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Hall v. State

Court of Appeals of Minnesota

January 23, 2017

Timothy Hall, Jr., et al., Respondents,
v.
State of Minnesota, et al., Appellants

         Ramsey County District Court File No. 62-CV-15-2112

         Reversed and remanded

          Daniel C. Hedlund, Daniel E. Gustafson, Joseph C. Bourne, Gustafson Gluek PLLC, Minneapolis, Minnesota; and

          Vildan A. Teske, Phillip M. Kitzer, Brian T. Rochel, Teske, Micko, Katz, Kitzer & Rochel, PLLP, Minneapolis, Minnesota; and J. Gordon Rudd, Jr., David Cialkowski, Zimmerman Reed, PLLP, Minneapolis, Minnesota; and Patrick Michenfelder, Throndset Michenfelder, LLC, St. Michael, Minnesota; and Garrett D. Blanchfield, Brant D. Penney, Reinhardt, Wendorf & Blanchfield, St. Paul, Minnesota (attorneys for respondents)

          Lori Swanson, Attorney General, Sarah L. Krans, Assistant Attorney General, St. Paul, Minnesota (for appellants)

          Considered and decided by Worke, Presiding Judge; Stauber, Judge; and Bratvold, Judge.

         SYLLABUS

         The Minnesota Uniform Disposition of Unclaimed Property Act (MUPA), Minn. Stat. §§ 345.31-.60 (2016), does not create an unconstitutional taking and satisfies procedural due-process requirements.

          OPINION

          WORKE, Judge

         This certified-question appeal under Minn. R. Civ. App. P. 103.03(i) arises from a constitutional challenge to MUPA. Appellants, the State of Minnesota and its commissioner of commerce, urge us to answer the district court's certified question as to whether MUPA creates an unconstitutional taking in the negative, and answer the district court's certified question as to whether MUPA meets procedural due-process requirements in the affirmative. We agree with appellants and reverse and remand.

         FACTS

         In 2011, respondent Timothy Hall Jr. did not receive his final paycheck from his employer. In 2015, Hall learned from his father that his paycheck had been remitted to appellant Michael Rothman, Commissioner of the Minnesota Department of Commerce (commissioner), and was being held by appellant State of Minnesota (state).

         In June 2015, respondent Michael Undlin learned from his attorneys that the state was holding two pieces of his property remitted by an insurance company. Undlin began the process of reclaiming his property.

         In 2011, respondent Mary Wingfield opened an interest-bearing savings account. In 2014, Wingfield received a letter from the bank asking her to contact the bank regarding the account. Wingfield ignored the bank's request. Wingfield's property was remitted to the commissioner and held by the state.

         Respondent Beverly Herron learned from her daughter that the state was holding her property. Herron's daughter made the discovery after searching for Herron's name on www.missingmoney.com. Wingfield and Herron submitted claims for the return of their property, and each received a check for the amount of the property that did not include interest accrued during the time the state held the property.

         All respondents claimed that they did not receive notice from the original holder of the property or from the state that their property had been remitted by the property holder to the state.

         On April 8, 2015, respondents filed a proposed class-action complaint against appellants, claiming that MUPA, with its intended purpose of protecting consumers by placing unclaimed property in the state's custody pending return to the rightful owners, was being used by the state to seize private property and use it for the state's benefit without any meaningful effort to locate the rightful owners. Respondents claimed that the state failed to provide adequate notice of its takings, which violated the Due Process Clauses of the United States and Minnesota Constitutions, and that the state's refusal to return interest that accrued on the property while in the state's custody violated the Takings Clauses of the United States and Minnesota Constitutions.

         Appellants moved to dismiss pursuant to Minn. R. Civ. P. 12.02 (a), (e), for lack of subject-matter jurisdiction and failure to state a claim upon which relief may be granted. The matter came before the district court on August 12, 2015.

         On December 10, 2015, the district court denied the motion to dismiss with respect to the above-referenced claims. The district court determined that respondents sufficiently alleged a due-process claim, because they alleged that notice is not reasonably certain to inform those affected. The district court determined that respondents also sufficiently alleged a takings claim because appellants took respondents' property and put it in a fund for public use, for which respondents are entitled to just compensation. Appellants petitioned this court for discretionary review. We denied the petition.

         On January 14, 2016, appellants moved the district court for an order certifying three questions as important and doubtful for appellate review pursuant to Minn. R. Civ. App. P. 103.03(i). The first questioned whether MUPA created "an unconstitutional taking by not entitling owners to interest on abandoned property after it is delivered to the [c]ommissioner." The second asked whether delivery of property to the commissioner under MUPA violated owners' procedural due-process rights. Finally, the state questioned whether it was a proper party to the action.

         The district court granted appellants' request to certify the first two questions. The district court asks us to answer the following certified questions:

1. When presumptively abandoned property has been delivered to the Minnesota Commissioner of Commerce pursuant to the Minnesota Uniform Disposition of Unclaimed Property Act . . . and thereafter placed into the general fund for use by the State, has the State effected an unconstitutional taking by failing to compensate owners for the loss of use ...

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