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Pestka v. County of Blue Earth

December 17, 2002

WAYNE PESTKA, ET AL., APPELLANTS,
v.
COUNTY OF BLUE EARTH, RESPONDENT.



Blue Earth County District Court File No. CX991998

Considered and decided by Hudson, Presiding Judge, Peterson, Judge, and Anderson, Judge.

SYLLABUS BY THE COURT

I. In a proceeding for a proposed drainage improvement, Minn. Stat. § 103E.511 (2002) allows a drainage authority to accept an amended viewers' report in order to correct errors in a previous viewers' report.

II. Minn. Stat. § 103E.505, subd. 2 (2002) grants a drainage authority the power to award a construction contract during the pendency of a benefits-and-damages appeal taken under Minn. Stat. § 103E.091 (2002), when the drainage improvement has already been established pursuant to Minn. Stat. § 103E.095 (2002).

III. A deposit in an attorney trust fund, held for an affected landowner in return for a promise not to appeal a benefits and damages determination, does not constitute an illegal gift to the drainage improvement project when it does not directly benefit the drainage authority.

The opinion of the court was delivered by: Hudson, Judge

Affirmed

OPINION

This is the second appeal to this court arising from the petition for a drainage improvement to County Ditch #86, Branch 1, in Blue Earth County. On appeal from summary judgment, appellants argue that the district court (a) erred in ruling that Minn. Stat. § 103E.511 (2002) gives the drainage authority the ability to approve a corrected report of the viewers; (b) should have ruled that Minn. Stat. §§ 103E.341 and 103E.505 (2002) preclude the drainage authority from awarding a contract for a drainage project unless it is known that the project's benefits exceed its cost; and (c) should have included in the cost of the project the amounts paid to avoid a challenge to the project by others. We affirm.

FACTS

On September 23, 1997, the Blue Earth County Board of Commissioners (county board), acting as the drainage authority, approved a proposed drainage improvement to County Ditch #86, Branch 1, in Blue Earth County.*fn1 As required by statute, the county board found that the estimated benefits were greater than the total estimated costs, including damages. See Minn. Stat. § 103.341 (2002).*fn2 At the time of the hearing, the viewers*fn3 determined the benefits to be $339,819 and the estimated costs of the improvement, including damages, to be $315,932, causing the estimated benefits to exceed the sum of the estimated damages and the costs by $23,886.

No appeal was taken from the order establishing the drainage improvement project. On October 28, 1997, however, appellants Wayne Pestka and Blaine Phillips (Pestka and Phillips), along with several other affected landowners, filed a benefits-and-damages appeal, contesting the amount of benefits and damages that would accrue to their lands under the drainage improvement project. At the January 11, 1999, jury trial of the consolidated appeals, the viewers indicated that they had misapplied a capitalization formula to arrive at the determination of benefits, and that their report to the county board had consequently understated the benefits that they believed accrued to the land. Nonetheless, the jury issued verdicts reducing the amount of benefits and increasing the amount of damages to most of the subject properties, resulting in the cost of the drainage improvement project exceeding the benefits.

In apparent anticipation that the viewers would file an amended report, on April 12, 1999, Pestka and Phillips filed a petition with the drainage authority for (1) nonapproval and denial of an amended viewers' report, on the basis that the viewers had made erroneous assumptions as to benefits and (2) dismissal of the proceedings on the basis that the costs, including damages, would exceed the benefits of the project. On April 30, 1999, the viewers did, in fact, file an amended viewers' report, reporting increased benefits to the affected land based on the adjustment to the capitalization factor. Benefits under the amended report were set at $324,168.

As a result of a posttrial settlement between the parties, the district court issued amended findings of fact, order, and judgment in the first benefits appeal, incorporating many of the verdict amounts and making minor modifications to the precise area of certain lands to be reclaimed. On May 25, 1999, the project engineers then filed a revised amended final report with some project engineering changes incorporating certain changes agreed to by the parties in the posttrial ...


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