AIM Dev. (USA), LLC v. City of Sartell, A18-0443

• Court: Supreme Court of Minnesota (US)
• Writing for the Court: McKEIG, Justice.
• Citation: 946 N.W.2d 330
• Parties: AIM DEVELOPMENT (USA), LLC, Appellant, v. CITY OF SARTELL, Respondent.
• Decision Date: 15 July 2020
• Docket Number: A18-0443

946 N.W.2d 330

AIM DEVELOPMENT (USA), LLC, Appellant,
v.
CITY OF SARTELL, Respondent.

A18-0443

Supreme Court of Minnesota.

Filed: July 15, 2020

OPINION

McKEIG, Justice.

In 2013, appellant AIM Development (USA), LLC, purchased property in respondent City of Sartell containing a facility for nonhazardous, non-toxic industrial waste, which had operated as a nonconforming use since 1989. This case concerns

946 N.W.2d 333

the scope of AIM Development's nonconforming-use rights and, specifically, whether the waste facility may accept waste from more than one source. The court of appeals defined AIM Development's nonconforming-use rights based on the terms of a state permit in effect at the time that it purchased the property. Based on the terms of that permit, the court of appeals determined that the facility was limited to accepting waste from a nearby paper mill, which was recently demolished. We conclude that the scope of a property owner's nonconforming-use rights is defined by the uses lawfully existing at the time of adverse zoning change. We further conclude that accepting waste from more than one source does not, standing alone, constitute an impermissible expansion of AIM Development's nonconforming-use rights. Therefore, we reverse the decision of the court of appeals and remand to that court for consideration of other issues not reached.

FACTS

For approximately 100 years, a paper mill operated in respondent City of Sartell along the shore of the Mississippi River. In 1984, the owner of the paper mill sought permission to open and operate a landfill nearby.

The property owner applied to the Minnesota Pollution Control Agency ("MPCA") for permission to construct and operate a 70-acre storage and disposal facility for nonhazardous, non-toxic industrial waste ("the landfill") on a nearby site ("the property"). The MPCA subsequently approved a permit, which provided that the landfill could accept any nonhazardous industrial waste that was listed in Appendix L of the permit application.¹

In December 1984, the City passed a resolution that rezoned the site of the proposed landfill from a residential district to a light-industrial district. The City then approved an ordinance that allowed as a permitted use in a light-industrial district an "industrial storage and disposal facility," defined as "[a] facility permitted by the Minnesota Pollution Control Agency or its regulatory successor for the disposal of non-hazardous and non-toxic industrial solid waste." Significant to this appeal, the ordinance defined "industrial solid waste" as "[n]on-hazardous, non-toxic waste material resulting from an industrial operation. It shall not include garbage, refuse and other discarded materials, animal waste, fertilizer, or solid or dissolved material from domestic sewage."

The landfill became operational a few years later. The landfill began accepting wood yard debris, boiler ash, scrubber cake, and other approved waste from the paper mill in September 1987. In 1989, the City amended its zoning ordinance to remove the operation of industrial storage and disposal facilities from the permitted uses of land in light-industrial districts. The operation of the landfill continued as a nonconforming use. As the district court observed, there is no indication that the landfill was ever used "for any purpose other than a captive landfill" for the paper mill.

In 2012, a fire significantly damaged the paper mill, ceasing all paper mill operations.² AIM Development purchased the paper mill and the nearby property (containing the landfill) in January 2013. AIM Development asked the MPCA to amend the permit in effect at that time (the 2009 MPCA permit) to reflect the change in

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ownership.³ The MPCA approved the change in ownership and issued an amended permit in AIM Development's name. The amended 2009 MPCA permit stated that the "[w]aste authorized for disposal" would "consist of wood yard waste (log wash grit and truck sweepings), paper mill bar screenings, wastewater grit, boiler ash, and scrubber cake generated by" the paper mill.

In January 2014, AIM Development applied to renew the amended 2009 MPCA permit, which was valid through March 2014. AIM Development's permit renewal application requested authorization to accept a wider variety of non-hazardous industrial waste from new sources and to construct additional fill area to increase the area of land used for disposal. The City opposed the application, arguing that the nonconforming use had been discontinued.⁴ In the alternative, the City argued that the proposal is an impermissible expansion of AIM Development's nonconforming-use rights.

AIM Development filed a declaratory judgment action against the City to define the scope of its nonconforming-use rights. The parties filed cross-motions for summary judgment. The issues concerned: (1) the sources of waste; (2) the types of waste; (3) the volume of waste accepted each year; (4) the area of land used for disposal; and (5) whether the nonconforming use had been discontinued or abandoned. The district court granted summary judgment in the City's favor on the issues of the source, type, and volume of waste.⁵

The district court ruled that the use of the landfill is "limited to waste generated by the paper mill operation" and that "the disposal of ... wastes from other generators is an unpermitted expansion of the use." The court of appeals affirmed. AIM Dev. (USA), LLC v. City of Sartell , 925 N.W.2d 255 (Minn. App. 2019). The court of appeals determined that AIM Development's use of the landfill was "limited to the activities approved by the [2009 MPCA] permit that was transferred to AIM [Development]" in 2013 and concluded that AIM Development did not establish that its predecessors in title used the landfill "as a commercial enterprise accepting both public and private waste." Id. at 261. Therefore, the court of appeals held that "AIM [Development]’s proposal to accept waste from other waste sources constitutes an impermissible expansion of the prior nonconforming use." Id.

946 N.W.2d 335

AIM Development requested further review. We granted review of the two issues that AIM Development raised in its petition: (1) whether the terms of the MPCA permit in effect at the time of the property transfer defined the scope of AIM Development's nonconforming-use rights; and (2) whether AIM Development's proposal to accept waste from sources other than the demolished paper mill is an impermissible expansion of AIM Development's nonconforming-use rights.

ANALYSIS

This case comes to us on appeal from summary judgment, and our review is de novo. See Visser v. State Farm Mut. Auto. Ins. Co. , 938 N.W.2d 830, 832 (Minn. 2020). On appeal from summary judgment, we determine whether genuine issues of material fact exist and whether the district court correctly applied the law. White v. City of Elk River , 840 N.W.2d 43, 48 (Minn. 2013). This dispute concerns whether the lower courts misapplied a provision of state law, Minn. Stat. § 462.357 (2018), and the City's zoning regulations, Sartell, Minn., City Code tit. 10. The application of statutes and local ordinances to undisputed facts is a legal question that we review de novo. Jennissen v. City of Bloomington , 938 N.W.2d 808, 813 (Minn. 2020).

We begin with a brief discussion of zoning law and nonconforming-use rights. A municipality's authority to regulate the use of privately owned land derives from state zoning enabling law. See Minn. Stat. §§ 462.351 –.364 (2018); White , 840 N.W.2d at 49. This authority provides municipalities with "the necessary powers and a uniform procedure for adequately conducting and implementing municipal planning," Minn. Stat. § 462.351, and allows a municipality to "guide the development of [its] community," White , 840 N.W.2d at 49. The scope of municipal authority is defined by statute and limited by "the valuable property rights of citizens guaranteed protection" under the Due Process and Equal Protection Clauses of the Minnesota and United States Constitutions. Pearce v. Vill. of Edina , 263 Minn. 553, 118 N.W.2d 659, 671 (1962) ; see White , 840 N.W.2d at 49.

The issues presented concern the scope of AIM Development's nonconforming-use rights. "A nonconforming use is a use of land that is prohibited under a current zoning ordinance but nonetheless is permitted to continue because the use lawfully existed before the ordinance took effect." White , 840 N.W.2d at 49. Although a zoning ordinance may constitutionally prohibit the creation of nonconforming uses, existing uses must be allowed to remain or be eliminated through eminent domain. Krummenacher v. City of Minnetonka , 783 N.W.2d 721, 726 (Minn. 2010).

With this context in mind, we turn to the issues presented in this appeal.

I.

The court of appeals defined the scope of AIM Development's nonconforming-use rights by the terms of the MPCA permit in effect at the time that AIM Development purchased the property (the 2009 MPCA permit). AIM Dev. (USA), LLC , 925 N.W.2d at 261–62. AIM Development argues that the court of appeals erred by focusing on this MPCA permit because "the scope of a nonconforming use is measured at the time the use became nonconforming due to an...