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277316 WHITE - CITY CLERK (�y I� PtNK • FINANCE ��_S�C C/fN�ARY - DEPARTMENT G I TY O F SA I NT ��U L COIlAC1I t� V BLUE - MAYOR File N . ncil Resolution Presented By Referred To Committee: Date Out of Committee By Date WHEREAS, The Council of the City of Saint Paul did issue a Class B Restaurant License for premises located at 490 Summit Avenue; and WHEREAS, Karl Van D'Elden and others did file suit against the City of Saint Paul on the grounds that the issuance of said license was in violation of the 1975 Saint Paul Zoning Code and the Summit Avenue Restricted Residence District; and WHEREAS, These issues were tried before the Honorable Joseph P. Summers, Judge of District Court; and WHEREAS, Judge Summers found, among other things, that the Restricted Residence District from Dale to the Cathedral to be void and that the granting of a Class B Restaurant License for 490 Summit was continuation of a legal use under the 1922 Zoning Code; and WHEREAS, Judge Summers ordered Defendant City of 5aint Paul to pay part of Plaintiffs ' attorney' s fees in the amount of $25,000, for in the opinion of the judge, the City, as trustee o� the Restricted Residence District, had a duty to initiate litiga- tion over whether the Restricted Residence District was still enforceable, rather than to wait for Plaintiffs to initiate such litigation; and WHEREAS, The Council finds that it is in the public interest and for a public purpose to pay, as ordered by the Court, $25,OOQ for Plaintiffs ' attorney's fees rather than to appeal this matter. COUNCILMEN Yeas Nays Requestgd by Department of: Hunt Levine In Favor Maddox McMahon B Showalter __ Against Y Tedesco Wilson Form Approved by City Attorney Adopted by Council: Date — CertifiE:d Passed by Council Secretary BY By, Approved by ;Navor: Date _ Approved by Mayor for Submission to Council 'I By _ BY � ., WHITE - CITY CLERK �yy�,�y.���� PIyK � FINANCE �l l' J Ca;�ARY - DEPARTMENT C I TY O F SA I NT ��U L COUIICII �� � BL«E - MAYOR File N . Council Resolution Presented By Referred To Committee: Date Out of Committee By Date 2. to the Supreme Courtp now, therefore, be it RESOLVED, That upon execution and delivery of a Satisfaction of Judgment in full to the City of Saint Paul, the proper City officers are hereby authorized and directed to pay out of the Judgment and Compromise Fund 09065-512-000 to Russell Brown, Esq. , attorney for Karl Van D'Elden and others, the sum of $25, 000. COU[VCILMEN Requestgd by Department of: Yeas Nays Hunt �evine In Favor Maddox � McMahon B Showalter __ A gai n s t Y — Tedesco �MI'rFSOR AU6 2 5 1981 Form Approved by City Attorney Adopted by Council: Date B �' �.Js Certified Y .s by Counc.' ecr Y Ap ro by Mayor. D e uG 2 6 ►98� Approved by Mayor for Submission to Council B — BY PllB11SHED S EP 519� ,. -, ����s t�t=��. CITY OF SAINT PAUL R� ; ; � OFFICE OF THE CITY ATTORNEY � iilt�ll��li o . „ EDWARD P. STARR, CITY ATTORNEY ,... 647 City Hall,Saint Paul,Minnesota 55102 612-298-5121 GEORGE LATIMER MAYOR MEMORANDUM TO: City Council Members FROM: Edward P. Starr, City Attorney Terrence J. Garvey, Asst. City Att ney DATE: August 13, 1981 RE: Summit Avenue Restricted Residence District Lawsuit During the last days of the legislative session, under Section 107 of the Transportation Appropriation Bill, an amendment to \ the statutes governing restricted residence districts was added. That amendment reads as follows : 462.16. Power to enact ordinances for enforcement of rights given to council The council shall have the power to enact ordinances for the enforcement of the rights which shall be acquired under sections 462. 12 to 462. 17, and to fix penalties for their violation, including a fine not exceeding $100 or confinement in the city workhouse not exceeding 90 days. Violations of the ordinances may be prosecuted in the municipal court of the city. Restricted residence districts created pursuant to sections 462. 12 to 462. 16 shall be subiect to the provisions of section 541.023. In construing the scope and effect of a residence district restriction, equitable principles shall be utilized and the following shall be considered: the historic pattern of enforcement or non-enforcement; changed circumstances; the lenath of time durinct which current uses have been allowed to exist; the actual impact of current land uses; and detrimental reliance. .-"`�,O . ,- ' � Fr f t�Y�.A� City Council Members Page Two August 13, 1981 That amendment appears to give additional support to the findings of Judge Summers in the lawsuit concerning the use of 490 Summit Avenue for a Catering Business. The judge, as you may recall, further ruled that the Summit Avenue Restricted Residence District was void and unenforceable between Dale Street and the Cathedral. Nonetheless, the judge ordered the City of Saint Paul to pay $25, 000 in attorneys ' fees to plaintiffs. EPS:TJG:er '� ����� ._; , �'���==o, , ,.,. CITY OF SAINT PAUL ; , OFFICE OF THE CITY ATTORNEY � ii11�11��i1 0 . � � EDWARD P. STARR, CITY ATTORNEY ,... 647 City Hall,Saint Paul,Minnesota 55102 612-298-5121 GEORGE LATIMER Au6 141981 � MAYOR • COUNEtCMAN MEMORANDUM �QN MppDOX TO: City Council Members FROM: Edward P. Starr, City Attorney Terrence J. Garvey, Asst. City Att ney DATE: August 13, 1981 RE: Summit Avenue Restricted Residence District Lawsuit ' During the last days of the legislative session, under Section 107 of the Transportation Appropriation Bill, an amendment to � the statutes governing restricted residence districts was added. That amendment reads as follows : 462.16. Power to enact ordinances for enforcement of rights given to council The council shall have the power to enact ordinances for the enforcement of the rights which shall be acquired under sections 462. 12 to 462. 17, and to fix penalties for their violation, including a fine not exceeding $100 or confinement in the city workhouse not exceeding 90 days. Violations of the ordinances may be prosecuted in the municipal court of the city. Restricted residence districts created pursuant to sections 462. 12 to 462. 16 shall be sub-iect to the provisions of section 541.023. In construinq the scope and effect of a residence district restriction, ec�uitable principles shall be utilized and the following shall be considered: the historic pattern of enforcement or non-enforcement; chanQed circumstances; the lenctth of time durincr which current uses have been allowed to exist; the actual impact of current land uses; and detrimental reliance. , �..�",�,`7 � � `� ' �z`7���5 City Council Members Page �vo August 13, 1981 That amendment appears to give additional support to the findings of Judge Summers in the lawsuit concerning the use of 490 Summit Avenue for a Catering Business. The judge, as you may recall, further ruled that the Summit Avenue Restricted Residence District was void and unenforceable between Da1e Street and the Cathedral. Nonetheless, the judge ordered the City of Saint Paul to pay $25,000 in attorneys' fees to plaintiffs. EPS:TJG:er ... ; �6��V .��T��. CITY OF SAINT PAUL �• ; o . OFFICE OF THE CITY ATTORNEY � i=i�ii�ii • : ,.� EDWARD P. STARR, CITY ATTORNEY �..• 647 Ciry Halt,Saint Paul,Minnesota 55102 GEpRGE LATIMER 612�299-5121 MAYOR M E M O R A N D U M TO: Council of the City of Saint Paul FROM: Edward P. Starr, City Attorney, and Terrance Garvey, Assistant City Attorney RE: Judge Summers ' ruling on Summit Avenue As you probably read in the newspaper, Judge Joseph Summers recently ruled on a lawsuit concerning permitted uses on Summit Avenue. In addition to what was reported in the news- Aaper, Judge Summers orde�'ed the City of Saint Paul to pay $25,000 to the plaintiffs ' counsel for attornegs ' fees. In essence, the City prevailed before the court on the issues of law but was ordered to pick up the tab for the losing parties ' attorneys ' fees . The novelness of Judge Summers ' ruling has prompted us to apprise you in writing of the issues involved prior to Council consideration of whether to appeal the court's order. � Summit Avenue has for approximately sixty years been subject to certain use restrictions known as the Restricted Residence Dis- trrct (RRD) . Land uses other than single family homes, duplexes , schools and churches were prohibited on Summit Avenue under the RRD. Under the RRD prohibitions, for example, the canversion of a 10 ,000 square foot mansion into three 3,000 square foot condo- minium units would not be permitted. In the early 1950 's, then private citizen Warren Burger challenged the issuance by the City of Saint Paul of a permit to convert the property at 669 Summit from a duplex to a fourplex. The validity of the RRD was upheld by the Minnesota Supreme Court in Burger v. City of Saint Paul (1954) . Notwithstanding the Supreme Court s ru ing, the RRD as not been enforced. Most of the properties in violation of the RRD restrictions are located east of Dale Street. About one half of the structures between Dale and the Cathedral are in violation of the RRD. Judge Summers ' order only applies to properties . between Dale and the Cathedral . � . O .AF - N /���� Memorandum Council of the City of Saint Paul Page Two The suit before the court arose from two unrelated events . First, the issuance by the City of a catering license in 1978 for 490 Summit Avenue and second, the opinior. issued by this office in 1979 that the RRD was no longer enforceable. The initial plaintiffs in the lawsuit were the nearby neighbors of 490 Summit Avenue. Subsequently the Ramsey Hill Association, the Summit Hill - Association and Old Town Restorations, Inc. , joined the lawsuit as plaintiffs. The later plaintiffs objected to the determination by the City Attorney's office that the Restricted Residence District was no longer enforceable . The property at 490 Summit is zoned RT-2. A catering business is a permitted use in B-2 zone. The license application of the owners of 490 Summit Avenue for a catering business was denied by the License and Permit Division because the property was not properly zoned for that enterprise. The applicant appealed to the License Committee and the License Committee made the determination that it was •permissible to issue a catering license for 490 Summit Avenue for it was a continuation of a previously existing non-confarming use. Judge Summers made the following findings : 1. That the Summit Avenue Restricted Residence District from Dale Street to Selby Avenue is void because con- ditions have changed since its enactment as to nullify its essential objecting purpose and to render continued enforcement inequitable and contrary to puhlic policy. 2 . That to enforce the RRD against 490 Summit while not enforcing it against the large number of other properties along Summit Avenue which are in violation of the RRD denies to the owners of 490 Summit Avenue the equal protection of the laws . 3. That the Summit Avenue RRD cannot be enforced against the present owners of 490 Summit because the RRD was not filed of record with the Ramsey County Recorder and these owners took title to the property without actual notice of the restrictions . 4. That the use of 490 Summit as a reception house to entertain social parties consisting solely of invitees , �. � ����� Memorandum Council of the City of Saint Paul Page Three is a lawful use of 490 Summit under the Summit Avenue RRD, such use being in accord with the purpose for which the structure was built, even though a_fee is paid for rental and food service. 5. That a reception house use of 490 Summit was a lawful social building use in an A Residence District under the 1922 Zoning Code. 6. That a reception house use of a structure is not a permitted use in a RT-2 district under the 1975 Zoning Code. 7. That the reception house use of 490 Summit was a lawful non-conforming us� at the time the 1975 Zoning Code became effective. 8. That the Council of the City of Saint Paul acted reason- ably in determining that this lawful non-conforming use at 490 Summit had not lapsed and in permitting the Skally grQUp to continue a reception house use on the property. 9 . Determining that defendant, City of Saint Paul, should pay $25,000 for plaintiffs ' legal fees . The dilemma which the court has left the City with is whether to appeal on the issue of attorneys ' fees and risk the Supreme Court overturning the trial court on the issues of law or whether to pay the attorneys ' fees and accept the court's favorable ruling on the issues of law. It is presumed that if the City appealed from the court 's ruling on attorneys ' fees that the plaintiffs would appeal to the Supreme Court on the court 's ruling on issues of law. Without publicly acknowledging the weaknesses of our case on appeal, there are several findings of the trial court which would cause some concern if an appeal is taken. Judge Summers ' ruling is a substantial departure from the law as last set forth by the Minnesota Supreme Court in Burger v. City of Saint Paul . The court in Burger said that notwithstan ing economic rea ities or concerns , property cwners along Summit Avenue had a vested property right in the Restricted Residence District for which they paid an assess- • I '. �'`1�3�6 Memorandum Council of the City of Saint Paul Page Four ment and even the state legislature could not take away that �roperty right without compensating the individual property owners for the loss . The last decision concerning the enforc�- , ability of the Restricted Residence District was made in 1973 by Judge Otis �odfrey wherein Judge Godfrey found the District to still be enforceable. The case before Judge Godfrey involved the use of a home at 958 Summit Avenue as a youth hostel. The award by the court of attorneys ' fees to the nonprevailing party is, as the court suggests, at first blush somewhat in- congruous . There is , however, some support for the court 's award of attorneys ' fees in the Burger case supra. In Burger, the court noted that the City was t-fie trustee for the Restr cted Residence District and that the City held all rights as trustee for the benefit of the various property owners along Summit ' Avenue. The trial court found that the City in not enforcing the RRD over many, many years and by not seeking a legal deter- mination from the courts as to the enforceability of the RRD was lax in its fiduciary duty as a trustee and therefore it was justifiable to order the City to pay attorneys ' fees . It is our understanding that the dollar figure awarded by the court is approxim.ately one half of the bill submitted by the attorneys for plaintiffs. � --- ���-. ���� �� �� • ��=�o, ' CITY OF SAINT PAUL ~�� ' OFFICE OF THE CITY ATTORNEY � nu��mu ;e � "" ""' a5 EDWARD P. STARR, CITY ATTORNEY • .... w� 647 City Hall, Saint Paul,Minnesota 55102 612-29&5127 GEORGE UTiMER M/�YOR r� .. � � .. ,X° I M E M O R A N D U M TO: Council of the City of Saint Paul FROM: Edward P. Starr, City Attorney, and Terrance Garvey, Assistant City Attorney RE: Judge Summers ' ruling on Summit Avenue As you probably read in the newspaper, Judge Joseph Summers recently ruled on a lawsuit concerning permitted uses on Summit Avenue. In addition to what was reported in the news- oaper, Judge Summers orde�'ed the City of Saint Paul to pay $25,000 to the plaintiffs ' counsel for attorne�s ' fees. In essence, the City prevailed before the court on the issues of law but was ordered to pick up the tab for the losing parties ' attorneys ' fees. The novelness of Judge Summers ' ruling has prompted us to apprise you in writing of the issues involved prior to Council consideration of whether to appeal the court 's order. � Summit Avenue has for approximately sixty years been subject to certain use restrictions known as the Restricted Residence Dis- trict (RRD) . Land uses other than single family homes, duplexes , schools and churches were prohibited on Summit Avenue under the RRD. Under the RRD prohibitions, for example, the conversion of a 10 ,000 square foot mansion into three 3,000 square foot condo- minium units would not be permitted. In the early 1950 's, then private citizen Warren Burger challenged the issuance by the City_ of Saint Paul of a permit to convert the property at 669 Suznmit from a duplex to a fourplex. The validity of the RRD was upheld by the Minnesota Supreme Court in Burger v. City of Saint Paul (1954) . Notwithstanding the Supreme Court 's ru ing, the RRD as not been enforced. Most of the properties in violation of the RRD restrictions are located east of Dale Street. About one half of the structures between Dale and the Cathedral are in violation of the RRD. Judge Summers ' order only applies to properties between Dale and the Cathedral . � � .�:�y�. � . �:�.��,..�r:�=s ; Memorandum Council of the City of Saint Paul Page Two The suit before the court arose from two unrelated events . First, the issuance by the City of a catering license in 1978 for 490 Summit Avenue and second, the opinion issued by this office in 1979 that the RRD was no longer enforceab le. The initial plaintiffs in the lawsuit were the nearby neighbors of 490 Summit Avenue. Subsequently the Ramsey Hill Association, the Summit Hill - Association and Old Town Restorations, Inc. , joined the lawsuit as plaintiffs. The later plaintiffs objected to the determination by the City Attorney's office that the Restricted Residence District was no longer enforceable. The property at 490 Summit is zoned RT-2. A catering business is a permitted use in B-2 zone. The license application of the owners of 490 Summit Avenue for a catering business was denied by the License and Permit Division because the property was not properly zoned for that enterprise. The applicant appealed to the License Committee and the License Committee made the determination that it was •permissible to issue a catering license for 490 Summit Avenue for it was a continuation of a previously existing non-conforming use. Judge Summers made the following findings : 1. That the Summit Avenue Restricted Residence District from Dale Street to Selby Avenue is void because con- ditions have changed since its enactment as to nullify its essential objecting purpose and to render continued enforcement inequitable and contrary to public policy. 2 . That to enforce the RRD against 490 Summit while not enforci;ng it against the large number of other properties along Summit Avenue which are in violation of the RRD denies to the owners of 490 Summit Avenue the equal protection of the laws . 3. That the Summit Avenue RRD cannot be enforced against the present owners of 490 Summit because the RRD was not filed af record with the Ramsey County Recorder and these owners took title to the property without actual notice of the restrictions . 4 . That the use of 490 Summit as a reception house to entertain social parties consisting solely of invitQes , Memorandum Council of the City of Saint Paul Page Three is a lawful use of 490 Summit under the Summit Avenue RRD, such use being in accord with the purpose for which the structure was built, even though a .fee is paid for rental and food service. 5. That a reception house use of 490 Summit was a lawful social building use in an A Residence District under the 1922 Zoning Code. 6 . That a reception house use of a structure is not a permitted use in a RT-2 district under the 1975 Zoning Code. 7. That the reception house use of 490 Summit was a lawful non-conforming us� at the time the 1975 Zoning Code became effective. 8. That the Council of the City of Saint Paul acted reason- ably in determining that this lawful non-conforming use at 490 Summit had not lapsed and in permitting the Skally group to continue a reception house use on the property. 9 . Determining that defendant, City of Saint Paul, should pay $25,000 for plaintiffs ' legal fees. The dilemma which the court has left the City with is whether to appeal on the issue of attorneys ' fees and risk the Supreme Court overturning the trial court on the issues of law or whether to pay the attorneys ' fees and accept the court 's favorable ruling on the issues of law. It is presumed that if the City appealed from the court's ruling on attorneys ' fees that the plaintiffs would appeal to the Supreme Court on the court's ruling on issues of law. Without publicly acknowledging the weaknesses of our case on appeal, there are several findings of the trial court which would cause some concern if an appeal is taken. Judge Summers ' ruling is a substantial departure from the law as last set forth by the Minnesota Supreme Court in Burger v. City of Saint Paul. The court in Burger said that notwithstan ing economic rea ities or concerns , property cwners along Summit Avenue had a vested property right in the Restricted Residence District for which they paid an assess- i Memorandum Council of the City of Saint Paul Page Four ment and even the state legislature could not take away that �roperty right without compensating the individual property owners for the loss . The last decision concerning the enforce- ability of the Restricted Residence District was made in 1973 by Judge Otis Godfrey wherein Judge Godfrey found the District to still be enforceable. The case before Judge Godfrey involved the use of a home at 958 Summit Avenue as a youth hostel. The award by the court of attorneys ' fees to the nonprevailing party is, as the court suggests, at first blush somewhat in- congruous. There is , however, some support for the court 's award of attorneys ' fees in the Burger case supra. In Burger, the court noted that the City was tF�ie trustee for the Restr cted Residence District and that the City held all rights as trustee for the benefit of the various property owners along Summit Avenue. The trial court found that the City in not enforcing the RRD over many, many years and by not seeking a legal deter- mination from the courts as to the enforceability of the RRD was lax in its fiduciary duty as a trustee and therefore it was justifiable to order the City to pay attorneys ' fees . It is our understanding that the dollar figure awarded by the court is approximately one half of the bill submitted by the attorneys for • plaintiffs. �