Kern v. Janson

800 N.W.2d 126

Michelle A. KERN, et al., Appellants,

v.Cody S. JANSON, et al., Respondents,

v.Jennifer Torborg, et al., Respondents.

No. A10–0355.

Supreme Court of Minnesota.

July 20, 2011.

Syllabus by the Court

1. A motion to vacate a judgment under Minnesota Rule of Civil Procedure 60.02(f) is committed to the discretion of the district court.

2. That a plaintiff consulted with an attorney before initiating a conciliation court action does not preclude a district court from vacating a conciliation court judgment, but it is a factor the court may consider in determining whether to vacate the judgment.

Nathan W. Nelson, Timothy W. Nelson, Nelson Personal Injury, LLC, St. Cloud, MN, for appellants.Matthew Moehrle, Rajkowski Hansmeier, Ltd., St. Cloud, MN, for respondents Cody S. Janson and Jessica Gerwing. Dyan J. Ebert, Joel M. Frye, Quinlivan & Hughes, P.A., St. Cloud, MN, for respondents Jennifer Torborg and James Torborg.

OPINION

GILDEA, Chief Justice.

The question presented in this case is whether the court of appeals erred in reversing the district court's vacation of a conciliation court judgment under Minnesota Rule of Civil Procedure 60.02(f) because the appellant consulted with an attorney before initiating the conciliation court action. We conclude that consultation with an attorney before initiating a conciliation court action does not automatically preclude vacation of the conciliation court judgment, and we therefore reverse the court of appeals and remand the matter to the district court for further proceedings.

This case arises from two separate automobile accidents. On November 14, 2003, appellant Michelle Kern was involved in an accident in Little Falls, Minnesota, with respondent Cody Janson. At the time of the accident, Janson was driving a vehicle owned by respondent Jessica Gerwing. On September 15, 2004, Kern was involved in an accident in St. Cloud, Minnesota, with respondent Jennifer Torborg. Torborg was driving a vehicle owned by respondent James Torborg when this accident happened.

Kern sought to recover her property damages from the Torborgs. But James Torborg's insurer denied part of Kern's property damage claim and Kern subsequently filed an action in Stearns County Conciliation Court against James Torborg. Kern sought to recover damages for the loss of her vehicle, towing fees, and storage fees. Kern represented herself at the contested conciliation court hearing. On December 15, 2004, the conciliation court entered a judgment of $3,423.43, against James Torborg, which was satisfied in full.

Kern also suffered personal injuries in her car accident with Jennifer Torborg. But at the time Kern filed her conciliation court action against James Torborg, she did not meet the statutory prerequisites under Minn.Stat. § 65B.51, subd. 3 (2010), for a personal injury claim. Under section 65B.51, subdivision 3, a plaintiff cannot recover damages for “noneconomic detriment” unless her medical expenses exceed $4,000 or her injuries result in permanent disfigurement, permanent injury, death, or disability for 60 days or more. Kern's medical expenses did not exceed $4,000 until October 5, 2006, nearly two years after entry of the conciliation court judgment. And Kern did not learn until October 24, 2006, that the injuries she suffered in the accident with Jennifer Torborg were permanent.

In 2008, Kern sought compensation for her personal injuries from the Torborgs. James Torborg's insurer denied Kern's demand for two reasons: one, because the doctrine of res judicata prevented Kern from “split[ting] her cause of action by pursuing a bodily injury liability claim” after obtaining judgment in conciliation court on her claim for property damages; and two, because Kern “was represented at the time she filed her Conciliation Court Claim by [an attorney].”

Kern was not represented by counsel in the conciliation court proceedings to recover her property damages, but she acknowledges that she consulted with an attorney about her personal injuries before filing her conciliation court claim. Nothing in the record indicates that the attorney advised Kern of the preclusive effects that a conciliation court judgment for property damages might have on a later claim for personal injuries. The attorney simply advised Kern to “just go ahead and take care of [the] property damage claim in conciliation court.”

In 2009, Kern and her husband, Terry Kern, sued Cody Janson, Jessica Gerwing, and Jennifer and James Torborg in Morrison County District Court, claiming they were jointly and severally liable for Kern's personal injuries. The Torborgs moved for summary judgment, citing the doctrine of res judicata. ¹ The Torborgs argued that under the doctrine of res judicata, the 2004 conciliation court judgment in Kern's favor with respect to property damages was a final judgment on the merits that barred her 2009 claim in district court for personal injuries.

The Kerns opposed the Torborgs' motion and moved to vacate the conciliation court judgment pursuant to Minn. R. Civ. P. 60.02(f).² The district court granted the Kerns' motion to vacate the conciliation court judgment and ordered Michelle Kern to repay the amount awarded in the conciliation court judgment to James Torborg. And because the vacated conciliation court judgment no longer had preclusive effect, the district court denied the Torborgs' motion for summary judgment.

The Torborgs appealed and the court of appeals reversed and remanded for entry of summary judgment in favor of the Torborgs. Kern v. Janson, No. A10–355, 2010 WL 3546867, at *1 (Minn.App. Sept. 14, 2010). The court concluded that the Kerns were not entitled to vacation of the conciliation court judgment under Rule 60.02(f) because Michelle Kern had consulted with an attorney about her personal injury claim before filing her conciliation court claim. Kern, 2010 WL 3546867, at *4. The Kerns petitioned for further review and we granted their petition.

The Kerns contend that under our decisions in Mattsen v. Packman, 358 N.W.2d 48 (Minn.1984), and Jorissen v. Miller, 399 N.W.2d 82 (Minn.1987), contact with an attorney before initiating a conciliation court action does not preclude a district court from vacating a conciliation court judgment under Minn. R. Civ. P. 60.02(f). The Torborgs disagree with that reading of our precedent. They contend that under Mattsen and Jorissen, a party's consultation with an attorney before initiating a conciliation court action bars the district court from later vacating the conciliation court's judgment.

I.

The parties assume that we review the district court's decision to vacate the conciliation court judgment for abuse of discretion. Indeed, we have reviewed the vacation of such a judgment for abuse of discretion in the past. See, e.g., Hammer v. Soderberg, 358 N.W.2d 53, 53 (Minn.1984). The Torborgs argue, however, that in Mattsen and Jorissen we adopted a bright-line, single-factor test for vacation of conciliation court judgments, namely, whether the conciliation court judgment creditor consulted with counsel before filing the conciliation court action. If the Torborgs' reading of our precedent is correct, then in a case such as this one in which the facts with regard to the judgment creditor's consultation with counsel are undisputed, the question becomes one of law and our review would be de novo. See Do v. Am. Fam. Mut. Ins. Co., 779 N.W.2d 853, 856 (Minn.2010) (stating that where the facts are undisputed, review of the district court's application of the law is de novo). Accordingly, to determine the appropriate standard of review to apply to the district court's decision in this case, we must first determine whether, as the Torborgs contend, we have adopted a bright-line, single-factor test for the vacation of a conciliation court judgment. We conclude that neither Mattsen nor Jorissen adopted the single-factor test the Torborgs advocate.

We turn first to Mattsen. After obtaining a judgment in conciliation court for damages to his automobile in the full amount that the court could then award ($500), the plaintiff in Mattsen began an action in district court for personal injuries and additional property damage. 358 N.W.2d at 49. The district court dismissed Mattsen's lawsuit under the doctrine of res judicata. Id.

On appeal to our court, Mattsen acknowledged the general preclusive effect of a judgment obtained in an earlier court action, but urged us to carve out an exception to the doctrine of res judicata for conciliation court judgments because of “the jurisdictional limitations and informality of the conciliation court and lack of legal counsel in conciliation court proceedings.” Id. at 50. We noted that making an exception to the doctrine of res judicata for conciliation court judgments “would accord each party involved in an automobile accident the right to bring two separate lawsuits: an action in conciliation court for property damage or some part of his property damage and another action in district court for personal injury.” Id. We declined to make such an exception, citing “the growing concern of the bench, the bar, and the public over court congestion and delay and the cost of litigation.” Id.

But we also said that a party “who is excusably ignorant of the effect of a judgment” could avoid the res judicata effect of the conciliation court judgment by seeking vacation of the judgment under Minn. R. Civ. P. 60.02. Mattsen, 358 N.W.2d at 50. Mattsen himself had not sought such relief, and we noted that Mattsen's personal injuries met the threshold requirements of the No–Fault Act by the time he filed his action in conciliation court. Id. at 51. Mattsen could not claim that he was ignorant of the effect of a conciliation court judgment because Mattsen had not sought to vacate the conciliation court judgment even after the defendant asserted the judgment as an affirmative defense to Mattsen's district court lawsuit. Id. We further...