Headwaters Rural Utility Association, Inc., Appellant, vs. City of Corcoran, Respondent, Metro West Inspection Services, Inc., Respondent, Minnesota Onsite Treatment Contractors' Association, Inc., et al., Defendants.

Headwaters Rural Utility Association, Inc., Appellant, vs. City of Corcoran, Respondent, Metro West Inspection Services, Inc., Respondent, Minnesota Onsite Treatment Contractors' Association, Inc., et al., Defendants. A05-2468, Court of Appeals Unpublished, December 19, 2006.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2004).

 

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A05-2468

 

Headwaters Rural Utility Association, Inc.,
Appellant,

vs.

City of Corcoran,
Respondent,

Metro West Inspection Services, Inc.,
Respondent,

Minnesota Onsite Treatment Contractors' Association, Inc., et al.,
Defendants.

 

Filed December 19, 2006

Affirmed; motion denied

Wright, Judge

 

Hennepin County District Court

File No. CT 03-13842

 

 

Jon E. Kingstad, 260 Lake Elmo Bank Building, 600 Inwood Avenue North, Oakdale, MN  55128 (for appellant)

 

John M. Baker, Pamela L. VanderWiel, Greene Espel, 200 South Sixth Street, Suite 1200, Minneapolis, MN  55402 (for respondent City of Corcoran)

 

Todd R. Haugan, Charles A. Beckjord, Haugan Law Offices, 746 Mill Street, Wayzata, MN  55391 (for respondent Metro West Inspection Services, Inc.)

 

 

            Considered and decided by Wright, Presiding Judge; Halbrooks, Judge; and Hudson, Judge.

U N P U B L I S H E D  O P I N I O N

 

WRIGHT, Judge

 

Appellant challenges the district court's award of costs and disbursements to respondents following the district court's entry of summary judgment and dismissal of appellant's claims for lack of subject-matter jurisdiction.  Appellant also moves to strike the citation of an unpublished opinion.  We affirm the award of costs and disbursements and deny the motion to strike.

FACTS

 

This legal controversy arose when respondent Metro West Inspection Services, Inc. (Metro West), on behalf of respondent City of Corcoran (the city), inspected septic systems designed and installed for appellant Headwaters Rural Utility Association, Inc. (HRUA) and its members.  As a result of the inspections, the city denied HRUA's applications for septic permits and issued findings of fact and an order for compliance.  HRUA subsequently sued the city and Metro West, alleging libel, defamation, violations of the Minnesota Consumer Fraud Act and Minnesota Uniform Deceptive Trade Practices Act, tortious interference with contract, and violations of federal civil-rights laws.  HRUA also sought declaratory judgment as to the rules governing individual septic treatment systems.  The city and Metro West moved for summary judgment, which the district court granted on the ground that it lacked subject-matter jurisdiction.  In its 51-page order, the district court also concluded that the city and Metro West were immune from suit on HRUA's claims. 

            Following the entry of judgment, the city and Metro West submitted separate bills of costs to the district court administrator for taxation.  The district court administrator taxed costs and disbursements for both parties, disallowing certain costs.  The district court affirmed this award, and this appeal followed.     

D E C I S I O N

I.

"Costs and disbursements shall be allowed as provided by statute."  Minn. R. Civ. P. 54.04.  The city and Metro West moved for costs and disbursements under Minn. Stat. §§ 549.02, subd. 1, .04 (2004).  HRUA argues that the taxation of costs and disbursements under Minn. Stat. §§ 549.02, .04 (2004) is contrary to the plain language of the statutes and rules governing costs and disbursements.  Whether the city and Metro West are entitled to tax costs and disbursements against HRUA presents a question of statutory interpretation, which we review de novo.  Schons v. State Farm Mut. Auto. Ins. Co., 621 N.W.2d 743, 745 (Minn. 2001). 

When interpreting a statute, we must "ascertain and effectuate the intention of the legislature."  Minn. Stat. § 645.16 (2004).  In doing so, we first determine whether the statute's language, on its face, is ambiguous.  Am. Tower, L.P. v. City of Grant, 636 N.W.2d 309, 312 (Minn. 2001).  A statute's language is ambiguous only when its language is subject to more than one reasonable interpretation.  Amaral v. Saint Cloud Hosp., 598 N.W.2d 379, 384 (Minn. 1999).  We construe words and phrases according to their plain and ordinary meaning.  Frank's Nursery Sales, Inc. v. City of Roseville, 295 N.W.2d 604, 608 (Minn. 1980); see also Minn. Stat. § 645.08(1) (2004) (providing that words are construed according to their common usage).  When the legislature's intent is clearly discernible from a statute's plain and unambiguous language, we interpret the language according to its plain meaning without resorting to other principles of statutory construction.  State v. Anderson, 683 N.W.2d 818, 821 (Minn. 2004). Because HRUA contests the district court's interpretation of Minn. Stat. §§ 549.02, .04, we examine the statutory language to determine how it applies in this case. 

A.

"In every action in a district court, the prevailing party . . . shall be allowed reasonable disbursements paid or incurred . . . ."  Minn. Stat. § 549.04.  HRUA argues that the district court erred by awarding the city and Metro West costs and disbursements under section 549.04 because they are not prevailing parties and the costs were not paid or incurred.

We first consider whether the city and Metro West are "prevailing" parties.  HRUA argues that the city and Metro West are not prevailing parties because the case was dismissed for lack of subject-matter jurisdiction.  HRUA's position is not supported by controlling caselaw.  It is well settled that, for purposes of section 549.04, a prevailing party is one "who has, in the view of the law, succeeded in the action."  Borchert v. Maloney, 581 N.W.2d 838, 840 (Minn. 1998) (quoting Haugland v. Canton, 250 Minn. 245, 254, 84 N.W.2d 274, 280 (1957)). A party who obtains dismissal for lack of jurisdiction has succeeded in the resolution of the lawsuit and, therefore, is a prevailing party.  See Nieszner v. St. Paul Sch. Dist. No. 625, 643 N.W.2d 645, 650 (Minn. App. 2002) (holding that district courthad authority to assess costs to defendant who obtained dismissal for lack of personal jurisdiction). 

The district court granted summary judgment in favor of the city and Metro West and dismissed HRUA's claims based on immunity and lack of subject-matter jurisdiction.  That they succeeded in this action is uncontroverted.  Thus, based on the dismissal and entry of judgment in favor of the city and Metro West, the prevailing party requirements of the statute are satisfied. 

HRUA also asserts that the city and Metro West are not entitled to costs and disbursements because they were not "paid or incurred" by the parties.  This argument also is unavailing.  To "pay" means "[t]o give money to in return for goods or services rendered . . . ."  The American Heritage Dictionary 1330 (3d ed. 1992).  In Collins v. Farmers Ins. Exch., the Minnesota Supreme Court defined "incur" as "to become liable for" the expense rather than to "pay for" it.  271 Minn. 239, 244, 135 N.W.2d 503, 507 (1965).  With these definitions in mind, we apply the statutory phrase "paid or incurred" to each party in turn.

The record establishes that Metro West both incurred and paid the expenses in its defense of this lawsuit.  In defending against HRUA's allegations, Metro West incurred fees, including filing fees and service-of-process fees.  Metro West also incurred discovery costs in its effort to ascertain the relevant facts and formulate its defenses.  Metro West subsequently paid vendors and the court for these fees and services.  Because these costs and disbursements were necessarily incurred and paid by Metro West, they were properly taxed under Minn. Stat. § 549.04.

HRUA argues that, because the city's insurer paid the city's costs, the city did not satisfy the paid or incurred requirement of the statute.  The law clearly provides that counsel hired by an insurer to defend a claim against the insured represents the insured.  Pine Island Farmers Coop v. Erstad & Riemer, P.A., 649 N.W.2d 444, 449 (Minn. 2002).  An insurer commonly pays all sums for which the insured becomes legally obligated in the course of its defense.  Minn. Mining & Mfg. Co. v. Travelers Indem. Co., 457 N.W.2d 175, 180-81 (Minn. 1990).  That the insurer pays the insured's expenses does not preclude a determination that the costs were incurred by the insured.  Indeed, the insurer would not pay expenses for which its insured is not liable.

The city is insured by the League of Minnesota Cities Insurance Trust.  Counsel hired by the League of Minnesota Cities Insurance Trust to defend a claim against the city represents the city.  Like Metro West, the city became liable for the litigation costs associated with the defense of this action.  This is true regardless of whether the city, as opposed to its insurer, actually paid the costs.  Thus, the district court correctly concluded that the city and Metro West were entitled to tax HRUA for costs and disbursements as these expenses were "paid or incurred" as required by section 549.04.

 

B.

 

"Costs and disbursements may be taxed by the court administrator . . . and inserted in the judgment."  Minn. R. Civ. P. 54.04.  Costs shall be allowed "[u]pon discontinuance or dismissal or when judgment is rendered in the defendant's favor on the merits . . . ."  Minn. Stat. § 549.02, subd. 1.  HRUA argues that the district court's dismissal for lack of subject-matter jurisdiction is not an order or judgment on which the court administrator may tax costs and disbursements because it is not a judgment "on the merits."

Neither rule 54.04 nor section 549.02 requires a judgment "on the merits" before costs and disbursements may be taxed.  Rule 54.04 refers only to inserting the costs and disbursements in the judgment.  And, using disjunctive language ("or"), section 549.02 provides three distinct bases for allowing costs, only one of which is a judgment rendered in the defendant's favor on the merits.  The two other permissible bases are discontinuance or dismissal.  HRUA invites us to add the language "on the merits" to each distinct basis under the statute.  We decline to do so.  We may not add words to a statute to "supply that which the legislature purposely omits or inadvertently overlooks."  Goplen v. Olmsted County Support & Recovery Unit, 610 N.W.2d 686, 689 (Minn. App. 2000) (quotation omitted).  And "words of a court rule, like those of a statute, must be taken and construed in the sense in which they were understood and intended at the time the rule was promulgated."  House v. Hanson, 245 Minn. 466, 473, 72 N.W.2d 874, 878 (1955).  

Construing the language of section 549.02 and rule 54.04 according to its plain meaning, dismissal for lack of subject-matter jurisdiction is sufficient to permit the district court administrator to tax costs and disbursements and insert them in the judgment.  Costs are explicitly allowed on "dismissal," Minn. Stat. § 549.02, subd. 1, "[i]n every action," Minn. Stat. § 549.04.  HRUA's claims against the city and Metro West were dismissed.  Because the taxation of costs on dismissal is expressly permitted by statute, HRUA's challenge to the taxation of costs fails.

II.

HRUA also contends that the district court abused its discretion by failing to hold an evidentiary hearing or make findings as to the reasonableness of the city's and Metro West's costs and disbursements.  Costs and disbursements generally are allowed within the sound discretion of the district court.  Kellar v. Von Holtum, 605 N.W.2d 696, 703 (Minn. 2000).  Accordingly, we review the amount of costs and disbursements allowed for an abuse of that discretion.  Id. 

An appeal of the taxation of costs and disbursements by the court administrator may be certified to the district court and the "appeal shall be heard . . . and determined upon the objections so certified."  Minn. R. Civ. P. 54.04.  An evidentiary hearing on the reasonableness of the costs is not required.  Buller v. A.O. Smith Harvestore Prods., Inc., 518 N.W.2d 537, 543 (Minn. 1994); see Auto-Owners Ins. Co. v. NewMech Cos.,678 N.W.2d 477, 485 (Minn. App. 2004)(holding that district court did not abuse its discretion when it awarded reasonable costs to prevailing party without evidentiary hearing).  We will not disturb the district court's decision to proceed without an evidentiary hearing when the district court's findings are amply supported by the record.  Buller, 518 N.W.2d at 543.

The district court determined that an evidentiary hearing was not required to effectively consider HRUA's challenge to the court administrator's allowance of costs.  Rather, as the district court observed, objections may be considered based on the parties' motions, briefs, and supporting materials filed with the district court.  After the district court administrator's reduction of costs, the district court was in the best position to assess the reasonableness of the challenged costs and did so. 

Given the nature of the allegations, it was not unreasonable for the city and Metro West to defend the claims asserted against them by utilizing extensive discovery and sending copies of pleadings and motions to the parties.  In ruling on the dispositive motions, the district court relied in part on the extensive recitation of facts in the city's brief, which included numerous citations to depositions taken during discovery.  The district court administrator disallowed certain costs claimed by both the city and Metro West.  The city's taxable costs were reduced from $5,927.93 to $3,632.81 because certain costs relating to legal research, certain service and filing fees, and photocopying were disallowed.  Similarly, Metro West's taxable costs were reduced from $2,561.93 to $2,013.58 because the district court administrator disallowed certain photocopying expenses for correcting a mathematical error.   

On the record before us, we cannot conclude that the district court, which was in the best position to determine the reasonableness of the costs and disbursements allowed, abused its discretion in doing so. 

III.

In a letter dated June 16, 2006, the city brought to our attention, pursuant to Minn. R. Civ. App. P. 128.05, the recently released unpublished opinion, Woodland Dev. Corp. v. City of Andover, No. A05-1636 (Minn. App. June 13, 2006),bearing on the issue of whether costs were "paid or incurred" by the city's insurer.  HRUA moved to strike the city's letter and citation to the unpublished opinion on the ground that an unpublished opinion lacks precedential value and is not an authority that may be cited under Minn. R. Civ. App. P. 128.05. 

Minn. R. Civ. App. P. 128.05 provides that, if "pertinent and significant authorities" come to a party's attention, a party may promptly advise the clerk of the appellate courts.  Indeed, our unpublished opinions are not precedential and shall not be cited unless the citing party provides a full and correct copy to all counsel.  Minn. Stat. § 480 A. 08, subd. 3 (2004).  Although not precedential, an unpublished opinion may be of persuasive value.  Dynamic Air, Inc. v. Bloch,502 N.W.2d 796, 800 (Minn. App. 1993).  Rule 128.05 does not require the cited case to be precedential.

The city complied with the requirements of rule 128.05 and Minn. Stat. § 480 A. 08, subd. 3, by notifying us and counsel for HRUA of the recent decision and providing a copy to the court and counsel well in advance of the oral argument.  Because HRUA received a copy of Woodland and had the opportunity to address it at oral argument, HRUA was not prejudiced by the city's submission.  Thus, we deny HRUA's motion to strike.

            Affirmed; motion denied.