DRB 24, LLC v. City of Minneapolis

United States Court of Appeals
For the Eighth Circuit
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No. 13-3385
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DRB #24, LLC, a Minnesota Limited Liability Company on behalf of itself, and
all those real property owners similarly situated in the City of Minneapolis; 701
Newton Avenue North, Minneapolis, Minnesota, on behalf of itself, and all those
similarly situated real properties located in the City of Minneapolis, Minnesota
lllllllllllllllllllll Plaintiffs - Appellants
v.
City of Minneapolis, a Municipal Corporation
lllllllllllllllllllll Defendant - Appellee
John Doe; Mary Roe
lllllllllllllllllllll Defendants
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Appeal from United States District Court
for the District of Minnesota - Minneapolis
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Submitted: October 9, 2014
Filed: December 23, 2014
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Before RILEY, Chief Judge, WOLLMAN and BYE, Circuit Judges.
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RILEY, Chief Judge.
DRB #24, LLC and 701 Newton Avenue North, Minneapolis, Minnesota
(collectively DRB), brought suit challenging the City of Minneapolis’s (city) vacant
building registration fee. The district court,1 granting summary judgment in the city’s
favor, determined the city had given DRB proper notice of its intent to assess the fee,
and DRB waived any objections to the fee because it did not raise them within thirty
days after the fee was levied, as required by Minnesota law. We now affirm.2
I. BACKGROUND
The city imposes an annual vacant building registration fee on owners of
vacant buildings “to recover all costs incurred by the city for monitoring and
regulating vacant buildings, including nuisance abatement, enforcement and
administrative costs.” Minneapolis Code of Ordinances (M.C.O.) § 249.80(j)(1). If
unpaid, the city can levy and collect the fee as a special assessment against the
property pursuant to the procedures in M.C.O. § 227.100. See id. § 249.80(j)(3).
DRB owns a vacant building in Minneapolis and for several years has failed
to pay the vacant building registration fee. On June 16, 2011, DRB received notice
the city intended to assess $6,550 for DRB’s unpaid 2010 fee. After a hearing
attended by DRB, an administrative hearing officer levied the fee. This process
repeated in 2012—DRB received notice on April 20 of the city’s intent to assess
$6,746 for its unpaid 2011 fee and, after an administrative hearing, the fee was levied
May 31, 2012. DRB did not appeal the assessment of either fee, but instead brought
a separate suit in state court—on behalf of itself and similarly situated
landowners—arguing the fees violated Minnesota statutory law, Minnesota common
law, and the United States and Minnesota Constitutions. The city removed the case
1
The Honorable John R. Tunheim, United States District Judge for the District
of Minnesota adopting the report and recommendation of the Honorable Janie S.
Mayeron, United States Magistrate Judge for the District of Minnesota.
2
We have appellate jurisdiction under 28 U.S.C. § 1291.
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to the District of Minnesota asserting jurisdiction under 28 U.S.C. §§ 1331 and
1367(a).
On cross motions for summary judgment, the magistrate judge recommended
granting judgment in favor of the city, concluding the city had provided DRB with
proper notice of the assessments and DRB did not bring its challenges to the
assessments within the statutory thirty-day appeal period. The district court, adopting
this recommendation, granted summary judgment in the city’s favor.
II. DISCUSSION
We review the district court’s summary judgment rulings de novo. See Stein
v. Chase Home Fin., LLC, 662 F.3d 976, 979 (8th Cir. 2011). This case involves the
interpretation of state statutes and city ordinances, which we read for their plain and
ordinary meanings in the context used. See Am. Fam. Ins. Grp. v. Schroedl, 616
N.W.2d 273, 277 (Minn. 2000).
Minn. Stat. § 429.081 provides: “Within 30 days after the adoption of the
assessment, any person aggrieved . . . may appeal to the district court . . . . All
objections to the assessment shall be deemed waived unless presented on such appeal.
This section provides the exclusive method of appeal from a special assessment
levied pursuant to this chapter.” DRB does not contest the application of this thirty-
day deadline to its statutory claims and has stipulated that it did not appeal its case
in accordance with § 429.081. The critical issue on appeal is whether the city had
jurisdiction to levy the fees.
A. City’s Jurisdiction
Under Minnesota law, a municipality lacks jurisdiction to levy a special
assessment unless it gives proper notice. See Klapmeier v. Town of Ctr. of Crow
Wing Cnty., 346 N.W.2d 133, 136 (Minn. 1984) (“Proper notice of assessment
proceedings is a jurisdictional prerequisite to any action by the town board.”). DRB
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contends the notice it received from the city was defective and, as such, the thirty-day
appeal period in § 429.081 never began to run. See, e.g., Sykes v. City of Rochester,
787 N.W.2d 192, 197 (Minn. Ct. App. 2010).
As a threshold matter, we must determine whether the notice provisions of
Minn. Stat. § 429.061, subdiv. 1 or M.C.O. § 227.100(d) govern the city’s
assessment. Although DRB claims the state statute must govern because it preempts
the city ordinance, the Minnesota state legislature explicitly gave Minneapolis the
option either to enact special assessments under its charter or apply the assessment
procedures outlined in Chapter 429 of the Minnesota Statutes. See 1969 Minn. Laws,
ch. 499, sec. 1.3 The legislature stated, “The procedure for the levy of said special
assessment shall, if the city elects to proceed under the provisions of said Chapter
429, be as provided in said Chapter 429.” Id. sec. 2 (emphasis added). This language
unambiguously shows the notice procedures outlined in § 429.061 only apply in the
absence of Minneapolis charter law, meaning there is no overlap to trigger conflict
preemption. See Curiskis v. City of Minneapolis, 729 N.W.2d 655, 658 (Minn. Ct.
App. 2007); Gadey v. City of Minneapolis, 517 N.W.2d 344, 348 (Minn. Ct. App.
1994). The notice requirements in M.C.O. § 227.100 govern this case.
DRB claims the city’s notice was inadequate under M.C.O. § 227.100 because
it did not disclose the basis for the fee or the existence of deferment procedures. We
disagree.
3
This provision is a session law that was never incorporated into the Minnesota
statutory code. Regardless, it remains binding law. See Granville v. Minneapolis
Pub. Sch., Special Sch. Dist. No. 1, 732 N.W.2d 201, 208 (Minn. 2007) (“The actual
laws of Minnesota as passed by the legislature are contained in the session laws.”
(quotation and internal marks omitted)).
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1. Fee Basis
The city’s notice of its intent to assess the fee must disclose the “amount and
basis for the costs.” M.C.O. § 227.100(d). The 2011 Notice of Intent to Assess
specified: “VACANT BUILDING REGISTRATION FEE Total cost is: $6,550.00”
and the 2012 Notice declared: “VACANT BUILDING REGISTRATION . . . Total
cost is: $6,746.00.”
DRB argues these notices do not adequately disclose the basis of the fees
because they do not provide a “foundation, development, calculation, or explanation”
of the fees, but the ordinance does not require a detailed calculation or explanation.
The district court correctly reasoned, “The term ‘basis for the costs’ is most
reasonably interpreted in this situation to mean a description of what the costs are for,
not a thorough calculation of or justification for the [fee].” Notice of a special
assessment is required to give the individual being assessed “an opportunity to
question the validity of the amount of the assessment.” Meadowbrook Manor, Inc.
v. City of St. Louis Park, 104 N.W.2d 540, 543 (Minn. 1960). The phrase “vacant
building registration” was sufficient to give DRB notice of the basis for the fee so
DRB could determine the fee’s validity and challenge the application of the fee at an
administrative hearing.
2. Existence of Deferment Procedures
When giving notice of its intent to assess a vacant building registration fee, the
city must also “inform the owner of . . . the existence of any deferment procedure.”
M.C.O. § 227.100(d). Both the notices of intent to assess informed:
Payment of this assessment may be deferred if the person homesteading
the property can demonstrate a financial hardship and is 65 years of age
or older or is retired due to permanent and total disability (Minnesota
Statutes 435.193 to 435.195). For questions regarding deferment due to
age and/or disability, call [the Minneapolis Senior Ombudsman at a
given phone number].
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DRB argues this language was insufficient because it did not disclose the
circumstances under which the fee could be “waived or suspended,” see id.
§ 249.80(j)(1) (“This fee may be waived or suspended for the current year as a term
or condition of a written restoration agreement or order issued pursuant to section
249.50.”).
Fundamental rules of statutory construction compel us to reject DRB’s
argument. “‘[W]hen different words are used in the same context, we assume that the
words have different meanings.’” State v. Nelson, 842 N.W.2d 433, 439 (Minn.
2014) (quoting Dereje v. State, 837 N.W.2d 714, 720 (Minn. 2013)); accord Johnson
v. Paynesville Farmers Union Co-op. Oil Co., 817 N.W.2d 693, 709 (Minn.
2012). Here, the M.C.O. uses “defer” in some provisions, and “waiver” or
“suspension” in others. Compare M.C.O. § 509.910 (describing “deferred payment
agreements” entered into when an individual cannot pay utility bills), with
id. § 447.150 (providing the city may “waive” a parade permit fee in the case of
indigence), and id. § 249.80(j)(1). Given the M.C.O.’s differentiation between these
terms, the waiver or suspension mentioned in § 249.80(j)(1) is not a “deferment
procedure” necessitating disclosure under § 227.100(d).
The city gave proper notice of its intent to assess the vacant building
registration fees. By failing to appeal its claims within thirty days after the
assessment was levied, in compliance with Minn. Stat. § 429.081, DRB waived its
substantive attacks on the fees.4
4
DRB vaguely appears to argue the city lacked jurisdiction to assess the fees
because the fees were unreasonable. Although clad as a jurisdictional issue, this is
a substantive attack on the assessment that also must have been brought within the
statutory thirty-day appeal period under § 429.081.
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B. Common Law Claims
DRB finally argues its common law claims of fraud, misrepresentation, and
unjust enrichment5 are not governed by the thirty-day appeal period in § 429.081
because they are “causes of action independent of the special assessment process,”
falling under Minnesota’s general statute of limitations. Section 429.081
unequivocally states: “All objections to the assessment shall be deemed waived unless
presented on such appeal. This section provides the exclusive method of appeal from
a special assessment.” (Emphasis added). The Minnesota Supreme Court has held
the above-quoted language—which was added to the statute in 1978—“clarified
legislative intent that there be no other avenue of contesting special assessments.”
Sievert v. City of Lakefield, 319 N.W.2d 43, 44 (Minn. 1982) (affirming the dismissal
of the plaintiff’s common law contract claims because they were not brought in
accordance with § 429.081); accord Krahl v. Nine Mile Creek Watershed Dist., 283
N.W.2d 538, 545 (Minn. 1979). Although purportedly sounding in common law,
each of DRB’s claims challenge the validity and accuracy of the vacant building
registration fee and, as such, are attacks on the special assessments governed by
§ 429.081’s thirty-day appeal deadline.
III. CONCLUSION
We affirm the decision of the district court.
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5
DRB also lists its constitutional taking claims as being exempt from
§ 429.081; however, DRB’s brief focuses on the common law claims—specifically
fraud, misrepresentation, and unjust enrichment. We do not expressly address the
constitutional claims because DRB does not present any separate meaningful
argument on the constitutional contentions. See, e.g., Dill v. Gen. Am. Life Ins. Co.,
525 F.3d 612, 621 (8th Cir. 2008) (explaining an argument not clearly addressed “in
[a party’s] briefs or at oral argument” is waived on appeal).
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