OSK III, LLC v. HLI, LLC, Timothy J. Lambrecht ( 2015 )

  •                         This opinion will be unpublished and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
                                       OSK III, LLC,
                                      HLI, LLC, et al.,
                                   Timothy J. Lambrecht,
                                    Filed March 23, 2015
                                        Reilly, Judge
                                Ramsey County District Court
                                  File No. 62-CV-14-735
    Allen E. Christy, Patrick C. Summers, DeWitt Mackall Crounse & Moore S.C.,
    Minneapolis, Minnesota (for respondent)
    Timothy J. Lambrecht, Medina, Minnesota (pro se appellant)
          Considered and decided by Ross, Presiding Judge; Kirk, Judge; and Reilly, Judge.
                           UNPUBLISHED OPINION
    REILLY, Judge
          Appellant Timothy Lambrecht challenges the entry of summary judgment against
    him, arguing that the district court erred by denying his request for a continuance.
    Because the district court did not abuse its discretion by denying the continuance, we
              In August 2006, the Port Authority of the City of Saint Paul (Port Authority) and
    HLI, LLC, a Minnesota limited liability company, executed a loan agreement. Port
    Authority then assigned the loan to Business Loan Conduit (BLC). Appellant, Joseph
    Hanson, and InCompass, Inc., served as guarantors for the loan.1 The principal amount
    of the loan was $1.4 million. A real estate mortgage secured the debt created by the loan
    agreement, and HLI recorded the mortgage in the Ramsey County recorder’s office. The
    mortgage encumbered a multi-unit commercial office building and the surrounding real
    property owned by HLI. HLI failed to pay the monthly payments and interest due under
    the loan since March 2012. HLI also failed to pay real property taxes due during 2008
    and the following years. These failures constituted a “default” under the terms and
    conditions of the mortgage.
              In July 2012, BLC initiated a judicial foreclosure action and served appellant and
    the other defendants with a summons and complaint. In the complaint, BLC alleged that
    HLI failed to make the monthly installment payments, and failed to or refused to pay real
    property taxes dating back to 2008. HLI, Lambrecht, and InCompass served a joint
    answer on BLC, but the answer was never filed with the court.
     Although HLI, Lambrecht, Hanson, InCompass, XYZ Corporation, John Doe, and Jane
    Doe are all named parties, this appeal involves only Lambrecht. Appellant and Hanson
    were the only parties to appear at the summary-judgment hearing. The district court
    entered default judgment against Hanson, XYZ, John Doe, and Jane Doe, and these
    parties did not appeal.
          In February 2014, BLC assigned its rights and interests in the loan agreement to
    National New Markets Tax Credit Fund I, L.P (NNMTCF). On March 12, 2014, BLC
    moved for summary judgment pursuant to Minn. R. Civ. P. 56 and default judgment
    pursuant to Minn. R. Civ. P. 55.      A summary-judgment hearing was scheduled for
    April 16, 2014. On March 24, 2014, counsel for appellant HLI and InCompass withdrew.
    Appellant’s counsel did not file a formal notice of withdrawal with the court. On
    March 28, 2014, NNMTCF assigned its rights and interests in the loan agreement to
    respondent OSK III. Respondent’s attorneys, Allen Christy and Patrick Summers, also
    represented BLC and continued to represent OSK.
          Appellant sought a continuance of the April 16 summary-judgment hearing. OSK
    opposed the continuance. On April 1 and 2, the district court informed appellant that he
    would need to file a formal motion for a continuance. Appellant did not file a motion for
    a continuance or a response to the summary-judgment motion.
          At the summary-judgment hearing, both appellant and Hanson appeared pro se.
    When asked by the district court why the record did not contain a response to the
    summary-judgment motion, appellant informed the court that he did not file a response to
    respondent’s motion for summary judgment because “there was no way [appellant] had
    enough time to replace counsel.” Appellant stated that he had contacted the judge’s staff
    on March 31 to request a continuance. The district court then explained to appellant:
                 And what the response [to your e-mail request] said was that I
                 don’t consider continuance requests made informally by e-
                 mail or with a phone call. If the request is contested –
                 sometimes the attorneys will agree or the parties will agree on
                 a continuance. If it’s contested, I need to have a motion for a
                   continuance. So that information was passed along to you,
                   and I do not see any motion for a continuance that was filed
                   with the Court as a result of that communication to you.
           When asked by the court if the attorneys appellant interviewed could have filed a
    motion for continuance, appellant told the court that “[n]one of them wanted to touch – I
    didn’t want to pay them to work through the night, to even work on it at that point. I was
    frustrated, but I – I just couldn’t afford to do it at that time.”
           The court then asked appellant what attempts he made to find substitute counsel.
    Appellant informed the court that, on the day his former counsel withdrew, he
    “immediately picked up the phone and called an attorney, and he had asked me to send
    him all of the documents.” Appellant later sent the attorney another e-mail on April 1,
    asking if there was any “movement on this.” At this point, the attorney told him he did
    not have time “to work over the weekends and nights for you on this one.” Appellant
    also claimed that he called three or four other attorneys on March 25. But these attorneys
    “didn’t feel right to [him] that they were – you know, that they were really real estate
    attorneys.” Appellant finally found an attorney with whom he was satisfied, and the
    attorney told appellant that he would “likely take it if [appellant] [could] get the
    continuance, because, again, you know, dishing money out for double-time for these
    attorneys is not something I’m in a position to do right now.”
           The district court then clarified that “there’s been no answer by any party or no
    responsive pleading that’s been filed.” And when asked by the district court what factual
    issues existed, appellant replied, “[W]e should never have been coerced to sign the
    contracts. We know for a fact, beyond a doubt, that there’s documents that [respondent]
    has in [its] hands that show that we did not qualify for this loan.” Respondent opposed
    appellant’s oral request for a continuance. Counsel for respondent explained that the
    resulting prejudice from a continuance would be the payment of property taxes that will
    become due. In May 2013, property taxes for the encumbered property were around
    $56,000, and counsel presumed that the 2014 taxes would be in the same range.
           The district court issued an order on May 20, 2014, denying appellant’s motion for
    a continuance, granting summary judgment against appellant and entering default
    judgment against Hanson, XYZ, John Doe, and Jane Doe. This appeal follows.
           Appellant argues that the district court abused its discretion by denying his request
    for a continuance to obtain counsel after his previous attorney withdrew from the case.2
    This court reviews the district court’s denial of a motion for a continuance for an abuse of
    discretion. Dunham v. Roer, 
    708 N.W.2d 552
    , 572 (Minn. App. 2006), review denied
    (Minn. Mar. 28, 2006). Minn. R. Gen. Pract. 105 provides that the “[w]ithdrawal of
    counsel does not create any right to continuance of any scheduled trial or hearing.”    The
    advisory-committee comment clarifies that “withdrawal or substitution of counsel may be
      In his reply brief, appellant challenges the district court’s grant of summary judgment
    and raises issues related to the loan transaction, due process, and federal law. Appellant
    did not make these arguments in his principal brief. Accordingly, the arguments in
    appellant’s reply brief are not properly before the court and will not be considered on
    appeal. See Wood v. Diamonds Sports Bar & Grill, Inc., 
    654 N.W.2d 201
    , 704, 707
    (Minn. App. 2002) (“If an argument is raised in a reply brief but not raised in an
    appellant’s main brief, and it exceeds the scope of the respondent’s brief, it is not
    properly before this court and may be stricken from the reply brief.”), review denied
    (Minn. Feb. 26, 2003).
    part of a set of circumstances justifying the exercise of the court’s discretion to grant a
    continuance.” Minn. R. Gen. Pract. 105 1997 comm. cmt.
           The district court has a duty to ensure fairness to a pro se litigant by allowing
    reasonable accommodations so long as there is no prejudice to the adverse party. Kasson
    State Bank v. Haugen, 
    410 N.W.2d 392
    , 395 (Minn. App. 1987). Nevertheless, while the
    court may make some accommodations for a pro se party, a pro se party is “generally
    held to the same standard as attorneys and must comply with court rules.” Black v.
    700 N.W.2d 521
    , 527 (Minn. App. 2005).
           Appellant primarily relies on Weise v. Comm’r of Pub. Safety, 
    370 N.W.2d 676
    678 (Minn. App. 1985), and Haugen to support his argument. Although in both Weise
    and Haugen this court held that the district court abused its discretion by denying a
    continuance, in these cases the litigants had either just a day’s notice or no notice of the
    event triggering the continuance request. Weise, 370 N.W.2d at 678; Haugen, 410
    N.W.2d at 395.      Here, appellant had notice of the summary-judgment hearing on
    March 12, 2014, and his attorney withdrew on March 24. Appellant had 17 business days
    to secure new counsel or file a motion for a continuance. Although appellant requested a
    continuance, he did so informally by e-mailing the court after he was informed that he
    needed to file a formal motion because the continuance was contested.
           Appellant also testified that he made a diligent effort to find alternative counsel,
    but that he was unable to find suitable counsel before his summary-judgment response
    was due. The district court found that appellant’s actions did not constitute a diligent
    effort. The district court noted that when appellant “was asked about what efforts he had
    made to retain counsel, he stated that he had interviewed several attorneys, but had not
    hired one because of high hourly rates, what he believed to be insufficient real estate
    experience, or his busy travel schedule.” The district court concluded that appellant
    “failed to establish good cause for a continuance, did not demonstrate adequate diligence
    in seeking replacement counsel, and did not demonstrate significant prejudice to his
    interests if his oral motion was denied.” Moreover, the record reveals that, in the two-
    plus years since the initiation of this lawsuit, appellant failed to conduct any discovery.
           Based on the record, the district court did not abuse its discretion in denying
    appellant’s informal oral motion for a continuance. Appellant’s failure to secure an
    attorney before the summary-judgment hearing was largely due to financial concerns and
    not due to a lack of time or notice. The district court informed appellant of the proper
    procedure to file a continuance, and he failed to follow the district court’s directions.