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Rolling Meadows Cooperative, Inc. v. MacAtee

Court of Appeals of Minnesota

November 27, 2017

Rolling Meadows Cooperative, Inc., Appellant,
Diane MacAtee, Respondent, John Doe, et al., Defendants.

         Dakota County District Court File No. 19HA-CV-16-3772

          Phaedra J. Howard, Hellmuth & Johnson, P.L.L.C., Edina, Minnesota (for appellant)

          Joshua Strom, Sam Khoroosi, Robins Kaplan LLP, Minneapolis, Minnesota (for respondent)

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


         After termination of occupancy and membership in a housing cooperative, a housing-cooperative member has no right to redeem occupancy of premises or housing-cooperative membership under Minnesota Statutes chapters 308A and 504B.



         Appellant challenges the judgment in an eviction action that allows respondent an opportunity to cure her defaults and redeem her occupancy and membership in a housing cooperative. We affirm the district court's judgment to appellant for recovery of respondent's dwelling unit but reverse and remand for immediate issuance of a writ of recovery and order to vacate.


         Appellant Rolling Meadows Cooperative is a Minnesota nonprofit cooperative corporation formed under Minnesota Statutes chapter 308A to manage the affairs of a cooperative housing community. When formed, Rolling Meadows executed a mortgage and regulatory agreement and received financing from the United States Department of Housing and Urban Development (HUD). In May 2009, respondent Diane MacAtee entered into a subscription agreement for the purchase of a membership in Rolling Meadows. The subscription agreement entitled MacAtee to occupy the premises under an occupancy agreement, approved by the cooperative's board of directors and signed by the parties. The subscription agreement required MacAtee to sign the occupancy agreement and comply with its terms. MacAtee signed the occupancy agreement in May 2009. The occupancy agreement contained a lease term of one year, renewable for successive one-year terms.

         While the HUD financing was in effect, Rolling Meadows was subject to a HUD regulatory agreement, and HUD partly subsidized MacAtee's and other members' housing. In 2015, Rolling Meadows paid off its HUD loans and was released from the regulatory agreement. HUD therefore no longer subsidized members' monthly carrying charges.[1]Rolling Meadows consequently amended its bylaws to reflect the cessation of HUD oversight and it increased members' monthly carrying charges. MacAtee's monthly carrying charge increased from $542 to $567 and, in April 2016, increased to $577. MacAtee refused to pay any increase, refused to sign Rolling Meadows's amended occupancy agreement, refused to pay related assessed fines, and refused to pay other fines assessed as a result of violating Rolling Meadows's landscaping rules. Rolling Meadows sent MacAtee multiple notices of delinquency.

         In August 2016, after MacAtee refused to sign an amended occupancy agreement, Rolling Meadows provided MacAtee 30-days' notice of termination if she did not cure her defaults. On September 30, after MacAtee failed to cure, Rolling Meadows sent her written notice of the termination of her month-to-month tenancy, along with notification that Rolling Meadows intended to terminate her cooperative membership effective October 15. Rolling Meadows also notified MacAtee of her right to request a hearing before Rolling Meadows's board of directors prior to termination of her membership.

         Rolling Meadows's board of directors scheduled a hearing at MacAtee's request and then rescheduled the hearing at the request of MacAtee's legal counsel. Before the hearing date, Rolling Meadows received a letter from another cooperative member, purportedly on behalf of MacAtee and other cooperative members, informing Rolling Meadows that the members declined Rolling Meadows's "invitation/request to attend . . . a meeting/hearing on November 22, 2016 for this purpose any time."

         On December 5, 2016, Rolling Meadows informed MacAtee that her cooperative membership was terminated, that she must surrender her cooperative membership certificate in accordance with the second amended and restated bylaws of Rolling Meadows, and that she must vacate her dwelling unit. When MacAtee failed to vacate her dwelling unit, Rolling Meadows commenced an eviction action.

         On January 20, 2017, after an evidentiary hearing, the district court granted judgment to Rolling Meadows "for recovery of the premises." But the court stayed the issuance of the writ of recovery of premises and order to vacate until February 24 and allowed MacAtee to "cure the instant default and avoid the issuance of the Writ" by signing a "current Occupancy ...

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