consultants are sandburs

Wednesday, January 16, 2013

Spring Lake Park's city-owned liquor store is in the news, because of mold remediation. That is less interesting than the fact that Spring Lake Park owns a liquor outlet. For Ramsey, that relates to the Wiser Choice situation.

The city decision makers, the council, can opt for a range of measures, from condemning the entire property, using it as needed for road improvement, and running the liquor store as city owned - with the price set by judicial decree; to caving in on every whim and fancy Jeff Wise chooses to negotiate.

Obviously reasonableness on both sides would avoid either extreme, but that's far from setting actual detailed terms and conditions. We have to trust the process.

As noted before, the city negotiated with Wise while he was on council, about terms and conditions, with agents representing the city with authority to negotiate but not to bind. Wise, as I understand things, contends basic terms of negotiation between him and the city's non-binding agents stood at terms acceptable to him in Feb. 2012.

Being on council and knowing the process, I cannot see how Wise can credibly claim reliance on things at the negotiation level with people he knew or should have known were without power to bind. If unsure, it was his duty to check sufficiently with other town officials to determine the scope of the agents' authority.

Next, the argument Wise should have made late in his term on council but did not make is now subject, if there is litigation, to claims of waiver, estoppel, laches and ratification, the ratification being that Wise continues even now to negotiate, months after having had an adverse council decision. Laches basically means not moving when timely, sitting and diddling; and not moving when timely can be considered waiver of then-timely actions and argument. Or not, depending on who decides and the mood of the decision maker, (judges varying one by one, and for one, day by day).

Without ever seeing reporting of which statute was in November deemed problematic regarding Wise, his property, and his council position, I can only flesh out an argument that would then have been sound to advance, regardless of the statute, if it was enacted (or last amended) prior to 2003 and/or 2006.

The argument, and this is from a non-lawyer and my understanding is it was not advanced back in November or so and is clearly a questionable hypothetical, but sketched below.

Worth noting early, if opinions on the law never differed we would not need courtrooms or a judiciary.

That said, my focus (if in Jeff's place) would have been MS Ch 117; especially:

117.036 APPRAISAL AND NEGOTIATION REQUIREMENTS.

Subdivision 1.Application.
This section applies to the acquisition of property under this chapter.

Subd. 1a.Definition of owner.
For the purposes of this section, "owner" means fee owner, contract purchaser, or business lessee who is entitled to condemnation compensation under a lease.

Subd. 2.Appraisal.
(a) Before commencing an eminent domain proceeding under this chapter, the acquiring authority must obtain at least one appraisal for the property proposed to be acquired. In making the appraisal, the appraiser must confer with one or more of the owners of the property, if reasonably possible. Notwithstanding section 13.44, the acquiring authority must provide the owner with a copy of each appraisal the acquiring authority has obtained for the property at the time an offer is made, but no later than 60 days before presenting a petition under section 117.055, and inform the owner of the right to obtain an appraisal under this section. Upon request, the acquiring authority must make available to the owner all appraisals of the property. If the acquiring authority is considering both a full and partial taking of the property, the acquiring authority shall obtain and provide the owner with appraisals for both types of takings.

(b) The owner may obtain an appraisal by a qualified appraiser of the property proposed to be acquired. The owner is entitled to reimbursement for the reasonable costs of the appraisal from the acquiring authority up to a maximum of $1,500 for single family and two-family residential property and minimum damage acquisitions and $5,000 for other types of property, provided that the owner submits to the acquiring authority the information necessary for reimbursement, including a copy of the owner's appraisal, at least five days before a condemnation commissioners' hearing. For purposes of this paragraph, a "minimum damage acquisition" means an interest in property that a qualified person with appraisal knowledge indicates can be acquired for a cost of $10,000 or less.

(c) The acquiring authority must pay the reimbursement to the owner within 30 days after receiving a copy of the appraisal and the reimbursement information. Upon agreement between the acquiring authority and the owner, the acquiring authority may pay the reimbursement directly to the appraiser.

Subd. 3.Negotiation.
In addition to the appraisal requirements under subdivision 2, before commencing an eminent domain proceeding, the acquiring authority must make a good faith attempt to negotiate personally with the owner of the property in order to acquire the property by direct purchase instead of the use of eminent domain proceedings. In making this negotiation, the acquiring authority must consider the appraisals in its possession, including any appraisal obtained and furnished by the owner if available, and other information that may be relevant to a determination of damages under this chapter. If the acquiring authority is considering both a full and partial taking of the property, the acquiring authority must make a good faith attempt to negotiate with respect to both types of takings.


Subd. 4.Use of appraisal at commissioners' hearing.
An appraisal must not be used or considered in a condemnation commissioners' hearing, nor may the appraiser who prepared the appraisal testify, unless a copy of the appraiser's written report is provided to the opposing party at least five days before the hearing.

Subd. 5.Documentation of business loss.
Documentation related to a loss of going concern claim made under section 117.186 must not be used or considered in a condemnation commissioners' hearing unless the documentation is provided to the opposing party at least 14 days before the hearing.

History: 1Sp2003 c 19 art 2 s 3; 2006 c 214 s 5

[emphasis added] The argument would be not that there was error or wrong to Wise negotiating with the city while on council; but that he was legally bound to do so irrespective of other considerations; via MS 117.036, Subd. 3.

The argument would also hinge upon an earlier Ch. 117 pubic policy statement:

117.012 PREEMPTION; PUBLIC USE OR PURPOSE.

Subdivision 1.Preemption.
Notwithstanding any other provision of law, including any charter provision, ordinance, statute, or special law, all condemning authorities, including home rule charter cities and all other political subdivisions of the state, must exercise the power of eminent domain in accordance with the provisions of this chapter, including all procedures, definitions, remedies, and limitations. Additional procedures, remedies, or limitations that do not deny or diminish the substantive and procedural rights and protections of owners under this chapter may be provided by other law, ordinance, or charter.

Subd. 2.Requirement of public use or public purpose.
Eminent domain may only be used for a public use or public purpose.

Subd. 3.Exceptions.
This chapter does not apply to the taking of property under laws relating to drainage or to town roads when those laws themselves expressly provide for the taking and specifically prescribe the procedure. The taking of property for a project undertaken by a watershed district under chapter 103D or for a project undertaken by a drainage authority under chapter 103E may be carried out under the procedure provided by those chapters.

History: 2006 c 214 s 1

Key Sect. 117.012, Subd. 1 language is, "Notwithstanding any other provision of law, [... government] must exercise the power of eminent domain in accordance with the provisions of this chapter, including all procedures, definitions, remedies, and limitations. Additional procedures, remedies, or limitations that do not deny or diminish the substantive and procedural rights and protections of owners under this chapter may be provided by other law, [...]". [italics added] Suggesting that Wise could not be on council and negotiate preliminary to a condemnation where the city is ostensibly the only instigating party would have "diminished" Jeff's substantive right to remain on council.

Moreover, additional law not impinging on procedural requirements of the chapter, or on owner rights, are the only exceptions allowed [along with inapplicable watershed stuff].

Finalizing the argument with authority on statutory construction, esp. MS Ch. 645, would flesh out the more mechanical aspects of things.

The argument, in essence, is that a general recently enacted statute applying specifically to all instances of eminent domain preempts considering Jeff's status as a city official, re MS Sect. 471.87 and similar statutes, which would apply in dealings other than eminent domain.

Continuing the argument - For the Wiser Choice site, because there was intent for a taking for a public purpose, even by litigation if needed, eminent domain law preempts contrary law, with clear recent statutory eminent domain law saying parties must negotiate first, without any implied or expressly stated exception or qualification upon whether the potential taking was or was not from a city official.

Surely a counterargument is that if statutes conflict the specific controls over the general, and specific to city officials there are measures absent in general legislation. It would be a pithy match between legal theories of statutory construction, which is the general and which the specific statute, had the argument been made in a timely way.

Back to the argument - It would put Wise in an untenable position if the specific statute about officials dealing with the government they are part of were to be read beyond applying only to an entirely voluntary purchase-and-sale dimension; vs. legislatively mandated negotiation with it already clear that a public use was intended which would require either eminent domain or successful bargaining.

A question is why am I beating this horse to death, and the simple answer is it interests me. My worry is prior to the new council taking over an appearance of cronyism might have been argued, particularly with Lazan as the city's fiduciary agent having a personal interest in seeing a closing with a commission to him/his firm, so that whether true arms-length bargaining existed, was unclear. Choice of appraisers on behalf of the city might have been unfair in some way, aimed at attaining valuations which other appraisers might not return. Now things are arms length, clearly so, and if the city seeks new appraisals with different numbers returned, that is the city's prerogative.

Things may need to start anew from square one. A key fact, Wise has remained in possession of his property throughout prior dealings and the entire council voted to reroute Sunwood and its intersection with Armstrong in a way where it did not matter how Wise voted. He was not a deciding vote, with Wise was powerless to alter the numbers his way, either way.

Nor would that normally be grounds to sue the city for damages, "They did road work down the road not touching my retail site and fewer in need of liquor sought me out given that there are competitors around and the driving to my store a bit less convenient." So?

Another key fact, for now there's not cash enough to modify Armstrong where it abuts Wiser Choice, so time is not of the essence. Nothing I know of in any statute or case says the city must file court papers at any time, only that it negotiate in good faith prior to that step, which allegedly was done.

The clearest and quickest resolution now would be for the present council to capitulate to whatever Wise wants, ending things, in a way the council has power to apply. Whether that is best is a subjective value question where opinions may differ, but the power to cut through things and give Wise everything he asks for rests with the council. The only question is whether or not they will go that route, now, with new faces, when the former council in November, for whatever reasons, did not. It was a discretionary thing then, and even if deferring was chosen by a mistaken view of constraints, so what? My preference, as an outsider-citizen, would be to see fresh appraisals by different appraisers, I worry that way, but beyond that, the council is bound to do nothing at all, if it chooses.

Were Wise to say, "I would not have voted for Sunwood alterations but for my seeing a personal interest of mine served by it," that would be an unsound argument, and hence one I would not expect him and his lawyer to make.

Finally, at a guess, I expect Wise gets his deal, possibly a bit of cutting and filling being done, but if he does not try to alter the ground rules in ways that might alienate opinion, the easy route of giving in to prior negotiations and, as boss, ratifying and going with the deal the agent negotiated is the most grief-free route for all concerned. And a bottom line is Wise is entitled to "due process" fairness, and to the city acting in good faith. I cannot see Wise in any way entitled to push things his way. He can resort to the courts as a matter of right, all it takes is a willing lawyer and the filing fee, but that consumes time and resources whether Jeff files papers, or the city files to condemn. I hope Jeff and the council make the wiser choice.

------------

Back to the headline, Sakry's Spring Lake Park report is online, here. Would a city-owned liquor store in Ramsey be all that great an idea? It could happen. It is unlikely, given the ups and downs of city land speculations, called by some, "the COR."

Private sector vs public sector debate will not end, however this liquor store question is resolved. Over the next two years before the 2014 election, the city has bigger fish to fry.

E.g., Town Center and what on earth to do to complete a best-feasible mop up.

I expect Jeff will get his deal.

________UPDATE_________
One typo was corrected, and links given for MS Ch. 645, and MS Sect. 471.87.

Beyond that, no changes. Now if you want more confusion I can give some. All in a single section of statutory construction law:

645.26 IRRECONCILABLE PROVISIONS.

Subdivision 1.Particular controls general.
When a general provision in a law is in conflict with a special provision in the same or another law, the two shall be construed, if possible, so that effect may be given to both. If the conflict between the two provisions be irreconcilable, the special provision shall prevail and shall be construed as an exception to the general provision, unless the general provision shall be enacted at a later session and it shall be the manifest intention of the legislature that such general provision shall prevail.

[...]

Subd. 4.Laws passed at different sessions.
When the provisions of two or more laws passed at different sessions of the legislature are irreconcilable, the law latest in date of final enactment shall prevail.
History:

1941 c 492 s 26

So, per Subd. 4, the later law, Ch. 117, preempts the earlier, Sect. 471.87. Right?

Now Subd. 1 has the earlier stated concept, the specific controls the general. So -

Is Sect. 471.87 specific as an exception to general eminent domain law of Ch. 117?

Or is Chap. 117 and its preemption language together with requiring negotiation a trump suit to the general requirement that officials not contract with their governmental unit, including absenting themselves from negotiations?

Clearly, council deliberations over what to do should exclude Jeff, and he did not participate, so that's fine. But he did negotiate the other side, as property owner.

Send it to Judge Judy? No, you are the judge - your decision ...

Look at MS Sect. 645.26, subd.1 above, ending sentence. Help me, tell me the "manifest intent" of the legislature in enacting Ch. 117 in its newest embodiment?

Never mind "intent" which says it all really - this says "manifest intent" which means what exactly, besides "intent?" Split those hairs, it is what lawyers do frequently.

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