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Semler Construction, Inc. v. City of Hanover

August 19, 2003

SEMLER CONSTRUCTION, INC., APPELLANT,
v.
CITY OF HANOVER, RESPONDENT.



Wright County District Court File No. C5-02-1510

Considered and decided by Kalitowski, Presiding Judge, Randall, Judge, and Willis, Judge.

SYLLABUS BY THE COURT

1. A city that gives approval to a preliminary plat for a period of eight years under Minn. Stat. §á462.358, subd. 3c (2002), may not deny final plat approval based on the theory that the approval was for only one year.

2. A city's moratorium on development does not apply to a development that has already received preliminary plat approval from the city.

3. Where genuine issues of material fact as to a claim exist, summary judgment is not appropriate.

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

Reversed and remanded

OPINION

This is an appeal from a district court decision upholding the city's denial of final plat approval for a subdivision that had been given preliminary approval. The district court reasoned that a one-year approval period had run and found that an interim moratorium applied to Semler. The district court granted summary judgment for the city on Semler's damage claim.

Semler contends the denial was erroneous as a matter of law because (a) it had been given approval of the preliminary plat for an eight-year period; (b) the interim moratorium did not apply; and (c) there are genuine issues of material fact precluding summary judgment on the issue of damages. We reverse and remand.

FACTS

In spring 1999, appellant Semler Construction, a development company, began the process of obtaining approval from respondent City of Hanover for a residential development project known as Crow River Heights East. Its co-developer, Gold Nugget Development, Inc. (not a party to this lawsuit), likewise sought approval for the development of an adjacent property, known as Crow River Heights West. Through these developments, 462 or 463 residential units would be built.

According to the then-city administrator, there were numerous city council and planning commission meetings concerning the project. At these meetings, concerns were raised by the city and some neighbors as to whether all the lots would be final platted and marketed in a short period of time, and whether the infrastructure (sewer, water, roads, etc.) could accommodate such a large increase in the number of houses in the city. Thus, according to a May 3, 2000, report issued by the city planner, the project was revised to address these concerns and provided for phased development over a seven-year period, with construction of approximately 70 homes per year. Semler went along with the city's suggestion as to phasing in the 400 plus homes over a period of years.

Shortly thereafter, at its May 16, 2000, regularly scheduled meeting, the city council adopted resolution 05-00-05 and conditionally approved the preliminary plat for the development projects. On July 18, 2000, in ordinance 00-04, the city council rezoned the land that was to be developed from RA-residence-agriculture to R1A-single-family residence with PD-planned-development overlay. This rezoning conformed to the city's comprehensive plan, thus allowing the development project to proceed.

On October 17, 2000, the city council adopted resolution 13-00-10, authorizing the city administrator and mayor to execute, in relevant part, a master subdivision agreement and a subdivision agreement for the first phase of Crow River Heights East with Semler and Gold Nugget for the first phase of the project, consisting of 47 lots. Under the resolution, however, the city noted that it was nonetheless "reserving all rights it has under law to accept, reject, or modify any plat presented to them." Pursuant to this authority, on November 1, 2000, Semler, Gold Nugget, and the city, as represented by the mayor and city administrator, entered into the master subdivision agreement. It provided, in relevant part, that the preliminary plat would be valid for an eight-year period:

The preliminary plat shall be valid for a period of eight years. If any portion of Crow River Heights East or West shall not be finally platted within eight years, the preliminary plat approval as to the property not finally platted shall terminate. Extensions may be granted at the option and in the discretion of the City. This paragraph shall be deemed an extension in accordance with § 5.02, subdivision 3b, of the City of Hanover subdivision ordinance * * *.

Also on November 1, 2000, the city and Semler entered into the subdivision agreement for the final plat of the first phase of the project, encompassing 47 lots, known as the Crow River Heights East First Addition. On November 21, 2000, the city council adopted resolution 12-00-11, approving the final development plan for the overall Crow River Heights project. It also adopted resolution 13-00-11, approving the final plat of the Crow River Heights East First Addition.

In city elections held in November 2000, a new council member, who had opposed the Crow River Heights project as a private citizen, and a new mayor were elected.

On January 2, 2001, the newly constituted city council held its first meeting of the year. In this meeting, the city council approved interim ordinance 01-01, which established a 12-month moratorium on residential development within the city, under Minn. Stat. §á462.355, subd. 4. On December 18, 2001, the city council adopted interim ordinance 2002-01, which extended the moratorium for an additional 18 months but exempted the Crow River Heights First Addition, which had already received final plat approval.

On January 30, 2002, Semler applied to the city for final plat approval of the next phase of the Crow River Heights project, the Crow River Heights East Second Addition. Semler asserted that the final plat for the Crow River Heights East Second Addition complied with requirements of the approved preliminary plat, the master subdivision agreement, and the approved final development plan.

On March 19, 2002, however, the city council adopted resolution 06-03-02, which denied final plat approval of the Crow River Heights East Second Addition. The stated reasons for the denial were as follows:

The City of Hanover finds the final plat application for Crow River Heights East Second Addition was filed more than one year from the date of preliminary plat approval as provided in the Minnesota Statutes 462.358; and The final plat application is subject to the restrictions and limitations set forth [in] the Moratorium Ordinance, and is not subject to the exemptions provided in Section 4 of the Moratorium Ordinance.

Semler sued the city in early May 2002 on a variety of claims connected with the denial of its application for final plat approval. It also challenged an assessment it had been charged on the entire project, and it sought monetary damages for the city's action in stopping its construction activities.

The city removed the case to federal district court, which then remanded the matter back to state court after Semler voluntarily dismissed its federal-law claims. Upon remand, the city moved for summary judgment on all of Semler's remaining claims, and Semler filed a cross-motion for its claim related to the denial of final plat approval. The district court ...


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