Hebert v. City of Fifty Lakes

• Decision Date: 17 January 2008
• Docket Number: No. A06-215.,A06-215.
• Citation: 744 N.W.2d 226
• Parties: John Wesley HEBERT, et al., Respondents, v. CITY OF FIFTY LAKES, Appellant.
• Court: Minnesota Supreme Court

744 N.W.2d 226

John Wesley HEBERT, et al., Respondents, v. CITY OF FIFTY LAKES, Appellant.

No. A06-215.

Supreme Court of Minnesota.

January 17, 2008.

Paul Donald Reuvers, Iverson Reuvers, LLC, for Appellant.

Scott Marshall Lucas, Thomas B. Olson & Associates, P.A., Edina, MN, for Respondents.

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

Thomas H. Boyd, Minneapolis, MN, for Builders Association Minnesota Amicus.

Jon William Morphew, Schnitker & Associates, P.A., Spring Lake Park, MN, for Eminent Domain Institute Amicus.

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

OPINION

GILDEA, Justice.

This case arises from the construction of a gravel roadway that partially intrudes on respondent landowners' Torrens property. The landowners filed this action in 2005, seeking a declaratory judgment that they owned the property over which the road encroaches and that the City "has no right, title or interest in any portion" of the property. They also sought equitable relief in the form of ejectment and damages for trespass. Appellant City of Fifty Lakes brought a motion to dismiss the complaint for failure to state a claim. The district court dismissed the complaint on the grounds that the City acquired the property by de facto taking when the road was constructed and that the landowners' claims were time-barred. The court of appeals reversed and remanded in an unpublished decision. Hebert v. City of Fifty Lakes, No. A06-215, 2007 WL 582956 (Minn.App. Feb.27, 2007). Because we hold that the City did not acquire an interest in the property through a de facto taking and that the timeliness of the landowners' claims cannot be resolved as a matter of law on the pleadings, we affirm.

The following facts are taken from the complaint and documents referenced in the complaint. Respondent landowners own six property lots located along the south side of North Mitchell Lake Road in. Fifty Lakes, Minnesota. The lots were registered in 1953, and a 66-foot-wide roadway was dedicated in 1954 when the plat was recorded. The City laid the gravel road at issue in this case in 1971, but the road as built deviated south from the platted and dedicated road and thereby encroached on respondent landowners' properties. The road invades each property, but the extent of the invasion varies from 29 feet up to 49 feet.

According to the complaint, the gravel road has been open and used by the public since 1971. The landowners demanded that the City remove the road from their property, but the City refused. The complaint does not allege, and the record does not disclose, when this demand was made.

The City moved to dismiss the complaint, contending that the City acquired the land in 1971 when the road was built and that the landowners' efforts to reacquire the land or sue for damages were barred by the statute of limitations. As indicated above, the district court granted the City's motion.

The court of appeals reversed and remanded. Hebert, 2007 WL 582956, at *6. The court held that the district court's determination that the City acquired the property by de facto taking was erroneous because "the degree of interference by the gravel road at the wrong location is not so substantial as * * * to constitute a taking in the constitutional sense." Id. at *4. The court also reversed the district court's decision that the statute of limitations barred the respondents' claims. Id. at *5. We granted the City's petition for review.

This case comes to us on review in connection with district court's decision to grant the City's motion to dismiss the complaint for failure to state a claim. When reviewing a case dismissed pursuant to Minn. R. Civ. P. 12.02(e) for failure to state a claim on which relief can be granted, the question before this court is whether the complaint sets forth a legally sufficient claim for relief. Barton v. Moore, 558 N.W.2d 746, 749 (Minn.1997). Our review is de novo. Bodah v. Lakeville Motor Express, Inc., 663 N.W.2d 550, 553 (Minn.2003). We are to "consider only the facts alleged in the complaint, accepting those facts as true and must construe all reasonable inferences in favor of the nonmoving party," the landowners in this case. Id.

I.

We turn first to the City's claim that it acquired the property in 1971 through its construction of the road. The City argued to the district court that it acquired the property through de facto taking and by common law dedication. The district court did not reach the dedication question, but ruled that the City had acquired the property by de facto taking. The City does not press common law dedication on appeal, but contends it acquired an interest in the land under the de facto taking doctrine and by statutory dedication. We address each argument in turn.

A. De facto Taking

A de facto taking is defined as a "taking in which an entity clothed with eminent-domain power substantially interferes with an owner's use, possession, or enjoyment of property." Black's Law Dictionary 1493 (8th ed.2004). The district court concluded that the City. "dispossessed the [landowners] of their enjoyment of this portion of their land for 34 years by physically appropriating it with a road used by the public on a regular basis." The court relied on Brooks Investment Co. v. City of Bloomington, 305 Minn. 305, 232 N.W.2d 911 (1975), to support its conclusion that the City had acquired the land in question.

In Brooks, we recognized that a governmental authority may acquire an interest in property by physical appropriation, even though no formal eminent domain proceeding has been initiated. Id. at 318, 232 N.W.2d at 920. We noted that this type of acquisition does not require an "official intention to acquire any property interest" and characterized such an acquisition as a de facto taking. Id., 232 N.W.2d at 920 (quoting Eyherabide v. United States, 170 Ct.Cl. 598, 345 F.21:1 565, 567 (1965)). A de facto taking "creates in the condemnor a protectable legal interest in the property which is equivalent to title by condemnation; the condemnor can be forced to compensate to the original owner of the property, but the owner cannot eject the condemnor nor can he require discontinuance of the public use." Id at 319, 232 N.W.2d at 920.

The facts of Brooks, like those alleged in this case, involved a roadway that encroached on private property. Id. at 307, 232 N.W.2d at 913. We said in Brooks that a "substantial interference * * * so as to constitute a taking in the constitutional sense," occurred when the city built a street encroaching on the property in question. Id., 232 N.W.2d at 920. We held that the city acquired an easement to the extent of the encroachment. Id., 232 N.W.2d at 920. Relying on the rationale of Brooks, the City argued to the district court that it acquired title to the land at issue by de facto taking when it constructed the gravel road in 1971.¹

The landowners argue that Brooks does not apply to this case because their property is Torrens property. We did not discuss in Brooks whether the property at issue there was Torrens or abstract property. The parties have not brought to our attention, and our own research has not disclosed, any case where we have addressed whether Torrens property can be acquired via de facto taking., We turn to that question now and begin with a discussion of the Torrens system.

Minnesota adopted the "Torrens system in 1901 as an alternative to abstract property ownership "to create a title registration procedure intended to simplify conveyancing by eliminating the need to examine extensive abstracts of title by issuance of a single certificate of title free from any and all rights or claims not registered with the registrar of titles." Hersh Props., LLC v. McDonald's Corp, 588 N.W.2d 728, 733 (Minn.1999) (internal quotation omitted). Under the Torrens system, title is registered through judicial proceeding. Id. at 734. "[I]n order to maintain the reliability of certificates of title, certain subsequent transfers of title and changes to the certificate must be made either by court order or by approval of the examiner of titles." Id., (citing Minn.Stat. §§ 508.58, 508.62, 508.68 (1998)).²

The Torrens Act does not specifically address whether Torrens property may be acquired via de facto taking. But Minn. Stat. § 508.02 (2006) contains two provisions that inform the analysis of that question. First, the statute provides that registration shall not operate to change "the right to take the land by eminent domain." Id. The statute thus makes it plain that the government may acquire title to Torrens property pursuant to an exercise of its eminent domain authority.

Second, the statute provides that registration "shall not operate to change or affect any other rights, burdens, liabilities, or obligations created by law arid applicable to unregistered land except as otherwise expressly provided herein." Id. Section 508.02 then contains two express exceptions to this general rule, providing that "[n]o title to registered land in derogation of that of the registered owner shall be acquired by prescription or by adverse possession." Id.³

The language of the Torrens Act, together with the notice principles underlying the Torrens system, leads us to conclude that the City did not acquire the property at issue by de facto taking. We acknowledge that a de facto taking under the analysis in Brooks operates similarly to the government's acquisition by eminent domain. Brooks, 305 Minn. at 319, 232 N.W.2d at 920 (noting that "the de facto taking creates in the condemnor an interest equivalent to title by condemnation"). But a de facto taking implies the government's intent to take private property from the circumstances. See id. at 318-19, 232 N.W.2d at 920 (citing Eyherabide, 345 F.2d at 567, and recognizing that within the context of a de facto taking "`a constitutional taking is implied'"). Indeed, in this case, the City argued to the...