Vermillion State Bank v. State, A16-1284

• Decision Date: 17 April 2017
• Docket Number: A16-1284
• Citation: 895 N.W.2d 269
• Parties: VERMILLION STATE BANK, Plaintiff-Petitioner Below, Faegre Baker Daniels, Respondent, v. STATE of Minnesota, BY its DEPARTMENT OF TRANSPORTATION, Appellant.
• Court: Minnesota Court of Appeals

895 N.W.2d 269

VERMILLION STATE BANK, Plaintiff-Petitioner Below,Faegre Baker Daniels, Respondent,

v.STATE of Minnesota, BY its DEPARTMENT OF TRANSPORTATION, Appellant.

A16-1284

Court of Appeals of Minnesota.

Filed April 17, 2017

David M. Jann, Bruce Jones, Faegre Baker Daniels LLP, Minneapolis, Minnesota (for respondent).

Lori Swanson, Attorney General, Stephen D. Melchionne, Assistant Attorney General, Jeffery S. Thompson, Assistant Attorney General, St. Paul, Minnesota (for appellant).

Patrick B. Steinhoff, Malkerson Gunn Martin LLP, Minneapolis, Minnesota; and Leland J. Frankman, Frankman Law Offices, Minneapolis, Minnesota (for amicus curiae Minnesota Eminent Domain Institute).

Considered and decided by Worke, Presiding Judge; Halbrooks, Judge; and Jesson, Judge.

OPINION

WORKE, Judge

Appellant challenges the district court's award of attorney fees and other costs directly to respondent law firm under Minn. Stat. § 117.045. Because respondent did not have statutory standing to petition for fees directly and independently of plaintiff-petitioner, its former client, we reverse.

FACTS

In 2012, appellant State of Minnesota Department of Transportation (MnDOT) permanently closed a restaurant's only access to a state highway. The restaurant's owners had purchased the property with the assistance of a mortgage loan from plaintiff-petitioner Vermillion State Bank (Vermillion). Within months, loss of highway access forced the restaurant to close. The restaurant owners were no longer able to pay the mortgage, and Vermillion foreclosed on the property.

In January 2014, Vermillion retained respondent Faegre Baker Daniels (Faegre) to represent it in an inverse condemnation action against MnDOT. Faegre conducted title work to establish the exact physical location of the property, conducted extensive legal research, sent a demand letter, and drafted pleadings. In February 2015, Vermillion, pointing to a "lack of progress" on the case, terminated its agreement with Faegre and hired Larkin Hoffman Daly & Lindgren Ltd. (Larkin Hoffman). As directed by Vermillion, Faegre forwarded its work to Larkin Hoffman. Shortly thereafter, Larkin Hoffman filed a summons and complaint that were substantially identical to the pleadings prepared by Faegre.

In December 2015, the district court granted Vermillion's motion for summary judgment and ordered MnDOT to commence condemnation proceedings. Faegre filed a motion for $63,495.50 in attorney fees and $368.46 in costs under Minn. Stat. § 117.045. Vermillion also filed a motion for attorney fees, seeking reimbursement for $55,416.19 in fees and costs incurred while it was represented by Larkin Hoffman. Vermillion did not request any fees for the work performed by Faegre and informed Faegre that it would not pay Faegre directly. Vermillion maintains that Faegre is not entitled to fees because it was hired on a contingent basis—meaning that it would be paid only if it successfully prosecuted the inverse condemnation action—and fired before the inverse condemnation action was commenced. MnDOT agreed to pay Larkin Hoffman's fees but argued that Faegre had no standing to bring a motion for attorney fees because Minn. Stat. § 117.045 allows only the landowner to petition the court for reimbursement; it does not allow an attorney to make a direct claim for fees.

The district court ordered MnDOT to pay Faegre $52,065 in attorney fees and $368.46 in other costs. It rejected MnDOT's claim that Faegre lacked standing to petition the court for fees and costs. This appeal followed.

ISSUE

Did the district court err by determining that Faegre had standing to petition for attorney fees and costs under Minn. Stat. § 117.045 ?

ANALYSIS

MnDOT argues that Faegre lacked standing to petition for fees and costs under Minn. Stat. § 117.045. MnDOT claims that the plain language of the statute allows only Vermillion to request attorney fees and other costs.

"Standing is acquired when a party has suffered some injury-in-fact or when a party is the beneficiary of some legislative enactment granting standing." Citizens for a Balanced City v. Plymouth Congregational Church , 672 N.W.2d 13, 18 (Minn. App. 2003) (quotation omitted). Here, Minn. Stat. § 117.045 allows only certain persons to bring a petition for attorney fees and costs. Accordingly, the issue is one of statutory standing, not general standing or "injury-in-fact." See id. ("Because standing is statutorily defined in this case, Minneapolis's reliance on general standing doctrine or injury-in-fact analysis is misplaced." (quotation omitted)).

Statutory standing determines whether a particular party "has a cause of action under the statute."

Steel Co. v. Citizens for a Better Env't , 523 U.S. 83, 97 n.2, 118 S.Ct. 1003, 1013 n.2, 140 L.Ed.2d 210 (1998). The question of statutory standing "is closely related to the merits inquiry (oftentimes overlapping it) and is analytically distinct from the question [of] whether a ... court has subject-matter jurisdiction to decide the merits of a case." Roberts ex rel. H.F.W. & T.W. v. Hamer , 655 F.3d 578, 580 (6th Cir. 2011) ; cf. Krueger v. Zeman Constr. Co. , 781 N.W.2d 858, 861-63 (Minn. 2010) (affirming dismissal for failure to state a claim by an individual who had no right to sue under the Minnesota Human Rights Act, discussing the issue both in terms of "statutory standing" and as a question of whether the statute "provide[s] a cause of action").

This court reviews an award of attorney fees for an abuse of discretion. County of Dakota v. Cameron , 839 N.W.2d 700, 711 (Minn. 2013). But determining whether Faegre had statutory standing to petition for attorney fees requires us to interpret Minn. Stat. § 117.045. Statutory interpretation is a question of law that this court reviews de novo. Krueger , 781 N.W.2d at 861.

The objective of statutory interpretation is to "effectuate the intent of the legislature." Ly v. Nystrom , 615 N.W.2d 302, 307 (Minn. 2000). "When legislative intent is clear from the statute's plain and unambiguous language, [this court] interpret[s] the statute according to its plain meaning without resorting to other principles of statutory interpretation." State ex rel. Duncan v. Roy , 887 N.W.2d 271, 276 (Minn. 2016) (quotation omitted). In other words, if the plain meaning of the statute is clear and unambiguous, "the letter of the law shall not be disregarded under the pretext of pursuing the spirit." Minn. Stat. § 645.16 (2016). If "a statute is reasonably susceptible to more than one interpretation, it is ambiguous and [this court] may resort to canons of construction or legislative history in order to determine the intent of the [l]egislature." Figgins v. Wilcox , 879 N.W.2d 653, 656 (Minn. 2016).

The district court ordered MnDOT to pay Faegre's fees and costs under Minn. Stat. § 117.045. The statute provides:

Upon successfully bringing an action compelling an acquiring authority to initiate eminent domain proceedings relating to a person's real property which was omitted from any current or completed eminent domain proceeding, such person shall be entitled to petition the court for reimbursement for reasonable costs and expenses, including reasonable attorney, appraisal and engineering fees, actually incurred in bringing such action. Such costs and expenses shall be allowed only in accordance with the applicable provisions of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970....

Minn. Stat. § 117.045 (emphasis added). MnDOT argues that "[t]he only party entitled to petition the court for costs and expenses is ‘such person’ " and that "such person" refers to the "person" previously mentioned who owns the "real property" at issue. Accordingly, in this case, only Vermillion is permitted to petition for fees and costs under the statute. The district court determined that this interpretation of the statute was "too narrow" and that allowing Faegre to petition for fees and costs "does no violence to the statute and is within the spirit of the law." The question of whether section 117.045 allows anyone other than the landowner to petition for fees is one of first impression.

The statute does not define "such person." "When there is no applicable statutory definition, [this court] often consult[s] dictionary definitions to discern a word's plain meaning."

Wayzata Nissan, LLC v. Nissan N. Am., Inc. , 875 N.W.2d 279, 286 (Minn. 2016). Definitions of "such" include: "[o]f this kind," "[o]f a kind specified or implied," and "[o]f a degree or quality indicated." The American Heritage College Dictionary 1356 (3d ed. 2000). The statute refers to a person whose real property was omitted from an eminent domain proceeding and who successfully brought an action to compel eminent domain proceedings and then provides that "such person shall be entitled to petition the court for reimbursement" of attorney fees and costs. Minn. Stat. § 117.045. "[S]uch person," refers to the landowner who successfully brought an action to compel eminent domain proceedings because that is the "kind" of person previously "specified or implied." Therefore, as MnDOT argues, the only person permitted to petition for fees and costs under the statute is the landowner.

Faegre argues that "person" and "such person" "could mean not only the property owner, but also the property owner's representative or successor, or one working on the property owner's behalf—such as an attorney." It claims that Vermillion does not fit MnDOT's definition of "such person" because the restaurant, not Vermillion, "was the ‘person’ whose ‘real property’ was ‘omitted from’ the condemnation proceeding." But chapter 117 defines "[o]wner" as "all persons with any interest in the property subject to a taking, whether as proprietors, tenants, life estate holders, encumbrancers, beneficial interest holders, or otherwise." Minn. Stat. § 117.025, subd. 3 (2016). The condemnation petition must name all "owners" of the land to be taken. Minn. Stat. §...