RESOLVED, that the proper city officials are authorized to pay to James McCauley and his attorney, Peter Nickitas, $13,500 in full and final settlement of the claim which arose out of the condemnation for demolition of property owned by James McCauley and located at 117 Park Avenue, Duluth, Minnesota, on February 22, 2000, and October 25, 2002; payment to be made from the self insurance fund.

STATEMENT OF PURPOSE:  On February 22, 2000, and October 25, 2002, the city of Duluth issued orders condemning for demolition the structure located at 117 Park Avenue, Duluth, Minnesota, and owned by James McCauley. The first order was determined to be invalid and was administratively lifted in May of 2002. In October of 2002, the structure was damaged by fire and a demolition order was issued on October 25, 2002. McCauley appealed that order, and the city council ultimately voided the order by Resolution 03-0176. Subsequent to the council action, McCauley petitioned the court for a writ of mandamus in which he sought an order directing the city to initiate eminent domain proceedings. McCauley claimed that the demolition orders served as a temporary taking of the property. The court subsequently issued its order holding that the demolitions constituted a temporary taking and ordering additional proceedings precatory to an eminent domain proceeding. This order is not yet appealable. Prior to scheduling of the additional proceedings, the parties engaged in settlement negotiations which resulted in the tentative settlement agreement which is now before the council for approval.

If the plaintiff were to prevail on appeal, the city’s liability would be premised upon the constitutional requirement that the state compensate a property owner when property rights are taken.

The civil division of the city attorney’s office analyzed the city’s loss exposure and costs of continuing litigation. The city attorney’s office recommends this settlement.