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Chanhassen Chiropractic Center, P.A. v. City of Chanhassen

June 10, 2003


Carver County District Court File No. C8021447

Considered and decided by Toussaint, Chief Judge, Minge, Judge, and, Hudson, Judge.


Where there is no showing of the city council's partiality on a specific issue, a city does not violate a clear duty by designating the city council as the hearing officer on a relocation benefits appeal under the Minnesota Uniform Relocation Act (MURA).

The opinion of the court was delivered by: Toussaint, Chief Judge



Respondent's city manager denied appellant's claim for relocation benefits and advised it of the right to an appeal to the Chanhassen City Council. Appellant sought mandamus relief from the district court, arguing that the city failed to appoint an impartial hearing officer to hear the appeal. Because the district court properly concluded that the city had not violated a clear duty in the relocation assistance hearing process, we affirm the court's denial of the writ of mandamus.


Petitioner Chanhassen Chiropractic Center (center) entered into a lease for office space in a building acquired by respondent City of Chanhassen for future development of a park and library. Upon expiration of the lease term, the center continued to lease the space on a month-to-month basis.

The lease, which was signed by center president Donald Kristenson and Chanhassen's mayor and city manager, allowed the center to assign the lease only with the city's prior written consent. The city also reserved the discretion to withhold consent. The lease specifically stated that any change in the ownership of the lessees' shares of voting stock constituted a transfer and assignment of the lease requiring the city's prior written consent. If certain specified conditions were met, the city agreed not to unreasonably withhold consent to assign the lease if it was notified at least 30 days prior to the effective date of assignment. The lease also required that the center complete estoppel certificates within ten days of each request by the city.

On or about January 11, 2002, less than three months before the anticipated termination of the lease, the center's sole shareholder, Dr. Kristenson, sold his shares to Dr. Susan Lecy. The agreement for purchase and sale of the center did not expressly refer to relocation benefits, but the parties contemplated a relocation of the business, as evidenced by a contingency in the agreement that Dr. Lecy "shall have procured a satisfactory lease agreement for relocation" of the center effective April 1, 2002. Dr. Kristenson was to deliver an estoppel certificate confirming that the center was not in default under its lease with the city. When Dr. Lecy requested a "landlord's estoppel certificate and consent to assignment of lease" from the city, City Manager Todd Gerhardt, responding for the city provided a notarized estoppel certificate indicating that the tenant was not in default and that the lease would expire March 31, 2002. With regard to consent to assignment of the lease, however, Gerhardt stated that the transfer of stock ownership was an assignment of the lease and that the city would consent to the assignment only if Dr. Lecy would waive and release the city from any claim for relocation benefits. The city asked that Drs. Kristenson and Lecy sign the agreement.

On February 22, 2002, Dr. Lecy responded to Gerhardt that she considered the city liable for her relocation expenses and that she did not intend to sign the waiver of relocation benefits. She also did not pay rent in January or February. Later in February, Gerhardt wrote Drs. Lecy and Kristenson, notifying them that the center was in default for nonpayment of rent and warning them that if they failed to pay by March 6, 2002, eviction proceedings would commence and the lease would terminate on April 1, 2002. On March 8, the city commenced an eviction proceeding, claiming that the center owed three months' rent and was in breach of the lease regarding assignment.

The center notified the city that it would vacate the premises before March 21, 2002, so the eviction hearing was cancelled. The center attempted settlement of its relocation benefits claim but on May 7, it made a request for an administrative hearing. On May 14, Gerhardt denied the center's relocation benefits claim and offered to forgive two months' past rent to settle the matter. In the denial of benefits, Gerhardt gave the center notice that it could request an appeal to the Chanhassen City Council. In a letter from the city attorney, the center was given various dates for an appeal hearing before the Chanhassen City Council. The center replied that the city council was not an appropriate tribunal. It then sought relief in the district court by petition for a preemptive writ of mandamus compelling the city to select a ...

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