Opinion
No. C8-02-1146.
Filed January 28, 2003.
Appeal from the Lac Qui Parle County District Court, File No. C400207.
Ronald R. Frauenshuh, Jr., (for respondents)
Richard G. Stulz, Roger L. Swenson, Swenson, Nelson Stulz, PLLC, (for appellant)
Considered and decided by Halbrooks, Presiding Judge, Schumacher, Judge, and Hudson, Judge
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
Appellant City of Madison challenges the district court's award of summary judgment for respondent property owners, arguing (1) that there are genuine issues of material fact, and (2) that the court prematurely determined as a matter of law that the amount of the special assessments exceeded the increase in the market value of the subject properties as a result of certain municipal improvements to those properties. Because we conclude that there was insufficient evidence for the district court to determine as a matter of law that the amount of the special assessments exceeded the increase in the market value of the subject properties as a result of the municipal improvements, we reverse and remand.
FACTS
In 1998, appellant City of Madison (the city) spent $2,076,600 to replace storm sewers, asphalt, curbs, and gutters along several streets. The project was known as the 1998 Storm Sewer Project.
In October 2000, the city assessed several property owners, including respondents, a total of $181,404.53 for the cost of the 1998 Storm Sewer Project. The properties were assessed based on the front-footage method. A meeting was held on October 23, 2000, to allow for public comment. Respondent property owners objected to the amount of the assessments. After considering the property owners' arguments, the city concluded that the assessments were proper and added the property owners to the assessment roll.
No reason was provided for why only a portion of the cost of the 1998 Storm Sewer Project was assessed to property owners.
The city's assessment policy states that corner lots "shall be assessed for frontage along the short side of such property, plus 50% of the long side frontage"; the other 50% of the long side frontage shall be spread among all other assessed properties of "inside" lots in the block. Assessments for the 1998 Storm Sewer Project were $13.99 per linear foot for curb and gutter, $23.53-$24.56 per linear foot for street construction, and the price for sanitary sewer service was $478.20 per service.
Pursuant to Minn. Stat. § 429.081 (2000), the property owners appealed the city's adoption of the assessment to the district court. The property owners argued that the amount of the assessment was improper because the special assessment project did not increase the value of their properties in an amount equal to or greater than their respective special assessments. The property owners also filed a motion for summary judgment asserting that the front-footage method of assessment used by the city was invalid as a matter of law.
The city opposed the property owners' summary judgment motion, arguing that the front-footage method of assessment was valid. The city also filed its own motion for summary judgment, asserting that the appraisals the property owners submitted during discovery were insufficient for them to meet their burden of establishing that the special assessments exceeded the increase in the market values of their properties. The city appended to its motion the assessment roll and eight appraisals performed by the property owners' expert. The property owners filed a responsive memorandum, but only addressed the issue of whether the front-footage method of assessment was valid. The property owners did not address the appraisal issues raised in the city's summary judgment motion.
The district court granted summary judgment for the property owners, holding that the special assessment was void as a matter of law because the special assessment projects did not increase the value of their properties in an amount equal to or greater than their special assessments. The district court also held that the city was entitled to adopt a fair and reasonable method of restructuring the assessment, provided it could show that the method chosen approximately equalizes the assessment and the benefit. The district court did not specifically address the validity of the front-footage method of assessment. This appeal followed.
DECISION
1. Front-footage method of assessment
Both parties brought motions for summary judgment; however, the property owners' motion was limited to the issue of whether the front-footage method of assessment was valid. Although the district court never specifically addressed the validity of the front-footage method of assessment, it implicitly found that this method of assessment was valid. We agree. Minnesota law clearly states that the front-footage method of assessment is valid as long as it is based on the cost of the municipal improvement. See Anderson v. City of Bemidji, 295 N.W.2d 555, 561 (Minn. 1980) (stating that the Minnesota Supreme Court has held on several occasions that the front-footage method of assessment meets constitutional and statutory requirements); Bisbee v. City of Fairmont, 593 N.W.2d 714, 719 (Minn.App. 1999) (stating that front-footage method is acceptable). Here, the city's use of the front-footage method of assessment was valid under Minnesota law because the assessments were based on the cost of the 1998 Storm Sewer Project.
The district court held that the assessments in this case were void because the amount of the assessments was greater than the increase in market value of the subject properties as a result of the municipal improvements, not because the front-footage method of assessment was used.
2. Validity of the special assessment
The city argues that the district court erred by granting summary judgment for the property owners because there were genuine issues of material fact and because the court's analysis of the legal issues was premature. On an appeal from summary judgment, we ask whether there are any genuine issues of material fact and whether the district court erred in its application of the law. DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn. 1997).
In reviewing the validity of a special assessment, this court conducts
a careful examination of the record to ascertain whether the evidence as a whole fairly supports the findings of the district court and whether these in turn support its conclusions of law and judgment.
Carlson-Lang Realty Co. v. City of Windom, 307 Minn. 368, 373, 240 N.W.2d 517, 521 (1976) (citation omitted). The cost of a municipal improvement "may be assessed upon property benefited by the improvement, based upon the benefits received." Minn. Stat. § 429.051 (2000). A municipality's power of assessment is limited by the following conditions:
(a) The land must receive a special benefit from the improvement being constructed,
(b) the assessment must be uniform upon the same class of property, and
(c) the assessment may not exceed the special benefit.
Carlson-Lang, 307 Minn. at 369, 240 N.W.2d at 519 (citations omitted). The special benefit is measured by the increase in market value of the affected property as a result of the improvement. Id. Generally, an assessment by a municipality is entitled to a presumption of validity. Bisbee, 593 N.W.2d at 718. Because of the presumption of validity, introduction of the municipality's assessment roll into evidence generally constitutes prima facie proof that the assessment does not exceed the special benefit. Id. A property owner may overcome the municipality's prima facie case by presenting competent evidence that the amount of the assessment exceeds the increase in the market value of the property as a result of the improvement. Carlson-Lang, 307 Minn. at 370, 240 N.W.2d at 519. If the municipality also presents evidence that the amount of the assessment is equal to or less than the increase in the market value of the property, the district court must weigh the parties' evidence and make a factual determination. Id. at 370, 240 N.W.2d at 519-20.
The city argues that there are genuine issues of material fact concerning the sufficiency of the property owners' appraisals, and that the city should have been allowed to present its own appraisal evidence to demonstrate that the amount of the assessment was equal to or less than the increase in the value of the subject properties as a result of the improvements. But a party who brings a motion for summary judgment is asserting that no genuine issues of material fact exist. See Minn.R.Civ.P. 56.03. Thus, once the city brought its motion for summary judgment based on the property owners' appraisal evidence, and without presenting any appraisal evidence of its own, the city conceded that the property owners' evidence was undisputed. Because the city conceded that there were no genuine issues of material fact by moving for summary judgment on this issue and submitted no evidence to create a factual issue, the district court correctly concluded that there were no genuine issues of material fact.
The city next argues that the court's analysis of the legal issues concerning the validity of the special assessment was premature. But, again, once the city conceded that there were no genuine issues of material fact on this issue, it ran the risk that the court might find for the property owners as a matter of law. See 2 David F. Herr Roger S. Haydock, Minnesota Practice § 56.26 (1998) ("A party making a motion for summary judgment runs the risk that by establishing no genuine issue of material fact exists, the law will favor the non-moving party and that the non-moving party will be entitled to judgment as a matter of law."). We therefore hold that the district court's consideration of the validity of the special assessment was not premature.
A careful consideration of the record, however, leads us to conclude that the findings of the district court are unsupported by the evidence and that the court erred in granting summary judgment to the property owners. Under Minnesota law, the city's submission of the assessment roll into evidence constituted prima facie evidence that the amount of the assessment was equal to or less than the increase in the market value of the properties as a result of the municipal improvements. See Bisbee, 593 N.W.2d at 718. Once the city established its prima facie case, the burden fell upon the property owners to demonstrate that the amount of the special assessments was greater than the increase in the market value of the subject properties as a result of the municipal improvements. Generally, any valuation method that approximates the increase in a subject property's market value before and after the municipal improvement may be used. DeSutter v. Township of Helena, 489 N.W.2d 236, 238 (Minn.App. 1992), review denied (Minn. Sept. 30, 1992). Characteristically, an appraiser in a special-assessment case provides a value for the property before and after the improvement. See, e.g., Eagle Creek Townhomes, LLP v. City of Shakopee, 614 N.W.2d 246, 251 (Minn.App. 2000), review denied (Minn. Sept. 13, 2000); but see E.H. Willmus Properties, Inc. v. Village of New Brighton, 293 Minn. 356, 359-60, 199 N.W.2d 435, 437-38 (1972) (holding that testimony from the owner of the subject property, who was experienced in real estate matters, that the property received no benefit from the municipal improvement was sufficient to overcome the municipality's prima facie case).
Calvin Sommer, CGRPA, performed appraisals for eight of the twelve properties at issue in this dispute. Sommer did not provide appraisals of the properties before and after the municipal improvements. He only appraised the properties "as is," after the improvements were completed. Sommer concluded:
It is the opinion of the real estate appraiser that the storm sewer project and replacement of the street did not increase the valuation of the subject properties, but instead reduced the valuation of the subject properties and in some subject properties the reduction would be significant.
Other than Sommer's conclusory statement that the subject properties were not benefited by the improvements, his appraisals provided no information regarding whether the value of the subject properties increased or decreased as a result of the municipal improvements. Additionally, Sommer only appraised eight of the twelve subject properties, and only eight appraisals were submitted into evidence. The district court held that Sommer's appraisals were sufficient to demonstrate that the assessment exceeded the benefit to the properties, and that the appraisals of the eight properties constituted sufficient "representative appraisal evidence" to show that the assessments exceeded the benefit on all twelve of the subject properties. We disagree.
To overcome the presumptive validity of the special assessment, the property owners were required to provide evidence that the amount of the assessments exceeded the increase in the value of the properties as a result of the improvements. See Carlson-Lang, 307 Minn. at 370, 240 N.W.2d at 519. Because Sommer only provided "as is" appraisals of the subject properties and did not provide appraisals based on the property values before and after the municipal improvements, the record contains no basis for his conclusory statement that the subject properties realized no increase in value from the municipal improvements. Thus, there was no direct evidence to support the district court's conclusion that the amount of the assessments exceeded the increase in the value of the properties. Furthermore, the burden of demonstrating that the amount of the assessments exceeded the increase in the value of the properties as a result of the improvements is on each individual property owner. To meet this burden, each individual property owner must submit evidence demonstrating that the amount of the assessment on his or her particular property exceeds the increase in the value as a result of the improvement.
Because we conclude that the property owners' evidence was insufficient as a matter of law to demonstrate that the amount of the assessments exceeds the increase in the value of the properties as a result of the improvements, we reverse the decision of the district court and remand this matter to the district court to solicit further evidence from the city and the property owners as to valuation.