Molgaard v. Town of Caledonia

• Decision Date: 14 December 1981
• Docket Number: No. 78-C-658.,78-C-658.
• Citation: 527 F. Supp. 1073
• Parties: Mervin M. MOLGAARD and Virginia C. Molgaard, Plaintiffs, v. The TOWN OF CALEDONIA, a body corporate; Steven Horvath, Jr.; Marcel Dandeneau; William P. Ruetz; and Richard P. Granger, Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

527 F. Supp. 1073

Mervin M. MOLGAARD and Virginia C. Molgaard, Plaintiffs, v. The TOWN OF CALEDONIA, a body corporate; Steven Horvath, Jr.; Marcel Dandeneau; William P. Ruetz; and Richard P. Granger, Defendants.

No. 78-C-658.

United States District Court, E. D. Wisconsin.

December 14, 1981.

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Charne, Glassner, Tehan, Clancy & Taitelman by F. Thomas Olson and Arthur J. Harrington, Milwaukee, Wis., for plaintiffs.

Strnad & Gossens by Paul J. Gossens, Milwaukee, Wis., for defendants.

DECISION AND ORDER

MYRON L. GORDON, District Judge.

The plaintiffs bring this action under 42 U.S.C. § 1983, alleging that the defendants violated their due process rights under the fourteenth amendment. A trial to the court on the issue of liability commenced on August 24, 1981. The parties have submitted post-trial briefs. This opinion constitutes the court's findings of fact and conclusions of law pursuant to Rule 52, Federal Rules of Civil Procedure.

I. BACKGROUND

The plaintiffs, Mervin and Virginia Molgaard, at one time owned a parcel of land in the town of Caledonia, Racine County, Wisconsin. About 1970, the Molgaards decided to construct a mobile home park at the site. They formed the Cal-Oaks Corporation to develop the park. The park itself was to be named Calvilla. A variety of plans were prepared and financing was obtained.

Section 66.058, Wis.Stat., requires that a mobile home park be regulated by the appropriate local government. Approval of a planned park is also required. To that end, Mr. Molgaard submitted detailed preliminary plans to the town of Caledonia board in July, 1970. A formal application for a mobile home park was filed on August 11, 1970; a public hearing was held on August 17, 1970. In a letter dated August 28, 1970, the town's attorney, Kenneth Hostak, stated that the town could not issue a mobile home park permit because of the preliminary nature of the plans. He proposed that the application be held in abeyance until the plaintiffs submitted further information. Mr. Hostak noted that the board would require certain conditions, including that the park be served by public sanitary sewer and that the park be completed "within a given period of time." Plaintiffs' exh. 1; defendants' exh. 109.

In August, 1970, the town board and Caledonia Utility District # 1 brought the Molgaard property within the district's boundaries. Defendants' exh. 104. The utility district had an agreement with the city of Racine that sewage from much of the district was conveyed to the Racine sewage system where it was processed. The agreement could be amended to bring in additional areas not covered, but both the town and Racine had to consent. The Calvilla site was not within the area covered by the agreement, even though after August, 1970, it was within the utility district. Thus there was no existing public sanitary sewer for the site.

The town board held a meeting on December 14, 1970, and expressed approval of the Molgaard application. Plaintiffs' exh. 3; defendants' exh. 114. Approval was given to Mr. Molgaard rather than to the Cal-Oaks Corporation, because the board felt that in the event of problems it could look to an individual more readily than to a corporation.

The town board chairman, Marshall Lee, sent Mr. Molgaard a letter dated December 17, 1970, informing him that the board had agreed to issue a "Mobile Home Park Permit" for the Calvilla project. Plaintiffs' exh. 4; defendants' exh. 115. Mr. Lee stated that the permit was subject to several enumerated requirements; condition four read: "The park must be served by public sanitary sewer." The letter also stated:

"This letter does not mean that these will be the only requirements that the Town Board will establish. Others may be worked out with you before the formal issuance of the permit."

Mr. Molgaard continued to submit plans to the board well into 1971. These plans indicated that the project would be a three-stage development that would be completed in 1972.

As required by condition seven of the Lee letter, in December, 1970, the plaintiffs through Cal-Oaks applied to Racine County for zoning approval for the project. Approval was given subject to twenty-one conditions, including that the site be served by public sewer. The zoning permit was valid for six months. Racine County zoning ordinance, § 7.048(B)(2); see defendants' exh. 134. The plaintiffs did not renew the permit after the initial six month period.

At a special meeting held on April 6, 1971, the town board reaffirmed its approval of the Calvilla project. Defendants' exh. 116. The next day, elections for the town board were held; defendants Horvath and Dandeneau were elected to the board. On May 7, 1971, Mr. Molgaard appeared before the new town board to bring it up to date. He stated that the project had been expanded somewhat. He again stated that the project would develop over a two-year period, with one additional year if necessary. Defendants' exh. 117.

In the fall of 1971, Mr. Molgaard rough-graded the site. The topsoil on seventy-five acres was removed and piled for eventual landscaping. Work ceased however, because Mr. Molgaard did not have the necessary building permits. In the spring of 1972, rains caused the exposed dirt to wash. At least one adjacent landowner complained about dirt washing onto his property. Dirt also washed onto an adjacent town road. These and other matters made the project increasingly controversial, and in October, 1972, town residents petitioned the board to rescind the earlier approval.

During this period, the town and the utility district had been negotiating with Racine to include Calvilla in the area of sewer coverage. These negotiations proceeded fitfully, because Racine wished to alter the overall arrangement, which the town refused to do. Most of the negotiations were oral; written documents were usually created only when there were difficulties. In a letter dated October 23, 1972, Mr. Hostak requested amendment of the sewer agreement to include Calvilla. Defendants' exh. 144A. However, Racine did not accede to the town's terms until August, 1978.

In a letter dated November 17, 1972, Mr. Hostak stated that the plaintiffs had to apply for a renewal of their "license." As is explained below, this determination was based on an erroneous interpretation of the relevant town ordinances. The letter concluded: "Should you fail to do so, the Town will have no recourse but to treat the license as terminated." Plaintiffs' exh. 11.

On December 11, 1971, Mr. Molgaard filed an application for renewal. Plaintiffs' exh. 12. The board held a public hearing on the application on January 10, 1973. Mr. Molgaard and his attorney, Mr. Paulson, attended. The board discussed the plaintiffs' compliance with the seven conditions stated in the Lee letter of December 17, 1970. The minutes of this meeting reveal that Mr. Hostak then raised the question of a time limit on the project, noting that there was no limit at that time. Plaintiffs' exh. 13, p. 3. Mr. Paulson stated that there was no deadline because of the uncertainty of the sewer hookup. The minutes read:

"Mr. Paulson assured that Mr. Molgaard wants to comply with any conditions which the Town Board might impose and would be receptive to a reasonable time schedule.... Mr. Paulson recognized that there has been no paper permit issued and that all that really exists at this time is a commitment by the Town Board." Id.

After the January 10th meeting, Mr. Hostak discussed the situation with Mr. Paulson. Each testified that there were no objections to the board's approach or to the imposition of reasonable deadlines for the project. On January 15, 1973, the board again met to consider a resolution prepared by Mr. Hostak which established several conditions and deadlines. Condition three of the resolution stated that a temporary plan for drainage had to be filed, "and the work required thereunder must be completed by May 1, 1973." Plaintiffs' exh. 27A. Condition five required service by "public sanitary sewer." Id. In addition, condition nine read:

"Inasmuch as more than two years have passed since a conditional permit was first approved by the Caledonia Town Board, and because the uncertainty of the development of the park has a very unsettling effect upon the neighborhood, the residents, and the Town, and because the Town Board considers it unfair to indefinitely grant conditional permits for a possible mobile home park, and because the developer knew that sewer service was not available for the site and must have known the problems involved in obtaining sewer service for the area when he first applied for a permit, the condition of public sewer availability to the park must be met no later than June 30, 1973, and the park must be completed in accord with an approved schedule within two years thereafter. In the event such conditions are not met, the permit shall become void." Id.

Mr. Molgaard was given the opportunity to present his position on the resolution. The minutes of that meeting state: "Upon completion of the reading of the conditions, Mr. Molgaard pointed out that only number nine might pose a problem." Plaintiffs' exh. 90. The resolution passed by a three to two vote; defendants Horvath and Dandeneau voted nay. Mr. Paulson did not attend this meeting.

In April, 1973, an election was held for the Caledonia town board. Defendants Ruetz and Granger were elected to the board. Messrs. Horvath and Dandeneau remained on the board.

No work was done to alleviate the drainage problem prior to the resolution deadline of May 1, 1973. The June 30th deadline for public sewer also passed without the installation of public sewer at the site. In addition, the town board received no communication on these topics from the Molgaards prior to June 30, 1973.

In a letter dated July 5, 1973, Mr. Paulson requested "a reasonable extension from the June 30th deadline...