650 N. Main Ass'n v. Frauenshuh, Inc.
| Decision Date | 09 April 2018 |
| Docket Number | A17-0890 |
| Parties | 650 North Main Association, Respondent, v. Frauenshuh, Inc., Defendant, Territorial Springs Riverview, LLC, et al., Respondents, Kraus-Anderson Construction Company, Appellant, Doe Affiliates 1-20, et al., Defendants, and Kraus-Anderson Construction Company, Defendant and Third Party Plaintiff, v. Berwald Roofing Company, Inc., et al., Third Party Defendants. |
| Court | Minnesota Court of Appeals |
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2016).
Affirmed
Washington County District Court
Hannah R. Stein, Levin Law Group, LLP, Minneapolis, Minnesota (for respondents) Jonathan M. Zentner, Adina R. Florea, Jeffrey M. Markowitz, Arthur, Chapman, Kettering, Smetak & Pikula, P.A., Minneapolis, Minnesota (for appellant)
Considered and decided by Johnson, Presiding Judge; Cleary, Chief Judge; and Kirk, Judge.
UNPUBLISHED OPINION
After a jury trial and post-trial motions, the district court denied relief on a defendant's cross-claim because the cross-claimant was not liable to the plaintiff for the conduct of the co-defendant against which the cross-claim was alleged. On appeal, this court reversed in part and concluded that the cross-claimant is liable to the plaintiff for the co-defendant's conduct. The cross-claimant then moved for relief from the earlier judgment under rule 60.02 of the rules of civil procedure and requested leave to proceed on its cross-claim. The district court granted the motion because the cross-claimant's successful defense on the plaintiff's underlying claim was "the very premise" on which the district court had denied relief on the cross-claim and that this court's subsequent opinion "radically altered the reason for the previous denial" of relief on the cross-claim. We conclude that rule 60.02 authorizes relief from the prior judgment in these circumstances and, therefore, affirm.
This construction-defect case is on appeal for a second time. The case was tried to a Washington County jury in February 2014, and the district court entered final judgment in August 2015 after resolving post-trial motions. This court affirmed in part, reversed inpart, and remanded. 650 North Main Ass'n v. Frauenshuh, Inc., 885 N.W.2d 478 (Minn. App. 2016), review denied (Minn. Nov. 23, 2016). This appeal concerns an order issued by the district court after the remand. We will recite in simplified fashion the facts and procedural history that are directly relevant to this appeal, and we refer the reader to our prior opinion for a more detailed version of the history of the case.
In 2005, two development companies, Territorial Springs Riverview, LLC and Frauenshuh Sweeney, LLC, both of which are wholly owned by Frauenshuh, Inc. (and, thus, are collectively identified in this opinion as Frauenshuh), hired Kraus-Anderson Construction Company to build a condominium building at 650 North Main Street in the city of Stillwater. Residents of the building later discovered water damage. In September 2011, the homeowners' association, 650 North Main Association, sued Frauenshuh and Kraus-Anderson. Frauenshuh alleged a cross-claim against Kraus-Anderson based on a contractual right to indemnification or contribution.
In February 2014, at the conclusion of an 11-day trial, a Washington County jury found that Frauenshuh did not commit a breach of warranty, that the project's architect (which was not a party to the case) designed the project in a defective manner, and that Kraus-Anderson committed a breach of statutory warranty. The jury found that the association sustained damages of $202,500. The jury also found that the association did not give timely notice of the construction defects to either Frauenshuh or Kraus-Anderson and that Frauenshuh and Kraus-Anderson did not have actual notice of the defects. On July 10, 2014, the district court issued an order stating that, in light of the lack of notice,the association is not entitled to an award of damages against either defendant. On the same date, the district court administrator entered judgment "in favor of the defendants."
The parties filed post-trial motions. The association moved for judgment as a matter of law (JMOL) or, in the alternative, a new trial. In January 2015, the district court granted the association's motion in part on the ground that Frauenshuh is vicariously liable for the architect's defective design. But the district court denied the association's motion in part on the ground that Frauenshuh is not liable for Kraus-Anderson's defective construction. The district court ordered judgment for the association and against Frauenshuh in the amount of $101,250. Frauenshuh moved for JMOL on its cross-claim against Kraus-Anderson for contractual indemnification or contribution. The district court denied the motion on the ground that Frauenshuh was not liable to the association for Kraus-Anderson's defective construction. On August 4, 2015, the district court administrator entered judgment against Frauenshuh for $101,250, plus attorney fees, costs, and disbursements.
Frauenshuh filed a notice of appeal, and the association filed a notice of related appeal. See Minn. R. Civ. App. P. 104, subd. 4. In August 2016, this court issued an opinion in which we concluded that the district court erred by denying the association's motion for JMOL to the extent that the association sought to hold Frauenshuh liable for Kraus-Anderson's defective construction. 650 North Main Ass'n, 885 N.W.2d at 489-91. We also concluded that the district court did not err by granting the association's motion for JMOL to the extent that the association sought to hold Frauenshuh liable for the architect's defective design. Id. at 493-94. Accordingly, with respect to the association'sclaims against Frauenshuh, this court reversed in part and remanded with directions for "the district court to enter judgment for the association for an additional $101,250." Id. at 500. The supreme court denied Frauenshuh's petition for further review, and the clerk of appellate courts entered judgment.
In February 2017, Frauenshuh sought to reassert its cross-claim against Kraus-Anderson. Frauenshuh moved for relief under rule 60.02 of the Minnesota Rules of Civil Procedure. Frauenshuh's motion was based on the fact that, at the conclusion of district court proceedings in August 2015, Frauenshuh was determined to be not liable to the association for Kraus-Anderson's defective construction, which meant that the district court had no basis to allow Frauenshuh to proceed on its cross-claim against Kraus-Anderson, but that, after this court's subsequent opinion, Frauenshuh now is liable to the association for Kraus-Anderson's defective construction. Frauenshuh argued to the district court that this court's opinion "nullified" the premise on which the district court previously had denied Frauenshuh's motion for JMOL on its cross-claim against Kraus-Anderson. In its memorandum of law in support of its rule 60.02 motion, Frauenshuh expressed its intention to seek leave to amend its complaint to assert an additional claim, a claim of common-law indemnification or contribution.
In May 2017, the district court granted Frauenshuh's rule 60.02 motion. The district court stated that its earlier decision "denying the motion of [Frauenshuh] for indemnity from Kraus-Anderson is vacated and reopened." The district court also stated that Frauenshuh "is hereby granted leave to refile their motion seeking contractual indemnity, as well as common law indemnity." Kraus-Anderson appeals.
Kraus-Anderson argues that the district court erred by granting Frauenshuh's motion for relief under rule 60.02.
The rule on which Frauenshuh's motion is based provides as follows:
Minn. R. Civ. P. 60.02. To the extent that an appellant challenges a district court's interpretation of a rule of civil procedure, this court applies a de novo standard of review. Cox v. Mid-Minnesota Mut. Ins. Co., ___ N.W.2d ___, ___, 2018 WL 522831, at *3 (Minn. Jan. 24, 2018); see also City of Barnum v. Sabri, 657 N.W.2d 201, 204 (Minn. App.2003) (). To the extent that an appellant challenges a district court's exercise of discretion under rule 60.02, this court applies an abuse-of-discretion standard of review. Cole v. Wutzke, 884 N.W.2d 634, 637 (Minn. 2016); In re Civil Commitment of Moen, 837 N.W.2d 40, 44-45 (Minn. App. 2013), review denied (Minn. Oct. 15, 2013).
In the district court's memorandum accompanying its order granting Frauenshuh's rule 60.02 motion, the district court quoted paragraphs (e) and (f) of rule 60.02 and provided the following reasons for its ruling:
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