Dennis Hallen and Rebecca Hart, on behalf of themselves and all others similarly situated, Appellants, vs. Hometown America, LLC, d/b/a Cimarron Manufactured Home Park, Respondent.
Annotate this CaseThis opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480 A. 08, subd. 3 (2006).
STATE OF MINNESOTA
IN COURT OF APPEALS
A06-1545
Dennis Hallen and Rebecca Hart,
on behalf of themselves and all others similarly situated,
Appellants,
vs.
Hometown America, LLC,
d/b/a Cimarron Manufactured Home Park,
Respondent.
Filed September 4, 2007
Affirmed
Kalitowski, Judge
Washington County District Court
File No. C3-04-7906
Kay Nord Hunt, Barry A. O'Neil, Valerie Sims, Lommen, Abdo, Cole, King & Stageberg, P.A., 2000 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for appellants)
John F. Bonner, III, Robyn K. Johnson, Bonner & Borhart LLP, U.S. Bank Plaza, Suite 1950, 220 South Sixth Street, Minneapolis, MN 55402 (for respondent)
Considered and decided by Klaphake, Presiding Judge; Toussaint, Chief Judge; and Kalitowski, Judge.
U N P U B L I S H E D O P I N I O N
KALITOWSKI, Judge
Appellants Dennis Hallen and Rebecca Hart, on behalf of themselves and all others similarly situated, challenge the district court's judgment in favor of respondent Hometown America, LLC, arguing that the district court erred by (1) denying appellants' jury trial request; (2) misstating the appropriate standard of proof regarding retaliation under Minn. Stat. § 327C.12 (2006); (3) making clearly erroneous findings of fact; and (4) admitting irrelevant expert testimony. We affirm.
O P I N I O N
Appellants Dennis Hallen and Rebecca Hart lease property in the Cimarron Manufactured Home Park (Cimarron), owned by respondent Hometown America, LLC. Appellants brought a class-action suit against respondent related to utility charges and monthly rent at Cimarron. This suit is closely related to a prior class-action suit between Cimarron residents and respondent.
The class in the first suit (hereinafter Cimarron I) was composed of Cimarron residents with lease agreements that provided that the park owner would provide water and sewer services at no extra charge. The jury in Cimarron I was asked to determine whether respondent[1] breached the parties' lease agreements and violated Minn. Stat. §§ 327C.02, .04 (2000) by installing water meters beginning in January 2002 and charging residents separately for water and sewer utility services. Prior to the January 2002 rule change, a flat amount for water and sewer expenses was included in the monthly lot rent charged to Cimarron residents. Respondent presented evidence to the jury that in lieu of charging for water and sewer utilities, it reduced monthly rent by $5 and did not institute an anticipated annual rent increase of $21, the net effect of which was a $26 reduction in rent.
Following trial, the jury concluded that respondent breached and substantially modified the lease agreements in violation of Minn. Stat. § 327C.02, subd. 2 (2000), and awarded $288,697.21 in damages to appellants. On November 4, 2004, the district court issued an order for judgment for the plaintiff class in the sum awarded and enjoined respondent from "charging class members for sewer and water utilities."
On November 24, 2004, 20 days after judgment was ordered in Cimarron I, respondent notified all Cimarron residents that it was eliminating direct billing for utility usage and would raise monthly lot rent by $26, effective February 1, 2005. Appellants then brought this suit alleging that (1) the rent increase was retaliation for the prior suit in violation of Minn. Stat. § 327C.12 (2006), and (2) the purpose of the rent increase was to pay, in whole or in part, the civil penalty imposed in Cimarron I, in violation of Minn. Stat. § 327C.06, subd. 2 (2006). The complaint sought to enjoin the rent increase and prevent the increase from being collected. On February 28, 2005, after the rent increase had taken effect, appellants amended their complaint to request damages in addition to injunctive relief.
Appellants sought a jury trial, which the district court denied. The case was then tried to the district court. The district court entered judgment in favor of respondent on all of appellants' claims.
I.
Appellants argue that the district court erred by denying their request for a jury trial. We disagree.
The Minnesota Constitution provides that "[t]he right of trial by jury shall remain inviolate, and shall extend to all cases at law without regard to the amount in controversy." Minn. Const. art. I, § 4. The only actions in which the Minnesota Constitution guarantees "the right to a jury trial are those which were conceived of as legal' so that such a right existed with respect to them, at the time the Minnesota [C]onstitution was adopted." State by Humphrey v. Alpine Air Prods., Inc., 490 N.W.2d 888, 895 (Minn. App. 1992) (quotation omitted), aff'd on other grounds, 500 N.W.2d 788 (Minn. 1993). "The controversy's nature and character is determined from all the pleadings and that determination governs the right to a jury trial." Id. "If a plaintiff's claim is one for the recovery of money, the Minnesota Constitution assures a right to a jury trial." Id. "Equitable claims, however, are not triable as a matter of right." Id. "If a jury trial is not a matter of right, it is within the trial court's discretion to submit the case to a jury." Id. A district court's interpretation and application of the Minnesota Constitution are reviewed de novo. Olson v. Synergistic Techs. Bus. Sys., Inc., 628 N.W.2d 142, 148 (Minn. 2001).
Appellants argue that their suit was for damages based on respondent's breach of the lease agreements and characterize the nature of their suit as a legal breach-of-contract claim. But when a claim for damages is intertwined with a request for injunctive relief, there is no right to a jury trial. Sonenstahl v. L.E.L.S., Inc., 372 N.W.2d 1, 4 (Minn. App. 1985).
In Koeper v. Town of Louisville, the plaintiff brought suit seeking to restrain the defendant from maintaining a flow of water over the plaintiff's land and seeking monetary damages sustained by the flow of water in the past. 109 Minn. 519, 520-22, 124 N.W. 218, 218-19 (1910). In affirming the district court's denial of a jury trial, the Minnesota Supreme Court stated:
There is a clear distinction between cases of this character, where two causes of action, one legal and the other equitable, are united in the same action, and those where the cause of action is an equitable one, in which equitable relief is sought, and also legal relief as an incident to the equitable cause of action; for example, a claim for damages growing out of the facts upon which the equitable relief depends. The rule in cases of this kind is that in an action not of a strictly legal nature, where the plaintiff seeks both equitable and legal relief, neither party is entitled to a jury trial as a matter of right.
Id. at 521-22, 124 N.W. at 218-19.
In Indianhead Truck Line, Inc. v. Hvidsten Transp., Inc., the plaintiff brought suit for specific performance of an agreement and monetary damages for the limited period between the time when it alleged the defendant wrongfully prevented consummation of the agreement and the time of trial. 268 Minn. 176, 181, 192-94, 128 N.W.2d 334, 339, 346-47 (1964). The defendant argued that it was entitled to a jury trial because the plaintiff sued for damages for breach of contract. Id. at 192-94, 128 N.W.2d at 346-47. The Indianhead court, citing Koeper approvingly, affirmed the denial of a jury trial, stating "[t]he award of interim damages in this case is not to be classed as an award of damages for breach of contract." Id. at 192-93, 194, 128 N.W.2d at 346, 347.
In Sonenstahl, plaintiff-detectives brought suit against their union, alleging that it breached its duty to fairly represent them in the negotiation process, and, as a result, they suffered monetary damages. 372 N.W.2d at 3. The plaintiff-detectives also sought injunctive relief prohibiting the union from discriminating against them in the future. Id. Citing and referencing Koeper and Indianhead,we affirmed the district court's denial of a jury trial, stating:
[T]he damages sought by the detectives are [] intertwined with the request for injunctive relief, since the behavior which caused the alleged damages (i.e. the alleged failure to fairly represent the detectives) is also that which the detectives are seeking to avoid in the future. Thus, under [Koeper and Indianhead], a jury trial is not required by the Minnesota Constitution.
Id. at 4.
Here, appellants sought an injunction prohibiting respondent from increasing rent, allegedly in violation of the lease. After the rent increase took effect, appellants amended their complaint seeking damages in the amount of the increase in rent for the period of time it was allegedly wrongfully in effect. Like the damages sought in Koeper, Indianhead, and Sonenstahl, which were intertwined with a request for injunctive relief because the behavior which caused the alleged damage was the same behavior sought to be avoided in the future, appellants' claim for damages is intertwined with their request to enjoin respondent from implementing the rent increase because the injunction seeks to stop the behavior (here, the increase in rent) causing the alleged damages. Following Koeper, Indianhead, and Sonenstahl, we conclude that the district court did not err by denying appellants' request for a jury trial.
II.
Appellants argue that the district court misapplied Minn. Stat. § 327C.12 (2006) because the court did not recite the proper rule for determining whether a landlord's action is nonretaliatory and erred by determining that the rent increase was nonretaliatory. We disagree.
Under Minn. Stat. § 327C.12, "[a] park owner may not increase rent, decrease services, alter an existing rental agreement or seek to recover possession or threaten such action in whole or in part as a penalty for a resident's" good faith complaint or attempt to exercise rights or remedies pursuant to law. If the park owner's challenged action began within 90 days after the resident engaged in the protected activity, there is a presumption of retaliation, and the park owner has the burden of proving otherwise. Id.
Appellants argue that the district court misstated the relevant law by failing to recite the language of Parkin v. Fitzgerald, 307 Minn. 423, 430, 240 N.W.2d 828, 832-33 (1976), that respondent had the burden of proving by a preponderance of the evidence that the rent increase was "wholly unrelated to and unmotivated by" the judgment in Cimarron I. Appellant does not cite any authority for the proposition that a district court must recite the language employed by the Parkin court. On appeal, this court's review is limited to deciding whether the district court's findings are clearly erroneous and whether the district court erred in its legal conclusions. Foster v. Bergstrom, 515 N.W.2d 581, 585 (Minn. App. 1994).
While the district court did not expressly state that respondent had the burden of proving that the rent increase was "wholly unrelated to and unmotivated by" the judgment in Cimarron I, the court's findings support its legal conclusion that respondent met its burden of proving a nonretaliatory purpose for the rent increase.
In its findings of fact, the district court recited the testimony of respondent's witnesses, which provided business considerations and compliance with the judgment in Cimarron I as nonretaliatory reasons for the rent increase. The district court recited the testimony of respondent's regional manager that the rent increase was implemented because the judgment in Cimarron I required respondent to cease separate utilities billing for residents who were part of the Cimarron I class and that it was his belief that Minnesota law required that rents for all community residents be uniform. The court also recited the regional manager's testimony that overall considerations of fairness in treating all Cimarron residents the same prompted the decision to implement the rent increase. Finally, the district court noted the regional manager's testimony that the effect of the rent increase on Cimarron residents was minimal because of the anticipated but foregone 2002 rent increase.
These findings support the district court's conclusion that respondent presented sufficient evidence to rebut the presumption that the rent increase was a penalty or retaliation for bringing Cimarron I. The evidence shows that the rent increase was necessitated by the injunctive relief granted in Cimarron I and implemented out of valid business considerations. We conclude that the district court did not misapply the burden of proof regarding retaliation under Minn. Stat. § 327C.12.
III.
Appellants challenge the district court's findings of fact. We give great deference to a district court's findings of fact and will not set aside such findings unless they are clearly erroneous. Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn. 1999). In actions tried without a jury, we will affirm a district court's findings of fact so long as the findings are reasonably supported by the evidence as a whole. Foster, 515 N.W.2d at 585.
Here, the district court noted in its findings of fact the testimony of respondent's regional manager that the net effect of respondent's anticipated but foregone rent increase of $21 in 2002, resulted in a $26 rent reduction when considered in light of the simultaneous $5 rent reduction. The district court also noted that "[w]ith the subject rent increase, residents are paying the same monthly rent they would have paid had the 2002 rule change and rent decrease never been implemented." Appellants argue that this finding is clearly erroneous because it ignores a $15 monthly minimum charge for water and sewer utilities implemented by respondent on January 1, 2002.
But the district court expressly noted the $15 monthly minimum charge instituted in 2002 in its findings of fact and found that despite this charge, following the 2005 rule change, Cimarron residents were paying the same monthly rate they would have been absent the foregone 2002 rent increase. The record does not support appellants' argument, and we conclude that the district court's findings of fact are not clearly erroneous.
IV.
Finally, appellants argue that the district court abused its discretion by allowing respondent's expert witness, a real estate appraiser, to testify about rent levels of manufactured-home communities in the vicinity of Cimarron. Appellants argue that this testimony was irrelevant to determining whether the rent increase was retaliatory. We disagree.
"The admission of evidence rests within the broad discretion of the [district] court and its ruling will not be disturbed unless it is based on an erroneous view of the law or constitutes an abuse of discretion." Kroning v. State Farm Auto. Ins. Co., 567 N.W.2d 42, 45-46 (Minn. 1997) (quotation omitted). Relevant evidence is admissible under Minn. R. Evid. 402, but rule 403 permits the exclusion of relevant evidence "if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury." Minn. R. Evid. 403. "The admissibility of an expert's opinion testimony rests within the sound discretion of the [district] court and we will not reverse unless there is clear error." State v. Nystrom, 596 N.W.2d 256, 259 (Minn. 1999).
Respondent's expert testified that rent increases at Cimarron compared favorably with increases at other manufactured-home communities in the Twin Cities and that although Cimarron rent was on the higher end of the spectrum, the park had greater amenities than any other community including its low density, golf course, parks, and walkways. This testimony was relevant to the issue of whether respondent's rent increase was instituted as a penalty for the protected activity of Cimarron residents.
Respondent's rent increase could be retaliatory under Minn. Stat. § 327C.12 only if the increase was a penalty for the protected activity of Cimarron residents, and respondent had the burden of proving a nonretaliatory reason for the rent increase. Respondent's expert testimony is relevant to this issue because it supports respondent's theory that the rent increase was implemented out of business considerations rather than as a penalty. We conclude that the district court did not abuse its discretion by admitting the testimony of respondent's expert witness.
Affirmed.
[1]The original defendant in Cimarron I was Cimarron's previous owner, Chateau Communities, Inc., which sold Cimarron to respondent prior to trial in Cimarron I. Because the distinction between respondent here and its predecessor in interest is not relevant to the issues presented, both owners will be referred to as respondent.'
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