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IN THE COURT OF APPEALS OF IOWA No. 9-938 / 09-0654 Filed December 30, 2009 KRUPP PLACE 1 CO-OP, INC., and KRUPP PLACE 2 CO-OP, INC., Plaintiffs-Appellees, vs. BOARD OF REVIEW OF JASPER COUNTY, IOWA, Defendant-Appellant. ________________________________________________________________ Appeal from the Iowa District Court for Jasper County, Dale B. Hagen, Judge.

Appeal from the district court ruling that plaintiffs rental properties should be classified as residential instead of commercial. AFFIRMED.

Steve Johnson, County Attorney, and Michael Jacobsen, Assistant County Attorney, Newton, for appellant. James Nervig of Brick Gentry, P.C., West Des Moines, and Craig Hastings of Hastings & Gartin, L.L.P., Ames, for appellees.

Considered by Sackett, C.J., Vaitheswaran and Danilson, JJ.

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SACKETT, C.J. The Jasper County Board of Review (Board) appeals from the district courts ruling on the plaintiffs combined motions that concluded "the plaintiffs rental properties should be classified as residential multiple housing

cooperatives" under Iowa Code chapter 499A (2007). We affirm. BACKGROUND. The plaintiffs are two multiple housing cooperatives

organized in November of 2007 under Iowa Code chapter 499A. In March of 2008 the Jasper County Assessor notified the plaintiffs of the 2008 property tax assessment, classifying the properties as commercial. In May, plaintiffs filed an objection, contending the properties were misclassified as commercial, but should properly be classified as residential under Iowa Code section 441.21(11). The Board adjusted the value of the properties because it determined they were assessed for more than the market value, but main tained the properties classification as commercial. In June, plaintiffs filed a petition on appeal in district court, seeking to have the properties reclassified as residential. The parties filed a joint stipulation of undisputed material facts, which the district court adopted as its findings of fact in its February of 2009 ruling on appeal. The court concluded the plaintiffs

complied with the requirements of Iowa Code chapter 499A in creating the cooperatives. "However, . . . although they did comply with the letter of the law in forming their cooperatives, they did not abide by the ,,spirit of the law and the corporate entities shall be disregarded." Many of the conclusions of the court cited a lack of proof the cooperatives were actually operating as true multiple

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housing cooperatives instead of standard rental properties. The court ultimately concluded: In light of the evidence and the purpose of housing cooperatives, the court disregards the plaintiffs organization under chapter 499A and instead treats the apartment buildings by their true nature--a commercial apartment building. The properties were properly assessed as commercial and the plaintiffs appeal is denied. The plaintiffs filed combined motions under Iowa Rules of Civil Procedure 1.904 (reconsider) and 1.1004 (new trial) and offered other documents, which the court admitted into evidence, that addressed the courts lack-of-proof concerns in its ruling. At the March hearing on the combined motions, the court admitted the additional evidence from the plaintiffs. In its April ruling, the court denied the motion for new trial, noting: "All the information the court needs to reconsider its previous ruling is found in the exhibit and a new trial would be a waste of judicial resources." The court then addressed the motion for reconsideration. It concluded: In light of the new evidence provided by the plaintiffs and admitted by the court, it is apparent the plaintiffs rental properties were improperly classified and the appeal should be granted, rather than dismissed as was done in the prior ruling. The plaintiffs followed all proper corporate formalities and the multiple housing cooperatives were set up exactly as prescribed by Iowa law. The absence of the evidence [that] is now before the court had previously raised questions about the propriety of such cooperatives. However, now that the court has seen this evidence it is assured the plaintiffs rental properties should be classified as residential multiple housing cooperatives under the Iowa Code. The February 10th, 2009 ruling shall be so modified. The Board appeals, contending the court erred in ruling the properties should be classified as residential, because the plaintiffs "are operating as a

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commercial enterprise and should be classified as commercial property for tax assessment purposes." SCOPE OF REVIEW. Appeals from decisions of local boards of review are heard in equity. Iowa Code

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