MINUTES OF THE FORMAL MEETING OF THE JOHNSON COUNTY BOARD OF SUPERVISORS:
JANUARY 19, 2006
Chairperson Lehman called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 9:00 a.m. Members present were: Pat Harney, Mike Lehman, Terrence Neuzil, Sally Stutsman, and Rod Sullivan.
Unless otherwise noted, all actions were taken unanimously.
Motion by Stutsman, second by Sullivan, to approve the claims on the Auditor’s Claim Register, as approved by a majority of the Supervisors.
Motion by Neuzil, second by Harney, to approve the minutes of the formal meeting of January 12, 2006.
Motion by Harney, second by Stutsman, to approve the payroll authorizations submitted by department heads, as approved by a majority of the Supervisors.
Motion by Harney, second by Stutsman, to place on file the Clerk’s Report of Fees Collected for the month of December, 2005, in the amount of $7,086.48, as submitted by Clerk of District Court Lodema Berkley.
Reconvened Public Hearing on Platting Application S05033 at 9:03 a.m.
Application S05033 of George and Marie Chalhoub, signed by J. Scott Ritter of Hart Frederick Consultants, requesting preliminary and final plat approval of Chalhoub First Subdivision, a subdivision described as being located in the NW 1/4 of the SW 1/4 of Section 10, Township 81 North, Range 7 West, of the 5th P.M. in Johnson County, Iowa (This is a 1-lot, 3.31-acre, Farmstead Split, located on the east side of James Avenue NE, approximately 3/4 mile south of its intersection with 120th Street NE in Jefferson Twp.).
Assistant Planner Dan Swartzendruber said the issue at hand is whether or not there is the possibility that a document exists that shows that one of the owners of the farm has rights to the farmstead split. Swartzendruber said that as far as Planning and Zoning is concerned, this application meets the technical requirements and they would recommend approval of this application.
Assistant County Attorney Andy Chappell said that the issue is whether the plat application meets the requirements of the ordinance and whether or not it should be adopted. He said he characterized the dispute that exists and that was the cause of the temporary injunction which has now been lifted as one of whether an agreement between a couple other parties and the dealings that went along with that created an encumbrance on the property that would prohibit the Board from moving forward. Chappell is not convinced that there is an encumbrance. He said that they have a signed title opinion from the applicant’s attorney and they normally rely on those opinions.
Lehman questioned what makes a valid legal document. He said that they heard that this wasn’t recorded before it was brought to the Board. Lehman noted that others have commented that the purpose of public hearings is to bring forth information. He asked when contracts for sale are legally binding instruments and are shown to the Board, do they carry the same weight as they would if they are made known as a recorded document. Chappell said that it is a complicated legal issue, but taking all of these factors into consideration, he has yet to be convinced that there is sufficient encumbrance on the applicant’s property to advise the Board that they shouldn’t move forward. He said that if he believed otherwise, he would have to advise the Board that they shouldn’t move forward. Chappell explained that what documents are binding on what parties would be a matter for a court to decide. He said that because this information was not recorded, it is considered a stray document because it isn’t something that would have been revealed in the abstract. He said that as the Board has seen from various correspondence, the parties opposing the application have alleged there was actual notice of the document, so the recording shouldn’t matter. He said that these are all things that the Board doesn’t need to decide.
Lehman said that the Board can only issue one farmstead split. If the Board approves the application and the matter is determined later in court that the farmstead split was not the applicants’ to apply for, they could then sell of the property and if someone else builds a house there, it would be difficult to restore the land back to the original situation. He said that the Board wouldn’t be allowed to give each party a farmstead split. Stutsman asked how a situation like this would be handled. Chappell said he couldn’t tell her, since there are so many different roads this might traverse from here on out. He said that if there was a cause of action brought that attempted to secure a farmstead split for the opposing parties; because obviously the dispute is that one party is applying for a farmstead split and the other party says they have the right to it; the technical reading of the County’s ordinance would not allow for that. However, a court may be able to order that to happen, but he wasn’t sure about this. He said that if, given that the Planning and Zoning staff and the County Attorney’s office have both said that this application meets the technical requirements of the ordinance, if the Board believes that it doesn’t meet the technical requirements of the ordinance because they think there is an encumbrance out there, in all fairness the Board should give the applicants an opportunity to defer. He said that his belief is that the Board, under it’s own ordinance, does not have the power to defer this any longer. The applicants have asked that it be brought up, the stay has been vacated, and at this point he thinks the Board needs to vote on it unless the applicant request deferral.
Sullivan said that from the beginning he has thought that this is a situation where two parties have a disagreement with each other, and he doesn’t want the County to become a pawn in this. He said that if they have a dispute with each other, he would like to see them figure it out. Sullivan said that the County has nothing to gain and everything to lose in this situation, since one party or the other will be suing the County no matter what the Board decides. Sullivan said he would like to see the two parties withdraw the application, figure it out, and then come back and apply once they have been told by a court that they have the right to do so. Sullivan said that it is unfortunate that no one is choosing to do this, because this is going to take tax payer dollars, and the Board’s and staff’s time.
Stutsman said that she has heard the recommendations from staff and Chappell, but for her there are too many unanswered questions, and she doesn’t think there is a clear legal process for this. She said that it isn’t fair to either applicant to vote on this today, so she would vote to deny it, because of the concerns that Lehman laid out.
Mark Roberts, attorney for the Chaloubs, said that yesterday the Ockenfels submitted a written position statement to the County Attorney and to the Board. Roberts agreed with Planning and Zoning and Chappell that there isn’t a legal reason not to grant the Chaloubs application today. He said that the ordinance says that the final plat shall be approved when found to be in conformance with the approved preliminary plat and accompanied by the approved document. He said they have done that, and because of the mandatory language in the ordinance the County should grant the farmstead split. He said that he and the Chaloubs are also frustrated by the process with respect to the application, and the Chaloubs haven’t done anything wrong, they have simply attempted to exercise legal rights that they believed they had. They haven’t acted illegally, and haven’t breached a contract, and there is no allegation in the petition that the Chaloubs did anything wrong. He said that they recognize that the Ockenfels are disappointed and that they are trying to persuade the Board not to vote in favor of the proper application for reasons outside of the legal reasons contained within the ordinance. Roberts said that on May 14, 2001, the Chaloubs entered into a written and binding contract with the Maraks. They made a purchase offer, and it was accepted in writing. The Chaloubs became, on that day, the equitable owners of the property. He said that in the purchase agreement that the Chaloubs signed, there is a reservation of a farmstead split to the Maraks. As of May 14, 2001, the Maraks did not have the right anymore. The Ockenfels weren’t in the picture until June 5, 2001, when they had a purchase agreement that they submitted to the Maraks, and theirs contains the language the Board has seen about the farmstead split. He said that the only thing that was ever supposedly provided to his clients about that was notice from Cheryl Balster, which was cited in the position statement. He said that in that notice Balster admitted that she didn’t understand what the notice meant or what she was attempting to explain to the Chaloubs about the farmstead. He said that there was no written notification, and more importantly, there was no amendment to the contract between the Maraks and the Chaloubs at any point. There was also never any agreement between the Chaloubs and the Ockenfels about access to the property or boundaries, in particular the farmstead split. There was never an agreement that the Chaloubs would give up their farmstead split rights. The closing on the Ockenfels purchase occurred in August 2001, which was a month before the Chaloubs closed on their contract with the Maraks. At the time that his clients closed on their agreement with the Maraks, nothing had changed in the agreement. Nothing was recorded that the Chaloubs would see that was a claim to the property by the Ockenfels for the farmstead split right. He said that their attorneys couldn’t see it when they wrote a title opinion and their lenders couldn’t see it when they decided to grant the loan. The Chaloubs believe that their application is complete and should be approved by the Board. The Chaloubs stand by their testimony to the Board at the last meeting that they never received any sort of notice about rights to the farmstead split.
Harney said he has read through all the documents, and it appears to him that the Chaloubs never did commit to a written agreement about the farmstead split other than the realtor saying that the farmstead split would go to the Ockenfels. Roberts agreed that there was no other written mention of the farmstead split. He said that it is their position that when the Maraks sold the property and did not explicitly reserve the farmstead split, that it belonged to the Chaloubs at that point. Lehman asked whether an offer to purchase signed before a closing contract would carry more weight. Roberts said that an offer to purchase that is accepted by both parties is a valid and binding contract. He said the fact that it is not recorded does not make it less enforceable between those two parties. Lehman said that since it was not public information, how were the Ockenfels were to know about this, since they signed a closing contract before the Chaloubs did. Roberts said there could be an inquiry notice if they were aware that the property had been sold to some other party, but he didn’t think there was an office that they could find out that there was a prior contract that was signed.
Bob Downer, attorney representing the Ockenfels, said that the Ockenfels did negotiate for the acquisition of the Maraks farmstead split rights. He said the Board has a copy of the Ockenfels offer, and a copy of the document that was executed at the time of closing, and irrespective of whether those were recorded and what the legal effect of that is, it is clear that the Ockenfels and the Maraks did bargain for the Ockenfels to acquire those rights. Downer said that there was an intention that the agreement executed at closing be recorded, and there was an attempt to preserve those rights subsequent to the execution of the offer. Thirdly, the Ockenfels did close before the Chaloubs transaction. He disagreed with Chappell and the Zoning staff regarding whether all acts necessary to apply for the farmstead split have been taken, because he would submit that the Chaloubs didn’t have the right to make this application. He said that it is made clear in the brief that Roberts filed in District Court that the Chaloubs do not intend to transfer this additional parcel, and this is being done only for the purpose of financing. The Ockenfels testified that they had specifically wanted the farmstead split because of the opportunity to locate other family members residences in close proximity to theirs with ownership in those individuals and would therefore submit that in an attempt to balance the rights and interests of the parties pending a court determination. He said that it would be easier to undo anything with respect to the Chaloubs’ interest than it is the Ockenfels. Downer explained that there is court action pending, and there is another hearing that has been scheduled on this for February 9, 2006, and insofar as a permanent, final resolution of this issue, the Board has the Ockenfels word that they will make every effort to try to expedite this. Downer said that he disagrees with many of the statements that Roberts made, and thinks they are contested and disputed facts whereas he has attempted to lay out things that are undisputed. Downer requested that the farmstead split be denied. In the alternative, they would request that the application be deferred until after the court has ruled.
Cheryl Balster, the realtor who represented the Maraks and the Chaloubs, said that when she wrote the purchase agreement for the Chaloubs, the Maraks still owned the other half of the land. She said that no one could answer the question of who had the right to the farmstead split at that time, since there was no precedent set. When the Maraks sold that piece of land to the Chaloubs, and had they not sold the other half to the Ockenfels, they could have gotten a farmstead split on the other part of it. The right to the farmstead split was not spelled out in the purchase agreement. From what she understands, this law is untried and untested in the particular context that they are looking at today. Her files were subpoenaed and there was a deposition, at which she told the truth at. When she delivered the notice to the Chaloubs she advised them to seek the advice of an attorney, and they did. Balster said that looking at the attention to detail in her files, there is no evidence that she did not notify them of the farmstead split, but at that time it was not a matter of importance. Every time it came up, the Chaloubs said they did not want a split, but they did want control of the boundary line.
Harney asked Balster whether if anywhere in the procedure she had a written agreement that the Chaloubs did not get the farmstead split, where the Chaloubs were a part of that contract. Balster said that she could not write a three way agreement, and at that point it would have required a three way agreement to do so. She gave the document to them and advised that they speak with their attorney. Balster said that the Chaloubs do recall that they had a discussion about how it was much more difficult to get a home loan on 40 acres than it was to get a loan if the land is split. Sullivan asked Balster whether she realized there was no precedent when she sold the property, and if so, why didn’t she mention this to the people who were buying and selling the property. Balster said that she did not know that then, and at that point she did not have a clear understanding of the law. She was told she was not qualified to write anything about a farmstead split. Balster said that when the Maraks sold the property to the Chaloubs, the Maraks could have applied for a farmstead split. Sullivan said that the Chaloubs could have done the same thing. Balster agreed but added that the Maraks sold this to the Ockenfels. Balster said that she has documentation showing that both parties had preliminary attorney contact before the deal closed, and the Chalhoubs were not concerned about the farmstead split at that point. She said that they believed at the time that Ockenfels were closing first. She said that if the Chalhoubs had gone out and gotten a title opinion, it would have turned up. She said that just because the document wasn’t recorded before, doesn’t mean that it affects the legality. Harney said that if it wasn’t recorded until recently, the Board and Planning and Zoning would have no way of knowing, and the first one who came in would be the first to get approval. Lehman said they have public hearings to bring information forward that may not be part of the public record. He said that the contract that included a farmstead split was made known to the Board at that time. Because someone presented a document at a public hearing, now they don’t have the right they thought they had.
Harney said that if he had to make the decision today he would vote in favor of the Chaloubs, but given the information received he would probably vote today to deny until the outcome of a court case. Lehman said that with the sequence of the events, he would have to vote for a deferral, but at this time he doesn’t think there is clear indication that the Chaloubs have the right to the farmstead split. Sullivan said that if they deny it they will be sued by the Chaloubs and if the Board approves it they will be sued by the Ockenfels. He said that if they are looking for direction from him he would ask that the applicants withdraw the application. He asked why the County should be drug into a private manner. He said that there is a dispute between two parties that has to be figured out. Stutsman agreed. Lehman said that if the Board approves the application, and then it goes to court, and the Court finds in favor of the Ockenfels, the Board is only allowed one farmstead split, and they can’t reverse it, even if the court tells them to reverse it. He said that if the Chaloubs have sold off a piece of property to someone else, and a home is built, the Board can’t tell them to take the house down and give the money back. Sullivan said that if the court orders the County to reverse it, they probably could but it would be hard to tear down a house. Lehman said that the County would probably end up giving two farmstead splits to make it right. Stutsman agreed. Sullivan said that the best thing would be for the applicants to withdraw or defer the application. Neuzil said that it will probably be denied if the Board votes today. He said that the Board knows who the land belongs to, but they don’t know who truly has the right to the farmstead split, and it would be extremely difficult for the Board to have to make that determination right now. He said that the County will be in litigation either way. Neuzil said that he would rather defer than to see the application be denied, however he would probably support the County Attorney’s request that it does meet the legal requirements and he would probably support it.
Mark Roberts said that given that the Board is likely to deny the application if voting today, he would request a deferral until such time that the court rules in favor of one party or it is requested by the Chaloub’s to be brought to a vote.
Assistant Planning and Zoning Administrator R.J. Moore said that since adoption of the farmstead split ordinance in December of 2000, when they talk to property owners with large areas of land who are thinking about dividing it, they advise them to decide who will get the farmstead split. Stutsman recommended that they be given something in writing. Planning and Zoning Administrator Rick Dvorak said that it is put into the subdivider’s agreement that goes with the abstract that it will be the only split on the farm.
Motion by Neuzil, second by Harney, to defer Application S05033 and continue the public hearing indefinitely until the matter is resolved in court or is brought before the Board at the request of the applicant.
Public Hearing closed at 9:56 a.m.
Motion by Stutsman, second by Sullivan, to approve and authorize the Chairperson to award South Gilbert Street/Sand Road Improvements--Napoleon Lane to Sycamore Street Project to Metro Pavers, Inc., Iowa City, Iowa.
Motion by Sullivan, second by Stutsman, to approve and authorize the Chairperson to sign the renewal and amendment to the contract for Fiscal Agent Services for Community Partnership.
Motion by Harney, second by Sullivan, to appoint Christopher Rossi, and Robert Conrad to the Johnson County Housing Task Force for unexpired terms ending June 30, 2006.
Adjourned to informal meeting at 10:00 a.m.
/s/ Mike Lehman, Chair, Board of Supervisors
Attest: Tom Slockett, Auditor
By Casie Kadlec, Recording Secretary
These minutes were sent for publication and formal approval on January 26, 2006.