Court Opinion

ID: 7881891
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:32:41.811163+00
Date Added: 2024-06-11T16:31:36.989320
License: Public Domain

OPINION
HARTEN, Judge.
In this consolidation of two class actions, appellants, mortgagors, challenge the tax service fees imposed by respondents, mortgagees, as violative of MinmStat. § 47.20, subd. 9(g) (1998). Respondents *778moved for dismissal of appellants’ complaints on the ground that Minn.Stat. § 47.204, subd. 1 (1998) supersedes Minn. Stat. § 47.20, subd. 9(g). Because we see no error of law, we affirm.
FACTS
Appellant Ronald Baughmann and appellant Dennis Driggers, both mortgagors, brought separate actions, on behalf of themselves individually and all others similarly situated, against their mortgagees, respectively, respondent Mellon Mortgage Company and respondent FBS Mortgage Company. Appellants alleged that the tax service fees charged by respondents violated Minn.Stat. § 47.20, subd. 9(g), and its predecessor. In each case, the district court dismissed the complaint on the ground that Minn.Stat. § 47.204, subd. 1, allows the tax service fees respondents charged appellants notwithstanding the disallowance of such tax service fees purportedly imposed by Minn.Stat. § 47.20, subd. 9(g).
Appellants challenge the dismissals; their appeals were consolidated.1
ISSUE
Does Minn.Stat. § 47.204, subd. 1 (1998), exempt the fees respondents charged appellants from the limitations purportedly imposed by Minn.Stat. § 47.20, subd. 9(g) (1998)?
ANALYSIS
Statutory construction is a question of law, which this court reviews de novo. Brookfield Trade Ctr., Inc., v. County of Ramsey, 584 N.W.2d 390, 393 (Minn.1998).
Minn.Stat. § 47.20, subd. 9(g) (1998), provides that:
The mortgagee shall not charge a direct fee for the administration of the escrow account, nor shall the mortgagee charge a fee or other consideration for allowing the mortgagor to discontinue the escrow account.
This statute was codified in 1996 to replace Minn.Stat. § 47.20, subd. 9(3), which was codified in 1975. Minn.Stat. § 47.20, subd. 9(3), read, “A mortgagee shall be prohibited from charging a direct fee for the administration of the escrow account.” The 1996 change was limited to replacing “shall be prohibited from charging” with “shall not charge” and adding a second clause, which is not relevant here. Both versions of this statute protect the rights of mortgagors such as appellants and both preclude mortgagees such as respondents from charging a tax service fee. Thus, the 1996 amendment of Minn.Stat. § 47.20, subd. 9(3) made no significant changes pertinent to the narrow issue before us.
In 1980, Congress passed the Depository Institutions Deregulation and Monetary Control Act of 1980, 12 U.S.C. § 1735f-7a (the federal law). The federal law preempted statutes like Minn.Stat. § 47.20, subd. 9(3), by providing that any state statute “expressly limiting the rate or amount of interest, discount points, finance charges, or other charges” made by mortgagees did not apply to certain mortgages such as appellants’. The overall purpose of the federal law was to encourage bank financing.
In 1981, Minnesota exercised its right to “opt out” of the federal law, see Minn.Stat.' § 47.203, but it also exercised its own right to preempt statutes like Minn.Stat. § 47.20, subd. 9(3), by passing Minn.Stat. § 47.204, subd. 1 (1998), which reads:
Notwithstanding any law to the contrary, no limitation on the rate or *779amount of interest, discount points, finance charges, or other charges shall apply to a * * * mortgage * * * which would have been exempt from the laws of this state pursuant to [the federal law] but for section 47.203 * * *.
Minn.Stat. § 47.20, subd. 9(3), and later Minn.Stat. § 47.20, subd. 9(g), are “limitation[s] on the rate or amount of * * * finance charges” within the meaning of Minn.Stat. § 47.204, subd. 1, because they forbid mortgagees to make those charges. The tax service fees here in question constituted “finance charges” under the federal law and its Minnesota correlative because they were included in the calculation of the annual percentage rate (APR) of the loan. The issue, then, is whether Minn.Stat. § 47.20, subd. 9(3), and later Minn.Stat. § 47.20, subd. 9(g), were in full force to disallow the charging of the tax service fees notwithstanding the federal law exempting such fees from limitation by state law.
Appellants contend that they were in full force and offer three grounds for this contention.2
First, appellants rely on the legislative history of the federal law. As a threshold matter, this rebanee is misplaced because the language of the federal law is plain, and, as appellants acknowledge, broad. Recourse to the legislative history is therefore not only unnecessary; it is not even permitted. See State by Beaulieu v. RSJ, Inc., 552 N.W.2d 695, 701 (Minn.1996) (when legislative intent manifested by plain and unambiguous statutory language, statutory construction neither necessary nor permissible).
Appellants’ reliance on the legislative history is also misplaced because they misread that history. They cite language from the Senate Report 96-368, 96 Cong., 2nd Sess., stating that Congress did “not intend to exempt limitation * * * designed to protect borrowers” and argue that because Minn.Stat. § 47.20, subd. 9(g), is a limitation designed to protect borrowers, Congress did not intend to exempt it. But appellants ignore the previous sentence, stating that Congress “intends to exempt only those limitations that are included in the [APR].” Respondents’ tax service fees were included in the APR; exempting them from state regulation was the intent of the federal law.
Second, appellants quote the federal law reference to state laws “expressly limiting the rate or amount of interest, discount points, finance charges, or other charges” and argue that Minn.Stat. § 47.20, subd. 9(g), is not “an ‘express’ limitation on the interest rate.” But the federal law refers to state laws that expressly limit the rate or amount of four entities: interest, discount points, finance charges, and other charges. The federal law is not confined to state laws that limit the interest rate.
Third, appellants contend that the “notwithstanding any law to the contrary” language in MinmStat. § 47.204, passed in 1981, cannot apply to MinmStat. § 47.20, subd. 9(g), passed in 1996. But when MinmStat. § 47.204 was passed, the predecessor of Minn.Stat. § 47.20, subd. 9(g), Minn.Stat. § 47.20, subd. 9(3), had been in effect for six years. And the provision of its successor statute, so far as it pertains to the issue before us, remained essentially the same. See MinmStat. § 47.20, subd. 9(g), replacing the phrase “shall be prohibited from charging” in Minn.Stat. § 47.20, subd. 9(3), with “shall not charge.” The 1996 changes and additions made to Minn. Stat. § 47.20, subd. 9(3), by MinmStat. *780§ 47.20, subd. 9(g), do not reach the superseding effect of Minn.Stat. § 47.204.
This court addressed similar arguments in Fratzke v. Pung, 378 N.W.2d 112 (Minn.App.1985), review denied, (Minn. Jan. 31, 1986). Fratzke was sentenced under Minn.Stat. § 244.05, effective date May 1, 1980, under which he had to serve 17 years before being eligible for supervised release; he wanted to be sentenced under an earlier statute, Minn.Stat. § 243.05, under which he would have had to serve only 14 years before being eligible. He contended that drafters of Minn.Stat. § 244.05 “overlooked the provisions of § 243.05.” Id. at 114. The court concluded that Fratzke’s contention was unsupported. Fratzke also argued that Minn.Stat. § 243.05 applied to his case because it had been amended subsequent to the adoption of Minn.Stat. § 244.05. This argument also was rejected.
The 1981 amendment essentially made minor stylistic changes. The 1983 amendment similarly made stylistic changes * * *. Neither of these amendments shows a legislative intent to implicitly repeal § 244.05.
Id. Similarly, the 1996 amendment of Minn.Stat. § 47.20, subd. 9(3), by Minn. Stat. § 47.20, subd. 9(g), shows no legislative intent to repeal Minn.Stat. § 47.204.
Moreover, we cannot read into Minn.Stat. § 47.20, subd. 9(g), the phrase, “Notwithstanding Minn.Stat. § 47.204 to the contrary” because we may not “supply [to a statute] that which the legislature purposefully omits or inadvertently overlooks.” Green Giant Co. v. Commissioner of Revenue, 534 N.W.2d 710, 712 (Minn.1995). Nor can we hold that the legislature in 1996 enacted a statute prohibiting mortgagees from making certain charges intending that statute to be in conflict with a 1981 statute prohibiting regulation of those charges “[n]otwithstanding any law to the contrary”; such a result would be absurd and we presume that the legislature did not intend an absurd result. See Minn.Stat. § 645.17 (1998).
DECISION
Because Minn.Stat. § 47.204, subd. 1, supersedes MinmStat. § 47.20, subd. 9(g), respondents did not violate Minn.Stat. § 47.20, subd. 9(g), by charging appellants the tax service fees. The district courts correctly dismissed appellants’ complaints.
Affirmed.

. The district court in Driggers also held that, although Driggers was a member of the class whose claims against FBS were settled by an agreement that resolved an earlier class action suit (Miller individually and o/b/o all others similarly situated v. FBS) and the claims Driggers made were among the claims released by the Miller settlement, the Miller settlement did not bar Driggers’ action because the Notice of Settlement was insufficient. FBS filed a Notice of Review of the district court’s decision that Notice was insufficient. Because our decision renders that issue moot, we do not address it.

. Appellants also argue that holding that Minn.Stat. § 47.204 preempts the first clause of Minn.Stat. § 47.20, subd. 9(g), would mean holding that it also preempts the second clause of that subdivision as well as Minn. Stat. § 47.207. But neither the second clause of Minn.Stat. § 47.20, subd. 9(g), nor Minn. Stat. § 47.207 meets the federal law criterion because neither is a state law "expressly limiting the rate or amount of interest, discount points, finance charges, or other charges * * * » Therefore, Minn.Stat. § 47.204 has no application to them.