Vern Reynolds Const., Inc. v. City of Champlin, C7-95-1196

• Decision Date: 07 November 1995
• Docket Number: No. C7-95-1196,C7-95-1196
• Citation: 539 N.W.2d 614
• Parties: VERN REYNOLDS CONSTRUCTION, INC., petitioner, Respondent, v. CITY OF CHAMPLIN, Appellant.
• Court: Minnesota Court of Appeals

Page 614

539 N.W.2d 614

VERN REYNOLDS CONSTRUCTION, INC., petitioner, Respondent, v. CITY OF CHAMPLIN, Appellant.

No. C7-95-1196.

Court of Appeals of Minnesota.

Nov. 7, 1995.

Review Denied Dec. 20, 1995.

Syllabus by the Court

1. A landowner who purchases land without notice that a taking has previously occurred has standing to sue for inverse condemnation upon a showing that the former owner was not compensated.

2. A landowner is not automatically entitled to attorney fees for defending an appeal, absent a specific statutory delegation of fees.

S. Todd Rapp, S. Todd Rapp, P.A., Bloomington, for respondent.

George C. Hoff, Hoff, Barry & Kuderer, P.A., Eden Prairie, for appellant.

Considered and decided by HUSPENI, P.J., and DAVIES and THOREEN, JJ. ^*

OPINION

HUSPENI, Judge.

On appeal from summary judgment and judgment of mandamus compelling eminent domain proceedings, appellant City of Champlin argues that respondent real estate developer lacked standing to sue for inverse condemnation because respondent did not own the land when the taking occurred. We conclude that on the facts of this case, ownership of the land when the taking occurred is not a dispositive factor, and we affirm.

FACTS

Respondent Vern Reynolds Construction, Inc. (Reynolds) purchased parcels of land in 1988 and 1993 as part of a residential development plan in Champlin, Minnesota. In 1967, appellant City of Champlin (Champlin) had constructed a 24-inch water main that ran under the easterly part of the land purchased by Reynolds. The record also reflects that, sometime in 1979 or 1980, Champlin had constructed a lift station and water pumping facility to pump water away from a newly developed shopping center through an 18-inch reinforced concrete pipe under U.S. Highway 169 and onto the westerly part of the land purchased by Reynolds. It is undisputed that Champlin never commenced eminent domain proceedings. The record does not reflect whether the former landowner was compensated for either the underground easement or the drainage easement running across the land.

Two feasibility reports, published in 1988 and 1989, indicate that the lift station "was intended as an interim facility until such time as gravity trunk storm sewer could be installed" and the natural drainage of the Champlin Plaza Shopping Center could be restored to its northerly flow to the Mississippi River. The 1989 feasibility report also notes that "[t]he adopted storm water drainage plan for the area west of T.H. 169 includes upgrading this pumping station and constructing a forcemain to the Mill Pond * * * [to] eliminate flow from the area west of T.H. 169 in the future * * *." Neither party disputes that Champlin at some point in 1994 abandoned its plans to reroute the storm water to Mill Pond and decided instead to permanently divert storm water onto Reynolds's land.

This action arose when Champlin refused to initiate eminent domain proceedings to obtain, inter alia, a permanent water drainage easement. The district court concluded that Reynolds had standing to pursue an inverse condemnation claim pertaining to the permanent storm water drainage easement and granted the writ of mandamus. ¹ The court also awarded Reynolds attorney fees and costs under Minn.Stat. § 117.045 (1994).

Champlin appeals, claiming that the district court erred by finding that as a matter of law, Reynolds had standing to pursue a condemnation award because Reynolds was not the landowner when the taking originally occurred in 1979. Reynolds requests attorney fees on appeal pursuant to Minn.Stat. § 117.045.

ISSUES

1. Does a lack of notice that a taking has previously occurred provide a subsequent landowner with standing to pursue an inverse condemnation claim upon showing that the former owner was not compensated?

2. If a statute confers attorney fees on a prevailing party in a district court proceeding, is that party necessarily entitled to additional attorney fees upon a successful appeal?

ANALYSIS

Standard of review

On appeal from the grant of summary judgment, a reviewing court must determine whether there are any issues of material fact and whether the district court erred in its application of the law. Offerdahl v. University of Minn. Hosp. & Clinics, 426 N.W.2d 425, 427 (Minn.1988). The appellate court must view "the evidence in the light most favorable to the party against whom judgment was granted." Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993). The parties agree that the sole issue on appeal is whether Reynolds has standing to bring an action against Champlin for inverse condemnation. Our focus, therefore, is solely upon that narrow issue.

While a government may appropriate private land for public use, the Minnesota Constitution requires that the government pay just compensation to the landowner for actions that take, destroy, or damage private property. Minn. Const. art. I, § 13. A cause of action for inverse condemnation arises when a government entity has appropriated the land without attempting "formal exercise of the power of eminent domain." Alevizos v. Metropolitan Airports Comm'n, 298 Minn. 471, 477, 216 N.W.2d 651, 657 (1974). Thus, the "taking" precedes the formal condemnation proceeding upon which payment is made. Brooks Investment Co. v. City of Bloomington, 305 Minn. 305, 312, 232 N.W.2d 911, 916 (1975).

Mandamus is the proper vehicle to assert a claim for inverse condemnation. Stenger v. State, 449 N.W.2d 483, 484 (Minn.App.1989), review denied (Minn. Feb. 28, 1990). A writ of mandamus is an extraordinary remedy and should only issue upon a showing that a party has suffered harm that is "direct, substantial, and peculiar * * * in that it differs markedly from the damage suffered by the public at large." Alevizos, 298 Minn. at 485, 216 N.W.2d at 661; see also Coyle v. City of Delano, 526 N.W.2d 205, 207 (Minn.App.1995) ("Mandamus is an extraordinary legal remedy awarded, not as a matter of right, but in the exercise of sound judicial discretion and upon equitable principles.") An appellate court should reverse a district court's grant of mandamus only upon concluding that "there is no evidence reasonably tending to sustain the [district] court's findings." Id.

I. Standing to pursue inverse condemnation

An individual has standing to maintain a suit by showing an "injury to some interest, economic or otherwise, which differs from injury to the interests of other citizens generally." Channel 10, Inc. v. Independent Sch. Dist. No. 709, 298 Minn. 306, 313, 215 N.W.2d 814, 820 (1974). The landowner seeking a writ of mandamus to compel inverse condemnation has the burden to prove that an unconstitutional taking has occurred or that there has been a "substantial invasion of property rights which results in a definite and measurable diminution of the market value * * *." Stenger, 449 N.W.2d at 484-85.

Champlin does not dispute that someone could have been entitled to compensation for the drainage easement but argues that the taking occurred in 1979-80 when it began diverting storm water across the subject land and that only the party who owned the land at the time of the taking is entitled to condemnation proceeds. Because Reynolds did not own the land in 1979-80, Champlin argues that Reynolds cannot be granted standing to pursue this inverse condemnation action. For support, Champlin relies on Brooks. We disagree with Champlin and find Brooks distinguishable.

In Brooks, the City of Bloomington, without acquiring an easement, appropriated a 30-foot section of land owned by the Berglunds to build a segment of Aldrich Avenue South. After the city began laying sewer and water lines, the Berglunds entered into an agreement to sell their land to Brooks for $24,000 plus $2,000 for development plans. That agreement eventually fell through. Id. at 306, 232 N.W.2d at 913. Bloomington completed construction of Aldrich Avenue that fall. After the street was completed, the Berglunds again negotiated a sale with Brooks for a total of $20,000. About a year later, the Berglunds filed a petition for mandamus to compel Bloomington to pay compensation for the land appropriated for street construction. Id. at 308, 232 N.W.2d at 914.

Bloomington paid the Berglunds $8,700 notwithstanding the fact that Brooks had been the record owner of the land for more than one year. Brooks sued the city upon learning of the payment to the Berglunds, but the court held that the Berglunds were entitled to the condemnation award because they were the owners when the taking occurred and "did not transfer the right to compensation for the portion * * * lost without a separate assignment of such right." Brooks, 305 Minn. at 315, 232 N.W.2d at 918.

Champlin interprets Brooks as holding that only the owner of land at the time of the taking has standing to pursue an inverse condemnation claim. We cannot view the Brooks rule narrowly or inflexibly as Champlin does. Rather, we agree with the district court's reasoning that notice of the taking is a critical factor in determining whether a party has standing to pursue a condemnation claim.

Comparing the Brooks facts to those present in this appeal, the district court noted that the taking in Brooks was open and obvious to the purchaser but that Champlin's "taking" was hidden and "unobvious." The court held that notice of the servitude was essential to determining entitlement to condemnation proceeds. See Levine v. Twin City Red Barn No. 2, Inc., 296 Minn. 260, 263, 207 N.W.2d 739, 742 (1973) (if the burden upon the land is "open and visible and apparent on ordinary inspection of the premises [then] the purchaser takes title with the servitude upon it.") Because Reynolds could not "be held to be on notice that Champlin was pumping water onto the property from across Trunk Highway 169 merely by the existence of standing water," the district court found that Reynolds had standing to sue for inverse condemnation.

At least one appellate court in...