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Agri Resist Motion to DismissTHE IOWA DISTRICT COURT IN AND FOR DUBUQUE COUNTY AGRI INDUSTRIES a/k/a AMERICAN GRAIN AND RELATED INDUSTRIES Plaintiff, VS. DUBUQUE COUNTY SHERIFF, CITY OF DUBUQUE, THE ASPERMONT COMPANY, CROMPTON CORPORATION, R.E. LEWIS REFRIGERATION, INC., THE BREWERY, AMERICAN TRUST & SAVINGS BANK, THE PLASTIC CENTER, INC. D/B/A THE FISCHER COMPANIES, JOSEPH ITUBER BREWING CO., INC., GLENSHAW GLASS COMPANY AND HILLSBORO GLASS COMPANY, SDI/SCREENPRINT DESIGN, FRED EINSTEIN D/B/A 21sT CENTURY BRANDS, DUBUQUE COUNTY BOARD OF SUPERVISORS, DURRANT ENGINEERS, INC, SPECIALIZED CONCRETE SYSTEMS CO., Defendants. CIVIL NO. CVCV092537 RESISTANCE TO MOTION TO DISMISS BY DEFENDANT CITY OF DUBUQbIE PlaintiffAGRI Industries a/k/a American Grain and Related Industries, for its Resistance to the Motion to Dismiss filed by Defendant City of Dubuque, states: 1. The procedure for taking and perfecting an appeal from a condemnation award is set forth in Iowa Code Sections 6B. 18 and. 19. AGRI properly perfected its appeal. It filed its notice of Appeal on July 26, 2001, and personally served ail adverse parties, the Dubuque County Sheriff, and lienholders, if any,~ on that date also. ~ In fact, it appears, as discussed below, that there are no lienholders with any right, title or interest in the fee of the Aspermont Company, and therefore, the proceeds of the condemnation award. -1- 2. The City of Dubuque alleges that AGRI failed to serve ail the lienholders with the Notice of Appeal. Nothing more. It does not specifically identify each of the alleged lienhoIders not served nor introduce any evidence whatsoever that any particular entity not served is in fact a "lienholder" entitled to service of notice under Iowa Code Section 6B. 18. The City's general, blanket statement that AGRI has not properly served alleged lienholders is insufficient to shift the burden to AGRI to prove that it has perfected its appeal. 3. Where generally the burden is upon the appellant to establish compliance with the procedures for an appeal, that burden arises only upon a "direct attack" upon the jurisdiction of the court. See Gray v. Lukowski, 241 N.W.2d 35, 39 (Iowa 1976) ("'[W]hen a defendant, by special appearance, makes a direct attack upon the jmisdiction of the court the burden is on plaintiff to sustain the requisitejurisdiction, but once a pr/ma facia showing has been made by him the burden of going forward with the evidence is upon defendant to overcome or rebut, if possible, such prima facia case.'"); Griffel v. Northern National Gas Co., 136 N.W.2d 265, 267 (Iowa 1965) (an appeal ~om condemnation award the court held an interested party made "direct attack" upon jurisdiction of court by alleging that no notice of appeal was served on them). The City simply has not carried its initial burden to make a "direct attack" on the jurisdiction of the Court. The City's nonspecific allegation that certain unidentified entities have not been served and are lienholders, unsupported by any evidence or detail whatsoever, is insufficient to trigger AGRI's burden to make a prima facia showing of jurisdiction. 4. Significantly, the City has not alleged that either it or the Dubuque Cotmty Sheriff was not properly served with the Notice of Appeal. The City lacks standing, therefore, to challenge AGRI's appeal upon the alleged failure to serve entities other than the City or the Sheriff. See Rowen v. Lamars Mutual Insurance Co. of Iowa. 347 N.W.2d 630, 639 (Iowa 1984) (parties who have been properly served with notice of cross appeal "are in no position to complain" about plaintifl's failure to properly serve cross appeal upon another party). For this reason, as well as the City's weak challenge to this Court's jurisdiction, the City's Motion to Dismiss must be denied. 5. It should be noted that the various entities who are named as Defendants in this matter were der/ved fi.om the original notice or service list used by the City for its Application for Condemnation. AGRI has never agreed to, stipulated or conceded that any of these entities are in fact truly interested parfies, adverse parties or lienholders, as that term is used in Iowa Code Section 6B.18. AGRI does not know for certain what basis the City had for including these entities as part of its service list. AGRI has served or attempted service on these entities, not as an admission of their vatid status as lienholders or parties entitled to notice, but out of an abundance of caution. These entities were named as Defendants in this appeal for the same reason. The only entities who in fact appeared in the proceedings before the Compensation Commission were the City of Dubuque, the Dubuque County Sheriff, Crompton Corporation, the Aspermont Company and AGRI. Each of those parties has tmdisputably been served with the notice of appeal as required by the statute. 6. Notwithstanding the City's utter failure to properly raise an issue as to the jurisdiction of this Court, and without concession of any matter, whether in fact or in law, AGRI has made a prima facia case that it has properly perfected its appeal fi.om the conderrmation award. 7. First, on August I 0, 2001, AGRI filed in this matter the Returns of Service. The Returns of Service demonstrate that AGRI's Notice of Appeal was properly -3- served, as provided by the applicable rule or statute for service, on each entity identified in the Notice of AppeaI, with one exception, which will be discussed further below. These Returns of Service are sufficient to establish a prima facia showing of proper service of the Notice of Appeal upon the parties identified therein. "It is an established rule of law that the return of service on an original notice is presumed to be correct, and can be overcome only by clear and convincing evidence to the contrary." Coster v. Jensen, 218 Iowa 215,257 N.W. 303,304 (Iowa 1934). 8. The one exception is B.E.S.T. Electric Co. AGRI attempted personal service of thc Notice of Appeal upon that company at its last known address and upon thc counsel last known to represent it, without success. Attached hereto as Exhibit 1 is a duc diligence affidavit cxcanted by the process scrver, establishing an attempt was made to serve B.E.S.T. Electric on July 26, 2001~ but it is no longer in business at that location, and its last known counsel advised that he no longer represents B.E.S.T. Electric. 9. Presumably, the City will contend that B.E.S.T. Electric is a lienholder by virtue of a civil judgment entered in its favor in the Iowa District Court for Dubuque Cotmty, LACV 51294, in its favor against Defendant Dubuque Brewing and Bottling Co., entered July 22, 1998, for $40,480.06 plus interest, which remains unsatisfied. For the purpose of this resistance, AGRI does not dispute the existence of this judgment as described. However, as a matter of law, B.E.S.T. Electric, Inc. is not a "Iianholder' under Iowa Code Section 6B. 18~ that would be entitled to personal service of the Notice of Appeal, because it has no right, title or interest in or to the proceeds of thc condemnation award~ and the property in which its judgment may have given a interest -- thc Icaschold of Dubuque Bre~ving and Bottling Co. -- is no longer in existence. These two issues have been previously decided by this Court by Judgment entered January 5, -4- 2001, in the consolidated matters of B.E.S.T. Electric Inc. v. The Aspermont Company et Case No. EQCV091572, and R.E. Lewis Refrigeration, Inc. v. B.E.S.T. Electric inc. et al., Case No. EQCV091609. 10. Attached hereto as Exhibit 2 is a tree and accurate c9py of the judgments filed in these matters in the Iowa District Court of Iowa, in and for Dubuque County, on January 5, 200I. That judgment establishes the following: Dubuque Brewing and Bottling Company was the lessee of the Dubuque Star Brewery building by virtue of an assignment of a sublease fi*om a bankruptcy trustee (Exhibit 2 at 3); On July 22, 1998, B.E.S.T. Electric Inc. obtained a judgment against Dubuque Brewing and Bottling Company, only, in an action in the Iowa District Court for Dubuque County, LACV 051294, on July 22, 1998 (Exhibit 2 at 5); On November 18, 1998, Crompton, Dubuque Brewing and Bottling Co.'s lessor, provided Dubuque Brewing and Bottling with a notice of defanlt and fight to cure, but Dubuque Brewing and Bottling failed to cure the default, and its sublease was terminated (Exhibit 2 at 5); When work is performed for a lessee or sublessee, the mechanic's lien typically attaches to the leasehold interest only, and not the lessor's fee interest (Exhibit 2 at 6); B.E.S.T. Electric did not have any right, title or interest in the fee interest of the Aspermont Company in the Dubuque Star Brewery building or surrounding real estate by virtue of a mechanic's lien (Exhibit 2 at 6-8). (See also, Joint Stipulation of Facts filed August 15, 2000, attached hereto as Exhibit 3). 11. I ' ' owa Code Section 6B. 18 s reference to "lienholders" is obviously meant to identify lienholders with a right, title or interest in or to the property that was the subject of the application for condemnation. "Lienholders are, by definition, persons who hold 'a charge upon property for the payment ora specific obligation.'" Brid~nan v. Cm2w, 398 N.W.2d 167, 171 (Iowa 1986). B.E.S.T. Electhc has neither a right, title or interest in the property that was the subject of the City's application for conderrmation, and the property it may have had an interest in -- the leasehold of Dubuque Brewing and Bottling -- was lost upon termination of that company's sublease with Crompton. I2. Other than B.E.S.T. Electric, Inc., AGRI is aware of only one other entity included in the City's service list, which the City may maintain is a iienholder entitled to service under Section 6B.18. The City may allege that Dallas County Brewing Company, Inc. is a holder of a security interest in the real estate that was the subject of the condemnation proceedings. 13. AGPd did attempt to personally serve Dallas County Brewing Company, Inc. with the Notice of Appeal. However, its last known business address is abandoned, and it is no longer in business there. (See letter of Scott C. Gracias attached hereto as Exhibit 4). As established by the Returns of Service, AGRI, pursuant to substantial compliance with the applicable statute, made proper substitute service upon Dallas County Brewing Company, Inc. 14. However, Dallas County Brewing Company, Inc. is not a lienholder under Section 6B.18 entitled to notice. There is of record a financing statement filed on June 28, i996, with the Dubuque County Recorder, identifying the secured party as Dallas County Brewing Company, Inc., and the debtor as Dubuque Brewing and Bottling Co. Attached hereto as Exhibit 5 is a copy of that financing statement. Attached to the financing statement as Exhibits A and B is a list of equipment and certain described real estate, respectively. The existence of this financing statement does not establish the existence of a valid security interest in the real estate conveyed by Dubuque Brewing and Bottling Co. to Dallas County Brewing Company, Inc. The City has not provided, and AGRI has not located, a copy of a security agreement, which is required for the -6- conveyance ora valid security interest in real estate. Iowa Code §554.9203(1)(a)(200i). Whether Dallas County Brewing has a valid, subsisting security interest in anything is pure speculation. 15. Second, as previously established, Dubuque Brewing and Bottling Co. was only a leaseholder, not the holder of any right, title or interest in the fee, and therefore, did uot have authority to convey to Dallas County Brewing Company, Inc. any interest whatsoever in the real estate, other than the interest Dubuque Brewing and Bottling Co. may have had by virtue of its sublease with Crompton. As established, that sublease has been terminated. See Iowa Code §554.9203(1)(c)(2001) ("a security interest is not enforceable against the debtor or third parties with respect to the collateral and does not attach unless.., the debtor has rights in the collateral.") 16. Further, the evidence actually suggests that any debt or security interest that may have existed no longer exists because the alleged secured party, Dallas County Brewing, let the financing statement lapse as of June 28, 2001, because it did not file a coutiuation statement as required by law. Iowa Code. §554.9403(2) (2001). (See Affidavit of Hallie Still-Caris attached hereto as Exhibit 6). WHEREFORE, AGRI Industries a/k/a American Grain and Related Industries requests the Court deny the Motion to Dismiss filed by Defendant City of Dubuque. -7- Hal~ie Still-Caris PK0009020 WEST, HANSELL & O'BRIEN, P.C. 700 Walnut Street, Suite 1600 Des Moines, IA 50309-3899 Telephone: (515) 283-8003 F~: (515) 283-8045 ATTORNEYS FOR AGRI INDUSTRIES -8- CERTIFICATE OF SERVICE The undersigned hereby certifies that a true copy of the foregoing instrument was served upon one of the attorneys of record for each party to the above-entitled cause by enclosing the same in an envelope addressed to each such attorney at his/her last known address as shown below, with postage fully paid, and by depositing said envelope in a United States Post Office depository on the __ day of August, 200I. Dubuque County Sheriff c/o Leo Kennedy 8th & Central Avenue Dubuque, Iowa 52001 City of Dubuque c/o Barry Llndahl 196 Dubuque Building Dubuque, Iowa 52001 City of Dubuque c/o Jeanne Schneider City Hall 50 W. 13th Street Dubuque, IA 52001 The Aspermont Company c/o John Rhomberg 1008 Clark Crest Court Dubuque, IA 52001 The Aspermont Company c/o Michael Stapleton, Esq. 141 Pine Drive East Dubuque, LA 51025 Crompton Corporation c/o T. Fergnson, Esq. Crompton Corporation One American Lane Greenwich, CT 06831 c/o Doug Meyer, Esq. Ackley, Kopecky & Klngery, L.L.P. 4056 Glass Road NE Cedar Rapids, IA 52402 R.E. Lewis Refrigeration, Inc. c/o Tim Von Eaton 803 S. Lincoln Creston, IA 50801 The Brewery c/o John Niebler N94 W 17900 Appleton Avenue, Suite 200 Menomonee Fails, WI American Trust & Savings Bank c/o Jackie Mahoney Ninth & Main Streets Dubuque, IA 52001 The Plastic Center, Inc. dPo/a The Fischer Companies c/o Ron Helblng 290 Main Street .Dubuque, IA 52001 Joseph Huber Brewing Co., Inc. c/o Steven Preston, Registered Agent 6169 McKee Road P.O. Box 44326 Madison, WI 53744-4326 Glenshaw Glass Company and Hillsboro Glass Company c/o Gary Quattro 3140 William Flynn Hig~hway Glenshaw, PA 15116 SDI/Screenprlnt Design c/o Lindsay Lay 378 West 300 South Salt Lake City, UT 84101 -9- Fred Einstein d/b/a 21 st Century Brands c/o Bruce Willey 3519 Center Point Road NE, Suite 200 Cedar Rapids, LA 52402 Dubuque County Board of Supervisors c/o Jim Wailer, Chairman Dubuque County Courthouse 720 Central Avenue Dubuque, IA 52001 Durrant Engineers, Inc. c/o Secretary of State Hoover Building Des Moines, IA Specialized Concrete Systems Co. c/o Ron Blount 3314 Hwy. 6 Trail Homestead, IA 52236-8500 O:\thwaltonkagrikes mtn2dismiss.doc -10- DUEDBLIGENCn* ~ AFFiDAViT STATE OF IOWA ) ) SS~ DUq?,UQUqS; COULNTY ) ., Drm~[ 13obtit d~he. eby certify that [ ~ecmve~l the NO:glCE OF APPEAL TO THE DISTRICT COURT OF IOWA E'4 AND FOR DUBUQUE COUNWY PURSUANT TO iOWA CODE SECTION 6B. 18. CIVIL NO. CVCV09253?~on the 26t~ day of July 2001 amd on the 26m day ofJu~ ~00~ B.E.S.£_ Eiecmc Co., Appncant, within named, was not found in this Comity.. IlEA-SON: Asaempt-,va-s-made te-~ at- 2:4-5 PM at 962 Main Street, Dubuque, Iowa And they are no longer in business at this location. Second attempt made to serve the Company'satmmey at 4<: 1,5 PM~to-Atty. Dave Clemens- wtm-ig~o longer their attorney. Subscribed and sworn to before me this 26ta day of luly 2001. Nota~~mte of Iowa EXHIBIT / IN THE DISTRICT COURT OF IOWA, IN .4~N'D FOR DUBUQUE COUNTY B.E.S.T. ELECTRiC, INC., Plaintif~ VS. THE ASPERMONT COMPANY, PLASTIC CENTER. INC. d/b/a THE FISCHER COMPANIES. JOSEPH HUBER BREWING, PROFESSIONAL TRANSPORTATION & LOGISTICS. INC., GLENSHAW GLASS COMPANY, HILLSBORO GLASS COMPANY, FRED EINSTEIN' d/b/a 21 sT CENTURY BtL~NDS, SDI/SCREENPRINT DESIGN, DURKANT ENGINEERS, INC., R.E. LEWIS RSEFRiGERATION, INC., and DUBUQUE BREWING AND BOTTLING CO.. Defendants. R.E. LEWIS REFRIGERATION, INC.. Plaintiff. VS. B.E.S.T. ELECTRIC, INC.. THE ASPERMONT COMPANY, PLASTIC CENTER. INC. d/b/a THE FISCHER COMPANIES, JOSEPH HUBER BREWING, PROFESSIONAL TRg2'4SPORTATION & LOGISTICS. INC.. GLENSHAW GLASS COMPANY. NILLSBORO GLASS COMPANY, FRED EINSTEIN d/b/a 21sT CENTURY BRANDS, SDI/SCREENPRINT DESIGN. DURP~ANT ENGINEERS, INC., and DUBUQUE BR_EWIN'G AND BOTTLING CO.. Defendants. __eNo. EQCV091572 JUDGMENT Case No. EQCV091609 J-UDGMENT !.~ EXHIBIT i ~.S. ~ E&ctr~c. Inc. v. The perrnont Cornpa~ R £ Le~s'ts Refr~Eernuon. lncv. B.E.S. ~ E&ctric. Jnc. ~CI'0915r2 ~ EQCV09]609 Page 2 qf 8 Both matters are actions to foreclose mechanic's liens for work performed on the same subject real estate. The petitions were presented to the Court for joint resolution upon stipulated facts. At the time of submission the Court noted that a number of issues remained open and ,~ould serve as an impediment to a resolution of the actions. The parties were given over a month to resolve the inconsistencies, and have failed to do so. In EQCV091609, Defendants. Plastic Center. Inc. d/b/a The Fischer Companies and Dubuque Brewing and Bottling Co. have yet to be properly served. Those same two defendants were defaulted in EQCV091572. Although these matters were set for a joint trial, they have never been formally consolidated, and a default entW in one action cannot be utilized to default the same party in the companion action. Accordingly, Defendants, Plastic Center, Inc. c9%/a The Fischer Companies and Dubuque Brewing and Bottling Co. must be dismissed from EQCV091609. The dual status of these defendants gives rise to a secondary problem. Since the cases are subject to joint resolution, entering judgment in only one action would result in inconsistent verdicts. The Court therefore declines to find the judgment in these matters applicable to either defendant. A similar problem is presented in regard to Defendants, Glenshaw Glass Company and Hiltsboro Glass Company. In EQCV091572, Defendant, Glenshaw Glass Company is in default. while Defendant. Hillsboro Glass Company has now been dismissed. However, both defendants have filed an answer in EQCV091609. This not only creates a consistency problem With the two rulings, but subjects both defendants to a judgrnent based on stipulated facts when they have had no opportunity, to consent to the stipulation. As with Plastic Center, Inc. and Dubuque Brewing and Bottling Co., the Court declines to £md the judgment in these matters appIicable to either the Glenshaw Glass Company or the Hillsboro Glass Company. As Defendant. Professional Transportation & Logistics, Inc. has been dismissed from both actions; judgment in these matters is applicable only to the following parties: R.E. Lewis Refrigeration, Inc., B.E.S.T. Electric, Inc., the Aspermont Company, Joseph Huber Brewing, Fred Einstein d/b/a 21 st CentuD' Brands, SDI/Screenprint Design, and Dun:ant Engineers. Inc. Defendants, Joseph Huber Brewing, Fred Einstein d/b/a 2Ist Century Brands. SDI/Screenprint Design and Durrant Engineers. Inc. have already been found in default in EQCV091572. As none of those same defendants have appeared or answered in EQCV091609? they are subject to a default judgment in that matter as well. FINDINGS OF FACT The Asperrnont Company [hereinafter Aspermont] is the fee title holder to certain read property in Dubuque Counw, Iowa. The properlT is con-ntnonly and variously referred to as the Old Dubuque BreweD,. the Star Brewery' and the BreweD, building. ~ Aspermont is an Iowa There is some confusion as to the exact legal description of the property, but the parries agree that the work gi~ing rise ro the mechanic's liens was performed on the same subject properb,, and that at ail times relevant to this litigation that proper%' was owned by Asperrnont and leased and subleased by the various relevant parties. ~9.£ S. ~ Electric, [nc. v. The permont Cornpa~, R.E £ewis R~tTz~era~]on. ]nc. v. B.£.S.~ £]ec~ric, ]nc. E0_CI'091572 & EO_CY091~09 Pa~q.e 3 o[8 corporation owned or controlled by Anthony Rhomberg. On April 12, 1983, Aspermont leased the premises to American Grain Related Industries [hereinafter AGR/]. A memorandum of that lease was filed with the Dubuque Counu' Recorders Office on Julv t4, 1983. The lease itself was not recorded, and the memorandum does not contain specific lease provisions. The Aspermont-AGRI lease had an option to purchase measured by the life of Anthony Rhomberg. Mr. Rhomberg is still alive and the option has not been exercised. It further granted AGKI the right to use the premises in whatever mariner it wished. "including the right to make any improvements, and to alter, change add to or remove in any manner an>' and all structures presently on the demised premises .... "[Exhibit 4, "Lease", p. 4] That lease also stated that the lessee woald not "permit any mechanic's or materialmen's or other liens to stand against the demised premises for any labor or material furnished the Lessee in connection with an5' work of any character performed on the demised premises by or at the direction of the Lessee, subject, however, to the right of the Lessee to contest the validity of any such liens in a court of competent jurisdiction. Upon f'maI determination of any such liens the same shall be fully paid by Lessee who shall cause the same to be discharged and released of record." [Exhibit 4, "Lease", p. 6] On July 3 t, 1983, AGRI subleased the premises to an entity known as The Brewery. On March 27, I991, AGRI assigned most of its interest in the prime lease to Crompton & Knowtes Corporation n/k/a Crompton Corporation [hereinafter Crompton]. A memorandum df the assignment agreement was filed with the Dubuque Count5,' Recorder in April t, 1991. The memorandum assigns to Crompton all of AGKI's "right, title and interest in and to the... 'Brewery Sublease.'" [Exhibit 6, "Memorandum of Assignment Ageement and Sublease", p. 1 ] As with the Aspermont-AGKI agreement, above, the memorandum did not contain specifics of the lease agreement. Since the assignment Crompton has acted as prime lessee on the premises. Crompton entered into the assumption agreement to preserve its ability to supply its customers with malt syrup then produced in the Brewer), building. Sometime thereafter Crompton built a new malt syrup factor), and has not~ for many years, produced malt syrup or any other product on the premises. Crompton has never been in the brewing business and had no iniention of entering into that business or using the subject real estate as a brewery. The sublease held by The Breweu, was assumed by Zele Brewing Company [hereinafter Zele]. tt is unclear whether Zele assumed the sublease before or after the assianment by AGRI to Crompton. It does appear, however, that Crompton had taken assignment o~f the prir~e lease prior to Zeie filing bankruptcy. As part ora settlement of certain litigation in the Zele bankruptcy, the Dubuque Brewing and Bottling Co. [hereinafter DB&B] took assigument of the sublease from the bankruptcy trustee. DB&B was an Iowa Corporation wh/ch operated an alcoholic brewer5., business on the subject real estate. DB&B was a wholly owaaed subsidiary of Brandevor_ USA. Inc.. a Washington state corporaffon, which in turn was the United States operating company for a Canadian company known as Brandevor Enterprises, L.T.D.. a public trading compan.x on the Toronto Stock Exchange. DB&B was obligated to make its lease payments to Crompton. The sublease gave the tenant the right "from time to time at its expense, upon receiving prior written consent of Sublessor (unless such consent is unreasonably withheld) to make improvements, additions, alterations, modifications, changes, replacements and substitutions in or to the Premises in accordance with written plans and specifications submitted to Subtessor.. "[Exhibit 5, "Sublease", p. 5] It further provided that "ia]ny lien for labor or materials for work done or claimed to be done or materiaI fumished or claimed to be furnished with respect to the Premises by or on behalf of Sublessee or its successors, assi~mns or subtenants shall be discharged by Sublessee (or adequate provision made for payment by obtaining a bond), within thirW (30) days after fiiing of such lien. Neither Sublessee nor anyone claiming by, through <Jr under Sublessee shaiI have the right to file or place any mechanic's lien or other lien of any kind or character whatsoever, upon the Premises or upon the leasehold interest of Sublessee therein and notice is hereby given that no contractor, subcontractor or anyone else who may furnish any material, service or labor wi[h respect to the Premises or any pan thereof shall at any time be or become entitled to an~ lien thereon, and for the further security of Sublessor? Subiessee covenants and agrees to give actual notice thereof in advance t~ any and ail contractors and subcontractors who may furnish or agee to furnish any such material, service or labor." [Exhibit 5, "Sublease", p. 7] In 1997 DB&B, through its president and brewmaster, Ron McCart, contracted with R.E. Lewis Refrigeration, Inc. [hereinafter Lewis] and B.E.S.T. Electric, Inc. [hereinafter B.E.S.T.]. for work on the subject real estate. At that time Mr. McCari understood that his company did not own the Brewery building, and he had seen some, if not all, of the relevant leases and subleases. All the work done on the subject real estate by B.E.S.T. and Lewis was performed in a worlcrnanlike manner, and the charges were fair and reasonable. In contracting for the work, Mr. McCarl was not acting on behalf of Crompton, but was acting at the direction of the chairman of the board of Brandevor Enterprises, L.T.D., DB&B's Canadian parent company. The work was done without the actual knowledge or actual consent of Aspermont, AGRI or Crompton. None of the work was authorized, permitted or condoned by Crompton. Electrical work commenced on the property in January or February 1997. The work, which included controtlers and electrical upgrades, was necessary,, for a functioning brewery. No written proposal was tendered by B.E.S.T. as the work on the brewery building was actuallY, started bra company 'know as Black Hawk Electric. The job was transferred when Black t~tawk Electri} x~as bought out by its operating manager, Mike Schroeder. Mr. Schroeder. B.E.S.T.'s owner and operator, had a good w-or'king relationship with DB&B through his position at Black Hawk Electric, and it was agreed that the work which is the subject of mechanic's lien would be performed on a time and material basis. Work on the site was completed July t 6, 1997. B.E.S.T. was owed, in a principal sum, $41,548.04. The billings from B.E.S.T. put DB&B on notice that interest would accumulate at an annual rate of eighteen percent (18%). B.E.S.T. was aware that the premises was not ow-ned by DB&B. and was under the impression that the building was owned by the Rhomberg family. At no time prior to the instigation of its suit did Mr. Schroeder view a copy of the prime lease between AGRI and Aspermom. the memorandum of assignment between AGPJ and Crompron, or the sublease bew,~een AGP,2 and The Breweu~. On one occasion it was communncated to Mr. Schroeder that the Rhombergs wanted to keep as much of the original electrical system intact as was possible. It is unclear whether that information was presented by Ron McCarI. However. no representative of B.E.$.T. ever spoke with any member of the R-homberg family or representatives of AGR/or Crompton. Pursuant to a wTitten proposal, in February 1997 Lewis began its efforts to replace old and install ne~ refrigeration equipment and piping as well as the rebuilding of an existing compressor. While it cannot be said that the work was immediately necessary for DB&B's breweu~ operations, the work was crucial to DB&B's abiliw to continue functioning as a successful breweq;. Lewis was aware that DB&B was not ~eavilv funded, and therefore attempted to hold down its costs. The work was completed on Ju'iy 26, 1997. at which time Lewis was owed $92,450.39. Lyn Mangrich, a representative of Lewis, was }ware that DB&B did not own the property- where work was performed. However. no one from Lewis ever spoke with any representative of Asperrnont, The Brewery, AGRI or Crompton, and prior to the instigation of its lawsuit no one from Lewis viewed copies of the prime lease between AGRI and Aspermont, the memorandum of assigrmaent between AGRI and Crompton. or the sublease between AGRt and The Brewery. Although Lewis had done some previou~ work on the premises for Crompton, that work was pe~ormed in the malt syrup room and was not brewery related. Lewis also performed some prior repair work directly for DB&B, for which it was ft~Ily compensated. B.E.S.T, filed a mechanic's lien with the Dubuque County- Clerk of Court on July 31. I997. Lewis filed a mechanic's lien w/th the Clerk on October 6. 1997, and Durrant Engineers. Inc. filed its mechanic's lien on December 3, 1998. B.E.S.T. pursued an alternate remedy, filing suit on open account in LACV051294. On July 22. 1998. it obtained a judgment against'DB&B for $40.480.06. B.E.S.T. has yet to recover an~, money or~ the judgment. In addition, three of the defendant companies possess judgments against DB&B: Joseph Huber Brewing Company obtained a judgment in SCSC038827 on JuN 30, 1998~ in the amount of $3093.14: Fred Einstein cb'b/a 21 sr Century, Brands obtained ~a judgment in LACV051189 on December 1, 1998. in the amount of $15.855.00; and SDI/Screenprint Design obtained a judgment in LACV051475 on Februa~, 2, t999, in the amount of $6,900.00.2 DB&B became delinquent on its rent. and on November 18.1998. Crompton provided DB&B with a notice of default and right to cure. The default was based not only upon failure to pay rent and property taxes, but also the mechanic's liens of B.E.S.T. and Lewis. which ?ompton categorized as an impermissible imposition under the sublease. DB&B failed to cure ~ts default, and by the time the lease was terminated DB&B was approximately $40,000.00 in arrears on its lease obligation. DB&B's representatives have not caused the brewina of beer on the subject real estate since December 1998, and as of that time Crompton has paid }ent to Aspermont pursuant to the prime lease and otherwise maintained the premises. DB&B has not existed, either administratively or effectively, for many months. As this judgment does not apply to them. the civil law and small claims jud~m'nents held by Plastic Center. nc. d b,a The Fischer Companies. Glenshaw Glass Company and Hillsboro Glass ,.. p ?'-om-an-. nOt listed, CONCLUSIONS OF LAW' B.E.S.T. and Lewis seek to attach by mechanic's lien Aspermont's fee interest in the subject real estate, even though improvements were pe3forrned for sublessee DB&B. The petitioners effectively concede that normally a part>.' contracting for improvements can only subject to attachment its own interest in the properU,. Therefore. when work is performed'for a lessee or sublessee, the mechanic's lien tTpically attaches to the ieasehold interest onlv. and not the Iessor's fee interest. They point, however, to a line of cases where mechanic's IiJns were allowed to attach to a iessor's interest. See e.g, A & W Elec. Contractors. Inc. v. Perm,. 576 N.W.2d 112 (Iowa 1998); Stroh Corp. v. i~ d- S Development Corp., 247 N.W.2d 750-(Iowa 1976). In those cases, the contractor must demonstrate as a preliminary matter that "the lessor has by express or implied ageement with his lessee contracted for the improvement of his real estate by the latter .... "Jcl. at 752. To put it plainly, it must be shown that the improvements were either expressly or implicitly "demanded" by the lease and any relevant surrounding circumstances. See, A 8- W £lec. Contractors./nc., 576 N.W.2d at 1 t3; Ringland-Johnson- Crowlev Co. v. First CemralService Corp., 255 N.W.2d 149, 15t (Iowa 1977). Once this threshold question has been answered in the affirmative, the contractor must further establish "(1) such improvements made will become the property of the lessor in a comparatively short time. (2) the additions or alterations were in fact substantial, permanent'and beneficial to the realty, and were so contemplated by the parties to the lease a~eement. and (3) that the rental payments reflected the increased value of the property as a result of those improvements." Ri~g/ond-Joh~son-Crowley Co., 255 N.W.2d at t 52. While the prime tease gives AGRI and their assignee Crompton the right to make improvements, such language is permissive and does not create an express contract for improvements between Aspermont as lessor and AGRI or Crompton as lessees. Nor does the record reveal any other express contracts which would support attachment of the lien. Cf7 Sn-oh. 247 N.W.2d at 751 (noting lease in that case required the lessee to construct a $50.000 t~uilding on the Iessor's vacant tot. with the lessor later reimbursing the lessee for the cost of construction). Accordingly, B.E.S.T. and Lewis can prevail only if thev can establish an implied agreement ~br improvements. ~ A prime example of such an implied agreement is demonstrated by the case of A 8: ~,[' E/cc. Conu'aczors. ]nc. v. Pe~ry, 576 N.W.2d 112 (Iowa 1998). In that ca~e the lease did not explicitly' call for any improvements by the lessee, but it did speci%; the property was to be used as a tavern, and the lease was conditioned upon the lessee obtainin= all necessanv licenses and permits. ,rd. at 113. tn order to procure a liquor license, and thus f~lflI1 the purpose of the lease. the electrical wiring in the building had to be brought up to code. _rd. Since the lease was conditioned upon obta/ning a liquor license, and since obtaining the license was conditioned upon re~xiring of the building, the lease contained an implied authorization to contract for the wiring, ici. at 114. In sharp contrast is the case of Ringland-dohnson-Cro~vtey Co. vt First Central Service CorI~., 255 N.W.2d t49 (Iowa I977). In that case the lessee was given the right to remodel the tessor' s building for the purpose of establishing a dirmer theater and night club. ,rd. at 151. Even though the lease obligated the lessor to contribute $55,000 towards the renovation, the totaliu- of the circumstances demonstrated that the decision to undertake the remodel was v, Sthin the discretion of the lessee./d. Accordingly, no implied contract for improvement was established. Id. In reviewing the case law' of this area. one common theme appears. As an initial matter the contract must require, and not simply permit, the m 'aking of improvements. The nature of the improvements, their benefit to the realD', their impact on the rental pas~ments and the limited knowledge of lease terms are ali issues secondary and subsequent to a determination of contract existence. As previously noted, the prime lease's improvement-related provision is permissive, and not mandatoD'. Two arguments are offered as to how' this term actually creates an implied agreement for improvements. First it is contended that as the lease contemplates improvements, Aspermont was impiiedty aware that such improvements might be made. This argurnent is unpersuasive, however, as k-nowledge of or even consent to the Lmprovements, standing alone, does not subject the lessor's interest to a mechanic's iien. Stroh Corp., 247 N.W.2d at 752. The petitioners also point to the fact that such improvements were necessary to the running of DB&B's business, apparently in an attempt to draw an analogy with ~/& ~:£lec. Contractors, Znc. v. ?etry. The Court is not convinced. In that case failure to make improvements would have constituted a violation of the lease. In this case the decision to make improvements - no matter how vital those improvements were to the continuing nature of DB&B's business - was purely within DB&B's discretion. Aspermont's prime lease did not require the improvements or even that the property be used as brewe~..3 In addition to the arguments but forth above, B.E.S.T. contends that equity itself dictates judgment in its favor, relying on the principal that mechanic's Iiens are to be "liberally construed to promote restitution, the prevention of unjust enrichment, and to assist the parties in obtaining justice." A & WElec. Contractors, 576 N.W.2d at 114. However. the adoption of B.E.S.T.'s position invalidates the purpose and effect of the mle set forth in Stroh Corp. and its progeny. The dictates of equit3,, no matter how, compelling, can not be used to overrule and obviate a clear rote of taw. .Although the sublease contains language limiting the use of the premises to that ora breweo,, the petitioners are not attempting to reach the sublessor but the prime lessor. To that end. there is no proof that Aspe,wnonr consented to, approved of or had any knowledge that this particular limitation had been put in place. B £.~ ~ 'Zleo~rw. Inc. ~' ]7~ ,permom Compo~' £~_)CI 'OYiZ-£ ct £O_CVOPi609 JUDGMENT AND RULING Petitioners having £ailed to establish their right to judgment, these matters are herebx DIS~ iIS3ED, with costs assessed to the petitioners. Done and ordered December S, 2000. ALAN L. PEARSON JUDGE, FIRST JUDICIAL DISTRICT 1 2 THE DISTRICT COURT OF IOWA IN ANT) FOR DUBUQUE COI~N'T'I: 3 4 5 6 7 8 9 10 I1 I2 13 14 I5 16 B.E.S.T. ELECTRIC, INC. Plaintiff. VS. THE ASPER~MONT COMPAN%L et al., Defendant. R.E. LEWIS REFRIGEKATION. INC.. Plaintiff, B.E.S.T. ELECTRICT, INC., THE ASPERMONT COMPANY, PLASTIC CENTER, INC., d/b/a THE FISCHER COMPANIES, JOSEPH HUBER BREWING, PROFESSIONAL TRANSPORTATION & LOGISTICS. INC., GLENSHAW GLASS COMPAN'Y. HILLSBORO GLASS COMPANY, FRED EINSTEiN' c[/b/a 21 s~ CENTU~R¥ BRANDS, SDIJSCREENPRINT DESIGN, DUT. RANT ENGINEERS, INC., DUBUQUE BREWING BOTTLING CO., Defendant. CASE NO. EQCV09t 572 JOINT STrPULATION OF FACTS CASE NO. EQCV091609 t 7 This factual stipulation is an amalgam of the facts asserted in the respective Petitions of 18 the Plaintiffs which are not in dispute among any of the parries. In addifion~ these facts include 19 what the parties believe to be pertinent facts from the depositions of the two principals of the 20 Plaintiffs, Lyn Mangrich for R.E. Lewis Refrigeration, Inc. and Michael Schroeder for the 21 B.E.S.T. Electric, Inc.. as well as the deposition ofRon McCarl, the former president of 22 Dubuque Brewing and Bottling Co. In addition, there are a few items taken from the Affidavit I of John Ferguson and facts taken from Yarious leases or other a~eements which relate to the 2 parties Or th~ premises in question and which were presented to the Court on July t 1, 2000. 3 I. PARTIES - 4 The Parties herein who are Plaintiffs. in two different actions, are B.E.S.T. Electric, ]nc. 5 (the Plaintiff in Dubuque County Case No. EQCV091572) and R.E. Lewis Refrigeration, ]nc. 6 (the Plaintiff in Dubuque Cotmty Case No. EQCV091609). Both parties are Iowa corporations 7 and do business in Dubuque County, ]nwa. Lyn Mangrich (whose deposition was presented to 8 the Court on July 11. 2000) is one of the principals of R.E. Lewis Refrigeration, Inc. Michael 9 Schroeder (whose deposition was presented to the Court on Jul}, 1 I, 2000) is the principal of 10 B.E.S.T. Electric, Inc. Petitions in both cases, EQCV091572 and EQCV091609 list numerous I 1 defendants, including each other. The only defendant which remains in either equity action 12 which has not been defaulted or dismissed, other than the respective Plaintiffs in each action, is t3 the Aspermont Company. 14 The Aspermont Company is an Iowa Corporation owned m' controlled by Anthony 15 Rhomberg. Mr. Rhomberg, by virtue of a lease between the Aspermont Company and AGRI 16 (Associated Grain and Related Industries), an agricultural cooperative, executed on April 12 of 17 1983) conveyed alt of the effective interest of the Aspermont Company in the oId Dubuque 18 brewery property to AGRI. AGRI, pursuant to a series of subsequem agreements, has, in effect, 19 assi~ed its interest in the brewery building in question here to Crompton Corporation (a 30 Delaware corporation, previously known as Crompton and Knowtes Corporation and CK-Witco 21 Corporation). By virtue of the original, prime lease on the premises from the Aspermont 23 Company to AGRI and subsequent assignments, at this point, since other lessees in the chain 23 have not elected to defend the Aspermont Company for reasons which are not relevant to this 8 9 10 11 I2 13 14 15 i6 17 18 I9 2O 21 22 23 6 proceeding, Crompton Corporation has a contractua~ obligation pursuant to the original, prime lease to defend the Aspermont Company. Consequently, xvhile the Aspermont Company is a defendant, due to the fact that it is the titleholder of record to the real estate in question and Crompton Corporation is not a defendant, Crompton Corporation, by virtue of the assignments, is the effective defendant to the Petitions herein. Crompton Corporation is a Delaware corporation which formerly had a division, In~edient Technologies, which manufactured malt syrup extract, for a time, on the brewery premises, in the late t980's. Subsequent to the Chapter I 1 proceeding of a brewer who was manufacturing beer on the premises, pursuant to a lease with AGRI, Crompton Corporation, then known as Crompton and Knowles Corporation, obtained an assignment of most of the interests which AGRI held under the prime lease between AGRI and the Aspermont Company. Since that time, Crompton Corporation has operated as the prime lessee on the premises. Subsequent to the bankruptcy o£ Zele Brewing (Northem District of Iowa Bankruptcy Case No. L-91-00377-D) an entity known as Dubuque Brewing and Bottling leased the brewery premises. Pursuant to a lease which was assig~ned to it by the trustee of the Zele Brewing Bankruptcy, Dubuque Brewing and Bottling Co. was supposed to undertake certain activities, including paying rent to Crompton Corporation and other activities as called for by that lease. Dubuque Brewing and Bottling Company is a nominal party to these two lawsuits. Dubuque Brewing and Bottling Company has not existed, either administratively, or effectively, for many months. Its representatives last caused the brewing of beer to occur on the premises in December of 1998. Since December of 1998. Crompton Corporation has paid rent to the Aspermont Company pursuant to the prime lease, insured the premises, paid the real estate taxes on the 1 premises, and maintained the premises in a "mothballed" manner. Crompton Corporation's 2 agents check the property at least five times each week. Crompton Corporation has caused the 3 ammonia from the ammonia cooling system to be drained and replaced with appropriate inert 4 gases in order to maintain the efficacy of ammonia lines. 5 Dubuque Brewing and Bottling Company, through its representative, Ron McCarI, 6 undertook to have all of the work done which is referred to in the two Petitions herein (and in the 7 Mechanic's Liens that were filed) which are the basis of the two Petitions herein. McCarl was 8 the brewmaster at the brewery on behalf of Dubuque Brewing and Bottling Company. Both 9 Petitions contend, and there is no dispute, that Dubuque Brewing and Bottling Company 10 requested the work to be done on the premises which is the subject of both Petitions. 11 II. AGREED UPON FACTS FROM THE PETITIONS. 12 All parties a~ee that both Plaintiffs are corporations which are authorized to do business 13 in Iowa. Both Plaintiff corporations performed work on the subject real estate which is located 14 in Dubuque, Dubuque County, Iowa. The fee title holder to the real estate in question is the t 5 Aspermont Company, defended herein by Crompton Corporation pursuant to contractual 16 obligations. The legal descriptions in the respective Petitions may, or may not, be correct based I7 upon certain condemnation actions undertaken by the City of Dubuque. The legal descriptions 18 referred to in both paragaphs, however, do describe the land upon which the brewery building is 19 tocated. It is possible, at this point, that the descriptions may be over-inclusive. 20 The defendant, Aspermont Company is authorized to do business in Iowa and owns the 2 t real estate in question subject to interests previously referred to herein. B.E.S.T. Electric, Inc. 22 commenced its work in January or February of i 997 and its 1asr day of work was July 16, t 997. 23 R.E. Lewis Refrigeration. Inc. commenced its work in February of 1997 and completed its work 6 7 8 9 10 11 12 13 14 15 16 17 t8 I9 20 21 22 23 on July 26, 1997. B.E.S.T. Electric, Inc. was owed. in a principle sum, the amount of 541,548.04. R.E. Lewis Refrigeration, Inc. was owed. at the time it concluded its v:ork, the principle sum of $92.450.39. B.E.S.T. Electric, Inc. sought, pursuant to a Petition in this Court (Dubuque District Court No. LACV51294, a judgment against Dubuque Brewing and Bottling Co. on open account the sum of $40,480.06, plus interest, and obtained j udgxnent in this Court for that amount on the 22nd day o£July, 1998, on the open account. The work done on the premises by both Plaintiffs herein was done in a workmanlike manner. Further, the work was done without the actual 'knowledge or actual consent of Aspermont, AGRI or Crompton Corporation. III. FACTS RELATING TO THE DEPOSITION OF LYEN- MANGRICH. R.E. Lewis Refrigeration. Inc. is a company authorized to do business in Iowa which operates in Dubuque, and also operates in thirty states. It works principally on ammonia refrigeration systems in industrial and commercial applications. The brewery building has a combination of ammonia and brine cooling systems. R.E. Lewis Refrigeration, Inc., generally, and Lyn Mangrich, specifically, have done prior work at the brewery. Furthermore, Ly'n Mangrich and R.E. Lexvis Refrigeration, Inc. had previously done separate work in the building specifically for Crompton Corporation. However, R.E. Lewis Refrigeration, Inc. had not done any brewing-related work for Crompton Corporation. A substantial port/on of the equipment cost and, concomitantly, a substantial portion of the labor for the R.E. Lewis Refrigeration, Inc. liens was for the installation of equipment. The new equipment installed included a control pressure receiver, and a suction trap. Further, evaporator coils were relocated and reinstalled on two different floors. In addition, the pipe that 5 6 7 8 9 10 I1 12 13 14 15 16 17 I8 19 20 2I 23 I 3 4 5 was installed by R.E. Lewis Refrigeration. Inc. is exposed, and generally away from walls so that if it leaks the leaking section can be identified, removed, and repaired. According to Mangfich's estimate. Fifty percent (5058) of the bill was equipment, twenty-five percent (25%) was materials, and txventy-five percent (25°/8) was labor. Those figures include subcontracting for insulation of pipe. R.E. Lewis Refrigeration, Inc. was aware, at the beginning of the work, that Dubuque Brewing and Bottling Co. was not heavily funded, and as a result, R.E. Lewis Refrigeration, Inc. took great care to hold costs down. No one from R.E. Lewis Refrigeration, Inc. ever talked with any representatives of Aspermont Company, the Brewery, a Wisconsin General Partnership (another lessee), AGRI, or Crompton and Knowles, now Crompton Corporation. Lyn Mangrich, a representative of R.E. Lewis Refrigeration, Inc. indicated that, prior to this lawsuit, he had never seen any of the leases involving the ownership, maintenance and operation of the brewery. No interest on the principal sum was ever called for in the original agreement on the balance due between R.E. Lewis Refrigeration, Inc. and Dubuque Brexving and Bottling Company. Lyn Mangrich, the representatives of R.E. Lewis Refrigeration, Inc: knew that Ron McCarl and Dubuque Brewing and Bottling did not own the building. IV. FACTS RELATING TO THE DEPOSITION OF MIKE SCHROEDER. Ron McCarl calted Mike Schroeder of B.E.S.T. Electric, Inc to see if his company ws interested in the electrical work at the brewery building. B.E.S.T. Electric, Inc. is locally owned and operated by Mike Schroeder. The breweryjob 'c/as actually started under Black Hawk Electric, and was transferred to B.E.S.T. Electric, Inc. When Mike Schroeder bought out Black Hawk Electric. There was no written proposal from B.E.S.T. Electric, ][nc. Mr. Schroeder 6 t asserts that Mr. McCarl. on behalf o£Dubuque Brewing and BottIing was Verbally aware of an o interest rate which ultimately was shown on the bills. 3 Schroeder indicated that he thought the Rhomberg's oxvned the building. He also 4' indicated that he never talked with anybody from the Rhomberg family, Aspermont. AGRt, or 5 Crompton Corporation and they did not know. 6 Schroeder testified that he had never seen any of the subieases or memoranda of 7 assi~ment regarding the building. 8 A portion Of the bills from B.E.S.T. Electric, Inc. were for controllers purchased from 9 R.E. Lewis Reff/geration, Inc. Further, Schroeder built some of the control equipment himself. I 0 B.E.S.T. Electric, Inc. had to repipe and repulI wire, and it had to set panels because of additional 11 evaporator coils in areas where they had not been previously located. 12 Schroeder indicated that he did not know' an~hing about the Rhombergs or Aspermont. t 3 V. FACTS RELATING TO THE DEPOSITION OF RON McCARI. 14 Ron McCarl was employed by Dubuque Brewing and Bottling Co. from May of 1992 15 until June of 1996 as vice president and general manager. From July 1996 until Janua~, of 1999 16 he was the president of the company. Dubuque Brewing and Bottling Co. was an Iowa 17 corporation, a wholly owned subsidiary of a Washington state company which, in turn, was the t 8 U.S. operating company for a Canadian company, which was called Brandevor Entreprises, 19 L.T.D. Brandevor was a publicly traded company on the Toronto Stock Exchange. McCarl's 20 duties included oversight of the daily operations of Dubuque Brewing and Bottling Co. 21 lVlcCarI's company was obligated to make lease pa)~ments to Crompton Corporation in 22 the amount o£$2,500.00 per month. By the time the lease was terminated, Dubuque Brewthg 23 and Bottling Co. was behind approximately 540,000.00 in rent. 1 At the time McCari contracted for the work with R.E. Lewis Refrigeration. Inc. he was 2 not acting on behalf of the landlord, Crompton Corporation. Crompton Corporation had no 3 knowledge of the work. In fact, he was acting at the direction of the chairman of the board of the 4 Canadian corporation. At this same time Dubuque Brewing and Bottling Co. contracted w'ith 5 B.E.S.T. Electric, Inc. for required electric work. controllers, and some up~ades and electrical 6 work. Once again, this work was all part of the same project that was done at the request of the 7 Canadian company. 8 The work done by B.E.S.T. Electric, Inc. was necessa~' to have a functioning brewery. 9 In iVlcCarl's opinion, the work was done in a good and workmanlike manner, for a fair and 10 reasonable charge for the work done. Likewise, McCarl had no problem with the quality of the 11 work done by R.E. Lewis Refrigeration, Inc. and the prices charged by R.E. Lewis Refrigeration, 12 Inc. were reasonable. 13 McCarl's best recollection is that he first saw the underling lease and/or subleases for 14 the breweD' property in 1992. He is unclear whether or not he actually saw ail of it then. or even 15 to the date of his deposition. 16 VI..ADDITIONAL RELEVANT FACTS. t 7 According to the Affidavit of John T. Ferguson, II, chief legal officer of Crompton 18 Corporation, Crompton Corporation never authorized, permitted or condoned any of the work I9 that is the subject of this action. At the time Crompton entered into the assumption of the lease 20 interests of AGRI, Crompton did so to preserve its ability to supply malt syrup then produced in 21 the Dubuque facility to Crompton's customers. Sometime after the transaction was entered into, 22 Crompton built a neb' malt syrup facility in northeastern Illinois. Crompton has noL for many 23 years, produced malt sF~up or any other product at the Dubuque facility. Cromptnn Corporation 9 10 11 I2 13 14 15 16 17 18 I9 20 21 22 23 24 25 26 3 4 5 has continued to maintain the property, and has paid the rent and tax obligations on the property. Crompton Corporation has never been in the brewing business and has no intention of entering into that business or using the Dubuque facility as a brewery. In fact, Crompton Corporation has received offers for uses of the building other than as a brewe~'. On November 18, 1998, Ingredient Technologies Corporation, a division of Crompton Corporation gave notice to Dubuque Brewing and Bottling Co. and related parties that that Dubuque Brexving and Bottling Co.'s lease on the brewery building was being terminated for failing to pay rent and for allowing the liens that are the subject matter of this action to be placed against the title to the real estate herein. Paragraph number six of the sublease allowing Dubuque Brewing and Bottling Co. to operate the brexvery on the premises strictly forbids the tenant from ordering any work or taking any action that would cause a lien to be placed on the premises. Respectfully submitted, Date: B.E.S.T. ELECTRIC, INC. By: David L. Clemens 000000880 REYNOLDS & ' ' ' KENLINE, LLP 222 Fischer Building PO Box 239 Dubuq2e, IA 52004-0239 Phone: (319) 556-8000 Fax: (319) 556-8009 9 6 7 8 9 10 11 12 13 14 15 16 17 tg 19 20 21 23 24 25 26 27 28 29 3O 31 32 DD 34 35 1 Date: R. E. LEWIS P,,EFRIGERATION. INC. William A. Conzett ~ 491 W 4th Street PO Box 741 Dubuque, LA_ 52004-0741 Phone: (319) 556-8552 ACKLEY KOPECKY & KINGERY, LLP /D0~uglas C. Mzyter 3691 · / Thomas G. McCusk[y 2744283-~2 4056 Glass Rd NE ~/' Cedar Rapids, IA 52402 '--~ Phone: (319) 393-9090 Fax: (319) 393-9012 ATTORNEY FOR THE ASPERMONT COMPAzNY i0 Gordon W. Gratias Scott C. Gratias August 2. 2001 GRATIAS IN¥ ESTIGATIONS, INC. Privtzte [tzvest~,atio~zs 10S0 Insurance Exchange Bldg. 505 Fifth Avenue Des Moines. Iowa 50309 (515)244-9817 FAX (515)244-9818 Gratiaspi~aol.com Tom Walton Attorney at Law 700 Walnut Street. Suite I600 Des Moines, LA 50309 RE: h~ the Matter of the Condemnation of Certain Rights in Land for the ][ce Harbor Urban Renewal District by the CiD' of Dubuque, Iowa Dear Tom: Please find enclosed Affidavits for service on Durrant Engineers, Inc. and RE Lewis Refrigeration, Inc. We also attempted to serve Dallas Co.u~ty Brewlhng Co.. Inc. That is an abandoned building, and they are no longer in business at the address ofo01 S. 10 Street in Add. If you have any questions concerning this or iff can assist you in anything further, please do not hesitate to contact me. Thank you. Veu, truly yours. · Scott u. Gmtm~ SCG\ws Enclosures I I I I I ! UCC FEES $ 12.00 REC FEES 21.00 Brewinq and k~3ging equi.~ment, forklift and pallet jack, as iist~ on E~hibit A a~tached herebo &A'fHf ~''''''' ....... THURi OW COU;iTY i1EOORDER DUBUOIIF fin lfiv/~ ~rE~, See E~hibit B attached hereto Dalla~ County Brewino~ fio'~afly, [~,gA~ 0:% ~;~/X~] IO:ol ~l~b UCC FEES $ 12.00 REC FEES 21.00 ~,~o~,~: $ 33.00 Brewin9 and k~g~ing ~di.~ant, forklift and pallet jack, as listed on E~hibit A a%~ached l~to ' F. ATHf ~LY;::; TH~" ~ v See Exhibit B attached h~ret~ pallas Cc~jmby Br¢-dn~ CoTsanv, mc. RoD~rt M. Imeson EXHIBIT A Des=ription ~ua~tity 756 Gallon Insulated Brew Ketfie/Whiripool, Serial # ! 1141 724 Gallon In~ulated Mash/Lautcr tun with Vcc-wirc Drain Screen, Serial # I t I42 1382 GalIon Jacketed and Insulated Cold Liquid Tank, Serial # II 106 1 :,382 Gallon Insulated Ho[ Liquor Tank, Serial # 11105 I322 Gallon Jacketed and Insulated Unitank (30bbl). Serial #'s ! ! t09, Ii ] 10, ! 11 I 1. 579 Galton Jacketed and Insulated Unitank (15bbl), Sofia/ # 1 i 1 I9 2075 Gallon InsulaIed and Jacketed Bright B~r Tank, as modifie, z], (60bbl), Serial # i Centrifugal Pumps (hot & cold liquor, wort), Serial #'s 22616, 22617, 22615, 22614 4. Vintech Portable Centrifugal Transfer, Filtering and CIP Pump, Model BY152FLF2AM 1 Hot Work Receiver {Grant) 1 Hi-Low Level Controller, Model FR215-2P Economite 300,{300-700,000 BTU Forced Air Natural Gas Burner, Model F400N33, Serl;~l # T120769 wl Control Panel, Serial # 91237 Mueller Plate and Frame Heat .Exchanger, Model AT4F-20, Serial # 102636 D E Filler, Velo Model #ERG 3, Serial # B317 Dellatofoia 40am X 40 cm Plate and Frame Filter w/20 plates, Serial # 59090 Rmskamp 2 h.p. rotter mill w/auger, RO5433255 53 Cubic foot Stainless Steel Grist Ca~e G&D Chillers 7 '/2 h.p. Glycol Refrigeraticm Unil with outdoor hi-iow ambient eondensor, Model GDiO 3-R, Serial # 91261210-3 Mid Steel Brewing PIafform, red I ~A in. brewery hose i 'A in. hose adaptor I Y2 in. hose clamp Hop Strainer I V1 elbow i V2 clamp I '/2 bntterfly valves 2 in. × ! V.- racking arm I ~,5 in. robing I ~h in. Tee t ~A in. hanger 6n. Capx I V2 in. TC 6 in. clamp In-line Temperature Gauge 3 in. clamp Sight glass 1%. in. ferrule 1 1 ! 10 10 1 70 103 33 5 210 il I5 I 1 3 5 2 24 ft. ft. I II UE SO0 Temperature Control]mr i ~n. Solenoid Vn]va 3/8 in, sample valvo [ ~A in. c~p Ca]~bmt~ sight glass MisceIlan~us Valves and fittings (lot) Pro Refrigeration 7.5 HP Glycol Refrig:mtian Unit whh remote ambient coodensor 59,600 BTU's, Model POART.SA2, Serial g A0925693 Modify 30 bbl. Bright Beer tank w/ 8ft. shell and 4 rt. coollng jacke~ to 60 BbL cnp Misc. valve, fittings, piping and plumbing (lot) Far.irt - Cate~illar ~D, Serial g 5GB1472. Propane fuel Palle~ Jack, BT Mfg. Model g ~000U, Serial g 1023291 EXHIBIT B All of Lots 5-6-7-S-9 & !0, and a part of Lots 3 & 4 of Block 3. Al! of Lot 1~ and part of Lot 2 of Block 4. Part of Lots 1-2-3-4-5-6-7 & 8 of Block 5. Part of Lots 20-21-22-23 L 24 of Block 6. Fart of vacated Pine Street Fart of vacated.alley in Blook 6. A Dart of the unplatted area lying East of Block 3 & Block 4 and Ail of whi=h are a part of the Dubuque Harbor Improvement Company's Addition, Dubuque County, Dubuque, Iowa, and being more fully described as follows: Beginning at the point where the East line of Block B intermects the Southerly lime of East Fourth Street Extension; thence on an assumed bearing of South 39~34'50'' East, along the Southerly right of the slope of the dike; thence South 52~59'35" West, along the toe of the slope of the dike, 278.15 feet7 thence North 46~24'52'' West, 142.50 feet to the East line of Block 47 thence North 24°34'08" West, 356.05 feet to the Southerly right of way line of East Fourth Street Extension; thence South 76=34'50'' East, along the Southerly line of Bast Fourth S~reet Extension, 326.63 feet; thence South D9~34'50'' East, along the Southerly line of East Fourth Street Ex%ension,139.50 feet to the point of beginning. Industr/es. 2. AFFIDAVIT OF HALLIE E. STILL-CARlS I, Hallie Still-Caris, having been duly sworn upon my oath depose and state: I am counsel for AGRI Industries a/k/a American Grain and Related My assistant, Renetta Chiodo, at my direction, inquired of the Dubuque County Recorder with respect to the filing of any continuation statement by Dallas County Brewing Company, Inc., relating to financing statement no. 7778-96, filed June 28, 1996, with the Dubuque County Recorder. We have been advised by the Dubuque County Recorder's office that there is no continuation statement of record or on file. 4. I certify under penalty of perjury and pursuant to the laws of the State of Iowa the foregoing is true and correct. Dated this ~ ~'!~ day of August, 2001. H~illie E. Still-Cads O:\thwalton\agrikstill-earis aft]davit, doc