Category Archives: Missouri economy

If the plat complies with the regulations, approval is mandatory

Posted on August 19, 2011 by Harry Styron

Real estate developers (remember them?) sometimes feel as though they’ve been pulled through a knothole backwards by the time they get a proposed subdivision plat to the stage at which it can be submitted to the local government for approval. According to several Missouri appellate opinions, if a proposed plat complies with the subdivision regulations, the local government has no choice but to approve it.

But reality is different, as shown by Alexander & Lindsey v. Platte County, an opinion issued last week by the Court of Appeals for the Western District of Missouri. The court reversed the trial court’s refusal to order that the Platte County Commission approve Alexander & Lindsey’s preliminary subdivision plat. But the appellate court noted that the county government would have additional opportunities to coerce Alexander & Lindsey into making more concessions if it attempted to go beyond the preliminary plat to the submittal of a final plat.

“Preliminary plats” are not mentioned in Missouri’s statutes that authorize counties to adopt and administer subdivision regulations. But the two-stage plat approval process is valuable for developers and planning and zoning boards. The preliminary plat approval process is often the means of obtaining approval for an entire project to be constructed in phases. Once the preliminary plat is approved, the developer can proceed with some confidence that final plats of each phase of the project will be approved when submitted. The preliminary plat approval process, sometimes done in conjunction with a rezoning application, introduces the proposed project to the public and the scrutiny of neighbors and a variety of government agencies.

During the preliminary plat approval process, the developer learns that the subdivision regulations, as written, do not represent the full scope of requirements. Often the government’s preferences for stormwater control, traffic signals, intersection improvements and other expensive issues are not expressed in the regulations. The preliminary plat application doesn’t seem to move forward, until the developer has agreed to install infrastructure that is beyond the requirements of the regulations.

When Alexander & Lindsey submitted a preliminary plat for a commercial subdivision with five lots ranging in size from 2 to 4.6 acres. Alexander & Lindsey completed a traffic study and a drainage study, which were approved by the county’s engineer and the Missouri Department of Transportation (MODOT).  The Platte County planning and zoning director found that it complied with the county regulations and recommended that the P&Z board approve it.

When the preliminary plat hearing took place before the P&Z board, several persons expressed concerns. Expressing “concerns” are a common manner of objecting to a project for reasons that are not based on regulations. A public water supply district represented that it could supply drinking water, but not in adequate volume or pressure for fire-suppression. An alderman from the nearby town of Weston was concerned that the project’s building setback line was only 75 feet, rather than 100 feet, as required by Weston’s ordinance; Weston had previously rejected the developer’s annexation petition. MODOT’s engineer stated that MODOT regulations did not require the elimination of a driveway, as suggested by a P&Z board member.

Even though the proposed preliminary plat fully complied with all regulations, the P&Z board voted it down. The developer appealed to the Platte County Commission, which was not bound to follow the P&Z board’s recommendation. The Commission upheld the P&Z board’s denial, citing four reasons:

  • lack of specification of proposed uses
  • lack of water for fire suppression and lack of sewer facilities
  • potential impact of possible sewer lagoons on neighboring properties and the public
  • potential for traffic hazards from the existence two driveways

The appellate court noted that these four objections were outside the scope of the county’s subdivision regulations. Therefore, the county’s refusal to deny the preliminary plat was arbitrary, and the trial court was instructed to order the Commission to approve the preliminary plat.

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Appellate court reverses trial court to affirm ban of deer-dogging in Missouri

Posted on July 18, 2011 by Harry Styron

Last August, Judge Robert L. Smith of Ripley County, Missouri, declared some state regulations regarding deer hunting to be unconstitutional. Those regulations prohibited hunting deer with the aid of dogs and from vehicles. On July 15, 2011, in Turner and Jones v. Missouri Dept of Conservation, the Missouri Court of Appeals for the Southern District reversed Judge Smith’s rulings, holding that Neil Turner and Bobby “Shannon” Jones lacked standing to challenge the constitutionality of these regulations, which are enforced by the Missouri Department of Conservation.

Turner was among those identified in a federal investigation of a group in Southeast Missouri who in 2008 apparently traveled in ATVs and used dogs to drive deer to hunters in tree stands within the Mark Twain National Forest. The dogs were equipped with radio transmitters. Jones was never charged, but was questioned by a Missouri Department of Conservation (MDC) investigator.

Turner and Jones persuaded Judge Smith that the regulations prohibiting hunting deer with “a motor-driven conveyance” or with dogs were unconstitutionally vague, so vague that they couldn’t tell what was prohibited. In addition, they claimed that the regulations were defective because they were too broad. The vagueness and overbreadth deprived Turner and Jones (and MDC) of notice of what was legal, depriving Turner and Jones of the due process protection afforded by the federal and state constitutions.

In a footnote, the court of appeals indicated that Judge Smith was striking a blow for hunting rights, rather than following the law, quoting his judgment before trashing it:

Upon consideration of all evidence and arguments of the parties, the trial court recognizes that hunting is an important right. In our area, hunting is not only for recreation, but it is a part of our way of life and any infringement of this right must be constitutional.

Turner and Jones had a couple of points. The language of the regulations in questions seems to encompass use of vehicles that is not intended to be prohibited (such as traveling to a hunting area) and only uses the plural term “dogs” not the singular form “dog.” At trial, the attorneys for Turner and Jones asked hypothetical questions of MDC agents about interpretation of the regulations and obtained inconsistent answers. The attorneys argued that not even MDC knew the meaning of its regulations.

But the Court of Appeals had no need to slice-and-dice the hunters’ legal arguments. The appellate court ruled that neither Turner nor Jones had the proper standing to bring the constitutional questions to court in the first place, because the vagueness in the regulations didn’t pertain to the acts that Turner was charged with, and Jones wasn’t charged with anything.  Courts do not have jurisdiction to consider hypothetical questions, so the trial court erred by ruling on the petition of Turner and Jones. In other words, Turner made no claim that the federal prosecution of him would end if the regulations were declared void. Turner’s group had more than one dog, so he couldn’t argue that the regulation was vague about whether use of one dog was prohibited.  Jones was not prosecuted and had nothing at stake.

The idea that the regulations were overbroad received even less respect from the Court of Appeals. MDC successfully argued that the concept of a regulation being overly broad only applies in the context of the First Amendment to the United States Constitution. To be constitutional, a regulation that restricts speech or the freedom of people to associate with whomever they wish must be narrowly focused on achieving a legitimate legislative purpose.

Deer-hunting regulations were formulated when deer were much more scarce than now, though seasons and limits have been loosened up considerably. Hunting deer with dogs was considered sporting in the 19th Century and earlier, but ATVs and radio telemetry weren’t a part of the tradition.

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Invest now in vacation property!

Posted on June 12, 2011 by Harry Styron

In preparing for a short talk about how to convey various kinds of vacation real estate, I arrived at the unbrilliant conclusion that people make decisions to buy vacation real estate (RV lots, lake houses, timeshares) based on what they think they want at the time of purchase, with some attention, but not enough attention, to the future. A short version of my presentation is posted here.

Many decisions to purchase vacation property are made when buyers are in a state of vacation bliss, a kind of wistfulness, that makes them less critical than when they’re on their home turf. They hope the vacation property will be a place of togetherness for family and close friends, where memories are created. Perhaps it will become a retirement home, where the grandchildren will want to visit. The sales techniques for vacation property are addressed squarely at those sentiments.

Many of those good things do happen. But vacation properties have the same drawback as all real estate investments: real estate is immobile. If you must to sell it quickly, the price must be low. You probably can’t sell it yourself, because you’re not there.

Ownership of most objects becomes undesirable. Our family situations change. Rising fortunes suggest that we should upgrade. Declining fortunes require that we sell. Seclusion that initially provided peace now brings feelings of loneliness. Or seclusion is ruined by the tasteless vacation home just built next door. The only time available to be at the vacation property is consumed with mowing and repairs.

Now is a great time to buy, because many owners need to sell. Get some advice about your purchase from people who aren’t going to make a commission if the sale goes through, whom you can confide in about your needs.

The advisors you need when considering purchasing vacation property should be able to advise you on such topics as:

  • the history of the project (subdivision, resort, condominium), including the reputation of its developer
  • subdivision restrictions and plats
  • maintenance fees
  • responsibility for road maintenance
  • recreational amenities
  • water and sewer systems
  • lake or river access
  • police and fire protection
  • homeowner association status and activities
  • distance to medical facilities
  • resale opportunities
  • nearby employment opportunities

The information that you need probably isn’t available from just one person. Take your time in making a decision. Don’t sign anything while you’re in the wistful state.

 

 

 

 

 

 

 

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Posted in Branson, Branson-Missouri, condominiums, economic development, homeowner association, Missouri, Missouri economy, Missouri law, ozark, Ozarks, Ozarks economy, table rock and tagged , . Bookmark the permalink.

Coverdell decision set aside, as Branson Landing case goes back to trial court

Posted on June 7, 2011 by Harry Styron

Using the “plain error” doctrine, rarely used in civil cases, the Court of Appeals for the Southern District of Missouri, in Empire District Electric Co. v. Coverdell, reversed and remanded a January 14, 2010 jury verdict that had awarded Douglas Coverdell and Coverdell Enterprises the north third of Branson Landing and adjacent areas. This decision is dated June 3, 2011.

The appellate decision is based on the City of Branson’s argument that the trial court made a serious mistake by allowing the jury to enter a verdict affecting the property interests of the City of Branson (and others) who did not participate in the trial.  The appellate court accepted the City’s argument that “plain error review” would be appropriate, because the court’s error was “so egregious as to ‘weaken the very foundation of the process’ and ‘seriously undermine confidence in the outcome of the case.’ ” Empire’s appellate arguments were not addressed in the decision, according to a footnote, since the court’s acceptance of the City’s arguments was sufficient to warrant reversal.

The City of Branson did not participate in the trial held in January 2010, though the City’s attorney was present in the gallery of the court room for much of the trial. In an earlier phase of the case, which took place in 2004, the City had won its effort of affirm its title to the west portion of the peninsula shared with North Beach Park. Thereafter, the City was in a monitoring mode, not aware that title to the City’s land, leased to Branson Landing, would be the subject of the trial.

The appellate court tied its decision to the words of Coverdell’s attorney, spoken to the jury, who told the jury in the January 2010 trial that the dispute with Empire concerned only the east part of the North Park Beach peninsula. Coverdell’s attorney is also quoted as telling the jury that the City “has nothing to do with this dispute between Empire and [Coverdell and Coverdell Enterprises.]”

However, the judgment that Coverdell’s attorneys submitted to the trial judge after the juy verdict included 27 acres that included the Belk store and parking lot at the between North Beach Park and the Belk store, as well as some of the area south and west of the Belk store. The trial court’s mistake was to cloud the title of the City and others who were did not participate in the 2010 trial. The owners of much of the 27 acres were not parties to the suit, which appears to be the fundamental reason for reversal of the trial court’s judgment. The appellate opinion refers to City’s statement that the City “as well as numerous other third parties, have interests in that southern tract of land such that Branson was aggrieved by the 2010 judgment.”

The appellate decision gives the City and Empire the right to amend their claims and face Coverdell in a new trial.

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Posted in adverse possession, Branson, Branson-Missouri, economic development, Missouri economy, Missouri law, Ozarks economy, real estate law, Taney County, tourism and tagged , , . Bookmark the permalink.

Pondering intentional flooding: why are we in this mess?

Posted on June 4, 2011 by Harry Styron

The random aspect of tornado damage is one thing. But people have put themselves in the paths of floodwaters. Now the Missouri River’s flood is moving downstream. Who knows what it will do to the Mississippi?

But can you blame people for building homes and businesses in the floodplains? We spent billions to control our rivers and create an economy that depends on our controlling them.

Have we lost the ability to manage our environment, or we were just kidding ourselves that our engineering ability (incorporating politically-mandated compromises) would be effective?

I ponder these things in a longish essay: Unnatural disasters: flooding from managed rivers and what to do. Of course, I don’t know what to do. Maybe you have an idea.

Please read and comment.

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Posted in agriculture, Missouri, Missouri economy, Ozarks, Ozarks economy, real estate development, table rock, water law (streams, lakes and groundwater) and tagged , , , . Bookmark the permalink.

Can a city’s utility charges be a tax? It’s a tough case to prove.

Posted on June 1, 2011 by Harry Styron

The City of Hermann provides water, sewer, natural gas, electricity and trash pickup to its residents, allowing them no choice of providers. When the City jacked up the rates and transferred the “profits” to other City accounts, some residents resented the City’s flexing of its monopoly power. They sued, claiming that the City’s governing board had sidestepped Missouri’s constitutional requirement (Article X, sections 16- 24, known as the Hancock Amendment) that tax increases be approved by voters. The court had to decide whether a utility rate increase was a disguised tax.

Here’s an overview of the Missouri Supreme Court’s 26-page opinion in Arbor Investtment Company LLC v. City of Hermann, released May 31, 2011, in which the court determined that the  City of Hermann’s utility fees were not taxes.

The Five (or Six or Seven) Factors

The Missouri Supreme Court identified five factors in the 1991 case Keller v. Marion County Ambulance District which may be applied to distinguish user fees (not requiring a vote of the people) from a tax (which requires a vote). These factors, the court pointed out, are not exhaustive, but provide a framework for analysis:

  1. When is the fee paid?
  2. Who pays the fee?
  3. Is the amount of the fee affected by the level of the service that it is for?
  4. Is the fee for a good or a service?
  5. Is the good or service one that has been historically provided by the government?

The City of Hermann’s utility charges are paid in response to monthly billing, after the services have been metered. This resembles a user charge, rather than a tax that is paid annually. Of course, it also resembles a sales tax that is paid upon a sale.

The City’s utility charges are assessed only against utility customers, unlike some kinds of taxes, which are charged without reference to who is using government services. For example, sales taxes are charged to non-resident and residents alike.

The amount of the City’s utility charges, at least above minimums and flat charges, is related directly to use, other than for Hermann’s “communications fee,” which is used to support the 911 network.

The City’s utility charges fees are imposed for goods or services, rather than being a general tax to be used however the City government chooses. This factor was not at issue in this challenge, though the plaintiffs claimed that the amount of the fees were in excess of the reasonable capital and operating costs incurred in providing the services.

The Supreme Court found the fifth factor in favor of a finding of a tax, though the City of Hermann has a long history of providing these services in Hermann. The court indicated that the City’s prohibition of any other provider offering these goods and services supports a finding that the utility charges are a tax, without explaining why, other than to state that the lack of alternatives was a part (a sixth factor?) of the analysis. Even so, a finding that the utility charges resembled a tax on this point was not enough to overcome the opposite findings on the other factors.

Borrowing from its opinion in Beatty v. Metropolitan St. Louis Sewer District, the court looked at a sixth factor, whether the payment was enforceable by imposition of a lien on the user’s property or merely by disconnection or discontinuance of the service. Without taking judicial notice of the fact that many if not most private and municipal utilities have the right to impose liens for non-payment of utility charges–in addition to disconnection– the court considered that a tax, such as a property tax, is secured by a lien, while utility providers have the right to disconnect the services to enforce payment.

The court upheld the City of Hermann’s utility rates, stating, “There simply has been no showing that the amount charged is so excessive as to not constitute the provision of a service or good in return for the amount paid.”

Municipal rates are unregulated, but does this lead to excessive rate levels?

We should be concerned with the quality of the facilities for providing our water supply, treatment and management of wastewater and stormwater, and delivery of electricity and telecommunications services. The infrastructure for these essential things was constructed in the 19th and 20th centuries. Repairing, replacing and upgrading them is enormously expensive and in many cases has been deferred.

But private and governmental providers face stiff resistance in raising revenues to confront these challenges. For many private providers, utility commissions determine the extent to which rate increases are allowed. For other providers, such as cooperatives, homeowner associations and local governments, rate increases are within the discretion of elected officials, who have wide discretion and motivations that may extend beyond the provision of utility services.

In my experience, local governments, looking at water and sewer rates, generally look around to neighboring communities and communities of the same size elsewhere in the state, hoping to stay somewhere below the top. While this strategy may be effective for helping elected officials to remain in office, it may not produce sufficient revenue for maintaining utility systems.

 

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The Corps of Engineers can only release water, not solve problems

Posted on May 22, 2011 by Harry Styron

As a lawyer, I first encountered the economic ruin and heartache from controlled discharge from a Corps’ reservoir about 25 years ago. The Corps had opened the gates at the Keystone reservoir west of Tulsa, filling the entire floodplain from Mannford, through Sand Springs and Tulsa. My client packaged fresh salads in a building on the edge of the floodplain that was not known to have ever flooded.

The Small Business Administration offered disaster loans to businesses, and my client’s only hope for survival was to accept a loan.

Unfortunately, the six-month interruption of my client’s business resulted in a loss of market share and employees. The SBA loan and insurance didn’t cover nearly all the losses. There was no revenue to cover the regular bills due in the weeks after the flood. The business had been marginally profitable, only because it had little debt. The SBA loan required the owner to sign a personal guarantee. The eventual result of the SBA loan was that my client became bankrupt (at age 70), since the business couldn’t generate enough money to service the debt and pay its other expenses.

I could find no legal basis for challenging the Corps’ management of the Keystone dam and the Arkansas River basin. The Corps operates under broad statutory authority that has many competing goals, the least of which seems to be protecting homes and businesses built in floodplains below the dams.

The Corps has no control over rainfall. In responding to rainfall, or lack of it, the Corps must respond to those who have statutory claims on impounded water for drinking, power generation, irrigation, recreation, and maintenance of the depth of water in navigation channels. The Corps is constrained by the design of its dams and the storage capacity of its reservoirs. To meet all its goals, the Corps has only one tool: controlling the rate of release of water.

Even if the Corps didn’t have governmental immunity from liability for many of its actions, persuading a judge or jury that the Corps made bad decisions would be an enormously expensive and difficult task.

The lesson is that the economic benefits and protection provided by federal and state projects are extremely uneven in application. We should make decisions based on our own situations.

If you’re a beneficiary of a specific federal program, you can probably count on whatever protection that offers, but only for now. If we expect federal, state and local governments to protect us from weather, we end up in the situation we’re already in.

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Posted in Branson, Branson-Missouri, economic development, Missouri economy, Ozarks, Ozarks economy, Taney County, water law (streams, lakes and groundwater) and tagged , . Bookmark the permalink.

Recording a real estate document gives notice, but lack of recording doesn’t?

Posted on April 13, 2011 by Harry Styron

By Missouri statute, the recording a document relating to real estate in the office of the county recorder of deeds gives notice to all of the contents of the recorded document (called an “instrument”):

Every such instrument in writing, certified and recorded in the manner herein prescribed, shall, from time of filing the same with the recorder for record, impart notice to all persons of the contents thereof and all subsequent purchasers and mortgagees shall be deemed, in law and equity, to purchase with notice.

Is lack of recording notice that something did not occur, even though it should have been recorded?

According to the Missouri Court of Appeals, in the case Warren County Concrete v. Peoples Bank & Trust and Warren County Title Company,  purchaser of real estate had no duty to check to see whether a release of a deed of trust had been recorded, even though the purchaser had provided the money to pay off the deed of trust to a title company that closed the transaction.

The purchaser claimed to have no idea that the bank had not released the deed of trust until four years later, when the purchaser received a notice that the bank was foreclosing on the property. A year later — more than five years after the purchaser closed its purchase of the property — the purchaser filed a lawsuit against the bank and the title company, alleging that they were obligated to record the release.

The bank and title company claimed that the five-year statute of limitations period had run for negligence and breach of contract, and the purchaser was out of luck. The trial court agreed.

The purchaser appealed, claiming that the statute of limitations only began to run when the purchaser became aware that he had been wronged, which would have been the date the notice of foreclosure was delivered to the purchaser.

In the appeal, the bank and the title company argued that the purchaser should have checked the recorder’s office after the closing to make sure that the release had been recorded. The appeals court reversed the trial court’s judgment, stating that the burden of searching the public records after the closing was “a duty we are unwilling to place on the purchaser.”

The Court of Appeals was probably influenced by the injustice that would result when a purchaser hires a title company to close a transaction and provides money to pay off an existing loan, but the title company fails to follow up to make sure that the lender receives the payoff and records a proper release.

The Court of Appeals’ opinion isn’t specific about the reason for the mix-up, but it looks like the bank recorded a release after receiving the payoff, but that the release described a different piece of real estate than the piece that purchaser bought.

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Contract protects self-storage company from liability for roof leak

Posted on April 5, 2011 by Harry Styron

Surely, a self-storage company would be responsible for damage to stored goods if the storage company neglected its roof, allowing water leaks.

John Easley, who represented himself, found out that the not-so-fine print left him with damaged goods, a worthless insurance policy and a big disappointment.

When Easley placed his furniture in AAA Mini Storage, he signed the usual forms that state that the warehouse owner is not responsible for damages and that the tenant is responsible for insuring the stored goods against damage.

Two years later, Easley found that rain had leaked into the storage unit and puddled against the back wall of the unit, leaving his goods damaged by moisture and mold. He made a claim on his insurance policy. The insurance adjuster said that negligent maintenance of the roof caused Easley’s loss, which was an exclusion from coverage.

Easley sued AAA Mini Storage in small claims court in Cape Girardeau, Missouri, and lost. He then took advantage of the Missouri law that allows losers in small claims court to have a new trial in associate circuit court.

This time Easley won. The judge agreed that the release of liability that Easley signed did not excuse AAA Mini Storage’s implicit obligation to maintain its roof. AAA Mini Storage appealed to the Missouri Court of Appeals.

Easley didn’t file a legal brief in the appeal, which may have been a mistake. The appellate opinion, Easley v. Gray Wolf Investments, agreed with the storage company’s legal argument:

Missouri law recognizes that a contract may eliminate liability for future negligence if the release is clear, unambiguous, unmistakable, and in conspicuous language.

The appellate judges reviewed the release of liability and found it was clearly and simply written and that its language was conspicuous, since some of it was in all capital letters.

The appellate judges also found that Easley was “a relatively sophisticated party,” because “he was building a 2,613-square-foot home with a walk-out basement.” Is this wisdom or what? Wow, a walk-out basement!

Not all releases of future liability are enforceable. Lawyers, for example, are prohibited by the Code of Professional Conduct from entering into contracts that release them from liability for their future negligence.

According to the Court of Appeals, Missourians need to make sure that their self-storage contracts include a clause requiring the storage company to repair leaks in their roofs. If the storage company won’t agree to change its form just for you, you can haul your stuff to a different place, perhaps Illinois.

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Ozark houses: White River Valley stonework

Posted on April 4, 2011 by Harry Styron
Ozark houses: White River Valley stonework

Looking over Bull Creek, about 30 miles south of Springfield, this old house displays one of several types of stonework that appears in the houses built in the White River Valley around 100 years ago. The smooth, flat stones come from the rivers and creeks. Some people call it river rock.

 

In this view, you can see that the pattern of laying the small flat stones horizontally is occasionally broken by standing a larger stone on end. Above the cellar door (and windows and doorways not visible here), small stones are set vertically akin to what brickmasons would call a “soldier course,” sometimes arching a bit.

I visited this house with a couple of sisters whose uncle had owned it in the early 1960s. The uncle added the fireplace.

You can see several  fine examples of this type of stonework on Downing Street in Hollister, Missouri, and in a few of the older commercial buildings in downtown Branson.

 

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