Title: Robertson v. Belle Creek Watershed Dist.
Citation: 255 N.W.2d 236
Docket Number: 47100
State: Minnesota
Issuer: Minnesota Supreme Court
Date: May 13, 1977

255 N.W.2d 236 (1977) Daryl ROBERTSON, et al., Appellants, v. BELLE CREEK WATERSHED DISTRICT, Respondent. No. 47100. Supreme Court of Minnesota. May 13, 1977. Rehearing Denied July 15, 1977. *237 Johnson London &amp; Rutzick and Lance J. Johnson, St. Paul, for appellants. Frank J. Murray, St. Paul, for respondent. Heard before ROGOSHESKE, MacLAUGHLIN and YETKA, JJ., and considered and decided by the court en banc. YETKA, Justice. This is an appeal from an order of the District Court, First Judicial District, dismissing appellants' appeal from an order of the Belle Creek Watershed District (hereinafter called "watershed district") Board of Managers confirming the report of appraisers that benefits resulting from construction of a watershed project would be greater than the assessments and damages resulting therefrom. We reverse and remand for trial. The watershed district decided to enter into a contract with the United States Department of Agriculture, Soil Conservation Service, for an improvement in the district consisting of five floodwater retarding structures, two grade stabilization structures, and a trout stream. The district held hearings pursuant to Minn.St. 112.69 to determine whether the improvement would be conducive to public health and promote the general welfare, and was in compliance with the provisions and purposes of the statute. The managers found that it was, and authorized the project and determined to enter into the proposed agreement with the Federal government. The appellants appealed these findings to the Minnesota Water Resources Board pursuant to Minn.St. 112.801 in an earlier proceedings. The Water Resources Board made findings adverse to appellants and that appeal was not pursued further. The board of managers then appointed appraisers to determine the benefits and damages to all lands and properties affected by the proposed improvement. All properties within the district, including those owned by appellants, were appraised and a separate report was prepared for each property. The managers found that the benefits resulting from the construction would be greater than the assessments and damages that would be incurred. Following the report of the appraisers, many of the landowners involved concurred in the feasibility of the project and conveyed their properties to the watershed district. Appellants refused to do so. Appellants are three landowners out of approximately 28 involved in these proceedings, and they own roughly 25 to 30 percent of the land affected above the retarding structure. When it became clear that appellants were steadfast in their opposition to the improvement and took the position that it was not economically viable and that they intended to challenge the appraisers' report in district court, respondent in its order confirming the appraisers' report apparently sought to thwart the challenge forthcoming from appellants and expedite the improvement by excluding the land of the appellants from the proceedings. In an order issued on September 9, 1975, the watershed district determined that while the property of the appellants was necessary for the improvement it should be stricken from the appraisers' report and acquired in *238 a separate condemnation proceeding. Separate condemnation proceedings on the part of the watershed district against the appellants are presently pending.[1] On October 1, 1975, appellants filed a notice of appeal pursuant to Minn.St. 112.801 to contest the exclusion of their land from the proceeding. They also sought to review the benefits and damages set forth in the appraisers' report, questioning whether the benefits would exceed said damages. In response, the respondent filed a motion to dismiss on the grounds that the appellants lacked standing to appeal because their land had been stricken from the report. The district court dismissed the appeal on those grounds and the appellants appeal to this court. The issue raised by this appeal is: Whether the appellants have a right to appeal the order of the watershed district determining that the benefits resulting from the construction in this project would be greater than the assessments and damages that would be incurred in the project as an order affecting a "substantial right" under Minn.St. 112.801, subd. 1(1). Since several statutes govern the questions on this appeal we will set them out in full. They are Minn.St. 112.69, subds. 1 and 2: And Minn.St. 112.801, subds. 1 through 4: Central to the determination of this case is whether the legislature intended to allow for one or two appeals for the proceedings brought pursuant to Minn.St. 112.69, specifically, whether there is a right to appeal the district's decision to contract with the Federal government for the project, and also a right to appeal the overall economic feasibility of the project after the assessment of benefits and damages. Initially, we note that it would not be conducive to a fair procedure for those affected to allow a watershed district to enter into a contract for the construction of a project before the initial finding that such a project would be in the public interest could be challenged on appeal. If a landowner could only appeal after a contract was entered into, the plans for the project devised, and the report of the appraisers submitted, large amounts of time and money might unnecessarily be expended should an appeal of the purpose of the project be successful. Thus, the legislature provided for such an appeal in § 112.801, subd. 5. The appellants already have appealed this decision to the Water Resources Board and thus this question is moot on this appeal. The remaining issue is whether the appellants may challenge the overall economic feasibility of the project on the grounds that it affects a "substantial right" under Minn.St. 112.801, subd. 4. Benefits or damages for individual lands may be appealed pursuant to Minn.St. 112.801, subds. 1 and 2, provided that notice is given to other affected owners if the landowner appeals benefits or damages to land other than his own. In this case, no such notice was given to other landowners; however, the appellants also appealed to the district court on the grounds that the order of the managers striking their land from the appraisers' report attempted to preclude them from challenging the overall economic feasibility of the project and thus affected a "substantial right." Respondent argues that the appellants cannot be heard under c. 112 at all on this issue. Instead, they contend that the economic feasibility and the amount of the awards can only be raised in a condemnation proceeding brought under c. 117. A watershed project such as this comprises three separate proceedings. First, § 112.69 provides that the managers should hear all interested parties, for and against the proposed project, and determine whether the improvement would be conducive to public health and promote the general welfare and in compliance with the statutes. Second, the managers then appoint appraisers who submit a report to them. After a hearing on the report, the managers must find that the benefits resulting from the construction would be greater than the assessments and damages that would be incurred. Finally, after and only after the first two stages have been completed does the third stage, condemnation, come into play. If an individual landowner refuses voluntarily to convey his property, the watershed district may condemn the land under c. 117. Each of these is a separate proceeding. We hold appeals can be taken at each stage. In the present case, the appeal from the first stage has been taken and exhausted. We are now at the second stage. We hold that any interested landowner may question whether the project is economically feasible. In this case, the appellants' lands were a necessary part of the overall project. Their right to appeal cannot be cut off by simply dismissing them from the proceedings after the appraisers' report has been filed and leaving them to challenge the condemnation proceedings. They have a right to contest the economic feasibility of the project. The case therefore is remanded *241 to the district court for trial on the question of the overall economic feasibility of the project in accordance with the following language under Minn.St. 112.69, subd. 2: Reversed and remanded for trial. PER CURIAM. The petition for rehearing is denied. On remand, the trial court is directed to consolidate the action to challenge the economic feasibility of the project with the condemnation proceeding. [1] In a separate proceeding brought by the appellants, this court stayed the condemnation proceeding pending the outcome of this case.