This opinion will be unpublished and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

A04-1812

 

Richard H. Hagstrom, et al.,

Appellants,

 

vs.

 

City of Shoreview,

Respondent.

 

Filed July 5, 2005

Affirmed in part, reversed in part, and remanded

Peterson, Judge

 

Ramsey County District Court

File No. C2-01-005646

 

Rolf E. Gilbertson, Michael R. Cashman, Zelle, Hofmann, Voelbel, Mason & Gette, LLP, 500 Washington Avenue South, Suite 4000, Minneapolis, MN 55415 (for appellants)

 

Pierre N. Regnier, Jessica E. Schwie, Jardine, Logan and O’Brien, PLLP, 8519 Eagle Point Boulevard, Suite 100, Lake Elmo, MN 55042 (for respondent)

 

            Considered and decided by Lansing, Presiding Judge, Peterson, Judge, and Crippen, Judge.*

U N P U B L I S H E D   O P I N I O N

PETERSON, Judge

On appeal from summary judgment in this zoning-ordinance dispute, appellants argue that (1) the district court resolved factual issues against appellants and violated their due-process rights by appointing a referee and adopting his report over appellants’ objections; (2) appellants were denied equal protection by the city treating appellants’ property differently than the property of appellants’ neighbor; (3) the city’s conduct denied appellants substantive due process of law because appellants had a property interest in the city correctly applying its fence ordinance and the city did not do so; (4) the district court erred in ruling that ordinance section 205.080(F)(1) applies, and even if that section applies, the district court incorrectly interpreted it; and (5) appellants were entitled to a declaratory judgment identifying how the ordinance’s term “front yard” would be applied here.  We affirm in part, reverse in part, and remand.

FACTS

            Since 1989, appellants Richard and Deirdre Hagstrom have owned the property located at 376 North Owasso Boulevard in the city of Shoreview.  Sue Nicholson owns the adjacent property located at 372 North Owasso Boulevard.  Both properties are lakeshore properties located on Lake Owasso.  Neither property is adjacent to a public street or right-of-way.  Both properties are located about 600 feet south of the public right-of-way for North Owasso Boulevard.  The only access to the Nicholson property is over a 20- by 60-foot driveway easement across a blacktopped area on the Hagstrom property.

            Following is a diagram of the properties:

 

 

            In 1993, the respondent City of Shoreview issued a permit to Nicholson to build an addition to her dwelling.  A dispute arose between the Hagstroms and Nicholson about Nicholson using the blacktopped area on the Hagstrom property that was outside the driveway easement to turn around and to park vehicles belonging to her guests and to contractors.  Richard Hagstrom had numerous communications with the city about the trespass problem.  The city recommended that the Hagstroms build a fence along the boundary between the Hagstrom and Nicholson properties (“mutual boundary line”) and extend the fence across the blacktopped area up to the point of the easement.

            In July 1993, Richard Hagstrom met with the city building inspector to determine the maximum size of the fence that could be built along the mutual boundary line.  The building inspector advised Hagstrom that the fence could not extend southerly toward Lake Owasso past the point on the mutual boundary line that is determined by drawing a line perpendicular to the boundary line from the southernmost point of the Hagstroms’ existing dwelling (“Hagstrom setback”).  The fence was limited to a height of four feet, and Hagstrom was required to have property irons or markers located by a surveyor and visible for the final inspection of the fence.  The Hagstroms applied for and were issued a permit to build a fence complying with those conditions.

            In June 2000, the city issued Nicholson a permit to build a fence, 100 feet long by six feet high, along the mutual boundary line.  The Hagstroms complained to the city that the fence encroached on their property; obstructed their view of the lake; exceeded the height permitted by the city’s development code; and did not meet the ordinary-high-watermark (OHW) setback requirement.  The city’s building official inspected the fence and found that it encroached on the Hagstroms’ property, so the fence was moved onto Nicholson’s property.  The city planner rejected Richard Hagstrom’s claim that the height and length of the Nicholson fence were contrary to the development ordinance.  The Hagstroms appealed the permit decision to the Shoreview Planning Commission, which upheld the decision.  The Hagstroms appealed the planning commission’s decision to the Shoreview City Council, which denied the appeal and upheld the decision issuing the building permit.

            The Hagstroms brought this action in district court against the city alleging that a city ordinance was unconstitutional and that the city had improperly construed and applied its ordinances with respect to the fence construction permit issued to Nicholson in 2000; a permit issued to Nicholson in 1993 to build an addition to her dwelling; and the placement of Nicholson’s driveway.  The Hagstroms also alleged that their constitutional due-process and equal-protection rights were violated because conditions that were imposed on them when they built a fence in 1993 were not imposed on Nicholson.  The Hagstroms sought declaratory and injunctive relief, monetary damages, and attorney fees.

            The city moved for summary judgment seeking dismissal of the complaint.  The Hagstroms moved for partial summary judgment on all claims and reserving only the issue of damages.  By order filed January 4, 2003, the district court denied both parties’ motions for summary judgment as premature.  The district court concluded that Minn. Stat. § 555.11 (2002) required both that Nicholson, as an interested person, be made a party to the declaratory action and that the Minnesota Attorney General be notified of the claim that a city ordinance was unconstitutional.  The court ordered that the lawsuit would continue when Nicholson was joined to the lawsuit and directed Hagstroms to verify compliance with Minn. Stat. § 555.11.

            Following a scheduling conference, the district court appointed a referee to review and make a recommendation to the district court on the application of the ordinances at issue.  The district court received the referee’s report on July 11, 2003, and by order filed July 16, 2003, the district court allowed the parties 30 days to file objections to the report and also stayed the requirement that Nicholson be made a party.  The Hagstroms filed objections to the referee’s report, arguing that the referee misapplied the law and improperly made factual findings.

            The parties again filed cross-motions for summary judgment, with the city seeking dismissal of all claims and the Hagstroms seeking summary judgment on all claims and reserving the issue of damages for trial.  By order filed June 17, 2004, the district court denied the Hagstroms’ partial-summary-judgment motion and granted partial summary judgment for the city.  The district court denied the Hagstroms’ motion for reconsideration but issued an amended order on July 13, 2004.

            The July 13, 2004 amended order denied the Hagstroms’ partial-summary-judgment motion and granted partial summary judgment for the city on all claims except the claim relating to the placement of Nicholson’s driveway.  The district court adopted the referee’s[1] report as part of the court’s findings and conclusions.  The district court found no just reason for delay and expressly directed the entry of judgment.  Judgment was entered on July 28, 2004.

            This appeal challenges the partial summary judgment in favor of the city.  The city filed a notice of review seeking review of the denial of summary judgment on the claim regarding Nicholson’s driveway.    

D E C I S I O N

            On appeal from summary judgment, this court determines whether any genuine issues of material fact exist and whether the district court erred in applying the law.  Cummings v. Koehnen, 568 N.W.2d 418, 420 (Minn. 1997).  This court “must view [the] evidence in the light most favorable to the party against whom summary judgment was granted.”  Vetter v. Sec. Cont’l Ins. Co., 567 N.W.2d 516, 520 (Minn. 1997).

I.

            The Hagstroms argue that the district court improperly resolved factual issues against them.  When deciding a summary-judgment motion, the district court may not weigh the evidence, but must resolve all factual inferences in favor of the party against whom summary judgment is granted.  Wagner v. Schwegmann’s So. Town Liquor, Inc., 485 N.W.2d 730, 733 (Minn. App. 1992), review denied (Minn. July 16, 1992).

Citing the district court’s use of the terms “alleged” and “claimed,” the Hagstroms argue that the district court rejected the evidence that the city limited the height of their fence to four feet and did not allow the fence to extend toward the lake past the Hagstrom setback.  We interpret the district court’s use of the terms “alleged” and “claimed” as a recognition that a factual dispute exists on that issue rather than as a factual finding contrary to the evidence presented by the Hagstroms.  Also, the district court’s order incorporates the referee’s report, which states:

There is dispute about whether the City limited the height and location of the Hagstrom fence or merely documented in the permit what the applicant requested.  However, noting a “4′ Max. Height” on the permit implies that the City was restricting the fence height.

 

The district court did not improperly resolve fact issues against the Hagstroms.

The Hagstroms also object to the appointment of the referee, but they have not shown that they were prejudiced by the appointment.  To obtain reversal, an appellant must show both error and prejudice.  Midway Ctr. Assocs. v. Midway Ctr., Inc., 306 Minn. 352, 356, 237 N.W.2d 76, 78 (1975).  We, therefore, decline to consider the Hagstroms’ claims of error regarding the appointment of the referee.

II.

The city argues that this action should be dismissed because Nicholson was not joined as an indispensable party.  In its January 4, 2003 order the district court directed the Hagstroms to join Nicholson as an indispensable party.  But in its July 16, 2003 order, the district court ordered, “[u]ntil further order of the court, the court’s prior requirement that [] Nicholson be made a party to this lawsuit is withdrawn.”  The stay of the order requiring Nicholson to be joined as an indispensable party remains in effect.  Therefore, a decision by this court on the issue would be premature.

III.

            The interpretation of an ordinance is a question of law subject to de novo review.  Gadey v. City of Minneapolis, 517 N.W.2d 344, 347 (Minn. App. 1994), review denied (Minn. Aug. 24, 1994).  Three general rules of construction guide a court’s interpretation: terms in zoning ordinances are given their plain and ordinary meaning; “zoning ordinances should be construed strictly against [a] city and in favor of [a] landowner;” and zoning ordinances must be considered in light of their underlying policy goals.  Frank’s Nursery Sales, Inc. v. City of Roseville, 295 N.W.2d 604, 608-09 (Minn. 1980).  General rules of statutory construction may also aid interpretation.  Chanhassen Estates Residents Ass’n v. City of Chanhassen, 342 N.W.2d 335, 339 n. 3 (Minn. 1984).

            The district court determined that the city’s interpretation of the ordinance was proper under the circumstances.  The city determined that the setback of Nicholson’s fence from Lake Owasso is governed by section 205.080(F)(1) (2000) of the Shoreview City Code.  The Hagstroms argue that section 205.080(F)(1) does not apply and, even if it does apply, the city’s interpretation of it is incorrect.  The Hagstroms contend that the city should not have permitted the Nicholson fence to extend toward Lake Owasso beyond the Hagstrom setback and that to the extent the fence is permitted to extend beyond this point, the fence is in a front yard and section 206.150(E)[2] limits the height of the fence to four feet.  Shoreview, Minn., City Code § 206.150(G) (2000). 

The city code contains a general provision that requires that structures must be set back 50 feet from the OHW of Lake Owasso.  Shoreview, Minn., City Code § 205.080(D)(3) (2000).  The city code also includes an exception from the general 50-foot setback requirement.  Under this exception, “[i]n those cases where there are existing adjacent structures which have a lakeside setback of more than fifty (50) feet, the lakeside setback for new structures shall be equal to the average of the lakeside setbacks for the existing adjacent structures, plus or minus 10 feet.”  Shoreview, Minn. City Code § 205.080(F)(1) (2000). 

In applying this exception to determine the setback from Lake Owasso for the Nicholson fence (the new structure), the city interpreted the phrase “existing adjacent structures” to mean the two principal structures located on the parcels adjoining the parcel where the fence was to be built.  In this case, this interpretation means that the existing adjacent structures are the Hagstrom home, which is the principal structure on the parcel adjoining Nicholson’s parcel on the west and the Schubert home, which is the principal structure on the parcel adjoining Nicholson’s parcel on the north.  Using the distances that these two homes are set back from Lake Owasso, the city determined that the setback for the Nicholson fence was the average of these two distances, plus or minus ten feet.  We conclude that this is not a correct interpretation of the ordinance.

Consistent with the general rule of construction that terms in zoning ordinances are given their plain and ordinary meaning, the Shoreview City Code provides that “[u]nless specifically defined [in the code], words or phrases used in the City of Shoreview Code of Ordinances shall be interpreted to give them the same meaning as they have in common usage and so as to give subject code its most reasonable application.”  Shoreview, Minn., City Code § 222.010 (2000).  Because the code does not define “existing adjacent structures,” this phrase must be given the same meaning it has in common usage.  In common usage, “adjacent” means, “1.  Close to; lying near: adjacent cities.  2.  Next to; adjoining: adjacent garden plots.”  The American Heritage Dictionary of the English Language 22 (3d ed. 1992).

The city’s interpretation of section 205.080(F)(1) is consistent with the first common meaning of adjacent; the Schubert home is close to and lies near the Nicholson fence.  But this meaning of adjacent cannot reasonably be used when interpreting the ordinance because there could be several existing structures that are close to or lie near the site of a new structure, and the city interprets the ordinance to identify two principal structures, not several structures.  Therefore, the second common meaning of “adjacent” must be used, and this meaning does not allow the city’s interpretation because the ordinance refers to adjacent structures, not adjacent parcels.  The Nicholson home stands between the Nicholson fence and the Schubert home and, therefore, the Nicholson fence is next to the Nicholson home; it is not next to the Schubert home.  The existing structures that are next to, or adjacent to, the Nicholson fence are the Hagstrom home and the Nicholson home, not the Hagstrom home and the Schubert home.

The city’s construction of the ordinance also leads to an absurd and unreasonable result because the setback for a fence along the boundary between two parcels can be significantly different depending on the side of the boundary where the fence is located.  See Minn. Stat. § 645.17 (2004) (stating that in ascertaining legislative intent, courts presume that “legislature does not intend a result that is absurd, impossible of execution, or unreasonable”).  In this case, the home on the west side of the Hagstrom home is set back much further from Lake Owasso than the Schubert home.  Therefore, under the city’s interpretation of the ordinance, if the Hagstroms had sought a permit to build a fence on their side of the mutual boundary line, the fence that Hagstroms would be allowed to build would have to be set back much further from the lake than the fence that Nicholson was allowed to build.  Because there is no apparent underlying policy goal that provides a basis for significantly different setbacks for fences built in almost exactly the same location along the same boundary line, this result is absurd and unreasonable.  If the Hagstrom home and the Nicholson home are used to determine the setback, this unreasonable result is avoided because the setback will be the same regardless of which homeowner builds the fence.

We also note that the exception from the general 50-foot setback requirement that is set forth in section 205.080(F)(1) is not the only exception set forth in the Shoreview  City Code.  The next paragraph of the code contains another exception that explicitly applies to fences on lakeshore property.  This paragraph states:

Setback requirements set forth in this section from side property lines and OHW level shall not apply to docks, piers, boat lifts, retaining walls, walks, required safety railings along steps and retaining walls, or vegetation (trees, shrubs, flowers, etc).  Fences may be permitted anywhere lakeward of the required structure setback, except within the shore impact zone, provided they are not taller than 3.5 feet above grade.  The City Planner may authorize fences up to 6 feet in height that exten[d] into the Shore Impact Zone when a property abuts a walkway, park, or similar facility.

 

Shoreview, Minn., City Code § 205.080(F)(2) (2000) (emphasis added). 

            The emphasized language in section 205.080(F)(2) appears to address the precise circumstances of this case and makes it unnecessary to determine whether Nicholson’s lakeside yard is a front yard.  It is not apparent why the city did not apply this provision when issuing the permit for the Nicholson fence.

            Because the city incorrectly interpreted section 205.080(F)(1) when it determined the setback for the Nicholson fence, we reverse the district court’s determination that the fence is a legal fence and remand to the district court for further proceedings consistent with this opinion.  On remand, the district court may reopen the record and may remand to the city to permit it to consider the applicability of section 205.080(F)(2) for determining the setback and the height of the Nicholson fence.

IV.

The Hagstroms argue that the city violated their equal-protection rights.

A zoning ordinance must operate uniformly on those similarly situated. . . .  [T]he equal protection clauses of the Minnesota Constitution and of the Fourteenth Amendment of the United States Constitution require that one applicant not be preferred over another for reasons unexpressed or unrelated to the health, welfare, or safety of the community or any other particular and permissible standards or conditions imposed by the relevant zoning ordinances.

 

Nw. College v. City of Arden Hills, 281 N.W.2d 865, 869 (Minn. 1979) (citations and quotation omitted).  “Essential to a ruling that equal protection has been denied by discriminatory administration of the laws is a finding that the persons treated disparately are similarly situated.”  State by Spannaus v. Lutsen Resorts, Inc., 310 N.W.2d 495, 497 (Minn. 1981).

            The Hagstroms argue that under Nw. College, the city is required to apply the same conditions to the Nicholson fence that were applied to the Hagstrom fence.  Nw. College involved two private colleges in the same city, one of which was denied a special-use permit and the other of which was granted a building permit.  251 N.W.2d at 867.  The applications of both colleges were considered at the same city-council meeting.  Id. The supreme court concluded:

The disparate treatment of Northwestern and Bethel is constitutionally impermissible.  Because Bethel has long been allowed to pursue its course of construction merely by complying with Arden Hills’ requirements in obtaining building permits, no more may be required of Northwestern on the instant application.

 

            Today’s decision is limited to ordering that Arden Hills grant a building permit to Northwestern to construct its proposed fine arts center, subject only to an application for such permit in the usual form and substance therefor.  Arden Hills is not otherwise bound in perpetuity by what it has asserted to be prior erroneous applications of its zoning ordinance and may in the future require Northwestern to exhaust its administrative remedies by application for the appropriate rezoning of its campus.

 

Id.at 869.

            Unlike the parties in Nw. College who filed their applications nearly simultaneously, id. at 867, the Nicholson’s permit to build a fence was issued seven years after the Hagstroms’ permit.  Hagstrom “cannot meet the similarly situated requirement for an equal protection claim because [their permit and the Nicholson’s permit] are separated in time.”  Stotts v. Wright County, 478 N.W.2d 803, 806 (Minn. App. 1991), review denied (Minn. Feb. 11, 1992).

V.

The Hagstroms argue that the city violated their due-process rights under 42 U.S.C. § 1983.

In order to establish a section 1983 claim, [plaintiffs] must establish that they have been deprived of a right, privilege, or immunity secured by the constitution or law of this state by any person acting under color of any statute, ordinance, regulation, custom, or usage, or any State or Territory.  A substantive due process claim under 42 U.S.C. § 1983 in the zoning context exists, if at all, only in the extraordinary situations and will not be found in “run-of-the-mill” zoning disputes.  To establish such a claim, the court considers (1) whether there has been a deprivation of a protectible property interest, and (2) whether the deprivation results from an abuse of governmental power sufficient to state a constitutional violation.

 

            State law and the city’s ordinance recognize that certain adjacent property owners can sue to require enforcement of the zoning laws.  It does not necessarily follow, however, that this right confers a protectible property interest for purposes of the substantive due process clause and 42 U.S.C. § 1983.  Minnesota law has recognized that zoning ordinances do not create a property right in adjacent landowners:  Setback lines or building lines do not really create an easement in the strict legal sense.  The effect of setback lines and open yards and spaces in zoning ordinances is merely to regulate the use of property.  It gives no beneficial use to another, except as light and air may rest undisturbed in the space where structure are prohibited.  This restriction of use is based upon the exercise of the police power for the general welfare, and is not based on contract rights or the exercise of the power of eminent domain. . . . 

 

            Even assuming for the sake of further analysis that [plaintiffs] could establish deprivation of a property right, in the zoning context, whether government action is arbitrary or capricious within the meaning of the Constitution turns on whether it is so egregious and irrational that the action exceeds standards of inadvertence and mere errors of law.

 

Mohler v. City of St. Louis Park, 643 N.W.2d 623, 635-36 (Minn. App. 2002) (citations and quotations omitted), review denied (Minn. July 16, 2002).

            Here, the record shows that confusion exists as to how to apply the conditions of the Shoreview City Code to lakeshore lots.  The city’s conduct does not rise to the level of egregious conduct required to support a section 1983 claim.  See id. at 636-37 (concluding that the city’s negligent misrepresentation of the law did not rise to the level of egregious and irrational conduct that would support a substantive due process claim) (citing Northpointe Plaza v. City of Rochester, 465 N.W.2d 686 (Minn. 1991) and Queen Anne Courts v. City of Lakeville, 726 F. Supp. 733 (D. Minn. 1989)).

VI

 

            By notice of review, the city seeks review of the denial of its motion for summary judgment on the Hagstroms’ driveway claim, arguing that the Hagstroms’ claim was not ripe because they failed to exhaust their administrative remedies.  In denying the motion, the district court retained jurisdiction “until the driveway issue is resolved, or until the administrative remedies . . . are exhausted.”  On appeal the city argues that the district court erred in retaining jurisdiction over the claim and that the proper remedy was to dismiss the claim.  We agree.

“Generally, a party aggrieved by a decision of a municipality’s governing body must exhaust all administrative remedies before seeking judicial review.”  Med. Servs., Inc. v. City of Savage, 487 N.W.2d 263, 266 (Minn. App. 1992) (citing Minn. Stat. § 462.361, subd. 2) (1990)).  Here, the record does not indicate that the Hagstroms have used administrative measures to resolve this claim; there is no final decision by the city. See id. (applying rule where city council had not made final decision on permit).  While the  rule does not apply when it would be futile to pursue administrative remedies, there is no conclusion by the district court that this is the case here.  McShane v. City of Faribault, 292 N.W.2d 253, 256 (Minn. 1980) (holding “administrative remedies need not be pursued if it would be futile to do so”); Zaluckyj v. Rice Creek Watershed Dist., 639 N.W.2d 70, 74 (Minn. App. 2002) (stating issues of exhaustion and futility of administrative remedies are legal questions for court), review denied (Minn. Apr. 16, 2002).  A plaintiff’s failure to pursue administrative remedies deprives the district court of subject-matter jurisdiction until the administrative remedies are exhausted.  See Nw. Airlines, Inc. v. Metro. Airports Comm’n, 672 N.W.2d 379, 385 (Minn. App. 2003) (concluding district court properly dismissed claim for lack of subject-matter jurisdiction where appellant failed to exhaust administrative remedies), review denied (Minn. Feb. 25, 2004).

The district court directed the parties to pursue their administrative remedies but retained jurisdiction.  When administrative remedies exist, the proper procedure is for the district court to dismiss the plaintiffs’ claim without prejudice for lack of subject-matter jurisdiction so that plaintiffs may pursue administrative remedies.  

Affirmed in part, reversed in part, and remanded.