Mcnulty Constr. Co. v. City Of Deephaven
| Decision Date | 27 July 2010 |
| Docket Number | File No. 27-CV-08-17989,A09-1625 |
| Parties | McNulty Construction Company, Appellant, v. City of Deephaven, Respondent. |
| Court | Minnesota Court of Appeals |
Joseph A. Nilan, Siira B. Gunderson, Gregerson, Rosow, Johnson & Nilan, Ltd., Minneapolis, Minnesota (for appellant)
Kimberly B. Kozar, George C. Hoff, Hoff, Barry & Kozar, P.A., Eden Prairie, Minnesota (for respondent)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. §480A.08, subd. 3 (2008).
Affirmed
Hennepin County District Court
Considered and decided by Stauber, Presiding Judge; Wright, Judge; and Willis, Judge.
UNPUBLISHED OPINION
Appellant challenges the district court's dismissal of its takings, equal-protection, and other claims arising from respondent city's denial of appellant's application to subdivide a parcel of land. Because we conclude that the district court did not err in granting summary judgment to respondent and did not abuse its discretion by denying appellant's request to amend its complaint, we affirm.
In 1981, appellant McNulty Construction Company acquired an 88-acre parcel of land in Deephaven that contained an 8.6-acre parcel known as "McNulty Manor." In 2001, McNulty obtained approval from respondent City of Deephaven to divide McNulty Manor into three lots two buildable lots and "outlot A." In 2002, McNulty sought to further subdivide outlot A to create a third buildable lot. A large portion of outlot A is designated wetland, and the non-wetland areas are generally very steep.
Deephaven denied the 2002 application. McNulty sued Deephaven, claiming that the denial was arbitrary, and the district court awarded summary judgment to Deephaven. McNulty appealed, and this court agreed with McNulty that "although the city has a lawful subdivision regulation requiring respect to the city's comprehensive plan on slopes, the regulation relates only to streets and not the building pad itself." McNulty Contsr. Co. v. City of Deephaven, No. A03-889, 2004 WL 78046, at *1 (Minn. App. Jan. 20, 2004). This court remanded for the determination of two issues of fact: the extent to which the proposed driveway construction interfered with severe slopes and therationality of driveway-safety concerns expressed by the city relating to emergencyvehicle access. Id. at *3.
After rehearing on remand, Deephaven again denied the application, and McNulty again sued. The district court again awarded summary judgment to Deephaven, and McNulty again appealed. This court affirmed the district court's decision. McNulty Contsr. Co. v. City of Deephaven, No. A05-1648, 2006 WL 1738171 (Minn. App. June 27, 2006), review denied (Minn. Sept. 19, 2006). This court found that the city council's denial was not arbitrary and capricious because "[t]he record contains evidence that driveway access in McNulty's application, originally proposing a 12-foot-wide driving surface, was not wide enough to permit safe and satisfactory access" and because "the proposed driveway... will require the alteration of slopes in excess of 30 percent," in violation of Deephaven's ordinance. Id. at *6.
Shortly after the second appellate opinion was filed in 2006, McNulty submitted another subdivision application. Ten days after McNulty submitted this application, Deephaven voted to amend its ordinance. The amendments prohibit the alteration of steep slopes for the construction of any structure not just streets. The parties do not dispute that under the amended ordinance McNulty needed a variance to build on the proposed new lot. McNulty applied for a variance shortly after the amendments became effective.
The planning commission considered McNulty's subdivision application and request for a variance at a public hearing and voted to recommend denial of both. The city council then considered the application and request for a variance. McNultyattempted to present additional documents to the city council that it had not presented to the planning commission, but the council declined to accept the new evidence, claiming that the public hearing had been closed and the record was therefore complete. The new documents included an engineer's report and information on other properties that McNulty claimed had received treatment different from that being given to McNulty's property. After hearing comments from representatives of McNulty, the city council denied McNulty's application and request for a variance.
McNulty again sued, claiming that the city council's denial was arbitrary and capricious, that the denial violated McNulty's right to equal protection, and that the denial of the application resulted in a regulatory taking entitling McNulty to compensation. McNulty subsequently moved to amend its complaint to add a claim for a violation of 42 U.S.C. § 1983 and for tortious interference with prospective business relationships. The district court denied the motion to amend. The parties filed crossmotions for summary judgment, and in its reply brief, McNulty argued that its application had been approved by operation of law because of the city council's failure to deny the application within the statutory time period.
The district court granted Deephaven's motion for summary judgment, denied McNulty's motion, and declined to address McNulty's argument regarding the application being approved by operation of law because McNulty failed to plead the claim in its complaint. This appeal follows.
When there are no material facts in dispute and either party is entitled to judgment as a matter of law, summary judgment is appropriate. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993) (citing Minn. R. Civ. P. 56.03). On appeal from summary judgment, we review the record to determine whether there is any genuine issue of material fact for trial and whether, in granting summary judgment, the district court committed an error of law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). In conducting our review, we view the evidence in the light most favorable to the party against whom judgment was granted. Fabio, 504 N.W.2d at 761.
McNulty did not plead in its complaint that its application had been approved by operation of law. Instead, it made this claim in its reply brief on a cross-motion for summary judgment. At oral argument before the district court, Deephaven argued that the claim had not been properly pleaded; but the district court nevertheless requested supplemental memoranda, and the parties briefed the issue. Ultimately, because this claim was raised outside the scope of the complaint, the district court declined to consider the argument.
McNulty argues that the district court erred by not considering the unpleaded claim. But "relief cannot be based on issues that are neither pleaded nor voluntarily litigated." Roberge v. Cambridge Coop. Creamery Co., 243 Minn. 230, 234, 67 N.W.2d 400, 403 (1954). McNulty attempted in its reply brief to assert an unpleaded statutorybasis for the approval of its application. A reply brief is limited in scope to "new legal or factual matters raised by an opposing party's response to a motion." Minn. R. Gen. Pract. 115.03(c). McNulty's addition of a new claim went beyond this limited scope, and McNulty did not move to amend its complaint to add the claim. Because the claim was neither pleaded nor voluntarily litigated, we conclude that the district court did not err by declining to address it.
McNulty also argues the merits of this unpleaded claim on appeal. In general, appellate courts need not consider issues not raised and decided by the district court. Thiele v. Stick, 425 N.W.2d 580, 582 (Minn. 1988). McNulty argues that a wellestablished exception allows the court to consider an issue when it is plainly decisive of the entire controversy and the absence of a district-court ruling causes no possible advantage or disadvantage to either party, citing Watson v. United Servs. Auto. Ass'n, 566 N.W.2d 683 (Minn. 1997). But in Watson, an appellant argued a properly pleaded claim under a new theory on appeal it did not involve an attempt to present a new claim on appeal. 566 N.W.2d at 687-88. We therefore find Watson to be inapposite, and we decline to consider the merits of McNulty's claim of approval of its application by operation of law.
Whether a governmental entity's action constitutes a taking is a question of law, which we review de novo. Wensmann Realty, Inc. v. City of Eagan, 734 N.W.2d 623, 631 (Minn. 2007). But the district court's findings of fact with regard to a takings claimwill be upheld unless clearly erroneous and unsupported by the record. Parranto Bros. Inc. v. City of New Brighton, 425 N.W.2d 585, 591 (Minn. App. 1988), review denied (Minn. July 28, 1988).
The Fifth Amendment to the United States Constitution states that private property shall not be taken "for public use without just compensation." U.S. Const. amend. V; see Minn. Const. art. I, § 13. A property owner may believe that the government has unconstitutionally taken its property by enacting a land-use regulation that interferes with the property owner's right to use its property. Westling v. County of Mille Lacs, 581 N.W.2d 815, 823 (Minn. 1998). But not all regulations that affect a property's value constitute a regulatory taking. Only if regulation goes too far will it be considered a taking. Penn. Coal Co. v. Mahon, 260 U.S. 393, 415, 43 S. Ct. 158, 160 (1922).
The United States Supreme Court has recognized two distinct classes of regulatory takings: (1) categorical takings, in which the regulation "denies all economically beneficial or productive use of land," Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1015, 112 S. Ct. 2886, 2893 (1992); and (2) case-specific takings, which involve consideration of...
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