Bashir Moghul, Relator, vs. City of Minneapolis, Respondent.

Bashir Moghul, Relator, vs. City of Minneapolis, Respondent. A06-424, Court of Appeals Unpublished, February 27, 2007.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2006).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A06-424

 

Bashir Moghul,
Relator,
 
vs.
 
City of Minneapolis,
Respondent.

 

Filed February 27, 2007

Affirmed

Stoneburner, Judge

 

City of Minneapolis Department of Licenses and Consumer Services

 

Dennis S. Schertz, Schertz Law Office, 530 Helen Street North, Box 133, Hudson, WI, 54016 (for relator)

 

Jay M. Heffern, Minneapolis City Attorney, Erik E. Nilsson, Assistant City Attorney, Suite 300, 333 South Seventh Street, Minneapolis, MN 55402 (for respondent)

 

            Considered and decided by Stoneburner, Presiding Judge; Toussaint, Chief Judge; and Wright, Judge.

U N P U B L I S H E D  O P I N I O N

 

STONEBURNER, Judge

 

            In this certiorari appeal, relator challenges respondent city's decision to demolish a building that he owns, arguing that the city failed to exercise any discretion and that its decision was arbitrary, capricious, not supported by substantial evidence, and made on unlawful procedure.  We affirm.

FACTS

 

            Relator Bashir Moghul, an experienced redeveloper, is the owner of a two-story duplex that has been vacant since it was damaged by fire in the fall of 2004.  Moghul was notified by the Minneapolis Housing Inspections Division (Inspections) in early January 2006 that the damaged property "constitute[d] a nuisance" under Chapter 249 of the Minneapolis Code of Ordinances and that it would be on the agenda of the Public Safety and Regulatory Services Committee's (the committee) February 1 meeting.  Moghul was notified that if he wanted to contest Inspections' recommendations, he must provide Inspections with a statement itemizing the cost to rehabilitate the building to demonstrate the feasibility of rehabilitation.

            On February 1, 2006, Moghul appeared with counsel before the committee, which consisted of five members of the Minneapolis City Council.  Wayne Murphy, from Inspections, presented his summary to the committee, concluding that rehabilitation, estimated to cost between $231,000 and $262,700, was not economically feasible.  Murphy recommended demolition, which was estimated to cost between $22,500 and $27,000.

            Moghul's attorney explained that Moghul was prepared to start work immediately and presented proposals from a general contractor, an HVAC contractor, a plumbing contractor, and an electrical contractor totaling $114,840.  Moghul also presented a letter of credit for $150,000.

            Committee members questioned the delay in beginning to bring the property into compliance, and Moghul explained that he had been relying on previous co-owners who had failed to perform.  The difference between Moghul's estimate and Inspections' estimate was questioned and explained by Murphy as possibly relating to Inspections' use of "union scale" rates and better quality materials.  Murphy told the committee that Moghul had successfully brought two other properties up to code compliance.  A committee member moved the recommendation but asked staff to check information regarding the differences in the estimates and report to his office before respondent City of Minneapolis addressed the recommendation at a council meeting.  The motion carried.

            On February 10, 2006, the full city council met.  The committee chair told the council that the committee had 15 items, including the recommendation for demolition of Moghul's property, on the agenda.  The committee chair moved all of the items on the committee agenda.  On a roll-call vote, all of the items were approved except one that was pulled from the agenda.  Notice of the decision was published, and this certiorari appeal followed.

D E C I S I O N

 

I.          Standard of review

            The city's decision to demolish relator's building was a quasi-judicial administrative decision.  City of Minneapolis v. Meldahl, 607 N.W.2d 168, 171 (Minn. App. 2000).  This court may reverse such a decision if relator's substantial rights may have been prejudiced because the decision was "arbitrary or capricious," "made upon unlawful procedure," or "unsupported by substantial evidence in view of the entire record as submitted."  Minn. Stat. §  14.69 (f), (c), (e) (2006).    This court accords the city's decision a presumption of correctness.  In re Excess Surplus Status of Blue Cross and Blue Shield of Minn., 624 N.W.2d 264, 278 (Minn. 2001).  If there is a reasoned basis for the decision, it should be affirmed even if the reviewing court would have reached a different result if it had been the finder of fact.  Cable Commc'ns Bd. v. Nor-West Cable Commc'ns P'ship, 356 N.W.2d 658, 669 (Minn. 1984).  Review is limited to the evidence in the record, and the decision is upheld if the administrative action has a legal basis demonstrated by substantial evidence.  Id. at 668.

II.        Authority and procedure for demolition

            A city may enact and enforce ordinances that address the problem of hazardous buildings.  Minn. Stat. § 463.26 (2006); Meldahl, 607 N.W.2d at 171.  The City of Minneapolis enacted such an ordinance under this statutory authority, Minneapolis, Minn. Code of Ordinances § 249.10 (2006).  It ordered the demolition of the building on relator's property under Minneapolis, Minn. Code of Ordinances § 249.40 (2006).  At the time of the decision to demolish the building, section 249.40 (1), provided[1] in relevant part:

Before any action is taken to abate a nuisance condition . . . the division of inspections shall examine the building to ascertain whether the nuisance condition should be ordered for rehabilitation or demolition.  Among the criteria to be considered by the division of inspections, the Minneapolis Community Development Agency (MCDA) and the planning department are the following:

a.                   The need for neighborhood housing;

b.                   The historic value of the building;

c.                   The impact on the neighborhood and the ability of the neighborhood to attract future residents;

d.                   The capacity of the neighborhood to use the property;

e.                   The zoning and comprehensive plan classifications for the property use;

f.                    The market potential for the property;

g.                   The estimated cost of rehabilitation;

h.                   The severity and the history of neglect;

i.                    The availability of funds for rehabilitation to the owner;

j.                    The structural condition of the building.

 

Section 249.40 (2) provided for notice and hearing before an appropriate council committee.  The version of section 249.40 (3) and (4) in effect at the time of the council committee hearing provided procedures for that hearing:

                        [a]t the hearing, the division of inspections shall present an oral summary of the background and reasons for its recommendation.  A report, including any pertinent documents and photos shall be filed as part of the record.  All parties having an interest in the property may review department documents . . . prior to the hearing, and shall be permitted to present evidence in support of their position.  Parties having an interest in the property shall have the right to question witnesses at the hearing. . . .

 

                        Any interested parties seeking to demonstrate the feasibility of rehabilitation, shall, at least 48 hours prior to the hearing, provide to the division a statement itemizing the cost to rehabilitate the building.

 

Id. § 249.40(3),(4). 

            After the hearing, the committee recommends demolition or rehabilitation of the building and the

[d]ivision of inspections staff shall prepare findings and an order based upon the evidence and record of the hearing.  The committee shall make the findings and such order as it deems appropriate based upon the evidence and record of the hearing. . . . After council approval the order shall be mailed to the last known address of the owner to whom the building is registered with the division of inspections . . . .

 

Id. § 249.50(b) (2006).

            Moghul argues that the city failed to exercise any discretion because the city did not make an independent decision but merely "rubber stamped" the recommendation of the committee, which merely "rubber stamped" the recommendation of staff.  See Blue Cross, 624 N.W.2d at 274 (emphasizing that "[a]gencies must make their own independent decisions and not[]‘rubber stamp' the findings of a hearing examiner" (quotation omitted)).  The fact that an agency agrees with such findings does not prove that the agency is "rubber stamping" them.  In re Universal Underwriters Life Ins. Co., 685 N.W.2d 44, 46 n.3 (Minn. App. 2004).  On this record, we cannot conclude that the city failed to exercise any discretion.

III.       Decision was not arbitrary or capricious

            Alternatively, Moghul asserts that the committee's recommendation for demolition was arbitrary and capricious because the ordinance does not contain any criteria to guide the committee on how to proceed with a nuisance property.  We find this argument without merit and reject Moghul's assertion that the criteria listed in section 249.40 apply only to an initial determination of whether a building should be demolished or rehabilitated and do not apply to subsequent determinations by the committee and the city. 

            Moghul cites no legal authority to support this proposition, and the absence of specific criteria for consideration by the committee in making its recommendationor for the city in making its ultimate decisionleads to the logical conclusion that once Inspections has made a recommendation based on the factors set forth in the ordinance, the committee and the city will consider the same standards in evaluating whether to accept or reject the recommendation.   In this case, the criteria in the findings issued by the city council closely track the criteria listed in the ordinance. These include the need for neighborhood housing, the building's historic value, the building's neighborhood impact, the estimated rehabilitation cost and whether funds are available for rehabilitation, the building's structural condition, and the severity and history of neglect.  Minneapolis, Minn. Code of Ordinances, § 249.40(1).  IV.       Substantial evidence supports the decision

           Moghul asserts in his brief that the city had "no [rational] reason for believing that this building should be torn down, aside from the [c]ommittee's recommendation (unsupported by a single fact in the record) that this should be done."  But the record demonstrates that the committee, in making its recommendation to demolish, and the city council, in accepting the recommendation to demolish, properly relied on the expertise of Inspections and community-development-agency/community-planning-department staff, who examined the property, evaluated it on standards recited in the ordinance, and based recommendations on those standards.  See Blue Cross, 624 N.W.2d at 278 (stating that "deference should be shown by courts to the agencies' expertise and their special knowledge in the field of their technical training, education, and experience" (quotation omitted)).  The code violations noted in the record provide rational reasons for the city's decision to demolish rather than to rehabilitate the building.

            Moghul also argues that the city's decision to demolish was not supported by substantial evidence because the city disregarded Moghul's rehabilitation estimates.  But in making its decision, the city was entitled to credit the estimates presented by Inspections' staff in determining a reasonable figure for rehabilitation costs.  See id. (stating that deference should be given to agency's conclusion on conflicting testimony).   And the findings of fact adopted by the city list factors in addition to rehabilitation costs to support the decision to demolish, such as the history of housing violations at that location.  Moghul does not contest the city's findings on these factors, which supported the demolition decision, and has not met his burden of establishing that the city's findings are unsupported by evidence in the record.  See id. at 279 (stating that appealing party bears burden of establishing that findings are unsupported by evidence in record as a whole).  Because the city's findings are supported by evidence in the record and have a rational relationship to the criteria listed in the ordinance, the city did not act arbitrarily or capriciously in making its decision to demolish the building. 

V.        Any procedural error was not prejudicial

            Moghul also argues that the city's decision to demolish the building was made on an unlawful procedure because the city failed to mail its findings and order to him as required by Minneapolis, Minn. Code of Ordinances § 249.50(b).  This court reviews de novo the procedural due process afforded a party.  Zellman ex rel. M.Z. v. Indep. Sch. Dist. No. 2758, 594 N.W.2d 216, 220 (Minn. App. 1999), review denied (Minn. July 28, 1999).   

            The city does not dispute that it failed to mail the findings and order to Moghul as required by the ordinance, but argues that Moghul is not entitled to any relief from this error absent a showing that his substantial rights have been prejudiced.  See Minn. Stat. § 14.69 (2006); Blue Cross, 624 N.W.2d at 277.  Moghul has failed to establish such prejudice.  The record shows that Moghul received timely notice of the hearing before the committee, informing him of his rights to appear before the committee, to review the inspection file before the hearing, to examine and cross-examine witnesses, and to submit evidence to the committee.  Moghul appeared personally and with counsel before the committee and presented evidence and arguments to the committee.  Moghul was present when the committee adopted the staff recommendation for demolition.  The city's subsequent decision to demolish the building could not have come as a surprise to Moghul, and he was not substantially prejudiced by the failure to receive official notice of the city's action.  Although Moghul was not allowed to present further oral testimony before the city council, the record shows that he submitted a letter to the council in support of his request to rehabilitate the property.

            Moghul also argues that neither Inspections nor the committee made the findings required by the ordinance to support the recommendation to demolish the building.  See Minneapolis, Minn. Code of Ordinances § 249.50.  But the record shows that the committee made "Findings of Fact, Conclusions and Recommendation," which were adopted by the city council on February 10 after the committee hearing held February 1.  And the findings refer to the chapter 249 findings and recommendations of the zoning/planning department and Inspections.  We conclude that the findings and recommendations satisfy the requirement of the ordinance, which does not require a separate set of findings to be made by the city council, but only council "approval."

            Affirmed.

[1] Sections 249.40 and 249.50 were amended in May 2006, and the amendments were effective October 1, 2006.  Minneapolis City Council, ORDINANCE2006-Or-059, (May 26, 2006), available at http://www.ci.minneapolis.mn.us/council/archives/proceedings/2006/20060526-proceedings.pdf.