City of St. Louis Park v. Engell

• Decision Date: 02 May 1969
• Docket Number: Nos. 41332,41782,s. 41332
• Parties: CITY OF ST. LOUIS PARK, Appellant, v. Alfred M. ENGELL, et al., Respondents-below, First National Bank of Minneapolis and Paul J. Schmitt, co-executors and co-trustees under last will of William How Smith, deceased, Respondents.
• Court: Minnesota Supreme Court

Page 3

168 N.W.2d 3

283 Minn. 309

CITY OF ST. LOUIS PARK, Appellant, v. Alfred M. ENGELL, et al., Respondents-below First National Bank of Minneapolis and Paul J. Schmitt co-executors and co-trustees under last will of William How Smith, deceased Respondents.

Nos. 41332, 41782.

Supreme Court of Minnesota.

May 2, 1969.

Syllabus by the Court

This court has previously established that where property is taken under the power of eminent domain, special benefits shall not be set off against an award of damages where the cost of improvements will be paid for by special assessments. We reaffirm and follow that rule in the instant case. It is our present view that the decision entered by the trial court herein will not in any way prejudice the right of petitioner-appellant to later recover by special assessment the cost of the improvements known as 39th Street.

Harold C. Evarts, Minneapolis, H. H. Burry, St. Louis Park, Louis W. Claeson, Jr., Minneapolis, for appellant.

Dorsey, Marquart, Windhorst, West & Halladay, and Craig A. Beck, Minneapolis, for respondents.

OPINION

NELSON, Justice.

Petitioner-appellant, the city of St. Louis Park, a municipal corporation, exercised its right of eminent domain pursuant to Minn.St. c. 117 to acquire for public use:

'* * * (A)n easement for street purposes * * * in, on, over and across (the lands involved herein described as Parcel 3, ¹ and other lands) for the purpose of building, constructing, reconstructing and improving a public street and to thereafter maintain same within the corporate city limits of said municipal corporation.'

The names of parties interested in Parcel 3 and the nature of their interest are as follows:

'William How Smith

Mary Larkin Smith

Western Oil and Fuel Company, a Delaware corporation

Richard E. Peterson

Petroleum Properties, Inc., a Minnesota corporation

Fee

Inchoate

Assignee of Lessee of Record

Sub-Lessee

Possible Claimant'

The report of the appointed commissioners awarded damages of $2,700 for the taking of this parcel. Separate appeals to the District Court of Hennepin County were taken from this award by petitioner and by Paul J. Schmitt and First National Bank of Minneapolis, a United States corporation, coexecutors and cotrustees of the estate of William How Smith, deceased. (Schmitt and the bank will be referred to hereafter as the coexecutors.)

A jury in the subsequent proceeding rendered the following special verdict:

'Question: What is the fair and reasonable market value as of February 17, 1966, of the land acquired by the petitioner, City of St. Louis Park, a Municipal Corporation, designated as Parcel 3?

'Answer: $'13,500' (Amount of Money).

'Question: Did 39th Street create special benefits to the remaining portion of the Smith property, that is, to the remaining portion of the original tract?

'Answer: 'Yes' (Yes or No).

'If your answer to the last question is 'Yes', answer the following question:

'Question: What is the fair and reasonable value of such special benefits?

'Answer: $'17,000' (Amount of Money).

The jury's special verdict was returned on November 7, 1967.

The trial court thereafter ordered judgment entered in the sum of $13,500 in favor of the coexecutors, together with their costs and disbursements, and refused to offset the special benefits against the damages upon the ground that the cost of improvements going into 39th Street had already been partly assessed by the city of St. Louis Park and the remainder of the cost could be assessed pursuant to powers granted to the city by statutes of the State of Minnesota and by the city's home rule charter.

Petitioner moved to amend the order for judgment on the special verdict to provide as follows:

'The fair and reasonable market value of the lands acquired, here designated as Parcel 3, as of the date of taking, is in the amount of $13,500.

'The taking of the lands designated herein as Parcel 3 for street purposes, known as 39th Street, created special benefits to the remainder of the lands designated as Parcel 3.

'The special benefits to the remainder of Parcel 3 not acquired herein, caused by the taking of 39th Street, are in the amount of $17,000.

'Respondents First National Bank of Minneapolis and Paul J. Schmitt, coexecutors and co-trustees under the last will and testament of William How Smith, deceased, are entitled to recover nothing from petitioner, City of St. Louis Park, and said petitioner is entitled to recover its costs and disbursements herein.'

The trial court on February 7, 1968, denied that motion and petitioner appealed from its order (41332)

Petitioner has also filed a petition for discretionary review (41782), respondents having moved for a dismissal of petitioner's appeal on the ground the order was not appealable. The motion to dismiss the appeal is denied. Judgment was entered April 1, 1968.

With respect to discretionary review, we want to make it clear that the exercise of discretion in one case is not necessarily a precedent for another. This court must determine under what circumstances it will exercise its extraordinary powers and grant a discretionary review. We have determined in this case to grant petitioner's request and render a decision upon the merits.

The sole issue appears to be whether the trial court was correct in refusing to offset special benefits when the cost of the improvements could be specially assessed against benefited property owners. An agreed statement of the case for the purposes of this appeal was entered between petitioner and its counsel and the respondent coexecutors, Mary Larkin Smith, and their counsel. This was approved by the trial court as being conformable to the truth and setting forth so many of the facts averred or approved as were thought to be essential to a decision on the issue raised on this appeal.

Petitioner contends that the special benefits should be set off against the damages sustained on account of the taking of Parcel 3. In other words, petitioner maintains that the coexecutors are not entitled to recover any damages because the damages awarded for Parcel 3 are less than the value of the special benefits. Respondents contend that the special benefits should not be set off against the damages because the cost of the sanitary sewer, storm sewer, and water main has been assessed against the abutting land, including decedent's tract, and the cost of the construction of 39th Street can be assessed against such property. They contend that to permit the offset would make the estate of decedent pay twice for the same benefits, once under the special assessments, and again as an offset to the damages for the taking of Parcel 3. They cite in support of their position Atkins v. City of Boston, 188 Mass. 77, 74 N.E. 292; 3 Nichols, Eminent Domain (3 ed.) § 8.6209, p. 102, and cases cited; and St. Louis Park Home Rule Charter, c. 7.

3 Nichols, Eminent Domain (3 ed.) § 8.6209, p. 102, states the law to be as follows:

'* * * Ordinarily, however, unless there is some special statutory provision which leads to a different conclusion, there can be no set-off of the benefits that will result from the improvement for which a piece of land has been taken when it lies within the power of the public authorities to levy a special assessment for the same improvement.'

No statutory provision in Minnesota has been cited which leads to a different conclusion from that stated in Nichols.

This court has previously established that where property is taken under the power of eminent domain, special benefits shall not be set off against an award of damages where the cost of improvements may be paid for by special assessments. In re Improvement of Third Street, St. Paul, 177 Minn. 159, 225 N.W. 92. A review of that decision discloses facts similar to those in the case at bar. In that case Third Street had been widened, taking property off the front of the landowner's lot. The following comment by this court in the Third Street case practically disposes of the issue presented here (177 Minn. 161, 225 N.W. 93):

'* * * There is no reasonable theory on which the taking away of the strip can reduce this value, unless it be on the theory of deducting therefrom some benefit that accrues to the remaining tract by reason of the widening of the street and extending the street up to the line of the remaining property. But where, as here, damages and benefits are assessed separately, there can be no such reduction in arriving at the amount of damages, which is the only question here presented.' (Italics supplied.)

Respondents contend that the foregoing decision is consistent with the overwhelming weight of authority in this country and that it establishes a rule which prevents double taxation and which is just and equitable to all parties concerned. If we contrast the power of eminent domain with the power of taxation, we must recognize that the power of eminent domain is a constitutional doctrine permitting the taking of private property for a public purpose but requiring that the property owner receive just compensation--that compensation which will fairly reimburse him for what has been taken from him--, while the power of taxation is an inherent and necessary power of government. The power of a public authority to levy a special assessment for improvements stems from the taxing power and is promulgated by legislative action. Minn.St. 429.051 provides:

'The cost of any improvement, or any part thereof, may be assessed upon property benefited by the improvement, based upon the benefits received, * * *.'

St. Louis Park Home Rule Charter, § 7.03, provides in part:

'* * * The amounts assessed to benefited property to pay for such local improvements may equal the cost of the improvements, including all costs and expenses connected therewith, with interest, until paid, but shall not exceed the benefits to the property.'

As stated by the court in Matter of Forty-Eighth Street, 19 App.Div. 602, 46 N.Y.S. 311,...