David B. Markle v. Metro Metals Corporation ( 2016 )

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA
IN COURT OF APPEALS
A15-1970
David B. Markle, et al.,
Respondents,
vs.
Metro Metals Corporation,
Appellant.
Filed August 29, 2016
Affirmed
Peterson, Judge
Ramsey County District Court
File No. 62-CV-14-776
Michael T. Cain, Kennedy & Cain PLLC, Minneapolis, Minnesota (for respondents)
James T. Smith, Craig D. Greenberg, Huffman Usem Crawford & Greenberg, P.A.,
Minneapolis, Minnesota (for appellant)
Considered and decided by Rodenberg, Presiding Judge; Peterson, Judge; and
Bjorkman, Judge.
UNPUBLISHED OPINION
PETERSON, Judge
In this appeal from a judgment following a jury trial on respondents’ claims for
conversion and violations of Minn. Stat. § 609.53 (2014) (receiving stolen property),
appellant argues that the district court erred by (1) allowing two respondents to recover
under section 609.53 when appellant was not convicted of receiving stolen property;
(2) awarding the full amount of requested attorney fees to those two respondents; and
(3) allowing the other five respondents to recover on conversion claims when their claims
under section 609.53 failed. We affirm.
FACTS
Respondents, six individuals and one corporation, initiated this lawsuit against
appellant Metro Metals Corporation, a scrapyard, on theories of common law conversion
and statutory liability under Minn. Stat. § 609.53, subd. 4, for receiving stolen property.
Respondents alleged that appellant demolished eight stolen vehicles after purchasing the
vehicles from thieves without requiring proof of title and without making an effort to verify
the vehicles’ owners or determine whether the vehicles had been reported stolen.
Respondents asserted that appellant knew or had reason to know that the vehicles had been
stolen. Appellant stipulated that respondents owned the vehicles, which had been stolen,
and that appellant purchased the vehicles from parties other than the owners.
On the first day of trial, appellant moved to dismiss the cause of action brought
under Minn. Stat. § 609.53, subd. 4. Appellant argued that a criminal conviction of
receiving stolen property under Minn. Stat. § 609.53, subd. 1, is a prerequisite to liability
under subdivision 4. The district court determined that the plain language of the statute
does not condition liability on a conviction and, therefore, denied the motion.
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The jury found that appellant had converted seven of the vehicles and awarded the
owners actual damages.1 The jury also found that appellant’s conversion of three of the
vehicles, owned by respondents More4aBuck, Inc. and Kathleen Raine, violated Minn.
Stat. § 609.53, subd. 1.
Appellant moved for judgment as a matter of law on the receiving-stolen-property
claims, again arguing that liability under Minn. Stat. § 609.53, subd. 4, requires a
conviction of receiving stolen property. Appellant also moved for judgment as a matter of
law or a new trial on the conversion claims, arguing that appellant could not be held liable
for conversion given the evidence presented and the jury’s findings that appellant did not
violate Minn. Stat. § 609.53, subd. 1. The district court confirmed its previous ruling that
liability under Minn. Stat. § 609.53, subd. 4, is not conditioned on a conviction of receiving
stolen property and determined that the jury’s findings on the conversion claims were
supported by the evidence and legal authority.
More4aBuck and Raine moved for an award of attorney fees and costs under Minn.
Stat. § 609.53, subd. 4. Appellant asked that the requested amount of attorney fees be
prorated because five of the eight receiving-stolen-property claims were unsuccessful. The
district court denied appellant’s request and awarded More4aBuck and Raine attorney fees
of $44,696.22 and costs of $4,185.46. The court reasoned that “the jury could have
concluded that [appellant’s] pattern of conduct as to all [of respondents’] vehicles” was
1
One of the respondents, RyAnne Quirk, was inadvertently omitted from the special-
verdict form, and appellant and Quirk stipulated posttrial that, absent a valid legal defense,
appellant had converted Quirk’s vehicle and she sustained actual damages.
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evidence that appellant violated Minn. Stat. § 609.53, subd. 1, with respect to the three
vehicles owned by More4aBuck and Raine and that, according to caselaw, a “fee award
should not be reduced simply because the plaintiff failed to prevail on every contention
raised in the lawsuit.”
This appeal follows the entry of judgments for respondents.
DECISION
I.
Appellant argues that the district court erred by determining that appellant can be
held liable for damages under Minn. Stat. § 609.53, subd. 4, without being convicted of
receiving stolen property in violation of Minn. Stat. § 609.53, subd. 1. Subdivision 1 of
the receiving-stolen-property statute states: “[A]ny person who receives, possesses,
transfers, buys or conceals any stolen property or property obtained by robbery, knowing
or having reason to know the property was stolen or obtained by robbery, may be sentenced
in accordance with the provisions of section 609.52, subdivision 3.”2 Minn. Stat. § 609.53,
subd. 1. Subdivision 4 of the statute states that “[a]ny person who has been injured by a
violation of subdivision 1 . . . may bring an action for three times the amount of actual
damages sustained by the plaintiff or $1,500, whichever is greater, and the costs of suit and
reasonable attorney’s fees.” Id., subd. 4.
Appellant cites Dairy Farm Leasing Co. v. Haas Livestock Selling Agency, Inc., 458
N.W.2d 417 (Minn. App. 1990), to support its argument that a conviction is a prerequisite
2
Minn. Stat. § 609.52, subd. 3 (2014), establishes sentences for theft offenses.
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to civil liability. In Dairy Farm Leasing, the owner of some dairy cows that had been
leased to a third party sued a selling agency for conversion after the agency sold the cows
for slaughter. Id. at 418. The district court determined that the agency was not liable for
conversion and, therefore, did not award damages. Id. This court reversed the district court
and remanded for a determination of damages. Id. at 420.
The owner of the cows also claimed that it was entitled to treble damages for
conversion of the cows under Minn. Stat. § 609.551, subds. 1, 4 (1988), which defined the
crime of livestock theft and provided “that a person who has been injured ‘by a violation
of this section’ may bring an action for treble damages, costs and attorney fees.” Id. at 420(quoting Minn. Stat. § 609.551, subd. 4). With respect to the treble-damages claim, this
court stated only: “Section 609.551 is a criminal statute for theft of livestock. There has
been no such criminal conviction in this case, and [the owner] cites no authority for finding
a violation of this statute in a civil proceeding; we cannot extend these damages to this civil
case.” Id.This court’s statement that the owner of the dairy cows cited no authority for finding
a violation of the statute in a civil proceeding was not a determination that a conviction is
a prerequisite to civil liability. The owner of the cows filed an action for conversion, which
did not require proof that the theft-of-livestock statute was violated. There had been no
conviction for theft of livestock, and the district court had not found that the statute was
violated. On appeal, the owner did not cite any authority that permitted this court to find
that the statute was violated, and, without a conviction, which would have proved a
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violation, this court did not extend treble damages to the conversion case. This court did
not undertake any statutory-interpretation analysis.
The interpretation of a statute presents a question of law, which is reviewed de novo.
Wayzata Nissan, LLC v. Nissan N. Am., Inc., 875 N.W.2d 279, 284 (Minn. 2016). “The
object of all interpretation and construction of laws is to ascertain and effectuate the
intention of the legislature.” Minn. Stat. § 645.16 (2014). “To interpret a statute, [an
appellate court] first assesses whether the statute’s language, on its face, is clear or
ambiguous.” Sleiter v. Am. Family Mut. Ins. Co., 868 N.W.2d 21, 24 (Minn. 2015)
(quotation omitted). “When legislative intent is clear from the statute’s plain and
unambiguous language, [the court] interpret[s] the statute according to its plain meaning
without resorting to other principles of statutory interpretation.” Binkley v. Allina Health
Sys., 877 N.W.2d 547, 550 (Minn. 2016) (quotation omitted). But “[i]f a statute is
reasonably susceptible to more than one interpretation, it is ambiguous and [the court] may
resort to the canons of construction or legislative history in order to determine the intent of
the Legislature.” Id. at 550-51.
Minn. Stat. § 609.53, subd. 4, speaks of “a violation of subdivision 1,” rather than
of a conviction under subdivision 1; it does not make a conviction under subdivision 1 a
condition for imposing liability for damages under subdivision 4. An appellate court
“cannot add words to a statute that the Legislature intentionally or inadvertently left out.”
Great River Energy v. Swedzinski, 860 N.W.2d 362, 364 (Minn. 2015) (quotation omitted);
see also 328 Barry Ave., LLC v. Nolan Props. Grp., LLC, 871 N.W.2d 745, 750 (Minn.
2015) (stating that appellate court “cannot add words to an unambiguous statute under the
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guise of statutory interpretation”). Thus, we conclude that under the unambiguous
language of Minn. Stat. § 609.53, subd. 4, a criminal conviction for violating Minn. Stat.
§ 609.53, subd. 1, is not required to establish civil liability for damages.
Our conclusion is supported by this court’s analysis of a statute similar to Minn.
Stat. § 609.53, subd. 4, in T.E.S. Constr., Inc. v. Chicilo, 784 N.W.2d 392 (Minn. App.
2010), review denied (Minn. Sept. 21, 2010). In Chicilo, a contractor received checks from
construction lenders to pay for work completed by a subcontractor. Id. at 394. Instead of
using the check proceeds to pay the subcontractor, the contractor deposited the checks into
a bank account that the contractor controlled. Id.The first subdivision of a section in the mechanics’ lien statute, Minn. Stat. § 514.02,
subd. 1(a) (2008), stated that a person who received the proceeds of payments for an
improvement to real estate must hold the proceeds “‘in trust for the benefit of those persons
who furnished the labor, skill, material, or machinery contributing to the improvement.’”
Id. at 395 (quoting Minn. Stat. § 514.02, subd. 1(a)). That subdivision also defined the
crime of theft of such proceeds. Id.The next subdivision in the statute stated that “[a] person injured by a violation of
subdivision 1 may bring a civil action and recover damages, together with costs and
disbursements, including costs of investigation and reasonable attorney fees, and receive
other relief as determined by the court.” Minn. Stat. § 514.02, subd. 1a (2008). The
subcontractor sued the contractor under this subdivision for damages for theft of the
proceeds. Chicilo, 784 N.W.2d at 394. The contractor argued that a civil action under
subdivision 1a could not be brought against him because he had not been convicted of
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violating subdivision 1(a). Id. at 395. This court analyzed the statute and determined that
a conviction of theft was not necessary for civil liability. Id. at 395-96. This court
explained:
The plain language of Minn. Stat. § 514.02, subd. 1a,
does not require a criminal conviction. . . . Appellant urges this
court to read subdivision 1a’s use of the term “violation” to
mean criminal conviction of theft, as provided for in
subdivision 1(b). We decline to do so because the violation of
a statute is unambiguously distinct from a criminal conviction
for any such violation.
Id. at 395.
More recently, this court held that extending an order for protection (OFP) for
violating a prior OFP did not require a conviction of violating the prior OFP. Ekman v.
Miller, 812 N.W.2d 892, 896 (Minn. App. 2012); see also Minn. Stat. § 518B.01, subd.
6a(a) (2014) (permitting extension of existing OFP or grant of new OFP “upon a showing
that . . . the respondent has violated a prior or existing order for protection”). This court
stated, “Minn. Stat. § 518B.01, subd. 6a, speaks of ‘violations,’ not ‘convictions.’ . . . [W]e
cannot supply what the legislature has omitted. There is a meaningful difference between
the concepts of ‘violation’ and ‘conviction.’” Ekman, 812 N.W.2d at 896 (citation
omitted).
II.
The receiving-stolen-property statute provides that any person who has been injured
by a violation of the statute may recover “the costs of suit and reasonable attorney’s fees.”
Minn. Stat. § 609.53, subd. 4. Appellant argues that the district court abused its discretion
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by awarding More4aBuck and Raine the full amount of attorney fees associated with this
lawsuit when five out of eight receiving-stolen-property claims were not successful.
An appellate court reviews an award of attorney fees for an abuse of discretion.
County of Dakota v. Cameron, 839 N.W.2d 700, 711 (Minn. 2013). The appellate court
“will not set aside a district court’s factual findings underlying an award of attorney fees
unless they are clearly erroneous.” Id. (quotation omitted).
“Generally, Minnesota courts have used the lodestar method for determining the
reasonableness of statutory attorney fees.” Green v. BMW of N. Am., LLC, 826 N.W.2d
530, 535 (Minn. 2013); see also Cameron, 839 N.W.2d at 711 (stating that supreme court
“ha[s] consistently adopted the lodestar approach whenever a statute contains an explicit
directive that an award of attorney fees must be reasonable”). “The lodestar method first
requires a district court to determine the number of hours reasonably expended on the
litigation and multiply that number by a reasonable hourly rate.” Cameron, 839 N.W.2d
at 711 (quotations omitted). “A court must consider all relevant circumstances when
evaluating the reasonableness of the hours expended by attorneys and their hourly rates.”
Id. (quotation omitted).
A court then evaluates the overall reasonableness of the award
by considering such factors as the time and labor required; the
nature and difficulty of the responsibility assumed; the amount
involved and the results obtained; the fees customarily charged
for similar legal services; the experience, reputation, and
ability of counsel; and the fee arrangement existing between
counsel and the client.
Id. (quotation omitted).
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Respondents collectively sustained actual damages of $28,048.11. Of this amount,
$8,132.50 was attributable to More4aBuck and Raine, the only respondents whose
receiving-stolen-property claims were successful. More4aBuck’s and Raine’s actual
damages were tripled to $24,397.50 pursuant to section 609.53, subdivision 4, and the
damages judgments against appellant totaled $44,313.11. The district court awarded
More4aBuck and Raine $44,696.22 in attorney fees.
Appellant argues that because the actual damages incurred by More4aBuck and
Raine were 28.9% of the total actual damages awarded, the attorney-fee award to
More4aBuck and Raine should be 28.9% of the total attorney fees incurred. “Where a
plaintiff succeeds on only some claims and fails on others, two questions must be
addressed: whether the unsuccessful claims were related to the successful claims, and
whether the plaintiff’s level of success makes the hours expended a satisfactory basis for
making the fee award.” Musicland Grp., Inc. v. Ceridian Corp., 508 N.W.2d 524, 535
(Minn. App. 1993), review denied (Minn. Jan. 27, 1994).
In some cases:
the claims will involve a common core of facts or will be based
on related legal theories. Much of counsel’s time will be
devoted generally to the litigation as a whole, making it
difficult to divide hours expended on a claim-by-claim basis.
Such a lawsuit cannot be viewed as a series of discrete claims.
In these circumstances the fee award should not be reduced
simply because the plaintiff failed to prevail on every
contention raised in the lawsuit. The most critical factor is the
degree of success obtained.
Id. (quotation and citations omitted); see also Riverview Muir Doran, LLC v. JADT Dev.
Grp., LLC, 776 N.W.2d 172, 179-80 (Minn. App. 2009) (relying on Musicland to affirm
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attorney-fee award that included fees associated with unsuccessful motion for temporary
injunction).
Appellant argues that the district court erred as a matter of law in relying on this
court’s decision in Riverview because Riverview involved analysis of a single plaintiff’s
multiple claims, while this case involves seven plaintiffs and their multiple claims.
Appellant contends that “[t]he trial court’s finding essentially holds that in a consolidated
case, a single plaintiff need be successful on a claim carrying attorney’s fees for purposes
of receiving all attorneys’ fees expended in the entire consolidated case—with no input as
to the damages sought by each plaintiff’s claim.” Appellant argues that “[t]his principle
runs afoul of the principle that an award of attorneys’ fees should factor in the results
secured at trial” and “[t]he amount awarded should be in reasonable relation to the amount
of the judgment secured.”
Appellant’s arguments disregard the district court’s rationale for the attorney-fee
award. See Anderson v. Hunter, Keith, Marshall & Co., 417 N.W.2d 619, 629-30 (Minn.
1988) (stating that, when reasonableness of requested attorney fees is challenged, district
court must provide a “‘concise but clear explanation of its reasons for the fee award’”
(quoting Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S. Ct. 1933, 1941 (1983)). The
district court explained that, to prevail on a receiving-stolen-property claim, it was
necessary to prove that when appellant received a stolen vehicle, it knew or had reason to
know that the vehicle was stolen. For each receiving-stolen-property claim, proving this
element of the claim required evidence that showed appellant’s practice of purchasing
vehicles without obtaining proof of ownership. And to prove that appellant had such a
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practice, each claimant needed to present evidence of multiple vehicle purchases.
Consequently, evidence about appellant’s purchases of all of respondents’ vehicles was
relevant to each respondent’s claim, and all of the claims had a common core of facts; the
facts regarding all of the purchases established appellant’s practice. The district court did
not award the full amount of fees requested simply because three of the claims were
successful. The court awarded the full amount because proving the pattern of conduct that
was needed to prevail on the three successful claims required the evidence presented for
all eight claims. The case involved eight separate claims, but the theory of the case was
that each of the claims arose from the same practice.
Furthermore, in district court, appellant argued only that the proportion of the
claimed fees that should be awarded for the successful receiving-stolen-property claims
should be limited to the proportion of the total actual damages awarded for those claims.
But the “direction to lower courts to consider the amount involved and the results obtained
when awarding reasonable attorney fees does not amount to a ‘dollar value proportionality
rule.’” Green, 826 N.W.2d at 538; see also Cameron, 839 N.W.2d at 712 (stating that
“[t]here is no precise rule or formula for applying the results-obtained factor” (quotation
omitted)). “The court should focus on whether the hours expended are reasonable in
relation to the overall relief obtained.” Milner v. Farmers Ins. Exch., 748 N.W.2d 608, 623
(Minn. 2008).
The district court’s explanation of its reasons for the fee award indicates that the
hours expended were reasonable in relation to the successful receiving-stolen-property
claims. Appellant argued in district court that “it is irrational and unreasonable to conclude
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that the work performed in association with 3 claims rather than 5 would have required the
same attorney’s hours.” Appellant has not identified anything in the record that indicates
that respondents’ attorneys would not have performed approximately the same amount of
work had the lawsuit been brought only by More4aBuck and Raine, rather than by all seven
respondents. We therefore conclude that the district court did not abuse its discretion in
awarding attorney fees.
III.
Appellant argues that the district court erred by denying its motion for judgment as
a matter of law on the conversion claims of the five respondents who did not succeed in
their receiving-stolen-property claims. Judgment as a matter of law should be granted
only in those unequivocal cases where (1) in the light of the
evidence as a whole, it would clearly be the duty of the trial
court to set aside a contrary verdict as being manifestly against
the entire evidence, or where (2) it would be contrary to the law
applicable to the case.
Jerry’s Enters., Inc. v. Larkin, Hoffman, Daly & Lindgren, Ltd., 711 N.W.2d 811, 816
(Minn. 2006) (quotation omitted). “The denial of a motion for judgment as a matter of law
presents a question of law that [an appellate court] review[s] de novo.” Gieseke ex rel.
Diversified Water Diversion, Inc. v. IDCA, Inc., 844 N.W.2d 210, 220 (Minn. 2014).
The receiving-stolen-property statute is violated when a person “receives,
possesses, transfers, buys or conceals any stolen property or property obtained by robbery,
knowing or having reason to know the property was stolen or obtained by robbery.” Minn.
Stat. § 609.53, subd. 1 (emphasis added). Appellant argues that, because it stipulated that
the vehicles were stolen, the jury’s failure to find that appellant violated section 609.53,
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subdivision 1, with respect to five of the vehicles means that the jury determined that
appellant did not know or have reason to know that those five vehicles were stolen.
Appellant contends that, given this determination, the jury’s findings that those vehicles
were converted are contrary to the law.
Conversion is “an act of willful interference with the personal property of another,
done, without lawful justification, by which any person entitled thereto is deprived of use
and possession” or “the exercise of dominion and control over goods inconsistent with, and
in repudiation of, the owner’s rights in those goods.” Christensen v. Milbank Ins. Co., 658
N.W.2d 580, 585 (Minn. 2003) (quotations omitted); see also Restatement (Second) of
Torts § 222A(1) (1965) (“Conversion is an intentional exercise of dominion or control over
a chattel which so seriously interferes with the right of another to control it that the actor
may justly be required to pay the other the full value of the chattel.”).
“The elements of common law conversion are: (1) plaintiff holds a property interest;
and (2) defendant deprives plaintiff of that interest.” Williamson v. Prasciunas, 661
N.W.2d 645, 649 (Minn. App. 2003). “Good faith is not a defense to a claim of
conversion.” Id.; see also Larson v. Archer-Daniels-Midland Co., 226 Minn. 315, 317, 32
N.W.2d 649, 650 (1948) (“As a general rule, the intent, knowledge, or motive of the
converter is immaterial except as affecting damages.”); Restatement (Second) of Torts
§ 244 (1965) (“An actor is not relieved of liability to another for . . . conversion by his
belief, because of a mistake of law or fact not induced by the other, that he (a) has
possession of the chattel or is entitled to its immediate possession, or (b) has the consent
of the other or of one with power to consent for him, or (c) is otherwise privileged to act.”).
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Conversion does not require proof that the defendant knew or had reason to know
that the property interest was wrongfully being deprived. The jury’s findings are not in
conflict, and the district court did not err by denying appellant’s motion for judgment as a
matter of law.
Affirmed.
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