IN COURT OF APPEALS
Gregory Scott Hanson, et al.,
Mark A. Woolston, et al.,
North American Land Title Group, Inc.,
Dale K. Kuhl,
Filed July 26, 2005
Affirmed in part, reversed in part, and remanded
Todd County District Court
File No. C2-03-0781, C2-03-0785
Thomas H. Sellnow, Sellnow Law
John D. Hagen, Jr.,
Randall D.B. Tigue,
Considered and decided by Lansing, Presiding Judge; Halbrooks, Judge; and Minge, Judge.
S Y L L A B U S
I. A judgment may be collaterally attacked for lack of jurisdiction if the record affirmatively shows that the requisite jurisdictional elements are missing.
II. A person who obtains an interest in property through the assignment of a void judgment may not acquire title as a third-party bona fide purchaser.
O P I N I O N
This is a consolidated appeal from an order declaring that Gregory Hanson has exclusive title to land redeemed by Mark Woolston and dismissing North American Land Title Group, Inc.’s unlawful-detainer action. The court based both determinations on its conclusion that Woolston’s redemption relied on a judgment that was void for lack of subject-matter jurisdiction. The record does not support this conclusion but establishes the absence of personal and territorial jurisdiction. Because the court did not have the opportunity to address whether the lack of personal and territorial jurisdiction appears on the face of the record, the condition necessary for collateral attack of the judgment, we reverse and remand for further proceedings.
F A C T S
Kuhl and her former husband, Dale Kuhl, bought the property at issue in this
appeal during their marriage. In January
2001 the Kuhls separated and Dale Kuhl moved out of the Kuhl’s
Before the end of the redemption period, Hanson bought the interests of two creditors who had obtained judgments against Dale Kuhl. Hanson then filed a notice of intention to redeem and obtained a certificate of redemption in his name.
April 2001 psychologist John Weber obtained a $425 default conciliation court judgment
against Dale Kuhl on a claim for professional fees. Weber’s statement of claim and summons, dated
March 16, 2001, listed Dale Kuhl’s
Weber assigned the judgment to Mark Woolston, and Woolston transcribed the judgment to district court. Woolston then filed a notice of intention to redeem based on the judgment and redeemed the property for $114,114. Woolston obtained a certificate of redemption and became the final creditor in the line of redemption. The sheriff, in turn, mailed Hanson a redemption check, which Hanson retained but did not cash.
later conveyed the property to North American Land and Title Group, Inc. (NALT)
and to Altair, Inc., a company in which Woolston’s trial counsel had an
ownership interest. NALT then brought an
unlawful-detainer action. At the same
time, Hanson and Lori Kuhl brought a quiet-title action against Woolston,
alleging that Woolston did not legally redeem the property because the Weber
judgment, on which the redemption was based, was void for lack of jurisdiction.
Hanson and Lori Kuhl claimed that the
conciliation court had lacked jurisdiction over Dale Kuhl because he was not a
The district court found that Dale Kuhl was not a resident of Todd County when the summons in the Weber action was mailed, and it is undisputed that Dale Kuhl did not respond and did not appear in that action. Based on its finding of nonresidency, the district court concluded that the conciliation court lacked subject-matter jurisdiction over Weber’s claim and that the Weber judgment was therefore void. The district court further concluded that, because the Weber judgment was void and had no legal effect, Woolston’s certificate of redemption was also void. The court declared that Hanson had exclusive title to the property and dismissed Woolston’s unlawful-detainer action against the Kuhls. This appeal follows.
I S S U E S
I. Do Hanson and Lori Kuhl have standing
to attack collaterally the validity of the Weber conciliation court judgment on
which Woolston relied to redeem the
II. Did the satisfaction of the Weber judgment immunize the judgment from collateral attack?
III. Did Hanson waive his right to challenge the validity of the Woolston redemption by retaining the redemption check?
IV. Is the Weber judgment void for lack of jurisdiction?
V. If the Weber judgment is void, are Woolston and his affiliated corporations entitled to the property as third-party bona fide purchasers?
A N A L Y S I S
Mark Woolston and his affiliated
is a threshold consideration in determining whether a litigant is entitled to
have the courts determine the merits of a dispute.
establish constitutional standing, a potential litigant must demonstrate
“injury in fact”—a harm that is both “concrete” and “actual or imminent, not
conjectural or hypothetical.” Whitmore v. Arkansas, 495
limitations on standing additionally require courts to refrain from
adjudicating “abstract questions of wide public significance” that amount to
“generalized grievances” and are most appropriately addressed by the
representative branches, Warth v. Seldin,
422 U.S. 490, 499, 95 S. Ct. 2197, 2205-06 (1975), and cases that do not fall
within the zone of interests protected by the statute or constitutional
provision in question.
Hanson and Lori Kuhl have alleged a concrete and imminent injury sufficient to establish constitutional standing and ensure that the issues will be specifically framed and vigorously and adequately presented with the necessary adverseness. If the Weber judgment is determined to be enforceable, Lori Kuhl faces eviction from her home of twenty years and Hanson faces the loss of the equity in the property he bought to protect his sister’s interests. These are concrete and imminent injuries, traceable to Woolston’s conduct, and likely to be redressed if the court grants the relief Hanson and Lori Kuhl have requested. These are also specific—rather than generalized or abstract—and imminent injuries. Hanson and Lori Kuhl therefore satisfy the constitutional and prudential limitations on standing.
Woolston argues that Hanson and Lori Kuhl lack procedural standing to challenge the judgment under Minn. Stat. § 548.14 (2004) and Minn. R. Civ. P. 60.02(d)—the two methods by which a judgment can be challenged directly—because they were not parties to the Weber action. But Hanson and Kuhl attacked the Weber judgment for lack of jurisdiction collaterally rather than directly. The restrictions of section 548.14 and rule 60.02(d) do not, therefore, apply.
A judgment may be collaterally attacked for lack of jurisdiction when the jurisdictional defect appears on the face of the record, i.e., when the record affirmatively shows that the issuing court lacked jurisdiction. Mueller v. Reimer, 46 Minn. 314, 315, 48 N.W. 1120, 1120 (1891) (ruling that “judgment absolutely void for want of jurisdiction appearing on its face may be set aside on the motion of any person who, although not a party to the action, has an interest in the property upon which it is a cloud”); Hurr v. Davis, 155 Minn. 456, 459, 193 N.W. 943, 944 (1923) (holding that judgment providing relief beyond scope of complaint is void for lack of jurisdiction and open to attack by nonparty whose property rights are affected by judgment, provided that excess relief was apparent on face of record). Accordingly, if Hanson and Lori Kuhl establish in the current action that a lack of jurisdiction appears on the face of the record in the Weber action, they may attack the judgment collaterally.
Woolston argues that the district court lacked authority to vacate the Weber judgment because the judgment had been satisfied. We reject this argument because Woolston’s acquisition by assignment does not have the same preclusive effect as a party’s voluntary payment.
Generally, satisfaction of a
judgment precludes a party from moving to vacate the judgment. Dorso
Trailer Sales, Inc. v. Am. Body & Trailer, Inc., 482 N.W.2d 771, 773
(Minn. 1992); Am. Sharecom, Inc. v. LDB
Int’l Corp., 553 N.W.2d 433, 435 (Minn. App. 1996) (stating that district
court lacks subject-matter jurisdiction to set aside satisfied judgment, even
if judgment fraudulently procured); Boulevard
Del, Inc. v. Stillman, 343 N.W.2d 50, 52 (Minn. App. 1984) (reasoning that
“judgment which is paid and satisfied of record ceases to have any existence,
leaving nothing to ‘vacate’”). The rule
that these cases recognize is intended to prevent a party who voluntarily pays a judgment or accepts the benefit of a
judgment from changing his mind and seeking the court’s aid in recovering
payment. McCallum v. W. Nat’l Mut. Ins. Co., 597 N.W.2d 307, 309 (
Woolston’s acquisition of the judgment by assignment was not a payment and satisfaction by a party to the Weber action. The collateral attack by Hanson and Lori Kuhl is consistent with their prior conduct, which did not indicate acceptance of or acquiescence in the Weber judgment. Consequently Woolston’s satisfaction does not operate to preclude a collateral attack by Hanson and Lori Kuhl.
Woolston redeemed the property, the sheriff sent Hanson a redemption check for
the value of the property. Hanson did
not negotiate the check, but he retained it for six months and returned it to
the sheriff one or two weeks before trial.
Relying on Clark v. Butts, 73
Woolston argues that the district court erred in concluding that the Weber judgment was void for lack of subject-matter jurisdiction. Woolston maintains that the conciliation court had subject-matter jurisdiction over the Weber action and that Dale Kuhl waived any defect in personal jurisdiction retroactively through his testimony in the present action.
court is a court of limited jurisdiction.
The conciliation court’s jurisdiction is limited by the amount of a
claim and the “geographic reach of the court’s summons.” 3A David F. Herr & Laurie A. Kindel,
exception authorizes the service of a conciliation court summons outside the
county boundaries in cases involving a claim against one person for unpaid
professional fees. The conciliation court’s
territorial jurisdiction in the Weber action did not therefore extend outside
district court concluded that the territorial limitation in Minn. Stat. § 491A.01,
subd. 3, affects the conciliation court’s subject-matter jurisdiction. But subject-matter jurisdiction refers to the
class of cases a court is authorized to hear. Bode v.
Woolston argues that Dale Kuhl waived any challenge to the court’s personal jurisdiction and consented to the entry of judgment against him because he “ratified” the default judgment three years after it was entered. This argument is flawed for two reasons. First, it ignores the conciliation court’s territorial limitations, which, except for exclusions that do not apply here, are coextensive with the county in which the court is established. Because service on Dale Kuhl could not effectively be made within the county, the court lacked territorial jurisdiction over the controversy.
Woolston’s argument relies on Dale Kuhl’s testimony in the present action that he had no objection to service of the
judgment and that he “approved and ratified” the judgment. But personal jurisdiction is waived only when
the party submits to the jurisdiction of the court by appearing or by otherwise
invoking the court’s jurisdiction. Patterson v. Wu Fam. Corp., 608 N.W.2d
863, 869 (
Having concluded that the conciliation court lacked personal and territorial jurisdiction and that Dale Kuhl’s retroactive ratification did not effectively waive the jurisdictional defects, we must now turn to whether Hanson or Lori Kuhl may challenge the judgment collaterally.
judgment is open to collateral attack when the lack of jurisdiction
affirmatively appears on the face of the record. See
limited record provided in this appeal includes the conciliation court
statement of claim and summons and the order for judgment on claim and
counterclaim. The statement of claim and
summons contains no affirmation that Dale Kuhl lived in
Woolston last argues that even if the Weber judgment is determined to be void, Woolston is entitled to the land as third-party bona fide purchaser. In essence, he argues that he had a right to rely on the validity of the Weber judgment at the time he redeemed the Kuhl property. We do not agree.
Whether a person who obtains an interest in property through
the assignment of a void judgment is entitled to protection as a third-party
bona fide purchaser has not been addressed by appellate courts in
The doctrine of bona fide purchaser without notice does not apply [when] thereis a total absence of title in the vendor. The good faith of a purchaser cannot create a title where none exists. And the purchaser from one in whomtitle has been vested by a judicial decree is chargeable with notice of defects apparent on the face of the record in the proceedings in which the decree was entered.
For the same reasons, we conclude that the bona-fide-purchaser doctrine should not apply to create a title to land when there is a total absence of title in the vendor. Thus, if the Weber judgment is void on the face of the record for lack of jurisdiction, Woolston obtained no rights as a bona fide purchaser of the judgment, and, consequently, the redemption based on that judgment is void. Like the grantee’s good faith in Sprang, Woolston’s good faith cannot create title to the property where no title exists. As an assignee, Woolston is chargeable with notice of defects in the judgment apparent on the face of the record in the Weber proceeding. Whether a jurisdictional defect appears on the face of the record remains to be litigated on remand.
D E C I S I O N
We conclude that Gregory Hanson and Lori Kuhl have constitutional standing to attack the judgment collaterally, that Hanson did not waive his right to challenge the validity of the Woolston redemption by retaining the redemption check, and that the satisfaction of the Weber judgment did not immunize the judgment from collateral attack. Although we reverse the district court’s determination that the Weber judgment is void for lack of subject-matter jurisdiction, the record establishes that the conciliation court lacked personal and territorial jurisdiction to enter judgment against Dale Kuhl and that Dale Kuhl could not retroactively waive these jurisdictional defects. Whether the judgment may be collaterally attacked depends on whether the jurisdictional defect appears on the face of the record. If the Weber judgment is void on the face of the record, Woolston may not obtain title to the land as a third-party bona fide purchaser. Because the district court did not have an opportunity to consider whether the Weber judgment is void on the face of the record, we remand for further proceedings.
Affirmed in part, reversed in part, and remanded.