CW Capital Asset Management - Northtown Center v. County of Anoka, 02-CV-19-2185

CourtTax Court of Minnesota
Writing for the CourtWendy S. Tien, Judge.
PartiesCW Capital Asset Management - Northtown Center, Petitioner, v. County of Anoka, Respondent.
Decision Date29 January 2021
Docket Number02-CV-19-2185

CW Capital Asset Management - Northtown Center, Petitioner,
v.

County of Anoka, Respondent.

No. 02-CV-19-2185

Tax Court of Minnesota, Regular Division, Anoka County

January 29, 2021


This matter came before the Honorable Wendy S. Tien, Judge of the Minnesota Tax Court, on respondent's motion to dismiss and petitioner's motion to amend the petition.

Aaron R. Thom and Samantha J. Ellingson, Thom Ellingson, PLLP, represent petitioner CW Capital Asset Management - Northtown Center.

Jason J. Stover and Christine V. Carney, Assistant County Attorneys, represent respondent Anoka County.

ORDER DENYING COUNTY'S MOTION TO DISMISS AND GRANTING PETITIONER'S MOTION FOR LEAVE TO AMEND

Respondent Anoka County moves to dismiss the petition filed by CW Capital Asset Management - Northtown Center contesting the assessment of real property taxes as of January 2, 2018, on the ground that petitioner lacked standing to petition pursuant to Minn. Stat. § 278.01, subd. 1(a) (2020). Petitioner moves for leave to amend the petition to bring the petition in the name of the property owner, 405-551 87th Lane NE Holdings LLC.

Based upon all the files, records, and proceedings, the court now makes the following:

ORDER

1. Respondent Anoka County's motion to dismiss is denied without prejudice.

2. Petitioner CW Capital Asset Management - Northtown Center's motion for leave to amend the petition is granted. An amended petition shall be filed not later than 20 days from the date of this order.

3. The court will file an amended scheduling order setting forth new deadlines. The Scheduling Order filed May 11, 2020, is stayed.

IT IS SO ORDERED.

MEMORANDUM

Wendy S. Tien, Judge.

I. BACKGROUND

On April 25, 2019, CW Capital Asset Management - Northtown Center ("CW") filed a petition with respect to Property Identification No. 31-31-23-32-0008 (the "subject property") for taxes payable in 2019.[1] The petition, filed on tax court Form 7, identifies the subject property by parcel ID number[2] and alleges both that the estimated market value of the subject property is greater than the property's actual market value, and that it is unequally assessed when compared with other property.[3] The petition includes, as an attachment to Form 7, a property account summary obtained from the Anoka County website, which describes the subject property and lists as its owner 405-551 87th Lane NE Holdings LLC ("405-551").[4]

On October 14, 2020, the County moved to dismiss the petition, [5] alleging that CW lacks standing to petition pursuant to Minnesota Statutes section 278.01, subdivision 1 (2020), as it does not have an estate, right, title, interest, or a lien upon the subject property.[6] In support, the County notes the attachment to the petition identifies 405-551 as the owner of the subject property, demonstrating CW's knowledge it lacked the requisite standing.[7] Furthermore, the County avers that 405-551 petitioned with respect to the subject property in its own name for taxes payable in 2020, further demonstrating that CW lacked the requisite standing.[8]

CW contends the petition is not defective.[9] Specifically, CW contends an entity called CWCapital Asset Management LLC ("CWCapital") is authorized to commence and pursue tax appeals on behalf of 405-551.[10] CW avers that CWCapital is the special servicer for U.S. Bank, the sole member of 405-551, [11] and that 405-551 is the owner of the subject property.[12]

In addition to its response to the County's motion, CW seeks leave to amend the petition to state that petitioner is CWCapital on behalf of 405-551, asserting the amendment corrects a technical defect and does not prejudice the County.[13] The County objects to amendment on the grounds the original petition was a "nullity, "[14] and further objects on the grounds that CWCapital rather than CW is the special servicer with respect to the subject property.[15]

A hearing on both motions was held on November 12, 2020.[16] The County's motion to dismiss is denied, and CW's motion to amend is granted.

II. GOVERNING LAW

A. Standing

"[S]tanding has been called one of the most amorphous concepts in the entire domain of public law." Cochrane v. Tudor Oaks Condo. Project, 529 N.W.2d 429, 433 (Minn.App. 1995) (quoting Sundberg v. Abbott, 423 N.W.2d 686, 688 (Minn.App. 1988)). Nonetheless, "the fundamental aspect of standing is that it focuses on the party seeking to get [its] complaint before a court and not the issues [it] wishes to have adjudicated." Id. (quoting Sundberg, 423 N.W.2d at 688). A party has standing if it has suffered "some 'injury-in-fact' or … is the beneficiary of some legislative enactment granting standing." In re Custody of D.T.R., 796 N.W.2d 509, 512 (Minn. 2011) (quoting Enright v. Lehmann, 735 N.W.2d 326, 329 (Minn. 2007)).

Minnesota Statutes section 278.01, subdivision 1(a), provides that "[a]ny person having personal property, or any estate, right, title, or interest in or lien upon any parcel of land" may file a petition with respect to the claims set forth in the statute. See also Int'l Harvester Co. v. State, 200 Minn. 242, 244-45, 274 N.W. 217, 218 (1937) (observing that "[t]ax proceedings against real estate are in rem," and that to the extent a party had a contractual obligation to pay the tax, it had a "vital interest to protect" and was therefore "a proper party" to a proceeding under version of section 278.01 then in effect)[17].

Statutory standing, or "whether a particular party has a cause of action under the statute," Vermillion State Bank v. Dep't of Transp., 895 N.W.2d 269, 271-72 (Minn.App. 2017) (quoting Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 97 n.2 (1998)), is "closely related to the merits inquiry … and is analytically distinct from the question [of] whether a … court has subject-matter jurisdiction to decide the merits of a case," id. (second and third alterations in original) (quoting Roberts ex rel. H.F.W. & T.W. v. Hamer, 655 F.3d 578, 580 (6th Cir. 2011)). Stated simply, "[s]ubject-matter jurisdiction governs a court's authority to consider an issue and standing implicates a party's ability to bring a particular cause of action." Fin Ag, Inc. v. Hufnagle, Inc., 700 N.W.2d 510, 515 (Minn.App. 2005).

To demonstrate standing, a potential litigant generally "must allege injury in fact, or otherwise have a sufficient stake in the outcome, to have a court decide the merits of a dispute." Cochrane, 529 N.W.2d at 433 (citing Middlewest Motor Freight Bureau v. United States, 525 F.2d 681, 683 (8th Cir. 1975)). A "sufficient stake" may be established by statute. Vermillion State Bank, 895 N.W.2d at 271 (citing Citizens for a Balanced City v. Plymouth Congregational Church, 672 N.W.2d 13, 18 (Minn.App. 2003)). Nonetheless, in evaluating the existence of standing, "courts appear hesitant to deny standing under circumstances which would prejudice the party whose standing would be found lacking. Id.; see also Wessin v. Archives Corp., 592 N.W.2d 460, 467 (Minn. 1999) (noting "the law favors cases being decided on their true merits" (quoting Lampert Lumber Co. v. Joyce, 405 N.W.2d 423, 426 (Minn. 1987))); Firoved v. Gen. Motors Corp., 277 Minn. 278, 283, 277 N.W.2d 364, 368 (1967) (observing "[a]n order of dismissal on procedural grounds runs counter to the primary objective of the law to dispose of cases on the merits").

B. Pleadings and Amendments

In general, the Minnesota Rules of Civil Procedure govern the procedures in the tax court, where practicable. Minn. Stat. § 271.06, subd. 7 (2020). Minnesota generally follows traditional rules of pleading. Walsh v. U.S. Bank, N.A., 851 N.W.2d 598, 602-03 (Minn. 2014). Under the traditional pleading standard, a pleading serves:

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 [its] 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

Id. at 602 (quoting N. States Power Co. v. Franklin, 265 Minn. 391, 394-95, 122 N.W.2d 26, 29 (1963)). With respect to petitions filed under chapter 278, a petition "shall set forth in concise language the claim, defense, or objection asserted." Minn. Stat. § 278.02 (2020); see Odunlade v. City of Minneapolis, 823 N.W.2d 638, 649 (Minn. 2012) (observing "[w]e interpret the filing requirements in the statute strictly" (citing Benigni v. Cty. of St. Louis, 585 N.W.2d 51, 54 (Minn. 1998))).

Minnesota Rule of Civil Procedure 15.01 governs the amendment of pleadings, and provides in relevant part:

A party may amend a pleading once as a matter of course at any time before a responsive pleading is served or, if the pleading is one to which no responsive pleading is permitted and the action has not been placed upon the trial calendar the party may so amend it at any time within 21 days after it is served. Otherwise a party may amend a pleading only by leave of court or by written consent of the adverse party and leave shall be freely given when justice so requires

Leave to amend the pleadings should be liberally granted except where it would result in prejudice to the other party. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). The trial court has "wide discretion" to grant or deny an amendment. Id.

An amendment to a pleading generally relates back to the date of the original pleading "whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading." Minn. R. Civ. P. 15.03.[18]

III. ANALYSIS

The County seeks dismissal of the petition for CW's lack of standing.[19] The County's motion to dismiss is denied without prejudice.

A. Standing

The County disputes CW's standing on the...

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