Legato, LLC v. City of Olathe
| Decision Date | 30 July 2021 |
| Docket Number | 122,891,122,358 |
| Citation | 491 P.3d 1285 (Table) |
| Court | Kansas Court of Appeals |
| Parties | LEGATO, LLC, Appellant, v. CITY OF OLATHE, KS; Woodbury Corporation; Great Olathe Center LLC ; and Beth Wright, Appellees. |
John M. Duggan and Andrew I. Spitsnogle, of Duggan Shadwick Doerr & Kurlbaum LLC, of Overland Park, for appellant.
Jason R. Scheiderer, Steven M. Aaron, and Betsey L. Lasister, of Dentons US LLP, of Kansas City, Missouri, for appellee Great Olathe Center, LLC.
Leslie Greathouse, Pat McInerney, Thomas Hiatt, and Madison Perry, of Spencer Fane LLP, of Kansas City, Missouri, for appellees City of Olathe and Beth Wright.
Christopher M. Grunewald and Ronald Shaver, of City of Olathe, for appellee Beth Wright.
Jere D. Sellers, of Stinson Leonard Street LLP, of Kansas City, Missouri, for appellee Woodbury Corporation.
Before Green, P.J., Schroeder, J., and Walker, S.J.
The property at issue has been the subject of multiple lawsuits between Legato, LLC (Legato) and the City of Olathe (City) since the 1980s. Legato owns property partially located in a benefit district created by the City. Legato granted the City an easement to maintain and use stormwater detention ponds on its property. A potential developer submitted preliminary site development plans to the City Planning Commission to build a mixed-use development, indicating it would use the City's easement to drain all its stormwater, potentially flooding Legato's property. Legato then sued the City, the adjacent landowner, the developer, and the City engineer, alleging 13 counts focused on the City's purported procedural violations to rezone the property and the developer's alleged intent to flood Legato's property with stormwater.
Legato now timely appeals from the district court's summary judgment ruling disposing of numerous disputes, claiming the district court improperly dismissed its claims by extrapolating answers to three questions into a sua sponte dismissal for failure to state a claim; the district court erred in failing to explain its factual and legal determinations in its summary judgment rulings; and the district court incorrectly ruled on the three summary judgment claims it did specifically address. For reasons explained below, we affirm the district court's judgment on Counts 1, 3, 5, and 6 because we find the issues are now moot. We also affirm the district court's finding on Counts 9, 12, and part of 13 as being moot. However, we reverse the district court's grant of summary judgment on Counts 4, 8,10, 12 and part of 13 where factual disputes remain. Thus, we affirm in part, reverse in part, and remand with directions.
In 1986, Legato's predecessor, Olathe Santa Fe Partnership (OSFP), purchased approximately 362.55 acres of property in Olathe, Kansas. The City later approved a benefit district comprising 241.3 acres—including some of OSFP's property—to construct streets, drainage, water lines, and sanitary sewers. As part of the Benefit District, the City was required to construct a stormwater detention system comprised of six ponds with outlet structures on one of OSFP's lots—lot 16. The City tried to levy a special assessment on the Benefit District landowners before completing the construction. The landowners sued the City for, among other things, injunctive relief prohibiting the City from prematurely levying a special assessment on the property and for inverse condemnation on about 18 acres of property taken by the City.
In 1993, the parties settled, and the City paid $150,000 in exchange for an easement on lots 16 and 27 of the Benefit District to operate the stormwater detention system. The easement agreement stated the City would construct certain stormwater detention facilities in the form of detention ponds and culverts, covering 17.91 acres, more or less, on OSFP's property. The City agreed to maintain the detention facilities by ensuring their structural and functional integrity, including removing silt, mud, and other vegetation. The parties agreed the easement agreement would run with the land.
In 1994, the landowners sued the City again, alleging the City failed to complete building the stormwater detention facilities in violation of the 1993 settlement agreement. The parties settled their dispute through a supplemental settlement agreement, and the City agreed as part of the settlement agreement to complete excavation and construction work on the detention ponds and levy the special assessment on the property owners. OSFP and other landowners within the Benefit District granted the City a permanent drainage easement on lot 16.
Later, a developer built the Great Mall of the Great Plains (Great Mall) on 105.5 acres next to OSFP's property. The Great Mall used the stormwater detention facility on lot 16 of the Benefit District. But the Great Mall ultimately failed and was demolished. The Great Olathe Center, LLC (GOC) owned the Great Mall property and contracted with Woodbury Corporation (Woodbury) to build a new development. In November 2018, Woodbury submitted a rezoning application and preliminary site development plans to the City Planning Commission for a mixed-use development called "Mentum." Mentum's preliminary stormwater management plan revealed all onsite and offsite stormwater runoff would flow into the existing detention system maintained by the City and located on lot 16. Legato still owned part of lot 16 not subject to the easement.
On January 14, 2019, the City Planning Division held a planning commission meeting regarding Woodbury's rezoning application for Mentum's mixed-use development. The planning division staff recommended approval of the rezoning application and preliminary development plans. At the meeting, Legato challenged the development's stormwater detention and requested Woodbury place the project on hold pending a proper analysis.
On February 1, 2019, Legato sent a letter to the City Council stating Legato and its predecessors never granted an easement for its ponds to serve Mentum's 105.5-acre development. Legato asserted the easement was strictly between the City and Legato's predecessors to serve the Benefit District and, by detaining stormwater runoff from the Mentum development, the ponds would regularly flood Legato's property outside the easement previously granted.
On February 5, 2019, the City Council approved Woodbury's rezoning application. The senior planner with the City Planning Division stated the rezoning ordinance would not be published until Woodbury completed purchase of the property. Legato again voiced its concern with the development's stormwater discharge plan, asserting Mentum did not have a contract right to store and discharge water on Legato's property.
In March 2019, Legato filed its petition and later filed its first amended petition in April 2019 against the City, GOC, Woodbury, and the City's engineer, Beth Wright (collectively the defendants), for nontort claims (Legato I ). Legato sought relief on 13 separate counts:
Legato voluntarily dismissed Count 11. The City moved to dismiss Counts 1 through 3, arguing Legato's claims were not ripe for judicial review because Woodbury's preliminary stormwater management plan was not final and Woodbury's rezoning application was not effective as it was not yet published. The City also argued Legato's Counts 5 through 8 should be dismissed for failure to state a claim upon which relief could be granted.
The City also filed an amended answer and affirmative defenses, counterclaims, and third-party petition in response to Legato's first amended petition. The City alleged in its counterclaims abuse of process, tortious interference with a prospective business advantage or relationship, breach of contract under both the settlement agreement and easement agreement, and sought a declaratory judgment to determine whether the City...
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