Mediation report as sent to homeowners in February, 2011

Mediation: The much anticipated mediation took place beginning at 9:30, February 3, 2011. It was scheduled for a full day and took place at the offices of Dispute Management, Inc. with Daniel Himelspach as mediator. On January 6 the Dunwodys notified Mr. Himelspach that they would not continue mediating past noon. Everyone was first asked to sign a confidentiality statement and agree to mediate in good faith. Both the HOA Board members and the Dunwodys requested permission to report to their respective friends, members and/or colleagues and permission was granted. Therefore we can legally report to you regarding the progress of the mediation negotiations but any information or proposals made cannot be used in court.

Attending for the HOA were our attorneys, Monica Lester and Nathan Osborn, Board members Bob Phelps, Suzy Nelson, Paul Vastola, Renae Braun, and named plaintiffs Katie Wells and Kevin O’Connell. Fred Wells and Fred Skillern were available by phone if their advice was needed. Attending for the Dunwodys was their attorney Victor Boog, and of course Vera and Drayton Dunwody. We were in one room and the Dunwodys were in a different room and we never met eye to eye the whole time we were there.

We were there for nearly an hour before meeting Mr. Himelspach, as he was meeting with the Dunwodys during that time. After the appropriate preliminaries, Mr. Himelspach asked what we wanted to get from these negotiations. Our goal has always been permanent, safe, convenient access to the subdivision. As a minor goal, we hoped to determine what the Dunwodys’ long term plans were with regard to the disputed roads. Why were they fighting our use of the roads so vehemently?

The Dunwodys made the first proposal: A five year easement over the disputed roads for $50,000 up front and escalating payments starting at $10,000/year. Homeowners would be allowed to use the roads with a ranch pass, purchased individually, at market prices, and the Dunwodys could choose to deny membership to any individual. The intent was to allow us access while we constructed a different access route, presumably up Elk Road. Elk Road is shown on the Block 1 plat map and goes from Elk Creek Road just south-east of B1/L6 to Jensen Road then on to Circle Drive intersecting Circle Drive between B1/L13 and B1/L14. In theory, Elk Road would be an ideal solution to the problem if it weren’t for the fact that Elk Road was vacated in the late 1960’s and there is no right of way, not to mention the disruption to homeowners along the route of that road. The Dunwodys had made a similar offer to the Liaison Committee that I chaired over a year ago. The offer was unacceptable then and was unacceptable now. As an aside, Mr. Himelspach noted that the Dunwodys made no secret of the fact that under no circumstances would they accept any permanent or perpetual access agreement.

Why are the Dunwodys so opposed to a permanent easement agreement and why is traffic along Juniper and Jensen Roads such a touchy issue? Mr. Himelspach informed us that the Dunwodys want to eliminate traffic along Juniper and Jensen Roads because they believe the noise and headlights interfere with the ambiance for guests staying in the Dunwodys’ nearby cabin(s). What is the Dunwodys’ motivation to be so uncompromising? Mr. Himelspach said the Dunwodys perceived that the HOA was trying to shutdown their guest ranch / wedding business and felt that control over this (and other issues) was essential to their survival.

If Elk Road is not a viable option, are there any other ways to gain acceptable access other than by using Juniper and Jensen Roads? Brainstorming this question yielded two non-viable options. The first was to widen and remove the steepness of Stallion Drive. The costs of excavation and potential right-of-way issues make this alternative marginally viable at best. In addition, it does not solve the problems of the dangerous three-way intersection with Rock Creek Road, the round-about route required for some residents to reach their home, or the need for a second route for ingress and egress. The second alternative access route proposed was to move Juniper Road so it runs adjacent to the western border of Block 1 between Elk Creek Road to where the existing Juniper Road enters Block 1. This would move our access to the other side of the lodge, satisfying the Dunwody desire to get the access route away from their overnight accommodations. The proposal was also acceptable to the Dunwodys as long as we purchased the right-of-way. That would mean buying Tract K (the “Dunwody junior” property) and continuing on along the western border of Block 1.  The cost would probably approach $500,000 not counting the cost of building the road; making it another non-viable alternative.

The final proposal of the afternoon came from the EFPOA board. It was to close Juniper and Jensen to subdivision traffic on weekends during the summer. This would limit interruptions of the ambiance enjoyed by the Dunwodys’ guests and give homeowners access rights most of the time including during the winter when Stallion is the greatest problem. I don’t think either party particularly liked this proposal. At this point the Dunwodys left. To their credit, they stayed well past their noon deadline (it was nearly 3:00 by this time). The message they left with Mr. Himelspach was that they would go home and think about it. Mr. Himelspach’s comment was that sometimes the best compromise is the one that both sides are equally unsatisfied with.

Mr. Himelspach gave no indication of his opinion regarding the relative strength of either our case or the Dunwodys’ case. He did remind us several times of the risks if we lose, but gave no indication of our chance of losing or wining. Our attorneys were very pleased with Mr. Himelspach as a mediator. I think he was successful in getting both sides to clarify their positions and negotiate in good faith. We didn’t reach a compromise but we came closer than we expected. At this point we can continue to hope that someone will come up with a yet unthought-of solution.

Your Board members were encouraged that the Dunwodys indicated that they would think about the offer from us to close Juniper and Jensen to local traffic during wedding season weekends and we asked our attorney, Nate Osborne to follow up with the Dunwody’s attorney on the offer. Mr. Boog responded with:

“ The Dunwodys are not prepared to grant permanent easements across the disputed roads, other than those being granted across that portion of S. Elk Creek road on the Dunwodys’ property which are being granted to the owners of Lots 30-46, Elk Falls Block 3.  The Dunwodys’ concerns are not limited to wedding parties.  They are also concerned about the quiet and privacy of persons who rent their cabins throughout the year who expect the same solitude and ranch experience as the lot owners in the Elk Falls subdivision desire. The Dunwodys are also satisfied that the platted roads within Elk Falls, Blocks 1 and 2 can be developed and improved to meet Jefferson County standards for public and private mountain roads at far less cost than creating a new road through Tract K on which their son and his family reside. Preliminary engineering and survey data supplied to Jefferson County in connection with the plats of Blocks 1 and 2 confirm that platted roadways in Block 2 which have not been vacated can be constructed or improved to meet County standards.  The Dunwodys are also prepared to permit access across the “Disputed Roads” for an extended period of time during which such road construction could be diligently commenced and completed, provided that the pending litigation was dismissed with prejudice, and the Dunwodys were compensated for the legal expenses they have incurred in the litigation and paid a reasonable fee for the use of the Disputed Roads.”

At least we now know what would constitute a satisfactory outcome to the Dunwodys.

Summary judgment: We also learned recently that the Dunwodys lawyers filed a motion for summary judgment (This motion, if granted, essentially rules that the parties filing the motion can win the case without proceeding to trial). Our attorneys think it’s a long shot but are analyzing the arguments prior to preparing a response. The response is a counter argument, and must be filed to prevent the Judge from entering a default judgment on behalf of the defendants (in this case the Dunwodys).

Current plan: We will continue to prepare for trial unless another alternative comes up. The unfortunate result is that from here, it appears that this dispute is quite a way from being settled.