Court Opinion

ID: 3212762
Source: CourtListenerOpinion
Date Created: 2016-06-13 22:05:19.411568+00
Date Added: 2024-06-11T14:29:48.005322
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This opinion will be unpublished and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
                                     A15-1154

                                   Kenneth S. Benigni,
                                       Appellant,

                                           vs.

                                   St. Louis County,
                                      Respondent,
                                  State of Minnesota,
                           by Department of Human Services,
                                      Respondent,
                        Lake Superior Community Health Center,
                                      Respondent.

                                  Filed June 13, 2016
                                       Affirmed
                                    Stauber, Judge

                             St. Louis County District Court
                              File No. 69DU-CV-13-1931

Peter J. Nickitas, Peter J. Nickitas Law Office, L.L.C., Minneapolis, Minnesota (for
appellant)

Mark Rubin, St. Louis County Attorney, Nicholas D. Campanario, Assistant County
Attorney, Duluth, Minnesota (for respondent St. Louis County)

Lori Swanson, Attorney General, Aaron E. Winter, Assistant Attorney General, St. Paul,
Minnesota (for respondent Department of Human Services)

Kevin C. Riach, Anupama D. Sreekanth, Ryan C. Young, Fredrickson & Byron, P.A.,
Minneapolis, Minnesota (for respondent Lake Superior Community Health Center)

         Considered and decided by Ross, Presiding Judge; Johnson, Judge; and Stauber,

Judge.
                           UNPUBLISHED OPINION

STAUBER, Judge

          Appellant recipient of medical-assistance benefits brought claims for promissory

estoppel, negligent misrepresentation, consumer fraud, and data-practices violations

against his medical provider, the county, and the state, after he learned that the receipt of

medical-assistance benefits could lead to a claim against his estate or a lien against his

real-property interests. The district court dismissed all of appellant’s claims as time-

barred, except his negligent misrepresentation claim against the county. The district

court also ruled in the alternative that some of appellant’s claims failed to state a claim

upon which relief could be granted. The district court then granted summary judgment to

the county on appellant’s negligent misrepresentation claim. Appellant challenges each

ruling and argues that reversal is also required because the district court was biased. We

affirm.

                                           FACTS

          In June 2004, appellant Kenneth S. Benigni applied for medical assistance (M.A.)

through respondent Lake Superior Community Health Center (LSCHC) in Duluth.

According to appellant, the individual assisting him with the M.A. application form

removed a six-page section of the form without showing it to appellant. This section of

the form included information about the state’s ability to place a lien on appellant’s

property to recoup appellant’s share of his M.A.

          At some point in 2005, appellant received a M.A. renewal application form. The

renewal application form contained the “Notice of Privacy Practices and

                                               2
Responsibilities” section, which states that “[t]he state or county may try to recover the

cost of medical services that MA . . . paid for you. They do this by filing a claim against

your estate or by filing a lien against your real property.”

       After receiving the 2005 renewal form, appellant contacted Kathy Pavolwich, his

social worker with respondent St. Louis County (county), and “requested information

concerning the sum that St. Louis County . . . or the state . . . had paid out to date to the

insurance company relating to [appellant’s] M.A. account.” Appellant also requested

“complete clarification concerning the ‘lien and estate claims’ that the state or county

may . . . try to attach, to recover the cost of medical services that M.A. paid for

[appellant].” According to appellant, he then “relied on” Pavolwich’s assurances that

“the stated lien claims would not apply to him.” But despite his alleged reliance on

Pavolwich’s assurances, appellant “made numerous requests for access to data” to the

county and respondent Minnesota Department of Human Services (DHS) under the

Minnesota Government Data Practices Act (MGDPA) to “ascertain the nature and extent

of a potential lien or claim against his property and estate.”

       In July 2007, appellant contacted Patti Theno, his county case worker, and

requested that his M.A. account be canceled due to a potential lien being attached against

his estate. Theno told appellant that he had nothing to worry about because no lien would

be placed on his estate. Appellant subsequently contacted Ina Minehan at DHS who

informed him that Theno’s representations were incorrect. Appellant then made several

calls over the course of the next few days in an attempt to learn whether a lien could be

placed on his estate to recover the amount he received in M.A. benefits. During this

                                               3
process, appellant spoke with Theno’s supervisor, Renee Selleck on July 31, 2007, who

informed appellant that the only time recoupment of M.A. benefits is sought is if the

recipient is “not entitled to [M.A. benefits].”

       Despite Selleck’s representations, appellant sought further clarification. Appellant

again spoke with Minehan who stated that the government “does put liens on estates to

recover M.A. expenditures.” Appellant subsequently contacted Selleck on August 3,

2007, who informed appellant that she “was wrong” and that his M.A. benefits were

subject to recovery through liens and estate claims. Appellant then canceled his M.A.

       In July 2012, appellant received a “Claims History Profile” from DHS indicating

an accumulation of approximately $20,000 on his M.A. account. A year later, appellant

brought this action against the county alleging that he was damaged when he received

M.A. benefits because he was not informed of the state’s ability to place a lien against his

property for unpaid amounts. Appellant subsequently amended his complaint twice, the

second time adding DHS and LSCHC as defendants. In the second amended complaint,

appellant asserted the following claims: (1) promissory estoppel against DHS; LSCHC,

and the county1; (2) negligent misrepresentation against the county; (3) violation of

MGDPA against all respondents; (4) a second negligent misrepresentation claim against

DHS and LSCHC; (5) intentional misrepresentation against LSCHC; and (6) a claim

under Minn. Stat. §§ 325F.67-.70 (2014) against LSCHC for false advertising and

consumer fraud.

1
 DHS, LSCHC, and the county will hereinafter be collectively referred to as
“respondents.”

                                              4
       DHS and LSCHC moved to dismiss counts I, III, IV, V, and VI of appellant’s

second amended complaint for failure to state a claim under Minn. R. Civ. P. 12.02(e).

The county moved for partial judgment on the pleadings under Minn. R. Civ. P. 12.03 on

the same counts. The district court found that respondents “each argue variations on the

same themes in their quests for dismissal of this matter,” and that “primary to the various

[respondents’] contentions are statute of limitations arguments.” The district court

concluded that under the damage-accrual rule, appellant’s claims against respondents

were barred by the statute of limitations. The district court also concluded that

appellant’s claim against respondents for promissory estoppel (count I), and his claim

against LSCHC and DHS for negligent misrepresentation (count IV), fail to “set forth . . .

legally sufficient claim[s] for relief and dismissal is appropriate because it appears to a

certainty that no facts exist which would support granting the relief demanded.” Thus,

the district court granted LSCHC and DHS’s motions to dismiss and the county’s motion

for judgment on the pleadings, and dismissed with prejudice counts I, III, IV, V, and VI

of the second amended complaint.

       In March 2014, the county moved for summary judgment on appellant’s negligent

misrepresentation claim, count II, the only remaining count in the second amended

complaint. The district court determined that (1) because the county employees made

misrepresentations of law, they cannot be the subject of a negligent misrepresentation

lawsuit and (2) appellant is unable to prove justifiable reliance on the statements of the

county employees. Thus, the district court granted the county’s motion for summary

judgment. This appeal followed.

                                              5
                                      DECISION

                                              I.

       Minn. R. Civ. P. 12.02(e) allows a defendant to move to dismiss for “failure to

state a claim upon which relief can be granted.” Under this rule, “a pleading will be

dismissed only if it appears to a certainty that no facts, which could be introduced

consistent with the pleading, exist which would support granting the relief demanded.”

N. States Power Co. v. Franklin, 265 Minn. 391, 395, 122 N.W.2d 26, 29 (1963). No

facts exist which would support granting the relief demanded “when it is clear and

unequivocal from the face of the complaint that the statute of limitations has run on . . .

the claims asserted.” Jacobson v. Bd. of Trs. of the Teachers Ret. Ass’n, 627 N.W.2d

106, 109 (Minn. App. 2001), review denied (Minn. Aug. 15, 2001).

       Any party may move for judgment on the pleadings “[a]fter the pleadings are

closed.” Minn. R. Civ. P. 12.03. The standard for relief under rule 12.03 is similar to the

standard under rule 12.02(e): “To withstand a motion for judgment on the pleadings, [a

plaintiff] must state facts that, if proven, would support a colorable claim and entitle it to

relief.” Midwest Pipe Insulation, Inc. v. MD Mech., Inc., 771 N.W.2d 28, 31 (Minn.

2009). “When a case is dismissed . . . for failure to state a claim for which relief can be

granted, [an appellate court] review[s] the legal sufficiency of the claim de novo to

determine whether the complaint sets forth a legally sufficient claim for relief.” Graphic

Commc’ns Local 1B Health & Welfare Fund A v. CVC Caremark Corp., 850 N.W.2d

682, 692 (Minn. 2014).

                                              6
       Appellant challenges the district court’s dismissal of counts I, III, IV, V, and VI of

his second amended complaint, arguing that the district court erred by concluding that

(1) these claims were barred by the statute of limitations and (2) in the alternative,

appellant’s claim against respondents for promissory estoppel and his claim against DHS

and LSCHC for negligent misrepresentation fail to state claims upon which relief could

be granted.

       The parties agree that appellant’s claims are subject to the six-year statute of

limitations period set forth in Minn. Stat. § 541.05, subd. 1 (2014). “The statute of

limitations begins to run on a claim when ‘the cause of action accrues.’” Park Nicollet

Clinic v. Hamann, 808 N.W.2d 828, 832 (Minn. 2011) (quoting Minn. Stat. § 541.01

(2010)). “A cause of action accrues when all of the elements of the action have occurred,

such that the cause of action could be brought and would survive a motion to dismiss for

failure to state a claim.” Id. We review “de novo the construction and application of a

statute of limitations, including the law governing the accrual of a cause of action.” Sipe

v. STS Mfg., Inc., 834 N.W.2d 683, 686 (Minn. 2013) (quotation omitted).

       Minnesota follows the damage-accrual rule. Antone, 720 N.W.2d at 336. Under

this rule, the statute of limitations begins to run as soon as “some” damage has occurred

as a result of the alleged action. Hermann v. McMenomy & Severson, 590 N.W.2d 641,

643 (Minn. 1999). “The running of the statute does not depend on the ability to ascertain

the exact amount of damages.” Id. Minnesota caselaw supports a broad interpretation of

“some” damage. Antone v. Mirviss, 720 N.W.2d 331, 336 (Minn. 2006).

                                              7
       Counts I, III, IV, V, and VI of appellant’s second amended complaint all arise out

of appellant’s application for and receipt of M.A. benefits. Appellant’s alleged damage is

his receipt of M.A. benefits because that is the action that conferred on the state the

ability to place a lien on his estate. Because appellant began receiving M.A. benefits in

September 2004, the statute of limitations on counts I, III, IV, V, and VI began to run at

that time. Appellant did not file his complaint against the county until July 2013, and

DHS and LSCHC were not added to the lawsuit until February 2014. These complaints

were filed long after the six-year statute of limitations had expired. Therefore, the district

court correctly concluded that they were untimely.

       Appellant argues that the district court erred by concluding that claims I, III, IV,

V, and VI were time-barred because respondents’ “ongoing fraudulent concealment of

the [M.A.] statutory lien information from [him] tolled the statute of limitations” on those

claims. We acknowledge that fraudulent concealment of facts tolls limitation periods.

Cohen v. Appert, 463 N.W.2d 787, 790-91 (Minn. App. 1990), review denied (Minn. Jan.

24, 1991). But fraudulent concealment tolls the statute of limitations only “until the party

discovers, or has a reasonable opportunity to discover the concealed defect.” Hydra-

Mac, Inc. v. Onan Corp., 450 N.W.2d 913, 918 (Minn. 1990). It is not necessary that a

party “know the details of the evidence establishing the cause of action, only that the

cause of action exists. When a party has this knowledge, it is his own fault if he does not

avail himself of those means which the law provides for prosecuting or preserving his

claim.” Id. at 919 (quotation omitted).

                                              8
       Appellant’s second amended complaint states that he “had no awareness of the

consequence of the attachment of the lien, until his receipt of the 2005 renewal

application form, appearing as Exhibit B.” Exhibit B to the complaint provides that the

“state or county may try to recover the cost of medical services that MA . . . paid for you

. . . by filing a lien against your real property.” Thus, when he received the M.A. renewal

application form in 2005, appellant knew that the state could place a lien on his property

to recoup his M.A. Although appellant suggests that the 2005 form is insufficient

because it fails to state that the lien requirement is necessary, such a distinction is

immaterial because regardless of whether it was mandatory, appellant was apprised of the

state’s ability to place a lien on his property, which is the power that appellant claims was

concealed from him. Therefore, by his own admission, appellant knew or should have

known of the alleged concealment and facts giving rise to his claim as early as 2005

when he received the 2005 renewal application form. Because he knew of these facts in

2005, the six-year statute of limitations on appellant’s claim expired in 2011, two years

before appellant filed his complaint. Accordingly, the district court did not err by

dismissing counts I, III, IV, V, and VI of the second amended complaint. And because

we conclude that appellant’s claims are time-barred, we need not address the district

court’s alternative conclusion that appellant’s claims against respondents for promissory

estoppel and his claim against DHS and LSCHC for negligent misrepresentation fail to

state claims upon which relief could be granted.

                                               9
                                              II.

       A district court must grant a motion for summary judgment if the evidence

demonstrates “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. A genuine issue of

material fact exists if a rational trier of fact, considering the record as a whole, could find

for the non-moving party. Frieler v. Carlson Mktg. Grp., Inc., 751 N.W.2d 558, 564

(Minn. 2008). We apply a de novo standard of review to the district court’s legal

conclusions on summary judgment and view the evidence in the light most favorable to

the non-moving party. RAM Mut. Ins. Co. v. Rohde, 820 N.W.2d 1, 6 (Minn. 2012); Day

Masonry v. Indep. Sch. Dist. 347, 781 N.W.2d 321, 325 (Minn. 2010).

       Negligent misrepresentations of fact may be actionable against government

officers and employees to the extent that they involve misrepresentations as to “factual

information maintained by the government” to which members of the public have no

other access except through government officers and employees. Mohler v. City of St.

Louis Park, 643 N.W.2d 623, 637 (Minn. App. 2002), review denied (Minn. July 16,

2002). A misrepresentation of law, however, is not actionable. Northernaire Prods., Inc.

v. County of Crow Wing, 309 Minn. 386, 388-89, 244 N.W.2d 279, 281 (1976). The

rationale for this rule is that the law is presumed to be equally within the knowledge of

the parties. Miller v. Osterlund, 154 Minn. 495, 496, 191 N.W. 919, 919 (1923). The

rule of nonactionability has two exceptions: (1) where the “person misrepresenting the

law is learned in the field and has taken advantage of the solicited confidence of the party

                                              10
defrauded” and (2) where a fiduciary or other similar relationship exists between the

parties. Northernaire Prods., 309 Minn. at 389, 244 N.W.2d at 281-82.

       Appellant’s negligent misrepresentation claim against the county is based on

statements made by Theno and Selleck, who allegedly “supplied false information to

[appellant] relating to the expenditure of monies for M.A. medical services, and the

resulting lien or claim to attach to [appellant’s] estate or real property.” But appellant

does not dispute that the statements made by Theno and Selleck were legal

representations, nor does he claim that Theno and Selleck are “learned” in the field.

Instead, he argues that the district court erred by granting summary judgment in favor of

the county because the issue of whether there was a fiduciary relationship between

appellant and Theno and Selleck involves “fact questions that the jury must decide.”

       “Ordinarily, the existence of a fiduciary relationship would be a question for the

trier of fact.” Northernaire Prods., 309 Minn. at 389, 244 N.W.2d at 282. “A fiduciary

relation exists when confidence is reposed on one side, and there is resulting superiority

and influence on the other.” Stark v. Equitable Life Assurance Soc’y, 205 Minn. 138,

145, 285 N.W. 466, 470 (1939) (quotation omitted). Simply reposing faith and

confidence in a person does not create a fiduciary duty. Id.

       In Northernaire Prods., the plaintiffs, promoters of a rock concert, sued Crow

Wing County and its employees after the plaintiffs were erroneously advised of the

zoning requirements for the area where they had planned to stage a concert. 309 Minn. at

387-88, 244 N.W.2d at 280. In affirming the dismissal of the complaint, the supreme

court held “as a matter of law,” that the “individual defendants, solely by virtue of their

                                             11
offices and in the absence of other facts evidencing an intent to assume such an

obligation, owe no fiduciary duty to members of the public when giving advice.” Id. at

389, 244 N.W.2d at 282. The supreme court elaborated that its

              holding is based on considerations of public policy. There is
              no dispute that the alleged misrepresentations were made in a
              good-faith effort to respond to plaintiffs’ inquiries. Plaintiffs
              concede that defendants acted without malice or intent to
              deceive. To subject county officials to the prospect of liability
              for innocent misrepresentation would discourage their
              participation in local government or inhibit them from
              discharging responsibilities inherent in their offices. Their
              reluctance to express opinions would frustrate dialogue which
              is indispensable to the ongoing operation of government.

Id. at 389-90, 244 N.W.2d at 282. And the court noted that the plaintiffs “had alternative

means of obtaining an interpretation of the zoning ordinance, either by consulting an

attorney or by applying . . . for a formal interpretation pursuant to established

procedures.” Id. at 390, 244 N.W.2d at 282.

       As in Northernaire Prods., appellant does not claim that the county employees

acted in bad faith, nor is there any evidence supporting such an allegation. Moreover,

appellant could have sought advice from an attorney regarding the legal issue of whether

the state could attach a lien to his estate after he began to receive M.A. benefits. In fact,

appellant ultimately sought further legal advice on the issues when he contacted DHS.

Thus, as in Northernaire Prods., there is simply no evidence to support the existence of a

                                              12
fiduciary relationship between appellant and Theno and Selleck. The district court did

not err by granting summary judgment in favor of the county.2

                                             III.

       In evaluating a claim of judicial bias, there is a “presumption that a [district] court

judge has discharged his or her judicial duties properly,” and a party alleging bias has the

burden to establish allegations sufficient to overcome this presumption. McKenzie v.

State, 583 N.W.2d 744, 747 (Minn. 1998). Adverse rulings are an insufficient basis to

prove judicial bias. Olson v. Olson, 392 N.W.2d 338, 341 (Minn. App. 1986). And, an

error cannot be argued based on “mere assertion” unsupported by argument or authority.

Schoepke v. Alexander Smith & Sons Carpet Co., 290 Minn. 518, 519-20, 187 N.W.2d

133, 135 (1971).

       Appellant argues that the district court’s statement in the summary judgment order

that appellant “has a longstanding distrust of government in almost any form,” is

evidence of judicial bias and warrants reversal. We disagree. Appellant offers no

support for his judicial bias argument other than this comment in the summary judgment

order, and a reference to signs appellant apparently posts on his property. Moreover, the

2
  Appellant also claims in his brief that in addition to Theno and Selleck’s
representations, Pavolwich made misrepresentations dating back to 2005. But as the
county points out, negligent misrepresentation must be pleaded with particularity. See
Hardin Cnty. Sav. Bank v. Hous. & Redev. Auth. of Brainerd, 821 N.W.2d 184, 191
(Minn. 2012). Although the county claims that appellant did not plead with particularity
the allegations against Pavolwich, we need not decide the issue because even if the
second amended complaint was pleaded with particularity with respect to Pavolwich,
summary judgment would be appropriate under the same reasoning applicable to Theno
and Selleck.

                                             13
comment was made in analyzing the issue of whether there was a fiduciary relationship

between appellant and Theno and Selleck. In determining that a fiduciary relationship

was lacking, the district court mentioned that appellant has a “longstanding distrust for

government,” and supported the statement by mentioning that appellant’s “multiple calls

to multiple government actors demonstrates that he did not blindly place his trust and

confidence in Ms. Theno or Ms. Selleck.” Although the district court’s comment was

arguably inappropriate and perhaps unnecessary, the statement does not demonstrate a

lack of partiality sufficient to overcome the presumption disfavoring a determination of

bias. See Hooper v. State, 680 N.W.2d 89, 93 (Minn. 2004) (“While removal is

warranted when the judge’s impartiality might reasonably be questioned, a[n]

[appellant’s] subjective belief that the judge is biased does not necessarily warrant

removal.”). Therefore, appellant is not entitled to a reversal based on judicial bias.

       Affirmed.

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