Housing & Redevelopment Authority of the City of St. Paul v. Lambrecht

Summary

The Minnesota Supreme Court reviewed whether a commercial lessee could recover going-concern damages arising from the condemnation of its leased restaurant and brewery premises. The court held that the lease's condemnation clause terminated the lessee's interest in the property and therefore barred recovery of going-concern damages. The court also held that the lessee failed as a matter of law to establish a compensable loss under Minnesota's two-prong going-concern test and affirmed summary judgment for the condemning authority.

Holdings

1. A lease provision terminating the lease upon condemnation and assigning all condemnation proceeds to the lessor terminated Shannon Kelly's interest in the property at the time of condemnation and barred its claim for loss-of-going-concern damages.
2. Shannon Kelly's failed as a matter of law to establish that its business could not be relocated as a practical matter or that relocation would cause irreparable harm; therefore, summary judgment for HRA was proper.
3. The court, not the jury, must apply the Schutt two-prong test as a matter of law to determine whether a compensable interest exists before submitting the amount of damages to the jury.

Questions Presented

1. Whether the condemnation clause in Shannon Kelly's lease terminated the lessee's interest in the condemned property and barred a claim for loss-of-going-concern damages.
2. Whether the district court properly granted summary judgment because Shannon Kelly's failed to establish a compensable loss-of-going-concern interest under the two-prong Schutt test.
3. Whether the court or the jury must apply the Schutt factors to determine whether a compensable interest was taken.

Disposition

reversed_and_remanded