This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat § 480A.08, subd. 3 (1998)

STATE OF MINNESOTA
IN COURT OF APPEALS
C6-99-985

DeLite Outdoor Advertising, Inc.,
Respondent,

vs.

City of Rochester,
Appellant.

Filed January 11, 2000
Reversed and remanded
Randall, Judge

Olmsted County District Court
File No. C7982627

Kenneth R. Moen, Dunlap & Seeger, P.A., 505 Marquette Bank Building, 206 South Broadway, P.O. Box 549, Rochester, MN 55903 (for respondent)

James G. Golembeck, Cara J. Debes, Jardine, Logan, & O'Brien, P.L.L.P., 2100 Piper Jaffray Plaza, 444 Cedar Street, St. Paul, MN 55101 (for appellant)

Considered and decided by Kalitowski, Presiding Judge, Randall, Judge, and Harten, Judge.

U N P U B L I S H E D   O P I N I O N

Randall, Judge

Appellant challenges the district court's conclusion on cross-motions for summary judgment that (1) the denial of standing to a third party under the zoning ordinance was arbitrary and capricious and (2) the city council's interpretation of a municipal ordinance was arbitrary and capricious. Because there is a genuine issue of material fact and the case was not ripe for summary judgment for either party, we reverse and remand.

FACTS

Appellant City of Rochester recently amended its outdoor advertising zoning ordinances. The amended ordinance included revised distance requirements: the residential setback requirement was changed from 100 feet to 250 feet and the spacing requirement between signs on the same side of a street was changed from 500 to 1,000 feet. Before adoption, the city council solicited input from sign companies, landowners, and the public. Concerned that a provision requiring the removal of old signs would raise conformity issues and would present other administrative difficulties, the council decided to create an exception for replacement signs. Respondent DeLite Outdoor Advertising, Inc., constructs and maintains advertising billboards in the City of Rochester. DeLite participated substantially in the drafting of the exception. Once the exception was adopted, DeLite applied for a permit to construct a replacement sign on Lot A along Highway 52 at Seventh Street Northwest. The zoning administrator rejected DeLite's application for failure to meet the revised residential setback requirements. DeLite appealed, and the zoning board of appeals reversed the zoning board and granted the permit.

Tri-State Media (f/k/a Vogel Sign Company), a competitor of DeLite, had received notice from the city about DeLite's application and appealed the grant to the city council. Tri-State appealed because it claimed to have a lease on Lot B, a property purportedly adjacent to Lot A, and because if DeLite were allowed to rebuild on Lot A, then Tri-State would not be able to place a sign on Lot B. Counsel for DeLite had a copy of the lease at the city council meeting but challenged Tri-State's standing to bring the appeal, arguing that the document did not conclusively establish that Tri-State had an interest in the adjacent lot. The city council did not have a copy of Tri-State's lease at the time but according to the council's findings, standing was granted because Tri-State was an "affected party" with an economic interest in Lot B; a decision presumably based on the lease, communications from Tri-State's counsel, and the recollection of a city staff member who recalled having seen applications from Tri-State for Lot B in 1997. The city council then reversed the zoning board of appeals, reinstated the zoning administrator's initial decision, and denied DeLite's application.

DeLite sought review of the council's denial in the district court. After cross-motions for summary judgment, the court requested that counsel provide it with full transcripts from the city council and the zoning board of appeals meetings. Counsel for the city furnished the transcripts and also enclosed a copy of a lease agreement he had just received from the Rochester Planning Department. The lease agreement was between Tri-State and Dakota, Minnesota, & Eastern Railroad Corporation entered into on March 1, 1997, for a term of five years. The lease described the property as

12" x 50" totaling .013 acres of land situated near Highway 52, Rochester, MN, as shown on drawing dated February 5, 1997, attached hereto and made part hereof.

No drawing accompanied the lease as submitted to the district court. The district court granted summary judgment for DeLite because "the record was completely devoid of any indication that Tri-State had an interest in Lot B at the time Tri-State filed its appeal." The district court found the standing issue dispositive, declined to rule on whether the residential setback requirement applied to DeLite, and ordered that the city issue the permit.

The city now challenges the district court's grant of summary judgment and asks this court to reverse summary judgment and the district court's determination that Tri-State lacked standing. The city further disputes DeLite's claim that its rights under the exception to construct a replacement sign also exempt it from the amended 250-foot residential setback requirement under the new/amended ordinance.

D E C I S I O N

Summary judgment is appropriate when there is no genuine issue of material fact and one party is entitled to a judgment as a matter of law. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). On appeal, we must "view the evidence in the light most favorable to the party against whom judgment was granted." Id. at 761 (citation omitted). There is no genuine issue of material fact and the case is ripe for summary judgment

when the nonmoving party presents evidence which merely creates a metaphysical doubt as to a factual issue and which is not sufficiently probative with respect to an essential element of the nonmoving party's case.

DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997). Any doubt is resolved in favor of finding that a factual issue does exist. State by Beaulieu v City of Mounds View, 518 N.W.2d 567, 571 (Minn. 1994).

The parties do not dispute the law the district court applied:

When the review is conducted on the record, * * * [t]he standard of review is whether the municipal body's decision was unreasonable, arbitrary or capricious, with review focused on the legal sufficiency of and factual basis for the reasons given.

Swanson v. City of Bloomington, 421 N.W.2d 307, 313 (Minn. 1988). Neither do the parties contest the legal sufficiency of the reasons given by the council; DeLite's attorney readily conceded that if Tri-State had property adjacent to his client's, then, of course, it had standing. Instead, they dispute the factual basis for the decision. The city based its determination on (1) testimony from city staff that Tri-State had a applied for a permit on Lot B in 1997, (2) a letter from Tri-State to the city council stating Tri-State had a lease, and (3) a report prepared by the planning department that indicated that Tri-State had been sent notice because of the location of the leased parcel relative to Lot A.

The city council is entitled to rely on staff reports and unsworn testimony during city council meetings. See Hubbard Broad., Inc., v. City of Afton, 323 N.W.2d 757, 764 (Minn. 1982) (concluding expert testimony, though conflicting, provided sufficient factual basis for legally sufficient determination); Barton Contracting Co. v. City of Afton, 268 N.W.2d 712, 716 (Minn. 1978) (determining city council appropriately considered information submitted in separate proceeding two years earlier because information incorporated into present record). City council members at a public hearing do not conduct hearings like formal trials. Respondent concedes that a municipality does not have to conduct public hearings like formal trials. Witnesses do not have to be sworn, credible hearsay reports can be allowed, and there are other informal differences between municipality hearings and court trials. It would be a violation of the separation of powers for courts in reviewing decisions of municipalities to require them to conduct their hearings in the same way that courts conduct theirs. For instance, as happened here, city council members have a right to rely on staff information. Tri-State did receive notice of the decision on Lot A, and the staff testified that there was a lease for Lot B in favor of Tri-State in 1997. Additionally, the lease states that the subject property is "near Highway 52," was executed by the railroad company that owned Lot B, was for a five year term beginning on March 1, 1997 (and, therefore, in effect at the time of Tri-State's appeal), and was provided to the district court prior to the court's decision. DeLite is correct that simply because Tri-State received notice does not mean that they were entitled to receive notice. Tri-State's receiving notice, however, lends circumstantial support to its claim that the lease represents an interest in Lot B.

The city staff stated that they sent notice to Tri-State because they determined it had an interest in the adjacent plot. DeLite acknowledges that city councils can rely on relevant information that might not be admissible at a formal trial; however, DeLite claims it is challenging the factual basis for the city council's decision because the lease was not before the city council when it made its determination. At oral argument, both counsel admitted that the lease does not conclusively establish the location of the leased property.

This dispute presents genuine issues of material fact that are not suited for summary judgment. We note that both parties made cross-motions for summary judgment. We cannot criticize a district court that, upon viewing cross-motions for summary judgment, says to both attorneys:

I am not sure this record is all that clear, but if you both are averring that there are no material facts in dispute, I will take you both at your word and there will be a winner and a loser.

On the other hand, acknowledging that the primary duty of courts is to apply the law, and reach an equitable result in doing so, we point out to district courts that the mere fact that both parties claim the record is fit for summary judgment does not undercut the district court's authority to state that the record is not fit for summary judgment for either party. A district court is easily within its authority to deny both cross-motions for summary judgment and require all pretrial discovery and other proceedings to continue (motions for summary judgment can always be made later). This is one of those cases.

Most importantly, the evidence presented at the city council meeting about the location of the properties at issue and the evidence presented to the district court about the location of these properties presents an issue that is not subjective, is readily ascertainable, and does not rise or fall on a "balancing of interests." The physical location of real estate within Olmsted County is an objective fact discoverable with certainty. The location of the real estate upon which Tri-State bases its claim for standing should be ascertainable upon remand to the district court. That location is both elementary and crucial to the parties' claims.

The record shows that Tri-State has a lease, and "some kind of interest" in "some piece of property" in the vicinity of a Lot A. The district court should direct the parties to collect their evidence on location and get it into the record. Thus, we remand to the district court for a finding on the exact location of any property relevant to the issues in this case.

Next, we consider DeLite's argument that the amended residential setback requirement of 250 feet does not apply to their replacement sign, if they are allowed to erect one, and that they only have to comply with the old ordinance requirement of a 100-foot residential setback. The record is also ambiguous on this point. There is some indication in the record that DeLite sought only an exception to the new 1,000-foot spacing requirement. However, it is possible that the record, such as it is, could be interpreted the way DeLite argues, which is that they are exempt from all new/amended spacing requirements, both the 1,000 feet on the distance between signs and the 250-foot residential setback.

The district court below found the standing issue dispositive and failed to reach the issue of the residential setback requirement. This court will generally not review matters considered by the court below. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988). Therefore, we decline to interpret the ordinance, particularly on the state of this record. We reverse the grant of summary judgment on standing and remand so the district court can resolve the factual issue of the location of the land in Tri-State's lease. Regardless of standing, we remand to the district court also to make findings and then a conclusion as to DeLite's (or any other sign company) obligation under the amended ordinance to comply with the old 100-foot residential setback or the amended 250-foot residential setback. After the parties have clarified the record for the district court, the district court should then decide the propriety of the city council's denial of the permit. Reversed and remanded.