In the Matter of Franz Schauer, WCA Application, dated April 28, 2014 for No-Loss and Exemption Petition for Appeal dated December 3, 2014, No. 14-09, re: LGU decisions on November 3, November 19, and December 2, 2014.

• Court: Court of Appeals of Minnesota
• Decided: August 8, 2016
• Docket: A16-4
• Status: Unpublished

Opinion

This opinion will be unpublished and may not be cited except as provided by Minn.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

STATE OF MINNESOTA IN COURT OF APPEALS A16-0004

In the Matter of Franz Schauer, WCA Application, dated April 28, 2014 for No-Loss and Exemption; Petition for Appeal dated December 3, 2014, No. 14-09, re: LGU decisions on November 3, November 19, and December 2, 2014.

Filed August 8, 2016 Affirmed Bjorkman, Judge

Minnesota Board of Water and Soil Resources File No. 14-09

Franz P. Schauer, Bonita Springs, Florida (pro se relator)

Lori Swanson, Attorney General, Jill Schlick Nguyen, Assistant Attorney General, St. Paul, Minnesota (for respondent Minnesota Board of Water and Soil Resources)

Michael K. Junge, McLeod County Attorney, Glencoe, Minnesota (for respondent McLeod County)

Considered and decided by Rodenberg, Presiding Judge; Peterson, Judge; and

Bjorkman, Judge.

UNPUBLISHED OPINION

BJORKMAN, Judge

Relator challenges the order of respondent Minnesota Board of Water and Soil

Resources (BWSR) reversing respondent McLeod County’s grant of exemption and no-

loss determinations to relator in relation to wetland restoration and replacement. Relator argues that the BWSR did not have jurisdiction to review McLeod County’s decisions, and

that the BWSR erred when it held that the county complied with Minn. Stat. § 15.99 (2014).

We affirm.

FACTS

Relator Franz Peter Schauer owns property that contains a wetland area. On

November 3, 2013, Schauer received a cease and desist order from the Minnesota

Department of Natural Resources (DNR), indicating that his excavation of a ditch

impermissibly drained the wetland, and demanding that Schauer stop all activity related to

draining, filling, or excavating the wetland area. On December 11, the McLeod County

Wetland Technical Advisory Committee met to discuss the situation, and passed a motion

directing Schauer to refill the ditch.

On March 3, 2014, the Commissioner of Natural Resources issued a restoration

order and a replacement order (R&R orders) that described what Schauer must do to restore

the wetland. The R&R orders also informed Schauer that he had 21 days to submit a

replacement plan or apply for exemption or no-loss determinations.1

On April 25, Schauer filed applications for exemption and no-loss determinations,

which McLeod County received on April 28. Schauer’s attorney attached an affidavit to

the applications stating that additional supporting documents would be provided as they

1 A no-loss determination is a finding that the challenged activity will not impact the wetland or cause permanent loss of the wetland. Minn. R. 8420.0415 (2013). An exemption determination is a finding that activity affecting a wetland does not require replacement of the wetland because the activity falls within a listed exemption category. Minn. R. 8420.0420 (2013).

2 became available. Schauer also appealed the R&R orders to the BWSR, which stayed the

appeal pending resolution of the applications.

On May 30, with his attorney’s advice, Schauer signed a document waiving McLeod

County’s 60-day deadline for deciding whether to grant his applications under Minn. Stat.

§ 15.99. Roger Berggren, a McLeod County environmentalist, signed the waiver

agreement and returned it to Schauer’s attorney on June 9. Berggren stated that Schauer

must submit his supporting documents by July 15. Schauer did not do so.

On August 11, a McLeod County Technical Evaluation Panel (TEP) met to consider

Schauer’s applications. The TEP recommended denial of both applications. One week

later, the McLeod County Environmental Services Committee2 met to discuss the

applications. Prior to that meeting, Schauer submitted written comments supporting his

applications, which were distributed to the committee members. The committee

considered Schauer’s comments and the TEP recommendation, and ultimately

recommended that McLeod County Environmental Services deny the exemption and no-

loss determinations.

McLeod County Environmental Services issued a formal notice of decision on

August 18, denying both applications. The notice of decision references the TEP and

McLeod County Environmental Services Committee recommendations. The denial was

based on the finding that Schauer’s ditch-cleaning activity exceeded regular maintenance

2 The McLeod County Environmental Services Committee is also referred to as the McLeod County Wetland Advisory Committee.

3 and resulted in a wetland loss and impact that is not permitted under the Minnesota Wetland

Conservation Act.

On August 27, Berggren sent the notice of decision to Schauer. On September 8,

Schauer sent a letter to the McLeod County Board of Commissioners, asserting that the

notice of decision was untimely because he did not receive it by the extended deadline.

Twelve days later, Schauer notified the Board of Commissioners that he was appealing the

notice of decision. On October 10, McLeod County Administrator Patrick Melvin advised

Schauer that the notice of decision was in fact timely, and that he had scheduled a hearing

on Schauer’s appeal. Schauer’s attorney responded on October 28, asking Melvin to

reconsider the timeliness issue. Melvin responded that same day, stating that the county

agreed that the notice of decision was untimely, and the applications for exemption and no-

loss determinations were therefore granted by operation of law.

McLeod County Environmental Services issued additional notices of decision on

November 3, November 19, and December 2. The final notice of decision states that

Schauer’s applications were approved without conditions. On December 3, Jeremy

Maul—the BWSR representative to the TEP—appealed the last three notices of decision

to the BWSR. The BWSR’s Dispute Resolution Committee reviewed the record and heard

oral arguments from the parties, and recommended that the three notices of decision be

reversed.

The BWSR issued an order reversing the last three notices of decision. After

determining that it had jurisdiction to consider the appeal, the BWSR concluded that the

first notice of decision (August 18) was timely and effective, and that McLeod County

4 erred by applying the automatic-approval rule pursuant to Minn. Stat. § 15.99. Schauer

appeals by writ of certiorari.

DECISION

A BWSR order regarding an appeal from an exemption or no-loss determination is

considered an agency decision in a contested case for purposes of judicial review under

Minn. Stat. §§ 14.63-.69 (2014). Minn. Stat. § 103G.2242, subd. 9(d) (2014). We review

such decisions to determine whether the decision is: (1) in violation of constitutional

provisions, (2) in excess of statutory authority or jurisdiction, (3) the product of unlawful

procedure, (4) affected by an error of law, (5) unsupported by substantial evidence, or

(6) arbitrary or capricious. Minn. Stat. § 14.69. A presumption of correctness attaches to

an agency’s decision, and we defer to an agency’s conclusions in its area of expertise. In

re Review of 2005 Annual Automatic Adjustment of Charges, 768 N.W.2d 112, 119 (Minn.

2009). But we are not bound by an agency’s determination of the meaning of a statute,

which is a question of law that we review de novo. St. Otto’s Home v. Minn. Dep’t of

Human Servs., 437 N.W.2d 35, 39-40 (Minn. 1989).

I. The BWSR had jurisdiction to hear the appeal of the notices of decision.

A local government unit’s exemption or no-loss determination may be appealed to

the BWSR. Minn. Stat. § 103G.2242, subd. 7, 9(a) (2014). 3 The BWSR shall grant the

petition and hear the appeal unless the petitioner has not exhausted all local administrative

3 Appeal may be taken by the wetland owner, anyone who is required to receive the notice of decision of a replacement plan, or 100 residents of the county in which a majority of the wetland is located. Minn. Stat. § 103G.2242, subd. 9(a).

5 remedies. Id., subd. 9(b)(2) (2014). If a determination was made by a local-government-

unit staff member, the challenger must first appeal the decision to the local government

unit. Minn. R. 8420.0200, subp. 2(C), .0905, subp. 3(A) (2013). Whether the BWSR has

jurisdiction to review a particular matter is a question of law that we review de novo. In

re Hubbard, 778 N.W.2d 313, 318 (Minn. 2010).

Determining whether the BWSR had jurisdiction to hear Maul’s appeal depends on

whether the challenged notices of decision reflect determinations made by the local

government unit or a local-government-unit staff member. Schauer argues that the BWSR

lacked jurisdiction because Berggren made the decision in his capacity as a local-

government-unit staff member, and therefore the appeal should have been made to the

McLeod County Board of Commissioners. We disagree.

After Schauer applied for exemption and no-loss determinations, two McLeod

County committees evaluated the applications. On August 11, the TEP held a meeting to

discuss the applications and recommended that they be denied. And on August 18, the

McLeod County Environmental Services Committee met and passed a motion

recommending the denial of the applications. The August 18 notice of decision states that

the decision is based on the recommendations from the TEP and Environmental Services

Committee, and is the decision of the local government unit—McLeod County

Environmental Services.

Although the August 18 notice of decision was not appealed, the process that led to

that decision illustrates why the subsequent notices of decision are decisions of the local

government unit rather than a staff member. The multiple evaluation processes and

6 committee recommendations demonstrate that Berggren was not acting in an individual

capacity when he signed the notices of decision. Moreover, the revised notices of decision,

while signed by Berggren, all state that they are decisions of McLeod County

Environmental Services, the local government unit. Because the notices reflect decisions

of the local government unit, we conclude that the BWSR had jurisdiction to hear Maul’s

appeal. Minn. Stat. § 103G.2242, subds. 7, 9(a).

II. The August 18 notice of decision was timely and is supported by substantial evidence.

Schauer asserts that the BWSR erred by finding that he waived the 60-day deadline

for McLeod County to issue a decision, and by finding that the August 18 notice of decision

was timely.

An agency4 must approve or deny within 60 days a written request for government

approval. Minn. Stat. § 15.99, subds. 2(a), 3(a). If an agency fails to deny an application

within 60 days, the application is automatically approved. Id., subd. 2(a). But an agency

may, with notice to the applicant, extend the deadline, and an applicant may also request

an extension. Id., subd. 3(f), (g).

McLeod County received Schauer’s applications on April 28.5 On May 30, Schauer

signed an agreement stating that he was “waiving the right to have a Board Decision in this

4 “Agency” includes a county. Minn. Stat. § 15.99, subd. 1(b). 5 Although the BWSR addressed the merits of Maul’s appeal, it initially found that Schauer’s applications for exemption and no-loss determinations were untimely. We disagree. While McLeod County did not officially waive the deadline for Schauer’s applications, the county did not object to their timeliness. After Schauer submitted the applications, McLeod County acted on the applications as if they were timely. We

7 matter within the 60 days of the application under Minnesota Statute Section 15.99.” By

signing the waiver, Schauer agreed that McLeod County had an additional 60 days to make

a decision regarding his application. This created a new deadline of August 26. Berggren

signed the notice of decision on August 18, within the extended deadline. Schauer

nonetheless argues that the decision was untimely because he did not receive a copy of it

until August 27. Schauer also argues that Berggren’s offer to submit Schauer’s comments

to the TEP (Schauer submitted his supporting comments after the TEP met) if Schauer

agreed to another 60-day waiver demonstrates that a final decision was not made on August

18. We are not persuaded.

First, our supreme court has rejected the argument that an agency must provide an

applicant with a written statement of the reasons for denying an application to comply with

the 60-day rule. Hans Hagen Homes, Inc. v. City of Minnetrista, 728 N.W.2d 536, 540

(Minn. 2007). In Hans Hagen, the city argued that denial of an application occurs when

the local government unit votes to deny the application and adopts a written statement of

the reasons for denial, regardless of whether notice is provided to the applicant. Id. at 539-

40. Our supreme court agreed, holding that Minn. Stat. § 15.99, subd. 2(c), which requires

an agency to provide applicants with a written statement of the reasons for denial, is

directory, rather than mandatory. Id. at 542. Accordingly, the city’s failure to provide its

written statement within 60 days did not implicate the automatic-approval provision. Id.

at 544.

conclude that by processing the applications, McLeod County effectively waived the deadline in Minn. R. 8420.0900, subp. 4(D).

8 Second, Berggren’s offer to forward Schauer’s written comments to the TEP did not

disturb the finality of the August 18 decision. Berggren’s offer effectively presented the

opportunity to appeal the decision to McLeod County. Schauer chose not to explore that

option. And our caselaw is clear that a denial is considered to occur when a government

unit votes to deny the application and adopts a written statement explaining the reasons for

denial. Id. at 540. We conclude that those actions were completed on August 18.

Having concluded that the August 18 notice of decision was timely, we consider

whether it is supported by the record. See City of Moorhead v. Minn. Pub. Utils. Comm’n,

343 N.W.2d 843, 847 (Minn. 1984) (stating that an appellate court will not disturb an

agency’s decision if it is supported by the record). Schauer does not assert that the notice

of decision is legally erroneous or that it lacks evidentiary support. And review of the

record reveals evidence that existing ditches on Schauer’s property were deepened and

widened in a manner that could impact or cause permanent loss to the wetland. This

evidence supports the decision to deny Schauer’s applications for exemption and no-loss

determinations. 6

6 Schauer argues that the BWSR’s findings of fact rely on evidence that is not in the record. We disagree. The challenged findings relate to information contained in the four notices of decision, all of which were included in the revised record and index. Schauer does not dispute that the BWSR was permitted to consider documents in the revised record and index.

9 Because McLeod County made its decision within the extended review period, and

Schauer makes no argument challenging the merits of the August 18 notice of decision, we

affirm.

Affirmed.