While a few such factories exist and a new one will come to the Ozarks once in a while, I’m doubtful that a policy directed at reeling in these factories should be a major part of an economic development strategy.

In his very brief essay, “Fetish for making things ignore real work,” John Kay breaks down the purchase price of an iPhone, which (ignoring the carrier subsidy, or what Verizon or ATT discounts it to you to get you to sign a contract) is about $700. He says the valuable parts–the camera and flash drive, not likely to be made by Ozarks labor–account for about $200. The assembly and the cheap parts amount to about $20. Most of the rest of the purchase price is returned to those brilliant people who designed the iPhone, its operating system, and its advertising and their shareholders.

Kay’s main argument is relevant to the local economic development director and chamber of commerce committee:

Where will the jobs come from in a service-based economy, manufacturing fetishists ask?

From doing here the things that cannot be done better elsewhere, either because of the particularity of the skills they require, or because these activities can only be performed close to home.

Manufacturing was once a principal source of low-skilled employment but this can no longer be true in advanced economies.

Most unskilled jobs in developed countries are necessarily in personal services. Workers in China can assemble your iPhone but they cannot serve you lunch, collect your refuse or bathe your grandmother.

If you’re wondering where in the USA the good technical jobs are, and which regions are experiencing growth, check out “The emerging technical, professional and scientific sector” by Rob Sentz. Missouri and Arkansas are losers, though the Kansas City area has significant growth.

If we want to have good jobs in the Ozarks, we have to invest our own money and energy. A big and difficult part of this challenge lies in raising expectations of our children, our schools, our civic and business organizations and our elected officials.

Otherwise, the best that many of our children can hope for is a job serving lunches, collecting refuse and bathing their elderly parents and grandparents.

Jason filed a workers’ compensation claim, which was denied because Jason failed to prove to the workers’ comp judge that his injury arose (1) out of his employment and (2) in the course of his employment. Under Missouri workers’ compensation law prior to 2005, an employee injured while on the job was not obligated to prove these two factors. Under the old law, workers’ compensation was administered under “no-fault”  system, in which the employer was usually liable unless the employer could show that the injury was not real or was not related to employment.

After the denial of Jason’s claim, he appealed to the Missouri Labor and Industrial Commission, which is a special court that hears appeals of decisions of administrative law judges in Missouri’s workers’ compensation system. The Labor and Industrial Commission reversed the administrative law judge’s decision, ruling the injury to be covered by workers’ comp. The employer then appealed to the Western District of the Missouri Court of Appeals, which issued its affirming opinion in  Pope v. Gateway to the West.

The 2005 changes to Missouri’s workers’ comp statutes took away the presumption in favor of coverage of employee injury claims. Part of the target of the “reform” was to prevent employers from paying for injuries that may have happened at work but which were not caused by the job. For instance, when an employee was walking across a parking lot and a “pop” occurred in his knee, the injury might not be covered by workers’ compensation, since it occurred in a normal life activity–walking–not as the result of a hazard or risk associated with the job.

In another situation arising after 2005, an employee was injured in a fall as she made coffee in a breakroom at work. Her medical records indicated that the employee’s shoes caused her to fall; the court held that the employee failed to prove that her injury was caused by a risk related to her employment.

The Western District framed the issue this way:

we consider whether Pope was injured because he was at work as opposed to becoming injured merely while he was at work.

The court sifted the facts that Jason presented, noting that Jason was following instructions from his supervisor to move motorcycles into the upper showroom. When he fell, he was on his way to check with his supervisor to make sure that he was done for the day. He couldn’t reach the supervisor without walking down stairs. His boots didn’t cause him to fall. His own physiology did not cause his injury. The court concluded that these facts  (and some others)

reasonably support a finding that Pope’s injury was causally connected to his work activity, i. e., a risk related to his employment as opposed to a risk to which he was equally exposed in his normal, non-employment life.

Before the 2005 amendments to the workers’ compensation statutes, the cause of Jason Pope’s injury would not have been an issue. The employer’s insurance company would have paid the same claim that it would have ended up paying, sooner though and without two appeals.

Policy should not be made on the basis of an isolated anecdote, such as this true story about Jason Pope.  As the number of similar cases accumulates, the workers’ comp insurance industry will be in a position to determine whether the 2005 reforms save money for employers and are of a general benefit to the economy. For now, there can be no question that the burden of the reforms falls on injured employees, some of them unable to work, and health care providers which are awaiting payment.

Judge Perigo did something similar in a boundary dispute case,  McLallen v. Tillman, arising on the Elk River in McDonald County, which occupies the southwest corner of Missouri. Like all streams in the Ozarks, the Elk River meanders through its floodplain, splitting and recombining, with seasonal floods shifting the arrangement of channels.

Several deeds said that the boundary of the property was a part of a quarter-section “lying North and West of Elk River.” The trial judge, taking the whole fork,  said that these deeds were not ambiguous, sustaining a motion for summary judgment.

The McLallens weren’t happy, because they thought that the eight acres lying between the north and south fork of the Elk River was theirs. Their neighbors claimed the same land. The McLallens appealed, claiming that the deed may be clear enough on its face, but that this language ignored the reality about the Elk River.

At that point, the Elk River splits into two channels, one carrying more water than the other. In 1984, at the time of one conveyance, the southern channel carried the most water. Sometime in the 1990s, the northern channel began to carry the most water. It’s safe to guess that one of the channels may even go dry during droughts.

The Missouri Court of Appeals reversed the summary judgment, sending the case back for a trial. The basis of the reversal is that the appeals court thought McLallen’s deed, while plain on its face, had a latent ambiguity, one that could be discerned from facts outside the words of the deed. The trial court should have heard evidence about which fork of the Elk River constituted its northern boundary, to determine which of two plausible interpretations of the deed would prevail.

According to an article in St. Louis Today, citing a study by the Manufacturing Institute, with results confirmed by St. Louis area businesses, thousands of manufacturing jobs are going unfilled because of lack of qualified applicants. And technical colleges have additional capacity to provide the needed training.

After World War II, manufacturers of shoes, clothing, furniture and other products moved into the small towns and cities of the Ozarks, taking advantage of a surplus of mostly non-union, low-skilled workers. Manufacturers later arranged for their products to be made in Mexico and elsewhere in Latin American, then in Asia, seeking lower labor costs and less environmental and worker-safety regulation. Most towns in the Ozarks have vacant manufacturing facilities, even though transportation systems and location with respect to markets have never been better.

Universities and colleges are everywhere, offering all kinds of courses in residence programs and at satellite campuses, with opportunities for online education for students of all ages.

Where are the students who want to learn practical mathematics and how to operate computer-controlled design and manufacturing equipment? Some of them are in the military services. Others are working in unskilled jobs, never having become aware of their own potential to learn and earn. Others are in the gray-collar world of retail and services, where hours are long and wages and benefits skimpy.

While the St. Louis Today article blames the shortage of trainees for modern manufacturing jobs on the widespread acceptance of the value of a college education–as though the college credential had value even without skills to go with it–I’d place part of the lack of interest in manufacturing on the bad experience with manufacturing in the Ozarks. In the 50s, 60s, 70s and 80s, the manufacturing workers in the Ozarks experienced low wages and benefits, workplace injuries, frequent layoffs, and union-busting, ending with their abandonment (I am not forgetting that these low-wage jobs were better than no jobs and sometimes were the best jobs ever available in some communities for many people).

Manufacturers locating plants in the Ozarks asked poor communities for subsidies in the form of property tax abatement and general-obligation bond issues to for construction of facilities. Some plants polluted streams or left toxic wastes.

The manufacturing of today is much different. It’s cleaner and safer. Workers with training and skills can earn as much or more than many people who have college degrees and obtain as much or more job security. Here’s hoping that Missouri’s technical schools will be seen as the gateways to the good life, rather than an undesirable alternative to college.

Matt Fifer and Grace Calloway sketch out a scenario of an astounding escalation in creation of opportunities for building on Walmart’s success: The Boom Ahead–Why Northwest Arkansas Could be the Next Silicon Valley.

Matt’s own career exemplifies what he’s writing about. I met Matt about five years ago, when he asked me to assist him with a small real estate deal in the Table Rock Lake area. He told me that he grew up in Stone County, Missouri, and had graduated from Reeds Spring high school. He worked for Walmart several years after college and rose through the ranks. He left Walmart not long before I met him and started a business called 8th & Walton, which teaches how to do business with Walmart. That business has grown steadily.

As this essay points out, if you can do business with Walmart as a vendor or service provider, you probably have the ability to do business with other large companies. Because so many companies located in Northwest Arkansas have honed their skills in product development and marketing by learning to do business with Walmart, the next stage may be for venture capitalists to move in and provide the funding that will allow many new efforts to succeed.

The City has followed the usual path of soliciting proposals from firms with expertise in land-use planning, incorporating the disciplines of engineering, architecture and design. The City is nearing the point of awarding a contract for producing a plan with design standards that will to some extent dictate the look of this part of the Strip, much of which was heavily damaged by the February 29, 2012 tornado.

Design standards have another effect, which is to set constraints on the returns on investment in land and building. Real estate appraiser Skip Preble takes a critical look at how land-use planners often neglect to evaluate real estate markets when they formulate design standards in “How Marketing Could Boost Land Development,” published on the New Geography web magazine.

Can land-use planners can be expected to examine real estate market data and translate what they learn into practical design standards? How would a governmental body, in adopting regulations incorporating the new design standards, know whether they will work well with the realities of future real estate markets?

A one-car accident in Howell County, which sits on Missouri’s border with Arkansas about halfway across southern Missouri, resulted in a 911 call and the summoning of the Brandsville Fire Protection District (FPD) and the Missouri Highway Patrol and an ambulance. FPD personnel arrived at the scene and assisted with first aid and loading Jerry and Nina Phillips into ambulances.

FPD personnel remained at the scene for a couple of hours, providing traffic control while the wrecker loaded the Phillips’ car.

The FPD sued the Phillipses for an unpaid bill of $662. The bill was issued under the FPD’s ordinance allowing it to charge non-residents of the FPD for services. These charges are authorized by Missouri statute. When the bill wasn’t paid, the FPD sued.

Most of the story appears in the opinion of the Southern District of the Missouri Court of Appeals, Brandsville Fire Protection District v. Phillips, upholding Judge Donald Henry’s decision in Howell County Circuit Court. But you have to dig a little deeper to figure out why a firm from St. Louis would defend a small collection case in a court three hours away from St. Louis.

The St. Louis firm is Brinker & Doyen, an insurance defense firm. It seems fair to assume that the Phillipses turned the bill over to their insurance company along with their car repair bill. Because the statute authorizing fire protection districts to charges non-residents for their services had not been interpreted by an appellate court, the insurance company apparently saw this case as an opportunity to persuade the court that such charges were improper, or at least to have the court give the statute a narrow interpretation to prevent FPD’s from charging as much as they might otherwise. This situation could be multiplied by thousands, so that the $662 could be millions. The insurance company asked its attorneys to challenge the FPD’s charges.

The statute in question is subsection 12 of section 321.220, which was added by the Missouri General Assembly in 2005, which reads as follows:

The [FPD] board shall have the power to adopt an ordinance, rule, or regulation allowing the district to charge individuals who reside outside of the district, but who receive emergency services within the boundaries of the district, for the actual and reasonable cost of such services. However, such actual and reasonable costs shall not exceed one hundred dollars for responding to each fire call or alarm and two hundred fifty dollars for each hour or a proportional sum for each quarter hour spent in combating a fire or emergency.

The insurance company’s strategy didn’t work, at least for now. The loser has a right to ask the Missouri Supreme Court to take a look at the case, which will delay the Court of Appeals’ decision from becoming final.

There are many problems with rural roads in Missouri. Simple questions–such as determining who owns the road, whether it is a subject to property taxes, who has the right to use it, and who is obligated to pay for its maintenance–are often impossible to answer.

HB 1103′s provisions regarding private road maintenance change section 228.368 RSMo and add three new sections to Chapter 228 of the Revised Statutes of Missouri. This legislation is an attempt to solve the problem of nobody stepping forward to pay for road maintenance in situations in which no provision was made when the road was created. But its definition of “private road” greatly limits its applicability.

According to the new section 228.341, a “private road” means “any private road established under this chapter or any easement of access, regardless of who created, which provides a means of ingress and egress by motor vehicle for any owner or owners of residences from such homes to a public road. A public road does not include any road owned by the United States or any agency or instrumentality thereof, or the state of Missouri, or any county, municipality, political subdivision, special district, instrumentality, or agency of the state of Missouri.” Got that?

Many roads are “dedicated” to the public by the language of plats that show the roads. While dedication does not force a city or county to become responsible for maintenance of the road, a road dedicated for public use is not subject to HB 1103, even though no provision is made for its maintenance. Dedication of a road to the public by plat, under section 445.070 RSMo, vests title to the road in the county (if in an unincorporated area) or the city where the road is located, making the roadway exempt from property taxes. In some cases, such roads are simply not maintained, even though they are in residential subdivisions.

HB 1103 does not apply to “any road created by or included in any recorded plat referencing or referenced in an indenture or declaration creating an owner’s association, regardless of whether such road is designated as a common element.”

In addition, the court has no power to issue a maintenance order, according to section 228.269.1, if there is a “prior order tr written agreement for the maintenance of the private road, including covenants contained in deeds or state or local permits provided for the maintenance of a private road…”

Subtracting all the exclusions leaves only a few kinds of private roads for which a court can issue a maintenance order, at least under these new statutes :

• roads not owned by any unit of government, not shown on recorded plats providing access to public roads by residences.
• roads not owned by any unit of government, which may be shown on a recorded plat, as long as the plat doesn’t reference a road maintenance agreement or a declaration of covenants that create an owners’ association, if the roads provide access to public roads for residences.

The court’s power to issue the maintenance order for a qualifying private road also depends on the “homeowners who are benefitted by the use of an abutting private road, or who have an easement to use a private road” being unable to agreeing in writing on “a plan of maintenance for the maintenance, repair, or improvement of the private road, including the assessment and apportionment of costs for the plan of maintenance.”

If all the above criteria are met, a homeowner may petition the circuit court for an order establishing a plan of maintenance. Section 228.369.2 empowers the circuit court to apportion the costs of the plan of maintenance among owners of abutting the road and holders of easements to use the private road. The costs are to be apportioned either by:

• mutual agreement, or
• apportioned according to equal division, proportionate to residential assessed value, front footage or usage or benefit.

The court may appoint “disinterested commissioners” to determine the plan and apportionment of costs and, in the absence of the agreement of the homeowners on such a person, appoint a “supervisor” to complete the plan of maintenance. The court-0rdered plan of maintenance is to be recorded with the county recorder of deeds.

Section 228.374 keeps the parties from quickly coming back to court. The plan of maintenance can be modified by a recorded agreement signed by all the homeowners or other benefitted owners. Once in place, no court proceeding to amend, modify or restate the court-ordered plan of maintenance may be filed sooner than seven years after the entry of the prior order except upon a showing that the plan of maintenance has become obsolete due to development or division of parcels or that the existing apportionment has become inequitable.

Time will tell whether HB 1103 is helpful. While I can see that it would give a judge a clear idea that the legislature wants judges to resolve private road disputes, judges are no strangers to litigants asking them to use their equitable powers to create private road use and maintenance agreements. HB 1103 provides some much-needed guidance to lawyers and judges.

It’s a shame that HB 1103 has an exclusion for private roads shown on plats that reference declarations “creating” owners’ associations. At least in the last 15 or 20 years, developers in the Missouri Ozarks have frequently recorded declarations of subdivision covenants that mention owners’ associations and which authorize these associations to assess for and maintain private roads. Creation of an owners’ association occurs through incorporation, not mentioning an association in a declaration. Unfortunately, many owners’ associations named in declarations have never been incorporated. If incorporated, they never have meetings to adopt budgets and impose assessments. If incorporated, many of them are dissolved for failing to file annual reports with the Secretary of State. Private roads in these subdivisions are not subject to HB 1103.

HB 1103 gives the right to petition the circuit court only to owners of residences abutting the private road and those who hold easements (whether or not owners of residences) to use the private road. An owner of an abutting lot without a residence, who plans to build a residence if a road maintenance plan is in place, seems to be left out.

Suppose a farmer owns the road, but has subdivided land along a section of the road and sold it for residences. That farmer has no right to seek a plan of maintenance and is also exempt from assessment, unless his residence is abutting.

Please remember that I cannot and will not give advice to you about your specific situation unless you become my client, which involves signing an engagement agreement and paying me. If you need legal advice, consult a lawyer in your community, where you can expect confidentiality and local expertise. Please do not post information here about your circumstances, because it can be used against you later.

I felt that the words above the window were speaking directly to me.

I couldn’t help but pull over while I was on one of my noontime foraging expeditions on the east side of Ozark, Missouri.

Set up under a shade tree at the corner of Missouri highways 14 and 125 in Sparta, about eight miles east of the Ozark WalMart and US 65, Gjetta Moss has just started her second month serving delicious lunches and suppers.

I keep coming back for more. Today I had lemonade from just-squeezed lemons, which paired perfectly with a BLT and peppery coleslaw.

Despite a couple of college degrees and years of restaurant experience, Gjetta hasn’t found the job she needs. She’s trying the time-honored bootstrap method of making her way in the world, keeping the overhead low and the quality of the food as high as she can make it, served with a big smile.

Redemption notices must be sent at least 90 days before August anniversary of sale

Harpagon MO, LLC v. Bosch overrules portions of several recent decisions of the Courts of Appeal for Eastern and Western Missouri, indicating definitively that the redemption notice sent by tax certificate purchasers at 1st sales and 2nd sales must be sent at least 90 days before the one-year anniversary of the sale. This holding, based on specific statutory language, is contrary to the printed advice given by some county collectors.

For example, the Stone County Collector’s instructions recommend mailing the redemption notices between June 1 and August 1 in the year following the sale, held by statute on the fourth Monday of August. The instructions also state that the title search may not be dated more than 90 days before the date (one year after the sale) that the tax certificate purchaser is allowed to apply for a collector’s deed and that the collector’s cannot make exceptions. Under this new decision, the last date to send the redemption notice would be 90 days before the anniversary of the prior year’s sale on the fourth Monday in August–in other words, before the last week of May.

In fairness to county collectors, I should state that at least in the counties of Southwest Missouri where I practice, the customary interpretation of the 90-day redemption period is that it was triggered by the sending of the redemption notice, as affirmed by several appellate court opinions. However, in the Harpagon and Sneil decisions, the Supreme Court specifically rejected this custom, indicating that the court had “grave reservations about the implications of vesting a tax sale purchaser with the authority to set the deadline for a landowner to act to save that owner’s own property by something as subjective and uncertain as the date the purchaser decides to put in a letter.”

The content of the redemption notices need not be elaborate

Sneil, LLC v. Tybe Learning Center erases the claim that the redemption notice must tell the delinquent owner (and others entitled to receive it) of the time period in which they must redeem or lose all interest in the property. The Supreme Court’s summary states that the redemption notice must tell the recipient of the right to redeem, but:

The notice need not inform the owner of the procedures for redeeming the property or the time frame within which he must do so. If the purchaser chooses to provide notice of the date by which the owner must redeem the property, however, the purchaser must provide the correct date or risk violating the owner’s due process rights.

What if the holder of a collector’s deed didn’t give the redemption notice 90 days before the anniversary of the August sale?

This category probably includes a large chunk of those who obtained property with collector’s deeds. One who is eligible to apply for a collector’s deed must do so within two years of the purchase of the tax certificate. Fortunately for them (and their sweating and swearing lawyers), the right of a property owner to challenge a collector’s deed expires three years after the date of the recording of the collector’s deed, according to section 140.590 RSMo.

But what about those who purchased at the August 2011 sale, who followed the collector’s suggestions and didn’t send the redemption notices before the last week of May? Will the collector issue the deed anyway or simply tell the purchaser that his money has been thrown away? The purchaser of the tax certificate doesn’t get a second chance to send the redemption notice once the 90-day period in advance of the August anniversary has passed.

How did the Missouri Supreme Court do?

In these decisions the court unanimously resolved some important questions affecting property rights, protecting owners of tax-delinquent properties from forfeiting their property without due process, without placing purchasers of tax certificates in the position of giving legal advice to the recipients of redemption notices. The decisions are written clearly and are based on strict interpretation of statutes. Sneil contains a nice summary of how the procedure of tax sales and issuance of collector’s deeds is supposed to work.

In addition, these decisions point out that appellate courts and the public have been faced with trying to understand statutes that have been tweaked by the legislature dozens of times, probably in response to complaints from (a) persons who lost their properties and (b) county collectors seeking relief from angry and confused citizens. In addition, some of the legislative tweaks have been in response to appellate court decisions.

I wish these decisions would have come down several years ago, before so much expense went into all the past lower court decisions that have now been overruled and before I advised clients to follow the collectors’ instructions.