Forty-Year Act used to extinguish city’s interest in land

by Allison Arends

City Of Lake View vs. Patrick L. Houston (link to case here)
(Unpublished opinion, Iowa Court of Appeals, December 31, 2008)

Landowner uses Marketable Record Title Act to extinguish city’s claimed interest in roadway identified on plats.

In 1964 Houston was conveyed by warranty deed a half interest to property in Sac County. This property included the disputed property: a 33-foot by 110-foot strip of undeveloped land identified by Sac County in 1874 for a county road that was never built.  Although the deed did include the disputed property, Houston was not assessed property taxes on it until 1998 when the Sac County assessor received a title opinion that Houson was the owner. In 2006 the city of Lake View filed a petition to quiet title to the disputed property, arguing that its ownership was superior to any interest of Houston’s.

Lake View’s claim of ownership over the disputed property was based on two recorded plats.  The first – the Dension Beach Plat of 1916, replatted in 1932 – included lines depicting the disputed property as “north-south roadway,”  but the the property itself was not platted.  The second – the Lakewood Park Plat in 1933 – depicted the disputed area as part of  “Government Lot 1,” but Government Lot 1 was not a part of the platted area of Lakewood Park.  The city’s expert witness testified that because Houston’s deed referred to “Government Lots 1 and 2″ a title examiner was obligated to consider plats identifying Government Lots 1 and 2, although the expert also acknowledged that Houson’s deed did not specifically refer to either the Denison Beach Plat nor the Lakewood Park Plat.  The district court ruled in favor of Lake View, stating that “the recorded plats clearly identify the road and all plats involved were recorded prior to the deed transferring the disputed lot to Houston.”  

Houston appealed to the Iowa Court of Appeals, claiming that Lake View’s petition to quiet title was barred by Iowa’s Marketable Record Title Act (found at Iowa Code 614.29 to 614.38) (commonly known as the “forty-year act”).   Intended to simplify land title transactions, the Act states that “subject to certain exceptions… a person is deemed to have a marketable record title to any interest in land if that person has an unbroken chain of title of record to such interest for forty years or more.” It was undisputed that Houston has had a forty-year unbroken chain of record title to the disputed property.  Therefore, in order for Lake View to avoid having its interest in the property extinguished by the Act it must prove that it falls within one of the identified exceptions. 

The exception to the Act relevant to this case is set out in Iowa Code 614.32(1).  In a previous case the Iowa Supreme Court determined that the applicability of the exception depends on the answers to three questions:  (1) whether the interest in the disputed property is inherent in the “muniments of title” (the legal instruments through which title to land passes)  forming the landowner’s chain of record title;  (2) whether the interest was created prior to the landowner’s root of title; and  (3) whether the deeds specifically identify the record title transaction that created the interest. 

Lake View’s interest in the property arose prior to Houston’s 1964 warranty deed, thereby answering the second question in favor of the city.  However, the Court found that neither the first nor third questions could be resolved for the city.  The Court  found that because plats are not “deeds, wills or otherwise instruments through which title to land passes,” the city’s interest was not inherent in a minument of title.  Furthermore, because Houston’s 1964 deed did not specifically identify the plats upon which the city depended to illustrate the creation of its interest, neither was the third requirement of section 614.32 satisfied.  The Court concluded, therefore, that Lake View’s interest was extinguished under the Marketable Recort Title Act, and dismissed Lake View’s petition to quiet title.

Iowa Supreme Ct. examines scope of access easement

by Allison Arends

Stew-Mc Development v. Fischer
(Iowa Supreme Court, August 14, 2009).

Proposed use of farm access lane for access to residential subdivision would exceed original scope of easement.

In 1888, Anton Birkel purchased land in Dubuque County, which was eventually passed down to Ferdinand Birkel. During Ferdinand’s ownership, his mother, Rosa, lived on a separate farm on the northern part of his property. Ferdinand allowed Rosa and other relatives to travel across his land in order to access public roads and other parts of the property. After Rosa sold her property and it was divided into two lots, Ferdinand continued to allow the new owners of Rosa’s property to travel across his land. This “access way” was later named Kress Lane. In 1983, Ferdinand Birkel’s land was sold to Nancy and Thomas Fischer, who continued to allow the owners of the northern properties to use Kress Lane for access purposes. Prior to this case, the owners of the two northern lots were James Kress and Joseph and Penni Schmitt. Although Kress Lane is vital to the survival of these farms, Dubuque County never formally accepted it as a public road, although over the years the county has rocked and graded it, and given it a name for 911 emergency addressing purposes.  The Birkel-Fischer chain of ownership has never established a written legal instrument granting a formal easement across the Fischer party for Kress Lane.

In February 2002, Stew-Mc Development, Inc. made an offer to purchase the two-hundred acre Kress estate in hopes that the Dubuque County Board of Supervisors would approve an application to rezone the property to permit single-family residential development. At the Dubuque County Planning Zoning Commission where Kress’ application was considered, Nancy Fischer objected, stating that Kress Lane was only an access easement over her property, and the northern landowners had no real ownership. As a result, the application was denied on the grounds that the Kress property had insufficient public access.

Kress and Stew-Mc filed for a declaratory judgment claiming that Kress Lane was a county road, thereby providing sufficient public access necessary for residential development. The district court granted summary judgment in favor of the Fischers. The court determined that Kress lane was a private road based on “an easement and was not a public roadway, either by direct acquisition, formal dedication and acceptance, implied dedication or prescriptive easement.” The court also determined that despite the “scope” of the easement, it was not “broad enough to cover the proposed residential development. “

The court applied law of easements in which they found they must look at the original scope and use of the easement, which was granted to the two farm properties at a time when residential development was not contemplated. The court also decided that if the scope of the easement was not defined, the easement is limited to what is “reasonably necessary and convenient for the purposes for which it was created.” The court also noted that the development of the residential area would not only increase the use of the easement, but it would change the nature of the easement constituting an extra burden upon the dominant estate.

City not liable for structures in alley

by Gary Taylor

 

ALLEN V. CITY OF PANORA (link to case here)

(Iowa Court of Appeals, June 17, 2009)

 

City not liable in nuisance for obstructions in alley.  Landowners could not compel city to order structures removed from alley.

 

In 1988 the Allens purchased property in Panora. Property to the north of the Allens is owned by the Dungans.  Between the two properties is a sixteen-foot-wide alley that was platted and dedicated to the city in 1901.  At the time the Allens purchased their property an electrical access box, telephone pedestal, and cable television pedestal were located in the alley, in the same place they are now.  A decorative fence was placed in the alley in 1998 or 1999.

 

In the summer of 2003, a survey revealed that the utility structures and the fence were seven feet into the alley. The Allens claimed this was the first they were aware of this fact.  They requested the city order the structures moved and when this did not happen, the Allens filed suit against the city to (among other claims) compel the city to remove the utility structures and fence, and to recover damages for nuisance and injury to their property.  The district court denied all of the Allens’ claims and entered judgment for the city.  

 

The Court of Appeals affirmed the district court on all counts.  It found that the Allens failed to prove a nuisance under Iowa Code 657.2(5) because they have always had reasonable and convenient access to their property from the street, nine feet of the alley was not affected by the utility structures, and the alley still provided them reasonable secondary access to their property. The Court also reasoned that the City has taken no action that would limit access to the Allens’ property to any greater extent than the access they had when they purchased the property in 1988.

 

The Court of Appeals went further to observe that even if there was a nuisance, a writ of mandamus would not be appropriate.  Mandamus is not available to control a city’s discretionary authority, and the decision as to whether to seek to abate a nuisance is discretionary with the city.  Under Iowa Code 364.12 “a city shall keep all . . . alleys . . . free from nuisance . . . .” but also provides “a city may require the abatement of a nuisance, public or private, in any reasonable manner.”  

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.

 

Iowa S.C. on moratoria, vested rights and bad faith

posted by Gary Taylor

GEISLER V. CITY OF CEDAR FALLS (link to case here)
769 NW2d 162 (Iowa Supreme Court, July 10, 2009)

In this case, the Iowa Supreme Court validates use of moratoria as planning tool and expounds on Iowa’s vested rights doctrine, but remands to district court the landowner’s claim of bad faith actions by the city.

In 2004, Michael Geisler purchased land located in an Overlay District of Cedar Falls, Iowa to develop an eight-unit apartment complex. In May 2005, he submitted a site plan to the Cedar Falls planning and zoning commission. Apparently at the time an amendment to the Overlay District that would have prohibited the project was “under discussion.” At the commission’s May 18, 2005, meeting, the Cedar Falls city planner stated that the site plan met all the basic ordinance requirements; however, because there was substantial resident opposition to the proposed development voiced at the meeting, the commission voted to recommend denial of Geisler’s site plan.

At the Cedar Falls city council meeting held May 23, 2005, the council considered Geisler’s site plan. Several citizens residing in the Overlay District expressed concerns about the plan, including the increase in traffic it would generate and the detrimental effect to single-family homes in the area. The council denied the site plan because it was “inconsistent with the character of the neighborhood due to architectural design … [and was] not of comparable scale and character in relation to adjoining properties.” At the same meeting, a motion also passed to discuss a temporary moratorium to study the issue of multi-family unit construction in the Overlay District. At the next city council meeting on June 13, 2005 the council passed a resolution imposing a moratorium on all development or construction of multi-family housing in the Overlay District. On that same day Geisler submitted a revised site plan that could not be processed in time to be discussed at the meeting. On June 22, 2005 Geisler filed a petition for writ of certiorari in the district court alleging the city acted illegally by denying his site plan and subsequently passing the moratorium. On July 11, 2005 a city official refused to process the revised site plan in light of the moratorium, effectively denying the project. On December 12, 2005 the city council passed an amendment to the Overlay District that prohibited multi-family housing. Geisler did not resubmit the site plan after the enactment of the ordinance.

Moratoria. The city first asserted that the district court did not have jurisdiction to hear the case because a writ of certiorari can only be used to challenge judicial and quasi-judicial actions, and the council’s adoption of the moratorium was a legislative function. The Iowa Supreme Court agreed, stating that in enacting the moratorium, “the city was performing a traditional legislative function.” In doing so, the court gave implicit approval to the use of moratoria by Iowa cities, an issue not previously addressed by the court. It observed that “a moratorium aids a governing body in performing the legislative task of municipal planning….They aid in bridging the gap between planning and its implementation into legal measures. They may be used to preserve the status quo while study of the area and its needs is completed [thus serving] a significant public purpose.”

Vested rights. The discussions of vested rights and bad faith came about in the court’s attempt to address a matter of procedure known as the “pending ordinance rule.” Under this rule, a court is supposed to decide a case “based on the zoning law as it exists at the time of the court’s decision.” The pending ordinance rule thus requires the court to apply the zoning ordinance as amended on December 12, 2005, since both courts’ (district and supreme court) decisions were made subsequent to the city council’s adoption of those amendments.

According to the court, the theory of vested rights acts as one exception to the pending ordinance rule. In a 1998 case, Quality Refrigerated Services v. Spencer, the Iowa Supreme Court determined that a developer acquires a vested right to proceed under the old ordinance if (1) s/he makes substantial expenditures toward the development prior to the zoning change, and (2) those expenditures were made lawfully. In the present case, the court essentially states that only expenditures made pursuant to a validly-issued building permit can be considered “lawful.” Since no building permit had been issued at the point when Cedar Falls rezoned Geisler’s property, he had not acquired a vested right to proceed.

The second exception to the pending ordinance rule is if the local government acted in bad faith. To establish bad faith in the context of a zoning decision, Geisler would need to show that Cedar Falls (1) illegally denied the application, and (2) did so with an improper purpose. The Supreme Court laid out markers for determining both illegality and improper purpose. Citing the 1999 Iowa Supreme Court case U.S. Cellular v. Board of Adjustment, the Court observed that the denial, without any legal justification, of an application that clearly meets all the requirements of the then-existing ordinance is illegal. Then, after providing examples from the Second and Sixth Federal Circuits, and state cases from New Jersey and Wisconsin, the Court “discerned that an improper purpose exists when a zoning authority adopts a new zoning regulation designed to frustrate a particular applicants plans for development.” It went even further in a footnote, saying that “unlike the [examples cited in these other cases] where bad faith was found when the governing body sought to change the rules in response to a particular request, the result may be different where a zoning change is already being contemplated before the particular request is made.” The Court found that the district court failed to consider the issue of bad faith and remanded the case back to the district court to determine whether the city acted illegally and with an improper purpose.

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