EN BANC CALENDAR
Before the Minnesota Supreme Court
SUMMARY OF ISSUES
Summaries prepared by the Supreme Court Commissioner’s Office
Monday, January 6, 2020
Supreme Court Courtroom, State Capitol Building, Second Floor
White Bear Lake Restoration Association, ex rel. State of Minnesota, Appellant, and White Bear Lake Homeowners’ Association, Inc., ex rel. State of Minnesota, plaintiff intervenor, Appellant vs. Minnesota Department of Natural Resources, et al., Respondents, and Town of White Bear, defendant intervenor, Respondent, City of White Bear Lake, defendant intervenor, Respondent – Case No. A18-0750: Appellant White Bear Lake Restoration Association sued respondent Minnesota Department of Natural Resources (DNR), asserting claims under the Minnesota Environmental Rights Act (MERA), Minn. Stat. §§ 116B.01–.13 (2018), on a theory that the DNR had inappropriately issued permits for groundwater extraction, leading to decreased water levels on White Bear Lake, in turn decreasing the lake’s value as a recreational, historical, cultural, and aesthetic asset. Appellant White Bear Lake Homeowners’ Association, Inc., intervened as a plaintiff, asserting claims both under MERA and the common-law public trust doctrine. Both appellants sought an order requiring the DNR to amend groundwater-appropriation permits that the DNR had issued to nearby municipalities that draw on groundwater, in aquifers underlying the lake but extending beyond it, for water. Respondents City of White Bear Lake and Town of White Bear intervened as defendants. The DNR challenged appellants’ claims, arguing that they were not properly asserted under Minn. Stat. § 116B.03, under which appellants brought their claims, but instead under Minn. Stat. § 116B.10 (which does not provide for injunctive relief); and further arguing that the claims were not properly asserted under the public trust doctrine.
After a bench trial, the district court found in favor of appellants and issued injunctive relief imposing restrictions on the DNR’s groundwater permitting activities with respect to groundwater under and around the lake. A divided panel of the court of appeals reversed and remanded for the district court to remit the parties to the DNR to institute appropriate proceedings under section 116B.10. The court of appeals concluded that section 116B.10 provides the exclusive remedy under MERA when the challenged action is that of a state agency issuing a permit, and that the application of the public trust doctrine to groundwater withdrawal remote from the lake and its bed would conflict with Minnesota law providing that landowners own water and mineral rights underlying their property.
On appeal to the supreme court, the issues presented are (1) whether appellants’ claims that the DNR improperly managed the groundwater under the lake are governed by section 116B.03 or section 116B.10; and (2) whether the public trust doctrine extends to groundwater not directly beneath a navigable water. (Ramsey County)
Alison Joel Peterson, Respondent vs. Western National Mutual Insurance Company, Appellant – Case No. A18-1081: Respondent Alison Peterson sustained a whiplash injury in an automobile collision. She was covered by an automobile insurance policy issued by appellant Western National Mutual Insurance Company with an underinsured motorist (UIM) policy limit of $250,000. After settling her liability claim for $45,000, Peterson made a written settlement demand for the full amount of UIM coverage. Western National reviewed the UIM claim for approximately a year without making a decision. Peterson then brought suit. During settlement negotiations, Western National did not offer more than $50,000 to settle the UIM claim. Ultimately, a jury found that Peterson had sustained over $900,000 in damages for past and future medical expenses.
Following the trial on the UIM claim, the district court authorized Peterson to assert a bad-faith claim against Western National under Minn. Stat. § 604.18 (2018). The district court concluded that (1) Western National “lacked a reasonable basis to deny or delay payment” on Peterson’s UIM claim, and (2) Western National “either knew of, or acted in reckless disregard of, the lack of a reasonable basis” to deny the UIM claim. A divided panel of the court of appeals affirmed the district court’s ruling on the bad-faith claim.
On appeal to the supreme court, the primary issue presented is whether Minn. Stat. § 604.18 permits a finding of bad faith when there is a jury issue on the merits of the underlying claim for UIM benefits. (Hennepin County)
Tuesday, January 7, 2020
Supreme Court Courtroom, State Capitol Building, Second Floor
Arthur H. Wendroth, Respondent vs. Madsen & Sons and Auto-Owners Insurance Group, Relators, and Special Compensation Fund – Case No. A19-1269: Respondent-employee Arthur Wendroth suffered a work-related injury to his low back while working for relator Madsen & Sons in 1977. As part of the treatment for this injury, Wendroth was injected with a Pantopaque dye during a lumbar myelogram in 1978. In 1983, the parties settled the workers’ compensation claims for $49,000 as a “full, final and complete settlement of all possible future claims” for permanent total disability (PTD), permanent partial disability (PPD), and any “aggravation or extension” of the 1977 injury.
By 2012, MRI scans and other tests showed significant degeneration in Wendroth’s spine. In 2014, an independent medical examiner concluded that Wendroth had developed chemical meningitis as a result of the 1978 myelogram procedure. Wendroth then filed a petition for PTD and PPD benefits for the chemical meningitis. After finding that the chemical meningitis was not reasonably contemplated when the parties reached the settlement in 1983, the compensation judge determined that the chemical meningitis is “a consequential injury not closed out” by the settlement. See Ryan v. Potlatch Corp., 882 N.W.2d 220, 225 (Minn. 2016) (holding that a settlement agreement “may close out not only the” work-related injury “but also conditions and complications arising out of” that injury). The compensation judge awarded Wendroth PTD benefits and PPD benefits. On appeal, the Workers’ Compensation Court of Appeals (WCCA) agreed with the award of PTD benefits, but remanded for reconsideration of the award of PPD benefits—specifically, for a determination of the extent to which the PPD is attributable solely to the chemical meningitis condition.
On appeal to the supreme court, the issues presented are (1) whether the WCCA committed an error of law when it determined that the parties’ settlement did not preclude the employee from making additional claims in connection with a purported consequential injury; (2) whether the WCCA committed an error of law when it determined that the employee is entitled to PTD benefits; and (3) whether the WCCA committed an error of law when it remanded the PPD claim for additional findings. (Workers’ Compensation Court of Appeals)
State of Minnesota, Respondent vs. Deveon Marquise Branch, Appellant – Case No. A18-1055: In 2017, Deveon Branch was charged with the drive-by shooting of an occupied vehicle, second-degree assault with a dangerous weapon, and reckless discharge of a firearm after he fired a single gunshot towards a vehicle containing three people. Branch pleaded guilty, and the district court sentenced him to 48 months in prison for the drive-by shooting and 36 months in prison for second-degree assault with a dangerous weapon. On appeal, Branch argued that his sentences violate Minn. Stat. § 609.035, subd. 1 (2018), because the offenses arose from a single behavioral incident. The court of appeals affirmed the sentences by applying the reasoning from State v. Ferguson, 808 N.W.2d 586 (Minn. 2012), concluding that a person who commits a drive-by shooting under Minn. Stat. § 609.66, subd. 1e (2018), can receive multiple sentences for multiple victims.
On appeal to the supreme court, the issue presented is whether a person who commits a drive-by shooting of an occupied vehicle can receive multiple sentences for multiple victims. (Hennepin County)
Wednesday, January 8, 2020
Supreme Court Courtroom, State Capitol Building, Second Floor
Pamela Maslowski, Respondent, vs. Prospect Funding Partners LLC, et al., Appellants, and Prospect Funding Holdings (NY) LLC, defendant and third-party plaintiff, Appellant vs. James Schwebel, third-party defendant, et al., Respondents – Case No. A18-1906: Respondent Pamela Maslowski, a Minnesota resident, was injured in a car accident in 2012. She retained respondents James Schwebel, et al., to bring a personal injury lawsuit in Minnesota district court on her behalf. In 2014 she entered into a “Sale and Repurchase Agreement” with appellant Prospect Funding Holdings (NY) LLC. In the agreement, Prospect purchased an interest in Maslowski’s suit: Maslowski received $6,000, and Prospect received the right to receive certain payments payable out of the proceeds of Maslowski’s suit. The agreement also contained New York choice-of-law and choice-of-forum clauses.
Maslowski subsequently settled her personal injury suit, and her lawyers filed the complaint in this action, seeking a declaration that the Sale and Repurchase Agreement is invalid and unenforceable as champertous, unconscionable, and against Minnesota public policy. Meanwhile, Prospect filed a complaint in New York state court against Maslowski and her counsel, asserting claims for, among other things, breach of contract. Each side moved in its chosen forum to enjoin prosecution of the other action, and each side moved in the other side’s chosen forum to dismiss the action on choice-of-forum grounds. On appeal, the New York courts ruled that the choice-of-forum clause was unenforceable against Maslowski. The Minnesota district court enjoined Prospect from prosecuting the New York action, and the court of appeals affirmed, concluding that the choice-of-forum clause is unreasonable because it would contravene Minnesota’s strong public policy against champerty. Maslowski v. Prospect Funding Partners LLC, 890 N.W.2d 756, 763 (Minn. App. 2017), rev. denied (Minn. May 16, 2017). On remand, the district court concluded that the agreement was unenforceable because it violates Minnesota’s prohibition against champerty and maintenance. The court of appeals affirmed.
On appeal to the supreme court, the issue presented is whether the parties’ agreement is unenforceable because it violates Minnesota’s public policy against champerty and maintenance. (Hennepin County)
State of Minnesota, Respondent vs. Derrick Zechariah Smith, Appellant – Case No. A19-0695: Following a court trial, appellant Derrick Smith was found guilty of two counts of first-degree murder, one count of second-degree murder, four counts of first-degree aggravated robbery, and one count of first-degree burglary. The district court imposed six consecutive sentences.
On appeal to the supreme court, the issues presented are (1) whether the district court’s admission of other bad acts evidence and Facebook records deprived Smith of a fair trial; (2) whether the district court’s denial of Smith’s motion to assert a duress defense deprived him of a fair trial; and (3) whether the district court erred by sentencing him for both the robbery and murder of the same victim. (Scott County)
Thursday, January 9, 2020
Supreme Court Courtroom, State Capitol Building, Second Floor
Patricia J. Marquardt, Appellant vs. James M. Schaffhausen, et al., Respondents, Steven M. Dittes, et al., Defendants, Steven W. Sonnesyn, et al., Defendants – Case No. A18-0968: Appellant Patricia Marquardt underwent knee replacement surgery in January 2012. Upon opening Marquardt’s knee joint, respondent Dr. James M. Schaffhausen, Marquardt’s orthopedic surgeon, observed dark cloudy fluid and necrotic tissue, causing him to suspect infection. An initial test result was negative for infection, and Schaffhausen proceeded with the surgery. But a sample sent out for testing revealed that Marquardt had MSRA, a type of staph infection. Schaffhausen consulted with an infectious disease specialist who recommended a course of intravenous vancomycin, an antibiotic.
Schaffhausen discharged Marquardt from the hospital and arranged for home monitoring of her vancomycin levels. When Marquardt’s vancomycin levels became elevated, she was diagnosed with vancomycin toxicity. Marquardt then began experiencing neurological symptoms, and was diagnosed with acute disseminated encephalomyelitis (ADEM), an autoimmune inflammatory condition, usually seen after an infection, in which the immune system attacks the central nervous system. She was started on a steroid regimen. A few days later, after suffering more neurological symptoms, Marquardt returned to the hospital, where she was diagnosed with posterior reversible encephalopathy syndrome (PRES), a condition involving a hyperfusion of fluid into the brain. Treatment for PRES involved discontinuing steroids (which can worsen PRES) and beginning treatment for acute renal failure due to vancomycin toxicity. Marquardt eventually recovered in part, but still suffers from neurological problems.
Marquardt sued Schaffhausen and his practice group, alleging medical malpractice. Marquardt presented two possible theories of causation: first, that Schaffhausen caused ADEM by continuing with surgery after discovering her infected knee joint, thus allowing the spread of the MSRA infection into her bloodstream; and second, that Schaffhausen caused PRES by prematurely discharging her from the hospital and failing to properly monitor her vancomycin treatment. Marquardt presented expert testimony in favor of causation by two physicians, an orthopedic surgeon and an infectious disease specialist. Both admitted that they were not neurologists and had never treated ADEM or PRES, and one admitted that he did not have experience with the administration of vancomycin. The jury returned a special verdict in favor of Marquardt, finding Schaffhausen negligent and awarding $2.5 million in damages.
A divided panel of the court of appeals reversed and remanded, reasoning that neither expert witness was qualified as an expert on ADEM or PRES, and one was not qualified as an expert with respect to vancomycin treatment, and therefore the district court abused its discretion by allowing their testimony on those topics and on causation.
On appeal to the supreme court, the issue presented is whether medical experts must have actual experience in treating a particular condition that allegedly caused a plaintiff’s injury in order to opine on the causal relationship between a deviation from the standard of care and the injury. (Hennepin County)
Nonoral: Medline Industries, Inc., Relator vs. County of Hennepin, Respondent – Case No. A19-1420: This appeal involves the property tax valuation for a distribution-warehouse facility owned by relator Medline Industries, Inc., for tax years 2014 and 2015 by respondent Hennepin County. Following a trial, the tax court concluded that the County’s assessed values of the property had overstated the market value of the property, but not by as much as Medline had asserted.
On appeal to the supreme court, the issues presented are (1) whether the tax court’s acceptance of the County’s capitalization rate was clearly erroneous; (2) whether the tax court’s rejection of the conclusions of Medline’s appraiser on functional obsolescence and the consideration of the cost approach to valuation was clearly erroneous; (3) whether the tax court’s refusal to consider a 2017 comparable sale, but consideration of a 2009 sale of the same property, was clearly erroneous; and (4) whether the tax court’s acceptance of some of the opinions of the County’s expert was clearly erroneous when the tax court concluded that the County had misidentified the highest and best use of the property. (Minnesota Tax Court)
Monday, January 13, 2020
Courtroom 300, Minnesota Judicial Center
Angela Hawley, Respondent vs. City of Blaine, Relator, and League of Minnesota Cities, Relator – Case No. A19-1373: Respondent Angela Hawley worked as a police officer for relator City of Blaine for 14 years. On October 25, 2018, a First Report of Injury was filed at the Department of Labor and Industry, reporting an alleged work-related injury sustained by Hawley in the nature of post-traumatic stress disorder. After denying primary liability for the claimed work-related injury, the employer asked Hawley to attend an independent psychological examination. When Hawley refused to do so, the employer filed a petition to compel Hawley’s attendance at that examination. The compensation judge denied the petition to compel, concluding that subject matter jurisdiction was lacking in the absence of a claim petition. The Workers’ Compensation Court of Appeals (WCCA) affirmed.
Shortly before the employer filed a petition for writ of certiorari with the supreme court, Hawley filed a claim petition. In September 2019, the employer reported that the parties were scheduling the requested examination, which the employer assumed that Hawley would attend. Hawley subsequently moved to dismiss the appeal, arguing that the appeal is now moot.
On appeal to the supreme court, the issues presented are (1) whether this appeal is now moot; (2) whether Minn. Stat. § 176.155 (2018) requires a claim petition to be filed or the claimed injury to be admitted before a compensation judge has subject matter jurisdiction to consider a petition to compel attendance at an independent psychological examination; and (3) whether the request for an independent psychological examination was reasonable. (Workers’ Compensation Court of Appeals)
State of Minnesota, Respondent vs. Brian Ven Vangrevenhof, Appellant – Case No. A18-1530: In 2017, Brian Vangrevenhof was charged with first-degree sale of a controlled substance and second-degree possession of a controlled substance after law enforcement officers observed him engage in a transaction with an adult female and then found a large amount of cash on Vangrevenhof and methamphetamine on the adult female. The adult female told law enforcement officers that she bought the methamphetamine from Vangrevenhof. During the jury trial, the adult female testified that she did not buy the methamphetamine from Vangrevenhof. The State offered into evidence the adult female’s prior statement to law enforcement, which was admitted under Minn. R. Evid. 807. The jury found Vangrevenhof guilty. The court of appeals affirmed Vangrevenhof’s convictions.
On appeal to the supreme court, the issue presented is whether the district court abused its discretion by admitting the adult female’s prior statements under Minn. R. Evid. 807. (Olmsted County)
Tuesday, January 14, 2020
Courtroom 300, Minnesota Judicial Center
State of Minnesota, Respondent vs. Brian James Wilkie, Appellant – Case No. A18-0288: The State of Minnesota charged Brian Wilkie with several offenses, including attempted third-degree criminal sexual conduct, Minn. Stat. §§ 609.17, 609.344, subd. 1(b) (2018). At a court trial, the State presented evidence that Wilkie communicated with a person using an online social media platform. The person said that he was 14 years old and sent Wilkie a “selfie,” which was a photo of a youthful-looking male. This person was actually a law enforcement decoy. Wilkie sent the decoy sexually explicit photographs. After further discussion, the two agreed to meet the next day to engage in sexual activity. The next day, Wilkie and the decoy resumed their electronic communication. The decoy said they could meet at his house, and the decoy sent Wilkie an address. Wilkie drove to the address. Wilkie was arrested after he knocked on the front door. The district court found Wilkie guilty of attempted third-degree criminal sexual conduct. A divided court of appeals panel affirmed Wilkie’s conviction.
On appeal to the supreme court, the issue presented is whether the State presented sufficient evidence to prove that Wilkie took a substantial step toward committing third-degree criminal sexual conduct. (Steele County)
State of Minnesota, Respondent/Cross-Appellant vs. Darren Heath Degroot, Appellant/Cross-Respondent – Case No. A18-0850: The State of Minnesota charged Darren Degroot with attempted third-degree criminal sexual conduct, Minn. Stat. §§ 609.17, 609.344, subd. 1(b) (2018); attempted fourth-degree criminal sexual conduct, Minn. Stat. §§ 609.17, 609.345, subd. 1(b) (2018); soliciting a child through electronic communication to engage in sexual conduct (electronic solicitation), Minn. Stat. § 609.352, subd. 2a(1) (2018); electronic communication with a child relating to sexual conduct (electronic communication), Minn. Stat. § 609.352, subd. 2a(2) (2018); and electronic distribution of material that relates to sexual conduct to a child (electronic distribution), Minn. Stat. § 609.352, subd. 2a(3) (2018).
During a court trial, the State presented evidence that Degroot communicated with a person using an online social media platform from his home in Edgerton. The person said that he was a 14-year-old boy, but this person was actually a law enforcement decoy. Degroot sent the decoy sexually explicit messages and photographs and told the decoy he wanted to engage in sexual activity with him. Over the next few hours, the two communicated online and via text messages. They agreed that Degroot would come to Worthington for a sexual encounter. Degroot drove to Worthington later that day and parked across the street from the prearranged meeting location. He was arrested as he exited his car.
The district court found Degroot guilty of all five charges. The district court said that because attempted fourth-degree criminal sexual conduct was an included offense of attempted third-degree criminal sexual conduct, it would only adjudicate Degroot guilty of attempted third-degree criminal sexual conduct. The district court also said that because electronic communication was an included offense of electronic solicitation, it would only adjudicate Degroot guilty of electronic solicitation. The warrant of commitment, however, indicated that judgment of conviction was entered on all five counts. The district court sentenced Degroot on the convictions for electronic distribution, electronic solicitation, and attempted third-degree criminal sexual conduct. The district court reasoned that these crimes were not part of one behavioral incident. A divided panel of the court of appeals affirmed in part, reversed in part, and remanded.
On appeal to the supreme court, the issues presented are (1) whether the State presented sufficient evidence to prove that Degroot took a substantial step toward committing third-degree criminal sexual conduct or fourth-degree criminal sexual conduct; (2) whether Degroot may receive multiple sentences because his offenses did not arise out of a single behavioral incident; and (3) whether Minn. Stat. § 609.04 (2018) precludes convicting Degroot of both electronic solicitation and electronic distribution. (Nobles County)
Wednesday, January 15, 2020
Courtroom 300, Minnesota Judicial Center
In the Matter of Merrill Lynch Mortgage Investors Trust Mortgage Loan Asset-Backed Certificates, Series 2006-RM2 – Case No. A18-1554: Appellant Procure LLC is a beneficiary of the Merrill Lynch Mortgage Investors Trust Mortgage Loan Asset-Backed Certificates, Series 2006-RM2 (the Trust). The Trust was created in 2006 to hold a pool of mortgage loans that had an initial principal balance of over $991 million. By 2016, the value of the Trust’s collateral was less than 10 percent of that initial amount. Under the terms of the Pooling and Servicing Agreement governing the Trust, this reduction in the value of the Trust collateral triggered an option for respondent Nationstar Mortgage LLC, which had been the servicer of the Trust, to buy out the Trust’s collateral at a prescribed optional termination price (provided there was no higher bidder at auction) and terminate the Trust. Nationstar exercised its right to purchase the assets at the optional termination price, and the trustee posted a notice of termination on its website on August 31, 2017. Nationstar offered $83.5 million as its consideration for the optional termination price.
On September 25, 2017, Procure petitioned the district court for instructions in the administration of the Trust, requesting a temporary restraining order to prevent the Trust’s termination and challenging Nationstar’s calculation of the optional termination price. Nationstar then rescinded its offer to purchase the Trust’s assets. Next, Nationstar moved to dismiss Procure’s petition for lack of a justiciable controversy. The district court granted Nationstar’s motion to dismiss, concluding that Procure’s petition was both moot and not ripe, and that Procure lacked standing to bring the action.
The court of appeals affirmed, concluding that Procure had standing to bring the action and the appeal, but agreeing with the district court that the case was not justiciable because it had become moot by Nationstar’s rescission of the offer to purchase. The court of appeals rejected Procure’s argument that this case falls within an exception to the mootness doctrine applied in the federal courts when a party voluntarily ceases challenged conduct, noting that the supreme court has never adopted such an exception.
On appeal to the supreme court, the issue presented is whether Minnesota should recognize an exception to the mootness doctrine when a party voluntarily ceases the wrongful conduct that the lawsuit was brought to address. (Ramsey County)
State of Minnesota, Respondent vs. Matthew Michael Garland, Appellant – Case No. A19-0240: Appellant Matthew Garland was indicted on four counts in connection with the murder of Rondell Dunn. Garland moved to exclude the testimony of a DNA expert from the Minnesota Bureau of Criminal Apprehension concerning the DNA results from a hat discovered at the murder scene. Garland also requested an evidentiary hearing on this motion. The district court denied the request for an evidentiary hearing, denied the motion to exclude, and ruled that the DNA evidence was admissible at trial. A jury subsequently found Garland guilty of first-degree murder and second-degree murder.
On appeal to the supreme court, the issues presented are (1) whether the district court abused its discretion by denying Garland’s motion to exclude the DNA expert’s opinion evidence under Minnesota Rules of Evidence 702 and 403; (2) under the Frye‑Mack standard, whether the district court erred by determining that the Globalfiler DNA testing kit had gained general scientific acceptance, and whether the district court abused its discretion by determining that the kit was scientifically reliable; (3) whether the district court erred by denying Garland’s request for an evidentiary hearing; and (4) whether Garland is entitled to a new trial because the prosecutor answered jurors’ fact questions about an exhibit. (Ramsey County)