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City of Willmar v. Kvam

Court of Appeals of Minnesota

December 2, 2013

City of Willmar, petitioner, Respondent,
Mark O. Kvam, as Trustee of the Mark O. Kvam Revocable Trust, et al., Appellants, Craig Groothuis, et al., Respondents Below.


Kandiyohi County District Court File No. 34-CV-07-623.

Robert J. Lindall, Peter G. Mikhail, Kennedy & Graven, Chartered, Minneapolis, Minnesota (for respondent)

Keri A. Phillips, Rinke-Noonan, St. Cloud, Minnesota (for appellants)

Considered and decided by Schellhas, Presiding Judge; Hudson, Judge; and Ross, Judge.

Natalie E. Hudson, Judge.

On appeal from a condemnation-related dispute where the district court mistakenly distributed funds from a statutory quick-take account, appellant property owners argue that the district court erred in ruling the mistake was a clerical error correctable at any time pursuant to Minn. R. Civ. P. 60.01, and requiring appellants to return the mistakenly distributed funds. Because the district court properly classified the error as clerical, we affirm.


Appellants owned several parcels of land acquired by the City of Willmar in eminent domain proceedings. Pursuant to Minn. Stat. § 117.042 (2006), the city deposited $241, 000 in a quick-take account with the Kandiyohi County court administrator in June 2008. Of that total, $197, 000 represented the appraised value of appellants' properties as determined by the city. The remaining $44, 000 of the deposit was attributable to the appraised value of a parcel of land owned by Groothuis, who is not a party to this appeal. The taking was challenged, but the city prevailed. See City of Willmar v. Kvam, 769 N.W.2d 775 (Minn.App. 2009), review denied (Minn. Oct. 20, 2009).

In April 2011, Groothuis settled with the city for $63, 642.31. The city paid Groothuis directly and did not move for disbursement of the $44, 000 Groothuis funds in the quick-take account. Appellants thereafter settled with the city for $250, 000, and on July 8, 2011, the district court issued an order authorizing the court administrator to release the quick-take "funds deposited for Parcel Nos. 2, 4–5, 6, 8–9, 11, 12, 14, and 25 in the amount of $197, 000 plus interest." The named parcels all belonged to appellants; parcel 3, owned by Groothuis, was not listed in the order. The order was prepared by appellants' attorney and not objected to by the city.

At that time, $248, 256.37 remained in the account. But later that same day, an employee in court administration called appellants' attorneys and informed them that because appellants were the only parties left on the account, the remaining $248, 256.37 would be disbursed to them. The court employee erroneously included the $44, 000, plus interest, attributable to the Groothuis land in the total amount, although the court's order did not authorize its disbursement. The district court directed its staff to have appellants' attorney calculate the accrued interest for each appellant's individual share, and $248, 256.37 was disbursed according to the attorney calculations. The city was unaware of this communication.

Over six months later, on January 27, 2012, the city's attorney contacted court administration to inquire about the $44, 000 it had deposited for Groothuis, believing it should still be in the quick-take account. The city was informed that there was no money on deposit with respect to the Groothuis land. Six months later, on July 31, 2012, the city contacted court administration a second time and was again informed that there were no funds on deposit for the Groothuis land, nor was there an order authorizing any disbursement for that land. The city then contacted the district court judge directly, inquiring about the $44, 000. The judge replied by letter in August 2012, stating that he was unaware the city had paid the Groothuis settlement directly, and that the $44, 000 plus interest had been distributed to appellants.

On December 11, 2012, the city moved the district court to: (1) determine ownership of the $44, 000 deposited for the Groothuis land; (2) order appellants to return to the court administrator the overpayment of $44, 000, plus interest; and (3) order the court administrator to pay the city $44, 000, plus interest.

The city argued that the Groothuis funds were disbursed to appellants through an error of court administration, that appellants should have known of the error, and that appellants had been unjustly enriched by the overpayment. Appellants responded that the error was not the court's; rather, the city erred by paying Groothuis directly and not promptly moving for disbursement of the quick-take funds. Appellants further argued that the city's motions were time-barred because the city's actions (and inactions) constitute mistakes or neglect pursuant to Minn. R. Civ. P. 60.02, requiring correction within one year of the court's July 8, 2011 order. The city ...

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