Beer v. Minnesota Power & Light Co.

• Decision Date: 13 February 1987
• Docket Number: No. C5-86-1125,C5-86-1125
• Citation: 400 N.W.2d 732
• Parties: Richard BEER, Respondent, v. MINNESOTA POWER & LIGHT COMPANY, Appellant.
• Court: Minnesota Supreme Court

Page 732

400 N.W.2d 732

Richard BEER, Respondent, v. MINNESOTA POWER & LIGHT COMPANY, Appellant.

No. C5-86-1125.

Supreme Court of Minnesota.

Feb. 13, 1987.

Syllabus by the Court

In actions for inverse condemnation or compensation for damages resulting from the limitation of access only, where the public authority is not in adverse possession of the landowner's property, the six-year statute of limitations (Minn.Stat. Sec. 541.05 (1986)) is applicable.

Douglas W. Peterson, James R. Habicht, Duluth, for appellant.

James Bang, Duluth, for respondent.

Heard, considered, and decided by the court en banc.

COYNE, Justice.

Respondent Richard Beer commenced these proceedings in inverse condemnation on December 26, 1985, alleging that his property was damaged by the vacation and closing of a portion of State Highway No. 6 as a result of the expansion of Minnesota Power & Light Company's (MPL) Clay Boswell generating plant near Cohasset, Minnesota. MPL moved for summary judgment on the ground that the six-year statute of limitations bars this action commenced more than seven years after the vacated portion of the highway was closed and rerouted. Respondent Beer contended, however, that his claim is not subject to any statute of limitations, that the damage to the bait business he operates on his property did not occur until 1980 and that, in any event, he is entitled to recover for those continuing damages occurring within the six years immediately preceding the commencement of this action. The trial court denied the motion for summary judgment and certified the question as important and doubtful. We reverse and direct the entry of judgment in favor of appellant MPL.

In 1976 MPL began acquiring land for the expansion of the Clay Boswell Station. The expansion plans contemplated the acquisition by purchase or condemnation of all the land adjacent to State Highway No. 6 along a 2 1/2 mile stretch of highway west of Cohasset. By November of 1978 MPL owned all the land necessary for its expansion project, and on November 13, 1978, the Minnesota Commissioner of Transportation vacated that portion of State Highway No. 6 lying within the boundary of the MPL land. Public use of the vacated portion of the highway was terminated on November 20, 1978, when MPL closed the gates at the edge of the station property.

Beer's property is situated in Cohasset (now Bass Brook Township) on the south side of former State Highway No. 6 about three blocks west of its intersection with U.S. Highway No. 2. Although it is no longer called State Highway No. 6, the roadway adjacent to respondent's property is open and unchanged, and access to Beer's property from the east and U.S. Highway No. 2 is unimpaired. The closed portion of State Highway No. 6 lies westerly of a point approximately seven-tenths of a mile west of Beer's property. Rerouted State Highway No. 6 now meets U.S. Highway No. 2 about five miles northwest of the former intersection.

The Minnesota Constitution, by amendment adopted in 1896, confers a right to compensation for damaging as well as taking private property. ¹ It is, of course, well recognized that the right of access to a public highway from abutting property is an interest in land and an incident of ownership. The right of access is subject to the law of eminent domain and may be extinguished for public use, but only upon payment of proper compensation. E.g., Burnquist v. Cook, 220 Minn. 48, 57, 19 N.W.2d 394, 399 (1945). This court has also held that limitation of access to a controlled-access highway may result in compensable damages to abutting property: when the modification of the highway "substantially impairs [an abutting owner's] right to reasonably convenient and suitable access to the main thoroughfare," owners of abutting land are entitled to damages. Hendrickson v. State, 267 Minn. 436, 446, 127 N.W.2d 165, 173 (1964).

The gravamen of the landowner's action in cases such as this where there is no actual taking or physical occupation of the land is the loss of access--not the diversion of traffic. We have previously observed that a property owner has no vested interest in the continued flow of the main stream of traffic, and the state may divert it to a new location without being liable for those consequential economic losses which owners of property abutting on the old highway may sustain. Id. at 442, 127 N.W.2d at 170. ² Here the loss of convenient access to State Highway No. 6 occurred on November 20, 1978, when a portion of the highway was closed and rerouted. Nevertheless, Beer contends that the damages occasioned by the closing of the highway did not occur until 1980 when the construction work on the generating station was completed. Then the flow of workers past his bait shop dried up, and "the damages really were felt."

Undoubtedly, the full impact of the cessation of public use of former State Highway No. 6 did not become apparent until the completion of the expansion project and the consequent reduction in the number of persons going onto MPL's property. But it is not the realization of the extent of damages, it is the interference with a property right which gives rise to a right to commence inverse condemnation proceedings. The actionable interference, however, is not--as the respondent contends--the limitation of access to his bait business with damages measured by the reduction in its profitability. The compensable injury is the interference with the right of access to the highway from his real property measured by the diminution in the market value of the property. The principle is fully explicated in Hendrickson v. State, 267 Minn. 436, 446-47, 127 N.W.2d 165, 173 (1964):

If the jury determines that plaintiffs are entitled to recover, the measure of damages is the difference between the market value of the property before and after suitable access has been denied. In awarding damages the jury may consider any change in the highest and best use which may have consequently occurred. For this limited purpose the court may in its discretion receive with caution evidence of lost patronage. However, no damages as such may be assessed for diversion of traffic or for loss of customers, business, goodwill, income, or profits since the latter depend not only on the location of access but on such complex and intangible variables as the initiative and industry of the proprietors. Personal attributes such as these will continue to influence the success or failure of a business enterprise wherever it is...