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The Supreme Court Chamber in the Minnesota Capitol in St. Paul. (Staff photo: Kevin Featherly)
The Supreme Court Chamber in the Minnesota Capitol in St. Paul. (Staff photo: Kevin Featherly)

Supreme Court Calendar: May 2019

The following summaries of upcoming Supreme Court arguments for May, 2019 were prepared from information provided by the Supreme Court Commissioner’s Office.

Monday, April 29, 2019

State Capitol Building, Supreme Court Courtroom, Second Floor

Ambree Getz, Respondent vs. Eila Kaarina Peace, et al., Appellants – Case No. A18-0121: This appeal involves an accident between a school bus, which was driven by appellant Eila Peace and owned by appellant Palmer Bus Service of Maple River, Inc., and a vehicle, which was driven by respondent Ambree Getz. Getz sued appellants for negligence, and the case proceeded to trial. The jury attributed 80 percent of the fault for the accident to Peace. In addition to other damages, the jury found that Getz had incurred damages for past health care expenses in the amount of $224,998.

Appellants moved for a determination of collateral sources under the collateral source statute, Minn. Stat. § 548.251 (2018). As an enrollee in Medical Assistance, Getz had received benefits for health care expenses through two managed care organizations under Minnesota’s Prepaid Medical Assistance Program. Appellants sought to limit the award of past health care expenses to the amounts the managed care organizations had actually paid, excluding the discounts they had negotiated with Getz’s providers. The District Court concluded that “the negotiated discounts are collateral sources subject to offset.” Therefore, the District Court ruled that “[t]he only amounts Getz can recover for past health care expenses are the amounts for which her health insurers claim a subrogation interest,” which was $45,979. The Court of Appeals reversed and remanded.

On appeal to the supreme court, the following issues are presented: whether discounts negotiated under Minnesota’s Prepaid Medical Assistance Program are “payments made pursuant to the United States Social Security Act” for purposes of Minn. Stat. § 548.251, subd. 1(2); and alternatively, whether the common law prohibits the recovery of negotiated discounts. (Blue Earth County)

 

State of Minnesota, Respondent vs. Joshua Chiazor Ezeka, Appellant – Case No. A18-0828: Joshua Ezeka, a gang member, received a call from a fellow gang member notifying him that a member of a rival gang, D.G., was in the area near Ezeka’s home and was going to shoot at Ezeka’s home. It was the fellow gang member’s expectation that in response to this news, Ezeka would shoot and kill D.G. Ezeka went outside into a vacant lot and fired nine shots at D.G.’s car as it went by. None of the shots hit D.G., although some hit his car. But other shots hit another car, driven by B.B., who was giving her granddaughter a ride, killing B.B. In early June 2016, one week after the shooting, police took Ezeka into custody. Ezeka gave the police a letter from “The Ezeka Family” asking that communications be through a lawyer. Police read Ezeka his Miranda rights, but he answered questions and denied involvement in the shooting. Ezeka was eventually released from custody. Then in January of 2017, after several months of additional investigation, police again took Ezeka into custody. Police again read Ezeka his Miranda rights, but again police asked and he answered questions. Ezeka did not request counsel and did not reference the previous letter. During this interview, the police implied Ezeka would receive a more lenient sentence and that others would stop shooting at his house if he confessed. Ezeka confessed to being the shooter.

At trial, the charges against Ezeka were first-degree premeditated murder and second-degree intentional murder (of B.B.), attempted first-degree premeditated murder and attempted second-degree intentional murder (of D.G.), and second-degree assault (of B.B.’s granddaughter). All of the charges also listed the aiding and abetting statute, Minn. Stat. § 609.05 (2018). The judge granted Ezeka’s motion to suppress the evidence of the June 2016 statements to the police, but denied the motion as to the January 2017 statements. At trial, the fellow gang member testified against Ezeka. The jury convicted Ezeka of all counts, including aiding and abetting first-degree premeditated murder and attempted first-degree premeditated murder. Ezeka was sentenced to life in prison without the possibility of parole.

On appeal to the Supreme Court, the issues are (1) whether the break in custody between the June 2016 and January 2017 interrogations nullified Ezeka’s invocation of counsel; (2) whether Ezeka’s January 2017 statements were involuntary because the police implied he would receive a more lenient sentence and that others would stop shooting at his house if he confessed; (3) whether the trial court’s instruction to the jury regarding aiding-and-abetting liability requires reversal; and (4) whether the trial court’s failure to instruct the jury that Ezeka could not be convicted based on the uncorroborated testimony of his fellow gang member, an accomplice, requires reversal. (Hennepin County)

 

Tuesday, April 30, 2019

State Capitol Building, Supreme Court Courtroom, Second Floor

Daniel J. Engstrom, Appellant vs. Whitebirch, Inc., et al., Respondents – Case No. A18-0366: Appellant Daniel J. Engstrom filed this lawsuit alleging that after his mother’s death, respondents Whitebirch, Inc. and other entities associated with a particular timeshare community sent him a letter stating that his mother had added his name to the deed for a particular timeshare and had filed it with the county. They requested that Engstrom quitclaim his interest in the property to respondents or pay unpaid maintenance fees on the property. According to Engstrom’s complaint, respondents threatened to begin collection activities against him if he did not sign a quitclaim deed. Engstrom denied having any interest in the timeshare and alleged that respondents committed fraud with respect to the deed. Engstrom refused to either pay the maintenance fee or quitclaim the property to respondents; instead he hired a lawyer who sent a letter to respondents alleging fraud, slander of title, and violations of the Fair Debt Collections Practices Act. The letter also demanded that respondents cease contact with Engstrom and pay him $2,500 in damages. The eventual lawsuit included allegations of two counts of violations of the Minnesota Prevention of Consumer Fraud Act, Minn. Stat. § 325F.69 (2018), and sought a variety of relief including attorney fees under the private attorney general statute, Minn. Stat. § 8.31 (2018).

The District Court granted respondents’ motions to dismiss the fraud claims, concluding that Engstrom had not alleged any injury. The Court of Appeals affirmed, reasoning that his alleged injury—attorney fees expended in responding to the fraud—did not support a private claim under the Consumer Fraud Act.

On appeal to the Supreme Court, the issue presented is whether attorney fees expended to investigate and respond to a fraudulent demand are a type of injury that may support a private claim alleging a violation of the Consumer Fraud Act. (Crow Wing County)

 

Nonoral: KCP Hastings, LLC, Relator vs. County of Dakota, Respondent – Case No. A18-0133: Relator KCP Hastings, LLC owns property in Hastings, Minnesota, upon which sits a retail shopping center. KCP sought review of respondent Dakota County’s estimated assessment of the market value of the property on three particular valuation dates in 2010, 2011, and 2012. After a trial, the Tax Court adopted market valuations of the property that exceeded the county’s estimated assessments. KCP appealed, and the Supreme Court affirmed in part, vacated, and remanded. KCP Hastings, LLC v. County of Dakota, 868 N.W.2d 268 (Minn. 2015). The Supreme Court affirmed the Tax Court’s use of the mall’s gross building area rather than its gross leasable area, as well as its rejection of KCP’s sales-comparison analysis. But the Supreme Court found that the tax court erred when it rejected KCP’s discounted-cash-flow analysis and when, having rejected both parties’ analyses of the income approach, it failed to consider the income approach in its final valuation.

On remand, the Tax Court invited the parties to supplement their appraisals in light of the Supreme Court’s instructions to consider a DCF analysis. KCP moved to exclude the county’s supplemental appraisal because it had argued in the first trial that the DCF method is not a reliable indicator of value in this case. The Tax Court denied the motion, and after considering all the evidence and the parties’ analysis, again adopted market valuations of the property exceeding the county’s estimated assessment. The Tax Court’s valuations on remand for 2010 and 2011 were lower than its initial valuations, but the valuation on remand for 2012 was higher than the initial valuation.

On appeal to the Supreme Court, the issues include whether the tax court erred when it: (1) allowed the county to supplement its appraisal on remand; (2) rejected KCP’s expert appraisal under the income approach as valuing a leased fee interest, rather than a fee simple interest; (3) rejected KCP’s appraiser’s vacancy rate, capitalization rates, terminal capitalization rates, and discount rates; (4) found that a particular portion of the property was “excess land” for appraisal purposes; (5) adopted the building size that was affirmed by the supreme court in its 2015 decision; and (6) formed its final valuation by ascribing 30 percent weight to the sales comparison approach and 70 percent weight to the income approach. (Minnesota Tax Court)

 

Wednesday, May 1, 2019

State Capitol Building, Supreme Court Courtroom, Second Floor

General Mills, Inc., Relator/Cross-Respondent vs. Commissioner of Revenue, Respondent/Cross-Relator – Case No. A18-1660:

International Business Machines Corporation and Subsidiaries, Respondents/Cross-Relators vs. Commissioner of Revenue, Relator/Cross-Respondent – Case No. A18-1740:

These cases involve separate appeals of separate decisions by the Minnesota Tax Court. However, both appeals involve similar issues involving the Minnesota Credit for Increasing Research Activities (“Minnesota R&D Credit”).

The Minnesota R&D Credit is a formula set forth in Minn. Stat. § 290.068 (2018). It allows a credit based on the excess of a taxpayer’s Minnesota “qualified research expenses” over a “base amount.” A corresponding federal credit in the Internal Revenue Code, see 26 U.S.C. § 41(c) (2018), defines “base amount” in part as “the fixed-base percentage” times “the average annual gross receipts of the taxpayer for the four taxable years preceding” the credit year. In turn, “the fixed-base percentage is the percentage which the aggregate qualified research expenses of the taxpayer for” the 1984 to 1988 taxable years “is of the aggregate gross receipts of the taxpayer for such taxable years.” Id. § 41(c)(3).

In Case No. A18-1160, General Mills, Inc. filed an amended Minnesota tax return for 2011, which calculated General Mills’ Minnesota R&D Credit, and sought a refund in the amount of $949,236 plus interest. In Case No. A18-1740, International Business Machines Corporation (IBM) filed an amended Minnesota tax return for 2011, which calculated IBM’s Minnesota R&D Credit, and sought a refund in the amount of $4,395,399 plus interest. In each case, the taxpayer contended, first, that the Minnesota definition of the base amount did not include a federal provision that sets a minimum for the base amount, see 26 U.S.C. § 41(c)(2); and, second, that the appropriate divisor for the fixed-base percentage was the aggregate worldwide gross receipts for 1984 through 1988, rather than the aggregate Minnesota gross receipts for those years.

The Commissioner denied both refund claims in their entirety. Both General Mills and IBM appealed. In each case, the taxpayer and commissioner filed cross-motions for summary judgment. In each case, the Tax Court found in favor of the commissioner with respect to the minimum base amount issue, but in favor of the taxpayer with respect to the fixed-base-percentage issue.

In both cases, the taxpayer and the commissioner appealed to the Supreme Court, where the issues are (1) whether the Minnesota R&D Credit incorporates the federal minimum base amount in its definition of “base amount,” and (2) whether the fixed-base percentage for the Minnesota R&D Credit is calculated based on aggregate worldwide receipts or aggregated Minnesota receipts. (Minnesota Tax Court)

 

Thursday, May 2, 2019

State Capitol Building, Supreme Court Courtroom, Second Floor

Firefighters Union Local 4725, et al., Respondents vs. City of Brainerd, Appellant – Case No. A18-0398: In 2015, appellant City of Brainerd restructured its fire department and eliminated all full-time fire-equipment operator (FEO) positions. After the restructuring, the fire department used paid on-call firefighters for the provision of fire services. Respondent Firefighters Union Local 4725, which represented the FEOs, and its president sued the city in District Court. Among other claims, the union asserted that the city had engaged in unfair labor practices in violation of the Public Employment Labor Relations Act (PELRA), Minn. Stat. §§ 179A.01–.25 (2016). On cross-motions for summary judgment, the district court granted summary judgment to the city and dismissed all of the Union’s claims.

The Court of Appeals reversed the District Court’s grant of summary judgment on the PELRA claim. The Court of Appeals concluded that the city had violated the prohibition against interfering with the existence or administration of an employee organization, Minn. Stat. § 179A.13, subd. 2(2), “when, during the midst of an operating bargaining agreement, [the City] unilaterally eliminated all FEO positions, effectively dissolving [the] Union.” The Court of Appeals further concluded that “it is not an ‘inherent managerial policy’ for an employer to reorganize a department when the reorganization interferes with the existence and administration of a union.” See Minn. Stat. § 179A.07, subd. 1 (“A public employer is not required to meet and negotiate on matters of inherent managerial policy.”).

On appeal to the Supreme Court, the following issue is presented: whether the city’s restructuring of the fire department constitutes an unfair labor practice under PELRA or whether the restructuring constitutes an authorized exercise of a public employer’s inherent managerial authority. (Crow Wing County)

 

Monday, May 6, 2019

Courtroom 300, Minnesota Judicial Center

State of Minnesota, Respondent/Cross-Appellant vs. Brian Arthur Barthman, Appellant/Cross-Respondent – Case No. A17-1191: Following a trial, a jury found Brian Barthman guilty of three counts of first-degree criminal sexual conduct and three counts of second-degree criminal sexual conduct. All counts involved the same complainant. The jury also found that the complainant had a chromosomal defect and a cognitive developmental delay, that Barthman was aware of these vulnerabilities, and that Barthman subjected the complainant to multiple forms of sexual penetration and sexual contact. The District Court sentenced Barthman to consecutive sentences of 360 months, the statutory maximum, for two of his first-degree criminal sexual conduct convictions, counts 1 and 2.

The Court of Appeals affirmed the greater-than-double durational departure on count 1 and the imposition of consecutive sentences, but it reversed the greater-than-double durational departure on count 2.

On appeal to the supreme court, the following issues are presented: (1) whether the District Court erred in imposing sentences on both counts 1 and 2 because they are part of the same behavioral incident; (2) whether the state failed to give proper notice of the alleged grounds for a durational departure in its pretrial notice; (3) whether the District Court abused its discretion in imposing durational departures because the facts of this case and the reasons cited by the district court are not atypical for this type of offense; (4) whether the court should modify the rule from State v. Evans, 311 N.W.2d 481 (Minn. 1981), for when a District Court may impose a greater-than-double durational departure; (5) whether the aggravating factors justify greater-than-double durational departures and consecutive sentences; and (6) whether the imposition of greater-than-double durational departures and consecutive sentences unduly exaggerates Barthman’s criminal conduct. (St. Louis County).

Nonoral: Prentiss Cordell Jackson, Appellant vs. State of Minnesota, Respondent – Case No. A18-1044: In 2006, a jury found appellant Prentiss Jackson guilty of first-degree murder. He was convicted and sentenced to life in prison without the possibility of release. The Supreme Court affirmed the District Court decision. In 2013, Jackson filed a petition for postconviction relief on the grounds that his conviction was based on false testimony and that he had new evidence of his innocence, and for reversal of his sentence pursuant to Miller v. Alabama, 567 U.S. 460 (2012). The District Court denied the petition for postconviction relief after an evidentiary hearing, but in 2016 the Supreme Court reversed in part and remanded the case to impose a life sentence with the possibility of release after 30 years, and Jackson was resentenced accordingly. In 2018, Jackson filed a second petition for postconviction relief asserting that he was denied effective representation by trial and appellate counsel. The District Court denied the second petition without a hearing, finding it was time-barred under Minn. Stat. § 590.01, subd. 1 (2018), procedurally barred by State v. Knaffla, 243 N.W.2d 737, 741 (Minn. 1976), and failed on the merits.

On appeal to the supreme court, the issues are whether Jackson’s claims are time-barred, Knaffla-barred, and set forth a sufficient basis to demonstrate ineffective assistance of counsel. (Hennepin County)

 

Tuesday, May 7, 2019

Courtroom 300, Minnesota Judicial Center

Nonoral: In re Charges of Unprofessional Conduct in Panel Case No. 44387 – Case No. A18-2113: A client retained an attorney to represent him in connection with a matter to secure title to a parcel of property. The parties mediated the dispute and reached a settlement. Following mediation, the attorney came into possession of an abstract of title and warranty deed for the parcel. The representation ended, but the lawyer refused to return the abstract of title and warranty deed, claiming an “attorney lien against personalty” against those documents and taking the position that the lawyer would not return them until the client paid the lawyer’s fees. The lawyer did not return the abstract of title and warranty deed for many months while the lawyer litigated the matter of the attorney lien. A panel of the Lawyers Professional Responsibility Board determined that the attorney failed to promptly deliver the client’s abstract of title and warranty deed and improperly conditioned the return of client documents on the payment of attorney’s fees, in violation of Minn. R. Prof. Conduct 1.15(c)(4), 1.16(d), and 1.16(g).

The attorney also failed to maintain an accurate client ledger for the client during the period from August 2011 to May 2013, and held more than a nominal amount of personal funds in his trust account from April of 2011 through July of 2015. The panel determined that the attorney’s conduct violated Minn. R. Prof. Conduct 1.15(a)(1), 1.15(c)(3), and 1.15(h), as interpreted by Appendix 1 thereto.

The panel issued an admonition. On appeal to the Supreme Court, the issues presented are (1) whether the panel clearly erred in finding that the attorney violated Minn. R. Prof. Conduct 1.15(c)(4), 1.16(d), and 1.16(g) by conditioning the return of client documents on the payment of attorney fees; and (2) whether the panel clearly erred in finding that the attorney violated Minn. R. Prof. Conduct 1.15(a)(1), 1.15(c)(3), and 1.15(h), as interpreted by Appendix 1 thereto, by failing to maintain an accurate client ledger for the client during the period from August 2011 to May 2013, and holding more than a nominal amount of personal funds in his trust account from April of 2011 through July of 2015. (Panel of the Lawyers Professional Responsibility Board)

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