This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
Filed June 21, 2005
Reversed and remanded
Gordon W. Shumaker, Judge
Ramsey County District Court
File No. C5-02008373
A. Roston, Malkerson Gilliland Martin LLP,
Thomas F. Pursell, Lindquist & Vennum P.L.L.P., 4200 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for appellant)
Manuel Cervantes, St. Paul City Attorney, Louise Toscano Seeba, Assistant City Attorney, 550 City Hall and Courthouse, 15 West Kellogg Boulevard, St. Paul, MN 55102 (for respondent)
Considered and decided by Klaphake, Presiding Judge; Shumaker, Judge; and Crippen, Judge.*
U N P U B L I S H E D O P I N I O N
GORDON W. SHUMAKER, Judge
Because (1) genuine issues of material fact exist that preclude summary judgment; (2) the statute of repose does not apply to claims based on negligent maintenance; and, (3) the city failed to give appellant timely notice of its intention to claim immunity, we reverse the district court’s order and remand.
Originally, the city paid for park utilities and operating costs through an annual assessment from downtown business owners. During the 1990s, the business owners objected to this assessment, which was phased out by 2000. The city’s Park and Recreation Department began paying the entire $325,000 in annual operating costs, which were only partially offset by about $75,000 in revenue. In 2000, the city decided to permanently close the park because of the high operating costs and concerns about rising future costs, including the anticipated replacement of the roof which was already 20 years into its expected life of 25-30 years. City workers gave a rough estimate of $1.8 million to replace the roof. Because the city’s tax levy had been held flat for 11 years, the Park and Recreation Department did not have funds for repairs or replacement of this magnitude. The city also began exploring the possibility of selling the park.
In 2000, appellant purchased the
The city leased the park to TSG for use as a party and reception site. During the first months of the lease, there were several incidents of leakage from the planters or the water features; and, at one point, the city cut off water to the park to remedy the problem. Flooding occurred in the offices of some of appellant’s tenants. The city made repairs and instructed TSG on the proper watering of the planters and use of the water features, which alleviated some of the problems.
In 2002, the city formally advertised the park for sale. Both appellant and TSG bid on it. TSG offered the winning bid and became the fee owner of the park on December 31, 2002. Appellant, however, had previously dealt with TSG’s owner, Wong, at another site and was upset to learn that he had successfully purchased the park. Appellant began to systematically document all problems with TSG, including leakage incidents.
At the evidentiary hearing before the referee, appellant’s expert testified that the cause of the leakage was a poor roof design. On rebuttal, the same witness also testified that the roof had been poorly maintained, but admitted he had not seen the roof until 2003. Other witnesses testified that the market value of appellant’s building had fallen because of the leakage problems.
The city generally pleaded the statute of limitations in its answer to appellant’s complaint. After the close of the evidentiary hearing, but before the matter was placed on the trial calendar, the city also raised the issue of immunity in its proposed findings to the referee. Appellant responded with a memorandum opposing the city’s immunity claims.
The referee issued his report on June 8, 2004, finding for the city on the merits because the city had paid for all damage for any acts of trespass or nuisance, had committed no fraud or misrepresentation, and owed appellant no duty of care. The referee further found that the city was immune from various claims and that the statute of repose precluded claims against it. He recommended dismissing the city from the action.
On June 22, 2004, the district court sua sponte issued an order adopting the referee’s findings and conclusions, dismissing the city from the action, and setting the matter between TSG and appellant on for trial. On August 27, 2004, the district court ordered summary judgment in favor of the city and dismissed the city from the case. This appeal followed.
D E C I S I O N
1. Summary Judgment
Although its order for judgment
lacks specificity, we conclude that the district court granted summary judgment
sua sponte to the city, and we therefore review it as such. Summary judgment may be granted when the
pleadings, discovery, and any affidavits on file show that there is no genuine
issue of material fact and that either party is entitled to judgment as a
matter of law.
The district court may grant summary
judgment sua sponte when (1) there are no genuine issues of material fact; (2)
one of the parties deserves judgment as a matter of law; and (3) the lack of a
formal motion does not prejudice the party against whom judgment is
granted. Hebrink v. Farm Bureau Life Ins. Co., 664 N.W.2d 414, 419 (
Under the circumstances of this case, we are troubled by the district court’s wholesale adoption of the referee’s report and resulting sua sponte grant of summary judgment dismissing the claims against the city.
In particular, the district court
apparently agreed with the referee that appellant failed to offer proof of
damages, an essential element of the tort causes of action. We note, however, that appellant offered evidence
of a diminution in its property’s market value.
Damages may be proved in different ways, including loss of value of real
property. See Snyder v. City of
Even if appellant arguably might not ultimately prevail in its claims, the district court may not resolve factual disputes in order to grant summary judgment, but must view the evidence in the light most favorable to the party against whom judgment is to be granted. We conclude that because there were genuine issues of material fact, the district court erred by granting summary judgment on the merits of appellant’s causes of action.
2. Statute of Repose
Actions in contract or tort that
arise out of the defective or unsafe condition of an improvement to real
property, whether against the owner or the builder, architect or suppliers,
must be brought within two years after discovery of the injury and not more
than ten years after substantial completion of construction. Minn. Stat. § 541.051, subd. 1(a) (2002). If actions for nuisance or trespass are based
on the defective or unsafe condition of an improvement to real property, the
appropriate limitation period is under this statute and not under Minn. Stat.
§ 541.05 (2002) (setting six-year statute of limitations for various
actions). Nolan & Nolan v. City of Eagan, 673 N.W.2d 487, 496-97 (Minn.
App. 2003) review denied (
This section does not apply, however, to actions against owners or a person in possession for damages based on negligent maintenance, operation, or inspection of real-property improvements. Minn. Stat. § 541.051, subd. 1(c) (2002). The referee concluded, and the district court apparently agreed, that appellant had failed to provide evidence of negligent maintenance or operation and that all injuries were the result of defective roof design. But appellant did show 21 leaks that occurred during the city’s ownership that could be tied to gaps in the roof windows, broken drains in the planters and water features, or misuse of the planters and water features. Further, appellant’s expert testified on rebuttal that in his opinion the roof structure showed evidence of negligent maintenance, including the growth of a small tree in a gap in the roof. Viewed in the light most favorable to appellant, this is sufficient to raise a genuine issue of material fact. We therefore conclude that the district court erred by granting summary judgment based on the statute of repose.
The referee concluded, and the
district court agreed, that the city was immune from suit based on statutory,
official, and recreational-land immunity.
Unlike an affirmative defense, immunity protects a municipality from the
lawsuit itself. Sletten v.
Although we acknowledge that the question of immunity is best resolved early in the hearing process and that the defense of immunity is not waived even if not pleaded in the initial pleadings, we cannot agree that appellant was given a meaningful opportunity to meet and respond to the city’s immunity claim. The city did not raise this defense until the discovery period had ended and a multi-day evidentiary hearing had concluded, leaving appellant with no meaningful opportunity to test the legitimacy of the city’s claim. The district court then sua sponte granted summary judgment, in part based on the city’s immunity defense. We can only conclude that appellant was prejudiced by the lack of a formal motion for both summary judgment and for the application of the claimed immunity defense and that the district court therefore erred by granting summary judgment to the city based on immunity. See Hebrink, 664 N.W.2d at 419 (stating that party against whom sua sponte summary judgment is granted must have meaningful opportunity to oppose action).
Reversed and remanded.