State by Lord v. Pahl, 37556

• Decision Date: 20 February 1959
• Docket Number: No. 37556,37556
• Citation: 95 N.W.2d 85,254 Minn. 349
• Parties: STATE of Minnesota, by Miles LORD, its Attorney General, Appellant, v. Catherine PAHL, et al., Respondents below, Erwin Heller, et al., Respondents, Studebaker-Packard Corporation, Successor to Packard Motor Car Company, Respondent.
• Court: Minnesota Supreme Court

Page 85

95 N.W.2d 85

254 Minn. 349

STATE of Minnesota, by Miles LORD, its Attorney General, Appellant, v. Catherine PAHL, et al., Respondents below, Erwin Heller, et al., Respondents Studebaker-Packard Corporation, Successor to Packard Motor Car Company, Respondent.

No. 37556.

Supreme Court of Minnesota.

Feb. 20, 1959.

Syllabus by the Court

1. A 'substantial destruction' within the meaning of a local ordinance is accomplished as a matter of law when the front 35 feet of a building 133 by 200 feet are taken where that portion includes all the important components, lavatory, display room, offices, and lunchroom, and the balance of the building consists of a warehouse.

2. Where condemnation by the state has caused the substantial destruction of a building which does not conform to a 60-foot setback provision of a municipal zoning ordinance passed after the building was constructed, the owner must comply with the 60-foot setback provision where the ordinance prohibits the continued nonconforming use if the building is substantially destroyed.

3. Valid existing zoning ordinances proscribe the uses which may be considered in valuing property under eminent domain unless there is evidence which reasonably indicates that the restrictions will be eliminated; if an owner must comply with the setback provision of a local ordinance as a result of a partial taking by the state, such fact must be considered in arriving at an evaluation of the property after the taking.

4. An owner of property which is the subject of condemnation proceedings is under a duty to exercise reasonable diligence to minimize his damages. Held, under the facts and circumstances of this case, the owners were not under a duty to make application for a variance permit allowing them to continue their nonconforming use.

Miles Lord, Atty. Gen., Robert W. Mattson, Deputy Atty. Gen., Richard J. Gunn, Sp. Asst. Atty. Gen., for appellant.

Maslon, Kaplan, Edelman, Joseph & Borman, Minneapolis, Hyman Edelman, Sidney J. Kaplan, Minneapolis, of counsel, for respondents Heller.

Dorsey, Owen, Scott, Barber & Marquart, by Leavitt R. Barker, Minneapolis, for Studebaker-Packard Corp.

FRANK T. GALLAGHER, Justice.

Appeal from an order of the district court denying motion for a new trial.

This condemnation proceeding was instituted in Hennepin County for the purpose of widening Highway No. 100 in the village of Bloomington. Respondents Erwin and Irene Heller own property and buildings fronting on the south side of the highway. The particular building pertinent to this appeal was constructed in 1948--1949. (All of the dimensions given hereafter are to the nearest whole foot.) It is rectangular, being 133 feet wide and 200 feet deep, with the exception of an offset 45 feet by 33 feet in the southwest corner. It is set back 37 feet from the existing right-of-way line of Highway No. 100. The new right-of-way line is to be established 72 feet south of the existing line, which will take 35 feet off of the front of the building. This portion includes its more important components--the heating system, plumbing and water, lavatory, display room, offices, and lunchroom. The balance of the building is used as a warehouse.

On October 25, 1955, the village of Bloomington adopted Ordinance No. 72 regulating the village zoning and land uses. The property involved here is located in an area designated as Industrial Zone 1. The ordinance provides in part as follows:

'3. Industrial Zones I and III, shall conform to the following site restrictions:

'(b) A minimum setback of 60 shall be observed from any street line, excepting industrial developments adjacent to a residential district or a nonconforming residential development shall be such as the Planning and Zoning Commission determines to be necessary to carry out the purposes of this ordinance.'

Due to the adoption of this ordinance respondents' building became nonconforming with respect to the setback requirement of 60 feet but was conforming in that it was used for industrial purposes as required by another provision of the ordinance. With respect to nonconforming uses, the zoning ordinance contained a provision as follows (§ 2):

'The lawful use of any land or building existing at the time of the adoption of this ordinance may be continued although such use does not conform to the regulations hereinafter provided by this ordinance for the district in which such land is located, provided, however, that no such non-conforming use be altered, nor shall it be extended to occupy a greater area of land than that occupied by such use at the time of the adoption of this ordinance. If such non-conforming use ceases for a period of one year, any subsequent use shall be in conformity to the regulations specified by this ordinance. No such non-conforming use, if once changed to a use permitted in the District, shall be changed back to a non-conforming use. If, at any time, any structure exclusive of foundation, in existence or maintained at the time of the adoption of this ordinance, which does not conform to the regulations in this ordinance provided, shall be Substantially destroyed, then the land on which such structure was located or maintained shall from and after the date of such destruction be subject to all the regulations specified by this ordinance.' (Italics supplied.)

The ordinance further provides for procedure by which application may be made for special-use permits and exceptions to the ordinance if they involve Minor variations and in certain cases involving Unnecessary hardship.

On March 29, 1956, the court appointed commissioners to appraise the property involved. Pursuant to that appointment, the commissioners awarded the sum of $115,000 to the Hellers, and $2,078 to the Studebaker-Packard Corporation, referred to herein as Studebaker, which occupied the premises under lease from the Hellers. The state appealed to the district court from this award.

At the trial in district court the state based its valuation on the theory that the Hellers would only be required to reestablish their building 37 feet back from the new right-of-way line, which would result in the destruction of the front 72 feet. The trial court, however, concluded, and Heller contends on appeal, that the taking resulted in a 'substantial destruction' of the building and that, according to the terms of the ordinance, the building, if it were to remain, had to comply with the 60-foot setback provision. In other words, the taking under the trial court's view would ultimately result in the destruction of the front 95 feet of the building. The trial court refused to permit the state's experts to testify as to their opinion of the damages based on the state's contention that the owners would only lose the front 72 feet of their building. Instead, the court required the state's experts to base their valuation on the fact that the Hellers would actually lose the front 95 feet of the building. The trial court also refused to permit the state to introduce evidence of the provision in the ordinance which allows application for special-use permits and exceptions to the ordinance and evidence which would show that the Hellers had not made application for such a permit.

At the conclusion of the trial the court instructed the jury in part as follows:

'* * * as a proximate result of the taking there will be a substantial destruction of the building requiring alteration and therefore compliance with said ordinance which would not otherwise be required. You have the right to take this into consideration in determining the reasonable market value before and after the taking.'

The jury awarded damages to respondents Heller in the amount of $111,940 ($58,410 for the value of the property actually taken and $53,530 for damages to the balance of their property involved) and $5,000 to respondent Studebaker.

The state assigns as error the refusal of the trial court to allow its witnesses to testify as to the value of the building if only the front 72 feet were destroyed; the refusal of the trial court to permit evidence of the procedure for procuring a variance permit; and also the instruction above quoted.

Four basic issues are raised by the assignments of error. They are as follows: (1) Was there, as a matter of law, a 'substantial destruction' of the building within the meaning of the ordinance? (2) Must the owner of a building, which is situated 37 feet from the old highway right-of-way, comply with the new 60-foot setback provision of a municipal zoning ordinance where the building is substantially destroyed through condemnation by the state and the ordinance provides that a nonconforming building must comply if it is substantially destroyed? (3) If the owner is required to remove 60 feet of his building in addition to 35 feet which is actually acquired by the state in order that the front of the restored building will be set back in accordance with the requirements of the ordinance, are the damages occasioned by the removal of such portion of the building a compensable element of damages in the condemnation proceeding? (4) Did the Hellers have a duty to apply for a variance permit to allow them to maintain the remainder of their building less than 60 feet from the new right-of-way line?

1. As to whether as a matter of law the actual taking resulted in a 'substantial destruction' of the...