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HomeMy WebLinkAboutAIRPARK VILLAGE - ODP - 16-05A - CORRESPONDENCE - LEGAL NOTICEM dy I; I I �•ut u { I ! I (I q r f e C �L\JM / / �` / / / / .,`Y � I •r�ER-@-"ter r Ri / V/ 1 ��,VLIS �0!'�16+ .._, i✓ If.�'1.� .,e,. „w,,., r ��.rr-.� � Cn, �Ih s 4 Lu Qi Ckf Ae if EXHIBIT 3 _ a. x CERTIFICATE OF MAILING This is to certify that on the _ day of March, 2008, a true and correct copy of the above and foregoing Order was delivered to the attorney of record and parties appearing pro se in the following manner: For counsel in Fort Collins who have agreed to such procedure, by placing said copy in the attorney pick up files located in the Larimer County Justice Center, 201 LaPorte Avenue, Suite 100, Fort Collins, Colorado. For all other counsel and/or parties appearing pro .re by efiling said copy through Courtlink. cc: D. Dean, Esq. R. Brandes, Esq. D. Konkel, Esq. M. Schlueter, Esq. J. Fonfara, Esq. D. Alexander, Esq. 9 The Lobato court noted that the current owner of the mountain property involved in that case had received record notice of the claimants' assertions from a number of documents in the chain of title. The Shalimar court noted that the purchaser of the golf course project from the original developer had notice of the representations made to individual lot owners by the original developer. Section 7.14 of the Restatement sets forth a rule that a purchaser of land subject to an easement arising by estoppel shall be bound by the easement unless the state recording statute explicitly exempts a purchaser without record notice of an estoppel claim. Here, AVL did not enter into any contract with the Plaintiffs or Counter -defendants. AVL did, however, purchase the Airport Land with either actual or imputed knowledge that an airport was being operated upon it, because the leaseback of the airport apparently began as of closing. See Gilpin Investment Co. tip. Blake, 712 P.2d 1051 (Colo. App. 1985). AVL also had record notice, from the 1976 Agreement, that a significant number of industrial lot owners were interested in using the taxiways and runways and had been granted access to them. The Court is not aware of any Colorado case that applies Colorado's recording statute in a manner that would exempt or protect AVL from an easement by estoppel claim. Termination: As noted above, Plaintiffs do not claim that CAA or AVL must operate a public airport on the Airport Land. The Court is uncertain whether the FAA or any other regulatory body would prohibit Plaintiffs and Counter -defendants from utilizing the taxiways and runways on the Airport Land for takeoffs and landings even if an casement by estoppel is established. For purposes of the summary judgment motion, the Court notes that no such allegation has been made or proven. CONCLUSION AND ORDER: For the reasons set forth above the motion for summaryjudgment is denied. DATED this `,a _ day of March, 2008. BY THE COURT: Dave Williams, District Court Judge 8 Margolin, cited by AVL, involved an agreement between a railroad and a bank that owned a building near one of the railroad's stations; for construction and maintenance of a footbridge connecting the two structures. The agreement was entered into in 1901. The railway station was closed on April 27, 1952, at which time it and the footbridge were razed. The bank complained that it had incurred expenses to specially design its building, and to close up the wall and reconfigure the now unnecessary stairway inside its building into offices. The bank also claimed damages for depreciation in the market value of its building. The Pennsylvania court found that the parties' rights were fully defined in the 1901 agreement, which simply did not bind the railroad to maintain a footbridge forever. Margolin is not controlling in the present case, because no elements of estoppel were involved in Margolin. The railroad had never stated that the bank would have permanent use of the footbridge. The Court also reviewed the Pyramid Development, Kearne & Son, Andersen, and Hackman cases cited by AVL in its initial memorandum. None of them involved the representation/change of position/rightful reliance elements of estoppel. Shalimar, on the other hand, appears closely analogous on its facts to the circumstances alleged by Plaintiffs. In that case, the developer of a golf course orally represented to residential lot purchasers that a golf course was subject to restrictions that would ensure its existence as a golf course until 2025; sales brochures stated that all residents would have access to golf club memberships; higher prices were charged for lots on the golf course; and restrictions on residential lots provided special setbacks from the golf course and prohibited obstructions of the view of the golf course. The golf course operated from 1961 until 1979. In fact, no restrictions on the golf course property itself had been recorded. The Arizona court imposed a requirement, by estoppel and by part performance under the statute of frauds, that the land remain as a golf course. The Court is aware that Shalimar is based upon the second prong of the Restatement's standards for an easement by estoppel, while Lobato referred to the first prong. Such distinction is not significant in this analysis The representations alleged here are sufficiently significant that the Court should not find as a matter of law that reliance by Plaintiffs was unjustified. %/ they believed that the permission would not be revoked_ Robert Tipton and Elliott J. Ray, who served on the original CAA board of directors (Mr. Tipton was also the manager of the airport from 1980 to 1986) stated by affidavit that they personally sold industrial lots and represented to purchasers that they would be entitled to perpetual access and use of the airport taxiways and runways because the airport was a "permanent amenity" for the lots. Each stated that he does not recall any conversation or representation that a right to revoke such use had ever been reserved. It appears likely that Plaintiffs and Counter -defendants may demonstrate that they changed positions in reliance on such representations by purchasing lots at the Fort Collins airport location, rather than elsewhere; by improving their lots for access by airplanes; by building hanger or other aviation -related facilities and taxiways on their lots; and (perhaps) by showing that they paid a premium for the airport access. it will apparently also be shown that CAA established a "perpetual access permit" and charged fees for it. The perpetual access permit was treated as an item of property. For example, on October 30, 1991 the price stood at $3,000 but was to be increased to $4,000 as of January 1, 1992. CAA recognized, and promoted, the fact that a perpetual access permit stayed with the lot to which it was designated, as transferable property. Perhaps the most hotly contested issue will be whether owners changed positions in reasonable reliance on a belief that permission to use the airport would not be revoked. As the Restatement notes, the finder of fact (a jury, here) must take into account a number of factors including, but not limited to, the nature and timing of any representations that were made; the sophistication of the purchasers; the "complexity" of the transaction; how intertwined the representations were with the transaction's overall purpose; the fact that these were commercial transactions (for which the standard of rightful reliance should ordinarily be higher than in a residential transaction); and any other factors affecting the reasonableness of the expectation that the Airport Land would always be available for use. In proper cases, courts may determine as a matter of law that claimants had no right to rely on such representations. Here the Court sought guidance on that issue from Lobato and from Margolin v. Pennsylvania Railroad Company, 168 A.2d 320 (Pa. 1961) and Shalimar Association v. D.O.C. Enters, 688 P.2d 682 (Az. App_ 1984). 6 Colorado recognizes that easement rights may arise by estoppel. See Lobato v. Taylor, 71 P.3d 938 (Colo. 2002), particularly at page 955. As noted in Lobato, the elements of an easement created by estoppel are well set forth in paragraph 2.10 of Restatement of the Law of Property (Third), Servitudes: If injustice can be avoided only by establishment of a servitude, the owner or occupier of land is estopped to deny the existence of a servitude burdening the land when: (1) the owner or occupier permitted another to use that land under circumstances in which it was reasonable to foresee that the user would substantially change position believing that the permission would not be revoked, and the user did substantially change position in reasonable reliance on that belief; or (2) the owner or occupier represented that the land was burdened by a servitude under circumstances in which it was reasonable to foresee that the person to whom the representation was made would substantially change position on the basis of that representation, and the person did substantially change position in reasonable reliance on that representation. As the Restatement notes, courts should be very cautious in establishing servitudes on the basis of estoppel because they tend to penalize neighborly cooperation and they undercut the policies encouraging the use of written documents for land transactions. The establishment of an easement must be necessary to avoid injustice. If restitution or eminent domain provides sufficient remedy, the Court should ordinarily avoid establishing an easement by estoppel. The same rule applies if damages will be sufficient. The Court has considered such cautions in the context of this litigation. From the information available at this early stage, it appears that Plaintiffs may be able to demonstrate that an injustice would occur if the servitude is not imposed and that restitution would likely be insufficient and eminent domain unavailable. The Restatement also cautions courts to carefully consider the comments regarding the statute of frauds that the Restatement sets forth relative to its section 2.9. The essence of such comments is that oral evidence relative to an easement claim should be clear and convincing and the claimant's reliance should similarly be substantial. Such comments should be taken into account, but do not change the analysis of this motion. Plaintiffs referenced numerous items of proof that CAA permitted the Plaintiffs and Counter -defendants to use the Airport Land under circumstances under which it was reasonably foreseeable that the lot purchasers and occupiers would substantially change position because 5 the Community Airpark taxiways, runways, and other publicly used facilities now owned or hereafter acquired by Community over and across the property more particularly diagramed on exhibit 1 attached hereto and incorporated by reference herein." Such map shows Tract D, the Industrial Park, and two access taxiways across Tract D. CAA obligated itself to construct a low speed taxiway twenty feet wide and about 1,350 long, parallel to the rear boundary lines of lots 94-107. To allow planes coming from the Industrial Park to reach the low speed taxiway, the Agreement provides for two access points, one running north from the northwest comer of lot 107 and the other running north from the northeast comer of lot 94. These two taxiways are designated the "north access" and the "south access" on the map. The Agreement specifies that the developer will have the right to grant "one free plane" privileges to the purchasers of 16 of the 19 lots (94-112) primarily involved. This litigation does not involve interpretation of such access easements rights; instead, the issue is whether such easement rights have terminated because conditions have arisen that make it impossible to accomplish the purposes for which the easement was created. AVL and CAA point out that the privately owned, public airport previously operated on the Airport Land was closed on October 31, 2006. The affidavits of Sharone Mekelburg and Lloyd Goff state that the airport was closed in accordance with FAA regulations; large "X's" have been painted on the runways; and the runways have not since been used for takeoffs or landings, to their knowledge. Plaintiffs respond, and the Court agrees, that the issue is not whether AVL or CAA is obligated to operate an airport on the Airport Land. (For that reason, CAA's motion based upon a judicial admission is denied.) The issue is whether Plaintiffs have an easement right to access the Airport Land and utilize the runways and taxiways for their own aviation purposes. That question will be addressed below. AIRPORT LAND: Formation of Easement: Plaintiffs' seventh claim for relief is based upon estoppel, and many of the factual contentions put forward by Plaintiffs and Counter -defendants relate to such theory. 4 The two casements are interrelated, because if Plaintiffs fail to establish an easement right in the Airport Land, the Tract D easement will fail for frustration of its purpose. Similarly, if easements in the Airport Land are recognized as a result of this litigation, but due to FAA regulations or for any other reason, the Airport Land can not hereafter be utilized for takeoffs and landings by airplanes from the industrial lots, both easements will terminate clue to changed conditions/frustration of their- purposes. The Court recognizes that the separate analysis approach necessarily implies that the 1976 Agreement does not constitute a comprehensive statement or resolution of all easement issues between the parties. Because the 1976 Agreement was made several years after the airport began operating, rather than at an earlier time when it would have been customary to define the legal relationships among those persons and entities interested in an airport; involved only a limited number of lots in the Fort Collins Industrial Park (lots 94-112, with the possibility of adding lots 1 13-124) rather than including everyone then interested in the airport; and does not address, either affirmatively or negatively, whether industrial lot owners held easement rights in the Airport Land, whether by estoppel, express grant, or under any other theory, the Court is satisfied that it was not intended to be, nor does it constitute, a resolution of the easement issues relative to the Airport Land. The Court has been made generally aware of prior litigation, including a federal District Court case in 1992 and a 2001 Colorado District Court case_ Because no argument has been put forward that either of such cases addressed the easement issues now before this Court, this Court assumes that they involved issues that are not relevant to this litigation. TRACT D ANALYSIS: In the 1976 Agreement, the developer of the Fort Collins Industrial Park agreed to convey Tract D to CAA and also to place deed restrictions on the rear 25 feet of lots 94-107 (which lie closest to the airport) to prohibit the construction of buildings or utilities, except utility services or fences no more than 48 inches high. In return, the developer received certain compensation, including easement rights. The crucial language for our purposes appears in paragraph 3 "Easement Grant by Community: By these presents, Community hereby grants the Park an easement for airplane ingress and egress to 3 Park) located south or west of, and adjacent to, the airport had access to its taxiways and runways, using taxiways located in each industrial park_ The original plat for Fort Collins Industrial Park First Filing was recorded April 20, 1965. On April 3, 1967, the original plat for Fort Collins Community Airpark subdivision was recorded. The original plat included an approximately 53 acre Tract A. In 1972, this tract was divided into two parcels, a diminished Tract A ("New Tract A") and Tract B. Community Airpark Association, Inc. ("CAA") which platted the Community Airpark subdivision, sold industrial lots within the subdivision and operated a public, privately owned airport on New Tract A and Tract B until it conveyed them to AVL on June 30, 2006. On October 31, 1976, Fort Collins Industrial Park, Inc. ("FCIP") and CAA signed an agreement ("the 1976 Agreement") pursuant to which FCIP deeded Tract D to CAA. Tract D is a long, thin strip of land lying immediately south of, and adjacent to, Tract B (with some overlap with New Tract A). A map prepared in 2006 is attached. It locates Tracts D, B, and New Tract A (which appears to be misidentified on the legend as `old Tract A.") The three tracts constitute the land CAA conveyed to AVL in June, 2006. For convenience, New Tract A and Tract B will be referred to below as "the Airport Land." AVL leased the Airport Land back to CAA, which used it as an airport until October 31, 2006, when the airport was closed after due notice had been given to the FAA. ANALYSIS: In its analysis the Court will refer to certain factual matters that it expects are controversial, and will make no findings of fact, as such. This case involves both a written, express easement agreement (the 1976 Agreement, which established two taxiways across Tract D providing access to the Airport Land for the benefit of certain lots in the Industrial Park) and the possibility that Plaintiffs may be able to establish, by estoppel rather than by a written agreement, an easement to use the Airport Land for taxiways and runways. Plaintiffs' rights, if any, must be analyzed separately as to Tract D and the Airport Land. For each, distinct issues of formation and interpretation of easement rights are involved. 17 District Court Larimer County, Colorado Larimer County Justice Center 201 La Porte Avenue, Suite 100 Fort Collins, Colorado 80521-2761 (970)498-6100 JOHN C. PERNICKA, CENTURY HELICOPTERS, INC., JOHN D. CLEAVER, RAYMOND MIDDLETON, GFC INVESTMENTS, WALTER J. FRICK TRUST, and CD FASTENERS, INC., Plaintiff, V. COMMUNITY AIRPARK ASSOCIATION, INC., and AIRPARK VILLAGE, LLC, Defendant. EFILED Document CO Larimer Count• District Court 8th Filing Date: Mar 5 2008 12:OOP i MSJ Filing ID: 18864372 Review Clerk: Veronica Wolfkeil T COURT USE ONLY T Case No.: 06 CV 958 Courtroom: 4A ORDER DENYING AIRPARK VILLAGE, LLC'S SUMMARY JUDGMENT MOTION On August 31, 2007, Defendant -Counterclaimant Airpark Village, LLC ("AVL") filed a motion for summary judgment based on its contention that any easement rights held by Plaintiffs and Counter -defendants relative to the land now owned by AVL had been terminated or extinguished as a matter of law when the airport located on such land ceased operations. Afler responses and a reply were filed, the Court heard oral arguments on December 7, 2007. BACKGROUND: This litigation involves land on the northeast edge of Fort Collins that was operated as an airport Ior many years, commencing in the 1960's. During that time owners and occupiers of lots within two industrial subdivisions (Community Airpark Subdivision and Fort Collins Industrial The Law Office of DOUCLAS D. KONKEL 1405 S. College Avenue, Suite I Fort Collins, Colorado 80524 Phone: (970) 493-8484 Fax: (970) 493-8598 email: doUgkonkcl a.comcast.net April 10, 2008 Ted Shepard Chief Planner City of Fort Collins Planning, Development and Transportation Services P.O. Box 580 Fort Collins, CO 80522-0580 Re: Fort Collins Downtown Airpark Dear Mr. Shepard: I represent the plaintiffs in Larimer County District Court Case Number 06CV958, Pernicka, et al. v. Community Airpark Association, Inc. and Airpark village, LLC. Enclosed is a copy of Judge Williams' recent Court Order. My clients object to the proposed development plan to the extent it will interfere with their continued use of the airport. If you have any questions, please feel free to contact me at your convenience. Sincerely, Douglas D. Konkel DDK/kct Enclosure Cc: Peter Barnes Paul Eckman, Esq. Jennifer Kroell, Esq.