CITY OF STILLWATER v. BLOCK 40 SOUTH
2021 OK CIV APP 29
| Okla. Civ. App. | 2021Background
- In 2009 the City of Stillwater conveyed a tract to Stillwater Children’s Museum, Ltd. (SCM) with a deed condition (possibility of reverter) requiring operation of a children’s museum.
- SCM never opened the museum; the reverter clause allegedly clouded title and impeded financing.
- On April 17, 2017 the City Council voted to release the reverter clause and the mayor executed a "Release of Deed Restriction and Reversion Clause;" the Release was recorded June 21, 2017.
- SCM sold the property to Block 40 South, LLC (Developer) in April 2018; Developer claims good‑faith purchaser status with insured title.
- The City filed a declaratory judgment action in June 2019 seeking a declaration that the Release was lawful; taxpayer Cory Williams submitted a qui tam written demand (signed by >100 voters) on June 21, 2019 and moved to intervene.
- The trial court denied Williams’s motion to intervene, finding his Section 373 written demand was untimely because the transfer occurred when the Release was executed (April 17, 2017); Williams appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Whether Williams’s Section 373 written demand was timely (when is the "transfer" date for §374 limitations). | Williams: transfer date = recording (June 21, 2017), so his June 21, 2019 demand was within two years. | City/Developer: transfer date = execution of Release (April 17, 2017); demand filed >2 years later and is untimely. | Held: Transfer occurred on April 17, 2017 (execution date); demand was untimely; intervention denied. |
| 2. Whether Williams may intervene under the equitable injunction statute (12 O.S. §1397). | Williams: equitable relief available to enjoin unlawful transfer/expenditure of public property. | City: §1397 applies to void judgments, taxes, or nuisances; not to deed releases; statutory remedy (qui tam) controls. | Held: §1397 does not apply here; trial court did not err in denying intervention under §1397. |
| 3. Whether Williams may intervene under the declaratory judgment statute (12 O.S. §1651). | Williams: incorporation of prior arguments; seeks to intervene to challenge legality of the release. | City: Qui tam remedy is time‑barred; no separate basis to intervene in declaratory action. | Held: Because Williams’s qui tam demand was untimely, he was not entitled to intervene under declaratory judgment statute. |
| 4. Whether the City diligently prosecuted the controversy (which would preclude qui tam intervention). | Williams: City’s petition omits sale prices and other facts showing reverter value > $250,000; City failed to diligently pursue recovery. | City: Filed declaratory action before Williams’ demand; presented the legal issues in court; acted in good faith and with diligence. | Held: Court did not need to reach diligence in light of the statute‑of‑limitations bar; intervention denied. |
Key Cases Cited
- State ex rel. Henricksen v. State ex rel. Corp. Com'n, 37 P.2d 835 (Okla. 2001) (§374 operates as a statute of limitations for qui tam demands)
- Tulsa Indus. Auth. v. City of Tulsa, 270 P.3d 113 (Okla. 2011) (public body can preclude taxpayer intervention by diligently presenting controversy in declaratory action)
- City of Broken Arrow v. Bass Pro Outdoor World, LLC, 250 P.3d 305 (Okla. 2011) (taxpayer intervention standards and qui tam principles)
- Stump v. Cheek, 179 P.3d 606 (Okla. 2007) (statutory construction—give plain words their operation; avoid strained constructions)
- Smith v. Benson, 262 P.2d 438 (Okla. 1953) (recording is constructive notice; actual knowledge makes recording unnecessary)
- Midwestern Dev., Inc. v. City of Tulsa, 374 F.2d 683 (10th Cir. 1967) (right of reverter generally has only nominal value)