Ameriprise Fin. v. Cnty. of Hennepin

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Ameriprise Financial Inc., Petitioner, v. County of Hennepin, Respondent.

Nos. 27-CV-20-7383, 27-CV-21-5271

Tax Court of Minnesota, Regular Division, Hennepin County

June 6, 2023

These matters came before the Honorable Bradford S. Delapena, Judge of the Minnesota Tax Court, on petitioner's motion to compel discovery.

Stuart T. Alger, Alger Property Law, and Adam J. Pabarcus, Faegre Drinker Biddle &Reath LLP, represent petitioner Ameriprise Financial Inc.

Matthew Hough, Assistant County Attorney, represents respondent Hennepin County.

ORDER ON MOTION TO COMPEL DISCOVERY

These consolidated matters concern the market value of a high-rise office building property located at 707 2^nd Avenue South in Minneapolis as of two assessment dates. By means of a motion to compel, Petitioner Ameriprise Financial Inc. seeks certain income and expense information concerning the subject property, concerning numerous separate properties and all documents the County provided to its expert appraiser. We grant in part and deny in part Ameriprise's motion.

Now therefore, upon all of the files, records, and proceedings herein, the court makes the following:

ORDER

1. Ameriprise's motion to compel is granted in part and denied in part.

2. Within 14 days of the date of this order, the County shall produce an unredacted copy of the assessor's file for the subject property.

3. Ameriprise's motion to compel as to recent sale and lease information of similar buildings with 100,000 square-feet or more of gross building area within a two-mile radius of the Subject Property is denied without prejudice.

4. Ameriprise's motion to compel as to Interrogatory 10, the second sentence of Interrogatory 18, and Document Request 8 is denied as exceeding the scope of Minn. R. Civ. P 26.02(e). The County's pretrial disclosure of its appraisal report and workfile in accordance with the court's Scheduling Order should furnish Ameriprise with all of the documents upon which the County's appraiser relies in forming their opinions, and should thus serve as an adequate response to the first and third sentences of Interrogatory 18, which comply with scope of Minn. R. Civ. P. 26.02(e)(1)(A).

5. Ameriprise's motion to compel as to Document Requests 3 and 5 is denied. 6. Because the County had a legal duty to object to the discovery of the protected materials sought by Ameriprise's motion to compel, Ameriprise's motion for expenses is denied and each party shall bear its own expenses in relation to this motion.

IT IS SO ORDERED.

MEMORANDUM

BRADFORD S. DELAPENA, JUDGE

I. Introduction

The Minnesota Government Data Practices Act ("Act") defines certain real-property income/expense information maintained by assessors as "income property assessment data" and protects such data from public dissemination by classifying it as "private or nonpublic." Minn. Stat. § 13.51, subd. 2 (2022). Minnesota law also provides, however, that "[a]ssessor's records ... shall be made available" to a property tax petitioner and "shall not be excluded from discovery or admissible evidence on the grounds that the[y] ... are confidential or classified as private." Minn. Stat. § 278.05, subd. 3 (2022). Thus, although Minnesota law protects income property assessment data as private, it simultaneously mandates the disclosure of assessor's records despite their possible status as private. To the extent that "income property assessment data" and "assessor's records" refer to the same items, the two statutes are in conflict.

We hold that the term "assessor's records" refers to all materials in an assessor's possession pertaining to the subject property, inclusive of any information about separate properties even if qualifying as "income property assessment data." "Assessor's records" does not extend to information about separate properties unless that information is contained in "assessor's records" for the subject.

II. Factual and Procedural Background

A. Ameriprise's Motion to Compel Discovery

Ameriprise leases the subject property from its owner ("Property Owner"). By means of formal, written discovery and a subsequent motion to compel,^[1] Ameriprise sought from the County: (1) "unredacted copies of documents contained in the assessor's file on the Subject Property that include, among other things, marketing brochures" apparently prepared for Property Owner; and (2) "recent sale and lease information of similar buildings [with 100,000 square-feet or more of gross building area] within a two-mile radius of the Subject Property."^[2]

Although the County produced its assessor's file for the subject, it redacted certain materials including marketing brochures.^[3] The County maintained that the redacted materials were protected "income property assessment data" under Minnesota Statutes § 13.51, subd. 2, and, consequently, that it could not disclose those materials to Ameriprise without either a waiver from Property Owner or a court order.^[4] See G&I IX OIC LLC ("G&I Oracle") v. Cnty. of Hennepin, 979 N.W.2d 52, 62 (Minn. 2022) ("[A]s guardian of ... nonpublic income property assessment data, the County is required by section 13.51 to object to their disclosure."). The County further contended that the court could not order disclosure because Ameriprise had not given Property Owner notice of its motion to compel discovery.^[5] See Minn. Stat. § 13.51, subd. 4 (2022) ("Upon request by a party to a responsible authority . for legal discovery of income property assessment data, . the requesting party shall notify the owner of record of the property.").

With respect to requested sale and lease information about separate office buildings, the County interposed numerous objections^[6] including: (1) that "[t]here is no need for the County to expend public resources searching publicly available property records on behalf" of Ameriprise; and (2) that Ameriprise had not shown "it lacks access to sufficient information to identify comparable properties to the Subject Property without the assistance of the County."^[7] The County further objected that the requested materials contain protected income property assessment data,^[8]and that Ameriprise had not notified record owners of the separate (and as yet unidentified) properties that it sought to compel discovery of such data, as required by section 13.51, subdivision 4.^[9]

In reply to the County's argument that the court could not order production of income property assessment data concerning the subject property absent notice to Property Owner, Ameriprise stated: "If the Tax Court concludes that notice to the owner is necessary before the unredacted materials on the Subject Property are produced, then Ameriprise will comply with the Tax Court's order."^[10] Ameriprise defended its requests for information concerning the separate properties-including any income property assessment data-on the grounds: (1) that they pertained to discoverable "assessor's records"; and (2) that they were reasonable and proportional to the needs of the case.^[11] Ameriprise also noted that it could not presently "notify the owners [of the separate properties] ... because it does not have a list of the relevant properties for which the County has data. If the Tax Court concludes that such notice is necessary, then Ameriprise will comply with the Tax Court's order once Ameriprise knows who to contact."^[12]

The court heard Ameriprise's motion to compel on January 5, 2023. We concluded on the record that before Ameriprise could receive income property assessment data concerning the subject property, Ameriprise had to provide notice to Property Owner that it sought such data through discovery.^[13] We subsequently filed a supplemental scheduling order: (1) requiring Ameriprise to provide Property Owner with notice no later than February 9, 2023; (2) requiring Property Owner to file a notice of intervention and substantive memorandum (if any) no later than February 22, 2023; (3) requiring the parties to file supplemental memoranda "addressing the scope of the term 'assessors records'"; and (4) setting the matter for a continued hearing on March 6, 2023.^[14]

B. Supplemental Proceedings

On February 9, 2023, Ameriprise provided Property Owner with notice of its motion to compel.^15[] Property Owner has elected not to intervene in these proceedings. On March 1, 2023, pursuant the court's interim order, the parties submitted memoranda concerning the scope of the term "assessor's records."^16[] The continued hearing on Ameriprise's motion to compel was heard as scheduled on March 6, 2023.

Considering that Property Owner had elected not to intervene, the parties agreed that materials the County had previously redacted from the assessor's file on the subject property could now be furnished to Ameriprise, shielded from public dissemination during discovery by a protective order. The parties' supplemental memoranda and oral arguments revealed a fundamental disagreement about whether requested materials concerning the separate office properties qualify as "assessor's records" and, consequently, the standard governing the discoverability of those materials.

III. Pertinent Statutes

This case requires us to examine the relationship between two statutes. In 1980, the Legislature enacted a provision addressing "assessor's records," see Act of Apr. 3, 1980, ch. 443, § 3, 1980 Minn. Laws 270, 271 (codified at Minn. Stat. § 278.05, subd. 3 (2022)), which currently provides in part:

Assessor's records; evidence. Assessor's records ... shall be made available to the petitioner . and may be offered at the trial . and shall not be excluded from discovery or admissible evidence on the grounds that the[y] . are confidential or classified as private data on

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