Minnesota Lawyer
When Yolanda Bass returned from work on April 10, 2013, she was locked out of her apartment and her personal property had been given a new home inside a dumpster filled with rainwater and melting snow. Bass, unable to save her things from the rain-soaked dumpster, was without a place to live or her belongings.
Bass’ case spawned an opinion from the Minnesota Court of Appeals, Bass v. Equity Residential Holdings, that clarified whether a housing court has jurisdiction to award monetary damages in an eviction proceeding. The court ruled that it does, upholding an award of $10,386.97, plus interest, attorney fees, and costs, in Bass’ favor.
Steven Katkov, who practices real estate law, said the case is unlikely to have a significant impact on future cases for one reason.
“The facts are so bad here for the landlord that the decision has to be read in that light,” Katkov said.
Katkov said that the decision could be read to mean that money damages can be awarded by the housing court only in extreme cases, saying he doesn’t think the Court of Appeals provided “carte blanche authority” to housing referees to make such awards. But, Katkov said, with the rental boom in the Twin Cities, more and more cases like this could come before the court in the future.
“What better case is there to let landlords know the Court of Appeals will review their behavior?” Katkov said.
Bass had fallen behind on her rent payments, and the landlord, Equity Residential Holdings, started an eviction action against her. An evidentiary hearing had been scheduled, but Bass never deposited a required $960 with the housing court. The housing court issued an order for recovery on April 5 indicating that, once Equity requested a writ of recovery and paid the required fees, the writ and an order to vacate would be issued. But Equity never made the request and did not pay the fees.
Even so, just days later, an employee at Equity’s rental office informed Bass, who had been locked out of her apartment while she was at work, that she had abandoned her apartment and that he had thrown all of her possessions into dumpsters behind the building. Bass filed a lockout petition which was heard in housing court on April 17. Equity did not show up. The housing court referee found that Equity had defaulted and Bass had not abandoned the property. The referee ruled that Equity acted in bad faith.
At a damages hearing, the referee awarded treble damages under Minnesota statute sec. 504B.231 and punitive damages under sec. 504B.271. Equity requested a District Court review of the order but did not seek a stay of the judgment. The District Court upheld the findings.
Kenneth Hertz, Equity’s attorney, declined to comment on the case. Matthew Kilby, who represented Bass, also declined to comment.
On appeal, Equity asserted that the housing court did not have jurisdiction to enter a monetary judgment and award punitive damages. The court found that, under Minnesota law, the housing court has jurisdiction over all proceedings under chapter 504B. Minnesota statute sec. 504B also provides for treble damages and attorney fees.
The court also noted that Equity did not follow state law requiring landlords to store tenant property for at least 28 days, attempt to notify the tenant before disposing of the property, and return a tenant’s property within 24 hours of receiving a written demand. Failure to do so allows for punitive damages of up to twice the actual damages or $1,000, whichever is greater. That law also falls under 504B.
In response to the argument that 504B vests a tenant with rights to recover damages but does not give the housing court authority to grant such damages, the court wrote that once a referee’s findings are confirmed by the District Court, they become the findings and the order of the District Court. And, because the housing court is a program within the District Court and the District Court has jurisdiction, these claims are within the District Court’s jurisdiction.
Equity also argued that Bass failed to mitigate her damages. The court noted that the District Court did not explicitly decide whether Bass had a duty to mitigate, but wrote “requiring [Bass] to mitigate by ‘dumpster diving’ to retrieve her rain-soaked belongings is outrageous, and is beyond reasonable diligence to mitigate damages.” The Court of Appeals did not determine whether Bass had a duty to mitigate, but wrote that the District Court’s finding was “not clearly erroneous” since the personal property thrown in the rain-soaked dumpster included electronic equipment, mattresses, pillows, a couch and wooden furniture.
Equity asserted that it did not act in bad faith and so punitive damages were not appropriate. The District Court had noted that Equity did act in bad faith by throwing everything that Bass and her children “needed to live in a home” into a wet dumpster, including medical equipment, and that the effect on Bass was substantial since she had a limited income. Further, Equity didn’t follow the law in taking Bass’ property.
