EN BANC CALENDAR
Before the Minnesota Supreme Court
February 2016
SUMMARY OF ISSUES
Summaries prepared by the Supreme Court Commissioner’s Office
Monday, February 1, 2016
University of Minnesota Law School, Room 25
Scott Rilley, et al., Respondents vs. MoneyMutual, LLC, Appellant – Case No. A14-1307: Appellant MoneyMutual, LLC, is a Nevada limited liability company. Respondents Scott Rilley, et al., are Minnesota residents who used MoneyMutual’s website to obtain short-term, high-interest payday loans. Respondents asserted a number of claims against MoneyMutual in Dakota County District Court. The district court denied MoneyMutual’s motion to dismiss for lack of personal jurisdiction. The court of appeals affirmed. Citing MoneyMutual’s website, advertising, e-mail communications, and “acceptance of and profit from more than 1,000 loan applications from Minnesotans,” the court of appeals concluded that respondents had “alleged sufficient minimum contacts to establish personal jurisdiction.”
On appeal to the supreme court, the issue presented is whether a constitutional basis exists for exercising specific personal jurisdiction over MoneyMutual. (Dakota County)
Nonoral: Tracy Alan Zornes, Appellant vs. State of Minnesota, Respondent – Case No. A15-1102: Following a jury trial, appellant Tracy Zornes was convicted of two counts of first-degree murder, first-degree arson, and theft of a motor vehicle. The supreme court affirmed Zornes’s convictions on direct appeal. Zornes filed a petition for postconviction relief, arguing he was entitled to a new trial because of prosecutorial misconduct, ineffective assistance of trial counsel, and ineffective assistance of appellate counsel. The district court summarily denied the petition.
On appeal to the supreme court, the issues presented include the following: (1) whether Zornes’s claims are barred by
State v. Knaffla, 309 Minn. 246, 243 N.W.2d 737 (1976); (2) whether Zornes is entitled to a new trial because he received ineffective assistance of trial counsel; and (3) whether Zornes is entitled to a new trial because he received ineffective assistance of appellate counsel. (Clay County)
Tuesday, February 2, 2016
Courtroom 300, Minnesota Judicial Center
Ryan Contracting Company, Respondent vs. O’Neill & Murphy, LLP, et al., Appellants – Case No. A14-1472: Respondent Ryan Contracting entered into construction contracts with Farr Development Corporation for Ryan to perform utility and street improvements on previously unimproved land. The contracts did not contain the pre-lien notice set out in Minn. Stat. § 514.011, subd. 1 (2014), which provides that subject to certain exceptions, a person who does not provide the notice is not entitled to maintain a mechanic’s lien. Ryan eventually terminated the contracts, and Farr brought suit against it. Ryan retained a law firm, Meagher Geer, to record liens in the amount of $356,000. Meagher Geer recorded a blanket lien in the full amount of the work against the parcels Farr still owned, recorded blanket liens in the same amount on each parcel that had been sold, and filed an action to foreclose the liens. The district court granted partial summary judgment to Farr, determining that the lien on the parcels Farr no longer owned were void because the multiple liens were for more than was justly due. The district court based its grant of partial summary judgment, in part, on Ryan’s stated position that it was “impossible to apportion the value of the improvement made to each particular lot.” Ryan later settled its claims with Farr, receiving payment of $280,000 and releasing the liens.
Ryan, represented by respondents, O’Neill & Murphy and attorney Patrick O’Neill, Jr., then sued Meagher Geer for legal malpractice, asserting that Meagher Geer’s actions in connection with the filing of the mechanic’s liens were negligent. O’Neill & Murphy did not file a mandated affidavit of expert review within 180 days of the commencement of the action, and the trial judge dismissed the case with prejudice.
Ryan then sued respondents for legal malpractice based on respondents’ failure to file the expert affidavit. The district court granted summary judgment to respondents, determining that Ryan could not have recovered in its malpractice suit against Meagher Geer for two independent reasons. First, Ryan’s failure to provide the pre-lien notice required by Minn. Stat. § 514.011, subd. 1, meant that it had no valid liens at all. Second, Meagher Geer was not at fault for Ryan’s inability to record liens against the non-Farr owned lots, based on Ryan’s statements that it was unable to apportion the work performed on those lots. The court of appeals reversed the district court’s decision on these issues. The district court also ruled that if it were wrong on the lien filing issues, Ryan would be entitled to a trial for the amount of the damages caused by Meagher Geer’s alleged malpractice, contrary to the general rule that a party may not settle a claim and then sue in malpractice alleging it should have been able to settle for more. The court of appeals affirmed the district court’s decision on that issue.
On appeal to the supreme court, the issues presented include the following: (1) whether the exemption from the pre-lien notice requirement in Minn. Stat. § 514.011, subd. 4c (2014), for “an improvement to real property which is not in agricultural use and which is wholly or partially nonresidential in use” applies to Ryan’s improvements in this case; (2) whether Meagher Geer’s failure to record liens on the non-Farr owned lots was due to Ryan’s inability to apportion the work performed on those lots; and (3) whether Ryan’s settlement of its claims against Farr precludes a malpractice action against Meagher Geer. (Hennepin County)
Darek Jon Nelson, Appellant vs. State of Minnesota, Respondent – Case No. A15-1298: Appellant Darek Nelson pleaded guilty to first-degree premediated murder. In January 2013, the district court accepted his guilty plea and convicted him. In January 2015, Nelson filed a petition for postconviction relief seeking to withdraw his guilty plea. Nelson argued that his plea was not intelligent, accurate, or voluntary. Following an evidentiary hearing, the district court denied the petition.
On appeal to the supreme court, the following issues are presented: (1) whether Nelson’s plea was unintelligent because he negated elements of the offense during his plea colloquy and afterwards his counsel failed to ensure his conduct supported a guilty plea and failed to inform him that he had the right to end the plea hearing; and (2) whether Nelson’s plea was inaccurate because he negated elements of the offense during the plea colloquy and his subsequent admissions related to those elements during the plea colloquy were made in response to leading questions. (Chippewa County)
Wednesday, February 3, 2016
Courtroom 300, Minnesota Judicial Center
McCullough and Sons, Inc., Appellant vs. City of Vadnais Heights, Respondent – Case Nos. A14-1992, A15-0064: Appellant McCullough and Sons, Inc., is a Minnesota corporation that owns real property in respondent City of Vadnais Heights. The City decided to fund a nearby road improvement project by special assessment and provided notice to appellant of an assessment hearing, which complied with a statutory provision requiring the notice to state that “no appeal may be taken as to the amount of any assessment . . . unless a written objection signed by the affected property owner is filed with the municipal clerk prior to the assessment hearing or presented to the presiding officer at the hearing.” Minn. Stat. § 429.061 (2014). A representative of McCullough appeared at the assessment hearing and objected orally to the proposed assessment, but did not object in writing.
McCullough appealed the assessment. The City moved for summary judgment, arguing that the failure to object to the assessment in writing prior to or at the assessment hearing bars the appeal. The district court denied the motion for summary judgment, concluding that a written objection was not required under Minn. Stat. § 429.081 (2014), which provides that “any person aggrieved, who is not precluded by failure to object prior to or at the assessment hearing. . . may appeal to the district court.” The court of appeals reversed and remanded.
On appeal to the supreme court, the following issues are presented: (1) whether Minn. Stat. § 429.081 is the operative provision governing appeals from special assessments; (2) whether the plain language of Minn. Stat. § 429.081 permits appeals by taxpayers who orally object at assessment hearings; and (3) whether Minn. Stat. § 429.081 can be reconciled with Minn. Stat. § 429.061 so as to give effect to all provisions in both sections. (Ramsey County)
State of Minnesota, Respondent vs. Antonio Dion Washington-Davis, Appellant – Case No. A14-0460: Respondent State of Minnesota charged appellant Antonio Washington-Davis with multiple offenses related to the promotion of prostitution. The State alleged that over a multiple-year period, Washington-Davis and his family members convinced several women and minors to work as prostitutes, actively ran a prostitution enterprise involving these women and minors, and kept the money the women and girls received after engaging in acts of prostitution. A jury found Washington-Davis guilty of five counts of the promotion of prostitution of an individual and one count of conspiracy to promote the prostitution of an individual. The court of appeals affirmed Washington-Davis’s convictions, reversed his sentence on the conspiracy count, and remanded for resentencing.
On appeal to the supreme court, the following issues are presented: (1) whether Minn. Stat. § 609.322, subd. 1a(1)-(2) (2014), which criminalizes the solicitation of another to practice prostitution or the promotion of prostitution by another, is facially overbroad under the First Amendment; (2) whether Washington-Davis is entitled to a new trial under a plain-error analysis because of alleged errors in the jury instructions on accomplice liability; and (3) whether there was sufficient evidence to sustain two of Washington-Davis’s convictions for the promotion of prostitution of an individual. (Ramsey County)
Thursday, February 4, 2016
Courtroom 300, Minnesota Judicial Center
Toyota-Lift of Minnesota, Inc., Appellant vs. American Warehouse Systems, LLC, et al., Respondents – Case No. A14-1159: Respondents Mark Juelich and Steven Thoemke are former commissioned employees of appellant Toyota-Lift of Minnesota. They left Toyota-Lift and founded respondent American Warehouse Systems, which purchased a portion of Toyota-Lift’s business. Toyota-Lift eventually sued American Warehouse, Juelich, and Thoemke, asserting that they retained, and failed to forward, customer payments properly due to Toyota-Lift. Juelich and Thoemke counterclaimed for unpaid commissions. Following a bench trial, the district court concluded that Toyota-Lift owed commissions to Juelich and Thoemke totaling over $100,000. The court also determined that American Warehouse had breached the parties’ asset purchase agreement and owed over $600,000 in damages to Toyota-Lift.
The district court considered whether to impose penalties upon Toyota-Lift under Minn. Stat. § 181.14, subd. 2 (2014), which authorizes certain penalties against employers who do not make prompt payment of unpaid wages. The court declined to do so, applying a safe harbor provision in Minn. Stat. § 181.14, subd. 3 (2014), that is applicable when an employee “recovers” no more than the amount tendered by the employer in good faith, plus interest. In determining how much Juelich and Thoemke recovered, the court reduced the amount of their unpaid commissions by the amount American Warehouse owed to Toyota-Lift on the breach of contract claim. The court of appeals reversed and remanded, holding that such offsets are improper in determining how much an employee recovers under the statute.
On appeal to the supreme court, the issue presented is whether, in determining whether an employee recovers a greater sum of wages than the employer tendered in good faith for purposes of imposing a penalty under Minn. Stat. § 181.14, subds. 2-3, a court should consider an offsetting liability from the employee to the employer. (Hennepin County)
Nonoral: Archway Marketing Services, Respondent vs. County of Hennepin, Relator – Case No. A15-1605: This tax appeal involves the property tax value, in tax years 2009 and 2010, of two warehouses in Rogers, Minnesota owned by respondent Archway Marketing Services. Both respondent and relator Hennepin County presented expert reports and testimony regarding the value of the property, both using the market (sales) and income approaches to valuation. The tax court gave no weight to either expert’s market valuation, relying instead only on the income approach to determine that Hennepin County’s assessment overvalued the properties for each tax year.
On appeal to the supreme court, the following issues are presented: (1) whether the tax court erred by rejecting relator’s sales comparison approach; (2) whether the tax court erred by concluding the fair market value for one of the warehouses in tax year 2010 was below the range of values proposed by either parties’ expert appraiser without providing adequate justification for doing so; and (3) whether the tax court erred by largely rejecting relator’s income approach. (Minnesota Tax Court)