Cooperative Power Association, a Minnesota cooperative corporation, petitioner, Respondent, vs. Danny O. Lundell, et al., Appellants, County of Goodhue, Respondent.

Cooperative Power Association, a Minnesota cooperative corporation, petitioner, Respondent, vs. Danny O. Lundell, et al., Appellants, County of Goodhue, Respondent. A04-1045, Court of Appeals Unpublished, January 11, 2005.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A04-1045

 

Cooperative Power Association,

a Minnesota cooperative corporation,

petitioner,

Respondent,

 

vs.

 

Danny O. Lundell, et al.,

Appellants,

 

County of Goodhue,

Respondent.

 

Filed January 11, 2005

Affirmed
Crippen, Judge*

 

Goodhue County District Court

File No. C3-03-809

 

Peter A. Koller, Paul B. Zisla, Lorie A. Klein, Moss & Barnett, P.A., 4800 Wells Fargo Center, 90 South Seventh Street, Minneapolis, MN 55402 (for respondent Cooperative Power Association)

 

Lance R. Heisler, Lampe, Swanson, Morisette & Heisler, LLP, 105 East Fifth Street, P.O. Box 240, Northfield, MN 55057 (for appellants)

 

Carol K. Lee, Assistant Goodhue County Attorney, Goodhue County Justice Center, 454 West Sixth Street, Red Wing, MN 55066-2475 (for respondent Goodhue County)

 

            Considered and decided by Kalitowski, Presiding Judge, Wright, Judge, and Crippen, Judge.

U N P U B L I S H E D   O P I N I O N

CRIPPEN, Judge

            This appeal challenges the district court's ultimate finding of need for the quick-take under Minn. Stat. § 117.042 (2002) of an acreage used for a telecommunications tower.  Because the record contains adequate evidence to support these findings, we affirm. 

FACTS

            Respondent Cooperative Power Association leased a 4.5-acre tract of Goodhue County land from appellants Danny and Mary Lundell for its telecommunications tower.   The governing lease, which ran until 2015 with an option to renew until 2030, provided for yearly rent of $450 with occasional percentage increases.  Through a management service agreement, the power association, which generates and distributes electricity to member cooperatives, delegated authority to Great River Energy, another electric cooperative, to act on its behalf.

            In 2002 appellants negotiated unsuccessfully with Great River for a revised lease, which included a substantial increase in rent to $9,000 per year.  When the parties appeared to reach an agreement but negotiations broke down, appellants sent Great River a notice claiming default under the proposed amended lease.  Appellants declined Great River's offer to purchase the property. 

            The Great River board of directors passed a resolution stating that, in order to assure continuing access to and use of the telecommunications tower, it must acquire fee title to the tower site on behalf of Cooperative Power Association by eminent domain and use the "quick-take" procedure under Minn. Stat. § 117.042 (2002) to take title before the filing of an award by the court-appointed commissioners.[1]  After a hearing, the district court granted the condemnation petition and quick-take motion. 

            Appellants challenge the district court's finding of necessity for the taking.  Although they do not disagree that the taking served a proper purpose, they dispute that fee title to the land was needed when the power association already maintained the right to operate the tower on the property under an extended lease.  Appellants also argue that the claim of need was pretextual, contending that the power association only sought fee title as a means to defeat the claim for increased rent.

D E C I S I O N

            In eminent domain proceedings, a party must show necessity and public purpose.  Absolute necessity is not required; it is enough that the proposed taking is reasonably necessary or convenient for the furtherance of a proper public purpose.  City of Duluth v. State, 390 N.W.2d 757, 764-65 (Minn. 1986). 

            Judicial review of condemnation proceedings is "very narrow."  In re Condemnation by Minneapolis Cmty. Dev. Agency, 582 N.W.2d 596, 598 (Minn. App. 1998) (quotation omitted), review denied (Minn. Oct. 29, 1998).  We are to reverse the condemning authority's determination only if we find that it was "arbitrary, unreasonable, or capricious, or that the evidence against the necessity or public use is overwhelming."  Hous. & Redevelopment Auth. v. Minneapolis Metro. Co., 259 Minn. 1, 16, 104 N.W.2d 864, 875 (1960).  In addition, we must affirm trial court findings on public purpose and necessity unless they are clearly erroneous, definitely suggesting that a mistake has been made.  Hous. & Redevelopment Auth. v. Schapiro, 297 Minn. 103, 109, 210 N.W.2d 211, 214 (1973). 

            The Great River board's declaration of necessity operates as prima facie evidence of public purpose and necessity.  See City of Pipestone v. Halbersma, 294 N.W.2d 271, 274 (Minn. 1980) (according prima facie effect to city council resolution regarding necessity of airport expansion).[2]  Respondent acknowledges appellants' argument that the determination of need enlarged its bargaining position after negotiations broke down, but asserts that the leasing dispute demonstrates the need for taking by showing that it was perilous to rely on the long-term lease arrangement for use of the property.  In lease negotiations, appellants proposed an increase in rent from $450 per year to $9,000 per year, demanded disclosure of information on usage of the property by subtenants, and questioned the use of the property as exceeding the boundaries specified in the lease.   The record indicates that, although respondent first indicated consent to a revised lease, it determined that a new lease arrangement was not feasible before signing the agreement.  Appellants then sent a notice of default as a precursor to eviction proceedings, based on the alleged unwritten agreement.

            Given this dispute concerning the lease arrangement, the district court did not err in finding necessity for the purpose of exercising eminent domain.  Although appellants assert a lack of need because respondent maintained rights under an existing lease, abundant evidence permitted the district court to conclude that the leasehold rights were less than peaceful and to make a finding of necessity for taking fee ownership.  This finding accords with judicial recognition that the power of eminent domain is not restricted by the existence of a previous contract that governs the rights between the parties.  Long Island Water Supply Co. v. City of Brooklyn, 166 U.S. 685, 689-90, 17 S. Ct. 718, 720 (1897); see also Vill. of St. Louis Park v. Minneapolis, Northfield & S. Ry. Co., 156 Minn. 164, 169, 194 N.W. 327, 330 (1923) (stating that "it is beyond the powers of public and private corporations effectually to contract that in the future no resort shall be had to the power of eminent domain to enlarge rights given by contract").  More specifically, courts in other jurisdictions have upheld a condemning authority's right to exercise the power of eminent domain despite the existence of a long-term lease agreement.  See, e.g., Bear Creek Dev. Corp. v. Dyer, 790 P.2d 897, 898 (Colo. App. 1990) (holding that lease agreement for access to communication towers did not preclude condemnation of property); Cent. Hanover Bank & Trust Co. v. Pan Am. Airways, 188 So. 820, 824 (Fla. 1939) (holding that existence of lease did not defeat airline's condemnation of property for business expansion).  As the district court recognized, the existence of a lease agreement was not a bar to condemnation proceedings.

            Appellants also contend that the significance of the lease dispute is diminished because respondent took an untenable position in lease negotiations.  They argue that their proposal merely raised rent to conform to market rates and challenge the credibility of respondent's spokesperson, who stated that the proposed rent grossly exceeded the property's market rental value.  But the district court had no duty to determine the merits of the dispute between the parties.  In similar circumstances, other courts have upheld the exercise of eminent domain despite evidence supporting the landowner's position in dispute with the condemning authority.  See City of Freeman v. Salis, 630 N.W.2d 699, 703 (S.D. 2001) (upholding city condemnation, given dispute as to terms of memorandum concerning ditch-clearing on property-owners' land); City of Marietta v. Edwards, 519 S.E.2d 217, 218 (Ga. 1999) (affirming city's condemnation of property that it had sold to property owners three months earlier, despite evidence of changing or inaccurate communications to property owners during sales transaction).  In this case, the parties' irreconcilable dispute called the stability of their lease arrangement into serious question; this fact alone supports the district court's finding of necessity.

            Appellants suggest that a "chilling effect" results from a state of law permitting an authority to use an ultimate show of force in determining an alternative arrangement from that originally negotiated.  There is no question that, through the landowners' eyes, the taking represented an unusual show of force, to which they might be expected to object.  But the taking is no less necessary and justified under the law when it occurs under these circumstances.  

            Appellants state additional arguments that a taking depends on a showing of good cause and that the district court failed to make findings to refute the assertion that the taking was exercised in bad faith.  But Minnesota courts have declined to invalidate takings on the ground of bad faith, viewing this argument through the lens of public purpose and necessity.  See City of Minneapolis v. Wurtele, 291 N.W.2d 386, 390 (Minn. 1980) (discussing concept of bad faith, stating that mere fact that project may benefit private business does not, without more, deprive project of public purpose); Schapiro, 297 Minn. at 108, 210 N.W.2d at 214 (refusing to find bad faith in condemning authority's decision to include landowners' property in project when their property was essential for project completion).  And appellants' argument on good cause merely reiterates the contention that there was no legitimacy in a taking that followed unsuccessful negotiations between the parties. 

Appellants also challenge the use of the quick-take procedure, which is a step in a condemnation proceeding that may be applied when an authority reasonably determines that it needs the property before the commissioners' award can be filed.  Minn. Stat. § 117.042 (2002); Wurtele, 291 N.W.2d at 396.  They argue that the application of the procedure in this case is in derogation of their leasehold right.  But the evidence shows that this right was encumbered by a pending, serious dispute between the parties concerning payment of property tax, the extent of use of the property, and the terms of the leasehold arrangement.  The district court did not err in using the procedure in this action. 

            Finally, appellants argue that the district court erred in adopting verbatim respondent's proposed findings and conclusions.  But a trial court's adoption of proposed findings is not by itself improper so long as those findings are not clearly erroneous.  Sigurdson v. Isanti County, 408 N.W.2d 654, 657 (Minn. App. 1987), review denied (Minn. Aug. 19, 1987).  Our review of the record indicates that the district court's findings, which reflected an independent consideration of the evidence, were not clearly erroneous.  

            Affirmed. 

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

[1] Minn. Stat. § 308 A. 101 (2002) authorizes the incorporation of cooperatives, such as the power association, and Minn. Stat. § 308 A. 201, subd. 13 (2002) provides "a cooperative that is engaged in the electrical, heat, light, power, or telephone business may exercise the power of eminent domain . . .."

[2] Appellants challenge the district court's specific finding that Cooperative Power Association had a policy to convert leased property to fee ownership, but this finding is adequately supported by an affidavit stating the existence of the policy.  More importantly, the presence or absence of such a policy is immaterial to a determination of need for a particular taking.