HomeMy WebLinkAbout20070904 - VIII-C-2
VIII-C-2
Donald J. Fluegel *
Daniel J. Fluegel
Sean R. McCarthy
FLUEGEL LAw FIRM P.A.
Attorneys At Law
1303 South Frontage Road, Suite 5
Hastings, MN 55033-2477
Telephone 651-438-9777
Fax 651-438-9775
August 30, 2007
Mayor Paul Hicks
& City Council Members
Hastings City Hall
101 East 4th Street
Hastings, MN 55033
Re: Litigation Matter -1602 East 4h Street, Hastings
Dear Mayor and City Council Members:
The City Council authorized commencement oflitigation against the owners of property
located at 1602 East 4th Street to require the removal of a garage and any other encroachments
located within a platted, but unimproved, right-of-way over Lake Street in East Hastings. An
opportunity for settlement ofthis matter exists and the Council is being asked to authorize a
settlement.
BACKGROUND
In November, 2003 and again in March, 2005, Ken Holtz requested the City Council
vacate the East 33 feet of Lake Street which lies south of 4th Street East. Mr. Holtz was then
purchasing the above-referenced property on a Contract for Deed. There is a garage located
within the East 33 feet of the platted Right-of-Way. A photograph of the Lot and Right-of-Way
are attached hereto. That part of Lake Street is a platted but unimproved right-of-way that leads
to the wetland to the south. The City Council denied both ofthe requests by Mr. Holtz for
vacation. City Staff requested that Mr. Holtz remove the garage from the right-of-way but that
did not occur.
In June, 2006, the City Council authorized commencement oflitigation against the
owners ofthe property. As part of that process, it was determined that Mr. Holtz defaulted on
the terms of the Contract for Deed and as a result title to the property remained in James Kreig
and Barbara Hamilton. Barbara Hamilton subsequently conveyed her entire interest to James
Kreig who is the remaining owner of the property. All parties having any interest in the property
were served with a Summons and Complaint. The Complaint requested a Court Order requiring
Mr. Kreig to remove all encroachments from the Lake Street Right-of-Way. Mr. Kreig is
represented by Attorney Harvey N. Jones. Mr. Kreig served an Answer and Counterclaim
* Also admitted to practice in Wisconsin
claiming the City has abandoned the right-of-way. The Complaint was filed with the Court and a
trial is currently scheduled for November 16, 2007.
Mr. Kreig had a survey of the property and right-of-way prepared and provided a copy to
the City. The survey confirmed that the garage structure is in fact located within the Lake Street
Right of Way. The survey also revealed that a portion of the residential structure on the Kreig
property also encroaches upon the right-of-way by approximately 4 feet.
Mr. Kreig desires to sell the property and pursuant to a Purchase Agreement, has a
closing scheduled on or before September 14, 2007. As part of the litigation, our Firm recorded
a Notice of Lis Pendens which is a document intended to provide notice to all potential
purchasers and lenders ofthe pending litigation. In my opinion, it is unlikely Mr. Kreig will be
able to close on the sale of the real estate when a lender is involved without first obtaining a
release of the Notice of Lis Pendens from the City. Because the residential structure encroaches
over the boundary line of the Kreig property, Mr. Kreig is requesting written permission for
himself and all subsequent purchasers to allow the residential structure to continue to encroach
upon the right-of-way for a perpetual term or until the residence would be destroyed beyond 50%
of its value.
PROPOSAL FOR SETTLEMENT
Working with the attorneys for Mr. Kreig, I recommend the City Council consider
entering into a settlement agreement based on the following terms:
1. Mr. Kreig will agree to remove, at his expense, the garage structure currently located
within the Lake Street Right-of-Way. All debris including the cement slab would be
removed and disposed of in a legal and proper manner. The Lake Street Right-of-Way
property would be graded, seeded and stabilized in a manner satisfactory to City Staff.
All work would need to be completed prior the closing date on September 14,2007.
2. James Kreig would execute a Quit Claim Deed running in favor of the City of Hastings
conveying any interest he may have acquired in the Lake Street Right-of-Way to the City
of Hastings. I do not believe Mr. Kreig acquired any interest but, for title purposes, I
believe it is prudent to obtain a Quit Claim Deed from Mr. Kreig.
3. The City of Hastings would agree to enter into a License Agreement whereby Mr. Kreig
and his successors in title to the property at 1602 East 4th Street would be allowed to
encroach upon the Lake Street Right-of-Way for maintaining the home in its present
location. The portion ofthe Lake Street Right-of-Way subject to the License Agreement
would be strip ofland, six feet in width and 60 feet long (containing 360 square feet)
extending along the western boundary of the Kreig property. I am attaching a draft of the
proposed License Agreement. As you will see, there are provisions dealing with the
possible destruction of the residential structure, termination of the license under very
limited circumstances, indemnification of the City for any liability resulting from the
encroachment, and a requirement that if the residential structure is removed from the
Right-of-Way in the future, the then owner would be obligated to restore the Right-of-
Way to its original condition.
4. The City would dismiss its claims against Mr. Kreig, the other Defendants, and the
Subject Property; Mr. Kreig would dismiss his counterclaim against the City; the City
would file a release ofthe Notice of Lis Pendens upon the property records; and both
parties would pay their own separate costs relating to the litigation.
It is my recommendation the City enter into a settlement agreement upon these terms. A
written settlement agreement would be drafted and signed by myself on behalf of the City and by
Mr. Kreig and his attorney. Upon completion of all requirements of the settlement agreement by
both parties, the settlement agreement would be submitted to the Court with a proposed order
requesting that the current Court File be dismissed.
Very truly yours,
DAF lImp
Enclosures
LICENSE TO ENCROACH UPON RIGHT-OF-WAY
This License Agreement is made on August _, 2007, by and between the City of Hastings,
a Minnesota Municipal Corporation with a business address of 101 East 4th Street, Hastings, MN
55033 ("Licensor"), and James H. Kreig of38-26th Street, Hastings, MN 55033, his Successors and
Assigns ("Licensee").
RECITALS.
A. Licensor is a municipality owner of a platted but unimproved street right-of-way for Lake
Street as the same is depicted on the plat of Barker's Addition to Hastings on file and of
record in the office ofthe County Recorder, Dakota County, Minnesota (said street right-of-
way being hereinafter referred to as "the Lake Street Right-of-Way").
B. Licensee is the fee owner of real property in Dakota County, Minnesota, legally described as
follows:
Lots 3, 4 and that part of Lot 6 and the vacated alley in Block 15,
BARKER'S ADDITION TO HASTINGS, on file and of record in
the Office of the County Recorder, Dakota County, Minnesota, and
that part of Govemment Lot 5, Section 27, Township 115, Range
17 described as follows:
Commencing at the Northwest comer of the East 7.40 feet of said
Lot 3, Block 15, said point being marked by a Judicial Landmark
set in Court File No. 19-C1-01-6087; thence South 00 degrees 15
minutes 50 seconds East (assumed bearing) along the West line of
the East 7.40 feet of said Lot 3, Block 15 as marked by Judicial
Landmarks set in Court File No. 19-C1-01-6087, a distance of
217.49 feet, said point being marked by a Judicial Landmark set in
Court File No. 19-C4-05-6478; thence North 89 degrees 08
minutes 47 seconds West 169.11 feet to a point hereinafter known
as Point "A"; thence South 21 degrees 20 minutes 32 seconds West
26 feet, more or less, to the shore of the Lake Isabel Outlet Creek
and the point of beginning of the land to be described; thence
North 21 degrees 20 minutes 32 seconds East to said Point "A";
thence South 89 degrees 08 minutes 47 seconds East 169.11 feet;
thence North 00 degrees 15 minutes 50 seconds West 217.49 feet;
thence South 89 degrees 45 minutes 01 seconds West, along the
north line of said Lots 3 and 4, a distance of 124.16 feet to the
northwest corner of said Lot 4; thence South 00 degrees 15 minutes
33 seconds East, along the west line of said Lot 4, a distance of
122.00 feet; thence South 65 degrees 12 minutes 57 seconds West
168 feet, more or less, to the shore ofthe Lake Isabel Outlet Creek;
1
thence southeasterly, along the shore of Lake Isabel Outlet Creek,
to the point of beginning.
Containing 0.8 acres, more or less (hereinafter referred to as "the
Subject Property").
C. That constructed upon the Subject Property is a residential structure which, as situated,
encroaches approximately four feet over the western boundary line of the Subject Property
onto the Lake Street Right-of-Way.
D. The parties desire to enter into an agreement whereby Licensor will grant to Licensee
permission to allow the residential structure to encroach upon the Lake Street Right -of-Way,
subject to certain restrictions and conditions.
NOW, THEREFORE, in consideration of the mutual promises contained in this License
Agreement, the parties agree as follows:
Section 1. Grant of Licensee~ Description of Premises.
Licensor grants to Licensee a license to occupy and use for residential dwelling purposes,
subject to all of the terms and conditions of this License Agreement, the following described
property located in the City of Hastings, County of Dakota, State of Minnesota, described as follows:
See Attached Legal Description as Exhibit A
Section 2. Limitation to Described Purpose.
The above-described property may be occupied and used by Licensee solely for residential
dwelling purposes and for incidental purposes relating to such purpose for a period of perpetual
duration until such time as the license is terminated as provided in Section 7 herein.
Section 3. License Payments.
No license payments shall be required of Licensee during the term ofthis License Agreement.
Section 4. Condition of Premises Not Warranted.
Licensor does not warrant or represent that the above-described property is safe, healthful, or
suitable for the purposes for which it is permitted to be used under the terms of this License
Agreement.
2
~-~.""""""""="""-'.;';''--~'-.:''..''-'''-'.,,;,,;-,.,.
Section 5. Indemnification of Licensor.
Licensee shall indemnify and hold Licensor harmless from and against any and all liability
for personal injuries, property damage, or for loss oflife or property resulting from, or in any way
connected with, the condition or use of the premises covered by this license, or any means of ingress
or egress from such premises, except liability for personal injuries, property damages, or loss oflife
or property caused solely by the negligence of Licensor.
Section 6. Licensee Has No Interest or Estate.
Licensee agrees that Licensee does not and shall not claim at any time any interest or estate of
any kind or extent whatsoever in the above-described Lake Street Right-of-Way property of Licensor
by virtue of the rights granted under this License Agreement or Licensee's occupancy or use of the
above-described property of Licensor under this License Agreement.
Section 7. Termination.
The license shall not be terminated for any reason except the following reasons explicitly
stated herein:
A. Licensee with the consent of all mortgagees having an interest in any mortgage then
encumbering the Subject Property may terminate the license at any time, by giving
written notice to Licensor, specifying the date oftermination, such notice to be given
not less than ten days prior to the date specified in such notice for the date of
termination, and subject to the requirements of Licensee for restoration set forth
below.
B. Licensor may terminate the license upon vacation of the underlying Lake Street
Right-of-Way.
C. In the event it is determined that the residential dwelling structure currently existing
on the Subject Property be destroyed by any means to an extent of more than 50% of
the residential dwelling structure's estimated market value at the time of such
destruction, the license shall terminate as set forth in this Paragraph, and Licensee
shall restore the Lake Street Right-of-Way Property pursuant to the requirements and
obligations for restoration as set forth in Section 8 of this License Agreement.
Subsequent to any significant destruction of the residential dwelling structure,
Licensee shall obtain bids to determine the cost of repair or restoration of the
structure within 60 days of such destruction. If such repair is determined to cost
more than 50% of the dwelling structure's estimated market value at time of such
destruction, then the license shall terminate within a reasonable amount of time, not
to exceed 6 months from the time of destruction, which shall allow Licensee to first
conform to the terms of Section 8.
3
Section 8. Restoration.
In the event the residential dwelling structure is determined to be more than 50% destroyed
pursuant to Section 7 (C) herein and if Licensee elects to rebuild a structure, then Licensee agrees to
rebuild the structure wholly within the boundaries of the Subject Property and in compliance with the
then existing Zoning and Building Codes of the City of Hastings, Dakota County, State of
Minnesota. Upon termination of the license pursuant to Section 7(A) or 7(C), Licensee must, at
Licensee's sole expense, restore that portion of the Lake Street Right -of-Way subject to the license to
its condition existing prior to the date of construction of the residential dwelling on the Subject
Property which shall include, but not be limited to, removal of all debris and foundation material,
filling with appropriate material all excavated areas, and reasonable grading of the resulting surface
and seeding to prevent erosion. All such work must be completed in a good and workman like
manner to Licensor's satisfaction.
Section 9. Assienment Bv Licensee.
This License Agreement shall run with the Subject Property and shall benefit and burden the
Subject Property. Licensee may sell, assign, or transfer the Subject Property along with the rights of
this License Agreement without the consent or approval of Licensor to an individual or entity who is
a successor in title. However, any attempted assignment of this License Agreement from Licensee to
any third party, which is unrelated to and separate and apart from a sale or transfer from Licensee to
any purchaser or other successor in title to the Subject Property, shall be null and void.
Section 10. Governine Law.
This License Agreement shall be governed by, construed, and enforced in accordance with
the laws of the State of Minnesota.
Section 11. Entire Aereement
This License Agreement constitutes the entire agreement between the parties and any prior
understanding where representation of any kind proceeding the date ofthis License Agreement shall
not be binding on either party except to the extent incorporated in this License Agreement.
Section 12. Modification of Aereement
Any modification ofthis License Agreement or additional obligation assumed by either party
in connection with this License Agreement shall be binding only if evidenced in writing signed by
each party or an authorized representative of each party.
Section 13. Notices.
Any notice provided for or concerning this License Agreement shall be in writing and shall
4
be deemed sufficiently given when sent by certified or registered mail if sent to the respective
address of each party as set forth at the beginning of this License Agreement or, in the case of
assignment, to an address provided by the assigning party, by certified or registered mail, to the
opposite party, at least ten days prior to the date of such notice.
Section 14. Attornev Fees.
If any lawsuit is filed in relation to this License Agreement, the unsuccessful party in the action shall
pay to the successful party, in addition to all these sums that either party may be called on to pay, a
reasonable sum for the successful parties attorney's fees.
Dated this _ day of
,2007.
CITY OF HASTINGS, A MINNESOTA
MUNICIPAL CORPORATION
By:
Paul J. Hicks, Mayor
(SEAL)
By:
Melanie Mesko Lee,
Assistant City Administrator/City Clerk
Dated this _ day of
, 2007.
LICENSEE
By:
James H. Kreig
ACKNOWLEDGMENT
STATE OF MINNESOTA)
) ss.
COUNTY OF DAKOTA )
The foregoing instrument was acknowledged before me this _ day of ,2007 by
Paul J. Hicks and Melanie Mesko Lee the Mayor and Assistant City Administrator/City Clerk of the
City of Hastings, Minnesota.
NOTARY PUBLIC
5
ACKNOWLEDGMENT
STATE OF MINNESOTA)
) ss.
COUNTY OF DAKOTA )
The foregoing instrument was acknowledged before me this _ day of
by James H. Kreig, Licensee.
, 2007
NOTARY PUBLIC
THIS INSTRUMENT DRAFTED BY:
FLUEGEL LA W FIRM P.A.
1303 South Frontage Road, Suite #5
Hastings, MN 55033
651-438-9777
(DAN)
6
LEGAL DESCRIPTION
EXHIBIT A
A strip of land 6 feet wide and 60 feet in length lying within the Lake Street Right-of-Way for
Barker's Addition to Hastings, Dakota County, Minnesota lying immediately west of the following
described line:
Beginning at the northwest corner of Lot 4, Block 15, Barker's Addition to Hastings, Dakota County,
Minnesota, thence south 00 degrees, 15 minutes, 33 seconds east, along the west line of said Lot 4, a
distance of 60 feet and there terminating, containing 360 square feet.
[g.ZQQa)~ $175,400
?.90.gT~pl~ VaJ.~L OOl); $175,400
$2,510.34
~;0.85
Y@?CSb!JIt; 1880
PLEASE READ Q!!'iGlA!Mj:;B
This application was developed by the Dakota County Qfftk(;;..9f OJ!?
in cooperation with f'.f<~&~lnQ.$.@l:v.i~.Q,I!:Qfl~.!Jj:s;[ :f\\K!jtor and PfQP.J3[tYJ~.m~ Departments
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Dakota County Real Estate Inquiry
Dakota County Real Estate Inquiry
Data Updated 8/2412007.
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