City of Morris v. Sax Investments, Inc.

• Decision Date: 15 May 2008
• Docket Number: No. A06-1188.,A06-1188.
• Citation: 749 N.W.2d 1
• Parties: CITY OF MORRIS, Respondent, v. SAX INVESTMENTS, INC., Appellant.
• Court: Minnesota Supreme Court

749 N.W.2d 1

CITY OF MORRIS, Respondent, v. SAX INVESTMENTS, INC., Appellant.

No. A06-1188.

Supreme Court of Minnesota.

May 15, 2008.

J. Richard Stermer, Montevideo, MN, for Appellant.

Charles C. Glasrud, Morris, MN, George C. Hoff, Hoff, Barry & Kuderer, PA, Eden Prairie, MN, for Respondent.

Susan Lynn Naughton, St. Paul, MN, for League of Minnesota Cities Amicus.

Terry Lee Adkins, Patricia Kay Alfredson, Rochester, MN, for City if Rochester Amicus.

Gerald T. Hendrickson, St. Paul, MN, for City of St. Paul Amicus.

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

OPINION

GILDEA, Justice.

In this case, we must determine whether the Minnesota State Building Code, Minn.Stat. §§ 16B.59-.75 (2006), permits the enforcement of four inspection standards contained in the Rental Licensing Ordinance of the City of Morris (Rental Licensing Ordinance), Morris, Minn., Rental Licensing Ordinance § 4.32 (2002). The district court concluded that the ordinance provisions regulate the business of rental housing, not the design or construction of buildings, and are therefore permitted under state law. The court of appeals affirmed, concluding that the ordinance provisions do not regulate "the act of building," but instead impose "standards of habitability" on "the subsequent use of the building as a business." City of Morris v. Sax Invs., Inc., 730 N.W.2d 551, 556 (Minn.App.2007). We conclude that the ordinance provisions regulating ground fault interrupter receptacles, bathroom ventilation, and egress window covers are building code provisions that regulate a component or system of a residential structure and differ impermissibly from the State Building Code, and that these provisions are therefore prohibited by state law. But we conclude that the factual record is insufficient for us to determine whether the ordinance provision regulating smoke detectors in sleeping rooms is prohibited by state law. Accordingly, we reverse and remand to the district court.

The Rental Licensing Ordinance prohibits the use of residential property as rental property unless the property has been licensed by the City for such use. Morris, Minn., Rental Licensing Ordinance § 4.32, subd. 3. Before a license is issued, the property must be inspected and found to "fully comply with all the provisions of the applicable rules, standards, statutes and ordinances which pertain to such dwelling units." Id., subd. 6. Among the provisions that the property must satisfy before licensure are extensive inspection standards contained in the ordinance. Id., subd. 21.

Appellant Michael Sax owns property in the City of Morris. On January 3, 2005, Sax registered the property as residential rental property. The record does not reveal whether the building on the property is a single-family or multi-family building. The parties agree, however, that no known improvements or alterations (other than replacement of shingles, siding, and exterior trim) have been made to the building since the State Building Code went into effect in 1972.

On January 18, 2005, an enforcement officer for the City of Morris inspected the property and identified eight violations of the inspection standards contained in the Rental Licensing Ordinance. The City ordered Sax to correct these violations. When the property was re-inspected two months later, four of the eight violations still had not been corrected: (1) ground fault interrupter receptacles were not installed on outlets within 6 feet of water sources in the kitchen, bathroom, and basement; (2) the bathroom did not contain either a window or a ventilation fan; (3) the egress windows in the basement lacked covers; and (4) the basement bedroom did not have a smoke detector. The City assessed a $50 fee due to the failed re-inspection.

After Sax refused to correct the remaining violations and pay the re-inspection fee, the City of Morris initiated the present action seeking temporary and permanent injunctions prohibiting Sax from leasing his property to residential tenants until the four remaining violations were corrected and the re-inspection fee was paid. In his answer to the City's complaint, Sax asserted that the remaining violations were not subject to a correction order because the property complies with the requirements of the Minnesota State Building Code. Sax also filed a counterclaim seeking an order directing the City to issue a residential rental license for the property and an injunction prohibiting the enforcement of the ordinance provisions.

The parties filed cross-motions for summary judgment. The district court ordered summary judgment in favor of the City on both the City's claim for a temporary injunction and Sax's counterclaims. The court concluded that the State Building Code does not prohibit local regulations that are "not directly tied to building design or construction," even if the subject of the local regulation "is also addressed in the State Building Code." Because it found that the ordinance provisions at issue in this case "are not structural, do not involve the `design or construction' of the property, and do not involve complex `components or systems' within [Sax's] rental property," the court concluded that the ordinance "regulates certain safety and health provisions that are part and parcel of the business of renting residential property in the City of Morris" and is therefore "a valid exercise of the City's police powers."

The court of appeals held that the State Building Code supersedes only local regulations pertaining "to construction, remodeling, alteration, or restoration, that is, to the act of building, and not to the subsequent use of the building as a business." Sax Invs., 730 N.W.2d at 556. Accordingly, the court of appeals concluded that "[l]ocal authorities retain the right to regulate the business of rental housing by enacting standards of habitability." Id. Without defining "standards of habitability," and without analyzing whether the ordinance provisions at issue constitute "local building ordinances" or "standards of habitability," the court of appeals affirmed the district court. Id. We granted Sax's petition for further review.

On review of a "grant [of] summary judgment, we determine whether there are any genuine issues of material fact and whether the district court erred in its application of the law." In re Estate of Kinney, 733 N.W.2d 118, 122 (Minn.2007); see also Minn. R. Civ. P. 56.03. The application of statutes, administrative regulations, and local ordinances to undisputed facts is a legal conclusion and is reviewed de novo. See Lefto v. Hoggsbreath Enters., Inc., 581 N.W.2d 855, 856 (Minn. 1998); Wallin v. Letourneau, 534 N.W.2d 712, 715 (Minn.1995); St. Otto's Home v. Minn. Dep't of Human Servs., 437 N.W.2d 35, 39 (Minn.1989).

I.

The questions presented in this case concern the scope of the Minnesota State Building Code. The State Building Code "governs the construction, reconstruction, alteration, and repair of buildings." Minn. Stat. § 16B.59. The purpose of the code is to "provide basic and uniform performance standards, establish reasonable safeguards for health, safety, welfare, comfort, and security of the residents of this state and provide for the use of modern methods, devices, materials, and techniques which will in part tend to lower construction costs." Id. To effectuate this legislative purpose, the statute instructs the Commissioner of Administration to establish by administrative rule "a code of standards for the construction, reconstruction, alteration, and repair of buildings, governing matters of structural materials, design and construction, fire protection, health, sanitation, and safety." Minn.Stat. § 16B.61, subd. 1. Most of the substantive standards are addressed in these administrative rules, which encompass several separate chapters of Minnesota Rules. See Minn. R. 1300.0050 (2007) (listing the Minnesota State Building Code as including chapters 1300-70, 4715, and 7670-78).

Shortly after the State Building Code became effective in 1972, Act of May 26, 1971, ch. 561, § 4, 1971 Minn. Laws 1018, 1020, we considered the interaction between the State Building Code and municipal regulation in City of Minnetonka v. Mark Z. Jones Assocs., Inc., 306 Minn. 217, 218-19, 236 N.W.2d 163, 165 (1975). In that case, a municipality sought to enforce a fire prevention ordinance that required the developer of an apartment complex to install an emergency lighting system in hallways and exits, and a sprinkler system in the basement garage. Id. at 218, 236 N.W.2d at 164-65. Although we recognized that municipalities were "undoubtedly" authorized to adopt some fire prevention ordinances, we held that the State Building Code preempts local ordinances that "affect [ ] the construction and design of buildings." Id. at 219-20, 236 N.W.2d at 165. In holding that the Minnetonka fire prevention ordinance provisions were preempted by state law, we concluded that "we are influenced, if not governed, by the fact that the State Building Code itself deals extensively with fire prevention and fire-related safety measures." Id. at 222, 236 N.W.2d at 167.

Since our decision in Mark Z. Jones, the legislature has added language to the State Building Code that specifically addresses municipal regulation of residential structures. Act of May 29, 2001, ch. 207, § 3, 2001 Minn. Laws 849, 850 (codified at Minn.Stat. § 16B.62, subd. 1). The specific issue here is whether the State Building Code, as currently written, leaves room for the enforcement of four inspection standards contained in the Rental Licensing Ordinance.

Generally, "municipalities have no inherent powers and possess only such powers as are expressly conferred by statute or implied as necessary in aid of those powers which have been expressly conferred." Mangold Midwest Co. v. Village of Richfield, 274 Minn. 347, 357, 143 N.W.2d 813, 820 (1966). Among other powers, statutory cities have the power to...