This appeal arises out of a lawsuit brought by Nicollet Restoration, Inc. and its president and sole shareholder, John Kerwin (collectively "NRI"), against the City of Saint Paul ("Saint Paul" or "the City") in connection with NRI's efforts to purchase and redevelop Northern States Power Company's (NSP) Island Station power plant (Island Station). Saint Paul Mayor George Latimer and a number of other Saint Paul officials, including James Bellus, the Director of the Department of Planning and Economic Development (PED), were named as individual defendants.
Saint Paul appealed
On appeal to this court, Saint Paul again contends that NRI's detrimental reliance claim fails as a matter of law because the claim is barred by governmental immunity and because any reliance by NRI was unreasonable. We reverse the court of appeals and hold that Saint Paul was entitled to summary judgment dismissing NRI's purported
In April 1983, NSP offered to sell Island Station to the City of Saint Paul for redevelopment. The City was not interested in purchasing Island Station, but agreed to help NSP select a developer for it. Saint Paul government officials, including Mayor Latimer and PED Director Bellus, entered into negotiations with NRI's Kerwin as a potential developer. The initial negotiations centered on Saint Paul providing $3.6 million or 30% of the total redevelopment costs in public funds for the project.
During its consideration of the project, the Saint Paul City Council passed a resolution that: (1) gave preliminary approval for the issuance of revenue bonds to assist NRI in financing the project, and (2) authorized the Saint Paul Housing and Redevelopment Authority (HRA)
Notwithstanding the City Council's resolution and the Memorandum of Understanding, NRI now seeks to hold Saint Paul liable for damages resulting, not from the City Council's failure to approve a financing package for the project, but from the failure of Latimer and Bellus to submit and recommend certain proposals to the City Council. NRI alleges that, during its negotiations with Bellus, he promised that if NRI agreed to purchase Island Station, he would submit and recommend to the City Council a proposal calling for $3.6 million or 30% of the total redevelopment costs in public funds to assist NRI in the project. NRI also alleges that when it became clear that NRI and Saint Paul would not be able to reach agreement on the amount of public funding for the project, Latimer and Bellus promised that if NRI nevertheless purchased Island Station, they would submit and recommend to the City Council a proposal that Saint Paul either purchase Island Station from NRI or pay for the West Seventh Street Federation to purchase Island Station. Finally, NRI contends that in reliance on these promises, it contracted to purchase, and then did purchase, Island Station from NSP.
On appeal from the denial of a motion for summary judgment, we review the record to determine: (1) whether there are any genuine issues of material fact for trial; and (2) whether the trial court erred in its application of the law. See State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990); Rico v. State, 472 N.W.2d 100 (Minn.1991) (reviewing denial of summary judgment for error in application of governmental immunity). In doing so, we view the evidence in the light most favorable to the nonmoving party. State by Beaulieu v. City of Mounds View, 518 N.W.2d 567, 571 (Minn.1994).
A moving party is entitled to summary judgment when there are no facts in the record giving rise to a genuine issue for trial as to the existence of an essential element of the nonmoving party's case. See
We first address Saint Paul's argument that NRI's reliance on Latimer's and Bellus' alleged promises was unreasonable as a matter of law. We do so because establishing the reasonableness of the reliance is essential to any cause of action in which detrimental reliance is an element. Whether NRI's purported cause of action sounds in contract or in tort, it can succeed only if NRI's reliance on the alleged promise or misrepresentation was reasonable. See AFSCME Councils 6, 14, 65 and 96, AFL-CIO v. Sundquist, 338 N.W.2d 560, 568-69 (Minn.1983) (promissory estoppel); Davis v. Re-Trac Mfg., Corp., 276 Minn. 116, 117, 149 N.W.2d 37, 38-39 (1967) (fraud). If the record reflects a complete failure of proof on this issue, Saint Paul is entitled to summary judgment as a matter of law because that failure "renders all other facts immaterial." Celotex Corp., 477 U.S. at 323, 106 S.Ct. at 2552. Viewing the evidence before us in the light most favorable to NRI, we conclude that the record reflects a complete failure of proof on the part of NRI as to the reasonableness of its reliance on Latimer's and Bellus' alleged promises.
Ordinarily, the reasonableness of reliance is a fact question for the jury. Berg v. Xerxes-Southdale Office Building Co., 290 N.W.2d 612, 616 (Minn.1980). Here, however, the record is devoid of any facts which would support a conclusion that NRI's reliance was reasonable. NRI's reliance on the alleged promises would be reasonable if, and only if, Latimer's and/or Bellus' recommendations would have ensured adoption of the proposals by the City Council as recommended. However, the record contains no evidence that the City Council would have adopted NRI's proposals in any form if they had been submitted and recommended by Latimer and/or Bellus. Neither Latimer nor Bellus had any authority to bind the City, and the record clearly shows that even if they had followed through on the alleged promises, there was no guarantee that the City Council would have adopted the proposals. Indeed, the Memorandum of Understanding between NRI and the HRA, and the City Council's resolution authorizing revenue bonds for the project, establish that the City Council was not obligated to approve the project. Thus, the record before us reflects a complete failure of proof on the part of NRI as to the reasonableness of its reliance.
NRI was obligated to present specific admissible facts showing that there was a genuine issue for trial as to the reasonableness of its reliance. See Celotex Corp., 477 U.S. at 324, 106 S.Ct. at 2553; Bob Useldinger & Sons, Inc., 505 N.W.2d at 328; Moundsview Indep. Sch. Dist. No. 621, 253 N.W.2d at 838. NRI failed to present such facts. Absent any facts in the record giving rise to a genuine issue for trial on this essential element of NRI's purported cause of action for detrimental