This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
Richard Cavanaugh, et al.,
f.k.a Chateau Communities, Inc.,
Filed March 21, 2006
Washington County District Court
File No. C4-02-2886
Kay Nord Hunt, Barry A. O’Neil, Valerie Sims, Lommen, Nelson, Cole & Stageberg, P.A., 2000 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for respondents)
John F. Bonner, III, Thomas F. DeVincke, Bonner & Borhart, LLP, 1950 U.S. Bank Plaza, Suite 1950, 220 South Sixth Street, Minneapolis, MN 55402 (for appellant)
Considered and decided by Wright, Presiding Judge; Dietzen, Judge; and Worke, Judge.
U N P U B L I S H E D O P I N I O N
On appeal in this class-action suit, appellant argues that (1) the district court should not have allowed this action to proceed as a class action when individualized questions existed regarding damages, and the record did not show typicality of circumstances of the class members; (2) the district court abused its discretion by disallowing certain expert testimony; (3) the district court erred in awarding attorney fees to respondents under Minn. Stat. § 8.31 (2004) (private attorney-general statute) when appellant’s conduct was a violation of Minn. Stat. § 327C.15 (2004) and directed at tenants rather than the public at large; and (4) the record does not support the damages awarded by the jury. We affirm.
D E C I S I O N
This issue was raised in Schaff v. Chateau Communities, Inc., No.
A04-1246 (Minn. App. July 26, 2005), review
Appellant argues that the district
court abused its discretion because respondents cannot satisfy the
class-certification requirements of Minn. R. Civ. P. 23 (1989) (amended
2006). District courts have considerable
discretion when determining whether a class action is maintainable. Peterson
v. BASF Corp., 618 N.W.2d
821, 825 (Minn. App. 2000), review denied (
Respondents argue that the class satisfies the typicality and representative requirements of Minn. R. Civ. P. 23.01. Rule 23.01 provides, in pertinent part:
One or more members of a class may sue or be sued as representative parties on behalf of all only if
. . .
(d) the representative parties will fairly and adequately protect the interests of the class.
The prerequisites of typicality and
representivity exist “to insure that the claims of the class members are fully
presented and vigorously prosecuted.” Streich
v. Am. Family Mut. Ins. Co.,
399 N.W.2d 210, 215 (Minn. App. 1987), review denied (Minn. Mar. 25,
1987). Typicality looks at whether the
interests of the representative parties are compatible with those of the
putative class that they seek to represent.
(1) whether the representatives’ interests are sufficiently identical to those of absent class members so that the representatives will vigorously prosecute the suit on their behalf; (2) whether the attorneys are qualified, experienced, and capable of conducting the litigation; and (3) whether the representatives have any interests in conflict with the objective of the class they represent.
Here, appellant allegedly injured all of the class members in the same manner. Therefore, respondents’ claims are based on the same legal theories. While the class members were not all injured to the same degree, their injuries arose from appellant’s unilateral change to the terms of the parties’ leases. All of the claims also involve the same legal determination: whether appellant violated Minn. Stat. § 327C (2004). Appellant offers no evidence to refute the assertion that the attorneys for the representative class members are capable of conducting a vigorous class-action litigation. Because respondents’ claims as the representative members of the class are compatible with those of the other class members and because appellants failed to show that the attorneys are not qualified, experienced, and capable of conducting the litigation, the requirements of typicality and representivity are met.
argue further that the requirement under Minn. R. Civ. P. 23.02 that common
issues “predominate over any questions affecting only individual members, and
that a class action is superior to other available methods for the fair and
efficient adjudication of the controversy” has been met. “No bright-line rules determine whether
common questions predominate.” Lewy
1990 Trust, 650 N.W.2d at
455. Instead, a district court must
consider “whether the generalized evidence will prove or disprove an element on
a simultaneous, class-wide basis that would not require
examining each class member’s individual position.
Here, the district court was required to make a preliminary determination of whether class-action status was appropriate to resolve respondents’ claims that appellant violated Minn. Stat. § 327C. Under section 327C, “‘[s]ubstantial modification’ means any change in a rule which: (a) significantly diminishes or eliminates any material obligation of the park owner; (b) significantly diminishes or eliminates any material right, privilege or freedom of action of a resident; or (c) involves a significant new expense for a resident.” Minn. Stat. § 327C.01, subd. 11. There is no individualized proof requirement in subsection (a). The rule requires only that a material obligation of the park owner be significantly diminished or eliminated. Thus, because one of the elements here is common to the class and predominates, certification is appropriate. See Lewy 1990 Trust, 650 N.W.2d at 455.
In addition, respondents seek to remedy a common legal grievance. Appellant created a single, uniform change to the leases of all of the park tenants. The change was widespread and not limited to the named respondents. Thus, the common issues relating to respondents’ claim here predominate over questions affecting individual class members, and individualized proof is unnecessary to prove the elements of substantial modification, as defined by Minn. Stat. § 327C.01.
Finally, for certification under rule 23.02(c),
a district court must find that a class action is “superior to other available
methods for the fair and efficient adjudication of the controversy.” Factors to consider in a “superiority”
analysis include “manageability, fairness, efficiency, and available
alternatives.” Streich, 399 N.W.2d at 218. A class action is most often needed in
litigation when the individual claims are small.
Sufficiency of Evidence
Appellant argues that it is entitled
to a new trial because the jury’s award of damages is not supported by
sufficient evidence and is excessive and inconsistent. This court will set aside a damages award if
it is “manifestly and palpably contrary to the evidence.” Levienn v. Metro. Transit Comm’n, 297 N.W.2d 272, 273 (
Here, the damages award was based on charges by appellant for sewer and water as a result of a change to metering and the imposition of monthly bills pursuant to this metering. A number of witnesses testified regarding the additional expense incurred as a result of appellant’s action, and documents were introduced regarding past billing amounts. During closing arguments, respondents presented their calculations of damages and asserted that they were entitled approximately $400,000 in damages. Because the record supports the jury’s award of damages, the district court did not abuse its discretion in denying appellant’s motion for a new trial.
Appellant next argues that the
district court abused its discretion by excluding the expert testimony of Roger
Skare. Evidentiary rulings are within
the district court’s sound discretion and will be reversed only if there has
been an abuse of discretion. Bahl v.
Country Club Mkt., Inc.,
410 N.W.2d 916, 919 (
Roger Skare is a licensed real estate appraiser. Respondents objected to Skare’s testimony regarding rental rates at other manufactured-home parks as being irrelevant and potentially confusing to the jury. The district court reviewed Skare’s report and considered counsels’ arguments before precluding Skare’s testimony. The district court ruled that Skare’s report and testimony would be prejudical because it would tend to confuse the jury as to the true issue in the case “together with the fact that the testimony can come in through [appellant’s] witnesses first-hand without the necessity of an expert.” The district court also ruled that Skare’s proposed testimony, in part, be cumulative. The issue in this matter was whether appellant’s unilateral decision to impose water and sewer charges on residents per the installation of metering devices constituted a substantial modification of the residents’ lease agreements in violation of Minn. Stat. § 327C.02 (2004). Skare’s report and testimony went to the issue of rent, not utility charges. Skare’s testimony would likely confuse the jury about the true issue in the matter and, therefore, its prejudical effect would outweigh any purported probative value. The district court did not abuse its discretion in excluding Skare’s testimony.
argues that the district court erred in awarding respondents attorney fees and
costs under the private attorney general statute because this action involves
no state interest or public rights, and no public benefit was realized by its
outcome. This is a legal issue, and a
reviewing court is not bound by, and need not give deference to, a district
court’s decision on a purely legal issue. Frost-Benco Elec. Ass’n v.
The attorney general is authorized to
investigate and enforce violations of unfair and unlawful business and commerce
practices, including violations of the Minnesota Consumer Fraud Act. Minn. Stat. § 8.31, subds. 1, 2 (2004). An
individual injured by a violation of this law may also bring a private civil
action for damages. Minn. Stat. § 8.31,
subd. 3a (2004). Attorney fees are
available under this statute to those private citizens who can demonstrate that
their claim furthers the public interest. Ly v. Nystrom, 615 N.W.2d 302, 314 (
Respondents argue that the district court abused its
discretion when it awarded respondents only one-half of the attorney fees
incurred. “[A]ttorney fees are not
recoverable in litigation unless there is a specific contract permitting or a
statute authorizing such recovery.” Barr/Nelson, Inc. v. Tonto’s, Inc., 336
N.W.2d 46, 53 (
Respondents’ retainer agreement with counsel provided for a 33.3% contingency fee award in the event no fee award was made. Based on the jury verdict of $288,697.21, respondents’ counsel’s contingency fee would be $96,136.17 (the district court order reflects $96,232.40). Respondents’ counsel sought recovery of $356,820.35 in fees and costs. The district court found that “after examining the factors set forth in Paulson that the attorney’s fees charged by [respondents’] counsel are excessive. The fees are almost four times the amount to be paid under the contingency fee agreement.” Further, the district court found “that the $49,111.01 for fees and costs relating to [respondents’] unsuccessful appeal cannot be awarded unless authorized by the Appellate Court and since these fees were not awarded or authorized, they must be deducted prior to any attorney fee award by this Court ($356,820.35 - $49,111.01 = $307,709.34).”
successful in bringing an action, a person may petition “the court” for
reimbursement for reasonable attorney fees incurred in
bringing the action.
After deducting the amount of fees and costs relating to the appeal, the district court determined that respondents’ attorney fees request was $307,709.34. The district court found “that based upon counsel’s experience and the time and labor involved[,] that [respondents’] counsel shall be awarded one-half of the applicable fees, or $153,854.67 ($307,709.34 divided by 2 = $153,854.67).” Respondents argue that the district court’s award was arbitrary and was unsupported by any reasoned explanation about what work was excessive or duplicative.
Respondents argue that this case is
similar to Liess v. Lindemyer, 354
N.W.2d 556 (Minn. App. 1984). In Liess, this court vacated a district
court’s award of attorney fees under the private attorney general statute when
the district court set the award at a contingency rate of one-third of the
recovery and ignored the attorney’s detailed hourly account of fees. The decision in Liess, however, provides that “[t]he record must reflect that the
attorney’s fees award was arrived at after consideration of both the factors
set forth in State v. Paulson
and the policies that support the Minnesota private
attorney general statute.”
Respondents argue that the district
court erred in allowing appellant to assert an offset in damages despite
respondents’ alleged objection.
Respondents claim they objected to an offset during trial and again posttrial;
but respondents fail to provide any citation to the record for their objections
and the brief in support of the motion for a new trial does not contain any
reference to this issue. This court generally
considers “only those issues that the record shows were presented and
considered by the [district] court in deciding the matter before it.” Thiele
v. Stich, 425 N.W.2d 580, 582 (
Respondents argue that the district court permitted
appellant to argue, and the jury to consider, mitigation of respondents’
damages by the $5 per month rent reduction and the purported $21 per month rent
increase. Respondents argue that the
district court erred because no notice of the rent increase was given as
required under Minn. Stat. § 327C.06 (2004).
Respondents claim that it was only after this lawsuit had commenced that
appellant claimed it had purportedly foregone a $21 per month rent
increase. Respondents contend that
without written notice, no such rent increase ever existed and could not be
considered as a purported offset. Due to
this, respondents maintain that as the nonbreaching party, they are entitled to
receive the benefit of the bargain and be placed in the same position that they
would have enjoyed if the contract had not been breached. See Lesmeister
v. Dilly, 330 N.W.2d 95, 103 (