This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A04-2106

 

In the Matter of River City Woodworking, Inc.

 

Filed June 21, 2005

Affirmed

Poritsky, Judge*

 

Chaska Economic Development Authority

 

 

Kirk A. Schnitker, Jon W. Morphew, Schnitker & Associates, P.A., 2300 Central Avenue Northeast, Minneapolis, MN 55418 (for relator River City Woodworking)

 

Luke L. Melchert, R. Lawrence Harris, Melchert Hubert Sjodin, PLLP, 121 West Main Street, Suite 200, Waconia, MN 55387 (for respondent Chaska Economic Development Authority)

 

            Considered and decided by Schumacher, Presiding Judge; Wright, Judge; and Poritsky, Judge.

U N P U B L I S H E D   O P I N I O N

PORITSKY, Judge

When respondent acquired relator’s property as part of a redevelopment project, relator became entitled to reimbursement for certain expenses incurred in relocating its business.  An administrative hearing officer denied various claims made by relator for relocation expenses.  By writ of certiorari, relator argues that the hearing officer erred in holding that relator was not entitled to reimbursement for (1) the full amount of its claimed self-move; (2) pre- and post-judgment interest; (3) costs incurred in the storage of its personal property in trucks and trailers purchased for its move; (4) costs incurred in the use of its own forklifts during the move; and (5) costs of installing new cabinets and countertops at the replacement property.  We affirm.

FACTS

 

On June 25, 1999, respondent City of Chaska Economic Development Authority (CEDA) served a petition seeking to acquire property owned by Ronald A. Paul (“Paul”) and relator River City Woodworking Inc. (RCW), and upon which RCWwas located.  Mr. Paul is the sole owner of RCW, which builds high-end custom cabinets.  CEDA hired Wilson Development Services (Wilson), a relocation-consulting firm, to assist RCW in preparing relocation claims, to review those claims, and to make recommendations concerning whether the claims were proper and what amount RCW should be reimbursed.  Wilson sent RCW notice of RCW’s eligibility for relocation benefits in July 1999. 

In August 1999, CEDA and RCW, along with other property owners whose property was to be condemned, entered into a stipulation and agreement concerning fixtures that CEDA would acquire as part of its condemnation.  The parties signed a second stipulation and agreement, dated October 7, 1999, under the terms of which CEDA agreed to determine, identify, and appraise all fixtures that it intended to acquire. On October 13, 1999, the district court granted CEDA’s condemnation petition and ordered that the “quick take” of the property occur on February 29, 2000, and that the property be vacated by that date.  In addition, the district court stated that

tenant shall be entitled to relocation for the moving of its inventory to one storage place, storage and move from said storage place to one permanent relocation.  That said relocation move for the inventory shall be strictly limited to inventory only and specifically excludes trade fixtures, equipment and machinery.

 

The court also appointed three commissioners to determine the appropriate compensation for the condemnation.

On November 3, 1999, an appraiser inspected RCW’s business and listed 75 fixtures that the CEDA would purchase as part of the “quick take.”  CEDA paid Paul andRCW $277,300 as compensation for taking the land, building, and fixtures.  The appraiser also included a list of moveable property, which RCW would move to the new location.  According to Wilson, (1) RCW did not object to the appraiser’s identification of what constituted moveable items, and (2) RCW was informed that the transfer of those items from the old location to the new location would serve as the basis on which professional movers would base estimates for the moving expenses, for which CEDA would reimburse RCW. Wilson arranged for two professional moving companies to perform a walkthrough of RCW’s property and estimate the cost of moving RCW.  The low estimate was $9,480.  The written estimate from the other moving company could not be located, but at the administrative hearing there was testimony that the estimate was for approximately $11,000.

RCW began planning for the move on January 3, 2000.  Even though CEDA acquired the property on February 29, 2000, RCW did not move out of the condemned property until March 19, 2000.  RCW chose not to use professional movers, but chose instead do a “self-move,” that is, to use its own employees to move its property.  RCW resumed the business of making cabinets on August 28, 2000, but Paul and the other employees continued to organize and set up the new facility.   Paul claims that the business is still not fully re-established. 

On April 12, 2002, RCW submitted a relocation claim for $445,428.09.   The claim included $80,000 for storage costs and more than $290,000 for labor involved in moving and re-establishing the business at the new location between 2000 and 2002.  RCW attached sheets listing the number of hours spent moving and re-establishing the business to document the labor costs.  Wilson responded on June 7, 2002, recommending that RCW be reimbursed $41,963.65 for relocating to the new property.  The reimbursement included the $9,480 based on the professional-move estimate and an additional $18,680 to cover the labor used to supervise and organize the move.  Wilson recommended denying the remainder of RCW’s claims, including storage costs because RCW did not incur any costs but merely used existing trailers to store items.  In February and March 2003, RCW submitted additional relocation claims, which included claims for reimbursement for using its own forklifts and for installation of new office cabinets and countertops.  CEDA, apparently acting on the basis of Wilson’s recommendations, denied most of those claims but paid RCW a total of $77,757.25 for relocation expenses. 

RCW appealed the denial of its claims to a hearing officer.  A hearing was held on April 5-6, 2004, at which Paul and two employees of the Wilson relocation firm, Daniel H. Wilson and Penny Rolf, testified.   The hearing officer ordered CEDA to pay $21,057.50—in addition to the $77,757.25 already paid—for costs incurred in 2000; that is, for “organizing the move, unpacking, organizing the office, unloading trailers, organizing the shop area and organizing tools and hardware.”  The hearing officer denied RCW’s claims for labor involved in the move for the years 2001-2003 as unreasonable.  The hearing officer denied RCW’s claim for time spent installing display-room cabinets and countertops in the new location, because RCW had already been reimbursed for the cabinets that were fixtures in its prior location, and to pay RCW for the time spent installing the new cabinets and countertops would result in a duplication of payment.  The hearing officer denied a claim for the rental of two forklifts, because RCW did not rent the forklifts but used its own and because the cost of using the forklifts was already compensated as part of the moving expenses.  The costs for storage in the trucks were similarly denied because RCW used its own trucks and trailers, which it purchased and kept after the move.  The hearing officer denied RCW’s claim for pre-hearing interest because neither federal nor state law provided for such interest.  On November 4, 2004, RCW appealed to this court by writ of certiorari.

D E C I S I O N

This court reviews quasi-judicial administrative decisions by writ of certiorari.  Dietz v. Dodge County, 487 N.W.2d 237, 239 n.3 (Minn. 1992).  Review by certiorari is limited to an inspection of the record.  Id. at 239.  Review is confined to (1) questions affecting jurisdiction; (2) regularity of proceedings; and (3) whether the order in question was arbitrary, oppressive, unreasonable, fraudulent, under an erroneous theory of law, or without any evidence to support it.  Id.  This court defers “to [the] agency’s conclusions regarding conflicts in testimony, the weight given to expert testimony and the inferences to be drawn from testimony.”  In Re Excess Surplus Status of Blue Cross & Blue Shield of Minn., 624 N.W.2d 264, 278 (Minn. 2001).  The court will uphold the decision of the agency if the agency “furnished any legal and substantial basis for the action taken.”  Senior v. City of Edina, 547 N.W.2d 411, 416 (Minn. App. 1996) (quoting Beck v. Council of St. Paul, 235 Minn. 56, 58, 50 N.W.2d 81, 82 (1951)). 

Minnesota makes public funds available to reimburse relocation expenses incurred by businesses displaced by public acquisitions of property.  Minn. Stat. § 117.50-.56 (2004).  This legislation requires the acquiring authority to provide relocation assistance in accordance with federal regulations promulgated to provide similar relief.  Minn. Stat. § 117.52.  The federal statute enabling such regulations is found at 42 U.S.C. §§ 4621, 4622 (2000).  The federal regulations implementing this statute are found at 49 C.F.R. §§ 24.1-.603 (2001).[1]

The regulations provide a list of expenses that are covered as part of a business’s relocation.  49 C.F.R. § 24.303 (currently 49 C.F.R. § 24.301(g) (2005)).  The list is not exhaustive, and the regulations provide a catchall which states that a business is entitled to “other moving-related expenses . . . as the Agency determines to be reasonable and necessary.”  49 C.F.R. § 24.303(a)(14) (currently 49 C.F.R. § 24.301(g)(7)).  Thus, for a business to receive reimbursement, the agency must find that the expenses are reasonable and necessary. 

I.

 

            RCW first challenges the hearing officer’s determination that it was entitled to only an additional $21,057.50 for labor costs involved in the self-move.  It argues that it should receive payment for all employee hours it spent in its self-move, and “that it is eligible to receive payment for its entire documented self-move claim in the amount of $286,165.” 

            RCW produced timesheets indicating the hours spent moving.  RCW argues that as long as it performed eligible tasks then it should be fully compensated.  But the regulations require that the tasks performed and the hours spent doing the tasks to be reasonable.  See 49 C.F.R. § 24.303 (“Payment for actual reasonable moving and related expenses”) (currently 49 C.F.R. § 24.301).  The hearing officer determined that RCW is not entitled to be reimbursed for its entire claim, finding that only a fraction of its claimed expenses for labor was reasonable and necessary.  The evidence supports this finding based on Daniel Wilson’s testimony that the number of hours RCW claimed it spent moving and the labor costs of the move were unreasonable.  See Blue Cross & Blue Shield of Minn., 624 N.W.2d at 278 (“We defer to an agency’s conclusions regarding conflicts in testimony”).

            RCW argues that the hearing officer’s decision is arbitrary and capricious because the hearing officer allowed only part of its claim, but not the full amount.  But the hearing officer awarded the additional amount based on a finding that it represented reasonable hours spent organizing the business and denied the remainder on a finding that such additional costs were unreasonable.  RCW’s position amounts to an argument that the hearing officer must either accept all or none of its claim.  This argument is unpersuasive.  The hearing officer awarded the additional $21,057.50, based on Paul’s testimony, and denied the remainder, based on Wilson’s testimony. 

            RCW also claims that the hearing officer acted arbitrarily and capriciously by denying RCW’s claims for reimbursing labor related to its move for 2001, 2002, and 2003.  The hearing officer found that the costs for those years were “unreasonable given the fact that the move commenced one year prior. . . . RCW has now been operating out [sic] their new location for almost three years.  These costs are unreasonable and are hereby denied for payment.”  RCW conceded in its brief that “[h]ad the Hearing Officer concluded that certain documented self-move expenses were not eligible because they were not reasonable or necessary[,] it may have made some sense.”  But that is precisely what the hearing officer concluded: that RCW’s self-move expenses for 2001, 2002, and 2003 were unreasonable.  The record supports the hearing officer’s determination, and RCW has failed to provide any legal reasoning or support of its argument that the hearing officer’s determination is arbitrary or capricious.

            In support of its claim to be reimbursed for all employee-labor costs incurred in its self-move, RCW argues at length that Wilson did not provide adequate relocation services.  The hearing officer, after two days of testimony, found that the relocation firm did not act unreasonably and was not unresponsive.  The hearing officer’s findings appear to be supported by evidence that the relocation firm repeatedly contacted RCW’s attorneys and sent letters indicating RCW’s rights to relocation benefits.  Finally, this court defers “to [the] agency’s conclusions regarding conflicts in testimony, the weight given to expert testimony and the inferences to be drawn from testimony.”  Blue Cross & Blue Shield, 624 N.W.2d at 278. 

II.

 

            RCW next challenges the hearing officer’s denial of pre- and post-judgment interest.  RCW concedes that Minnesota statutes do not“specifically” provide for interest in relocation claims.  It argues, however, that the statutory provision requiring payment of interest in eminent domain proceedings pursuant to Minn. Stat. § 117.195 (2004) also requires interest in relocation claims.  Section 117.195, subd. 1, states “[a]ll damages allowed under this chapter, whether by the commissioner or upon appeal, shall bear interest from the time of the filing of the commissioner’s report,” and if the award is not paid the court “shall vacate the award and dismiss the proceedings against the land.”  Id. at subd. 1.  

Chapter 117 does not define “damages,” but in light of the references to “the commissioner’s report” and “proceedings against the land,” it is our opinion that the interest provision relates only to land-condemnation proceedings.  Moreover, relocation benefits deal exclusively with personal property, and because personal property is not compensable in an eminent domain proceeding, the statutory requirements for an eminent domain proceeding do not apply to personal property.  See State by Humphrey v. Kouri, 415 N.W.2d 412, 413 (Minn. App. 1987) (“Personal property which is to be removed upon the termination of a lease is not a compensable interest in an eminent domain proceeding”), review denied (Minn. Jan. 28, 1988). 

RCW cites Minn. Stat. § 549.09 (2004) (relating to interest) and Henry v. Metro. Waste Control Comm’n, 401 N.W.2d 401, 407 (Minn. App. 1987), to support its claim for pre- and post-judgment interest.  However, in Henry this court ruled that section 549.09 does not apply to administrative hearings and does not play a role in determining whether interest is appropriate in any administrative proceeding.  Henry, 401 N.W.2d at 407.  Thus, section 549.09 is of no help to RCW.[2]  We conclude, therefore, that section 117.195 does not require pre or post judgment interest for relocation claims.

III.

 

            RCW next argues the hearing officer’s denial of costs for storing personal property in trucks and trailers it purchased for the move was arbitrary because the hearing officer did not state that these costs were unreasonable.  RCW claims that because 49 C.F.R. § 24.303(a)(4) (currently 49 C.F.R. § 24.301(g)(4) (2005)) generally covers storage, RCW should be reimbursed.  RCW purchased several trucks and trailers to use for storage of RCW’s personal property during the move.  RCW submitted a claim for the approximate rental cost for similar trucks and trailers, and argues that it should be reimbursed for that amount.  But section 24.303(a) authorizes payment for “actual” expenses.  Because RCW used its own trucks and trailers, it did not actually incur any costs.  See In re Relocation Benefits of James Bros. Furniture, Inc., 642 N.W.2d 91, 101 (Minn. App. 2002), review denied, (Minn. June 18, 2002), superseded by statute on other grounds, Minn. Stat. § 117.50, subd. 3 (Supp. 2003).  In James Bros. Furniture, relator sought relocation benefits for storing merchandise from its business at homes of friends and family.  Id. at 95.  This court affirmed the hearing officer’s denial of claims for “hypothetical storage costs” because relator did not incur direct financial costs.  Id. at 101.  Similarly, here, RCW did not incur any direct financial costs because RCW stored the personal property in trucks and trailers it owned.  Unlike a renter, who will have to return the equipment to the owner, RCW will still have this equipment after the move, so the comparison to renting is invalid.  Thus, rental costs do not provide a valid basis to determine RWC’s actual costs attributable to the move.

IV.

            RCW next argues that it should be reimbursed for the costs it incurred for having to use its own forklifts during the move.  RCW had one forklift on hand and purchased another for the move.  As it did with respect to its trucks and trailers, RCW determined the fair-market rate for the monthly rent of a forklift, and seeks reimbursement in an amount based on such rental.  In our view, however, the same reasoning that applies to the cost of storage in its own equipment applies here:  Because RCW will have the forklifts after the move is completed, cost of renting is not a valid basis to determine “actual” costs attributable to the move. 

V.

 

Finally, RCW argues that the hearing officer erred when she denied its claim for the cost of installing new cabinets and countertops at its new showroom.  The hearing officer denied that claim because to allow it would constitute a “duplication of payments” under 49 C.F.R. § 24.3 (unchanged).  RCW argues that section 24.3 is a procedural regulation and has not been adopted by Minnesota

But as we view the issue, under the applicable regulation, a business is entitled to receive up to $10,000 for “[m]odifications to the replacement property to accommodate the business operation,” to “make replacement structures suitable for conducting the business,” or “[r]edecoration or replacement of soiled or worn surfaces at the replacement site, such as paint, paneling, or carpeting.”  49 C.F.R. §§ 24.304(a)(2), (5) (.304(a)(2) (unchanged); .304(a)(5) (currently 49 C.F.R. § 304.(a)(4) (2005)).  RCW’s claim for installation of cabinets qualifies as a modification to accommodate the business or redecoration and is grouped with other reestablishment costs, which are capped at $10,000.  RCW already received $10,000 in re-establishment expenses.  Thus even if section 24.3 has not been adopted by Minnesota, the hearing officer’s ruling that RCW should not be paid twice for the same expenses is not arbitrary, capricious, or unreasonable.

  Affirmed.



*   Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.

[1] The Federal Highway Administration revised, reorganized and renumbered these regulations, effective February 3, 2005.  Uniform Relocation Assistance and Real Property Acquisition for Federal and Federally-Assisted Programs, 70 Fed. Reg. 590, 603-04 (Jan. 4, 2005) (codified at 49 C.F.R. pt. 24).  We note that although the version of these regulations in effect at the time of the claims for relocation expenses was amended, the changes do not affect the substance of this opinion. 

[2] RCW also relies on an order from an administrative law judgment in a separate relocation proceeding to support its argument.  The case is factually distinguishable because in that case the agency did not promptly pay relocation claims and often delayed payment for more than 100 days with no explanation.  But, here the relocation-consultation firm noted that RCW’s claims were vague, unclear, and required additional documentation.  In addition, RCW’s reliance on unpublished authority is not a persuasive argument for this court.  See Minn. Stat. § 480A.08, subd. 3(c) (“Unpublished opinions of the court of appeals are not precedential.”); Vlahos v. R&I Constr., Inc., 676 N.W.2d 672, 676 n.3 (Minn. 2004) (stating district court erred “both as a matter of law and as a matter of practice” by relying on an unpublished opinions).