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Madison Equities, Inc. v. Crockarell

Supreme Court of Minnesota

January 25, 2017

Madison Equities, Inc., Appellant,
v.
Robert L. Crockarell, Respondent.

         Court of Appeals Office of Appellate Courts

          Kelly S. Hadac, Michael S. Mather, HKM, P.A., Saint Paul, Minnesota, for appellant.

          Matthew P. Kostolnik, Kelly C. McGinty, Moss & Barnett, P.A., Minneapolis, Minnesota, for respondent.

         SYLABUS

         1. Minnesota Rule of Civil Procedure 58.01 does not provide the district court an independent grant of authority to order a stay of entry of judgment.

         2. Mandamus is the proper remedy to compel the district court to vacate a stay that the court did not have the authority to order.

         Reversed; writ of mandamus issued.

          OPINION

          McKEIG, Justice.

         Appellant Madison Equities, Inc. sued respondent Robert Crockarell for repayment of a long-overdue promissory note. Crockarell later initiated a separate action against Madison Equities and other parties alleging, among other things, that Madison Equities sued Crockarell on the note to interfere with his business interests. The district court granted summary judgment to Madison Equities on the note claim, but ordered a stay of entry of judgment pending mediation in Crockarell's later-filed action. Madison Equities petitioned for a writ of mandamus seeking to vacate the stay, and the court of appeals denied the petition. We granted review. We reverse the court of appeals and issue a writ of mandamus ordering the district court to vacate the stay.

         I.

         In December 2004, Crockarell borrowed $100, 000 from his father, James Crockarell, and his stepmother, Rosemary Kortgard, (collectively, "parents") to purchase a home. He executed a note promising repayment with interest within 2 years. Crockarell and his parents were also involved together in several business ventures, including in the parents' company, Madison Equities. While Crockarell worked for Madison Equities, he did not repay the note and his parents did not demand repayment. After Crockarell's employment with Madison Equities ended in 2014, however, his parents allonged[1] the note to Madison Equities, which then sued Crockarell for repayment of the note in Ramsey County District Court ("Note Litigation").

         While the Note Litigation was pending, Crockarell initiated a separate action in Ramsey County District Court ("Shareholder Litigation"). Crockarell alleged multiple business-related claims against his parents, Madison Equities, and five limited liability companies (LLCs) co-owned by Crockarell and his parents. Crockarell claimed that his parents initiated the Note Litigation to pressure him to return to work for Madison Equities and to interfere with his business interests.[2]

         By April 2016, the district court had granted summary judgment to Madison Equities in the Note Litigation, awarding it $144, 698.59 in damages, plus interest and late charges, and an additional $34, 790.36 in costs and attorneys' fees. Crockarell filed a motion to stay the entry of judgment in the Note Litigation pending the resolution of the Shareholder Litigation. He argued that payment of the Note Litigation judgment would substantially impair his ability to pursue the Shareholder Litigation. Crockarell reasoned that if the Note Litigation judgment were entered, he would engage in additional motion practice, followed by an appeal, to stay the enforcement of the judgment and therefore resist payment while the Shareholder Litigation was still pending. He further argued that his debt to Madison Equities would likely be offset by the more than $11 million in damages he claimed in the Shareholder Litigation. Crockarell relied on Minn. R. Civ. P. 54.02, which allows the court to defer the final entry of judgment when a decision fails to resolve "all the claims or the rights and liabilities of . . . all the parties." Although he suggested that the district court could consolidate the two actions sua sponte to ensure that Rule 54.02 applied, Crockarell never filed a motion to consolidate the actions.

         On April 25, 2016, without consolidating the Note Litigation with the Shareholder Litigation, the district court ordered a stay of entry of ...


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