Court Opinion

ID: 4111314
Source: CourtListenerOpinion
Date Created: 2016-12-27 19:09:09.893075+00
Date Added: 2024-06-11T09:20:33.994738
License: Public Domain

This opinion will be unpublished and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
                                    A16-0611

                                   Victoria L. Sloan,
                                      Appellant,

                                          vs.

                                     Kelly O'Neil,
                                     Respondent,

                                    Regina Sabbia,
                                     Respondent,

                                    Kerrie Cathcart,
                                     Respondent,

                         Uptown Realty & Management, LLC,
                                     Defendant.

                               Filed December 27, 2016
                                      Affirmed
                                   Peterson, Judge

                            Hennepin County District Court
                              File No. 27-CV-14-12814

Susan D. Minsberg, St. Paul, Minnesota (for appellant)

Samuel C. Spaid, Minneapolis, Minnesota (for respondent O’Neil)

Joshua S. Casper, St. Paul, Minnesota (for respondent Sabbia)

Craig A. Buske, Shulman and Buske, PLLC, Minneapolis, Minnesota (for respondent
Cathcart)
       Considered and decided by Cleary, Chief Judge; Peterson, Judge; and Worke, Judge.

                         UNPUBLISHED OPINION

PETERSON, Judge

       In this landlord-tenant dispute arising from damage to a rental unit, appellant-

landlord argues that the district court erred in (1) granting summary judgment for

respondent-tenants on appellant’s claim for willful destruction of property, (2) awarding

statutory attorney fees to respondents for the willful-destruction-of-property claim,

(3) offsetting the jury verdict on appellant’s breach-of-contract claim against respondents

by the amount of appellant’s settlement with defendant property-management company,

and (4) deducting the amount of the security deposit from the jury verdict. We affirm.

                                         FACTS

       Appellant-landlord Victoria L. Sloan, through defendant Uptown Realty & Property

Management, rented a house that she owned to respondent-tenants Kelly O’Neil, Regina

Sabbia, and Kerrie Cathcart. The lease term ran from April 15, 2013, through April 30,

2014. Although Sloan initially intended to include a no-dog provision in the lease, she

agreed to allow O’Neil’s dog to live in the home. To accommodate O’Neil’s dog, the lease

permitted one dog weighing less than 50 pounds to live in the house.

       Before renting the house, Sloan, her real-estate agent, and friends and family

members visited it multiple times, and Sloan and her sister lived in the home for two weeks.

No one noted any pet damage to the home or any damage of any kind to woodwork or

millwork. Damages noted in an inspection report prepared by Uptown Realty before the

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tenants moved in included one tiny crack in the stained glass on the dining-room door, a

hole that had been repaired and some permanent staining in the master-bedroom carpeting,

water damage on the upstairs foyer ceiling, uncracked but bowed stained glass on a

staircase window, and two staircase spindles cracked near the bottom but not broken

through. The report described the dining room’s sliding wooden passage or pocket door

as “flawless.”

       In June 2013, Sloan’s sister was at the house and saw two dogs inside scratching the

woodwork under a living-room window. She saw what appeared to be urine stains on

carpeting in the house and smelled a urine odor on the second floor. O’Neil admitted that

a second dog was present two to three times a month for an overnight stay from May

through October 2013. In September 2013, Sloan talked to respondents about the urine

stains on the carpeting, which were still there, and respondents assured Sloan that the issue

would be resolved. In November 2013, a contractor saw dog feces inside the house and

urine stains on the carpeting.

       Following these discoveries, Sloan hired contractor Tim Jahnke to inspect the extent

of urine damage. Using an ultraviolet light, Jahnke found several areas of urine stains on

the library carpeting. He also found a large urine stain in the front south fireplace room

under a dog bed, a few urination spots in the second-floor hallway, and two very small

urination spots in the master bedroom.

       Sloan then hired Dan Schilling, who had 33 years of experience as a building

inspector and had been providing environmental-inspection services since 1998, to perform

an environmental inspection of the home. Schilling concluded that the urine damage and

                                             3
the woodwork damage attributable to dogs was inconsistent with the previous owner’s

small dog. Schilling determined that the urine and woodwork damage were consistent with

O’Neil’s dog and the dog that visited between May and October 2013.

       Using an ultraviolet light, Schilling estimated that there were 250 occurrences of

urination on library carpeting on the first floor. Schilling found urine and fecal damage to

the hardwood flooring in the kitchen. Schilling found that the edges of a Persian rug in the

dining room had been damaged by dog claws. Schilling described the urine odors in the

house as “pungent upon entry.”

       In May 2014, after respondents had moved out, Schilling performed a follow-up

inspection, during which he found additional damage. Paint and wallpaper in the first-floor

bathroom were peeling due to respondents’ failure to use the exhaust fan. Hardwood

flooring in a second-floor bedroom was scratched by respondents’ furniture. A front-door

screen was ripped out. The wooden door jamb on that door was split due to a forced entry,

during which a chain lock was forced open. The hardwood finish on built-in cabinetry was

scratched and stained. Damage to leaded glass on the cabinetry was consistent with

respondents’ bicycles’ pedals and handle bars. Schilling determined that respondents’

indoor storage of their bicycles was the apparent “cause of breakage to a wood panel of a

custom-crafted historic wood door, breakage to stair spindles, damage[] [to] the rim on a

newel post, and severely scratched and gouged woodwork in various areas.” The damage

was consistent with the sharp metal edges of bicycle axles and pedals. Two pieces of trim

molding were missing from a staircase post adjacent to the damaged spindles. Damage to

hardwood trim on a first-floor door and jamb were consistent with bicycle pedals and axles.

                                             4
Schilling also found that damage to the hardwood trim on the stairway going to the second

floor and on walls and to the dining-room sliding door were apparently caused by the metal

parts of bicycles. Schilling found additional damage to woodwork caused by dog teeth and

claws and scratches in the glass in windows and doors caused by dog claws. He found

additional damage to the Persian rug caused by dog teeth or claws and additional urine

damage to carpeting and hardwood flooring on the first floor.

       Schilling determined that chemical stains on the hardwood flooring under the library

carpet were due to the overuse of chemicals to clean the carpet. Schilling also stated that,

due to the carpet pad remaining soaked with dog urine for extended time periods, “the foam

padding had become bonded to the hardwood flooring.” Schilling stated that the 250

instances of urination found on the library carpet during the initial investigation included

areas that had not been cleaned, indicating a lack of care or a lack of awareness of the

frequency and locations of urination. Schilling opined, “In cases such as this where there

have been hundreds of pet urination and fecal accidents in a home, it is reasonable to

conclude that [respondents] had direct knowledge of the problem they were creating in the

home during their occupancy.” Schilling also opined that “the discovered evidences of

new and additional damage to the walls, hardwood flooring and woodwork that was caused

directly by [respondents] is further proof of continued lack of care for the home they

intended on vacating.” In addressing the damage caused by bicycles, Schilling indicated

that respondents’ conduct was careless.

       Sloan brought this action against respondents and Uptown Realty alleging claims

for breach of contract and willful destruction of rental property against respondents and

                                             5
claims for breach of contract, negligent misrepresentation, and unjust enrichment against

Uptown Realty. Sloan settled her claims against Uptown Realty.

       After respondents moved for summary judgment on the willful-destruction-of-

rental-property claim, Schilling stated in an affidavit:

                        The nature of the following damage, in my opinion, was
                caused willfully by humans.
                           a. Scratching and gouging of hardwood floor in
                second floor bedroom.
                           b. Ripped front door screen and broken wood door
                jamb.
                           c. Deep scratches and stains on the horizontal
                surface of historic built-in cabinetry.
                           d. Cracked leaded glass on historic built-in
                cabinetry, the heights of which are consistent with bicycle
                pedals and handlebars.
                           e. Broken wooden spindles that support the
                bannister railing between the first and second floors.
                           f. Gouging and damage of hardwood trim,
                consistent with being hit by bicycles.
                           g. Two impact cracks and gouges in the historic,
                custom built sliding passage door. As noted in the move
                in/move out report . . ., Uptown Realty & Management noted
                on the tenant’s move in-“Pocket door flawless”. I also was
                able to ascertain that the impact cracks were recent because
                there was no dust settled in the cracks.
                           h. Original woodwork on cabinet shelving, doors
                and windows were further damaged by an improper attempt to
                repair the damage from the dog(s) by using wood filler and a
                colored wax pencil. The use of those products will make repair
                and restoration of the wood more difficult and more expensive.

Schilling also stated, “In my experience serving as an expert witness in landlord/tenant

disputes, for [respondents] to willfully allow their dogs to commit such extensive and

destructive damage to the property that they were guardian over constitutes willful

destruction.”

                                              6
       The district court granted respondents’ motion for summary judgment on the

willful-destruction-of-rental-property claim. The district court concluded that the evidence

was insufficient to establish genuine issues of material fact on whether respondents

willfully and maliciously damaged the house. The district court awarded statutory attorney

fees of $5,750 to O’Neil and $1,250 to Cathcart for defending against the willful-

destruction-of-rental-property claim.    The district court denied Sabbia attorney fees

because she is a licensed attorney who represented herself. The district court also ordered

Sloan to disclose to the court her settlement agreement with Uptown Realty.

       Sloan’s breach-of-contract claim against respondents was tried to a jury. Following

trial, the district court issued findings of fact, conclusions of law, and order for judgment,

as amended by order filed February 8, 2016.1 The district court adopted the jury’s verdict.

The jury found:

                  a. [Respondents] breached their contract with [Sloan].
                  b. [Respondents] (or persons or animals under their
              control) damaged [Sloan’s] property through negligent
              conduct.
                  c. This damage was beyond ordinary wear and tear.
                  d. The following amounts fairly and adequately
              compensate [Sloan] for damages caused by [respondents’]
              breach:
                        i. Damage to carpet - $1,700
                       ii. Damage to kitchen floor - $0
                      iii. Damage to woodwork - $10,000
                      iv. Damage to glass - $2,260

1
 The amendments were due to a clerical error, the failure to address respondents’ security
deposit, which had been withheld by Sloan.

                                              7
The jury’s award of damages to Sloan totaled $13,960. The district court offset that amount

by $10,000 of Sloan’s $15,000 settlement with Uptown Realty and also deducted the

$2,700 security deposit withheld by Sloan, leaving a balance due to Sloan of $1,260. The

district court denied Sloan’s motion for a new trial.

       This appeal followed.2

                                     DECISION

                                             I.

       Summary judgment is appropriate when the record shows “that there is no genuine

issue as to any material fact and that either party is entitled to a judgment as a matter of

law.” Minn. R. Civ. P. 56.03. We review the district court’s grant of summary judgment

de novo, to determine whether there are genuine issues of material fact and whether the

district court erred in applying the law. Mattson Ridge, LLC v. Clear Rock Title, LLP, 824

N.W.2d 622, 627 (Minn. 2012). “We view the evidence in the light most favorable to the

party against whom summary judgment was granted.” STAR Ctrs., Inc. v. Faegre &

Benson, L.L.P., 644 N.W.2d 72, 76-77 (Minn. 2002).

       To withstand a summary-judgment motion, a party must present specific evidence

showing the existence of a genuine issue for trial; speculation is insufficient. Nicollet

Restoration, Inc. v. City of St. Paul, 533 N.W.2d 845, 848 (Minn. 1995). Summary

judgment may be granted if the party opposing summary judgment has the burden of proof

2
 Sloan has a second appeal pending before this court, challenging the district court’s denial
of her application for costs and disbursements. Sloan v. O’Neil, No. A16-1249 (hearing
date Jan. 18, 2017).

                                             8
on an essential element and fails to “present specific admissible facts showing a material

fact issue.” Doe v. Archdiocese of St. Paul, 817 N.W.2d 150, 163 (Minn. 2012) (quotation

omitted).

       Sloan challenges the summary judgment for respondents on her willful-destruction-

of-property claim. Minn. Stat. § 504B.165(a) (2014) states: “An action may be brought

for willful and malicious destruction of leased residential rental property. The prevailing

party may recover actual damages, costs, and reasonable attorney fees, as well as other

equitable relief as determined by the court.” “[S]tatutory construction is a question of law,

which [an appellate court] review[s] de novo.” Lee v. Lee, 775 N.W.2d 631, 637 (Minn.

2009). Sloan argues that the district court erred in construing Minn. Stat. § 504B.165(a)

as requiring proof of state of mind. The district court concluded that respondents’ intent

was relevant to the elements of willfulness and maliciousness.

       Minn. Stat. § 504B.165(a) does not define the terms willful and malicious, and

Minnesota’s appellate courts have not construed them in the context of the statute. But the

supreme court has addressed these terms in the context of an insurance-policy exclusion.

Hogs Unlimited v. Farm Bureau Mut. Ins. Co., 401 N.W.2d 381, 383 (Minn. 1987).

       The supreme court has construed willful as synonymous with intentional. Hogs

Unlimited, 401 N.W.2d at 383.        It is unclear from the statutory language whether

intentional refers to the act that causes the damage or the damage itself. A presumption

exists in criminal and tort law that a person intends the natural and probable consequences

of her actions. Continental W. Ins. Co. v. Toal, 309 Minn. 169, 175, 244 N.W.2d 121, 125

(1976) (holding that the presumption does not apply to the construction of terms used in

                                             9
insurance contracts). We need not decide whether the presumption applies in the context

of section 504B.165 because, even if it does apply, the district court properly granted

summary judgment for respondents.

       In addressing willfulness, the district court distinguished between intentional and

negligent conduct. Sloan argues: “Since [respondents] denied engaging in any conduct

that damaged Sloan’s home, [respondents’] state of mind is not at issue. If [respondents]

had alleged that they accidentally damaged Sloan’s home, then they may have put their

state of mind at issue.” But it was Sloan’s burden to prove each of the essential elements

of her claim for unlawful destruction. See Carpenter v. Nelson, 257 Minn. 424, 427, 101

N.W.2d 918, 921 (1960) (stating that, “[i]n the ordinary civil action, . . . the plaintiff has

the burden of proving every essential element of [her] case”). Thus, to prevail on her claim

of intentional destruction, Sloan had the burden of proving that respondents damaged her

property and that they did so willfully and maliciously.

       In his affidavit, Schilling identified the following damage as having, “in [his]

opinion,” been caused willfully by humans: scratching and gouging of hardwood floor in

second-floor bedroom; ripped front-door screen and broken wood door jamb, deep

scratches and stains on the horizontal surface of historic built-in cabinetry; cracked leaded

glass on historic built-in cabinetry; broken wooden spindles on staircase railing, gouging

and damage of hardwood trim; and two impact cracks and gouges in dining-room sliding

door. But Schilling does not explain the reason for his opinion that the damage was caused

willfully. For example, he does not state that the damage indicates that the bicycles struck

the damaged items with great force. If the intentional conduct is the act causing the

                                             10
damage, at some point, repetitive conduct might support an inference of willful conduct.

But the record does not contain evidence of such repetition. The closest case for intentional

conduct is the ripped front-door screen and broken wood door jamb. But Schilling does

not explain how he determined that the door jamb was broken in an effort to force the chain

lock rather than accidentally by someone who did not know that the chain lock was engaged

or that the screen was ripped out at the same time the jamb was damaged.

       The use of wood filler and wax pencil was an intentional act. But as the district

court concluded, there was no evidence that use of those items destroyed any property,

only that their use would make repair more difficult and more expensive.

       Regarding the damage caused by dogs’ teeth and claws, as with the human damage,

Schilling did not identify the number of occurrences required to cause the damage. Most

of the damage to the carpet was discovered only after ultraviolet light was used and forensic

testing was conducted. Sloan does not cite evidence in the record showing when the carpet

was installed. Schilling’s second report states that the urine damage was inconsistent with

the previous owner’s small dog. But the record does not show that no other dogs resided

in the home after the carpet was installed.

       Because the evidence was insufficient to create a genuine issue of material fact on

whether respondents willfully and maliciously, rather than negligently, damaged Sloan’s

property, the district court properly granted summary judgment for respondents on the

willful-destruction-of-property claim.

                                              11
                                              II.

       Sloan challenges the statutory award of attorney fees to O’Neil and Cathcart on her

willful-destruction-of-property claim. Minn. Stat. § 504B.165(a) provides for an award of

attorney fees to the prevailing party.

       Sloan argues that, when determining the prevailing party for purposes of an attorney

fee award under section 504B.165(a), the district court should have considered the entire

case and not just the willful-destruction-of-rental-property claim. We disagree. Section

504B.165(a) applies specifically to a willful-destruction-of-rental-property claim. Cf. Fox

v. Vice, 563 U.S. 826, 833-34, 131 S. Ct. 2205, 2213-14 (2011) (construing the statute

authorizing an award of attorney fees to the prevailing party in specified civil-rights actions

as permitting a fee award to a party who does not prevail on every claim).

       The cases relied on by Sloan are not on point. See Borchert v. Maloney, 581 N.W.2d

838, 840 (Minn. 1998) (applying general costs-and-disbursements statute and rejecting

argument that defendant was prevailing party when final judgment was in favor of plaintiff

but amount of judgment was less than settlement offer by defendant); Elsenpeter v. St.

Michael Mall Inc., 794 N.W.2d 667, 673 (Minn. App. 2011) (explaining that, when

determining prevailing party, “[n]o allowance is provided in favor of a party who may

prevail upon intermediate motions or preliminary proceedings” (quotation omitted)).

       Sloan also challenges the amount of attorney fees awarded to O’Neil and Cathcart.

Generally, this court reviews an award of attorney fees for an abuse of discretion. Carlson

v. SALA Architects, Inc., 732 N.W.2d 324, 331 (Minn. App. 2007), review denied (Minn.

Aug. 21, 2007).

                                              12
       The district court used the lodestar method to determine the amount of attorney fees.

The lodestar method of determining attorney fees requires district courts to consider the

reasonableness of the number of hours billed and the fee rate. Green v. BMW of No.

America, LLC, 826 N.W.2d 530, 536 (Minn. 2013). In addition, district courts “should

consider all relevant circumstances” in setting the amount of recoverable attorney fees,

including: (1) the time and labor required; (2) the nature and difficulty of the responsibility

assumed; (3) the amount involved and the results obtained; (4) the fees customarily charged

for similar legal services; (5) the experience, reputation, and ability of counsel; and (6) the

fee arrangement existing between counsel and the client. Id. (quotation omitted). “The

reasonableness of [the] hours expended and the fees imposed raise questions of fact,” and

we reverse findings of fact only if they are clearly erroneous. City of Maple Grove v.

Marketline Constr. Capital, LLC, 802 N.W.2d 809, 819-20 (Minn. App. 2011).

       Sloan argues that the district court erred by awarding $1,250 in attorney fees to

Cathcart because the record does not show that she was actually billed for those fees. Craig

Buske, Cathcart’s attorney, submitted an affidavit with a spreadsheet attached showing that

the attorney fees accrued in defending Cathcart against Sloan’s unlawful-destruction-of-

property claim totaled $4,287.50. Attorney David Shulman submitted an affidavit that

stated, “My firm charged reduced hourly rates to Ms. Cathcart in this matter of $175 for

my time and $150 for Craig Buske’s time.” Sloan relies on language in Green stating that

hours that are not properly billed to a client are not properly billed to an adversary under a

statute. Green, 826 N.W.2d at 538-39. When making that statement, the Green court was

addressing “excessive, redundant, or otherwise unnecessary” fees. Id. at 539 (quotation

                                              13
omitted); it was not referring to reasonable fees that were incurred but were not actually

billed to the client.

       Sloan also objects to the $5,750 in attorney fees awarded to O’Neil because the fee

agreement between HOME Line and O’Neil capped her fees at $2,000, and she had paid

only $1,000 in fees up to the point of the summary judgment motion. Even if O’Neil’s

attorney did not charge her the full amount of fees awarded, this court has applied the

principle that reasonable attorney fees are to be calculated according to the prevailing

market rates in the relevant community, regardless of whether a party is represented by a

private or nonprofit attorney. Reome v. Gottlieb, 361 N.W.2d 75, 77-78 (Minn. App. 1985),

review denied (Minn. July 11, 1985).

       In a paragraph in their brief, respondents assert that, if they prevail on appeal on the

unlawful-destruction claim, this court should award them their costs and attorney fees

incurred in defending against these portions of the appeal. The procedure for requesting

attorney fees on appeal is set forth in Minn. R. Civ. App. P. 139.06, subd. 1, and requires

a party to submit a motion under Minn. R. Civ. App. P. 127. Although Minn. R. Civ. App.

P. 139.06, subd. 1, allows the court to award reasonable attorney fees on its own motion,

we decline to do so in this case.

                                             III.

       Sloan argues that the district court erred in deducting $10,000 of her settlement with

Uptown Realty from the jury verdict because, under the common-law collateral-source

rule, the payment from Uptown should not reduce the jury verdict. “The collateral source

rule provides in general that compensation received from a third party will not diminish

                                              14
recovery against a wrongdoer. Because its purpose is punitive, this doctrine has generally

been applied only to tort cases.” Hubbard Broad., Inc. v. Loescher, 291 N.W.2d 216, 222

(Minn. 1980). “The collateral source rule, if applied to an action based on breach of

contract, would violate the contractual damage rule that no one shall profit more from the

breach of an obligation than from its full performance.” Id. at 223 (quotation omitted).

              Where A and B owe contract duties to C under separate
              contracts, and each breaches independently, and it is not
              reasonably possible to make a division of the damage caused
              by the separate breaches closely related in point of time, the
              breaching parties, even though they acted independently, are
              jointly and severally liable.

Lesmeister v. Dilly, 330 N.W.2d 95, 102 (Minn. 1983).

       Sloan argues that the settlement with Uptown did not duplicate the damages

awarded by the jury. But the district court found:

                      In this case, aside from the first floor bathroom [$5,000
              of the settlement was attributable to bathroom repair costs], the
              damages alleged by [Sloan] from Uptown’s breach of contract
              and negligent misrepresentations were caused by
              [respondents]. [Sloan] alleged that Uptown’s actions resulted
              in her permitting [respondents], and more specifically O’Neil’s
              dog, to reside in her home. [Sloan] claimed that had Uptown
              honored their contract and not negligently misrepresented
              information, she would not have allowed the dog and the
              damage would not have occurred. Because of its actions,
              [Sloan] explicitly attempted to hold Uptown liable for the
              damage caused by [respondents], arguing that a property
              management company can be held liable “for damage that
              occurred from tenants placed in the property by the
              management company.”

       We defer to the district court’s findings of fact and will not set them aside unless

they are clearly erroneous. Sirek v. Sirek, 693 N.W.2d 896, 898 (Minn. App. 2006). The

                                             15
district court’s finding that a portion of Uptown’s settlement payment was for the damage

caused by respondents is not clearly erroneous. Because the Uptown settlement provided

compensation for damages cause by respondents, the district court did not err in deducting

$10,000 of the settlement from the jury verdict.

                                           IV.

       Sloan argues that the district court implied that she assented to deduction of the

security deposit from the verdict. The finding and order addressing the security deposit do

not indicate that Sloan assented to the deduction. Sloan also argues that the jury may have

deducted the security deposit because the lease was admitted into evidence, so the jury

knew that there was a $2,700 security deposit. The jury, however, was instructed “to

determine the amount of money that will fairly and adequately compensate [Sloan] for

damages caused by the breach of contract” and that “damages means a sum of money that

will fairly and adequately compensate a person who has been harmed.” The jury was also

instructed that damages “should put [Sloan] in the position she would have been in, if the

contract had not been breached,” to “not consider the possible effect of your answers to

other questions,” and that Sloan’s “damages are the reasonable cost of repair for restoring

the property to substantially the same condition as it was before the harm.” Given these

instructions, Sloan’s argument is not persuasive.

       Affirmed.

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