This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
Brian J. Peterson,
Vance Albert, et al.,
Lance R. Heisler, et al.,
Filed June 6, 2000
Otter Tail County District Court
File No. C9-99-1093
Brian J. Peterson, 7101 Northland Circle, Suite 102, Minneapolis, MN 55428-1598 (respondent attorney pro se)
Lance R. Heisler, P.O. Box 743, Detroit Lakes, MN 56502 (for appellants)
Considered and decided by Kalitowski, Presiding Judge, Klaphake, Judge, and Foley, Judge.*
Appellants Vance and Robin Albert and their attorney, Lance Heisler, challenge a $1,000 judgment entered against them for bad faith attorney fees under Minn. Stat. § 549.211 (1998). The fees were requested by respondent Brian Peterson after appellants submitted a counterclaim in an unlawful detainer action he had brought against the Alberts, based on a 1998 month-to-month written lease.
Because respondent failed to follow the statutory prerequisites for an award of fees and because appellants’ actions did not delay the unlawful detainer proceeding or otherwise demonstrate bad faith warranting an award of fees under that statute, we reverse.
A trial court’s decision to award attorney fees as a sanction under Minn. Stat. § 549.211 (1998) is discretionary. Whalen ex rel. Whalen v. Whalen, 594 N.W.2d 277, 281-82 (Minn. App. 1999).
1. Procedural Requirements
Appellants argue that the trial court abused its discretion because respondent failed to follow the procedural requirements of Minn. Stat. § 549.211. We agree. That statute requires that a motion for sanctions “be made separately from other motions or requests and describe the specific conduct alleged to violate subdivision 2.” Id., subd. 4(a). The statute further requires that the motion
must be served * * * but may not be filed with or presented to the court unless, within 21 days after service of the motion, or another period as the court may prescribe, the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected.
These procedural requirements are intended to give the opposing party notice and a reasonable opportunity to respond and to withdraw or correct an unfounded position. Pfleiderer v. Pfleiderer, 591 N.W.2d 729, 734 (Minn. App. 1999) (“Sanctions cannot be awarded against a party under Minn. Stat. § 549.211 unless that party is given an opportunity to withdraw or correct the challenged paper or claim.”). The goal “is not to punish the offender or to shift fees, but to deter bad faith litigation.” Kellar v. Von Holtum, 605 N.W.2d 696, 701 (Minn. 2000) (discussing awards of attorney fees as sanctions under predecessor statute and Minn. R. Civ. P. 11). To meet that goal, “an offender must be given timely notice of the intention to seek sanctions, the reasons for those sanctions, and an opportunity to correct the abuses.” Id. at 702.
The procedural requirements of Minn. Stat. § 549.211 were not met in this case: (1) respondent failed to make a separate motion and incorporated his request for attorney fees into his motion to dismiss appellants’ counterclaim; (2) respondent’s request was filed with the court on the same day it was served on appellants; and (3) respondent failed to describe how appellants’ conduct violated a specific subsection of Minn. Stat. § 549.211, subd. 2. Thus, appellants were not given adequate notice of respondent’s intent to pursue sanctions or of the exact basis for his request.
Moreover, sanctions were imposed even after appellants acknowledged that their counterclaim for specific performance or damages would have to be heard separately from the unlawful detainer action, and even though the trial court has actually dismissed appellants’ counterclaim without prejudice one day before trial in the unlawful detainer action. Under these circumstances, the award of sanctions several months after dismissal of the counterclaim was merely punitive and served no deterrent effect. Cf. Kellar, 605 N.W.2d at 703 (reversing award of fees where motion not made until results of appeal known and where sanction “simply punishes those with unsuccessful claims”). Thus, the trial court abused its discretion by awarding fees where the procedural requirements of the statute were not met.
2. Substantive Basis for Sanctions
Appellants also argue that there was no substantive basis for fees under Minn. Stat. § 549.211. Again, we agree. An award of sanctions under that statute requires a finding that an attorney or party acted in bad faith. Uselman v. Uselman, 464 N.W.2d 130, 140 (Minn. 1990) (interpreting predecessor statute). Bad faith has been defined as “a frivolous claim which increases the opponent’s costs, an unfounded position taken to delay the action or harass the opponent, or fraud upon the Court.” Radloff v. First Am. Nat’l Bank, 470 N.W.2d 154, 156 (Minn. App. 1991), review denied (Minn. July 24, 1991).
Minn. Stat. § 549.211, subd. 5(c) requires that “[w]hen imposing sanctions, the court shall describe the conduct determined to constitute a violation of this section and explain the basis for the sanction imposed.” In this case, the trial court merely summarized respondent’s allegation that appellants’ counterclaim, which sought specific performance and alleged breach of contract based on a 1997 purchase agreement, was improper because it attempted to assert issues not within the jurisdiction of the court in an unlawful detainer action. See Eagan East Ltd. Partnership v. Powers Investigations, Inc., 554 N.W.2d 621, 622 (Minn. App. 1996) (court in unlawful detainer action lacks jurisdiction to consider issues other than present possessory rights). The court then cited Minn. Stat. § 549.211, subd. 2(2), which prohibits submission of a pleading or position for “any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.”
However, the unlawful detainer action met the statutory timeframes and was not delayed by the filing of appellants’ counterclaim. See Minn. Stat. §§ 566.05-.07 (1998). Although respondent criticizes appellants’ request for a jury trial as an improper attempt to influence a jury with the “extraneous issues” raised in appellants’ counterclaim, appellants had an absolute right to request a jury trial in the unlawful detainer action. And at trial after the court had dismissed the counterclaim without prejudice, appellants waived a jury trial, agreed to stipulate to the facts, and allowed the matter to be completed in a truncated manner. At the conclusion of trial, the court announced on the record that respondent was entitled to restitution of the premises. Thus, the record does not support a finding that appellants’ counterclaim unnecessarily delayed the unlawful detainer proceedings.
Nor did the filing of the counterclaim needlessly increase the costs of litigation, because appellants acknowledged before trial that the counterclaim would have to be heard separately. Any time and expense incurred by respondent in moving to dismiss the counterclaim could have been minimized by informal discussions. These limited costs do not support an award of sanctions.
We therefore reverse the trial court’s award of $1,000 in fees to respondent.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.