In an unusual twist, the lawsuit filed by the city of Wasilla against a Washington D.C. environmental group and land investor Gary Lundgren is working its way backward through the federal court system. Attorneys on both sides of the case have agreed that the U.S. District Court of Appeals Ninth Circuit should send the case back to the court of U.S. District Judge John Sedwick in Anchorage.

The case is coming back because Wasilla argued that it had legal access via right-of-way to one of the properties when it fact, it didn't. Whether that revelation will tip the scales in favor of Lundgren remains to be seen.

"We're basically back to where we were about two years ago," said attorney Jim Gorski, who represents Lundgren in the case. Sedwick could hear additional arguments and accept evidence from Gorski and Kenneth Jacobus, the attorney representing Wasilla or he could decide the case based on the evidence brought before him previously. At issue is title to land which was sold by The Nature Conservancy (TNC) to either Lundgren or the city depending on which side you believe. The property in question is just east of the Wasilla airport and is made up of one 126 acre lot and a portion of a 30 acre lot which has yet to be subdivided. Wasilla negotiated with the Anchorage TNC office while Lundgren closed his deal with the nonprofit's Washington D.C. office. Wasilla sued, Sedwick decided in the city's favor, and Lundgren appealed the case to the Ninth Circuit.

Sedwick declared Wasilla the winner in July 2000. In his order, Sedwick directed TNC to void it's sale to Lundgren and to subdivide the smaller parcel in the manner the Anchorage TNC office had agreed to in negotiations with the city. Lundgren's corner was ordered to assist TNC in subdividing the property, but the court-ordered subdivision hit a snag at the platting office of the Mat-Su Borough.

"We tried to do the subdivision as the judge ordered us and we couldn't," Gorski said. The platting office denied the request for a subdivision of the property because the new lot wouldn't have a legal access.

The situation on the ground is different than how it appears on platting maps. South Church Road -- which the city plans to rename soon -- was built in 1999 and goes through both of the TNC lots. The problem for the platting office was that South Church crosses the Alaska Railroad's tracks with only limited approval from the railroad.

"It was originally permitted as a temporary crossing for a haul road, and that permit has since expired," Railroad spokesman Patrick Flynn said, "The railroad and the city are working together to make that permanent."

A fox in the hen house?

Although the city of Wasilla has title to the D2 parcel, Lundgren still believes he is the rightful owner of the D2 parcel and its neighbor, the parcel known as B1.

"We thought we bought it three years ago and for the past three years we've been involved in this litigation," Lundgren said.

Lundgren's agent when he pursued the property in 1999 was Kevin Baker, a Wasilla real estate broker who at the time also served on the city planning commission. As a planning commissioner Baker voted in favor of the city's land purchase. Baker is not named as a defendant in the lawsuit, but the city's court filings portray him as a sort of fox guarding the hen house.

TNC had decided to dispose of several west Wasilla parcels. Lundgren and Baker, the city alleges, threatened not to close on other property deals with TNC unless TNC broke off its agreement with the city.

"This would be particularly egregious if it were done merely by a real estate agent, but in fact it was done by a public official of the City of Wasilla," Jacobus wrote to Judge Sedwick.

Baker's actions on the planning commission show that Baker wanted the city to buy the property first, according to Lundgren.

"He voted in favor of [the city] acquiring it, the problem is they never acquired it" Lundgren said.

Gorski's co-counsel in the case, Ken Albertsen -- who sometimes represents Baker in other matters -- said the flap about Baker's supposed insider dealing from the planning commission isn't material to Wasilla's case at all. Albertsen called that part of Wasilla's case slander against Baker and Lundgren.

"It has no bearing on the outcome of the argument," Albertsen said.

Albertsen points out that Lundgren and Baker have never been deposed by Wasilla in the case. He also claims that Lundgren wanted the city to have first pick of the TNC properties to begin with. Lundgren's offer to TNC was long-standing and TNC only approached Lundgren because the nonprofit grew tired of waiting for Wasilla's administration to close it's deal, according to Albertsen.

"It was Wasilla's inaction that caused this," Albertsen said.

Cramer said that while government admittedly moves slower than the private sector, there were no signals from TNC that anyone should hurry.

"There was no sense of urgency on the part of TNC in my opinion, and there wasn't a sense of urgency on our part because we believed that our negotiations with TNC were in good faith," Cramer said.

Albertsen and Gorski both believe that the questions of access give them a better chance of defending Lundgren from Wasilla's lawsuit. In a recent ruling denying one of Wasilla's motions in the case, Sedwick reminded Jacobus that Wasilla's claim that a railroad crossing existed had led to his decision two years ago.

"It will be remembered that it was during oral argument that Wasilla's counsel made misrepresentations which affected this court's judgment," Sedwick wrote.

Jacobus said he's not particularly bothered by Sedwick's assertion.

"I didn't make a mis-representation. I answered the questions in the correct way in the context in which they were asked," Jacobus said. That context Jacobus said, was the judge's queries about how much money Wasilla had spent in the area and what steps the city had taken on the road project.

"I have to admit it was ambiguous," Jacobus said. "... he judge took an unwarranted leap."

Road, interrupted

The case comes back to Sedwick with the additional information about Wasilla's limited -- now expired -- permission to cross the tracks. Even the attorney whose job it is to find holes in Wasilla's case was initially surprised by that wrinkle.

"What the judge had assumed -- and I think what we all assumed -- was that because the city had built the road that the city had the right to access across the tracks," Gorski said.

Jacobus is scheduled to explain the case to the Wasilla council in an executive session at the council's July 22 meeting. He's still confident in Wasilla's case and said that in the event of a loss his advice to the council would be to take the property by condemnation.

In the meantime, South Church Road remains unfinished, but there are tire tracks that lead up to where the gravel stops.

From there, the trail and tracks continue into the forest. The trail headed toward the Susitna Valley appears to be well-traveled, but the extension to Mack Road doesn't exist yet.

The trail could be anywhere in Alaska where development has been interrupted by a boom-and-bust economy or by a mountain of paperwork or, as in the case, by legal bickering. The city's barricades on the north side of the railroad tracks have been broken apart, but so far, the people using the route seem to have a low impact. Currently there isn't much litter on the trail, except for one discarded refrigerator and a flattened penny sitting next to the railroad tracks.