Cooperative Power Association v. Lundell, No. A04-1045 (MN 1/11/2005)

• Decision Date: 11 January 2005
• Docket Number: No. A04-1045.,A04-1045.
• Parties: Cooperative Power Association, a Minnesota cooperative corporation, petitioner, Respondent, v. Danny O. Lundell, et al., Appellants, County of Goodhue, Respondent.
• Court: Minnesota Supreme Court

Page 1

Unpublished Opinion

Cooperative Power Association, a Minnesota cooperative corporation, petitioner, Respondent, v. Danny O. Lundell, et al., Appellants County of Goodhue, Respondent.

No. A04-1045.

Court of Appeals of Minnesota.

Filed January 11, 2005.

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).

Appeal from the District Court, Goodhue County, File No. C3-03-809.

Peter A. Koller, Paul B. Zisla, Lorie A. Klein, Moss & Barnett, P.A., (for respondent Cooperative Power Association).

Lance R. Heisler, Lampe, Swanson, Morisette & Heisler, LLP, (for appellants).

Carol K. Lee, Assistant Goodhue County Attorney, (for respondent Goodhue County).

Considered and decided by Kalitowski, Presiding Judge, Wright, Judge, and Crippen, Judge.

UNPUBLISHED OPINION

CRIPPEN, Judge^*

This appeal challenges the district court's ultimate finding of need for the quick-take under Minn. Stat. § 117.042 (2002) of an acreage used for a telecommunications tower. Because the record contains adequate evidence to support these findings, we affirm.

FACTS

Respondent Cooperative Power Association leased a 4.5-acre tract of Goodhue County land from appellants Danny and Mary Lundell for its telecommunications tower. The governing lease, which ran until 2015 with an option to renew until 2030, provided for yearly rent of $450 with occasional percentage increases. Through a management service agreement, the power association, which generates and distributes electricity to member cooperatives, delegated authority to Great River Energy, another electric cooperative, to act on its behalf.

In 2002 appellants negotiated unsuccessfully with Great River for a revised lease, which included a substantial increase in rent to $9,000 per year. When the parties appeared to reach an agreement but negotiations broke down, appellants sent Great River a notice claiming default under the proposed amended lease. Appellants declined Great River's offer to purchase the property.

The Great River board of directors passed a resolution stating that, in order to assure continuing access to and use of the telecommunications tower, it must acquire fee title to the tower site on behalf of Cooperative Power Association by eminent domain and use the "quick-take" procedure under Minn. Stat. § 117.042 (2002) to take title before the filing of an award by the court-appointed commissioners.¹ After a hearing, the district court granted the condemnation petition and quick-take motion.

Appellants challenge the district court's finding of necessity for the taking. Although they do not disagree that the taking served a proper purpose, they dispute that fee title to the land was needed when the power association already maintained the right to operate the tower on the property under an extended lease. Appellants also argue that the claim of need was pretextual, contending that the power association only sought fee title as a means to defeat the claim for increased rent.

DECISION

In eminent domain proceedings, a party must show necessity and public purpose. Absolute necessity is not required; it is enough that the proposed taking is reasonably necessary or convenient for the furtherance of a proper public purpose. City of Duluth v. State, 390 N.W.2d 757, 764-65 (Minn. 1986).

Judicial review of condemnation proceedings is "very narrow." In re Condemnation by Minneapolis Cmty. Dev. Agency, 582 N.W.2d 596, 598 (Minn. App. 1998) (quotation omitted), review denied (Minn. Oct. 29, 1998). We are to reverse the condemning authority's determination only if we find that it was "arbitrary, unreasonable, or capricious, or that the evidence against the necessity or public use is overwhelming." Hous. & Redevelopment Auth. v. Minneapolis Metro. Co., 259 Minn. 1, 16, 104 N.W.2d 864, 875 (1960). In addition, we must affirm trial court findings on public purpose and necessity unless they are clearly erroneous, definitely suggesting that a mistake has been made. Hous. & Redevelopment Auth. v. Schapiro, 297 Minn. 103, 109, 210 N.W.2d 211, 214 (1973).

The Great River board's declaration of necessity operates as prima facie evidence of public purpose and necessity. See City of Pipestone v. Halbersma, 294 N.W.2d 271, 274 (Minn. 1980) (according prima facie effect to city council resolution regarding necessity of airport expansion).² Respondent acknowledges appellants' argument that the determination of need enlarged its bargaining position after negotiations broke down, but asserts that the leasing dispute demonstrates the need for taking by showing that it was perilous to rely on the long-term lease arrangement for use of the property. In lease negotiations, appellants proposed an increase in rent from $450 per year to $9,000 per year, demanded disclosure of information on usage of the property by subtenants, and questioned the use of the property as exceeding the boundaries specified in the lease. The record indicates that, although respondent first indicated consent to a revised lease, it determined that a new lease arrangement was not feasible before signing the agreement. Appellants then sent a notice of default as a precursor to eviction proceedings, based on the alleged unwritten agreement.

Given this dispute concerning the lease arrangement, the district court did not err in finding necessity for the purpose of exercising eminent domain. Although appellants assert a lack of need because respondent maintained rights under an existing lease, abundant evidence permitted the district court to conclude that the leasehold rights were less than peaceful and to make a finding of necessity for taking fee ownership. This finding accords with judicial recognition that the power of eminent domain is not restricted by the existence of a previous contract that governs the rights between the parties. Long Island Water Supply Co. v. City of Brooklyn, 166 U.S. 685, 689-90, 17 S. Ct. 718, 720 (1897); see also Vill. of St. Louis Park v. Minneapolis, Northfield & S. Ry. Co., 156 Minn. 164, 169, 194 N.W. 327, 330 (1923) (stating that "it is beyond the powers of public and private corporations effectually to contract that in the future no resort shall be had to the power of eminent domain to enlarge rights given by contract"). More specifically, courts in other jurisdictions have upheld a condemning authority's right to exercise the power of eminent domain despite the existence of a long-term lease agreement. See, e.g., Bear Creek Dev. Corp. v. Dyer, 790 P.2d 897, 898 (Colo. App. 1990) (holding that lease agreement for access to communication towers did not preclude condemnation of property); Cent. Hanover Bank & Trust Co. v. Pan Am. Airways, 188 So. 820, 824 (Fla. 1939) (holding that existence of lease did not defeat airline's condemnation of property for business expansion). As the district court recognized, the existence of a lease agreement was not a bar to condemnation...