This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1998).




Raymond Kvalvog,



Eldon Swenson, et al.,


Filed June 22, 1999


Schultz, Judge[*]

Marshall County District Court

File No. C397251

Kevin T. Duffy, 1008 West Second Street, P.O. Box 715, Thief River Falls, MN 56701 (for appellant)

John C. Novacek, 204 North LaBree Avenue, P.O. Box 494, Thief River Falls, MN 56701 (for respondents)

Considered and decided by Randall, Presiding Judge, Davies, Judge, and Schultz, Judge.



Appellant challenges the district court's order in favor of respondent's motion for attorney fees. Because appellant survived respondents' earlier motions for summary judgment and directed verdict and respondent did not comply with the notice requirement for attorney fees, we reverse.


This appeal arises out of a conversion claim filed by appellant Raymond Kvalvog against respondents Eldon and Corrine Swenson, and their son Robert Swenson. The district court entered a default judgment against Robert Swenson, based on his guilty plea to the criminal charge of theft. Later, the district court denied respondents' motions for summary judgment and directed verdict. The jury returned a verdict in favor of respondents. After the close of trial, respondents moved for $9,225.00 in attorney fees and sanctions under Minn. Stat. § 549.211 (1998) and Minn. R. Civ. P. 11. The district court partially granted respondents' motion, awarding $3,500.00 under section 549.211.

In support of its motion for attorney fees, respondents' attorney, by affidavit, attempted to demonstrate the frivolity of appellant's claim by explaining that because appellant had, prior to trial, possessed information that proved that neither Corinne nor Eldon had participated in the conversion, and Robert had been held liable for the conversion, appellant's suit was frivolous.


Effective August 1, 1997, Minn. Stat. § 549.21 (1996) was repealed and replaced with Minn. Stat. § 549.211 (Supp. 1997). The new statute was enacted on May 22, 1997, took effect on August 1, 1997, and applies to all causes of action arising on or after its effective date. See 1997 Minn. Laws ch. 213, art. 1, § 1 (enacting Minn. Stat. § 549.211); Minn. Stat. § 645.02 (1996) (where effective date not specified, act "takes effect on August 1 next following its final enactment"). Because respondents filed their motions for bad faith attorney fees after August 1, 1997, an award of such fees is governed by Minn. Stat. § 549.211.

Appellant challenges the district court's award of attorney fees to respondents. An abuse of discretion standard is applied to a district court's decision on sanctions. State Bank of Young America v. Fabel, 530 N.W.2d 858, 863 (Minn. App. 1995), review denied (Minn. June 29, 1995). The district court awarded the fees, concluding that appellant had violated subdivision 2, paragraphs (1) and (3) of section 549.211. Under section 549.211, a court may award reasonable attorney fees against a party whose claims: "(1) * * * [are] presented for any improper purpose, such as to harass or to cause unnecessary delay;" and (3) lack evidentiary support. Minn. Stat. § 549.211, subds. 2, 5(a) (providing for imposition of sanctions for violations of this section to deter improper conduct). Under section 549.21, subd. 2 (1996), a court could assess attorney fees against a party that acted in bad faith, asserted frivolous claims, or pursued an unfounded legal position solely to harass or cause unnecessary delay. Because both versions are reasonably similar and were intended to deal with the same inappropriate activity, we apply case law interpreting the prior version to the present statute. See Wagner v. Minneapolis Public Schools, 581 N.W.2d 49, 52 (Minn. App. 1998) (applying case law interpreting section 549.21 to section 549.211 question).

In deciding this case, we do so without the benefit of a brief from respondent or a transcript from the trial court proceedings. Absent a transcript, we lack most of the evidentiary record upon which the district court based its findings of fact, conclusions of law, and order for judgment. Yet, the supreme court has held that courts may dispose of appeals on conclusions of law, limited by whether such conclusions are supported by the findings. Duluth Herald and News Tribune v. Plymouth Optical Co., 286 Minn. 495, 498, 176 N.W.2d 552, 555 (1970); accord Mesenbourg v. Mesenbourg, 538 N.W.2d 489, 492 (Minn. App. 1995).

Previously, we have ruled that attorney fees may be assessed against a party that "assert[s] an interpretation of the law which is contrary to existing law, * * * frivolous, without merit and intended to harass." Summit House Co. v. Gershman, 502 N.W.2d 422, 425 (Minn. App. 1993); see also Strand v. Nelson, 380 N.W.2d 906, 909 (Minn. App. 1986) (affirming award of attorney fees against party pursuing "unwarranted" litigation); Anderson v. Lindgren, 360 N.W.2d 348, 353 (Minn. App. 1984) (affirming award of attorney fees against party whose claims were frivolous and brought in bad faith).

The district court awarded attorney fees, explaining that: (1) Eldon Swenson's obvious bad health prohibited his knowledge of the conversion; (2) at trial, respondents had effectively neutralized the testimony that implicated Corrine Swenson in the conversion; and (3) while appellant's case had survived motions for summary judgment and directed verdict, the case would not necessarily have survived a motion for judgment notwithstanding the verdict. The district court's conclusions fail to reflect current law, and are clearly erroneous.

In denying respondents' motion for summary judgment, the district court explained that a genuine issue of material fact had been raised against respondents. The supreme court has explained that "[a] party who survives [summary judgment] motions with the major claims intact should not be subject to sanctions after trial predicated on these surviving claims." Uselman v. Uselman, 464 N.W.2d 130, 144 (Minn. 1990).

In their motion for attorney fees, respondents discussed issues identical to those which survived the motion for summary judgment. At the beginning of the proceedings, the district court believed appellant's claims to be meritorious, but after trial reversed its opinion to the extent it was willing to sanction appellant for its arguments. The district court's reversal is an abuse of discretion.

Next, we rule that respondents did not comply with the notice requirements of filing for attorney fees. Section 549.211 requires that the party moving for attorney fees give "notice and a reasonable opportunity to respond." Id., subd. 3. Absent such notice, the withdrawal provision of section 549.211, subd. 4(a) (1998) would be left meaningless.[1]

This statutory framework reflects the mandates of prior case law. The Uselman court also required "fair notice" as to the possibility or threat of sanctions. 464 N.W.2d at 143. The court explained that the policy of deterrence central to such sanctions "`is not well served by tolerating abuses during the course of an action and then punishing the offender after the trial is at an end.'" Id. (quoting In Re Yagman, 796 F.2d 1165, 1183 (9th Cir. 1986)). Respondents should have moved for sanctions when appellant raised sanctionable issues.[2]

Although we lack a transcript, we conclude that the district court abused its discretion in awarding to respondents attorney fees under section 549.211. Respondents clearly did not comply with the notice requirements of subdivisions 3 and 4(a). Moreover, Uselman requires reasonable notice to serve the policy behind sanctions. 464 N.W.2d at 143. Furthermore, appellant's survival of respondents' earlier motions for summary judgment and directed verdict demonstrates that appellant's claim had raised material fact issues, not warranting a sanction of section 549.211 attorney fees.


[*] Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. Art. VI, § 10.

[1] Subdivision 4(a) provides that a motion for sanctions "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."

[2] Yet, the fact that appellant survived respondents' summary judgment motion demonstrates that even if respondents had raised the motion at the appropriate opportunity, such sanctions should have been denied.