TMC Stores, Inc., Appellant, vs. City of Robbinsdale, Minnesota, Respondent.

This opinion will be unpublished and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

A03-167

 

TMC Stores, Inc.,

Appellant,

 

vs.

 

City of Robbinsdale, Minnesota,

Respondent.

 

Filed ­­­December 9, 2003

Affirmed

Harten, Judge

 

Hennepin County District Court

File No. CT-01-3845

 

Paul V. Kieffer, Lock Box 282, 6066 Shingle Creek Parkway, Brooklyn Center, MN 55430; and

 

Benjamin F. Gallagher, 3210 Rice Street, Little Canada, MN 55126 (for appellant)

 

Thomas M. Scott, 317 Eagandale Office Center, 1380 Corporate Center Curve, Eagan, MN 55121 (for respondent)

 

            Considered and decided by Peterson, Presiding Judge, Toussaint, Chief Judge, and Harten, Judge.

U N P U B L I S H E D   O P I N I O N

 

HARTEN, Judge

 

            Appellant challenges the summary judgment granted to respondent municipality, arguing that fact issues preclude summary judgment on appellant's claims of interference with tenant's rights and inverse condemnation and that official immunity does not bar its claims of negligence and negligent misrepresentation. Because we see no genuine issue of material fact and no error of law, we affirm.

FACTS

 

            Thomas Hutchinson and his wife purchased a building and a small parcel of land surrounding it in 1999 for $792,350.  The building housed a retail store owned and operated by appellant TMC Stores, Inc., of which Hutchinson is the principal.  The building and land are situated in respondent City of Robbinsdale. 

            Appellant had an oral lease with the Hennepin County Regional Rail Authority (RA) to use part of a 29-acre parcel of land adjoining its store as a parking lot and display and storage area.  The lease expired in July 2000, but appellant continued to use the property.

            Respondent leased the parcel from RA in October 2000 because respondent planned to incorporate part of it in a development project.  Construction began in September 2000 and continued until mid-November.  Respondent then resurfaced the parking lot so appellant could use it during the winter. 

Appellant signed a sublease in November 2000 and continued using the property.  The sublease provided that, when construction resumed in spring 2001, the parking lot would be partially or totally unavailable and that appellant would have seven days' notice to remove property stored on the lot.  In consideration of the disruption caused by the construction, appellant was excused from paying rent from November 2000 to September 2001.[1]

            Appellant brought this action alleging unlawful taking, negligent misrepresentation, negligence, and breach of contract.  Respondent moved for and was granted summary judgment on those claims, but appellant was granted leave to amend its complaint to add counts of inverse condemnation and interference with its rights as a tenant.  Respondent again moved successfully for summary judgment.  Appellant now challenges the summary judgments, arguing that it has a claim for violation of tenant's rights prior to the sublease, that it has standing to assert a claim for taking, and that official immunity does not bar its claims of negligence and negligent misrepresentation.

D E C I S I O N

 

            On appeal from summary judgment, this court asks whether there are any genuine issues of material fact and whether the district court erred in its application of the law.  State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).

1.         Tenant's Rights

Appellant claims the district court failed to address its claim that respondent violated appellant's rights prior to the signing of the lease, i.e., from 3 October 2000 to 21 November 2000, and that this claim involves a factual dispute and should go to the jury.  "[T]he party resisting summary judgment must do more than rest on mere averments."  DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997).  A genuine issue of material fact must be established by substantial evidence.  Id. at 69-70.  

But appellant presented little evidence that it was respondent's tenant prior to signing the lease. In its 16-page memorandum opposing respondent's motion for summary judgment, appellant never argued that it was respondent's tenant prior to the signing of the lease; in fact, appellant asserted that it was respondent's tenant because "[o]n November 21, 2000, [appellant] signed a lease with [respondent]. . ." and "[u]ndisputed factual evidence shows [appellant] was offered a lease, executed the lease, and the lease was ratified by [respondent.]" 

The 40-page transcript of the summary judgment hearing includes only two references to the period prior to the signing of the lease.  First, appellant's attorney mentioned Hutchinson's affidavit in which he stated that respondent's assistant manager told him in June or July 2000 that respondent would not collect rent during the construction period.  From this, appellant's attorney asked the court to infer that appellant was respondent's tenant.  However, respondent itself did not lease the property until October 2000; it could not have subleased it to appellant before that time, and there is no evidence of a sublease prior to the sublease the parties signed on 21 November 2000.  

The second reference was, "in terms of the landlord/tenant claims for the fall [i.e., prior to the signing of the lease], we would argue that [appellant] was a tenant based not on [appellant's] testimony but on [the assistant manager's] testimony."   This "testimony" is actually an affidavit that does not mention any conversation with Hutchinson in June or July 2000. 

The unsupported statement in Hutchinson's affidavit that respondent said appellant would not be charged rent during the construction period is not substantial evidence giving rise to a genuine issue of material fact as to whether appellant was respondent's tenant prior to the signing of the lease.  No genuine issue of material fact precludes the summary judgment on this issue.

2.         Taking of Property

The district court found that, "Based on Hendrickson [v. State, 267 Minn  436, 127 N.W.2d 165 (1964)] . . . only the property owner may bring an action for inverse condemnation based on lost roadway access.  Accordingly, [appellant] has no standing to bring an action for inverse condemnation."  Hendrickson holds that, in measuring damages for a taking, "the diminution in value of only the real estate is relevant."  Id. at 447, 127 N.W.2d at 173.  See also State by Humphrey v. Strom, 493 N.W.2d 554, 560-61 (Minn. 1992) ("In a partial-taking condemnation action, evidence of construction-related interferences is admissible, not as a separate item of damages, but as a factor to be considered by the finder of fact in determining the diminution in market value of the remaining property.").  Because only the owner of real estate is affected by a diminution in its value, only an owner has standing to bring an action for taking. 

At the hearing, appellant moved for leave to amend the complaint to add the property owners, Hutchinson and his wife, as plaintiffs.  A district court has broad discretion to grant or deny leave to amend a complaint; its ruling will not be reversed absent a clear abuse of discretion.  Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). The district court orally denied the motion on the ground that no compensable taking had occurred. 

One criterion of a compensable taking is a diminution in the value of property.  Hendrickson, 267 Minn. at 447, 127 N.W.2d at 173.  The district court found that the construction had ultimately increased the value of the property, and that finding is supported by Hutchinson's testimony.  He testified that access to his property from Hubbard Avenue was as good as it had been and that Hubbard Avenue had been significantly improved.

The district court did not abuse its discretion in denying appellant's motion to amend the complaint.

3.         Official Immunity

            The district court dismissed appellant's claims for negligence and negligent misrepresentation after finding that both claims were based on respondent's discretionary acts.  The negligent misrepresentation claim is based on an Hutchinson's affidavit in which he states that various officials and employees of respondent told him, prior to the construction project, what would happen during the construction project.  Public officials engaged in duties that call for the exercise of judgment or discretion are not liable unless they commit a willful or malicious act.  Pletan v. Gaines, 494 N.W.2d 38, 40 (Minn. 1992).  Appellant argues that, because the predictions allegedly made by respondent's officials and employees were not fulfilled, they were made maliciously; but appellant offers nothing in support of this argument.  Moreover, although appellant says this case "was about enforcing the promises made, not whether the promises should have been made or if they were made," there is no evidence except Hutchinson's affidavit to indicate that any promises were made.  The district court determined that appellant presented no evidence of a contract whereby respondent promised to cover appellant's business losses, and appellant does not challenge that determination. 

Appellant argues that misrepresentation of a fact is not protected by official immunity and relies on Northernaire Prod. Inc. v. Crow Wing County, 309 Minn. 386, 244 N.W.2d 279 (1976) for this argument.  The district court rejected appellant's interpretation, first because Northernaire never reached the immunity issue and second because, although Northernaire notes in dictum that the supreme court has "recognized a cause of action against a city employee for negligent misrepresentation of a matter of fact," id. at 388, 244 N.W.2d at 281, the district court found that recognition is "subject to those defenses and immunities ordinarily applicable, including the doctrine of official immunity."[2]  

As to negligence, the district court found that "[appellant] sets forth its negligence claim . . . which alleges simply that the City ‘negligently conducted the construction project.'  [Appellant] did not argue its negligence claim at the hearing on this motion, and in opposing [respondent's] motion for summary judgment, [appellant] does not substantiate its negligence claim . . . ."  Appellant's brief similarly fails to specify any negligent act of respondent.  In considering the application of official immunity, the court must be aware of  "the precise governmental conduct at issue."  Olson v. Ramsey County, 509 N.W.2d 368, 371 (Minn. 1993).

Moreover, the construction was performed not by respondent's employees but by a private contractor; respondent's engineering department merely supervised and oversaw the work.  Supervision is not a ministerial task but a discretionary task, and, as such, is entitled to official immunity.  See generally Wiederholt v. City of Minneapolis, 581 N.W.2d 312 (Minn. 1998) (distinguishing discretionary from ministerial tasks in the context of official immunity).  The district court did not err in dismissing appellant's claims of negligent misrepresentation and negligence on the grounds of official immunity.

No genuine issue of material fact precludes summary judgment on the claims of interference with tenant's rights and taking, and official immunity bars the claims of negligence and negligent misrepresentation.

Affirmed.      

[1] In fact, no rent had been paid since July 2000, when appellant's lease with RA expired.

[2]Appellant's reliance on Mohler v. City of St. Louis Park, 643 N.W.2d 623 (Minn. App. 2002), review denied (Minn. 16 July 2002),is misplaced: that case merely cites Northernaire and does not hold that claims for misrepresentation are not subject to official immunity.