Arcadia Development Corp. v. City of Bloomington, C0-96-157

CourtCourt of Appeals of Minnesota
Citation552 N.W.2d 281
Docket NumberNo. C0-96-157,C0-96-157
PartiesARCADIA DEVELOPMENT CORP., et al., Petitioners, Appellants, v. CITY OF BLOOMINGTON, Respondent.
Decision Date13 August 1996

Syllabus by the Court

1. The city's adoption and enforcement of an ordinance requiring a mobile home park owner to pay relocation costs to displaced residents upon the closing of a park did not constitute a regulatory taking without just compensation, nor was it a taking for governmental enterprise.

2. The ordinance, which is rationally related to legitimate governmental purposes, withstands equal protection and substantive due process challenges.

3. The district court did not err in granting summary judgment on a claim alleging intentional infliction of emotional distress when the park owner failed to allege sufficiently egregious facts to sustain that claim.

Christopher J. Dietzen, Daniel W. Voss, Sharna A. Wahlgren, Larkin, Hoffman, Daly & Lindgren, Ltd., Bloomington, for appellants.

John E. Simonett, Clifford M. Greene, John M. Baker, Green Espel, P.L.L.P., Minneapolis, David R. Ornstein, City Attorney, Greg Brooker, Associate City Attorney, Bloomington, for respondent City of Bloomington.

Maury Landsman, Minneapolis, for Amicus Curiae APAC.

Hubert H. Humphrey, III, Attorney General, John S. Garry, Assistant Attorney General, St. Paul, for Amicus Curiae, State of Minnesota.

Considered and decided by HUSPENI, P.J., TOUSSAINT, C.J., and HOLTAN, J. *

OPINION

TOUSSAINT, Chief Judge.

Appellants Arcadia Development Corp., a Minnesota corporation, and Mildred Collins (Arcadia) brought this action against respondent City of Bloomington, a municipal corporation (City). Arcadia challenges the constitutionality of a City ordinance requiring mobile home park owners who close their parks to pay relocation costs to park residents. Arcadia's complaint alleges that (1) application of the ordinance constitutes a regulatory taking without just compensation and is a taking for governmental enterprise, (2) the ordinance, as applied, is unconstitutional because it denied Arcadia its right to substantive due process and equal protection, and (3) the City's actions in adopting the ordinance constitute intentional infliction of emotional distress on Mildred Collins.

Arcadia appeals from the district court's grant of summary judgment to the City on all of its claims. Amicus curiae briefs have been submitted by the State of Minnesota and by All Parks Alliance for Change (APAC). Both amici support affirmance of the district court's grant of summary judgment to the City. We affirm.

FACTS

In 1949, Mildred Collins and her husband William T. Collins 1 purchased a portion of the property involved in this action. They built their home on the property and also used it as a trailer park, which they operated under the name of "Collins Mobile Home Park."

The property consists of 13.57 acres located along Interstate 494, at the intersection of 78th Street and Chicago Avenue. Prior to 1958, the property was zoned C-A (commercial). In June 1958, the property was granted a permit to allow its continued use as a "transient trailer camp." Later that year, the property was rezoned to B-2 (retail business district). In March 1963, the City council rezoned the property from B-2 to FD-2 (freeway development II). The Collinses did not oppose this rezoning, and Collins Park became a non-conforming use.

While Collins Park operated debt-free for many years, it began to lose money in the late 1980's. Arcadia claims that the 1963 rezoning caused higher real estate taxes to be imposed on its property. Arcadia further claims that the rezoning and increased taxes were part of a clear policy by the City to eliminate Collins Park so that the property could be put to a higher real estate tax generating use. Arcadia decided to sell the property and began marketing it for $6.1 million in June 1988.

In late 1989, the City council considered the adoption of an ordinance to require mobile home park owners to pay certain relocation costs to park residents when a park closes. In 1987, the Minnesota legislature enacted a statute allowing municipalities to adopt this type of an ordinance. Minn.Stat. § 327C.095, subds. 1-5 (1988) (1987 Minn. Laws ch. 179, § 10). This enabling statute was inspired by the problems and financial hardships caused by the 1986 closing of another mobile home park in the City, Lyndale Lodge. 2

The City discussed the proposed ordinance at four separate council meetings in September and October 1989. Arcadia and its counsel strongly opposed the ordinance at each meeting. The ordinance nevertheless was passed and became effective on December 15, 1989.

The ordinance's official purpose is stated as follows:

In view of the peculiar nature and problems presented by the closure or conversion of manufactured home parks, the City Council finds that the public health, safety and general welfare will be promoted by requiring compensation to displaced residents of such parks. The purpose of this Article is to require park owners to pay displaced residents reasonable relocation costs and purchasers of manufactured home parks to pay additional compensation, pursuant to the authority granted under Minnesota Statutes, Section 327C.095.

Bloomington, Minn. City Ord. 89-57 (codified at Bloomington, Minn. City Code Art. VI, 15.69). The ordinance generally requires a park owner to pay a displaced resident the reasonable cost of relocating a mobile home to another park located within a 25-mile radius of the park being closed. If a resident cannot relocate, the resident may tender title to the purchaser of the park and receive compensation equal to the amount of the tax assessed value of the home. To protect a park owner's investment, the ordinance has a "cap," which limits the "total compensation to be paid to displaced residents by the park owner and purchaser" to 20 percent of the purchase price of the park.

In May 1992, Arcadia entered into a purchase agreement with Wal-Mart, Inc. The agreement was subject to several contingencies, including reduction in the purchase price by the amount it would cost to comply with the ordinance and approval of certain zoning changes that had been requested by City staff. Those zoning changes were subsequently approved by the City council based on Wal-Mart and Arcadia's agreement to abide by a number of conditions, including compliance with the relocation ordinance.

Collins Park was closed on February 22, 1994. Because there were ample vacancies within a 25-mile radius of the park, mobile homes that physically could be moved were moved. Only five of the 90 homes remaining in the park at the time of closing had to be acquired. Arcadia sold the property to Wal-Mart for $2,338,842.66, after deducting relocation expenses of $363,128.71.

Arcadia brought this action in September 1994. It claims that as a result of the City's adoption of the ordinance, it lost potential buyers and was forced to sell the property for substantially less than its market value.

ISSUES

I. Did the district court err in granting summary judgment to the City on Arcadia's takings claim?

II. Did the district court err in granting summary judgment to the City on Arcadia's substantive due process and equal protection claims?

III. Did the district court err in granting summary judgment to the City on Mildred Collins's claim of intentional infliction of emotional distress?

ANALYSIS

Summary judgment is proper when there are no genuine issues of material fact and either party is entitled to judgment as a matter of law. Minn. R. Civ. P. 56.03. Where the material facts are not in dispute, a reviewing court need not defer to the district court's application of the law. Hubred v. Control Data Corp., 442 N.W.2d 308, 310 (Minn.1989).

Statutes and local ordinances are presumed valid and will not be declared unconstitutional unless clearly shown to be so. City of St. Paul v. Kekedakis, 293 Minn. 334, 336, 199 N.W.2d 151, 153 (1972); State v. Ellis, 476 N.W.2d 662, 664 (Minn.App.1991), review denied (Minn. Dec. 13, 1991). The party challenging a statute or ordinance's constitutionality has the burden of proof. Ellis, 476 N.W.2d at 664.

I.

Takings analyses often involve factual inquiries that make summary judgment inappropriate. Nevertheless, a court may evaluate the legal significance of undisputed material facts without forcing parties to trial. See 767 Third Ave. Assocs. v. United States, 48 F.3d 1575, 1580 (Fed.Cir.1995) ("Even though a regulatory taking analysis is normally ad hoc and fact-intensive, the [defendant] may still be entitled to judgment as a matter of law."). Because Arcadia's takings claim rests not on genuine issues of material fact, but on Arcadia's disagreement with the applicable legal standards and analyses to apply, it is amenable to summary judgment. See Outdoor Sys., Inc. v. City of Mesa, 997 F.2d 604, 618 (9th Cir.1993); Chesapeake Outdoor Enters., Inc. v. Mayor & City Council of Baltimore, 89 Md.App. 54, 597 A.2d 503, 512-13 (1991).

1. Takings Analysis Under the United States Constitution

The Takings Clause states: "[N]or shall private property be taken for public use, without just compensation." U.S. Const. Amend. V. Its purpose is "to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." Armstrong v. United States, 364 U.S. 40, 49, 80 S.Ct. 1563, 1569, 4 L.Ed.2d 1554 (1960), quoted in Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 227, 106 S.Ct. 1018, 1027, 89 L.Ed.2d 166 (1986).

The parties generally agree that the challenged governmental action passage and enforcement of the ordinance did not constitute a per se taking. Arcadia does not claim there has been an actual taking of title or permanent physical invasion of the property; nor does Arcadia claim that it was denied all economically beneficial or...

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