Title: CONTINENTAL SALES, ETC. v. Town of Stuntz

State: minnesota

Issuer: Minnesota Supreme Court

Document:

257 N.W.2d 546 (1977) CONTINENTAL SALES & EQUIPMENT CO., et al., petitioners, Respondents, v. TOWN OF STUNTZ, Appellant. No. 46783. Supreme Court of Minnesota. July 15, 1977. Rehearing Denied October 3, 1977. *547 Bischoff & Sellman and Bernard J. Bischoff, Hibbing, for appellant. Halverson, Watters, Bye & Downs, Duluth, Abate & Wivoda and Paul F. Wojciak, Hibbing, for respondents. Heard before PETERSON, KELLY, and SCOTT, JJ., and considered and decided by the court en banc. SCOTT, Justice. This is an appeal from a summary judgment involving a special assessment. Respondents, Continental Sales & Equipment Company and other companies, brought this action in the district court of St. Louis County to invalidate a special assessment levied upon them by appellant, the town of Stuntz. On October 24, 1973, the board of supervisors for the town passed a resolution establishing a special assessment for funding a sanitary sewer project. The assessment took the following form: After receiving their first tax bill in May 1974, which included amounts attributable to the special assessment, Continental Sales and other industrial companies affected by the assessment filed petitions to invalidate the assessment as it applied to them. Both the complaining companies and the town moved for summary judgment. The court found that the town's method of assessment was contrary to law and a denial of equal protection. The court also ruled that the companies could appeal the assessment under Minn.St. 278.01 and had not lost their right to challenge the assessment by failing to bring a timely action under Minn.St. 429.081. We affirm. The following issues are presented for our consideration by this appeal: (1) May a taxpayer specially assessed by a municipality challenge the assessment under Minn.St. 278.01, notwithstanding the fact that the time for appeal under Minn.St. 429.081 has expired? (2) Was the special assessment herein void as a matter of law as it applied to the companies? (3) Was summary judgment appropriate in this case? 1. Minn.St. 278.01 provides as follows: Minn.St. 429.081 provides: Chapter 278 deals with objections and defenses to the payment of real estate taxes. Chapter 429 establishes procedures for the approval and funding of local improvements by special assessments. No contention is made herein that the town did not follow the procedures specified by c. 429. The town argues, however, that since the companies did not bring an appeal to the district court within 20 days after the adoption of the assessment, they have no right of appeal under c. 429. The companies concede that they have no right of appeal under c.429. The town argues further that the appeal remedy of § 429.081 is exclusive with regard to special assessments, i. e., that the word "assessment" therein should be distinguished from the word "assessed" in § 278.01, and hence the companies have no alternative remedy under § 278.01. Prior decisions of this court have long resolved this issue contrary to the town's argument. In Rosso v. Village of Brooklyn Center, 214 Minn. 364, 8 N.W.2d 219 (1943), taxpayers objecting to a special assessment for a local improvement project brought a suit in equity for an injunction. The court upheld the district court's sustaining of the village's demurrer on the following grounds: The court explained the overall purpose of § 278.01 in Land O'Lakes Dairy Co. v. Village of Sebeka, 225 Minn. 540, 548, 31 N.W.2d 660, 665, certiorari denied, 334 U.S. 844, 68 S. Ct. 1513, 92 L. Ed. 1768 (1948), a case in which a declaratory judgment was sought as an alternative remedy: This principle was restated by the court in Village of Edina v. Joseph, 264 Minn. 84, 94, note 5, 119 N.W.2d 809, 816 (1962), where taxpayers challenged a special assessment under § 429.081: Finally, these cases were cited with approval in Larson v. Freeborn County, 267 Minn. 383, 385, 126 N.W.2d 771, 772 (1964), in which taxpayers sought equitable relief from a ditch assessment: The above-cited cases stand for two propositions: (1) Minn.St. 278.01 is applicable to special assessments as well as to general taxes, (2) Minn.St. 278.01 and 429.081 are alternative taxpayer remedies when a particular assessment, special or general, is to be challenged. The contention that the above cases are not applicable since the propositions contained therein are dicta is not persuasive. Further, there has not been any legislative amendment directly affecting these remedies. The district court therefore correctly held that the companies could contest the town's assessment under § 278.01, despite the fact that the 20-day limit of § 429.081 had expired. 2. The basis for special assessments is that of market value: To determine the value of a special benefit, the taxing authority must consider "what increase, if any, there has been in the market value of the benefited land." City of St. Louis Park v. Engell, 283 Minn. 309, 316, 168 N.W.2d 3, 8 (1969). See, also, Nyquist v. Town of Center, Minn., 251 N.W.2d 695 (1977). The test is whether the improvement for which the assessment was levied has increased the market value of the property, against which the assessment operates, in at least the amount of the assessment. In re Appeals by Am. Oil Co. v. City of St. Cloud, 295 Minn. 428, 206 N.W.2d 31 (1973). A concise summary of the rules to be applied appears in E. H. Willmus Prop. Inc. v. Village of New Brighton, 293 Minn. 356, 361, 199 N.W.2d 435, 438 (1972): The treatises concur in the market value approach. 14 McQuillin, Municipal Corporations (3 ed.) § 38.33; 2 Antieau, Municipal Corporation Law, § 14.33. As pointed out by the district court, each parcel does not have to be assessed exactly in the amount of benefit received; various formulas such as the front-footage or square-footage methods may be utilized. See, Antieau, Municipal Corporation Law, § 14.38, et seq. In short, any method resulting in a fair approximation of the increase in market value for each benefited parcel may be used. A method which on its face appears to be a fair approximation will be presumed valid, with the burden resting upon the objector to show its invalidity. Nyquist v. Town of Center, supra. See, also, In re Improvement of Superior Street, Duluth, 172 Minn. 554, 216 N.W.2d 318 (1927). The assessment in the present case has two parts, a front-footage charge and a lump-sum charge based on the type of building on the assessed parcel (residential, commercial, or industrial). As to the front-footage charge, the companies have no complaint, and it is clear this method is acceptable. It is equally clear, however, that the lump-sum approach based on present use bears little if any relation to the market value of the improvement. The town has not attempted to demonstrate such a relation, beyond asking that it be allowed to do so at a trial on the merits. Contrary to the town's assertion of prima facie validity, this assessment is prima facie invalid, in that it makes no attempt in its lump-sum portion to approximate market value of the improvement. The first rule of E. H. Willmus Prop. Inc. v. Village of New Brighton, supra, is directly applicable: Even though the procedure was regular, the question whether the special assessment exceeds the special benefit is open for review. This is so because, if the assessment results in more than small variations from equality of benefits and assessments, the municipality may be exceeding its constitutional authority to levy such assessments under Minn.Const. art. X, § 1, and its statutory authority as indicated. The summary of the district court is in accord with the applicable law discussed above: The lump-sum portion of the assessment is therefore void as a matter of law, and should not be enforced upon the companies. 3. The town argues that because it complied with the procedural requirements of c. 429 it has "made out a prima facie case that these assessments are valid," and hence summary judgment should not have been granted in favor of the companies. First, as the companies point out, the mere allegation of a prima facie case in the pleadings is not sufficient to raise a material issue of fact for trial. The party opposing the motion for summary judgment must present "specific admissible facts showing a material fact issue." O'Neil v. Kelly, Minn., 239 N.W.2d 231, 232 (1976). In this case, the town would have had to come forward with facts demonstrating that, at least with regard to the moving *551 parties, there was a genuine issue as to whether the assessment approximated the benefits. This the town did not do, and therefore it ran the risk of an adverse judgment. Second, the prima facie case relied upon by the town was not relevant to the issues presented on summary judgment. As noted above, the first rule of E. H. Willmus Prop. Inc. v. Village of New Brighton, supra, is that notwithstanding the regularity of an assessment's adoption, its validity as to the balance of benefits and charges remains an open question. An assessment void on its face for failure even to approximate a market value analysis cannot be made valid by the regularity of its adoption. The regularity of the adoption of the assessment did not raise factual questions, and summary judgment was therefore appropriate. The town is entitled to adopt any fair and reasonable method of restructuring this assessment, provided it can show that the method chosen for each benefited parcel approximately equalizes the assessment and the benefit. Among several valid alternatives, the town would of course be free to chose the one least burdensome to itself. Affirmed.