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State v. Arkell

December 31, 2003

STATE OF MINNESOTA, RESPONDENT,
v.
JOHN ARKELL, OFFICE OF APPELLATE COURTS APPELLANT, CARRIAGE HOMES, INC., DEFENDANT.



SYLLABUS BY THE COURT

Minnesota Statutes § 16B.69 (2000), concerning violations of the Uniform Building Code, is not a strict liability or public welfare statute.

Reversed.

Heard, considered, and decided by the court en banc.

The opinion of the court was delivered by: Gilbert, Justice.

OPINION

This case presents the question of whether alleged building code violations by a contractor, based on the construction work of a subcontractor, should be classified as a strict liability offense that does not require a mens rea element. The facts in this case are undisputed. Carriage Homes was a Minnesota corporation that engaged in multi-family residential and land-development projects. See State v. Arkell, 657 N.W.2d 883, 885 (Minn. App. 2003). Appellant John Arkell was chief executive officer, president and sole shareholder of Carriage Homes from 1996 to 1998, at all relevant times to this matter. The corporation employed approximately six people. Appellant had worked on numerous projects through Carriage Homes, including developments in Faribault, St. Cloud, Rochester, and in Wisconsin.

Beginning in 1997, appellant worked with the City of Austin, Minnesota on a new development titled "Southwinds Development." The development consists of a 7-acre parcel of land with 38 residential units. The Austin City Council approved appellant's development plan on June 16, 1997. Appellant signed the Development Agreement on behalf of Carriage Homes. Appellant was involved in the planning of the Southwinds project to a point where he personally spoke with the Austin planning director and appeared at city council meetings. Construction work on Southwinds was subcontracted to several outside companies. The development was substantially completed in 1998. Id.

In July and August of 1999, and in June 2001, Craig Hoium, the community development director for the City of Austin, wrote a series of letters to appellant regarding grading, water drainage and roofing problems at the Southwinds Development.*fn1 Hoium further spoke with the construction supervisor of Southwinds, and other construction managers, but never directly spoke with appellant. Regarding the grading issue, exhibits at trial showed that elevations of certain homes were below grade, causing water to run toward structures. Following snowmelt or during rain conditions, some water pooling occurs in the driveways of certain residential units. After Carriage Homes was notified of the grading problem, it worked to a certain degree to fix the problem. The city inspectors allege that Carriage Homes did not do enough, as drainage issues remain.

Ulland Brothers, a local subcontractor based in Austin, performed the grading on the Southwinds Development. In doing so, Ulland Brothers attempted to implement plans drawn by B.R.W. Engineering, another independent subcontractor. B.R.W. prepared the engineering report, and Ulland performed the grading.*fn2 Appellant has no involvement or ownership in those entities other than the hiring of them as independent subcontractors. Appellant claims that he had no control over grading or drainage issues because he subcontracted all of those types of construction projects. He further claims that he has no education or experience in engineering.

On May 30, 2001, the state charged Carriage Homes and appellant with three misdemeanor counts each, alleging violations of the Uniform Building Code and thereby both an ordinance violation and a violation of Minn. Stat. § 16B.69 (2000).*fn3 The district court dismissed Counts I and II, relating to alleged defects in roofing. Carriage Homes pleaded guilty to Count III, a charge of violating UBC § 1806.5.5 (1997), a section associated with foundation elevation, and was fined $1,000. Arkell, 657 N.W.2d at 886.

Appellant pleaded not guilty, arguing that he could not be held personally criminally liable for the violation. After a bench trial, the district court found appellant guilty of Count III and in violation of the city ordinance under the responsible corporate officer doctrine. The responsible corporate officer doctrine allows corporate officers to be found personally liable for a company's violations of a public welfare statute, even if the individuals are unaware of the actual violations. Appellant was sentenced to a fine, to pay restitution to the property owners, and a 90-day jail sentence, with 80 days stayed pending his compliance with the sentencing conditions. Id.

The court of appeals affirmed without oral argument. It concluded that Minn. Stat. §á16B.69, which imposes misdemeanor liability for a violation of the State Building Code, is a public welfare statute. Arkell, 657 N.W.2d at 887. It reasoned that appellant could be found criminally guilty of a misdemeanor under the responsible corporate officer doctrine. Id. at 889-90. The Southwinds Homeowners' Association has submitted a request for restitution.*fn4 This request was stayed pending the outcome of the present matter. We reverse.

I.

Minnesota Statutes ยง 16B.69 states: "A violation of the [building] code is a misdemeanor." Appellant argues that he did not intend to violate the building code, and thought that subcontractors would take care of all regulatory issues. The district court and the court of appeals both concluded appellant's intent to be irrelevant because they ...


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