Smart Growth America releases report on best practices for rural mobility

Gary Taylor

Smart Growth America has just released a new report An Active Roadmap: Best Practices in Rural Mobility that discusses rural transportation needs and challenges along with success stories from rural and small town communities across the country. It explores the different ways that rural communities can adapt to thrive in a changing America, with a primary focus on active and multimodal modes of transportation as a tool.

The press release announcing the publication lists some interesting statistics:

  • More than 1 million rural American households are without cars.
  • Older adults who no longer drive make 15% fewer trips to the doctor, 59% fewer trips to shop or eat out, and 65% fewer trips to visit friends and family, than drivers of the same age.
  • While close to 19% of the US population lives in rural areas, they account for 49% of all traffic deaths.

The report itself is organized into four sections (1) defining rural typologies, (2) identifying the unique needs and challenges of rural communities, (3) strategies for successful multimodal transportation in rural communities, and (4) recommendations for success.

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Local ordinance requiring conditional use permit for business selling alcohol not preempted by state liquor licensing law

Gary Taylor

by Gary Taylor

Lime Lounge, LLC v. City of Des Moines

Iowa Court of Appeals, February 8, 2023

Lime Lounge owns and operates a bar in the East Village of Des Moines. To sell alcoholic beverages in Iowa an establishment must obtain a liquor control license from the state Alcoholic Beverages Division (ABD). Among other requirements, the applicant for the license must first file the application with the local authority – in this case the city of Des Moines – for its approval. If the local authority disapproves of the application, the applicant has the ability to appeal the decision to the administrator of the ABD.

To sell alcoholic beverages in Des Moines an establishment must, among other things, be granted a conditional use permit (CUP), which places different requirements on establishments than the liquor control license. Depending on the type of business it is engaged in, a business is required to meet standards related to noise, litter, hours of operation, and others. The city will not consider a liquor control license application until the CUP is approved.

Lime Lounge obtained a CUP from the Des Moines Zoning Board of Adjustment (ZBA) and had their liquor control license approved in 2011. In 2015, the ZBA amended Lime Lounge’s CUP after multiple noise complaints. The ZBA revoked Lime Lounge’s CUP in March 2016. Lime Lounge challenged the revocation, but the revocation was upheld on appeal. On May 14, 2019, Des Moines filed a complaint with the ABD to revoke Lime Lounge’s state liquor license on the basis of the establishment’s failure to comply with local ordinances. Lime Lounge resisted the city’s complaint by filing a temporary injunction, but the district court dismissed Lime Lounge’s suit. Lime Lounge appealed.

Preemption. Lime Lounge’s first argument was that the Des Moines zoning code requirement of a CUP for an establishment selling liquor was preempted by the state alcoholic beverage control law found in chapter 123 of the Iowa Code because the zoning code requires an additional permit and fees in order to obtain a state liquor license. Lime Lounge asserted that the doctrine of express preemption, which “applies where the legislature has specifically prohibited local action in a given area,” rendered the Des Moines ordinance illegal.

Courts will look to the “specific language used by the legislature” to determine whether express preemption applies. Although Iowa Code section 123.37(1) provides, “The power to establish licenses and permits and levy taxes as imposed in this chapter is vested exclusively with the state. Unless specifically provided, a local authority shall not require the obtaining of a special license or permit for the sale of alcoholic beverages at any establishment….” the Court of Appeals determined that this did not apply to the city’s CUP permitting scheme because the zoning provisions related to the use of land. It agreed with the conclusion of the district court that “[t]he ordinance does not require a permit for the sale of alcohol, it requires a permit to use certain premises for the sale of alcohol. It’s a land-use regulation, not a regulation on the sale of alcohol. Thus, the requirement to obtain a CUP is not a permit requirement ‘for the sale of alcoholic beverages'” as contemplated by chapter 123. The Court of Appeals further observed that chapter 123 provides:

Local authorities may adopt ordinances or regulations for the location of the premises of liquor control licensed and retail wine or beer permitted establishments and local authorities may adopt ordinances, not in conflict with this chapter and that do not diminish the hours during which alcoholic beverages may be sold or consumed at retail, governing any other activities or matters which may affect the retail sale and consumption of alcoholic beverages and the health, welfare and morals of the community involved.

Iowa Code 123.39(2)

Equal Protection. Lime Lounge also asserted the the Des Moines zoning ordinance violates the Equal Protection clause of the Iowa and United State Constitutions, which has been interpreted by courts to direct that “all persons similarly situated should be treated alike.” Whether this ideal has been met in the context of economic legislation is determined through a “rational basis” test. If the regulation is “rationally related to a legitimate governmental purpose” then the regulation will be deemed valid.

Lime Lounge alleged the varied requirements—particularly the necessity of obtaining a CUP and the fees necessary to do so—imposed on different establishments such as restaurants, bars, and retail establishments are arbitrary, and that the municipal ordinance allows the ZBA to “impose virtually any condition which it can contemplate—and, more onerously—on an individualized basis.”

The court disagreed with both allegations. The city has a legitimate purpose in ensuring the health, welfare, and safety of the community. The distinctions drawn in the ordinance between bars, restaurants and other retail establishments is rationally related to that purpose because each has different characteristics of operation. For example, bars tend to operate later in the evening than restaurants, create more noise from music and patrons, and have increased law enforcement requirements. Requiring additional permitting for these and other businesses that are more likely to exhibit greater nuisance behaviors is rationally related to protecting the community.

The court also disagreed that the ordinance allows the ZBA “unfettered discretion” in imposing permitting restrictions. The ZBA is in fact constrained by criteria found in the ordinance for imposing conditions related to public health and safety, noise, traffic congestion, and nuisance prevention. The East Village of Des Moines is a mixed-use neighborhood, containing both commercial and residential buildings. Tailoring certain zoning restrictions related to noise, congestion, and other nuisance behavior to the specific circumstances of the area is rationally related to promoting the community’s welfare.

Spot zoning. Finally Lime Lounge asserted that the code section amounted to illegal spot zoning, but the court dismissed that assertion by noting the similarities between the city’s treatment of Lime Lounge and those of several of its East Village contemporaries. Furthermore, the noise restrictions and other directives limiting nuisance behavior fall squarely within the city’s police power.

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Condemnation and demolition of historic Keokuk church not a taking. 657A not the sole procedure for abating a dangerous building

Gary Taylor

by Gary Taylor

Christ Vision, Inc., v. City Keokuk

Iowa Court of Appeals, January 25, 2023

Built in 1876, the former Unitarian Church in Keokuk had fallen into serious disrepair by 2005. That year the city sent a letter to the church’s owner – Christ Vision – asking the owner to address deteriorating brick and falling moldings. Christ Vision took no action for three years, so the city delcared the building unsafe to occupy in 2008, informing Christ Vision that “no person shall remain in or enter any building that has been so posted except to enter for repair or demolish….” Christ Vision representatives spoke with city officials numerous times, and presented (unfunded) plans for rehabilitation, but by December 2016 Christ Vision still had made no repairs. By then the church had gaping holes in the roof, fallen plaster and bricks, depressions in the floor, water in the basement, and other serious deficiencies. The city filed for a declaration of nuisance, and after a hearing the district court found in December 2016 that the church’s hazardous condition constituted a nuisance and ordered abatement. The court told Christ Vision that, at a minimum, the roof would need to be replaced and “any hazardous conditions with the structure that make it unsafe to occupy” would need to be fixed. Otherwise, the building would need to be demolished or deeded to the city. The court ordered Christ Vision to create a written abatement plan with a timeline by March 2017, but when that did not happen, and had not happened even by October 2017, the city approved a contract for the church’s demolition. Christ Vision applied for a temporary injunction, but (and i am skipping some irrelevant facts here) the city began demolition before the hearing on the injunction. Two years later Christ Vision filed this lawsuit, alleging a taking, trespass, and conversion of personal property.

Taking. Christ Vision alleged that the city’s nuisance action amounted to an illegal taking; however, the Court of Appeals noted that in City of Eagle Grove v. Cahalan, 904 N.W.2d 552, 561 (Iowa 2017) the Iowa Supreme Court held that the state’s exercise of its related police powers over abandoned property did not constitute a taking, even though Eagle Grove’s action denied the owner of “all economically beneficial or productive” use of the property. The Court of Appeals confirmed that a landowner has no vested property right in a nuisance, and so in demolishing the church in compliance with an unchallenged court order (the December 2016 order) the city did not take anything. “Bottom line, Keokuk could enforce its nuisance law without compensating Christ Vision for its losses stemming from that enforcement.”

Due Process. Christ Vision did not did not contest contest the procedural history of the December 2016 order, but rather insisted that the order did not automatically authorize demolition of the church once the March 2017 deadline was missed. It argued that the city then needed to Follow Chapter 657A before it could demolish the building. The Court of Appeals disagreed, noting that Iowa Code 657A.11(2) states “This chapter does not prevent a person from using other remedies or procedures to enforce building or housing ordinances or to correct or remove public nuisances.” The city followed its own nuisance ordinance and state law. The fact that the city demolished the church prior to the hearing on the temporary injunction was of no effect because there was not yet an injunction in place, meaning it was still lawful for the city to proceed under the December 2016 order.

Trespass and conversion. Because Christ Vision did not challenge the court’s authority to permit the city to demolish the building once the owner missed the abatement deadline the city was within its rights to enter the premises. “[C]onduct otherwise a trespass is often justifiable by reason of authority vested in the person who does the act.” Nothing in the December 2016 order imposed on the city a duty to help preserve the church; to the contrary, the onus was on Christ Vision to take action. As for the claim of conversion, Christ Vision claimed the city interfered with its right to personal property by demolishing the church with the property still inside. There was no evidence, however, that Christ Vision requested access to the church to remove personal property once it knew demolition was imminent or any time prior.

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Denial of rezoning is a legislative action not easily overturned

Gary Taylor

by Gary Taylor

Fettkether v. Grundy County Board of Supervisors

Iowa Court of Appeals, December 7, 2022

The Fettkethers requested rezoning of 12 1/2 acres of property from A-1 agricultural district to R-2 suburban residence district. On July 27, 2020 the Grundy County Planning and Zoning Commission considered the request, and after reviewing the application materials and listening to the Fettkethers and comments from the public voted unanimously to recommend denial of the request. On August 24, after proper notice was published, the Board of Supervisors (Board) met to consider the request, after which the Board voted 4-1 to deny the rezoning. As is often the case, litigation ensued. Sparing you some of the procedural machinations, the issues raised by the Fettkethers at the Court of Appeals were (1) the failure of the Board to make written findings, (2) the Board’s denial was not supported by substantial evidence, and was illegal, unreasonable, arbitrary and capricious.

Standard of judicial review. At the outset, both parties got the court’s standard of review wrong. They cited Bontrager Auto Service, v. Iowa City Board of Adjustment, 748 N.W.2d 483 (Iowa 2008) for the principle that the court should review the Boards findings de novo (translation: anew, without reference to any legal conclusion or assumption made by the previous court or other decision-making body); however, Bontrager was a review of a decision by a zoning board of adjustment, the standards for which are set out in Iowa Code chapter 414. In this case, which was a review of a rezoning decision by an elected body, “a court’s scope of review is limited…[to a] review for the correction of errors at law.” A court should only overturn if the decision “violates a statute, is not supported by substantial evidence, or is unreasonable, arbitrary, or capricious.”

Written findings of fact. Again relying on Bontrager, the Fettkethers were “adamant in their claim the Board must make written findings of fact.” Again, however, the reliance on Bontrager was misplaced. Iowa courts have never extended the requirement for written findings of fact in board of adjustment cases to a board of supervisors’ legislative proceedings. “The comment-argument format cannot be confused with the evidentiary-adjudicatory hearing found in the board of adjustment setting, where findings and conclusions are mandatory.”

Substantial evidence. The Fettkethers contended there was not substantial evidence to support the rezoning denial because without written findings of fact “no [substantial evidence decision] can withstand appellate scrutiny”; however, having dispensed with the written findings argument already, the court found the record complete. It then moved on to examine the record in light of the standards of review for rezonings that by now should be etched in all our minds:

Zoning decisions are entitled to a strong presumption of validity.

A party challenging a zoning decision bears the burden of showing the decision was unreasonable, arbitrary, capricious or discriminatory, with no reasonable relationship to the promotion of public health, safety, or welfare.

The court will not substitute its judgment for that of the zoning authority. Thus, if the reasonableness of the zoning decision is fairly debatable and the decision is facially valid, the court will not interfere with the [Board’s] action.

The court found that the Board considered concerns related to traffic, dust, safety, character of the area, preservation of habitat, preservation of agricultural land, location of the development, and access through a narrow bridge. It also found that the Board considered the county’s comprehensive plan and found that the Fettkethers’ proposal was contraindicated by at least two of the policies designed to protect high quality farmground. Thus, the Fettkethers did not meet their burden of showing the Board’s decision was unreasonable, illegal, arbitrary or capricious.

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Failure to comply with previous ZBA SUP conditions does not render “illegal” ZBA’s decision to grant same party another SUP

Gary Taylor

by Gary Taylor

Brinkley v. City of Milford Zoning Board of Adjustment

Iowa Court of Appeals, November 2, 2022

In May 2021, Okoboji Community School District (OCSD) submitted applications to the Milford Zoning Board of Adjustment (ZBA) seeking special use permits for the construction of a bus barn and a multipurpose building on its high school campus. The next month, the ZBA discussed OCSD’s applications during a special meeting, which the Brinkleys and their representatives attended. The Brinkleys raised multiple issues with the project, primarily focusing on OCSD’s failure to fully comply with a 2004 ZBA decision imposing a condition that OCSD must “plant, cultivate and maintain vegetative screening in an adequate and appropriate manner on the School’s property adjacent to the north, west and south of the Brinkley property” to receive a special use permit. It was essentially indisputable that OCSD had not installed or maintain the required vegetative screening along substantial portions of the border between the properties. Nevertheless, at the conclusion of the hearing on the special use permit the ZBA approved the application. One of the conditions attached to the approval was that “The vegetative screens plan as presented by the school must be planted within 12 months after the ‘substantial completion’ of the school project.” The Brinkleys filed a petition for writ of certiorari, arguing the ZBA acted without substantial evidence and illegally by granting the special use permit despite OCSD’s failure to plant the vegetative screen required in the 2004 ZBA decision. The district court found the ZBA acted legally, and this appeal was taken.

The Court of Appeals found nothing illegal or arbitrary about the ZBA’s decision. Upon review the court concluded that the ZBA was not unreasonable in concluding that OCSD met the criteria for special use permits found in the Milford zoning ordinance, nor was it unreasonable to allow the 12-month window from project completion to install new vegetative screening. On the issue of the city’s failure to enforce the screening condition from 2004, “[a]lthough the city had an obligation to enforce its zoning requirements, such [failure to carry out its] duty does not equate to an illegality.” Mandamus action could have provided the Brinkleys a vehicle to compel compliance with the 2004 decision, but that avenue was lost when the ZBA granted the current permit.

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Montana Legislature passes substantial land use reforms to promote housing and planning

Gary Taylor

The Montana Legislature, not generally known as a bastion of left-leaning principles, has passed several bills designed to promote land use planning and, specifically, the development of missing-middle housing in its cities.

Perhaps the most significant of the bills is SB 382, the Montana Land Use Planning Act. The fifty-two page bill, among other things, will require cities of 5,000 or greater in counties of 70,000 or greater to create land use plans. It sets out processes for public participation in, and the adoption of such plans, and requires plans to address (1) existing conditions and population projections, (2) housing, (3) local services and facilities, (4) economic development, (5) natural resources, environment, and hazards, (6) land use and future land use map, and (7) implementation. It also sets forth a schedule for the review and possible amendment of land use plans, and permits jurisdictions to adopt area plans and issue plans that provide more detailed analyses of any component of the land use plan.

SB 245 will require local zoning in cities over 7,000 in an urban area to allow multi-family housing and mixed-use development in commercial zones that previously only allowed office and retail.

SB 323 will require local zoning in cities of 5,000 or greater to allow duplexes in single-family neighborhoods.

At the same time, the Montana Legislature passed SB 406, preventing cities from adopting building codes more stringent than the state building code.

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Donuts: Art or signage? You decide.

Gary Taylor

A bakery owner in Conway, New Hampshire had local art students cover the wall above his front door with a painting of the sun shining over a mountain range made of sprinkle-covered chocolate and strawberry donuts, a blueberry muffin, a cinnamon roll and other pastries. The town zoning board decided that the pastry painting was not so much art as advertising, and so violated the local code because it was about four times larger than the signage provisions allowed. Rather than modify or remove the painting, the bakery owner sued in federal district court, saying the town is violating his freedom of speech rights. You can read the complaint here.

Art or sign? You decide!

“They said it would be art elsewhere,” the bakery owner told The Associated Press in an interview. “It’s just not art here.”

The Conway code considers a sign to be “any device, fixture, placard, structure or attachment thereto that uses color, form, graphic, illumination, symbol, or writing to advertise, announce the purpose of, or identify the purpose of any person or entity, or to communicate information of any kind to the public, whether commercial or noncommercial.”

What do you think?

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Open Records Act applies to Governor’s office; documents must be provided promptly and timely

Gary Taylor

by Gary Taylor

Laura Belin, Bleeding Heartland, LLC, et al v. Governor Kim Reynolds, et al.

Iowa Supreme Court, April 14, 2023

Three journalists, two news organizations and the Iowa Freedom of Information Council collectively emailed eight different open records requests to the Governor’s office and staffers, with each request covering a different topic. The first request was sent April 2020, and the last was sent April 2021. Each request was followed up, some several times, by the requestors sending follow-up emails to check on the status of their requests. Receiving no documents, the requestors filed suit December 2021 alleging that the Governor’s office had violated the Open Records Act by failing to provide the requested records. They further alleged that even if the documents were to be provided after the filing of their suit, the Governor’s office had already violated the Act by failing to provide the records promptly and timely. The Governor’s office did supply the requested records around January 3, 2022, and quickly moved to dismiss the suit as being moot (because the records had been provided). Alternatively the Governor’s office argued that even if the case was not moot, the claims nonetheless failed “when brought against the Governor” because permitting timeliness claims would “infringe on the Governor’s executive privilege.” Plaintiffs countered that the Governor’s office had not provided all the requested records: some had still not been provided while others that were provided had been redacted under claims of confidentiality. Plaintiffs argued that regardless of these facts, the timeliness issue must be addressed. Plaintiffs also disputed the claim of executive privilege.

The Supreme Court characterized plaintiffs’ claims as raising issues of (1) insufficiency and (1) delay.

Insufficiency. The Court first determined that the issue of production of unredacted documents on January 3, 2022 was in fact moot, because an order to produce already-produced records would have no force or effect in the underlying controversy. Further, the Court saw no important public interest in further litigation about the production of records that have already been produced. Weighing on the Court’s decision was the “great respect” the judicial branch owes to the executive branch.

The Court looked differently, however, on the claims regarding documents that had not been provided or provided but redacted. Mootness did not apply to those claims, and the issue must be heard by the district court to determine whether the Governor’s office’s claims of confidentiality were valid.

Delay. The Court laid out the following general principles in reviewing Open Records claims: Plaintiff’s burden is to demonstrate three elements: (1) that “the defendant is subject to the requirements of” the Act, (2) “that the records in question are government records,” and (3) “that the defendant refused to make those government records available for examination and copying by the plaintiff.” Then, the burden shifts to the defendant “to demonstrate compliance with the requirements of” the Act. The question here is whether the Open Records Act allows a plaintiff to sue when there is no express refusal but yet the defendant fails to produce the records for an extended period of time.

The Court focused on the term “refused” and, after consulting four different dictionaries for definitions of the word, concluded that a party can “refuse” by “showing that it won’t produce records,” which can be demonstrated through an “unreasonable delay” in producing records.

Relevant inquires [as to whether a delay is unreasonable] may include:

1. how promptly the defendant acknowledged the plaintiff’s requests and follow-up inquiries,

2. whether the defendant assured the plaintiff of the defendant’s intent to provide the requested records,

3. whether the defendant explained why requested records weren’t immediately available (e.g., what searches needed to be performed or what other obstacles needed to be overcome),

4. whether the defendant produced records as they became available (sometimes called rolling production),

5. whether the defendant updated the plaintiff on efforts to obtain and produce records, and

6. whether the defendant provided information about when records could be expected.

The district court was correct in not dismissing plaintiff’s case, as there were relevant questions related to these factors that still needed to be addressed. The Court also disagreed with the Governor’s office’s contention that these questions do not apply to electronic records. Nothing in the Open Records Act suggests that electronic-record requests should be exempted from a timeliness inquiry.

Executive privilege. Finally, the Governor’s office argued that permitting timeliness claims would “infringe on the Governor’s executive privilege”; contending that gauging the reasonableness of her response times would require an inquiry into “how the Governor and her staff – including her senior legal counsel – were spending their time,” and “whether her allocation of resources between responding to open records requests and her other governing responsibilities was reasonable.” The Governor’s office believed that these issues were nonjusticiable political questions.

The Court dismissed this theory. The answer to the question of timeliness in a records request depends on a defendant’s “outward behavior”; i.e., how the defendant responded. “It should not depend on defendants’ thinking. It should not depend on the defendants’ internal conversations. It should not depend on the inner workings of the Governor’s office. It should not depend on political questions, like whether the Governor properly allocated resources when staffing her office. And it should not depend on potentially privileged information, like the details of how the Governor was spending her time, or what she discussed with her lawyers.” [emphasis original]. The Court expressed doubt that a defendant’s attempt to show a good faith, reasonable delay per section 22.8(4) “would require substantial inquiries into a defendant’s resource allocation choices or any other confidential decision-making. They should not require us to wander in constitutional minefields.”

The case was remanded to district court for further proceedings.

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The Bureau of Alcohol, Tobacco and Firearms is Unconstitutional, so says a Missouri county

Gary Taylor

In order to open a gun store an individual must obtain a federal firearms license from the Bureau of Alcohol, Tobacco, Firearms and Explosives, commonly known as the ATF. In processing the applications the ATF will contact the local jurisdiction to inquire about the zoning of the parcel where the sales are to take place. When four people in Camden County, Missouri applied for licenses from the ATF, their county government responded to ATF’s inquiry by refusing to cooperate, stating in a letter that the county has an ordinance “prohibiting any county employee from assisting your unconstitutional agency in violating the rights of our citizens.” The presiding county commissioner stated that “Any and all federal firearms laws, so-called laws, in my opinion, and many others’ opinion, are unconstitutional.”

The net effect, of course, is that the ATF will be unable to provide these four citizens with federal firearms licenses to sell guns. The law works in mysterious ways.

https://www.kcur.org/news/2023-04-08/a-missouri-county-wont-work-with-the-atf-claiming-the-federal-agency-is-unconstitutional

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Iowa Supreme Court interprets “satisfaction” to the satisfaction of county

Gary Taylor

by Gary Taylor

McNeal v. Wapello County

Iowa Supreme Court, February 3, 2023

The McNeals were operating a vehicle repair and salvage business on property in Wapello County zoned R-1 Residential. For our purposes it’s not necessary to go too far into the history of the dispute between the McNeals and the county over the condition of the property; it is sufficient to know that in April 2019 the parties entered into a settlement agreement that, in part, included the following provisions:

1. The McNeals have 90 days from April 1, 2019 to clean the Property including the removal of debris and derelict vehicles and begin repairs on the residence . . . .

2. Forty-five days after April 1, 2019, (May 16, 2019) the McNeals grant to the County the right to enter onto the Property and to determine what remaining debris, derelict vehicles, or repairs need to be completed. The County will then notify the McNeals of the additional work which needs to be completed within the 90 day period.

3. If the removal of debris, derelict vehicles, and maintenance of the Property has not been completed to the satisfaction of the County by the end of the 90th day (June 30, 2019), then the McNeals grant unto the County the right for the County and/or its agents to enter onto the Property and to remove all remaining debris, derelict vehicles, and unrepaired structures. The County’s cost in removing such debris, derelict vehicles, or structures will be assessed against the Property ….

4. . . . Other than the procedure set forth in this Settlement Agreement, the McNeals waive and release any other statutory or common law right to challenge the County’s right to enter the Property and to conduct clean up activities, including any rights against the County’s employees, elected officials, or agents….

6. This Agreement is the entire agreement between the Parties and supersedes all prior discussions, understandings or representations. It may not be modified or amended, nor any waiver of its provisions, except by a written instrument executed by the parties.

emphasis added in Paragraph 3

When the county zoning administrator entered the property on May 19 no cleanup work had been done. He sent a letter to the McNeals on May 21 documenting this fact. On August 5, after the ninety-day period referenced in Paragraph 3 of the settlement agreement, plus another thirty-five days, had passed, the county entered the property and removed a large number of items. This included sixteen vehicles, none of which displayed any indication of being licensed. The county sent the McNeals a letter on August 27 advising them that they could retrieve any of the vehicles by providing an indication of title and paying the towing and storage fees, but none could be returned to the same property. The letter also stated that the vehicles would be destroyed if not retrieved within 10 days.

The McNeals filed suit in district court against the county on September 6, claiming that the county’s actions constituted a breach of the settlement agreement. At a hearing on motions filed by bother parties the dispute was determined to be centered on Paragraph 3 of the settlement agreement; specifically on what the term “derelict” meant for purposes of the agreement. The county argued that the language of Paragraph 3 gave the county sole discretion to determine whether the vehicles were “derelict,” while the McNeals disagreed, and countered that there were genuine issues of fact about whether the vehicles were, in fact, derelict. After some actions at the district court and the Court of Appeals that you probably don’t care about, the Iowa Supreme Court took up the case and issued this opinion.

The court stated the issue as primarily an interpretation of Paragraph 3: “What does it mean to say that ‘the removal of debris, derelict vehicles, and maintenance of the Property has not been completed to the satisfaction of the county'”? The county argued, first, that “to the satisfaction of the county” means what it says; that is, it is within the county’s sole discretion to determine whether vehicles were “derelict.” Second, that Paragraph 2 giving the County “the right to enter onto the Property and to determine what remaining debris, derelict vehicles, or repairs need to be completed” affirms this. Third, that to decide otherwise would, in effect, render the “settlement” meaningless as it would give the McNeals the right to essentially relitigate the case over whether the county had the right to remove the items on the property. The McNeals, of course, disagreed with the county’s characterization of the agreement’s provisions.

The Court noted that, absent a phrase in the agreement such as “as determined by the County in its sole discretion,” the relevant inquiry should be “whether a reasonable person in the position of the county would be satisfied” that the McNeals had carried out its obligations under the agreement. The Court concluded that it was reasonable for the county to determine on August 5 that all the vehicles in question were derelict and should be removed. None had current licensure, most were decades old, most if not all were unable to be driven, and a few even lacked VINs. The McNeals had done nothing to clean up the property since the agreement was reached, and offered no proof, either to the county or during the court proceedings, that any of the vehicles were in good, running condition. While the McNeals argued that all the cars had “productive value” because they were salvaged for parts and therefore didn’t require removal, the Court said this was immaterial. A party’s “undisclosed, unilateral intent” in signing a settlement agreement doesn’t matter. A reasonable person could still view a vehicle as derelict even if it had salvage value.

In sum, the Court concluded that the terms of the agreement required the county to act reasonably in determining whether the vehicles were derelict, and that it had done so.

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