TUNIS E. DEN HARTOG, SHIRLEY ANN SCHWEERTMAN, LEONARD G. LYBBERT, MARY ELLEN MOLINARO, WILLIAM JAMES ROBERT, AND MARK D. FISHER, Appellants,
CITY OF WATERLOO, IOWA, Appellee, SUNNYSIDE SOUTH ADDITION, LLC, Intervenor.
from the Iowa District Court for Black Hawk County, Andrea J.
challenge the district court's ruling finding a
municipality was not in contempt of a court order forbidding
it from selling certain property except in compliance with
statutory requirements. AFFIRMED AS
Nagle, Waterloo, for appellants.
Zellhoefer, Waterloo City Attorney, and Ivan T. Webber of
Ahlers & Cooney, P.C., Des Moines, for appellee.
case, we must decide if we should hold a municipality in
contempt of a court order that required it to dispose of
certain property only in compliance with Iowa Code section
306.23 (2014). The municipality promulgated notices that gave
a development company preferential bidding on the property
even though it was not a prior or adjacent landowner, gave
that same development company a bid credit for the
improvements it had already made to the property, described
the land as delineated in the plat filed for the contested
development, and used a backdated valuation. Following a
hearing, the district court found the notices did not satisfy
the requirements of section 306.23, but nevertheless held the
municipality's actions did not rise to the level of
contempt. The taxpayers appealed. On appeal, we affirm. We
also address additional arguments presented to, but not ruled
on by, the district court. We conclude the municipality
violated the injunction but agree the record does not
establish beyond a reasonable doubt the municipality acted
with the requisite willfulness to establish contempt.
Factual Background and Proceedings.
case is before us for the second time. The factual background
can be summarized from our earlier opinion, as follows:
The State of Iowa acquired property in Black Hawk County for
purposes of constructing a state highway in 1959. The highway
had originally been planned as, and enough land had been
acquired for, a four-lane project, but the highway was
eventually constructed with just two lanes. In 1983, the
state transferred control of the highway and attendant
property to the City of Waterloo (the City), in accordance
with the terms of Iowa Code chapter 306, entitled
"Establishment, Alteration, and Vacation of
Highways." After the transfer, the highway property
became known as San Marnan Drive in Waterloo. The City has
retained jurisdiction and control over the property in the
years since and has maintained it with grading, mowing, and
City has now indicated its intention to transfer the property
to Sunnyside South Addition, LLC (Sunnyside), as part of a
development agreement. Under the terms of the agreement,
Sunnyside proposes to relocate San Marnan Drive by
reconstructing it approximately eighty feet south of its
current position and intends to retain the property on which
the current San Marnan Drive sits for purposes of residential
construction. The City proposes to transfer the highway
property to Sunnyside according to the agreement for the sum
Taxpaying residents of Waterloo . . . became aware of and
objected to the proposed transfer in 2011. They filed in the
district court a petition for writ of mandamus and temporary
injunction requesting postponement of the sale on the ground
the City's proposed transaction failed to comply with
certain appraisal, notice, right-of-first refusal, and public
bid requirements set forth in chapter 306.
Den Hartog v. City of Waterloo, 847 N.W.2d 459,
460-61 (Iowa 2014).
dispute was submitted to the district court for a resolution.
The fighting issue was whether a statutory preference given
to certain persons when unused right-of-way land is intended
to be sold apply not only to land acquired for highway
purposes but never used, but also land used for highway
purposes that were later discontinued. Following a hearing,
the district court held the statutory preference procedures
did not apply to the sale of the right-of-way land in this
case and dismissed the motion to enjoin the sale and the
petition for writ of mandamus.
taxpayers filed an appeal from district court decision.
Around the same time, the City entered into a contract to
sell the right-of-way land to Sunnyside. It also entered into
a development agreement with Sunnyside. Under the agreement,
Sunnyside was required to develop the unused right-of-way,
which ran next to a country club and golf course, into lots
for residential development. The City also gave Sunnyside a
special warranty deed to the land. During the pendency of the
appeal, the City platted the land for the development, and
Sunnyside relocated San Marnan Drive to the south. Sunnyside
also graded the land for the housing development and
installed curbs, gutters, storm sewers, utilities, and took
other action necessary to complete the development site for
2014, we reversed the decision of the district court. We held
the statutory sales preference did apply to land formerly
used for highway purposes. We remanded the case to the
district court to enter the requested injunction against the
City. On July 7, 2014, the district court entered an order
enjoining the City "from selling or transferring the
property in this proceeding without first following the
procedures prescribed in Iowa Code section 306.23."
City subsequently moved to dissolve the injunction. It did
not assert the sale of the property to Sunnyside was
complete. Instead, it asserted that it desired to sell the
land and proposed to do so by first giving notice of the
intended sale consistent with the requirements of the
preference statute. On February 20, 2015, the district court
denied the motion to dissolve the injunction.
City then proceeded to give the notices of the intended sale
under the preference statute. The taxpayers filed an
application to find the City in contempt of court for
noncompliance with the statutory requirements of the notices.
They also sought a temporary restraining order to prevent any
4, 2015, the district court held the notices of sale sent by
the City failed to comply with the statutory sales
preference. However, it found the deficiencies in the notices
were not willful and did not amount to contempt. It further
found a ...