Private covenants requiring improvements to be harmonious with surrounding structures are not per se ambiguous

by Hannah Dankbar

Curtis Acres Association v Stephan Hosman
Nebraska Court of Appeals, January 13, 2015

Hosman began construction of a boathouse in Douglas County, Nebraska. Curtis Acres Association manages the properties where Hosman’s property is located. The Association filed suit against Hosman asking the court to make Hosman stop construction and remove the boathouse because he was violating multiple restrictive covenants.

Before Hosman bought his property in the Curtis Acres subdivision in 1990 the Association had filed a “Declaration of Covenants, Conditions, Restrictions and Easements” (CCR). Part of this document requires residents to get pre-approval of any improvements on their lots. Hosman submitted three sets of plans for his residence before being approved. The Association’s CCRs were amended four times subsequent to this. One of the amendments required residents to submit two plans in order to get approved and if approval was not granted within thirty days the plans were deemed disapproved. This amendment was added to ensure that future projects were in alignment with Nebraska law and with the master plan for the subdivision.

Three years after the amendment was added Hosman began construction of a boathouse on his lot, approximately 15 feet from the edge of the lake. The Association sent Hosman a letter telling him sought approval of his plans before beginning construction. Hosman submitted a one-page hand drawn picture of his boathouse. Hosman included dimensions, color and materials on the page, noting that the siding would be the same as on his residence and the roof was to be blue in color. The Association informed him that his drawing was insufficient, and that “a blue standing seam roof is not acceptable.”  The Association further informed him that “structures will be set back from the shoreline so as not to impede one’s neighbor’s views.  We suggest 100′.”  Hosman continued construction and in October 2010 the Association filed a complaint against him. In summary judgment the court found that the Association can enforce their covenants and required Hosman to stop construction.  Hosman appealed that ruling.

Hosman claiming that the court was wrong in deciding, “(1) that the covenants provide a clear, articulable standard for approval of building projects; (2) that the enforcement of the covenants against Hosman was reasonable; (3) that the Association did not have unclean hands in the administration of its covenants.” Hosman does not fight the fact that he is not obeying the covenant.

As for Hosman’s first argument, the Nebraska Court of Appeals decided that the relevant covenants were not ambiguous and gave a ‘sufficient’ standard for approval. In Normandy Square Assn. v. Ells the Nebraska Supreme Court held that “restrictive covenants that permit a homeowners association to approve or disapprove improvements based on a standard of whether such improvements conform to the harmony of external design and location in relation to surrounding structures are not per se ambiguous; rather, such covenants are enforceable provided that the authority is exercised reasonable within the framework of the covenants’ stated purposes.” Following the ruling in Ells the court found that in this case the covenants are enforceable because the stated purpose is to “protect the value, character and residential quality of all lots.”  According to the court this statement does not create ambiguity and the Association had the power to disapprove the boathouse.

Next is the question of whether the authority was reasonable exercised. The Association decided that the blue roof did not meet the standards of the neighborhood, and the boathouse was too close to the shore. Hosman argued that there are other boathouses within 100 feet of the shore, so he should be allowed to have his that close as well. The Association allowed the houses to be that close before changing the rule. Since the rule changed no new boathouses have been built that close to the shore, and Hosman did not show that any of the other boathouses have blue roofs. The Association properly changed the rule, and properly enforced the rule once it had been changed.

Third, Hosman argued that the Association inconsistently enforced the covenants. The Association admitted that under extenuating circumstances there were two incidences where residents were given extensions on timeframes set forth in the covenants; however, the covenants themselves allowed for such a deviation.  The court found no merit to Hosman’s argument.

Lastly, Hosman argued that the Association treats him differently because they do not like him. There was evidence to this effect, including a letter one member of the Association sent to Hosman’s home containing derogatory comments and insinuations about Hosman’s character.  Hosman failed to demonstrate, however, any link between the actions of individual members of the Association expressing their dislike towards him and the decision making process of the Association as a whole.

The Court of Appeals affirmed the decision of the trial court to order Hosman to remove his boathouse from his property.

Elimination of median cut not a taking

by Gary Taylor

Buck’s, Inc. v. City of Omaha
(Nebraska Court of Appeals, November 25, 2014)

Buck’s, Inc. owns and operates a gas station on the northwest corner of the intersection of 144th Street and Stony Brook Boulevard in Omaha. In August 2009, the City eliminated a cut in the median on Stony Brook Boulevard that gave eastbound traffic access to the gas station. No access points to the gas station were eliminated. The city engineer testified that the decision to eliminate the median cut was made to address safety concerns associated with the anticipated increased traffic generated by a new grocery store in the area. The city’s right-of-way manager testified that the City did not acquire any property or property interest from Buck’s for this project, and affirmed that Buck’s had three entrances to its property prior to the project, and continued to have three entrances after project completion.

Buck’s nevertheless brought an inverse condemnation action against the City. A board of appraisers was appointed, and Buck’s was awarded $30,000. Both parties appealed to the district court, which entered summary judgment for the City. Buck’s appealed.

The Nebraska Court of Appeals noted that the right of an owner of property that abuts a street or highway to have ingress and egress by way of the street is a property right in the nature of an easement, and the owner cannot be deprived of such right without due process of law and compensation for loss. The court also noted, however, that “as to damages claimed by reason of a change in the flow of traffic by placing medians in the center of a street, [the damages] result from the exercise of the police power and are noncompensable as being incidental to the doing of a lawful act.” After the median cut was closed, Buck’s still had access to Stony Brook Boulevard. “The fact that left-hand turns are now restricted is but an inconvenience shared with the general public.” The Court of Appeals affirmed the district court.

Maps provided to landowner sufficiently accurate representation of land ultimately condemned

By Victoria Heldt

Krupicka v. Village of Dorchester
(Nebraska Court of Appeals, October 11, 2011)

Krupicka farms a 160-acre plot of land outside the Village of Dorchester.  The Village of Dorchester owns a wastewater treatment plant on the property adjacent to the northeast portion of Krupicka’s land.  In October 2008, the Village notified Krupicka that its wastewater treatment plant must undergo alterations and expansions in order to meet federal and state standards.  The letter specified that the expansion (new lagoons) would need to take place on a portion of Krupicka’s land and that the Village was prepared to negotiate a purchase agreement.  Krupicka met with the Village’s attorney (Gropp) regarding the acquisition in October 2008 and then in December of 2008 Krupicka received an official offer letter.  The letter informed Krupicka that the Village desired to purchase 40 acres of Krupicka’s land at $2,200 per acre.  The initial plan consisted of four new lagoons placed on a portion of land north of a creek that ran through Krupicka’s property.  Krupicka hired representation (Hemmerling) and requested a meeting with Gropp in order to discuss alternative plans.

In January of 2009 Krupicka met with Gropp and the project manager, who explained that the project required a 35-40 acre plot of land and needed to be finalized by September of that year.  Krupicka expressed concerns about his ability to use his pivot irrigation system on the land near the lagoons.  Another meeting was held in February of 2009 at which Krupicka suggested the lagoon site be moved to the south side of the creek running through his property.  After the Village’s superintendent of sewer, water, and electrical completed research regarding the alternative location of the lagoons, Krupicka received a letter stating it would not be feasible.  The letter, received in March 2009, included images of the acceptable future location of the lagoon and contained the following warning:  “Dimensions are approximate & will vary.  Area shown = 35.0 acres.”  Sometime shortly afterwards, Krupicka received a similar letter in which the area shown was equal to 36.7 acres.

Later that month Hemmerling, on behalf of Krupicka, sent a letter to Gropp rejecting the $2200 per acre offer and countered with a $10,000 per acre offer.  Gropp rejected this offer and countered with a $3,650 per acre offer “for the land in the northeast quarter of…Krupicka’s land.”  In August, Krupicka attended a Board meeting at which he requested a postponement of the decision regarding the lagoons.  The Board said it was not possible due to the September 1 deadline and reiterated its offer of $3,650 per acre.  Krupicka walked out of the meeting.  At the same meeting the Board authorized the condemnation of approximately 37 acres of Krupicka’s land on which to build three lagoons.  A witness at the meeting could not recall whether this took place before or after Krupicka left.  Gropp testified that he provided Krupicka with a copy of the final plan, but Krupicka claimed he never received it.  Gropp sent a “Petition for Condemnation and for Appointment of Appraisers” to Hemmerling.  Attached to this letter as a reference was an image of the plan included in the April 2009 letter to Krupicka and not the most recent plan.  Gropp said this was because he had sent his only copy of the most recent plan to Krupicka, and he provided one later that month to the appraisers.  The appraisers valued Krupicka’s damages at $160,000 (or $4,311 per acre.)  Krupicka later consented to a temporary construction easement for consideration of $8,500.

In district court, Krupicka alleged that the $160,000 was not adequate and that the condemnation of his property was invalid since there were no good faith negotiations prior to it.  The court found that the Village did indeed enter into good faith negotiations before condemning the property.  Krupicka appealed.  After clarifying that it does have jurisdiction to decide the case, the Court of Appeals addressed Krupicka’s claim.  At the heart of the claim, Krupicka argued that the good faith negotiation requirement was not met because he never received a legal description of the land to be condemned and therefore the condemnation was invalid.  In order to satisfy the statutory requirement of good faith negotiation, “there must be a good faith attempt to agree, consisting of an offer made in good faith and a reasonable effort to induce the owner to accept it.”  He did not want the land returned to him (as the treatment facility construction had already begun) but instead wanted more compensation.

Krupicka relied on Prairie View Tel. Co. v. County of Cherry as precedent.  In that case, the County of Cherry sought to condemn property in order to build a county road.  The only form of negotiation was a letter addressed to the landowners.  The letter informed them that since they failed to appear for negotiations as formerly requested and since the County was unable to find them at their home on one occasion, the County was offering $3,000 as consideration.  The Court held that an offer in good faith was not made since the county never discussed how much land it was going to take.

The Court noted that the facts in Prairie differed greatly from the facts in this case.  The Village indicated “with reasonable clarity” how much land was to be taken.  In addition, it sought Krupicka’s input regarding the location of the lagoons in the initial planning stages.  Although it was unclear as to whether Krupicka received the final draft of the plan for the lagoon, the other three drawings he did receive showed a portion of land that was in “essentially the same location as the portion of Krupicka’s land that was ultimately condemned.”  For these reasons, the Court affirmed the district court’s decision.

Nebraska CA: actual usage, not physical capacity controls scope of legal nonconforming use

by Allison Arends and Gary Taylor

Thieman v. Cedar Valley Feeding Company Inc.
(Nebraska Court of Appeals, February 23, 2010)

Boone County, Nebraska adopted a zoning ordinance in 1999 that classifies livestock feeding operations in terms of the number of animal units in the operation, and contains setback requirements.  Cedar Valley Feeding Company operated a livestock operation in Boone County on the date the zoning ordinance was adopted.  The ordinance differentiated between livestock feeding operations of 5,000 or fewer animal units and those with more, in how they regulated various aspects of the operations.  On a questionnaire distributed by the Boone County zoning administrator in 2000, Cedar Valley indicated they had 5,000 cattle on the property at the time the ordinance was adopted.  In 2008 Cedar Valley applied for a conditional use permit for the sole purpose of constructing waste facilities to “maintain the present animal capacity of such operations that existed on September 13, 1999, the date of enactment of the Boone County Zoning regulations.”  The owners of Cedar Valley put forth that the actual capacity of the facilities on that date was 7,500 cattle, and that the facilities were not being used to full capacity at the time they had 5,000 cattle.  Ted Thieman, a nearby landowner in Boone County, filed a complaint against Cedar Valley Feeding Company requesting that the company be enjoined from feeding 7,500 head of cattle.  Cedar Valley argued that because their feeding operation’s physical capacity was greater than 5,000 animal units prior the regulation’s enactment, the operation was grandfathered at 7,500 cattle.

The Nebraska Court of Appeals framed the issue as “whether the scope of a nonconforming use is dictated by the physical capacity of the premises or the actual number of cattle confined.”  The court observed that the “Rules and Definitions” section of the Boone County ordinance defined the term “enlargement” as “the expansion of a building, structure or use in volume, size, area, height, length, width, depth, capacity, ground coverage, or in number.” (emphasis added).  The court concluded that when read in the context of zoning regulations that specifically limit the permissible number of animals that may be kept on the premises of a particular livestock feeding operation, this provision prevents the addition of livestock beyond the number on the premises when the zoning regulations went into effect.  In other words, under the specific language of the regulations, actual usage controls.

In addition to Cedar Valley’s responses to the zoning administrator’s questionnaire, data from the Nebraska Department of Environmental Quality inspection indicated that Cedar Valley had 5,000 total animal units on its property on May 19, 1999.  Three additional documents provided evidence indicating Cedar Valley had  5,000 cattle on their property.  The court found persuasive the numerous documents providing evidence that Cedar Valley consistently operated their feeding company with 5,000 cattle more persuasive. Therefore, the court found that Cedar Valley’s legal nonconforming use of the property was limited to the confinement of 5,000 cattle.

Land condemnation for deceleration lane not for “economic development” purposes

by Allison Arends

John V. Haltom v. City of Omaha
(Nebraska Court of Appeals, January 26, 2010)

The City of Omaha, in an attempt to install a deceleration lane for traffic that would access a new retail development, negotiated with John Haltom and another property owner to obtain a strip of land. When the negotiations failed, the City filed a petition to condemn Haltom’s property. Haltom and the other property owner were awarded a total of $55,300 from the “Report of Appraisers”. Haltom filed a complaint  arguing that Neb. Rev. Stat. 76-710.04 prohibited the City from exercising it’s eminent domain powers to acquire land for the purpose of economic development. The City filed a motion for partial summary judgment in response. At the summary judgment hearing the city engineer provided an affidavit in which he explained that his recommendation for the installment of the deceleration lane was primarily for purposes of traffic control and safety. The district court granted the City’s motion for summary judgment. Haltom appealed.

The court first addressed the issue of whether Haltom’s appeal was moot since his property had already been condemned and the deceleration lane had been built. However, because (1) the lane was determined to be a public issue (2) municipal authorities desiring to condemn property rely upon authoritative adjudication for future proceedings and (3) condemnation proceedings are replicated and identical in most cases, this case was found not moot under the public exception rule.

In his appeal, Haltom argued that the district court erred in determining that the City did not condemn his property for economic purposes. Furthermore, Haltom specifically argues the City directly violated statute 76-710.04 because the deceleration will (1) provide vehicles access to the retailer and (2) ultimately cause the expansion of the City’s property and sales tax bases through providing the retailer’s customers easier access to the retailer’s parking lot therefore exercising eminent domain for the purpose of economic development.

In response to Haltom’s claim the court cited the plain language of the statute, specifically noting section 76-710.04(1) which prohibits the use of eminent domain powers where taking is, “primarily for an economic development purpose.” Using this section the court found four reasons to reject Haltom’s argument. First, the City did not take the property for the use by a commercial for-profit enterprise. Second, the City’s acquisition of the land did not serve the primary purpose of increasing tax revenue or tax base. Third, the City’s acquisition of the land did not serve primarily for increasing employment. Finally, the use of the property cannot be understood as primarily related to “general economic conditions”. The court acknowledged that the City’s use of eminent domain may have resulted in incidental and indirect benefits to the retailer, but those benefits do not constitute a violation of statue 76-701.04 since it was not the City’s primary concern in the construction of the deceleration lane.

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