Allan D. Hauge v. James Schowalter, Commissioner of Management and Budget, State of Minnesota ( 2014 )

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2012).
STATE OF MINNESOTA
IN COURT OF APPEALS
A13-2073
Allan D. Hauge, et al.,
Appellants,
vs.
James Schowalter, Commissioner of Management and Budget, State of Minnesota,
Respondent.
Filed August 18, 2014
Affirmed
Smith, Judge
Washington County District Court
File No. 82-CV-13-972
Timothy P. Brausen, St. Louis Park, Minnesota (for appellants)
Lori Swanson, Attorney General, Oliver J. Larson, Assistant Attorney General, St. Paul,
Minnesota (for respondent)
Considered and decided by Smith, Presiding Judge; Halbrooks, Judge; and
Hudson, Judge.
UNPUBLISHED OPINION
SMITH, Judge
We affirm the district court’s dismissal of appellants’ complaint because
appellants do not state a valid claim for compensation under Minn. Stat. § 508.76 (2012).
FACTS
In 1965, the Washington County Registrar of Titles recorded a land survey that
later had the effect of awarding title to land, including a peninsula abutting a lake, to
Mark and Mary Kay Durfee. In 1986, appellants Allan and Cecilia Hauge purchased
property including title to the same peninsula. Their title did not reflect any interest in
the peninsula held by others.
In July 2006, the Durfees sued the Hauges in district court for trespassing on the
peninsula. The Hauges filed a counterclaim requesting reformation of the Durfees’ title.
The Durfees petitioned the district court to cancel the Hauges’ title, and the Hauges
petitioned for cancellation of the Durfees’ title.
The Hauges owned their property subject to an adjustable-rate mortgage. In
March 2007, after the bank began adjusting their interest rate upward, they attempted to
refinance their mortgage, but their application was denied because of the pending dispute
over the property lines. As a result, the Hauges experienced large increases in their
monthly mortgage payments.
The Durfees sold their property to Paul and Stephanie Howe in June 2007 and the
Howes were substituted as plaintiffs. The Howes moved for a temporary injunction to
exclude the Hauges from the peninsula, which the district court granted in August 2007.
In January 2008, the district court granted summary judgment to the Howes,
holding that the Hauges’ claims were time-barred. We reversed and remanded, holding
that the time-bar statute that the district court had relied on “does not apply to the filing
of a registered land survey and certificate of title that is issued based on that survey” and
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that “genuine issues of material fact about the ownership of the peninsula preclude
summary judgment in this case.” In re Hauge, 766 N.W.2d 50, 57 (Minn. App. 2009).
In October 2011, the parties agreed to a stipulation settling their dispute in favor of the
Hauges, and the district court dismissed the matters.
In July 2012, the Hauges filed a complaint in district court, alleging that they had
been damaged by the registrar’s “omission, mistake or malfeasance” and requesting
payment of damages by respondent State of Minnesota under the Torrens Act
compensation statutes. In April 2013, the state moved to dismiss for failure to state a
claim upon which relief could be granted. Relying on Zahradka v. State, 515 N.W.2d
611, 613-14 (Minn. App. 1994), review denied (Minn. June 29, 1994), the district court
granted the state’s motion, ruling that the Hauges lacked standing to sue under the
Torrens Act compensation statutes because they had not been precluded from bringing an
action for recovery of their land.
DECISION
The Hauges argue that the district court erred by interpreting Minn. Stat. § 508.76,
subd. 1 as allowing only those who have been precluded from bringing an action for
recovery of land to sue for recovery of damages suffered as a result of a registrar’s error.
They contend that the statute allows a party to sue for compensation when the party is
either precluded from an action to recover land or suffers other kinds of damages
resulting from a registrar’s error. Although we review questions of statutory
interpretation de novo, Swenson v. Nickaboine, 793 N.W.2d 738, 741 (Minn. 2011), we
are guided in doing so by our prior interpretations of a statute, see Riverview Muir Doran,
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LLC v. JADT Dev. Grp., LLC, 790 N.W.2d 167, 172 (Minn. 2010) (interpreting the
meaning of a statute in light of existing caselaw interpreting the same statute).
The statute at issue here provides:
Any person who, without negligence on that person’s
part, sustains any loss or damage by reason of any omission,
mistake or misfeasance of the registrar or the registrar’s
deputy, or of any examiner or of any court administrator, or
of a deputy of the court administrator or examiner, in the
performance of their respective duties under this law, and any
person who, without negligence on that person’s part, is
wrongfully deprived of any land or of any interest therein by
the registration thereof, or by reason of the registration of any
other person, as the owner of such land, or by reason of any
mistake, omission, or misdescription in any certificate of title,
or in any entry or memorial, or by any cancellation, in the
register of titles, and who, by the provisions of this law, is
precluded from bringing an action for the recovery of such
land, or of any interest therein, or from enforcing any claim or
lien upon the same, may institute an action in the district
court to recover compensation out of the general fund for
such loss or damage.
Minn. Stat. § 508.76, subd. 1.
In Zahradka, we held that “Minn. Stat. § 508.76 only allows recovery when a
party is precluded from bringing an action by the Torrens registration laws.” 515 N.W.2d
at 613 (emphasis added). We added that a claim under section 508.76 is not allowed
when a party is “given a full and fair chance to litigate and appeal their cause” and that
“[t]he statute does not guarantee relief, it only guarantees a chance to make a claim
against the general fund if a party was unable to litigate the claim in the first instance.”
Id. at 614 (emphasis added).
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Here, the Hauges were able to litigate their claim fully in their suit against the
Howes and, in fact, they recovered the land that they had lost as a result of the registrar’s
recording of the 1965 land survey. Accordingly, they are precluded from claiming
compensation under Minn. Stat. § 508.76.
Because we affirm the district court’s dismissal of the Hauges’ complaint on the
basis of Minn. Stat. § 508.76, the state’s alternative argument that the Hauges’ cause of
action is barred by the statute of limitations is moot.
Affirmed.
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