Bass v. Equity Residential Holdings, LLC

Citations: 849 N.W.2d 87; 2014 WL 2921959; 2014 Minn. App. LEXIS 64Docket: No. A13-2177

Court: Court of Appeals of Minnesota; June 30, 2014; Minnesota; State Appellate Court

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Appellant Equity Residential Holdings, LLC (Equity) is appealing a district court judgment requiring it to pay damages for violating Minnesota Statutes 504B.231 and .271, following an eviction action involving tenant Yolanda Bass. Bass fell behind on rent, leading Equity to initiate an eviction but fail to properly secure a writ of recovery after a court order. After Bass left for work, Equity changed her locks and disposed of her belongings, claiming abandonment. Bass documented her possessions in dumpsters but could not retrieve them due to damage from rain.

Bass filed a lockout petition, which the housing court heard despite Equity's absence. The court found Equity had acted in bad faith and wrongfully locked Bass out, concluding she had not abandoned the premises. At a subsequent damages hearing, Bass presented evidence of her loss, resulting in the housing court awarding her treble damages of $9,386.97 and $1,000 in punitive damages, totaling $10,386.97.

Equity sought district court review of the referee's order without requesting a stay, which allowed Bass to docket the judgment. The district court upheld the referee's decision and ordered Equity to pay Bass, including interest and attorney fees. Equity's appeal raises issues regarding the housing court's jurisdiction to issue a monetary judgment and the calculation of damages.

Minn. R. Gen. Pract. 611(a) establishes that the district court reviews housing court referee decisions based solely on the record created before the referee. Once confirmed by the district court, the referee's findings and orders become the court's official findings. The court's findings are subject to review for clear error, with deference given to the district court’s credibility assessments, while statutory interpretations are reviewed de novo.

Equity contends that the housing court referee lacks authority to award damages due to the limited jurisdiction of housing courts, which aim to provide expedited relief. Conversely, district courts hold general jurisdiction and can consolidate residential rental housing matters, as outlined in Minn. Stat. 484.01 and specifically for Hennepin County under Minn. Stat. 484.013, subd. 2. This statute details the housing court's jurisdiction over various housing-related proceedings and mandates the consolidation of landlord-tenant damage actions upon request.

The housing court referee addressed Bass's lockout petition, finding Equity in default for non-appearance and scheduling a separate hearing for damages. Under Minn. Stat. 504B.231(a), a tenant may claim treble damages or $500, along with reasonable attorney’s fees, for unlawful ouster. Section 504B.231(b) indicates these damages are supplementary to other tenant rights. Additionally, if a tenant abandons the premises, a landlord must store their property for 28 days and notify them before disposal; failure to return property upon written demand within 24 hours can lead to punitive damages of twice the actual damages or $1,000, as per Minn. Stat. 504B.271. Both remedies are available under chapter 504B.

Minn.Stat. 484.013, subd. 2 grants the housing court jurisdiction over all proceedings under chapter 504B, allowing consolidation of landlord-tenant damage actions and rent actions upon request. Equity contends that while sections 504B.231 and 504B.271 allow tenants to recover damages, they do not empower the housing court to award monetary damages. However, the housing court operates within the district court, and its findings become the district court's findings upon review. The district court holds original jurisdiction over all civil actions, including those raised here.

Equity disputes the damages awarded to Bass, claiming insufficient proof of damages, failure to mitigate, and improper awards of both treble and punitive damages. Bass presented photographic evidence of her belongings disposed of in dumpsters and a valuation based on research of similar used items, which the district court found credible. Findings of fact are upheld unless clearly erroneous, and the district court's conclusions regarding the value of Bass's property are supported by the record.

Regarding mitigation of damages, while the general principle requires an injured party to act with reasonable diligence, the district court did not definitively rule on Bass's obligation under sections 504B.231 and 504B.271. Nonetheless, it deemed it unreasonable to expect Bass to retrieve her damaged belongings from dumpsters. Equity's assertion that section 504B.231 limits recoverable damages to ouster alone is incorrect; the section allows claims for damages resulting directly from unlawful ouster, establishing a causal link between Equity's actions and the damages incurred.

Equity contends it acted in good faith and argues that the district court did not adequately support its award under Minn.Stat. 504B.271. The court found that Bass left her apartment for only six hours, indicating no abandonment, as she left behind substantial personal property and made efforts to contact both the management company and the police regarding her belongings. Despite this, Equity maintained that Bass had abandoned the property, did not apply for a writ of recovery for eviction, and refused to assist her in retrieving her property. Under Minn.Stat. 504B.271, subdivision 2, a finding of bad faith is required for punitive damages, and the court evaluated four factors: the nature and value of the property, the impact of its deprivation on the tenant, whether the landlord unlawfully took possession, and if the landlord acted in bad faith. The court concluded Equity acted in bad faith due to the essential nature of the discarded items for Bass's family, the significant impact of the deprivation given her limited income, and the unlawful taking of property. The record supported the bad faith finding, as Equity failed to fulfill its statutory duties regarding tenant property. Equity also claimed error in awarding both treble damages under section 504B.231 and punitive damages under section 504B.271, arguing these sections address different landlord conduct, with both allowing for cumulative remedies. The district court affirmed its jurisdiction to award monetary judgment under Minn.Stat. 504B.375, found no clear error in damage findings, and upheld the awards. It ruled that Equity could not seek review of an earlier order due to default for not paying damages, but also addressed the merits of Equity’s claims. The conclusion is that the district court erred in determining Equity forfeited its right to review, warranting a consideration of the merits of its claims.