Minnesota Realty and Management LLC, Relator v. Minneapolis Department of Regulatory Services

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).

STATE OF MINNESOTA
IN COURT OF APPEALS
A14-1958

Minnesota Realty and Management LLC,
Relator,

vs.

Minneapolis Department of Regulatory Services, et al.,
Respondents

Filed August 3, 2015
Reversed
Worke, Judge

Minneapolis Department of Regulatory Services

Lee R. Johnson, Johnson & Greenberg, P.L.L.P., St. Louis Park, Minnesota (for relator)

Susan L. Segal, Minneapolis City Attorney, Lee C. Wolf, Assistant City Attorney,
Minneapolis, Minnesota (for respondent)

Considered and decided by Smith, Presiding Judge; Hudson, Judge; and Worke,

Judge.

UNPUBLISHED OPINION

WORKE, Judge

Relator challenges the revocation of its rental license, arguing that revocation was

based on violations of an ordinance it was in compliance with at the time of the hearing

on the notice of revocation. We agree and reverse.
 DECISION

Relator Minnesota Realty and Management LLC challenges the city council’s

revocation of relator’s rental license for property it owns in Burnsville, Minnesota. “City

council action is quasi-judicial and subject to certiorari review if it is the product or result

of discretionary investigation, consideration, and evaluation of evidentiary facts.”

Staeheli v. City of St. Paul, 732 N.W.2d 298, 303 (Minn. App. 2007) (quotation omitted).

On certiorari review, we do not retry facts or make credibility determinations, and “will

uphold the decision if the lower tribunal furnished any legal and substantial basis for the

action taken.” Id. (quotation omitted). We will reverse a city council’s decision “if it is

fraudulent, arbitrary, unreasonable, unsupported by substantial evidence, not within its

jurisdiction, or based on an error of law.” Lam v. City of St. Paul, 714 N.W.2d 740, 743

(Minn. App. 2006) (quotation omitted).

The city council adopted approval of the revocation of relator’s license after an

administrative hearing officer (AHO) concluded that relator’s license should be revoked

because relator received notice of revocation for having multiple instances of illegal

occupancy. Relator argues that revocation merely for two violations is contrary to the

applicable ordinance because relator achieved compliance before the hearing date; thus,

there was no legal basis to revoke the license. There is no dispute that relator corrected

the violation. Therefore, we must determine, based on the ordinance, whether the license

could be revoked based on two violations, or whether the license could not be revoked

because the property was in compliance on the date of the hearing. This court interprets

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an existing city ordinance de novo. Frank’s Nursery Sales, Inc. v. City of Roseville, 295

N.W.2d 604, 608 (Minn. 1980).

Relator twice violated the ordinance that requires bedrooms to have a ceiling

height of not less than seven feet. Minneapolis, Minn., Code of Ordinances (MCO)

§ 244.800 (2015). Because rooms with ceilings under the minimum height were used as

bedrooms, relator violated a requirement that “[n]o rental dwelling . . . shall be over

occupied.” MCO § 244.1910(a)(3) (2015). Because of the occupancy violations, relator

failed to meet minimum standards to hold a rental dwelling license. Id.(a) (2015).

“Failure to comply with any of the[] standards and conditions shall be adequate grounds

for . . . revocation . . . of a rental dwelling license . . . .” Id.

After the first violation on January 10, 2011, relator was given until February 4 to

come into compliance with the ordinance, which it did. After the second violation on

May 6, 2014, relator was given until June 14 to come into compliance, which it did by re-

inspection on May 27. However, following the second violation, respondent Minneapolis

Department of Regulatory Services issued a notice of revocation. The applicable

ordinance provides in relevant part that: “if the director determines that a building or

dwelling unit fails to meet licensing standards [in section] 244.1910 . . . for a second

time, under the same owner/licensee, the director shall mail the owner . . . a notice of . . .

revocation . . . of the license.” MCO § 244.1940(a) (2015). The notice warned relator

that if an appeal of the determination “recommending” revocation was not taken within

15 days, the license would be revoked. MCO §§ 244.1960(a), .1940(a)(4) (2015).

Relator appealed within 15 days.

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 Following a hearing, the AHO found that relator admitted the violations, but took

corrective action. The AHO found that relator achieved compliance with the ordinance

when the beds were removed from the rooms and the tenant signed a letter of compliance.

The AHO, relying on MCO § 244.1940, recommended revocation after determining that

respondent “issued a valid Notice of Revocation . . . for having had multiple instances

[of] illegal occupancy.”

To support its contention that relator’s license was properly revoked for having

two violations, respondent cites to MCO § 244.1930(a) (2015), which states that when a

“dwelling unit fails to meet licensing standards . . . for a second time under the same

owner/licensee, a notice of director’s determination of noncompliance shall not be

required to be sent as the . . . dwelling unit may be subject to an action for . . . revocation

. . . pursuant to section 244.1940.” Respondent claims that relator was provided “one

chance to bring [the] propert[y] into compliance with the licensing standards and . . . a

second violation of these standards provided adequate grounds to revoke a rental

license.” For several reasons respondent’s argument is not persuasive.

First, the AHO did not rely on MCO § 244.1930(a), which states that a

determination of noncompliance is not required following a second violation. Following

the second violation, relator was given an opportunity to achieve compliance with the

ordinance, which it did. Additionally, relator was given notice that appeal must be taken

within 15 days of the determination recommending revocation. See MCO § 244.1960(a).

Relator was given notice that it must comply with the ordinance by a set date and was

also given notice that the license would be revoked unless it appealed within 15 days. If

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revocation is automatic after a second violation, it is unclear as to why relator was

instructed to comply with the ordinance and given the opportunity to appeal.

The decision to revoke relator’s license is based on an error of law because the

AHO did not rely on the MCO that respondent cites in its brief relating to a notice of

noncompliance not being required for a second violation. Relator received a notice and

was afforded a hearing. Following the hearing, the AHO found that relator complied

with the ordinance.

Reversed.

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