Hall v. State
| Decision Date | 23 January 2017 |
| Docket Number | A16-0874 |
| Citation | 890 N.W.2d 728 |
| Parties | Timothy HALL, Jr., et al., Respondents, v. STATE of Minnesota, et al., Appellants |
| Court | Minnesota Court of Appeals |
Daniel C. Hedlund, Daniel E. Gustafson, Joseph C. Bourne, Gustafson Gluek PLLC, Minneapolis, Minnesota; and Vildan A. Teske, Phillip M. Kitzer, Brian T. Rochel, Teske, Micko, Katz, Kitzer & Rochel, PLLP, Minneapolis, Minnesota; and J. Gordon Rudd, Jr., David Cialkowski, Zimmerman Reed, PLLP, Minneapolis, Minnesota; and Patrick Michenfelder, Throndset Michenfelder, LLC, St. Michael, Minnesota; and Garrett D. Blanchfield, Brant D. Penney, Reinhardt, Wendorf & Blanchfield, St. Paul, Minnesota (attorneys for respondents).
Lori Swanson, Attorney General, Sarah L. Krans, Assistant Attorney General, St. Paul, Minnesota (for appellants).
Considered and decided by Worke, Presiding Judge; Stauber, Judge; and Bratvold, Judge.
This certified-question appeal under Minn. R. Civ. App. P. 103.03(i) arises from a constitutional challenge to MUPA. Appellants, the State of Minnesota and its commissioner of commerce, urge us to answer the district court's certified question as to whether MUPA creates an unconstitutional taking in the negative, and answer the district court's certified question as to whether MUPA meets procedural due-process requirements in the affirmative. We agree with appellants and reverse and remand.
In 2011, respondent Timothy Hall Jr. did not receive his final paycheck from his employer. In 2015, Hall learned from his father that his paycheck had been remitted to appellant Michael Rothman, Commissioner of the Minnesota Department of Commerce (commissioner), and was being held by appellant State of Minnesota (state).
In June 2015, respondent Michael Undlin learned from his attorneys that the state was holding two pieces of his property remitted by an insurance company. Undlin began the process of reclaiming his property.
In 2011, respondent Mary Wingfield opened an interest-bearing savings account. In 2014, Wingfield received a letter from the bank asking her to contact the bank regarding the account. Wingfield ignored the bank's request. Wingfield's property was remitted to the commissioner and held by the state.
Respondent Beverly Herron learned from her daughter that the state was holding her property. Herron's daughter made the discovery after searching for Herron's name on www.missingmoney.com . Wingfield and Herron submitted claims for the return of their property, and each received a check for the amount of the property that did not include interest accrued during the time the state held the property.
All respondents claimed that they did not receive notice from the original holder of the property or from the state that their property had been remitted by the property holder to the state.
On April 8, 2015, respondents filed a proposed class-action complaint against appellants, claiming that MUPA, with its intended purpose of protecting consumers by placing unclaimed property in the state's custody pending return to the rightful owners, was being used by the state to seize private property and use it for the state's benefit without any meaningful effort to locate the rightful owners. Respondents claimed that the state failed to provide adequate notice of its takings, which violated the Due Process Clauses of the United States and Minnesota Constitutions, and that the state's refusal to return interest that accrued on the property while in the state's custody violated the Takings Clauses of the United States and Minnesota Constitutions.
Appellants moved to dismiss pursuant to Minn. R. Civ. P. 12.02 (a), (e), for lack of subject-matter jurisdiction and failure to state a claim upon which relief may be granted. The matter came before the district court on August 12, 2015.
On December 10, 2015, the district court denied the motion to dismiss with respect to the above-referenced claims. The district court determined that respondents sufficiently alleged a due-process claim, because they alleged that notice is not reasonably certain to inform those affected. The district court determined that respondents also sufficiently alleged a takings claim because appellants took respondents' property and put it in a fund for public use, for which respondents are entitled to just compensation. Appellants petitioned this court for discretionary review. We denied the petition.
On January 14, 2016, appellants moved the district court for an order certifying three questions as important and doubtful for appellate review pursuant to Minn. R. Civ. App. P. 103.03(i). The first questioned whether MUPA created "an unconstitutional taking by not entitling owners to interest on abandoned property after it is delivered to the [c]ommissioner." The second asked whether delivery of property to the commissioner under MUPA violated owners' procedural due-process rights. Finally, the state questioned whether it was a proper party to the action.
The district court granted appellants' request to certify the first two questions. The district court asks us to answer the following certified questions:
I. Are the certified questions important and doubtful?
II. Does MUPA create an unconstitutional taking?
III. Should the district court's certified question regarding due process be rephrased?
IV. Does MUPA satisfy procedural due-process requirements?
A party may appeal an order denying a motion to dismiss a complaint for failure to state a claim upon which relief can be granted if "the [district] court certifies that the question presented is important and doubtful." Minn. R. Civ. App. P. 103.03(i). An appellate court reviews de novo the denial of a motion to dismiss for failure to state a claim. Hauschildt v. Beckingham , 686 N.W.2d 829, 836 (Minn.2004). Certified questions present issues of law that an appellate court reviews de novo. Fedziuk v. Comm'r of Pub. Safety , 696 N.W.2d 340, 344 (Minn.2005).
Are the certified questions important and doubtful?
This court makes an independent determination of whether the questions certified are important and doubtful. Nat'l City Bank of Minneapolis v. Lundgren , 435 N.W.2d 588, 590 (Minn.App.1989), review denied (Minn. Mar. 29, 1989). We may decline to reach the merits if we conclude that the questions are not important and doubtful. Proprietors Ins. Co. v. Cohen , 451 N.W.2d 904, 906 (Minn.App.1990).
A question is important if it "(1) has statewide impact, (2) is likely to be reversed, (3) is dispositive of potentially lengthy proceedings, and (4) will impose substantial harm on the parties if it is wrongly decided." Persigehl v. Ridgebrook Invs. Ltd. P'ship , 858 N.W.2d 824, 830 (Minn.App.2015). Courts "give special consideration to whether reversal would terminate potentially lengthy proceedings." Id. (quotation omitted).
"A question is doubtful only if there is no controlling precedent." In re Welfare of Child of L.M.L. , 730 N.W.2d 316, 319 (Minn.App.2007) (quotation omitted). But the fact that the question is one of first impression itself is insufficient to justify certification. Id. The question must "be one on which there is substantial ground for a difference of opinion." Id. (quotation omitted).
The district court's certified questions are important and doubtful. The questions will have a statewide impact. A decision may impact every citizen of this state who has property held by a financial or other institution that has been overlooked or forgotten and could potentially be remitted to the commissioner or has already been remitted to the commissioner. Respondents alleged in the complaint that the state holds approximately $606,000,000 in abandoned property that could be affected by a decision and that the proposed class would "likely include at least tens of thousands of members." Additionally, with a class this numerous, the proceedings will be lengthy. Finally, there is no precedent in Minnesota; these are constitutional questions of first impression, and the parties cite several cases from other jurisdictions that appear to have divergent opinions. Because the questions presented are important and doubtful constitutional questions of statewide impact, they are appropriately before this court.
MUPA covers certain property, including, but not limited to:
(a) unclaimed worker's compensation; (b) deposits or payments for repair or purchase of goods or services; (c) credit checks or memos, or customer overpayments; (d) unidentified remittances, unrefunded overcharges; (e) unpaid claims, unpaid accounts payable or unpaid commissions; (f) unpaid mineral proceeds, royalties or vendor checks; and (g) credit balances, accounts receivable and miscellaneous outstanding checks.
Minn. Stat. § 345.39, subd. 1. If this property has been held in the ordinary course of business and remained unclaimed by the owner for more than three years it is "presumed abandoned." Id. Any wages owing in the ordinary course of the business that an owner fails to claim for more than one year are "presumed abandoned." Id. , subd. 3.
Every holder of property that is presumed abandoned must submit an annual report to the commissioner,...
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Hall v. State, A16-0874
...as important and doubtful. See Minn. R. Civ. App. P. 103.03(i). The court of appeals answered the certified questions. Hall v.State , 890 N.W.2d 728, 731 (Minn. App. 2017). Regarding the takings question, the court determined that no taking occurs when the Act specifies the disposition of u......
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Cambria Co. v. M&M Creative Laminants Inc.
...statewide impact. A question, however, may also present an issue of statewide impact that supports certification. See Hall v. State, 890 N.W.2d 728, 733 (Minn. App. 2017) (recognizing, among other grounds, that $606 million in abandoned property controlled by the state for a class of at lea......