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City Council Minutes 08-25-2008 SpecialMINUTES SPECIAL MEETING - MONTICELLO CITY COUNCIL Monday August 25, 2008 - 4:30 p.m. Members Present: Clint Herbst, Wayne Mayer, Tom Perrault, Brian Stumpf and Susie Wojchouski. Members Absent: None Others Present: John Lundsten, John Gries (legal counsel for Lundsten), Glen Posusta, Stephen Conroy (legal counsel for Posusta) and City Attorney Tom Scott Jeff O'Neill summarized the history of the dispute relating to a portion of Cedar Street (formerly TH 25) vacated by the City. As part of an agreement to acquire new right-of--way for the realignment of Cedar Street the City provided a quit claim deed to John Lundsten for the vacated right-of--way and made adjustments to the proposed assessments on the Lundsten property. When MnDOT released their interest in the right-of--way to the City, the City at that point learned that MnDOT did not have fee title to the right-of--way only an easement. Since it was based on an easement the property should have reverted to the property owner(s) who provided the easement. In the dispute of the vacated right-of--way, John Lundsten stated he was promised marketable title to the vacated right-of--way which the City has not provided. Glen Posusta the adjacent property owner claims the property should have reverted back to him as the original property owner. A quiet action title initiated by one or the other of the landowners involved would have resolved the issue. Glen Posusta had indicated in earlier discussion of the dispute that he would pursue a quiet title action. However, because the property owner was in the process of selling the land and the prospective buyer did not want to wait until the quiet title action was complete the disputed parcel was deleted from the area to be sold. Both parties are requesting compensation from the City. In an earlier discussion of the land dispute, the Council had indicated that the City would consider some financial assistance in the quiet title action. The quiet title action did not proceed as Glen Posusta stated he knew that John Lundsten would oppose the quiet title action. The Council had directed that this land dispute issue come before the full Council. City Attorney Tom Scott maintains that from a strictly legal position the City position as set forth in his letter of November 8, 2007 is still intact. If there is a sense that litigation could result from the City's position and the Council wants to avert that litigation, the City could negotiate something different from the position set forth in Tom Scott's letter. Tom Scott said since the City issued a quit claim deed the City was not warranting title or indicating the City would get ownership of the right-of--way outright. Clint Herbst asked what the value was of the right-of--way the City got from John Lundsten. Tom Scott stated it was more of land exchange with consideration given in the area of special assessments. The City relinquished whatever interest they had in the parcel. The City relinquishing its interest in the parcel should not impact Glen Posusta's property. Tom Scott noted that Glen Posusta had taken the parcel out of the quiet title action. John Gries stated that Mr. Lundsten believed he was going to get title to the property. John Gries said an agreement was made and the City is trying to get out of the agreement on a technicality. Wayne Mayer asked what documentation there was to indicate that title would be given to John Lundsten. Tom Scott said there was an agreement that states John Lundsten would get a quit claim deed for the property. Tom Scott noted there was also an agreement relating to assessments against the Lundsten property. John Gries said John Lundsten had no way of knowing that the City would not get title to the land from MnDOT. Clint Herbst stated that Rick Wolfsteller screwed up on this deal because at the time the agreement was prepared the City didn't know that MnDOT did not have fee title to the parcel. Clint Herbst said Glen Posusta could have waited until a quiet title action was done but then his claim against the City would be even more. Clint Herbst felt the City should come up with some kind of settlement. Glen Posusta said the remnant parcel of land was a value to him when he was negotiating the sale of the larger parcel but now it has little value to him. Glen Posusta felt since he couldn't use it any more the property has no value to him but he wants to be made whole for what was taken from him. He stated he couldn't utilize the parcel as long as John Lundsten was opposed to the quiet title action. Glen Posusta feels the land should have been given to him. The City would have had to pay John Lundsten for the right-of--way of realigned Cedar Street if that had not given him the disputed parcel. Susie Wojchouski asked if MnDOT did not have fee title to the parcel, who did. Tom Scott said currently MnDOT acquires right-of--way by fee title but that was not always the case. When MnDOT acquires right-of--way by easement it reverts back to whomever they acquired the easement from. If MnDOT releases the easement it may not necessarily go back to the abutting property owners. It depends on who MnDOT obtained the easement from. Tom Scott said they are going under the assumption that the property would go back to abutting property owners. Because of the title issue the parcel was left out of the platting process initiated by Glen Posusta and the purchaser of the property is no longer interested in obtaining this parcel. Clint Herbst asked for suggestions. Glen Posusta said the two parcels are now combined and platted. The City vacated the right-of--way and someone owns it. It is just a question of determining who that is. Someone who has claims of ownership would have to go to court and initiate a quiet title action. Tom Scott said when the City vacated the right-of--way they no longer had interest in it so the City could not be the one to initiate the quiet title action. John Gries asked if the other parcel ofright-of--way abutting the Lundsten property had been vacated. Tom Scott indicated their investigation did not show that it had been vacated. Tom Scott reiterated that the City's quit claim to John Lundsten doesn't do anything to the title to Glen Posusta's property. Clint Herbst said regardless of who ends up with title to the property he felt one of parties in the dispute would take legal action and the City would end up in court. Clint Herbst felt the City should step up to the plate if the City made a mistake. Wayne Mayer wanted to know what mistake was made. Wayne Mayer felt by giving the quit claim deed the City wasn't transferring title just their interest in the parcel. Glen Posusta asked what John Lundsten got for giving up the realigned Cedar Street right-of--way. Wayne Mayer said he was trying to determine if the vacated right-of--way was all that John Lundsten received for the realigned Cedar Street right-of- way. John Lundsten said the City did not pay any consideration to him and he believed the consideration he was receiving was the vacated right-of--way. Wayne Mayer asked if in exchange for John Lundsten not pursuing anything on the quiet title action on this piece could the City give some consideration on his property tax. Tom Scott said the City could not make adjustments to the property tax. John Lundsten said Wayne Mayer didn't understand the urgency with which the City pursued the right-of--way needed to realign Cedar Street. With Wal-Mart and other development in the area there was a push by the City to get this done. Clint Herbst asked if the Council wanted to put a small group together to negotiate a settlement. Susie Wojchouski said if Glen Posusta has no use for the property and accepts payment in lieu of land then John Lundsten would get fee ownership of the land. If that happens Glen Posusta would give John Lundsten a quit claim deed and John Lundsten would begin a quiet title action. Brian Stumpf asked if the possibility exists that Glen Posusta would receive payment and still claim title. Tom Scott said if Glen Posusta gave a quit claim deed it may not make a difference since it is not known how much of the right of way is owned by each property owner. Tom Scott said the City cannot pay Posusta's claim and give title to John Lundsten because the City doesn't have title to give. Tom Perrault asked what can be done with the property. Tom Scott suggested Glen Posusta go forward with quiet title action and then the question of ownership would be known. Tom Scott said the City is not in the position to say it can give good title to John Lundsten. Tom Scott noted the remnant parcel was vacated but the other parcel abutting the Lundsten property has not been vacated. Clint Herbst felt Posusta should be paid and the property should be given to John Lundsten. Tom Scott said if the City wants to go that the route the City needs to find out if they can get a title binder. Tom Scott felt the City needs to research what it will take to provide John Lundsten with clear title. John Gries felt this was something that could be resolved but not today. SUSIE WOJCHOUSKI MOVED TO PROCEED WITH RESEARCHING WHETHER THE CITY CAN OBTAIN A TITLE BINDER FOR THE VACATED PARCEL WHICH WOULD SATISFY THE INTENT OF THE AGREEMENT WITH JOHN LUNDSTEN AND TO NEGOTIATE WITH GLEN POSUSTA A PRICE FOR HIS INTEREST IN THE PARCEL. TOM PERRAULT SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY. Clint Herbst adjourned the meeting. Recording Secretary ~