County District Court File No. 82-CV-14-4555
C. Spaid, Minneapolis, Minnesota (for respondents)
Auleciems, Lake Elmo, Minnesota (pro se appellant)
Susanne Auleciems, Lake Elmo, Minnesota (pro se appellant)
Considered and decided by Hooten, Presiding Judge; Peterson,
Judge; and Bratvold, Judge.
attempt to waive Minn. Stat. § 504B.178 (2014) by
agreeing to forfeit a security deposit as a remedy for
violating a lease provision that does not require a payment
of funds to the landlord is void and unenforceable under
Minn. Stat. § 504B.178, subds. 3, 10.
When a conciliation court decision is appealed by removal to
the district court and the removing party does not prevail,
the opposing party is not limited by Minn. Stat. §
491A.02, subd. 6 (2014), to recovering $50 for costs and
landlord-tenant dispute regarding forfeiture of security
deposits, pro se appellant landlords challenge the district
court's summary judgment that the forfeiture clause in a
lease is unenforceable and the district court's award of
attorney fees, costs, and disbursements to respondent
tenants. We affirm.
Andrew and Elisa Kaeding leased a house from
appellant-landlords Karl and Susanne Auleciems. The house had
a basement, a main floor, and a second floor. The lease ran
from April 1, 2013, through March 31, 2014, with monthly rent
of $2, 700, a $2, 500 security deposit, and an additional $1,
000 pet deposit. Respondents lived in the house with their
two children and two dogs.
lease prohibited pets from being in the basement or on the
second floor. To prevent their dogs from going into the
prohibited areas, respondents kept the basement door closed
and installed a gate at the top of the stairs leading up to
the second floor. Despite these precautions, the dogs got
into the prohibited areas several times during
respondents' tenancy. The dogs were always immediately
removed from the prohibited areas and caused no damage.
respondents moved out of the house, appellants retained the
$3, 500 in deposits and also sought an additional $1, 425 for
damages. Appellants sent respondents a letter in which they
listed the items for which they were seeking
damages and informed respondents that the entire
security deposit was forfeited because the dogs were on the
upper and lower floors.
brought an action in conciliation court seeking to recover
the $3, 500. Appellants filed a counterclaim, asserting that
they were entitled to retain the entire security deposit
under a lease clause that stated that "[t]enants agree
to forgoe [sic] security deposit if pets are found to have
been on the top or bottom floors of the house." The
conciliation court determined that the forfeiture clause was
unenforceable but awarded appellants $800 for damages beyond
normal wear and tear. The conciliation court awarded
respondents the remaining $2, 700 balance of the security
deposits plus $75 in costs.
filed a demand for removal to district court. Respondents
filed an amended complaint, and the parties filed
summary-judgment motions. The district court granted the
motions in part and denied them in part. The district court
concluded that the forfeiture clause was unenforceable under
Minn. Stat. § 504B.178, subds. 3(b) and 10 (2014). The
district court also concluded that appellants' retention
of the two deposits constituted bad faith under Minn. Stat.
§ 504B.178, subd. 7 (2014), and awarded respondents $1,
000 in punitive damages. The district court granted summary
judgment for appellants on respondents' claim for unjust
enrichment based on the lease making respondents responsible
for snow removal and lawn care. The district court denied summary
judgment on appellants' claim for $1, 425 in damages and
ordered that the issue of damages proceed to trial.
damages issue was tried to the court, and, on the day of
trial, appellants orally moved to add a diminution-of-value
claim, asserting that damages that occurred during
respondents' tenancy were a factor in appellants'
decision to sell the property for $389, 000 after respondents
moved out, although appellants' initial asking price had
been $469, 000. Appellants' proposed order following
trial set the diminution-of-value claim at $12, 000.
district court made specific findings on each item of damages
claimed by appellants and awarded appellants $640 for damages
beyond normal wear and tear and ordered that the balance of
the security deposits, $2, 860, be returned to respondents.
The district court determined that appellants failed to
present sufficient evidence to prove their
trial, respondents submitted an application for costs and
disbursements and a motion for attorney fees. The district
court awarded respondents $50 for costs under Minn. R. Gen.
Pract. 524 and Minn. Stat. § 491A.02, subd. 7 (2014),
and $1, 142.95 for disbursements under Minn. Stat. §
549.04 (2014). The disbursements included $601 in court fees,
a $100 payment to a court reporter for a two-hour deposition,
$241.95 for deposition transcripts, and a $200
professional-witness fee for testimony on the
district court determined that respondents were entitled to
recover attorney fees under a lease clause that stated that
"[t]he court may award reasonable attorney's fees
and costs to the party who prevails in a lawsuit about the
tenancy" and awarded respondents $12, 350 for attorney
fees. The fee award was based on 49.4 hours billed at $250
per hour, which the district court found was a reasonable
rate for an attorney of counsel's experience and a
reasonable number of hours for a contested matter with
multiple motions and a one-day trial. The court explained:
[Respondents] appear to have attempted to resolve the case as
quickly as possible at each turn. [Appellants] have
repeatedly prolonged and complicated this case. Rather than
go directly to trial after losing most claims on summary
judgment, [appellants] chose to increase their demands by
adding a legally and factually baseless claim for the alleged
diminution of value to the Premises, without properly filing
any pleadings with this court. Clearly, the diminution of
value claim was an attempt to weaken [respondents']
resolve with the specter of a financially crippling monetary
judgment. [Respondents] were entirely within their rights to
take these claims seriously, and invest in more time,
discovery, research, trial preparation, and a trial.