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Hunter Landing LLC v. City of Council Bluffs

Court of Appeals of Iowa

May 16, 2018

HUNTER LANDING, LLC, Plaintiff-Appellant,
v.
CITY OF COUNCIL BLUFFS, IOWA, Defendant-Appellee.

          Appeal from the Iowa District Court for Pottawattamie County, Kathleen A. Kilnoski, Judge.

         Hunter Landing, LLC, appeals from an adverse judgment in this inverse condemnation action.

          James C. Webering of Webering Law Offices, P.C., Glenwood, and Ryann A. Glenn of Husch Blackwell LLP, Omaha, Nebraska, for appellant.

          Jordan T. Glaser and Lyle W. Ditmars of Peters Law Firm, P.C., Council Bluffs, for appellee.

          Considered by Danilson, C.J., and Mullins and McDonald, JJ.

          DANILSON, Chief Judge.

         The central question in this appeal is whether Hunter Landing, LLC, is entitled to a new trial because of a faulty jury instruction on inverse condemnation. Because we conclude the instruction was a misstatement of the law, we reverse and remand for a new trial.

         I. Background Facts and Proceedings.

         Hunter Landing, LLC (Hunter Landing) owns about twelve acres along the Missouri River near the City of Council Bluffs (City). Five houses, a duplex, and a mobile home existed on the acreage pursuant to a conditional-use permit issued to the prior owners, which allowed "weekend cabins and/or summer cottages."

         In May 2011, a flood inundated the area, including the Hunter Landing property, resulting in a disaster proclamation by the Governor and a proposed buyout and destruction of flooded properties by the City (in large part with federal funds to be obtained via a Hazard Mitigation Grant Program Agreement). In September, the City's building inspector was able to gain entry onto the Hunter Landing property to inspect buildings for damage by the flood. The inspector declared six residential structures on the Hunter Landing property as "unsafe and unfit for human occupancy." Using a damage estimator provided by the Federal Emergency Management Agency, the inspector determined all but one residential structure was more than fifty percent damaged and, consequently, subject to demolition. After a review, one additional structure was found not to require demolition.

         In December, the City notified Gail Hunter, as representative of Hunter Landing,

Please be advised that the City of Council Bluffs has performed site damage assessments to the property located at attached legal description, which was inundated by flood waters during the 2011 flood event. Structure(s) which you own in the area have been identified as having substantially damaged or destroyed structures and are classified as an imminent threat to the public health. These structures are hereby ordered condemned and to be demolished in accordance with the City Code.
Please be advised the City of Council Bluffs is giving you sixty (60) days from receipt of this notice to remove all residential structures from the property (see attached photo). If the residential structures are not removed in the time specified, the City will remove them from your property and bill you . . . .

         The City demolished the condemned structures. During that process, subsurface equipment and structures were damaged or destroyed. Electrical lines were removed by the power company.

         Two appraisals were prepared for the City in anticipation of offering to buy the Hunter Landing property. The average of the two appraisals found the preflood market value was $485, 000. However, because the property was subject to four, 100-year leases and all the lessees would not voluntarily terminate their leases, the buyout did not occur.

         After the 2011 flood, the City amended its floodway ordinance. With respect to future construction, the amended ordinance stated:

If any nonconforming use or structure is destroyed by any means, including flood, it shall not be reconstructed if the cost is more than fifty (50) percent of the market value of the structure before the damage occurred, unless it is reconstructed in ...

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