This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2006).

STATE OF MINNESOTA

IN COURT OF APPEALS

A06-1696

In re the Matter of the Decision of

County of Otter Tail Board of Adjustment

to Deny a Variance to

Cyril Stadsvold and Cynara Stadsvold.

Filed July 3, 2007

Affirmed

Worke, Judge

Otter Tail County District Court

File No. C0-05-1901

Nathan L. Seeger, Nathan Seeger Law Office, 128 West Junius Avenue, Fergus Falls, MN 56537 (for appellants Cyril Stadsvold and Cynara Stadsvold)

Nicholas J. Heydt, Michael T. Rengel, Pemberton, Sorlie, Rufer & Kershner, PLLP, 110 North Mill Street, P. O. Box 866, Fergus Falls, MN 56538 (for respondent Otter Tail Board of Adjustment)

Considered and decided by Stoneburner, Presiding Judge; Dietzen, Judge; and Worke, Judge.

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

WORKE, Judge

Appellants challenge the denial of their variance request, arguing that (1) they do not need a variance as a non-conforming lot with a site permit; (2) they did not receive a complete, accurate, adequate, or fair hearing; (3) the variance denial was arbitrary and capricious, and the reasons for the denial were insufficient and without a factual basis; and (4) the doctrines of equitable estoppel, vested rights, and unconstitutional taking require the granting of the variance. We affirm.

FACTS

Appellants Cyril and Cynara Stadsvold own a lot on Blanche Lake in Otter Tail County. The area of the lot is approximately 17,900 square feet. In 2001, appellants applied for a site permit to build a dwelling and garage on the lot. In their application, appellants indicated that their structures would have setbacks from lot lines and the road right-of-way that complied with The Shoreland Management Ordinance (ordinance). Appellants were issued a site permit.

After the structures were nearly completed, appellants were cited for violating the setback requirements in the ordinance. A land survey showed that the dwelling was 5 feet from the lot line, instead of the required 10 feet; and 16.7 feet from the road right-of-way, instead of the required 20 feet. The garage was 5.1 feet from the road right-of-way, instead of the required 20 feet.

Appellants applied for an after-the-fact variance for a structure setback. Respondent County of Otter Tail Board of Adjustment (board) held a hearing on appellants’ application. At the hearing, appellants acknowledged the violation and indicated that their contractor did not find or verify the property lines before construction. The general contractor stated that to his knowledge the site had been staked by appellants because it was not his practice to stake property lines on undeveloped lots. Appellants did not recall staking the property and stated that if there were property-line stakes, they had been there since 1969. The chairman told appellants that the landowners are required to know their lot lines. The board denied the variance request finding that: (1) no adequate hardship existed that was unique to the property, (2) the variance would have been denied had the request been submitted prior to the project, and (3) the property is large enough for a reasonable use without the variance.

Appellants challenged the board’s denial, under Minn. Stat. § 394.27, subd. 9 (2006). The district court granted the board’s motion for summary judgment, finding that appellants failed to show any reason for the variance other than their lack of knowledge of their property lines. This appeal follows.

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 as a matter of law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). This court views the evidence in the light most favorable to the party against whom judgment was granted. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). Summary judgment is appropriate when a party fails to make a showing sufficient to establish the existence of an element essential to the party’s case, Bersch v. Rgnonti & Assocs., Inc., 584 N.W.2d 783, 786 (Minn. App. 1998), review denied (Minn. Dec. 15, 1998), or when “the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party.” DLH, Inc. v. Russ,566 N.W.2d 60, 69 (Minn. 1997) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 1356 (1986)).

Ordinance Required Variance

Appellants argue that as a grandfathered, non-conforming lot, they were not required to obtain a variance under the ordinance. 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 rules of construction guide a court’s interpretation: terms are given their plain and ordinary meaning; “zoning ordinances should be construed strictly against [a] city and in favor of [a] property owner”; and “zoning ordinance[s] must always 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). Rules of statutory construction also aid in interpretation. Chanhassen Estates Residents Ass’n v. City of Chanhassen, 342 N.W.2d 335, 339 n.3 (Minn. 1984).

Under the ordinance, non-conformity is defined as:

Any legal use, structure or parcel of land already in existence, recorded, or authorized before the adoption of official controls or amendments thereto that would not have been permitted to become established under the terms of the official controls as now written, if the official controls had been in effect prior to the date it was established, recorded or authorized.

Otter Tail County, Minn., Shoreland Mgmt. Ordinance § II.42 (2004). The ordinance, which became effective in 1971, requires a lot area of at least 40,000 square feet for recreational development. Id. § III.4. Appellants’ lot is 17,900 square feet, but it existed in 1969, predating the ordinance and is a non-conforming lot.

The ordinance provides exemptions for non-conforming lots. Id.§ IV.13. “A structure may be erected on a lot of less than the established minimum area and width, provided the lot existed by virtue of a recorded plat or deed before October 15, 1971 . . . provided a Site Permit for the structure is obtained.” Id.§ IV.13(B).

A Site Permit shall be obtained prior to erecting or installing a new structure[.] . . . The applicant . . . shall file an application which shall include a scale drawing of the proposal[.] . . . The applicant shall notify the Administrative Officer once the building footings have been constructed for an inspection. Prior to these inspections, the applicant shall stake out all lot lines and road right-of-ways.

Id. § V.1(A). Appellants obtained a site permit, but the setback information appellants provided in their application was not accurate. Because the site permit was issued based on inaccurate setback information provided by appellants, they were required to apply for a variance, and the district court did not err in interpreting the ordinance to require such.

Hearing and Record

Appellants also argue that the hearing was not fair and adequate and that the record was incomplete. On appeal, this court reviews the record made before the local authority, without according any special deference to the district court’s review. Swanson v. City of Bloomington, 421 N.W.2d 307, 311 (Minn. 1988). “Where the municipal proceeding was fair and the record clear and complete, review should be on the record .” Id.at 313. But when the local authority has failed to make a complete and adequate record of its proceedings, this court may require the local authority to prove the basis of its decision. Id.at 312. Whether the record is clear and complete is a determination made by looking at the entire record. See Billy Graham Evangelistic Ass’n v. City of Minneapolis,667 N.W.2d 117, 123-24 (Minn. 2003). The record should include statements of experts, contemporaneous written findings by the municipality, and verbatim transcripts of hearings. Swanson, 421 N.W.2d at 313. But a verbatim transcript is not essential. See, e.g., SuperAmerica Group, Inc. v. City of Little Canada,539 N.W.2d 264, 266 (Minn. App. 1995) (finding a clear and complete record when the public meeting was recorded and summarized in prepared minutes), review denied (Minn. Jan. 5, 1996).

Appellants contend that the hearing was unfair because they were only allotted 15-20 minutes. The record shows that appellants’ application was read, and appellants were given an opportunity to supplement their application; appellants’ general contractor gave a statement; other hearing attendees were given the opportunity to speak for or against the application; appellants were permitted to submit letters in support of the variance; and appellants gave a statement. The transcript is approximately 17 pages long. Appellants were afforded adequate time to present their argument.

Appellants contend that the hearing was unfair because their application was treated like a “before-the-fact” application. But there is nothing in the ordinance providing that an after-the-fact application should be treated differently from a request for a variance. See Otter Tail County, Minn., Shoreland Mgmt. Ordinance § V.5. To treat after-the-fact variance requests differently, by considering factors such as completed construction, would encourage landowners to do first and request permission later. Additionally, the ordinance gives the board the exclusive power to issue variances. See id. Therefore, it was within the board’s power to treat appellants’ application as a before-the-fact application.

Appellants contend that the record is incomplete because it does not include the board’s inspection of the lot. But that was not necessary because appellants’ application specifically states that their garage is 5 feet from the road right-of-way, when the required setback is 20 feet; that their house is 5 feet from the lot line, when the required setback is 10 feet; and that their house is 16.7 feet from the road right-of-way, when the required setback is 20 feet. A board member stated: “[t]he house is too close. The garage is too close.” The board did not have to describe their physical inspection of the property, even though the board did visit the property, because the reason for the denial is clear from the statement that appellants’ structures are “too close” to the lot lines and the road right-of-way, and the dimensions are provided in the application.

Appellants contend that the record is incomplete because there are portions of the hearing that are inaudible. The transcript shows that a board member said: “The reason (inaudible) I didn’t is because it’s so (inaudible) out here. Bad situation.” Appellants suggest that crucial portions were inaudible because they contain the source of information the board relied upon in denying the variance. But the transcript also provides the following:

Board Member: I would not have approved it if it had come before as a brand new construction. There was plenty of room on this lot.

Board Member: Plenty of room.

Board Member: For reasonable use of that lot.

Board Member: Squeeze it together a little bit.

Board Member: Because of that I’m going to make a motion that we deny the variances as requested.

And the meeting minutes succinctly state the basis for the board’s decision. Appellants’ assertion that a “crucial portion” of the transcript is missing is not supported by a review of the entire record.

Appellants contend that the record is incomplete because the board failed to consider the practical-difficulty standard required by the ordinance and the factors listed in the ordinance. Otter Tail County, Minn., Shoreland Mgmt. Ordinance § V.5 provides:

A. Variances shall only be permitted when they are in harmony with the general purposes and intent of the Ordinance in cases when there are practical difficulties or particular hardship in the way of carrying out the strict letter of the Ordinance. ‘Hardship’ as used in connection with the granting of a variance means the property in question cannot be put to a reasonable use if used under the conditions allowed by the Ordinance; the plight of the landowner is due to circumstances unique to the property not created by the landowner; and the variance, if granted, will not alter the essential character of the locality.

B. Economic considerations alone shall not constitute a hardship if a reasonable use for the property exists under the terms of the Ordinance.

. . . .

E. In considering variance requests, the [board] must also consider:

1. Whether the variance will secure for the applicant a right or rights that are enjoyed by other owners in the same area;

2. Whether existing sewage treatment systems on the property need upgrading before additional development is approved;

3. Whether granting the variance will be contrary to the public interest or damaging to the rights of other persons or to property values in the neighborhood.

4. No variance shall be granted simply because there are no objections or because those who do not object outnumber those who do.

Appellants suggest that the board imposed a more stringent undue-hardship standard. But the written denial and the meeting minutes show that the board determined that appellants failed to show an “adequate hardship.” The ordinance requires a variance in cases when particular difficulties or a particular hardship exists. The board finding that appellants failed to show an adequate hardship meets the standard set forth in the ordinance. Additionally, under the ordinance, “hardship” means that the property cannot be put to reasonable use due to circumstances unique to the land, not created by the landowner. Appellants have not shown a hardship unique to the land because appellants created the hardship by not determining the location of their property lines. The board used the correct standard in considering appellants’ variance request.

Finally, appellants suggest that the board’s failure to consider the additional factors provided in the ordinance makes the denial arbitrary as a matter of law. But appellants fail to suggest how findings on these factors, i.e., whether the variance will secure for appellants a right enjoyed by others in the area, whether sewage-treatment systems on the property need upgrading, whether granting the variance will be contrary to the public interest or damaging to the rights of other persons or to property values, would have lead to the granting of the variance. The board made adequate findings for denying the variance.

Arbitrary and Capricious, Insufficient Reasons, and Without Factual Basis

A board of adjustment has broad discretion to grant or deny variances, and we review the exercise of that discretion to determine whether it was reasonable. In determining reasonableness, we are guided by the standards set out in the relevant county ordinance, but a board’s authority to grant variances under the ordinance may not exceed the power granted by statute. When proceedings before a board are fair and complete, appellate review is based on the record of the board’s proceedings, not the district court’s findings or conclusions.

Kismet Investors, Inc. v. County of Benton, 617 N.W.2d 85, 90 (Minn. App. 2000) (citations omitted), review denied (Minn. Nov. 15, 2000). A variance applicant has the burden of showing that granting the variance is appropriate. Luger v. City of Burnsville, 295 N.W.2d 609, 612 (Minn. 1980).

The board of adjustment shall have the exclusive power to order the issuance of variances from the terms of any official control including restrictions placed on nonconformities. Variances shall only be permitted when they are in harmony with the general purposes and intent of the official control in cases when there are practical difficulties or particular hardship in the way of carrying out the strict letter of any official control, and when the terms of the variance are consistent with the comprehensive plan. ‘Hardship’ as used in connection with the granting of a variance means the property in question cannot be put to a reasonable use if used under the conditions allowed by the official controls; the plight of the landowner is due to circumstances unique to the property not created by the landowner; and the variance, if granted, will not alter the essential character of the locality. Economic considerations alone shall not constitute a hardship if a reasonable use for the property exists under the terms of the ordinance.

Minn. Stat. § 394.27, subd. 7 (2006). Appellants essentially argue that the denial of the variance was arbitrary and capricious because the board used the incorrect standard. Appellants argue that they are requesting an area variance, as compared to a use variance, and as such, the correct standard is the practical-difficulty standard.

Minnesota courts have drawn a distinction between use and area variances. Kismet, 617 N.W.2d at 90. “Use variances allow a use prohibited under the zoning ordinance; area variances control area, height, setback, density, and parking requirements for uses permitted by an ordinance.” Id. The practical-difficulty standard may provide a separate basis for granting an area variance. See Merriam Park Cmty. Council, Inc. v. McDonough,297 Minn. 285, 291-92, 210 N.W.2d 416, 420 (1973) (applying the practical-difficulty standard in affirming the grant of an area variance), overruled on other grounds by Nw. Coll. v. City of Arden Hills, 281 N.W.2d 865 (Minn. 1979).

The practical difficulty that appellants experience with the denial of the variance is the moving of their structures; this is an economic consideration, which standing alone does not constitute a practical difficulty because the land still has reasonable use without the granting of the variance. The reason that the structures went up without compliance with the appropriate setbacks was appellants’ failure to properly stake their property lines, which was their responsibility as landowners. The board’s denial was not arbitrary or capricious and was supported by a sufficient factual basis.

Appellants also rely on In re Kenney, in arguing that the board must consider the equities in favor of the landowner when considering an after-the-fact-variance application. 374 N.W.2d 271 (Minn. 1985). Appellants’ reliance is misplaced for at least two reasons. Kenney involved an individual who obtained a building permit for the renovation of a boathouse, but the clerk improperly issued the permit. Id.at 272. Under the mistaken belief that the building permit was legally sufficient, Kenney renovated his boathouse and increased the value in excess of 50%. Id. This case is different because in Kenney the clerk erred, whereas here, appellants erred. Additionally, the court in Kenney noted that it was still within the board’s discretion to grant a variance, but urged the board to consider factors on remand without making the factors mandatory. Id. at 275. Therefore, the board did not have to consider the factors outlined in Kenney for an after-the-fact application.

Equitable Estoppel, Vested Rights, and Unconstitutional Taking

Appellants argue that the district court erred in failing to consider the claims of equitable estoppel, vested rights, and unconstitutional taking. In its findings, the district court concluded that appellants’ failure to raise these issues before the board and without justification for such failure required that the issues not be addressed in district court.

The district court has broad powers in its consideration of equitable doctrines. But the district court is not required to consider claims not pleaded in an appeal. Here, appellants failed to plead the vested-rights and unconstitutional-taking claims in their appeal of the board’s decision. Thus, the district court did not err in its determination that the matters were not properly before the court. Appellants did plead the equitable-estoppel claim in their appeal of the board’s decision, and the district court could have addressed this claim. Nevertheless, it would be futile to remand on any of the equitable-doctrine claims because appellants’ arguments are meritless. See Grein v. Grein,364 N.W.2d 383, 387 (Minn. 1985) (declining to remand in a child-custody case when “from reading the files, the record, and the court’s findings, on remand . . . would undoubtedly make findings that comport with the statutory language” and reach the same result); Minn. R. Civ. P. 61 (requiring harmless error to be ignored).

Estoppel

In order for the board to be equitably estopped from denying appellants’ variance request, appellants must demonstrate that the board, “through [] language or conduct, induced [appellants] to rely, in good faith, on this language or conduct to [their] injury, detriment or prejudice.” Ridgewood Dev. Co. v. State, 294 N.W.2d 288, 292 (Minn. 1980).

A local government exercising its zoning powers will be estopped when a property owner, (1) relying in good faith (2) upon some act or omission of the government, (3) has made such a substantial change in position or incurred such extensive obligations and expenses that it would be highly inequitable and unjust to destroy the rights which he ostensibly had acquired.

Id.

“Estoppel is available as a defense against the government if the government’s wrongful conduct threatens to work a serious injustice.” Id.at 293 (emphasis added) (quotation omitted). Appellants contend that they relied on the site permit. But appellants provided inaccurate setback information in their site-permit application and cannot now claim to have relied in good faith on a wrong governmental action.

Vested Rights

“When a right has arisen upon a contract, or transaction in the nature of a contract, authorized by statute and liabilities under that right have been so far determined that nothing remains to be done by the party asserting it, it becomes vested.” Yaeger v. Delano Granite Works, 250 Minn. 303, 307, 84 N.W.2d 363, 366 (1957). Appellants argue that they have a vested right in their structures because they have a permit, the structures are constructed, and there is no threat of harm to the public. But again, appellants failed to provide accurate information in their site-permit application, and therefore, they do not have a valid site permit.

Taking

Appellants argue that the denial of their variance request constitutes a “taking” of their property in violation of the Minnesota Constitution, which provides: “Private property shall not be taken, destroyed or damaged for public use without just compensation.” Minn. Const. art. I, § 13.

“To establish an unconstitutional taking a landowner must demonstrate that he had been deprived, through governmental action or inaction, of all the reasonable uses of his land.” Holaway v. City of Pipestone, 269 N.W.2d 28, 30 (Minn. 1978) (quotation omitted). But “[m]ere diminution in market value is not such a demonstration, when a reasonable use of the land is permitted under the zoning ordinance.” Id. The denial of appellants’ variance request was not an unconstitutional taking of appellants’ property. Appellants retain a reasonable use of their land; they are only required to move the structures.

Affirmed.