Steven W. Hill, et al., Respondents,

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A20-1309

Steven W. Hill, et al.,
Respondents,

vs.

Bemidji Township,
Appellant.

Filed June 7, 2021
Affirmed
Gaïtas, Judge

Beltrami County District Court
File No. 04-CV-19-117

Ryan K. Kieson, Drahos Kieson & Christopher, P.A., Bemidji, Minnesota (for
respondents)

Jason J. Kuboushek, Julia C. Kelly, Iver son Reuvers, Bloomington, Minnesota (for
appellant)

Considered and decided by Gaïtas, Presiding Judge; La rkin, Judge; and Cochran,
Judge.
NONPRECEDENTIAL OPINION
GAÏTAS, Judge
Appellant Bemidji Township appeals from th e district court’s grant of declaratory
judgment in favor of responde nts Steven Hill and Jill Hill in their challenge of a zoning
decision. The township contends that the district court erred in concluding that the
township unreasonably denied the Hills’ application for a building permit. Because we
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determine that the to wnship’s denial of the requested building permit was unreasonable,
arbitrary, and capricious, we affirm.
FACTS
Steven Hill and Jill Hill are contractors and real estate developers who often conduct
business as “S & J Enterprises.” In 1998, the Hills created a development called Tyler
Estates, which is located within Bemidji city limits and abutting Bemidji Township.
Bemidji and surrounding areas experienced fl ooding in the spring of 2005. One of
the most impacted areas was Tyler Estates, where many homes incurred substantial water
damage.
Motivated, in part, to resolve the flooding in Tyler Estates, the Hills considered
developing an adjacent 60-acre farmstead in Bemidji Township into a 66-unit development
with green space and drainage that would “tie into Tyler Estates drainage.” This planned
development, which the Hills intended to ca ll Tyler Hills, would be a common interest
community (CIC)—a type of development where there are units instead of lots and each
unit owner shares ownership of the land with other owners as tenants in common. See
generally Minnesota Common Interest Owne rship Act (MCIOA), Minn. Stat.
§§ 515B.1-101 to .4-118 (2020).
In 2005, however, CICs were not a permitted use under the Bemidji Township land
use ordinance. S & J Enterprises therefore applied for a conditional use permit (CUP) from
Bemidji Township to construct Tyler Hills.
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The CUP Application Process
The Bemidji Township Planning and Z oning Commission (the commission) heard
the Hills’ CUP application in Ju ly 2005 at a public hearing. According to the meeting
minutes, commission members noted concerns about the proposed number of units in the
CIC, the size of a proposed retention pond and its impact on other developments, and how
green space was defined, among other issues . Steven Hill assured the commission that
once the proposal was approved, “the engineers will design a final plat with the approved
number of lots and the wate r paths and drainage easements necessary,” as well as
performing grading plans and surveys. The township’s zoning administrator recommended
that the commission provide preliminary approval for the CUP, noting that final approval
“would not be made until a fina l drawing of the plat with tr ails, roads, buffers, etc. was
presented to the Town Board.”
During the meeting, the commission gave pr eliminary approval for a CUP, which
would allow “S & J Enterprises to devel op 60 acres . . . into a Common Interest
Community with no more than 62 dwelling units.” The commission also recommended
that the Bemidji Township Board (the board) place 10 conditions on the CUP.
In August 2005, the township granted S & J Enterprises a preliminary CUP, subject
to 10 conditions. Condition 8 stated that “[f]inal approval shall not be granted until the
final plat drawing, the results of the engineering modeling study, and the final grading plan
are published and approved by the Bemidji Township Town Board.”
Steven Hill purchased the farmstead. Then, in September 2005, he appeared before
the board for a review of the “Steven Hill Development and CUP.” According to the
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meeting minutes, Hill “provide d copies of ‘Common Intere st Community Number 38,
Tyler Hills, A Planned Neighborhood,’ plat so that Board members could compare the plat
to [the] conditions [listed] on the prelim inary Conditional Use Permit.” The meeting
minutes also reflect that modeling and engi neering plans were completed and a copy was
provided to the township. Du ring the meeting, the board voted unanimously to approve
the CUP with 10 conditions, in cluding condition 8, and the bo ard chair and the township
clerk signed the CUP. Additionally, the townsh ip and S & J Enterpri ses entered into an
agreement “for the construction of all streets and roads located within Tyler Hills.”
Once the township granted th e CUP, the Hills prepared a platting permit application
for Beltrami County, the county where the to wnship is located. The Beltrami County
Surveyor issued a letter in September 2005, which stated, “[t]he plat of ‘Tyler Hills
Common Interest Community Number 38’ ha s been checked and has been found to
conform to the requirements of Minnesota State Statute number 515B.2-110, subdivision
‘C.’” In early 2006, the Beltrami County Bo ard of Commissioners “approved the Final
Plat of Common Interest Co mmunity #38, Tyler Hills, as submitted,” and included
“Bemidji Township’s approval” because the CUP had been gran ted. The Office of the
Beltrami County Recorder recorded the plat for Tyler Hills in December 2006.
S & J Enterprises then perfo rmed significant work on Tyler Hills. The Hills spent
over $600,000 on grading work fo r the roads, a water retention basin, fencing, and trees.
They also supplied all 62 lots in Tyler Hills with connections for natural gas and electricity.
In January 2007, the Hills used a quit claim deed to convey to the Tyler Hills Homeowner’s
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Association “all common elements of the Common Interest Community No. 38, Tyler
Hills, also known as Outlot A.”
The Hills’ 2018 Building-Permit Application
In early 2018, Steven Hill contacted the township’s current zoning administrator—
who was not involved in the 2005 CUP application process—to discuss the development
of the residential lots in Tyler Hills. The zoning administrator reviewed the plat and noted
that the lot sizes were not “the appropriate size.” He advised that the Hills “would need to
start the process because we didn’t, we weren’t going to say yes or no to any of this stuff
until, at that time.”
Several months later, S & J Enterprises applied to the township for a permit to build
a house on a lot that the Hills owned in Tyler Hills. Th e commission met in November
2018 and recommended that th e board deny the permit because the lot size did not meet
the lot-size regulations in the township’s land use ordinance.
Although the Hills asserted th at the 2005 CUP gave them the right to develop the
property, the board unanimously denied the Hills’ building-permit application in December
2018. The board supplied two reasons for the denial:
1. The lot size for [the property] is .33 [acres] and in the
Land Use Ordinance, the minimum lot size needs to be
2.4 [acres]; and
2. The Conditional Use Permit is invalid as #8 in the CUP
was not met, as the Township did not sign off on the
plat. The plat in questi on as according to Minnesota
State Statute 505.09, subd. 1a, was not complied with.

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The Hills then brought a d eclaratory-judgment action against the township,
challenging the denial of their building-perm it application. They asserted that the
township’s denial of the requested building permit was arbitrary and capricious.
The Trial and the District Court’s Decision
In January 2020, the district court held a court trial on the Hills’ claim. The parties
agreed to a joint e xhibit list and submitted 108 exhib its, including township meeting
minutes from 2005 and the si gned 2005 CUP. Additionally, the district court heard
testimony from multiple witnesses, including St even Hill, land surveyors, the former
township zoning administrator, the former township board ch air, the current township
zoning administrator, the current township board chair, and Beltrami County officials.
The former township zoning administra tor, who worked closely with the Hills
during the application process for the 2005 CUP, testified that the City of Bemidji, the
township, and Beltrami County were very motivated to correct their flooding problem and
believed the Tyler Hills development would be a part of the solution. Because CICs were
not a permitted use under the township’s land use ordinance in 2005, a CUP was the only
available legal avenue for creating the proposed Tyler Hills CIC.
Both the former zoning administrator and the former board chair testified that the
Hills had satisfied all conditions in the CU P and that the CUP had been approved.
According to the former board chair, the township only granted CUPs after all conditions
were met.
The current zoning administrator, who also functioned as the township supervisor,
agreed that if the Hills had complied with all of the conditions in the 2005 CUP, they would
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be entitled to their requested building permit. But he disagreed that the Hills had satisfied
the CUP conditions. Based on his review of documents from 2005, he did not believe that
the CUP had been issued because the plat had not been signed by the township, as required
by law. Moreover, he saw no evidence that the township board had given final approval
to the plat.
The district court granted declaratory judg ment in favor of th e Hills. Because the
township approved the 2005 CUP, the Hills had satisfied all of the CUP conditions, and
the CUP remained in effect at the time of the building-permit application, the district court
determined that the township’s decision to deny th e building-permit application was
arbitrary and capricious. The district ordere d the township to issu e the building permit.
Following the decision , the township moved the district court for a new trial and for
amended findings. The district court denied the motions.
The township appeals.
DECISION
The township contends that it reasona bly denied the Hills ’ building-permit
application. Accordingly, the township urges us to reverse the district court’s grant of
declaratory judgment in favor of the Hills and either uphold its denial of the building permit
or remand for a new trial.
In reviewing a zoning decision, a “quasi -judicial” decision, appellate courts
consider whether the decision was unreasonable, arbitrary, or capricious. Honn v. City of
Coon Rapids, 313 N.W.2d 409, 416-17 (Minn. 1981). If the zoning authority’s decision
was reasonable, it will be upheld. See id. at 417.
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When a party challenges a zoning authority ’s decision via a declaratory-judgment
action, the district court may allow the par ties to supplement the r ecord with additional
evidence if it determines “that the additional evidence is material and that there were good
reasons for failure to present it at the municipal proceedings.” Swanson v. City of
Bloomington, 421 N.W.2d 307, 313 (Minn. 1988). On review, “this court must then
conduct an independent review of the record as augmented.” St. Croix Dev., Inc. v. City of
Apple Valley , 446 N.W.2d 392, 397 (Minn. App. 1989), review denied (Minn. Dec. 1,
1989); see also VanLandschoot v. City of Mendota Heights, 336 N.W.2d 503, 509 (Minn.
1983) (“Based upon an independent examination of the record, we must determine whether
the City’s denial of respondent’s application for subdivision was reasonable.”). Moreover,
“[i]n reviewing the denial of a conditional us e permit by a local gove rning authority, this
court must conduct an independ ent examination of the local authority’s decision without
according any special deference to the same review conducted by the district court, even if
the district court hear s additional evidence.” City of Barnum v. Carlton County , 394
N.W.2d 246, 247 (Minn. App. 1986), review denied (Minn. Dec. 17, 1986).
It is unreasonable for a zoning authority to base its decision on reasons that have no
factual basis or are legally deficient. C.R. Invs., Inc. v. Village of Shoreview, 304 N.W.2d
320, 325 (Minn. 1981). A zoning decision is arbitrary and capricious when it “represents
the agency’s will, rather than its judgment” or if it is “based on whim or is devoid of
articulated reasons.” In re Proposal by Lakedale Tel. Co. , 561 N.W.2d 550, 553 (Minn.
App. 1997) (quotation omitted).
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Here, the township i ssued a written explan ation of its decision to deny the Hills’
building-permit application, providing two bases for the denial. First, the township stated
that the lot size was too small because it was smaller than the minimum lot size required
by a township ordinance. Second, the townsh ip said that the CUP was invalid because
condition “#8 in the CUP was not met, as the To wnship did not sign off on the plat. The
plat is in question as accord ing to Minnesota State Statute 505.[0]9, subd. 1a, was not
complied with.”
We initially consider the township’s second stated reason for denying the building
permit, which is that the 2005 CUP is inva lid. The townsh ip advances two distinct
arguments in support of this position.
First, the township contends that the pl at did not comply with Minnesota law.
According to the township, in 2005, its land use ordinance required that the subdivision of
all land conform with the procedures set fort h in Minnesota Statutes chapter 505 (2020). 1
The township’s ordinance did not authorize the creation of a CIC, which is a process
governed by different statutes—the MC IOA, Minnesota Statutes chapter 515B. 2 T h e
township argues that, because its ordinance explicitly required compliance with chapter

1 Minnesota Statutes chapter 505 defines term s and provides procedures for subdividing
land. See Minn. Stat. §§ 505.01-.33. A plat prepared and recorded pursuant to chapter 505
may be used to “(1) indicate the dedication of easements for public ways, utility easements,
and drainage easements as necessary for or derly development; (2) depict one or more
parcels for the purpose of simplifying legal descriptions; or (3) comply with minor
subdivision procedures of a local unit of government.” Minn. Stat. § 505.01, subd. 2.

2 Among other things, the MCIOA provides procedures for common interest communities,
including their creation, alteration, and termination. See Minn. Stat. §§ 515B.2-101 to
.2-125.
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505 in the platting process, the township did not have authority to permit the creation of a
CIC through the CUP process. Moreover, the township points out, the plat for Tyler Hills
did not comply with Minnesota Statutes section 505.09, subdivision 1a,3 which requires a
plat to bear the signature of the township board chair.
The township’s second argu ment in support of its pos ition that the 2005 CUP is
invalid is that the record cont ains no evidence that shows the township actually approved
the Tyler Hills plat. Thus, according to th e township, the CUP was invalid because the
Hills failed to satisfy condition 8.
The record does not support e ither of the township’s arguments. We initially note
that the 2005 CUP does not reference chapter 505. Compliance with chapter 505 was not
identified as a condition and there is no mention of chapter 505 in the signed CUP
document. The 2005 CUP document does state that it was granted “subject to any and all
applicable regulations, standards and criteria set forth in said Bemidji Township Land Use
Ordinance.”4 But the former zoning administrator explained that because the township’s
ordinances did not expressly provide for CICs in 2005, th e very purpose of the CUP was
to create the Tyler Hills CIC notwithstanding the limitations of the law in existence at the
time. Because the 2005 CUP did not require compliance with chapter 505, the procedures

3 “The board shall not approve any plat of land lying in a town which has appointed a
planning and zoning commission unless the town board approves the plat and the laying of
streets and other public ways shown on it. The approval shall be endorsed on the plat and
signed by the chair of the town board.” Minn. Stat. § 505.09, subd. 1a.

4 The 2005 CUP did not cite any specific ordinance.
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outlined in that chapte r, including the requirement for the board chair’s signature on the
plat, did not apply.
Moreover, contrary to the township’s claim, the record shows that the township did
approve the plat for Tyler Hills. The boar d meeting minutes from September 12, 2005,
state that the CUP was unanimously approved. In addition to noting the approval of the
CUP, the minutes also incorporate “findings of fact,” which address the conditions of the
2005 CUP. The findings suggest that all of the 2005 CUP conditions were satisfied,
including condition 8, and that the project was moving forward. Among other things, the
board found: “[t]he modelin g and engineering plans have been completed and a copy is
on file in the township office”; “[t]he deve loper has signed a ‘Road Agreement for Plats’
to verify to the City of Bemidji that he plans to build the road to township specifications”;
and “the modeling and engineeri ng plans have been sent out for contract bids and these
bids are due Friday, September 16, 2005.” A CUP document, signed by the board chair
and township clerk, was issued. Indivi duals who were involved in the 2005 CUP
application process—including the township’s former zoning administrator and board
chair—testified that all of the CUP conditions had been satisfied befo re the board issued
the 2005 CUP. And in January 2006, th e Beltrami County Board of Commissioners
approved the final plat, noting that the townsh ip had approved the plat because the CUP
had been granted.
Given this record, it is clear that the 20 05 CUP was issued irrespective of chapter
505, that the Hills satisfied all of the identified conditions, and that the CUP was valid upon
its issuance. The township’s insistence that the 2005 CUP was never valid—13 years after
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the township granted it and following the Hills’ investment of substantial resources in Tyler
Hills—is contrary to the facts in the record a nd thus unreasonable. See C.R. Invs., Inc. ,
304 N.W.2d at 325.
We next address the township’s concern ab out the size of the lot where the Hills
intend to build—the town ship’s first stated reason for de nying the building permit. The
township maintains that its land use ordinance, which requires a minimum lot size of 2.4
acres, Bemidji Twp., Land Us e Ordinance art. III.3.A (2004 ), precludes the Hills from
building on their proposed lot, which is just 0.33 acres in size. But the 2005 CUP did not
specify any required lot size and did not reference the town ship ordinance now cited.
Moreover, the 2005 CUP specif ically authorized the divisi on of a 60-acre farm into 62
individual units, none of which could comply with the township ordinance. Because the
2005 CUP did not limit or even reference lot sizes, and instead, expressly permitted 62
buildings on 60 acres of land, denying the Hills’ permit on the basis of the township’s lot-
size ordinance was arbitrary and capricious. Cf. Hay v. Township of Grow , 206 N.W.2d
19, 22 (Minn. 1973) (stating that, when a z oning ordinance specifies the standards that
must be applied in determining whether to grant a conditional use permit, and the applicant
fully complies with the specified standards, denial of the permit is arbitrary as a matter of
law).
“A conditional use permit shall remain in e ffect so long as the conditions agreed
upon are [followed].” Minn. Stat. § 394.301, subd. 3 (2020). Our independent review of
the record convinces us that the 2005 CUP was valid when i ssued and remains in effect.
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We therefore conclude that the township’s denial of the building-permit application was
unreasonable, arbitrary, and capricious and that the permit must be granted.
Affirmed.