Title: BURNER SERV. & COMBUSTION v. City of Minneapolis
Citation: 250 N.W.2d 224
Docket Number: 46626
State: Minnesota
Issuer: Minnesota Supreme Court
Date: January 27, 1977

250 N.W.2d 224 (1977) BURNER SERVICE AND COMBUSTION CONTROLS CO., INC., Appellant, v. CITY OF MINNEAPOLIS, Respondent. No. 46626. Supreme Court of Minnesota. January 27, 1977. *225 Carlsen, Greiner &amp; Law and Jack D. Elmquist, Minneapolis, for appellant. Walter J. Duffy, Jr., City Atty., Frank C. LaGrange and Jerome R. Jallo, Asst. City Attys., Minneapolis, for respondent. Heard before TODD, MacLAUGHLIN, and YETKA, JJ., and considered and decided by the court en banc. YETKA, Justice. Burner Service and Combustion Controls Company, Inc. (Burner), appeals from a judgment entered on January 22, 1976, pursuant to an order by the district court granting the motion for summary judgment of the city of Minneapolis and denying Burner's motion for summary judgment. We reverse. The issue presented in this appeal is whether the city attorney is, as a matter of law, without authority to bind the city to a stipulation of settlement with a condemnee, while acting pursuant to a resolution of the city council directing him to "take all necessary steps to prepare for, institute, and prosecute on behalf and in the name of the City of Minneapolis all such condemnation proceedings as may be necessary for the acquisition by said City of Minneapolis [of Burner's property interest], the costs thereof to be paid from [funds authorized for this purpose]." This appeal arises out of a condemnation proceeding instituted by the city of Minneapolis as part of a development district in the Nicollet-Lake area where Burner leased property. On November 22, 1972, the city council designated the Nicollet-Lake area a development district. Shortly thereafter it authorized funding for the district. Walter J. Duffy, Jr., the city attorney, was authorized to purchase or condemn property in the district. On May 8, 1974, a condemnation proceeding was brought by the city. The petition listed Burner as a respondent and recited that the city attorney was given authority to direct condemnation proceedings on behalf of the city and that the city deemed it necessary to secure the land under the "quick take" provision of Minn.St. 117.042.[1] The petition was heard on June 18, 1974, before Judge Edward Parker, who allowed the condemnation to proceed but denied the city's request for a "quick-take" and immediate possession. On December 12, 1974, Burner's president, Thomas A. Ryan, and an assistant city attorney signed a stipulation of settlement. The settlement provided for payment of $15,778, allocating $7,500 to the present value of Burner's leasehold interest and $8,278 to Burner's irremovable fixtures, in return for a quit claim deed from Burner and the termination of Burner's interests in the premises on March 29, 1975. A problem developed on February 4, 1975, when the assistant city attorney informed *226 Burner's attorney that the city would not pay the portion of the settlement previously allotted to Burner's leasehold interest ($7,500) because an examination of Burner's lease disclosed a clause which, in the city's opinion, terminated Burner's leasehold interest in the event of condemnation. In response, Burner instituted an action in district court for breach of the stipulation of settlement. Cross-motions for summary judgment were heard, and the city's motion was granted and Burner's motion was denied. Burner appeals from the judgment entered. A motion for summary judgment may be granted only when the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that a party is entitled to a judgment as a matter of law. Rule 56.03, Rules of Civil Procedure; Couillard v. Charles T. Miller Hospital, Inc., 253 Minn. 418, 92 N.W.2d 96 (1958); 10 Dunnell, Dig. (3 ed.) § 4988b. In Sauter v. Sauter, 244 Minn. 482, 484, 70 N.W.2d 351, 353 (1955), this court stated the rules governing a motion for summary judgment as follows: Thus, in view of these governing principles, the granting of the city's motion for summary judgment can be upheld only under one of two circumstances: (1) if, as a matter of law, a city attorney may not bind the city to a stipulation of settlement under any circumstances; or (2) if such authority may exist, the facts before us raise no genuine issue as to the actual authorization of the city attorney to enter into a settlement on behalf of the city. The city contends that the signing of the stipulation of settlement by the city attorney was the attempted performance of a nondelegable duty of the city, and as such, no legal effect can be given to the city attorney's acts. The city further contends that Burner must be presumed to know the extent of the power of the officers with whom it dealt and is thus precluded from arguing either actual authority or estoppel premised on actions within the permissible scope of the officer's authority. Burner, on the other hand, contends that the city attorney not only had the power but also the specific authorization to settle under the condemnation action initiated by the city attorney under the direction of the city council. In granting the city's motion for summary judgment, the trial court agreed with the *227 city's position. It found that the signing of the settlement agreement by the city attorney involved the attempted delegation of a nondelegable duty, stating in its memorandum: Both the trial court and the city rely on provisions of the Minneapolis City Charter for their conclusion that the city is without authority to enter into stipulation agreements involving condemnation. Minneapolis City Charter, c. 4, § 14, provides: Minneapolis City Charter, c. 5, § 26, also provides: Minneapolis City Charter, c. 4, § 15, further states: From these provisions the city concludes that the city attorney is, as a matter of law, without authority to enter into a stipulation of settlement. However, the real issue here, as stated by Burner, is not whether there was a redelegation of authority by the city to the city attorney, but rather whether there had been an actual exercise of the power by the city itself. The distinction between redelegation and actual exercise is noted in 1 Nichols, Eminent Domain (Rev. 3 ed.) § 3.211[1], which states: The cases cited by the trial court stand for the well-established rule that an officer or agent of a municipality cannot bind the city when he acts beyond the scope of his lawful powers. However, none of these cases offer much assistance in determining what those lawful powers are, and thus are not of assistance here. In determining whether, as a matter of law, the city attorney has the authority to enter into a stipulation of settlement, it should be noted first that what is involved is the scope of the powers of an attorney. In 62 C.J.S., Municipal Corporations, § 695, p. 1387, this rule is stated: Also, in West v. Bank of Commerce &amp; Trusts, 167 F.2d 664, 666 (4 Cir. 1948), the court stated the rule as follows: A case which illustrates the workings of the rule and which involves analogous facts is Richardson v. City of Seattle, 97 Wash. 371, 166 P. 639 (1917). The city of Seattle contended that its city attorney was without authority to enter into a binding stipulation made during the course of a condemnation trial. In rejecting the city's claims, the court stated (97 Wash. 377, 166 P. 641): Thus, a city attorney is placed in no lesser position as such to settle or compromise claims merely because his client is a municipal corporation rather than a private corporation or an individual. We cannot hold that a city attorney, as a matter of law, cannot be given the authority to bind the city to a stipulation of settlement. Therefore, we must turn to the authority given to the city attorney in this particular case. Except in an emergency, an attorney has no authority to enter into a stipulation to settle and compromise a cause of action without the knowledge or consent of his client. Matteson v. Blaisdell, 148 Minn. 352, 182 N.W. 442 (1921); Gibson v. Nelson, *229 111 Minn. 183, 126 N.W. 731 (1910). However, an attorney may be authorized expressly to compromise a claim of his client. See, Ghostley v. Hetland, 295 Minn. 376, 204 N.W.2d 821 (1973); Albee v. Hayden, 25 Minn. 267 (1878). The powers and duties of the city attorney are set out in Minneapolis City Charter, c. 3, § 5, as follows: In addition, the city's condemnation petition of May 8, 1974, contained the following paragraph: In our opinion there is little doubt that by this resolution the city council gave authority to the city attorney to acquire the property from Burner and to agree to the prices to be paid for it. Neither the resolution of the city council nor the stipulation itself conditioned the stipulation's effectiveness on council approval. Moreover, the record is devoid of any indication of fraud or mutual mistake in the execution of the stipulation. Therefore, on the facts of this case, we hold that the city is bound by the stipulation. We do not hold that a city attorney can in every instance, even when clothed with the apparent authority to negotiate and settle, make an outrageous settlement where it would be apparent to any reasonable person that the settlement is wholly without justification and therefore is without the consent, express or implied, of the city council. But such are not the facts of this case. Reversed and remanded with instructions to enter summary judgment for appellant for the amount of the award agreed to in the stipulation of settlement, plus costs and disbursements. [1] Minn.St. 117.042, provides: "Whenever the petitioner shall require title and possession of all or part of the owner's property prior to the filing of an award by the court appointed commissioners, the petitioner shall, at least 90 days prior to the date on which possession is to be taken, notify the owner of the intent to possess by notice served by registered mail and shall pay to the owner or deposit with the court an amount equal to petitioner's approved appraisal of value. If it is deemed necessary to deposit the above amount with the court the petitioner may apply to the court for an order transferring title and possession of the property or properties involved from the owner to the petitioner."