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court found in the City’s favor, concluding in part that TSB was not a successor to Kempf and that the order was no longer applicable.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.

Statute of limitation runs on claims resulting from stormwater discharge

by Victoria Heldt

Charles Tsamardinos and Suzanne Tsamardinos v. Town of Burlington
(Wisconsin Court of Appeals, December 7, 2011)

Charles and Suzanne Tsamardinos own a residential property in Burlington.  They brought a claim for inverse condemnation against the Town of Burlington, arguing that the increased presence of draining water on their property after the development of Villa Heights Subdivision constitutes “physical occupation” by the Town, and results in a taking.  Storm water from Cedar Drive and from Villa Heights Subdivision flows through a culvert, across their property, and into Brown Lake, and that by this action the Town “has incorporated part of their property into its storm water management system.”  They provided two expert witnesses, the first being Hey and Associates, Inc.  The company reported that the problem was indeed due to water flowing through the culvert under Cedar Drive and that the Town was responsible for the drainage system.  Jendusa Design, the second expert witness, similarly described the source of the problem and reported that the flooding had been occurring over the past eight years. The district court denied the claim, finding that a legal taking did not occur, and further finding that the claim was barred by the statute of limitations.

On appeal, the Court of Appeals ruled against the Tsamardinos on the grounds that the statutes of limitations had expired regarding the issue. First,  Wis Stat. §88.87(2)(c) states that a property owner has three years to file a complaint if a government agency has damaged property due to negligent construction a highway or railroad grade (this would include the culvert).  Since the culvert was constructed 24 years prior, and flooding problems had been occurring for at least 8 years according to the expert witnesses, the Tsamardinos filed the complaint too late.  In response to the alternative claim that the water run-off is due to the development of the Villa Heights subdivision, the Court found that claim to be barred as well.  The governing statue requires a complaint to be filed within ten years of completion of the improvement on the property.  Since Villa Heights was recorded in 1948 and graded in the mid-1960’s, the ten year period had expired.  The Tsamardonoses argued that they should be permitted to file a complaint outside the ten year required period since the time limit does not apply to those affected by negligence in maintenance.  The Court concluded that their problem was not the result of negligent maintenance, but of the development of the subdivision, they were subject to the ten year limit.

The Court affirmed the lower court’s decision in favor of the Town of Burlington.

Claim allowed against city for negligent reconnection of severed sewer line in 1978.

by Gary Taylor

 

ST. PAUL’S EVANGELICAL LUTHERAN CHURCH v. WEBSTER CITY (link to case here)

(Iowa Supreme Court, June 12, 2009)

 

Statute of repose did not bar church’s claim against city for negligent severing, then reconnection of sewer line during 1978 water main installation project.

 

The City’s liability turned on the interpretation of whether the water main installation project was an “improvement to real property” under Iowa Code 614.1(11). This provision is a statute of repose that bars a claimant from bringing “an action arising out of the unsafe or defective condition of an improvement to real property . . . more than fifteen years after the date on which occurred the act . . . [that] cause[d] . . . the injury. . . .”  Thus, regardless of when an injury occurs, this statute of repose terminates any right of action fifteen years after the date of the improvement.  If the statute applies, St. Paul’s claim would be barred since the reconnection of St. Paul’s sewer line occurred twenty-seven years before sewage backed up into the church and this action was commenced.  The City argued that work on St. Paul’s sewer line should be considered part of the water main improvement project because cutting St. Paul’s sewer line would have not been done but for the water main installation project. St. Paul’s, on the other hand, argued that the reconnection of its sewer line was not an improvement, but rather a repair resulting from the water main project that improved neither the function nor the value of the sewer line.

 

The district court found in favor of the city, reasoning that the retrofit of the Church’s sewer line was a collateral step in and a consequence of the new water main’s installation.  Further, and because of the faulty retrofit, the water main improvement project was defective at that time and at that location.  It was because of that defect

that the Church eventually incurred its damages.

 

The Supreme Court reversed.  Relying on the testimony of a building official and inspector employed by Webster City for over forty-one years who is also a licensed plumber, the Court determined that it would have been possible to complete the water main project without touching St. Paul’s sewer line and therefore the negligent reconnection of St. Paul’s sewer line was not part of the project to improve the City’s water main. It further found that the reconnection of the sewer line (and not the water main project) also was not an “improvement to real property” as set forth in case law.  While it was “a permanent addition to or betterment of real property that involved the expenditure of labor or money,’ it did not “enhance the property’s capital value,” nor was it “designed to make the property more useful or valuable.” Rather than an improvement to real property, the reconnection of the sewer line was more appropriately characterized as an ordinary repair.  Therefore, the statute of repose did not bar St. Paul’s claim.

 

 

In 1978, during Webster City’s water main installation project, a city contractor severed and then negligently reconnected St. Paul’s Evangelical Lutheran Church’s gravity flow sewer line. Twenty-seven years later, in 2005, sewage backed up into the church resulting in $30,000 in damages. St. Paul’s brought a suit against the City to recover damages.

 

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