Justia Consumer Law Opinion SummariesArticles Posted in Minnesota Supreme Court
State v. Minnesota School of Business, Inc.
In this case against two for-profit universities (the Schools) alleging that the Schools violated the Minnesota Consumer Fraud Act (MCFA), Minn. Stat. 325F.69, and the Uniform Deceptive Trade Practices Act (DTPA), Minn. Stat. 325D.44, the Supreme Court held that the Attorney General proved that a causal nexus was established between the Schools' fraudulent statements and the harm suffered by students.At issue was whether the Attorney General established a causal nexus between the Schools' statements misleading prospective students about the value of criminal justice degrees offered by the Schools and the harm suffered by students who entered the Schools' criminal justice program. During trial, fifteen students who had enrolled in the criminal justice program testified. The district court ultimately issued an injunction and ordered equitable restitution requiring the Schools to disgorge the tuition collected from the criminal justice program students. The court of appeals upheld the restitution order for the students who testified at trial but reversed the order as to nontestifying students. The Supreme Court reversed in part, holding (1) the Attorney General established a causal nexus between the Schools' misleading statements and the harm suffered by the non testifying students; and (2) the equitable restitution process ordered by the district court was proper. View "State v. Minnesota School of Business, Inc." on Justia Law
Engstrom v. Whitebirch, Inc.
The Supreme Court reversed the decision of the court of appeals affirming the judgment of the district court dismissing Plaintiff's complaint alleging two counts under the Minnesota Consumer Fraud Act, Minn. Stat. 325F.69, holding that a person who is targeted by a fraudulent demand and consequently pays an attorney to investigate his liability in response to that demand has been "injured" within the meaning of the private attorney general statute, Minn. Stat. 8.31, subd. 3a.Plaintiff alleged that Defendant engaged in a practice of fraud by sending unlawful demand letters and that he suffered an injury by having to hire an attorney to respond to Defendant's fraudulent demands. The district court dismissed the counts based on violations of the Consumer Fraud Act for failure to state a claim. The court of appeals affirmed, concluding that Plaintiff failed to sufficiently plead that he was injured by Defendant's purported violation of the Act. The Supreme Court reversed, holding that Defendant's alleged violations of the Act caused him a pecuniary loss in the form of hiring an attorney to investigate and resolve the fraud, and therefore, Plaintiff alleged an injury sufficient to plead a cause of action under the private attorney general statute. View "Engstrom v. Whitebirch, Inc." on Justia Law
Sorchaga v. Ride Auto, LLC
A seller’s fraudulent statements about the fitness of a vehicle for the purpose for which it was purchased make disclaimers in purchase documents stating that the buyer purchased the vehicle “as is” ineffective.The district court in this case awarded relief to the buyer on both fraud and breach of warranty theories. The Supreme Court affirmed, holding (1) the buyer’s fraudulent statements about the fitness of the vehicle being sold for the purpose for which the vehicle was purchased made the “as is” disclaimers of implied warranties in the purchase documents ineffective under Minn. Stat. 336.2-316(3)(a); and (2) under the Uniform Commercial Code, a party may seek remedies for fraud, including breach of warranty, even after the rescission of a purchase contract, and therefore, the district court did not err in awarding damages under both fraud and breach of an implied warranty theories of liability. View "Sorchaga v. Ride Auto, LLC" on Justia Law
Rilley v. MoneyMutual, LLC
Respondents filed a class-action complaint alleging, among other claims, that MoneyMutual, LLC, which operates a website allowing individuals to apply for short-term loans known as payday loans, matched Respondents with payday lenders that were unlicensed in Minnesota and that the terms of the payday loans were illegal. MoneyMutual moved to dismiss the complaint for lack of personal jurisdiction. The district court denied the motion to dismiss, concluding that it could exercise specific personal jurisdiction over MoneyMutual based on MoneyMutual’s email correspondence with residents and advertising in Minnesota. The court of appeals affirmed. The Supreme Court affirmed, holding that sufficient minimum contacts existed for the exercise of personal jurisdiction over MoneyMutual and that exercising personal jurisdiction over MoneyMutual comported with notions of fair play and substantial justice. View "Rilley v. MoneyMutual, LLC" on Justia Law
Green v. BMW of N. Am., LLC
Plaintiff leased a vehicle from BMW. Plaintiff claimed the leased vehicle was defective and brought suit against BMW. After a bench trial, the trial court awarded Plaintiff $25,157 in damages based on Minnesota's lemon law. The district court then granted Plaintiff's motion for an award of attorney fees and litigation costs, awarding Plaintiff a total of $229,064 in fees and costs. In reaching its conclusion on attorney fees, the court determined that it was "improper to compare the amount of reasonable legal fees to the amount of recovery in determining the proper fee award." The court of appeals affirmed. The Supreme Court reversed, holding (1) the amount involved in the litigation and the results obtained are relevant factors that the district court is to consider in awarding attorney fees under Minnesota's lemon law; and (2) the district court abused its discretion by failing to consider these factors in awarding attorney fees under the lemon law. Remanded. View "Green v. BMW of N. Am., LLC" on Justia Law
Curtis v. Altria Group, Inc.
Respondents brought this action on behalf of themselves and others similarly situated against Philip Morris, alleging that Philip Morris's marketing of its cigarettes violated Minnesota's consumer protection statutes. Respondents asserted claims under Minn. Stat. 8.31(3a) and for common law fraud and unjust enrichment. The district court granted Respondents' motion to certify the class. Subsequently, the court granted summary judgment to Philip Morris on the consumer protection claims asserted under section 8.31(3a) and then dismissed the case. The court of appeals affirmed the class certification but reversed the grant of summary judgment and reinstated Respondents' section 8.31(3a) consumer protection claims. The Supreme Court reversed, holding (1) Respondents' consumer protection claims asserted under section 8.31(3a) were previously released; and (2) because all of Respondents' claims had been dismissed, the issue of whether the plaintiff class was properly certified was moot. View "Curtis v. Altria Group, Inc." on Justia Law
Fannie Mae v. Heather Apartments Ltd. P’ship
The property at issue in this case was the interest of Respondent, the judgment debtor, in a spendthrift trust. The district court issued a temporary injunction prohibiting Respondent from disposing of any money or property he had received, was due to receive, or will receive from the trust. The court of appeals reversed. The Supreme Court affirmed, holding (1) based on its plain language, Minn. Stat. 575.05 authorizes a district court to enjoin the deposition of a judgment debtor's property only if that property is in the hands of the judgment debtor or a third party or is due to the judgment debtor at the time the district court issues its order; and (2) because the judgment creditor, Appellant Fannie Mae, did not argue that Respondent's interest in the trust was Grossman's property that was currently in the hands of Grossman or a third party or currently due to Grossman, the requirements of section 575.05 were not met. View "Fannie Mae v. Heather Apartments Ltd. P'ship" on Justia Law
United Prairie Bank-Mountain Lake v. Haugen Nutrition & Equip., LLC
Appellants, Leland and Ilene Haugen and Haugen Nutrition and Equipment, defaulted on promissory notes held by respondent United Prairie Bank-Mountain Lake (UPB). The various loan agreements between the parties contained provisions in which Appellants agreed to pay UPB's reasonable costs and attorney fees associated with the protection of UPB's security interests and the enforcement of Appellants' obligation to repay the loans. The district court denied Appellants' motion to submit the question of reasonable attorney fees to the jury and subsequently awarded UPB over $400,000 in attorney fees. The court of appeals affirmed, holding that UPB's claim for the recovery of attorney fees was equitable in nature and thus did not give rise to a jury trial right under the Minnesota Constitution. The Supreme Court reversed in part, holding that Appellants were constitutionally entitled to a jury determination on UPB's claim for attorney fees because the nature of the claim was contractual and the remedy sought was legal. View "United Prairie Bank-Mountain Lake v. Haugen Nutrition & Equip., LLC" on Justia Law
U. S. Bank N. A. v. Cold Spring Granite Co.
Appellants were trustees of eight family trusts. After stock of closely-held corporation belonging to the trusts was fractionalized in a reverse stock split and Appellants were forced to accept cash in exchange for their shares, Appellants brought suit against the corporation. The district court dismissed all of Appellants' claims. The court of appeals affirmed. The Supreme Court affirmed, holding (1) the valuation of the stock was not the product of common law fraud; (2) Minn. Stat. 302A.471 does not provide for dissenters' rights in the event of a reverse stock split; (3) Appellants were not entitled to equitable relief under Minn. Stat. 302A.751 because the corporation did not frustrate Appellants' reasonable expectations as shareholders; (4) merely conducting an involuntary redemption of Appellants' stock at a fair price, without more, did not constitute a breach of fiduciary duty; and (5) the district court did not err in determining the fair value of Appellants' stock when it adopted a valuation that relied in part on asset value.