A05-757

Universal Marine and RV, Inc., et al.,

Appellants,

vs.

State of Minnesota, by its Commissioner of Transportation,

Carole Molnau, defendant and third party plaintiff,

Respondent,

vs.

City of Rochester, third party defendant,

Respondent.

Filed January 3, 2006

Affirmed

Randall, Judge

Olmsted County District Court

File No. C3-03-4035

Daniel N. Rosen, Alan R. Einisman, Rosen & Rosen, LLC, 150 South Fifth Street, Suite 3250, Minneapolis, MN 55402 (for appellants)

Mike Hatch, Attorney General, Kelly Kemp, Assistant Attorney General, 1800 Bremer Tower, 445 Minnesota Street, St. Paul, MN 55101 (for respondent State of Minnesota)

George C. Hoff, Hoff, Barry & Kuderer, P.A., 775 Prairie Center Drive, 160 Flagship Corporate Center, Eden Prairie, MN 55344 (for respondent City of Rochester)

Considered and decided by Randall, Presiding Judge; Peterson, Judge; and Dietzen, Judge.

U N P U B L I S H E D O P I N I O N

RANDALL, Judge

In this appeal from summary judgment denying appellants’ petition for mandamus to compel the state to institute eminent domain proceedings for the allegedly uncompensated taking of appellants’ property, appellants argue that the state’s closure of a temporary connection to Highway 14 in Olmsted County deprived them of reasonably convenient and suitable access to the main thoroughfare, entitling them to compensation for loss of that access. We conclude the district court did not err in granting summary judgment on the basis that appellants had no special property interest entitling them to direct access to the highway, and that they acquired an interest in the property only after the effective date of an agreement of public record establishing a limited temporary connection. We affirm.

FACTS

Appellants G & G Universal Properties, LLC and Universal Marine and RV, Inc. assert a taking of the right of access from a commercial property located at 2850 Highway 14 in Olmsted County. G & G Universal, the fee owner of the property, rents a portion of the property to Universal Marine, a retail boat and recreational-vehicle business owned by one of G & G’s two principals. On its north, the property abuts a frontage road. The frontage road runs on the south side of Trunk Highway 14 and ends in a cul-de-sac near the entrance to appellants’ property.

The state originally acquired property from appellants’ predecessor-in-interest, the Saunders Corporation, in the late 1950’s and early 1960’s in two condemnation actions, to construct and improve Trunk Highway 14. Part of the construction converted Highway 14 into a “controlled access” highway and imposed access controls under Minn. Stat. § 160.08.

In the first condemnation action, the state acquired title to a parcel of land south of Highway 14 and access rights to that highway. The Saunders Corporation retained access rights to a township road (now Seventh Street), which ran along the property’s west side. In the second condemnation action, the state acquired title to an additional strip of land and constructed a frontage road along the north side of the property. This road led to an intersection at Seventh Street and Highway 14, located about 500 feet west of appellants’ current property.

Over the years, the Saunders Corporation sold and subdivided its property. Appellants concede that when they purchased the parcel in question, it did not directly abut the portion of Seventh Street to which the Saunders Corporation originally retained access rights.

On September 24, 1996, the Rochester City Council adopted, by resolution, a September 23, 1996 agreement between the city and the state to provide a temporary access point between the frontage road and eastbound Highway 14. The agreement provided that the state owned the right of access along the south side of Highway 14 from the intersection of Seventh Street to Highway 52; that the intersection of Highway 14 and
Seventh Street would be eliminated when a new interchange was constructed; and that the state granted the city a “temporary, revocable right of direct access” to Highway 14, with an extension of the frontage road east “without providing for a vehicular outlet other than the temporary access.” The agreement recited an end date of October 1, 2002, and that end date would require no further notice from the state. Permissive use was later extended to January 2003.

Appellants G & G Universal purchased the subject property in the late 1990’s. The frontage road was extended east, with a temporary “right in, right out” access connection to Highway 14 constructed across from appellants’ property entrance. About January 20, 2003, the temporary connection was closed.

Appellants sought a writ of mandamus in district court, seeking compensation for a taking of their right to access Highway 14 by closure of the temporary connection, which they asserted deprived them of reasonably convenient and suitable access to the main thoroughfare. The state filed a third-party complaint against the city of Rochester based on an indemnity provision in the temporary access permit agreement. Both the state and the city moved for summary judgment. The district court granted the state’s motion for summary judgment, determining that no taking had occurred because the subject property did not abut Highway 14, and the agreement establishing the temporary “right in, right out” access point was a public record made and adopted by city council resolution before the date either appellant acquired an interest in the property. The district court dismissed as moot the third-party complaint. This appeal followed.

D E C I S I O N

On appeal from summary judgment, a reviewing court considers whether genuine issues of material fact exist and whether the district court erred in applying the law. O’Malley v. Ulland Bros., 549 N.W.2d 889, 892 (Minn. 1996); see Minn. R. Civ. P. 56.03 (stating that summary judgment is appropriate if the record shows “there is no genuine issue as to any material fact and that either party is entitled to a judgment as a matter of law”). When a motion for summary judgment is properly made and supported, the nonmoving party may not rest upon mere averments or denials, “but must present specific facts showing that there is a genuine issue for trial.” Minn. R. Civ. P. 56.05; see D.L.H., Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997). The reviewing court views the evidence in the light most favorable to the nonmoving party and resolves any doubt on the existence of a material fact against the moving party. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).

The Minnesota Constitution provides that “[p]rivate property shall not be taken, destroyed or damaged for public use without just compensation.” Minn. Const. art. I, §13. A taking can arise out of the state’s interference with the ownership, possession, enjoyment, or value of private property. Grossman Invs. v. State by Humphrey, 571 N.W.2d 47, 50 (Minn. App. 1997), review denied (Minn. Jan. 28, 1998).

Property owners who believe their property has been taken within the meaning of [the Minnesota constitution] may petition the court for a writ of mandamus to compel the state to initiate condemnation proceedings under Minn. Stat. ch. 117. In such a mandamus action, the [district] court must decide, as a threshold matter, whether a taking of property has occurred in the constitutional sense. While either party may request a jury trial on the issues of fact, the court ultimately decides whether the facts as determined constitute a taking.

Id. (citations omitted).

A landowner abutting a street or road has an easement of access, or a right to ingress and egress, which is a property right protected by the Minnesota constitution. Underwood v. Town Bd. of Empire, 217 Minn. 385, 389, 14 N.W.2d 459, 461 (1944). Thus, access to a public highway from abutting property is considered a right that may not be taken without compensation. Hendrickson v. State, 267 Minn. 436, 440, 127 N.W.2d 165, 170 (1964). Government regulation or physical changes to the roadway system that deprive an owner of “reasonable” or “reasonably convenient and suitable access” constitute a taking, for which compensation must be paid. Johnson v. City of Plymouth, 263 N.W.2d 603, 605 (Minn. 1978).The existence of reasonable access is a question of fact and depends on the unique circumstances of each case, including the character of the property involved. Id.at 607. But “[t]hose who are not abutting owners have no right to damages merely because access to a conveniently located highway may be denied, causing them to use a more circuitous route.” Hendrickson, 267 Minn. at 442, 127 N.W.2d at 170-71.

The district court granted summary judgment on appellants’ inverse condemnation claim on two grounds: (1) that at no time when appellants had rights in the subject property, did the property abut Highway 14, so that no taking had occurred, and (2) that the closure of the access point resulted from the city-state agreement allowing temporary access, which the city council adopted by resolution on September 23, 1996, “well before” appellants acquired an interest in the subject property. That agreement, a public record, was expressly and unilaterally revocable by the state, with a stated ending date. The court thus concluded that because appellants’ current property rights were no less than at the time they acquired their interests in the property, no taking had occurred.

Appellants argue that because the state provided further access to their property after the 1959 and 1962 takings with a frontage road and the “right in, right out” connection, the earlier damages award to their predecessors in title did not compensate them for the later loss of that access. They assert that they are entitled to a trial to determine whether they can sustain their burden of proving that they suffered a special injury and actual damage; and that they were left without reasonably convenient and suitable access when the connection was terminated. See Kick’s Liquor Store, Inc., v. City of Minneapolis, 587 N.W.2d 57, 60 (Minn. App. 1998) (stating elements for proof of compensable taking by closing of public street).

We conclude the district court did not err in granting summary judgment to the state. The record shows that the state had acquired, by prior condemnation proceedings, property and controlled access to Highway 14, as well as a strip of land along which the state constructed a frontage road. Although the first condemnation action provided access for appellant G & G Universal’s predecessor-in-title along a township road (now Seventh Street), after that property was subdivided, the portion purchased by G & G Universal did not abut that road. The record contains no evidence that G & G Universal acquired an easement over the property of other subdivides to reach the township road. The state purchased, in the second condemnation action, the land for the later-constructed frontage road. Thus, by the time G & G Universal took title to the subject property, over thirty years after both condemnation actions, the property in question did not abut Highway 14 and had not done so for a number of years. See Black’s Law Dictionary 11 (7th ed. 1999) (defining “abutter” as “owner of adjoining land”). Thus, appellants had no special right to access as distinct from the general public. See Finke v State, 521 N.W.2d 371, 375 (Minn. App. 1994) (holding that owner must have land touching affected street to have special rights), review denied (Minn. Oct. 27, 1994); see also Wendt v. Bd. of Sup’s of Town of Minnetrista, 87 Minn. 403, 406, 92 N.W. 404, 405 (1902) (recognizing special rights of landowners whose property “runs through, to or along” a highway). And without such a special right to access, appellants may not claim damages. See Underwood, 217 Minn. at 388, 14 N.W.2d at 461 (holding that landowner is not entitled to damages sustained by general public). Thus, we agree with the district court that appellants failed to sustain their burden of alleging facts sufficient to support a claim for a loss of property rights arising from the later closing of the temporary connection to the highway.

Further, we agree with the district court that G & G Universal acquired the property subject to the terms of the preexisting agreement for temporary access. Although the limited record fails to establish conclusively the exact date appellant G & G Universal purchased the property, G & G Universal acknowledges taking title after the date of the city-state agreement. Thus, when it purchased the property it had constructive notice of the agreement, which was a matter of public record. See State by Humphrey v.
Schneider-Kurth, 395 N.W.2d 136, 139 (Minn. App. 1986) (holding, in analogous condemnation action, that property owners did not make adequate or reasonable inquiry, which would have revealed payment of damages for taking to previous owners), review denied (Minn. Dec. 12, 1986), citing Mercantile Nat’l Bank v. Parsons, 54 Minn. 56, 55 N.W.2d 825, 826 (1893) (stating that “[w]hatever is sufficient to put a person of ordinary prudence upon inquiry is constructive notice of everything to which that inquiry would presumably have led”), review denied (Minn. Dec. 12, 1986).

The agreement, adopted by the City of Rochester as a public record, stated specifically that (a) the state granted a “temporary, revocable right of direct access” via the temporary connection; (b) the state could withdraw the agreement if, in its unilateral opinion, certain conditions existed, including increased traffic hazards; and (c) in any event, the state could withdraw the agreement without further notice on October 1, 2002. Although the agreement was later extended three more months until January 2003, it contained no further provision for extension. Thus, any temporary access right given by the agreement expired under its terms in January 2003, when the connection was closed. We also recognize that appellant may have purchased the property at a reduced price, reflecting a discounted value based on the agreement for pending closure of the temporary access point, proving respondent’s argument that appellants took the property with full notice of the prior rights in the City of Rochester and the State of Minnesota.

On this record, we reject appellants’ argument that Universal Marine, as a tenant who, appellants contend, had occupied the property for a longer period of time, could independently assert a right to compensation based on lost thoroughfare access. To assert damages for taking of a leasehold interest, Universal Marine must show a compensable interest in the subject property. In re Minneapolis Cmt’y Dev. Agcy., 417 N.W.2d 127, 129 (Minn. App. 1987), review denied (Minn. Feb. 24, 1988). This requires examination of the terms of the governing lease. Id. The district court did not err in failing to address a separate claim regarding a lease. Appellants failed to include in the record a copy of any applicable lease.

We do not address the issue of any remedy based on the application of the state’s indemnification agreement with the City of Rochester. That is because we are sustaining the district court’s grant of summary judgment on the inverse condemnation claim.

Affirmed.