Landowners v. S. Cent. Reg'l Airport Agency

• Decision Date: 24 June 2022
• Docket Number: 20-1323
• Citation: 977 N.W.2d 486
• Parties: Site A LANDOWNERS, Appellant, v. SOUTH CENTRAL REGIONAL AIRPORT AGENCY, City of Pella, and City of Oskaloosa, Appellees, and Mahaska County, Appellant. City of Pella and City of Oskaloosa, Appellees/Cross-Appellants, v. Mahaska County, Appellant/Cross-Appellee.
• Court: Iowa Supreme Court

977 N.W.2d 486

Site A LANDOWNERS, Appellant,
v.
SOUTH CENTRAL REGIONAL AIRPORT AGENCY, City of Pella, and City of Oskaloosa, Appellees,
and
Mahaska County, Appellant.

City of Pella and City of Oskaloosa, Appellees/Cross-Appellants,
v.
Mahaska County, Appellant/Cross-Appellee.

No. 20-1323

Supreme Court of Iowa.

Submitted January 20, 2022
Filed June 24, 2022

Tyler M. Smith (argued) of Smith Law Firm, PLC, Altoona, for appellant Site A Landowners.

Michael R. Reck (argued), Charles F. Becker, Kelsey J. Knowles, and Joseph H. Lubben of Belin McCormick, P.C., Des Moines, for appellant/cross-appellee Mahaska County.

Mark Weinhardt (argued) of the Weinhardt Law Firm, Des Moines, and Jason C. Palmer and Benjamin R. Erickson (until withdrawal) of Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des Moines, for appellees/cross-appellants City of Pella and City of Oskaloosa.

Amy Beattie of Brick Gentry P.C., West Des Moines, and David T. Bower of Nyemaster Goode, P.C., Des Moines, for appellee South Central Regional Airport Agency.

McDonald, J., delivered the opinion of the court, in which all participating justices joined. Appel, J., filed a concurrence. Mansfield and McDermott, JJ., took no part in the consideration or decision of the case.

McDONALD, Justice.

Two cities and a county signed an agreement to jointly create an airport authority that would build and operate a new regional airport. Landowners at the site of the proposed airport objected to the plan, and

977 N.W.2d 490

a newly-elected slate of county supervisors opposed to the project sought to extricate the county from the airport authority. The cities filed suit to enforce the county's obligations under the airport authority agreement. The landowners filed a separate suit against both the cities and the county to have the airport authority declared illegal and prevent their land from being acquired for the airport by eminent domain. The district court granted summary judgment in favor of the cities and against the county and landowners. This consolidated appeal follows.

I.

The complicated procedural history of this case begins a decade ago, but the material facts are not in dispute. In 2012, the cities of Oskaloosa and Pella (Cities) along with Mahaska County (County) entered into an agreement to create the South Central Regional Airport Agency (SCRAA). Oskaloosa is located in Mahaska County, while Pella is located in neighboring Marion County. Both cities currently operate their own municipal airports that have become inadequate for their communities’ needs, so a new regional airport to be built and operated by the SCRAA and located in rural Mahaska County, midway between the Cities, was deemed the preferred solution.

The SCRAA was established pursuant to a joint powers agreement authorized by Iowa Code chapter 28E. That agreement is referred to throughout this opinion as the "28E Agreement." Iowa Code chapter 28E allows state agencies (including local units of government) "to provide joint services and facilities with other agencies and to cooperate in other ways of mutual advantage." Iowa Code § 28E.1 (2017). The stated purpose of the 28E Agreement is to provide for the "joint acquisition, construction, equipping, use and operation" of the new regional airport. The SCRAA is governed by a six-member board of directors. Three members are appointed by Pella, two members are appointed by Oskaloosa, and one member is appointed by Mahaska County. Under the 28E Agreement, any costs to construct the airport that are not otherwise funded by the federal government are to be split evenly between the Cities. The County is not responsible for financing construction of the airport.

The Cities explicitly assert that the County's participation in the SCRAA is necessary for the success of the enterprise. This is because, according to the Cities, they lack the governmental powers necessary to build the airport on their own. The Cities state that to successfully build the airport, they must rely on the County's "regulatory and legislative authority over ... zoning, road relocations, and issuing building permits," as well as the County's power of eminent domain over land in unincorporated Mahaska County where the airport is to be located. To that end, Article X, section 1 of the 28E Agreement allows the SCRAA to either "bring an action in eminent domain in its own name" or to "request a Party to bring such action, which the Party shall then do." Article XII, section 1 of the 28E Agreement requires each party to "cooperate in good faith" with the SCRAA board and the other parties and requires each party to "use its best efforts to carry out the provisions" of the 28E Agreement. The same provision says the Cities and the County must work "in good faith to resolve road relocations which may be required."

In another key provision, Article XI of the 28E Agreement says that a party may not amend or terminate the Agreement without "the approval of the governing Boards of each Party." This means a party may not unilaterally withdraw from the SCRAA. Absent the consent of the Cities,

977 N.W.2d 491

the County must remain a party "for the life of the Airport Facility." Michael Schrock, Jr., Oskaloosa's city manager, testified that the parties’ goal in drafting this provision was "to create a binding and long-lasting agreement that could withstand political changes within the communities." When asked, Schrock agreed that the parties’ intent was to create an entity to govern the airport that would have "certainty and some binding nature for future governmental bodies." The Federal Aviation Administration (FAA) apparently required such certainty as to the long-term cohesiveness and viability of the SCRAA before it would consider funding the project. An FAA representative wrote to Schrock in 2013 that it was "not prudent" for the agency to fund an airport project unless it was "assured that the sponsor has the means and ability to see a project to completion."

Despite initially agreeing to the terms of the 28E Agreement, the County's participation in the SCRAA proved controversial among members of the public. In 2013, the County's board of supervisors passed a resolution that sought to strike the portion of Article X, section 1 of 28E Agreement that permits the SCRAA to either "bring an action in eminent domain in its own name or ... request a Party to bring such action, which the Party shall then do." The proposed amendment would still have allowed the SCRAA to acquire property by means other than eminent domain. After reviewing the proposed amendment, an FAA representative stated it was "unlikely that a new airport could be constructed without the use of eminent domain." Neither the city councils of Oskaloosa nor Pella approved of the amendment, so it was not incorporated into the 28E Agreement.

Also in 2013, the SCRAA board approved a site for the airport known as "Site A." Site A is located in unincorporated Mahaska County, northwest of the city of Oskaloosa. The site plan called for the airport's primary runway to extend through an existing road, 220th Street. A Mahaska County engineer wrote to the SCRAA board in 2013, stating the County would disconnect 220th Street to accommodate construction of the airport, pending favorable environmental reviews. A group of landowners at the proposed site formed an unincorporated nonprofit organization, known as "Site A Landowners" (Landowners), which opposed the airport project. The Landowners contended that Site A was located on "prime farmland" and argued the proposed airport site should be rejected on this basis. Despite this opposition, the SCRAA acquired a parcel of land within Site A using eminent domain in 2020.

A new slate of county supervisors who opposed the airport project and the County's involvement in the SCRAA took office in 2017. In January and again in June of 2017, the board of supervisors voted to amend the 28E Agreement to remove the County as a party. Since neither Oskaloosa nor Pella agreed to the proposed amendments, they failed according to the terms of the 28E Agreement.

The Cities filed suit against the County in response to the County's attempts to withdraw from the 28E Agreement. The Cities’ complaint sought declaratory judgment that the 28E Agreement was valid and enforceable and sought specific performance of the County's obligations under the Agreement. The County answered the Cities’ claims and asserted various affirmative defenses, including that the County's entry into the 28E Agreement violated the Iowa Constitution. The County also brought a counterclaim alleging the Cities breached the 28E Agreement by requiring the County to close 220th Street. The

977 N.W.2d 492

County contended this violated the portion of the 28E Agreement that requires the Cities to "work with Mahaska County in good faith to resolve road relocations " since closing a street is different from relocating it. (Emphasis added.)

The district court granted the Cities’ motion for summary judgment on its claims against the County. The court found the 28E Agreement was valid and binding on the County, and it held the Cities could pursue the remedies provided in the Agreement, including specific performance of the County's obligations. However, the district court denied the Cities’ motion for summary judgment on the County's breach of contract counterclaim, finding that questions of fact made summary judgment inappropriate. The County appealed the Cities’ summary judgment win to this court, but we denied the appeal as interlocutory since the counterclaim remained pending.

After the Cities’ motion for summary judgment was granted and while the case was still pending in the district court, the Cities filed a motion for change of venue pursuant to Iowa Rule of Civil Procedure 1.801(1). That rule allows a party to request a change of venue if "the county where the case would be tried is a party, the motion is by an adverse party, the issue is triable...