Litigation

Bayliss Successfully Defends County of Le Sueur

June 23, 2015

Kenneth Bayliss

Quinlivan & Hughes attorney Kenneth Bayliss successfully defended an appeal in the case of Klockmann v. County of Le Sueur, a decision of the Minnesota Court of Appeals handed down on June 22, 2015.

The case involved landowners' claim that the county board's award of a conditional use permit was improper because it reversed an earlier decision. The landowners also contended that the decision was not supported by sufficient evidence and that the ordinance did not permit the use at issue. The Court of Appeals affirmed the county board on all grounds. It held that the county ordinance directly permitted the type of use at issue; that there was sufficient evidence in the record to support the board's decision; and that the board had the inherent right to revisit an earlier decision based on the presentation of additional evidence.


Big Win for Rajkowski, Holthaus
Supreme Court Rules in Favor of Landowners

March 4, 2015

Michael RajkowskiRachael Pressler

On March 4, 2015 the Supreme Court issued a ruling stating that utility companies must purchase a property in whole for fair market value if it constructs a 200KV or larger power line, and the line crosses any contiguous and commercially viable land. Quinlivan & Hughes' attorney Michael Rajkowski and Rachael Holthaus successfully argued on behalf of the clients Dale and Janet Tauer, who are owners of agricultural land that was slated to have a 200KV CAPX 2020 power line constructed across their property.

The utility, Great River Energy, argued that it should only have to compensate the Tauers for the easement needed to construct the power line, and no more. Rajkowski and Holthaus successfully argued that Great River Energy must purchase the property as a whole as elected by the Tauers. The Tauers made this election pursuant to Minnesota law, which seeks to protect agricultural landowners from utility companies that take their property for the use and construction of power lines.

"This is a big win for landowners", said Rajkowski. "No longer will they have to worry about a power line decimating the value of their property."


Q&H Attorney Bayliss Prevails for Lake County on $5 Million Bond Claim

December 6, 2013

Kenneth BaylissOn December 5, 2013, the Minnesota District Court entered summary judgment for Quinlivan & Hughes client Lake County on a $5 million claim related to the sale of county revenue bonds. ORIX Public Finance, LLC, a Texas-based investment group, sued Lake County when Lake County could not perform on a bond purchase agreement.

The case arose out of Lake County's attempt to provide broadband internet services to its residents. The County obtained a $66 million loan and grant from the Rural Utility Service ("RUS") a federal agency, on the condition that it provide $3.5 million in matching funds-funds that would cover costs the federal loan and grant could not cover. The County planned to provide the matching funds by selling revenue bonds. The bond purchase agreement provided that the County would sell ORIX $5.6 million in revenue bonds at a very high (15%) interest rate.

As it turned out, the County could not sell the bonds and provide the matching funds in this manner because the RUS would not approve the financing on the terms stated in the bond purchase agreement. When the RUS would not approve the financing, the County decided to fund the match by taking money from its own reserves. ORIX then sued, claiming approximately $5 million in damages.

The case presented some interesting challenges. Ordinarily, the bond purchase agreement would contain language that would allow the County to back out of the agreement if the federal funds were not available. But a drafting error made this argument difficult. Additionally, the RUS, wanting to stay out of the fray, refused to state its position in writing or allow its employees to give depositions, a prerogative allowed by federal law.

The key to the defense of the case was the doctrine of "frustration of purpose," which applies when the fundamental purpose of a transaction has been frustrated so as to excuse a party from performing a contract. Lake County argued that there was no purpose to the bond transaction, given that without the federal funds there was no need for matching funds because there was nothing to match. ORIX argued that the RUS had never formally rejected the bond purchase agreement and that it was therefore entitled to $5 million in damages.

Alain Baudry and Maslon, Edelman, Borman & Brand LLP associated with Quinlivan & Hughes on the briefing. Quinlivan & Hughes attorney Kenneth Bayliss argued the case before Minnesota District Court Chief Judge Michael Davis on October 9.

Judge Davis's opinion found that the case was one where the doctrine of frustration of purpose applied. The decision first rejected ORIX's assertion that witness statements about what RUS representatives said in a key phone conference were hearsay. The court noted that the RUS statements about its rejection of the revenue bond financing were not hearsay, but "verbal acts" or "words of independent legal significance." The court went on to find that even if the statements were hearsay they would be admissible hearsay.


Rajkowski Successful in Capx2020 High-Voltage Transmission Line Matter

May 30, 2013

Michael RajkowskiQuinlivan & Hughes attorney Michael Rajkowski successfully argued before the Minnesota Supreme Court in the CapX2020 high-voltage transmission line matter that landowners are entitled to relocation costs and minimum compensation. The decision overturns a Court of Appeals decision and affirms the ruling by Stearns County District Court Judge Frank Kundrat.

The case involves landowners who invoked the Buy the Farm statute, which allows homeowners and farmers to force a utility to purchase their entire property at fair market value rather than selling an easement to the utility. Judge Kundrat previously ruled that the homeowners who invoked the Buy the Farm statute were entitled to relocation costs and minimum compensation. A three-judge panel of the Court of Appeals, however, reversed that decision, in a 2-1 vote. Court of Appeals Judge Edward Cleary dissented, writing that the landowners essentially were forced from their property by an involuntary taking by CapX and that they were entitled to the compensation and relocation costs.

The Supreme Court decision overturned that Court of Appeals decision agreeing with Judge Cleary's dissent. The Supreme Court's decision can be found.

DSC00576Has the government taken a condemnation / eminent domain action against you? Know your rights and protect your inventment. Contact the Quinlivan & Hughes Condemnation and Eminent Domain team today!


Changing the Way We Litigate Minnesota Cases
Major Civil Rules Changes Effective July 1

February 6, 2013

The Minnesota Supreme Court has just handed down some major revisions to the civil rules (found HERE). These changes will result in some significant changes in the way our civil cases are handled. The changes were just handed down yesterday and will be effective July 1, 2013. The issues of most concern to claims handlers have been summarized in the five numbered points at the end of the article.

1.) The amendments may limit the use of pocket service by Plaintiffs by providing that actions must be filed with the court within one year of service or they are automatically dismissed. Plaintiffs may be less willing to use pocket service if their case can be dismissed and would have to be refiled-statute of limitations issues might come into play. No actions will be dismissed until July 1, 2014, so the bar gets a year to figure this out.

2.) Rule 26 is substantially rewritten and "federalized." An initial disclosure requirement is added and requires parties to automatically disclose such things as: the names of witnesses with knowledge of discoverable information; any relevant documents; an itemization of damages with supporting information made available for inspection; and disclosure of insurance information. These disclosures are due for both parties 60 days from the original due date of the answer.

3.) Absent a provision in a scheduling order, expert disclosures are required 90 days before trial with a 30 day provision for rebuttal disclosures.

4.) Pretrial disclosures must be made 30 days before trial, including witness identity and contact information, identification of deposition testimony, and identification of all exhibits. Parties must object to others' pretrial disclosures within 14 days or any objections are waived.

5.) Rule 26.02 begins with an express statement that "proportionality" is the guiding concept in determining the proper scope of discovery. This concept limits the general rule providing for the discovery of any evidence that is relevant to the claim or defense of a party. This gives parties an opportunity to not disclose relevant evidence and hide behind the vagueness of "proportionality."

6.) As in federal court, the parties are required to conduct a "discovery conference." This conference is required to be held 30 days after the date the answer is originally due. The parties must prepare a "discovery conference report."

7.) Rule 37.04 is amended to provide that evidence not disclosed as required by the rules will be excluded, unless the non-disclosure was substantially justified or harmless.

8.) The rule abolishes the information statement, modifies use of the certificate of representation, and creates a "Civil Cover Sheet" that must be filed with any new lawsuit. The Civil Cover Sheet is based on a form available on the court system website. Scheduling information will be submitted as part of the Civil Cover Sheet. Importantly, parties have only ten days to respond to the Plaintiff's Civil Cover Sheet-so the Civil Cover Sheet would appear to be due ten days before a Defendant's Answer is due. While the rule permits the court to wait until 90 days after the date the last Civil Cover Sheet is due (and thus take into account the discovery conference report mentioned above), it also allows it to immediately enter a scheduling order at the point the last Civil Cover Sheet is due. This may give rise to bitter early wranglings over scheduling.

9.) Rule of General Practice 115.04 is amended to provide a process whereby judges can hear civil motions through an informal process involving letters and conference calls.

10.) Rule 1 is also amended to include a statement requiring the courts to consider "proportionality" in the handling of all cases. In a world of diminishing court resources, this could give the courts the opportunity to significantly cut back on the resources devoted to civil cases. -But only time will tell on this point.

These are huge changes. They will alter the way we handle even the simplest cases. I see more convenience for the courts, but little in the way of savings for litigants.

For claims handlers, insurers, and trusts, here's my assessment as to the significance of these changes:

1.) The limitation on pocket service cases-dismissal after one year-will likely result in more matters being filed and not just pocket served.

2.) The use of the civil cover sheet and the requirement of a response within ten days will require that in cases where the plaintiff filed a civil cover sheet that counsel be retained immediately so that a responsive civil cover sheet can be filed within ten days. The service of a complaint will trigger obligations that cannot be easily extended without leave of court. The court may even issue scheduling provisions requested by the Plaintiff before an attorney for the defendant has even been retained.

3.) The amendment of Rule 26.02 to include an express "proportionality" requirement will likely give rise to more discovery disputes. This is particularly true until the courts hand down some appellate cases explaining application of the proportionality factors.

4.) The processing of cases will be more formal and will require a different and somewhat more straight-jacketed workup.

5.) The parties will have more conferences early on to put in place agreements regarding the use of discovery.

These rule changes are the result of the recommendations of the Minnesota Supreme Court's Civil Justice Reform Task Force. The report and recommendation of the Task Force was circulated and the Supreme Court held a hearing on the recommendations before deciding to implement these changes. While the Courts were certainly a big part of the discussion and recommendations that were made, civil practitioners from a wide range of practice areas also participated and provided input on ways to improve the civil justice system to add increases in efficiencies and to resolve disputes more economically. There are some aspects of the rules that could lead to efficiencies, but it would also seem that the rules do add some additional steps to the litigation process.


CapX2020 Eminent Domain

September 27, 2012

CapX2020 Project

CapX2020 is a joint initiative of 11 transmission-owning utilities in Minnesota, North and South Dakota, and Wisconsin to expand the electric transmission grid. CapX2020 will follow the I-94 corridor and will use eminent domain, the taking of private property for the public good, as it is needed. The high voltage lines are expected to be constructed and transmitting electricity by 2014.

Where the line is going
The CapX2020 power line will cross through the St. Cloud area in two phases. The first phase includes private properties between Monticello and St. Cloud and the second phase includes private properties between St. Cloud and Fargo.

Monticello to St. Cloud
The route for the Monticello to St. Cloud phase has already been determined, and a "take date" of February 22, 2011 has been set. An interactive map of this route can be found here:

St. Cloud to Fargo
UPDATE 06/10/2011: The Public Utilities Commission unanimously approved Administrative Law Judge Beverly Jones Heydinger's recommended route for a high-voltage power line from St. Cloud to Fargo, a segment of a $1.7 billion project that is one of the largest expansions of the power grid in Minnesota. The St. Cloud-to-Fargo segment will mostly follow Interstate 94, except for a diversion on a section between St. Cloud and Sauk Centre.

UPDATE 05/20/2011: Stearns County Judge Frank J. Kundrat ruled in favor of Quinlivan & Hughes attorney Michael C. Rajkowski and his client on a CapX2020 matter. Our client elected to require CapX2020 to buy their home, because power lines will be on their property. CapX2020 took the position that our client did not qualify for the additional benefits of a full take under the statute, because they were not "forced" to leave their home. Judge Kundrat agreed with attorney Rajkowski and ruled that CapX2020 must make the full take and compensate our client accordingly.

To discuss this ruling further or to inquire about your rights under eminent domain law, contact Mike Rajkowski at (320) 251-1414.

UPDATE 04/26/2011: An administrative law judge has recommended routing a Fargo-to-St. Cloud high-voltage power transmission line away from the Interstate Highway 94 corridor once it approaches Freeport and then south of Avon Hills and St. John's University before it heads east to St. Cloud. Administrative Law Judge Beverly Jones Heydinger's recommendation on where to put the line will be sent to the Public Utilities Commission, which is expected to make a decision this summer on the location of the line. The route Heydinger preferred costs about $1.4 million more than the route preferred by Xcel and Great River Energy, and it heads farther south than their preferred route. Heydinger's decision came after public input sessions and testimony from organizations and residents who would be potentially affected.

Judge Beverly Jones Heydinger's Recommended Route

Protect your rights
Whether a utility is planning to take all or only a portion of your property, it is important to have an independent appraisal done before you sign your name to any agreement. Your property is an investment, and the addition of an unsightly power line pole or the loss of a freeway tree buffer could impact the value of your property significantly.

Hiring an Attorney
It is important to remember that public utilities are a business. Overall profitability relies on keeping costs, including what is paid in eminent domain settlements, as low as possible. If your property is going to be taken and the utility offer price is significantly lower than your independent appraisal, you should protect your property investment and hire a reputable eminent domain attorney.

Why Hire Quinlivan & Hughes?
Attorney Keith Hughes has nearly 40 years of experience helping clients with Eminent Domain matters. His partner Michael Rajkowski adds another 10 years of experience. Together, Keith and Mike can help guide you through the process of property condemnation and help insure that you are receiving fair compensation for your property.

How Are Eminent Domain Attorneys Paid?
Eminent Domain Attorneys are paid 2 ways, hourly or on a contingent basis. If you choose to pay hourly, you will pay the attorney only for the time he works on your file. If you choose to pay on a contingent basis, you will only pay your attorney a percentage of the final award, and nothing until that occurs. Individual circumstances may find either option a better choice.

In Minnesota, state law provides for full attorney reimbursement by the utility if the court award is 40% more than their (the utility's) final written offer. If the court award is 20% to 40% more than the utilities final written offer, attorneys fees can still be paid by the utility at the discretion of the court.


Robert Cunningham Saves Client Approximately $1.8 Million in Taxes

September 26, 2012

Quinlivan & Hughes tax attorney Robert Cunningham just concluded the 3-year process of representing his client in a tax dispute against the IRS. Mr. Cunningham successfully appealed the client's IRS audit to the U.S. Tax Court, ultimately saving his client approximately $1.8 million in taxes.

Mr. Cunningham practices in the area of Tax Law, Creditor Remedies, Business and Corporate Law, Business Succession and Estate Planning.


Favorable Ruling From the Minnesota Supreme Court in Staab v. Diocese of St. Cloud

September 26, 2012

Mike LaFountaineDyan EbertLaura Moehrle
Quinlivan & Hughes attorneys Michael D. LaFountaine, Dyan Ebert, and Laura Moehrle recently received a favorable ruling from the Minnesota Supreme Court in Staab v. Diocese of St. Cloud. The decision, handed down by the Supreme Court on April 18, 2012, holds that a tortfeasor who is 50% or less at fault pays only that percentage-even if the remaining fault was placed on a tortfeasor who was not a party to the action. This is a landmark decision which supports the principle that defendants should only be liable for their own fault and should not be required to pay percentages of fault attributable to others.


Michael LaFountaine Obtains Result Greatly Limiting Damages

September 26, 2012

Mike LaFountaineMichael LaFountaine started 2012 with a trial in Long Prairie before Todd County Judge Jay Carlson. Mr. LaFountaine represented the driver of a vehicle that was in the passing lane when the vehicle being passed turned left into a driveway. The driver and passenger of the vehicle that was turning left both sued Mr. LaFountaine's client and asked the jury for more than 1.2 million dollars.

The jury placed fault on both drivers, but determined that the total damages payable to the Plaintiffs will amount to something between $27,000 and $43,000 for the driver (depending upon post trial motions) and $10,000 for the passenger.


Minnesota Counties Intergovernmental Trust (MCIT) Publishes Booklet on Governmental Immunities for Member Counties Authored by Attorney Ken Bayliss

September 26, 2012

Kenneth BaylissQuinlivan & Hughes attorney Kenneth Bayliss, long a student of issues relating to governmental immunities, has had a booklet on immunities circulated to local governments. The Minnesota Counties Intergovernmental Trust (MCIT) recently made his booklet, a comprehensive summary of immunities, available to Minnesota local governments.

Mr. Bayliss comes by his interest in governmental immunities naturally, having spent the first ten years of his career in the Tort Claims Division and the Employment Law Division of the Minnesota Attorney General's Office.

Ken's current practice involves litigation concerning government liability, general insurance defense, premises liability, construction accident liability, and business litigation. He is a past chair of the Minnesota State Bar Association's Civil Litigation Section and of the law firm's Insurance Defense Group. He is the current chair of the firm's Appellate Practice Group.