State of Minnesota v. Schierholz and Associates, Inc., and Paul Milton Schierholz

A defense team from Fredrikson & Byron and The Law Firm of Kevin C. Riach secured a landmark jury verdict in a high-stakes civil trial that established important precedents for Minnesota landlord-tenant law and mobile home park standards.

In State of Minnesota v. Schierholz and Associates, Inc., and Paul Milton Schierholz, shareholder Alethea Huyser, senior associate Nathan Converse, senior paralegal Leslie Anderson and criminal defense attorney Kevin Riach defended their clients against claims exceeding $5 million following a six-year state investigation. The case centered on a Marshall mobile home park providing low-income housing for more than 200 residents.

The state alleged the aging park roads and infrastructure violated minimum requirements, that late fees exceeded statutory limits, and claimed consumer fraud and retaliation violations. The claims involved novel statutory interpretation questions that had rarely been litigated.

During the nearly two-week Lyon County trial, the defense team successfully objected to approximately 200 instances of improperly offered evidence. The court ultimately struck the state’s closing argument from the record as a sanction for misrepresentations of law and evidence.

The team established critical legal guidance on park standards under Minnesota Statute 327.20, including that the requirement for streets permitting emergency vehicle passage and normal resident travel does not mandate pothole-free roads maintained to city-street standards. They also clarified that cleanliness requirements apply only to common areas, not resident-controlled properties, and that landlords must receive fair notice and opportunity to remedy issues before enforcement actions.

The case developed important precedent on late fee calculations under statute 504B.177(a), clarifying that percentage ceilings are based on monthly rent obligations, not outstanding amounts.

Evidence presented at trial revealed that while pursuing the case, state officials prevented the defendants from obtaining anticipated Minnesota Housing Finance Authority grants to improve conditions, despite objective criteria initially qualifying the applications for funding.

After just hours of deliberation, the jury found for the defendants on 11 of 12 claims, resulting in zero liability. The court subsequently awarded $981,273 in fees and costs under the Minnesota Equal Access to Justice Act, determining the state’s positions were not substantially justified.