Walsh v. U.S. Bank, N.A.

• Decision Date: 06 August 2014
• Docket Number: No. A13–0742.,A13–0742.
• Citation: 851 N.W.2d 598
• Parties: Laura L. WALSH, Respondent, v. U.S. BANK, N.A., Appellant.
• Court: Minnesota Supreme Court

851 N.W.2d 598

Laura L. WALSH, Respondent,

v.U.S. BANK, N.A., Appellant.

No. A13–0742.

Supreme Court of Minnesota.

Aug. 6, 2014.

Syllabus by the Court

There is no compelling reason to depart from the traditional pleading standard for civil actions in Minnesota. Under that well-established standard, a claim is sufficient to survive a motion to dismiss for failure to state a claim if it is possible on any evidence which might be produced, consistent with the pleader's theory, to grant the relief demanded.

Martin A. Carlson, Law Offices of Martin A. Carlson, Ltd., Minneapolis, MN; and Roy B. Henline, Henline Law, P.A., Maple Grove, MN, for respondent.

Charles F. Webber, Colton D. Long, Faegre Baker Daniels LLP, Minneapolis, MN, for appellant.

OPINION

LILLEHAUG, Justice.

We granted review in this case to decide a question of great interest and consequence to parties and their lawyers in civil cases: whether the plausibility standard announced in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), applies to civil pleadings in Minnesota state court. We conclude that it does not.

I.

Laura L. Walsh defaulted on the mortgage on her residential property in Minneapolis. The mortgage holder, U.S. Bank, N.A., commenced a non-judicial foreclosure proceeding.

On November 16, 2011, U.S. Bank attempted to serve an adult at Walsh's property, identified as “Jane Doe” by the process server, with a notice of the impending foreclosure sale and related documents. The process server described Jane Doe as an “occupant” of the property at the time of service “and for some time prior thereto.”

According to the process server, Jane Doe “refuse[d] to give her name or acquiesce to service” and “refused to open the door and accept service in hand.” The process server displayed the foreclosure-related documents to Jane Doe and told her “that [he] would leave them in the door if she didn't want to cooperate.” Jane Doe “began shouting at [the process server] about trespassing” and “much of what she said was unintelligible.” Ultimately, the process server left the foreclosure-related documents “in a secure place” in the door. Nothing in the record indicates whether U.S. Bank attempted service again.

After the property was sold at a foreclosure sale, Walsh sued U.S. Bank to vacate the sale because of ineffective service of the foreclosure-related documents in violation of Minn.Stat. § 580.03 (2012) and Minn. R. Civ. P. 4.03(a). She alleged that, when U.S. Bank attempted to serve the documents, the only persons residing at the property were Walsh and her male roommate. Walsh further alleged that neither she nor her roommate was served with the documents. Nowhere in her complaint did Walsh explain who Jane Doe was or why Jane Doe was at Walsh's property when U.S. Bank attempted to serve the documents.

U.S. Bank moved to dismiss Walsh's complaint pursuant to Minn. R. Civ. P. 12.02(e) for failure to state a claim upon which relief can be granted. U.S. Bank relied on the plausibility standard from Bell Atlantic Corp. v. Twombly, which requires that a complaint contain “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570, 127 S.Ct. at 1973. U.S. Bank argued that Walsh's complaint failed to allege any facts that nudged her claim across the line from conceivable to plausible.

Using the Twombly plausibility standard, the district court dismissed Walsh's complaint with prejudice. The district court reasoned: “Walsh has failed to establish any evidence or facts giving rise to a plausible claim for relief. All of the appropriately considered facts fail to establish improper service.” (Emphasis added) (citation omitted.)

Walsh appealed. In an unpublished opinion, the court of appeals reversed and remanded. Walsh v. U.S. Bank, N. A., No. A13–0742, 2013 WL 6050427 (Minn.App. Nov. 18, 2013). According to the court of appeals, the district court erred by dismissing Walsh's complaint because “it is possible for Walsh to produce evidence consistent with [her legal] theory.” Id. at *3.

We granted review to decide whether the plausibility standard, applied by the district court, or our traditional pleading standard, applied by the court of appeals, governs civil pleadings in Minnesota.

II.

Whether the plausibility standard or our traditional pleading standard is controlling turns on the proper interpretation of Minn. R. Civ. P. 8.01, captioned “Claims for Relief.” We interpret our rules of civil procedure de novo. Mingen v. Mingen, 679 N.W.2d 724, 727 (Minn.2004). When interpreting a rule, we look first to the plain language of the rule and its purpose. In re Welfare of S.M.E., 725 N.W.2d 740, 742 (Minn.2007). “Where the language is plain and unambiguous, that plain language must be followed.” State v. Dahlin, 753 N.W.2d 300, 305 (Minn.2008). Ambiguity exists only if the language of a rule is subject to more than one reasonable interpretation. Id. at 306.

A.

Minnesota Rule of Civil Procedure 8.01 provides, in relevant part, that “[a] pleading which sets forth a claim for relief ... shall contain a short and plain statement of the claim showing that the pleader is entitled to relief.” This language from Rule 8.01 has remained the same since we adopted the rule in 1951.

Only four years later, we first interpreted the plain language of Rule 8.01 in First National Bank of Henning v. Olson, 246 Minn. 28, 74 N.W.2d 123 (1955). We said: “ ‘[T]here is no justification for dismissing a complaint for insufficiency ... unless it appears to a certainty that the plaintiff would be entitled to no relief under any state of facts which could be proved in support of the claim.’ ” Id. at 38, 74 N.W.2d at 129 (quoting Dennis v. Vill. of Tonka Bay, 151 F.2d 411, 412 (8th Cir.1945)).

In Northern States Power Co. v. Franklin, 265 Minn. 391, 122 N.W.2d 26 (1963), we expanded on our understanding of the plain language of Rule 8.01. We explained:

One of the fundamental changes intended by the adoption of our Rules of Civil Procedure, particularly as embodied in Rule 8, was to permit the pleading of events by way of a broad general statement which may express conclusions rather than, as was required under code pleading, by a statement of facts sufficient to constitute a cause of action. The functions of a pleading today are simply to give fair notice to the adverse party of the incident giving rise to the suit with sufficient clarity to disclose the pleader's theory upon which his claim for relief is based, to permit the application of the doctrine of res judicata, and to determine whether the case must be tried by the jury or the court. No longer is a pleader required to allege facts and every element of a cause of action. A claim is sufficient against a motion to dismiss ... if it is possible on any evidence which might be produced, consistent with the pleader's theory, to grant the relief demanded. To state it another way, under this rule a pleading will be dismissed only if it appears to a certainty that no facts, which could be introduced consistent with the pleading, exist which would support granting the relief demanded.

Id. at 394–95, 122 N.W.2d at 29 (emphasis added) (citations omitted).

Olson and Franklin are our leading cases on Minn. R. Civ. P. 8.01. We have cited the Franklin interpretation of Rule 8.01, for example, 15 times, most recently in July 2014. See, e.g., Graphic Commc'ns Local 1B Health & Welfare Fund “A” v. CVS Caremark Corp., 850 N.W.2d 682 (Minn. July 2, 2014).

B.

For many years, the United States Supreme Court interpreted the federal counterpart to Minn. R. Civ. P. 8.01–Fed.R.Civ.P. 8(a)(2)¹—in a manner substantially similar to Olson and Franklin.See, e.g., Mayle v. Felix, 545 U.S. 644, 655, 125 S.Ct. 2562, 162 L.Ed.2d 582 (2005) (“[A] complaint need only provide fair notice of what the plaintiff's claim is and the grounds upon which it rests.”) (citation omitted) (internal quotation marks omitted); Conley v. Gibson, 355 U.S. 41, 45–46, 78 S.Ct. 99, 101–02, 2 L.Ed.2d 80 (1957) (“[A] complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”), abrogated by Twombly, 550 U.S. at 562–63, 127 S.Ct. at 1969. But in 2007, when it issued Twombly, the Court changed course.

In Twombly, the Court announced a new pleading standard—the plausibility standard—for civil actions in federal court. Under that standard, a pleading must contain “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570, 127 S.Ct. at 1973 (emphasis added). Mere “labels and conclusions, and a formulaic recitation of the elements of a cause of action” are not sufficient. Id. at 555, 127 S.Ct. at 1964. Instead, a complaint must contain factual allegations that “raise a right to relief above the speculative level.” Id.

Two years after Twombly, the Court clarified in Ashcroft v. Iqbal the two “working principles” that underlie the plausibility standard. Iqbal, 556 U.S. at 678, 129 S.Ct. at 1949. “First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Id. Second, if the facts in a complaint do not permit a court to infer more than a mere possibility of misconduct, “the complaint has alleged—but it has not ‘show[n]’—‘that the pleader is entitled to relief.’ ” Id. at 679, 129 S.Ct. at 1950 (quoting Fed.R.Civ.P. 8(a)(2)).

C.

In the wake of Twombly and Iqbal, we have not expressly adopted or rejected the plausibility standard. We have cited Twombly only three times, twice substantively, and we have never cited Iqbal.See Bahr v. Capella Univ., 788 N.W.2d 76, 80 (Minn.2010); Hebert v. City of Fifty Lakes, 744 N.W.2d 226, 235 (Minn.2008); Lorix v. Crompton Corp., 736 N.W.2d 619, 631 n. 3 (...