Following an inconclusive court hearing Monday, the city of Ketchum remains unsuccessful in its effort to persuade a judge to dismiss a lawsuit filed against it by a would-be gas station developer.

Roy Bracken’s $3 million suit alleges that the city—along with former Planning Director Micah Austin, former Mayor Nina Jonas and current City Administrator Suzanne Frick—acted illegally when considering his building-permit application for a gas station, which he planned to build across from Knob Hill Inn north of town.

Bracken’s claims include gross negligence, illegal spot-zoning and illegal enactment of an ordinance.

In December, the city filed a motion for partial summary judgment asking the court to dismiss most of the case.

“The city intends to vigorously defend this lawsuit and denies the allegations within,” Ketchum spokeswoman Lisa Enourato wrote in a previous email to the Express.

In 2016, Bracken’s original plan to purchase the Main Street property from Nick and Kathy Gyurkey was met with support from the sellers, who in a Mountain Express guest opinion described the gas station design as “low-key, muted and discrete.” But neighboring property owners Barbi Reed and Gary Lipton, along with a coalition called Citizens Against Bracken Station, said they worried the development would cause traffic bottlenecks and open the door to a chain gas station or fast-food joint.

When Bracken first applied for a conditional-use permit in April 2016, a staff report found that his project met all city standards except one. In his June 5 lawsuit, Bracken alleges that the report grew increasingly critical after a public survey on the proposal was conducted behind closed doors and illegally discussed during a Planning and Zoning hearing.

Bracken contends that the survey influenced staff findings and that Austin illegally refused his applications and reapplications, despite their having been filled out properly. The crux of the suit revolves around a zoning ordinance that Ketchum passed in July 2017—one day before Bracken could have resubmitted his permit application—barring gas stations on Main Street.

At tense P&Z meetings throughout 2016 and 2017, commissioners issued rulings both against and in favor of Bracken’s project, which was axed in December 2016. But every time Bracken revised site plans and reapplied, he alleges, Austin refused to process his paperwork on grounds of untimeliness or inadequacy and at times hand-delivered the files back to Bracken’s attorney.

“The defendants had a duty to monitor, process and safeguard the plaintiff’s applications,” one of Bracken’s attorneys, Robert Elgee—a former district judge—told Judge Jonathan Brody during a hearing Monday on the city’s motion for summary judgment. “A vested application is a valuable property right.”

Beyond just violation of due process, Elgee said, the city had tried to run Bracken into the ground by requiring expensive traffic studies—and when that didn’t work, it pulled the rug out from under him by rezoning the land. Bracken’s $3 million claim represents a tally of financial losses from those actions: $299,000 in annual profit loss, multiplied by 10 years, plus over $181,000 in out-of-pocket expenses like attorney fees and city-ordered data analyses.

“The city’s idea is that it can whack out certain evidence of negligence and deceit, but all of [the evidence] combined is what it takes to prove an intentional tort,” Elgee said.

Defense attorney Kirk Houston questioned Bracken’s financial-loss calculation.

“There’s no guarantee that Bracken would have been able to get the building permit from the P&Z and make $299,000 [per year] once he got it up and running. It’s remote. It’s speculative,” he said.

While Houston attempted to have Bracken’s claims against the city thrown out, Brody declined to rule on the pretrial motion.

At issue Monday was the application of Idaho’s common-law economic loss rule, which prohibits recovery of economic losses in negligence cases except for in three circumstances. One exception recognized by the Idaho Supreme Court is when economic loss is “parasitic in injury to a person or property,” a condition that Brody, on Monday, assigned both parties to further explore in supplemental briefings.

The hearing was continued to Feb. 24 and a jury trial is set for April 14.

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