In re Application for Relocation Benefits by Susan G. Lecy on behalf of Chanhassen Chiropractic Center, P.A.

In re Application for Relocation Benefits by Susan G. Lecy on behalf of Chanhassen Chiropractic Center, P.A. A04-1235, Court of Appeals Unpublished, March 15, 2005.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2004).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A04-1235

 

In re Application for Relocation Benefits by

Susan G. Lecy on behalf of

Chanhassen Chiropractic Center, P.A.

 

Filed March 15, 2005

Affirmed

Kalitowski, Judge

 

City of Chanhassen

 

Kirk A. Schnitker, Jon W. Morphew, Schnitker & Associates, P.A., 2300 Central Avenue Northeast, Minneapolis, MN 55418 (for relator Chanhassen Chiropractic Center)

 

Thomas M. Scott, Campbell Knutson, 1380 Corporate Center Curve, #317, Eagan, MN 55121 (for respondent City of Chanhassen)

 

Daniel N. Rosen, Rosen & Rosen LLC, 150 South Fifth Street, Suite 3250, Minneapolis, MN 55402; and

 

Leland J. Frankman, 2000 Pillsbury Center, 220 South Sixth Street, Minneapolis, MN 55402; and

 

Keith Hughes, Quinlivan & Hughes, 400 South First Street, Suite 600, P.O. Box 1008, St. Cloud, MN 56302; and

 

Josiah E. Brill, Jr., James A. Yarosh, Siegel Brill Greupner Duffy & Foster PA, 100 Washington Avenue South #1300, Minneapolis, MN 55401; and

 

Bruce D. Malkerson, Howard A. Roston, Malkerson Gilleland Martin, 1750 Pillsbury Center, 220 South Sixth Street, Minneapolis, MN 55402 (for amicus curiae Minnesota Eminent Domain Institute)

 

            Considered and decided by Klaphake, Presiding Judge; Kalitowski, Judge; and Peterson, Judge.

U N P U B L I S H E D   O P I N I O N

KALITOWSKI, Judge

            Following an administrative appeal heard by three members of respondent City of Chanhassen's City Council (hearing officers), relator Chanhassen Chiropractic Center, P.A. challenges the hearing officers' decision affirming the Chanhassen City Manager's determination that relator is not eligible for relocation benefits.  This is relator's second appeal before this court on essentially the same set of facts.  Relator contends that (1) Chanhassen failed to appoint an impartial hearing officer; (2) relator was denied equal protection under the law in its first appeal by this court's interpretation of the due-process requirements of the Minnesota Uniform Relocation Act (MURA), Minn. Stat. § 117.50-.56 (2002); (3) the hearing officers erred in their interpretation of MURA; and (4) the city attorney was placed in "a legal quandary" of conflicting duties.  We affirm.

D E C I S I O N

 

I.

 

            This court reviews the quasi-judicial decisions of a broad array of executive bodies by writ of certiorari.  Dietz v. Dodge County, 487 N.W.2d 237, 239 n.3 (Minn. 1992).  And this court's review by certiorari is limited to an inspection of the record below, in which we are confined to determining (1) questions affecting jurisdiction; (2) the regularity of proceedings; and (3) whether the order in question was arbitrary, oppressive, unreasonable, fraudulent, under an erroneous theory of law, or without any evidence to support it.  Id. at 239.  This court will not retry facts or make independent credibility determinations, and it will uphold the decision if the tribunal "furnished any legal and substantial basis for the action taken."  Senior v. City of Edina, 547 N.W.2d 411, 416 (Minn. App. 1996) (quoting Beck v. Council of St. Paul, 235 Minn. 56, 58, 50 N.W.2d 81, 82 (1951)). 

            Relator argues that its constitutional right to due process was violated by the use of three members of the Chanhassen City Council to hear its appeal of the city manager's decision.  But this court addressed relator's due-process concerns in a prior appeal.  See Chanhassen Chiropractic Ctr., P.A. v. City of Chanhassen (Chanhassen I), 663 N.W.2d 559, 563 (Minn. App. 2003), review denied (Minn. Aug. 5, 2003).  And in this appeal, as in the first, relator does not present any specific examples of partiality.  Instead, relator merely discusses the right to an impartial decision-maker in judicial and quasi-judicial proceedings and asserts that the hearing officers had inherent conflicts of interest and could not possibly be fair and impartial. 

            It is well settled that the decision from a previous appeal controls the determination of a subsequent appeal if no new facts are established.  Nees v. Minneapolis St. Ry. Co., 221 Minn. 396, 397-98, 22 N.W.2d 164, 164 (1946).  Here, the only new fact relator presents is that three city council members affirmed the city manager's decision that relator was not eligible for relocation benefits.  Otherwise, relator simply re-asserts its argument that the hearing officers were not impartial because the city council had a pecuniary interest in the outcome of relator's claim and that the city council was placed in the dual role of respondent and hearing officer.  Accordingly, we reject relator's claim.  See State v. Modern Recycling, Inc., 558 N.W.2d 770, 772 (Minn. App. 1997) (stating assignment of error based on mere assertion and not supported by argument or authority is waived unless prejudicial error is obvious on mere inspection). 

II.

            Relator argues that it was denied equal protection under the United States and Minnesota Constitutions because Minn. Stat. § 117.52 and the Chanhassen I court's interpretation of the due-process requirements of that statute have created two distinct classes of displaced persons.  Relator further argues that the city council members misconstrued MURA and that the city attorney was placed in "a legal quandary" of conflicting duties.  Because we conclude that the terms and conditions of the property lease are dispositive of this case, we do not reach these arguments.

The Chanhassen Chiropractic Center (center), originally owned and operated by Dr. Donald Kristenson, was a tenant in the building located at 680 West 78th Street, Chanhassen, Minnesota.  The City of Chanhassen (city) purchased the building in 1996, with plans to build a park and library in front of Chanhassen City Hall.  Because the city did not have an immediate need for the building, it allowed the center and other tenants to continue doing business in the building.  Dr. Kristenson, as sole shareholder of the center, entered into a lease with the city that began on April 1, 1996, and ended on June 30, 1998.  After the lease expired, the center, under the ownership of Kristenson, continued to lease the space from the city on a month-to-month basis pursuant to the same terms.   

The following description of the lease's relevant terms is taken directly from this court's opinion in Chanhassen I, 663 N.W.2d at 560: 

 

The lease, which was signed by center president Donald Kristenson and Chanhassen's mayor and city manager, allowed the center to assign the lease only with the city's prior written consent.  The city also reserved the discretion to withhold consent.  The lease specifically stated that any change in the ownership of the lessees' shares of voting stock constituted a transfer and assignment of the lease requiring the city's prior written consent.  If certain specified conditions were met, the city agreed not to unreasonably withhold consent to assign the lease if it was notified at least 30 days prior to the effective date of assignment.  The lease also required that the center complete estoppel certificates within ten days of each request by the city.

 

            On January 11, 2002, Dr. Kristenson sold his interest in the center to Dr. Susan Lecy.  And on February 19, 2002, Dr. Lecy requested a "landlord's estoppel certificate and consent to assignment of lease" from the city.  The city indicated that it would consent to the assignment of lease only if Dr. Lecy waived any claim for relocation benefits.  Dr. Lecy refused to waive her claim for relocation benefits and did not pay rent in January or February.  And on March 8, 2002, the city commenced eviction proceedings against the center.

            The center voluntarily vacated the premises prior to its formal eviction, and requested an administrative hearing regarding its claim for relocation benefits.  City Manager Todd Gerhardt denied the center's claim for relocation benefits on May 15, 2002, and informed the center of its right to appeal to the Chanhassen City Council.  The center then petitioned the district court for a writ of mandamus, seeking to compel the city to select a fair and impartial hearing officer to decide its relocation benefits appeal.  The district court denied the center's petition.  And the Chanhassen I court affirmed the district court's decision on June 10, 2003.  Id. at 563.

Relator subsequently proceeded with an administrative-appeal hearing before three members of the city council, who affirmed the city manager's determination that relator was not eligible for relocation benefits.  The hearing officers' decision included findings that (1) Dr. Lecy acquired her interest in the center on January 11, 2002, with knowledge of the fact that the city would need possession of the property on April 1, 2002, as evidenced by a specific reference to that date in paragraph 3(d) of the purchase agreement drafted by Dr. Lecy's attorney; (2) the center, upon the transfer of ownership to Dr. Lecy in January 2002, did not make any further rent payments; (3) on March 8, 2002, the city served and filed an eviction summons and complaint for nonpayment of rent and transfer of ownership without the city's consent; and (4) the center vacated the premises prior to the date scheduled for the eviction trial.  Relator does not challenge any of these findings. 

As noted by the hearing officers, the lease required written consent by the city for any transfer of the lease occurring by change in ownership of the shares of the corporation.  Specifically, paragraph 13 of the lease stated: 

Lessee may not, voluntarily or by operation of law, assign, mortgage, pledge or otherwise transfer any right of Lessee under this Lease without the prior written consent of the City.  Any transfer of this Lease by merger, consolidation, reliquidation or any change in ownership of the shares of voting stock, shall constitute an assignment of this Lease and, as such, shall require the prior written consent of the City.

 

Thus, the transfer of ownership to Dr. Lecy without the written consent of the city constituted a violation of the lease.  In light of this violation, the hearing officers found that relator was not a "displaced person" because the center did not move as a result of the city's acquisition of the building, but because "it was being evicted for nonpayment of rent and for an illegal assignment of the lease." 

            Relator contends that the hearing officers erred in applying the definition of "displaced person" under MURA.  Relator argues that the pre-2003, broader definition of "displaced person" did not require the displaced person to have moved as a result of a project and, thus, it should still have been eligible for relocation benefits.  See Minn. Stat. § 117.50, subd. 3 (Supp. 2003).  But because the city did not approve the assignment of the lease, the center, as owned by Susan Lecy, had no rights under the lease.  Without a valid leasehold, relator cannot be considered a displaced person under any definition.  Accordingly, we reject relator's contention that under In re Relocation Benefits of James Bros. Furniture, Inc., 642 N.W.2d 91 (Minn. App. 2002), review denied (Minn. June 18, 2002), a party that never had a valid leasehold can be a displaced person.  Unlike this case, James Bros. involved an actual tenant with a valid month-to-month lease.  See id. at 95.  Further, as noted by the hearing officers, even if the transfer of ownership is ignored, the center moved because it was being evicted for nonpayment of rent and for an illegal assignment of the lease.  The center did not move as a result of the city's acquisition of the building. 

 The provisions of the lease control the right to occupy the building.  Thus, we cannot say that the hearing officers acted arbitrarily or under an erroneous theory of law.  The record supports the conclusion that (1) under the lease, the center owned by Dr. Lecy was a different entity than the center owned by Dr. Kristenson; (2)  relator had no rights under the lease because the city did not approve the assignment; and (3) the center owned by Dr. Lecy moved because it was being evicted for nonpayment of rent and for an illegal assignment. 

Affirmed.