Opinion ID: 2139450
Heading Depth: 1
Heading Rank: 3

Heading: Was the City's Condemnation of Land in This Case Necessary For the Papermill Project?

Text: Paulucci makes several related arguments that the city's condemnation of Paulucci property is not necessary and that the district court erred in finding otherwise. The arguments are based on his contentions that: other, and better, sites are available for locating a papermill; the papermill and the Chun King plant could co-exist on the site; the city's resolution declaring the condemnation of the Chun King property necessary for the project was based on an arbitrary and capricious decision; and the district court improperly relied on the city's determination of necessity rather than coming to its own independent decision. In a related argument, Paulucci contends that condemning his property is not necessary to carry out the designs of the city and LSPI. He argues that the papermill can be built without using his property, allowing both the mill and the plant to operate. In Housing and Redevelopment Authority v. Minneapolis Metropolitan Co., 259 Minn. 1, 104 N.W.2d 864 (1960), this court stated the general proposition that, once a public purpose is found to a condemnation action, the only question left for the court is that of adequate and just compensation. This statement alone would indicate that no question of necessity is before a court in a condemnation proceeding. Metropolitan goes on, however, to find that, while courts generally have disclaimed the power to supervise the selection of a site for public improvement, they are reluctant to surrender their right to prevent an abuse of the discretion delegated by the legislature by an attempted appropriation of land in utter disregard of the public necessity of its use. Id. at 14, 104 N.W.2d at 874. In explaining the extent of this right, the court stated that great weight was to be given the condemnor's determination and that a court was precluded from substituting its own judgment for that of the condemnor. We do not understand that it is the function of the court to decide between conflicting opinions of the parties as to the advisability of a discretionary act. Id. at 15, 104 N.W.2d at 874. The court's limited scope of review would only allow the condemnor's decision to be overturned if it were arbitrary, unreasonable, or capricious, or [if] the evidence against the necessity or public use is overwhelming. Id. at 16, 104 N.W.2d at 875 (emphasis added). Consistent with Metropolitan, this court has stated that, where necessity is required as part of a condemnation, its existence is a judicial question. City of Shakopee v. Minnesota Valley Electric Cooperative, 303 N.W.2d 58, 62 (Minn. 1981). Minn.Stat. § 117.011 (1984) mandates that all eminent domain proceedings, except those under laws relating to drainage or town roads, shall follow the format of that chapter. Section 117.075 states that the district court shall appoint three commissioners to value the property only after a determination that the proposed taking shall appear to be necessary and such as is authorized by law. We thus affirm that it is the intent of our constitution and statutes that, in all eminent domain cases in this state, necessity, as well as public purpose, must be shown. Numerous cases have declared that the requisite necessity is not absolute necessity. It is enough to find that the proposed taking is reasonably necessary or convenient for the furtherance of a proper purpose. City of Pipestone v. Halbersma, 294 N.W.2d 271, 274 (Minn.1980) (quoting The Kelmar Corp. v. District Court of Fourth Judicial District, 269 Minn. 137, 142, 130 N.W.2d 228, 232 (1964)). Finally, a district court's finding that the required necessity does exist should be overturned only if clearly erroneous. See County of Blue Earth v. Stauffenberg, 264 N.W.2d 647 (Minn.1978). Paulucci argues that the district court in this case made no finding with regard to necessity, but, rather, simply bowed to the determination of the city. He alleges that if the court had come to an independent decision, it would have been that necessity does not exist and that the court's failure to come to an independent conclusion deprived him of his right to litigate whether a specific interest in a particular piece of property is necessary. That right is found in Cooperative Power Ass'n v. Eaton, 284 N.W.2d 395 (Minn.1979). In that case, the district court had determined that no factual dispute existed as to the necessity of the condemnation. This court disagreed and remanded so that evidence could be taken regarding the necessity for the broad type of easement sought. If the district court below had neglected to decide the necessity issue, Eaton indicates that such action would be incorrect. However, the trial court did decide the issue. True, the district court did rely on the city's findings. Finding No. 27 shows that the court looked at the findings of the city in both the development program and the agreement with LSPI and found them to support the city's finding of a public purpose. Finding No. 26a recognizes the city resolution that acquiring the Paulucci property was necessary. Finding No. 30 states: Pursuant to the Findings of Fact made by Duluth, the property of the respondents is reasonably necessary, or is reasonably convenient to achieve the public purpose objectives. In City of Pipestone v. Halbersma, 294 N.W.2d 271 (Minn.1980), this court held that a resolution by a city council that a taking was necessary to accomplish a proper purpose was prima facie evidence of that necessity, at least where no higher judicial finding of necessity is mandated by the statute. The statute involved in Halbersma, Minn.Stat. § 360.032, subd. 2 (1978), stated: Property needed by a municipality for an airport    may be acquired by    condemnation. This statute did not mandate any higher judicial finding of necessity than reasonably necessary or convenient for the furtherance of a proper purpose standard already discussed. The three authorizations for exercising eminent domain that the city points to in this case similarly impose no higher standard. Minn.Stat. § 472A.03 (1984) allows a municipality to use eminent domain to acquire developments aimed at improving the physical facilities, quality of life and quality of transportation consistent with a development program for a designated district. Minn.Stat. § 458.192, subd. 2 (Supp. 1985) authorizes a port authority to acquire by condemnation proceedings the needed right, title and interest in property to create industrial development districts. The Duluth Home Rule Charter empowers the City of Duluth to acquire, by    condemnation, any property    which may be needed by said city for any public use or purpose. Duluth City Charter § 1. According to the reasoning of Halbersma, the city resolution and, logically, the findings underlying that resolution are evidence to be considered by the district court. Further, the district court's memorandum attached to the order explains this apparent reliance. The court states that it has found that the city has met all the legal requirements, apparently including that the taking be necessary or convenient, and that it does not have the authority to carve out a few acres for Paulucci. Later, the court specifically rejected Paulucci's contention as to the lack of necessity in condemning his property. [I]t is a governmental decision as to size. The Court does not have authority to substitute its views for the views of the City Council. In their wisdom and discretion decisions were made, and the court must adhere to that process, absent fraud, or arbitrariness or caprice. Finally, the court, in discussing the power of eminent domain, states: The Court only determines whether the government, (in this case Duluth) acted arbitrarily, capriciously, or fraudulently. This memorandum indicates not so much that the district court blindly followed the city's determinations, but, rather, that the court understood the limited scope of review over condemnation proceedings. Paulucci is correct in stating that the district court issued no specific findings regarding its own determination of necessity. Rather, it found that, in light of the limited scope of review, the city's determinations should be upheld. In Halbersma, after holding that the city council resolution's findings of public use and necessity were prima facie evidence of those characteristics of the condemnation, this court went on to review the record carefully to determine if the council's decision as to the need for the public improvement was arbitrary or capricious. In the trial transcript, there is much testimony as to the necessity, or lack thereof, for the Paulucci property to be included in this condemnation. At trial, Pauluccis' counsel elicited a great deal of testimony regarding possible alternatives to the site in issue. Therefore, it should be noted that, when reviewing a condemnor's decision on the necessity of its action, merely suggesting possible alternatives to the city's plan does not support a finding of arbitrariness. Metropolitan Sewer Board v. Thiss, 294 Minn. 228, 230, 200 N.W.2d 396, 397 (1972). There was a great deal of testimony supporting both sides of the issue of whether it is necessary for the city to condemn Pauluccis' food processing plant. Given the standard of review for a condemnor's determination of necessity, as discussed earlier, this split of evidence clearly supports upholding the city's decision. Paulucci contends that the city's decision to condemn the land that it did for the papermill development is prima facie arbitrary because the city made no independent finding of necessity, but, instead, relied solely on the studies of the joint venture. For this contention, Paulucci relies on this court's previous decisions concerning denials of special use permits. See Holasek v. Village of Medina, 303 Minn. 240, 226 N.W.2d 900 (1975); Metro 500, Inc. v. City of Brooklyn Park, 297 Minn. 294, 211 N.W.2d 358 (1973); Inland Construction Co. v. City of Bloomington, 292 Minn. 374, 195 N.W.2d 558 (1972). Apart from the fact that these cases concern the quasi-judicial act of applying a zoning ordinance to individual parcels and that this case concerns the purely legislative act of condemnation, these decisions stand for the proposition that a prima facie case of arbitrariness is established only in those cases in which a local legislative body does not provide a legally sufficient basis for its land use decision. By merely denying, for example, a conditional use permit without stating the basis on which such a decision is made, a local legislative body does not afford a reviewing court a record on which to determine whether the decision was, in fact, arbitrary. Thus, this court has held that, in such a case, such a decision is prima facie arbitrary. Here, a sufficient evidentiary basis exists. Whether the City of Duluth relied on the findings of another party or made findings of its own concerning the necessity to condemn the land it did, a record was, in either case, established on which a reviewing court could determine whether the condemnation was, in fact, arbitrary. A prima facie case of arbitrariness was not, in this case, established. Our decision might be different if the Chun King plant were actually in operation employing the 500 people contemplated. However, we must accept conditions as they are today. As the city points out, the buildings are over 100 years old and in a rather dilapidated condition. The entire zone was found to be marginal; thus, the condemnation proceedings could be justified on the basis of urban redevelopment even if a new paper plant were not being contemplated. It is also argued that the legislature and the courts have become far too lenient in allowing governmental units to exercise eminent domain in urban renewal projects, particularly where private property is condemned and then turned over to a new private venture. That argument may have some merit. However, after permitting so much new development in the Twin Cities area where an economic boom may be said to be in progress, it hardly seems appropriate to apply a more stringent rule to the City of Duluth and to northeastern Minnesota where economic depression and chronic unemployment have persisted for over a decade.