Field of Dreams site cleared for development of baseball complex and tourist attraction

by Gary Taylor

Residential and Agricultural Advisory Committee, LLC et al. v. Dyersville City Council
Iowa Supreme Court, December 9, 2016

The Dyersville City Council voted to rezone the area containing the site of the 1989 movie Field of Dreams from A-1 Agricultural to C-2 Commercial in order to facilitate the development of a  a 24-field baseball and softball complex, along with the farmhouse and original baseball field used for the movie which would continue to be maintained as a tourist attraction. Community members filed two writs of certiorari to challenge the rezoning on a number of grounds.  The District Court annulled the writs and found in favor of the city council.  This appeal followed.  The Iowa Supreme Court engaged in a 20-page recitation of the facts of the case on its way to its 44-page decision.  Only those relevant to the outcome of each challenge will be repeated here.

Quasi-judicial vs. legislative action.  The petitioners argued that the city council’s actions were quasi-judicial in nature rather than legislative, and therefore the council should have been required to conduct a more formal fact-finding proceeding and make findings of fact in support of its decision.  Quasi-judicial proceedings are also subject to greater judicial scrutiny when reviewed by an appellate court.  Petitioners relied on the Iowa Supreme Court’s decision in Sutton v. Dubuque City Council in support of their position. In contrast, the city council maintained that the action of  a legislative body in rezoning land is legislative in nature, which gives the legislative body wider latitude in the conduct of the proceedings.  Courts also give greater deference to legislative decisions made by city councils and county boards of supervisors.

In ruling on this issue the Iowa Supreme Court reviewed Sutton and several other past cases.  It recognized that in its Sutton decision the Court set forth three factors in determining whether zoning activities are quasi-judicial (versus legislative) in nature (1) [when the rezoning] occurs in response to a citizen application followed by a statutorily mandated public hearing; (2) [when] as a result of such applications, readily identifiable proponents and opponents weigh in on the process; and (3) the decision is localized in its application affecting a particular group of citizens more acutely than the public at large.   Recognizing that the Court “cited these factors with approval” in Sutton, it noted that at the time it chose not to hold that all public zoning hearings should be classified as adjudicatory.  It stated:

The Sutton Case dealt with a different situation than many of our previous zoning cases because it involved PUD zoning.  We noted the ‘quasi-judicial character of municipal rezoning is particularly evident in matters involving PUD zoning.’  We discussed the distinction between traditional rezoning and PUD zoning:

Creating zoning districts and rezoning land are legislative actions, and…trial courts are not permitted to sit as ‘super zoning boards’ and overturn a board’s legislative efforts….The [PUD] concept varies from the traditional concept of zoning classifications.  It permits a flexible approach to the regulation of land uses. Compliance must be measured against certain stated standards….Since the board was called upon to review an interpretation and application of a n ordinance…and the ordinance was not challenged per se, the board’s decision was ‘clearly quasi-judicial’.

Rather than follow Sutton, the Court found the present case to be “much more analogous” to the case of Montgomery v. Bremer County Board of Supervisors.  In Montgomery, the county Board rezoned two parcels of land from agricultural to industrial after two rezoning petitions were filed.  In Montgomery, the Court found that the zoning decision of the supervisors was “an exercise of its delegated police power,” and held that “the generally limited scope of review applicable to the case [was] to determine whether the decision by the Board to rezone [was] fairly debatable.”   In making the analogy, the Court observed:

The city council [in the present case] was acting in a legislative function in furtherance of its delegated police powers.  The council was not sitting ‘to determine adjudicative facts to decide the legal rights, privileges or duties of a particular party based on that party’s particular circumstances.  The [decision] was not undertaken to weigh the legal rights of one party (the All-Star Ballpark Heaven) versus another party (the petitioners).  The council weighed all of the information, reports, and comments available to it in order to determine whether rezoning was in the best interest of the city as a whole.

The Court held that the proper standard of review “in this case is the generally limited scope of review” utilized to “determine whether the decision…is fairly debatable.”  A decision is “fairly debatable” when “reasonable minds may differ, or where the evidence provides a basis for a fair difference of opinion as to its application to a particular property.”  If a rezoning decision is “fairly debatable” then a court will decline to substitute its judgment for that of the city council or board of supervisors.

Impartiality of the city council.  The Court noted that, while it was true that several council members viewed the rezoning and the project as an opportunity for the city, each council member attended all meetings, read reports, listened to citizens speak for and against the project, asked questions, and investigated issues and concerns.  Nothing in the record demonstrated that any council member had any conflict of interest.  Several members participated in an economic development bus trip to Des Moines to discuss the project with legislators and state officials, but the Court found that mere participation in such activities for the potential benefit of the city does not establish partiality or bias. “Rather, this is more akin to the council members upholding their public duty by performing their due diligence in determining what state aid might be available to help with the project before any formal action was taken.  The council make its decision based on what it believed was best for the community after a full and open discussion of the issues over many months.”

Decision was arbitrary, capricious, unreasonable. A decision is arbitrary, capricious, or unreasonable when it is not authorized by statute, or is unsupported by the facts.  For the reasons cited above, the Court declined to find in favor of the petitioners on these grounds.

Inconsistent with comprehensive plan.  Under Iowa Code 414.3, zoning regulations “shall be made in accordance with a comprehensive plan.”  The Court referred to its prior decision in Iowa Coal Mining Co. v. Monroe County for the principle that “compliance with the comprehensive plan requirement merely means that the zoning authorities have given ‘full consideration the problem presented, including the needs of the public, changing conditions, and the similarity of other land in the same area.'”  The Court referred to the boilerplate language found in every plan that says rezonings should be made with consideration of the unique character of the area, the suitability of the land for the proposed use, the conservation of buildings or value, and the encouragement of the most appropriate use of the land.  It noted that the Field of Dreams site is a unique parcel of land, and that the council considered the distinctiveness of the land and whether the proposed rezoning would be the best use of the site for the benefit of the community as a whole.  The city’s community builder plan also specifically addresses the importance of preserving the site in order to maintain and increase tourism.

Illegal spot zoning. To determine whether illegal spot zoning has occurred, a court must consider (1) whether the new zoning is germane to an object within the police power; (2) whether there is a reasonable basis for making a distinction between the spot zoned land and the surrounding property; and (3) whether the rezoning is consistent with the comprehensive plan.  Noting again the uniqueness of the Field of Dreams site, the Court refused to find this to be a case of illegal spot zoning even though the result is an island of commercial development surrounded by agriculturally zoned properties.

200-foot buffer zone.  Under Iowa Code 414.5, if 20% or more of the landowners immediately adjacent to the property proposed to be rezoned protest the change, then the city council must approve the rezoning by a four-fifths vote.  The rezoning applicants left out of the rezoning request a 200-foot buffer zone along the three sides of the perimeter of the property  (leaving it as A-1 Agricultural).  The petitioners challenged the use of this 200-foot buffer as a way to prevent nearby property owners from objecting to the project and thereby triggering the requirement of a unanimous vote.  While the Court acknowledged that “at first blush the buffer zone can appear to be unfair,” the Court concluded that the buffer in fact provides a benefit to adjacent landowners by addressing their expressed concerns about hunting and farming operations directly adjacent to the ballfields.  The Court also noted that other courts have validated the use of buffer zones to avoid supermajority requirements.  Regardless, even if the 200-foot buffer was improper, the rezoning was adopted by 4-1 vote of the city council.

Incorrect legal description.  While the notice of the original ordinance (Ordinance 770) contained errors in the legal description, the council corrected the legal description in the ordinance that ultimately rezoned the property (Ordinance 777).  No new notices were published, however, for Ordinance 777.  The Court does not require complete accuracy when providing notice.  Neither Iowa Code nor the city ordinances require the publication of a complete legal description.  The purpose of the notice requirement is to give the public reasonable notice of the pending action.  The public was well aware of the ongoing proceedings, and no one was confused or misled by the inaccuracy of the legal description.

Equal Protection.  Petitioners argued that all neighboring landowners were similarly situated, yet the 3-sided 200-foot buffer prevented those neighbors along the buffer from exercising the same right to object as the neighbors along the side of the property without the buffer.  The Court found that the council’s decision met the rational basis test required by the Equal Protection clause in this case.  The buffers, as described above, served a legitimate purpose of protecting the neighboring properties on the three sides.

Due Process.  Petitioners and the public in general were given adequate notice.  Further, they were heard in multiple public hearings.  All community members wishing to speak were allowed to do so.

Based on all preceding points, the Iowa Supreme Court affirmed the rezoning of the Field of Dreams property.

Agland preservation district statutes not relevant to rezoning application. No conflicts of interest found, either

by Gary Taylor

Miller v. Grundy County Board of Supervisors and MidAmerican Energy
Iowa Court of Appeals, April 22, 2015

In August 2013 MidAmerican Energy requested to rezone approximately 1,200 acres in Grundy County, Iowa from A-1 Agricultural to A-2 Agricultural.  MidAmerican had “Wind Farm Option Agreements” on the acres to be rezoned, and A-2 zoning would allow MidAmerican to place larger wind turbines on the land than those that would be permitted by A-1.  The Grundy County Planning and Zoning Commission voted 6-1 to recommend denial of the request at its September 2013 meeting; however, the Grundy County Board of Supervisors went against this recommendation and voted 4-0 to approve the rezoning at its meeting later the same month (one supervisor recused himself due to a conflict of interest).   Susan Miller, a nearby landowner, appealed the decision to district court, where the appeal was dismissed.  Miller then appealed to the Iowa Court of Appeals.

Miller’s first issue on appeal was that the Board of Supervisors acted illegally because it failed to comply with the requirements of Iowa Code 352.6, which requires supervisors to make specific findings before permitting non-agricultural uses in an “agricultural area.”   Chapter 352 authorizes the creation of agricultural preservation districts.  It does not address county zoning as enabled through Chapter 335 of the Iowa Code.  The Court of Appeals summarily stated that Chapter 352 is inapplicable in this case because “there is no evidence in the record that the Grundy County Board of Supervisors has ever designated any of the land involved in the zoning amendment as an ‘agricultural area'” as it is meant in Chapter 352.  “Nor, for that matter, is there any evidence in the record that any owner of any of that land has ever consented to the owner’s land being included in an area designated as an ‘agricultural area.'”  Simply zoning land as A-1 Agricultural does not of itself create or expand an “agricultural area” as defined in Chapter 352.

Miller’s second issue was that two of the supervisors who voted for the rezoning had conflicts of interest that required their recusal.  Citing Bluffs Development Co. v. Pottawattamie County Board of Adjustment the court noted that proof of a conflict of interest must be “direct, definite, capable of demonstration, not remote, uncertain, contingent, unsubstantial, or merely speculative or theoretical.”  One of the supervisors called out by Miller owns the AmericInn motel, which offers discounted rates to wind energy officials who stay there.  The court found that Miller was unable to offer evidence that any discounts received by wind energy officials were different than discounts available to anyone else staying there.  Without that evidence, or other evidence that the supervisor’s vote was significantly influenced by a pecuniary interest Miller’s claim failed as to the first supervisor.

The second supervisor has multiple relatives that own lands subject to “Wind Farm Option Agreements” with MidAmerican Energy; however, none of those lands were the subject of the 2013 rezoning request, and so the court concluded that any advantages to the supervisor or his relatives were “uncertain, speculative, and remote.”

The Court of Appeals affirmed the district court’s dismissal of Miller’s claims.

City council corruption does not give rise to Constitutional claims in rezoning denial

by Kaitlin Heinen

EJS Properties, LLC v. City of Toledo; Robert McCloskey
(Federal 6th Circuit Court of Appeals, September 5, 2012)

In April of 2002, EJS Properties entered into a conditional agreement with Pilkington Corporation to purchase 20 acres of a 43-acre lot that Pilkington owned, which included a technical center that EJS intended to convert into a charter school. This agreement was expressly contingent on obtaining a zoning change from industrial to one that could contain a school. EJS also entered into a non-conditional lease agreement with Lake Erie Academy to open the charter school. In May 2002, EJS filed a re-zoning petition with the Toledo-Lucas County Plan Commission. The Plan Commission recommended the re-zoning and passed the request onto the Toledo City Council. The City Council’s Zoning and Planning Commission held a public hearing on July 17, 2002, where everyone agreed to re-zone only the portion of Pilkington’s lot that would be needed for the school. The Committee voted unanimously to recommend the request for full vote by the Council, which was placed on the City Council’s agenda for August 13, 2002. During this re-zoning process, EJS had obtained an early-start building permit to begin $200,000 worth of repairs and improvements on the technical center.

Prior to August 13, Pilkington executives John Keil and Randy Berg had a lunch meeting with City Council member Robert McCloskey, who represented the district containing the Pilkington lot. McCloskey asked Pilkington to donate $100,000 to assist local retirees at the community center—Keil and Berg declined. At the next council meeting, member Peter Gerken moved to table consideration of the re-zoning for two weeks. EJS claims that McCloskey lobbied the other members to reverse their vote, but when he could not get enough to defeat the measure, he asked Gerken to table the matter. (McCloskey was a former Pilkington union negotiator, who had helped negotiate a labor agreement that capped healthcare benefits for retirees, for which he faced significant criticism upon being elected to City Council.) McCloskey then proceeded to call Keil, Berg, and Erich Speckin, the owner of EJS, and left questionable voicemails that sought the money for the retirement center in connection with the pending re-zoning. On August 22, Keil sent a letter to all of the City Council members and Mayor, seeking support for the re-zoning request and to consider the unrelated issues between Pilkington and McCloskey: “Such issues have the potential for exploitation to the detriment of the zoning request.” Pilkington and EJS never reported McCloskey’s request to the police.

On August 27, 2002, the City Council voted 7-4 against re-zoning (4 members had changed their vote from committee, including McCloskey). Only one member testified that he had been approached by McCloskey, who discouraged voting for the ordinance. EJS did not appeal the denial. Two months later, Toledo voters passed a levy, mandating the building of two new middle schools on the east side of Toledo. Toledo Public Schools (TPS) won an eminent domain lawsuit against Pilkington in November 2003 for the entire 43-acre lot. The Plan Commission, the City Council’s Zoning and Planning Committee, and the City Council approved a re-zoning in January 2004 to build a TPS middle school there.

EJS filed a complaint against the City and McCloskey in May 2004 for deprivation of substantive and procedural due process, deprivation of equal protection, deprivation of its property rights and its First Amendment right to petition in violation of 42 U.S.C.A. §1983, and wrongful interference with a business expectation in violation of state law. The district court granted summary judgment to the City and McCloskey on EJS’ constitutional claims. The court denied McCloskey summary judgment on EJS’ tortious interference claim (the district court actually stayed legal proceedings at one point to see the outcome of McCloskey’s 2006 indictment on federal criminal corruption charges, for which he pleaded guilty and received a 27-month prison sentence). After first dismissing EJS’ appeal for jurisdictional reasons, EJS dropped the state-law claim for wrongful interference. Then the U.S. 6th Circuit Court was able to hear the case.

In arguing for the deprivation of substantive and procedural due process, EJS argues that it had property interests at stake in the ordinance for re-zoning, in its contracts, and in its early-start building permit. The City Council never approved the re-zoning ordinance; rather, the City’s Planning Commission and Committee did. The 6th Circuit found that the only way for EJS to have a property interest in the re-zoning ordinance then is if the City Council lacked the discretion to approve it. However, the Toledo Municipal Code’s use of the word ‘may,’ grants the City Council discretionary authority over zoning regulation. Therefore EJS had no property interest in the re-zoning ordinance. Absent a property interest, EJS had no recognizable rights subject to due process protections.  As for its contracts, EJS argues that the contract options created property interests subject to due process protections; however, the purchase agreement explicitly states that “prior to the Closing Date, [EJS] has no title or estate in the Property…and will not claim any such interest…over any part of the Property.” The contract was explicitly contingent upon obtaining a re-zoning for the property, which did not happen–therefore, EJS possesses no interest in the property as a result of its contract. Finally, in regards to the early-start building permit, the permit did not entitle EJS to a re-zoning change, and the improvement work done on the building was “performed at the applicant’s own risk,” according to Toledo Municipal Code.

EJS also argued that it possessed two liberty interests that were violated: 1) a liberty interest in a government decision free from corruption and 2) a liberty interest in engaging in business contracts without unlawful interference. As to the first claim, corruption only affects procedural due process, which EJS could not be deprived of since the court ruled that EJS never possessed a  property interest of any kind. The court rejected the second claim on the same grounds as its ruling on property interests in relation to EJS’ contracts, holding that the defendants did not interfere with EJS’ right to contract because the contracts were contingent on discretionary zoning.  Additionally, the Supreme Court of the United States has upheld only a short list of liberty interests, and the circuit court here could not find any support for a liberty interest in a discretionary government decision free from corruption or unlawful interference.

In addition, EJS argued that corrupt zoning decisions “shock the conscience” and violate substantive due process as a result, regardless of whether or not a property or liberty interest is at stake. However, the court dismissed this claim, stating, “Our prior precedent makes clear that in the context of a discretionary zoning decision, government action will not shock the conscience unless the arbitrary and capricious action touches on a protectable interest.” With neither a property nor a liberty interest at stake, EJS had no merits for this claim. Even if EJS had a property or liberty interest, the court reasoned that “although we can condemn McCloskey for his misconduct, we simply cannot say that his behavior is so shocking as to shake the foundations of this country,” which was the original purpose for establishing the “shocks the conscience” standard.

Finally, EJS’ last two claims involved its right to petition and its right to equal protection. The court conceded that seeking redress from a government official qualifies as petitioning, for which a zoning request also qualifies. Specifically in regards to its right to petition, EJS argued that its right to meaningful access was violated. The court countered that EJS was equating meaningful access with meaningful process. Process is associated with violations of substantive or procedural due process, which was already decided to not have occurred in this case because EJS lacked both a property and a liberty interest. As for equal protection, the court ruled that EJS and TPS were not similarly situated, which does not grant adequate merits for an equal protection claim. Unlike EJS, TPS owned the relevant property at the time of their re-zoning request. TPS also intended to use the entirety of the property rather than part of it. And TPS planned to build a financially stable public school rather than a private school. These are rational bases for the City Council to have treated EJS differently than TPS.

Having dismissed all of EJS’ constitutional claims, the U.S. 6th Circuit Court upheld the district court’s decision to grant summary judgment to the defendants.

Non-profit association has standing to challenge major North Dakota coal gasification facility; loses on merits

by Gary Taylor

Dakota Resource Council, et al. v. Stark County Board of County Commissioners
(North Dakota Supreme Court, June 7, 2012)

Great Northern planned to construct and operate a coal gasification facility on 8,100 acres of land in Stark County. Great Northern’s planned complex would include a coal gasification plant, chemical fertilizer plant, electrical power plant, coal mine, solid waste landfill, and facilities for manufacture and storage of hazardous, explosive, and odorous products. Great Northern submitted an application to the Stark County Zoning Commission (Commission) to change the zoning of the land from agricultural to industrial and to allow nine conditional uses of the land, including “[m]ineral and other substance exploration or excavation and mining [in] accordance with provisions of Sec. 6.10” of the Stark County Zoning Ordinance. The Commission scheduled a hearing and sent notice by certified mail to all persons who owned land within 200 feet of the boundaries of the proposed rezoned tract. Following the hearing, the Commission voted to recommend that the County Board of Supervisors (Board) approve the application, conditioned upon Great Northern obtaining all necessary local, state, and federal permits or approvals. The Board subsequently approved the application to rezone the property from agricultural to industrial and approved the requested conditional uses. The Board’s approval was subject to several express conditions, including a requirement that Great Northern “obtain all the necessary local, state and federal approvals, licenses and permits relative to the operation of the coal mine.”

The Dakota Resource Council (Council) is a membership-based non-profit corporation which, among other things, works for preservation of family farms, regulation of coal mining and oil and gas development, protection of ground water and clean air, and sound management of solid and toxic wastes. Neighbors United is an unincorporated association which promotes the protection of farming and ranching. The Council, Neighbors United, and several individuals who owned land near the rezoned tract appealed the Board’s decision to the district court. The district court initially determined that the Council, Neighbors United, and the individual landowners had standing to challenge the Board’s decision, but the district court affirmed on the merits the Board’s decision to rezone the property and allow the conditional uses.

The Council, Neighbors United, and landowners appealed.  The Board and Great Northern cross-appealed, arguing that the Council lacked standing to appeal the Board’s decision to the district court.

Standing.  The North Dakota Supreme Court noted at the outset that “standing is the concept used to determine if a party is sufficiently affected so as to insure that a justiciable controversy is presented to the court.”  A not-for-profit association such as the Council that has not suffered an injury itself must satisfy a three-pronged test to demonstrate standing: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit. In addition, a nonprofit membership corporation has standing to seek judicial review on behalf of its members, of governmental or municipal regulations directly affecting such members.  The Board and Great Northern challenged the Council’s standing only on the first prong of the test.  The Court affirmed the district court’s conclusion that the Council had standing in this case, at the same time acknowledging that it presented a “close question.” The Stark County Zoning Ordinance requires that, when a proposed amendment to the Zoning Ordinance and Map affects a property use, all property owners within 200 feet of the affected property must be notified of the hearing by personal service or certified or registered mail. In this case, the record demonstrated that at least two individuals identified as Council members received notice of the scheduled hearing from Stark County by certified mail because they owned property within 200 feet of the proposed rezoned tract.  The Court saw the notice requirement “effectively [as] a legislative determination that landowners within 200 feet of the proposed rezoned property have a significant, protectable interest in the Board’s decision whether to grant an application to rezone the property and permit requested conditional uses.  The notice requirement established that Kenneth Kudrna and Randall Kudrna’s property interests were affected by the Board’s decision in a manner different than that suffered by the public generally, and they were more than just an elector and resident taxpayer affected by the decision….We do not believe it can be seriously argued that an 8,100 acre industrial complex, including a coal gasification plant, chemical fertilizer plant, electrical power plant, coal mine, solid waste landfill, and facilities for manufacture and storage of hazardous, explosive, and odorous products, would not adversely affect the Kudrnas’ use and enjoyment of their respective properties located within 200 feet of the proposed complex.”

Rezoning decision.  The Council contended that the Board failed to correctly interpret and apply the Stark County Zoning Ordinance. The Court began this analysis by noting that although interpretation of an ordinance presents a question of law fully reviewable on appeal, the interpretation of a zoning ordinance by a governmental entity is a quasi-judicial act, and a reviewing court should give deference to the judgment and interpretation of the governing body rather than substitute its judgment for that of the enacting body.  The Council argued that Great Northern was required by the ordinance to submit all application materials necessary to apply for a land disturbance permit.  The Board disagreed.  The Court disagreed, as well.  The Board, construing its Zoning Ordinance in light of the facts presented in this case, concluded that the Zoning Ordinance allowed the Board to issue a conditional use permit for mining operations, subject to the requirement that Great Northern ultimately comply with another section of the ordinance and obtain a land disturbance permit before commencing any exploration, excavation, or mining activities on the property.  The Board viewed the granting of the conditional use permit as merely the first step in a lengthy and complex process, and its approval of the conditional use was contingent upon Great Northern complying with all of the enumerated special conditions imposed upon the conditional use permit.  The Court concluded that “this is a reasonable interpretation of the Zoning Ordinance, and we give deference to the Board’s interpretation and will not substitute our judgment for that of the Board.”

The district court decision was affirmed in all respects.

Conditions in development agreement not enforceable as contractual promises

by Victoria Heldt

Button Realty, LLC, v. Charter Township of Commerce and Country Hills Development, LLC
(Michigan Court of Appeals, September 22, 2011)

In 2004, Button Realty entered into a purchase agreement with Country Hills Development for the sale of 34 acres of land.  The agreement provided that Country Hills purchase the property in order to build a single-family residential project with pressure sewer and public water.  It stated that Button would enter into a legitimate land contract once Country Hills obtained site approval from the Charter Township of Commerce (the township).   It further stated that Button must agree to the imposition of any special assessments in order to cover costs for installing the water/sewer system.  Country Hills petitioned the Township for the creation of a special assessment district (which included the property) in order to finance the extension of the public water system to the property.  The Township approved.  Subsequent to approval of the site plan, Button and Country Hills executed a land contract in accordance with the terms of the agreement.

Country Hills submitted an application to the township to rezone the property (as it was zoned “undeveloped” at the time) to allow the single-family residence to be constructed.  The Township agreed and entered into a development agreement with Country Hills.  As a condition of the rezoning, Country Hills was required to undertake certain actions (such as the construction of the residences and the installation of a water system) within 15 years of the date of the agreement or else the property would revert back to its original zoning classification.  The Township noted that Country Hills was not required to do these things, but that they were a condition of the rezoning.

Country Hills eventually defaulted on its land contract with Button and the property was transferred back to Button before the public water and sewer lines had been extended throughout the development onto Country Hills’ property.  Button filed an action in district court seeking to have the assessments declared unenforceable on the grounds that they conferred no special benefit to Button.  They also claimed they received no notice of the assessment hearing, so the assessments were invalid.  In addition, Button claimed that Country Hills breached its contract with the Township when they failed to extend the water system to the property.  Button alleged that those contractual obligations conferred a direct benefit to Button, and so Button was a third-party beneficiary of the development agreement.

Country Hills argued that Button was not a third-party beneficiary of the agreement with the township, so therefore Button had no grounds to bring a lawsuit raising the issue that Country Hills was in breach of that contract.  Country Hills further claimed that it had not breached the contract since there was a 15-year limit in which to complete the actions and because the actions were not required.  The district court granted summary judgment in favor of the township and Country Hills on both claims.   Button appealed.

In regards to the question of whether Country Hills breached their development contract with the township, the Court of Appeals ruled they had not.  It noted the distinction between a condition and a promise.  A condition “is distinguished from a promise in that it creates no right or duty in and of itself but is merely a limiting or modifying factor.”  In this case, the actions to be taken by Country Hills were a condition to the rezoning of the property, not a requirement.  The only consequence of not completing the actions was that it would revert back to its previous zoning classification.  Additionally, the Court noted that the agreement allows for a 15 year deadline to complete the actions, and therefore the claim was not yet timely.

Further, the Court agreed with the district court in its decision that Button is not a third-party beneficiary of the development agreement.  A person is a third-party beneficiary of a contract only when the promisor undertakes an obligation “directly” to or for the person.  This means that not just anybody who benefits from a contract can enforce it.  Since Button was not named in the contract, it is not a third-party beneficiary.  The Court of Appeals affirmed the district court’s decision.

Consistent with a plan, but not enough – not now

by Gary Taylor

Francis, et.al. v. Bremer County Board of Supervisors
(Iowa Court of Appeals, October 21, 2009)

Showing of consistency with the comprehensive plan does not result in an automatic right to rezoning. 

J.D. Francis purchased approximately 35 acres north of Waverly, Iowa.  The land was zoned agricultural but most of it was designated for future single-family residential use by the Bremer County comprehensive plan.  Approximately four acres of the property was designated as “prime agricultural land” under the plan with a Corn Suitability Rating (CSR) above 50. 

Francis sought to rezone the non-prime agricultural land for residential development.  This land had a CSR of 49.5.  The Bremer County Planning and Zoning Commission found that the land was in a “planned growth area” under the plan, but nonetheless recommended denial of the rezoning request, citing citizen concerns about “current water supplies, runoff, number of drives along 190th Street, increased traffic, a possible sink hole in the area, productivity of the land, quality of life, septic system drainage, and not wanting more neighbors.”  The Bremer County Board of Supervisors followed the Commission’s recommendation and denied the rezoning.  Francis sued.

Francis asserted that the board of supervisors acted illegally in rejecting their rezoning petition because the land for which they sought rezoning had a lower CSR than the comprehensive plan’s rating for prime agricultural land, and was in an area designated for residential growth; i.e., that the requested rezoning was consistent with the comprehensive plan.  While agreeing with the general proposition that a county with a comprehensive plan must abide by that plan when making zoning decisions, the Court of Appeals also stated that “strict adherence to the statements [in a comprehensive plan] could actually negate other objectives of the plan.”  Citing the district court’s decision affirming the rezoning denial, the court stated,

“Just because a land owner demonstrates that a proposed use is consistent with a comprehensive plan does not mean, ipso facto, that the land owner is entitled to the zoning change….It remains for the board of supervisors to determine when, if at all, growth consistent with the comprehensive plan should occur.”

While the Court of Appeals admitted that the reasons for the denial stated in the record were “sparse,” it nonetheless determined that the comprehensive plan did not mandate a residential designation for land with a CSR of less than 50.  The plan does state that the county will “strive to preserve agricultural land, placing emphasis on” areas with a CSR of 50 or greater.  The plan lists other factors for consideration aside from agricultural land protection, such as the “protection of environmental features and sensitive areas” and the “quality of life.”

Justice Miller filed an opinion concurring in the result, but finding fault with the majority’s reasoning.  He particularly took issue with the fact that the board of supervisors, almost simultaneously, approved a similar rezoning request for a tract of land known as the Lakefield Estates Subdivision.  Justice Miller compared several relevant factors among the two requests:

(1) the comprehensive plan designates the Francis tract for future residential development, but identifies the Lakefield Estates tract as one that should remain agricultural;
(2) the Francis tract has a CSR of less than 50, while the Lakefield Estates land has a CSR greater than 64;
(3) the Francis tract has numerous nearby residences, while the area surrounding the Lakefield Estates land remains predominately agricultural;
(4) the Francis tract is adjacent to a blacktop highway, while the Lakefield Estates tract does not have direct access to a paved road;
(5) the Lakefield Estates tract is in a floodplain, while the Francis tract is not.

Nevertheless, Justice Miller concurred in the result despite the fact that the board’s two decisions “may be difficult or impossible to reconcile….It may be the board’s approval of the Lakefield Estates…rezoning…and not its denial of the Francis request, that arguably violates the comprehensive plan.”

Hudson Iowa rezoning consistent with its comp plan

by Gary Taylor

Marianne Craft Norton Trust v. City Council of Hudson, et.al.
(Iowa Court of Appeals, October 7, 2009)

Rezoning of parcel within city limits from suburban agricultural to rural residential consistent with comprehensive plan; did not constitute spot zoning.

Defendants, the Manatts and the Petersons, own 40 acres west of Highway 58, on the north side of the City of Hudson within the city limits.  The Marianne Craft Norton Trust owns adjacent property immediately south of the defendants’ property.  Although the land along both sides of Highway 58 leading out of town to the north is primarily agricultural, there are more than 20 rural residences in the area between the densely-settled part of the city and Highway 20, four miles to the north. 

The city adopted an updated comprehensive plan in October 2006 that designated 160 acres along the west side of Highway 58, including the defendants’ land and the land owned by the Trust, for future residential development.  In November 2006  defendants filed with the city council a request to rezone the 40 acres in question from A-1, Suburban Agriculture to R-5, Large-Lot Residential.  The plat submitted with the request showed 5 lots for development, ranging from 3 1/3 acres to over 4 1/2 acres, and two large undeveloped parcels.  The city planning and zoning commission voted in January 2007 to recommend approval of the rezoning.  After the required public hearings, the city council approved the rezoning request in April 2007.  In May 2007 the Trust filed a petition for writ of certiorari  with the district court, alleging the rezoning was “illegal, arbitrary and capricious, unreasonable, not based on substantial evidence, and an abuse of discretion.”   After taking testimony, reviewing exhibits and, with permission from the parties, visiting the area the court ruled in favor of the city and the defendants.  The court found the character of the area in question, while once primarily agricultural, has changed significantly and “visually appears to be more rural residential than agricultural.”  It found the city council gave proper reasons for approving the rezoning, and gave consideration to the appropriate factors.  It further concluded that “even if the rezoning does fit within the definition of spot zoning, it is not illegal,” in that there was a reasonable basis for making the distinction between the rezoned property and the surrounding property, and the rezoning was consistent with the comprehensive plan.  The Trust appealed the district court’s ruling.

The Court of Appeals affirmed the district court on all counts.  The Trust contended that the city council did not follow the elements found in Iowa Code 414.3 when considering whether to rezone the property and that the council, in performing a quasi-judicial function, should have made written findings with regard to each element.  The Court of Appeals disagreed, finding that “a primary consideration of [Iowa Code 414.3] is that the zoning be in accordance with a comprehensive plan.”   The minutes of the council meetings and the testimony of two council members at trial showed that the rezoning followed many of the land use goals stated in the comprehensive plan, and was consistent with the designation of the area for future residential use.  The Court of Appeals then, on its own, proceeded to relate the considerations of the rezoning to a number of the elements found in Iowa Code 414.3, and determined that although the evidence on some elements of the statute was mixed and could support a decision supporting or reversing the rezoning, the bulk of the evidence on the elements of section 414.3 supported the council’s decision.  “In addition, if the reasonableness of a zoning decision is open to a fair difference of opinion, courts do not interfere with the decision.”  The Court of Appeals did not address the district court’s conclusion that it “did not read Sutton v. City of Dubuque to require a council to issue written findings.”

The Court of Appeals judged the claim of illegal spot zoning against the three-part test in Perkins v. Madison County:  (1) whether the new zoning is germane to an object within the police power; (2) whether there is a reasonable basis for making a distinction between the spot zoned land and the surrounding property; and (3) whether the rezoning is consistent with the comprehensive plan.  It also examined the considerations discussed in Kane v. City of Cedar Rapids, those being “the size of the spot zoned, the uses of the surrounding property, the changing conditions of the area, the use to which the subject property has been put, and its suitability for various uses.   It again ran through a number of facts from the record, and found particularly persuasive that the permitted uses in A-1, Suburban Agriculture and R-5, Large-Lot Residential were “quite similar and compatible,” that the character of the area was changing from agricultural to rural residential, and that the comprehensive plan contemplated future residential development in the area.   The court also observed that “in contrast to some other spot zoning cases, where the rezoned property was freed from some restrictions placed on the surrounding property, the rezoning in the case before us is more restrictive than the zoning on the surrounding property.”  The court concluded that the rezoning did not constitute an illegal spot zoning, nor were the council’s actions arbitrary, capricious or an abuse of discretion.

Archives

Categories