of Appeals Office of Appellate Courts
P. Sheu, Ashleigh M. Leitch, Best & Flanagan LLP,
Minneapolis, Minnesota, for appellant.
Jones, Aaron D. Van Oort, Erin L. Hoffman, Jeffrey P.
Justman, Faegre Baker Daniels, LLP, Minneapolis, Minnesota,
Although an award of costs and disbursements is not subject
to review under Minn. R. Civ. App. P. 117, a petition for an
extraordinary writ under Minn. R. Civ. App. P. 120 may be an
appropriate remedy to obtain review of that decision.
prevailing party in an appeal is not entitled to tax the
interest incurred on a loan used to secure a supersedeas
prohibition issued; reversed.
awarded appellant Alan Klapmeier $10 million on his claim
against respondent Cirrus Industries, Inc. The court of
appeals reversed the jury's verdict and granted in part
Cirrus's request to tax costs and disbursements for the
appeal. Specifically, the court of appeals awarded $671,
863.88 to Cirrus, most of which was for the interest that
Cirrus incurred on a loan that it obtained to enable it to
post a supersedeas bond, which was used to secure the
judgment on the jury's verdict during the appeal.
Asserting that the interest is not taxable on appeal,
Klapmeier sought review of the court of appeals' taxation
decision under either Minn. R. Civ. App. P. 117 or by
granting a petition for a writ of prohibition under Minn. R.
Civ. App. P. 120. We granted Klapmeier's petition for
review and agreed to hear the petition for a writ of
prohibition, directing the parties to also address our
authority to review a decision of the court of appeals that
taxes costs and disbursements. We now hold that, although
review of the court of appeals taxation decisions is not
permitted under Rule 117, we retain the discretionary
authority to grant a petition under Rule 120 for a writ of
mandamus or prohibition to address such a decision. Further,
we conclude that Minn. R. Civ. App. P. 139 does not permit
the taxation of borrowing costs in the circumstances
presented here. Thus, we grant the writ of prohibition,
reverse the court of appeals' decision to allow taxation
of those costs, and direct the Clerk of the Appellate Courts
to tax costs and disbursements as set forth below.
Klapmeier was one of the founders of Cirrus Industries, Inc.,
a Duluth-based aircraft manufacturer. Klapmeier was removed
from his position as Chief Executive Officer at Cirrus in
2008. In 2011, Klapmeier and Cirrus settled certain claims
between them with an agreement that included a
non-disparagement clause. In 2012, Klapmeier claimed that
Cirrus breached the non-disparagement clause and in 2014 a
jury agreed, awarding Klapmeier $10 million. Cirrus then
moved for judgment as a matter of law, a new trial, and
remittitur. Cirrus also moved to stay entry of judgment on
the jury's verdict while its posttrial motions were
pending before the district court. In response, Klapmeier
asked the district court to require Cirrus to post a bond for
the full amount of the jury's verdict, plus ten percent
prejudgment interest, to ensure that Cirrus could pay the
judgment if its appeal was unsuccessful. In March 2014, the
district court ordered Cirrus to post a bond to secure the
$10 million award.
considered various options for posting the security,
ultimately deciding to secure a supersedeas bond through a
loan and a letter of credit. Specifically, Aon Risk Insurance
Services West, Inc. (Aon) agreed to provide Cirrus with a $12
million bond if Cirrus obtained a $12 million letter of
credit as collateral and paid $96, 000 in premiums per year.
To obtain the letter of credit, Cirrus borrowed $12 million
from Superior Aerospace Insurance Company (SAIC),
Cirrus's affiliated captive insurance company, under
terms set out in a promissory note, including that Cirrus
owed SAIC 4.25 percent interest. Cirrus deposited the $12
million with a Los Angeles bank. In return, the bank gave
Cirrus a $12 million certificate of deposit and issued an
irrevocable letter of credit to Aon. Having obtained the
letter of credit that it requested, Aon issued the $12
million supersedeas bond to Cirrus, and Cirrus posted the
district court denied Cirrus's posttrial motions and
Cirrus appealed. In 2015, the court of appeals reversed,
holding that the evidence was insufficient to support the
jury's finding as to the amount of damages awarded to
Klapmeier. Klapmeier v. Cirrus Indus., Inc., Nos.
A14-1725, A14-2217, 2015 WL 5194755, at *1 (Minn.App. Sept.
8, 2015). We denied review. Klapmeier, Nos.
A14-1725, 14-2217, Order (Minn. filed Nov. 25, 2015).
the court of appeals filed its decision, Cirrus filed a
timely request to tax costs and disbursements for the appeal.
As relevant here, Cirrus sought $192, 000 in "bond
costs, " representing the premiums paid for the
supersedeas bond, and $743, 750 in "borrowing costs,
" representing the interest owed to SAIC on the loan
that Cirrus used to obtain the letter of credit to secure the
objected to the requested taxation on several grounds,
arguing specifically with respect to the claimed borrowing
costs that the taxation of interest payments is not
authorized by Minnesota law. Klapmeier also argued that
because Cirrus's claim to borrowing costs was based on a
loan that it obtained from an affiliated entity, Cirrus was
essentially borrowing money from itself and did not actually
incur any expenses. Finally, Klapmeier requested discovery
and an evidentiary hearing on Cirrus's proposed taxation.
court of appeals denied Klapmeier's request for discovery
and an evidentiary hearing because those procedures are not
authorized by the appellate rules. Klapmeier, Nos.
A14-1725, A14-2217, Order at 2 (Minn.App. filed Jan. 22,
2016). Then, the court of appeals allowed taxation of some
disbursements, including some of the bond premium payments,
and reduced the amounts taxed for other disbursements.
Id. at 3-5. Regarding the borrowing costs, the court
of appeals found that some of Cirrus's borrowing costs
were incurred during proceedings in the district court,
rather than the appeal, and therefore could not be taxed by
the court of appeals. Id. at 5-6. But the court
allowed taxation of $542, 583.33 in borrowing costs,
concluding that Klapmeier did not establish that those costs
were clearly excessive. Id.
petitioned for review of the court of appeals' order and,
in the alternative, for a writ of prohibition. We granted
review and agreed to hear the petition for a writ of
prohibition. We also directed the parties to address our
authority to review a court of appeals award of costs and
begin with our authority to review an award of costs and
disbursements made by the court of appeals. We have the
authority to review "any decision of the Court of
Appeals." Minn. R. Civ. App. P. 117, subd. 2. But our
rules also state that "no appeal from the taxation of
costs and disbursements" is allowed. Minn. R. Civ. App.
argues that the court of appeals' taxation decision
"deviates from Minnesota law, " making it the type
of case in which we should exercise our supervisory and
discretionary authority over the lower courts under Minn. R.
Civ. App. P. 117, particularly when a decision on taxation
"deviates from Minnesota law, creates new law, or denies
due process of law." In the alternative, Klapmeier asserts
that a writ of prohibition under Minn. R. Civ. App. P. 120 is
appropriate because the only other remedy available to the
party facing taxation-to assert objections to the requested
taxation, Minn. R. Civ. App. P. 139.04-has been exhausted by
the time relief is sought by way of a writ.
acknowledges that we have the authority to review any
judicial action, but argues that we should decline to review
the court of appeals taxation decisions based on the plain
and unambiguous language of Rule 139.04. Further, as Cirrus
notes, we have declared that "decisions regarding costs
and disbursements are final" and not reviewable under
Minn. R. Civ. App. P. 117. Kelly v. Ellefson, No.
A04-0615, Order at 2 (Minn. Sept. 18, 2006); see also
Dargi v. City of Golden Valley, No. A12-2293, Order at 4
(Minn. Jan. 31, 2013) (quoting Kelly and recognizing
that Rule 139.04 prohibits an appeal from an award of costs
next argues that a writ of prohibition is not an appropriate
remedy because an extraordinary writ is available only when a
lower court has "clearly exceeded any arguable
authority." Arguing that the exercise of discretionary
authority to tax certain allowable costs and disbursements
does not exceed any arguable authority, Cirrus contends that
reviewing these decisions through an extraordinary writ
proceeding would render meaningless the plain language of
Minn. R. Civ. App. P. 139.04 (stating that "[t]here
shall be no appeal from the taxation of costs and
of the Rules of Civil Appellate Procedure is a question of
law, which we review de novo. Madson v. Minn. Min. &
Mfg. Co., 612 N.W.2d 168, 170 (Minn. 2000). We will
follow the plain and unambiguous language of a procedural
rule. Walsh v. U.S. Bank, N.A., 851 N.W.2d 598');">851 N.W.2d 598, 601
(Minn. 2014). We read a procedural rule "as a whole,
" interpreting each rule in light of surrounding
sections in order to avoid rendering superfluous any other
word, phrase, or sentence. State v. Dahlin, 753
N.W.2d 300, 305-06 (Minn. 2008).
scope of our discretionary authority to review decisions of
the court of appeals is broad; we have the authority to
review "any decision" of that court. Minn. R. Civ.
App. P. 117, subd. 2; see Hyatt v. Anoka Police
Dept., 691 N.W.2d 824, 826 (Minn. 2005) (stating that
"[t]he word 'any' is given broad application in
statutes"). But this broad review authority is
constrained by the more specific provision in Rule 139.04,
which prohibits an appeal from a specific decision, namely,
"the taxation of costs and disbursements."
Typically, a specific provision prevails over a more general
provision. See, e.g., Minn. Stat. § 645.26,
subd. 1 (2016) (explaining that the "special provision
shall prevail and shall be construed as an exception to the
general provision"); Mumm v. Mornson, 708
N.W.2d 475, 492 (Minn. 2006) ("Widely-accepted rules of
construction dictate that specific provisions control over
general provisions."). Moreover, we have relied on the
particular exception stated in Rule 139.04 in declining to
exercise our discretionary review ...