Premier Asset Services v. City of Minneapolis

• Decision Date: 26 May 2008
• Docket Number: File No. 27-CV-06-15968.
• Parties: Premier Asset Services, Plaintiff, v. City of Minneapolis, Defendant.
• Court: Minnesota District Court

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Premier Asset Services, Plaintiff, v. City of Minneapolis, Defendant.

File No. 27-CV-06-15968.

District Court of Minnesota, Fourth Judicial District.

May 26, 2008.

The above-titled matter came before the Honorable Gary Larson, Judge of Hennepin County District Court, on May 21, 2007, on Plaintiff and Defendant's cross motions for summary judgment.

John Westrick and Kirk Anderson, Esq.,

appeared for and on behalf of Plaintiff, Premier Asset Services.

Lee Wolf,

Esq., appeared for and on behalf of Defendant, City of Minneapolis.

ORDER GRANTING CITY OF MINNEAPOLIS' MOTION FOR SUMMARY JUDGMENT, DENYING PREMIER ASSET SERVICES' MOTION FOR SUMMARY JUDGMENT AND MEMORANDUM OF LAW

GARY LARSON, Judge of District Court.

The matter was taken under advisement on June 15, 2007.

Based upon all files, records, and proceedings herein, together with the arguments of counsel,

IT IS HEREBY ORDERED:

1. Defendant's Motion for Summary Judgment is GRANTED.

2. Plaintiff's Motion for Summary Judgment is DENIED.

LET JUDGMENT BE ENTERED ACCORDINGLY.

MEMORANDUM I. FACTUAL BACKGROUND

The property in dispute, located at 2509 Girard Avenue North, Minneapolis, MN was purchased on December 19, 2002 by Michael J. Okoneski. On April 27, 2005, JP Morgan Chase Bank, the mortgagee for the property in dispute, commenced foreclosure proceedings on the property. On August 11, 2005, JP Morgan Chase Bank purchased the property at a sheriff's auction for $175,578.90. The property was condemned on November 21, 2005. On February 13, 2006, the six (6) month redemption period ended and JP Morgan Chase Bank became the fee owner of the property in dispute. Plaintiff's assignees acquired title on February 15, 2006.

On April 14, 2006, the current owner had Plaintiff, through Barry Tanner, a licensed Real Estate agent, apply for a Code Compliance Inspection; the purpose of which inspection was so that the property could be listed for sale with full disclosure of all the work that needed to be completed prior to the lifting of the condemnation. On April 24, 2006, notices of violations found during the Code Compliance Inspection were sent to Barry Tanner on behalf of the Plaintiff. Thereafter, Plaintiff did not apply for any permits nor was any work commenced on the property.

On May 5, 2006, Defendant sent a letter to Michael Okoneski, EMC Mortgage Corporation, the law firm of Wilford & Geske, and Barry Tanner on behalf of Plaintiff, that the property had been declared a nuisance, pursuant to MINNEAPOLIS, MINN. CODE § 249.10 (1993). The letter further stated that a hearing was to be held before the Public Safety & Regulatory Services Committee of the Minneapolis City Council on June 7, 2006 to determine whether or not to "rehabilitate or raze" the structure on the property. The letter also informed the interested parties that they had:

a. The right to appear individually or through a representative, or to submit a written statement to the Department of Inspections, Boarded Building Division.

b. The opportunity to review the Department of Inspections' file prior to the hearing, by arranging for review at the Department of Inspections' office,

c. The right to examine witnesses appearing at the hearing,

d. The right to cross-examine witnesses appearing at the hearing,

e. The right to offer such evidence as may bear on the decision to demolish or rehabilitate the building.

The letter also indicated to the interested parties that if they wished to contest the Department of Inspections' recommendation to raze the building, a party must provide to the Department of Inspections, 48 hours prior to the hearing, a statement itemizing the cost to rehabilitate the building in order to demonstrate the feasibility of rehabilitation. The Plaintiff did not submit a rehabilitation plan prior to the hearing.

At the Public Safety & Regulatory Services Committee hearing on June 7, 2006, the Department of Inspections presented their recommendation, and their reasons, to raze the property in question. Neither Barry Tanner, the Plaintiff's contact person, did not appear at the hearing nor did he or Plaintiff submit any written materials to support a plan to rehabilitate the property. Kyle Kasmider of Global Investment Managers, Inc., a potential buyer, did appear at the hearing and stated that he would be willing to rehabilitate the property if he could purchase it from the Plaintiff.

The Public Safety & Regulatory Services Committee voted to raze the structure on the property per the recommendation of the Department of Inspections. The full council thereafter voted to raze the property and the action was finalized when signed by the Mayor.

In July, 2006, Plaintiff entered into a Purchase Agreement with Global Investment Managers Inc. to sell the property. On August 28, 2007, Plaintiff filed this action requesting a Temporary Restraining Order ("TRO") to prevent the razing of the property and requesting relief. The City did not object to the TRO and agreed to continue the case so that Plaintiff could sell the property to Global Investment Managers, Inc., who would, in turn, rehabilitate the property. On December 13, 2006, the Public Safety & Regulatory Services Committee agreed to continue the matter until February, 2007, so that Plaintiff and Global Investment Managers, Inc. could complete the transaction.

The closing did not occur in late January 2007, and the Public Safety and Regulatory Services Committee hearing was continued until March, 2007. In March 2007, the purchase agreement between Plaintiff and Global Investment Managers, Inc. fell apart and the closing never occurred. Yet again, Plaintiff did not submit a rehabilitation plan for the property.

Moreover, Minneapolis' Code, Section 249.10, was amended in 2006 with the amendments taking affect on October 1, 2006. MINN. CODE § 249.10 (1993). As part of the amended ordinance, an appeals panel was put into place, and a method was included by which landowners or other interested parties could appeal the Department of Inspections' orders to raze a nuisance condition building.

Based on all available information, it does not appear that Plaintiff appealed the Department of Inspections' order to raze the structure on the property per the process outlined in MINNEAPOLIS, MINN. CODE § 249.10 (1993).

II. DEFENDANT'S MOTION FOR SUMMARY JUDGMENT IS GRANTED BECAUSE THIS COURT LACKS SUBJECT MATTER JURISDICTION AND BECAUSE NO TAKING OCCURRED.

A. SUMMARY JUDGMENT STANDARD.

Rule 56 of the Minnesota Rules of Civil Procedure provides in relevant part that:

Judgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that either party is entitled to summary judgment as a matter of law.

MINN. R. Civ. P. 56.03.

In opposing a motion for summary judgment, the non-moving party must demonstrate at the time of the motion that specific material facts are disputed, creating a genuine issue for the finder of fact to resolve at trial. Hunt v. IBM Mid America Emp. Fed. Cr. Union, 384 N.W.2d 853, 855 (Minn. 1986). Summary judgment is appropriate when there is exclusively a question of law involved. French v. State Farm Mut. Auto Ins. Co., 372 N.W.2d 839, 841 (Minn. Ct. App. 1985). Evidence presented upon a summary judgment motion must be taken in the light most favorable to the non-moving party. Concord Co-Op v. Security State Bank of Claremont, 432 N.W.2d 195, 197 (Minn. Ct. App. 1988).

The mere existence of a scintilla of evidence in support of the non-moving party's position is insufficient, rather there must be evidence on which the jury could reasonably find for the non-moving party. DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997). "While summary judgment is intended to secure a just, speedy, and inexpensive disposition, it is not designed as a substitute for a trial where there are issues to be determined." Vieths v. Thorp Fin. Co., 305 Minn. 522, 525, 232 N.W.2d 776, 778 (Minn. 1975). A material fact is one that will affect the result or outcome of the case, depending upon its resolution. Zappa v. Fahey, 310 Minn. 555, 556, 245 N.W.2d 258, 259-60 (Minn. 1976). Thus, "summary judgment is proper when the non-moving party fails to provide the court with specific facts indicating that there is a genuine issue of material fact." Hunt v. IBM Mid Am. Emp. Fed. Credit Union, 384 N.W.2d 853, 855 (Minn. 1986) citing Erickson v. General United Life Ins. Co., 256 N.W.2d 255, 258-59 (Minn. 1977).

Whether a genuine issue of material fact is presented is determined by asking if "a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 248 (1986). This motion may be moved for by a party at any time. Minn. R. Civ. P. 56.02. Material facts are understood in light of the substantive law: "only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson, 477 U.S. at 248.

B. THE COURT LACKS SUBJECT MATTER JURISDICTION TO HEAR PLAINTIFF'S CLAIM.

"The existence of subject-matter jurisdiction is a question of law reviewed de novo on appeal." City of Minneapolis v. Meldahl, 607 N.W.2d 168, 172 (Minn. App. 2000) (citing Shaw v. Board of Regents of Univ. of Minn., 594 N.W.2d 187, 190 (Minn.App.1999). Under Minnesota Statute § 463.26 (1998), a city may enact and enforce ordinances that address the problem of hazardous buildings. The city enacted MINNEAPOLIS, MINN. CODE § 249.10 (1993) pursuant to this statutory authority. It further employed this ordinance to initiate the demolition of the building at issue in the present case. Id.

There is no dispute that the city's decision to demolish the structure on this property was quasi-judicial. Minnesota Ctr. for...