Halla Nursery, Inc. v. City of Chanhassen
| Decision Date | 06 May 2010 |
| Docket Number | No. A08-233.,A08-233. |
| Citation | 781 N.W.2d 880 |
| Parties | HALLA NURSERY, INC., et al., Appellants, v. CITY OF CHANHASSEN, Respondent. |
| Court | Minnesota Supreme Court |
Phillip R. Krass, Benjamin J. Court, Krass Monroe, P.A., Minneapolis, MN, for appellants.
Thomas M. Scott, Campbell Knutson, Professional Association, Eagan, MN, for respondent.
Appellants Donald and Sandra Halla own real property in the City of Chanhassen that they lease to appellant Halla Nursery, Inc. (collectively "Halla"). At issue is the interpretation of a 1997 stipulation and judgment between Halla and respondent City of Chanhassen concerning an illuminated sign at Halla's nursery and the application of the vested rights doctrine. The district court allowed Halla to continue using the illuminated sign, concluding that Halla had obtained vested rights to use the sign. The court of appeals reversed. The court concluded that the sign did not comply with the terms of the 1997 stipulation and judgment. The court also held that Halla did not have vested rights to use the sign because Halla was aware that construction of an illuminated sign was prohibited by the 1997 stipulation and judgment and relevant city ordinances. We affirm the court of appeals.
In 1994, Halla constructed a retail sales building without obtaining a building permit on property located at the intersection of Highway 101 and Pioneer Trail in Chanhassen, Minnesota. The City inspected the building and determined that it did not comply with building code requirements. The City sought to enjoin Halla from operating a business in the new building.
On February 10, 1997, the parties entered into a stipulation for entry of judgment to resolve the dispute over the building. The stipulation and judgment addressed signage, which is at issue here. Paragraph 6A of the stipulation and judgment provides that the following signs are allowed:
The stipulation and judgment further provides that "the action or inaction of the City shall not constitute a waiver or amendment to the provisions of this Stipulation," and "except as otherwise provided herein, the Subject Property shall be subject to the requirements of the City's Zoning Ordinance, as may be amended from time to time." The stipulation and judgment also provides its provisions "shall be liberally construed to protect the public's interest."
Following the entry of judgment, the City issued a sign permit to Halla. The permit approved sign faces 8 feet in height and 72 square feet in total area. Halla then constructed the sign. Shortly after the sign was completed, the Chanhassen Community Development Director observed that the sign faces were illuminated in violation of the stipulation and judgment. The Director contacted Halla regarding illumination of the sign, but the conversation became confrontational, and the issue went unresolved. The City did not take any action, choosing instead to wait, assuming that the property would soon be sold and the sign torn down. The sign, however, remained standing and illuminated until 2005.
On March 28, 2005, the City received a new sign permit application from Halla. According to Halla, relocation of the sign was required due to road improvements at the intersection of Highway 101 and Pioneer Trail. The permit application indicated that Halla was planning to erect an illuminated monument sign that would be approximately 9 feet tall with a total area of 102 square feet. The application also indicated that the sign would have electronic message centers. On April 11, 2005, a permit for the new sign was issued by a Chanhassen city planner, who was not aware of the 1997 stipulation and judgment and apparently did not notice that the proposed sign would have electronic message centers.1
In early 2006, Halla began construction of the sign at a cost of $124,000. On April 28, 2006, with construction nearly complete, the City received a call from a concerned citizen who reported that electrical hook-ups were being installed on the sign. The City issued a stop-work order on the basis that a conditional use permit is required for electronic message centers. The City also determined that the new sign exceeded the size requirements for signs under the City Code.
In June 2006, Halla filed a complaint against the City seeking injunctive relief, declaratory judgment, and a writ of mandamus to prohibit the City from interfering with the use of the sign. The City filed a counterclaim, alleging that the sign violated the 1997 stipulation and judgment as well as the City's zoning ordinances. The City asserted that the sign was too large, impermissibly contained electronic message centers, and violated the stipulation and judgment's prohibition against illumination. Following a court trial and a motion for amended findings, conclusions, and judgment, the district court made the following conclusions:
Despite these conclusions, the district court conditionally granted Halla's request for injunctive relief on the basis that Halla had acquired vested rights in construction of the new sign because the sign was substantially completed when the City ordered Halla to stop work. In addition, the district court suggested that Halla was entitled to an illuminated sign based on the City's acquiescence in allowing an illuminated sign for eight years. The court placed certain restrictions on the operation of the sign that the court determined would result in substantial compliance with the prior history of use, the stipulation and judgment, and the 2005 City Code.
The City appealed, and Halla filed a notice of review. The court of appeals reversed in a published decision, concluding that (1) the district court erred in concluding that the City's inaction prevented it from enforcing the stipulation and judgment with respect to illumination; (2) the district court erred in concluding that the sign faces are in substantial compliance with the stipulation and judgment; and (3) the district court erred in concluding that Halla acquired vested rights in the new sign. Halla Nursery, Inc. v. City of Chanhassen, 763 N.W.2d 42, 44 (Minn. App.2009).
We granted Halla's petition for review to address two issues: (1) whether the court of appeals erred as a matter of law in its interpretation of the 1997 stipulation and judgment and (2) whether the vested rights doctrine applies.
We first consider whether the terms of the 1997 stipulation and judgment authorized the construction of the sign. Halla contends that the 1997 stipulation and judgment granted it the right to build any sign, regardless of its compliance with the City Code, so long as Halla obtained a permit. The district court concluded that the sign did not comply with the 1997 stipulation and judgment because the stipulation and judgment did not allow additional off-premises signs, such as Halla's newly constructed sign. Stipulated judgments are treated as binding contracts. Shirk v. Shirk, 561 N.W.2d 519, 521 (Minn. 1997). The interpretation of a contract is a question of law, and therefore we review de novo the district court's interpretation of the 1997 stipulation and judgment. See Valspar Refinish, Inc. v. Gaylord's, Inc., 764 N.W.2d 359, 364 (Minn.2009).
When interpreting a contract, we must determine if the language is clear and unambiguous, meaning it has only one reasonable interpretation. Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 394 (Minn.1998). If so, we give effect to the language of the contract. Id. The determination of whether a contract is unambiguous depends on the meaning assigned to the words and phrases in accordance with the apparent purpose of the contract as a whole. Art Goebel, Inc. v. N. Suburban Agencies, Inc., 567 N.W.2d 511, 515 (Minn.1997).
The district court concluded that the sign violated paragraph 6A of the 1997 stipulation and judgment because it found that the sign is illuminated in violation of the prohibition against lit signs and that it is a general advertising sign, not a directional sign. These findings are supported by the evidence.
Halla asserts that if the sign is not allowed under paragraph 6A, it is allowed under paragraph 6C, which provides that "all signs are strictly prohibited, except as expressly allowed pursuant to paragraphs 6A and 6B of this Stipulation, or pursuant to a sign permit issued by the City." Essentially, Halla claims it is prohibited from constructing any sign not expressly allowed ...
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