WAPS fights back: District to sue SOS


(12/10/2018)

by NATHANIEL NELSON

Winona Area Public Schools (WAPS) is headed to the Minnesota Court of Appeals in January, after the Save Our Schools (SOS) Committee challenged the closure of Madison and Rollingstone schools and the second-highest court in the state agreed to hear the case. Now, the district is fighting back, after the board voted to pursue legal action against the citizen group.

At the WAPS Board meeting on Thursday, board members voted to sue the SOS Committee in an attempt to remove a court notice placed on Madison and Rollingstone schools. According to superintendent Rich Dahman, the buyers for both schools have requested that the district work to strike the notice from the property titles, and following a threatening letter to SOS asking to remove the notice on November 13, Dahman stated the district had no other option than to pursue litigation.

“The district has requested that it be removed, and [SOS] has replied that they are not going to remove it. The only recourse we have as a district to get it removed is to file this suit,” Dahman said.

On November 13, the district’s attorney, Joseph Langel, of Ratwik, Rozak, and Maloney, sent a letter to SOS threatening legal action over the court notice of Lis Pendens attached to the Madison title. The notice simply indicates that the property is awaiting a ruling from the Court of Appeals.

“The notice serves no legitimate purpose; it only serves to cloud title … If the notice is not discharged, the district reserves the right to pursue any and all appropriate legal remedies,” the letter states.

Dahman explained that while the arguments have been set, the court has up to 90 days to rule on the case. He said that is too long for the buyers to wait, and recommended that the board move forward with legal action. The district’s legal counsel will allege that the filing of the Lis Pendens is “slander of title” and pursue litigation in district court. 

 

“We feel that we owe it to the buyers that we have to hand them a clean title, and we feel we can get it removed,” Dahman said.

On Thursday, board members voted on the suit against the citizen group, with Allison Quam casting the sole dissenting vote. “It is our duty to give them a clean title,” said vice chair Tina Lehnertz after expressing her regret at the closing of Rollingstone.

Rollingstone was sold to MC Properties for $80,000 in July, before being purchased by the city of Rollingstone for $125,000 earlier this month, though that sale has not yet been finalized. Madison was awarded earlier this fall to Andrew Brenner for $110,000 after the initial bid award to Building Value Partners, LLC, was revoked.

According to Dahman, both buyers have expressed concern over the title notice. While the notice of Lis Pendens has no effect on the actual sale of the schools, it can cause complications for new owners to make investments in the buildings.

“It could have an impact on the owner’s ability to take out a construction loan. A bank may say there is a notice on the title, and the property would be used as collateral for that loan. The lending agent might be less inclined to grant a loan. Andrew Brenner has shared that is a concern of his,” Dahman said.

The sale of Madison has faced other difficulties, as well. Following the discovery of an outstanding grant agreement from 2007 in a title search, the closing of the sale was delayed until the district received permission from the Minnesota Department of Management and Budget to sell the property. According to Dahman the state has signed off on the sale and the district is now planning a new closing date. The district was also required to repay a $40,000 grant from the state for the Madison property, bringing down the revenue of the city block to $70,000.

“The hope was that SOS would remove [the notice of Lis Pendens] voluntarily,” he said. “Our legal viewpoint is that they don’t have a legal standing to issue that Lis Pendens.”

Dahman said the district’s legal counsel will file the case as soon as possible, but it is too soon to say when the case will be heard. It is unclear if the litigation will be completed before the Court of Appeals hears oral arguments in the SOS case, but Dahman said it was the responsibility of the district to attempt to clear the title as soon as possible.

In a statement issued on Thursday night, SOS wrote: “SOS finds it incredibly disheartening that the WAPS superintendent and members of the public School Board have chosen to sue a group of concerned citizens who have acted in good faith as strong proponents of public schools.”

The removal of the court notice would not lead to the end of the court case, however –– it would only strike the notice from the titles, allowing their new owners to move forward with renovation plans.

SOS attorney Gregory Richard stated that if the Court of Appeals were to rule in the committee’s favor, the district would be forced to rescind the sale of the properties and return the sale funds to the buyers. The notice only serves to warn buyers of that possibility.

“The School Board does ultimately have the ability to sell the schools,” Richard said. “But what we wanted was a process where they were forthcoming with the public and they did what they were supposed to do and we don’t feel that we got that.”

 

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