On the day Kenai Superior Court Judge Charles Huguelet imposed a deadline for the city to respond to an order to show why it’s not in contempt of court regarding its assessment of condominiums in the Kachemak Bay Title Company Building, the Homer City Council at its Monday meeting made clear it will abide by Huguelet’s January 2014 decision in Castner v. City of Homer.
“The council intends to follow the prior court ruling in the Castner case in the assessment of Mr. Castner’s condominium property,” council member David Lewis said after the council met in executive session. “The council will be considering at the March 9 meeting amending the preliminary assessment roll to correct the assessment for Mr. Castner’s condominium building.”
The amendment would charge Castner and two other Kachemak Bay Title Company Building condo owners a proportionate share of the $3,237.14 assessment. Last week, property owners, including other condo owners, began receiving a notice of a preliminary assessment for the Homer Natural Gas Special Assessment District.
However, the city doesn’t think Huguelet’s decision should apply to the rest of about 100 condo owners.
In a reply to the order-to-show-cause brief filed on Tuesday, Klinkner asked Huguelet to deny a motion by Castner that the city is not complying with Huguelet’s decision and order.
Klinkner also asked Huguelet to defer action until the council can vote on its motion to correct the assessment of the Kachemak Bay Title Company Building.
In his motion, Castner alleged the city has “instead decided to continue to impose certain special assessments on condominium units, including one owned by Castner, using a method which the decision and order ruled to be unlawful.”
In 2013, Castner, an owner of a condominium in the Kachemak Bay Title Company Building on Ben Walters Lane, challenged a city ordinance establishing how property owners would be assessed in the natural gas assessment district. The ordinance assessed property by parcel number. In Castner’s case, the city assessed the building seven times.
Castner argued the ordinance was unjust, and the assessment should have been by lot. Huguelet agreed and issued a decision in January 2014. Huguelet struck down a portion of Ordinance 13-02 requiring Castner to pay multiple assessments. In February 2014, the city announced it would not appeal Huguelet’s decision.
In the latest reply by the city, Klinkner summarized the case and quoted from Huguelet’s decision, in which the judge said, “The city’s assessment with respect to condominium owners is arbitrary and unreasonable.”
At Monday’s council meeting, Klinkner said he didn’t think the court would apply its decision to other condo owners.
“It’s my very strong view that Mr. Castner’s contempt motion with regard to the other condos would be rejected by the court,” he said.
Klinkner asserted that Huguelet’s decision only applies to Castner’s building and does not apply to other condo assessments. He said Castner lacks standing to assert the constitutional rights of others.
In his 2014 decision, Huguelet granted a motion by Castner for summary judgment “striking down that portion of City of Homer Ordinance 13-02 that requires plaintiff to pay multiple assessments for his condominium ownership.”
Klinkner quoted that phrase and emphasized the words “his condominium ownership.”
Klinkner said the court made a judicial review of a particular administrative decision and thus the ruling should apply narrowly and only to the Castner case.
However, Klinkner had written an earlier opinion in a memo last November recommending “that the city apply the same assessment method to any other condominium where more than one unit is served by a single service connection.”
The council didn’t take that advice, though. On Jan. 12, the council met in executive session to consider Klinkner’s recommendation, and then announced it would stick to the original assessment plan.
At Monday’s meeting, before going into executive session to discuss its legal strategy, the council amended a motion to meet in executive session to first discuss publicly the Castner case.
In the public discussion, council member Beau Burgess said Castner sued prematurely. He should have waited until the final assessment roll was published, Burgess said. The council considers the final assessment at its March 23 meeting and can make amendments and exemptions to the roll for such things as a lot being too steep to develop or having conservation easements. If a property owner doesn’t get an exemption, the person can then sue in Superior Court.
“This isn’t an issue of not agreeing with the judge,” Burgess said. “It’s simply an issue of sticking with the original assessment and allowing people to go through the process.”
“The typical way would be to come and appeal to the city case by case,” said council member Catriona Reynolds. “Mr. Castner didn’t do that. He went directly to the court. There was a way to disagree with the assessment.”
That misstates what he did, Castner said. In going to court, he didn’t challenge his assessment on technical grounds. He challenged the ordinance itself, saying it was unjust, Castner said. By asserting that the law was wrong, he didn’t have to go through the administrative process.
Huguelet agreed on that point. The judge said by protesting the ordinance in two public hearings, Castner had standing.
“Requiring the plaintiff to have to argue for a variance a third time in front of the Homer City Council would likely to be futile and would allow the city of Homer to continue to collect unreasonable assessments from similarly situated landowners,” Huguelet wrote in his 2014 decision.
Castner also said Huguelet’s decision would apply to other condo owners. Citing the doctrine of collateral estoppel, Castner said that similarly aggrieved parties — that is, other condo owners — also would benefit from Huguelet’s decision.
In collateral estoppel, if a court rules for one party, a party in a similar situation doesn’t have to reargue its own case in another lawsuit. Huguelet didn’t just strike down the ordinance as it applied to Castner’s condo assessment — he struck down the ordinance as it applied to all condos, Castner said.
Another condo owner, Margarida Kondak, said she was reviewing her legal options. She did say other condo owners should file written objections to the assessment roll.
“All condo owners should object on the grounds that the portion of each condo owner’s assessment should be just that: It should be equal to a percentage of their common interest,” Kondak said.
The latest round in the Castner case started when, after receiving a preliminary assessment, Castner filed a contempt of court motion because the Kachemak Bay Title Company got three, $3,237.14 assessments. On Feb. 12, Castner got an order from Huguelet to serve city officials and ask them to show cause why they should not be held in contempt of court. Castner asked that Huguelet compel interim City Manager Marvin Yoder, City Attorney Tom Klinkner and at least two Homer City Council members to appear at a hearing and explain why the city did not comply with the judge’s order. Huguelet could still order that hearing.
All property owners have until 5 p.m. March 16 to object to their assessments.
Michael Armstrong can be reached at email@example.com.