This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A03-1841

 

In the Matter of the Agassiz Valley Water Management Project

 

Filed July 20, 2004

Appeal dismissed

Peterson, Judge

 

Marshall County District Court

File Nos.

C4-02-324, C0-02-326, C8-02-326, C6-02-325,

C7-02-320, C3-02-329, C0-02-319, C9-02-321,

C1-02-328, C2-02-323, CX-02-327

 

Dwain E. Fagerlund, Johannson, Rust, Fagerlund, Yon & Stock, 407 North Broadway, P.O. Box 605, Crookston, MN  56716; and

 

Tami L. Norgard, Vogel Law Firm, 218 N.P. Avenue, P.O. Box 1389, Fargo, ND  58701 (for appellant landowners)

 

Gerald W. VonKorff, Rinke Noonan, Suite 300, US Bank Plaza, P.O. Box 1497, St. Cloud, MN  56302-1497 (for respondent Middle River-Snake River Watershed District)

 

            Considered and decided by Peterson, Presiding Judge; Shumaker, Judge; and Anderson, Judge.

U N P U B L I S H E D   O P I N I O N

 

PETERSON, Judge

 

In this appeal from an order for partial summary judgment in a watershed-project condemnation dispute, appellant landowners argue that the cost-benefit issue addressed in the order goes to the issue of public necessity for the project, and, therefore, the order is immediately appealable.  Because the order does not address the necessity of taking appellants’ property, we conclude that an appeal may not be taken from the order, and we dismiss the appeal.

FACTS

            Respondent Middle River-Snake River Watershed District initiated the Agassiz Valley Water Resource Management Project in 2000.  The primary purpose of the project is flood control, and the project requires the taking of 2,635 acres of private property.  State funding for the project was authorized by Minn. Stat. § 103F.161, subd. 3 (2000) (authorizing flood-mitigation projects for the Red River basin), and in 2001, respondent entered into a grant agreement with the State of Minnesota under which the state would pay 75% of the cost of the project.  See also 2002 Minn. Laws ch. 393, § 7, subd. 20 (appropriating money for Agassiz project).  Initially, respondent assumed that it would be assessing landowners for part of respondent’s share of the cost of construction, but respondent no longer intends to assess landowners.

            In a December 17, 2001, order, respondent’s board of managers authorized the appointment of three appraisers to determine the damages for the properties required for the project.  The appraisers filed their report determining damages with the board of managers on March 28, 2002.

            A public hearing about the project was held on June 10, 2002.  Respondent’s board of managers issued its findings of fact and order regarding the project in September 2002.  The board found that “the damages and benefits have been properly determined” and that “the benefits as determined from the construction and implementation of the project will be greater than the cost of the construction or implementation and damages.”  The board also found that the project would be conducive to public health, promote the general welfare, and was in compliance with the law.  The board determined that the total damages to properties required for the project were $2,043,312.  Based on these findings, the board authorized the project and directed that the project may be constructed and that the project proceed.

            In November 2002, appellants appealed the board’s order to the district court pursuant to Minn. Stat. § 103D.535 (2002), and also filed a petition for an order staying implementation of the board’s order until final determination of their appeal.  In their appeal, appellants alleged that the appointed appraisers failed to calculate the benefits that accrue for each parcel as a result of the project, and, as a result, respondent had no factual or legal basis for determining whether the benefits exceeded the costs and damages to be incurred on the project as required by Minn. Stat. § 103D.601, subd. 6 (2002).  Therefore, appellants alleged, because respondent failed to comply with the statutory procedures necessary to implement the project and condemn the required property, respondent has no authority to proceed with construction and no power of eminent domain with respect to the project. 

Appellants also challenged the constitutionality of the eminent-domain authority granted to watershed districts under chapter 103D and alleged that the errors in the procedures and methods used to establish the project, condemn the affected property, and determine benefits and damages constitute an unlawful taking without due process of law in violation of the Minnesota and United States Constitutions.  Finally, appellants described numerous errors in the calculation of damages for specific parcels of land and alleged that the amounts of damages allowed are insufficient to compensate appellants.  Appellants sought full and complete damages resulting from the project or, in the alternative, to have the project dismissed. 

            Respondent opposed appellants’ petition for a stay of implementation, arguing that Minn. Stat. § 103D.605 (2002), not Minn. Stat. § 103D.601, governs the establishment of the project and that a cost-benefit analysis is not required under section 103D.605.  The district court agreed and denied a stay.  The district court determined that Minn. Stat. § 103D.605 applies to the project because “[t]he project involves a granting agreement in which the costs of the project are being paid for in whole or in part by the State of Minnesota pursuant to the State bonding bill and a granting agreement,” and “Minnesota Statute Section 103D.605 does not require [respondent] to find that benefits assessed exceed the costs of the project.” 

            In January 2003, respondent moved for summary judgment, seeking to dismiss appellants’ appeal of the establishment of the project so that the parties could proceed to try the compensation issue.  See Minn. Stat. § 103D.535, subd. 3 (a) (if appeal is taken from order authorizing a project, trial of an appeal of benefits or damages must be stayed until appeal is decided).  Three days before the scheduled hearing date, appellants filed a responsive brief and a cross-motion for summary judgment, seeking to have the project dismissed on the basis that respondent failed its duty to calculate total project benefits.

            In September 2003, the district court filed an amended order granting in part, and denying in part, the parties’ summary-judgment motions.  The court adopted the finding relative to costs and benefits made in its previous order denying appellants’ petition to stay implementation and reaffirmed its conclusion that the cost-benefit test did not apply.  The court granted partial summary judgment on appellants’ motion with respect to appellants’ due process claim and ordered respondent to appoint commissioners in a manner similar to the procedures in Minn. Stat. § 117.075 (2002) and to have the commissioners take testimony and issue an award for damages for the taking of property in a manner similar to the procedures in Minn. Stat. § 117.085 (2002).  The district court also ordered that any appeal “shall follow the time lines and procedures outlined in Minnesota Statutes 103D.”

            On November 20, 2003, appellants sought a supplemental order from the district court directing entry of a final judgment pursuant to Minn. R. Civ. P. 54.02 with respect to the September 2003 partial-summary-judgment order, and certifying as important and doubtful the question whether satisfaction of a cost-benefit test is necessary to implement the project. 

Before the district court made a decision on appellants’ requests, appellants filed this appeal, arguing that (a) the calculation of benefits is a prerequisite to exercise of the eminent-domain power, and the benefits associated with the proposed project were not calculated; (b) the district court’s ruling is incorrectly based on section 103D.605 rather than section 103D.601; (c) the requirements of section 103D.601 and related statutes have not been met; and (d) respondent’s assertion that section 103D.605 controls is both incorrect and a change in its original position. 

Respondent filed a notice of review, challenging this court’s jurisdiction on the basis that appellants are appealing from a nonappealable order.  If this court determines that it has jurisdiction, respondent also challenges the portion of the district court’s order that requires respondent to follow the procedures of chapter 117. 

Following submission of respondent’s brief, appellants filed a motion to strike portions of the brief that appellants allege are not supported by the record.

D E C I S I O N

            Respondent argues that the district court’s order is not appealable at this time because (1) the order does not dispose of all claims by and against all parties, and the court did not direct entry of judgment pursuant to Minn. R. Civ. P. 54.02; (2) the order does not concern public purpose and necessity; and (3) appellants did not challenge public necessity in the district court.

            Minn. Stat. § 103D.541 (2002) authorizes appeals to this court from district court orders reviewing watershed district decisions.  Minn. Stat. § 103D.541, subd. 1, provides that “[a] party may appeal a court order as in other civil cases if aggrieved by a final order or judgment given on appeal to the district court.”  (Emphasis added.)  The general rule in civil cases is that a judgment that does not adjudicate all claims of all parties and that is not entered pursuant to an order that states that there is no just reason for delay and directs entry of final judgment is not appealable. Krmpotich v. City of Duluth, 449 N.W.2d 507, 509 (Minn. App. 1989); see Minn. R. Civ. App. P. 103.03(a) (appeal may be taken from a final judgment or a partial judgment entered pursuant to Minn. R. Civ. P. 54.02). 

            But, in County of Blue Earth v. Stauffenberg, 264 N.W.2d 647, 649-50 (Minn. 1978), the supreme court held that in a condemnation proceeding when the issue of public necessity has been determined by the district court, an aggrieved party may appeal the issue of public necessity directly from the district court order for condemnation despite the lack of finality of a condemnation order.  But the exception recognized in Stauffenberg is limited to cases involving the issue of public necessity.  In Alexandria Lake Area Serv. Region v. Johnson, 295 N.W.2d 588, 590 (Minn. 1980), the supreme court explicitly declined “to extend the rule of the Stauffenberg case to situations beyond those involving the issue of public necessity.”  Issues other than public necessity and purpose are reserved for appeal after a final order is entered.  Id.; Stauffenberg, 264 N.W.2d at 649-50. 

            Citing Reilly Tar & Chem. Corp. v. City of St. Louis Park, 265 Minn. 295, 121 N.W.2d 393 (1963), and Robertson v. Belle Creek Watershed Dist., 255 N.W.2d 236 (Minn. 1977), appellants argue that the district court’s order is appealable under Stauffenberg because a positive cost-benefit ratio is a necessary threshold that must be met to demonstrate public necessity and invoke the power of eminent domain.  Therefore, appellants contend, because respondent failed to demonstrate that the benefits of the project exceed the costs and damages, respondent failed to establish the public necessity of the project.  We disagree.

            For a court to determine that a taking is necessary, “[i]t is enough to find that ‘the proposed taking is reasonably necessary or convenient for the furtherance of a proper purpose.’”  City of Duluth v. State, 390 N.W.2d 757, 764-65 (Minn. 1986) (quoting City of Pipestone v. Halbersma, 294 N.W.2d 271, 274 (Minn. 1980) (quotation omitted)).  It is not necessary to determine whether the benefits of a project exceed the cost of the project in order to determine whether taking a particular parcel of land is reasonably necessary or convenient for the furtherance of the project.  Therefore, a positive cost-benefit ratio is not a necessary threshold that must be met to demonstrate public necessity.  Appellants do not dispute that flood control is a proper purpose for the project.

            Appellants are simply recasting their argument that respondent failed to meet the statutory requirement for a cost-benefit analysis, which is the argument that appellants made in the district court, into an argument that by failing to apply the statutory requirement for a cost-benefit analysis, the district court incorrectly determined the public necessity of the taking.  By recasting their argument in this manner, appellants are attempting to come within the Stauffenberg exception and obtain review of the district court’s decision that a cost-benefit analysis is not required for this project because the project was established under Minn. Stat. § 103D.605 (2002), rather than under Minn. Stat. § 103D.601 (2002).

            Appellants’ reliance on both Reilly Tar and Robertson as authority for obtaining review is misplaced.  In Reilly Tar, the City of St. Louis Park established a housing and redevelopment authority (HRA) by following a statutory procedure that required the city to pass a resolution finding that at least one of three conditions described in the statute existed in the city before the HRA could transact any business or exercise any powers.  265 Minn. at 297, 121 N.W.2d at 394-95.  The St. Louis Park resolution found that all three conditions described in the statute existed in the city.  Id. at 298, 121 N.W.2d at 395.  Reilly Tar & Chemical Corporation obtained a writ of certiorari to review and determine the validity of the proceedings under which the city established the HRA.  Id.  The corporation contended that there was no evidence to support the city’s findings that the specified conditions existed in the city.  Id. at 302, 121 N.W.2d at 397. The city then obtained an order quashing the writ, and Reilly Tar appealed from that order.  Id.  The supreme court reversed and reinstated the writ to permit the district court to review the city’s action in establishing the HRA.  Id. at 303, 121 N.W.2d at 398.

            Appellants contend that in Reilly Tar, the supreme court interpreted the statute that required the city to find that certain statutory conditions existed in the city as requiring the city to prove actual need for a taking before exercising delegated condemnation powers.  But even if the supreme court recognized in Reilly Tar that a condemnation power delegated to a municipality by statute must be exercised in a manner that conforms with the statute, Reilly Tar did not involve any issue related to the necessity of a taking.  There was no taking in Reilly Tar, and the supreme court did not conclude that meeting all requirements of a statutory condemnation procedure is a threshold that must be met to demonstrate that a taking is necessary. 

            Nor was there any issue in Reilly Tar related to an appeal from a district court order that does not dispose of all claims of all parties.  The appeal in Reilly Tar was from an order that granted a motion to quash a writ of certiorari.  By quashing the writ of certiorari, the district court’s order disposed of all of Reilly Tar & Chemical Corporation’s claims against the city, and there was no issue in Reilly Tar as to whether the district court’s order was a final order from which an appeal could be taken.  Therefore, Reilly Tar provides no support for appellants’ claim that the district court’s order for partial summary judgment is appealable under the Stauffenberg exception.

            Similarly, in Robertson, there was no issue as to whether the district court order from which the appeal was taken was a final order.  In Robertson, the Belle Creek Watershed District followed a statutory procedure for establishing a watershed project that was similar to the procedure followed by respondent in the present case.  255 N.W.2d at 237.  The watershed district appointed appraisers to determine the benefits and damages to all properties affected by the project, and all properties were appraised.  Id.  Following the appraisers’ report, many of the affected landowners concurred in the feasibility of the project and conveyed their properties to the watershed district.  Id.  But three of the affected landowners refused to do so, and when it became clear that the three landowners intended to challenge the appraisers’ report in district court, the watershed district sought to thwart the forthcoming challenge by determining in its order confirming the appraisers’ report that although the three landowners’ property was necessary for the project, it should be stricken from the appraisers’ report and acquired in a separate proceeding.  Id. at 237-38.

            The three landowners filed an appeal in the district court to contest the exclusion of their land from the proceeding and to review the benefits and damages in the appraisers’ report to determine whether the benefits exceeded the damages.  Id. at 238.   The watershed district moved to dismiss on the ground that the landowners lacked standing to appeal because their land had been stricken from the report.  Id.  The district court dismissed the appeal on that ground, and the landowners appealed to the supreme court.  Id.  The supreme court held “that any interested landowner may question whether the project is economically feasible” and that the three landowners’ “right to appeal cannot be cut off by simply dismissing them from the proceedings.”  Id. at 240.  The supreme court reversed and remanded for trial.  Id. at 241.  But, as in Reilly Tar, there was no issue in Robertson as to whether the district court’s order was appealable because the district court order that was appealed in Robertson dismissed the three landowners’ appeal, which disposed of all of the landowners’ claims against the watershed district. 

            And the supreme court did not conclude in Robertson that determining the necessity of taking the three landowners’ land required a determination of the economic feasibility of the project.  The necessity of the takings was not an issue at all.  The landowners did not challenge the necessity of the takings, and the supreme court  explicitly noted that “appellants’ lands were a necessary part of the overall project.”  Id. at 240.

            Because the order from which this appeal is taken is not a final order and does not address the necessity of taking appellants’ property, an appeal may not be taken from the order, and the appeal must be dismissed.  Because the appeal is dismissed, appellants’ motion to strike portions of respondent’s brief is moot.

Appeal dismissed.