A property rights clash between the City of Hood River and a developer tied up Hood River Circuit Court for two weeks — and both sides are claiming a victory.
On Monday a jury ended three days of deliberations by awarding the Indian Creek Development Company $385,000 for “negligence” on the part of the city. However, the 12-member panel struck down six other charges that would have cost the municipality much more.
“It didn’t matter if we prevailed on all counts as long as we got the message out that an injustice had been done,” said Charlotte Wertgen, a senior partner in the Indian Creek firm.
The City Council will decide whether to challenge the jury decision following a legal briefing about the issue during an executive session at Monday’s meeting.
“We do not feel we were negligent and, therefore, the options that are available to us under the law will be considered,” said Lynn Guenther, city manager.
Indian Creek was represented by John Shonkwiler, the attorney who successfully brought the landmark Dolan versus Tigard case before the U.S. Supreme Court. He was once again facing off with his opponent from that battle, Robert Franz. The Springfield lawyer had been hired by Northland Insurance on behalf of the city.
At issue was the 1998 approval of six commercial lots on the north side of Pacific Avenue. The subdivision application was granted without any requirement for off-site improvements. However, Shonkwiler argued, similar to the 1994 Dolan case, that the city had overstepped its constitutional authority. He said the potential sale of five lots had been thwarted when city officials told potential purchasers they could only obtain a building permit if the roadway was widened and a traffic light was installed at the intersection with 12th Street. The plaintiff’s attorney also claimed that, in addition to a regulatory “takings,” the city had unfairly allowed other developers in the area to proceed with commercial construction that was not held to the same conditions.
Franz countered that the city had not denied or restricted any use of Indian Creek’s property and, in fact, several of the lots had subsequently been sold at a profit. He also claimed the city had upheld its responsibility to ensure that development of that corridor did not create traffic problems for other community members.
After reviewing more than 2,000 pages of documentation, the jury agreed with Franz’ assertion that there was not enough proof to support the charges of civil rights violations. However, they upheld Shonkwiler’s argument that the city was wrong to recommend that Wertgen spend time convincing other property owners to form a Local Improvement District so funding could be pooled — when they subsequently refused to move ahead with that plan.
“The city truly does commend the jury for their deliberations and hard work at revealing the facts and coming to the decision they did,” Guenther said.
Wertgen said Indian Creek does not plan to file any further appeals. She said the company will use the money to offset other development fees levied by the city, including $66,000 for infrastructure and a share of the $400,000 used for intersection improvements. However, Wertgen said if the city does decide to proceed with further court action, Shonkwiler will be called back into the fight.
“The reason we sued to begin with was to show that you can’t treat people differently, you can’t do things like this,” she said.
Guenther described the lawsuit as a “good learning tool” and said the city plans to incorporate that lesson proactively to avoid future “misunderstandings.”
The Indian Creek lawsuit is the second major court action faced by the city this year. In March, the City Council acted on the advice of legal counsel and settled out of court with the contractor hired to renovate its wastewater treatment plant.
Stellar J. Corporation of Woodland, Wash., agreed to accept $92,000 on its claim for unpaid wages. The company had originally asked $183,560 for delays brought by “incomplete and/or deficient work plans.” City officials decided to make the settlement offer after receiving a legal opinion that a jury was likely to award $72,000 of the claim — and the attorney and expert witness fees could mount up to another $20,000.
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