EN BANC CALENDAR
SUMMARY OF ISSUES
Summaries prepared by the Supreme Court Commissioner’s Office
Monday, December 5, 2009, 9:00 a.m.
EN BANC NONORAL – Ronald L. Schober, Relator vs. Commissioner of Revenue, Respondent – Case No. A09-717: Relator Ronald Schober owns and operates Timber Creek Renovation, which performs residential repair and remodeling. The Commissioner of Revenue determined that between 2000 and 2005, Schober charged some customers sales tax on materials and labor but did not remit the taxes collected to the Minnesota Department of Revenue. The Department assessed Schober taxes, penalties, and interest for the years in question. Schober appealed to the Minnesota Tax Court, which affirmed the assessment. Schober, appearing pro se, appeals the tax court’s ruling to the supreme court and presents the following issues: (1) whether the installation of building materials purchased by a contractor at retail constitutes a retail sale, within the meaning of Minn. Stat. ch. 297A (2008); (2) whether the imposition of a sales tax on Schober constitutes double taxation in violation of the Fourteenth Amendment of the United States Constitution; (3) whether the Commissioner of Revenue had authority under law to impose a sales tax on Schober; (4) whether Schober was prejudiced, and whether Schober’s credibility was undermined, during the proceedings before the tax court by the introduction of certain evidence; and (5) whether Schober is required to pay sales tax on a truck that was purchased from a Minnesota dealer but then used in another state. (Minnesota Tax Court)
EN BANC NONORAL – Kou Moua, petitioner, Appellant vs. State of Minnesota, Respondent – Case No. A09-1528: The first trial of appellant Kou Moua for first-degree murder was declared a mistrial after Moua’s lawyer left the courtroom to protest one of the court’s rulings and was held in contempt. After a second jury trial, Moua was convicted of first-degree murder; his conviction was affirmed on direct appeal. State v. Moua, 678 N.W.2d 29 (Minn. 2004). In 2009, Moua filed a third petition for post-conviction relief, alleging that he was denied a fair trial because his lawyer left the courtroom during the first trial and was further denied the effective assistance of counsel because the issue was not raised on direct appeal. The petition was denied without an evidentiary hearing, and Moua appealed. The issue before the supreme court is whether the district court erred in denying Moua’s third post-conviction petition without an evidentiary hearing. (Ramsey County)
Tuesday, December 1, 2009, 9:00 a.m.
Supreme Court Courtroom, State Capitol
State of Minnesota, Respondent vs. Zachery Otis Matthews, Appellant – Case No. A09-184: Appellant Zachery Matthews was convicted after a jury trial of first-degree murder while committing domestic abuse. Under Minn. Stat. § 609.185 (2008), a conviction of domestic-abuse murder requires that the perpetrator have engaged in “a past pattern of domestic abuse.” During trial, the prosecution introduced both evidence of prior domestic abuse and evidence to illuminate the history of Matthews’ relationship with the victim under Minn. Stat. § 634.20 (2008). On appeal from his conviction, Matthews questions: (1) whether the district court committed plain error in not identifying for the jury the particular incidents that the jury could consider in determining whether there was a “past pattern of domestic abuse”; (2) whether the district court committed plain error in not instructing the jury that a “past pattern of domestic abuse” requires more than one prior incident; and (3) whether the prosecutor committed misconduct during closing argument. Matthews raises additional issues in a pro se supplemental brief. (Hennepin County)
Mona Savig and Robert Savig, Plaintiffs vs. First National Bank of Omaha and Messerli & Kramer, P.A., Defendants – Case No. A09-1221: In 2004, First National Bank of Omaha obtained a default judgment against Mona and Lowell Bjerke for unpaid credit card bills. The Bjerkes later divorced and Mona married Robert Savig. In 2009, First National Bank garnished the Savigs’ joint checking and savings accounts at Midwest Bank. Robert Savig contends that at least some of the funds garnished belonged to him. The Savigs sued First National Bank and Messerli & Kramer, the law firm that served the garnishment summons, in federal court. The Minnesota Supreme Court has accepted three questions certified to it by the federal district court: (1) may a judgment creditor serve a garnishment summons on a joint account to satisfy the debt of an account holder when not all of the account holders are judgment debtors; (2) if so, is it the judgment creditor or the account holders who bear the burden of establishing net contributions to the account during the garnishment proceeding; and (3) if so, what applicable presumptions regarding ownership, if any, apply in the absence of proof of net contributions. (Questions certified by United States District Court for the District of Minnesota)
Wednesday, December 2, 2009, 9:00 a.m.
Supreme Court Courtroom, State Capitol
Greg Siewert and Harlan Siewert, d/b/a Siewert Holsteins, Respondents vs. Northern States Power Company, d/b/a Xcel Energy, Appellant – Case Nos. A07-1975 and A07-2070: Respondents Greg and Harlan Siewert, farmers in rural Wabasha County, contend that stray voltage from appellant Northern States Power Company’s electric transmission lines has reduced the milk production and damaged the health of their dairy herd. The Siewerts seek both monetary damages and an injunction requiring NSP to reduce or eliminate the alleged stray voltage. The district court denied NSP’s motion to dismiss the Siewerts’ claims. The court of appeals concluded that the Siewerts’ request for injunctive relief is barred but affirmed and remanded for trial on the claims for monetary damages. On NSP’s appeal, the supreme court will consider the three questions the district court certified to the court of appeals as important and doubtful: (1) whether the filed rate doctrine bars the Siewerts’ challenge to services and facilities provided pursuant to a state commission-approved tariff; (2) whether the primary-jurisdiction doctrine requires judicial deference to the responsible administrative agency for the resolution of disputes over the services and facilities required by the applicable tariff; and (3) whether the applicable statute of repose precludes claims brought more than ten years after substantial completion of a real property improvement, regardless of the improvement’s ownership, control, or relationship to a larger distribution system. (Wabasha County)
HMN Financial, Inc. and Affiliates, Relator vs. Commissioner of Revenue, Respondent – Case No. A09-1164: Relator HMN Financial, Inc. is a publicly-held stock savings bank holding company organized under Delaware law. HMN’s wholly-owned subsidiary, Home Federal Savings Bank, operates retail banking facilities in Minnesota and Iowa. Between 2002 and 2005, the tax years at issue, Home Federal Savings Bank owned stock in HF Holding, a Delaware corporation with offices in Grand Cayman. HF Holding, in turn, owned stock in Home Federal REIT, Inc., a real estate investment trust. The Commissioner of Revenue determined that certain loan transfers among Home Federal Savings Bank, HF Holding, and Home Federal REIT lacked economic substance and should be ignored in determining the taxable income of the combined group. Alternatively, the Commissioner determined that HF Holding did not qualify as a foreign operating company, meaning that funds paid by HF Holding to Home Federal Savings Bank would not qualify as a dividend under Minn. Stat. § 290.17 (2008). Under subdivision 4 of section 290.17, dividends paid by a foreign operating company to a corporate shareholder that is a member of the same unitary business are eliminated from the net income of the unitary business. On the companies’ appeal, the Minnesota Tax Court concluded that HF Holding was a foreign operating company. The tax court further concluded that the Commissioner has authority to disregard transactions that have no genuine business purpose and are intended to avoid Minnesota tax. The tax court disallowed the transactions among Home Federal Savings Bank, HF REIT and HF Holdings as having no economic substance or genuine business purpose. On the companies’ appeal to the supreme court, the issue is whether the Commissioner may impose a different tax treatment for an entity than that prescribed by the legislature, if its owner was motivated to form it by a desire to reduce the owner’s taxes but the entity was formed and operated in conformity with law. (Minnesota Tax Court)
Thursday, December 3, 2009, 9:00 a.m.
Supreme Court Courtroom, State Capitol
Halla Nursery, Inc., et al., Appellants vs. City of Chanhassen, Respondent – Case No. A08-233: Donald Halla owns real property in Chanhassen that is leased to Halla Nursery. In 1997, to resolve a dispute with the City of Chanhassen, the parties agreed that the nursery could construct an off-premises directional sign of specified shape and maximum size at the intersection of Highway 101 and Pioneer Trail. The parties also agreed that all other signs are strictly prohibited except as expressly allowed by the settlement agreement or pursuant to a sign permit issued by the city. Although the settlement agreement specified that the new sign not be lighted, the nursery installed a lighted sign, which the city did not take action to remove.
The lighted sign was torn down in 2005 as part of improvements to the intersection and the nursery’s contractor applied for a permit for a replacement, also to be illuminated. The city approved the application and issued the permit in April 2005. However, the city later ordered construction of the replacement sign stopped because the sign included an electronic message board and was larger than the limits specified in the 1997 settlement agreement. The district court allowed the sign to remain, but limited the nursery to using the electronic message board only to direct traffic to the nursery with a message that could be changed no more often than once a month. The court of appeals reversed, requiring the sign to be torn down entirely. On the nursery’s appeal two issues are before the supreme court: (1) whether the sign should remain because it was constructed pursuant to a permit obtained from the city and substantially complies with the 1997 settlement; and (2) whether the nursery has a vested right to use the sign consistent with the permit. (Carver County)
In re Petition for Disciplinary Action against Chad M. Roggeman, a Minnesota Attorney, Registration No. 28788X – Case No. A09-100: A lawyer discipline case that presents the question of what discipline, if any, is warranted under the facts of the matter.
Monday, December 7, 2009, 9:00 a.m.
Courtroom 300, Minnesota Judicial Center
Day Masonry, Appellant vs. Independent School District No. 347, Respondent, Commercial Roofing, Inc., Appellant, GenFlex Roofing Systems, LLP, Appellant, Lovering-Johnson Construction, Appellant – Case No. A08-929: Respondent Independent School District No. 347 contracted with appellants Lovering-Johnson Construction and Commercial Roofing, Inc., for construction of a new high school. Commercial Roofing used a roofing membrane manufactured by appellant GenFlex Roofing Systems. Appellant Day Masonry, a subcontractor on the project, performed masonry work. The high school was substantially complete by the start of the 1994-95 school year. Shortly thereafter, the building developed leaks. A 2004 inspection recommended repairs that were estimated to cost approximately $2 million. In December 2004, the school district sent a copy of the inspection report to appellants Lovering-Johnson, Commercial Roofing, and GenFlex Roofing Systems. On March 14, 2006, the school district demanded arbitration of its claims.
Day Masonry filed an action in district court seeking to stay arbitration, arguing that the school district’s claims were barred as untimely by Minn. Stat. § 541.051 as it read before August 1, 2004. Section 541.051(a) generally bars claims for defects in improvements to real property unless the claim is brought within ten years of substantial completion of construction. Before August 1, 2004, subdivision 4 of section 541.051 provided that it did not apply to an action based on breach of statutory or express written warranty if the action was brought within two years of the discovery of the breach. Effective August 1, 2004, subdivision 4 of section 541.051 requires actions for breach of warranty be brought within two years of the discovery of the breach but, for actions that accrue during the ninth or tenth year after the warranty date, in no event more than 12 years after the effective warranty date. Applying section 541.051 as it read before August 1, 2004, the district court agreed that the school district’s claims for breach of contract and breach of warranty against Lovering-Johnson, Commercial Roofing, and Day Masonry were time-barred. The district court further agreed that the school district’s claims against Gen-Flex under one of its two warranties were also time-barred.
On appeal, the court of appeals agreed that the school district’s claims for breach of contract were time-barred, but reversed the district court’s decision to stay arbitration of the school district’s claims for breach of warranty because, the court of appeals concluded, the school district could not have known before March 13, 2004 (two years before the demand for arbitration), that the warranties would not be honored. Finally, the court of appeals declined to consider appellant contractors’ argument that the district court applied the wrong version of section 541.051, concluding that the district court’s ruling was adverse to the contractors and the contractors had not filed a notice of review of the district court’s ruling.
Several issues are before the supreme court, including: (1) whether the court of appeals erred in concluding that the district court made a determination adverse to the contractors on the applicable version of Minn. Stat. § 541.051, requiring the contractors to have filed a notice of review in order to preserve the court of appeals’ jurisdiction over the issue; (2) whether the district court’s findings of fact provide sufficient support for its conclusion of law that the school district’s non-warranty claims accrued before March 13, 2004 (that is, two years before the demand for arbitration); and (3) whether the court of appeals erred in concluding that a breach of warranty claim may not accrue, as a matter of law, before the warrantee gives notice of the defect. (Kandiyohi County)
State of Minnesota, Respondent vs. Gary H. Tomassoni, Appellant – Case No. A08-1879: Appellant Gary Tomassoni was charged with first-degree murder in the death of his wife; Tomassoni admitted shooting her but denied that it was premeditated. After his arrest, Tomassoni spoke with an Anoka County child protection worker about the offense. Before trial, Tomassoni moved to suppress his statements to the child protection worker and the State agreed that they were not admissible during the State’s case-in-chief because Tomassoni had not been represented by counsel during the conversation. At trial, Tomassoni testified in his own defense and was impeached with his statements to the child protection worker. In closing argument, the prosecution argued that Tomassoni’s statements to the child protection worker could be used to show premeditation. Tomassoni was convicted. On appeal from that conviction, Tomassoni contends that the prosecutor committed plain error that affected his substantial rights, warranting a new trial, by stating in closing argument that the jury could consider Tomassoni’s statements to the child protection worker as evidence of premeditation. Tomassoni raises additional issues in a pro se supplemental brief. (Anoka County)
Tuesday, December 8, 2009, 9:00 a.m.
Courtroom 300, Minnesota Judicial Center
Citizens State Bank, Appellant vs. Raven Trading Partners, LLC, et al., Respondents – Case No. A08-1560: On February 16, 2005, Feyereisen Enterprises, Inc., granted a mortgage to appellant Citizens State Bank, secured by real property. The proceeds of the loan from Citizens were used to satisfy two prior mortgages on the property. The Citizens mortgage was sent to the Hennepin County Recorder for recording on February 21, 2005, but it was returned, unrecorded, because the check submitted for the mortgage registry tax was in the wrong amount. The Citizens mortgage was returned to the county recorder, along with a check for the correct amount, on April 20, 2005. The county recorded a mortgage on the property in favor of respondent Raven Trading Partners, LLC, on April 29, 2005. Raven Trading had notice of the two mortgages that were satisfied by the Citizens mortgage, but did not have notice of the Citizens mortgage itself. The county recorded the Citizens mortgage on May 9, 2005. Mortgagor Feyereisen Enterprises later defaulted. The district court issued an order equitably subordinating the mortgage in favor of Raven Trading to the mortgage in favor of Citizens. The court of appeals reversed. On appeal to the supreme court, the question is whether the Raven Trading mortgage should be equitably subordinated to the Citizens State Bank mortgage. (Hennepin County)
David K. Seehus, Respondent vs. Bor-Son Construction, Inc. and CNA-RSKO, Respondents, Wesley Residence, Inc. and MIGA by GAB Robins North America, Relators, and Twin Cities Spine Center, Blue Cross/Blue Shield of Minnesota & Blue Plus, SMDC Health Systems, Minnesota DOLI/Vocational Rehabilitation Unit, Dr. Christian A. Audette, Chiropractic Health Center, Intervenors – Case No. A09-1388: While employed by Bor-Son Construction in 1989, respondent David Seehus suffered a work-related back injury. After surgery for the injury, Seehus went to work for relator Wesley Residence. While working for Wesley, Seehus suffered a second work-related back injury. After a course of physical therapy, chiropractic care, pain medication, and ultimately surgery, Seehus filed a workers’ compensation claim for that injury in 2007 against Wesley and its workers’ compensation insurer. However, by then Wesley’s workers’ compensation insurer was no longer solvent; the claim was administered by the Minnesota Insurance Guaranty Association (MIGA). MIGA was formed by the legislature in the early 1970s to provide a mechanism for payment of covered claims when an insurer which formerly did business in the state liquidates. See Minn. Stat. § 60C.02, subd. 2 (2008). MIGA, Seehus’s former employer (Bor-Son), and Bor-Son’s insurer (CNA-RSKCO) were joined to the claim.
A workers’ compensation judge in the Office of Administrative Hearings found that Seehus’s 1989 and 2001 injuries were each substantial contributing causes to Seehus’s condition and the judge apportioned liability equally between Seehus’s employers, Bor-Son and Wesley. However, the judge found that because MIGA was an integral party and there was a solvent insurer that was also liable, the Workers’ Compensation Court had no jurisdiction to direct MIGA to pay its proportionate share and the remaining solvent insurer (Bor-Son’s insurer, CNA-RSKCO) was therefore legally responsible for 100% of the amounts payable to Seehus’s medical providers. Bor-Son and its insurer CNA-RSKCO appealed to the Workers’ Compensation Court of Appeals, which reversed the findings of the compensation judge. The appeals court found that the compensation judge lacked jurisdiction to grant joinder of Bor-Son and its insurer, and therefore ordered Wesley and MIGA to pay Seehus’s medical costs.
On the appeal of Wesley and MIGA, there are three issues before the supreme court: (1) whether the Workers’ Compensation Court of Appeals had subject matter jurisdiction to order MIGA to pay medical benefits; (2) whether the Workers’ Compensation Court of Appeals had jurisdiction to order that Bor-Son and CNA-RSKCO be joined in the litigation; and (3) whether the decision of the Workers’ Compensation Court of Appeals violated the requirement of Minn. Stat. § 60C.13 (2008) that all remedies through other insurers be exhausted before seeking payment from MIGA. (Workers’ Compensation Court of Appeals)
Wednesday, December 9, 2009, 9:00 a.m.
Courtroom 300, Minnesota Judicial Center
Jason Finnegan, Appellant vs. State of Minnesota, Respondent – Case No. A08-777: Appellant Jason Finnegan was charged with criminal sexual conduct. On the morning of the second and final day of his jury trial, Finnegan’s mother found him in bed, unresponsive. Finnegan’s mother notified defense counsel, and defense counsel notified the district court, that Finnegan was still in bed and she was unable to rouse him. An officer sent by the court to bring Finnegan to court told the prosecutor that Finnegan could not be brought to court because he was unresponsive and could not move his legs. The officer told the prosecutor that Finnegan likely had overdosed. Finnegan was hospitalized; the trial continued in his absence, the district court ruling that Finnegan had voluntarily waived his right to be present during trial and his right to testify in his own defense. A doctor later determined that Finnegan had attempted suicide. Finnegan was convicted by the jury; the court of appeals affirmed. On appeal to the supreme court, the issue is whether a suicide attempt constitutes a voluntary absence from trial that waives the defendant’s right to be present during trial. (Otter Tail County)
State of Minnesota, Appellant vs. Angel Morales, Respondent – Case No. A07-2401: Respondent Angel Morales was charged with second-degree felony murder committed during a robbery. Before trial, the district court granted immunity to a man who had been convicted of second-degree murder in the same shooting; that man’s conviction was on appeal. Despite the grant of immunity, the man indicated he would not testify for fear of being prosecuted for perjury. The prosecution called the man to testify and then asked the man a series of questions drawn from the man’s testimony at his own trial, which questions the man refused to answer. Morales was convicted of unintentional second-degree murder. On Morales’ appeal, the court of appeals concluded that the district court abused its discretion in allowing the prosecution to call the man as a witness, knowing he would assert his Fifth Amendment privilege, and in allowing the prosecution to question the man at length using the man’s testimony at his own trial, which testimony the defense could not cross-examine. The court of appeals reversed Morales’ conviction and remanded for a new trial. Three questions are before the supreme court on the state’s appeal: (1) whether the witness had a valid Fifth Amendment privilege after he was given statutory use immunity; (2) whether the court of appeals erred in reversing Morales’ conviction based on the prosecutor’s questioning of the recalcitrant witness; and (3) whether references to Morales were effectively redacted from testimony about an after-the-fact conversation by a co-defendant about the murder. (Hennepin County)