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Vacationaire at center of legal storm

Litigation continues despite a May 29 Hubbard County District Court order that a portion of Icon Drive is owned by Tim and Nikki Clancy of Vacationaire Resort and another portion owned by the Flamm Community Property Trust. The judge determined a permanent easement grants ingress and egress for all parties using the private road. The court also found that no customer parking is permitted on the sections of parking lot owned by Flamm and Vacationaire Estates, an association of 10 cabin owners.

Timothy Clancy, 51, co-owner of Vacationaire Resort, was arrested Saturday and charged in Hubbard County District Court with two counts of fifth-degree assault and one charge of reckless watercraft operation.

According to the criminal complaint, at about 9 p.m. Aug. 12, Clancy drove his pontoon at a high rate of speed and came within five feet of hitting Eric Flamm's inflatable boat on Island Lake. Clancy's wife, Nikki, was reported to be in the pontoon. Flamm's brother, Barry, was a passenger in his boat.

Eric told the Hubbard County Sheriff's investigator he believes Clancy was "trying to run him over and hurt him." Barry stated it was "the closest he has ever been to being killed and was scared for his life."

Seven people witnessed the incident. One videotaped it from shore.

According to the complaint, the investigator found the Clancys at their nearby residence on Icon Drive. The Clancys opened their door and spoke with the investigator at approximately 2:45 a.m. Both denied anything happened or having any contact with the Flamms.

A pre-trial hearing is scheduled for Tuesday, Aug. 21 with District Court Judge Paul Rasmussen. All the charges are misdemeanors.

The Clancys have been embroiled in a property dispute with the Flamms and other adjacent property owners for two years.

A permanent easement

A lawsuit by the Clancys against the Flamms' parents, Donald and Sandra Flamm, was consolidated with a lawsuit by Vacationaire Estates, Inc. (VE) against the Clancys.

VE is a Minnesota nonprofit corporation organized in 1971 to provide an operating agreement for 10 cabin owners.

Hubbard County District Court heard testimony and received evidence at a civil court trial in March. In late May, Rasmussen issued his judgment.

The court order states that a portion of Icon Drive is owned by the Clancys and another portion by the Flamm Trust.

"The land is, however, subject to the highway easement (and other easements) and the owners of that land cannot impede those easements," wrote Rasmussen.

Most of Icon Drive is paved. The court determined that the paved surface is 24 feet wide, accommodates two-way traffic and "there was no evidence to suggest the road was any wider or narrower at the time VE was created or when the road was vacated."

Land exchanges over the years

All of the real property involved in the case was once under common ownership, stated Rasmussen in his findings of fact.

According to the court order, in 1963, the parcel was deeded to David and Lora Sedgwick. In 1966, the Sedgwicks formed a corporation, Vacationaire Inc. (VI), and transferred the land to the corporation.

In 1971, Sedgwick opted to separate the cabins from the resort and formed Vacationaire Estates (VE). He had VI deed to VE a parcel north of the resort with several cabins. Initial cabin sales were made to friends and family members of the Sedgwicks, including Donald and Sandra Flamm.

"The deed for this conveyance described the easterly boundary of the parcel as 'lying west of County Aid Road 89.' The intent of VI/Sedgwick was that the easterly boundary of the lot would be the edge of the road (now the edge of the pavement)," not to the edge of any right-of-way (ROW), Rasmussen said.

Rasmussen determined that the parties use the land as if there is no ROW. Structures and a septic system encroach "the supposed ROW," he wrote, adding that "the county tax map ignored the road altogether and currently has VE as the owner of the ROW. VE has been paying real estate taxes on the ROW land for a number of years (and VI has never objected)."

The lodge was built in 1972. "There was no defined parking lot at that time and the area west of the lodge was open (and grassy)," Rasmussen wrote.

The court found that, in 1974, Hubbard County vacated a section of County Road 89 (now a private road named Icon Drive) that all parties use to access their land. County Road 89 was relocated to the east of land owned by VI. As part of this process, VI executed a highway easement agreeing to provide a "reasonable and adequate access route" for ingress and egress to VE, said Rasmussen.

Rasmussen said Hubbard County Board resolutions formally vacating the old County 89 incorrectly state that VI was the only affected property owner. "This was in error as VE was also an affected property owner," he wrote.

In the mid- or late 1970s, the parking lot was paved. "VE paid for the paving for the portion of the parking lot that lies on VE property," Rasmussen noted.

'The owner's house'

In 1975, VI deeded to James Grewe the parcel known as "the owner's house," which is across the street from the lodge/restaurant and is currently owned by the Flamm Trust. The centerline of the road was utilized as the western boundary of the parcel, according to Rasmussen's findings of fact. "Part of the paved parking lot covers the southwest corner of this parcel. Grewe would allow employees and guests of the lodge to occasionally park vehicles in this area," he wrote.

Grewe installed a new septic system on this property around 1989. The drain field extends a few feet onto property now owned by the Clancys.

"Of note, this system was installed when Grewe was the president and majority stockholder in VI. As such, this drain field encroached upon land that Grewe at the time controlled. Until this litigation there had never been any complaints or concerns regarding the drain field which has been in existence for over 25 years," Rasmussen said.

In his court order, Rasmussen stated the Clancys "are estopped from claiming any trespass and/or damages. Any part of that drain field that exists on the Clancy parcel shall remain and need not be removed."

Grewe closed the resort in 2000. On Oct. 13 that year, he conveyed to VE a parcel of land to the north of the "owner's house" lot and gave VE an easement "for ingress and egress over and across the existing roadway over the land currently owned by the Clancys," wrote Rasmussen.

In 2002, VI sold the resort on contract for deed to Island Lake, Inc. (IL), a corporation owned by James Preiner.

In 2008, IL sold the resort on contract for deed to J & S Keenan, LLC, which could not make a scheduled balloon payment and filed for bankruptcy in 2010.

In 2016, IL sold the resort to the Clancy on contract for deed.

Permission for parking required

In 2016, VE approached the Clancys with a $1 per year lease agreement, which would allow customer parking on VE's property.

No agreement was reached, and "a dispute arose thereafter regarding parking that has led to this litigation," Rasmussen wrote. "The evidence at trial established that parking had never been a problem or issue until the Clancys started to operate the lodge and restaurant."

The court record states that, via a quit claim deed dated Nov. 1, 2016, VI conveyed to IL the land under the vacated County Road 89. In January 2017, IL conveyed the same to the Clancys in an amended contract for deed.

Rasmussen concluded that the Clancys own the real property under Icon Drive; however, it is "subject to an easement for ingress and egress" in favor of current and future members of VE, the Flamm Trust and Richard and Candis Kvamme (property owners to the north who were not involved in the litigation).

"No party shall park upon or in any way impede vehicular traffic on Icon Drive nor shall any party block or impede access to any driveway coming off Icon Drive," Rasmussen wrote.

The court order states the Clancys are responsible for maintenance, liability and real estate taxes for the portion of Icon Drive that they own.

The Flamm Trust is similarly responsible for the portion of Icon Drive that they own.

Rasmussen said the Clancys did not met the burden of proof regarding "claims for adverse possession or a prescriptive easement and their patrons have no right to use this section of the parking lot without permission from the Flamm Trust."

"Grewe and subsequent owners and occupants have used the road to access the Flamm Trust property for over 40 years. The Clancys cannot now claim trespass and bar access to this property over this long-existing roadway," Rasmussen said.

VE is owner of the northwest part of the paved parking lot within its property boundary, he continued. The Clancys "failed to establish their claims for adverse possession or a prescriptive easement and their patrons have no right to use this section of the parking lot without permission from VE."

Motion hearing

The Clancys' attorney, Patrick Doran, filed a formal motion to amend the court order "regarding perceived ambiguity" about the definition of Icon Drive. Differing opinions about the effect of the court order "has caused additional controversy that has led to law enforcement intervention," Doran wrote in a June 6 letter to Rasmussen.

A motion hearing was held Tuesday, with Rasmussen presiding.

Speculating it was a clerical error, Doran said the court omitted language for Clancy's ingress and egress over Icon Drive. "Everyone can use the road except the Clancys," he said, suggesting that a survey shows "a clear 66-foot roadway through the middle of all the property." Road length also was not discussed in the court order, Doran noted.

Doran also sought clarification on the encroaching septic system should it fail or need to be repaired in the future.

Rasmussen said he would take the motion under advisement.

Federal lawsuit

On Aug. 1, the Clancys filed a civil lawsuit in U.S. District Court against Vacationaire Estates, the Flamm Community Property Trust, Donald Flamm (who died of bone cancer on July 24), Eric and Dena Flamm, Dan Elsey, Craig Bingen, Todd Jungwirth and Richard Jungwirth.

The lawsuit alleges that former and current members of Vacationaire Estates used "threats of violence, acts of violence and malicious defamation for the purpose of harming the plaintiff's business, frightening the plaintiffs and thereby forcing the plaintiffs to surrender their property interest in old County Road 89 and the easement to Vacationaire Estates."

The Clancys further claim the Flamm Trust purchased property across the street from their restaurant from Todd Jungwirth in March 2017 "for the purpose of harassing and terrorizing the plaintiffs, their employees and customers."

In the lawsuit, the Clancys estimate they have lost in excess of $200,000 in profits.

VE President Dan Elsey purchased his cabin in 2001. Bingen and Todd Jungwirth no longer own property in this area.

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