This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
STATE OF MINNESOTA
IN COURT OF APPEALS
Kick's Liquor Store, Inc., d/b/a Broadway Liquor Outlet,
City of Minneapolis,
Filed June 25, 2002
Hennepin County District Court
File No. 97-10330
Daniel N. Rosen, Rosen & Rosen, LLC, 150 South Fifth Street, Suite 3250, Minneapolis, MN 55402 (for respondent)
Jay M. Heffern, City Attorney, William C. Dunning, Assistant City Attorney, Suite 300, 333 South Seventh Street, Minneapolis, MN 55402 (for appellant)
Considered and decided by Hanson, Presiding Judge, Toussaint, Judge, and Harten, Judge.
Respondent liquor store sued appellant-city, seeking mandamus to compel inverse condemnation. Respondent alleged that the city’s closing of a street (and the resulting diminished access to the store’s parking lot) deprived respondent of its property. Respondent initially prevailed in a summary judgment but this court reversed and remanded for trial (Kick’s I). After trial, the district court concluded that a taking had occurred and ordered the city to begin the process of condemnation to award damages. The district court later awarded attorney fees. The city appealed from the district court’s decision, and this court affirmed (Kick’s II). The Minnesota Supreme Court granted the city’s petition for review but stayed proceedings pending its review of this court’s decision in Dale Props., LLC v. State, 619 N.W.2d 567 (Minn. App. 2000). After issuing its opinion in Dale Props., LLC, 638 N.W.2d 763 (Minn. 2002), the supreme court vacated this court’s opinion in Kick’s II, and remanded for proceedings consistent with its decision in Dale Props.
Because the principles set forth by the supreme court in Dale Props., do not alter our decision in Kicks II, we again affirm the district court.
Respondent Kick’s Liquor Store, Inc. operates the Broadway Liquor Outlet in North Minneapolis, whose parking lot at the rear of the building is accessible only from McNair Avenue. In 1997, appellant City of Minneapolis placed a barrier across McNair Avenue. The barrier turned McNair into a cul-de-sac, and cut off direct access to the store’s parking lot for patrons traveling on McNair from the south. McNair, however, remains open at the intersections of Broadway and Penn Avenues, so patrons can still access the parking lot by entering McNair from Broadway. At this sole remaining point of access, the city erected a pylon with a concrete base. On the pylon is a sign stating “Road Open to Broadway Liquor Outlet.” The city does not deny that this pylon does not conform to its own standards and several accidents have occurred when unsuspecting drivers turning onto McNair have collided with the pylon. Further, the city did not provide drivers who turn onto McNair, believing it to be a through street, with an area in which they may turn around legally and safely. As a result, those drivers must turn around in the liquor store’s parking lot.
Respondent sued the city, seeking mandamus to compel inverse condemnation. Respondent argued the city’s closing of the street deprived respondent of its property. The district court granted respondent’s motion for summary judgment, but this court, in Kick’s Liquor Store, Inc. v. City of Minneapolis, 587 N.W.2d 57 (Minn. App. 1998) (Kick’s I), reversed and remanded for trial on whether a compensable taking had occurred.
Upon remand, the district court found that respondent “has suffered harm unique from that suffered by the general public as a result of the closure of McNair [Avenue]” and respondent’s “property has been diminished in value as a result of the closure of McNair [Avenue].” The district court concluded that the city’s actions
constitute a taking or damaging of [respondent’s] property for which just compensation must be paid as required by the Constitution of the State of Minnesota, Article 1, § 13.
Accordingly, the district court ordered the city to initiate condemnation proceedings to determine just compensation. In a Corrected Memorandum Order Determining Legal Fees, the district court ordered the city to pay respondent’s attorney fees and costs of $58,180 pursuant to Minn. Stat. § 117.045 (2000).
On appeal after remand, the city argued the district court erred by finding that a taking had occurred, because (a) the closure to traffic in just one direction did not eliminate reasonable access to the store; (b) the city’s failure to provide a turn-around at the cul-de-sac created by the closure, and the consequent use of the store’s parking lot as a turn-around, is not a compensable injury; and (c) the award to respondent of attorney fees under Minn. Stat. § 117.045 was excessive. This court affirmed the district court’s determination that a taking occurred and its award of attorney’s fees. Kick’s Liquor Store, Inc., v. City of Minneapolis, No. C4-00-2063, 2001 WL 506937 (Minn. App. May 15, 2001) (Kick’s II).
The supreme court granted the city’s petition for review but stayed proceedings pending its review of this court’s decision in Dale Props., LLC v. State, 619 N.W.2d 567 (Minn. App. 2000). After issuing its opinion in Dale Props., LLC v. State, 638 N.W.2d 763 (Minn. 2002), the supreme court vacated this court’s opinion in Kick’s II and remanded for proceedings consistent with its decision in Dale Props. Because our original opinion in Kicks II was vacated, we will reiterate our reasoning on all issues, including those unrelated to Dale Props. We affirm.
To prove that a compensable taking has occurred by the closing of a public street, the abutting property owner has the burden of proving (1) it suffered special injury; (2) it suffered actual damage; and (3) it is left without reasonably convenient and suitable access to the main thoroughfare in at least one direction. Kick’s I, 587 N.W.2d 57, 60 (Minn. App. 1998). These are questions of fact, which this court will reverse only if they are clearly erroneous. Id.; Hendrickson v. State, 267 Minn. 436, 445-46, 127 N.W.2d 165, 172-73 (1964); see also In re Improvement of Murray County Ditch No. 34, 615 N.W.2d 40, 49 (Minn. 2000) (stating that the reviewing court reverses findings of fact only if they are clearly erroneous); Citizens State Bank of Hayfield v. Leth, 450 N.W.2d 923, 925 (Minn. App. 1990) (same).
To prove that a taking occurred, the property owner must first establish that the government’s action caused a special injury. Kick’s I, 587 N.W.2d at 60. A special injury is “one different in kind from that suffered by the general public as the result of the city’s action.” Id.; see also Hendrickson, 267 Minn. at 442, 127 N.W.2d at 170.
The district court found that the store suffered a special injury when the city placed the barrier across McNair because the closure is adjacent to respondent’s property and requires patrons who previously accessed the store from the south to take another route. It also found that the closure caused drivers who mistakenly turned onto McNair, believing it to be a through street, to drive onto the store’s parking lot to turn around. These findings are supported by the record and, therefore, are not clearly erroneous.
The district court also found that respondent suffered actual damage. Actual damage is determined by a measurable decrease in the property’s market value. Kick’s I, 587 N.W.2d at 60.
Both parties presented experts who testified regarding the property’s value. Based on a full appraisal of respondent’s property, respondent’s expert testified that the city’s closure of McNair had negatively affected the property’s value. The district court found respondent’s expert to be more credible than the city’s expert. We defer to the district court’s determinations regarding credibility of witnesses. See Minn. R. Civ. P. 52.01 (stating that “due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses”). Because the testimony of respondent’s expert supports the district court’s finding that respondent suffered actual damage, that finding is not clearly erroneous.
Furthermore, and contrary to the city’s assertion, respondent’s expert properly included the liquor store’s loss of customers and income as ingredients of the “income approach” to determining the value of respondent’s property. See Marquette Bank Nat’l Ass’n v. County of Hennepin, 589 N.W.2d 301, 306 (Minn. 1999) (acknowledging the importance of the income approach to valuation of commercial properties). Moreover, respondent’s expert properly combined use of the income approach with other standard approaches to arrive at his ultimate opinion on the property’s diminution of value.
Because the record supports the district court’s determinations that respondent suffered a special injury and actual damages as a result of the city’s erection of the barrier on McNair Avenue, the district court properly concluded that a taking occurred. Thus, the next question is whether the taking is compensable.
A taking through loss of access is compensable only when the owner is left without reasonably convenient and suitable access to the main thoroughfare in at least one direction. Hendrickson, 267 Minn. at 445-46, 127 N.W.2d at 172-73. The city claims that because (1) the north entrance of McNair Avenue remains open and is accessible from the major arterial roads in the area and (2) the city has put a sign on the intersection of Penn Avenue, Broadway Avenue, and McNair Avenue, instructing motorists that McNair leads to the liquor store, respondent still enjoys access to its store in at least one direction. However, to avoid a taking, the access has to be reasonably convenient and suitable. Id. at 446, 127 N.W.2d at 173. Whether the one remaining access is reasonably convenient and suitable is a fact question. Id. at 445, 127 N.W.2d at 172.
The district court determined that the one remaining access was not reasonably convenient when it found that:
The city has obstructed the sole remaining opening to McNair [Avenue] with a non-standard, pylon sign [‘Road Open to Broadway Liquor Outlet’] at the intersection of McNair [Avenue] with Broadway [Avenue] and Penn [Avenue]. Traffic, which cannot easily see the pylon sign until after it begins to turn into McNair [Avenue] from northbound Penn [Avenue], has collided with the pylon sign on more than one occasion since its placement.
In Kicks II, we concluded that this finding is not clearly erroneous.
The city argues that, under Dale Props., the question of whether a taking has occurred is one of law. The city concludes, therefore, that the clearly erroneous standard does not apply and that no deference need be given to the district court’s findings.
In Dale Props., the supreme court considered a case involving the closure of highway median. 638 N.W.2d at 767. The supreme court upheld a long-standing rule that, as a matter of law, the installation or closure of a median does not consitute a compensable taking where the property owner maintains direct access in one direction. Id. Specifically, the supreme court stated that
a property owner who retains direct access to traffic in one direction, although losing it in the other direction due to the closure of a median crossover, retains reasonable access as a matter of law.
Id. at 764.
Dale Props. is distinguishable because it only involved the closure of a median, which denied access in one direction but did not modify access in the remaining direction. Here, the city took two actions. It erected a barrier across McNair that completely closed access in one direction. And, it also erected a concrete pylon in the middle of McNair that modified access in the remaining direction. We do not read Dale Props. to have modifed the rule stated in Hendrickson that, to avoid a taking, the remaining access must be reasonably convenient and suitably. In fact, Dale Props. relies on Hendrickson as one of its governing decisions.
Accordingly, we interpret Dale Props. to rule that the question of whether there has been a taking should be decided as a matter of law when, as under its facts, the challenged governmental action only modifies access in one direction and does not effect the access in the other direction. Under our facts, where the governmental action effects access in both directions, the question of whether the access that remains in one direction is reasonably convenient and suitable is, under the authority of Hendrickson, a fact question reviewable under the clearly erroneous standard.
Further, the district court’s conclusion that a compensable taking had also occurred by the failure of the city to provide an adequate turn around at the cul-de-sac, forcing drivers to use respondent’s parking lot, provides an independent basis for the court’s ruling that is unrelated to the principles discussed in Dale Props.
In Kick’s II, the city argued that respondent had failed to prove that the use of the liquor store’s parking lot as a turn-around by drivers who turn onto McNair is a substantial invasion which is repeated and aggravated rather than merely occasional. That standard, however, applies when a government act causes an indirect invasion of the property owner’s property rights. See Alevizos v. Metro. Airport Comm’n, 298 Minn. 471, 488, 216 N.W.2d 651, 662 (1974) (stating that a property owner who claims that indirect invasions of his or her property rights has caused compensable damages must prove “that these invasions * * * are not of an occasional nature, but are repeated and aggravated, and that there is a reasonable probability that they will be continued in the future”). On remand, we take the opportunity to emphasize that the city’s act of creating a cul-de-sac that forces motorists onto respondents’ private property to turn around is a direct taking.
The city also argues that the district court erred by awarding respondent attorney fees.
A reviewing court will not reverse a district court’s award of attorney fees unless the factual basis for the fees is clearly erroneous. Shepard v. City of St. Paul, 380 N.W.2d 140, 143 (Minn. App. 1985); see also Jadwin v. Kasal, 318 N.W.2d 844, 848 (Minn. 1982) (providing that the district court has broad discretion in awarding attorney fees).
In its request for attorney fees, respondent divided its work into the following seven phases: (1) pre-street closure; (2) inverse condemnation pleading and discovery; (3) summary judgment; (4) first appeal; (5) remand/pretrial; (6) trial; and (7) post-trial. The district court awarded respondent attorney fees for all the phases except the first appeal.
The city claims the district court should have denied respondent’s request for all phases that occurred prior to remand because respondent was unsuccessful in those procedures. See Minn. Stat. § 117.045 (2000) (stating that a court may award attorney fees only where the landowner is successful in the litigation).
The city claims the district court erred by granting respondent attorney fees for this phase because respondent attempted and failed to obtain an injunction. Respondent, however, presented evidence that it was not seeking fees for the attorney’s work on the injunction, but rather for the work he performed in preparation for the inverse condemnation proceeding. In his affidavit, respondent’s attorney presented numerous examples of the work he performed at the time of the injunction action that was essential to the inverse condemnation proceeding, including research on cul-de-sac cases, meetings with respondent and with city officials, and court hearings that affected the inverse condemnation proceeding.
Because the evidence presented provides a factual basis for the fees, the district court’s award of attorney fees for this phase is not in error.
The city also argues that because, in Kick’s I, we reversed the district court’s grant of summary judgment, the district court erred by awarding respondent attorney fees for the summary judgment phase.
While respondent acknowledges that it was not successful in its request for summary judgment, it claims that the expenses it set forth in its request for fees resulted from its work in response to the city’s cross-motion for summary judgment. Keeping in mind the broad discretion reviewing courts afford a district court’s award of attorney fees, we conclude that the district court’s award of attorney fees for expenses accrued during the summary judgment phase was not clearly erroneous. See Jadwin, 318 N.W.2d at 848.