This opinion will be unpublished and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
Home Town Mortgage, Inc.,
Ronald Tomczik, et al.,
Ronald Tomczik, et al.,
Filed April 25, 2006
Hennepin County District Court
File No. CT 04-005037
Gary B. Bodelson,
Mike Hatch, Attorney General, Thomas K. Overton, Assistant Attorney General, 900 Bremer Tower, 445 Minnesota Street, St. Paul, Minnesota 55101-2127 (for State)
Patrick Neaton, Neaton &
Considered and decided by Peterson, Presiding Judge; Klaphake, Judge; and Hudson, Judge.
U N P U B L I S H E D O P I N I O N
On appeal from summary judgment in this lien dispute, appellant mortgage company argues that the district court (a) erred in concluding that the Minnesota Department of Revenue lacks authority under Minnesota Statutes to compromise a reduction of tax debts over $50,000 without the attorney general’s approval; and (b) erred in dismissing appellant’s claims for promissory estoppel, negligent misrepresentation, and waiver. Because Minnesota Statutes require the attorney general to approve significant tax compromises and because appellant’s additional claims fail as a matter of law, we affirm.
In 1997 and 1998, the State
In 2003, R. Tomczik contacted the Minnesota Department of Revenue (the department) to propose a compromise of his state tax debt. R. Tomczik proposed to pay $24,000 to compromise the state tax debt. R. Tomczik and Alan Maxson, a representative of the department, discussed the possibility of a compromise agreement. According to R. Tomczik, during the discussions, Maxson represented that he had the authority to negotiate and enter into a compromise agreement regarding the state tax liens. Maxson denies making such representations.
The department sent a proposed compromise agreement to R. Tomczik providing, on the first page, as follows:
The taxpayer has offered to pay to the State
The commissioner of revenue has referred this matter to the attorney general and has recommended acceptance of the compromise amount. And in accordance with Minnesota Statute 8.30, the attorney general deems it to be in the State’s best interests to accept the taxpayer’s offer.
On the second page of the agreement, item # 9 states that “[t]his agreement is not binding on the State until it is signed by both the attorney general and the commissioner of revenue.” The third page of the agreement is a signature page with separate lines for the signatures of the attorney general and the commissioner of revenue.
R. Tomczik signed the proposed compromise agreement and returned it to the department. According to his affidavit, R. Tomczik believed that he was signing a written confirmation of an existing oral compromise agreement. R. Tomczik further alleges that he phoned Maxson shortly after submitting the signed proposed compromise agreement, and that Maxson stated that a compromise agreement had been reached and, therefore, R. Tomczik should close on the refinanced mortgage loan. Maxson disputes the allegation, testifying at his deposition that he explicitly informed R. Tomczik that the compromise agreement was not final.
After discussing the proposed compromise agreement with
Maxson, R. Tomczik contacted appellant to obtain a refinanced mortgage and the
funds to satisfy the amount listed in the proposed compromise agreement. Deborah Teich acted as the closing agent for
the lender. Appellant instructed Teich
that its mortgage was to be in first lien position and, therefore, it was
necessary to pay off prior liens from the mortgage proceeds, including the tax
liens claimed by the State of
Prior to the closing, R. Tomczik informed Teich that he
had reached an agreement with the State of
On August 19, 2003, Maxson signed the proposed compromise agreement on behalf of the department. At this point, the signature line for the attorney general was blank. Maxson forwarded the proposed compromise agreement to Ann Marie Patterson, a collection officer and quality assurance coordinator for the department’s collection division. Patterson reviewed the proposed compromise agreement and rejected it on behalf of the department of revenue. No one at the department forwarded the proposed compromise agreement on to the attorney general. No one in the attorney general’s office ever saw, discussed, or signed the proposed compromise agreement.
On or about August 31, 2003,
the State of
Appellant filed suit against
the State of
The parties filed cross motions for summary judgment. In June 2005, the district court issued an order granting the state’s motion for summary judgment, denying appellant’s motion for summary judgment, and dismissing appellant’s claims as well as the Tomcziks’ claims. The district court entered judgment. This appeal follows.
D E C I S I O N
In an appeal from summary
judgment, this court reviews two determinations: whether a genuine issue of
material fact exists, and whether an error in the application of law
occurred. Offerdahl v.
Appellant first argues that
the district court erroneously interpreted Minnesota Statutes to require the
attorney general’s approval of compromise agreements that reduce tax debts by
more than $50,000. Statutory
interpretation presents a question of law, which this court reviews de
The purpose of statutory
interpretation is to ascertain and effectuate the legislature’s intent.
Minn. Stat. § 8.30 (2004) applies to the reductions of debt in amounts exceeding $50,000:
Notwithstanding any other provisions of law to the contrary, the attorney general shall have authority to compromise taxes, fees, surcharges, assessments, penalties, and interest in all cases, whether reduced to judgment or not, where the debt is being reduced by an amount exceeding $50,000 and, in the attorney general’s opinion, it shall be in the best interests of the state to do so. Such a compromise must be in a form prescribed by the attorney general and shall be in writing signed by the attorney general, the taxpayer or taxpayer’s representative, and the commissioner of revenue. Compromises of such debts in cases where the debt is being reduced by an amount of $50,000 or less are governed by section 16D.15.
Minn. Stat. § 16D.15 (2004) provides that “[u]nless expressly prohibited by other federal or state law, a state agency may compromise debts owed to the state, whether reduced to judgment or not, where the state agency determines that it is in the best interests of the state to do so.”
Here, it is undisputed that the proposed compromise agreement would have reduced R. Tomczik’s tax liability by more than $50,000. It is also undisputed that the attorney general never approved or signed the proposed compromise agreement. Relying on section 8.30, the district court concluded that the compromise agreement was not valid or enforceable as a contract or agreement between the parties because the department could not enter into a binding agreement without the attorney general’s signature.
Appellant argues that section 16D.15 gives the department co-equal and independent authority to make compromise agreements for a tax debt owed by a taxpayer, regardless of whether the debt exceeds $50,000, unless expressly prohibited. According to appellant, section 8.30 does not expressly prohibit the department from making a compromise agreement without the attorney general’s approval; rather, section 8.30 preserves the department’s authority while granting the attorney general similar authority. We disagree.
The unambiguous language of section 8.30 expressly requires the attorney general’s signature to compromise tax debt in an amount in excess of $50,000, “[n]otwithstanding any other provisions of law to the contrary.” Accordingly, even assuming that the department has authority under section 16D.15 to compromise large tax debts, that authority is circumscribed by section 8.30. Furthermore, section 8.30 expressly limits the application of section 16D.15, which governs compromises of such debts in cases where the debt is being reduced by an amount of $50,000 or less. And, by its own terms, section 16D.15 does not apply to compromise agreements in which the compromised debt exceeds $50,000, because a state agency acting without attorney general approval would be “expressly prohibited by other . . . state law”—section 8.30. Therefore, appellant’s argument that section 8.30 contains no such express prohibition ignores the plain language of section 8.30, which requires the attorney general’s signature.
Appellant also argues that Minn. Stat. § 270.67, subd. 1 (2004) (repealed 2005) gives the department independent authority to compromise significant tax debts:
Liability agreements. The commissioner of revenue, or any officer or employee of the department of revenue authorized in writing by the commissioner, is authorized to enter into an agreement in writing with any taxpayer, or duly authorized agent or representative of the taxpayer, relating to the liability of the taxpayer in respect of any state tax administered by the commissioner for any taxable period ending prior to the date of the agreement.
Minn. Stat. § 270.67, subd. 1.
Appellant argues that compromise agreements “relate” to the liability of a taxpayer and, therefore, section 270.67 authorizes the department to make compromise agreements without reference to the amount of debt reduction. But, as noted above, section 8.30 explicitly requires the attorney general’s signature on significant compromise agreements, “[n]otwithstanding any other provisions of law to the contrary.” Therefore, section 8.30 circumscribes whatever authority, if any, section 270.67 gives to the department to negotiate compromise agreements.
district court did not err in concluding that R. Tomczik and the department of
revenue did not have a contract or agreement to compromise R. Tomczik’s tax
Appellant next challenges the district court’s dismissal of its promissory-estoppel claim, arguing that genuine issues of material fact preclude an award of summary judgment. The doctrine of promissory estoppel provides: “‘[A] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.’” Faimon v. Winona State Univ., 540 N.W.2d 879, 882 (Minn. App. 1995) (quoting Restatement (Second) of Contracts § 90(1) (1981)), review denied (Minn. Feb. 9, 1996).
Appellant argues that Maxson’s alleged representations to R. Tomczik indicating that the compromise agreement was finalized and suggesting that R. Tomczik proceed with the refinancing, constitute a promise to remove the state’s tax liens in exchange for $24,000, which R. Tomczik reasonably relied upon. According to appellants, the failure to enforce that promise results in injustice.
argument fails as a matter of law because the department lacked the authority
to compromise the debt without the attorney general’s approval, and this court
cannot confer that authority through estoppel.
Compromise agreements for tax debts are a “creature of statute,” and the
department only had the authority to take action that is authorized by
statute. Bd. of Educ. v. Sand, 227
Therefore, while the department was exclusively involved in negotiating R. Tomczik’s proposed compromise agreement, the relevant issue is whether the agency had the authority to effectuate the alleged promise. Because the department was not authorized to compromise R. Tomczik’s tax liens without the attorney general’s approval, the district court did not err in dismissing appellant’s promissory-estoppel claim.
Appellant next challenges
the district court’s dismissal of its claim for negligent misrepresentation,
arguing that the state should be liable for the pecuniary loss resulting from
its reliance on Maxson’s alleged misrepresentation that the compromise
agreement was valid.
Claims for negligent misrepresentation against a government
official are available only when that official is the exclusive source of the
information sought. In Mohler, this court held that a homeowner
could not recover for losses attributable to a city staff’s misinterpretation
of a zoning statute because the erroneous statements involved a
misrepresentation of law. Mohler, 643 N.W.2d at 637. In doing so, this court stated that
“[n]egligent misrepresentation of fact is actionable against government
officers and employees, because members of the public have no other access to
factual information maintained by the government except through those
individuals.” Id; see also Northernaire,
In dicta, the Mohler court determined that summary judgment would have been
appropriate even if the court analyzed the claim as a negligent
misrepresentation of fact. Mohler, 643 N.W.2d at 637–38. The homeowners asserted that they did not
have access to the ordinance which governed their structure, and the city
failed to provide them with a copy. But
this court concluded that summary judgment would have been proper because the
homeowners “failed to provide sufficient evidence to establish that they did
not have access to the March 1998 ordinance or that it was not included in the
city’s codified ordinances.”
The Mohler court placed the burden on the plaintiff to provide some evidence suggesting that he had no alternative means of accessing the information. 643 N.W.2d at 638. Appellant failed to put forth any evidence suggesting that Maxson was the sole source of information regarding the status of the proposed compromise agreement. In contrast, the state put forth the affidavit of Ann Marie Patterson, the department’s quality assurance coordinator, who stated, “Daily the Department receives and answers telephone, fax, and written inquiries from real estate professionals including title companies, mortgage companies, closers, and attorneys regarding liens on various parcels of real estate.” But neither appellant nor Teich, the closing agent, contacted the department to determine whether the compromise agreement had been approved by the necessary parties or attempted to obtain a signed copy of the agreement. Appellant failed to satisfy its burden and, therefore, the district court did not err in concluding that appellant’s negligent misrepresentation claim fails as a matter of law.
challenges the district court’s grant of summary judgment, arguing that the
state waived its right to deny the existence of the compromise agreement. Appellant’s argument lacks merit. Waiver involves the “voluntary relinquishment
of a known right whose essential elements are both intent and knowledge, actual
or constructive.” Meagher v. Kavli, 251