Washington County District Court. File No. C0-03-6170.
1. Appellants' second claim against respondent Stillwater is barred by res judicata because the claim involves the same claim for relief as their prior claim, involves the same parties, a final judgment on the merits was made in their prior claim, and appellants had a full and fair opportunity to litigate the matter in their prior claim.
2. A sedimentation pond built on an easement granted to respondent Stillwater to reduce the amount of nutrients and sediment flowing into a lake abutting appellants' property is an improvement to real property under Minn. Stat. § 541.051, subd. 1(a) (2002).
Considered and decided by Lansing, Presiding Judge, Randall, Judge, and Willis, Judge.
This is an appeal from summary judgment in a drainage-related dispute. Appellant-property owners argue (a) the district court erred in ruling that a prior action by appellants against the city is a basis for applying res judicata in this action where, they argue, part of the basis of the current action occurred after the ruling in the prior case and the claims are distinct; (b) fact issues exist regarding whether the city failed to maintain the easement in question; (c) the city is liable for damages caused by its failure to maintain the easement; (d) the district court mischaracterized the drainage-related hole on appellants' property as an improvement to real property, and hence erred in concluding appellants' suit against the project designer is barred by the statute of limitations in Minn. Stat. § 541.051, subd. 1(a) (2002); (e) fact issues exist regarding appellants' injury and hence summary judgment was inappropriate; and (f) the city's notice of review regarding the alternative theories for the relief it sought is premature because the district court did not address those theories. We affirm.
Since 1968, appellants Duane and Margaret Nelson have been owners of a parcel of land adjacent to Lily Lake (lake) located in the City of Stillwater (Stillwater), respondent. When purchased by appellants, the property was encumbered by an easement in favor of Stillwater for the purpose of maintaining storm-sewer outlets to the lake.
As a result of increased nutrient pollution in the lake, Stillwater employed Short Elliot Hendrickson, Inc. (SEHI), respondent, to conduct a feasibility study of the lake to find ways to improve its water quality. After consideration of various suggestions by SEHI, and based on the recommendations of an engineering firm, Stillwater opted to implement a plan referred to as the "Northwest Storm Water Diversion and Treatment System" (plan). A public hearing was held and Stillwater voted to adopt the plan.
The purpose of the plan was to reduce the amount of nutrients and sediment flowing into the lake, thereby improving its water quality. The plan required that an above-ground sedimentation pond be built to capture harmful nutrients and sediment before entering the lake. The plan placed the sedimentation pond on Stillwater's easement located on appellants' property. SEHI designed and constructed the sedimentation pond which was completed in December 1999.
In October 2000, appellants brought suit against Stillwater alleging temporary taking damages, nuisance, and trespass damages in the form of loss of reasonable use and occupation of their property. Both Stillwater and appellants brought motions for partial summary judgment. Appellants argued that the sedimentation pond and its accompanying structures exceeded the scope of Stillwater's easement and were not permissible uses under the easement. Stillwater argued that the pond and its structures were a reasonable use of the dominant estate and fell within the scope and purpose of the easement. The district court granted Stillwater's motion for partial summary judgment, dismissing appellants' claim for inverse condemnation, finding that the sedimentation pond was an essential component of the storm-sewer water quality treatment program and within the scope and purpose of the easement.
Stillwater sought dismissal of appellants' remaining claims of nuisance and trespass. Appellants moved the district court to amend its findings regarding the nature of the sedimentation pond and its impact on their property. Appellants argued that the pond was not merely an improvement to Stillwater's storm sewer system, but that the pond was a holding pond or catch basin that was not permitted under the terms of the easement. The district court rejected appellants' argument and granted Stillwater's motion to dismiss appellants' nuisance and trespass claims.
In September 2003, appellants again brought suit against Stillwater and SEHI. Appellants alleged that Stillwater failed to maintain its easement and that SEHI was negligent in failing to adequately examine the impact of the plan and designing the sedimentation pond. SEHI and Stillwater both moved the district court for summary judgment dismissing appellants' claims. SEHI argued that the two-year statute of limitations governing improvements to real property set forth in Minn. Stat. § 541.051 (2002) barred appellants' claim, that appellants failed to comply with the strict affidavit requirements of Minn. Stat. § 544.42 (2002), and that the doctrine of res judicata barred appellants' claim. Stillwater argued that appellants' claims were untimely and barred by the doctrine of res judicata, that it was entitled to discretionary immunity, and that appellants failed to present evidence establishing the elements of causation and damages necessary to support their claims of negligence.
The district court granted the summary judgment motion of SEHI and Stillwater, dismissing appellants' complaint. In granting SEHI's motion, the district court found that the sedimentation pond was an integrated component of the storm-sewer system and an improvement to real property under Minn. Stat. § 541.051. Thus, the district court dismissed appellants' claims as untimely under the statute, concluding that appellants first discovered any claimed injury from the sedimentation pond in 2002. The district court did not consider SEHI's other arguments. As to Stillwater's motion, the district court found that the doctrine of res judicata barred appellants' claims and did not consider any remaining defenses. This appeal followed.
Appellants argue the following: (1) the district court erred in ruling that the prior action by appellants against Stillwater is a basis for applying res judicata in this action. Appellants claim part of the basis of the current action occurred after the ruling in the prior case and the claims are distinct; (2) the district court mischaracterized the drainage-related hole on appellants' property as an improvement to real property, and hence erred in concluding appellants' suit against SEHI is barred by the statute of limitations in Minn. Stat. § 541.051, subd. 1(a); (3) genuine issues of material fact exist regarding their injuries and therefore summary judgment in favor of respondents was not proper; and (4) Stillwater's notice of review regarding the alternative theories for the relief it sought is premature because the district court did not address those theories.
I. Did the district court err by ruling that res judicata barred appellants' ...