This opinion will be unpublished and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
Headwaters Rural Utility
City of Corcoran,
Metro West Inspection Services, Inc.,
Minnesota Onsite Treatment Contractors’ Association, Inc., et al.,
Affirmed; motion denied
Hennepin County District Court
File No. CT 03-13842
Jon E. Kingstad, 260 Lake Elmo Bank Building, 600 Inwood Avenue North, Oakdale, MN 55128 (for appellant)
John M. Baker, Pamela L. VanderWiel, Greene Espel, 200 South Sixth Street, Suite 1200, Minneapolis, MN 55402 (for respondent City of Corcoran)
Todd R. Haugan, Charles A. Beckjord, Haugan Law Offices, 746 Mill Street, Wayzata, MN 55391 (for respondent Metro West Inspection Services, Inc.)
Considered and decided by Wright, Presiding Judge; Halbrooks, Judge; and Hudson, Judge.
Appellant challenges the district court’s award of costs and disbursements to respondents following the district court’s entry of summary judgment and dismissal of appellant’s claims for lack of subject-matter jurisdiction. Appellant also moves to strike the citation of an unpublished opinion. We affirm the award of costs and disbursements and deny the motion to strike.
This legal controversy arose when respondent Metro West Inspection Services, Inc. (Metro West), on behalf of respondent City of Corcoran (the city), inspected septic systems designed and installed for appellant Headwaters Rural Utility Association, Inc. (HRUA) and its members. As a result of the inspections, the city denied HRUA’s applications for septic permits and issued findings of fact and an order for compliance. HRUA subsequently sued the city and Metro West, alleging libel, defamation, violations of the Minnesota Consumer Fraud Act and Minnesota Uniform Deceptive Trade Practices Act, tortious interference with contract, and violations of federal civil-rights laws. HRUA also sought declaratory judgment as to the rules governing individual septic treatment systems. The city and Metro West moved for summary judgment, which the district court granted on the ground that it lacked subject-matter jurisdiction. In its 51-page order, the district court also concluded that the city and Metro West were immune from suit on HRUA’s claims.
Following the entry of judgment, the city and Metro West submitted separate bills of costs to the district court administrator for taxation. The district court administrator taxed costs and disbursements for both parties, disallowing certain costs. The district court affirmed this award, and this appeal followed.
D E C I S I O N
“Costs and disbursements shall be allowed as provided by statute.” Minn. R. Civ. P. 54.04. The city and Metro West moved for costs and disbursements under Minn. Stat. §§ 549.02, subd. 1, .04 (2004). HRUA argues that the taxation of costs and disbursements under Minn. Stat. §§ 549.02, .04 (2004) is contrary to the plain language of the statutes and rules governing costs and disbursements. Whether the city and Metro West are entitled to tax costs and disbursements against HRUA presents a question of statutory interpretation, which we review de novo. Schons v. State Farm Mut. Auto. Ins. Co., 621 N.W.2d 743, 745 (Minn. 2001).
interpreting a statute, we must “ascertain and effectuate the intention of the
“In every action in a district court, the prevailing party . . . shall be allowed reasonable disbursements paid or incurred . . . .” Minn. Stat. § 549.04. HRUA argues that the district court erred by awarding the city and Metro West costs and disbursements under section 549.04 because they are not prevailing parties and the costs were not paid or incurred.
first consider whether the city and Metro West are “prevailing” parties. HRUA argues that the city and Metro West are
not prevailing parties because the case was dismissed for lack of
subject-matter jurisdiction. HRUA’s
position is not supported by controlling caselaw. It is well settled that, for purposes of section
549.04, a prevailing party is one “who has, in the view of the law, succeeded
in the action.” Borchert v. Maloney, 581 N.W.2d 838, 840 (
The district court granted summary judgment in favor of the city and Metro West and dismissed HRUA’s claims based on immunity and lack of subject-matter jurisdiction. That they succeeded in this action is uncontroverted. Thus, based on the dismissal and entry of judgment in favor of the city and Metro West, the prevailing party requirements of the statute are satisfied.
also asserts that the city and Metro West are not entitled to costs and
disbursements because they were not “paid or incurred” by the parties. This argument also is unavailing. To “pay” means “[t]o give money to in return
for goods or services rendered . . . .” The American Heritage Dictionary 1330 (3d
ed. 1992). In Collins v. Farmers Ins. Exch., the Minnesota Supreme Court defined
“incur” as “to become liable for” the expense rather than to “pay for” it. 271
The record establishes that Metro West both incurred and paid the expenses in its defense of this lawsuit. In defending against HRUA’s allegations, Metro West incurred fees, including filing fees and service-of-process fees. Metro West also incurred discovery costs in its effort to ascertain the relevant facts and formulate its defenses. Metro West subsequently paid vendors and the court for these fees and services. Because these costs and disbursements were necessarily incurred and paid by Metro West, they were properly taxed under Minn. Stat. § 549.04.
argues that, because the city’s insurer paid the city’s costs, the city did not
satisfy the paid or incurred requirement of the statute. The law clearly provides that counsel hired by
an insurer to defend a claim against the insured represents the insured.
The city is insured by the League of Minnesota Cities Insurance Trust. Counsel hired by the League of Minnesota Cities Insurance Trust to defend a claim against the city represents the city. Like Metro West, the city became liable for the litigation costs associated with the defense of this action. This is true regardless of whether the city, as opposed to its insurer, actually paid the costs. Thus, the district court correctly concluded that the city and Metro West were entitled to tax HRUA for costs and disbursements as these expenses were “paid or incurred” as required by section 549.04.
“Costs and disbursements may be taxed by the court administrator . . . and inserted in the judgment.” Minn. R. Civ. P. 54.04. Costs shall be allowed “[u]pon discontinuance or dismissal or when judgment is rendered in the defendant’s favor on the merits . . . .” Minn. Stat. § 549.02, subd. 1. HRUA argues that the district court’s dismissal for lack of subject-matter jurisdiction is not an order or judgment on which the court administrator may tax costs and disbursements because it is not a judgment “on the merits.”
rule 54.04 nor section 549.02 requires a judgment “on the merits” before costs
and disbursements may be taxed. Rule 54.04
refers only to inserting the costs and disbursements in the judgment. And, using disjunctive language (“or”),
section 549.02 provides three distinct bases for allowing costs, only one of
which is a judgment rendered in the defendant’s favor on the merits. The two other permissible bases are
discontinuance or dismissal. HRUA
invites us to add the language “on the merits” to each distinct basis under the
statute. We decline to do so. We may not add words to a statute to “supply
that which the legislature purposely omits or inadvertently overlooks.” Goplen
Construing the language of section 549.02 and rule 54.04 according to its plain meaning, dismissal for lack of subject-matter jurisdiction is sufficient to permit the district court administrator to tax costs and disbursements and insert them in the judgment. Costs are explicitly allowed on “dismissal,” Minn. Stat. § 549.02, subd. 1, “[i]n every action,” Minn. Stat. § 549.04. HRUA’s claims against the city and Metro West were dismissed. Because the taxation of costs on dismissal is expressly permitted by statute, HRUA’s challenge to the taxation of costs fails.
also contends that the district court abused its discretion by failing to hold
an evidentiary hearing or make findings as to the reasonableness of the city’s
and Metro West’s costs and disbursements.
Costs and disbursements generally are allowed within the sound
discretion of the district court. Kellar v. Von Holtum, 605 N.W.2d 696,
appeal of the taxation of costs and disbursements by the court administrator
may be certified to the district court and the “appeal shall be heard . . . and
determined upon the objections so certified.”
The district court determined that an evidentiary hearing was not required to effectively consider HRUA’s challenge to the court administrator’s allowance of costs. Rather, as the district court observed, objections may be considered based on the parties’ motions, briefs, and supporting materials filed with the district court. After the district court administrator’s reduction of costs, the district court was in the best position to assess the reasonableness of the challenged costs and did so.
Given the nature of the allegations, it was not unreasonable for the city and Metro West to defend the claims asserted against them by utilizing extensive discovery and sending copies of pleadings and motions to the parties. In ruling on the dispositive motions, the district court relied in part on the extensive recitation of facts in the city’s brief, which included numerous citations to depositions taken during discovery. The district court administrator disallowed certain costs claimed by both the city and Metro West. The city’s taxable costs were reduced from $5,927.93 to $3,632.81 because certain costs relating to legal research, certain service and filing fees, and photocopying were disallowed. Similarly, Metro West’s taxable costs were reduced from $2,561.93 to $2,013.58 because the district court administrator disallowed certain photocopying expenses for correcting a mathematical error.
On the record before us, we cannot conclude that the district court, which was in the best position to determine the reasonableness of the costs and disbursements allowed, abused its discretion in doing so.
a letter dated June 16, 2006, the city brought to our attention, pursuant to
Minn. R. Civ. App. P. 128.05, the recently released unpublished opinion, Woodland Dev. Corp. v. City of Andover,
No. A05-1636 (
The city complied with the requirements of rule 128.05 and Minn. Stat. § 480A.08, subd. 3, by notifying us and counsel for HRUA of the recent decision and providing a copy to the court and counsel well in advance of the oral argument. Because HRUA received a copy of Woodland and had the opportunity to address it at oral argument, HRUA was not prejudiced by the city’s submission. Thus, we deny HRUA’s motion to strike.
Affirmed; motion denied.