Dead Lake Ass'n, Inc. v. Otter Tail County

• Court: Minnesota Supreme Court
• Writing for the Court: MEYER, Justice.
• Citation: Dead Lake Ass'n, Inc. v. Otter Tail County, 695 N.W.2d 129 (Minn. 2005)
• Decision Date: 28 April 2005
• Docket Number: No. A03-750.,A03-750.
• Parties: DEAD LAKE ASSOCIATION, INC., Appellant, v. OTTER TAIL COUNTY, Minnesota, Respondent, R. Murray Partnership, LLP, Respondent.

695 N.W.2d 129

DEAD LAKE ASSOCIATION, INC., Appellant, v. OTTER TAIL COUNTY, Minnesota, Respondent, R. Murray Partnership, LLP, Respondent.

No. A03-750.

Supreme Court of Minnesota.

April 28, 2005.

Gerald W. VonKorff, Rinke-Noonan, St. Cloud, MN, for appellant.

Byron E. Starns, Leonard, Street and Deinard, Minneapolis, MN, Robert L. Russell, Fergus Falls, MN, Peder A. Larson, Edina, MN, for respondent R. Murray Partnership.

Michael T. Rengel, Pemberton, Sorlie, Rufer & Kershner, PLLP, Fergus Falls, MN, for respondent Otter Tail County.

John H. Erickson, Erickson, Pearson & Aanes, Brainerd, MN, for amicus curiae Minnesota Lakes Association.

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

OPINION

MEYER, Justice.

This is an appeal from a decision by respondent Otter Tail County (the County) to grant a conditional use permit (CUP) for a planned unit development (PUD) on Dead Lake in Otter Tail County. Dead Lake Association (the Association), a group of landowners opposed to the development, challenged the County's grant of the CUP, arguing that the County lacked authority to grant the permit because the shoreland at issue was not properly zoned for a PUD. In addition, it argued that the CUP was arbitrarily granted by the County. The court of appeals affirmed in part and reversed in part. Dead Lake Ass'n, Inc. v. Otter Tail County, No. A03-750, 2004 WL 422570, at *4 (Minn.App. Mar.9, 2004). It concluded that the County had authority to approve the CUP but that the County acted arbitrarily for lack of findings. Id. It remanded the matter to the county board to make findings in support of its decision. Id.

The Association petitioned this court for review, asserting that the County lacked authority to approve the CUP because it failed to follow a planning process outlined in state regulations, which requires the County to "legislatively create a planned unit development zoning district in which PUD is `an allowable conditional use.'" We granted review on that single issue.¹

Respondents Otter Tail County and R. Murray Partnership (the Developer) claim that the appellate courts lack jurisdiction over this issue because the Association's argument is an attack on the validity of the County's zoning ordinance and such an attack is not reviewable by writ of certiorari.² We agree and vacate the court of appeals' determination that the County had authority to approve the CUP.

On November 20, 2002, the Developer submitted an application for a CUP for construction of a cluster development or PUD on Dead Lake in Otter Tail County.³ Dead Lake is a 7,900-acre lake classified by the Department of Natural Resources as a "natural environment lake."⁴ The proposed development consisted of 151 residential housing units, a general store, a restaurant, two swimming pools, a marina, and mooring facilities.

The Otter Tail County Planning Commission (the Planning Commission) stayed the permit application so that an Environmental Assessment Worksheet (EAW)⁵ could be completed, as required by Minn. R. 4410.1400 (2003). The Developer submitted its EAW to the Planning Commission, which approved the EAW on January 21, 2003. The Planning Commission submitted notice of the forthcoming EAW to the Environmental Quality Board and public comment was solicited. At the close of the public comment period, concerned parties were allowed to present additional information and comment at two public meetings conducted by the Planning Commission.

After the public hearings, the Planning Commission concluded that a detailed Environmental Impact Statement (EIS)⁶ was unnecessary based on its findings that the Developer had amended the project proposal to mitigate environmental impacts, that the revised proposal fell below the maximum density limitations prescribed by the County's Shoreland Management Ordinance (the Ordinance), and that the County could mitigate environmental effects through its regulatory authority. The Otter Tail County Board of Commissioners (the County Board) then issued a negative declaration concerning the need for an EIS.⁷ In mid-April 2003, the Planning Commission considered and approved the Developer's CUP application, subject to numerous conditions.⁸ The County Board met the following week and approved the CUP with the conditions, for a maximum of 139 units and boat slips. The Association appealed the County Board's decision by writ of certiorari to the Minnesota Court of Appeals. The court of appeals found that the County Board had the authority to approve the CUP, because "[u]nder both the rules and the [ordinance], cluster developments are conditional uses on natural environment lakes. Therefore, at least with regard to this proposed development, the ordinance is not inconsistent with, and complies with, the standards set forth in the rules." Dead Lake Ass'n, 2004 WL 422570, at *3. However, the court of appeals concluded that the County Board had failed to properly establish a record of findings supporting its decision and remanded the matter to the County Board "to make a record indicating the basis for its decision." Id. at *4.

On appeal, the only issue before us concerns the County's authority to grant the CUP for the proposed cluster development. The Association claims that the County improperly granted the CUP without first zoning Blue Heron Bay as a land use district in which PUD is an allowable conditional use. It claims that such zoning is required by state regulation before a CUP may be issued.

In 1990, the Minnesota Legislature promulgated statutes relating to shoreland development to "provide guidance for the wise development of shorelands of public waters," "preserve the economic and natural environmental values of shorelands," and "provide for the wise use of water and related land resources of the state." Minn.Stat. § 103F.201 (2004). The legislature directed the Commissioner of the Department of Natural Resources (DNR) to adopt model standards and criteria for the use and development of shoreland. See Minn.Stat. § 103F.211 (2004). In addition, counties were required to adopt a shoreland conservation ordinance that meets the minimum standards set forth in section 103F.211. See Minn.Stat. § 103F.215, subd. 1 (2004). As mandated by the statutes and subsequent state regulations, the County created this Ordinance, revising it in 1992 and most recently in 2001.

According to state regulations, "[t]he development of shorelands of public waters must be controlled by means of land use zoning districts which are designated to be compatible with the classes of public waters." Minn. R. 6120.3100 (2003) (emphasis added). First, the DNR Commissioner is required to classify all public waters according to specified criteria.⁹ The three classifications for lakes are natural environment lakes, recreational development lakes, and general development lakes. See Minn. R. 6120.3000, subp. 1a.A-C (2003). Natural environment lakes are the most environmentally sensitive, and generally have "limited capacities for assimilating the impacts of development and recreational use." Id., subp. 1a.A. Recreational development lakes are generally moderately developed with seasonal and year-round residences and associated recreational uses. Id., subp. 1a.B. General development lakes are usually large and highly developed, and can generally withstand higher levels of additional development. Id., subp. 1a.C.

Second, once the DNR Commissioner has classified all public waters, each county must create "land use zoning districts which are designated to be compatible with the classes of public waters." Minn. R. 6120.3100 (2003). The five types of land use zoning districts are: (1) special protection districts; (2) residential districts; (3) high density residential districts; (4) water-oriented commercial districts; and (5) general use districts. Minn. R. 6120.3200, subp. 3 (2003). The regulations include a chart identifying whether specific uses are permitted, conditional, or prohibited depending on the type of district and the class of public waters in question. See id., subp. 4.

Minnesota Rule 6120.3800 addresses issues relating to PUDs. It provides that "[l]ocal governments must consider incorporating, with approval of the commissioner, provisions into shoreland management controls to allow planned unit developments," which are consistent with the standards in the shoreland management regulations. Minn. R. 6120.3800, subp. 1 (2003). "If local governments allow planned unit developments, the land use districts in which they are an allowable conditional use must be identified in their official controls and on a zoning map." Id., subp. 2. In addition, "[d]esignation of the districts must be based on consideration of" certain specified criteria. Id. (emphasis added).

The Ordinance does not use the land use zoning districts described in the regulation. Rather, it provides that "[t]he classification for each area surrounding each public body of water is hereby established according to the document entitled `Waters of Otter Tail County Classification,' which accompanies and is made a part of this Ordinance." Otter Tail County, Minn., Shoreland Management Ordinance § III.1 (2001). The "Waters of Otter Tail County" document is a list of the lake and river classes for Otter Tail County established by the DNR. Because the DNR classified Dead Lake as a natural environment lake, the Ordinance classifies the shoreland surrounding Dead Lake as a district that surrounds a natural environment lake. The Ordinance then lists specific uses and whether those uses are permitted, conditional, or prohibited based upon the class of lake or river. Cluster developments are conditional uses on natural environment lakes.

At the court of appeals, the Association argued that treating the shoreland of an entire lake as if it is open to cluster development is destructive of the planning process contemplated by state regulations. Dead Lake Ass'n, 2004 WL 422570...