Michelle Kirchner v. Patricia Jernell, Turpen Realty

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2012).
STATE OF MINNESOTA
IN COURT OF APPEALS
A14-0221
Michelle Kirchner, et al.,
Respondents,
vs.
Patricia Jernell, et al.,
Appellants,
Turpen Realty,
Defendant.
Filed November 10, 2014
Affirmed
Hudson, Judge
Anoka County District Court
File No. 02-CV-10-4550
Scott A. Johnson, Todd M. Johnson, Hellmuth & Johnson, PLLC, Edina, Minnesota (for
respondents)
Anthony C. Palumbo, Anoka County Attorney, Robert D. Goodell, Assistant County
Attorney, Anoka, Minnesota (for appellants)
Considered and decided by Kirk, Presiding Judge; Hudson, Judge; and
Stoneburner, Judge.

Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
UNPUBLISHED OPINION
HUDSON, Judge
Appellants challenge the district court’s denial of their motion for summary
judgment in this malicious-prosecution action, arguing that: (1) they are immune from
suit under the official immunity doctrine; (2) they did not initiate criminal prosecution of
respondents; and (3) there was probable cause for the charges prosecuted. Because we
conclude that the district court correctly determined that genuine issues of material fact
preclude summary judgment on the immunity issue, we affirm.
FACTS
In February 2006, respondent Michelle Kirchner filed an application for public
assistance on behalf of herself and her four children.1 At the time of her application,
respondent worked as an independent contractor for Re/Max Associates Plus and
Mortgages West. Income earned from these positions was paid to Creative Loan
Consulting, Inc. (CLC), a private subchapter S corporation respondent formed in 2003.
Respondent withdrew and recognized income from CLC at year’s end for tax purposes.
An Anoka County Human Services caseworker assisted respondent with her
application. Respondent described her family, assets, and income to the caseworker. She
informed the caseworker that she would not know her income until year’s end, that she
had no knowledge of Minnesota public-assistance programs, and that she was unaware if
she was eligible for assistance. The caseworker determined that respondent qualified for
1
“Respondent” refers to Michelle Kirchner. “Respondents” refers to Michelle Kirchner
and Jeffrey Kirchner.
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MinnesotaCare and her children qualified for Medical Assistance. Respondent renewed
her application in April 2006.
A few months later, respondent’s file was transferred to appellant Cassandra Volk,
a human services caseworker supervised by appellant Patricia Jernell. Respondent and
Jernell knew each other. Jernell also worked as a realtor and previously represented the
buyer of property for which respondent had served as the listing agent. During the sale
period, respondent twice reprimanded Jernell for permitting pre-sale access to the
property and threatened to file ethics complaints against her when Jernell’s employer
demanded additional commission for Jernell’s role in the sale.
Shortly after respondent’s file was transferred, respondent completed and signed a
Minnesota Health Care Programs Renewal Form (renewal form). The renewal form
listed respondent’s assets, indicated she was self-employed, and reported her 2006 self-
employment income to be $0. It is unclear who placed the $0 figure on the renewal form;
respondent claims she left the line blank and that the figure was added after she
completed the renewal form. Respondent also authorized human services to contact any
third party necessary to verify information on the renewal form.
Volk stated at a deposition that she received the renewal form after she conducted
a phone screening with respondent. Volk maintained that she became suspicious because
the renewal form indicated that respondent’s family survived with no income. Volk
expressed her concerns to a program coordinator, who directed her to approve the
application, refer it for an internal fraud investigation, and discuss the matter with Jernell.
Volk indicated that she informed Jernell of the fraud referral, and she admitted that
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Jernell became upset upon learning respondent’s identity. Volk also stated that Jernell
agreed that a fraud referral was appropriate, but maintained that Jernell’s approval was
not required to file the referral.
Respondent, however, alleges that she filled out the renewal form during a
consultation with Volk. She maintains that she explained to Volk that she would not
calculate her 2006 income until year’s end, that she borrowed money from friends and
family, and that she relied on caseworkers’ advice to provide the information necessary to
complete the renewal form. She asserts that she never intended to claim $0 in 2006.
Instead, respondent alleges Volk “induced” her to claim $0 income and colluded with
Jernell to “manipulate[]” the renewal form to instigate a fraud investigation against her.
She asserts that the referral for a fraud investigation was “misleading, factually
inaccurate, and omitted critical information.”
The record reflects that six Regional Multiple Listing Services (RMLS) printouts,
each describing the value of property sold by respondent in the previous year, were
attached to the fraud referral. These printouts were acquired by Jernell, who used her
realtor’s password to access RMLS password-protected records for the purpose of
investigating respondent’s real-estate sales. Notations in the referral record indicate that
these printouts demonstrate that respondent failed to report real estate commissions as
income on the renewal form.
The internal fraud referral was assigned to an Anoka County deputy for
investigation and was later submitted to the Anoka County Attorney for additional
investigation. The county attorney’s investigation culminated in the arrests of
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respondents; respondent was ultimately charged with one count of wrongfully obtaining
assistance. The state later dismissed the criminal complaint without prejudice.
In June 2010, respondents brought suit against appellants, alleging various claims,
most of which were disposed of before trial. In November 2013, appellants moved for
summary judgment on the remaining claim of malicious prosecution. The district court
determined that genuine issues of material fact preclude summary judgment and denied
appellants’ motion. This appeal follows.
DECISION
An order denying summary judgment is immediately appealable under the
collateral-order doctrine when the motion is based on a claim of official immunity.
Gleason v. Metro. Council Transit Operations, 582 N.W.2d 216, 218 (Minn. 1998). A
court reviewing the denial of summary judgment determines de novo whether genuine
issues of material fact exist and whether the district court erred in its application of the
law. Mumm v. Mornson, 708 N.W.2d 475, 481 (Minn. 2006). A genuine issue of fact
exists when the evidence permits “reasonable persons to draw different conclusions.”
Frieler v. Carlson Mktg. Grp., Inc., 751 N.W.2d 558, 564 (Minn. 2008) (quotation
omitted). The evidence is viewed in the light most favorable to the nonmoving parties
and all reasonable inferences are drawn in their favor. Id.Appellants argue that the district court erred by concluding that genuine issues of
material fact preclude summary judgment, alleging that, as a matter of law, common-law
official immunity protects their conduct related to respondent’s renewal form. The
doctrine of common-law official immunity prevents public officials charged by law with
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duties which call for the exercise of “judgment or discretion from being held personally
liable to an individual for damages.” Schroeder v. St. Louis Cnty., 708 N.W.2d 497, 505
(Minn. 2006) (quotation omitted). The purpose of the doctrine is to enable public
officials “to perform their duties effectively, without fear of personal liability that might
inhibit the exercise of their independent judgment.” Mumm, 708 N.W.2d at 490. The
application of immunity is a question of law reviewed de novo, Gleason, 582 N.W.2d at
219, and “[t]he party asserting immunity has the burden of showing particular facts
demonstrating an entitlement to immunity.” Meier v. City of Columbia Heights, 686
N.W.2d 858, 863 (Minn. App. 2004), review denied (Minn. Dec. 14, 2004).
“Before we analyze the application of official immunity, we must first identify the
precise governmental conduct at issue.” Mumm, 708 N.W.2d at 490. Common-law
official immunity does not protect officials from liability related to the exercise of
ministerial duties, but extends to officials charged with the execution of discretionary
functions. Anderson v. Anoka Hennepin Indep. Sch. Dist. 11, 678 N.W.2d 651, 655
(Minn. 2004). Conduct is discretionary if it requires “individual professional judgment
that necessarily reflects the professional goal and factors of a situation.” Mumm, 708
N.W.2d at 490–91 (quotation omitted). Here, the parties identify two official acts at
issue: (1) Jernell’s use of her realtor’s password to access RMLS records and (2) Volk’s
decision to refer respondent’s case for fraud investigation. It is undisputed that this
conduct is discretionary. Therefore, appellants are entitled to official immunity unless
they acted maliciously or willfully. Rico v. State, 472 N.W.2d 100, 107 (Minn. 1991).
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Malice has been defined as “the intentional doing of a wrongful act without legal
justification or excuse, or . . . the willful violation of a known right.” Id. (quotation
omitted). In the context of official immunity, an official acts with malice by intentionally
committing an act that he or she has reason to believe is legally prohibited. Id.Generally, the existence of malice is a question of fact decided by the jury. Kelly v. City
of Minneapolis, 598 N.W.2d 657, 664 n.5 (Minn. 1999). But when there is no genuine
issue of material fact, malice may be decided as a matter of law by the court. See
Vassallo ex rel. Brown v. Majeski, 842 N.W.2d 456, 465 (Minn. 2014) (deciding
existence of malice as matter of law because undisputed facts established defendant did
not maliciously violate a known right of plaintiff).
Here, the district court determined that genuine issues of material fact exist with
regard to both official acts. Regarding the RMLS records, the district court determined
that disputed facts remain about “the events that led to the entry of a zero dollar figure on
[respondent’s] application,” and whether Jernell acted “in the service of her alleged
personal animus against the [respondent].” The district court determined that “the same
reasons” also prevented it from determining whether the fraud referral was legally
reasonable, specifically noting that disputed facts remain regarding, “who actually
entered zero dollars as self-employment income on the form” and whether “[respondent]
verbally communicated that she earned zero income in 2006 to Volk.” The district court
concluded that resolution of these facts is necessary to determine whether Jernell and
Volk colluded to persuade respondent to fill out the renewal form “in a manner that
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would lead to adverse consequences. . . .” The district court determined that appellants
possess no legal justification for their actions if these facts were proven.
Appellants argue, however, that the district court erred by concluding that Jernell’s
alleged animus toward respondent presents an issue of material fact that precludes
summary judgment. We agree. The malice exception “contemplates an objective inquiry
into the legal reasonableness of an official’s actions.” State by Beaulieu v. City of
Mounds View, 518 N.W.2d 567, 571 (Minn. 1994). The fact that an official’s act is
motivated by a desire to cause “mischief” with another is insufficient to establish malice.
Carnes v. St. Paul Union Stockyards Co., 164 Minn. 457, 462, 205 N.W. 630, 631
(1925); see also Gleason v. Metro. Council Transit Operations, 563 N.W.2d 309, 317–18
(Minn. App. 1997) (“Malice in the context of immunity connotes a concept unrelated to
‘ill will’ or ‘improper motive.’”), aff’d in part, 582 N.W.2d 216 (Minn. 1998). The
malice exception applies only if a “clearly established law or regulation” prohibits the
official’s conduct. Rico, 472 N.W.2d at 107. Thus, the fact that Jernell may have acted
with animosity toward respondent is not relevant to the determination of whether her
conduct is legally reasonable.
But the remaining factual questions identified by the district court, which relate to
the events surrounding respondent’s listing $0 income, are relevant to the determination
of whether Jernell or Volk’s conduct was legally reasonable. Here, the appropriate
inquiry is whether these questions, resolved in a light most favorable to respondents,
would demonstrate conduct prohibited by a well-established law or regulation. In this
context, the facts could demonstrate that appellants created a fraud referral based on
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information they knew to be false, accessed password-protected records to make their
claims that the information was false appear credible, and communicated the false
information to a law enforcement officer for further investigation. Viewed objectively, if
proved, these actions are not legally reasonable; they are akin to providing a false report
to law enforcement, see Minn. Stat. § 609.505, subd. 1 (2006), or making a false
statement that has the effect of harming another’s reputation, which is conduct prohibited
by the common-law tort of defamation. See Richie v. Paramount Pictures Corp., 544
N.W.2d 21, 25 (Minn. 1996) (listing elements of defamation claim). We therefore
conclude the district court properly determined that resolution of these predicate factual
disputes precluded summary judgment.
In addition, malice may be established by conduct that is willfully committed in
violation of another’s known rights. Rico, 472 N.W.2d at 107. Appellants contend that
Jernell’s accessing of the RMLS listings did not violate respondents’ rights because
respondent had no recognized right to the privacy of the information in the RMLS
listings. We reject appellants’ narrow interpretation. Generally, public officials are not
immune from suit in intentional tort actions because the “willful and intentional nature”
of their acts establishes malice. LeBaron v. Minnesota Bd. of Pub. Defense, 499 N.W.2d
39, 41 (Minn. App. 1993), review denied (Minn. June 9, 1993); but cf. Kelly, 598 N.W.2d
at 663 (upholding jury’s finding that defendants committed intentional tort of intentional
infliction of emotional distress, but did so without malice, because the jury could have
concluded the conduct was reckless or justified by the circumstances). Malicious
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prosecution2 is an intentional tort, and we have stated, in a different context, that
malicious prosecution results in a “direct invasion” of another’s rights. See Manteuffel v.
City of North St. Paul, 570 N.W.2d 807, 810 (Minn. App. 1997) (citing malicious
prosecution as example of intentional tort in data-practices-act claim); Bohdan v. Alltool
Mfg., Co., 411 N.W.2d 902, 907 (Minn. App. 1987) (noting that plaintiffs may recover
damages for mental anguish and suffering in a malicious prosecution action because
plaintiffs have suffered a “direct invasion” of their rights). Here, the disputed facts
identified by the district court are also relevant to the elements of respondents’ malicious
prosecution claim, which, in turn, may establish whether appellants’ conduct violated
respondents’ known rights. We conclude for this reason as well that the district court did
not err in denying appellants’ motion for summary judgment.
Finally, appellants assert that summary judgment was warranted because
undisputed facts in the record gave them ample reason to suspect that respondent
misrepresented her income and thus they were “legally justified” in pursuing the fraud
investigation. We disagree. In support of their argument, appellants rely on evidence
documenting multiple instances in which it appears that respondent asserted that she
earned no income. But this evidence does not establish that respondent knew that her
claims were false or that appellants believed that respondent intended to claim no income
2
To state a claim for malicious prosecution, respondents must demonstrate: (1) the
criminal action was brought without probable cause or reasonable belief that the plaintiff
would ultimately prevail on the merits; (2) the action was instituted and prosecuted with
malicious intent; and (3) the action terminated in favor of the party asserting the claim.
Dunham v. Roer, 708 N.W.2d 552, 569 (Minn. App. 2006), review denied (Minn.
Mar. 28, 2006).
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on the renewal form. Respondent has consistently maintained that appellants knew that
she relied on caseworkers’ assessments of her employment and income to complete her
application for public assistance. She asserts that appellants understood that respondent
never intended to claim $0 income, but that they manipulated her renewal form to make it
appear that she misrepresented her income. The undisputed facts appellants rely on do
not support summary judgment unless additional factual inferences are drawn in
appellants’ favor. But all factual inferences are to be drawn in respondent’s favor as the
nonmoving party. Frieler, 751 N.W.2d at 564. Therefore the district court did not err in
denying appellants’ motion for summary judgment.
Appellants also allege that they did not initiate criminal prosecution of
respondents, that there was probable cause for the charges prosecuted, and that the
district court erred by concluding that genuine issues of material fact preclude summary
judgment on these issues. But the scope of review on this interlocutory appeal is limited
to the issue of immunity. Pigs R Us, LLC v. Compton Twp., 770 N.W.2d 212, 217
(Minn. App. 2009). We therefore decline to address these additional issues.
Affirmed.
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