Martens v. Metzgar

524 P.2d 666, 1974 Alas. LEXIS 299
CourtAlaska Supreme Court
DecidedJuly 12, 1974
Docket1885
StatusPublished
Cited by18 cases

This text of 524 P.2d 666 (Martens v. Metzgar) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Martens v. Metzgar, 524 P.2d 666, 1974 Alas. LEXIS 299 (Ala. 1974).

Opinion

OPINION

RABINOWITZ, Chief Justice.

This appeal involves a dispute as to who should pay the costs of utility improvements which were constructed adjacent to 12 lots in the Geneva Woods subdivision in Anchorage.

In 1967, appellant Wallace Martens was the owner of a tract of land outside the city limits of Anchorage. Martens subdivided this land into the Geneva Woods and Central City subdivisions, the former intended to be residential and the latter primarily commercial/industrial.

Martens entered into an agreement with McQuaid’s Realty whereby that realty company, or more specifically realtors Roger McQuaid and Howard Hall, would have the exclusive right to sell all properties within the two subdivisions, with Martens reserving to himself the right to also sell lots. Martens testified at trial that part of this agreement was that the prices to be quoted for the land were to be “unimproved” prices, since improvements had not yet been installed in either subdivision and the cost of such improvements was uncertain.

Appellee Edward Metzgar, who had been involved in prior real estate dealings with Howard Hall of McQuaid Realty, was informed of the availability of residential lots in the Geneva Woods subdivision by Howard Hall. On June 21, 1967, Metzgar signed an Earnest Money Receipt prepared by Hall, offering to purchase 12 lots in the Geneva Woods subdivision for lObSOO. 1 On June 28, Martens signed the agreement for the sale and purchase of the 12 lots.

At the time of the signing of the Earnest Money Receipt, the land in the Geneva Woods subdivision was in an unimproved condition. No mention was made in the written agreement of any improvements to be installed. Metzgar was permitted to testify at trial that Howard Hall had assured him at the time of the signing of the agreement that the land price included improvements that were to be installed at a later date by the subdivider. Mary Metzgar, the wife of Edward, testified that the day after execution of the earnest money agreement Howard Hall had assured her that the land price included the improvements that had not yet been installed.

On July 24, 1967, Martens submitted a petition to the Anchorage City Council, requesting annexation of the Geneva Woods and Central City subdivisions by the city of Anchorage. In this petition, Martens held himself forth as 100% owner of the land which was proposed to be annexed. On July 25, the Anchorage City Council passed Ordinance 25-67⅛ by the terms of which the Geneva Woods and Central City subdivisions were annexed into the city of Anchorage. This ordinance provided that in the annexed area Martens would construct, by competitive bid contract, interior streets, sanitary and storm sewers, and water mains. The city retained the right to approve all plans and contract prices, to inspect the actual construction, and to ap *668 prove the final total construction cost of the improvements.

Ordinance 25-67 provided that the costs of the improvements were to be paid for in the following manner:

costs of providing the interior street improvements, the sanitary sewer mains and the water mains for the 1967 platted and approved Geneva Woods and Central City subdivisions within the annexed area to be constructed by Petitioner [Martens] in this ordinance shall be paid by special assessments levied on the properties within the annexed area specially benefitted in accordance with procedures for special assessments set forth in the Code of Ordinances.
The Petitioner in the annexation petition shall, within thirty (30) days after the effective date of this ordinance, execute the necessary petitions to create the special assessment districts required by this ordinance, but if no petition is submitted within said thirty (30) day period, the City’s obligations to reimburse the Petitioner as provided in Section 3(b) of this ordinance shall become null and void and the costs and expenses of the improvements constructed or to be constructed shall be the sole responsibility of the Petitioner.

Section 4 of Ordinance 25-67 provided that the ordinance was to be in full force and effect after its first reading, passage and approval.

On September 8, 1967, Metzgar signed a document entitled “Agreement to Create Improvement and Assessment District and Special Power of Attorney.” In this document Metzgar appointed Martens as his attorney-in-fact :

for the special purpose of executing and signing petitions for the creation of special improvement districts and/or special assessment districts for Geneva Woods and Central City Subdivision, and agree that said districts may be created, so that water, sewer, street improvements, utilities, and other improvements may be constructed thereon in accordance with the ordinance of the City of Anchorage, No. 25-67.

Metzgar was allowed to testify at trial that when he signed this document he believed it was simply an authorization for Martens to enter onto his property in order to install the improvements adjacent to his 12 lots.

There is no indication in the record that a petition was ever filed with the city by Martens for the creation of assessment districts pursuant to Ordinance 25-67.

During the remainder of 1967 and through 1968 Martens proceeded to construct improvements in the two subdivisions. On December 13, 1968, Martens made written demand upon Metzgar for a proportional share of the cost of the improvements constructed in Geneva Woods. According to Martens’ calculations, the cost of the streets, water mains and sewers prorated over the 12 lots owned by Metz-gar came to $55,138. Metzgar refused to pay for the improvements, arguing that the original purchase price of the land had included the costs of these subsequently-installed improvements.

On June 10, 1969, Martens entered into a subdivision agreement with the city of Anchorage. In this agreement, Martens once again represented himself to be the possessor of an estate in fee simple in the Geneva Woods subdivision. The agreement provided that “[i]n lieu of the special assessment district procedures set forth in Ordinance Number 25-67” for recovering improvement costs, Martens would “assume and pay the city for the costs of said improvements.”

Martens testified that his purpose in signing this new agreement with the city was to bypass a 25% surcharge that the city imposed in its collection procedure involving assessment districts. By directly collecting the costs of the improvements, from the lot owners in Geneva Woods, Martens would bypass the city procedures and save the 25% surcharge. On October 19, 1970, Metzgar sold his 12 lots in Geneva Woods for $225,000.

*669 Martens subsequently filed a complaint against Metzgar seeking to recover $55,138, which sum allegedly represented Metzgar’s purported liability to pay the costs of the utilities which were installed. The case was tried before the superior court without jury.

At trial the deposition of Howard Hall, the realtor who had negotiated the sale to Metzgar of the 12 lots in Geneva Woods, was offered as evidence by Martens.

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Bluebook (online)
524 P.2d 666, 1974 Alas. LEXIS 299, Counsel Stack Legal Research, https://law.counselstack.com/opinion/martens-v-metzgar-alaska-1974.