EN BANC CALENDAR

Before the Minnesota Supreme Court
May 2014
SUMMARY OF ISSUES
Summaries prepared by the Supreme Court Commissioner’s Office

 
Gary Ekdahl, Relator, vs. Independent School District #203, Self-Insured/Riverport Insurance Services, Respondent – Case No. A14-0089:

Sharyn Hartwig, Relator, vs. Traverse Care Center and Minnesota Counties Intergovernmental Trust, Respondents – Case No. A14-0090:

            Relator Gary Ekdahl suffered a work-related injury that led to his retirement from teaching at ISD #203.  Ekdahl applied for and is receiving a retirement annuity from the state Teachers Retirement Association.  The compensation judge granted Ekdahl’s petition for wage loss benefits and denied the employer’s request to offset the payments by the amount of Ekdahl’s TRA retirement annuity.  The workers’ compensation court of appeals reversed, ruling that Minn. Stat. § 176.101, subd. 4 (2013), required the requested offset.

            Relator Sharyn Hartwig was injured in the course of her employment at the Traverse Care Center.  Hartwig and the employer stipulated that she was permanently and totally disabled.  Hartwig is receiving a retirement annuity from the Public Employees Retirement Association.  The compensation judge granted the employer’s request to offset the disability payments by the amount of Hartwig’s PERA retirement annuity.  The worker’s compensation court of appeals affirmed.

            On appeal to the supreme court, the cases were consolidated for oral argument.  The following issues are presented: (1) whether Minn. Stat. § 176.101, subd. 4, requires that disability payments be offset by state and local government retirement benefits; and (2) whether such offsets would constitute constitutional violations of the right to equal protection and due process of law.  (Worker’s Compensation Court of Appeals)

 
Patrick Finn, et al., Appellants, vs. Alliance Bank, Respondent, Home Federal Bank, Appellant, KleinBank, Appellant, Merchants Bank, M&I Marshall & Ilsley Bank, Appellant, American Bank of St. Paul, et al., Defendants – Case Nos. A12-1930, A12-2092: First United Funding, LLC was the vehicle for a now-collapsed Ponzi scheme involving the sale of loan participations to banks.  Patrick Finn and Lighthouse Management Group, Inc., acting as a court-appointed receiver (“the Receiver”), brought a civil action against, among others Alliance Bank, Home Federal Bank, KleinBank, Merchants Bank, and M&I Marshall & Islsley Bank.  The suits alleged that the banks were all “net winners” of the Ponzi scheme, and sought to recover proceeds of the scheme as fraudulent transfers under the Minnesota Uniform Fraudulent Transfer Act, Minn. Stat. §§ 513.41-.51 (2012) (“MUFTA”), under theories of both actual and constructive fraud.  The district court dismissed some of the claims against Alliance Bank, and all of the claims against the remaining banks, as time-barred, but entered summary judgment against Alliance Bank on the remaining claims based on a presumption that for purposes of fraudulent transfer liability, transfers from a Ponzi scheme are actually fraudulent.

The court of appeals consolidated the separate appeals of Alliance Bank and the Receiver.  The court of appeals held that actual-fraud claims under MUFTA are subject to the limitations period for actions seeking “relief on the ground of fraud” set forth in Minn. Stat. § 541.05, subd. 1(6) (2012), which states that “the cause of action shall not be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud.”  It further held that constructive-fraud claims under MUFTA are subject to the limitations period set forth for actions “upon a liability created by statute” set forth in Minn. Stat. § 541.05, subd. 1(2) (2012), which has no corresponding discovery provision.  Additionally, the court of appeals in large part rejected the “Ponzi scheme presumption.”  Accordingly, it affirmed the dismissal of the constructive fraud claims, reversed the dismissal of the actual-fraud claims and remanded for trial, reversed the grant of summary judgment against Alliance Bank, and remanded to the district court to enter summary judgment in favor of Alliance Bank.

On appeal to the supreme court, the following issues are presented: (1) whether the “Ponzi scheme presumption” applies to actions under MUFTA; and (2) what statute of limitations applies to actions under MUFTA.  (Dakota County)

 
Jacky L. Larson, Appellant, vs. The Northwestern Mutual Life Insurance Company, Respondent, CMInformation Specialists, Inc., Respondent – Case No. A13-0186: Appellant Jacky Larson brought an action challenging the rescission of a life insurance policy issued to her deceased husband by respondent Northwestern Mutual Life Insurance Company on the ground that the decedent had failed to disclose his heart-related medical history.  Larson also brought claims against respondent CMInformation Specialists, Inc. (CMI), asserting that CMI had violated the Minnesota Health Records Act, Minn. Stat. §§ 144.291–.34 (2012), by failing to provide a full set of the decedent’s medical records to Northwestern Mutual.  The district court granted summary judgment to both Northwestern Mutual and CMI.  The court of appeals affirmed.  

On appeal to the supreme court, the following issues are presented: (1) whether the decedent made “willfully false or intentionally misleading” representations under Minn. Stat. § 61A.11 (2012), which warranted rescission of the life insurance policy as a matter of law; and (2) whether the Minnesota Health Records Act provides a cause of action against a medical records releaser that allegedly under-disclosed a patient’s records to a third party.  (Hennepin County)

Nonoral:       State of Minnesota, Respondent, vs. Toby Earl Johnson, Appellant – Case No. A13-2353: Toby Earl Johnson pleaded guilty in April 2000 to aiding and abetting premeditated first-degree murder for the home invasion, torture, and killing of Randy Pool in 1999.  Johnson was sentenced to life in prison and ordered to pay restitution in the amount of $23,060.22.  The district court held Johnson jointly and severally liable for this amount with the co-defendants also convicted of committing the crimes.  Of that amount, $7,468.48 was for house repairs, and $3,080.41 was for loss of an automobile. 

            On appeal to the supreme court, the following issues are presented: (1) whether the district court improperly calculated the amount of restitution by including amounts that were reimbursed by insurance and by valuing the lost vehicle by the amount due on an outstanding loan; and (2) whether a criminal defendant may be held jointly and severally liable with his co-defendants for restitution.  (McLeod County)

 
State of Minnesota, Respondent vs. Keith Richard Rossberg, Appellant – Case No. A13-1241: Keith Richard Rossberg was convicted of first-degree premeditated murder in March 2013 for the shooting death of his friend and neighbor Devan Hawkinson in 2011. As part of its case-in-chief, and over Rossberg’s objection, the State introduced evidence of a variety of incidents that occurred in late 2008, all of which involved some kind of misconduct by Rossberg, including acts of violence, or threats of violence, against Hawkinson; damage to Hawkinson’s property; and firearms-related conduct. The State also presented evidence that Hawkinson expressed his fear of Rossberg. The trial court ruled that the evidence was admissible to show the relationship between Rossberg and Hawkinson.

            On appeal to the supreme court, numerous issues are presented, including: (1) whether Rossberg was denied the right to a fair trial when the State introduced a vast array of bad-act and character evidence that was remote in time from the charged offense and which lacked probative value as to motive, intent, opportunity, or plan; and (2) whether Rossberg was denied a fair trial where the trial court admitted statements by Hawkinson to police concerning his fear of Rossberg, when the statements were made during the police investigation and Rossberg did not raise the defense of accident, suicide, or self-defense. (Wright County).

 
Daniel Garcia-Mendoza, Appellant, vs. 2003 Chevy Tahoe, Vin #1GNEC13V23R143453, Plate #235JBM, et al., Respondents – Case No. A13-0445: On March 19, 2012, the police stopped appellant Daniel Garcia-Mendoza while driving the 2003 Chevy Tahoe.  Police searched the vehicle and discovered a plastic bag with 225.90 grams of methamphetamine.  Garcia-Mendoza was given a notice of seizure and intent to forfeit the Tahoe and $611 in cash that was found on his person.  Garcia-Mendoza was also charged in both state and federal court with controlled-substance crimes.  He pleaded guilty in federal court, and the state criminal charges were dismissed.

Garcia-Mendoza filed a timely petition for judicial determination of forfeiture.  After Garcia-Mendoza’s federal conviction, Hennepin County moved for summary judgment in the forfeiture action.  In response to the motion, Garcia-Mendoza argued that his property should not be forfeited because his state and federal constitutional rights against unreasonable searches and seizures were violated by the stop of his vehicle and subsequent search of it.  The district court granted the County’s motion for summary judgment.  The court determined that there was not a reasonable, articulable suspicion for the stop of the Tahoe or a legitimate basis for the expansion of the stop.  Nevertheless, the court concluded that the legality of the stop was not at issue in the forfeiture action.  The court of appeals affirmed the district court.

On appeal to the supreme court, the following issues are presented: (1) whether the exclusionary rule applies to civil forfeiture actions; and (2) if the exclusionary rule applies, whether the County has an independent and untainted basis to seek forfeiture of the Tahoe and cash found on Garcia-Mendoza.  (Hennepin County)

 
State of Minnesota, Respondent, vs. Erica Ann Rohde, Appellant – Case No. A13-0610:         The State charged appellant Erica Rohde with fifth-degree possession of a controlled substance.  At a pretrial hearing, Rohde moved to suppress the methamphetamine arguing the search of her motor vehicle was not authorized by the inventory-search exception to the state and federal constitutional prohibitions on unreasonable searches.  The district court denied the motion to suppress.  Following a stipulated-facts trial, the court found Rhodes guilty as charged and stayed imposition of sentence.  On appeal, Rohde claimed the court erred when it denied her motion to suppress.  The court of appeals affirmed.

            On appeal to the supreme court, the issue presented is whether a motor vehicle with revoked license plates and no insurance is subject to immediate impoundment pursuant to the police caretaking function, when the driver does not request an opportunity to make alternative towing arrangements.  (Anoka County).

In re Petition for Disciplinary Action against Paul Arthur Moe, a Minnesota Attorney, Registration No. 264477 – Case No. A13-1611: An attorney discipline matter that presents the question of what discipline, if any, is appropriate based on the facts of the matter.

 
In re Petition for Review of Panel Decision against RESPONDENT, Panel Case No. 35104 – Case No. A13-1912: An attorney disciplinary matter that presents the issue of whether a panel of the Lawyers Professional Responsibility Board acted arbitrarily, capriciously, or unreasonably when it issued an admonition against respondent.

Laura L. Walsh, Respondent, vs. U.S. Bank, N.A., Appellant – Case No. A13-0742: Respondent Laura Walsh defaulted on her mortgage loan with appellant U.S. Bank, N.A., which led to a nonjudicial foreclosure proceeding and a foreclosure sale.  After the sale, Walsh brought an action against U.S. Bank, alleging that the bank had not properly served the notice of foreclosure sale.  U.S. Bank moved to dismiss the complaint for failure to state a claim upon which relief can be granted under Minn. R. Civ. P. 12.02(e).  Following a hearing, the district court dismissed the complaint with prejudice, concluding that Walsh had “failed to establish any evidence or facts giving rise to a plausible claim for relief.”  The court of appeals reversed and remanded.

            On appeal to the supreme court, the following issues are presented:  (1) whether the court should adopt the civil pleading standards established by the United States Supreme Court in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009); and (2) whether the complaint pleads enough facts to state a claim for relief under Minn. R. Civ. P. 8.01.  (Hennepin County)