Croix Holdings, LLC, Appellant,

This opinion is nonprecedential except as provided by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
A21-0630

Croix Holdings, LLC,
Appellant,

vs.

City of Newport,
Respondent.

Filed December 20, 2021
Affirmed
Gaïtas, Judge

Washington County District Court
File No. 82-CV-20-1548

Robert B. Bauer, Arthur J. Waldon, Dougher ty, Molenda, Solfest, Hills & Bauer P.A.,
Apple Valley, Minnesota (for appellant)

Paul D. Reuvers, Susan M. Tindal, Andrew A. Wolf, Iverson Reuvers, Bloomington,
Minnesota (for respondent)

Considered and decided by Smith, Tracy M., Presiding Judge; Slieter, Judge; and
Gaïtas, Judge.
NONPRECEDENTIAL OPINION
GAÏTAS, Judge
This appeal centers on a dispute betwee n appellant Croix Holdings, LLC (Croix
Holdings) and respondent City of Newport (t he city) over the use of properties owned by
Croix Holdings. After the city revoked a conditional use permit (C UP) for one property
and ordered Croix Holdings to cease its nonc onforming use of its other property, Croix
2
Holdings filed a declaratory-judgment action in the district court. The city moved for
summary judgment, and the district court gran ted the city’s motion. On appeal, Croix
Holdings argues that the district court e rred in granting the city’s summary-judgment
motion and abused its discretion in determ ining that email exchanges between city
employees were protected by attorney-client privilege. We affirm.
FACTS1
Imperial Camper Sales (Imperial Camper), which opened in 1972 in Newport, sold
pop-up campers. The original Imperial Camp er property (original property) was located
in the city’s general business zoning district. Within that district, camper sales was an
authorized use without a CUP. The zoning classification of the original property changed
over the next decade, but Imperial Camper was allowed to continue selling campers
because its business activity was a preexisting legal nonconforming use.
Over time, Imperial Camper expanded its sales area to an additional property, where
camper sales were not allowed under the city’s zoning ordinance without a CUP. It also
expanded its business from pop-up campers and custom-built truck toppers to include pull-
behind travel trailers and fifth-wheel trailers . Eventually, Imperial Camper applied for a
CUP that would allow trailer sales on this a dditional property (CUP lot). The specific
request was to “[p]ave & fence lot to secure trailers for display sale & storage.”
In 1986, the Newport City Council approved the CUP. The CUP authorized “a retail
sales operation on Lots 1 th 10, Block 17, Newport Park Addition, subject to the expiration

1 The facts are derived from the summary-judgme nt record and are presented in the light
most favorable to Croix Holdings. See STAR Ctrs., Inc. v. Faegre & Benson, L.L.P., 644
N.W.2d 72, 76-77 (Minn. 2002).
3
of the permit upon any change of ownership of the property or ch ange of use of the
property, and subject to annual review by the City.”
Notwithstanding adverse changes to the ci ty’s zoning ordinanc es over the years,
Imperial Camper continued to sell campers on the original property and the CUP lot. Those
sales were authorized as a legal nonconforming use of the original property. And the CUP
allowed Imperial Camper to continue its retail sales operation on the CUP lot “subject
to . . . change of use of the property, and subject to annual review by the City.”
In 2015, Croix Holdings purcha sed the original property an d the CUP lot. It then
leased these properties to tenants, including Imperial Camper.
In 2018, Croix Holdings began converting two existing buildings on the properties
into car dealerships. Add itionally, Croix Holdings purcha sed a vacant lot abutting the
original property (A&W lot 2). The following is an approximate rendering of the parcels
owned by Croix Holdings.3

2 The lot was previously used for an A&W restaurant.

3 This image is not to scale and is only meant to provide the reader with a sense of the areas
relevant to this dispute.

4
The A&W lot was zoned as MX-4—a general mixed-use district. By the time Croix
Holdings acquired the A&W lot, the original property and the CUP lot were also zoned
MX-4 based on a zoning law that was enacted in 1994. The MX-4 classification expressly
prohibits vehicle sales and service, and it prohibits vehicle storage without a CUP.
Throughout 2018 and 2019, residents file d grievances with the city about the
properties, complaining about new activity that was occurri ng there. The grievances
included residents’ concerns about loud nighttime work on cars, general noise, and
increases in traffic and trash.
In March 2019, Croix Holdings applied to rezone its properties as a B-2 Business
Park District and sought a CUP for the original property, the CUP lot, and the A&W lot.
The city planning commission unanimously recommended denial of Croix Holdings’
requests to the council. Following this reco mmendation, Croix Hold ings withdrew its
rezoning request and CUP application.
Separately, in May 2019, the city informed Croix Holdings “that it had decided to
formally review the CUP associ ated with the CUP property an d other zoning issues with
Croix Holdings’ property” and ordered Croix Holdings to submit a site plan 4 one week

4 The desired site plan was described as a document

that shows the entire property that is being use[d] for vehicle
sales of all types, existing buildings, and dedicated parking and
display spaces. The site plan should identif y the office
locations of all dealers curren tly operating at the site and
parking and display spaces for each dealer, including Imperial
Camper and all motor vehicle dealers. It should show 5 display
spaces for each dealer[] as well as parking space(s) for office
staff and customers for each deal er. The plan should clearly
show the number of display and parking spaces that may be
5
before a public planning-commission hearing to be held on June 6, 2019. Croix Holdings
submitted a site plan, but it was deficient because it was not to scale and did not accurately
show the number of parking spaces that the property designated for existing and proposed
dealers. The site plan also did not illustra te the required setbacks from property lines.
Although the city notified Croi x Holdings about the problems with the site plan, Croix
Holdings did not correct the deficiencies before the public hearing.
The June 6 public hearing was attended by th e city planner, the city attorney, and
Croix Holdings’ counsel, among others. At that hearing, the mayor and planning
commission moved to (1) “send a formal requ est to [Driver and Vehicle Services (DVS)]
for [a] compliance review of th e entire Croix Holdings site;” (2) set a public hearing for
August 1, 2019, to review the CUP and zoni ng-compliance review of the property; and
(3) “discuss a moratorium on new vehicle sales and multiple dealer lots for June 25, 2019.”
Days later, the city informed Croix Holdings in writing of zoning-compliance issues
on the properties. These issues pertained to parking requirements, fence requirements,
exterior storage and screening, and nuisance concerns. Because Croix Holdings’ first site
plan had been deficient, the city requested a new site plan. Croi x Holdings submitted its
new site plan eight days late and acknowledged that it was only “about 90% complete.”
After additional public hearings, the city gave Croix Holdings 60 days to comply
with the existing CUP and zoning-ordinance requirements. The city ordered Croix
Holdings to discontinue all car sales occurring on the properties and threatened to schedule

available for additional motor vehicle dealers that [Croix
Holdings] propose[s] to be added in the future.
6
a public hearing to consider revocation of the existing CUP if the property was not brought
into compliance.
Approximately two weeks before the compli ance deadline, the city emailed Croix
Holdings a request to cease and desist c ontinued viola tions of the CUP and zoning-
ordinance requirements. Two da ys after the deadline, city staff visited the property and
took photos, which showed that Croix Hold ings still housed ma ny junked cars on the
property.
The city held another public hearing in February 2020. At that hearing, the council
unanimously decided:
That the Conditional Use Permit for Retail Sales (outdoor)
issued by the city on February 6, 1986 for the [CUP] property
. . . shall be revoked. That the nonconforming use of the
[original] property . . . for automobile sales that was
abandoned for more than one year beginning in 1996 shall
cease and the effective date of the order is May 31, 2020.

In April 2020, Croix Holdin gs initiated a declaratory-ju dgment action in district
court. Croix Holdings challenged the city’s zoning decisions and alleged that the city’s
actions constituted an unconstitutional taking of property and tortious interference with
contracts. Both parties moved for summary judgment.
In support of their cross-motions for summary judgment, th e parties submitted
evidence to the district court regarding the history of car sales on the original property and
the CUP lot. Croix Holdings attempted to demonstrate that automobile sales had been
permitted on the property in th e past. It provided declara tions and deposition testimony
that several people purchased three cars and a motorcycle from Imperial Campers, without
specifying when these purchases occurred. The city su bmitted aerial photographs of the
7
properties taken at different points in time between 1969 and 2017. In these photographs,
no cars are visible in the sales lots.
Croix Holdings also sought to introduce two emails it obtained pursuant to the
Minnesota Government Data Practices Act (MGDPA). See Minn. Stat. §§ 13.01-.99
(2020). In the emails—which were addresse d to multiple people, including the city
attorney—city officials expre ssed their opinions regarding zoning issues and sought the
city attorney’s advice. The city argued that the emails were protected by attorney-client
privilege and moved the district court to exclude them on that basis.
The district court concluded that both em ails were protected by attorney-client
privilege and denied Croix Ho ldings’ request to include them in the summary-judgment
record. And the district court granted the city’s motion for summary judgment.
Croix Holdings appeals.
DECISION
On appeal, Croix Holdings argues that the city’s zoning decisions were
unreasonable, that the district court erred in granting the city’s motion for summary
judgment on Croix Holdings’ claims of unconstitutional taki ng of property and tortious
interference with contracts, and that the district court erre d in excluding Croix Holdings’
proffered emails on the ground of attorney-c lient privilege. We address each of these
arguments in turn.
I. The city’s zoning decisions were not unreasonable.

Croix Holdings first challenges the city’s zoning decisions. It contends that the city
and the district court erred in concluding that car dealerships were not a legal
8
nonconforming use of the original property. And it argues that the city’s revocation of the
1986 CUP was arbitrary and capricious.
A “person aggrieved” by a city council’s land-use decision is entitled to appropriate
judicial review in district court. Minn. Stat. § 462.361, subd. 1. The district court examines
the municipal record and may allow the parties to supplement it with additional evidence,
as was the case here. See Swanson v. City of Bloomington , 421 N.W.2d 307, 313 (Minn.
1988) (stating district court may receive additional evidence “on substantive issues raised
and considered by the municipal body and th en only on determini ng that the additional
evidence is material and that there were good reasons for failure to present it at the
municipal proceedings”). The question before the reviewing court is “whether the zoning
authority’s action was reasonable.” Honn v. City of Coon Rapids , 313 N.W.2d 409, 416-
17 (Minn. 1981); see also Goerke Fam. P’ship v. Lac qui Parle-Yellow Bank Watershed
Dist., 857 N.W.2d 50, 55 (Minn. App. 2014). “[T]he nature of the matter under review has
a bearing on what is reasonable.” Honn, 313 N.W.2d at 417. “[I]n special use permit cases,
‘reasonableness’ is measured by the standards set out in the local ordinance.” White Bear
Docking & Storage, Inc. v. City of White Bear Lake, 324 N.W.2d 174, 176 (Minn. 1982).
On appeal, the reviewing court consider s the supplemented record to address
specific arguments made on appeal and, appl ying a rational-basis standard, conducts an
independent review of the zoning authority’s decision. St. Croix Dev., Inc. v. City of Apple
Valley, 446 N.W.2d 392, 397 (Minn. App. 1989), rev. denied (Minn. Dec. 1, 1989); see
also VanLandschoot v. City of Mendota Heights, 336 N.W.2d 503, 509 (Minn. 1983). The
appellate court does not give “any special de ference to the same review conducted by the
9
[district] court.” Nw. Coll. v. City of Arden Hills, 281 N.W.2d 865, 868 (Minn. 1979)
(quotation omitted). Appellate courts reverse a zoning authority’s decision only if it is
“unreasonable, arbitrary, or capricious.” RDNT, LLC v. City of Bloomington, 861 N.W.2d
71, 75 (Minn. 2015). There are two steps in deciding whether a city’s zoning decision was
unreasonable. Id. First, the court determines whether “the reasons given by the city were
legally sufficient.” Id. at 75-76. Second, “if the reason s given are legally sufficient, [an
appellate court] must determine if the reasons had a factual basis in the record.” Id. at 76.
The party challenging the zoni ng decision bears the burden of proving it was legally
insufficient or factually unsupported. Sagstetter v. City of St. Paul, 529 N.W.2d 488, 492
(Minn. App. 1995).
Here, the district court granted the city’s motion for summary judgment, concluding
that Croix Holdings had expanded the nonconforming use of the original property by using
it for car dealerships and that the city had a rational basis for its decision to revoke the 1986
CUP. Summary judgment “is appropriate when there is no genuine issue of material fact
and a party is entitled to judgment as a matter of law.” Senogles v. Carlson, 902 N.W.2d
38, 42 (Minn. 2017). Appellate courts review a grant of summary judgment de novo. Com.
Bank v. W. Bend Mut. Ins. Co. , 870 N.W.2d 770, 773 (Minn. 20 15). “In conducting this
review, [appellate courts] view the evidence in the light most favorable to the nonmoving
party and resolve all doubts and factual inferences against the moving parties.” Fenrich v.
Blake Sch., 920 N.W.2d 195, 201 (Minn. 2018) (quotation omitted).
Before turning to the substance of Croi x Holdings’ arguments, we address its
suggestion that there are disputed fact issues that the district court erroneously resolved in
10
the city’s favor. Croix Holdings’ brief to this court implies that there were material factual
disputes in the proceedings below. At oral argument, counsel for Croix Holdings directly
stated that there were genuine issues of material fact because the district court allegedly
made factual findings. According to the district court’s order, however, the parties
stipulated that there were no material factual disputes. 5 The order states, “The parties
agreed at the January 8, 2021 hearing that there were no material disputes of fact.” Because
Croix Holdings, the appealing pa rty, did not request a transcri pt of the January 8, 2021
hearing, we cannot review the district court’s characterization of the parties’ agreement for
error. Mesenbourg v. Mesenbourg, 538 N.W.2d 489, 494 (Minn. App. 1995) (stating that
the appealing party bears the burden of providing an adequate record for appellate review).
Because Croix Holdings has not shown error in this regard, we limit our review to deciding
whether the record evidence, viewed in the light most favorable to Croix Holdings, shows
a rational basis for the city’s zoning decisions.
A. The city reasonably concluded th at Croix Holdings expanded the
nonconforming use of the original property by leasing it to car
dealerships for automobile sales.

We first consider Croix Holdings’ argument that its use of the original property was
not an expansion of the use that existed before the zoning change.
Local governments have authority to enac t and change zoning ordinances, as well
as to allow and, under some circumstances, to terminate, legal nonconforming uses. White

5 The order goes on to note that the only “potential disputed fact was whether Croix
Holdings represented to the city that they intended to use the property for multiple used car
dealerships.” But it concludes that this potential disputed fact was immaterial.

11
v. City of Elk River, 840 N.W.2d 43, 49 (Minn. 2020). “A [legal] nonconforming use is a
use of land that is prohibited under a current zoning ordinance but nonetheless is permitted
to continue because the use lawfully existed before [an adverse zoning change] took
effect.” Id. (citing Krummenacher v. City of Minnetonka , 783 N.W.2d 721, 726 (Minn.
2010)). Because a property owner has a vested interest in a legal nonconforming use, there
are limits to a city’s authority to terminate it, however. “It is a fundamental principle of
the law of real property that uses lawfully existing at the time of an adverse zoning change
may continue to exist until they are removed or otherwise discontinued.” AIM Dev. (USA),
LLC v. City of Sartell , 946 N.W.2d 330, 336 (M inn. 2020) (quoting Hooper v. City of
St. Paul, 353 N.W.2d 138, 140 (Minn. 1984)) (emphasis omitted). The scope of the use at
the time of the zoning change is the point against which all subsequent uses are compared.
Id.
“An established nonconforming use runs with the land, and hence a change in
ownership will not destroy the right to continue the use.” 8A Eugene McQuillin, The Law
of Mun. Corp. § 25.256, at 66 (3d rev. ed. 2020). “However, generally speaking, the
character of the nonconforming use must be th e same for the change in ownership not to
effect a valid nonconforming use.” Id. at 66-68; see also 2 Patricia E. Salkin, Am. Law. of
Zoning § 12:18, at 12-119 (5th ed. 2021) (observing that a nonconforming use generally
“may not be changed to a different nonconforming use” if the change is “substantial”).
A nonconforming use must be continuous from the time the adverse zoning change
occurred. If “the nonconform ity or occupancy is discontinue d for a period of more than
one year,” a city may take action to prohibit that use. Minn. Stat. § 462.357, subd. 1e(a)(1)
12
(2020). Additionally, a landowner is not en titled to expand a no nconforming use. See
Minn. Stat. § 462.357, subd. 1e (a) (2020) (“Except as othe rwise provided by law, any
nonconformity, including the lawful use or occu pation of land or premises existing at the
time of the adoption of an additional control . . . may be continued, including through
repair, replacement, restoration, maintenance, or improvement, but not including
expansion.” (emphasis added)); AIM Dev., 946 N.W.2d at 336. “Rather, to further the
public policy interests underlying compre hensive zoning plans, the law disfavors the
expansion or enlargement of pre-existing nonconforming uses and instead favors the
gradual elimination of such uses through obsolescence, e xhaustion, or destruction.”
Northgate Homes, Inc. v. City of Dayton , 126 F.3d 1095, 1100 (8 th Cir. 1997) (quoting
County of Freeborn v. Claussen, 203 N.W.2d 323, 325 (Minn. 1972)). “The [landowner]
seeking to continue a nonconforming use has the burden of proving that an exception to a
zoning law is warranted.” Id.
Here, the city notified Croix Holdings that the use of the original property was not
a legal nonconforming use for the following reasons:
• “Multiple dealer auto sales is a diffe rent primary use than camper sales
as a primary use in definition.”

• “Croix Holdings is operati[ng] outside of its legal non-conforming use by
changing its primary use from campe r sales to multiple dealership
automotive sales on the non-CUP areas of the Croix Holdings site.”

• “Auto sales use was abandoned on the Croix Holdings site as it has not
existed as a use for at least one year.”

• “Croix Holdings is operating outside the scope of the CUP and as a legal
non-conforming use allowed on the site due to intensification.”

13
The district court agreed that the record evidence indisputably showed an expansion
of the legal nonconforming use. It noted that there was no evidence that the property was
used for car sales for at l east one year after 1994, when the zoning change prohibiting
vehicle sales was enacted. Moreover, the district court observed that Croix Holdings failed
to present evidence that automobile sales was ever “an established, pre-existing, legal, non-
conforming use prior to the adverse zoning change in 1994.”6
Croix Holdings argues that the city and the district court were wrong. According to
Croix Holdings, it did not expand the legal nonconforming use of the original property
because there is virtually no distinction betw een camper sales and car sales. Moreover,
pointing to evidence in the record that car sales occasionally occurred at Imperial Camper
over the years, it contends that car sales were an existing nonconforming use at the time of
the adverse zoning change.
In considering Croix Holdings’ argument, we briefly review the caselaw in this area.
In Hawkins v. Talbot, the Minnesota Supreme Court concluded that the landowner—who
operated a gravel pit—did not expand the nonconforming use by enlarging the size of the
pit and using a new rock crusher on the proper ty because the activity remained the same
and was still confined to the gravel bed. 80 N.W.2d 863, 866 (Mi nn. 1957). And more

6 Croix Holdings contends that the district court erroneously weighed the evidence in
reaching its conclusions. If the district court weighed the evidence in considering the city’s
summary-judgment motion, it erred. See Fairview Hosp. & Health Care Servs. v. St. Paul
Fire & Marine Ins. Co., 535 N.W.2d 337, 341 (Minn. 1995) (“[O]n a summary judgment
motion a court may not weigh the evidence or make factual determinations.”). But because
we apply a de novo standard of review in c onsidering the city’s decision, we review the
record in the light most favorable to Croi x Holdings without deferring to any factual
determinations made by the district court.
14
recently, in AIM Development , the supreme court determin ed that a la ndfill would not
expand its nonconforming use by accepting waste from new sources, which would lead to
an increase in its physical size. AIM Dev., 946 N.W.2d at 339-40. The court clarified that
a “more flexible approach” wa s appropriate for the nonconfor ming rights of “special use
properties,” such as quarries, gravel pits, an d landfills, which necessarily increase in size
as operations continue. Id. at 339. But the court emphasized that the “nature and purpose
of the original use” must remain unchanged, even if materials and equipment are
“substitut[ed].” Id. at 340.
On the other hand, in Claussen, the supreme court determined that there had been
an expansion of the nonconfo rming use. 203 N.W.2d at 326. There, the nonconforming
use was outdoor storage and repair of digging equipment, and the landowner intended to
construct a building on the land to house the equipment. Id. at 324. In concluding that this
amounted to an expansion, the supreme co urt noted that the building would physically
expand the nonconforming use of the property. Id. at 326. And it observed that a building
would increase the landowner’s use of the property by enabling work to be performed even
in the winter. Id. Similarly, in Hawkinson v. County of Itasca, the supreme court held that
the property owner could continue “the precise business in which he was engaged” before
the new zoning ordinance—a “small recreati onal-commercial business on his lakeshore
lots.” 231 N.W.2d 279, 280 (Minn. 1975). But he could not expand the business into a
larger resort. Id. at 282. The supreme court explaine d that allowing such an expansion
“would do violence to the well-established rule that nonconforming uses are to be restricted
in a way which will be conducive to their ultimately being phased out.” Id.
15
The district court found the Eighth Circuit’s decision in Northgate Homes to be
persuasive. In that case, applying Minnesot a law, the Eighth Circ uit affirmed the lower
court’s determination that the landowner had expanded the nonconforming use of property.
126 F.3d at 1100-01. A prev ious owner had developed the property into a mobile home
park. Years later, the city passe d an ordinance prohibiting the “sale, storage, or display”
of mobile homes in mobile home parks. Id. at 1097. Northgate Homes acquired the mobile
home park and began selling mobile homes from the property. Id. The district court found,
and the Eighth Circuit agreed, that the sale of mobile homes was not a continuation of the
previous use, but was a new use of the property, and thus an expansion. Id. at 1100-01.
The caselaw instructs that a property owner expands a nonconforming use by
utilizing the property for an activity that is different in nature and different in scope than
the nonconforming use. Here, the undisputed evidence shows that Croix Holdings changed
the primary use of the original property in both nature and scope. Before and after the
zoning ordinance was enacted, the original prope rty was consistently used for the sale of
nonmotorized campers and tra ilers by one entity. The city rationally concluded that the
use of the property for car sales by multiple dealerships was qualitatively different and
broader in scope than the sale of nonmotorized trailers and campers by a single retailer.
And although Croix Holdings ar gues that camper-trailers are no different than cars, the
record confirms that they are. Local resi dents observed a difference in the amount of
traffic, activity, and noise in the area when Croix Holdings began leasing to car dealerships.
Because Croix Holdings substantially change d the use of the original property—in both
16
nature and scope—the city reasonably determined that there was an expansion of the legal
nonconforming use.
Croix Holdings further argues that the c ity and the district court overlooked the
conduct of the city’s own employees, which is evidence that the operation of car
dealerships was a legal nonconforming use. Before Croix Holdings purchased the original
property, it received a letter from a city employe e stating that vehicle sales was no longer
a permitted use of the property. According to Croix Holdings, the letter was misleading
because it also stated “that th e Property is classified as a legal nonconfor ming use.”
Additionally, Croix Holdings po ints to the fact that city employees provided multiple
zoning verifications to tenants of the properties before the c ity determined there was an
expansion of the nonconforming use.
Croix Holdings overstates the contents of the letter from the city employee. It did
not suggest that automobile sales was a legal nonconforming use. The letter states, “Since
Imperial Campers was a permitted use in a zoni ng district when it was established, it is
classified as a legal nonconforming use in a z oning district.” It also emphasizes that any
new use of the property “must conform to the zoning ordinance.” Moreover, a
“municipality cannot be estopp ed from correctly enforcing [a n] ordinance even if the
property owner relied to his detriment on prior city action.” Frank’s Nursery Sales, Inc. v.
City of Roseville, 295 N.W.2d 604, 607 (Minn. 1980). And appellate courts have rejected
the argument that cities should be estopp ed from enforcing ordinances where permit
applicants relied on mistakes by city employees. See City of N. Oaks v. Sarpal, 797 N.W.2d
18, 22, 25-26 (Minn. 2011); Mohler v. City of St. Louis Park, 643 N.W.2d 623, 638 (Minn.
17
App. 2002). We therefore reject Croix Holdi ngs’ argument that the co nduct of the city’s
employees rendered the city’s ultimate determination of expansion unreasonable.
The law and the record su pport the city’s conclusion that Croix Holdings
impermissibly expanded the use of the original property by changing the nature and scope
of its use. Thus, the city’s decision was reasonable, and the district court did not err in
granting summary judgment on this issue.
B. The city’s revocation of the 1986 CU P was not arbitrary, capricious, or
unreasonable.

Next, we turn to Croix Holdings’ asserti on that the city had no rational basis for
revoking the 1986 CUP.
“A conditional use permit shall remain in effect as long as the conditions agreed
upon are observed, but nothing in this section shall prevent the municipality from enacting
or amending official controls to change th e status of conditional uses.” Minn. Stat.
§ 462.3595, subd. 3 (2020); see Upper Minnetonka Yacht Club v. City of Shorewood, 770
N.W.2d 184, 187 (Minn. App. 2009) (stating that a CUP is “perpetual in nature” and
remains in effect as long as the conditions of the CUP are observed); Dege v. City of
Maplewood, 416 N.W.2d 854, 856 (Minn. App. 19 87) (stating that a CUP “remains in
effect until its provisions are violated”). The city’s zoning ordinance allows the city to
inspect a conditionally permitted use at any tim e. Newport, Minn., Code of Ordinances
§ 36-45(h) (2021). If a property is out of compliance with the permit or conditions after
the owner has been given a reasonable opportunity to make corrections, the ordinance
allows the city to revoke the CUP after a public hearing. Id.
18
Here, Imperial Camper applied for the CUP to “[p]ave & fence lot to secure trailers
for display sale & storage.” The city granted the application and issued a CUP authorizing
“a retail sales operation . . . subject to . . . ch ange of use of the property, and subject to
annual review by the City.”
In 2020, the city notified Croix Holdings that it was in violation of the 1986 CUP
for the following reasons:
• “The CUP [h]as a condition that the primary use . . . be camper sales” and
“Croix Holdings is in violation of the CUP by changing the primary use
from camper sales to multi dealer automotive sales.”

• “Croix Holdings is operating in violation of the CUP by failing to comply
with required zoning standards.”

• “Croix Holdings is operating outside the scope of the CUP and as a legal
non-conforming use allowed on the site due to intensification.”

The city issued an order requiring Croix Ho ldings to bring the CU P lot into compliance
within 60 days. To comply with the CUP, the city notified Croix Holdings that automobile
sales on the lot would have to cease as the only permitted use was retail sales of campers.
When Croix Holdings did not bring the CUP lo t into compliance, the city held a lengthy
public hearing and then revoked the CUP.
In granting the city’s mo tion for summary judgment, the district court concluded
that the city provided a sufficient reason to revoke the CUP. And because the city
interpreted the 1986 CUP as being limited to camper sales, and the record evidence showed
that Croix Holdings’ use of the CUP lot was different, the district court determined that the
city had a rational basis for its decision.
19
Croix Holdings argues that the city’s deci sion was unreasonable. It contends that
the very broad CUP lang uage placed no restrictions on the type of retail sales that were
permitted, that it never violat ed any explicit CUP condition, and that the city failed to
articulate which express CUP condition was violated. We disagree.
In special-use-permit matters, we consider the standards in a local ordinance to
assess reasonableness. White Bear Docking, 324 N.W.2d at 176. We observe that the city
followed the procedures required under its own ordinances—notifying the property owner
of the compliance issues, giving the property owner a reasonable opportunity to correct the
problems, and then holding a public hearing on the issue of revocation.
And contrary to Croix Hold ings’ assertion, an expre ss condition of the CUP was
that there be no change in th e use of the property. Based on citizen complaints, public
hearings, and site visits, among other evidence, the city concluded that Croix Holdings had
changed the use of the property by leasing it to multiple car dealer ships for automobile
sales. Despite the city’s warning, Croix Holdings did not bring the pr operty into
compliance by ceasing these car sales. Because the city supplied a sufficient reason for the
revocation, and that reason is supported by the record, the c ity’s decision to revoke the
CUP was not arbitrary, capricious, or unreasonable. See RDNT, LLC, 861 N.W.2d at 75-
76.
Croix Holdings argues that the plain lang uage of the CUP itself placed no explicit
restrictions on the type of retail sales that could occur. And, according to Croix Holdings,
the city could not look beyond the four corners of the CUP to determine whether there was
a “change of use of the property.” In othe r words, because the CUP itself did not specify
20
the nature of the original use, the city was not permitted to look to other evidence of original
use, such as the CUP application or historical information. For this proposition, Croix
Holdings cites our decision in Upper Minnetonka Yacht Club, 770 N.W.2d 184.
There, we held that a municipality could not unilaterally add a new condition to an
existing CUP. Id. at 190. While we did state that an applicant’s representations in applying
for a CUP “are irrelevant because interested parties or future purchasers may have no notice
of the representations and use restrictions on the property,” id. at 189, we did not hold that
a city can never look beyond the four corners of a CUP to identify the original conditional
use of the property.
Although the 1986 CUP could have been more explicit about the nature of the
original permitted use, the CUP was expressly conditioned on that use remaining the same.
And in this case—where Croix Holdings stipul ated that there are no genuine issues of
material fact—there is no factual dispute that Imperial Camper applied for the CUP so that
it could sell nonmotorized campers on the lot. We therefore reject Croix Holdings’
argument that the city unreasonably went beyond the plain language of the CUP in
determining that multi-dealer car sales was a “change of use.”
Croix Holdings has not shown that the c ity’s decision to revoke the 1986 CUP was
arbitrary and capricious. Because the city had a legally sufficient basis for its decision, and
the record supports that basis, the city’s decision to revoke the CUP was not unreasonable.
Thus, the district court did not err in grantin g summary judgment in favor of the city on
this issue.
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II. The district court did not err in gran ting the city’s motion for summary
judgment on Croix Holdings’ constitutional taking-of-property claim.

Croix Holdings next argues that the di strict court erred in dismissing its
constitutional taking claim on summary judgment. According to Croix Holdings, even if
the city’s zoning decisions were reasonable, they effectively constituted a regulatory taking
of its properties for public use entitling Croix Holdings to compensation under the Takings
Clause of the Minnesota Constitution.
We again apply our summary-judgment st andard of review, considering the
evidence in the light most favorable to Croi x Holdings, resolving doubts against the city,
and considering de novo whether the city is entitled to judgment as a matter of law. See
Fenrich, 920 N.W.2d at 201. “Whether a governmental entity’s action constitutes a taking
is a question of law that [appellate courts] review de novo.” Wensmann Realty, Inc. v. City
of Eagan, 734 N.W.2d 623, 631 (Minn. 2007) (citing Alevizos v. Metro. Airports Comm’n,
216 N.W.2d 651, 660 (Minn. 1974)).
The Minnesota Constitution prov ides that “Private proper ty shall not be taken,
destroyed or damaged for publ ic use without just compensa tion therefor, first paid or
secured.” Minn. Const. art. I, § 13. “The government need not directly appropriate or
physically invade private property to effectuate a taking.” Wensmann Realty, 734 N.W.2d
at 632. But regulatory takings—where government action taken in the interest of the public
effectively deprives a property owner of the use of private property—are rare. See id. at
630. To determine whether such a taking has occurred, a court should consider the factors
outlined in the United St ates Supreme Court’s Penn Central case. Id.; see Penn Cent.
Transp. Co. v. City of New York , 438 U.S. 104 (1978). Those factors are (1) “[t]he
22
economic impact of the regulation on the claima nt and, particularly, the extent to which
the regulation has interfered with distinct in vestment-backed expectations” and (2) “the
character of the governmental action.” Wensmann Realty , 734 N.W.2d at 632-33
(quotation omitted).
However, the Takings Clause does not require compensation for property rights that
a property owner never had. Minn. Sands, LLC v. County of Winona , 940 N.W.2d 183,
200 (Minn. 2020). Cr oix Holdings was never entitled to operate car dealerships on the
original property or the CUP lot. When Croix Holdings purchased the property, the zoning
laws in effect prohibited this use of the prop erty. And the city reasonably concluded that
Croix Holdings’ business was an expansion of the legal nonconforming use and a violation
of the CUP. Because Croix Ho ldings did not have a right to use the prop erty for car
dealerships, it is not entitled to compensation for its inability to exercise that nonexistent
right.
Moreover, although Croix Holdings assert s that the city’s decisions effectively
deprived it from using its property, this is a conclusory assertion unsupported by the record.
As the district court observed, the MX-4 zoni ng classification curren tly in place allows
numerous other economically viable property uses, including “residential, commercial, and
office uses.” See Newport, Minn., Code of Ordinances, § 36-238 (2021). Croix Holdings
presented no evidence to support its clai m that while other property uses may be
economically viable in theory, they are “unrealistic” and “cost prohibitive” in practice. A
party cannot overcome a motion for summary judgment with “unverified and conclusory
23
allegations.” Lubbers v. Anderson, 539 N.W.2d 398, 401 (Minn. 1995) (quoting Rosvall
v. Provost, 155 N.W.2d 900, 904 (Minn. 1968)).
Because Croix Holdings did not have a lega l right to operate car dealerships on its
properties and produced no evidence to support its conclusory claim that the city’s zoning
regulations prevent it from making other economically viable use of the properties, it failed
to establish its constitutional taking claim. Ac cordingly, the district court appropriately
granted the city’s summary-judgment motion on that claim.
III. The district court did not err in gr anting summary ju dgment on Croix
Holdings’ tortious-interference-with-contract claim.

Croix Holdings also contends that the c ity’s zoning decisions tortiously interfered
with its contractual relationships with its tenants. Thus, Croix Holdings argues, the district
court erred in granting the city’s motion for summary judgment on this claim.
A prima facie case of tortious interferen ce with contract requires a showing of:
“(1) the existence of a contract; (2) knowledg e of the contract by the alleged wrongdoer;
(3) intentional procurement of the contract’s breach; (4) absence of justification; and
(5) damages caused by the breach.” Metge v. Cent. Neighborhood Improvement Ass’n, 649
N.W.2d 488, 500 (Minn. App. 2002) (citing Furlev Sales & Assoc., Inc. v. N. Am. Auto.
Warehouse, Inc., 325 N.W.2d 20, 25 (Minn. 1982)). “A successful claim requires proof of
all five elements.” Bebo v. Delander, 632 N.W.2d 732, 738 (Minn. App. 2001), rev. denied
(Minn. Oct. 16, 2001).
Applying our summary-judgmen t standard of review, we agree with the district
court that Croix Holdings has failed to identify specific facts in the record that show the
city’s knowledge of the contracts between Croix Holdings and its tenants, which is fatal to
24
the claim. See Bob Useldinger & Sons, Inc. v. Hangsleben, 505 N.W.2d 323, 328 (Minn.
1993) (“Mere speculation, without some c oncrete evidence, is not enough to avoid
summary judgment.”). Furthermore, because we have concluded that the city reasonably
enforced its zoning laws—the action that a llegedly caused Croix Ho ldings to breach its
tenant contracts—there is no factual dispute as to the fourth elemen t, justification.
Accordingly, the district court’s grant of summary judgment on this issue was appropriate.
IV. Because emails among city employees about the 1986 CUP were not relevant to
the legal issues before the district court, the district court’s decision to exclude
them did not prejudice Croix Holdings.

Finally, Croix Holdings argues that the di strict court erred in excluding emails
disclosed by the city in response to a MGDPA request. According to Croix Holdings, the
district court improperly concluded that th e emails were protected by attorney-client
privilege, and the exclusion of the emails prejudiced Croix Holdings.
“Communications that seek to elicit legal advice from an attorney acting in that
capacity, that relate to that purpose, and that are made in confiden ce by the client are
protected from disclosure, unless the privilege is waived.” Nat’l Texture Corp. v. Hymes,
282 N.W.2d 890, 895 (Minn. 1979) (citing Brown v. St. Paul City Ry., 62 N.W.2d 688, 700
(Minn. 1954)). Attorney-client privilege exists in a commun ication: “(1) Where legal
advice of any kind is sought (2) from a professi onal legal adviser in his capacity as such,
(3) the communications relating to that purpose, (4) made in confidence (5) by the client,
(6) are at his instance permanently protected (7) from disclosure by himself or by the legal
adviser, (8) except the protection be waived.” Kobluk v. Univ. of Minn., 574 N.W.2d 436,
440 (Minn. 1998).
25
The MGDPA presumes all government data to be public unless classified as
nonpublic, private, or confidential. Minn. Stat . § 13.03, subds. 1, 3. Government data is
defined as “all data collected, created, re ceived, maintained or disseminated by any
government entity regardless of its physical fo rm, storage media or conditions of use.”
Minn. Stat. § 13.02, subd. 7.
The district court has wide discretion to issue discovery orders and, absent a clear
abuse of that discretion, its discov ery orders will not be disturbed. In re Comm’r of Pub.
Safety, 735 N.W.2d 706, 711 (Minn. 2007). “We review a district court’s order for an
abuse of discretion by determ ining whether the district court made findings unsupported
by the evidence or by improperly applying the law.” Id. Additionally, the party
challenging the exclus ion bears the burden of showing that the alleged error was not
harmless and “that such evidence might reasonably have changed the result” of the case if
the district court had admitted it. Poppenhagen v. Sornsin Constr. Co., 220 N.W.2d 281,
285 (Minn. 1974) (referencing exclusion of evidence at trial).
Croix Holdings cannot show that the em ails—which included discussions among
city employees about their interpretation of the 1986 CUP—would have changed the
outcome of its challenge to the CUP revocati on. In determining whether the city acted
reasonably in revoking the CUP, the district court was required to consider the original use
of the CUP lot in 1986 and whether the use of the CUP lot in February 2020 reflected a
“change of use.” The impressions of city em ployees in 2019 regard ing the scope of the
1986 CUP were not releva nt to these issues. See Minn. R. Evid. 401 (defining relevant
evidence as “evidence having any tendency to ma ke the existence of any fact that is of
26
consequence to the determination of the action more probable or less probable than it would
be without the evidence”). Moreover, based on our review of the emails, we conclude that
they would not have affected the district court’s decision or our disposition of the appeal.
Because Croix Holdings cannot show any prejudice resulting from the district court’s
exclusion of the emails, we reject the request to reverse on this basis.
Affirmed.