Tag: Minnesota Court of Appeals

Limiting percentage of rental units allowed per block was valid exercise of police power

by Rachel Greifenkamp and Gary Taylor

Dean v. City of Winona

(Minnesota Court of Appeals, February 24, 2014)

In the City of Winona, MN, there exists an ordinance that limits, in certain districts of the city, the number of lots on a block that are eligible to obtain certification as a rental property. Based on the findings from the city’s planning commission and a Parking Advisory Task Force that was formed to consider the issues of increased parking demands, the City found that rental-housing units comprised about 39% of the City’s total housing units, but that these rental properties comprised 52% of the complaints received by the Community Development Department. Based on data from 2004, the planning commission found that 95 of the 99 calls for police service based on noise and party-related complaints involved rental properties. They also found that 52% of the zoning violations that resulted in written violations were for rental properties. In 2005, the idea of restricting the number of rental properties per block was suggested. The Parking Advisory Task Force suggested that the number of rental units be restricted to 30% of the total properties on any given block. The task force adopted a motion to forward a “30% rule” to the planning commission for its consideration. The planning commission voted to recommend the 30% rule to city council, and the council subsequently passed the 30% rule.  The three appellants challenging the 30% rule in this case were the owners of three houses that were purchased after the 30% rule was adopted. In January of 2013 the district court denied the appellants’ motion that the 30% rule was an invalid exercise of the City’s broad police power, and that it violated their Equal Protection, Substantive Due Process, and Procedural Due Process rights under the Minnesota Constitution, and granted summary judgment to the city. The appellants then took their case to the Minnesota Court of Appeals.

Police Powers. The Court of Appeals determined that the 30% rule was, in fact, an authorized exercise of police power. The term “police power” means simply the power to impose such restrictions upon private rights as are practically necessary for the general welfare of all. “The development of the law relating to the proper exercise of the police power of the state clearly demonstrates that it is very broad and comprehensive, and is exercised to promote the general welfare of the state….[T]he public has a sufficient interest in rental housing to justify a municipality’s use of police power as a means of regulating such housing.”

Equal Protection. In order for an equal protection challenge to be valid the appellant must show that “similarly situated persons have been treated differently.” Similarly situated means that the two groups in question are alike in all relevant respects. The Court concluded that the 30% rule is not invalid on its face:

The ordinance is facially neutral and applies equally to all property owners in the regulated districts. The ordinance sets a 30% cap, but it does not define or predetermine which lots will be certified. That determination is made based on the changing facts and circumstances on each block, and not based on the ordinance or the characteristics of lot owners. The fact that the number of lots that may be certified might be less than the number of property owners who desire certification is not a class-based distinction between two groups of property owners.

The Court also concluded that the 30% rule was not discriminatory in the manner it was being applied by the city.  The Appellant did not show that the city “has done anything other than apply the mathematical formula on a first-come, first-served basis. Appellants’ real complaint is about the effect of an otherwise neutral ordinance on their particular circumstances, which does not give rise to an equal protection claim.”

Substantive and Procedural Due Process.  The substantive due process and procedural due process claims were also considered invalid. The appellants argued the the 30% rule violated their right to rent their property, but such a right is not a “fundamental right” protected by the Minnesota Constitution.  Unless a fundamental right is at stake, substantive due process requires only that the statute not be arbitrary or capricious.  The Court concluded that the 30% rule was adopted after a long, deliberate information-gathering process that considered public input, data, and expert review, and was thus not arbitrary or capricious.

As for procedural due process, the appellant’s argued that the 30% rule improperly delegates the power of deciding whether or not they may receive a license to their neighbors, but the Court reasoned otherwise because the “neighbors” (owners of certified rental properties) do not determine which other lots may be certified. “The certified-property owners’ views regarding whether a particular lot should be certified as a rental property are irrelevant; they can neither grant certification by consenting to it nor prevent certification by denying consent.”

The Minnesota Court of Appeals affirmed the district court’s award of summary judgment in favor of the city because the adoption of the ordinance was an authorized exercise of its police power and because the appellants did not met the burden to show that the ordinance is unconstitutional.

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Be careful what you include in your county resolution

Gary Taylor 1 Comment

This is a land use case in only the loosest sense (it involves property), but it is always interesting to highlight the many ways local government officials can stumble into trouble.  It’s not just small counties, either.  Hennepin County is home to Minneapolis and its western suburbs.

Kevin Holler, et al., v. Hennepin County
(Minnesota Court of Appeals, February 3, 2014)

The facts alleged in the complaint (trial has not yet been held): Hennepin County adopted a plan in 2008 to build a new library.  The plan did not specify a location; rather the county sent letters to various land owners indicating that it might want ot purchase their property.  Kevin and Valerie Holler received one of those letters.  They had listed their property for sale in early 2007, but by August 2007 they had taken it off the market.  They did not respond to the county’s letter; nevertheless, the county began purchasing lots adjacent to the Hollers’ property.  In December 2008 the county went so far as to adopt a resolution declaring its intent to purchase their property.  When the Hollers learned this they contacted the county and asked to be removed from the resolution because they were not interested in selling.

The complaint alleges that two Hennepin County commissioners defamed them in three statements. First, in a newspaper article one commissioner was quoted as saying

Valerie Holler had a sign on her house, a ‘for sale’ sign, as big as the IDS building in 2007….[S]o all of a sudden we want to buy the house and she takes the property off the market.

Second in a later newspaper article another commissioner was quoted as saying

[W]ith the Holler rental property posted for sale in 2007, the County purchased the other sites necessary for an ideal, state-of-the-art library to be built on the Parkway. Only after those purchases did the Hollers actively oppose the sale of their rental property and commercial building. Pursuant to that property’s availability, the County purchased the four nearby properties and met several times with the Hollers, attempting to purchase their rental property. Our staff reported to us that they would only sell for one million or more, then insisted that the property was no longer for sale. But we will not agree to build in a sub-par location due to a single property owner—not after successfully acquiring four nearby parcels, and especially not after the remaining property was once listed for sale. We will not pay one million dollars for the rental property that’s needed. We will wait and hope that its owners, who once had the property for sale, will accept fair-market value and allow the community to move forward on this important project. Despite their manipulation of this process, the Hollers are long-time residents in our community and I hope they will one day be partners with us on building a new library.
Third, the county commission adopted a resolution that scrapped the construction of the new library altogether, and included the statement
WHEREAS, the portion of the proposed library site…[the Hollers’ property] was listed for sale in 2007; and
WHEREAS, when County staff sought to negotiate a sale of the [property] the owners stated that the property was no longer for sale and they were not interested in selling.
The district court dismissed the suit on summary judgment, concluding that the complaint failed to identify an particularized false and reputation-damaging statements.  The Hollers appealed.
Unless a statement is capable of being proven false, it cannot support a defamation suit.  This includes opinions, which sometimes imply provably false statements.  Moreover, a statement is defamatory if it harms a person’s reputation and lowers him or her in the estimation of the community. Using these standards, the Minnesota Court of Appeals determined that the Hollers sufficiently pleaded the elements of defamation to survive summary judgment.  In the context of the overall dispute and the commissioners’ statements, a juror could interpret the statements to mean that the Hollers took the property off the market only after the county made its other purchases, and only after county personnel met with the Hollers to buy their still-available property.  This interpretation would be contrary to the facts as stated in the Hollers’ complaint.  As to the question of defamatory statements, the Court determined that “ordinary members of the community could conclude, as it at least appears the [commissioners] wanted them to conclude, that the Hollers are not now partners with the community, but rather are opportunistic manipulators who acted to take unfair advantage of ‘us’ – the real community members. This seems to be precisely the sort of statement that could potentially harm the Holler’s reputations or subject them to ridicule or hate or diminished community esteem.”  The case must go forward to trial.
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Environmental Assessment Worksheet required for parcel where previously permitted gravel mining was taking place

by Kaitlin Heinen

Duininck, Inc. v. Renville County Board of Commissioners
(Minnesota Court of Appeals, April 15, 2013)

Duininck, Inc. applied to Renville County Board of Commissioners for an interim use permit (IUP) to allow gravel mining on 44 acres of land in the County. Duininck has been mining at Molenaar site since 2000 under conditional use permits (CUPs) from the County for 39 acres of the area. The County now requires an IUP instead of a CUP for gravel mining, so Duininck applied for an IUP to expand the site by 5 acres. The County’s director of environment and community development, Mark Erickson, reviewed the application and concluded that an environmental assessment worksheet (EAW) might be mandatory under Minnesota Rules because the application encompassed more than 40 acres.

Before the county board’s next meeting, Duininck filed another application for an IUP that only covered the permitted 39 acres “to ensure that it would be able to continue existing mining operations if its CUP expired during the environmental-review process.” If the board decided to require an EAW, Duininck would pursue the 39 -acre application instead. The board voted to require an EAW for the 44-acre application, so Duininck withdrew the 44-acre application after the meeting. The County then reviewed and granted the 39-acre application. However, Duininck still appealed to the Minnesota Court of Appeals regarding the EAW and the 44-acre application.

In reviewing an EAW challenge, the Court of Appeals must determine whether the decision was “unreasonable, arbitrary or capricious, made under an erroneous theory of law, or unsupported by substantial evidence.” The Court noted, “Minnesota Rule 4410.4300 describes the types of projects for which an EAW must be prepared…Preparation of an EAW is mandatory for projects that meet or exceed the thresholds identified in rule 4410.4300…which requires preparation of an EAW in connection with a project for the ‘development of a facility for the extraction or mining of sand, gravel, stone, or other nonmetallic minerals, other than peat, which will excavate 40 or more acres of land to a mean depth of ten feet or more during its existence.'” Duininck’s project involves mining gravel on 44 acres of land, and because this falls within the definition of ” project” in 4410.4300, the Court concluded that an EAW is required with the 44-acre IUP application.

Duininck argued that the scope of the project in determining whether an EAW is required should not include the 39 acres it had been mining under CUPs since 2000. In support, Duininck cited part of the rules that provides a 3-year look-back rule for determining whether to include original project acreage in determining whether the mandatory EAW threshold is met. However, Duininck’s CUPS expired on their own terms. So Duininck filed the 44-acre application, intending to continuing and expanding its mining operations. Because all 44 acres were considered a part of the current project, the rule cited by Duininck did not apply. Duininck also argued that the county erred by treating the 5-acre expansion as a phased action. “Phased actions are multiple projects to be undertaken by the same proposer that ‘will have environmental effects on the same geographic area’ and ‘are substantially certain to be undertaken sequentially over a limited period of time.'” Though the county argued that Duininck’s expansion can be considered a phased action, the record did not reflect this as a basis for its decision. Further the rules governing phased actions do not apply again because all 44 acres are part of the current project.

Having applied the plain language of the EAW rules to ongoing mining operations, which require permit renewals whether or not the proposer has completed any particular area, the Minnesota Court of Appeals affirmed the county’s decision to require an EAW in connection with the 44-acre application.

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Council’s decision not to allow locking covers in lieu of fences around pools had rational basis

by Kaitlin Heinen and Gary Taylor

Gregory Frandsen, et al. v. City of North Oaks
(Minnesota Court of Appeals, February 19, 2013)

The City of North Oaks enacted an ordinance (§§ 150.055-.062) in 1989 that requires permits to build swimming pools and that swimming pools be enclosed by safety fences. Michael Johnson, James Rechtiene, and Gregory Frandsen (the appellants) own swimming pools not enclosed by fences, despite their permits being contingent upon compliance with the fencing requirement.  Instead all three have automatic locking pool covers. In April 2010, the City notified the appellants that they were in violation of the fencing requirement. The appellants asked the City to consider amending the ordinance so that it would allow automatic locking covers to serve as an alternative. The City agreed to suspend enforcement and research the alternative.

After forming subcommittees to research several alternatives, reviewing information from insurance companies, and hearing from citizens at public hearings the planning commission agreed to recommend to the city council that fences be required to enclose all pools built after 1989, that the back of a home could be used as one side of the enclosure, and that locking covers not be allowed as a substitute for the fencing requirement. At a December 2010 meeting, the city council voted in favor of the planning commission’s recommendation. The amended ordinance became effective in July 2011. So in April 2011, the City notified the appellants that they had until July 1 to comply with the amended ordinance. Appellants responded by bringing this suit against the City, alleging that the amended ordinance violates their equal protection rights and that the amended ordinance is arbitrary and capricious. The district court denied their appeal, so the appellants appealed to the Minnesota Court of Appeals.

The Minnesota Court of Appeals’ duty is to determine “whether the district court properly applied the law and whether there are genuine issues of material fact that preclude summary judgment.” The district court referred to the ordinance as one that “promote[s] the health, safety and general welfare of [the city’s] residents.” The Minnesota Court of Appeals agreed that the ordinance is a general safety ordinance.

By exempting pre-1989 pools from the ordinance, the appellants argued that their equal protection rights were violated. They argued that there is no rational reason for this exclusion when the purpose of the ordinance is to keep children from harm: “[W]hatever danger to children exists with respect to pools built after the effective date of the ordinance also exists with respect to pools built before the effective date of the ordinance.” Since the City’s pool safety-fence ordinance became effective in May 1989, building permits of pools prior to May 1989 were not conditioned to comply with this ordinance. But the appellants’ building permits were conditioned to comply with this ordinance because their pools were built after 1989. Therefore the appellants are not similarly situated to homeowners who built pools prior to 1989. In addition, “the practice of grandfathering non-conforming properties has been upheld in the face of equal-protection challenges since at least 1914.” The appellants failed to explain why grand-fathering is rational with respect to zoning ordinances, but irrational with respect to a general welfare ordinance, so the Minnesota Court of Appeals ruled that it was not a violation of equal protection for the City to treat its residents differently with respect to the law effective when their pools were built.

The appellants also argued, without explanation, that the amended ordinance was arbitrary and capricious because it allowed a wall of a building to serve as one side of the enclosure, which they argued increased the risk of harm to children. The appellants cited a unidentified report from “US Public Safety Commission” that supported the conclusion that a house should never be considered part of the fence. But the court could not verify the existence of a “US Public Safety Commission.” To the contrary, the U.S. Consumer Product Safety Commission report considered by the planning commission stated that “when a door opens directly onto the pool area, ‘the wall of the house is an important part of the pool barrier.'” Amending an ordinance is a legislative power in which the municipality has discretion as long as there is a rational basis for its decision. The court held that the City’s decision is rational because it is directly related to promoting prevention of trespassing children gaining access to pools. The City’s decision is not arbitrary as long as one valid reason exists.

Finally, the appellants contested the City’s decision to not allow pool covers as an alternative to the fence requirement. They pointed to evidence that showed that a pool cover is a safe and viable alternative to a fence. This evidence does not mandate that the City to allow pool covers as an alternative, however. The City researched the issue for more than six months and considered numerous resources before reaching a decision. The City expressed concern for pool covers’ susceptibility to mechanical failures, human errors, and enforcement issues. The decision to require fences and not allow locking covers as substitutes is a rational decision.

The Minnesota Court of Appeals affirmed the district court’s decision to deny the appellants’ claims.

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MN county board had reasonable basis for denying conditional permit for asbestos disposal

by Kaitlin Heinen

VONCO IV Austin, LLC v. Mower County, et al.
(Minnesota Court of Appeals, February 19, 2013)

VONCO IV Austin, LLC challenged the Mower County Board of Commissioners’s decision to deny its conditional use permit to dispose of friable asbestos at its landfill facility. On appeal, the Minnesota Court Appeals must affirm the Board’s decision unless it was unreasonable, arbitrary, or capricious. VONCO first argued that the Board’s decision was arbitrary and capricious because the findings of fact were adopted after the resolution without using motion, second, and majority vote procedures. Minn. Stat. § 15.99 (2010) states that a board must adopt findings contemporaneously with its decision to deny a conditional use permit, or at the latest at “the next meeting following the denial of the request but before the expiration of the time allowed for making a decision.” The Minnesota Court of Appeals concluded that the Board adopted its findings within a reasonable time after its denial. When the Board denied the conditional use permit, it had passed Resolution #28-12, which included the factual basis for its decision. The factual basis was nearly identical to the Board’s findings of fact, which were adopted at the same meeting. After discussion, the findings of fact were written down and signed by the vice-chairperson, which the Minnesota Court of Appeals held was consistent with § 15.99.

VONCO also argued that there was insufficient evidence in the record to conclude that there would be a problem with asbestos dust, and that such a problem would negatively impact property values. The Minnesota Court of Appeals disagreed and held that the record contained testimony that strong winds tend to blow dust and other debris from VONCO’s landfill onto neighboring properties. County staff members indicated that friable asbestos poses a risk of becoming airborne, and that this is especially dangerous because any exposure to asbestos dust creates a serious health risk. One county commissioner testified that he believed the addition of friable asbestos would negatively impact property values, based on his experience as a professional real estate appraiser. Because county officials have sufficient expertise to determine impacts on property values, the Minnesota Court of Appeals concluded that the evidence was sufficient to support the denial of the conditional use permit.

VONCO further argued that the evidence in the record was insufficient because some of it was in the form of neighbor testimony. The board “may consider neighborhood opposition only if based on concrete information.” That is, vague “concerns” are not sufficient. However, neighbor testimony that is concrete, describes current conditions, and includes information based on scientific reports provides a sufficient basis to deny a conditional use permit. The Rythers, owners of a neighboring property, testified that the winds frequently blow dust and debris from VONCO’s property onto theirs, that a recent fire at VONCO’s site caused their home to be inundated with dust and ash, and that these conditions make it unlikely that VONCO would be able to prevent friable asbestos from escaping. The Rythers also provided the Board with copies of complaints, enforcement actions, and orders from the EPA regarding VONCO’s improper disposal of materials, including asbestos. Because the Rythers’ testimony was concrete and not limited to “concerns,” the Minnesota Court of Appeals concluded that this evidence was sufficient to support denying the conditional use permit request.

Finally, VONCO argued that the Board’s decision is arbitrary and capricious because the Board failed to consider reasonable conditions before denying the conditional use permit. The Board’s meeting notes showed that the Board considered more than 30 recommended conditions. Because the Board considered the possibility of approving the conditional use permit  with conditions, the Minnesota Court of Appeals concluded that it was not arbitrary and capricious for the Board to find these conditions insufficient and deny the request. The Mower County Board of Commissioners’ decision was affirmed.

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Contract for deed purchaser not “owner” for condemnation purposes

by Kaitlin Heinen

City of Cloquet v. Julie Crandall, et al.
(Minnesota Court of Appeals, December 10, 2012)

Kerry and Julie Crandall operated an auction business out of a downtown building when the City of Cloquet took the building’s parcel by condemnation for the construction of a new human services building. The district court granted title to the City in July 2010. Three court-appointed commissioners determined that $198,000 was fair compensation under a fair-market-value analysis and under a minimum-compensation analysis under Minnesota Statutes section 117.187. When the parcel was condemned, the Crandalls had been in the process of purchasing it under contract for deed. In August 2010, the contract for deed sellers executed a satisfaction, stipulating with the Crandalls that the contract was fully paid. In September 2010, the district court recognized the satisfaction and entered a stipulation order observing that the sellers disclaimed any continuing interest in the property.

Before the district court trial, the City unsuccessfully moved to exclude any evidence bearing on a minimum-compensation analysis, arguing that the Crandalls were contract for deed vendees rather than owners. Appraiser John Vigen testified as an expert witness for the City, stating that the “Carlton property” was comparable to the Crandalls’. The Carlton property’s building was older, smaller, poorly constructed, and had limited access by comparison, but Vigen testified that it was comparable because the Crandalls’ auction business did not use all of the space available on the parcel and because the Carlton property zoning classification allowed it to be used as an auction business. To the contrary, the Crandalls’ real estate expert David Reach testified that the small size, poor condition, and limited access made the Carlton property unsuitable for the Crandalls’ business. Instead, he identified the Kolar property (formerly a car dealership) as comparable, though it was much larger and more expensive. Reach testified that it was comparable because the Kolar property included a building with floor space equal to the Crandall property’s building. The district court found that the Carlton property was a comparable property, thus upholding that the Crandalls were entitled to $198,000 in compensation. Both the Crandalls and the City appealed to the Minnesota Court of Appeals.

The Minnesota Court of Appeals first addressed the September 2010 order recognizing the August 2010 satisfaction of the contract for deed. The Crandalls claim that the order’s stipulated satisfaction functioned as an assignment to them of vendors’ rights, vesting in them a fee title interest in the property. However, neither the satisfaction nor the order is an assignment. An assignment requires the grantor’s manifest intention to assign a specific right. The satisfaction of the contract for deed only releases the Crandalls from contract obligations. Further, the district court had already transferred title to the City in its July 2010 order. When the satisfaction was executed in August, the vendors had no title to transfer to the Crandalls. So the Minnesota Court of Appeals held that the September order did not grant vendors’ rights to or vest fee title to the property in the Crandalls.

Both the Crandalls and the City argue that the district court misinterpreted section 117.187, which states: “For the purposes of this section, ‘owner’ is defined as the person or entity that holds fee title to the property.” The Crandalls argued that they are entitled to minimum compensation as contract for deed vendees. Though section 117.187 is restricted to “owners,” the Crandalls claim that contract for deed vendees are still considered owners. Section 117.036, enacted at the same time as section 117.187, defines “owner” as “fee owner, contract purchaser, or business lessee who is entitled to condemnation compensation under a lease.” This section indicates that the legislature classifies fee owners and contract purchasers separately, but “contract purchaser” is not expressly defined nor is the term used elsewhere in regards to real estate. The Minnesota Court of Appeals concluded that “contract purchaser” must include contract for deed purchasers. To interpret “fee title” owner in section 117.187 to include contract for deed vendees would mean that “contract purchaser” in section 117.036 is superfluous. So it must be inferred that the legislature intended to exclude contract for deed purchasers from the scope of section 117.187. If the legislature wanted to include contract purchasers in section 117.187,  it would have included them explicitly. In fact, “fee owners” traditionally includes only those holding legal title.

Furthermore, section 507.092 states that “[n]o contract for deed or deed conveying fee title to real estate shall be recorded…” The separate specification of “contract for deed” and “deed conveying fee title” shows that the legislature does not intend for a contract for deed to include fee title. Additionally, section 117.187’s history suggests that the legislature intended to exclude contract for deed vendees. When the Eminent Domain Conference Committee added the definition of “owner” to section 117.187, committee members specifically discussed the meaning of the language at issue here.  Legislative counsel Bonnie Berezovsky asserted that “fee owner would not include a purchaser under a contract for deed.” Although the opinion of legislative counsel is not proof of legislative intent, the court found her comment persuasive as a legal explanation of what is  and is not included as an “owner” in section 117.187.

Because the Crandalls were not fee title owners entitled to minimum compensation under section 117.187, the district court erred by denying the City’s motion to exclude the Crandalls’ minimum-compensation evidence at trial. The Minnesota Court of Appeals reversed and remanded the district court’s ruling.

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Non-conforming use lawful only so long as it complies with original permit conditions

by Kaitlin Heinen

Lorraine M. White Trust, et al. v. City of Elk River
(Minnesota Court of Appeals, October 28, 2012)

The Lorraine M. White Trust owns the Wapiti Park Campgrounds, which is operated on 52 acres in the City of Elk River. In 1973 when the park opened, no zoning ordinance governed the use of the land. In 1983, the City made campgrounds a conditionally permitted use in the zoning district where Wapiti Park was located. In 1984, the City granted Wapiti Park a conditional use permit with 9 conditions. The City removed campgrounds as a conditionally permitted use in Wapiti Park’s zoning district in 1988, so Wapiti Park became a legal, nonconforming use instead. The one building on Wapiti Park property contained an office, laundry facilities, a restaurant, shower facilities, and served as a gathering place for campers. It was destroyed by a fire in 1999. Before attempting to rebuild it in 2000, the City required Wapiti Park to apply for an interim-use permit because the building was an accessory to the nonconforming campground, which did not change the terms of the primary conditional use permit. The City granted the interim-use permit, with the condition that it be valid for 10 years. When a building permit was granted afterwards, Wapiti Park rebuilt the building.

The interim-use permit expired in 2010, so Wapiti Park applied for a new one to continue using the building. The City inspected the campground and found that some people use the campground as permanent housing, even during the winter. In fact, some of the campsites included insulation, sheds, and porches. Several vehicles also had alterations such as piping connecting the vehicle to the sanitation system. The City concluded that this permanent use of the campground violated the conditions of the 1984 conditional use permit. The City gave Wapiti Park several months to comply with the 1984 conditions, but it failed to do so. As a result, the City proposed to deny the interim-use permit renewal and to revoke the 1984 conditional use permit. After three hearings, the City passed a resolution that revoked the permit in July of 2011 unless conditions were satisfied. After failing to meet this resolution’s conditions, the revocation of the 1984 conditional use permit became effective in December of 2011. Then Wapiti Park sued the City. The district court found the campground was a legal, nonconforming use, and that the city could not revoke the 1984 conditional permit to eliminate this use, and Wapiti Park was entitled to rebuild the 2000 building without a permit from the City.  The City then appealed to the Minnesota Court of Appeals.

Minn. Stat. Section 462.537 governs nonconforming uses of property and states in part: “Except as otherwise provided by law, any nonconformity, including the lawful use or occupation of land or premises existing at the time of the adoption of an additional control under this chapter, may be continued, including through repair, replacement, restoration, maintenance, or improvement, but not including expansion . . . ” The City alleged that because Wapiti Park was no longer in compliance with the 1984 conditional use permit in 2010, the use was no longer “lawful” under Section 462.537, The Minnesota Court of Appeals agreed. The Court interpreted this statute to protect a nonconforming use if it was lawful at the time it became nonconforming. At the time of the 1988 amendment to the zoning ordinance, the use of the property as a campground was only lawful because of the 1984 conditional use permit. Thus Wapiti Park is only entitled to Section 462.537’s protections if it remained in compliance with the permit that made it lawful. The Minnesota Court of Appeals concluded that Wapiti Park’s conditional use permit was still in effect because a conditional use permit does not cease to exist when the use becomes nonconforming. Instead the nonconforming use is defined by the conditions in the conditional use permit, and any use outside of these permit parameters may be considered an unlawful expansion of the nonconforming use. Conditional-use permits are perpetual, and “shall remain in effect as long as the conditions agreed upon are observed.”

The Minnesota Court of Appeals concluded that the 1984 conditional-use permit was still in effect even after the campground became nonconforming, and the City properly revoked the permit when it determined that the campground was no longer in compliance with the permit conditions. The 1984 conditional-use permit did not expire when Wapiti Park became a nonconforming use in 1988. Rather, the permit remained in effect, and the campground’s nonconforming use of the property was only lawful so long as it complied with the permit conditions. And the City was entitled to revoke the 1984 conditional-use permit when Wapiti Park continued to violate the conditions of the 1984 conditional-use permit. Thus the district court ruling was reversed.

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Supermajority requirement for county (MN) zoning ordinance amendment allowed to stand

Gary Taylor

by Gary Taylor

Motokazie! Inc., et al., v. Rice County, Minnesota
(Minnesota Court of Appeals, December 17, 2012)

Motokazie! Inc., sought to build a motorsports facility in Rice County, Minnesota that would include snowmobile and go-kart racing – land uses not allowed in the zoning district. Motokazie! and co-appellant Portinga Brothers LLC applied for a text amendment to Rice County Zoning Ordinance so that the uses they desired could be allowed with a conditional use permit. The Rice County Board of Commissioners (Board) considered the proposal and voted three-to-two in favor of the proposed change; however, under the Rice County zoning ordinance a supermajority (four-fifths) vote is required to adopt a zoning amendment.  Therefore, the amendment proposed by Motokazie! and Portinga was deemed defeated.

Motokazie! and Portinga brought an action against Rice County, arguing that: (1) the zoning amendment was actually approved by the three-to-two vote because Minn. Stat. § 375.51(1) dictates that a simple majority approves such amendment, and (2) the zoning amendment was automatically approved under Minn. Stat. § 15.99(2)(a) because it was not approved or denied within 60 days. The district court denied relief on both arguments.  The case was appealed to the Minnesota Court of Appeals.

Supermajority.  The Court of Appeals concluded that while there is no explicit or specific grant of authority to create the supermajority requirement , such authority is clearly contemplated within chapter 394.  Minn. Stat. § 394.21(1) authorizes counties “to carry on county planning and zoning activities.” Minn. Stat. § 394.25(7)(a) authorizes a county to adopt “procedures to be employed in land development.”  Minn. Stat. § 394.312 refers to “procedures for the administration of official controls.”  Moreover, it is well settled that counties have the authority to exercise not only the powers as are expressly granted to them by the state, but also have the authority to enact such procedural rules and requirements necessary to exercise such powers.  Because chapter 394 authorizes the county to enact procedural controls, the enactment of a supermajority rule for zoning amendments was within the authority of the county and is not inconsistent with the procedural requirements of section 375.51.

60-day deadline. Minn. Stat. § 15.99(2)(a) states in part that “an agency must approve or deny within 60 days a written request relating to zoning, septic systems, watershed district review, soil and water conservation district review, or expansion of the metropolitan urban service area for a permit, license, or other governmental approval of an action. Failure of an agency to deny a request within 60 days is approval of the request….”  Motokazie! and Portinga argued that the 60-day rule required approval of the requested amendment and that it was undisputed that respondents did not comply with the 60-day rule.  The county responded that the 60-day deadline was extended by Motokazie’s agreement to a timeline that went beyond 60 days, and by an e-mail from a county official indicating that the decision would come after the 60-day deadline had passed.  The county further argued that a text amendment request is not “a written request relating to zoning . . . for a permit, license, or other governmental approval of an action” within the meaning of the statute. The Court of Appeals sided with the county on the statutory interpretation argument, concluding that a text amendment is of a different character than a permit or license, and therefore not contemplated by section 15.99(2)(a).  The Court observed that amending the text of a zoning ordinance would apply to all properties of that type in the county, rather than the specific property to be permitted, licensed, subdivided, or rezoned; making it “a pure exercise of the legislative power of the county.”  Also, approval of text amendment request would not allow the applying party to undertake an action, rather the request is for the government to take an action. The Court viewed this conclusion as being consistent with the policy goals for section 15.99, believing that “it benefits the public interest to have [text amendments that affect a] large class of property be made with adequate time for a fully deliberated decision” rather than having an automatic approval penalty result in approval without any justifications.

The district court decision was affirmed.

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Error to interpret list of accessory uses as an exhaustive list precluding other uses

by Kaitlin Heinen

City of Orono v. Jay T. Nygard, et al.
(Minnesota Court of Appeals, October 22, 2012)

Jay and Kendall Nygard live in a district of the City of Orono zoned as One-Family Lakeshore Residential (LR-1B). On October 13, 2010, the Nygards applied for a permit to erect a wind turbine on their property. Two days later on October 15, the City denied the Nygards’ permit application in a letter from the City’s Planning and Zoning Coordinator, which stated that wind turbines are not a permitted accessory use on property zoned LR-1B. On November 12, 2010, city employees observed a concrete footing being installed on the Nygards’ property, which they believed was being done to erect the wind turbine despite the City’s denial of their permit application. On November 16, 2010, the City issued a stop-work order and demanded that the Nygards remove the concrete footing. The Nygards disregarded this order and completed the wind turbine by February 2011.

In March 2011, the City filed suit in district court for a declaratory judgment that the Nygards’ wind turbine was not in compliance with the City’s zoning  ordinance.  In April 2011, the Nygards’ filed a separate suit against the City, challenging the City’s denial of their permit application. The district court consolidated the two cases. In March 2012, the district court granted the City’s motion and denied the Nygards’, holding that the City’s zoning ordinances clearly set forth a list of lawful accessory uses, which does not include wind turbines. The Nygards appealed to the Minnesota Court of Appeals.

The Nygards argue that the City misinterpreted 78-329 of the Orono City Code as setting forth an exhaustive list of lawful accessory uses, thereby forbidding wind turbines on LR-1B property. In contrast, the Nygards argued that section 78-329 is a non-exhaustive list and that their wind turbine is within the general definition of accessory uses. In reviewing the City’s interpretation of its zoning ordinance, the Minnesota Court of Appeals considered three principles: “First, courts generally strive to construe a term according to its plain and ordinary meaning…Second, zoning ordinances should be construed strictly against the city and in favor of the property owner…[Third,] A zoning ordinance must always be considered in light of its underlying policy.”

In regards to the first principle, the zoning ordinance should be interpreted according to its plain and ordinary meaning. It is reasonable to interpret 78-329 to mean that the nine accessory uses listed are the only lawful accessory uses in the LR-1B district. But the Nygards argue that 78-329 also can be reasonably interpreted to allow accessory uses that are not listed because the language of section 78-329 is different from the language of nearby sections of the zoning code, which are more explicit in foreclosing the possibility of other allowed uses.  Section 78-329 – the section in question – states that “the following uses shall be permitted accessory uses.”  Section 78-327, in contrast, states that “no land or structure shall be used except for” a list of specified uses, while another section – Section 78-566 – states that “no accessory structure or use of land shall be permitted except for one or more of the following uses.” Because 78-329 does not use the same type of strong language to negate the possibility of lawful accessory uses not listed within the ordinance, it is reasonable to interpret 78-329 more broadly to allow other accessory uses. Furthermore, the city conceded that it has interpreted 78-329 in other past situations to allow accessory uses that are not expressly mentioned. For example, the City has allowed structures such as flagpoles, basketball hoops or clotheslines within the LR-1B district.

In light of the City’s inconsistent interpretation of 78-329, the Minnesota Court of Appeals did not uphold the City’s denial of the Nygards’ permit application.  It ruled that the City erred when it denied the Nygards’ permit application, and that the district court also erred in entering judgment in favor of the City. The Minnesota Court of Appeals reversed the district court ruling and remanded the matter to the City for further consideration of the Nygards’ permit application.

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Property did not qualify for Minneapolis vacant building registration program because conditions did not constitute nuisance

Gary Taylor

by Victoria Heldt

Larry Naber v. City of Minneapolis
(Minnesota Court of Appeals, May 29, 2012)

Larry Naber owns a home in the City of Minneapolis that he vacated in 1996.  In 2001 the City sent a letter to Naber requesting him to apply to the City’s vacant building registration (VBR) program.  Naber paid the $400 registration fee annually and took part in the VBR program from 2001 until 2008.  During those years, the property incurred several minor zoning code violations, all of which Naber remedied in a timely fashion.

In 2009 the City cited three code violations (brush/branches, tall grass/weeds, and an inoperable vehicle) which Naber timely remedied.  In September 2009 Naber received a letter from the City requesting he pay a $6,360 registration fee for the VBR program that year.  He refused to pay and the Minneapolis City Council levied the sum as a special assessment against the property.  In district court, the special assessment was affirmed.  The court determined the property qualified for the VBR program since it was unoccupied for 365 days and incurred zoning code violations.  Naber appealed to the Court of Appeals.

The City’s VBR program operates pursuant to MCO §249.10 and works “to enhance the livability and preserve the tax base and property values of buildings within the city.”  The ordinance states that a building is vacant if (among other factors) it is “unoccupied for a period of time over three hundred sixty-five (365) days and during which time an order has been issued to correct a nuisance condition pursuant to section 227.90.”  First, the parties disagreed as to who bears the burden of proof to show the property qualified for the VBR program.  After analyzing precedent, the Court determined that the City bears that burden and that it failed to satisfy it.

Naber argued the fact that his property qualified for the VBR program in 2009 because it was vacant for 365 days and incurred zoning code violations.  He did not deny its vacancy, but rather that the zoning code violations did not meed the code’s nuisance definitions.  According to the code, in order for tall grass to constitute a nuisance condition it must measure eight inches tall or have gone (or about to go) to seed.  Naber noted there was no evidence in the record that the grass measured eight inches tall or that it was about to go to seed.  The picture provided in the record does not indicate the height of the grass.  The Court agreed with Naber and concluded the district court’s finding that the grass was a nuisance condition was not supported by the record.

Naber next argued the violation for fallen branches.  The existence of a branch in a yard is not a nuisance condition and the district court did not find the branch was a health, safety, or fire hazard.  The City’s only witness did not testify about the branch and the picture provided in the record shows only a small branch in the back yard.  The Court determined the district court’s finding that the fallen branch was a nuisance condition was erroneous.

Naber finally argued that the vehicle placed on his property was not a nuisance condition.  He admits that it was parked on the property without current license plates or registration, but asserts that it was not on the property in such a way as to constitute a nuisance.  It was parked on a designated parking pad similar to that of a neighbor.  The City argued that, regardless of the manner in which it was parked, an inoperable vehicle on the property is in itself a nuisance.  The Court disagreed.  It looked to the language of the statute.  An “inoperable vehicle” was listed within a sentence as one of several nuisance conditions separated by a comma.  The sentence ended with the phrase “in such a manner as to constitute a nuisance.”  The Court found that this phrase applied to the entire sentence, so an inoperable vehicle must be parked “in such a manner as to constitute a nuisance” in order to be a nuisance condition.  The Court rejected as erroneous the district court’s finding that the vehicle was a nuisance.

Since the Court of Appeals found that Naber’s property did not qualify for the VBR program it reversed the district court’s decision.

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