by Melanie Thwing and Gary Taylor
City of North Oaks v. Sarpal
(Minnesota Supreme Court, May 11 2011)
Dr. Rajbir and Dr. Carol Sarpal own a home in the City of North Oaks, Minnesota. The property is subject to two different restrictions. The first is a fifteen foot easement by the North Oaks Company over the northern and western edges of the property for a future trail. The second is the city’s zoning setback regulation that states no building can be within thirty feet of the property line.
In 2006 the Sarpals wanted to build a shed on their property. The Architectural Supervisory Committee (ASC) required the plans for the building before they could apply for a building permit. The ASC also required a “as-built survey” with the specific location of the shed. A City employee provided a survey and told the Sarpals that was the document they needed. This survey shows the “proposed house” and does not encroach on either restriction.
The ASC approved the shed and the Sarpals signed and submitted an application to the City for a building permit that was granted. As the Sarpals started construction they measured from the house as it was built on the property.
After the foundation was laid and the frame was constructed the City inspector approved the construction. However, one year after construction the Sarpals received a letter from the City stating that the shed encroached on the trail easement. It was at this point that the Sarpals noticed the survey obtained from the City was not an “as-built” survey but rather for a “proposed house.”
The Sarpals applied for a variance, which was denied. They then requested an extension of time because concrete foundations poured during winter run a higher risk of cracking. This City approved this request.
After the Sarpals failed to move the shed later in the year the City filed an action in district court requesting an order for the Sarpals to remove it. After a bench trial the court found that the City was equitably estopped from enforcement of the zoning ordinance because they provided the survey. The City appealed to the Court of Appeals, which affirmed.
The City then petitioned for review with the Minnesota Supreme Court. The City argues that the district court abused discretion when it equitably estopped the city from enforcing the zoning ordinance.
For an equitable estoppel claim there must be: 1.) Wrongful conduct on the part of the government, 2.) the party must have reasonably relied on the wrongful conduct, 3.) The party must have incurred a unique expenditure in reliance on the wrongful conduct, and 4.) The balance of the equities must weigh in favor of the estoppel.
The City argues that the mistake with the survey does not constitute “wrongful conduct,” because government action that is erroneous does not automatically constitute “wrongful” action, nor is it established by a simple mistake or imperfect conduct. The Supreme Court agreed. In this case the government action was nothing more than a simple mistake. This does not fulfill the first element necessary for a equitable estoppel.
The district court had also found that the City acted wrongfully when granting a permit based on the plans. However, the City is entitled to rely on the accuracy of the documents provided by landowners. The Sarpals certified the information in the application packet was correct. There is no reason why the City should have noticed or corrected the error in regards to the survey. The district court abused its discretion when it dismissed the City’s claims against the Sarpals. The Minnesota Supreme Court reversed the Court of Appeals decision and remanded the case for further proceedings.