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IOWA DISTRICT COURT FOR JOHNSON COUNTY

SADDLE CLUB ROAD HOMEOWNERS

ASSOCIATION,

Plaintiff,
v.

KIRK J. FERENTZ, TRUSTEE OF THE

KIRK J. FERENTZ REVOCABLE
TRUST (sic),

And

MARY C. FERENTZ, Individually and as

TRUSTEE OF THE MARY C. FERENTZ
REVOCABLE TRUST (sic), No. LACV077939

Defendants DEFENDANTS’ ANSWER TO

___________________________________
KIRK J. FERENTZ, INDIVIDUALLY AND
AS TRUSTEE OF THE KIRK J. FERENTZ
REVOCABLE TRUST u/d/o October 5,
2012 and MARY C. FERENTZ,
INDIVIDUALLY AND AS TRUSTEE OF THE
MARY C. FERENTZ REVOCABLE
TRUST u/d/o October 5, 2012,
PETITION AT LAW AND IN EQUITY
AND
COUNTERCLAIM AND THIRD PARTY
PETITION TO QUIET TITLE AND FOR
DECLARATORY JUDGMENT

Third Party Plaintiffs,

v.

SADDLE CLUB ROAD HOMEOWNERS

ASSOCIATION, JOHN M. BUATTI,
ANN MARIE BUATTI, GARY D.
WATTS, BECKY J. WATTS, ELAYNE
O. SEXSMITH and FRED N. PAGE,

Third Party Defendants

DEFENDANTS’ ANSWER AND AFFIRMATIVE DEFENSES

COME NOW, Defendants Kirk J. Ferentz, Individually and as Trustee of the Kirk J.

Ferentz Revocable Trust u/d/o October 5, 2012 and Mary C. Ferentz, Individually and as

Trustee of the Mary C. Ferentz Revocable Trust u/d/o October 5, 2012, (collectively

“Ferentzes”) and for their Answer to Petition at Law and in Equity state as follows:
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1. Denied.

2. Admitted.

3. Ferentzes incorporate their previous answers.

4. Admitted.

5. Ferentzes incorporate their previous answers.

6. Denied.

7. Admitted.

8. Ferentzes admit that a written Agreement was executed on or about May 31,

2001 to June 25, 2001 and recorded August 7, 2001, in Book 3108, at Page 224, of the

records of the Johnson County Recorder. Ferentzes admit a true and correct copy of this

“2001 Agreement” is attached to Plaintiff’s Petition. Ferentzes admit Plaintiff has quoted a

portion of the 2001 Agreement; however, Plaintiff has omitted crucial language necessary

for understanding of the quoted provisions. Ferentzes deny any “unincorporated

Association” consisting of the then owners of the real properties referenced in Paragraph 6

of Plaintiff’s Petition existed. Ferentzes deny they were ever included in any such

“unincorporated Association.”

9. Ferentzes admit that Paragraph 6(b) of the 2001 Agreement is accurately

quoted. Ferentzes have never been in privity of contract with Plaintiff and, therefore, deny

that Plaintiff was a party to such 2001 Agreement and the remaining allegations of

paragraph 9.

10. Ferentzes admit that Plaintiff accurately quotes the 2001 Agreement.

11. Ferentzes deny that the Saddle Club Homeowners Association was

incorporated pursuant to Paragraph 6(a) of the 2001 Agreement. Ferentzes admit that a true

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and correct copy of the purported “Articles of Incorporation” were attached to Plaintiff’s

Petition as Exhibit C. The remaining allegations of paragraph 11 are denied.

12. Ferentzes admit that on or about May 23, 2015 a meeting to discuss

formation of a proposed association and proposed bylaws was attended by Ferentzes and

Third Party Defendants herein. Ferentzes admit they agreed to provide any comments or

required revisions to the bylaws to a designated Owner by June 17, 2015. Ferentzes admit

they agreed to meet again for an additional organizational meeting. Ferentzes deny the

organizational meeting was scheduled for June 24, 2015, to accommodate the Ferentzes

schedules at the Ferentzes’ request. Ferentzes affirmatively assert that paragraph 9 of the

2001 Agreement expressly provides,

This agreement constitutes the entire agreement related to the matters contained
herein and it shall not be altered, amended, modified, or changed unless done so in
writing, signed by all parties hereto, or their respective heirs, assigns, transferees and
successors in interest.

Plaintiff has produced no writing establishing Ferentzes’ intention to be bound by the

alleged agreements contained in paragraph 12.

13. Denied. Ferentzes affirmatively assert that they made oral and written

objections to the proposed Bylaws on or about June 17, 2015.

14. The Ferentzes admit they did not attend an organizational meeting on June

24, 2015. Ferentzes deny for lack of information that such meeting occurred.

15. Denied for lack of information. Ferentzes affirmatively assert that even if a

“unanimous vote of all members present at the June 24, 2015 organizational meeting”

occurred, such vote is not binding on Ferentzes.

16. Ferentzes admit Plaintiff has quoted the Bylaws. Ferentzes deny the

Association owns or maintains Saddle Club Road N.E. Ferentzes deny the Bylaws identify

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the initial Owners and members of the Association. Ferentzes deny they are members of the

Association. All remaining allegations of paragraph 16 are denied.

17. Ferentzes admit that section 3.01 of the Bylaws purports to require the Board

of Directors of the Association to obtain the approval of a majority of Owners to enter into

contracts consisting of an expenditure of $5000 or more. Ferentzes deny the Board of

Directors of the Association or the Association itself is duly authorized to enter into any

contract on behalf of its alleged Members or the Ferentzes. All remaining allegations of

paragraph 17 are denied.

18. Ferentzes admit the Article V of the Bylaws purports to govern the

Association’s authority to levy assessments. Ferentzes deny the Association is duly

authorized to levy any assessment, including assessments against its alleged Members or the

Ferentzes. All remaining allegations of paragraph 18 are denied.

19. Denied for lack of information. Ferentzes affirmatively assert that even if a

“unanimous vote of all members present at the June 24, 2015 organizational meeting”

occurred, such vote is not binding on Ferentzes. Ferentzes affirmatively assert that the pro

rata voting purportedly approved by Plaintiff as shown in Exhibit E is directly contrary to

the terms of the 2001 Agreement which expressly provides, “Each member of the

homeowners Association will be entitled to one vote on all Association matters.” See

Plaintiff’s Exhibit B paragraph 6(a).

20. Denied.

21. Admitted.

22. Denied.

23. Denied for lack of information.

24. Denied.

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25. Denied for lack of information.

COUNT I: BREACH OF CONTRACT (WRITTEN) (2001 Agreement)

26. Ferentzes incorporate their previous answers.

27. Ferentzes incorporate their answer to paragraphs 18, 19 and 21 above.

28. Ferentzes admit they are not members of the Association and have refused to

pay any assessment Plaintiff has attempted to levy. The remaining allegations of paragraph

28 are denied.

29. Denied.

30. Denied.

31. Denied.

32. Denied for lack of information.

33. Denied.

COUNT II: BREACH OF CONTRACT (WRITTEN) (Association Bylaws)

34. Ferentzes incorporate their previous answers.

35. Denied.

36. Ferentzes admit Plaintiff has recorded a document purporting to be a lien

against the Ferentz Property. The remaining allegations of paragraph 36 are denied.

37. Denied.

COUNT III: TRESPASS

38. Ferentzes incorporate their previous answers.

39. Denied.

40. Denied.

41. Denied.

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AFFIRMATIVE DEFENSES

1. Plaintiff is not in privity of contract with Ferentzes and, therefore, the

Association is not the real party in interest pursuant to the 2001 Agreement.

2. Plaintiff has no right title or interest in the area formerly known as Saddle

Club Road and is therefore not the real party in interest.

3. Plaintiff’s claims are barred by the statute of limitations.

4. Plaintiff’s claims are barred by the doctrine of laches, waiver and estoppel.

5. Plaintiff’s claims are barred by the doctrine of unclean hands.

6. Ferentzes have a prescriptive easement with regard to the placement of the

alleged Encroachments.

WHEREFORE, Defendants Kirk J. Ferentz, Trustee of the Kirk J. Ferentz

Revocable Trust and Mary C. Ferentz, trustee of the Mary C. Ferentz revocable trust pray

the Court dismiss Plaintiff’s Petition, enter a judgment in Defendants’ favor holding

Plaintiff’s purported lien is null and void, granting Defendants a judgment for their

reasonable attorney’s fees and costs and for such other and further relief as the Court deems

equitable in the premises.

COUNTERCLAIM AND THIRD PARTY PETITION

COME NOW, Third Party Plaintiffs Kirk J. Ferentz, Individually and as Trustee of

the Kirk J. Ferentz Revocable Trust u/d/o October 5, 2012 and Mary C. Ferentz,

Individually and as Trustee of the Mary C. Ferentz Revocable Trust u/d/o October 5, 2012,

and submit their Counterclaim and Third Party Petition to Quiet Title and for Declaratory

Judgment.

1. Defendant and Third Party Plaintiff Kirk J. Ferentz is a resident of Johnson

County, Iowa and is Trustee of the Kirk J. Ferentz Revocable Trust u/d/o October 5, 2012.

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Defendant and Third Party Plaintiff Mary C. Ferentz is a resident of Johnson County, Iowa

and is Trustee of the Mary C. Ferentz Revocable Trust u/d/o October 5, 2012. Collectively

they are referred to herein as “Ferentzes.”

2. Plaintiff and Third Party Defendant Saddle Club Road Homeowners

Association (“the Association”) is a corporation organized pursuant to Chapter 504 of the

Code of Iowa.

3. Third Party Defendants John M. Buatti, Ann Marie Buatti, Gary D. Watts,

Becky J. Watts, Elayne O. Sexsmith and Fred N. Page are all residents of Johnson County,

Iowa.

4. Third Party Defendants John M. Buatti, Ann Marie Buatti, Gary D. Watts,

Becky J. Watts, Elayne O. Sexsmith and Fred N. Page are all members of the Association

and are owners of real property more particularly described in the Bylaws of Saddle Club

Road Homeowners Association identified below.

5. Kirk J. Ferentz and Mary C. Ferentz reside on the property described as

follows:

COMMENCING AT A STONE MARKING THE SOUTHEAST

CORNER OF THE SE¼ OF THE NW¼ OF SECTION 23, TOWNSHIP 80
NORTH, RANGE 6 WEST OF THE 5TH P.M., IN JOHNSON COUNTY,
IOWA; THENCE NORTH 1°44’ WEST FOR A DISTANCE OF 333.5
FEET TO THE POINT OF BEGINNING; THENCE NORTH 1°44’ WEST
FOR A DISTANCE OF 994.3 FEET TO THE NORTHEAST CORNER
OF SAID SE¼ OF NW¼; THENCE SOUTH 88°51’ WEST FOR A
DISTANCE OF 668.04 FEET; THENCE SOUTH 9°58’ WEST FOR A
DISTANCE OF 101.0 FEET; THENCE SOUTH 19°44’ EAST FOR A
DISTANCE OF 621.07 FEET; THENCE SOUTH 31°37’ EAST FOR A
DISTANCE OF 354.0 FEET; THENCE NORTH 88°52’ EAST FOR A
DISTANCE OF 320.0 FEET TO THE POINT OF BEGINNING

(“The Ferentz Property”).

6. The Ferentz Property is owned by Kirk J. Ferentz as trustee of the Kirk J.

Ferentz Revocable Trust u/d/o October 5, 2012, as may be amended (undivided ½ interest)
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and Mary C. Ferentz as trustee of the Mary C. Ferentz Revocable Trust u/d/o October 5,

2012, as may be amended (undivided ½ interest).

The 2001 Agreement

7. Prior to May 31, 2001, Third Party Plaintiffs Kirk J. Ferentz and Mary C.

Ferentz, along with Richard P. Brown and Marilyn J. Brown, the predecessors in interest to

the property now owned by Third Party Defendants Elayne O. Sexsmith and Fred N. Page,

objected to the subdivision of Lot 7 Saddleback Ridge – Part Two by Third Party

Defendants John M. Buatti and Ann Marie Buatti (“Buatti Third Party Defendants”).

8. On or about May 31, 2001, Third Party Plaintiffs Kirk J. Ferentz and Mary C.

Ferentz, the Buatti Third Party Defendants, and Richard P. Brown and Marilyn J. Brown

entered into an agreement regarding the maintenance of Saddle Club Road N.E. (sometimes

referred to as “Saddleclub”); Recorded August 7, 2001 in Book 3108, Page 224 of the

records of the Johnson County, Iowa Recorder (“2001 Agreement”).

9. The 2001 Agreement resulted in the subdivision of the property owned by the

Buatti Third Party Defendants and the creation of the lot now owned by Third Party

Defendants Gary D. Watts and Becky J. Watts (“Watts Third Party Defendants”).

10. On June 12, 2001 the Johnson County Board of Supervisors adopted a

“Resolution Approving the Preliminary and Final Plat and Subdivider’s Agreement of

Saddleback Ridge Parts Three, Johnson County, Iowa,” (the “Resolution”).

11. A true and accurate copy of the 2001 Agreement, as filed with the Recorder

with the Resolution is attached hereto as Exhibit A.

12. The parties to the 2001 Agreement agreed to certain provisions for the

maintenance of Saddle Club Road N.E. between Prairie Du Chien Road and the North

boundary line of Saddleback Ridge – Part Three.

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13. The 2001 Agreement provides, in pertinent part:

The parties hereto will create an Iowa nonprofit corporation consisting of themselves
as well as all future owners of the property now owned by the parties hereto
including any resubdivided lots therein. The bylaws of the nonprofit corporation will
incorporate the terms of this road maintenance agreement and establish more
detailed procedures for the selection of road maintenance contractors and payment
thereof all consistent with this agreement.… Any changes in the bylaws by a super
majority vote shall not alter any rights or obligations created by this agreement.”

Exhibit A, para. 6(a), emphasis added.

14. The 2001 Agreement further provides,

The surface of Saddleclub Road N.E. is now gravel. In the event any party hereto
who subdivides their property in compliance with the terms of this agreement desires
to change the roadway surface to some surface other than gravel, and such change in
surface is required by any ordinances, law, regulation or governmental body for
further subdivision by any party hereto, the cost thereof shall be paid by said party
and none of the other parties hereto or their successors in interest shall be required to
pay for and maintain over and above their current obligations for said improved
roadway surface.

Exhibit A, para. 6(d).

15. On information and belief, Ferentzes state that following the execution of the

2001 Agreement no change in the surface of Saddle Club Road N.E. was required by any

ordinance, law, regulation or governmental body.

16. On information and belief Ferentzes state that following the execution of the

2001 Agreement, there has been no further subdivision of any of the properties subject to the

2001 Agreement.

The Bylaws

17. On July 8, 2015, a certificate was filed in Book 5393 at page 602 of the

records of the Johnson County, Iowa Recorder, which included the bylaws of Saddle Club

Road Homeowners Association (“the Bylaws”). A true and accurate copy of the Bylaws is

attached hereto as Exhibit B.

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18. At a meeting of the Association members on or about June 24, 2015, the

individual Third Party Defendants voted to adopt the Bylaws and declared them to be

approved by a “3/4 super-majority vote of the owners in favor of the Bylaws of the

Homeowners Association, assuming disapproval as was expressed via the letter submitted

by Mary & Kirk Ferentz.” A true and accurate copy of the minutes of the Saddle Club Road

Homeowners Association dated June 24, 2015 are attached hereto as Exhibit C.

19. Section 1.03 of the Bylaws includes a statement that the initial Owners and

members of the Association include: “Trustee of the Kirk J. Ferentz Revocable Trust and

Trustee of the Mary C. Ferentz Revocable Trust.”

20. Neither Kirk J. Ferentz nor Mary C. Ferentz individually or as trustee

approved or signed the Bylaws.

21. Neither Kirk J. Ferentz nor Mary C. Ferentz individually or as trustee or in

any other capacity, have agreed to be bound by the Bylaws or to be members of the

Association nor have they agreed that such Bylaws are binding in any manner on the title to

the Ferentz Property or on the title to any other property owned by them individually or as

trustees or in any other capacity.

22. The Bylaws were filed for record in the office of the Johnson County, Iowa

Recorder, without the approval or consent of Kirk J. Ferentz and Mary C. Ferentz

individually or in any capacity.

23. Despite the fact that the 2001 Agreement expressly prohibited any

homeowners association from adopting bylaws that altered any rights or obligations of any

party to the 2001 Agreement, the Bylaws nevertheless adopted numerous provisions

inconsistent with the 2001 Agreement and purported to alter the parties rights and

obligations, including but not limited to the following:

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a. Section 6(a) of the 2001 Agreement provides for one vote by

each member of the Homeowners Association, but Section 2.07(a) of the

Bylaws purports to alter the voting to correspond with each member’s

pro rata share of road expenses.

b. Section 3.07 of the bylaws gives the Board of the Association

authority to spend up to $5,000 without member approval, contrary to

the terms of the 2001 Agreement which contemplates the parties voting

“on all Association matters” and limits the parties’ liability to pay for

nonvoluntary improvements to the road to its then existing status as a

gravel surfaced roadway.

c. Section 5.03 sets forth examples of common expenses for

which members can be assessed not contemplated by the 2001

Agreement, including the cost of administration, operations and

management of the Association, snow removal and the establishment of

a reserve fund.

d. Section 5.06 purports to permit the Association to file and

foreclose liens against the property of a member. Such a lien is contrary

to Iowa law and was not contemplated by and is contrary to the 2001

Agreement.

e. Section 6.02 of the Bylaws purports to give the Association

authority to trim a member’s trees at the member’s expense, if the

member fails to do so after notice, “in the case of tree limbs needing to

be trimmed.” Such obligation extends well beyond any authorized

action by any Association contemplated by the 2001 Agreement.

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f. Section 6.03 of the Bylaws purports to give the Board of the

Association authority to adopt rules and regulations regarding the road.

Such provision grants the Board authority far beyond the contemplation

of the 2001 Agreement.

g. Section 7.01 of the bylaws provides that if any conflict between

the 2001 Agreement and the bylaws, “the terms of these Bylaws shall

govern.” The 2001 Agreement provides that the 2001 Agreement will

control in all instances unless any Bylaws or any amendment to the

Bylaws is unanimously approved by all lot owners.

24. Pursuant to Iowa Code Section 504.601, “[a] person shall not be admitted as

a member [of an Iowa nonprofit corporation] without the person’s consent or affirmative

action evidencing consent.”

25. Because the Ferentzes did not consent to be admitted as members of the

Association and because the Bylaws were established without their consent and contrary to

the terms of the 2001 Agreement, such Bylaws are not binding upon the Ferentzes or their

successors in interest, but instead constitute a cloud on the Ferentzes’ title to their Property.

The Lien

26. At the time the 2001 Agreement was executed by the Ferentzes, the Browns

and the Buatti Third Party Defendants, the surface of Saddleclub Road N.E. was gravel.

27. In approximately 2002, the Watts Third Party Defendants elected to change

the gravel surfaced road to a chip-seal surface.

28. The Ferentzes never agreed in writing to the change and, in fact, Third Party

Plaintiff Mary Ferentz voiced her objection to the change.

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29. In March 2015, prior to the formation of the Association and without the

approval of the Ferentzes, Third Party Defendant Gary Watts obtained bids from LL

Pelling Company for the purpose of scarifying, grading, and adding to the road’s sub base

and chip-sealing the road.

30. On or about May 2015, prior to the formation of the Association and without

the approval of Ferentzes, Third Party Defendants authorized LL Pelling Company to

perform such work in the amount of $36,736.

31. At a meeting of the Association members on or about June 24, 2015, the

individual Third Party Defendants voted to assess Ferentzes $8,449.28 for the cost of the

work performed by LL Pelling Company and to collect additional fees for road

maintenance, snow removal and maintenance in the full amount of $5,000 and assess

$1,150 of that amount to the Ferentzes.

32. On or about June 26, 2015, the Association forwarded to Ferentzes a bill in

the amount of $9,599.28.

33. October 23, 2015 Third Party Defendants caused to be filed a “Claim of Lien

For Assessment” (the “Lien”) wherein Third Party Defendants asserted that a lien exists

against Ferentzes’ Property in the total amount of $9,599.28. A true and accurate copy of

the Lien is attached hereto as Exhibit D.

34. The Lien is contrary to the 2001 Agreement and was not established pursuant

to any homeowners association’s bylaws to which the Ferentzes are subject.

35. The Lien constitutes a cloud on the Ferentzes’ title to the Ferentz Property.

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Relief Requested

36. The Ferentzes seek to:

a. Quiet title in the Ferentz Property by having the Court declare that the
Ferentzes are not members of the Association and that the Ferentzes
and the Ferentz Property, as well as the Ferentzes’ successors in
interest, are not bound by any rules, regulations, bylaws or the like
which have been or may be promulgated by the Association, or by the
other Third Party Defendants herein.

b. Quiet title in the Ferentz Property by having the Court declare that the
Lien filed by the Association is invalid and the alleged debt
represented by the Lien is not due and owing for all the reasons set
forth herein.

c. Have the Court declare the parties’ respective rights and obligations
pursuant to the 2001 Agreement.

d. Obtain a judgment for their reasonable attorneys’ fees and costs.

WHEREFORE, Third Party Plaintiffs Kirk J. Ferentz, Individually and as Trustee of

the Kirk J. Ferentz Revocable Trust u/d/o October 5, 2012 and Mary C. Ferentz,

Individually and as Trustee of the Mary C. Ferentz Revocable Trust u/d/o October 5, 2012

request that the Court quiet title in the Property; confirm that Third Party Plaintiffs are not

members of the Saddle Club Road Homeowners Association and that they and their

successors in interest are not bound by any rules, regulations, bylaws or the like which have

been or may be promulgated by the Association or its members; confirm that the Lien filed

by the Association is invalid and does not constitute a lien on Third Party Plaintiffs’

property and that the alleged debt represented thereby is not due and owing; and to

otherwise declare the rights of the Parties hereto pursuant to the 2001 Agreement as

necessary to resolve the issues before the Court. The Third Party Plaintiffs pray for such

other and further relief as may be equitable in the premises.

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SIMMONS PERRINE MOYER BERGMAN PLC

/s/Mark A. Roberts
MARK A. ROBERTS AT0006579
NICHOLAS PETERSEN AT0012570
Simmons Perrine Moyer Bergman PLC
115 3rd Street, Suite 1200
Cedar Rapids, IA 52401-1266
(319) 366-7641; Fax (319) 366-1917
mroberts@simmonsperrine.com
npetersen@simmonsperrine.com

Attorneys for Defendants and

Third-Party Plaintiffs

CERTIFICATE OF SERVICE

I hereby certify that on March 18, 2016 I filed the foregoing with the Clerk of Court
using the electronic filing system which will send notification of such filing to the following:

Adam S. Tarr
atarr@pughhagan.com

Bryce K. Dalton
bdalton@pughhagan.com

/s/Mark A. Roberts_____________

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