This opinion will be unpublished and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

CX-01-2093

 

Housing and Redevelopment Authority

of the City of St. Paul, Minnesota,

Respondent,

 

vs.

 

Hoyt Development Company,

Appellant,

 

vs.

 

Geraldine M. Lambrecht, et al.,

Respondents,

 

Shannon Kelly’s Inc.,

Respondent,

 

W.O.A.M., Inc., et al.,

Respondents.

 

Filed August 27, 2002

Affirmed

Gordon W. Shumaker, Judge

 

Ramsey District Court

File No. C9979946

 

 

Marc J. Manderscheid, Lisa M. Agrimonti, Briggs and Morgan, P.A., 2200 First National Bank Building, 332 Minnesota Street, St. Paul, MN 55101 (for respondent Housing and Redevelopment Authority of the City of St. Paul, Minnesota)

 

David D. Meyer, Steven J. Quam, Fredrikson & Byron, P.A., 1100 International Centre, 900 Second Avenue South, Minneapolis, MN 55402 (for appellant Hoyt Development Company)

Considered and decided by Harten, Presiding Judge, Willis, Judge, and Shumaker, Judge. 

U N P U B L I S H E D   O P I N I O N

 

GORDON W. SHUMAKER, Judge

 

            Appellant Hoyt Development Company challenges the district court’s condemnation judgment, arguing that respondent St. Paul Housing and Redevelopment Authority’s condemnation of appellant’s property was not legal because it lacked a proper public purpose.  Appellant also argues that the district court erred in restricting the scope of cross-examination at trial and in giving the statute-of-frauds jury instruction.  We affirm. 

FACTS

 

            On July 30, 1997, respondent Housing and Redevelopment Authority of the City of St. Paul (HRA) was authorized by Resolution 97-7/30-1 to acquire “Block 39,” real property bounded by Wabasha, St. Peter, Fifth, and Sixth Streets in St. Paul for redevelopment purposes.  The resolution noted that the area was blighted and that redevelopment would expand job opportunities and would otherwise benefit the health, safety, and morals of the residents of the city.  The purpose of the rehabilitation of this area was to construct a building for Lawson Software, and a parking garage and retail facilities.

The HRA then proceeded under the power granted to it by Minn. Stat. § 469.012 (Supp. 1997) to acquire the subject property and filed a petition to acquire all right, title, and interest in Block 39, pursuant to Minn. Stat. § 117.042 (1996) (quick-take).  Appellant Hoyt Development Company opposed the condemnation.  After a hearing on the petition to acquire the property, the district court granted the petition and appointed commissioners.

At the time of the condemnation, a restaurant/bar named Shannon Kelly’s was the lessee and the occupant of appellant’s property.  However, a company called M-7 had signed a lease for future occupancy in appellant’s building, but was not yet the occupant of the property.  Shannon Kelly’s was not a party to the proceeding and is not a party on appeal.

            After inspecting the subject property and holding a hearing on the matter, the commissioners entered an award for appellant’s property in the amount of $1,040,000: $700,000 was apportioned for the value of the real estate, $263,000 for the value of the trade fixtures, and $77,000 was for the going-concern value.  Appellant contested the award to the district court because the commissioners did not make an allocation among appellant, the property owner, and Shannon Kelly’s, the leaseholder.  The HRA cross-appealed.  Appellant conceded that it was not entitled to the going-concern value, and this is not an issue on appeal. 

A jury trial was held under Minn. Stat. § 117.175 (1998) to determine compensation.  At the trial, appellant testified that it was to receive $202,500 a month in rental payments for a lease he entered into with a Mr. Moss from M-7.  Appellant and Mr. Moss testified that they had both signed the lease, but the lease in evidence did not contain a signature on behalf of appellant as lessor because no one was able to find a copy with both signatures.  Respondent HRA objected to the admission of the lease, arguing that it was void under the statute of frauds.  The court allowed the lease, but at the end of the trial it instructed the jury that a lease is void if it is not signed by the lessor.

The jury awarded appellant $850,000.  Appellant now appeals the judgment, arguing that the HRA’s taking was not legal because it exceeded its statutory authority, that the district court erred in restricting its scope of cross-examination of the commissioners, and that the district court erred in giving the jury instruction regarding the statute of frauds. 

D E C I S I O N

1.         Timeliness

The HRA filed its Petition in Condemnation on October 9, 1997.  After hearings, the district court entered its order on December 31, 1997, granting the petition.  The court concluded, among other things, that the taking was necessary and was proper.

The HRA served a notice of filing that order upon Hoyt on the same date.  Hoyt did not appeal from the order.

The matter then proceeded to commissioners’ hearings and ultimately a jury trial.  The district court entered judgment on the jury verdict on October 5, 2001.  Hoyt appeals from that judgment and challenges not only the jury award but the propriety of the taking as well.

The HRA contends that Hoyt’s appeal as to the issue of the propriety of the taking is untimely.  Hoyt contends that two authorities support its position that the appeal is timely.

The first is County of Blue Earth v. Stauffenberg, 264 N.W.2d 647, 650 (Minn. 1978), in which the supreme court noted that, even though traditionally eminent domain appeals were properly taken only from the final judgment, where public necessity had been determined an appeal could also be taken from the order granting the condemnation petition:

Henceforth, in a condemnation proceeding where the issue of public necessity has been determined by the district court, an aggrieved party may appeal directly to this court from the district court order.

 

The second authority is Park & Recreation Bd. v. Bolander & Sons, 436 N.W.2d 481, 483 (Minn. App. 1989), in which this court interpreted Stauffenberg:

After Stauffenberg, appeals in condemnation proceedings are authorized from either the order on public necessity or from the final judgment.  On appeal from the final judgment, the parties may obtain review of other interlocutory or intermediate orders pursuant to Minn. R. Civ. App. P. 103.04.

 

(Citation omitted.)  Stauffenberg held that an appeal from the order granting the condemnation petition is permissive.  Bolander made it clearthat the appeal may be taken from that order or from the final judgment, and, if from the judgment, all intermediate orders are reviewable.  Under these clear authorities, we hold that Hoyt’s appeal is timely.

2.         Legality of HRA’s condemnation of appellant’s property

            Appellant argues that the condemnation of its property was not authorized by law because the HRA was not able to show that the condemnation of the land addressed an area of blight, and, thus, the HRA acted outside its statutory authority in condemning the property.  Appellant argues that the HRA also acted outside its authority by arranging to relocate Lawson Software to Block 39, because it had not found that the redevelopment project was necessary to address blight.

Our review of condemnation proceedings is very narrow.  Minneapolis Cmty. Dev. Agency v. Opus N.W. LLC, 582 N.W.2d 596, 598 (Minn. App. 1998).

We review only whether the taking serves a public purpose and is necessary.  * * *  Public purpose and necessity are questions of fact, and the district court’s decisions on these matters will not be reversed on appeal unless clearly erroneous.

 

Id. at 598-99 (citations omitted).  Although appellant challenges the legal adequacy of the findings, it does not challenge the factual accuracy of the findings. Rather, at the heart of appellant’s argument is that the relocation of Lawson Software to Block 39 was improper because no findings were made before the relocation as to how the relocation will eliminate blight in the area.

The acquisition and clearing of blighted areas serve a public purpose.  Hous. & Redevelop. Auth. v. Minneapolis Metro. Co., 259 Minn. 1, 7, 104 N.W.2d 864, 869 (1960).  A “blighted area” is an area with

buildings or improvements which, by reason of dilapidation, obsolescence, overcrowding, faulty arrangement or design, lack of ventilation, light, and sanitary facilities, excessive land coverage, deleterious land use, or obsolete layout, or any combination of these or other factors, are detrimental to the safety, health, morals, or welfare of the community.

 

Minn. Stat. § 469.002, subd. 11 (1998).

Appellant focuses on the findings made in the HRA’s May 28, 1997 order.  However, that resolution did not authorize the condemnation of Block 39; rather, the resolution dated July 30, 1997, authorized the acquisition of Block 39, and the July 30, 1997 resolution is the critical document to consider in determining whether the HRA made the proper findings.  In its order granting the petition, the district court found that the HRA’s resolution dated July 30, 1997, determined that the buildings in Block 39 were substandard:

[b]ased on appraisals and other information presented to the HRA, the HRA had previously concluded, * * * and reaffirmed in the Resolution, that Block 39 contains a preponderance of structures which are substandard, and need to be removed to prevent further deterioration of the area, and to allow for the development of the Project, the Garage, and the Wabasha Retail.

 

The “Seventh Place Redevelopment Project,” first adopted in 1978 and modified in 1981, 1982, 1983, and 1989, notes that

[w]hile the central business district has been the site of substantial public development and redevelopment activity, within said area and the Seventh Place Project Area, conditions of deterioration, blight and substandardness of buildings and structures remain to a degree, warranting further redevelopment activity designed for its elimination and for the prevention of the development or spread of further deterioration.

 

The district court also found public purposes for the redevelopment project, namely, (1) increasing the tax base; (2) immediately increasing the employment base; (3) creating a positive effect on nearby retail businesses; and (4) creating new job opportunities in the area.  The district court’s findings are not clearly erroneous.

Finally, the district court found that “[t]he uncontested evidence at the hearing was to the effect that Block 39 is under utilized and that it contains blighted areas.”  The record supports this finding.  Evidence was elicited at trial demonstrating that although appellant’s building did not show evidence of blight, some buildings in the block were under-utilized, some were vacant, and others contained evidence of blight.  See Hous. & Redevelop. Auth. v. Schapiro, 297 Minn. 103, 107, 210 N.W.2d 211, 213-14 (1973) (eliminating blighted parts of a community may be done on an area basis rather than a structure-by-structure basis; thus, the fact that one building is not substandard does not invalidate the taking).  Thus, the district court’s findings are not clearly erroneous.

If the record contains some evidence to support a finding by an authority, there is nothing left for the district court to pass on, as courts may only interfere when the authority’s actions are arbitrary or unreasonable.  Hous. & Redevelop. Auth. v. Coleman’s Serv., 281 Minn. 63, 71, 160 N.W.2d 266, 272 (1968).  See also Minneapolis Metro. Co., 259 Minn. at 15-16, 104 N.W.2d at 875 (whether an area is blighted is generally not reviewable, “unless fraudulent or capricious, or, in some instances, unless the evidence against the finding is overwhelming”) (quotation omitted).  We find no error with the district court’s decision that the HRA’s taking was lawful.

3.         Application of Minn. Stat. § 117.175

Appellant argues that the district court misapplied Minn. Stat. § 117.175 (2000) in denying appellant’s request to cross-examine the commissioners regarding their award for trade fixtures.  During the jury trial, there was a dispute as to the highest and best use of the property.  Appellant argued that the highest and best use was office/retail space, but the HRA argued that the highest and best use was its current use, a restaurant/bar.  Thus, appellant argues, the restaurant fixtures added no value to the award under its theory, but did add value under the HRA’s theory.  But appellant contends that, because it was not able to cross-examine the commissioners regarding the amount of their award for the fixtures, the jury was not able to learn of the full value of the property under respondent’s theory.  As a result, appellant argues, the jury award may not reflect “just compensation.”

            Absent an erroneous interpretation of the law, the question of whether to admit or exclude evidence is within the district court’s discretion.  Kroning v. State Farm Auto. Ins. Co., 567 N.W.2d 42, 45-46 (Minn. 1997).  Minn. Stat. § 117.175, subd. 1, describes the procedure to be taken in a condemnation trial.  The jury hearing the case assesses damages de novo.  Id.  The relevant provision that appellant cites and bases his argument on states that:

A commissioner in a condemnation proceeding may be called by any party as a witness to testify as to the amount and the basis of the award of the commissioners and may be examined and qualified as any other witness.

 

Id.

 

Appellant argued at trial that, although it had previously represented that it would not be seeking compensation for fixtures, since the HRA was advocating that highest and best use of the property was a restaurant/bar, it should be entitled to compensation for the fixtures under the HRA’s theory:

When I argued the most recent motion for summary judgment before you, I represented to you that I would not be making a claim for the fixtures in this case because to make such a claim was inconsistent with the highest and best use that we’re advocating.  The fixtures consist mostly of attachments to the building having to do with the operation of a bar and restaurant. 

            The Court ruled pursuant to my motion that the tenant in this case was not entitled to any compensation for fixtures under the law of this state and I believe that to be a correct ruling.  The Court also ruled, however, or did not rule, that the owner is not entitled to any compensation for fixtures in this case. 

 

* * * *

 

The point, your Honor, is that if it is consistent and logical and proper for me not to make a claim for fixture compensation because of the highest and best use that we’re advocating, then it is also consistent and the same logic applies to the government.  That is, under their highest and best use, that is, a restaurant and bar use, value is given to the fixtures.  To the extent value is given to fixtures, and if the jury finds value in the fixtures, my client is entitled to that compensation.

 

* * * *

 

I believe I have a right to inquire of the commissioners as to the basis of their award, about the fact that the City, during the commissioners’ hearing, put a witness on the stand and advocated not only that it had taken trade fixtures, but the trade fixtures they had taken had a value of $271,000.

If the City is going to advocate a highest and best use of restaurant and bar, then it must pay for the fixtures that it has taken, the fixtures that it has advocated that it has taken and the fixtures that it has taken, in an amount that they advocated of $271,000.  I intend to cross-examine the commissioners and the appraiser on that point and I want the Court and counsel to be aware of that.

 

Appellant also stated that it wanted to show at trial that the commissioners’ award does not include fixtures. 

Respondent’s counsel replied, stating that

the HRA at the commission hearing did not present any testimony as to the fixtures.  The position of the HRA was that there should not be a separate award for fixtures * * * .  In this case, [appellant] took the position that it was not going to seek valuation for the trade fixtures at trial.

 

* * * *

 

[Appellant] ought not to be able at this stage of the proceedings to change its theory midcourse.  It is not that it would have been inappropriate for [appellant] to have advocated for a payment for trade fixtures, but [appellant] waived that claim.  [Appellant] should be held to its waiver.

 

            The district court ruled that:

You can cross-examine as to whether that includes any dollar amount for fixtures, but I’m not going to allow you to cross-examine about the amount that they awarded in addition for fixtures because your client has consistently said they make no claim for that.

 

            The appeal of the commissioners’ award to the district court is a trial de novo, and, as such, appellant would ordinarily be allowed to question as to the amount of compensation for the fixtures; however, in this case appellant expressly stated that it was not seeking compensation for fixtures.  See State v. Robinson, 266 Minn. 166, 174-75, 123 N.W.2d 812, 818-19 (1963) (it is within the district court’s discretion to allow cross-examination of court-appointed commissioners to be outside matters brought out on direct examination).  The court and other party-litigants were entitled to rely on appellant’s assurance that the value of fixtures would not be an issue at trial.  Thus, in light of appellant’s representations made consistently until the middle of trial, appellant waived its right to seek compensation for the fixtures.  See Flaherty v. Indep. Sch. Dist. No. 2144, 577 N.W.2d 229, 232 (Minn. App. 1998) (waiver is a voluntary relinquishment of a known right), review denied (Minn. June 17, 1998).

4.         Jury instruction re: statute of frauds

            Appellant argues that the district court erred in its jury instruction regarding the statute of frauds as it applied to a lease agreement that was not signed by appellant.  The relevant statute of frauds is set forth in Minn. Stat. § 513.05 (1998).  Appellant argues that, because respondent was a stranger to the agreement, it could not use the defense offensively.

            District courts are allowed considerable latitude in selecting the language of jury instructions.  Alholm v. Wilt, 394 N.W.2d 488, 490 (Minn. 1986).  We will not reverse a district court’s decision unless the instructions constituted an abuse of discretion.  See id. (concluding that appellant failed to demonstrate that district court’s instructions were an abuse of discretion).  Error in a jury instruction may be fundamental if the instruction destroys the substantial correctness of the entire jury charge, results in a miscarriage of justice, or leads to substantial prejudice of a party.  Lindstrom v. Yellow Taxi Co., 298 Minn. 224, 229, 214 N.W.2d 672, 676 (1974). 

            In this case, the judge instructed the jury regarding the lease:

Under Minnesota law, every contract for the leasing of any property for a longer period than one year is void unless the contract is in writing and signed by the lessor.

 

There is no issue as to whether this instruction is inaccurate as a matter of law. 

Appellant objected to the use of this instruction, arguing that the statute-of-frauds defense can only be used by the parties to an agreement to challenge the validity of the agreement.  However, as the rule clearly states, because the lease is void without the lessor’s signature, as was the situation in this case, it was within the district court’s discretion to fully inform the jury of the law regarding the lease.  Because the instruction did not destroy the substantial correctness of the entire jury charge, result in a miscarriage of justice, or lead to substantial prejudice of a party, the district court did not abuse its discretion in giving the jury the statute-of-frauds instruction.

            Affirmed.