McCullough & Sons, Inc. v. City of Vadnais Heights

• Citation: 883 N.W.2d 580
• Decision Date: 10 August 2016
• Docket Number: Nos. A14–1992,A15–0064.,s. A14–1992
• Parties: McCULLOUGH AND SONS, INC., Appellant, v. CITY OF VADNAIS HEIGHTS, Respondent.
• Court: Supreme Court of Minnesota (US)

883 N.W.2d 580

McCULLOUGH AND SONS, INC., Appellant,

v.CITY OF VADNAIS HEIGHTS, Respondent.

Nos. A14–1992

A15–0064.

Supreme Court of Minnesota.

Aug. 10, 2016.

Mark Essling, North Branch, MN; and Andrew M. Essling, Essling Law Office, LLC, Scandia, MN, for appellant.

Caroline Bell Beckman, James C. Erickson, Jr., Erickson, Bell, Beckman & Quinn, P.A., Roseville, MN, for respondent.

Susan L. Naughton, League of Minnesota Cities, Saint Paul, MN, for amicus curiae League of Minnesota Cities.

Considered and decided by the court.

OPINION

STRAS

, Justice.

This case requires us to determine if, and under what circumstances, Minnesota's appellate courts have jurisdiction to review an order denying summary judgment to one of the parties in a civil case. Here, the City of Vadnais Heights (“the City”) imposed an assessment on real property owned by McCullough and Sons, Inc. (“McCullough”). On appeal to the district court, the City filed a motion for summary judgment seeking dismissal of the action based on McCullough's failure to file a written objection to the proposed assessment. The district court denied the City's motion, but the court of appeals reversed. McCullough & Sons, Inc. v. City of Vadnais Heights, 868 N.W.2d 721, 728 (Minn.App.2015)

. Because the court of appeals lacked jurisdiction over the City's appeal, we dismiss the appeal, vacate the court of appeals' decision, and remand to the district court.

I.

McCullough owns a 9–acre parcel located in the City of Vadnais Heights. The parcel is contaminated by hazardous waste from a hospital that previously occupied the site. Development of the property is not economically viable because the cost to remove the waste exceeds the parcel's value. McCullough currently uses the property to display billboard signs, but the land is otherwise vacant. McCullough has been unable to find a buyer for the property for the last 15 years.

In 2013, the City proposed a road-improvement project to serve a new commercial development near McCullough's parcel. The City informed McCullough through a written notice that the proposed assessment for its share of the improvements was approximately $158,000. The notice also stated that the Vadnais Heights City Council would discuss the project and its funding at a hearing on July 17, 2014. James McCullough, a shareholder of McCullough, attended the hearing and spoke against the proposed assessment, but the company did not file or present a written objection. At the end of the hearing, the City adopted the proposed assessment with one modification that is not relevant here.

In accordance with the requirements of Minn.Stat. § 429.081 (2014)

, McCullough appealed the City's decision by serving a notice of appeal upon the mayor of Vadnais Heights and then filing a copy of the notice of appeal with the Ramsey County District Court. Early in the litigation, the City filed a motion for summary judgment in which it argued that McCullough was precluded from appealing because it had failed to file a written objection with the “municipal clerk prior to the assessment hearing” or present a written objection “to the presiding officer at the hearing.” Minn.Stat. § 429.061, subd. 2 (2014)

(stating that “[n]o appeal may be taken as to the amount of any assessment” without a written objection). The court denied the City's motion, concluding that the statute did not require McCullough to submit a written objection to the proposed assessment in order to preserve its right to file an appeal.

The City appealed twice, once from the district court's denial of its motion for summary judgment and again after the court issued an order following an evidentiary hearing in which it determined that McCullough had “perfected its appeal by objecting to the special assessment.”¹ The court of appeals consolidated the two appeals. On the merits, the court of appeals reversed the district court, holding that a party opposed to a proposed assessment must object in writing before or at the assessment hearing to preserve its right to appeal the assessment to the district court. McCullough, 868 N.W.2d at 727

; see also Minn.Stat. §§ 429.061, subd. 2, 429.081 (2014) (requiring a “written objection” to appeal the amount of an assessment).

After granting McCullough's petition for review but before holding oral argument, we issued an order asking the parties to be prepared to discuss whether the district court's order denying summary judgment was immediately appealable. McCullough & Sons, Inc. v. City of Vadnais Heights, Nos. A14–1992, A15–0064, Order (Minn. filed Jan. 28, 2016). McCullough then submitted a supplemental memorandum along with a motion asking us to accept the filing. Following oral argument, we granted McCullough's motion, but did not address its argument that appellate jurisdiction over the case is lacking. We also gave the City the option to respond in writing to McCullough's supplemental memorandum, which it did by arguing in its own memorandum that jurisdiction exists over the appeal. McCullough & Sons, Inc. v. City of Vadnais Heights, Nos. A14–1992, A15–0064, Order (Minn. filed Feb. 3, 2016).

II.

This case has multiple jurisdictional layers. The question that the parties initially asked us to address, which was also the subject of the court of appeals' decision, is whether the written-objection requirement in Minn.Stat. § 429.061

is a jurisdictional limitation on Minnesota's district courts. Before we can answer the jurisdictional question presented by the parties, however, we must determine whether the City's appeal was taken from a final judgment of the district court, which we have described as a jurisdictional limitation on Minnesota's appellate courts. See

T.A. Schifsky & Sons, Inc. v. Bahr Constr., LLC, 773 N.W.2d 783, 788 (Minn.2009) (discussing the “final judgment” requirement). This case therefore presents the unusual situation in which the answer to the parties' question about the district court's subject-matter jurisdiction hinges upon the antecedent question of whether the court of appeals properly exercised jurisdiction over the City's appeal.

A.

Jurisdiction refers to a court's “power to hear and decide disputes.”

State v. Smith, 421 N.W.2d 315, 318 (Minn.1988)

. Whether a court has subject-matter jurisdiction “to hear and determine a particular class of actions and the particular questions” presented generally depends on the scope of the constitutional and statutory grant of authority to the court. See

Robinette v. Price, 214 Minn. 521, 526, 8 N.W.2d 800, 804 (1943) ; see also

Giersdorf v. A & M Constr., Inc., 820 N.W.2d 16, 20 (Minn.2012) (“Subject matter jurisdiction is a court's ‘statutory or constitutional power to adjudicate the case.’ ” (quoting Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 89, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) )). In Minnesota, however, court rules can also define subject-matter jurisdiction, including, for example, the requirement that an appeal in a civil case be taken from a final judgment. See

T.A. Schifsky & Sons, 773 N.W.2d at 788 (referring to the final-judgment requirement in Minn. R. Civ.App. P. 104.01, subd. 1, as jurisdictional); see also

State v. Barrett, 694 N.W.2d 783, 786 (Minn.2005) (holding that the requirement in Minn. R.Crim. P. 28.04, subd. 2(2) that a prosecutor must serve the State Public Defender with notice of a pretrial appeal is jurisdictional).

Courts can question subject-matter jurisdiction at any time, even if the parties to a case have not done so. See Seehus v. Bor–Son Constr., Inc., 783 N.W.2d 144, 147 (Minn.2010)

(stating that subject-matter jurisdiction cannot be waived by the parties). Our authority to consider subject-matter jurisdiction extends to whether the court of appeals had jurisdiction to decide the appeal. See

Dead Lake Ass'n, Inc. v. Otter Tail Cty., 695 N.W.2d 129, 134 (Minn.2005) (describing the court of appeals' jurisdiction as presenting a “threshold question”).

B.

The threshold question for us, which the parties had an opportunity to brief in their supplemental memoranda, is whether the district court's order in this case falls within one of the categories of orders that are immediately appealable to the court of appeals under Minn. R. Civ.App. P. 103.03

. Rule 103.03 allows an immediate appeal in a variety of circumstances, but the parties focus first on paragraph (a), which states that “[a]n appeal may be taken to the Court of Appeals ... from a final judgment, or from a partial judgment entered pursuant to Minn. R. Civ. P. 54.02.” The record does not contain an order entering partial judgment under Rule 54.02, and the parties do not contend otherwise.

The district court's order denying summary judgment to the City was also not a “final judgment” because it did not “end[ ] the litigation on the merits.” T.A. Schifsky & Sons, Inc., 773 N.W.2d at 788

(quoting Riley v. Kennedy, 553 U.S. 406, 419, 128 S.Ct. 1970, 170 L.Ed.2d 837 (2008) ). During the summary-judgment hearing, the district court explained that it denied summary judgment because the factfinder could reasonably conclude that Mr. McCullough's statements and actions at the City Council hearing were sufficient to meet the requirements of Minn.Stat. § 429.081. The court then made clear that its ruling was not final when it immediately turned to other pending matters in the case, including its decision to defer ruling on the constitutionality of the special assessment. The second order, which addressed a motion for reconsideration and the sufficiency of McCullough's objection, also did not end the litigation on the merits. On this record, there is no question that the district court's rulings on the various motions were not a “final judgment.”

Indeed, Minn. R. Civ.App. P. 103.03(i)

recognizes that orders like these are interlocutory because it requires that, before a party can appeal a denial of summary judgment, district courts must first certify that the “question presented is important and doubtful.” The district...