Disbarment is warranted for a lawyer who repeatedly neglected client matters, failed to communicate with clients, failed to return client files and property, failed to account for client fee payments, violated the conditions of a disciplinary probation, failed to cooperate with the disciplinary process, and had a history of professional discipline for similar misconduct.

Heard, considered, and decided by the court en banc.

OPINION

PER CURIAM.

This lawyer discipline action arose out of a petition served and filed by the Director of the Office of Lawyers Professional Responsibility alleging that Bradley C. Rhodes violated the Minnesota Rules of Professional Conduct by: failing to abide by client decisions concerning the objectives of the representation (Rule 1.2); failing to act diligently in client matters (Rule 1.3); failing to reasonably communicate with clients (Rule 1.4); acquiring an interest in client property without the client’s informed consent (Rule 1.8(a)); failing to hold client funds in trust (Rule 1.15(a)); failing to return client property and unearned fee payments (Rule 1.15(c)); failing to protect clients’ interests upon termination of the representation (Rule 1.16(d)); and failing to respond to the disciplinary authority (Rule 8.1(b)). The petition also alleges that Rhodes’s conduct violated Rule 25 of the Minnesota Rules on Lawyers Professional Responsibility and a previous order by this court placing Rhodes on probation subject to specific conditions. After Rhodes failed to respond to the petition, we deemed the allegations in the petition admitted and set the matter for oral argument to determine the appropriate discipline. The Director recommends that we disbar Rhodes. We conclude that the appropriate discipline under the facts and circumstances of this case is disbarment.

Rhodes was admitted to the practice of law in Minnesota in May 1984. We disciplined Rhodes for professional misconduct on three previous occasions. In February 1992, we admonished Rhodes for failing to refund unearned client fees. We admonished Rhodes again in July 1996 for failing to serve an answer to a summons and complaint until after a default hearing had occurred in the action. Finally, on May 18, 2005, we admonished Rhodes and placed him on supervised probation for 2 years for failing to file two briefs on behalf of a client and for failing to cooperate with the investigation into that misconduct. See In re Rhodes, 696 N.W.2d 328, 329 (Minn. 2005).

The current disciplinary petition is based on Rhodes’s failure to comply with the terms of the probation previously ordered by this court, new acts of professional misconduct in seven client matters, and Rhodes’s failure to cooperate with the investigation into this new professional misconduct.

A. Violation of Probation Conditions

As a condition of the probation we imposed in May 2005, Rhodes was required to, among other things, provide a list of lawyers who agreed to serve as his probation supervisor, submit specific information about all his active cases by the first of each month, provide a written plan of his office procedures to ensure compliance with the probation terms, and cooperate with the Director’s efforts to monitor Rhodes’s compliance with the probation. Rhodes failed to submit the list of potential supervisors and the office procedures within the specified timeframe, and repeatedly failed to submit a monthly list of his active cases in a timely fashion. Rhodes also failed, without explanation, to attend two meetings with the Director to discuss Rhodes’s compliance with the probation terms and failed to respond to several communications from his probation supervisor and the Director.

B. New Professional Misconduct in Client Matters

G.O. and L.O. paid Rhodes $1,000 in January 2004 to represent them in a mechanic’s lien action. After the initial meeting, Rhodes failed to respond to telephone calls or letters from G.O. and L.O. When the representation was eventually terminated, Rhodes failed to return the clients’ file, which included documents necessary to defend their claim. Rhodes has also failed to account for any legal services provided in this matter or to refund the $1,000 G.O. and L.O. paid him.

V.M. paid Rhodes a $500 retainer to represent her in a probate matter. Rhodes deposited this money in his personal account rather than in a trust account. Over the next several months, Rhodes failed to respond to numerous communications from V.M. Ultimately, Rhodes failed to either provide documentation of any legal work performed or refund the $500, and failed to return original documents provided by V.M.

W.R. retained Rhodes in January 2005 to defend him against a driving under the influence (DUI) criminal charge. W.R. and Rhodes agreed to seek modification of an earlier DUI conviction to avoid the permanent loss of W.R.’s driver’s license, but Rhodes failed to pursue that strategy within the required timeframe. Before a hearing in March 2006, Rhodes told W.R. that he had negotiated a plea agreement that would result in a conviction for careless driving rather than DUI, and that Rhodes would prepare the documents necessary to finalize the plea agreement. Rhodes apparently failed to prepare these documents, and did not return several telephone calls from W.R. inquiring into the matter. Finally, in September 2006, W.R. fired Rhodes and personally negotiated a new agreement with the prosecutor.

Rhodes began representing K.M. in a marriage dissolution proceeding in April 2005. Although the parties to the dissolution reached a settlement a few months later, Rhodes failed to prepare and distribute the settlement documents as he had agreed to do. Subsequently, a dispute between K.M. and his former spouse led the district court to order the proceedings be reopened. K.M. paid Rhodes $2,000 to appeal the order reopening the proceedings after Rhodes told him there was a strong chance of success. Over the next few months, Rhodes took no action on the appeal and failed to return several telephone calls from K.M. When K.M. confronted Rhodes over this lack of action, Rhodes stated that he had unilaterally decided not to appeal the matter. Rhodes has not provided an accounting of any legal work performed for the $2,000 payment.

In July 2005, Rhodes received $1,000—including $300 for a filing fee and $700 as an advance attorney’s fee payment—to represent M.K. in her marriage dissolution proceeding. Rhodes failed to place any of this money in a trust account. During the course of the representation, Rhodes failed to return several telephone messages from M.K. and her family, including calls concerning threats of physical violence made by M.K.’s former spouse against M.K. and her infant daughter. Rhodes has also failed to account for any legal work performed in this matter. Although Rhodes eventually agreed to refund the $1,000, the check he sent to M.K. was denied for insufficient funds and the money was never repaid.

In December 2005, P.T. and D.T. paid Rhodes $500 to represent them in a property dispute. Although Rhodes initially stated that the matter would be resolved by spring 2006, when P.T. spoke to him a few months later, Rhodes indicated that he had not yet begun working on the matter because “he had been too busy.” Over the next few months, Rhodes failed to respond to several communications from P.T. and D.T. In July 2006, Rhodes finally agreed to return the $500 payment and documents, including the original abstract of title and property survey, that he had been given. Neither the money nor the documents were ever returned.

N.F. retained Rhodes to defend her against criminal theft charges related to her handling of a trust. N.F.’s husband, D.F., subsequently retained Rhodes in an unrelated criminal matter. In January 2006, N.F. and D.F. paid Rhodes $500 toward their legal fees and gave him six firearms as collateral for the additional fees. N.F. also gave Rhodes a bag of documents and receipts relating to the trust expenditures as evidence that the payments were legitimate. Rhodes met with N.F. in August 2006 to discuss her case, but N.F. was unable to contact Rhodes during the subsequent months. In November 2006, Rhodes failed to appear at a scheduled court proceeding in N.F.’s criminal case. Rhodes also failed to return the evidence provided by N.F. and the firearms provided as collateral for legal fees.

C. Noncooperation with the Investigation

Between October 2005 and February 2007, the Director issued 11 notices of investigations regarding Rhodes’s failure to follow the conditions of his probation, the new allegations of professional misconduct outlined above, and a separate complaint forwarded to the Director by court personnel. During this period, Rhodes failed to respond to any of the complaints and to several related communications from the district ethics committee investigator and the Director.

We do not impose disciplinary sanctions to punish a lawyer; rather, we do so “to protect the public, to guard the administration of justice and to deter future misconduct” by both the individual lawyer and by other members of the legal profession. In re Grzybek, 567 N.W.2d 259, 262 (Minn. 1997) (Grzybek II); see also In re Brooks, 696 N.W.2d 84, 87–88 (Minn. 2005). When determining the appropriate sanction, we consider four factors: “(1) the nature of the misconduct; (2) the cumulative weight of the disciplinary violations; (3) the harm to the public; and (4) the harm to the legal profession.” In re Nelson, 733 N.W.2d 458, 463 (Minn. 2007). Discipline is imposed based on the unique circumstances of each case, but previous cases are used to draw analogies and to promote consistency in sanctions over time. Id. at 463–64; In re Harp, 560 N.W.2d 696, 701 (Minn. 1997).

A. Neglect of Client Matters, Failure to Communicate with Clients,
and Failure to Return Client Property

We have repeatedly warned that “[a] continuing pattern of client neglect is serious misconduct often warranting indefinite suspension by itself,” Brooks, 696 N.W.2d at 88, and that more “extreme” cases involving client neglect and failure to communicate with clients may merit disbarment, In re De Rycke, 707 N.W.2d 370, 374 (Minn. 2006). See also Grzybek II, 567 N.W.2d at 263. We have also stated that the failure to return client property and files upon the termination of the attorney-client relationship warrants “serious treatment,” particularly when this misconduct “continued a pattern of conduct for which we already disciplined [the lawyer]” and when this misconduct “caused substantial inconvenience and unnecessary frustration to [the lawyer’s] clients.”
Grzybek II, 567 N.W.2d at 263.

The admitted allegations against Rhodes reveal a pattern of neglecting client matters and noncommunication with clients that involves seven new client matters and that closely resembles the misconduct for which we previously disciplined Rhodes. Moreover, the property Rhodes failed to return to his clients included original documents necessary to G.O. and L.O.’s mechanic’s lien defense, an original abstract of title and property survey, and evidence regarding N.F.’s defense against criminal charges. Rhodes’s retention of these documents likely caused a great deal of inconvenience to his clients. We conclude that this behavior constitutes serious professional misconduct and warrants severe discipline.

B. Financial Misconduct

The misappropriation of client funds is particularly serious misconduct and usually warrants disbarment “absent ‘clear and convincing evidence of substantial mitigating factors.’ ” De Rycke, 707 N.W.2d at 374 (quoting In re Swerine, 513 N.W.2d 463, 466 (Minn. 1994)). In this case, Rhodes accepted more than $5,000 from his clients without accounting for any legal services provided for these payments. The Director concedes in his brief that Rhodes has only been found to have failed to account for client funds, not to have misappropriated those funds. But the Director argues that Rhodes’s misconduct should be treated as severely as misappropriation because Rhodes’s failure to cooperate is what caused the inability to determine whether Rhodes misappropriated client funds or only failed to account for the funds and because, from a client’s perspective, the two violations are the same. We agree that Rhodes’s misconduct in this case, whether characterized as misappropriation or failure to account, is a serious violation of the rules of professional conduct and merits severe discipline.

C. Violation of the Terms of Disciplinary Probation

Failure to comply with the conditions of probation ordered by this court is an additional act of professional misconduct. See Grzybek II, 567 N.W.2d at 264–65 (failure to comply with court orders is a “serious violation”); Minn. R. Prof. Cond. 8.1(b); R. Lawyer Prof. Resp. 25. Although we occasionally determine that additional or modified probation is an appropriate sanction for probation violations, we generally conclude that “supervised probation is not appropriate where the attorney consistently fails to communicate with the Director,” In re Danielson, 620 N.W.2d 718, 721 (Minn. 2001); see also In re Anderson, 734 N.W.2d 238 (Minn. 2007). In this case, Rhodes’s repeated failure to respond to the Director’s inquiries and to participate in the disciplinary process would render the mere extension or modification of his prior probation inappropriate. We therefore conclude that Rhodes’s violation of the conditions of his prior probation is an independent act of misconduct warranting professional discipline.

D. Noncooperation with the Disciplinary Process

A lawyer’s failure to cooperate with an investigation into professional misconduct is serious misconduct that constitutes separate grounds for discipline. De Rycke, 707 N.W.2d at 375; see also Brooks, 696 N.W.2d at 88; Grzybek II, 567 N.W.2d 264. Noncooperation has been found to warrant indefinite suspension on its own, Brooks, 696 N.W.2d at 88, and to increase the severity of the disciplinary sanction when connected with other professional misconduct, De Rycke, 707 N.W.2d at 375; see In re Mayrand, 723 N.W.2d 261, 269 (Minn. 2006) (referring to noncooperation as a “serious aggravating factor[]”). In this case, Rhodes failed to respond to the 11 notices of investigation and repeated requests for information from the district ethics committee investigator and the Director. Rhodes has also failed to appear before this court in these proceedings. We conclude that Rhodes’s repeated failure to cooperate with the disciplinary process is a serious aggravating factor in determining the appropriate discipline.

E. Prior History of Professional Misconduct and Discipline

“After a disciplinary proceeding, [this court] expect[s] a renewed commitment to comprehensive ethical and professional behavior.” In re Weems, 540 N.W.2d 305, 309 (Minn. 1995). Accordingly, we consider a lawyer’s prior discipline and professional misconduct when determining the appropriate discipline for new misconduct. Brooks, 696 N.W.2d at 88. We generally impose “more severe sanctions when the current misconduct is similar to misconduct for which the attorney has already been disciplined.” Id. The new professional misconduct for which we are disciplining Rhodes includes the neglect of seven client matters (including repeated failure to submit promised documents), the failure to account for client fees, and the failure to cooperate with the disciplinary investigation. Moreover, most of this new misconduct occurred at the same time as, and in the months immediately following, the previous disciplinary proceedings against Rhodes for similar violations (failing to submit two briefs and noncooperation with the disciplinary investigation). Finally, the new misconduct is also similar to the misconduct for which we admonished Rhodes in 1992 (failing to return unearned fees) and 1996 (failing to timely serve an answer to a complaint). We conclude that Rhodes’s disciplinary history is a serious aggravating factor in determining the appropriate discipline in this case.

II.

In determining the appropriate discipline for professional misconduct, we consider not just the nature of each individual violation of the rules of professional conduct but also the cumulative weight of all of the professional misconduct in determining the appropriate sanction. We have repeatedly held that “ ‘[t]he cumulative weight and severity of multiple disciplinary rule violations may compel severe discipline even when a single act standing alone would not have warranted such discipline.’ ” Nelson, 733 N.W.2d at 464 (quoting In re Oberhauser, 679 N.W.2d 153, 160 (Minn. 2004)). In this case, Rhodes’s pattern of neglecting client matters, his repeated failure to communicate with clients, and his financial misconduct involving more than $5,000 in clients funds each warrant severe discipline individually. Rhodes’s misconduct also includes violations of the conditions we imposed on his prior disciplinary probation and two significant aggravating factors—his repeated failure to cooperate with the disciplinary process and his history of prior misconduct and discipline. Finally, the record does not contain any suggestion of mitigating factors.

In support of his recommendation that we disbar Rhodes, the Director cites Grzybek II as an analogous case. In July 1996, we suspended Grzybek for 6 months for failing to establish the basis for legal fees, to keep his clients informed, to respond to client communications, to promptly return client property, and to cooperate with the Director’s investigation. In re Grzybek, 552 N.W.2d 215, 215–17 (Minn. 1996) (Grzybek I). Approximately 6 months later, the Director filed a new petition alleging that Grzybek neglected client matters, failed to communicate with clients, misappropriated $750 of client funds, failed to cooperate with the disciplinary process, and disobeyed court orders. Grzybek II, 567 N.W.2d at 259–62. We held that Grzybek’s repeated neglect of client matters, failure to communicate with clients, and failure to cooperate with the disciplinary process—all of which occurred less than a year after he had been disciplined for similar misconduct—were “sufficient to merit disbarment.” Id. at 264–65. We also noted that Grzybek’s “misappropriation of $750 in client funds and his subsequent failure to make any effort to return the money[,] and his repeated failure to comply with court orders” are “separate grounds upon which he could be disbarred.” Id. at 265.

But in another analogous case, In re Brooks, we concluded that indefinite suspension was more appropriate than disbarment. 696 N.W.2d 84 (Minn. 2005). Brooks neglected client matters, failed to communicate with clients, failed to return client files and unearned fees, violated trust account rules, converted client money to her own use, and failed to cooperate with the disciplinary investigation. Id. at 86–87. Brooks had previously been disciplined five times for violating trust account rules, representing both parties to a dissolution proceeding, failing to adequately communicate with clients, and failing to provide a complete file to a client. Id. at 87. The record in Brooks suggested that the death of her father may have caused some of her unprofessional conduct, but we found it difficult to consider this mitigation because of Brooks’ failure to provide sufficient information. Id. at 87-88. Nonetheless, despite recognizing that a continuing pattern of client neglect, trust account violations, and noncooperation with disciplinary investigations each generally warrant lengthy or indefinite suspensions by themselves, we determined—based on the lack of “complete information of the surrounding circumstances,” the small amount of the misappropriation ($200), and Brooks’ abandonment of her legal practice—that an indefinite suspension for a minimum of 2 years was the appropriate sanction. Id. at 88–89.

We agree with the Director that the present case is more analogous to Grzybek II than to Brooks. Although the misconduct in Brooks, like in Grzybek II, was similar to the present case, the record in Brooks suggested a mitigating factor about which we lacked complete information. Because of Rhodes’s complete failure to participate in the disciplinary process, the record in this case lacks any evidence of mitigating factors.

III.

In summary, Rhodes’s repeated neglect of client matters and noncommunication with clients, his financial misconduct involving $5,000 in client funds, his failure to obey the conditions of the prior disciplinary probation, and his repeated failure to cooperate with the disciplinary process each warrant severe discipline by themselves. When the weight of these violations are combined and considered in light of his prior professional discipline for similar misconduct and the complete lack of mitigating facts in the record of this case, we conclude that the appropriate sanction in this case is disbarment. Therefore, we hold that the appropriate discipline in this case is disbarment.

Accordingly, we order that:

1. Bradley C. Rhodes be disbarred from the practice of law, effective immediately;

2. Rhodes shall comply with the requirements of Rule 26 of the Minnesota Rules of Lawyers Professional Responsibility; and

3. Rhodes shall pay to the Director the sum of $900 in costs pursuant to Rule 24 of the Minnesota Rules of Lawyers Professional Responsibility.

So ordered.

ANDERSON, Russell A., C.J., took no part in the consideration or decision of this matter.

Friday, October 12, 2007

Messerli-Kramer Judgments

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This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).

STATE OF MINNESOTA

IN COURT OF APPEALS

A03-1482

Midland Credit Management, Inc.,

Appellant,

vs.

John Resler,

Respondent.

Filed May 25, 2004

Affirmed

Randall, Judge

Washington County District Court

File Nos. C6-02-640

Derrick N. Weber, Jeffrey J. Cohen, Messerli & Kramer, P.A., 3033 Campus Drive, Suite 250, Plymouth, MN 55441 (for appellant)

Thomas J. Lyons Sr., Thomas J. Lyons & Associates, 342 East County Road D, Little Canada, MN 55117; and

Thomas J. Lyons Jr., John H. Goolsby, Consumer Justice Center, P.A., 342 East County Road D, Little Canada, MN 55117 (for respondent)

Considered and decided by Randall, Presiding Judge, Klaphake, Judge, and Forsberg, Judge.

U N P U B L I S H E D O P I N I ON

RANDALL, Judge

On appeal from an order granting a motion to vacate a default judgment, appellant argues that: (1) the district court erred in ruling that a letter respondent sent constituted an “answer;” (2) respondent’s motion to vacate, brought more than a year after default judgment was entered, was not timely; and (3) the court abused its discretion in vacating the default judgment where respondent had not provided a meritorious defense. We affirm.

FACTS

On December 28, 2001, appellant Midland Credit Management, Inc., served respondent John Resler with a summons and complaint in Washington County. The complaint alleged that respondent owed appellant a total of $4,048.90 including $1,793.65 as the principal amount, and $2,255.25 in accrued interest. In a letter from respondent to appellant dated January 13, 2002, respondent stated:

This is my response to your summons that I received on 12/28/01. I had previously been paying Messerli and Kramer $115.00 per month for the debt I owe to Midland Credit Management, Inc. I am a part-time student paying my tuition with no financial assistance. I also have a monthly car payment and other expenses. Considering the pitifully low income that I receive from my current employer, I was unable to afford this amount. However, I have every intention of clearing myself of this debt and building my credit again.

At this present date, I can agree to pay $30.00 a month until the principal sum of $1,793.65 is paid, then $60.00 a month, with the continued interest dropped entirely. Keep in mind, I always have the option of filing bankruptcy. Therefore, you would get nothing. My question to you is do you want something or nothing?

On January 23, 2002, appellant executed and filed an Affidavit of No Answer, Identification, Non-Military Status, Amount Due and Costs and Disbursements, which stated that respondent had not answered or otherwise defended the action. On February 8, 2002, the district court entered a default judgment against respondent in the amount of $4,492.27. This amount constituted $4,126.77 in principal and prejudgment interest plus $365.50 in costs and disbursements. That same day, a copy of the judgment was mailed to each party at their last known residence.

In July 2002, respondent, now represented by counsel, commenced a lawsuit against appellant’s attorneys’ law firm Messerli & Kramer, P.A., and attorneys Derrick N. Weber, Jeffrey J. Cohen, and Jefferson C. Pappas, in federal district court for alleged violations of the Fair Debt Collection Practices Act. The defendants brought a motion to dismiss. The federal court denied in part, and granted in part, the defendants’ motion to dismiss. The federal court agreed to entertain respondent’s claims based on the alleged defective garnishment notice. But the federal court stated that in order to challenge the alleged deceitful procedure by which the judgment was obtained, respondent must file a motion to vacate the judgment in state court.

On April 17, 2003, respondent filed a motion in Washington County District Court to have the February 8, 2002 judgment vacated. On May 7, 2003, respondent filed an amended motion to vacate the judgment. Respondent argued that appellant failed to fully and accurately inform the court that respondent had responded to appellant’s pleadings. Respondent also asserted that appellant failed to accurately report the principal balance respondent owed to appellant. Respondent argued that he paid $448.41 toward the principal, but that it was, unknown to him, allocated toward attorney fees. Respondent also argued that appellant inaccurately told the district court that the case involved “reasonable attorney’s fees of $.00.”

On August 1, 2003, the district court granted respondent’s motion and ordered the judgment vacated. The court found that respondent answered appellant’s pleadings and that the default judgment was “partially based” on the representation that respondent failed to answer. The district court also disregarded appellant’s argument that respondent’s motion to vacate was untimely because it was filed more than one year after the default judgment was entered. The court stated:

Furthermore, Plaintiff’s claim of one year and three months past judgment issuance does not hold up in this Court. Defendant, John Resler, first brought his claim to Federal District Court on July 31, 2002. A mere four months following the entry of judgment. Federal Court found the proper venue was in State Court where the judgment was entered.

The district court’s judgment was entered on August 8, 2003. This appeal follows.

D E C I S I O N

Respondent’s arguments on the merits, and the gravity of allegations against a law firm, our not our issue on appeal. Our review is confined to whether, on these facts, the district court abused its discretion in vacating the default judgment. The trial is a long way off.

Under Minn. R. Civ. P. 60.02 a court may relieve a party of a final judgment on the basis of mistake, inadvertence, surprise, excusable neglect, or “any other reason justifying relief from the operation of the judgment.” Onreview, this court views the record in the light most favorable to the district court’s decision. Bentonize, Inc. v. Green, 431 N.W.2d 579, 582 (Minn. App. 1988). Absent a clear abuse of discretion, this court upholds the district court’s decision. Lund v. Pan Am. Machine Sales, 405 N.W.2d 550, 552 (Minn. App. 1987).

A party seeking relief under rule 60.02 must demonstrate:

(1) a reasonable case on the merits, (2) a reasonable excuse for the failure to act, (3) that it acted with due diligence after notice of the entry of judgment, and (4) that there would be no substantial prejudice to the opposing party if the motion to vacate is granted.

Imperial Premium Fin., Inc. v. G.K. Cab. Co., Inc., 603 N.W.2d 853, 857 (Minn. App. 2000) (citing Finden v. Klaas, 268 Minn. 268, 271, 128 N.W.2d 748, 750 (1964)). All four of the Finden factors must be satisfied in order to justify relief under the rule. Charson v. Temple Israel, 419 N.W.2d 488, 491 (Minn. 1988); Nelson v. Siebert, 428 N.W.2d 394, 395 (Minn.1988). A strong showing on three of the four factors can outweigh a weak showing on one. Armstrong v. Heckman, 409 N.W.2d 27, 29 (Minn. App. 1987), review denied (Minn. Sept. 18, 1987). Courts favor a liberal application of these factors to further the policy of resolving cases on their merits. Kemmerer v. State Farm Ins. Cos., 513 N.W.2d 838, 841 (Minn. App.1994), review denied (Minn. Jun. 2, 1994) (emphasis added).

1. Respondent’s Letter

Appellant first argues that the district court erred in ruling that respondent’s letter constituted an answer. Specifically, appellant argues that the letter contained no defenses to the allegations, and did not admit or deny any of the allegations. We disagree.

Respondent (a layman) submitted a letter to appellant’s attorneys in response to appellant’s summons and complaint. The letter stated:

The district court determined that respondent, for a layman, had adequately answered the allegations in appellant’s complaint. Respondent argues further that even if the letter does not constitute an answer he “otherwise defended” within the time allowed under Minn. R. Civ. P. 55.01 (2002). name="_ftnref2" title="">

Under Minn. Civ. P. 55.01,

When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend within the time allowed therefor by these rules or by statute, and that fact is made to appear by affidavit, judgment by default shall be entered against that party as follows . . .

(emphasis added). It was within the district court’s discretion to find that respondent’s letter answered “or otherwise defended” against appellant’s compliant. We agree that respondent’s letter, from a reasonable layman’s standpoint, can easily be construed as a defense to the initial complaint.

From the beginning, respondent disputed the amount owed to appellant. In his letter, respondent disputed the amount of interest respondent owed appellant. The complaint against respondent alleged him owing $4,048.90, 60% consisting of accrued interest on the principal in the amount of $2,255.25, and 40% of that amount consisting of real debt in the amount of $1,793.65. In his letter to appellant’s attorneys, respondent agreed to pay the principal amount, and then make monthly $60 payments “with the continued interest dropped entirely.” That is a dispute by respondent over the issue of the debt and interest accruing on the debt. Appellant now contends that respondent owes approximately $6,000 the majority of which constitutes accrued interest. We find as the district court did, respondent’s letter answered or otherwise defended the allegations against him.

2. Timeliness

Appellant argues that respondent’s motion to vacate was untimely. We disagree. Minnesota Rule of Civil Procedure 60.02 provides in pertinent part:

On motion and upon such terms as are just, the court may relieve a party or the party’s legal representatives from a final judgment (other than a marriage dissolution decree), order, or proceeding and may order a new trial or grant such other relief as may be just for the following reasons:

(a) Mistake, inadvertence, surprise, or excusable neglect;

. . .

extrinsic), misrepresentation, or other misconduct of an adverse party;

. . .

(f) Any other reason justifying relief from the operation of the judgment.

A motion for relief under 60.02(a) and (c) must be brought within one year from

entry of judgment. Minn. R. Civ. P. 60.02. Under 60.02(f), the time for bringing a motion to vacate is within a “reasonable time.” See generally Minn. R. Civ. P. 60.02. If a party’s reason for vacating a judgment falls under a specified ground, he or she may not avoid the one-year time limit by asserting that 60.02(f) is applicable. Chapman v. Special School District No. 1, 454 N.W.2d 921, 924 (Minn. 1990) (“Clause (f) has been designated a residual clause, designed only to afford relief in those circumstances exclusive of the specific areas addressed by clauses (a) through (e).”). Relief under clause (f) is available only in exceptional circumstances and where grounds for granting it do not fall under one of the first three clauses. Id.

What constitutes a reasonable time is determined in each case by considering the facts and circumstances before the court. Bode v. Minnesota Dept. of Natural Resources, 612 N.W.2d 862, 870 (Minn. 2000). Exceptional circumstances warranting relief under clause (f) have been found where the severity of the injury was impossible to determine within the one-year time limit, and where there is insufficient evidence to prove damages. See, e.g., Simons v. Schiek’s, Inc., 275 Minn. 132, 138, 145 N.W.2d 548, 552 (1966); Wiethoff v. Williams, 413 N.W.2d 533, 537 (Minn. App. 1987); Qualy v. MacDonald, 395 N.W.2d 423, 425-26 (Minn. App. 1986), review denied (Minn. Dec. 23, 1986). In contrast, relief under clause (f) was found inappropriate for attorney neglect or misconduct. See, e.g., Chapman, 454 N.W.2d at 923-24 (client did not learn that action was dismissed until attorney was suspended, 3 1/2 years after dismissal); Gould v. Johnson, 379 N.W.2d 643, 649 (Minn. App. 1986) (attorney careless in mistakenly allowing client to sign stipulation), review denied (Minn. Mar. 14, 1986).

Here, respondent filed its amended motion to vacate over one year after the default judgment was entered. Respondent brought his motion under rule 60.02(a) and (f). The district court found that respondent was timely because he brought a claim in federal court within four months after the judgment was entered. Appellant argues that respondent’s motion fell under 60.02(c), and therefore, respondent was effectively barred from relief because of the one-year time limit under that section of the statute. Although technically respondent did not go into federal court to move to vacate the judgment, we conclude “there was no such motion to make in federal court!” As the federal court pointed out, respondent’s motion to vacate had to be made in state court. Respondent was doing the best that he could. It was not clearly erroneous for the district court to find that the respondent’s lawsuit filed in federal court within four months after the judgment complied with the one-year statute in spirit. See Minn. R. Civ. P. 52.01 (stating that we review a district court’s findings of fact to determine if they were clearly erroneous).

Appellant also argues that the circumstances of this case do not constitute exceptional circumstances qualifying respondent for relief under 60.02(f). Contrary to appellant’s assertion that respondent’s motion could only be brought under 60.02 (a) or (c), we conclude that it could come in under 60.02 (f), which has no one-year time bar. Clause (f) is a residual clause for reasons justifying relief other than the reasons specified. The other circumstances justifying relief is the above-described posture, the lawsuit filed in federal court within four months of the judgment being entered, the federal court sending respondent back to state court, and then the motion to vacate. The district court did not err by concluding that respondent’s motion was timely.

3. Abuse of Discretion

Appellant argues that respondent failed to meet the Finden factors, and that the district court erred by failing to make factual findings regarding the four factors. Respondent argues that he made a strong showing on each of the four factors.

Default judgments are to be “liberally” reopened to promote resolution of cases on the merits. Galatovich v. Watson, 412 N.W.2d 758, 760 (Minn. App. 1987). A party moving for relief from a judgment must (1) have a reasonable defense on the merits; (2) have a reasonable excuse for its failure to act; (3) have acted with due diligence; and (4) show that no substantial prejudice will result to the other party if the default judgment is vacated. Conley v. Downing, 321 N.W.2d 36, 40 (Minn. 1982) (citing Finden, 268 Minn. at 271, 128 N.W.2d at 750. But when the district court fails to address the Finden factors, our standard of review is de novo. Carter v. Anderson, 554 N.W.2d 110, 115 (Minn. App. 1996), review denied (Minn. Dec. 23, 1996). In its order, the district court did not specifically label how respondent satisfied the factors. That would have been helpful, but the record is adequate to determine if respondent satisfied the factors.

With respect to the first factor, the record demonstrates that respondent has a reasonable claim on the merits. Appellant argues that respondent failed to present a meritorious defense to the merits because respondent conceded that he owed the debt and did not assert any defense to the action in his letter. In his letter, respondent stated that he did not have any money and that he would not pay any further accrued interest on the principal. The assertions in respondent’s letter arguably constitute a meritorious defense, at least to the amount of accrued interest owed, and accrued interest is a significant part of the debt. See Charson v. Temple Israel, 419 N.W.2d 488, 491-92 (Minn. 1988) (stating that a claim need only be “debatably” meritorious to satisfy this factor).

Regarding the second factor, the district court found that respondent’s lawsuit filed in federal court within four months of judgment excused respondent’s failure to act. Although appellant disputes this finding, we agree with the district court’s resolution of this factual issue.

With respect to the third factor, the record demonstrates that respondent acted with due diligence after notice of entry of judgment by filing his lawsuit in federal court within four months of the default judgment. The district court determined that appellant brought his claim within four months of the judgment. Roe v. Widme, 191 Minn. 251, 253, 254 N.W. 274, 275 (1934) (stating that the district court determines the factual question of whether a party acted with due diligence in moving to vacate a default judgment). We agree with the district court that respondent acted (in the spirit of the law) within the time required when he filed his lawsuit in federal court. Simons, 275 Minn. at 138, 145 N.W.2d at 552 (stating that due diligence depends on all the facts and circumstances involved in the individual case).

Finally, no evidence in the record indicates prejudice other than the normal expense of delay of litigation. “[T]he delay and expense of additional litigation, without more, do not create sufficient prejudice to defeat a motion to vacate.” Imperial Premium Fin., 603 N.W.2d at 858.

Respondent satisfied the requirements for vacating a judgment. See Kemmerer, 513 N.W.2d at 841 (stating that courts favor a liberal application of these factors to further the policy of resolving the case on the merits). Applications for relief are addressed to the discretion of the district court, and appellate courts interfere only when that discretion has clearly been abused. Kosloski v. Jones, 295 Minn. 177, 180, 203 N.W.2d 401, 403 (1973). Cf. Hearne v. Waddell, 341 N.W.2d 876, 877 (Minn. 1984) (abuse of discretion found when district court reopened default as to individual defendant but refused to reopen as to corporate defendant with similar defense and excuse).

We conclude, viewing the record in the light most favorable to the district court decision, the district court did not abuse its discretion in granting respondent’s motion to vacate the default judgment.

Affirmed.

Thursday, September 20, 2007

Sale of Home-Mental Illness

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2006).

STATE OF MINNESOTA

IN COURT OF APPEALS

A06-1818

In re Conservatorship of

Ruth V. Hopkins,

Protected Person.

Filed September 18, 2007

Affirmed

Parker, Judge*

Hennepin County District Court

File No. 27-P8-97-1381

Jennie M. Brown, 17905 Cascade Drive, Eden Prairie, MN 55347 (for appellant Ruth Hopkins)

Stephen C. Fiebiger, Stephen C. Fiebiger & Associates, Chartered, 2500 West County Road 42, Suite 190, Burnsville, MN 55337 (for respondent Carol S. Giuliani)

Considered and decided by Randall, Presiding Judge; Halbrooks, Judge; and Parker, Judge.

U N P U B L I S H E D O P I N I O N

PARKER, Judge

Appellant challenges a July 2006 district court order discharging respondent-conservator, arguing that her nursing home did not have authority to submit a receipt on her behalf for the balance due on her conservatorship accounts, the condition precedent for the conservator’s discharge. We affirm.

D E C I S I O N

In 1997, the district court appointed respondent Carol S. Giuliani as co-guardian of the person and sole conservator of the estate of appellant Ruth Hopkins. Appellant has a history of mental illness that manifests itself in a fixed false belief that she can communicate with other species, particularly mice and fruit flies. Despite appellant's illness, her capacity to make medical decisions was restored in June 2003.

Appellant possessed a life estate in a house previously owned by her mother. In October 2003, respondent filed a petition to sell this real estate, claiming that appellant’s personal property was insufficient to pay debts and other charges against the estate, or to provide for appellant’s support and maintenance. Respondent alleged that it was in the best interests of appellant to sell the real estate because appellant was no longer able to live independently at home.

In May 2004, the district court granted respondent’s petition to sell the real estate, and the home was sold in September 2004. This court affirmed the district court’s denial of appellant’s motion to vacate the May 2004 order allowing the sale of the real estate. See In re Conservatorship of Hopkins, 2005 WL 1514441 (Minn. App. June 28, 2005).

In February 2006, the district court heard appellant’s petition for an order restoring her to capacity as to her person and estate. During the same hearing, respondent petitioned for an order allowing her fifth, sixth, seventh, and final accounts and discharging her as conservator. Appellant objected to the accounts on the ground that respondent unconstitutionally deprived her of her property.

In May 2006, the district court filed an order for termination of guardianship and conservatorship, finding that a guardian or conservator would not be of any further assistance to appellant. In a separate order, the court approved respondent’s fifth, sixth, and seventh accounts. The court amended respondent’s final account and concluded that total receipts were $64,795.47, total disbursements were $63,527.88, and that the balance due appellant was $1,267.59, consisting of a computer, desk, chair, and $473.83 in cash. The district court ordered that respondent conservator be discharged upon filing a receipt from appellant for the balance due.

In July 2006, after appellant refused to sign the check for the remaining balance issued by respondent, respondent placed the remaining $473.83 balance in appellant’s trust account at Chateau Health Center (CHC), where she resided. Acting on behalf of appellant, an employee of the CHC filed a receipt with the district court for the balance due from respondent’s final account of May 2006. The district court discharged respondent as conservator. This appeal followed.

Discharge of respondent-conservator

Appellant argues the district court abused discretion by (1) allowing CHC to accept appellant’s balance-due funds and place them into her trust account after she had originally refused them; and (2) accepting a receipt from CHC for the balance due as its basis for discharging respondent as conservator. This court reviews decisions related to the best interests of protected persons for an abuse of discretion. In re Conservatorship of Brady, 607 N.W.2d 781, 784 (Minn. 2000). The district court’s findings will not be set aside unless clearly erroneous. Minn. R. Civ. P. 52.01; see also In re Conservatorship of Moore, 409 N.W.2d 14, 16 (Minn. App. 1987) (stating that the district court’s approval of a conservator’s accounting for disbursements is reviewed for clear error).

Under Minn. Stat. § 524.5-431(a) (2006), a conservatorship terminates upon order of the court. “The order of termination must provide for expenses of administration and direct the conservator to execute appropriate instruments to evidence the transfer of title or confirm a distribution . . . and to file a final report and a petition for discharge upon approval of the final report.” Id.at (e). The court shall enter a final order of discharge upon the approval of the final report and satisfaction by the conservator of any other conditions placed by the court on the conservator’s discharge. Id. at (f).

Here, the conservator strictly followed the statutory requirements for terminating the conservatorship, and the district court accepted the receipt for discharge filed by the CHC, even though its termination order requested a receipt from appellant. Further, appellant admits that she currently lives at CHC and has control over the funds in her trust account, including the balance due from respondent. While appellant believes she was unjustly deprived of her home, she cannot thwart the discharge of respondent as her conservator when the statutory requirements for discharge have been fulfilled. This appeal attempts to forestall the inevitable, namely, the eventual discharge of respondent as conservator. On this record, the district court did not abuse discretion.

Sale of home

Appellant implies that because the district court ordered the sale of her home due to her mental illness, and then later granted her petition to terminate her guardianship, she was unjustly deprived of her property in violation of due process of law.[1] Appellant made the same argument in her prior appeal, and the district court found that this court had addressed the issue. See In re Conservatorship of Hopkins, 2005 WL 1514441 at *11. Appellant did not seek review of our prior decision. The district court’s decision to apply collateral estoppel will be reversed only upon a demonstrated abuse of discretion. Saudi Am. Bank v. Azhari, 460 N.W.2d 90, 92 (Minn. App. 1990).

The application of collateral estoppel is appropriate where (1) the issue was identical to one in a prior adjudication; (2) there was a final judgment; (3) the estopped party was a party or in privity with a party to the prior adjudication; and (4) the estopped party was given full and fair opportunity to be heard on the adjudicated case. Ellis v. Mpls. Comm’n on Civil Rights, 319 N.W.2d 702, 704 (Minn. 1982).

The record supports the district court’s finding. An examination of the opinion from the prior appeal suggests the same due process issues were raised that appellant presents here. The parties in the prior appeal were the same, they were in privity through the conservatorship, and appellant’s motions and appeal were considered by the relevant courts. Appellant’s counsel concedes that the issues related to the home’s sale have already been litigated. On this record, the district court did not abuse discretion by applying collateral estoppel.

Affirmed.

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

[1] Appellant also states she was deprived of due process because she was not given notice about the sale of her home. This argument is not developed in the brief and, therefore, is waived. State, Dep’t of Labor & Indus. v. Wintz Parcel Drivers, Inc., 558 N.W.2d 480, 480 (Minn. 1997).

Monday, August 13, 2007

Isaacson v. City St. Paul-Demolition

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2006).

STATE OF MINNESOTA

IN COURT OF APPEALS

A06-1219

Naomi Isaacson,
Relator,

Laureen Marie Ballinger,
Relator,

vs.

City of St. Paul,
Respondent,

St. Paul City Council,
Respondent.

Filed August 7, 2007

Affirmed; motion granted

Minge, Judge

City of St. Paul

File No. 06-439

Rebekah M. Nett, Westview Law Center, P.L.C., 1350 South Frontage Road, Hastings, MN 55033;

Brendan Tupa, Entrepreneurs & Free Markets, PLC, 701 Fourth Avenue South, Suite 500, Minneapolis, MN 55415; and

Thomas A. Thistle, 976 14th Avenue Southwest, Rochester, MN 55902 (for relators)

John J. Choi, St. Paul City Attorney, Virginia D. Palmer, Assistant City Attorney, 400 City Hall/Courthouse, 15 West Kellogg Boulevard, St. Paul, MN 55102 (for respondents)

Considered and decided by Minge, Presiding Judge; Kalitowski, Judge; and Wright, Judge.

U N P U B L I S H E D O P I N I O N

MINGE, Judge

By writ of certiorari, relators challenge action by respondent city authorizing demolition of their building. Relators argue that the city’s decision was arbitrary and capricious, that the city failed to follow its own procedures, and that changed circumstances make demolition of the building improper. Respondent moves to strike portions of relators’ brief as outside the record. We affirm and grant respondent’s motion.

FACTS

Relators Naomi Isaacson and Laureen Ballinger purchased the property at 1956 Feronia Avenue in St. Paul in September 2002,[1] allegedly without knowledge that the city of St. Paul, respondent, had revoked the building’s certificate of occupancy and classified it as a vacant building. Because the building attracted drug dealers and vagrants, the city had been monitoring the building since 1999. From 1999 to 2003, the city issued numerous summary-abatement notices for various problems with the building.

In June 2003, the city conducted an inspection of the property. Following the inspection, the city served relators with an order informing them that their building was a nuisance and that they were required to repair or demolish the building by July 25, 2003. But after a hearing conducted by the city’s legislative hearing officer and a subsequent hearing before the St. Paul City Council, on September 3, 2003, the council granted relators 180 days to repair the building. Before commencing repairs, relators were required to post a $2,000 performance bond, present a plan, and obtain a permit. At the hearings, relator stated that she intended to rehabilitate the building and that she was working to secure the requisite permits. Relator was informed that if she completed 50% of the rehabilitation project, she could reapply for a 180-day extension.

After 180 days, relators had not corrected the property’s nuisance conditions and had made little rehabilitation progress. A second legislative hearing and city council hearing were held in April 2004. Relator blamed the delays on the city, arguing that it was slow to respond to the rehabilitation plans that had been submitted for approval in August 2003. But according to the city, it was unable to issue the requisite permits because relator did not supply it with adequate information regarding the rehabilitation project. The record also indicates that during the first 180-day period, the city issued several summary-abatement orders because of relators’ consistent failure to properly maintain the property.

Based on the record of the hearings and the evidence offered at the April 2004 council hearing, the city council authorized demolition of relators’ building if relators failed to repair or remove the nuisance conditions within 30 days. The matter languished, no demolition occurred, and in December 2004, the city council stayed its prior demolition order and granted relators 180 additional days to complete rehabilitation of the property. As a condition of that extension, the city required relators to file complete rehabilitation plans, demonstrate their capacity to finance the project, and post a $25,000 performance bond. The bond requirement was later reduced to $2,000.

Following the expiration of the second 180-day extension, relators had still made little progress toward rehabilitation. A city inspector estimated that as of August 2005, relators had only completed five percent of the project. This minimal progress notwithstanding, the city council authorized a 90-day extension in July 2005 and an additional 60 days in September 2005.

In March 2006, another legislative hearing was held. At that hearing, the city offered evidence of the minimal progress towards rehabilitation and neighbors’ dissatisfaction with the condition of the building. Relator offered evidence to show that progress had been made and that rehabilitation was still feasible. Following this hearing, the city’s hearing officer prepared a thorough report summarizing the history of the property, describing the evidence presented at the most recent legislative hearing, and recommending that the city proceed with demolition.

A city council hearing was held on April 19, 2006. On May 3, 2006, the city council decided to “formally vacate the stay on the orders to remove or repair . . . and re-instate[d] the orders to remove or repair . . . [and authorized] the Administration to proceed with demolition [in] 30 day[s].” This certiorari appeal follows.

D E C I S I O N

A municipality’s decision to demolish a building is quasi-judicial. City of Minneapolis v. Meldahl, 607 N.W.2d 168, 171 (Minn. App. 2000). A writ of certiorari is the procedure for securing appellate review of such municipal actions. Larson v. New Richland Care Ctr., 538 N.W.2d 915, 918 (Minn. App. 1995), review granted (Minn. Dec. 20, 1995) and order granting review vacated (Minn. Mar. 4, 1997). Our review on certiorari is limited to “questions affecting the jurisdiction of the board, the regularity of its proceedings, and, as to merits of the controversy, whether the order or determination in a particular case was arbitrary, oppressive, unreasonable, fraudulent, under an erroneous theory of law, or without any evidence to support it.” Dietz v. Dodge County, 487 N.W.2d 237, 239 (Minn. 1992) (quotation omitted).

The first issue is whether the city council’s May 3, 2006 decision authorizing demolition was arbitrary and capricious. A decision is arbitrary and capricious only if the decision-making body: (1) relied on factors not intended by the ordinance; (2) entirely failed to take into account an important aspect of the issue; (3) justified its decision in a way that conflicts with the evidence; or (4) made an implausible decision that cannot be explained as a difference in view or the result of the city’s expertise. Rostamkhani v. City of St. Paul, 645 N.W.2d 479, 484 (Minn. App. 2002). The bases for relators’ arbitrary-and-capricious challenge are not clearly formulated. While relators present their arbitrary-and-capricious challenge under multiple theories, their challenge is best understood if simplified into two distinct arguments: first, that the city’s decision was based on insubstantial and misconstrued evidence, and second, that the city failed to consider important facts.

A. Inadequate Evidence

First, relators argue that the city’s decision was arbitrary and capricious because the city has legal authority to order destruction of a building only when the property owner fails to rehabilitate the nuisance property, and, according to relators, they sufficiently rehabilitated the building such that the city was not permitted to demolish the building. Elsewhere, relators argue that the city “misconstrue[d] . . . the evidence” it relied upon in its decision.

Here, in its final decision ordering relators to repair or remove the nuisance, the city council relied on: (1) the report of the hearing officer, who heard substantial testimony regarding the progress of the rehabilitation project at an informal hearing; (2) the hearing minutes documenting the evidence presented; (3) photographs of the building; (4) the testimony of the owner who attempted to explain the history of rehabilitation challenges; and (5) the testimony of neighbors.

This evidence indicates that despite at least four separate decisions granting relators two 180-day extensions, a 90-day extension, and a 60-day extension, relators completed little more than five percent of the rehabilitation. The city began the formal process of requiring repair and abatement of nuisances or removal of the building in June 2003. As of March 2006, 33 months later, most framing, plumbing, heating, insulation, and a multitude of other rehabilitation tasks were uncompleted. The photographs of the building showed little exterior improvement. Moreover, there was evidence that relators were slow to obtain permits, were consistently behind schedule, had recurring financing problems, and were unwilling to commit to a schedule. Neighbors who were initially supportive became frustrated with relators’ minimal progress and the poor condition of the building. For the first two years of the effort, elected city officials were optimistic that relators would successfully rehabilitate the building, stated a willingness to work with relators, and approved extraordinary extensions of time.

Finally, the city’s hearing officer, who had been extensively involved in the hearings beginning in 2003, and who had recommended several extensions in the past, recommended that the city issue a repair-or-remove order. In making her recommendation, the hearing officer noted that she was skeptical whether relators had the financial capacity to complete the project and concerned that relators’ contractor was not competent to complete the project on schedule. There is ample evidence supporting the city council’s determination that relators did not rehabilitate their property on a timely basis. The record does not support relators’ assertion that the council misconstrued this evidence.

B. Consideration of Relevant Factors

Relators also argue that the city council’s decision was arbitrary and capricious because the council “fail[ed] to consider several important factors,” including construction delays, the contractor’s other commitments, and the city’s own contribution to the delays. The record indicates that relators told the hearing officer and the city council that the lack of progress was due to problems beyond their control. The explanations offered by relators for the construction delays may have been part of the reason that the council extended the rehabilitation timeline on several occasions. Relators’ claim that the city failed to consider legitimate construction delays is inconsistent with the multiple extensions they received over a period of almost three years.

Relators appear to argue that the city was obligated to grant their requests for further extensions. But relators cite no legal basis for the proposition that the city is required to take extraordinary steps to facilitate rehabilitation of this building or grant extension after extension. The arbitrary-and-capricious standard of review only requires that the city have a rational basis for its decision; the standard does not guarantee relators a favorable outcome. Ultimately, relators were responsible for complying with the city deadlines and anticipating set-backs. There is evidence in the record that relators did not hire a contractor capable of promptly completing the project.

Relators also assert that the city ignored its own contribution to the delays in rehabilitation. They claim that city officials delayed issuing required permits and that the council imposed an illegal $25,000 bond requirement. See St. Paul, Minn., Legislative Code § 33.03(f) (2007). The city agrees that the bond was set too high. The record does not indicate when the error was noticed. And at oral argument, the parties were unable to clarify the circumstances surrounding the bond reduction. Without an adequate record, we are unable to determine whether relators were materially prejudiced by this excessive-bonding requirement. Relators also provided no specific evidence of the setback in rehabilitation attributable to the city’s delay in issuing relators’ permits. There is ample evidence in the record that notwithstanding relators’ consistent failure to make progress toward rehabilitation of the building, the city was patient with relators over a period of almost three years. Based on the record, we conclude that the city’s decision was not arbitrary and capricious.

II.

The next issue is whether the city failed to comply with its own procedures. First, relators contend that the city failed to follow its own ordinance by failing to grant them “a reasonable time period for completion of the required work.” Relators argue that they are entitled to a minimum of two years in which to rehabilitate the building and obtain a certificate of occupancy.

Relators cite Saint Paul Legislative Code § 33.03(f)(2) (“SPLC”) as a basis for their claim of an extended time. SPLC § 33.03(f)(2) describes the time period provided to building owners seeking to regain a certificate of occupancy after the city conducts its initial code-compliance inspection:

Except as otherwise specified . . ., a certificate of compliance . . . or a certificate of occupancy . . . must be obtained within six (6) months from the date of the original certificate of compliance . . . . One (1) six-month time extension beyond the initial six-month time limitation may be requested by the owner and will be considered by the building official if it can be shown that the code compliance work is proceeding expeditiously and is more than fifty (50) percent complete or if unforeseen conditions have had significant schedule impact on the completion of work.

The provisions for completion of rehabilitation within six (6) months and the six-month extension apply only to property not presently subject to any orders issued to the property pursuant to chapter 43 or 45 of the [SPLC] . . . .

(emphasis added).

SPLC § 33.03(f)(2), read in its entirety, does not support relators’ two-year claim. Relators’ property was classified as a category-III vacant building under SPLC chapter 45 as early as 2003. Because relators’ building was a nuisance building, under the plain language of the ordinance, relators were not, as a matter of right, even entitled to the initial six-month period or to the discretionary six-month extension. There is no colorable basis for relators’ assertion that they were legally entitled to two years to rehabilitate their building. Regardless, we note that relators had two years and nine months from the time their building was first cited and when repair or removal was ordered to the final city council demolition decision.

Relators also assert that the city failed to follow its procedures by neglecting to post notice that the building was a nuisance property before relators’ purchase of the property in 2002. But there is no evidence in the record in support of this claim, and relators have not shown how the city’s alleged failure to properly post notice in 2002 or earlier is relevant to our consideration of the 2006 city decision under review.

In sum, we conclude that relators have not established that the city failed to follow its own procedures.

III.

Two parallel issues remain. They both concern the record on appeal, and they both deal with claimed developments after the city’s action on May 3, 2006, authorizing demolition.

A. Motion to Strike

First, we consider the city’s motion to strike certain parts of relators’ appendix. “The papers filed in the trial court or agency, the exhibits, and the transcript of the proceedings, if any, shall constitute the record on appeal in all cases.” Minn. R. Civ. App. P. 110.01; see Minn. R. Civ. App. P. 115.04, subd. 1 (providing that rule 110 applies to certiorari proceedings as far as possible). On appeal, this court may not base its decision on evidence outside the record. Rostamkhani, 645 N.W.2d at 483. “The court will strike documents included in a party’s brief that are not part of the appellate record.” Fabio v. Bellomo, 489 N.W.2d 241, 246 (Minn. App. 1992), aff’d, 504 N.W.2d 758 (Minn. 1993). But we recognize that

[i]f anything material to either party is omitted from the record by error or accident or is misstated in it, . . . the appellate court, on motion by a party or on its own initiative, may direct that the omission or misstatement be corrected, and if necessary that a supplemental record be approved and transmitted.

Minn. R. Civ. App. P. 110.05. The party seeking to supplement the record must show that the omitted supplementary material was properly before the decision-maker when it made the decision appealed from. Stephens v. Bd. of Regents, 614 N.W.2d 764, 769-70 (Minn. App. 2000), review denied (Minn. Sept. 26, 2000).

After relators filed their brief, the city moved to strike pages 6 to 39 of relators’ appendix. These parts of the appendix consist of e-mail reports and photographs which relators claim document their progress toward rehabilitating their building. Relators did not file a motion to supplement the record under rule 110.05. And in any event, all of the challenged material is dated after relators filed a writ of certiorari on June 30, 2006. Obviously the material was not, and could not have been, before the city council when it made its May 3, 2006 decision. Relators object to the motion and claim that the documents are necessary for fair consideration of their claim that there has been a change in circumstances. But relators fail to recognize that this appellate court reviews decisions made by the city. We do not compile a record and make initial decisions. Because the challenged portion of relators’ appendix was not part of the record and arose out of activity occurring after the city’s demolition decision, we grant the city’s motion to strike.

B. Changed Circumstances

Finally, relators argue that city is without the authority to demolish their building because they claim that they have recently made substantial progress toward rehabilitation. Although any record supporting this claim is effectively eliminated by our granting the motion to strike, we will address relators’ argument that this court’s decision in City of Barnum v. Sabri, 657 N.W.2d 201 (Minn. App. 2003), is a credible basis for relief.

To properly consider relators’ claim of similarity between their situation and the Sabri case, recognition of the complex history of the Sabri decision is important. In Sabri, the city determined that Sabri’s building was hazardous and ordered Sabri to repair the building within 60 days. More than two years later, the city filed an action in district court for enforcement of its repair order. 657 N.W.2d at 203. The district court entered judgment authorizing the city to raze the building, and thereafter the city authorized demolition. Id. More than a year after the district court’s order, Sabri moved to vacate the demolition orders and judgments and sought a temporary injunction. Id. The city then agreed to reconsider the demolition decision, and the district court denied the temporary injunction as moot. Id. at 203-04. In its reconsideration, the city determined that the building was still a safety hazard and decided to raze the building. Id. at 204. Sabri then went back to the district court seeking relief from the district court’s original demolition order pursuant to Minn. R. Civ. P. 60.02(e) and (f). Id. Sabri sought to introduce new evidence incident to his Rule 60.02(e) motion. Id. This court held that the district court erred in concluding that it lacked authority under rule 60.02(e) to consider post-judgment requests for relief based on changed circumstances. Id. at 206.

Here, in contrast to Sabri, the city of St. Paul is not required to obtain any district court order to proceed with demolition, and the city did not do so. As a result, we are not asked to review a district court ruling on a rule 60.02(e) motion or the refusal by the city to reconsider. Rather, our task is confined to reviewing the city’s final decision ordering relators to repair or remove their nuisance building. Here, the City of St. Paul made the type of decisions that the district court made in Sabri. To be parallel to Sabri, relators would have had to request that the city reconsider and accept additional evidence as a part of that reconsideration. Then, if the city refused the request, relators could appeal asking that we review that decision by the city. Minn. R. Civ. P. 60.02(e) does not authorize the court of appeals to supplement the appellate record. Unlike the district court, the court of appeals does not receive evidence and establish a record. Sabri is not helpful.

Because we have struck extra record documents, because relators base their argument on those stricken documents, and because relators are not appealing a denial of relief by the district court, we reject relators’ Sabri-based claim.

Affirmed; motion granted.

Dated:

[1] The record indicates that both Naomi Isaacson and Laureen Ballinger own the building located at 1956 Feronia Avenue, but the record also indicates that the city council dealt almost exclusively with Isaacson throughout the city hearing process. For ease of reference, when this opinion uses the singular “relator,” it refers to Isaacson.

Opinions-Unpublished?

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Friday, November 2, 2007

Aitkin Co. Attorney Bradley C. Rhodes Disbarred 1Nov07

Friday, October 12, 2007

Messerli-Kramer Judgments

A03-1482

Randall, Judge

U N P U B L I S H E D O P I N I ON

FACTS

Thursday, September 20, 2007

Sale of Home-Mental Illness

U N P U B L I S H E D O P I N I O N

Monday, August 13, 2007

Isaacson v. City St. Paul-Demolition

STATE OF MINNESOTA

A06-1219

Filed August 7, 2007

Minge, Judge

U N P U B L I S H E D O P I N I O N

FACTS

D E C I S I O N

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