Opinion
No. C3-98-1663.
Filed March 9, 1999.
Appeal from the District Court, Hennepin County, File No. 98-3758.
Patrick J. Neaton, (for respondents)
George C. Hoff, Paula A. Callies, (for appellant)
Considered and decided by Amundson, Presiding Judge, Anderson, Judge, and Huspeni, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1998).
UNPUBLISHED OPINION
Appellant City of Long Lake challenges the district court's order granting a temporary injunction to prevent appellant from enforcing: (1) the revocation of the conditional use permit it granted to respondent Insurance Salvage Services, Inc. (ISS); and (2) its junkyard ordinance against ISS, until a trial on the merits can be held. Because the district court considered all appropriate factors and did not abuse its discretion in granting the temporary injunction, we affirm.
FACTS
Respondent Daniel Dailey is the owner of ISS, a corporation that has been licensed and bonded as an automobile auction facility and used automobile dealership since 1987. ISS began its operations on rental property in the City of Long Lake (the city) in 1987. ISS then obtained a conditional use permit (CUP) from the city, allowing it to maintain a six-foot chainlink fence, rather than the required eight-foot screening fence around its property. In March 1992, the city revoked ISS's CUP, stating that the property had become unsightly. The city, however, once again granted ISS a CUP in April 1992, subject to the conditions that: (1) the automobiles be kept in an orderly fashion; and (2) the fence be kept in good repair and childproof.
The city amended its zoning ordinance in June 1994 to identify junkyards as a nonconforming use within the city. In 1995, ISS expanded its operations, purchasing property adjacent to the rental property. Before purchasing the property, Dailey contacted the city administrator, Joseph P. Lynch. Lynch informed Dailey that the automobile-brokerage business was a conforming use but also outlined some specific concerns that the city had about the property.
On July 14, 1997, Martha Faust, the Long Lake City Planner, sent a letter to Dailey informing him that the planning commission had learned that his property had become "unsightly, contrary to the terms of [his] CUP" and would be addressing the issue at an upcoming meeting. By letter dated September 5, 1997, Faust informed Dailey that the city had approved a Comprehensive Plan to improve the industrial park's image and to "reorient the industrial park to a business park." At the September 9, 1997 planning commission meeting, Dailey was instructed to get his business in compliance with the CUP or it would be revoked.
By letter dated September 16, 1997, the city's attorney notified Dailey that ISS was not in compliance with the conditions of the CUP and had 30 days to formulate a plan to comply with the city's zoning ordinances and the CUP. On October 10, 1997, Dailey contracted to: (1) repair the chainlink fence; (2) trim the trees by the fence; and (3) install a double-drive gate. The work on the fence and shrubbery was not completed until December 8, 1997.
Having last inspected ISS's property on December 5, 1997, the planning commission met on December 10, 1997 to discuss the revocation of Dailey's CUP. Counsel for Dailey and ISS informed the planning commission that the property had been brought into conformance with the CUP conditions and that the city could inspect the property. Faust, however, indicated that the inspection would not be necessary. Ultimately, the commission decided to revoke the CUP.
At a January 13, 1998 meeting, of which Dailey had notice, the commission found that ISS's use of the property met the definition of a junkyard, the 1995 expansion involved an expansion of a nonconforming use, and the use of the property was to be terminated. On February 17, 1998, the city adopted a resolution that required ISS to submit a timeline for the termination of its operations by February 27, 1998. Dailey and ISS commenced this suit, seeking both a temporary and permanent injunction preventing the city's enforcement of the CUP revocation and the city's enforcement of the zoning ordinance to require the termination of its operations. The city appeals the district court's grant of a temporary injunction to Dailey and ISS.
DECISION
Absent a clear abuse of discretion, we will not reverse the district court's decision to grant a temporary injunction. Carl Bolander Sons Co. v. City of Minneapolis , 502 N.W.2d 203, 209 (Minn. 1993). Furthermore, we view the facts alleged in the pleadings and affidavits in the light most favorable to the prevailing party. Pacific Equip. Irrigation v. Toro Co. , 519 N.W.2d 911, 914 (Minn.App. 1994), review denied (Minn. Sept. 16, 1994).
A temporary injunction is an "extraordinary equitable remedy" that serves to maintain "the status quo pending a trial on the merits." Ecolab, Inc. v. Gartland , 537 N.W.2d 291, 294 (Minn.App. 1995). In its determination to grant or deny a temporary injunction, a court must consider five factors set forth in Dahlberg Bros., Inc. v. Ford Motor Co. , 272 Minn. 264, 274-75, 137 N.W.2d 314, 321-22 (1965). In the memorandum accompanying its order, the district court addressed each of the Dahlberg factors, finding that:
1. the nature and background of the parties' relationship weighed in favor of granting the injunction;
2. the relative hardships of the parties weighed in favor of granting the injunction;
3. respondents were at least as likely to prevail on the issue of whether ISS's operations constituted a junkyard as the city was to prevail;
4. the public policy weight in favor of granting the injunction; and
5. an unreasonable administrative burden would not be placed on the court by granting a temporary injunction.
See id. (listing relevant considerations in granting injunction). Each of these determinations is supported by the record in this case.
1. Relationship of the Parties
There is indication in the record that, up until the 1997 Comprehensive Plan for the beautification of the city, ISS's CUP violations were, at the very least, ignored by the city. Planning commission meeting minutes indicate that on December 10, 1997, the parties were still attempting to reach a mutually beneficial solution that would accommodate both parties' interest. The district court did not abuse its discretion in concluding that the parties' relationship could be maintained while awaiting trial on the merits.
2. Relative Harm to Parties
The party seeking a temporary injunction must show that a legal remedy is inadequate and that an injunction is necessary to prevent great and irreparable injury. Cherne Indus. v. Grounds Assoc. , 278 N.W.2d 81, 92 (Minn. 1979).
The district court noted that without a temporary injunction:
ISS would be unable to retrieve, store, and auction damaged vehicles, its sole source of income. * * * Without this source of income, Mr. Dailey would likely be unable to maintain his current investment in the property. In addition, as the result of ISS not being able to carry on its business, its employees would be out of work. Moreover, if ISS is required to terminate operations until after a determination on the merits, it is likely that its current customers, the insurance companies, would find alternative businesses to handle their vehicles. Even if ISS is ultimately successful on the merits, the insurance companies are not guaranteed to return their business to ISS.
The district court further found that any potential harm suffered by the city, consisting merely of delay in the beautification process, would be slight in comparison to that suffered by ISS if the status quo was not preserved pending trial. The district court did not abuse its discretion in finding that the relative harm to the parties weighed in favor of granting the temporary injunction.
3. Likelihood of Success on Merits
Appellant asserts that the factor involving the parties' likelihood of success on the merits is the overriding factor in this appeal. District courts, however, have the discretion to balance the factors of irreparable harm and likelihood of success on the merits. Sanborn Mfg. Co. v. Currie , 500 N.W.2d 161, 164 (Minn.App. 1993). Even if the potential for success on the merits is doubtful, where plaintiffs make a strong showing of irreparable harm, district courts may properly grant an injunction to preserve the status quo pending trial. Id. at 164-65.
On the trial of the merits, a "rational-basis" test will be applied to the review of the city's decision to revoke ISS's CUP and even a debatable decision must be upheld if there is a reasonable basis for that action. Honn v. City of Coon Rapids , 313 N.W.2d 409, 415 (Minn. 1981). Given the deferential standard applied when reviewing municipal decisions, it seems likely that a court could find that the city had at least a debatable reason for revoking the CUP.
Having made this observation, we note that nothing in this opinion should be construed as an expression of this court's opinion on how the merits of this case should be resolved at trial.
The second decision of the city to be addressed at the trial on the merits is whether the city's junkyard ordinance could be applied to ISS to prevent its automobile salvaging operation and to declare the 1995 expansion of ISS's business an unlawful expansion of a nonconforming use. The interpretation of an existing ordinance is a question of law for the court. Frank's Nursery Sales, Inc. v. City of Roseville , 295 N.W.2d 604, 608 (Minn. 1980).
Following rules of construction, which guide courts in interpreting zoning ordinances, the city's junkyard ordinance could be interpreted in a manner that would not include ISS's operations. See Medical Services, Inc. v. City of Savage , 487 N.W.2d 263, 266 (Minn.App. 1992) (listing three rules of construction to follow when interpreting zoning ordinances).
The first rule of construction requires that ordinances be interpreted according to their plain and ordinary meaning. Id. It could be argued that if the plain and ordinary meaning of "junkyard" is a place where people bring their useless cars to rust out or to be sold for parts, a court could find that ISS does not operate a junkyard. Indeed, ISS never considered itself a junkyard, but rather an automobile-auctioning and used-automobile dealership, and it does not appear that the city considered ISS a junkyard until recently. As late as 1996, notably after the 1995 expansion of ISS's operations, the city administrator acknowledged that ISS's business constituted a permitted use of the property.
In August 1979 the city amended its zoning ordinance to include a definition of an "Automobile Wrecking or Junk Yard," defining it as
[a]ny place were two (2) or more vehicles not in running condition and/or not licensed, or parts thereof, are stored in the open and are not being restored to operation or any land, building or structure used for wrecking or storing of such motor vehicles or parts thereof; and including any commercial salvaging and scavenging of any other goods, articles or merchandise.
City of Long Lake, Zoning Ordinance § 2, subd. 7 (1998). In 1994, the city amended its zoning ordinance to make junkyards a nonconforming use in the city. Id. § 24, subd. 5 (1998).
The second rule governing the interpretation of this ordinance is that the court must strictly construe the ordinance against the city and in favor of the property owner. Id. This rule of construction would favor ISS in a trial on the merits.
Finally, the third rule of construction states that ordinances must be considered in light of their underlying policy goals. Id. Although the underlying policy of this ordinance is to eliminate unsightly junkyards, there is also a clear policy that when municipalities endeavor "to apply esthetic considerations to plans for future development," they must be mindful that any such plans that involve the destruction or diminution of property rights require that property owners be justly compensated for the loss of property. Golden v. City of St. Louis Park , 266 Minn. 46, 57, 122 N.W.2d 570, 577 (1963), overruled on other grounds by Northwestern College v. City of Arden Hills , 281 N.W.2d 865, 868 (Minn. 1979). For this reason, a court may find that public policy favors the interpretation of the statute that would allow ISS to continue its operations.
The district court did not abuse its discretion in finding that the factor of success on the merits favored granting the temporary injunction.
Appellant, however, also contends that the district court improperly noted that it was
likely that a finder of fact would find that due to the City's actions, the junkyard ordinance does not apply to ISS and the City's attempt to bring ISS under the ordinance is for an improper purpose.
We conclude these comments were meant to express hypothetically respondent's likelihood of success on the merits, rather than stating the district court's position on how this case will eventually be decided after a trial on the merits.
4. Public Policy
While noting that local government's zoning decisions are to be afforded deference, citing Swanson v. City of Bloomington , 421 N.W.2d 307 (Minn. 1988), the district court also noted that courts have the responsibility to ensure that zoning ordinances have a rational basis. Honn , 313 N.W.2d at 415. Moreover, courts must ensure that a municipality does not "destroy valuable property rights solely in adherence to the esthetic concepts of municipal planning commissions." Golden , 266 Minn. at 56, 122 N.W.2d at 577. The district court did not abuse its discretion in determining that this factor weighed in favor of granting the injunction.
5. Administrative Burdens
The district court is in the best position to assess the potential administrative burden created by the granting of a temporary injunction. See Dahlberg , 272 Minn. at 283, 137 N.W.2d at 326 (deferring to district court's finding on parties' ability to maintain harmonious relationship pending outcome of litigation). Here, the court noted that:
An unreasonable administrative burden would not be placed on this Court if the parties were required to continue their relationship under the same circumstances they have for more than ten years.
We accept the judgment of the district court with respect to the anticipated administrative burden of granting the temporary injunction.
6. Security Requirement
Minn.R.Civ.P. 65.03 provides that a temporary injunction may not be granted unless the applicant gives a security "in such sum as the court deems proper, for the payment of such costs and damages as may be incurred" by a party found to have been wrongfully enjoined. Although appellant correctly notes that the district court failed to address the security requirement, nothing in the record indicates that appellant raised the lack of a security requirement in the district court. As a general rule, this court will not consider matters not argued and considered in the court below. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988). Further, because this matter will be tried on the merits in the near future, we expect that the city will bring an appropriate motion to correct this oversight prior to the time of trial.