American Bank of St. Paul v. City of Minneapolis
802 N.W.2d 781
Minn. Ct. App.2011Background
- 1999: LLC purchased property in Minneapolis; areaway under building extended beneath street.
- 2005: city ordered removal of areaway because it encroached on county right-of-way and hindered East Lake Street reconstruction.
- City contracted removal to lowest responsible bidder; later completed by city due to contractor failure; total cost $409,358.46 assessed to property.
- American Bank (mortgagee and later fee owner after foreclosure in 2009) became successor and pursued the assessment appeal.
- City argued the assessment is a regulatory service fee under police power; district court denied summary judgment.
- Bench trial: American proved market values (2007: $3,850,000; 2009: $3,030,000) but city did not rebut; city’s expert testified removal increased value by cost of removal; district court upheld assessment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district court applied the correct legal standard | American argues special-benefit standard governs | City argues reasonableness standard or police-power standard applies | Reasonableness standard applies; district court correct |
| Whether the district court erred by admitting undisclosed evidence | American claims discovery failures tainted trial | City contends objections not properly preserved | Not preserved for appellate review; affirmed without addressing evidentiary issues |
Key Cases Cited
- Carlson-Lang Realty Co. v. City of Windom, 807 N.W.2d 368 (Minn. 1976) (presumption of validity; burden on challenger to show excess over benefits)
- G.E. Qvale v. City of Willmar, 223 Minn. 51, 25 N.W.2d 699 (Minn. 1946) (limits on assessment validity; (contextual) required proof of invalidity by competent evidence)
- Anderson v. City of Bemidji, 295 N.W.2d 555 (Minn. 1980) (special-benefit standard for local improvements; distinction from nuisance removal)
- Country Joe, Inc. v. City of Eagan, 560 N.W.2d 681 (Minn. 1997) (distinguishes police power fees from taxes; regulatory fees may be charged with reasonable relationship to expense)
- Tri-State Land Co. v. City of Shoreview, 290 N.W.2d 775 (Minn. 1980) (defines special-benefit measurement for property improvements (contextual))