This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat.§ 480A.08, subd. 3 (1994).


Muller Family Theaters,


Edward B. McMenomy, Jr., et al.,

Filed August 20, 1996
Affirmed in Part and Reversed in Part
Randall, Judge

Dakota County District Court
File No. C79410284

Peter H. Grills, Michael R. Bradley, David E. Crawford, O'Neill, Grills & O'Neill, P.L.L.P., 1250 Minnesota World Trade Center, 30 East 7th Street, St. Paul, MN 55101 (for Respondent)

George C. Hoff, Paula A. Callies, Hoff, Barry & Kuderer, P.A., Suite 260, 7901 Flying Cloud Drive, Eden Prairie, MN 55344 (for Appellants)

Considered and decided by Parker, Presiding Judge, Randall, Judge, and Willis, Judge.


This case arises from the City of Rosemount's zoning decisions and negotiations concerning the development of a movie theater in Rosemount. Appellants (Mayor McMenomy, Port Authority, and City of Rosemount) challenge the district court's partial denial of their summary judgment motion. They argue they are immune from this suit alleging negligence, negligent and reckless misrepresentation, interference with prospective business advantage, promissory and equitable estoppel, and tortious interference with contract. Respondent Muller Family Theaters (Muller) also appeals the district court's decision granting partial summary judgment against it on the issues of breach of contract, violation of state civil rights, and tortious interference with contract. We affirm in part and reverse in part.

Respondent owns and operates movie theaters in the Twin Cities. In the spring of 1993, respondent contacted Rosemount with an interest in developing a movie theater complex. Rosemount, through its Economic Development Coordinator John Miller, welcomed respondent's interest and prepared a package of incentives including the potential for partial public financing. In response, respondent hired architects, financial advisors, development consultants, and legal counsel and began to seek financing options. Negotiations between respondent and Rosemount ensued and both parties agreed respondent's proposed theater complex would best be suited for certain land that could be made available to the city, referred to as the business park.
Later in the spring of 1993, Guetschoff Theater Management Corporation (GTI) contacted Rosemount, also hoping to build a theater complex. Around July 6, 1993, City Administrator Steven Jilk advised the Port Authority that it should negotiate exclusively with respondent, as its proposal was already taking shape and respondent had done everything requested by Rosemount. The Port Authority voted unanimously to negotiate exclusively with respondent.
On July 20, 1993, the Port Authority rescinded its action of July 6, 1993, and decided to solicit proposals from both respondent and GTI. Respondent and GTI submitted proposals. On August 2, 1993, Jilk and Miller issued a "staff report" recommending that Rosemount award the project to respondent. On August 3, 1993, the Port Authority approved a resolution accepting respondent's proposal subject to certain conditions. Specifically, resolution 1993-5 states
the proposal submitted by the Mullers, as further developed and clarified by the Staff Report, is selected and accepted by the Rosemount Port Authority, subject to the following specific conditions:
A. The meeting of all financial and other conditions set forth in the staff report.
B. The prompt submission of cash, tangible assets and personal guarantees as enumerated in the August 2, 1993, staff report.
C. The negotiation and full execution of a Development Agreement between the Mullers and the Rosemount Port Authority by no later than August 17, 1993, * * *
D. The approval of the Agreement described in (C) above, by the Rosemount City Council.

Following Rosemount's decision to accept respondent's proposal, negotiations continued between Rosemount and respondent regarding, among other items, the division of financial responsibility between respondent and Rosemount and the purchase price of the land on which the theater was to be built. Respondent alleges Rosemount intentionally delayed the negotiation process by failing to acquire the necessary property, failing to pass the necessary zoning ordinances, and failing to come to a final agreement with respondent regarding the purchase price of the land. Respondent alleges McMenomy used his power as mayor to stall the project. Miller stated in a deposition that McMenomy came to his office, shut the door, and told him to "slow down" the Muller project.
Also in the fall of 1993, GTI undertook a joint effort with Carlson Properties of Rosemount to develop a theater in Rosemount entirely with private funds. Carlson Properties sold property to GTI for the development of the GTI theater. The property was just six blocks from the business park where respondent's theater was to be built. Like respondent's property, the Carlson property was not properly zoned for a theater. Respondent alleges, and city council member Klassen noted in a meeting, that Rosemount was inappropriately aiding GTI's development plan by putting it on a "fast track" through Rosemount's zoning process. The City Council quickly rezoned the Carlson property so construction of the GTI Theater could begin. Respondent alleges McMenomy used his influence to aid the Carlson family, who were family friends of the McMenomys, to develop the GTI theater.
Respondent claims such intentional disruption of its project, coupled with McMenomy's assistance to the GTI project, made it possible for GTI to commence construction before respondent. This, in turn, made respondent's project infeasible.
On December 16, 1994, respondent filed this action against McMenomy, the Port Authority, and the City of Rosemount. The complaint alleged ten counts including: (1) violation of civil rights under federal law (§1983); (2) violation of civil rights under state law (property rights); (3) breach of contract; (4) promissory estoppel; (5) equitable estoppel; (6) negligence (based on a duty to exercise reasonable care with regard to competing developers); (7) tortious interference with contract by McMenomy; (8) tortious interference with prospective business advantage by McMenomy; (9) reckless misrepresentation; and (10) negligent misrepresentation.
The federal claim (count one) was dismissed by the federal district court on July1995. On September 6, 1995, appellants moved for summary judgment on all remaining claims and asserted the defense of discretionary and official immunity to the tort claims. The district court concluded material issues of fact existed preventing it from granting summary judgment on the issues of official and discretionary immunity and denied summary judgment on the estoppel, negligent and tortious interference with business, and reckless and negligent misrepresentation claims. Because it found no valid contract existed between the parties, however, the court granted summary judgment with regard to the breach of contract, tortious interference with contract, and breach of state civil rights claims, all of which were contract-based claims.
Rosemount requests this court review (1) the denial of official immunity to McMenomy and (2) the denial of discretionary immunity to the Port Authority and City. Rosemount and respondent each raise one non-immunity related issue.

A party may bring an immediate appeal from a trial court's denial of a motion for summary judgment based upon a claim of immunity. McGowan v. Our Savior's Lutheran Church, 527 N.W.2d 830, 832 (Minn. 1995). Summary judgment is appropriate if there is no genuine issue of material fact and either party is entitled to a judgment as a matter of law. Minn. R. Civ. P. 56.03. The issue of immunity is a legal question. Waste Recovery Coop. v. County of Hennepin, 517 N.W.2d 329, 331 (Minn. 1994), modified (Minn. Jan. 28, 1994). This court need not defer to a district court's decision on legal issues. Frost-Benco Elect. Ass'n v. Minnesota Pub. Utils. Comm'n, 358 N.W.2d 639, 642 (Minn. 1984).

Official immunity is a common law doctrine that protects a public official who is charged by law with duties calling for the exercise of judgment or discretion. Olson v. Ramsey County, 509 N.W.2d 368, 371 (Minn. 1993). In determining whether official immunity applies, courts have examined whether the official's duties were ministerial or discretionary. McDonough v. City of Rosemount, 503 N.W.2d 493, 497 (Minn. App. 1993), review denied (Minn. Sept. 10, 1993). Even if the official acted in a discretionary capacity, however, official immunity does not protect an official who commits a wilful or malicious wrong. Id. Otherwise stated, an official is entitled to immunity when the official has not violated clearly established law. Finch v. Wemlinger, 361 N.W.2d 865, 868 (Minn. 1985).
No one disputes McMenomy was exercising discretion when dealing with the Muller and GTI proposals. Respondent alleges, and the district court concluded, however, that genuine issues of fact exist as to whether McMenomy wilfully and maliciously delayed respondent's project for personal gain.
Respondent provided evidence that McMenomy told the City's Economic Development Coordinator, who was responsible for the Muller project, to slow it down. Miller stated he told people at city hall that he wanted nothing to do with McMenomy's treatment of respondent's project, and that other council members had similar feelings. Respondent presented a letter from Rosemount's legal counsel stating that the Muller Theater complex development agreement and purchase agreement could be completed within two days of the Council's final negotiations with respondent. Further, according to the minutes of a December 21, 1993, City Council meeting, several council members expressed concerns that the GTI project was not being required to follow the "proper process" and was being put on the "fast track" and treated with "favoritism." Miller stated in deposition that McMenomy was the driving force behind the GTI process being accomplished so quickly. Miller further stated that he and others expressed concerns, but followed McMenomy's directions because McMenomy was "a very powerful person in town." Respondent presented evidence that the Carlsons, the chief developers of the GTI project, were family friends of McMenomy.
We agree with the district court in concluding McMenomy's actions present a jury question on whether he wilfully and maliciously used his position of power to interfere with respondent's prospective business relations or whether he made intentional or negligent misrepresentations to respondent. See Rico v. State, 472 N.W.2d 100, 107 (Minn. 1991) (official immunity does not protect the official who commits a wilful or malicious wrong). Accordingly, the district court properly refused to grant summary judgment on the issue of official immunity.

Discretionary immunity precludes municipal tort liability for claims "based upon the performance or the failure to exercise or perform a discretionary function or duty, whether or not the discretion is abused." Minn. Stat. § 466.03, subd. 6 (1994); Olson, 509 N.W.2d at 371. Generally, discretionary immunity protects governmental conduct at the planning or policymaking level, while conduct at the operational level is not protected. Olson, 509 N.W.2d at 370-71. To be immune for discretionary acts, the governmental entity must produce evidence showing the conduct involved a balancing of policy objectives. Nusbaum v. County of Blue Earth, 422 N.W.2d 713, 722 (Minn. 1988).
Respondent argues, and the district court concluded, that the Port Authority and the City acted in an operational capacity (not balancing policy) in dealing with respondent's proposal following Rosemount's "acceptance" of such proposal. We disagree. Rosemount's acceptance of respondent's proposal contained several conditions. Thereafter, Rosemount presented evidence that the Port Authority's actions with regard to respondent's proposal required it to weigh economic and social factors to come to an agreement with respondent on several issues including the land price, the size of the proposed business park lots, when and how the infrastructure for the business park would be developed, and what roadways were needed to service the business park. Such actions are discretionary and are entitled to statutory immunity. Similarly, the City Council's actions following the conditional acceptance of respondent's proposal involved zoning decisions regarding the Muller and GTI developments. Discretionary immunity protects a city's actions when determining the appropriateness of zoning issues as such issues involve the balancing of complex and competing factors. Wilson v. Ramacher, 352 N.W.2d 389, 393 (Minn. 1984). Accordingly, we conclude the district court erred by refusing to grant the Port Authority and Rosemount's motions for summary judgment on the issue of discretionary immunity.

Both Rosemount and respondent raise one non-immunity issue on appeal. We decline to review those issues. See Rasivong v. Lakewood Community College, 504 N.W.2d 778, 782 (Minn. App. 1993) (a party generally has no right to interlocutory review of issues not involving immunity from suit), review denied (Minn. Oct. 19, 1993).
Affirmed in part and reversed in part.