Restore House, Inc. v. Helga Township ( 2014 )

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2012).
STATE OF MINNESOTA
IN COURT OF APPEALS
A14-0901
Restore House, Inc.,
Appellant,
vs.
Helga Township,
Respondent.
Filed December 22, 2014
Affirmed
Ross, Judge
Hubbard County District Court
File No. 29-CV-13-594
Thomas S. Kuesel, Tom Kuesel, P.A., Bemidji, Minnesota (for appellant)
Kenneth H. Bayliss, Quinlivan & Hughes, P.A., St. Cloud, Minnesota (for respondent)
Considered and decided by Chutich, Presiding Judge; Halbrooks, Judge; and Ross,
Judge.
UNPUBLISHED OPINION
ROSS, Judge
We must resolve this land-use dispute between a chemical-dependency treatment
facility, which wants to increase its capacity from six to nine residential clients, and a
township, which wants to prevent the increase. Helga Township refused to issue a
conditional use permit to allow nonprofit chemical-dependency treatment facility Restore
House, Inc. to serve more residents. Restore House unsuccessfully challenged the
township’s stated reasons through a declaratory-judgment action in the district court, and
it makes the same challenge on appeal. Although the facility’s substantive challenges do
not appear to be meritless, we do not reach them because the district court accurately
concluded that the township lacked the legal authority to grant the facility’s requested
permit. We affirm on that ground.
FACTS
Restore House is a nonprofit corporation providing faith-based chemical-
dependency rehabilitative treatment in Helga Township. Restore House purchased a
14-acre lot with a large house in the township in 2013 to use for residential treatment.
Since the facility became operational, up to six men have resided there at once for
treatment that lasts from one to six months. The house sits on a lot zoned
“Agricultural/Rural Residential District” under the township’s land-use ordinance. This
zoning designation allows licensed residential facilities serving six or fewer persons to
operate without any additional township permission.
Restore House wants to increase its services in that home, but vocal neighbors
strongly oppose its effort. In February 2013, Restore House applied to the township for a
conditional use permit (CUP) that would allow it to serve nine, rather than just six,
residents on the property. The township’s planning commission and board of supervisors
considered the application at lengthy back-to-back meetings. Public comments at these
meetings expressed fear that Restore House’s residents would menace the community.
Some referenced a 2010 tragedy in Mahnomen County where a resident of an unrelated
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treatment facility walked away and killed an elderly couple in their home. One neighbor
asked, “Personal trackers, is there a personal tracker on any one of these people?” He
added, “I’ve dealt with these people that are meth heads, druggies, alcoholics, and they
need help. . . . But they don’t need help next to my house, in our neighborhood.” A
different commenter said, “I think your program’s terrific. . . . I also want to agree with
most of us that we don’t want it in our backyard.” Another warned, “I mean, if somebody
gets out, who’s going to find them, how? One of us will end up . . . getting hurt.”
Neighbors complained that the property’s rural location would prevent police from
responding quickly. Restore House representatives defended their program as beneficial
and safe.
The planning commission did not make any recommendation to the board of
supervisors about whether to approve the permit application. But it did prepare a list of
conditions that might accompany a CUP. In turn, board members indicated that the board
should defer to the public, stating, “We want to do what the people in our township want.
What do you want?” Ultimately, the board denied Restore House’s CUP application.
The board supported its denial with fact findings ostensibly tied to the CUP
standards in the township’s ordinance. The board found that the “planned use would be
detrimental to the public safety of the neighborhood because of the nature of the business
and the increased traffic” and because of “numerous ‘unknowns’ regarding activities on
the property including, but not limited to, whether or not there would be enough staff to
handle the clientele.” The board also found that Restore House’s proposed use was
“incompatible because it [would] change the essential character of the area, which at this
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time is primarily residential” and would be “disturbing to the neighborhood, based upon
the public input.” Finally, the board found that the planning commission’s suggested
conditions would be “difficult and costly to enforce” because of “privacy and the nature
of the business.”
Restore House sued, asking the district court to declare that the board denied its
CUP application on insufficient and discriminatory grounds. The district court entered
judgment against Restore House in part because the ordinance gave the board no legal
authority to approve the application. Restore House appeals.
DECISION
Restore House asks us to reverse the district court’s decision affirming Helga
Township’s decision to deny its conditional-use-permit application. The district court was
required to determine whether the township’s decision was reasonable, and we undertake
the same review de novo, bound by neither the findings nor conclusions of the district
court. VanLandschoot v. City of Mendota Heights, 336 N.W.2d 503, 508 (Minn. 1983);
Yeh v. Cnty. of Cass, 696 N.W.2d 115, 124–25 (Minn. App. 2005), review denied (Minn.
Aug. 16, 2005). A town’s action is reasonable if its decision-making body understood the
law and provided factually based, legally sufficient reasons for its decision. In re
Stadsvold, 754 N.W.2d 323, 332 (Minn. 2008); VanLandschoot, 336 N.W.2d at 508.
Restore House maintains that the township’s decision was unreasonable because its
explanations for the denial are factually and legally deficient. It adds that the decision
also discriminates against the disabled. The township defends its explanations, but it
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principally argues that its ordinance did not authorize the township to grant the CUP
regardless of any other bases for the denial.
I
Before we can address the township’s argument that its ordinance does not allow
Restore House’s proposed use in the “Agricultural/Rural Residential District,” leaving
the township with no discretion to issue the requested CUP, we first address the issue of
waiver. Restore House maintains that the township improperly raised this issue in the
district court after it denied the requested CUP application on other grounds. The failure
to raise the issue during the CUP proceedings, argues Restore House, constitutes the
township’s waiver of the argument. For the following reasons we are not persuaded that
the township is foreclosed from contending that it lacked the authority to grant the CUP.
It is true that we generally do not allow land owners to litigate issues that they did
not raise in the zoning process. See Big Lake Ass’n v. Saint Louis Cnty. Planning
Comm’n, 761 N.W.2d 487, 490–91 (Minn. 2009). And it is also true that when a
municipality denies a CUP application, “the reviewing court typically should confine
itself at all times to the facts and circumstances developed before that body.” Id. at 491
(quotation omitted). This is because judicial review of a municipality’s quasi-judicial
decision is “focused on the legal sufficiency of and factual basis for the reasons given”
for the decision. Swanson v. City of Bloomington, 421 N.W.2d 307, 313 (Minn. 1988).
But this case presents the rare situation in which, in addition to the municipality’s stated
reasons for denying the permit application, the municipality might also have simply
lacked the legal authority to grant the application. None of the separation-of-powers
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concerns that restrain judicial review of an elected body’s quasi-judicial decision
similarly restrains a court from considering the elected body’s post-decision argument
that its decision also happened to be compelled as a matter of law. We do not ignore the
line of separation by addressing the township’s legal argument; rather, we honor it. The
municipality is not a mere party in the quasi-judicial decision-making process, it is the
quasi-judicial decision maker. The argument urging that we apply the doctrine of waiver
here misses that distinction. We hold that neither the district court nor this court is
prevented by the doctrine of waiver from affirming a municipality’s denial of a
conditional use permit based on the municipality’s lack of authority to grant the permit
even if the municipality first identifies its lack of authority during a judicial proceeding
challenging its bases for denying the permit.
Our new-issue jurisprudence also supports this approach. An appellate court
should “generally consider only those issues that were presented and considered below.”
In re Stadsvold, 754 N.W.2d at 327 (citing Thiele v. Stich, 425 N.W.2d 580, 582 (Minn.
1988)). We follow this approach in cases that began before a local-government decision
maker. See id.; In re Block, 727 N.W.2d 166, 178–79 (Minn. App. 2007). But exceptions
apply. We may “review any order involving the merits . . . [and] review any other matter
as the interest of justice may require.” Minn. R. Civ. App. P. 103.04. We have been
willing to consider a question raised first even on appeal if it is “plainly decisive of the
entire controversy on its merits” and involves undisputed facts. Watson v. United Servs.
Auto. Ass’n, 566 N.W.2d 683, 687 (Minn. 1997) (quotation omitted); see also In re Estate
of Barg, 752 N.W.2d 52, 62 n.6 (Minn. 2008) (addressing a pure legal question); Oanes
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v. Allstate Ins. Co., 617 N.W.2d 401, 403 (Minn. 2000) (deciding a nondispositive legal
issue not raised in the district court). We are inclined to consider a question if it includes
a new legal issue, was presented clearly in the briefing, was implied by or closely related
to the arguments raised below, and does not depend on new or disputed facts. Watson,
566 N.W.2d at 688. These well-established exceptions to waiver apply here.
Interpretation of the township’s zoning ordinance presents a new, purely legal question.
The parties both argued the issue extensively in the district court and in this court. The
threshold question of whether the ordinance even authorizes the township to issue the
requested CUP is implied in the question of whether the board lawfully and rationally
denied Restore House’s permit application on narrower grounds. And our legal analysis
does not depend on any uncertain or disputed facts. All four exception factors favor our
considering the question, which might resolve the entire controversy.
II
Having rejected the contention that the argument is waived, we turn to the merits
of the township’s argument that its ordinance does not allow Restore House’s proposed
use in the “Agricultural/Rural Residential District” so that the township had no legal
authority to issue the requested CUP. The argument is persuasive.
The authority to restrict land use flows from statutes to local ordinances. The
legislature authorizes town boards to designate land uses by zoning ordinances, Minn.
Stat. § 462.357 (2012), and it authorizes town boards “by ordinance [to] designate . . .
certain land development activities as conditional uses under zoning regulations,” Minn.
Stat. § 462.3595 (2012). It then authorizes the town board to issue a conditional use
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permit on “a showing by the applicant that the standards and criteria stated in the
ordinance will be satisfied.” Id. But the statute gives a town board no authority to permit
a conditional use that the ordinance has not designated as a conditional use or to issue a
permit when the standards “stated in the ordinance” cannot be satisfied.
The township’s argument that its zoning ordinance does not designate Restore
House’s proposed use as a conditional use requires us to examine and interpret the
township’s CUP-authorizing ordinance. We interpret ordinances de novo. State by
Minneapolis Park Lovers v. City of Minneapolis, 468 N.W.2d 566, 569 (Minn. App.
1991), review denied (Minn. July 24, 1991). In doing so, we construe their terms
according to their plain and ordinary meaning. Frank’s Nursery Sales, Inc. v. City of
Roseville, 295 N.W.2d 604, 608 (Minn. 1980). The controlling provision of the
township’s ordinance directs that “[o]nly those uses specifically listed in this Ordinance
as being allowed within a particular district as a permitted, conditional, interim, or
accessory use may occur within that district.” Helga Township, Minn., Land Use
Ordinance art. V, § 3 (2011). Unlisted proposed uses are allowed in a district only if the
board expressly finds that the proposed use is substantially similar to a listed use. Id.
art. V, §§ 3–4. A landowner may, as a matter of right with no need for governmental
action, engage in any use that the ordinance identifies as a “permitted use.” Id. art. IV,
§ 1(35). But the landowner may not engage in any conditional use in a district without a
permit. Id., § 1(9).
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Restore House’s property sits in an “Agricultural/Rural Residential District,” a
district with six express permitted uses:
1. Farms and agricultural uses;
2. Forestry . . . ;
3. Single family residences;
4. State licensed residential facilities serving six or fewer persons;
5. Class A home occupations; and
6. Accessory uses and structures to the above principal uses.
Id. art. VI, § 1(c). Unlike its treatment of the other two types of districts (Commercial
Districts C-1 and C-2), both of which include many listed conditional uses, the ordinance
enumerates no conditional uses for the “Agricultural/Rural Residential District.”
Compare id., § 1, with id., §§ 2–3. And this designation of no conditional uses is the heart
of the township’s argument. That is, the board’s statutory authority to grant any
conditional use is restricted to those conditional uses designated by ordinance, and the
township’s ordinance does not designate residential treatment facilities serving more than
six residents as a conditional use in the district.
Restore House argues that the ordinance does not exclude its proposed use from
the district. It maintains first that its use qualifies as “multifamily housing,” which it
insists is specifically permitted in the district. The ordinance does not support the
argument. Under the ordinance, Restore House may serve six persons residing in its
treatment facility. Id. art. VI, § 1(c). This six-person treatment-facility allowance is also
required by statute, which treats the facility expressly as a single-family residence, but
not as a multifamily residence. See Minn. Stat. §§ 245A.11, subd. 2, 462.357, subd. 7
(2012); Costley v. Caromin House, Inc., 313 N.W.2d 21, 27 (Minn. 1981) (“These
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statutes specify that a licensed group home for six or fewer . . . persons shall be
considered a single-family residential use for zoning purposes.”). By contrast, the statutes
identify larger licensed residential treatment facilities as multifamily residences, requiring
a town to treat programs that serve seven to sixteen clients as it would treat a multifamily
residential unit. Minn. Stat. §§ 245A.11, subd. 3, 462.357, subd. 8 (2012). Defeating
Restore House’s argument, the statutes do not require a town to allow a nine-person
residential treatment facility in a district that does not allow multifamily housing,
regardless of whether the town has zoned the district as “residential.” And also contrary
to Restore House’s argument, the ordinance’s express list of permitted uses does not
include “multifamily housing.”
Restore House points us to a different part of the ordinance—the “general
regulations” article. Under the heading “Multifamily Housing,” the “general regulations”
article states, “The following regulations/requirements shall apply to all future multi-
family development: Minimum lot size of 5 acres inclusive of road right-of-way per
dwelling unit in the Agricultural/Rural Residential District.” Helga Township, Minn.,
Land Use Ordinance art. VII, § 2(1) (2012) (emphasis added). Despite its referring to
“multifamily housing” in the regulations of “the Agricultural/Rural Residential District,”
the language does not advance Restore House’s position. The organization of the
ordinance and the language of the different provisions establish this conclusively. Article
VI, which determines the “district requirements,” lists the six uses after declaring, “The
following uses are allowed” in the district without any board-issued permit. This strongly
indicates that the list is exclusive.
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This textual interpretation is consistent with the parties’ understanding from the
outset. Restore House would not have sought a CUP if it believed it was permitted to
operate the nine-person facility as a matter of statutory right. In other words, if
multifamily housing were truly a permitted use in the zoned district, as Restore House
now argues, then its effort to obtain a conditional use permit was meaningless; expressly
permitted uses need no conditional permission. If, on the other hand, Restore House
needed a conditional use permit to increase its facility into a multifamily residence, it was
required to demonstrate that the ordinance includes that multifamily, large-facility use as
conditional. As we have observed, the ordinance does not.
We need not decide exactly what this provision of the “general regulations” article
means (although the township argues plausibly that the reference to “future” multifamily
housing indicates that the general provisions were drafted anticipating a potential
amendment to add multifamily housing to list of the permitted uses in the district). For
our purposes, it is clear from the organization of the ordinance and the specific text that
neither multifamily housing generally, nor expanded residential treatment facilities
specifically, are designated permitted or conditional uses in the district.
Restore House also highlights other provisions in the same general regulations
article to urge similarly that the specified list of six permitted uses in the district is not
exclusive. We are not persuaded. It highlights the following language and argues that
“churches” and “schools,” for example, are also permitted uses despite not being included
in the district’s list of permitted uses: “Permitted non-residential uses, including
churches, schools, etc. are allowed one freestanding sign per street frontage.” Id.
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§ 6(I)(2). But again, the theory that the Restore House program is one of the supposedly
unlisted permitted uses does not support Restore House’s appeal. Restore House brought
this lawsuit asking the district court to declare that the township unlawfully rejected its
expansion as a conditional use, not to declare that Restore House’s expansion is a
permitted use needing no board action.
We conclude that the ordinance contains no present mechanism allowing a nine-
resident treatment facility in the township’s “Agricultural/Rural Residential District” (at
least without a board determination of “substantial similarity” to a listed use). Restore
House therefore could not, as a matter of law, show that the ordinance’s criteria could be
satisfied. For this reason we agree with the district court that the board had no legal
authority to grant Restore House the conditional use permit it requested.
III
Restore House contends that the township’s stated reasons for denying the permit
are insufficient because they are unreasonable. In most cases, we assess the
reasonableness of the town’s denial of a conditional use permit by examining whether the
applicant has shown the standards in the ordinance will be satisfied. Bartheld v. Cnty. of
Koochiching, 716 N.W.2d 406, 411 (Minn. App. 2006); see Minn. Stat. § 462.3595,
subd. 1. Restore House’s contentions have some merit. The record suggests that the
township board was driven largely by vocal opposition. But a local government may
consider neighborhood opposition only if it rests on concrete information, not on vague,
generalized concerns. Bartheld, 716 N.W.2d at 413. And the board should not make
findings that contradict the only evidence presented. Here, the board’s decision referred
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to neighborhood opposition. Some neighbors urged that the nature of Restore House’s
operation would endanger the community, apparently unaware that Restore House
already operates its six-person facility in the community and may continue to operate it as
a matter of right. Others expressed their fear of drug- or alcohol-induced violence by
Restore House residents, apparently oblivious to the undisputed fact that Restore House
does not allow either drugs or alcohol or insobriety. The board also cited traffic concerns,
but the only discussion at either meeting attempting to quantify traffic indicated that
“traffic isn’t going to be anything more than a normal five-bedroom house,” which might
amount to “five to seven cars.” Nothing in the record seems to substantially support a
finding that Restore House’s adding three more residents would significantly affect
traffic, endanger the community, or change the residential and agricultural nature of the
area.
Despite our misgivings about the cited reasons for the CUP denial, however, our
holding that the ordinance does not qualify the proposed expanded facility as a
conditional use directs us to affirm. We rest our decision on that ground alone. For three
reasons we are not persuaded otherwise by Restore House’s suggestion that affirming
would require it to move its expanded operation to the harsh environment of a
nonresidential, commercial district. First, the ordinance includes various residential uses
and residential-friendly uses as conditional uses in the Commercial District C-2. These
include “residential dwellings” generally, as well as hospice centers, religious
institutions, nursing homes, preschools, schools, “crisis center supportive housing,” bed-
and-breakfast homes, and “board and care” homes. Ordinance, art. VI, § 3(E). Second,
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the ordinance allows for Restore House to expand its operation even in the
residential/agricultural district; if it chooses, it could open any number of additional six-
person treatment homes in the district without any need for a CUP. And third, even if the
township ordinance does allow Restore House to expand only in a commercial district,
Restore House identifies nothing in the statute that requires the township to zone less
restrictively.
IV
Restore House also argues that we should reverse because the township had
previously told it that a conditional use permit could be issued, estopping the township
from relying on its lack of legal authority to justify the denial. We generally will not
ignore applicable law to protect the expectations of a property owner even if the local
zoning body bolstered those expectations.
[A] party seeking to establish equitable estoppel against a
government entity must establish four elements. First, there
must be “wrongful conduct” on the part of an authorized
government agent. Second, the party seeking equitable relief
must reasonably rely on the wrongful conduct. Third, the
party must incur a unique expenditure in reliance on the
wrongful conduct. Finally, the balance of the equities must
weigh in favor of estoppel.
City of N. Oaks v. Sarpal, 797 N.W.2d 18, 25 (Minn. 2011) (citations omitted). “While
the result may be harsh, a municipality cannot be estopped from correctly enforcing the
ordinance even if the property owner relied to his detriment on prior city action.” Mohler
v. City of St. Louis Park, 643 N.W.2d 623, 638 (Minn. App. 2002), review denied (Minn.
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July 16, 2002) (quotation omitted). Restore House has not established any of the bases
necessary for us to further consider its equitable estoppel argument.
V
Restore House asserts also that the town’s refusal to issue the CUP should be
reversed because it constitutes discrimination, violating the federal Fair Housing
Amendments Act. The assertion is not factually or legally supported. The Act prohibits
disability discrimination in housing. 42 U.S.C. § 3604(f)(1) (2012). Unlawful
discrimination includes “refusal to make reasonable accommodations in rules . . . when
such accommodations may be necessary to afford [a handicapped] person equal
opportunity to use and enjoy a dwelling.” 42 U.S.C. § 3604(f)(3)(B) (2012). Impairment
due to drug addiction and alcoholism fits the Act’s definition of handicap. 42 U.S.C.
§ 3602(h)(1) (2012); 24 C.F.R. § 100.201 (2012). But while some public commenters
expressed their desire to exclude chemically-dependent persons from the community, the
township of course did not attempt to go that far; it merely denied the CUP application.
This denial was compelled by a facially and practically nondiscriminatory local
ordinance. And because the ordinance allows for no new multifamily uses in the
“Agricultural/Rural Residential District,” it does not discriminate on the basis of
chemical dependency but, rather, on the basis of residential size. The act does not
prohibit this kind of distinction.
Affirmed.
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