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Minnehaha Business Center, LLC v. St. Paul Port Authority

April 22, 2013

MINNEHAHA BUSINESS CENTER, LLC, APPELLANT,
v.
ST. PAUL PORT AUTHORITY, INC., RESPONDENT, CITY OF ST. PAUL, DEFENDANT.



Ramsey County District Court File No. 62-CV-09-10956

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

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2012).

Affirmed in part, reversed in part, and remanded

Considered and decided by Stauber, Presiding Judge; Peterson, Judge; and Connolly, Judge.

UNPUBLISHED OPINION CONNOLLY, Judge

In this appeal from the district court's grant of respondent's motion for a directed verdict and the denial of appellant's motion for a new trial, appellant argues that the district court (1) erred by denying its motion to amend its complaint and dismissing its inverse-condemnation claim; (2) abused its discretion by excluding the appraisal report and testimony of appellant's expert witness; and (3) abused its discretion by excluding three other forms of evidence.

Because appellant has an adequate legal remedy in breach of contract, the district court did not err by denying appellant's motion to amend its complaint and dismissing its inverse-condemnation claim. But, because the Minnesota Rules of Civil Procedure do not currently provide for the automatic discovery of an opposing party's expert-witness report, the district court abused its discretion by excluding appellant's appraisal report as untimely. Finally, we discern no abuse of discretion in the district court's three additional evidentiary rulings. We therefore affirm in part, reverse in part, and remand for a trial on what remains of appellant's breach-of-contract claim.

FACTS

At all times relevant to this appeal, appellant Minnehaha Business Center LLC (Minnehaha) and respondent St. Paul Port Authority Inc. owned adjacent properties in an area of St. Paul bordered on the north by Seminary Avenue, on the south by Minnehaha Avenue, on the west by Chatsworth Street, and on the east by Milton Street. The two properties are subject to a reciprocal easement agreement (REA), entered into by the parties' predecessors in interest on July 8, 1999. The REA was established in favor of two parcels of real property described as Parcel One and Parcel Two.

Robert Arnold, the principal owner of Minnehaha, purchased the northwestern section of Parcel One in July 1999, and conveyed the property to Minnehaha in 2002. The Minnehaha property is bordered on the east by Parcel Two, on the north by Seminary Avenue, on the West by Chatsworth Street, and on the south by an adjacent parcel not involved in this dispute. Because a steep change in grade prevents access to the Minnehaha property from Chatsworth Street, the only direct access to the Minnehaha property is from Seminary Avenue. Alternatively, the Minnehaha property can be accessed indirectly by crossing the adjacent parcel from Minnehaha Avenue to the south or Parcel Two from Milton Street to the east via an ingress and egress easement. The southeastern section of Parcel One is owned by a third party not involved in this dispute.

In May 2008, the Port Authority acquired all of Parcel Two, which consisted of two sections bisected by Seminary Avenue. The Port Authority property to the south of Seminary Avenue is bordered on the east by Milton Street, on the west by the Minnehaha property, and on the south by the southeastern section of Parcel One. The district court found that the Port Authority acquired Parcel Two "with the intent to demolish and remove all of the existing improvements, remediate the property's contaminated condition, construct a new parking facility over the part of Parcel Two covered by Easement Parcel A, and to sell the property to a private industrial user." On July 1, 2010, the Port Authority and City of St. Paul successfully petitioned the city council to vacate the eastern half of Seminary Avenue between Chatsworth Street and Milton Street in order to connect the two sections of Parcel Two.

According to the REA, Parcel One and Parcel Two are subject to and the beneficiaries of two separate easements: (1) "a non-exclusive easement over and across said Easement Parcel A for vehicular and pedestrian traffic and parking that is normal, usual and customary in nature for a retail facility when space is available for the owner of Parcel Two . . . and for the owners of Parcel One," and (2) "a non-exclusive easement over, across and through Easement Parcel B for vehicular and pedestrian ingress and egress for the Parcel One owners and Parcel Two owners." The two easements cover property that is owned by Minnehaha and by the Port Authority, but the easements do not overlap. The REA provides that the owners of Parcel One and Parcel Two shall not interfere with the use of either easement by "locating equipment, barriers, signs, fences, or other property" on the easements or in any other manner that interferes with the purposes of the easements. But the REA allows for certain temporary restrictions as follows:

The owners of Parcel One and Parcel Two shall be entitled to temporarily restrict Parcel One Owners or Parcel Two Owners, only to the extent reasonably required, from access to the Easement Parcels A and B for the purpose of maintaining, repairing, and replacing the asphalt surface, and the lighting, poles, underground wiring and related appurtenances to the parking lot lighting on the Easement Parcel from time to time, as may be reasonably necessary.

On or about May 19, 2009, the Port Authority constructed a chain link fence and concrete jersey barriers around the perimeter of Parcel Two. The Port Authority then demolished and removed all of the property's existing improvements, remediated the property's contaminated condition, and constructed a new surface parking facility over the section of property lying south of former Seminary Avenue. The Port Authority substantially completed construction of the new parking facility in October 2009.

Minnehaha filed a complaint against the Port Authority and the City in September 2009, alleging five counts: declaratory judgment against the City, violation of 42 U.S.C. § 1983 against both the Port Authority and the City, and tortious interference, nuisance, and breach of contract against the Port Authority. Specifically, Minnehaha alleged that the Port Authority breached the REA by temporarily restricting access to and the free use of the easement parking lot during construction and permanently reducing the number of parking spaces available. On June 29, 2010, the district court issued its first scheduling order, requiring Minnehaha to "disclose all experts and provide information required by the Minnesota Rules of Civil Procedure by August 27, 2010." The order also stated: "If any party has not disclosed their expert(s) and has not provided required information prior to the deadline, the expert testimony will not be allowed at trial." Minnehaha disclosed five experts, including an appraiser, Jeffrey Johnson, on the date of the deadline. According to its disclosure, Johnson would testify as to the market value of Minnehaha's property, including its interest in the easement property, and the damages caused by the interferences alleged in its complaint.

On September 27, 2010, the Port Authority and the City noticed motions for summary judgment, and the Port Authority noticed a motion for a declaratory judgment that it had not breached the REA. On January 18, 2011, in a separate proceeding, Minnehaha filed a Petition for an Alternative Writ of Mandamus compelling the Port Authority and City to commence condemnation proceedings. Minnehaha also moved to amend its complaint to add an inverse-condemnation claim or, in the alternative, to consolidate the two actions.

On January 21, 2011, the district court granted the City's motion for summary judgment as to Minnehaha's declaratory-judgment claim, granted the Port Authority's motion as to Minnehaha's tortious-interference and nuisance claims, and granted in part and denied in part the Port Authority's motion as to Minnehaha's breach-of-contract claim. The district court concluded that genuine issues of material fact precluded summary judgment as to Minnehaha's temporary-breach-of-contract claim but granted the Port Authority's motion with respect to the reduced number of parking spaces. The district court stayed its decision as to Minnehaha's section 1983 claim, pending its decision on Minnehaha's motion to amend or consolidate, and denied the Port Authority's motion for a declaratory judgment. On March 30, 2011, the district court denied Minnehaha's motion to amend the complaint as to the Port Authority, dismissed Minnehaha's proposed inverse-condemnation claim, and removed the stay and granted the Port Authority's motion for summary judgment on Minnehaha's section 1983 claim. The district court granted Minnehaha's motion to amend the complaint as to the City.

The district court issued a revised scheduling order on November 9, 2011, requiring Minnehaha to make the same disclosures required by its original scheduling order as to any expert witness by January 13, 2012. Minnehaha timely filed an amended expert-witness disclosure, again identifying Johnson as an appraiser retained to testify as to market value and damages. Upon receipt of Minnehaha's amended disclosure, the Port Authority notified Minnehaha that it believed the disclosure failed to comply with Minn.

R. Civ. P. 26.02(e)(1). The Port Authority also requested a copy of Johnson's appraisal report but did not bring a motion before the district court. On February 3, 2012, Minnehaha provided the Port Authority with its second amended expert-witness disclosure, which included more information on the substance of and grounds for Johnson's testimony, but did not provide Johnson's appraisal report. Upon request by the City, Minnehaha voluntarily provided the appraisal report to both the City and the Port Authority on June 22, 2012.

On June 25, 2012, the Port Authority and City filed motions in limine, which the district court heard on July 2, the first day of trial. After hearing from both sides, the district court excluded Johnson's appraisal report and precluded him from testifying at trial for lack of foundation. The district court did so because it believed the report had not been provided in a timely manner in accordance with its scheduling order. The district court also excluded (1) evidence regarding Minnehaha's right of access across a 40-foot strip of city-owned property, (2) evidence from Minnehaha's owner and property manager regarding tenant complaints concerning access to the easement parking lot, and (3) evidence from Minnehaha's traffic engineer concerning safety issues arising from the changes in the easement parking lot.

Following the exclusion of Johnson's report and testimony, Minnehaha and the City settled, and the Port Authority successfully moved for a directed verdict on grounds that, without the appraisal and Johnson's testimony, Minnehaha did not have any evidence of damages to present at trial. Minnehaha moved for a new ...


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