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City of Lake Elmo v. Nass

Court of Appeals of Minnesota

July 15, 2013

City of Lake Elmo, Appellant,
v.
Bernard Nass, et al., Respondents.

UNPUBLISHED OPINION

Washington County District Court File No. 82-CV-12-726.

David K. Snyder, Christopher D. Johnson, Johnson and Turner, Forest Lake, Minnesota (for appellant)

Paula A. Callies, Callies Law, PLLC, Minneapolis, Minnesota (for respondents)

Considered and decided by Worke, Presiding Judge; Halbrooks, Judge; and Larkin, Judge.

LARKIN, Judge

Appellant challenges the district court's affirmance of an administrative-law judge's (ALJ) order granting respondent property owners' petition for detachment. We affirm.

FACTS

Respondents Bernard and Loella Nass, and Robert Buberl petitioned for detachment of their real property from appellant City of Lake Elmo to Stillwater Township under Minn. Stat. § 414.06 (2010).[1] The petition was later amended to add respondents Thomas and Patricia Bidon. The Lake Elmo City Council objected to respondents' petition, and the matter was assigned to an ALJ. The ALJ held a two-day evidentiary hearing at which the ALJ heard the testimony of several witnesses and received 46 exhibits.

The evidentiary record establishes that the subject property is comprised of four separate parcels of land and has a total acreage of 57.17. The Nasses own two parcels, which they purchased as a hobby farm in the 1980s. The northern parcel is approximately 16 acres, and it is subject to an easement for high-voltage transmission lines owned by Xcel Energy. This parcel was formerly used as a horse pasture because the power lines did not interfere with this activity. The southern parcel is approximately 11 acres and heavily treed with pines. A home and horse barn are located on the southern parcel. The parcels do not have municipal water or sewer services.

In recent years renters have shown little interest in leasing the Nasses' northern parcel for use as a horse pasture. The property has been for sale for two years, and the Nasses have received no offers. They have talked to developers about the possibility of developing their property, and all of the developers opined that the Nasses' parcels are not suited for residential development because of the power lines running through the northern parcel, the proximity of Trunk Highway 36, and the location of commercial warehouse buildings and a parking lot directly east of the southern parcel in the City of Oak Park Heights.

Thomas and Patricia Bidon own a parcel of land located between the Nasses' northern and southern parcels. The Bidons have a house and pole barn on their property, which is served by a well and septic system. No agricultural activity occurs on the land. On at least two occasions, developers expressed interest in the Bidon property, but that interest dissipated when the developers concluded that Lake Elmo would not rezone the property to permit higher-density residential or commercial development.

Robert Buberl owns a triangular shaped parcel, which is east of the Nass and Bidon parcels. Buberl's property is divided diagonally along the length of a creek. The property east of the creek and west of Trunk Highway 5 previously was annexed from Baytown Township to Oak Park Heights. In that same annexation proceeding, the property west of the creek and south of Highway 36 was annexed from Baytown Township to Lake Elmo. Buberl operates a composting/recycling facility on his property. The composting activity occurs on the portion of his property that was located in Lake Elmo, as a permitted agricultural use under a conditional-use permit. The recycling activity takes place on the portion of Buberl's property that is located in Oak Park Heights.

The current and planned future zoning designation for the subject property is agricultural (AG). Under Lake Elmo's comprehensive plan for 2005-2030, the existing and future land-use designation for the subject property is rural agricultural density (RAD). The RAD classification allows low-density, semi-rural residential development. Working farms, agricultural uses, and single-family detached residences are also allowed under this classification. RAD is a common land-use designation that exists in large quantities throughout Lake Elmo. Lake Elmo's RAD classification and zoning regulations would permit each of the four parcels in the subject property to have a single house; however, if respondents combined their property, up to 18 homes potentially could be constructed on 40 contiguous acres under the open-space regulations in the zoning ordinance.

The subject property lies within Lake Elmo's boundaries. It abuts Lake Elmo's boundary on the east and partially abuts Lake Elmo's boundary on the north. Fifty-five percent of the perimeter of the subject property is bordered by Lake Elmo, 23% is bordered by Stillwater Township, and 22% is bordered by Oak Park Heights. Lake Elmo provides no water, sanitary sewer, storm sewer, solid-waste collection or disposal, or law-enforcement services to the subject property. But Lake Elmo provides fire protection, street improvements and maintenance, as well as administrative and recreational services.

The subject property contains .4 miles of Highway 36 and .2 miles of Manning Avenue. Manning Avenue runs south from Highway 36 and is paved for approximately two blocks to 58th Street, which is the entrance to the St. Croix Sanctuary, a development of large homes. The remainder of Manning Avenue, from 58th Street to 55th Street, is a gravel road that ends at Lake Elmo's well house #2. Well house #2 was constructed to service the Sanctuary and another housing development, Carriage Station.

The ALJ granted respondents' petition for detachment on January 3, 2012. Lake Elmo appealed the ALJ's decision to the district court, and the parties brought cross-motions for summary judgment. The district court granted respondents' motion, thereby affirming the ALJ's detachment determination. This appeal follows.

DECISION

The detachment of property from a municipality is governed by Minn. Stat. § 414.06. The chief ALJ[2] is empowered to "conduct proceedings, make determinations, and issue orders" in a detachment action under section 414.06. See Minn. Stat §§ 414.01, subd. 1 ("The chief administrative law judge shall conduct proceedings, make determinations, and issue orders for the creation of a municipality, the combination of two or more governmental units, or the alteration of a municipal boundary."), .06, subd. 1 (providing that a detachment proceeding may be initiated by submitting a resolution or petition to the chief ALJ) (2010).

The chief ALJ may order detachment so long as "the requisite number of property owners have signed the petition if initiated by the property owners, . . . the property is rural in character and not developed for urban residential, commercial or industrial purposes, . . . the property is within the boundaries of the municipality and abuts a boundary, . . . the detachment would not unreasonably affect the symmetry of the detaching municipality, and . . . the land is not needed for reasonably anticipated future development."[3] Minn. Stat. § 414.06, subd. 3. The ALJ may deny detachment "on finding that the remainder of the municipality cannot continue to carry on the functions of government without undue hardship." Id.

Any person aggrieved by an order under section 414.06 may appeal to the district court on the following grounds: "(1) that the order was issued without jurisdiction to act; (2) that the order exceeded the [issuer's] jurisdiction; (3) that the order is arbitrary, fraudulent, capricious or oppressive or in unreasonable disregard of the best interests of the territory affected; or (4) that the order is based upon an erroneous theory of law." Minn. Stat. § 414.07, subd. 2 (2010). Section 414.07 provides the exclusive remedy in an appeal of detachment proceedings. See Township of Thomastown v. City of Staples, 323 N.W.2d 742, 744 (Minn. 1982) ("Section 414.07 provides the exclusive remedy on appeal of annexation proceedings requiring the [MMB's] approval"); City of Lake Elmo v. City of Oakdale, 468 N.W.2d 575, 577 (Minn.App. 1991) (discussing appeal of order allowing concurrent detachment and annexation under section 414.061).

"The district court on review may not assume legislative functions or substitute its views for that of an administrative agency." Thomastown, 323 N.W.2d at 744. "In turn, this court must determine whether the record supports the [district] court's review of the [ALJ's] findings." City of Lake Elmo, 468 N.W.2d at 577 (citing Thomastown, 323 N.W.2d at 745). The ALJ's findings of fact are reviewed under the substantial evidence test, which requires an independent examination of the record. Id. Substantial ...


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