TC2 - Case Notes

August 30 through September 5: No Cases

2006-09-05T18:40:00.000-05:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week. We will continue to monitor the released opinions and summarize those that deal with landlord-tenant matters.

August 16 through August 22: No Cases

2006-08-23T23:20:00.000-05:00

July 5 through July 11: No Cases

2006-07-11T22:32:00.000-05:00

June 28 through July 4: No Cases

2006-07-04T22:32:00.000-05:00

June 21 through June 27: No Cases

2006-06-27T22:31:00.000-05:00

June 14 through 20: No Cases

2006-06-26T20:38:00.000-05:00

June 7 through June 13: No Cases

2006-06-17T20:43:00.000-05:00

May 31 through June 6: No Cases

2006-06-11T18:45:00.000-05:00

May 24 through May 30: No Cases

2006-05-30T21:22:00.000-05:00

May 10 through May 16: No Cases

2006-05-16T21:20:00.000-05:00

May 3 through May 9: No Cases

2006-05-09T21:20:00.000-05:00

April 26 through May 2: Condemnation Case

2006-05-02T21:04:00.000-05:00

Ronald Rasmussen et al. v. Housing and Redevelopment Authority for the City of St. Anthony, Minnesota

AND

Housing and Redevelopment Authority for the City of St. Anthony, Minnesota v. Ronald Rasmussen et al.

A05-1418
A05-1419

This case is a consolidated appeal regarding a landlord who initiated condemnation proceedings against its commercial tenant. Basically, the landlord in this case also had the power of eminent domain. Using that eminent domain power, it brought condemnation proceedings against its commercial tenant, thus allowing it to take over the land, despite the fact that a lease was still in effect.

The landlord in this case was the Housing and Redevelopment Authority for St. Anthony Park (“the housing authority”). As a city authority, the housing authority has eminent domain power. The commercial tenants leased a Tires Plus store at the same location in St. Anthony since the 1980s. In 1996, the tenants entered into a 15-year lease with their former landlord. The housing authority purchased the land from the former owner and landlord in 1997, thus becoming the new landlord.

Six years later, the site of the Apache Plaza shopping center was the subject of a redevelopment project. Incident to that project, the housing authority agreed to acquire certain parcels of land, including the site of the tenants’ tire business, to use eminent domain if needed to accomplish this, and to transfer the parcels to a development company. Upon learning of the housing authority’s commitment to acquire their leasehold and to condemn it if necessary, the tenants brought a claim for breach of contract against the housing authority in May 2004. The tenants alleged that, by telling them that they needed to vacate their premises and threatening to condemn the premises, the housing authority breached the quiet enjoyment provision of the lease.

The court considered two main issues on this appeal: First, did the housing authority breach the quiet enjoyment provision of the lease in acquiring the tenants’ interest as lessees by condemnation? Second, do the lease provisions limiting the tenants’ right to condemnation damages apply to this condemnation by the housing authority?

For the first issue, the court asked whether the housing authority breached the quiet enjoyment provision of its lease by bringing the condemnation petition. The court first considered how to view the prerogatives of a condemning authority that is also a party to a lease. The court relied upon language in Lundell v. Coop. Power Ass’n, 707 N.W. 2d 376, 381-83 (Minn. 2006), which involved a utility company’s authority to condemn property when negotiations with its sublessors broke down. In Lundell, the Supreme Court said that “a condemning authority that has an interest in a property under a lease need only show that the taking was necessary, not that the taking of an interest greater than its current interest under the lease was necessary.” Quoting Lundell at 382. The court looked to Lundell as instructive on the issue of a condemning authority’s powers when the authority is also a party to the lease. The court then looked at cases in other jurisdictions that stood for the general notion that a city cannot delegate its powers of eminent domain. The court concluded that the housing authority retained and did not waive the right to its power of eminent domain and that the use of that power did not breach the quiet enjoyment provision of the lease with the tenants.

The second issue involved whether the terms of the lease limited the tenants’ recovery following condemnation. The Minnesota Supreme Court has said in a previous case involving commercial tenants that a lease may contain a provision limiting the rights of a tenant upon condemnation of the property. Housing and Redevelopment Auth. of City of St. Paul v. Lambrecht, 663 N.W. 2d 541, 546 (Minn. 2003). The lease in this case contained two of these provisions, one terminating the lease upon a “total taking” or a “partial taking” and the other assigning the award for any taking to the landlord. The court decided that when the housing authority acquired the property containing tenants’ store, it acquired full ownership in fee simple. Since they fully owned the property, their taking was a total taking. Since the lease terminated upon the taking, the tenants’ no longer had any interest in the condemned property. The lease prohibits tenants from recovering a takings award following a condemnation. The court's precedent was a commercial lease, and the court did not indicate whether they intended their holding to apply to residential tenants.

In sum, the court of appeals upheld the district court’s decisions. It decided that the district court did not err in determining that the quiet enjoyment provision of the lease does not preclude the housing authority from acquiring the tenants’ interest by condemnation even though the housing authority was also the landlord. The district court also did not err in determining that the lease provisions limiting damages in condemnation were applicable to the housing authority’s acquisition of the tenants’ interest in this proceeding.

April 19 through April 25: No Cases

2006-04-25T21:18:00.000-05:00

April 12 through April 18: No Cases

2006-04-22T11:58:00.000-05:00

April 5 through April 11: No Cases

2006-04-13T14:05:00.000-05:00

March 29 through April 4: No Cases

2006-04-04T23:21:00.000-05:00

March 8 through March 14: 1 Case

2006-03-14T09:00:00.000-06:00

The Minnesota Court of Appeals released an unpublished opinion this week dealing with attorney fees awarded to a tenant advocacy group and the rights of that group to canvass and leaflet a manufactured home park. The decision involves the statutory rights of residents of a manufactured home park, which is Minnesota Chapter 327C.

The case is All Parks Alliance for Change v. Uniprop Manufactured Housing Communities Income Fund, dba Ardmor Village. It involves Ardmor Village, a manufactured home park in Lakeville, Minnesota, owned by Uniprop. All Parks Alliance for Change had challenged the reasonableness of limitations on its statutory right to leaflet and canvass tenants in Ardmor Village, contending that the hours that Uniprop had attempted to limit leafletting were not proper and that Uniprop should not be allowed to enforce a "no-contact" list on behalf of tenants. The district court essentially found in favor of APAC, ordering Uniprop not to interfere with APAC's right to canvass and leaflet and allowing such activities to take place during daylight hours. The district court had also allowed Uniprop to enforce, with some limitations, a tenant no-contact list.

On appeal, Uniprop objected to the award of more than $31,000.00 in attorney fees to APAC, while APAC contended that it was entitled to more than $45,000.00 in fees. APAC also challenged the district court's decision to limit leafletting to daylight hours and upholding Uniprop's effort to enforce a no-contact list. With respect to attorney fees, the Court of Appeals agreed with the district court and stated the court did not err in its decision, which had reduced the overall award by one-third based on APAC obtaining most, but not all of the relief it requested. The Court found that the district court had properly determined the attorney fee award.

With respect to the right to canvas, the Court noted Minnesota's law regarding such rights for manufactured home park residents, which states:

No park owner shall prohibit or adopt any rule prohibiting residents or other persons from peacefully organizing, assembling, canvassing, leafletting or otherwise exercising within the park their right of free expression for noncommercial purposes. A park owner may adopt and enforce rules that set reasonable limits as to time, place and manner.

APAC contended that the statute incorporated First Amendment principles governing reasonable speech restrictions and that Uniprop was bound by those principles. The Court disagreed, stating that the First Amendment generally applies to government actors, not private parties. Rather, the Court held that the issue was governed solely by the statute, which allowed the park owner to set "reasonable" limits on the rights to canvas and leaflet. The Court agreed with the district court that the limitations were reasonable, though the lower court had allowed an additional hour on Saturdays from May through August.

March 1 through March 7: No Cases

2006-03-07T23:32:00.000-06:00

February 22 through February 28: No Cases

2006-03-02T19:22:00.000-06:00

February 15 through 21: No Cases

2006-02-21T14:37:00.000-06:00

February 8 through February 14: No Cases

2006-02-14T14:38:00.000-06:00

February 1 through February 7: No Cases

2006-02-07T17:35:00.000-06:00

January 25 through January 31: No Cases

2006-01-31T20:40:00.000-06:00

January 18 through January 24: No Cases

2006-01-26T21:40:00.000-06:00

January 11 through January 17: No Cases

2006-01-26T21:39:00.000-06:00

January 4 through January 10: No Cases

2006-01-26T21:33:00.000-06:00

December 28 through January 3: Extension Provision in Farm Lease

2006-01-26T21:24:00.000-06:00

There was one unpublished opinion issued by the MN Court of Appeals this week that dealt with an extension provision in a farm lease. View the case here. Our summary follows.

STATE OF MINNESOTA
IN COURT OF APPEALS
A05-614

Brian and Kevin Kuehl Farms, Appellant,

vs.

Gerald Barth, Respondent.

Filed January 3, 2006
Reversed
Lansing, Judge

Clay County District Court
File No. C9-04-2114

This case involved a dispute over a five-year extension provision in a farm lease. In deciding the case in favor of the tenant, the court of appeals looked to the lease itself and determined that the renewal provision of the lease unambiguously permitted a five-year renewal unless the lessor provides notice of dissatisfaction by the specific date.

Landlord Barth first leased farmland to Kuehl in October 1994. They typed specific terms into a form lease, including several conditions. The last condition stated: “Lease may be extended for another 5 year period if the lessor is satisfied with the conditions of this lease, if not lessor should notify lessee on or before July 15, 1999.” In October 1999, before the end of the term, they negotiated a new lease that decreased the amount of rent, but was otherwise identical to the prior lease. The date for notice of dissatisfaction was extended to July 15, 2004.

In August 2004, Barth contacted Kuehl twice to discuss negotiating a new lease. Barth told Kuehl that other people were interested in renting the land. Barth asked Kuehl to submit a bid. Shortly thereafter, Kuehl told Barth that, because he had not notified him of dissatisfaction before July 15, 2004, they were entitled to extend the 1999 lease until 2009. In response, Barth send Kuehl a letter stating that he would begin accepting bids to rent the property to other people.

Kuehl sued, arguing that Barth’s failure to give notice of dissatisfaction by July 15, 2004 extended the lease to 2009, and that the plain meaning of the lease-extension provision gives Kuehl Farms the right to extend the lease for an additional five years unless Barth provides notice of dissatisfaction by July 15, 2004.

The lower court ruled in favor of Barth. They said that the words “may” and “should” made the language permissive or discretionary, and therefore notice of dissatisfaction did not result in a five-year extension.

The Court of Appeals reversed this decision. While they agreed with the lower court that the language of the lease was unambiguous, they said the language “may” and “should” was not permissive or discretionary for the following reasons:

(1) Aggregating “may” and “should” to make a permissive or discretionary construction takes the words out of context rather than considering the provision as a whole.

(2) To accept Barth’s interpretation that the notice requirement is only discretionary or permissive would essentially render the provision meaningless.

(3) Although Minnesota courts have not expressly defined “should” as a mandatory or discretionary term, Minnesota cases have implicitly held that the phrase “should notify” requires notice and is not discretionary.

In addition, the court ruled against Barth’s arguments to include evidence of intent (extrinsic evidence is not relevant because contract was unambiguous); waiver of notice requirement due to the September meetings and negotiations (Barth did not show that Kuehl’s conduct equates to a waiver); and substantial compliance with notice provision (again, there was no evidence that Kuehl waived their right to notice).

December 21 through December 27: No Cases

2006-01-26T21:23:00.000-06:00

December 7 through December 13: No Cases

2005-12-22T12:44:00.000-06:00

December 14 through December 20: No Cases

2005-12-20T13:34:00.000-06:00

November 30 through December 6: No Cases

2005-12-06T20:30:00.000-06:00

November 23 through November 29: No Cases

2005-11-29T17:05:00.000-06:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

We will continue to monitor the released opinions and summarize those that deal with landlord-tenant matters.

November 16 through November 22: No Cases

2005-11-22T16:13:00.000-06:00

November 9 through November 15: No Cases

2005-11-16T06:00:00.000-06:00

November 2 through November 8: No Cases

2005-11-08T15:20:00.000-06:00

October 26 through November 1: No Cases

2005-11-01T18:58:00.000-06:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court orthe Minnesota Court of Appeals in the past week.

We will continue to monitor the released opinions and summarize those that deal with landlord-tenant matters.

October 19 through October 25: Eviction Case

2005-10-25T15:08:00.000-05:00

There was one case involving an eviction that was decided by the Minnesota Court of Appeals in the past week. Case Credit Corporation v. Hydra-Mac, Inc., et al.

Though the case involved an eviction, it was in all respects a case about determining ownership of a piece of property. While the court briefly mentioned the right of a jury trial in eviction proceedings under Minn. Stat. Sec. 504B.335, it did not otherwise analyze the claims under the landlord-tenant statute or general landlord-tenant law. Rather, the primary issue was whether the trial court appropriately granted summary judgment to the property owner, given there was no formal motion for summary judgment by either party.

October 12 through October 18: No Cases

2005-10-18T12:00:00.002-05:00

October 5 through October 11: No Cases

2005-10-11T16:09:00.000-05:00

September 28 through October 4: Security Deposit Case

2005-10-04T14:30:00.000-05:00

There was one unpublished Minnesota Court of Appeals decision released on October 4, 2005, related to a security deposit issue. A summary of the case follows.

Reed v. Rooms Plus, LLC
Court File No. A05-141
Filed October 4, 2005

This case involves the efforts of a residential tenant to obtain the return of his security deposit. The tenant rented a property in Southeast Minneapolis from December 1999 until June 2001, and paid a $100 security deposit to the landlord. The landlord at the time--W.S. Property Management--did not return the security deposit when the tenant moved out, and he brought a case in conciliation court. The landlord apparently did not show up for the hearing in conciliation court, so the tenant received a default judgment of $418.24. He was unable to collect on the judgment.

After his tenancy had already ended, the tenant learned that the ownership of her former apartment building had changed and it was now managed by The Miles Group and owned by Rooms Plus, LLC. The tenant then brought a second conciliation court case to obtain his security deposit, this time naming The Miles Group, Rooms Plus and W.S. Property Management as the defendants. The tenant claimed that W.S. Property Management had transferred management responsibilities to The Miles Group and that, because Rooms Plus now owned the property, it was liable for the prior security deposit. The conciliation court dismissed the tenant's second action and the tenant appealed to Hennepin County District Court. The district court dismissed the tenant's action as well, and the tenant appealed to the Court of Appeals. The tenant represented himself, while Douglass E. Turner represented each of the landlord parties.

The Court of Appeals analyzed the case by reviewing the claims against each defendant--against The Miles Group, W.S. Property Management, and against Rooms Plus. Because the tenant merely alleged that Rooms Plus was the new owner of the property--and did not allege any connection to the security deposit in any way--the Court of Appeals agreed with the district court that such a claim should be dismissed, stating that the plaintiff "does not allege that . . . Rooms Plus has any liability, statutory or otherwise, for the return of the security deposit."

With respect to The Miles Group, the Court of Appeals disagreed with the dismissal of the claim against it. The Court stated that, because the tenant alleged that the Miles Group had failed to return the security deposit pursant Minnesota's security deposit statute, Minn. Stat. § 504B.178, it was a sufficient claim, at least to survive a motion to dismiss.

The Miles Group and W.S. Property Management also argued that res judicata, the general notion that a person cannot bring the same claims twice, barred the tenant's second action. Because W.S. Property Management was the same defendant in the first case and the second case also involved an identical claim against it, res judicata barred the second action against W. S. Property Management. The Court noted, however, that The Miles Group was not the same party as in the first claim, and that the second claim involved the allegation that a 'successor' landlord is responsible for security deposits paid to a former landlord. The Court noted:

In Minnesota landlord-tenant law, a landlord receives a security deposit in a fiduciary capacity and it 'shall be held by the landlord for the tenant . . . .' Minn. Stat. § 504B.178, subd. 2 (2004). At the end of the tenancy, the landlord is required either to return the entire deposit with interest or to account for withholding part or all of it. Id., subds. 3-5 (2004). If a new landlord succeeds the former, the successor landlord assumes the same obligation of the former respecting security deposits, subject to certain statutory limitations. Id., subd. 6 (2004).

Because the tenant alleged that The Miles Group succeeded the former landlord as the new landlord, the tenant's claim was a sufficient, at least to survive a motion to dismiss. While the Court was careful to say it had no opinion on the merits of the tenant's claim against The Miles Group, the Court disagreed that the claim should have been dismissed. Thus, the Court reversed the trial court on this issue and sent the matter back to district court.

September 21 through September 27: No Cases

2005-09-27T19:10:00.000-05:00

September 13 through September 20: No Cases

2005-09-20T18:57:00.000-05:00

September 7 through September 13: Commercial Lease Dispute Case

2005-09-13T19:21:00.000-05:00

STATE OF MINNESOTA
IN COURT OF APPEALS
A04-2352

Eagle Shores Hospitality, Inc.,
d/b/a Signature Café,
Respondent,

vs.

Peter Karkos,
Appellant.

Filed September 13, 2005
Affirmed in part, reversed in part, and remanded
Toussaint, Chief Judge

This case involved a commercial lease dispute between Peter Karkos and Eagle Shores Hospitality. While the facts of the case resemble in some ways an eviction action, the case arises solely out of a lease dispute between the parties and the efforts of the parties to enforce and/or terminate their lease. While it is not clear from the opinion which party was the landlord and which was the tenant, it appears that Eagle Shores was doing business as a restaurant and is presumably the tenant in the case.

In the case, the district court ruled in favor of Eagle Shores, granting it injunctive relief to prevent Karkos from further violations of the lease. The Court of Appeals affirmed the decision of the district court.

Karkos admitted to violating specific provisions of the lease by storing items in the basement of the property despite clear language in the lease that afforded Eagle Shores “exclusive use” of the basement. Karkos also admitted to entering the property to remove the items without the permission of Eagle Shores. The trial court found this violated the express terms of the lease, that “[l]essee shall permit [l]essor or [l]essor’s agents to enter upon the premises at reasonable times and upon reasonable notice, for the purpose of inspecting the same. . . .”

Karkos argued that the materiality of a breach presents a jury question precluding summary judgment. The Court of Appeals rejected this argument because Karkos admitted that it had violated the express terms of the lease and because Eagle Shores was not seeking to terminate the lease. Thus, the trial court reasoned, there was no issue as to the materiality of the breach, and the Court of Appeals affirmed this decision.

Karkos also counterclaimed against Eagle Shores and sought to terminate the parties’ lease, claiming that Eagle Shores breached the lease by (1) allowing a non-electrician to work on the electrical wiring of the property; (2) installing outdoor lighting to the patio area of the property without permission; and (3) violating a city of Minneapolis ordinance by allowing the consumption of alcohol on the premises prior to having obtained a liquor license. The Court of Appeals rejected Karkos’s arguments, stating that:

Minnesota courts have held that “forfeitures are disfavored.” In Cloverdale [Foods of Minn., Inc. v. Pioneer Snacks], this court stated the general rule that termination or rescission of a lease is only justified by a material breach or a substantial failure in performance. If a material breach has occurred, rescission is appropriate “[w]here the injury is . . . irreparable, or where the damages would be inadequate or difficult or impossible to determine.” A material breach “goes to the root or essence of the contract.” Minnesota appellate courts have concluded that a breach is material when “one of the primary purposes” of the contract was violated.

[citations omitted]. The Court of Appeals determined that Karkos did not present evidentiary support for the first two breach of lease claims and that Eagle Shores corrected, or ‘cured,’ the liquor license violation by ultimately obtaining a liquor license for the restaurant.

Although there were additional issues in the case concerning an award of attorney fees and costs, those issues are not included in this summary.

August 24 through August 30: No Cases

2005-08-30T18:21:00.000-05:00

August 17 through August 23: No Cases

2005-08-24T17:14:00.000-05:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court orthe Minnesota Court of Appeals in the past week.

We will continue to monitor the released opinions and summarize those that deal with landlord-tenant matters.

August 10 through August 16: No Cases

2005-08-17T02:30:00.000-05:00

August 4 through August 10: No Cases

2005-08-10T22:29:00.000-05:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court orthe Minnesota Court of Appeals in the past week. We will continue to monitor the released opinions and summarize those that deal with landlord-tenant matters.

July 27 through August 2: Commercial Lease Dispute Case

2005-08-02T21:00:00.000-05:00

STATE OF MINNESOTA
IN COURT OF APPEALS
A04-2034

RPC Properties, Inc.,
Appellant,

vs.

Mark Olson, D. D. S.,
Respondent.

Filed August 2, 2005
Reversed and remanded
Worke, Judge

This case involves a dispute between a dentist and a landlord regarding removal of cabinetry and fixtures from leased commercial property, as well as a dispute about proper notice to terminate a tenancy after expiration of the lease.

The space in question was originally leased to a dentist in 1979, though the parties dispute whether the dentist or the original landlord installed cabinetry and fixtures in the leased space. Ultimately, the dentist sold his practice to another dentist in 1984, and the new dentist assumed all obligations under the existing lease. Although there were a number of lease extensions and renewals over the years, the final lease began on March 1, 2002. The final lease terms indicated that the lease terminated in six months or upon 90 days’ written notice. The final lease, as well as each prior lease, contained the same provisions about surrendering the leased space and removing any additions or fixtures.

In January 2003, the tenant notified the landlord that he intended to vacate the property on March 1, 2003. In February 2003, the landlord sent a letter to the tenant reminding him that all cabinets and plumbing fixtures must be removed prior to his vacating the unit. When the tenant vacated the property at the end of February, however, he did not remove the items, nor did he repair damage caused by removal of other items.

The landlord brought a claim in conciliation court for damages, and the claim ultimately made its way to district court, which found in favor of the tenant. The landlord appealed, arguing that the tenant was responsible for removing the cabinetry and fixtures and for the damages the tenant caused in vacating the space.

The Court of Appeals agreed with the landlord, rejecting the arguments of the tenant and specifically rejecting the tenant’s argument that the landlord had installed the fixtures.

The tenant, however, argued that, even if the cabinets and plumbing fixtures were installed by the original dentist in 1970, they became the property of the landlord when the original dentist did not remove the items at the expiration of the original lease. The court of appeals found that this argument was “absurd.” They found that the fixtures remained the property of the original dentist until he sold the practice, at which time the lease was assigned to the new tenant and became the new tenant’s property.

The tenant further argued that the fixtures became the property of the landlord at the expiration of a 1984 lease, the lease the original tenant had assigned to him, because the original tenant had not removed the disputed items. The court said that, while “ordinarily, a tenant must remove trade fixtures before the lease expires…the supreme court has created an exception in cases where a tenant conditionally sells trade fixtures to a subsequent tenant who plans to carry on the same business.” Central Chrysler Plymouth, Inc. v. Holt, 266 N.W.2d 177, 180 (Minn. 1978). In such cases, when the landlord knows of the arrangement, the fixtures are not deemed abandoned and do not become the property of the landlord.

Finally, the tenant argued that the final lease between the parties required the landlord to restore the office suite to the condition it was in when he moved in. The tenant argued that, because the cabinetry and plumbing fixtures were already there when he moved into the space, he was not required to remove it. The court disagreed and found that the tenant had assumed all of the terms and conditions of the prior lease when it was assigned to him by the original dentist. Citing long-standing Minnesota law, the court found that the assignment of a contract does not impose duties or liabilities on the assignee unless the assignee specifically assumes those duties and liabilities. Because the tenant had specifically assumed all provisions of the original lease, including provisions requiring him to surrender the premises in good order and to remove any additions installed by him, the court found that the tenant had agreed to remove any trade fixtures owned by the original tenant.

The court found that it was “well-established law in Minnesota that a landlord can recover the expenditures necessary to restore the premises to the original conditions on the lessee’s failure to do so in accordance with the lease.” Storr v. Keljik, 178 Minn. 391, 392-93 (1929). Every lease between the parties in this case contained language making the tenant responsible for repairing damages caused by removing fixtures and making the tenant responsible for repairs incurred by the landlord in restoring the suite to its original condition.

A separate issue in the case involved the landlord’s claim that the tenant gave insufficient notice of termination under the lease. The tenant argued that, upon expiration of the parties’ lease, it became a tenancy at will requiring only a thirty day notice of termination. The court disagreed, noting that the lease specifically stated that, upon expiration and without any notice from either party, the tenancy became a tenancy at sufferance that included all the prior obligations under the expired lease—including the requirement of a 90 days notice. Thus, the court of appeals said, the tenant had not given sufficient notice under the lease. Neither the parties nor the court, however, addressed Minn. Stat. § 504B.145, which restricts automatic renewal clauses in leases.

The Court of Appeals ultimately sent the case back to the trial court to determine the landlord’s damages from the tenant’s failure to remove the fixtures and the tenant’s failure to give sufficient notice. Other issues in the case but not addressed in this summary include the landlord’s claim of conversion of property and the award of attorney fees to the landlord.

July 19 through July 26: No Cases

2005-07-26T22:33:00.000-05:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

July 13 through July 19: Redemption in month-to-month tenancy

2005-07-21T14:32:00.000-05:00

There was one unpublished opinion reported this week from the Minnesota Court of Appeals. A summary of the case follows.

Bert Clark vs. Michael Smith, (Court of Appeals file A 04-1850)

Issued July 19, 2005.

The tenant in this case appealed a district court’s issuance of a writ of recovery to a landlord. The issue was whether the district court erred by ordering a writ of recovery of premises even though appellant claims that he tried to redeem. In this opinion, the Court--without any prompting by the parties--revived the debate from an earlier commercial landlord-tenant case about whether the right to redeem exists in a month-to-month at will tenancy, stating:

“Although the district court did not consider and the parties did not address the availability of redemption to tenants at will on month-to-month leases, we are aware of caselaw that indicates that the right of redemption does not apply in such tenancies.” See Univ. Cmty. Props. v. New Riverside Cafe, 268 N.W.2d 573, 575 (Minn. 1978).

Appellant, Smith, was in a month-to-month tenancy with Respondent, Clark. After Smith had failed to pay rent for July and August, he reached an agreement with Clark that a local agency would pay his July rent, and he would pay his August and September rent by September 3. On September 3, Smith offered to pay part of the rent, and Clark refused to accept partial payment.
The district court found that appellant failed to pay rent, stating that “a plan to pay is not payment. A promise to pay is not payment.” The district court stated that “[a]n offer to pay rent is not payment of rent, and it was not in a timely fashion. Therefore, he is delinquent.”

The Court of Appeals affirmed the decision, relying on Minn. Stat. § 504B.291, subd. 1(a) (2004), which states:

“the tenant may, at any time before possession has been delivered, redeem the tenancy and be restored to possession by paying to the landlord or bringing to court the amount of the rent that is in arrears, with interest, costs of the action, and an attorney’s fee not to exceed $5, and by performing any other covenants of the lease.”

The Court of Appeals stated that there was no evidence in the record that Smith did more than promise to pay the amount due or state over the telephone that he was willing to pay the amount due. They found no evidence that appellant made an actual attempt at payment that respondent refused. In addition, Clark never refused full payment.

Based on the facts in the record, the Court of Appeals decided that the district court did not err by finding that appellant’s offers or promises did not constitute actual attempted payment by appellant of the amount due in order to exercise his statutory right of redemption.

The Court also stated, in a footnote:

We recognize that despite the clear statutory language allowing redemption by paying all amounts due “at any time before possession has been delivered,” Minn. Stat. § 504B.291, subd. 1(a), there are court determinations that indicate the right
of redemption “applies until a court has issued an order dispossessing the tenant and permitting reentry by the landlord.” 614 Co. v. D.H. Overmyer Co., 297 Minn. 395, 397, 211 N.W.2d 891, 894 (1973), accord Paul McCusker & Assocs., Inc. v. Omodt, 359 N.W.2d 747, 748-49 (Minn. App. 1985), review denied (Minn. Mar. 29, 1985). Although these decisions were made prior to rewriting the current unlawful detainer statute, the relevant portions of the current and the former statutes are virtually the same. Compare Minn. Stat. § 504.02 (1982) with Minn. Stat. § 504.291, subd. 1(a) (2004). The reconciliation of the statutory language and the court decisions is a task for the supreme court.

July 8 through July 12: No Cases

2005-07-13T10:40:00.000-05:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

June 29 through July 5: Retaliatory Rent Increase in Manufactured Home Community

2005-07-06T16:47:00.000-05:00

There was one unpublished opinion reported this week from the Minnesota Court of Appeals involving claims of retaliatory rent increases in a manufactured home community. A summary of the case follows.

Schaff, et al. v. Hometown America, L.L.C., d/b/a Cedar Knolls Manufactured Home Community (Court of Appeals File A04-1778)

Issued July 5, 2005

This case involves a dispute over billing for utilities in a manufactured home park. The appellants represent a class of residents at Cedar Knolls Manufactured Home Community. The individuals had entered into leases where the price of utilities was included in their monthly rent. The lease provides that modification of the lease's terms and rule changes may only be made upon 60 days written notice to the residents. The lease also provides that rent increases must be reasonable.

In December 1998, Cedar Knolls gave the residents notice that, as of March 1999, they would be billed directly for their water and sewer usage. Cedar Knolls decreased their rent $29 per month to offset this expense. A class of residents challenged that action in a prior case (Cedar Knolls I), and they prevailed. The district court entered an injunctive order prohibiting Cedar Knolls from continuing to impose the 1999 rule change against the residents in the action, who represented approximately one-third of the community. (The others had entered into a different lease whereby they would be directly billed for the utilities.)

During Cedar Knolls I, the residents testified that they preferred to be billed at a flat rate.

Following the decision in Cedar Knolls I, Cedar Knolls sent a notification to the community that as a result of the lawsuit, they would be switching to a flat rate fee for all residents. Rather than being billed directly for utilities, all residents would now be charged $36 per month to cover the fees. For members of the previous class, this represented a net $7 per month increase due to the $29 rent decrease accompanying the direct billing plan.

The residents sued, arguing that the $36 increase was a retaliatory response to Cedar Knolls I in violation of Minn. Stat. §327C.12 (2004); that it is an unenforceable substantial modification of the lease and violates Minn. Stat. §327C.02, subd. 2 (2004); and that the proposed rule change is a breach of the lease agreements.

The court found that the $36 rent increase, when coupled with the previous $29 decrease amounted to a total $7 increase over a five-year period. Expert testimony showed that the rent was comparable to other manufactured home communities in the area. In addition, the district court found that testimony in Cedar Knolls I revealed that residents wanted to return to a flat-rate plan, and that the overall economic impact of the proposed rule change on all of the residents would be less than $1 per month, higher or lower, for the average Cedar Knolls resident. Based on these findings, the district court concluded that the proposed $36 increase was reasonable, and that the rule change was neither unreasonable nor a substantial modification of the lease agreements.

Reviewing the decision for clear error, the Minnesota Court of Appeals affirmed the decision of the district court. The Court of Appeals reviewed the case in light of the anti-retaliation statute (Minn. Stat. 327C.12 (2004)) and the case of Parkin v. Fitzgerald. The Court held that as a matter of law, a net $7 increase in rent was not unreasonable in this case. They noted that the residents who were involved in the first lawsuit got what they wanted--a flat rate system. In addition, they noted that the new system actually benefited many of the complainants. They found the increase to not be retaliatory.

On a separate issue relating to evidentiary bias, the appellate court held that the district court had not erred in allowing testimony from an expert whose appraisal properties included manufactured home communities and apartment units that were "hand-picked" by the respondent Cedar Knolls. The district court held that the information on apartment buildings would not be "terribly helpful." In addition, the appellate court noted that the expert had admitted that the data was not comprehensive, had submitted several exhibits, and had testified at length. The court also noted that the complainants had the opportunity to rebut the expert's evidence and that they had conducted a lengthy cross-examination of the witness. Therefore, the district court did not abuse its discretion or show any bias.

June 22 through June 28: Lockout Case

2005-06-29T05:00:00.000-05:00

There was one unpublished opinion reported this week from the Minnesota Court of Appeal involving the illegal lockout of a tenant from the tenant's apartment. A summary of the case follows.

Lindner v. Foy (Court of Appeals File A04-2060)
Issued June 28, 2005

In July of 2004, tenant Barbara Lindner was on a month-to-month lease for a house and attached garage. She did not initially pay her August rent and vacated the house on August 6. After a dispute with her landlord, she returned on August 10 and paid her August rent in full. For some 14 days afterward the landlord admitted that he was in the house ‘working on it’ while Lindner apparently was not around. On August 25, Lindner’s son came to the house to retrieve personal property that his mother had left. He found that his key would not open the house and the garage door opener would not open the garage. Lindner’s son called the landlord, and a friend of the landlord’s arrived to open the garage. Lindner’s son, however, did not have a vehicle appropriate for loading the items, so he left and returned 90 minutes later. At that time, he found that the garage door opener again would not open the garage door and he could not get Lindner’s property. Lindner was unable to retrieve her property until August 31.

Lindner sued the landlord, claiming that a “lockout” had occurred under Minn. Stat. § 504B.375.

The trial court found a lockout had occurred from August 25 through August 31, stating that Lindner “had paid rent for the month of August, 2004, and had not surrendered or abandoned her right of access to the premises.” The trial court awarded damages of $308.70, which amounted to pro-rated rent for the six days the tenant did not have access to the property. The trial court declined to award attorney fees, triple damages, or the cost of the trailer that Lindner used to remove her property.

In a very short opinion, the Court of Appeals upheld the trial court’s decision. The court found that the evidence supported a conclusion that Lindner had been locked out for six days, and the court refused to set aside the judgment of the trial court. The court also upheld the damage award, despite the landlord’s claim that the property left in the house and garage was ‘junk’ and did not have any value. The court stated that the landlord’s argument “misses the point. The value of respondent’s property is irrelevant to her right to have access to the premises, for any reason or no reason, during the period for which she had paid rent.”

--Michael John Niemann, Student Editor

June 15 through June 21: No Cases

2005-06-21T21:49:00.000-05:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

June 8 through June 14: No Cases

2005-06-15T09:00:00.000-05:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

June 1 through June 7: No Cases

2005-06-07T21:36:00.000-05:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

May 25 through May 31: No Cases

2005-06-01T09:00:00.000-05:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

May 18 through May 24: No Cases

2005-05-24T18:28:00.000-05:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

May 11 through May 17: No Cases

2005-05-17T15:50:00.000-05:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or
the Minnesota Court of Appeals in the past week.

We will continue to monitor the released opinions and summarize those that deal with landlord-tenant matters.

May 4 through May 10: No Cases

2005-05-11T08:00:00.000-05:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

April 27 through May 3: No Cases

2005-05-03T23:26:00.000-05:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

April 20 through April 26: No Cases

2005-04-27T09:00:00.000-05:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

April 13 through April 20: No Cases

2005-04-20T13:06:00.000-05:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

April 6 through April 12: No Cases

2005-04-12T15:14:00.000-05:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

Mar. 30 through Apr. 5: No Cases

2005-04-05T15:05:00.000-05:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

Though unrelated to landlord-tenant law, the Court of Appeals did issue an opinion that discusses Minnesota's anti-SLAPP statute. Minnesota enacted an anti-SLAPP (Strategic Lawsuits Against Public Participation) statute in 1994 to protect citizens and organizations from lawsuits that would chill their right to publicly participate in government. Because of its importance to nonprofit organizations and others, we have summarized that opinion and it is available upon request.

Mar. 23 through Mar. 29: Cullen v. Eder, d/b/a Splat, You're Out

2005-03-30T11:01:00.000-06:00

There was one landlord tenant case decided by the Minnesota Court of Appeals this week: Cullen v. Eder, d/b/a/ Splat, You're Out. It is an unpublished opinion. The case involved a commercial contractual dispute and whether past due rent was due and owing to the landlord, who was the original owner of the leased property.

The facts are somewhat unique. The lease between the landlord and tenant did not require the tenant to pay rent until October 1, 2002 for rent that was owed in 1999. The appeal does not appear to be one that involved an eviction case; it involved the terms of the lease and whether a commercial landlord may collect past due rent after the landlord had mortgaged the property and then sold the property. The tenant had two arguments against the landlord's claim, and the court rejected both arguments.

First, the tenant argued that the landlord could not claim unpaid rent after the landlord mortgaged the property and had assigned the tenant's rent payments to the bank. The court said the assignment of rents was merely security for the property and that the arrangement did not affect the tenant's obligation to pay rent to the landlord (unless the landlord defaulted on his mortgage and the bank took over collection of rent).

The tenant also argued that the landlord had no claim to the past due rent because the landlord had sold the property before rent became due in 2002. The tenant argued that, because future rents 'run with the land' and are to be paid to the new owner, no rent was then due and owing to the landlord.

The court rejected this argument, essentially finding that the rent had accrued in 1999 but was not payable until 2002. Citing an 1887 case, the court said that a landlord's debt or claim for past due rent accrues once the tenant has enjoyed the use of the premises. Wilder v. Peabody, 37 Minn. 248 (1887). Because the tenant in the case had enjoyed the use of the premises in 1999, and because Minnesota statute 504B.125 allowed a landlord to assert a civil claim for past due rent, the tenant was obligated to the pay the rent that was owed in 1999 but had not become due and payable until 2002.

Mar. 16 through Mar. 22: No Cases

2005-03-23T16:17:00.000-06:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

Mar 9 through Mar 15: No Cases

2005-03-15T18:13:00.000-06:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

Mar 2 through Mar 8: No Cases

2005-03-08T22:47:00.000-06:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

Feb 3 through March 1: No Cases

2005-03-02T20:50:00.000-06:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

Feb 16 through Feb 22: No Cases

2005-02-23T12:00:00.000-06:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

Though not directly a tenant-related case, the Court of Appeals upheld the suspension of the real estate and mortgage originator licenses of Hendrie Cutler Grant and Cutler Mortgage Company, in relation to allegations of 'equity stripping.' The court, in upholding the suspensions, noted the commerce department's characterization of the practice of equity stripping as 'repugnant' and noted the need for an immediate deterrent for the purpose of protecting other homeowners in Minnesota.

Feb 9 through Feb 15: No Cases

2005-02-16T00:33:00.000-06:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

Retro Case Files: Parkin v. Fitzgerald--Retaliation

2005-02-16T00:20:00.000-06:00

From the Retro Case Files: 1976
Parkin v. Fitzgerald

What It Means

The Parkin case established the standard courts use to determine if an eviction is retaliatory, but only after the state’s anti-retaliation statute applies. If it applies, a landlord must establish a substantial non-retaliatory reason for the eviction, arising at or within a reasonably short time before service of the notice to quit. If you remember anything, remember ‘substantial non-retaliatory reason’ and ‘arising at or within a short time before service of the notice to quit.’

Here’s the story:

In 1974, a group of tenants rented a house in Minneapolis. There was no written lease. When the tenants moved into the house in March, the landlord verbally agreed to make certain repairs. By July, when repairs had not been made, the tenants notified the landlord by mail of the need to fix the leaky pipes, the kitchen ceiling, the back porch, and other items. The tenants also notified the landlord that they would withhold rent if the repairs were not made within 30 days. No repairs were made. On July 22, the Minneapolis Department of Inspections inspected the house and cited eight violations of the Minneapolis Housing Maintenance Code. Within a week of the inspection, the landlord gave the tenants a 30-day notice to vacate the house.

The tenants refused to pay rent for the month of August, and the landlord brought an eviction action against the tenants the following month. The tenants deposited their rent with the court and asserted that repairs were needed and that the eviction was in retaliation for requesting the repairs.

The Minnesota Supreme Court found that the state’s anti-retaliation statute clearly applied to the tenants’ case. The Court said that (1) The statute applied to oral or written lease agreements; (2) The tenants’ request for repairs was a good-faith attempt to enforce their protected rights; (3) The report to the housing inspector was a good-faith report to a governmental authority; and (4) The landlord served the notice to quit within 90 days of the request for repairs and report to the housing inspector.

Because the court found that the statute applied, the landlord had to establish a non-retaliatory purpose for the eviction. This was the first time the Minnesota Supreme Court had considered this issue.

After reviewing cases from other courts, the Minnesota Supreme Court adopted the following standard:

A landlord must establish by a fair preponderance of the evidence a substantial nonretaliatory reason for the eviction, arising at or within a reasonably short time before service of the notice to quit. A nonretaliatory reason is a reason wholly unrelated to and unmotivated by any good-faith activity on the part of the tenant protected by the statute (e.g. nonpayment of rent, other material breach of covenant, continuing damage to premises by tenants, or removal of housing from market for a sound business reason). Such a standard will give full protection to tenants and will enhance the legislative policy of liberal construction of statutory covenants to insure adequate housing.

Applying the standard to the tenants’ case, the Court rejected the landlord’s “non-retaliatory” reasons, specifically stating that:

A bounced check in March was insufficient nonretaliatory reason for eviction because payment was accepted by the landlord at a later time, and landlord waived the right to complain of this breach by failing to serve an eviction notice until 5 months later.
Failure to pay rent in August was insufficient nonretaliatory reason because it occurred after the July 29 eviction notice.
Complaints that the tenants had a dog was an insufficient nonretaliatory reason because the Landlord had prior knowledge of the dog, the dog caused no damage, and the Landlord had previously acquiesced to its presence.
The eviction notice came within five days of the inspector’s visit and at the same time as discussions between the Landlord and Tenants about the rate of completion of the repairs, at which time the Landlord said that if the Tenants were in a hurry to have the repairs done, they could leave.

The Parkin case continues to be an important landlord-tenant case around the issue of retaliatory evictions. It set the standard for all courts to follow, and it is continues to be an essential case to know when dealing with allegations of retaliation.

--Anna Petosky, Editor

Feb 2 through Feb 8: No Cases

2005-02-09T15:12:00.000-06:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

Jan 26 through Feb 1: No Cases

2005-02-02T16:00:00.000-06:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals in the past week.

Jan 19 through Jan 25: No Cases

2005-01-26T12:00:00.000-06:00

There were no landlord-tenant opinions issued by the Minnesota Supreme Court or the Minnesota Court of Appeals for the past week.

Jan 12 through Jan 18: 1 Case

2005-01-19T13:00:00.000-06:00

Kathleen Welch v. Andre & Winnie Scott
Appealed from Hennepin County

Unpublished Decision [info]

Attorneys:

Francis Rondoni (for Welch)
Alan Tschida (for Scott)

Issues:

Cancellation of a Contract for Deed
Waiver Based on Acceptance of Payment
Equitable Mortgage

In this case, a couple lived in a house in North Minneapolis and made contract for deed payments to the holder of the contract (in legal terms, the "Vendor"). The couple, however, failed to make several payments to the Vendor and the Vendor began the process of cancelling the contract for deed. [Cancellation of the contract for deed would legally result in the couple losing all interest in the property, resulting in eviction. Indeed, the case comes out of housing court and the Vendor's attempt to evict the couple from their home.]

In the case, the Vendor served a cancellation of contract for deed on the couple. The 60 day 'reinstatement' period for the couple to pay off all arrears and 'reinstate' the contract then expired. Nevertheless, after the expiration of the reinstatement period, the couple paid more than $20,000 to the Vendor. Although the Vendor's attorney wrote a letter stating that the payment would not reinstate the contract, the attorney nevertheless accepted the payment and did not return the money.

The Court of Appeals held that, because the couple paid $20,000 to the Vendor and the Vendor accepted the money and retained it, the Vendor WAIVED the right to seek forfeiture of the contract for deed. The Court of Appeals decision essentially upheld longstanding law stating that accepting and retaining payments after a contract for deed has been cancelled waives any right of the Vendor to recover the property. From the opinion:

Thus, a vendor may waive his or her right to insist on a forfeiture resulting from a statutory cancellation of the contract by accepting and retaining payments due under the contract after the cancellation proceedings are complete. See Cohler v. Smith, 280 Minn. 181, 189, 158 N.W.2d 574, 579 (1968) (recognizing that acceptance of payment under contract after cancellation is inconsistent with claim of forfeiture and may constitute waiver). A vendor's acceptance of the amount in default as a payment on the contract may constitute a waiver as a matter of law. Jandric v. Skahen, 235 Minn. 256, 261, 50 N.W.2d 625, 628 (1951).

The Court of Appeals reversed the trial court and held that the couple could remain in their home.

Although the Court decided the case already on the basis of the contract for deed, the Court also discussed and decided that the contract for deed was not an 'equitable mortgage.' The Court first outlined the requirements for an equitable mortgage:

A transaction may be construed as an equitable mortgage if both parties intended a loan transaction with the deed as security only and not as a sale. Ministers Life & Cas. Union v. Franklin Park Towers Corp., 307 Minn. 134, 138, 239 N.W.2d 207, 210 (1976). The intent of the parties must be "ascertained by the written memorials of the transaction and the attendant facts and circumstances." Id.

The Court nevertheless determined that the contract for deed was NOT an equitable mortgage, stating that:

The contract for deed was a true sale, not a financing arrangement by which appellants were willing to give respondent a deed to the property in exchange for her lending them money. As in the nature of a true sale, respondent was willing to sell her property to appellants so that she could recoup some of her investment and turn over to appellants the obligations for insurance, taxes, and the remaining listed and necessary repairs. We therefore conclude that the contract for deed was just that: a contract for the sale of property.

Jan 5 through Jan 11: No Cases

2005-01-12T13:00:00.000-06:00

There were no landlord-tenant cases issued by the Minnesota Supreme Court or the Minnesota Court of Appeals for this past week.