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Summary of Opinion: Lance J. Johnson v. Cook County, No. A08-1501 (Minn. July 29, 2010)

Factual and Procedural Background

Lance J. Johnson owned two contiguous parcels in Cook County along Highway 61 (parcel A and parcel B). In January 2001 he acquired parcel A (zoned residential) which contained a storage shed used commercially. In 2003 he acquired parcel B by contract for deed; the west half of parcel B was zoned residential and the east half commercial. On May 15, 2001, Johnson and his contract vendor applied to Cook County to rezone parcel A and the west half of parcel B from residential to general commercial use.

The Cook County Planning Commission held a public meeting on June 13, 2001, and issued written findings recommending denial. The Cook County Board of Commissioners held a hearing on September 11, 2001, received testimony (including from Johnson), voted to deny the rezoning request, but did not state in writing the reasons for that denial at the time of the vote. The parties agreed that September 11, 2001, was the statutory deadline under Minn. Stat. § 15.99, subd. 2, for addressing Johnson's request.

In 2005, a neighboring landowner (Rita's Grandview Ridge) obtained county approval to rezone part of its property and a conditional use permit; the County granted those applications. In 2006 Johnson filed a declaratory judgment action alleging the County incorrectly denied his 2001 rezoning application and incorrectly approved Rita's applications, and he also alleged a taking entitling him to just compensation.

Cook County moved for summary judgment arguing its decisions were lawful, that laches barred Johnson's claims, and that Johnson failed to establish a takings claim. Johnson argued, inter alia, that his 2001 rezoning request was automatically approved because the County failed to state in writing the reasons for denying the request as required by Minn. Stat. § 15.99, subd. 2 (2000). The district court granted summary judgment to the County, concluding the County's denial was reasonable and that Johnson had lost his right to seek review. The court of appeals reversed, holding the failure to state written reasons triggered the statute's automatic-approval provision. The Minnesota Supreme Court granted review.

Legal Issues Presented

  1. Whether the automatic-approval provision of Minn. Stat. § 15.99, subd. 2, is triggered when a government agency (here, a county board) fails to state in writing the reasons for denial of a zoning request at the time the request is denied.
  2. Whether the statute's written-reasons requirement must be satisfied within the 60-day statutory deadline (i.e., whether the written-reasons requirement is mandatory and its noncompliance results in automatic approval) or whether it is directory (and thus noncompliance does not trigger automatic approval so long as the agency acted within the 60-day period).

Arguments of the Parties

Appellant (Cook County)

  • Argued that the court of appeals erred in reading the statute to trigger automatic approval when the County failed to state written reasons at the time of denial.
  • Contended that the automatic-approval penalty is triggered only when the agency fails to act (i.e., fails to approve or deny) within the 60-day deadline set by Minn. Stat. § 15.99, subd. 2.
  • Maintained that the written-reasons requirement is merely directory (i.e., noncompliance does not invoke the automatic-approval penalty) and that the County's denial was reasonable.

Respondent (Lance J. Johnson)

  • Argued that Minn. Stat. § 15.99, subd. 2 requires both denial within the 60-day period and that written reasons for denial be stated at the time of denial; failure to provide written reasons at that time triggers automatic approval.
  • Relied on language and reasoning from prior case law (notably Hans Hagen) to support a construction that treats the written-reasons requirement as mandatory.
  • Asserted that because the County did not state written reasons at the time it denied the request, his rezoning request should be treated as automatically approved under the statute, and therefore laches does not bar his claim.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Am. Tower, L.P. v. City of Grant, 636 N.W.2d 309, 312 (Minn. 2001) Cited for the proposition that questions of statutory interpretation are reviewed de novo. The court invoked Am. Tower to state the standard of review for the statutory-interpretation question presented.
Hans Hagen Homes, Inc. v. City of Minnetrista, 728 N.W.2d 536 (Minn. 2007) Interpreted a related version of Minn. Stat. § 15.99, subd. 2; addressed whether failure to give the applicant a copy of written reasons within the time deadline triggers automatic approval; recognized distinctions between directory and mandatory provisions. The court relied heavily on Hans Hagen, noting (1) Hans Hagen concluded that failure to give the applicant a copy of written reasons did not trigger automatic approval under the 2003 amendments, and (2) Hans Hagen contained a footnote declining to decide the narrower construction now argued by the County. Hans Hagen's reasoning regarding directory/mandatory distinctions informed the court's conclusion that written-reasons requirement is directory.
Benedictine Sisters Benevolent Ass'n v. Pettersen, 299 N.W.2d 738, 740 (Minn. 1980) Recognized that time deadlines in statutes may be directory rather than mandatory where no consequence is provided for noncompliance. The court cited Benedictine Sisters for the proposition that a statutory time deadline can be directory, supporting the analysis distinguishing mandatory time-deadline consequences from directory requirements absent a specified penalty.
Genin v. 1996 Mercury Marquis, 622 N.W.2d 114, 117 (Minn. 2001) Stated the judicial principle that courts may not add words to a statute that the Legislature has not supplied. The court invoked Genin to support the point that it could not read an additional requirement (that written reasons be provided within the 60-day period to avoid the penalty) into the statute when the Legislature did not supply such a consequence.
Swanson v. City of Bloomington, 421 N.W.2d 307, 313 (Minn. 1988) When a local zoning proceeding was fair and the record clear and complete, appellate review is based on the record. Cited to clarify that even though the written-reasons requirement is directory, where the record is fair and complete, review proceeds based on the existing record rather than being invalidated for lack of written reasons.
Honn v. City of Coon Rapids, 313 N.W.2d 409, 416 (Minn. 1981) When legally sufficient reasons are not recorded or reduced to writing, a prima facie case of arbitrariness is established, risking non-sustainment of the decision. The court cited Honn to explain the consequence that a failure to record legally sufficient, factually supported reasons can give rise to an arbitrariness challenge—even though the written-reasons requirement is directory—placing the burden on the zoning authority to justify its decision or face a remedy.
In re Stadsvold, 754 N.W.2d 323, 332-33 (Minn. 2008) Where a zoning authority's decision is arbitrary and capricious, the standard remedy may be ordering issuance of the permit; remand to articulate reasons is appropriate in limited circumstances. The court relied on Stadsvold to explain available remedies if arbitrariness is established: either issuance of the permit or, in limited circumstances, remand to the zoning authority to articulate reasons confined to earlier proceedings.
Earthburners, Inc. v. County of Carlton, 513 N.W.2d 460, 463 (Minn. 1994) Remand to a zoning authority to articulate reasons is an appropriate remedy in limited circumstances. Earthburners was cited alongside Stadsvold as authority supporting remand to the zoning authority to articulate reasons in appropriate cases.

Court's Reasoning and Analysis

The Court reviewed the statutory-interpretation question de novo and identified the operative text of Minn. Stat. § 15.99, subd. 2 (2000), which consists of three sentences:

"Except as otherwise provided in this section and notwithstanding any other law to the contrary, an agency must approve or deny within 60 days a written request relating to zoning. Failure of an agency to deny a request within 60 days is approval of the request. If an agency denies the request, it must state in writing the reasons for the denial at the time that it denies the request."

The Court parsed the statute sentence-by-sentence:

  • The first sentence imposes the general 60-day approve-or-deny duty on agencies.
  • The second sentence establishes a time-deadline penalty: failure to deny within 60 days operates as approval of the request.
  • The third sentence imposes a written-reasons requirement when an agency denies a request, but contains no explicit consequence or penalty for failure to comply.

Applying established principles of statutory construction, the Court reasoned that:

  • The time-deadline provision (the second sentence) plainly supplies a consequence for noncompliance and is therefore mandatory.
  • The written-reasons requirement (the third sentence) provides no statutory consequence for noncompliance; a statute that contains a requirement but provides no consequence is properly read as directory rather than mandatory.
  • The Court may not add statutory language the Legislature did not supply; thus it could not read a consequence into the written-reasons sentence to make the written-reasons requirement a condition precedent to avoiding automatic approval.

The Court relied on Hans Hagen's earlier analysis distinguishing mandatory and directory provisions and its conclusion that failure to give the applicant a copy of written reasons was directory under the 2003 amendments. It noted that Hans Hagen had declined to decide the precise narrower question now presented (i.e., whether written reasons must accompany the denial within the 60-day period to avoid the penalty), but that Hans Hagen's discussion supported the directory/mandatory distinction the Court adopted.

The Court therefore concluded that the statute's time-deadline penalty and the written-reasons requirement are separate: the time-deadline is mandatory (and triggers automatic approval if the agency fails to act within 60 days), while the written-reasons requirement is directory (and failure to state written reasons at the time of denial does not, by itself, trigger automatic approval so long as the decision was made within the 60-day period).

The Court emphasized that this construction does not eliminate consequences for failure to state legally sufficient reasons. It explained that when legally sufficient reasons are not recorded or reduced to writing, a prima facie case of arbitrariness may be established (citing Honn), which can lead to remedies including ordering issuance of a permit or, in limited circumstances, remand to the zoning authority to articulate reasons (citing Stadsvold and Earthburners). The Court also noted that where proceedings were fair and the record clear, appellate review proceeds based on the record (citing Swanson).

The Court expressly stated that because it concluded the automatic-approval penalty did not apply, and because Johnson did not challenge the district court's conclusion that the County's decision was reasonable, the Court did not address whether Johnson's § 15.99 challenge was timely.

Holding and Implications

Holding: The Court held that the written-reasons requirement in Minn. Stat. § 15.99, subd. 2, is directory and not mandatory. In particular:

Core Ruling: The failure to comply with the written-reasons requirement does not result in automatic approval under Minn. Stat. § 15.99, subd. 2, provided the agency made its decision within the statute's 60-day deadline.

Direct consequences of the decision (as stated in the opinion):

  • The Minnesota Supreme Court reversed the court of appeals' ruling that the County's failure to state written reasons at the time of denial automatically approved Johnson's rezoning request.
  • Because the written-reasons requirement is directory, a zoning application is not automatically approved under § 15.99, subd. 2 when a government agency fails to state in writing its reasons supporting a denial within the 60-day period, so long as the agency acted within that 60-day period.
  • Although automatic approval was not triggered, the Court acknowledged existing legal consequences if a zoning authority fails to record legally sufficient, factually supported reasons: such failure can support a prima facie showing of arbitrariness and lead to remedies such as ordering issuance of a permit or remand to the authority to articulate reasons in limited circumstances.

The opinion therefore resolves the statutory-interpretation dispute between the parties in favor of Cook County's narrower construction and restores the district court's disposition (the opinion ends with "Reversed" as to the court of appeals' decision). The Court did not decide or rule on the timeliness issue because Johnson did not challenge the district court's conclusion regarding reasonableness.

Disposition: Reversed.

Justice Anderson, Paul H., and Justice Stras took no part in consideration or decision of this case, as noted in the opinion.

Lance J. JOHNSON, Respondent, v. COOK COUNTY, Appellant.

OPINION

DIETZEN, Justice.

Respondent Lance J. Johnson brought a declaratory judgment action against appellant Cook County in 2006 alleging that the County erroneously denied his 2001 request to rezone two parcels of real property for commercial use. Subsequently, the County filed a motion for summary judgment, arguing that its decision was reasonable and laches barred review. Johnson responded that his 2001 rezoning request was automatically approved because the County failed to state in writing the reasons for the denial of his request as required by Minn. Stat. § 15.99, subd. 2 (2000). The district court granted the County's motion for summary judgment, and the court of appeals reversed on the ground that the County failed to comply with Minn. Stat. § 15.99, subd. 2. Subsequently, we granted review. Because we conclude that the County's failure to state in writing the reasons for the denial did not result in automatic approval of the request, we reverse.

Johnson owns two contiguous parcels of real property in Cook County, Minnesota, located along Highway 61 between Lutsen and Grand Marais. Johnson acquired the first parcel (parcel A) in January 2001 by warranty deed. Parcel A was zoned for residential use, and had a storage shed that was used commercially to store boats and other equipment on the property. In 2003, Johnson acquired the second parcel (parcel B) by a contract for deed. The west half of parcel B was zoned for residential use, and the east half was zoned for commercial use. Both parcels occupy about 11.45 acres, and are bounded on the south side by Highway 61, on the east side by Isak Hansen Construction Lumber True Value, on the north side by property owned by Rita's Grandview Ridge, LLC, and on the west side by residential property.

On May 15, 2001, Johnson and his contract vendor for parcel B submitted an application to the Cook County Office of Planning and Zoning, requesting that parcel A and the west half of parcel B be rezoned from residential to general commercial use. The Cook County Planning Commission considered Johnson's application at a public meeting on June 13, 2001. Following the hearing, the Commission issued written findings and a recommendation to deny Johnson's request.

The Cook County Board of Commissioners considered Johnson's application at a public hearing on September 11, 2001. At the hearing, the County Board received testimony from the public as well as Johnson. The County Board voted to deny Johnson's request, but did not state in writing the reasons for the denial of Johnson's request. Johnson continued his commercial use of the storage shed on parcel A by storing boats and other equipment.

The parties have agreed that September 11, 2001, was the County's deadline under Minn. Stat. § 15.99, subd. 2, for addressing Johnson's request. Consequently, the timeliness of the Board's vote to deny the request is not at issue.

In 2005, Rita's Grandview Ridge submitted to the County an application to rezone a portion of its property from commercial to residential and for a conditional use permit to develop a 12-lot planned unit development on the larger portion of the property. The County Board granted both zoning applications.

In 2006, Johnson brought a declaratory judgment action, alleging that the County erroneously denied his 2001 application to rezone parcel A and the west half of parcel B from residential to general commercial use and erroneously granted Rita's Grandview Ridge's zoning applications. He also alleged that the County's zoning decisions resulted in a taking of his property, and therefore he was entitled to just compensation. Cook County moved for summary judgment, arguing that the County's zoning decisions were lawful and proper, that the doctrine of laches barred Johnson's claims, and that Johnson had failed to establish a takings claim. In response, Johnson asserted, among other things, that his 2001 rezoning request was automatically approved due to the County's failure to state in writing the reasons for the denial of his request as required by Minn. Stat. § 15.99, subd. 2.

The district court granted the County's motion for summary judgment, concluding that the County's decision denying Johnson's 2001 zoning application was "reasonable" and that Johnson "lost whatever right to seek review that he had at the time of the 2001 proceeding." Judgment was entered and Johnson appealed.

In order to facilitate the appeal, the parties stipulated to a dismissal of Johnson's takings claim on the ground that the relevant zoning approval of Rita's Grandview Ridge granted by the County had expired.

In an unpublished opinion, the court of appeals reversed the district court, concluding that Johnson's application was automatically approved under Minn. Stat. § 15.99, subd. 2, because the County failed to state in writing the reasons for the denial of the rezoning request. Johnson v. Cook County, No. A08-1501, 2009 WL 2366127, at *3-4 (Minn.App. Aug. 4, 2009). The court of appeals also concluded that since the rezoning request was automatically approved pursuant to statute, Johnson's claim was not barred by the doctrine of laches. Id. at *3. Subsequently, we granted the County's petition for review.

I.

The County argues that the court of appeals erred in concluding that the automatic-approval provision in Minn. Stat. § 15.99, subd. 2, is triggered when a government agency fails to state in writing the reasons for the denial of a zoning request at the time that such request is denied. Rather, the County argues that the automatic-approval penalty is triggered only when the agency does not deny a request within the 60-day deadline of the statute. Johnson responds that Minn. Stat. § 15.99, subd. 2, requires that the agency not only deny the zoning request within the time deadline, but also state in writing the reasons for the denial within the time deadline to avoid the automatic-approval penalty.

We review questions of statutory interpretation de novo. Am. Tower, L.P. v. City of Grant, 636 N.W.2d 309, 312 (Minn. 2001). The goal of all statutory interpretation is to ascertain the intent of the Legislature. Minn. Stat. § 645.16 (2008). When construing the language of a statute, we must give words and phrases their plain and ordinary meaning. Minn. Stat. § 645.08 (2008). If the language of a statute is clear and free from ambiguity, our role is to apply the language of the statute, and not to explore the spirit and purpose of the law. Minn. Stat. § 645.16; Am. Tower, 636 N.W.2d at 312. But if the language of a statute is ambiguous, then we can go beyond the language at issue to ascertain the intent of the Legislature. Minn. Stat. § 645.16.

With these principles in mind, we turn to the applicable language of Minn. Stat. § 15.99, subd. 2. It provides:

Except as otherwise provided in this section and notwithstanding any other law to the contrary, an agency must approve or deny within 60 days a written request relating to zoning. . . . Failure of an agency to deny a request within 60 days is approval of the request. If an agency denies the request, it must state in writing the reasons for the denial at the time that it denies the request.

Minn. Stat. § 15.99, subd. 2 (2000) (emphasis added).fn3] Subdivision 2 contains three sentences. The first sentence provides that government agencies, including counties, subject to certain exceptions not applicable here, must approve or deny a zoning request within a time deadline. See id.; see also Minn. Stat. § 15.99, subd. 1 (2000). Specifically, it states that "an agency must approve or deny within 60 days a written request relating to zoning." Minn. Stat. § 15.99, subd. 2. The second sentence provides that the "[f]ailure of an agency to deny a request within 60 days is approval of the request." Id. This is the time deadline requirement and penalty provision of the statute. The third sentence provides that if an agency denies a zoning request, it "must state in writing the reasons for the denial at the time that it denies the request." Id. This is the "written-reasons requirement" of the statute. At issue is whether an agency must satisfy both requirements — the time deadline and written-reasons requirements — within the 60-day deadline to avoid the automatic-approval penalty provision of subdivision 2.

The parties do not dispute that if the County failed to deny a zoning request within the 60-day response period, the automatic-approval penalty provision of the statute would be triggered. Johnson argues that the written-reasons requirement of the statute is mandatory, and that failure to express written reasons for the denial within the time deadline results in automatic approval. The County argues that the written-reasons requirement of the statute is merely directory. Both parties rely heavily on Hans Hagen Homes, Inc. v. City of Minnetrista, 728 N.W.2d 536 (Minn. 2007), to support their respective positions.

In Hans Hagen, we concluded that a city's failure to give an applicant a written statement of the reasons for its denial of a zoning request within the time deadline, as required by the 2003 amendments to subdivision 2, did not trigger the automatic-approval penalty provided in Minn. Stat. § 15.99, subd. 2(a) (2004). Hans Hagen, 728 N.W.2d at 539, 544. We observed that "denial is complete when a city votes to deny the application and adopts a written statement of its reasons for denial, whether or not the city provides notice to the applicant." Id. at 540. Johnson relies on this language to argue that the denial of a zoning request is not complete until written reasons are given for the denial. But Johnson ignores a footnote in which we explicitly declined to reach this issue. We stated:

[T]he penalty could be read to apply only where the City has not acted on the request (i.e., has not held a public hearing and taken a vote) before the expiration of the response deadline. But, because the City does not argue for that narrower construction, and the facts before us show that the City did both — acted to deny and stated its reasons for denial in writing — before the expiration of the response deadline, we will not decide that precise issue and instead leave it for another day.
Id. at 540 n. 1. Here, the County argues for the narrower construction of the statute that was not before us in Hans Hagen. Now, the issue is squarely before us.

Our case law has previously distinguished between mandatory and directory provisions in Minn. Stat. § 15.99 (2000). The County's noncompliance with a mandatory provision in Minn. Stat. § 15.99, subd. 2, would trigger application of the automatic-approval penalty, but noncompliance with a directory provision in the statute would not. See Hans Hagen, 728 N.W.2d at 541-44; see also Benedictine Sisters Benevolent Ass'n v. Pettersen, 299 N.W.2d 738, 740 (Minn. 1980) (concluding that a 30-day time deadline in which the health commissioner was required to issue a decision on an application for a certificate of need was directory and the decision was therefore valid regardless of whether it was issued within 30 days). In Hans Hagen, we recognized that "a statute may contain a requirement but provide no consequence for noncompliance, in which case we regard the statute as directory, not mandatory." 728 N.W.2d at 541-42 (concluding that failure to give the applicant a copy of the written reasons for denial in Minn. Stat. § 15.99, subd. 2(a) (2004) was directory). We explained that when a statute requires a government agency to act, "it is reasonable to assume [it] will do so or it could be compelled to do so by mandamus." Hans Hagen, 728 N.W.2d at 541. Therefore, the lack of a consequence for a zoning authority's failure to state in writing its reasons for denying a zoning request does not render the statute ineffective, but instead supports the conclusion that the statute is directory. See id. at 541-42.

We read the second sentence of Minn. Stat. § 15.99, subd. 2 (2000), to unambiguously state that failure of a government agency to deny a request within 60 days is approval of the request. Importantly, the second sentence does not require that a denial must include written reasons within the 60-day period. We may not add words to a statute that the Legislature has not supplied. Genin v.1996 Mercury Marquis, 622 N.W.2d 114, 117 (Minn. 2001). And the third sentence of the statute provides that the agency must state in writing the reasons for the denial, but does not provide a consequence for the failure to do so. See Minn. Stat. § 15.99, subd. 2. The Legislature could have easily done so, but it did not. We must interpret the language of a statute, if possible, to give effect to all its provisions. Minn. Stat. § 645.16.

We conclude that the time deadline requirement in the second sentence and the written-reasons requirement in the third sentence of subdivision 2 are separate requirements. The time deadline provision provides a consequence for the failure to act, and therefore is mandatory. See Hans Hagen, 728 N.W.2d at 542. Conversely, the written-reasons requirement does not provide a consequence for failure to act, and therefore is directory. Thus, subdivision 2, read as a whole, supports the conclusion that the written-reasons requirement is directory and not mandatory.

Our construction of Minn. Stat. § 15.99, subd. 2, does not, however, change the consequence to a local zoning authority for failing to record or reduce to writing its reasons for denying a zoning request. Specifically, when a local zoning proceeding "was fair and the record clear and complete," review on appeal is based on the record. Swanson v. City of Bloomington, 421 N.W.2d 307, 313 (Minn. 1988). More importantly, when a zoning authority fails to record legally sufficient reasons for the denial of a zoning request that are factually supported in the record, a prima facie case of arbitrariness is established. See Honn v. City of Coon Rapids, 313 N.W.2d 409, 416 (Minn. 1981) (concluding that when legally sufficient reasons are not recorded or reduced to writing, the zoning authority "runs the risk of not having its decision sustained"). If the zoning authority's decision is arbitrary and capricious, "the standard remedy is that the court orders the permit to be issued." In re Stadsvold, 754 N.W.2d 323, 332 (Minn. 2008). But a remand to the zoning authority to articulate its reasons confined to the issues raised in the earlier proceedings is appropriate in limited circumstances. Id. at 333; Earthburners, Inc. v. County of Carlton, 513 N.W.2d 460, 463 (Minn. 1994). Our construction of Minn. Stat. § 15.99, subd. 2, does not preclude an applicant from arguing that the failure to record or reduce to writing legally sufficient reasons factually supported in the record renders the zoning authority's decision arbitrary and capricious, or a zoning authority from proving that a remand is compelled by the circumstances of the case.

Because we conclude that the automatic-approval penalty does not apply here, and because Johnson does not challenge the district court's conclusion that the County's decision was reasonable, we do not address whether Johnson's section 15.99 challenge was timely.

We hold that the written-reasons requirement in Minn. Stat. § 15.99, subd. 2, is directory and not mandatory.5 Consequently, the failure to comply with the written-reasons requirement does not result in the application of the penalty provision of the statute, provided the agency decision is made within the time deadline of the statute. The written-reasons requirement is a directory provision, and therefore, a zoning application is not automatically approved under Minn. Stat. § 15.99, subd. 2, when a government agency fails to state in writing the reasons supporting its denial within the 60-day period.

Reversed.

ANDERSON, PAUL H., J., took no part in the consideration or decision of this case.

STRAS, J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this case.

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JOHNSON v. COOK COUNTY
(Jul 29, 2010)