Karmel Properties, LLC v. Mohamed

Decision Date03 July 2008
Docket NumberNo. 27-CV-HC-08-2708.,27-CV-HC-08-2708.
PartiesKarmel Properties, LLC, Plaintiff, v. Osman Mohamed d/b/a Qoraxlow Restaurant, Defendant.
CourtMinnesota District Court

Gary Larson, Judge of District Court.

The above-captioned matter came on for hearing on July 3, 2008, before the Honorable Gary Larson, Judge of the Hennepin County District Court, on appeal for judicial review from Housing Court Referee Mark Labine's Findings of Fact, Conclusions of Law, and Judgment dated May 2, 2008. Referee Labine entered judgment for the Defendant to remain in possession of the premises and for allowable costs and disbursements to the prevailing party. The parties both submitted briefs and this Court took the case under advisement on August 14, 2008.

At the hearing before the undersigned, Robert M. Speeter, Speeter & Johnson, appeared on behalf of Plaintiff and Daniel M. Kennedy, Kennedy Law Group, PLLC, appeared on behalf of Defendant.

IT IS HEREBY ORDERED:

1.) That Housing Court Referee Mark Labine's decision in this matter is AFFIRMED.

2.) That this Order and the attached Memorandum shall be properly served upon each party by United States mail and such service shall constitute due and proper service.

MEMORANDUM
I. INTRODUCTION

The above-captioned matter originally came on for hearing on April 18, 2008, before Housing Court Referee Mark Labine, at the Hennepin County District Court. On May 2, 2008, Referee Labine entered judgment for Defendant. Plaintiff filed a timely notice of review of Referee Labine's Conclusions of Law, Order, and Judgment. This Court has the benefit of a transcript of the proceedings below, as well as the arguments and briefs by counsel.

II. FACTS

Plaintiff, Karmel Properties, LLC, leased to Defendant, Osman Mohamed d/b/a Qoraxlow Restaurant, the premises at 2910-2920 Pillsbury Avenue South, Suite W1/W2 (#11/12), Minneapolis, Hennepin County, Minnesota 55408 ("Premises"). Plaintiff seeks possession of the leased property based on a notice to vacate that was served on Defendant on February 27, 2008. On February 27, 2008, Plaintiff hand-delivered and mailed to Defendant, at the Premises, written notice to vacate the Premises by midnight on March 30, 2008. Defendant has not vacated the Premises.

Plaintiff asserts that Defendant is a month-to-month tenant and that Defendant must vacate upon receiving proper notice. Defendant denies that this tenancy is month-to-month and argues that the parties entered into a five-year lease, with the term ending in February 2011.

III. LEGAL ANALYSIS
A. Standard of Review.

At issue in this case is whether the standard of review for a district court judge reviewing the findings of fact and conclusions of law made by a housing court referee is clear error or de novo. Plaintiff contends that the standard of review appropriate for district court review of a housing court judgment is de novo. Defendant concedes that the standard of review for conclusions of law is de novo. However, Defendant asserts that Minnesota district courts restrict their review of a housing court referee's findings of fact to clear error. The Court is not persuaded by Plaintiff's arguments supporting de novo review of Referee Labine's Conclusions of Law, Order, and Judgment and will apply a clear error test.

When reviewing a housing court referee's judgment, this court applies a clear error test. See In re Rudawski, 710 N.W.2d 264, 269 (Minn. 2006); Schuett Inv. v. Anderson, 386 N.W.2d 249, 252 (Minn. Ct. App. 1986). The Court will not determine that a finding is clearly erroneous absent a "clear demonstration that it is without substantial evidentiary support or that it was induced by an erroneous view of the law." Schuett Inv., 386 N.W.2d at 252. Minnesota General Rules of Practice Rule 611(a) articulates this standard of review. Rule 611(a) states, "[a] judge's review of a decision recommended by the referee shall be based upon the record established before the referee." A hearing is not required. Id. Upon the request of any party, however, a hearing shall be scheduled before the reviewing judge. Id.

The issue of deference to the trial court, including a referee's, is addressed in Minn. R. Civ. P. Rule 52.01, which states in part, "[f]indings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses." See also In re Rudawski, 710 N.W.2d at 269 (noting that when a referee makes findings of fact, those findings shall not be set aside unless clearly erroneous). Even when the reviewing court is ultimately responsible for the factual determination, the Minnesota Supreme Court has stated that the reviewing court must grant great deference to a referee's findings of facts. See id. at 269 (noting that "this court gives . . . great deference to a referee's findings and will not reverse those findings unless they are clearly erroneous . . . .").

B. The Standard of Review is Not De Novo.

Plaintiff argues that the Court should review this case de novo. First, Plaintiff claims that under the provisions of Minn. R. Civ. P. Rule 53.07, the Court should review this case de novo. Minn. R. Civ. P. Rule 53.07(c) states that "[t]he court must decide de novo all objections to findings of fact made or recommended by a master unless the parties stipulate with the court's consent that: (1) the master's finding will be reviewed by clear error, or (2) the findings of a master appointed under Rule 53.01(a)(1) or (3) will be final." Although this provision seems to require de novo review, Minn. R. Civ. P. Rule 53.09 makes Rule 53.07 inapplicable to housing court matters. "A statutory referee employed in the judicial branch is subject to this rule only when the order referring a matter to the statutory referee expressly provides that the reference is made under this rule." See Minn. R. Civ. P. Rule 53.09. Accordingly, since the parties did not stipulate that Minn. R. Civ. P. Rule 53.09 applies, this Court will use the standard of review articulated in Minn. R. Civ. P. Rule 52.01 and Minn. Gen. R. Prac. Rule 611, which provides for a clear error review for findings of fact.

Plaintiff responds to the provision in Minn. R. Civ. P. Rule 53.09 by referring this Court to Thompson v. Thompson, 385 N.W.2d 55, 57 (Minn. Ct. App. 1986). In Thompson, the Minnesota Supreme Court found that "the proviso of Rule 53.05(2), which requires the court to accept the referee's findings unless clearly erroneous, does not apply to the family court judge's review." Plaintiff argues that housing court is similar to family court because the referee's findings are advisory only and because it is the district court who has the ultimate responsibility of making a decision in the case. Given these similarities, Plaintiff contends that the Court should adopt the de novo standard of review.

The Court is similarly not persuaded by this argument. Minn. Gen. R. Prac. Rule 312 provides that review of a referee's findings or recommended order in family court "shall be based on the record before the referee and additional evidence shall not be considered, except for compelling circumstances constituting good cause." However, Minn. Gen. R. Prac. Rule 611 merely provides that review of a housing court referee's order "shall be based upon the record established before the referee." Rule 611 does not provide for circumstances when additional evidence shall be considered and, unlike Rule 312, restricts the district court's review of housing court matters to those "based upon the record established before the referee." Therefore, Plaintiff's comparison between the two courts is flawed and the Court will apply the clear error test when reviewing housing court referee's judgments.

Plaintiff contends that de novo review is appropriate because Minn. Gen. R. Prac. Rule 611 requires a transcript for review. Indeed, Plaintiff argues that if findings of fact were subject to a clearly erroneous standard, then Minn. Gen R. Prac. Rule 611 would not contain this requirement. Specifically, Plaintiff asserts that given the cost of obtaining a transcript, Minn. Gen. R. Prac. Rule 611 implies a de novo review of both the factual proceedings and the legal conclusions drawn from those facts. While Plaintiff has made a unique argument in favor of de novo review, he cites no legal authority in support of his assertion.

It is the long standing policy of Minnesota courts to defer in findings of fact to the court that actually heard the testimony. See Conroy v. Klienman Realty, 179 N.W.2d 162, 165-66 (Minn. 1970) (noting that the Court is "committed to...

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