Minn. Stat. § 462.358, subd. 2a . Section 462.358, subdivision 1a, provides that “a municipality may by ordinance” regulate the subdivision of land to , among other things, facilitate “adequate provision for transportation.” Minn. Stat. § 462.35 8, subd. 1a . Subdivision 2a states , in relevant part:

The standards and requirements in the regulations [authorized by subdivision 1a] may address without limitation : the size, location, grading, and improvement of lots, structures, public areas, streets, [and] roads . . . . The regulations may prohibit the issuance of permits or approvals for any tracts, lots, or parcels for which required subdivision approval has not been obtained.

The regulations may permit the municipality to condition its approval on the construction and installation of sewers, streets , electric, gas, drainage, and water facilities, and similar utilities and improvements or, in lieu thereof, on the receipt by the municipality of a cash deposit.

The city maintains that subdivision 2a’s “open-ended language” unambiguously authorizes it to condition subdivision approval on a developer’s agreement to pay an MRA that funds necessary road improvements “without limitation on location.”

The Court disagrees. This section only authorizes city planning not the collection of a fee to cover road construction costs. The Court pointed out the legislature has explicitly authorized municipalities to assess water and sewer connection charges against developers to fund public water and sewer improvements made necessary by development. The legislature has never made similar provisions for roadways.

The court agreed with the district court finding that although the city had communicated with Harstad that the remaining deficiencies in his application were minimal, the fact that they were never corrected meant that the statutory period in which the city had to approve or deny the application never began.

Finally the court affirmed the district courts denial of Harstad’s taking claim. The permit has not yet been denied nor has the major roadway assessment been collected, so no taking could have occurred.

The City of Woodbury has appealed to the Minnesota Supreme Court which accepted to hear the case. A date for oral argument has not been set.

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Town properly used its police powers to build roads and levy special assessments after developer failed obligations

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First State Bank v Town of Omro
Wisconsin Court of Appeals, November 11, 2015

Barony subdivision is a 74 lot subdivision that received plat approval in 2004. Only 9 lots were developed over the course of the next 5 years, and in 2009 First State Bank took control of the remaining 65 lots in lieu of foreclosure. At the time of foreclosure, sections of the roads in the subdivision were not paved. In 2013 Omro authorized the roads to be finished and specially assessed all the lots within the subdivision for the cost of completing the roads, which was $219,641.60. The Bank challenged Omro’s authority to levy the special assessments.  The issue on appeal was whether a municipality may use its police powers to build roads and levy special assessments against the land after a developer fails their obligation to build the roads.

The Bank claimed that the assessment was improper because: (1)the development agreement required the developer to pay for the roads; (2) the Ordinance prohibited the road work because 70% of the subdivision was not developed; (3) at the time the special assessments were imposed the subdivision’s roads were privately owned; (4) three lots were not specially benefited because they do not abut Omro’s roads; and (5) the wording of the preliminary and final resolutions did not conform with § 66.0703. The circuit court provided summary judgment to Omro.

The first two arguments asked whether Omro acted outside of their authority granted by the legislature. The Bank argued that the Ordinance says that the money for paving roads “will come directly from the developer, from a special assessment on the development, or another method approved by the Town Board” and that “the development agreement will dictate the method of payment for the paving.” The Bank argues that the developer is the only recourse for payment based on this language in the Ordinance and in the developer agreement. However, the language in these documents does not limit Omro’s power to levy special assessments. Just because the agreed upon payment did not work out does not mean alternatives are not allowed as long as Omro follows the appropriate procedures in state law permitting special assessments.

The Bank argued that because 70% of the subdivision was not developed the special assessment could not be levied.  The court pointed out, however, that there is language in the Ordinance that allows for a different schedule if Town Engineer and the Town Board recommend a different action, which they did.

The last three arguments asked whether Omro failed to follow the requirements of Wis. Stat. §66.0703.  The Bank argued that because the lots were privately owned, the special assessment was not for public improvement.  This argument missed the point that the roads within the subdivision were public property.  State law provides that all roads or streets shown on a final plat are dedicated to the public unless clearly marked as private, which these were not.  Therefore, the assessments were clearly for a public improvement.

Next, the Bank argued that three of the lots do not receive “special benefits” from the project because they do not abut the newly paved roads and should not be specially assessed because of this. The Bank demonstrated a genuine issue of fact. The circuit court erred in granting summary judgment on this issue.

The court affirmed the decision ratifying the special assessment of the lots that benefit from the road project, but reverse the decision that found that the lots that do not abut the roads received special benefits and remanded that issue to the lower court.

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Montana landowners successfully claim reverse adverse possession of county road created by public prescriptive easement

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by Hannah Dankbar and Gary Taylor

Letica Land Company, LLC v Anaconda-Deer Lodge County
Montana Supreme Court, November 17, 2015

Letica Land Company (Letica) and Don McGee appeal a lower court’s ruling that two stretches of a road crossing their properties in Anaconda-Deer Lodge County are public roads.

Modesty Creek Road was established as a county road by the County Commission in 1889. The land across which the road traverses has been owned by the federal government, Anaconda Company, various private interests and most recently Letica and McGee who purchased the land in 1989 and 1997 respectively. Prior to Letica and McGee purchasing the land locked gates were placed on various places in the road that blocked public access, even though the public continued to access the road on a permissive basis. Because of these gates Letica and McGee claim that they were unaware of any public right of access of Modesty Creek Road.

In 2012 county residents asked the County Commission to reaffirm the road as a county road and reopen it to the public. The County Commission voted in approval and Letica filed a complaint. The complaint was denied and McGee joined as a plaintiff to amend the complaint.

The trial court concluded that Modesty Creek Road’s lower branch was a statutorily created road, and that Modesty Creek Road’s upper branch was established as a public road via public prescriptive easement, and that the prescriptive easement had not been terminated by “reverse adverse possession.” The court also found the takings question was not ripe until after an appeal. Letica and McGee appealed, challenging both the declaration of a statutorily created road and the declaration of a public prescriptive easement.

Letica and McGee first claimed that the record does not sufficiently demonstrate that the road was created by petition. They claim that Modesty Creek Road is on some county road maps, but not on others. The court found that this does not qualify as “affirmative steps to indicate intention to abandon” county roads once they are established, further these maps do nothing to provide evidence of the process of how these roads were approved. Letica and McGee also claimed that the lower branch must terminate at the eastern portion of Section 23, Township 6 North, Range 11 West. There is no definitive description in the record of where the road ends, but evidence when taken as a whole, such as testimony and other historical records are consistent enough for the court to conclude that the Dry Gulch is located along Section 22, Township 6 North, Range 11 West and that the lower court correctly took the record as a whole. The lower court’s decision regarding the statutorily created lower branch of the road were affirmed.

Letica and McGee argued that the actions of landowners to block public access throughout the years created in the landowners ownership by adverse possession.  The court emphasized that in Montana a “private individual may not obtain title to a public statutorily created road by a adverse possession.” Since it was established that the lower branch is a statutorily created road and therefore could not be claimed by adverse possession.  This still left open the question of whether reverse adverse possession extinguished the public prescriptive easement on the upper branch.

Locked gates blocked public access to the upper branch from 1980 to 2012. The public who used to use the upper branch found alternate routes and County staff said they would have cut the locks if they were made aware of the issue as they did this in other instances. The record shows that the public “cooperated and adhered” to the permissive use policy. Those who leased land or had water rights along the road had keys to the gates.

After declaring the upper branch a county road in 2012 the County found that the landowners asserted hostile rights for thirty years. However, the court found that the public abandoned this road and the County was aware of the gates and did not remedy the situation.  Montana statute provides that a prescriptive easement may be terminated “by disuse of the servitude by the owner of the servitude for the period prescribed for acquiring title by enjoyment.” The Court reversed the lower court’s ruling that the public prescriptive easement was not terminated by reverse adverse possession.

One justice dissented. Chief Justice McGrath concurred with the resolution of the first issue, and dissents the conclusion of the second issue. He would uphold the lower court’s decision and conclude that “this case would not exist but for the unlawful closure of the lower branch road….[A] person may not illegally block a road created by action of a public government entity, and then use that blockage as evidence to support a claim of reverse adverse possession that extinguishes the public’s prescriptive right to any other property or interest in property.”

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Landowner (and predecessors) implicitly dedicate road to township through actions over the course of a century

Gary Taylor

by Andrea Vaage

Niemi v. Fredlund Township
South Dakota Supreme Court, July 15, 2015

David and Roxie Niemi filed a declaratory judgment action against Fredlund Township, South Dakota seeking a determination that the road traversing their property (their property being known as Section 20) was not a public road. The Niemis claimed the road on their property, locally called “Lewton Road,” was being used by Fredlund Township as a public road. During the hearing in circuit court, several residents and township officials testified that the Township had paid for repairs and the installation of a cattle guard, had paid to “build up” the road from the driveway to Section 20 and a state highway, and that the road was the only access point to a dam and school. Up until an incident in 2011, when Roxie Niemi informed a nearby resident they could not use Lewton Road, no one had been informed the road was not for public use. The evidence indicated that the road had otherwise been used by the public since 1927. The circuit court determined the road was a public road by common law and statutory declaration. The Niemis argued that the circuit court erred.

The Court reviewed the circuit court’s decision for factual error. The standard of proof is the finding of “clear and convincing” evidence that the Niemis or their predecessors implicitly dedicated Lewton Road as a public road. Since no express dedication was made, the Court had to determine whether the dedication was implied through the owner’s conduct and the facts and circumstances associated with the case. The Court found that the previous owners of Section 20 either requested or acquiesced to Township maintenance of the road, and that one owner asked that a cattle guard be built. Roxie Niemi acquiesced to maintenance of the road in both 2007 and 2009. Although Roxie Niemi stated she didn’t want the road to be used for public use during testimony, her actions and conduct showed otherwise. Her testimony could not override her acts and conduct inconsistent with the stated intent.

The evidence also supported the conclusion that the Township accepted the dedication of the road.  It maintained the road since 1927, provided gravel, grading, and construction, and installed a cattle guard and a culvert.  Although the maintenance was not routine or consistent, the evidence established that the Township maintains some other Township roads only when requested by residents.  The fact that the Township declared Lawton Road a “No Maintenance Road” in 2005 further demonstrated that the Township accepted it as a public road.

The Court found that the district court did not err in determining Lewton Road was a public road under common law dedication. The decision was affirmed.

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Record did not support the level of inconvenience required to establish private road by necessity

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by Hannah Dankbar and Gary Taylor

Price v Judy Hutchinson, Wayne Garman and Ross Garman
Wyoming Supreme Court, December 16, 2014

In February 2011 Price applied to establish a private road across Wayne Garman’s land under Wyo, Stat. Ann. §24-9-101 because his property had no outlet to a public road.  Price preferred the route crossing Garman’s land, but the Garmans argued that Price had three viable access points to public roads and therefore did not qualify for a private road. Price contended that County Road 58 in Crook County, Wyoming does not touch or enter his land, and that in any case the road is a cow trail that does not provide reasonable and convenient access because it is not used or maintained as a public road.  Furthermore, State Highway 14 also did not provide reasonable or convenient access. In summer and fall of 2011 the Crook County Board of Commissioners gathered evidence and tried to make their decision, but malfunctioning audio equipment led the Board to start the process over. On May 1, 2012 the Board denied Price’s application. The District Court upheld this order and an appeal followed.

Price argued that the Board failed to take an preserve a complete record of the proceedings, as required by state statute, when it failed to record the proceedings, and that therefore the orders resulting from those meetings should be reversed.  The court determined that the failure to record the meetings is a procedural failure according to this statute, but because the meetings immediately stopped when the technology failure was discovered, and the meetings were later reconvened with functioning equipment, there was no error or prejudice to Price.

Price questioned whether the Hearing Officer in this case provided legal opinions and advice to the Board violating Wyoming statutes. (Wyoming law allows for the appointment of a Hearing Officer to preside over a hearing to regulate the course of proceedings, receive evidence and address procedural questions). Wyo. Stat. Ann. §16-3-107(k) provides that a person serving as the hearing officer cannot be the representative of an agency  at a hearing of which the agency is a party, but the Board was never a party in this case, so this argument failed. Price argued that the County Attorney should not have been the Hearing Officer and that as such, he should not have offered legal opinion to the Board. Price’s arguments failed. Wyo. Stat. Ann. § 16-3-112(a) and (b) allow for the Hearing Officer to provide recommendations and advice.  It was clear from the record that the Board alone made the decision, and no bias or prejudice resulted from the County Attorney’s responses to the Board’s questions or his clarification of the issues.

Price claims that the Board’s findings were not supported by substantial evidence as required by Wyo. Stat. Ann. § 16-3-14(c)(ii)(E). The court disagreed. The Board gave multiple reasons why County Road 58 is a public road. At the hearing multiple people testified that they use County Road 58 to travel to and from Price’s residence. Just because another road would be more convenient for Price as an individual does not mean that the Board has to approve it.  “Necessity” as the showing required for condemnation of private property to provide access means that existing alternatives must be “obviously impractical and unreasonable.”  Price failed to carry this burden of proof.

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Platted village streets constitute “public highway” for purpose of defense to acquiescence claim

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by Hannah Dankbar

Haynes v Village of Beulah
Michigan Court of Appeals, December 9, 2014

The Haynes argue that they are entitled to two strips of land within the platted rights-of-way of Lake Street and Commercial Avenue in the Village of Beulah citing the theory of acquiescence. The Haynes own Lots 10,11 and part of Lot 7 in Block 2. These lots are bordered by Lake Street on the northwest side and Commercial Avenue on the southwest side. Before 1968 the prior owners of the Haynes’ property installed railroad ties along Lake Street, separating the portion of the road used for travel from the grass and trees. On the southwest, a rock wall was installed in the 1950s to separate the part of Commercial Avenue used for travel from landscaping plants, a portion of the Haynes’ driveway, a maple tree and a strip of grass owned by the Haynes.

In 2012, the Village of Beulah introduced plans to create angled parking, a new sidewalk and a streetscape in the platted right-of-way of each street and would occupy land owned by the Haynes. The Haynes brought suit to prevent this action. The trial court granted the Village of Beulah’s motion for summary disposition based on MCL 247.190.

MCL 247.190 provides as follows:

 All public highways for which the right of way has at any time been dedicated, given or purchased, shall be and remain a highway of the width so dedicated, given or purchased, and no encroachments by fences, buildings or otherwise which may have been made since the purchase, dedication or gift nor any encroachments which were within the limits of such right of way at the time of such purchase, dedication or gift, and no encroachments which may hereafter be made, shall give the party or parties, firm or corporation so encroaching, any title or right to the land so encroached upon.

Plaintiffs argued that MCL 247.190 does not apply to platted village streets or property acquiescence claims.  The issue in this case is the definition of “public highways,” which is not defined in the statute. “Highway” has been defined through multiple cases and multiple legal dictionaries before the enactment of MCL 247.190. These definitions encompass a broad reading of the term “highway.” Because of this, the Court of Appeals found that the trial court did not err in broadly construing the term to include village streets.

The Haynes also argued that MCL 247.190 does not apply to property acquiescence claims, but the Court of Appeals disagreed. MCL 247.190 provides, “no encroachments” on a public highway “shall give the party or parties, firm or corporation so encroaching, any title or right to the land so encroached upon.” Nothing in the statute permits the court to distinguish between different legal theories used to assert a private right or claim to any portion of a public highway.  A claim for acquiescence constitutes an encroachment.

The Haynes also argued that the unimproved portions of platted right-of-ways are not “public highways” that are entitled to protection under MCL 247.190. The Court of Appeals disagreed with this assertion, as well.  It is sufficient for the spending of public funds on a road in a dedicated right-of-way to constitute public acceptance of the entire width, and therefore have the entire width constitute “public highway,” even if the municipality never improves the specific strips of land within the right-of-way.

Judgment for the Village of Beulah was affirmed.

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Plat approval results in town acceptance of public road, but does not obligate town to construct it

by Rachel Greifenkamp

Runkle, et al. v. Town of Albany
(Wisconsin Court of Appeals, June 19, 2014)

In the Town of Albany, Wisconsin several individuals purchased land and built homes along a street called Proverbs Pass. The developer of the subdivision entered into a development agreement with the town to build Proverbs Pass; however, neither the developer nor the town has completed construction or maintained the street. The people who built homes on the road filed a complaint asking the court to direct the town to complete the road and accept it as a town road, meaning the town would be responsible for it’s maintenance. The town admitted that the plat for the road had been approved and recorded with the register of deed but denied that it had any obligation to complete or maintain it as the town had not accepted the street as a town road. The circuit court ruled in favor of the town because certain conditions that were set forth in the development agreement were not met by the developer and the court concluded that that meant the town had not accepted the plat. The homeowners appealed the decision.

The Wisconsin Court of Appeals found that the only issue was whether the town accepted Proverbs Pass as a town road when the town approved and recorded the plat. If the approval does not equal acceptance, then the Town would be correct in assuming no responsibility for the road. If the approval does equal acceptance, the the Town would be required to assume the same responsibility it does for all other town roads. The town argued that acceptance of Proverbs Pass as a town road hinged on the developer meeting conditions in the development agreement, and that those conditions were not met. Based on Wisconsin court precedent, a town accepts a plat when it is approved and recorded in the register of deed, therefore the Court of Appeals reversed the Circuit Court’s ruling and found that the the Town of Albany did in fact accept Proverbs Pass as a town road.  This, however, did not determine whether the town had an obligation to construct and maintain the street.  “The acceptance of a plat by the city does not require that it shall open all the streets and alleys for immediate use.”  This issue was handed back to the circuit court to determine whether any other events or agreements obligated the town to complete construction of Proverbs Pass.

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“Unused right-of-way” includes property previously used for roadway purposes

Gary Taylor

by Gary Taylor

Tunis E. Den Hartog, et al. v. City of Waterloo
(Iowa Supreme Court, May 30, 2014)

The state of Iowa transferred control of a state highway – now known as San Marnan Drive – and its right-of-way to the city of Waterloo in 1983. The city has maintained it by grading and mowing since that time. The city recently reached agreement to transfer the property to Sunnyside South Addition, LLC, for one dollar. Sunnyside proposes to relocate San Marnan Drive in order to place residential development where the road is currently located. Some Waterloo taxpayers filed suit, claiming that the transaction failed to comply with the notice and sale provisions of Chapter 306 of the Iowa Code, which governs the establishment, alteration, and vacation of roads. The city responded that the procedures of Chapter 306 cited by the taxpayers (specifically, section 306.23) only apply to property acquired for roadway purposes that was never used as a roadway.

Iowa Code 306.23 provides in part:

1. The agency in control of a tract, parcel, or piece of land, or part thereof, which is unused right-of-way shall send by certified mail to the last known address of the present owner of adjacent land from which the tract, parcel, piece of land, or part thereof, was originally purchased or condemned for highway purposes, and to the person who owned the land at the time it was purchased or condemned for highway purposes, notice of the agency’s intent to sell the land, the name and address of any other person to whom a notice was sent, and the fair market value of the real property based upon an appraisal by an independent appraiser.
2.  The notice shall give an opportunity to the present owner of adjacent property and to the person who owned the land at the time it was purchased or condemned for highway purposes to be heard and make offers within sixty days of the date the notice is mailed for the tract, parcel, or piece of land to be sold.  An offer which equals or exceeds in amount any other offer received and which equals or exceeds the fair market value of the property shall be given preference by the agency in control of the land. If no offers are received within sixty days or if no offer equals or exceeds the fair market value of the land, the agency shall transfer the land for a public purpose or proceed with the sale of the property.

The parties dispute the meaning of “unused right-of-way.” The city argued that it refers only to land never in use for roadway or related purposes – the implication being that section 306.23 does not apply in this case. The taxpayers argue that the phrase should be read to include any land which the city has determined will no longer be needed or used for roadway purposes. This could include land currently in use for roadway purposes, so long as the city has determined that the land will not be used as such in the future. Under this reading section 306.23 applies and the property should have first been offered to adjacent landowners for purchase at or above fair market value.

In siding with the taxpayers, the Iowa Supreme Court cited several “linguistic and structural cues…the statutory purpose, and the legislative history [of chapter 306].” Noting that the owner of land abutting a highway may suffer special damage because of its vacation, the hearing procedures in chapter 306 protect their unique property interests. The Court looked to several provisions in the chapter that suggest a broad reading of the term “unused”; i.e., to apply to land that will not be used for roadway purposes going forward, regardless of whether it may have been used for such purposes previously.

The Supreme Court remanded for entry of an order prohibiting the city from the sale or transfer of the property to Sunnyside without first following the requirements of section 306.23.

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