Buettner v. City of St. Cloud, 47956.
| Decision Date | 16 March 1979 |
| Docket Number | No. 47956.,47956. |
| Citation | 277 NW 2d 199 |
| Parties | Leo C. BUETTNER, Respondent, v. CITY OF ST. CLOUD, Appellant. |
| Court | Minnesota Supreme Court |
Bernard E. Boland, City Atty., St. Cloud, for appellant.
Hall, Byers, Hanson, Steil & Weinberger, Stanley J. Weinberger and L. M. Hall, Jr., St. Cloud, for respondent.
Stanley G. Peskar, Gen. Counsel, League of Minnesota Cities, St. Paul, amicus curiae seeking reversal.
Heard before TODD, SCOTT, and WAHL, JJ., and considered and decided by the court en banc.
The city of St. Cloud appeals from the June 3, 1977 judgment and order of the Stearns County District Court reducing the special assessment on the property owned by Leo C. Buettner, respondent herein, from $32,678.20 to $26,925.00. The League of Minnesota Cities filed an amicus curiae brief in appellant's support, by order of this court September 9, 1977. The primary issue on appeal is whether the trial court exceeded the permissible scope of review of special assessments. We affirm on that issue.
Mr. Buettner owns a 3.725-acre tract of undeveloped property wholly contained within the city limits of the city of St. Cloud. Residential development was clearly anticipated. A preliminary plat dividing the property into 11 lots has been filed and approved by the city. City subdivision regulations, however, prohibited residential development of land not served by a sewer and water system.
Installation of water and sanitary sewer lines crossing Buettner's property took place in 1975. Following public hearings, the St. Cloud city council adopted the special assessment roll on March 1, 1976. The Buettner property was assessed at the rate of $29.41 per front foot, for a total of $32,678.20. Pursuant to Minn.St. 429.081, Buettner properly appealed the assessment.
The sole issue presented to the district court had to do with the relationship between the value of the "specific benefits" conferred on the property by the project to the amount of the "special assessment" levied. No issue regarding the procedural regularity of the assessment adoption was raised. Any issue regarding the actual proportionate project costs was eliminated by stipulation of counsel during trial. There was no dispute that the reasonably anticipated "highest and best use" of the property was residential, nor was the local character of the improvement seriously in contention.
The measure of "special benefits" was agreed to be the comparative market value of the subject property before and after the project. Petitioner Buettner's evidence included testimony by Jerome Cypher, a certified appraiser. Cypher testified that the 3.275-acre property, lying wholly within the St. Cloud city limits, had a pre-project value of $3,275; that, although zoned for single-family residential development, the area was "poor development-type land," low, treeless, with some granite outcropping; and that his appraisal did not consider the approved preliminary plat or sale prices of comparable unimproved lots. He placed the post-project land value at $27,383 by dividing the property into 12 hypothetical 90-front-foot lots valued at approximately $2,250 per lot and considering the 1975 sale price of $5,850 for a nearby comparable lot with adjustments because of the absence of curb, gutter, and black-topped street at the subject property. Mr. Leo Buettner, who had prior real estate development experience, testified on his own behalf that the pre-project value was $1,000 per acre ($3,275) and that its post-project value increased to $18-19,000. He admitted offering the 11 platted lots for sale at $8,500 per lot, although there had been no purchasers at that price.
On behalf of the city, Mr. Gerald McKinzie, an independent certified appraiser, testified that he initially appraised the property at 26½ cents per square foot or about $3,000 per lot for the unimproved 11 lots shown on the preliminary plat. His appraisal considered the value of an approved preliminary plat, the value of city services (police, fire, school) available to property within the city limits, and sale prices of three comparable unimproved lots, adjusted for lot size, improvements, and recency of sale. After installation of the sewer and water mains, he estimated market value at 52½ cents per square foot, or $6,000 per lot, again relying on adjusted sales data from comparable lots. This time four lots were used, and again adjusted for size, improvements, and recency of sale.
After consideration of the conflicting testimony, the district court entered findings of fact, conclusions of law, and order for judgment reducing the assessment to $26,925. The city's alternative motions for new trial or amended findings were denied June 2, 1977, and judgment entered accordingly.
This case squarely presents the issue of the permissible scope of review of special assessments under Minn.St. 429.081.
A special assessment is a tax, intended to offset the cost of local improvements such as sewer, water and streets, which is selectively imposed on the beneficiaries of such products. Appeal from the levy of the local taxing entity is provided by statute, Minn.St. 429.081:
As is obvious from the face of the statute, the scope of the review of a special assessment to be conducted by the trial court is not specified. It has therefore fallen to the courts to establish the appropriate scope in accordance with accepted legal principles. We have said that a special assessment by a municipality, constituting as it does an exercise of the legislative and executive functions of local government, is entitled to a "presumption of validity." Nyquist v. Town Center, Crow Wing County, 312 Minn. 266, 251 N.W.2d 695 (1977). But the strength of that presumption, the manner in which it may be overcome, the range of its applicability, and the conditions under which a trial court may substitute its own judgment for that of the city council are open to question. The language in the numerous opinions of this court dealing with the subject has been unclear and, in fact, directly contradictory.1 As a result, considerable confusion exists among the members of the bench and bar as to the proper scope of a Section 429.081 review. This case, in which the trial court has weighed conflicting appraisal testimony, substituted its opinion for that of the municipality and ordered not only a reassessment but a specific reduction, provides the opportunity for clarification.
Initially, we note that the nature of the issues presented to a trial court reviewing a specific assessment may differ. Specifically, this court has established the rule that a special assessment which exceeds the special benefits to the property, measured by the difference in market value before and after the improvements, is a taking of property without fair compensation in violation of the Fourteenth Amendment. See, e. g., Southview Country Club v. City of Inver Grove Heights, 263 N.W.2d 385 (Minn.1978). This is the sole issue that was presented to the trial court in this case.
Challenges can be made to a special assessment on grounds other than this constitutional one, however. The proportionate distribution among property owners of the total costs of the improvement, the determination of the area actually benefited by a given construction project, the regularity of the assessment process — all may be contested by a property owner under Minn.St. 429.081.
It is our conclusion that the proper scope of review to be conducted by the trial court depends on which of these issues is presented to it. The fact that different standards are appropriate in different cases or even in different aspects of the same case is one reason the prior cases in this area may appear inconclusive.
The levying of special assessments is a legislative function. The city council possesses the discretion ordinarily afforded a legislative body in adopting one among a number of reasonable alternatives. Therefore, in cases where the issue presented to the trial court is the regularity of the assessment process or determinations made within the range of the municipality's legislative discretion, such as what property is benefited and a prorated division of the cost, the city's conclusions may not be upset unless clearly erroneous. See, e. g., Hartle v. Glencoe, 203 Minn. 262, 226 N.W.2d 914 (1975).2
But in a case such as this, where the sole issue presented is whether there has been an unconstitutional taking, the trial court cannot abrogate its duty to uphold constitutional safeguards and defer to the judgment of the taxing authority. Decision must be based upon independent consideration of all the evidence. This is the basis of our opinion in Carlson-Lang Realty Co. v. City of Windom, 307 Minn. 368, 240 N.W.2d 517 (1976)...
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