Honorable Paul A. Magnuson, Chief Judge, United States District Court for the 1

District of Minnesota.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

____________

No. 96-1873

____________

Northgate Homes, Inc., *

*

Appellant, *

* Appeal from the United States

v. * District Court for the

* District of Minnesota

City of Dayton, a *

municipal corporation, *

*

Appellee. *

____________

 Submitted: December 9, 1996

 Filed: October 8, 1997 

____________

Before McMILLIAN, JOHN R. GIBSON and MAGILL, Circuit Judges.

____________

McMILLIAN, Circuit Judge.

Northgate Homes, Inc. (Northgate), appeals from a final judgment

entered in the United States District Court for the District of Minnesota 1

granting declaratory and injunctive relief to the City of Dayton (City)

upon holding that Northgate’s sale, display, and storage of manufactured

homes on a particular parcel of land constitute an
The district court also denied declaratory and injunctive relief to Northgate on 2

the identical issue. Northgate Homes, Inc. v. City of Dayton, No. 3-94-178, slip op.

at 13 (D. Minn. Mar. 12, 1996).

The terms “manufactured home” and “mobile home” are used interchangeably 3

herein.

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unlawful nonconforming use. Northgate Homes, Inc. v. City of Dayton, No. 2

3-94-178, slip op. at 13 (D. Minn. Mar. 12, 1996) (memorandum and order

following bench trial). For reversal, Northgate argues that the district

court erred in: (1) granting the City’s request for a bench trial on the

parties’ cross-claims, including claims for declaratory relief, id. (Feb.

2, 1996); (2) holding that Northgate’s use is an unlawful nonconforming

use, id. (Mar. 12, 1996); and (3) granting the City summary judgment on

Northgate’s claims of equitable estoppel, breach of contract, due process

violations, commerce clause violations, and an unlawful taking without just

compensation, id. (Jan. 23, 1996). Upon careful consideration and for the

reasons discussed below, we affirm the judgment of the district court.

Jurisdiction was proper in the district court based upon 28 U.S.C.

§ 1343. Jurisdiction on appeal is proper based upon 28 U.S.C. § 1291. The

notice of appeal was timely filed under Rule 4(a) of the Federal Rules of

Appellate Procedure.

I. BACKGROUND

Northgate operates a retail business selling manufactured or mobile

homes on the premises of a residential mobile home park called Dayton Park 3

(hereinafter “the Dayton Park property”) located in the City of Dayton,

Minnesota. Ben Dehn and George Hedlund originally developed the Dayton

Park property in 1958, pursuant to a permit issued by the City. At that

time, the zoning ordinance governing the establishment of mobile home parks

did not prohibit the sale of mobile homes on
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mobile home park property. Beginning in 1969, Dehn and Hedlund sold the

Dayton Park property to Kent Kjellberg. Kjellberg thereafter incorporated

Dayton Park, Inc. 

In 1973, the City passed Ordinance 73-5 and Ordinance 73-6. One of

the numerous subdivisions of Ordinance 73-5 prohibits the sale, storage,

or display of mobile homes on mobile home park premises. Ordinance 73-6

includes the zoning regulations for areas designated as “R-M” (referring

to “residential-mobile”). Neither the sale, storage, nor display of mobile

homes is a permitted or conditional use in an area zoned R-M. See

Appellee’s Appendix at 138 (Ordinance No. 73-6).

In October 1973, the City brought a suit in Minnesota state court

against Dayton Park, Inc., for violating Ordinance 73-5. The parties to

that state court action stipulated and agreed that the City would issue

Dayton Park, Inc., a special use permit allowing it to continue its thencurrent operations. Appellant’s Appendix at 207-12 (Defendant’s exhibit

16 (stipulation and agreement dated April 22, 1974)). The state court

incorporated the stipulation into an order directing the City to issue to

Dayton Park, Inc., the special use permit. Id. at 206 (state court order

dated April 30, 1974). In 1977, the State of Minnesota sued Dayton Park,

Inc., in state court for violating Ordinance 73-5. The state court in that

action held that the 1974 state court order granted Dayton Park, Inc., the

variances necessary to continue its operations as they existed on April 30,

1974. 

At some point around the mid-1970s, Joel Dunn began selling

manufactured homes under the name Black Forest, Inc., from a nine-acre

sales lot located on the Dayton Park property. The nine-acre parcel is in

an area zoned R-M. In 1978, Dunn reincorporated Black Forest Homes, Inc.,

as Northgate Homes, Inc. On August 3, 1990, Kathy Greenberg purchased all

of Northgate’s stock and became its sole owner. Thereafter, Northgate’s

sales volume, sales staff, and number of display homes exhibited on the

sales lot increased dramatically.
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In a letter to Northgate dated January 14, 1992, an attorney

representing the City stated:

It has come to my attention that you have created

a sales lot on your property with 20 plus manufactured

homes stored in the open area. . . . This is not a

permitted use by City Ordinance. I have enclosed a copy

of the Ordinance and Zoning Map. Your property is zoned

R-M. 

The use as a sales lot and storage of homes must be

discontinued by March 1, 1992.

A copy of this ordinance will be sent to the City

Attorney George Hoff for his information on this matter.

Upon receipt of this letter, Northgate did not discontinue its sales

activities on the Dayton Park property. The City agreed not to enforce its

zoning ordinances while Northgate applied for a zoning amendment or a

conditional use permit (CUP) that would permit its sales operation to

continue. After a series of Dayton City Council meetings and public

hearings, Northgate’s application was denied on June 7, 1993. On February

7, 1994, the City sent Northgate a letter stating that Northgate had until

March 8, 1994, to cease its mobile home sales operations on the Dayton Park

property and to remove all evidence of the business.

 Northgate filed a § 1983 claim against the City in state court and

sought injunctive relief. The City removed the case to federal court.

Subsequently, Northgate filed an amended complaint seeking declaratory

judgment that Northgate’s mobile home sales business is a lawful

nonconforming use of the Dayton Park property. Northgate claimed that the

City’s actions amounted to a taking of Northgate’s property interest in its

business without just compensation, in violation of the Fifth Amendment of

the United States Constitution. Additionally, Northgate asserted due

process claims
The district court declined to address the constitutionality of Ordinance 73-5

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because it found it unnecessary to consider any alleged violations of Ordinance 73-5

in disposing of the case. Slip op. at 4-5 n.1 (Mar. 12, 1996). 

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under the United States Constitution and the Minnesota constitution, a

commerce clause claim, a breach of contract claim, and an equitable

estoppel claim. In its answer to Northgate’s amended complaint, the City

asserted counterclaims seeking declaratory judgment that Northgate’s sales

and storage of mobile homes on the Dayton Park property constituted an

unlawful nonconforming use of the property and requesting that Northgate

be enjoined from continuing its business operations at that site. 

The City moved for summary judgment. The district court granted the

City’s motion in part and dismissed most of Northgate’s claims. Remaining

for trial were the parties’ cross-claims for declaratory and injunctive

relief on the nonconforming use issue. The City then filed a motion for

a trial to the court, which the district court granted. Following a bench

trial, the district court rendered the following findings of fact and

conclusions of law: Ordinance 73-6 is constitutional and binding ;

4

Northgate’s sales operations within the nine-acre sales lot zoned R-M

violate Ordinance 73-6; such sales operations were non-existent at the time

Ordinance 73-6 became effective; and Northgate’s operations on the sales

lot therefore constitute an unlawful nonconforming use. Accordingly, the

district court permanently enjoined Northgate from operating its sales lot

for the sale, display, or storage of manufactured homes in the area of the

Dayton Park property zoned R-M. In addition, the district court ordered

each party to pay its own costs and attorneys’ fees. This appeal followed.
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II. DISCUSSION

Denial of jury trial

Northgate argues that the district court violated its Seventh

Amendment right to a jury trial by granting the City’s motion for a trial

to the court. The district court granted the motion upon concluding that

any right Northgate had to a jury trial was lost once Northgate’s common

law damages claims and § 1983 claims were dismissed on summary judgment,

leaving only equitable claims for declaratory and injunctive relief.

Federal procedural law governs the question of whether Northgate has

a right to a jury trial on its claim for declaratory judgment. Simler v.

Conner, 372 U.S. 221, 222 (1963) (per curiam). A litigant is not

necessarily deprived of a jury trial merely because it is a party to a

declaratory judgment action. Id. at 223. Although the declaratory

judgment procedure largely originated in equity, declaratory relief per se

is neither legal nor equitable. The fact that a declaratory judgment is

sought neither restricts nor enlarges any right to a jury trial that would

exist if the issue were to arise in a more traditional kind of action for

affirmative relief. Id. To determine whether there is a right to a jury

trial in a declaratory judgment action, it is necessary first to determine

the nature of the action in which the issue would have arisen absent the

declaratory judgment procedure. In other words, if there would have been

a right to a jury trial on the issue had it arisen in an action other than

one for declaratory judgment, then there is a right to a jury trial in the

declaratory judgment action; conversely, there is no right to a trial by

jury if, absent the declaratory judgment procedure, the issue would have

arisen in an equitable proceeding. Johnson v. Fidelity & Casualty Co., 238

F.2d 322 (8th Cir. 1956) (Johnson) (cited in Beacon Theaters, Inc. v.

Westover, 359 U.S. 500, 504 (1959)); accord Owens-Illinois, Inc. v. Lake

Shore Land Co., 610 F.2d 1185, 1189 (3d Cir. 1979).
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In the present case, we are of the opinion that Northgate’s claim,

in the absence of the declaratory judgment procedure, would have arisen in

an action to enjoin the City from enforcing its zoning ordinances. Thus,

using the Johnson analysis, we conclude that Northgate is not entitled to

a jury trial because its claim would have been an equitable claim.

Moreover, a judgment in favor of Northgate on its declaratory judgment

claim would have had the effect of preventing, or enjoining, the City from

enforcing the demand that Northgate cease its use of the nine-acre parcel,

zoned R-M, for selling and storing mobile homes on the Dayton Park

property.

We are also of the opinion that the City, in the absence of the

declaratory judgment procedure, would at most have attempted to enforce its

cease and desist order by seeking injunctive relief. On this point, we

disagree with Northgate’s assertions that the City would have criminally

prosecuted Northgate for violating the zoning ordinances and, thus,

Northgate’s declaratory judgment action must be viewed as an “inverted

criminal prosecution” to which a jury right attaches under the Sixth

Amendment. The district court reasoned, and we agree, that there simply

is no indication here that the City had any intention of criminally

prosecuting Northgate, notwithstanding the City’s efforts to criminally

prosecute other entities in the past for violating Ordinances 73-5 and 73-

6. Slip op. at 3 (Feb. 2, 1996). Prior to Northgate’s filing of the

present lawsuit, the City’s actions vis-a-vis Northgate were focused

entirely upon stopping Northgate’s current and future violations, not

punishing Northgate’s past violations. Id. Thus, because the likelihood

of an eventual criminal prosecution is at best purely speculative, we agree

with the district court’s holding that Northgate is not entitled to a jury

trial based on its “inverted criminal prosecution” theory. Id. 

We also reject Northgate’s arguments that it is entitled to a jury

trial because it requested attorneys’ fees and costs or because factual

issues are vigorously disputed. As the district court explained, even

assuming that attorneys’ fees and costs could have been recovered in the

present case (an assumption which the City disputes),
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Northgate’s request for such fees and costs does not alter the

fundamentally equitable nature of its claim for declaratory judgment. See,

e.g., Doucas Volkswagen, Inc. v. Volkswagen of America, Inc., 893 F. Supp.

15, 16 (E.D. Wis. 1995) (rejecting the plaintiff’s request for a jury trial

in a declaratory judgment action and holding that plaintiff’s request for

attorneys’ fees and costs did not alter the equitable nature of its action

even though the underlying statute contained an attorneys’ fees provision)

(citing FDIC v. Sanders, 785 F. Supp 528, 529 (W.D. Pa. 1992)). Nor is

Northgate entitled to a jury trial merely because of the intensity of

factual disputes. In sum, we hold that the district court did not err in

the present case, under either the Constitution or statutes of the United

States, in granting the City’s request for a bench trial on the parties’

claims for declaratory and injunctive relief. 

Disposition of nonconforming use issue on the merits

“A residential zoning ordinance may constitutionally prohibit the

creation of uses which are nonconforming, but existing nonconforming uses

must either be permitted to remain or be eliminated by use of eminent

domain.” County of Freeborn v. Claussen, 203 N.W.2d 323, 325 (Minn. 1972)

(citing Hawkins v. Talbot, 80 N.W.2d 863 (Minn. 1957)). The law does not

require that pre-existing nonconforming uses be allowed to expand or

enlarge. Id. Rather, to further the public policy interests underlying

comprehensive zoning plans, the law disfavors the expansion or enlargement

of pre-existing nonconforming uses and instead favors the gradual

elimination of such uses through obsolescence, exhaustion, or destruction.

Id. The party seeking to continue a nonconforming use bears the burden of

proving that an exception is warranted. See, e.g., id. at 326 (in action

by county to restrain property owner from constructing commercial building

on land zoned residential, property owner bore burden of proving that

enforcement of zoning ordinance violated property owner’s due process

rights).
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In the present case, the area which Northgate uses as its sales lot

is zoned R-M (residential-mobile), a zoning designation which does not

permit the sale, storage, or display of mobile homes for commercial

purposes. Therefore, in order to prevail, Northgate was required to prove

that its predecessor was using the same sales lot to sell, store, and

display mobile homes at the time Ordinance 73-6 became effective. At

trial, Northgate maintained that, at the time Ordinance 73-6 became

effective, Northgate’s predecessors, Dayton Park, Inc. (owned and operated

by Kent Kjellberg) and Black Forest Homes, Inc. (owned and operated by Joel

Dunn), were engaged in selling, storing, and displaying mobile homes on the

Dayton Park property at the same location and within the same geographical

area as that from which Northgate presently operates its retail business.

However, based upon the evidence adduced at trial, the district court

specifically found that no business operation similar to Northgate’s

existed at the same location at the time Ordinance 73-6 went into effect.

On appeal, Northgate specifically challenges this finding. Northgate

summarizes its argument on this issue as follows:

The District Court’s findings are clearly erroneous for

two reasons. First, the testimony at trial demonstrated

that Northgate’s Sales Lot was used for the display,

storage and sale of manufactured homes prior to the

enactment of the City’s ordinances prohibiting such a

use. Second, the evidence which the Court relied on is

either inconclusive or in one case, nonexistent. 

Brief for Appellant at 29. 

We review the district court’s findings of fact for clear error.

Fed. R. Civ. P. 52(a). In the present case, the district court provided

a detailed summary of the evidence upon which it relied in making its

factual findings. See slip op. at 5-11 (Mar. 12, 1996). Northgate

presented the testimony of three individuals to show that its
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current sales lot, the nine-acre parcel on the Dayton Park property, was

used for the sale, display, and storage of mobile homes prior to August 1,

1973. Kjellberg, whose deposition testimony was admitted into evidence,

stated that he displayed manufactured homes on the entire nine-acre parcel

in the early 1970s. Two other witnesses also testified that they remember

seeing mobile homes displayed on that nine-acre parcel as early as 1971 or

1972. By contrast, however, the Dayton City Administrator testified that

she never saw manufactured or mobile homes displayed on the nine-acre

parcel during the 1970s. 

In addition, numerous aerial photographs of the Dayton Park property

were introduced into evidence at trial. The City introduced photographs

which were taken on: November 9, 1971; November 1, 1975; May 13, 1978;

November 18, 1979; April 5, 1980; April 10, 1985; and May 3, 1989.

Defendant’s exhibits 6, 17, 18, 19, 21, 24, and 29. Northgate submitted

aerial photographs taken on May 8, 1960, and April 23, 1962. Plaintiff’s

exhibits 191 and 190. The pre-1985 photographs show that manufactured

homes were not displayed anywhere on the nine-acre parcel at the times the

photographs were taken. In fact, the photographs suggest that no mobile

homes were displayed on that parcel until 1989. Moreover, in a 1971

photograph, approximately half of that parcel appears to be occupied by a

softball diamond. Defendant’s exhibit 6. The softball diamond also

appears at the same location in the 1975 and the 1978 photographs, but

apparently was not in use at those times. Defendant’s exhibits 17 and 18.

Contrary to Northgate’s assertion that the photographs only show the

condition of the sales lot in the late fall or the early spring, when

mobile home inventories are at their lowest levels, Kathy Greenberg

testified that the number of display homes on Northgate’s sales lot is

usually at its peak from March through November or December -- a period

which includes the dates on which most of the photographs were taken.

Kjellberg testified in his deposition that, on the rare occasions when

there would be no inventory, such circumstances would probably last no more

than a week. Based upon the evidence, the district court reasoned: “[i]t

seems highly unlikely that so many photo[graph]s would show no manufactured

homes on
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Northgate’s current sales lot if the property were being used regularly to

display mobile homes, as Northgate claims.” Slip op. at 9 (Mar. 12, 1996).

The district court also found compelling the language of the

stipulation which was incorporated into the state court order disposing of

the 1974 lawsuit brought by the City against Dayton Park, Inc. (Kjellberg’s

corporation) for violations of Ordinance 73-5. The stipulation

specifically distinguishes the subdivisions of Ordinance 73-5 with which

Dayton Park, Inc., was in compliance from those subdivisions of Ordinance

73-5 with which Dayton Park, Inc., was not in compliance, for purposes of

granting a variance for the pre-existing nonconforming uses. Notably, the

subdivision of Ordinance 73-5 which prohibits the sale or storage of mobile

homes on mobile home park premises is found in the list of subdivisions

with which Dayton Park, Inc., was deemed to be in compliance. Defendant’s

exhibit 16. The district court thus concluded that “[t]he most plausible

inference to be drawn from the stipulation is that the City and Kjellberg

both understood in April 1974, when the stipulation was signed, that sales

or storage activities were not taking place on the Dayton Park premises,

including Northgate’s current sales lot.” Slip op. at 10 (Mar. 12, 1996).

We hold that the evidence discussed above, along with additional

evidence discussed in the district court’s memorandum and order,

demonstrates that the evidence presented by Northgate was at the very least

contradicted by evidence presented by the City and certainly not conclusive

on the issue of whether mobile homes were being displayed and sold on

Northgate’s current sales lot at the time Ordinance 73-6 went into effect.

As the district court observed, whereas the City provided the court with

tangible, physical, and documentary evidence of non-use, Northgate provided

only testimonial evidence to the contrary. Id. at 12. Notably, Northgate

recognizes on appeal that the determination of factual issues in the

present case necessarily involved “an analysis of the credibility of the

witnesses and the evaluation of direct and circumstantial evidence.” Brief

for Appellant at 22. When a trial court’s findings of fact are based upon

its decision to credit the testimony of a witness or witnesses, each
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of whom has told a coherent and facially plausible story which is not

contradicted by extrinsic evidence, the trial court’s findings, unless

internally inconsistent, can “virtually never” be clearly erroneous.

Anderson v. City of Bessemer City, 470 U.S. 564, 575 (1985). Similarly,

“[w]here there are two permissible views of the evidence, the factfinder’s

choice between them cannot be clearly erroneous.” Id. at 574; see also

Stanton v. Larry Fowler Trucking, Inc., 52 F.3d 723, 729 (8th Cir. 1995)

(“[w]e are bound by the district court’s assessment of the witnesses’

credibility and its determination of the weight of their testimony”).

Bearing these standards in mind, we defer to the district court’s

assessment of the witnesses’ credibility and the inferences to be drawn

from the evidence and hold that the district court did not clearly err in

finding that Northgate’s predecessors did not use the nine-acre sales lot

for retail sales operations prior to the effective date of Ordinance 73-6.

We also find no merit to the legal arguments advanced by Northgate

to challenge the district court’s disposition of the nonconforming use

issue. Northgate primarily contends that the district court erred in

failing to recognize that a pre-existing use that is seasonal or

fluctuating is nevertheless sufficient to establish its lawfulness even to

the extent that it may later become year-round or continuous. Brief for

Appellant at 27-29 (citing Morin v. Board of Appeals, 227 N.E.2d 466 (Mass.

1967)). In the present case, it is abundantly clear that the district

court simply concluded that the retail sales operations conducted by

Northgate’s predecessors on the nine-acre sales lot did not commence until

after the effective date of Ordinance 73-6. See slip op. at 1, 6-11 (Mar.

12, 1996). Therefore, Northgate’s argument is misplaced. 

In sum, we hold that the district court did not err in holding that

Northgate’s mobile home retail sales operations, which are conducted in an

area of the Dayton Park property zoned R-M, constitute an unlawful

nonconforming use.
See SLS Partnership v. City of Apple Valley, 511 N.W.2d 738, 743 (Minn.

5

1994) (holding that city could not be estopped from enforcing area and setback

requirements set forth in one of its ordinances, even if property owner detrimentally

relied on city’s prior conduct). 

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III. CONCLUSION

For the reasons discussed above, we affirm the district court’s grant

of the City’s request for a bench trial and affirm the district court’s

disposition of the parties’ claims for declaratory and injunctive relief

on the nonconforming use issue. In addition, we have considered all of

Northgate’s remaining arguments, including the arguments that: the City’s

zoning ordinances are unconstitutional; the City is equitably estopped from

enforcing its ordinances after failing to do so for many years ; and the

5

district court erred in granting summary judgment on Northgate’s takings

claim, due process claims, commerce clause claim, and breach of contract

claim. Upon careful review of the record, the district court’s orders, and

the parties’ briefs and oral arguments on appeal, we are of the firm

conviction that none of those arguments has sufficient merit to warrant

further discussion. 

The judgment of the district court is affirmed.

A true copy.

Attest:

 CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.