David Ness, et al., Appellants, vs. County of Crow Wing, et al., Respondents.

David Ness, et al., Appellants, vs. County of Crow Wing, et al., Respondents. A06-1690, Court of Appeals Unpublished Decision, December 18, 2007.

This opinion will be unpublished and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
A06-1690
 
David Ness, et al.,
Appellants,
 
vs.
 
County of Crow Wing, et al.,
Respondents.

 

Filed December 18, 2007

Affirmed

Wright, Judge

 

Crow Wing County District Court

File No. C5-05-1278

 

David K. Nightingale, Sarah L. Krans, Bernick & Lifson, 1200 The Colonnade, 5500 Wayzata Boulevard, Minneapolis, MN  55416 (for appellants)

Stephen G. Andersen, Ratwik, Roszak & Maloney, 300 U.S. Trust Building, 730 Second Avenue South, Minneapolis, MN  55402 (for respondents)

 

 

            Considered and decided by Wright, Presiding Judge; Shumaker, Judge; and Stoneburner, Judge.

U N P U B L I S H E D   O P I N I O N

WRIGHT, Judge

            Appellant property owners challenge respondent county's denial of their application for a construction permit.  Appellants argue that (1) respondent's decision was arbitrary and capricious and violated its own zoning ordinance; (2) the district court erroneously failed to consider trial testimony relevant to the arbitrary and capricious nature of respondent's decision; (3) denying their application for a construction permit and granting their neighbor's application violated the constitutional guarantees of equal protection; and (4) the zoning ordinance on which respondent based its decision operated as an unconstitutional taking of their property.  We affirm.

FACTS

Appellants David and Nancy Ness (the Nesses) own residential lakefront property in Crow Wing County.  "Parcel A," which the Nesses have owned since 1993, has 75 feet of lakeshore frontage and covers an area of approximately 18,750 square feet.  Parcel A also includes a 2,361 square-foot cabin.  Under the applicable zoning ordinance, Parcel A ordinarily would be required to have at least 150 feet of lakeshore frontage and cover an area of at least 40,000 square feet.[1]  But because Parcel A has been in Nancy Ness's family for more than 50 years, the ordinance explicitly allows these existing nonconformities to continue as a substandard use.[2] 

In December 2002, the Nesses purchased "Parcel B," which shares its southern border with Parcel A, and is almost twice as large.  With 200 feet of lakeshore frontage and an area of approximately 50,000 square feet, Parcel B meets the applicable lot-area and width requirements established in the zoning ordinance.  The cabin on Parcel B, however, is located only 33 feet from the lake, and therefore does not conform to the ordinance's 100-foot setback requirement.[3]  The Nesses intended to demolish this cabin, build a retirement home on Parcel B, and give Parcel A to their children. 

After the Nesses acquired Parcel B, however, the county informed the Nesses that, because of Parcel A's nonconformity, under Crow Wing County, Minn., Zoning Ordinance § 7.5(C)(4) (1972), when these contiguous lots came under the same ownership, they merged.  Therefore, when the Nesses purchased Parcel B, Parcel A merged with Parcel B, creating a single parcel totaling less than 70,000 square feet (Parcel AB).  According to the county, merging the two parcels meant that, (1) because the new home would be the Nesses' primary residence, their original cabin would be classified as a guest house; (2) their original cabin exceeded the maximum dimensions for a guest house; and (3) Parcel AB did not meet the lot-area requirement for both a primary residence and a guest house.[4]  

In March 2004, the Nesses applied for variances that would permit Parcels A and B to exist as a substandard duplex lot, permit their original cabin on Parcel A to remain as a nonconforming guest house, and replace the cabin on Parcel B with a new primary residence.  After the county denied these variances, the Nesses attempted to sell Parcel B, but the sale was abandoned when the county informed the would-be purchasers that section 7.5(C)(4) prohibited the sale. 

In February 2005, even though the county's permitting supervisor advised the Nesses that the county would deny the proposed construction permit without a variance, the Nesses applied for a permit to demolish the existing structures on Parcel B and construct a new 2,892 square-foot home that purportedly would comply with all applicable zoning ordinances.  The county denied this permit, once again citing section 7.5(C)(4).  Believing that the county had incorrectly interpreted its ordinance, the Nesses appealed the denial to the county's board of adjustment, which also denied their application.  

            Following the county's final decision, the Nesses filed a complaint in district court, seeking relief on four grounds: (1) the county's denial to issue the permit was "unreasonable, arbitrary and capricious, contrary to law, and [did] not represent a legitimate public purpose"; (2) the denial violated their right to equal protection under the federal and state constitutions; (3) the denial violated their right to due process; and (4) the county's action constituted an uncompensated regulatory taking.  The Nesses moved for partial summary judgment on the first ground, but the district court granted summary judgment in the county's favor.  Following a bench trial, the district court found in favor of the county on the remaining claims.  And although the Nesses argued in their closing memorandum that the testimony at trial shed new light on their first claim, the district court declined to allow them to "re-litigate" this issue, reasoning that it had already been decided on summary judgment.  This appeal followed.

 

D E C I S I O N

I.

            The Nesses challenge the county's denial of their application for a construction permit as arbitrary and capricious.  Specifically, they assert that the county denied their application based on a misinterpretation of the Crow Wing County Zoning Ordinance.  The interpretation of a zoning ordinance is a question of law, which we review de novo.  Tuckner v. Twp. of May, 419 N.W.2d 836, 837 (Minn. App. 1988).  In doing so, we give terms in the ordinance their plain and ordinary meaning, construing them strictly against the county and in favor of the property owner, while considering the ordinance in light of its underlying policy.  Id. 

            Crow Wing County, Minn., Zoning Ordinance § 7.5(C)(4) (1972), provides:

If, in a group of two or more contiguous lots under the same ownership, any individual lot does not meet the requirements of Section 24.4 and 24.5 of this Ordinance, the lot must not be considered as a separate parcel of land for the purposes of sale or development.  The lot must be combined with the one or more contiguous lots so they equal one or more parcels of land, each meeting the requirements of Section 24.4 and 24.5 of this Ordinance as much as possible.

 

Once triggered, section 7.5(C)(4) merges previously separate contiguous lots owned by the same person.  It is undisputed that Parcel A does not meet the lot-area and lot-width requirements of Crow Wing County, Minn., Zoning Ordinance § 24.4(A) (1972).  And although the cabin on Parcel B is a nonconforming use, the lot itself is conforming.

            The Nesses argue that section 7.5(C)(4) is clearly intended "to transform nonconforming lots into one or more conforming parcels, not to transform a conforming parcel into one large nonconforming parcel."  In support of this argument, they contend that section 7.7 of the zoning ordinance specifically prohibits transforming a conforming parcel into a nonconforming parcel and urge us to interpret section 7.7 as a limit on the operation of section 7.5(C)(4).  The county counters that the Nesses triggered section 7.5(C)(4) when they purchased Parcel B, instantaneously merging it into Parcel AB.  Hence, the merger did not transform a conforming lot into a nonconforming lot because Parcel B ceased to exist as an independent entity.  Thus, we must analyze the language of section 7.5(C)(4) to determine whether the Nesses own two separate entities"Parcel A" and "Parcel B"or a single, undivided entity"Parcel AB". 

            Applying standard grammar and syntax to analyze the plain meaning of the ordinance, section 7.5(C)(4)'s structure implies a conventional "if . . . then . . . " proposition.  Cf. First Nat'l Bank of the N. v. Auto. Fin. Corp., 661 N.W.2d 668, 670 (Minn. App. 2003) ("Plain meaning embodies ordinary use of the language in the context of the whole-act structure, applying the usual conventions of grammar and syntax.").  As such, section 7.5(C)(4) can be divided into two parts:

[If], in a group of two or more contiguous lots under the same ownership, any individual lot does not meet the requirements of Section 24.4 and 24.5 of this Ordinance,

 

[then] the lot must not be considered as a separate parcel of land for the purposes of sale or development.  The lot must be combined with the one or more contiguous lots so they equal one or more parcels of land, each meeting the requirements of Section 24.4 and 24.5 of this Ordinance as much as possible.

 

Crow Wing County, Minn., Zoning Ordinance § 7.5(C)(4).  The first part of the ordinance applies to "individual lot[s]" that are "in a group of two or more contiguous lots under the same ownership."  Thus, to apply section 7.5(C)(4), one must determine first whether the individual lots at issue constitute a "group" as defined by the terms of the ordinance.  To constitute a "group" under this provision, three conditions must be met: (1) at least two lots are contained therein; (2) such lots are contiguous; and (3) all such lots are under the same ownership.  Whether a particular lot is conforming is irrelevant to the ordinance's requirements for inclusion in the defined "group."  But in such a group, the existence of "any individual lot" that fails to "meet the requirements of Section 24.4 and 24.5" will trigger the second or consequential part of the ordinance.

            Once triggered, section 7.5(C)(4) prohibits any individual nonconforming lots within the group from being "considered as a separate parcel of land for the purposes of sale or development."  No longer a "separate" parcel within the group, the nonconforming lot ceases to exist as an independent entity and must be "combined with the one or more contiguous lots," creating a new parcel of land.  Indeed, the language plainly contemplates that the newly created parcel might be nonconforming, as section 7.5(C)(4) requires that each new parcel created "meet[s] the requirements of Section 24.4 and 24.5 of this Ordinance as much as possible."  (Emphasis added).  

            The Nesses' argument fails because, in order to transform Parcel B into a nonconforming parcel, it must still exist as a "parcel," which is contrary to the plain language of section 7.5(C)(4).  Prior to February 21, 2003, Parcel A and Parcel B were owned by different people.  Although contiguous, the parcels fell outside the plain language of section 7.5(C)(4), which applies only when contiguous parcels are "under the same ownership."  When the Nesses purchased Parcel B, however, both Parcel A and Parcel B became individual lots "in a group of two or more contiguous lots under the same ownership."  Because Parcel A was a member of the group and failed to meet the requirements of sections 24.4 and 24.5 of the zoning ordinance, namely, the minimum lakefront lot-size requirements of section 24.4(A), Parcel A triggered the second or consequential part of section 7.5(C)(4).    

            Once section 7.5(C)(4) was triggered, neither Parcel A nor Parcel B continued to exist "as a separate parcel of land for the purposes of sale or development."  Because Parcel B ceased to exist, at least for the purposes of sale or development, at the moment it was "under the same ownership" as Parcel A, the Nesses never owned "Parcel B" as a distinct parcel.  Rather, their purchase created a completely new entity, "Parcel AB." 

            The Nesses' argument that section 7.7 limits this merger also is unavailing.  Section 7.7 states that "[t]he change from a conforming use or structure to a nonconforming use or structure . . . shall be a Violation of this Ordinance."  Crow Wing County, Minn., Zoning Ordinance § 7.7 (1972).  An ordinance, like a statute, is construed as a whole while attempting to harmonize apparent conflicts and give effect to all of its component parts.  Yeh v. County of Cass, 696 N.W.2d 115, 128 (Minn. App. 2005), review denied (Minn. Aug. 16, 2005).  In isolation, section 7.7 might appear to prohibit an application of section 7.5(C)(4) that "changes" Parcel B from a distinct conforming lot into part of a larger nonconforming lot.  But this construction ignores another provision that restricts the type of "change" referred to in section 7.7 to a change in "use, size or shape, structure size or location, structure addition, or any other physical change of any nature which may affect classification or compliance" with the zoning ordinances.  Crow Wing County, Minn., Zoning Ordinance, Definition 23 (1972) (emphasis added) (defining "changes").  The "change" that section 7.7 refers to, therefore, is the alteration of a physical characteristic of the property, not its legal status.  The apparent conflict between section 7.5(C)(4) and section 7.7 is merely superficial because the transformation that occurred by operation of section 7.5(C)(4)  is not a "change" within the meaning of section 7.7. 

            The Nesses further argue that the county failed to establish that Parcels A and B were "under the same ownership."  Specifically, they maintain that the county based its determination that the Nesses owned both Parcels A and B on tax records, when one of the prior owners remained listed as an owner of Parcel B in the county auditor's records.  This argument is without merit because "the property owner named in the current tax books," not the person listed in the auditor's records, is used "[f]or the purpose of determining who owns property." Crow Wing County, Minn., Zoning Ordinance, Definition 106 (1972) (defining "property owner").   Because the current tax records listed the Nesses as the owners of both parcels, the county was entitled, if not obligated, to use these records to determine whether they are "under the same ownership" for the purposes of section 7.5(C)(4).[5] 

            In sum, we hold that the county denied the Nesses' permit application based on a correct interpretation of its ordinance.  This denial, therefore, was not arbitrary and capricious.

II.

            The Nesses also challenge the district court's decision not to consider testimony presented at trial that, they maintain, was relevant to their claim that the county's denial of the permit application was arbitrary and capricious.  This claim was the subject of the Nesses' pretrial motion for partial summary judgment, which the district court granted in favor of the county.  Before the district court, the Nesses argued that summary judgment was granted without the benefit of the permitting supervisor's testimony, which is dispositive evidence of their claim that the permit was arbitrarily and capriciously denied.  Citing its partial summary judgment order, the district court acknowledged the Nesses' attempt "to re-litigate their First Cause of Action at trial" and declined to rescind its earlier decision.  The Nesses argue that, because the district court's grant of partial summary judgment was subject to revision as a nonfinal judgment under rule 54.02, the decision to refrain from reconsidering this claim was erroneous.

            When a case involves multiple claims, a district court may direct a final judgment to be entered on some, but not all, of those claims.  Minn. R. Civ. P. 54.02.  To do so, the district court must expressly determine that "there is no just reason for delay" in entering a final judgment on the claim; it also must expressly direct entry of a final judgment.  Id.  When the district court does not follow this protocol, any "order or other form of decision, however designated," that does not adjudicate all of the parties' various rights and liabilities "is subject to revision at any time before the entry of [a] judgment" that does.  Id. 

            We typically encounter rule 54.02 when determining whether a particular district court action is appealable.   Pederson v. Rose Coop. Creamery Ass'n, 326 N.W.2d 657, 660 (Minn. 1982).  Under the rules of appellate procedure, a party has the right to appeal a partial judgment entered pursuant to rule 54.02.  Minn. R. Civ. App. P. 103.03(a).  Thus, whether an order granting partial summary judgment is a "final" partial judgment determines whether the losing party is entitled to immediate appellate review or must wait until all other claims are decided.  Pederson, 326 N.W.2d at 660.  Similarly, whether the partial judgment is "final" determines whether it is an event that triggers the time limits for filing an appeal.  See Minn. R. Civ. App. P. 103.03(a) (complying partial judgments appealable); Minn. R. Civ. App. P. 104.01, subd. 1 (setting times for appealing judgment or order).  In this context, rule 54.02 is designed to avoid piecemeal appellate litigation while simultaneously protecting parties from potential prejudice when the district court adjudicates some, but not all, of their rights or liabilities.  2 David F. Herr & Roger S. Haydock, Minnesota Practice § 54.11 (4th ed. 2005); accord Fin. Relations Bd., Inc. v. Pawnee Corp., 308 Minn. 109, 111, 240 N.W.2d 565, 566 (1976) (quoting previous version of Minnesota Practice).   

            Appellate courts also have occasionally used the rule's plain language to permit a district court to revise an earlier ruling before a traditional final judgment is entered.  E.g., Pederson, 326 N.W.2d at 660 (advising district court that rule 54.02 was tool for revising mistaken partial order); Denike v. W. Nat'l Mut. Ins. Co., 473 N.W.2d 370, 373 (Minn. App. 1991) (permitting revision of order granting summary judgment on all issues except attorney fees and costs).  Here, the district court neither expressly determined that there was "no just reason for delay" in entering a final judgment on the partial summary judgment motion nor expressly directed a final judgment to be entered on it.  Under the plain language of rule 54.02, therefore, the district court was not precluded from revising its earlier ruling.

            But the record does not remain open for the submission of new evidence after the district court makes its order granting partial summary judgment, even if the district court does not make its order final by making the express determination that there was no just reason for delay in the entry of judgment.  Dalco Corp. v. Dixon, 338 N.W.2d 437, 440 (Minn. 1983).  Otherwise, a pretrial grant of summary judgment would either have to be expressly made finaland therefore appealableor "be subject to continued changes throughout the course of litigation as new evidence was discovered and submitted."  Id.  This result would "undermine[ ] the expediency which makes summary judgment a useful procedural practice."  Id. 

            The Nesses took advantage of the procedural expediency presented by summary judgment.  While, in hindsight, they may have considered this course of action a less desirable strategy, neither the record before us nor the circumstances surrounding the entry of summary judgment lead us to conclude that the district court erred by declining to permit relitigation of the claim.

 

 

III.

 

            The Nesses next argue that the county deprived them of their right to equal protection by denying their permit, but granting one to their neighbors.  We review the decisions of a local zoning authority independent of any of the district court's findings or conclusions.  Nw. Coll. v. City of Arden Hills, 281 N.W.2d 865, 868 (Minn. 1979).

            A zoning ordinance "must operate uniformly on those similarly situated."  Billy Graham Evangelistic Ass'n v. City of Minneapolis, 667 N.W.2d 117, 126 (Minn. 2003) (quoting Nw. Coll., 281 N.W.2d at 869).  This is because the equal protection clauses of the United States and Minnesota constitutions prohibit treating property owners differently "for reasons unexpressed or unrelated to the health, welfare, or safety of the community or any other particular and permissible standards or conditions imposed by the relevant zoning ordinances."  Nw. Coll., 281 N.W.2d at 869.  If two property owners are similarly situated, disparate treatment "may be an indication that the local government is acting unreasonably or arbitrarily."  Billy Graham Evangelistic Ass'n, 667 N.W.2d at  126. 

            The Nesses argue that they were similarly situated to their neighbors, the Trones, to whom the county granted a permit nearly identical to the one they were denied earlier the same year.  The facts establish, however, that because the parcels being compared and the proposed construction projects are distinguishable, different actions taken on each permit application can be justified.  Although Parcel A is roughly the same size as the Trones' nonconforming parcel, as addressed above, "Parcel A" no longer exists.  The Nesses own "Parcel AB," which is approximately 50,000 square feet larger than the Trones' parcel.  Further, the Trones applied for a permit to demolish and replace the single cabin on their property.  By contrast, the Nesses sought to demolish and replace a second one on theirs.  These differences between the two applications demonstrate that the Nesses and the Trones are not "similarly situated." 

IV.

            Finally, the Nesses claim that the county's actions constitute an uncompensated regulatory taking.  When the relevant facts are undisputed, whether governmental action constitutes an unconstitutional taking is a question of law, which we review de novo.  Concept Props., LLP v. City of Minnetrista, 694 N.W.2d 804, 822 (Minn. App. 2005), review denied (Minn. July 19, 2005).

             "[T]he right to use property as one wishes is subject to and limited by the proper exercise of the police power in the regulation of land use." McShane v. City of Faribault, 292 N.W.2d 253, 257 (Minn. 1980) (citing Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S. Ct. 114 (1926)).       The Nesses argue that the county's decision to deny their permit application was not a legitimate exercise of the county's police power.  It is well-established that zoning regulations may legitimately fix minimum lot-size and setback requirements "in order to minimize . . . the evils of overcrowding and the like."  Euclid, 272 U.S. at 388, 47 S. Ct. at 118.   And although owners are not necessarily required to bring their property into compliance with every new regulation, see Crow Wing County, Minn., Zoning Ordinance §§ 7.5, 24.11(A) (1972), the government may regulate land use  in a way that will be conducive to nonconformities being ultimately phased out.  Hawkinson v. County of Itasca, 304 Minn. 367, 373, 231 N.W.2d 279, 282 (1975). 

            Section 7.5(C)(4) facilitates the phase-out of nonconforming uses by providing owners of adjoining lots an incentive to bring their property into conformity.  Cf. Tuckner, 419 N.W.2d at 837-38 (discussing policy behind similar ordinance).  Under the plain language of section 7.5(C)(4), the merger of adjoining lots only strips lots of their independent identities "for the purposes of sale or development," not for use as a home.  Crow Wing County, Minn., Zoning Ordinance § 7.5(C)(4).  Indeed, the ordinance expressly provides that substandard uses of lakefront property "shall be allowed to continue."  Crow Wing County, Minn., Zoning Ordinance § 24.11(A).  But if an owner proposes to do something new with his property, the property must be brought into conformity with governing land-use regulations.  See Crow Wing County, Minn., Zoning Ordinance § 7.5(C)(4) (merging parcels "for the purposes of sale or development").  This ordinance provision requires owners to bring their property as a whole into conformity before selling or developing a discrete subset of it. 

            A legitimate purpose by itself, however, is insufficient if the regulation does not employ reasonable means to achieve it.   Goldblatt v. Town of Hempstead, 369 U.S. 590, 595-96, 82 S. Ct. 987, 990-91 (1962).  The Nesses argue that the county's application of section 7.5(C)(4) to "creat[e] one large nonconforming parcel where previously there was a small nonconforming parcel and a conforming parcel" does not "substantially advance" the county's legitimate interest in phasing out nonconformities.  Thus, we must determine (1) whether there is an "essential nexus" connecting the county's legitimate interest in phasing out nonconformities and the merger used to achieve it, and (2) if so, whether the connection is close enough in nature and extent.  Dolan v. City of Tigard, 512 U.S. 374, 391, 114 S. Ct. 2309, 2320 (1994). 

            There is ample connection between merging the two lots and the county's asserted interest in phasing out nonconforming uses.  The Nesses testified that they purchased Parcel B specifically so that they could give Parcel A to their children and "build a retirement home right next door to them."  The Nesses purchased Parcel B precisely because it was contiguous to Parcel A; and they applied for a permit to pursue a common plan for the two parcels.  The county's decision to treat these parcels as intimately connected was consistent with a proposed development plan that did the same.  Merger of the parcels by operation of section 7.5(C)(4) substantially advanced the county's legitimate interest in prohibiting land owners from developing a single property that was too small for the proposed use.

            When a regulation substantially advances a legitimate state interest, the analysis we employ to determine whether a land-use regulation is a taking "depends on the effect of the regulation."  Johnson v. City of Minneapolis, 667 N.W.2d 109, 114 (Minn. 2003).  The United States Supreme Court has acknowledged that government regulation must be able to diminish the value of private property "to some extent" without "paying for every such change in the general law."  Dolan, 512 U.S. at 384-85, 114 S. Ct. at 2316 (quoting Penn. Coal Co. v. Mahon, 260 U.S. 393, 413, 43 S. Ct. 158, 159 (1922)). If, however, the government "goes too far," such regulation constitutes an unconstitutional taking of private property unless the government pays just compensation for what it has taken.  U.S. Const. amend. V; Minn. Const. Art. I, § 13; Concept Props., 694 N.W.2d at 822.

            We will not conclude that a categorical taking has occurred unless the regulation deprives the owner of all economically viable uses of the land.  Dolan, 512 U.S. at 385, 114 S. Ct. at 2316; McShane, 292 N.W.2d at 257.  It is undisputed that the Nesses sustained substantial financial losses because of section 7.5(C)(4).  Unless they demolish or modify their original cabin, they have an expensive adjoining parcel that they can neither develop nor sell.  But the Nesses have not been deprived of all reasonable use of Parcel AB.  They may continue to use the cabin as they have in the past and build a new cabin that can house their guests.  Furthermore, the acquisition of Parcel B nearly triples the length of their lakeshore beach.  Under these circumstances, the record does not support a determination that, by merging the two parcels, the county engaged in a categorical taking.

            If the regulation is not a categorical taking, our focus shifts to "the character of the action and on the nature and extent of the interference with [the owner's] rights in the parcel as a whole."  Johnson, 667 N.W.2d at 115 (quoting Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 130-31, 98 S. Ct. 2646, 2662 (1978)).   Under the Penn Central test, we weigh (1) the regulation's economic impact on the owner, (2) the extent to which the regulation has interfered with particular investment-backed expectations, and (3) the nature of the regulation.  Id. at 114-15.

            Under the first Penn Central factor, we generally examine "the magnitude of a regulation's economic impact and the degree to which it interferes with legitimate property interests."  Wensmann Realty, Inc. v. City of Eagan, 734 N.W.2d 623, 634 (Minn. 2007) (quotation omitted).  As addressed above, the merger here has had a significant and undisputed economic impact on the Nesses.  Nevertheless, the Minnesota Supreme Court has "repeatedly upheld zoning ordinances and other land use restrictions against allegations of unconstitutional taking, even where the value of the property declined significantly as a result of the restrictions."  McShane, 292 N.W.2d at 257. 

            In examining a property owner's investment-backed expectations under the second Penn Central factor, "the existing and permitted uses of the property when the land was acquired generally constitute the ‘primary expectation' of the landowner regarding the property."  Wensmann Realty, 734 N.W.2d at 637 (quoting Penn Central, 438 U.S. at 136, 98 S. Ct. at 2665).  "[W]hen an owner buys property with knowledge of restrictions upon the development of that property, he assumes the risk of any economic loss."  Id. at 638 (quotation omitted).  While such knowledge will not automatically defeat a takings claim, the effect of existing regulations is "relevant to determining the reasonableness of [the owner's] expectations."  Id.  Here, the plain language of section 7.5(C)(4) referred to contiguous parcels owned by the same person and explicitly placed restrictions on "sale or development."  Moreover, section 7.5(C)(4) had been in effect for many years when the Nesses purchased Parcel B.  The existence of the ordinance should have prompted the Nesses to investigate further before making a substantial investment.  Any expectation that section 7.5(C)(4) would not operate to merge Parcel A and Parcel B when Parcel B was purchased by the Nesses was not reasonable.

            Finally, because the third Penn Central factor focuses on the nature of the regulation, "the relevant considerations may vary depending on the circumstances of the case."  Id. at 639.  Thus, we examine how the regulation distributes the burdens of property ownership.  Id.  Although section 7.5(C)(4) affects only those who own contiguous lots, it applies only when at least one of those lots is a substandard or nonconforming use.  Moreover, it imposes a burden only on those who are not satisfied with continuing their prior use and want to modify or sell their property. 

            Based on the facts and circumstances before us, we conclude that the county's application of section 7.5(C)(4) did not constitute a taking.  Indeed, the county may not compel the Nesses to remodel their cabin whenever the county changes the zoning ordinance.  But it is only the nonconformity that the Nesses have a right to grandfather in, not the preexisting ordinance to which the use once conformed.

            Affirmed.

[1] See Crow Wing County, Minn., Zoning Ordinance §§ 7.1 (defining nonconformity), 24.4(A) (setting lot area and width standards for residential lakefront property) (1972).

[2] Crow Wing County, Minn., Zoning Ordinance § 24.11(A) (1972).

[3] Crow Wing County, Minn., Zoning Ordinance § 24.4(C)(1)(a) (1972).

[4] See Crow Wing County, Minn., Zoning Ordinance, Definition 67 (defining "guest house"), § 24.4(B)(3) (requiring lots with guest house to meet or exceed area for duplex lot), .4(A) (setting minimum lot-area for residential lakefront duplex lot at 80,000 square feet), .4(B)(3)(b) (capping area for guest house at 700 square feet) (1972).

[5] The Nesses also argue that various discrepancies between the permitting supervisor's trial testimony and her deposition testimony "amply illustrate[ ] the [county's] chaotic and contradictory decision-making process."  But because this trial testimony has no bearing on whether the county correctly interpreted its ordinance, we need not address this argument.