D01 88 001 BC
2-3000 1751-2
STATE OF MINNESOTA
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE DEPARTMENT OF TRANSPORTATION
in the Matter of the Denial
of Certain Relocation Benefits FINDINGS OF FACT,
to Stanley W. Davies and CONCLUSIONS AND
Darlene J. Davies, Former RECOMMENDATION
Fee Holders of 1840 Sand
Street, Shakopee, Minnesota
The above entitled matter came on for hearing in Shakopee, Minnesota, on
September 23 and September 30, 1987, before Bruce D. Campbell, Administrative
law judge for the Minnesota Office of Administrative Hearings.
Appearances: Sherry A. Enzler, Special Assistant Attorney General,
515 Transportation Building, St. Paul, Minnesota 55155, appeared on behalf of
the Department of Transportation (Department or DOT); and James B. Dickinson,
Attorney at law, 3600 Shoreline Drive, Wayzata, Minnesota 55391, appeared on
behalf of the former fee holders, Stanley W. Davies and Darlene J, Davies.
The record closed on November 12, 1987, the date of receipt by the
Administrative Law Judge of the post-hearing memoranda of counsel.
This Report is a reconnendation, not a final decision. The Commissioner
of Transportation will make the final decision after a review of the record
which may adopt, reject or modify the Findings of Fact, Conclusions, and
Recommendations contained herein. Pursuant to Minn. Stat. 14.61, and the
Rules of Practice of the Public Utilities Commission as applicable to the
Department of Transportation, the final decision of the Commissioner shall not
be made until this Report has been made available to the parties to the
proceeding for at least 20 days. An opportunity must be afforded to each
party adversely affected by this Report to file exceptions and present
argument to the Commissioner. Parties should contact Leonard W. Levine,
Commissioner of Transportation, 411 Transportation Building, St. Paul,
Minnesota 55155, (612) 296-3000, to ascertain the procedure for filing
exceptions or presenting argument.
STATEMENT OF ISSUES
the issues to be determined in this proceeding are whether the former fee
holders are "displaced persons" within the meaning of 42 U.S.C. 4601(6) and
Minn. Stat. 117.50, subd. 3 (1986), so as to qualify them to receive
relocation housing payments under the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970, 42 U.S.C. sec. 4601, et seq. and Minn.
Stat. 117.50 117.56 (1986); and, if not, whether the Department of
Transportation is estopped from asserting that the former fee holders do not
qualify for such relocation benefits.
Based upon all of the proceedings herein, the Administrative Law Judge
makes the following:
FINDINGS OF FACT
1. Stanley and Darlene Davies are the former fee owners, as joint
tenants, of a residence which was located at 1840 Sand Street, Shakopee,
Minnesota, legally described as Lot 5, Block 2, Davies Second Addition.
2. In 1976, the Minnesota Department of Transportation (DOT) began the
initial consideration of a federally assisted highway construction project
which has become known as the Shakopee By-pass. The purpose of the by-pass
was to reroute trunk highway 101 around the south side of the City of
Shakopee. Rerouting of that trunk highway, if accomplished, would require the
acquisition by the State of Minnesota of real property and improvements for
highway right of way purposes. Since the highway construction project
involved the use of federal funds, persons displaced by the State's
acquisition of real property for such purposes would be eligible to receive
monetary relocation benefits under the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 19/0, 42 U.S.C. 4601, el seq,
"Displaced persons" might also receive State benefits under Minn. Slat.
sec 117.50 - 117.56 (1986).
3. In the early spring of 1977, the Department held a series of open
houses in Shakopee to receive comments of potentially affected members of the
public .
4. On May 10, 1977, the Department held a corridor public hearing in
Shakopee to discuss the by-pass proposal and the then current location and
design considerations with potentially affected residents. At that hearing,
two Department acquisition and relocation officials were available to discuss
the process with persons in attendance. The transcript of the public hearing
includes the following statement:
The 1970 Uniform Relocation Assistance and Real Property
Acquisition Policies Act passed by Congress and the 1971
State Relocation Assistance law provide for benefits and
assistance to residences (sic) and businesses affected by
highway purchases. These policies are fully explained in
the pamphlets that the Right of Way section will make
available to you in the outer hall. Also, Mr. Earl Howe,
District Right of Way Engineer, and Kurt Hartner, Relocation
Supervisor, will be available out in the lobby if you have
further right of way questions.
DOT Ex. 8, 11.
5. !he brochure, referred to in the transcript of the public hearing of
May 10, 1977, includes the following statement following bold headings
relating to relocation assistance eligibility:
An individual, family, business or farm operation
displaced due to acquisition for highway improvements may
be eligible for relocation payments and services depending
upon the date of occupancy as follows:
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1. The eligibility date is that date upon which
negotiations are initiated with the owner (date of
purchase offer). To explain this more fully, the date
the State makes an offer to the owner of the property
establishes the eligibility date. You must be in
occupancy on this date to be eligible for relocation
payments. The State will record the names of all
owners and tenants on this date.
DOI Ex. 6, 5. The Relocation Assistance brochure available at the 1977 public
hearing had been approved by the appropriate federal authorities as correctly
statinq the requirements of the federal Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970.
6. Persons in attendance at the public hearing of May 10, 1977 who
desired to receive a free transcript of the hearing signed a request roster.
DOT Ex. 5. The twelfth entry on that request roster is Mrs. Stan Davies,
Route 3, Box 411, Shakopee, Minnesota 55379. Mrs. Davies attended the May 10,
1917 public hearing.
7. There is no evidence in the record that Mrs. Davies requested or
received a copy of the Relocation Assistance brochure, DOI Ex. 6, either at
the public hearing or at a later date.
8. Additional public hearings on the corridor proposal were held in 1977
and 1978. Again, the current status of the proposal was discussed and the
then current Relocation Assistance brochure, DOT Ex. 6, wan available to
persons in attendance. Moreover, Department of Transportation personnel were
available to answer specific questions about the project or eligibility for
relocation assistance.
9. There is no evidence in the record that either of the former fee
holders attended the hearings held in the fall of 1977 and in 1978.
10. On June 21, 1984, a meeting was held in Shakopee to discuss the then
current status of the by-pass project. Mrs. Davies was present at that
meeting. DOT Ex. 9. A summary of the meeting indicates that persons in
Attendance asked a variety of questions about the avai la bility of federa I
relocation assistance. The Department agreed to send the current Relocation
Assistance booklet to persons who signed a sheet requesting uch information.
D0T Ex. 9, 2. That lint was signed by Mrs. Davies, in her husband's name.
DOI Ex . 9 , 3 .
11. A copy of the then current Relocation Assistance brochure, DOI Ex. 4,
was mailed by the Department to each person listed on DOT Ex. 9, 3, including
Mr. Stan Davies, at 1840 sand Street, Shakopee, Minnesota 55319.
12. The 1981 edition of the federally approved Relocation Assintance
brochure, which was mailed to Mr. and Mrs. Davies in 1984, states:
An individual, family, business or farm operation displaced
due to acquisition for transportation improvements may be
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eligible for relocation payments and services depending
upon the date of occupancy as follows:
1. The eligibility date is that date on which Mn/DOT
makes an offer to the owner of the property. Mn/DOT
will record the names of all owners and tenants on
this date. You must be in OCCupancy on this date to
be eligible for relocation payments . . . .
DOT Ex. 4, 3.
13. In January of 1986, a public meeting was held in Shakopee to again
discuss the status of the by-pass plan. At that meeting, which Mr. Davies
admits attending, a Department spokesperson summarized DOT's timetable
regarding land acquisition and discussed the availability of relocation
benefits. No transcript of that meeting was prepared. The District Five
Right of Way Engineer, Earl Howe, stated that DOT intended to begin making
offers to purchase individual properties in the spring of 1987. He also
stated that, prior to formal offers to purchase, individual parcels would be
measured and appraised. He cautioned people in attendance not to purchase
substitute housing until a specific offer had been made on their individual
tracts of property, because there was no assurance that federal funds would be
available to make the anticipated purchases or that the program would continue
according to the anticipated time schedule. Mr. Howe called to the attention
of people in attendance the then current edition of the Relocation Assistance
brochure, DOI Ex. 4, which was available at the meeting free of charge. He
also stated that Department personnel were available to respond to specific
questions. Mr. Howe then discussed the availability of relocation assistance
benefits. He began by stating that "relocation benefits" would not be
available if a landowner or tenant ceased occupancy prior lo the date of the
State's offer to purchase that specific property. He then discussed the
individual types of "relocation benefits" that might be available to affected
persons. in discussing each separate benefit, he did not restate that each
particular benefit required occupancy at the time the State made an offer to
purchase the specific property.
14. After the January 1986 meeting, Mr. Davies contacted various
unidentified persons in the Department to discuss the status of the by-pass
proposal. At no time during those contacts did any Department employee make
an affirmative misstatement of fact regarding the availability of relocation
benefits or tell Mr. Davies that occupancy was not a condition for receipt of
relocation benefits.
15. sometime in late 1986, after September 8, 1986, Mr. Davies obtained
from the Department a sketch of the Davies Addition, %honing his parcel of
property "blacked out" for acquisition. Davies Ex. 1. That sketch, however,
contains the following statement:
!his article is subject to change as required without
previous notice.
Davies Ex. 1.
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16. At the time of the public meeting in 1986, the design for the
Shakopee By-pass, as it affected the Davies Addition, had been fixed and no
additional design alternatives for that portion of the project were being
considered.
17. Sometime in the summer of 1986, Department personnel measured Mr.
Davies' property and prepared an appraisal.
1 8 . In September of 1986, Mr. and Mrs. Davies purchased a second home
outside of the Shakopee By-pass project. At an unspecified date between
September of 1986 and March 4, 1987, Mr. and Mrs. Davies began living in the
substitute home as their place of dwelling. The movement of their personal
effects took place sequentially during that period. The home at Sand Street
was !eased on a month-to month basis to a tenant, who occupied the house as
his residence. The Davies had instructed the tenant that he could remain
there, on a month to month basis, for a stated rent, until the house was
purchased by the Department for highway purposes.
19. The acquisition of the homes in the Davies Addition was accomplished
on a sequential basis, due to the number of properties involved and the
limited personnel available to the Department. Some written offers to
purchase individual properties were made in the final months of 1986. Some
residents of the Davies Addition did make legal arrangements for substitute
housing prior to the Stdte'S written offer to purchase their residences.
Davies Ex. 13-20.
20. There is no evidence in the record that any property owners, other
than Mr. and Mrs. Davies, ceased to occupy their dwellings in the Davies
Addition as their place of residence prior to obtaining the State's written
offer to purchase their property.
21. On March 4, 1987, Ms. Lenay Sanford, a Department Direct Purchase
Agent, delivered to Mr. Davies the State's initial written offer to purchase
the land and home located at 1840 Sand Street, Shakopee, Minnesota. DOT
Ex . 1 1 .
?2. The written offer is dated March 4, 1987. DOI Ex. 11. Ms. Sanford
had learned, prior to March 4, 1987, that Mr. and Mrs. Davies were residing at
a location other than the Sand Street property. She, therefore, made the
appointment to deliver the State's initial written offer to Mr. and Mrs.
Davies at their new home, The new residence was completely decorated and
furnished and Mr. and Mrs. Davies had been living at the substitute home for
some period of time.
23. After delivering the written offer, Ms. Sanford responded to
questions by Mr. Davies about the availability of relocation assistance
payments. She informed him that they would not qualify for such payments
because they had ceased ID OCCUPY the property to be acquired prior to
March 4, 1987, the date of the State's written offer. She offered to give him
a copy of the then current Relocation Assistance booklet. DOT Ex. 12. Mr.
Davies responded that he had a previous edition of the Relocation Assistance
booklet and that it just had a different colored cover.
24. On March 13, 1987, Ms. Sanford met personally with Mr. Davies to
discuss the acquisition of property owned by one of his relatives. At that
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meeting, the subject of relocation benefits again was discussed and she
referred Mr. Davies to the appropriate Department personnel.
25. On March ?I, 1987, Ms. Sanford went to the Sand Street property and
observed a tenant in residence.
26. At the time the State made its initial written offer to purchase,
March 4, 1987, the Davies had ceased to occupy the Sand Street property as
their dwelling. On that date, their only remaining personal property loCdted
at the Sand Street house consisted of Some art supplies and a few small
personal items. On March 4, 1987, Mr. and Mrs. Davies had no intention of
ever re-establishing actual residency at the Sand Street property under any
set of circumstances.
27. Mr. and Mrs. Davies do not assert that any Department personnel made
any affirmative statement that occupancy was not a prerequisite to obtaining
relocation benefits under state and federal law.
28. There is no evidence in the record that the Department made any oral
offers to purchase the Sand Street property that predated the written offer.
29. Mr. and Mrs. Davies subsequently applied for relocation benefits,
including a reimbursement of moving expenses and a replacement housing
payment. The State paid Mr. and Mrs. Davies $500 as a reimbursement for
moving expenses. Davies Ex. 2. Their claim for a replacement housing payment
was denied. The Department found that the Davies were not "displaced persons"
because they had ceased to occupy the Sand Street property aS their residence
prior to the date of the State's written offer to purchase, March 4, 1987.
30. Mr. and Mrs. Davies appealed the Department's denial of their claim
to a replacement housing payment internally within DOT. The appeal did not
include any consideration of the Department's allowance of moving expense
benefits. The Department's hearing officer concluded that Mr. and Mrs. Davies
were not "displaced persons" qualifying for a replacement housing payment
under the federal or state programs because they had ceased to occupy the
subject property prior to the State's written purchase offer.
31. Subsequently, Mr. and Mrs. Davies requested a hearing on the
Department's denial of benefits for replacement housing, as authorized by the
governing federal statute and regulations and state statute.
32. On August 7, 1981, the Commissioner of Transportation, Leonard W.
Levine , is sued a Notice of and Order for Hearing in this matter which was
proper in all respects. Mr. and Mrs. Davies received a copy of the Notice of
and Order for Hearing. The date of the hearing was postponed at the request
of legal counsel for Mr. and Mrs Davies.
33. The State has purchased title to the Sand Street property from the
former fee holders for purposes of federally assisted highway construction.
Based upon the foregoing Findings of Fact, the Administrative Law Judge
makes the following:
CONCLUSIONS
1 I he Commiss loner of the Department of transpor tation has juri sdict ion
over the subject matter of the hearing pursuant to 42 U.S.C. 4601, et seq,,
and 49 C.F.R. pt. 25 (1986), and Minn. Stat. 117.52 and 16l.36 (1986).
6
2. Proper notice of the hearing was timely given, and all relevant,
substantive and procedural requirements of law or regulation have been
fulfilled and, therefore, the matter is properly before the Administrative law
Judge.
3. Mr. and Mrs. Davies are not "displaced persons" within the
definitions contained in 42 U.S.C. 4601(6) and 49 C.F.R. 25.2(f), or Minn.
Stat. 117.50, subd. 3 (1986).
4. As a consequence of Conclusion 3, supra, Mr. and Mrs. Davies do not
qualify for receipt of the replacement housing payments specified in 49 C.F.R.
25.401 (1986).
5. The Department is not estopped by its conduct from asserting that Mr.
and Mrs. Davies do not qualify for the receipt of replacement housing payments.
6. The Department has not breached any duty of notice or advice owed to
Mr. and Mrs. Davies as fee owners of residential property ultimately acquired
by the State for a federally assisted highway construction project.
7. Any Finding of Fact heretofore enumerated more properly considered a
Conclusion and any Conclusion more properly considered a Finding of Fact is
expressly adopted as such.
THIS REPORT IS NOT AN ORDER AND NO RIGHTS OR DUTIES RESULT HEREFROM. THE
COMMISSIONER OF TRANSPORTATION WILL ISSUE THE ORDER WHICH MAY ADOPT OR DIFFER
PROM THE FOLLOWING RECOMMENDATION.
RECOMMENDATION
Based on the foregoing Conclusions, it is the Recommendation of the
Administrative Law Judge to the Commissioner that he determine that Stanley W.
Davies and Darlene J. Davies, former fee holders of 1840 Sand Street,
Shakopee, Minnesota, are not "displaced persons" so as to qualify for the
receipt of replacement housing payments under 42 U.S,C. 1601, et_seq. and
the governing federal regulations, 49 C.F.R. pt. 25 (1986), or Minn. Stat.
sec. 117.50 - 117.56 (1986). Therefore, the application of Stanley W. Davies and
Darlene J. Davies for replacement housing payments should be DENIED.
Dated this !!day of December, 1987.
Administrative taw Judge
NOTICE
Pursuant to Minn. Stat. 14.62, subd. 1, the agency is required lo serve
its final decision upon each party and the Administrative taw Judge by first
class mail.
Reported: Tape Recorded.
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MEMORANDUM
Mr. and Mrs. Davies c ha 1 lenge the Department' s deni a I of replacement
housing payments under the Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970, 42 U.S.C. 4601 , et,seq,, and the
implementing regulations, 49 C.F.R. pt. 25 (1986) , and Minn. Stat. S 11 1.50
I 1 7 . 5 6 ( 1 9 06) . They assert that they meet the definition of "displaced
persons" contained in both the federal and state statutes and the implementing
federal regulations. Alternatively, they argue that the Department should be
estopped from denying they have that status, both as a consequence of the
general law of governmental estoppel and the special legal relationship
between the displacing governmental agency and persons whose real property is
acquired for a federally assisted program.
Minn. Stat. 117.50 - 117.56 (1986), does not expand the federal statute
or implementing regulations as regards the persons entitled to relocation
assistance or the circumstances under which such benefits may be paid when
real property is acquired for a federally funded project. The State statute
mandates that State "acquiring authorities" cooperate to the fullest extent
possible to secure federal financial participation otherwise available under
the federal act and requires the "acquiring authority" to provide relocation
payments when the "displaced persons" would otherwise qualify for assistance
under the federal act, except for the lack of federal funds. Mr. and Mrs.
Davies do not assert that Minn. Stat. 117.50 - 117.56 (1986) , enlarges the
right to relocation assistance as specified in the federal act and
implementing regulations. Rather, they claim to satisfy the federal
definition of "displaced persons" contained in both the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C.
4601, el seg., and the implementing federal regulations, 49 C.F.R. pt. 25
1986).
The Department has published, as part of its Right -of Way Manual ,
parts 5-491.401 - 5 491.410. largely, at least as material to this
proceeding, the relocation assistance portions of the Right of Way Manual
parallel exactly the federal regulations contained in 49 C.F.R. pt. 25
( 1 9 86) . A material difference, however, exists between 49 C.[ R. 25.2(k)
(1986) and 5 491 .401 .4(k) , when considered in conjunction with 5 -491 .403.lD
of the Right of-Way Manual. Mr. and Mrs . Davies assert that the cited
portions of the Right of -Way Manual impermissibly limit the rights avai Table
to them under the federa I statute and implementing regulationg .
!he Administrative Law judge invited counsel to discuss the legal status
of the ReIo(ation Ann i s tance portion of DOT' s Right of Way Manua I, whether
the Manual has the Status of rules promulgated pursuant lo Minn. Stat., Ch. 14
or is el herwi se en for c eable as being with in a state or f edera I exception lo
the Minnesota Administrative Procedure Act. see, McKee v. Likins, 26l N.W.2d
566 (Minn. 1977). Counsel did not expressly discuss the Department's
authority to adopt "relocation assistance pol icies" or the status of those
policies in this protceding.
The Davies do not, however, claim that the Relocation Assistance portions
of the Right-of Way Manual enlarge the right to relocation benefits resulting
from the federal statute and implementing regulations. Their argument is
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exactly the ccontrary, as previously indicated. The Administrative law Judge
need not determine the legal status of the "relocation assistance policies"
contained in the Department of Transportation's Right-of-Way Manual. It is
axiomatic that the State may not limit monetary benefits provided for by
federal law. See, Dixon v. United States, 381 U.S. 68, 74 (1965); Tullock v.
State Hiqhway Commission
507 F.2d 712 (8th Cir. 1974). Hence, for purposes
of determining whether the former fee holders are eligible for a replacement
housing supplement, the Administrative Law Judge will consider the federal
statute and implementing regulations.
The Shakopee By pass is a federally assisted highway construction project,
affording to "displaced persons" the relocation benefits provided for by the
Uniform Relocation Assistance and Real Property Acquisition Policies Act of
1910, 42 U.S.C. 4601, et. seq and its implementing regulations, 49 C.F.R.
pt. 25 (1986). Mr. and Mrs. Davies do not assert that any portion of the
implementing f edera 1 regu I iti on, a reimpermissible admin istrat ive rest ict ions
on the rights afforded by the federal statute. Whether Mr. and Mrs. Davies
qualify for the relocation assistance benefits denied, therefore, depends on a
construction of the applicable federal regulations.
A person must be a "displaced person" as defined by 49 C.F.R. sec. 25.2(f)
(1986), to qualify for relocation assistance benefits. The federal
regulations exclude from the definition of a "displaced person" a "person who
moves before the initiation of negotiations". 49 C.F.R. 25.2(f)(2)(i)
(1986). "Initiation of negotiations" is defined as the date the acquiring
authority de 1 ivers its in i I i a I written purchase of fer to t he owne r. 49 C.F.R.
25.2(k). 49 C.F.R sec. 25.2(k)(1) (1986), however, provides:
If the Agency issues a notice of its intent to acquire the
real property, and a person moves after that notice, but
before delivery of the initial written purchase offer, the
"initiation of negotiations" means the date the person
moves from the property . . . .
Mr. and Mrs. Davies, initially, assert that the statements made by
Department personnel at the 1986 public meeting and DOT's property acquisition
activities in late 1986 and early 1987 in the Davies Addition, including the
issuance of Davies Ex. 1, all combined to constitute a "notice of . . . intent
to acquire the real property . . . ." 49 C.F.R. 25.2(k)(1) (1986). As
such, they assert that the "initiation of negotiations" did not commence on
the date of the State's initial written purchase offer, March 4, 1987, but on
t he d a te they c ea sed to oc cupy the Sand Street p roperty a s t he ir res idence.
Under that interpretation, Mr. and Mrs. Davies would not be excluded from the
definition of "displaced persons" because they would not have moved from the
band Street property before the "initiation of negotiations". 49 C.F.R.
sec.25.2 (f)(1) (1986). Mr. and Mrs. Davies do not concede that they had "moved"
frum the sand Street property as of the late of the State's initial written
purchase offer within the meaning of 49 C.F.R. 25.2(f)(2)(i) (1986). they
admit, however, that they were, at that time, no longer using the premises as
their place of abode.
The federal regulations contain no definition of the phrase "notice of its
intent to acquire the real property". Moreover, that phrase has not been
judicially construed in the context of 49 C.F.R 25.2(k)(1) (1986). 49
C.F.R. pt. 25 (1986), does, however, contain internal evidence that the phrase
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"notice of its intent to acquire the real property" refers to a formal
written document issued by the acquiring authority. 49 C.F.R. sec. 25.5 (1986),
requires that each notice that the acquiring authority must provide to a
property owner or occupant under the regulations is required to be in writing
and either personally served on the property owner or occupant or sent by
certified or registered mail. Moreover, Appendix A to the regulations also
negates a conclusion that informal verbal statements by agency personnel could
constitute "notice of its intent to acquire the real property", within 49
C.F.R. sec. 25.2(k)(1) (1986). In the discussion of initiation of negotiations
contained in Appendix A to the regulations, the following statement is made:
This section of the rule provides a special definition for
acquisitions and displacements under Pub. L. 96-510 or
Superfund. These activities differ under Superfund in that
relocation may precede acquisition, the reverse of the
normal sequence . . . . If a decision is made later to
permanently relocate such persons, those who had moved
earlier would no longer be on site when a formal, written
offer to acquire the property was made and thus would lose
!heir eligibility for a replacement housing payment.
49 C,F.R. 184 (1986). The Administrative Law Judge concludes that "notice of
its intent to acquire the real property," within 49 C.F.R. 25.2(k)(1)
(1986), requires an unequivocal written statement by the agency that it will
acquire the real property.
Mr. and Mrs. Davies do not claim to have received any written document
from the Department st ating unequi voc ally that I he State would purc hase the
Sand Street property. the parcel sketch obtained by Mr. Davies in December of
1986, Davics Ex. 1, states: "This article is subject to changes as required
without previous notice." That document, although in writing, is not a
"notice of its intent to acquire the real property". In Matter of
Commonwealth, Department of Transportation, 368 A.2d 917 (Pa. Cmwlth. 1911),
the court found t hat written documents with qua I i fying language simi I ar to
that contained in Davies Ex. I did not constitute a written notice of the
agency's intent to acquire the property. The disclaimer contained in Davies
Ex. I emphasizes the tentative nature of the Department's acquisition plans at
the date of the issuance of the document, as did the letters considered by the
court in Matter of Commonwealth, Department of Transportation, supra
Even assuming arguendo that a "notice of intent to acquire the real
property" need not be in writing, the Administrative Law Judge rejects the
contention that the Department's activities in the Davies Addition between
1986 and the spring of 1987 constituted a "notice of its intent to acquire"
the sand Street property, within the meaning of 49 C.F.R. sec. 25.2(k)(1)
(1986). At a bare, logical minimum, a notice of intent lo acquire must
consist of an unequivocal, unconditional statement by the agency that it will
acquire a specific property.
The courts have consistently held !hat mere preparatory activity by an
acquiring authority, even if relied upon, does not entitle one to receive
relocation benefits. In Messer v. Virgin Islands Urban Renewal Board 623
F.2d 303, 306 (3d Cir. 1980), the court noted:
The "acquisition" requirement was written into the statute
for the purpose of limiting benefits to situations in which
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the move is the result of an acquisition . . . . Protection
was provided for those who moved after receiving formal
notice of an acquisition because of a proposed project, but
not to those who moved without notice, based merely on
speculation that acquisition might take place.
S im i I arly, in Matter of Commonwealth, Department of Transportation, supra
the court clearly held that pre ratory activity of an acquiring authority,
short of an unconditional statement that particular property would be
purc ha sed , doe s not c on s t i tute " not i ce o f intent to a cqu i re " .
As will be discussed more particularly in the context of Mr. and Mrs.
Davies' claim of estoppel, none of the acts of the Department from the date of
t he pub I i c hear i ng i n 1 986 t o t he date of t he wr i t t en pu re ha se of fer ev i denced
any unconditional or unqualified intent on its part to purchase the Sand
Street property, At the hearing in 1986, Department personnel clearly stated
t ha t any p 1 a n s f or t he a cqu i s i t i on of part i cu 1 ar p rope rt i es we re t en t a t ive ,
that people should not purchase substitute housing and that occupancy was a
condition for receiving relocation benefits. As previously noted, the parcel
sketch obtained by Mr. Davies specifically stated that it was subject to
change without notice. Davies Ex. 1. Upon questioning by the Administrative
law Judge, Mr. Davies admitted that no Department employee had ever stated,
unqualifiedly, prior to the State's written purchase offer of March 4, 1987,
that the Sand Street property would definitely be acquired. In retrospect, it
was purchased. The invitation of Mr. and Mrs. Davies to define "notice of its
intent to acquire the real property" by hindsight reference to the fact of
ultimate purchase by the State, rather than by the Department's objective
statements node prior to their move, is inconsistent with the regulations and
applicable caselaw.
The Administrative law Judge, therefore, concludes that the "initiation of
negotiations", with regard to the Sand Street property, began on the date of
the issuance of the State's formal written purchase offer, March 4, 1987, and
not on some undefined earlier date when Mr. and Mrs. Davies ceased to reside
at !hat property.
Mr. and Mrs. Davies argue, in the alternative, that if the "initiation of
negotiations" herein occurred on March 4, 1987, they were still occupying the
Sand Street property on that date since they had retained title and had stored
a small amount of personal property there. Although not specifically
articulated, Mr. and Mrs. Davies, apparently, assert that the occupancy
requirements of the federal regulations are satisfied by some species of
constructive possession.
in their ordinary legal usage, the terms "occupying" residential real
property and "moving" therefrom connote actual use of the residential property
as a place of abode by the persons in question. Jaenicke v. Fountain City
Drill Co,, 106 Minn. 442, 90 N.W. 60, 61 (1909); Quehl v. Peterson 47 Minn.
13, 49 N.W. 890 (1891); Knowlton v. Patrons' Androscoggin Mutual -- Fire
Insurance Co,, 62 A. 289 (Me. 1905), While the Administrative taw Judge does
concede that, in particular contexts, occupancy may be constructive rather
than actual, constructive occupancy is not sufficient to qualify for
relocation assistance.
In Ledesma v. Urban Renewal Agency of the City of Edinburg, 432 F. Supp.
564 (S D. Tex. 1977), the court recognized that the federal statute
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contemplated actual occupancy. It limited any constructive occupancy
except ion to a s ituati on in which the owners were tempo rarily abs en t from the
premises due to circumstances beyond their control when the HUD regulations
clearly contemplated such a hardship exception. In Reasor v._City of Norfolk,
606 F. Supp. 788 (E.D. Va. 1984), the court held that an owner who was not
also an actual occupant was not a "displaced person" qualifying for relocation
benefits. Similarly, in City of Mishawaka v, Knights of Columbus Home, 396
N.E.2d 948 (Indiana App. 1979), the court construed the federal act to exclude
owners not in actual occupancy from the definition of "displaced persons".
The Administrative Law Judge rejects the contention of Mr. and Mrs. Davies
that, by retaining title to the Sand Street property and incidentally storing
on it some personal items, they were occupying that property or had not moved
from that property, as of the date of the "initiation of negotiations",
March 4, 1987.
The facts are undisputed that substantially before the date of the initial
written offer Mr. and Mrs. Davies had purchased replacement housing, moved
into that housing as their place of residence and had no intention of
returning to the Sand Street property at any time. The Sand Street property
was physically occupied by a tenant who was entitled to retain actual
possession until required to leave by the State. Mr. Davies did not even
testify that he intended to return to the Sand Street property if it were not
purchased by the State. Hence, the Davies had ceased to actually occupy the
Sand Street property and had moved therefrom prior to the date of the
"initiation of negotiations" for the purchase of the Sand Street property.
Under such circumstances, the former fee holders are not "displaced persons"
so as to qualify for the receipt of a replacement housing payment.
Mr. and Mrs. Davies rely on the Department's determination that they were
entitled to moving expense relocation benefits for their personal property
stored at the Sand Street property after the State's written purchase offer.
Since the applicable regulations require for both relocation housing payments
and moving expense eligibility that the person be a "displaced person", as
defined in the regulations, the Department's positions are asserted to be
inconsistent.
At the hearing herein, the Administrative Law Judge questioned a
Department employee about its apparently contradictory positions. The
Department did not relate its disparate treatment of moving expenses and
replacement housing payments to any difference in the eligibility requirements
of the applicable regulations. Apparently, the Department has applied its
distinction with federal administrative approval.
The Administrative law Judge does not find the distinction drawn by the
Department controlling in this instance. Initially, the propriety of the
Depdrtment's payment of moving expenses to Mr. and Mrs. Davies is not at issue
in this proceeding. Moreover, since the Department's determination of
eligibility for the payment of moving expenses was made substantially after
Mr. and Mrs. Davies had ceased to occupy the Sand Street property as their
residence, it could not have influenced their decision to purchase and occupy
substitute housing prior to the State's written purchase offer. Finally, if
Mr. and Mrs. Davies intend to rely on the anomalous positions taken by the
Department under the regulations, the appropriate conclusion would not be to
allow unauthorized benefits, but to require the repayment of the moving
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expenses benefits improperly paid. See, Cable Communications Board v.
Nor-West Cable Communications Partnership 356 N.W.2 65 Minn. 1
Mr. and Mrs. Davies also argue that the Department is estopped from
asserting that they are ineligible for a replacement housing payment.
Although Mr. and Mrs. Davies do not articulate a specific form of estoppel
that applies in this proceeding, initially, a consideration of promissory
estoppel is appropriate. Promissory estoppel, at a minimum, requires a
promise which induces substantial action or forbearance. Restatement of
Contracts (2d), 90(l). 1 n Day_ _v. City of Dayton 604 F . Su p p . 1 9 1 ( S. D .
Ohio 1984), the court found that a specific, unqualified statement by the
acquiring agency that relocation benefits would be provided must be proven
before promissory estoppel is established. Preparatory activity of an
acquiring authority which includes appropriate qualifications about ultimate
purchase and the availability of relocation benefits does not establish
promissory estoppel.
As stated in the Findings, the Department never made an unqualified
promise to Mr. and Mrs. Davies that they would be paid relocation benefits.
Any discussion of the subject included a reference to the then current
Relocation Assistance handbook which prominently stated that occupancy as of
the date of the "initiation of negotiations" was required. Upon questioning
by the Administrative Law Judge, Mr. Davies specifically admitted that no
employee of the Department promised him or his wife that they would be paid
relocation benefits. Promissory estoppel, therefore, has not been established.
A second species of estoppel, equitable estoppel, may be asserted under
appropriate circumstances against a government agency. A governmental agency
may be estopped if justice requires. Mesaba Aviation Division of Halvorson of
Duluth,_Inc, v. County of Itasca, 258 N.W.2d 877, 880 (Minn. 1917). However,
estoppel will not be "freely applied against the government." Mesaba Aviation
Division of Halvorson of Duluth,_l c. v. County of I A party
seeking to estop a governmental agency carries a heavy burden of proof.
Brown v. Minnesota Department of Public Welfare, 368 N.W.2d 906, 910 (Minn.
1985). Some element of fault or wrongful conduct must be shown, and "the
court will weigh the public interest frustrated by the estoppel against the
equities of the case." Brown v. Minnesota Department of Public Welfare, suprA.
Again, in response to questioning by the Administrative Law Judge, Mr.
Davies admitted that no Department employee misled him as to the status of the
project at any time, or made inappropriate statements about the availability
of relocation benefits on which he relied to his detriment. As discussed in
the Findings, al 1 of the statements of the Department regarding the project,
the acquisition of property and the availability of relocation benefits were
stAted as conditional and related to appropriate informational handbooks in
which the conditions of eligibility for relocation benefits were accurately
described. The most that can be said is that Mr. Davies formed a subjective
Conclusion about the availability of relocation benefits as a consequence of
his interpretation of the Department's actions. That conclusion, in light of
what was objectively communicated, was not reasonable and, apparently, was not
shared by the other residents of the Davies Addition whose property was
acquired in late 1986 or 1981. Under such circumstances, the Administrative
law Judge concludes that the Department has not been guilty of any wrongful
conduct which could have reasonably resulted in substantial detrimental
relidnce.
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It could be argued that the acquiring agency, in this case, had a
different relationship to Mr. and Mrs. Davies than the government generally
would have to any of its citizens. In their brief, Mr. and Mrs. Davies assert
that the Department did not provide them with the appropriate assistance so
that they could ultimately qualify for relocation benefits. At the hearing,
Mr. Davies complained not of incorrect information but of his sense that the
"right hand didn't know what the left hand was doing". Specifically, Mr. and
Mrs. Davies suggest that the Department should have sent them, by certified
mail, a copy of the then current Relocation Assistance booklet sometime prior
to the date they actually moved from their property. Also, apparently, Mr.
and Mrs. Davies claim that the Department acted inappropriately in not
affirmatively telling them that actual occupancy of the property as of the
date of the State's written purchase offer was a condition of benefit
eligibility. These failings by the Department, Mr. and Mrs. Davies assert,
raise an estoppel.
In Halbyrg Construction and Supply Pp. v. Minnesota_Transportation
RRegulation Board, 385 N.W.2d 381 (Minn. App. 1986), the court held that the
f a ilu re of the Transportati on Regu I ation Board to speci fically describe the
scope of the applicant's existing geographic authority to him raised an
estoppel regarding the scope of that authority.
In this case, however, the Administrative Law Judge has found that Mr.
Davies stated to the Department employee who made the initial written offer,
that they had previously received a copy of the Relocation Assistance booklet
describing the actual occupancy requirement prior to his move from the Sand
Street property. Since the former fee holders had a copy of the booklet prior
to their move, the Administrative Law Judge does not agree that the lack of a
certified mailing of the booklet is material.
Finally, with respect to the Complaint that the Department did not tell
Mr. and Mrs. Davies that actual occupancy as of the date of the State's
written purchase offer was required, the Administrative Law Judge has found
that adequate warnings were given. At the public hearing held in Shakopee in
1986, a Department employee told those persons present, including Mr. Davies,
that they had to be in actual occupancy of the premises as of the date of the
State's written purchase offer. On at least three occasions, Mr. or Mrs.
Davies were present at public hearings or meetings at which relocation
assistance benefits were discussed. Their attention was called to the
availability of a federally approved booklet which included a prominent
statement that actual occupancy as of the date of the written purchase offer
was a condition to the payment of relocation benefits. Moreover, on all of
these occasions, Department personnel were available to respond to any
questions asked about relocation benefits.
While Mr. Davies asserted at the hearing that he did not obtain
appropriate infornotion from the Department, he also stated that he was not
given false or erroneous information. Considering the number of opportunities
that Mr. and Mrs. Davies had to apprise themselves of the requirements for
relocation benefits and to question Department personnel, the fault, if any,
lies with Mr. and Mrs. Davies. The Department did all that it was required to
do under the governing federal statute and regulations. As recognized by the
courts, "a person is not entitled to relocation advisory services until the
agency involved acquires real property and such acquisition renders such
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person's relocation inevitable City of Mishawaka v, Fred W. Bubb,
396 N.E.2d 943, 946 (Indiana App. 1979).
This proceeding is dissimilar to Halberg, supra. In Halberg, the
Transportation Regulation Board was aware that the holder of transportation
authority was mistaken about the extent of that authority and took no action
to correct that misinterpretation even though they were also aware of his
substantial detrimental reliance. In this case, there is no evidence in the
record that the Department knew that Mr. and Mrs. Davies had misinterpreted
the available information, if that in fact occurred, until after they had
moved from the Sand Street property. hence, Halberg, supra, does not support
an estoppel in this case.
The information that the Department provided to Mr. and Mrs. Davies and
the procedures it followed in informing affected persons generally followed
the information plan approved by the federal Department of Transportation.
Under such circumstances, the Administrative Law judge finds that the
Department, did not breach any duty of assistance or notice owed to Mr. and
Mrs. Davies by either federal or state law.
B . D . C .
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