by NATHANIEL NELSON
Winona Area Public Schools (WAPS) and the Save Our Schools (SOS) Committee had their day in court on Wednesday, after WAPS’ lawyers moved for a summary judgement –– or a judgement without a full trial –– on the slander of title case against the community group over the recently removed lis pendens notices on the Rollingstone and Madison property titles. Last May, following the closure of the two schools, SOS appealed the district’s decision to close Madison and Rollingstone in the Minnesota Court of Appeals, which agreed to hear the case. The group placed notices of lis pendens –– or pending litigation –– on the titles of the two properties and, in response, the district sued the group over the notices in December.
The district, seeking damages to the amount of $10,600 for legal fees, claimed that the facts in the case were not in dispute. However, during the course of the hour-long hearing, representatives from SOS disagreed, and argued that there were not enough facts to come to a decision. The two groups now have 30 days to write orders for or against summary judgement, and after reviewing the two, judge Matthew Opat will have 90 days to decide whether the case will need to face a full trial.
“If the court agrees with the district’s position that SOS had no legal right to file the lis pendens, attorney fees can be reclaimed as possible damages to the district,” superintendent Rich Dahman said.
Judge Opat questioned the district about how they would receive payment for the damages, since SOS is an unincorporated entity with little collective property. WAPS’ attorney Joseph Langel of Ratwick, Wozak, and Malony explained that in the event that the court ruled for the district, it could choose one or multiple members to cover the damages. According to superintendent Rich Dahman, the district is seeking $10,600 in damages to cover the legal fees of the case against SOS, while MC Properties –– the company that purchased Rollingstone from the district for $80,000 last June –– is seeking an unknown amount of damages for the alleged delay in the sale to the city of Rollingstone.
Last year, the WAPS Board voted to close and sell Rollingstone and Madison schools as part of $1.7 million in budget cuts. SOS appealed the decision to the Court of Appeals and asked them to delay the sale of the school, and while the court declined to delay the sale, it agreed to the hear the case. Both Rollingstone and Madison were sold later that year to MC Properties and Andrew Brenner, respectively.
The current lawsuit began in November of last year, when Langel sent a letter to SOS threatening legal action over the group’s court notice attached to the Madison title. The notice of lis pendens, which signifies that there is potential litigation involving the property, was filed as a result of SOS’ appeal of the district’s decision to close Madison and Rollingstone in the Court of Appeals.
In December, the WAPS Board, in a split vote, voted to move forward with a lawsuit against the community group to remove the notices of lis pendens from the properties in a “slander of title” case, alleging that the group had no right to file the notices in the first place. At that time, the district had already sold the buildings.
Earlier this month, the Court of Appeals ruled in favor of the district, after which SOS removed the lis pendens notice from Madison. The notice on the Rollingstone property was removed following the sale of the the building to the city of Rollingstone earlier this year.
The hearing on Wednesday was for a motion of summary judgement, which is a request for a court to rule that the opposing party has no case and there are no facts in dispute. In this case, the three points that Langel claimed were of no issue were that the notice was a false statement, the false statement was published to others, the false statement was published maliciously, and the publication of the statement caused the district to incur damages.
At the hearing, Langel explained that the notice hampered the district’s ability to sell the buildings in the timeframe that it wanted, and hurt its ability to offer a clean title to the buyers. He argued that the group had no right to file the lis pendens since they had no proprietary interest in the property and that the Court of Appeals case could not have an effect on the sale and, as an extension, the filing was malicious in intent.
“It is presumed as a matter of fact: if you record a false document against a property, it is done maliciously,” Langel said. “The goal from the start for this organization was to slow down or stop the sale of these properties.”
He also argued that SOS did not perform due diligence in the filing of the notice, claiming that they relied on a “Google search” of lis pendens before filing and while former SOS attorney and current WAPS Board member Karl Sonneman claimed he had filed the notices in good faith, it could not be proven.
Additionally, attorney Michael Bernatz, who represents MC Properties, joined onto the suit and claimed that the notice prevented the company from closing on the property when it had wanted to, and claimed that the company was “assured on behalf of the school district that the notice would be removed.”
Lucas Thompson, the attorney for SOS, disputed these claims and stated that the community group was operating in good faith, filing the notice to represent the ongoing litigation in St. Paul, Minn. He argued that since the Court of Appeals had never said that it could not reverse the school closure decision, the case could impact the properties and a notice of lis pendens was logical to notify potential buyers of the litigation.
As a result, Thompson claimed, the district could not prove that the group filed the notice maliciously, and that malice cannot simply be “implied.” He also argued that proprietary interest was not mentioned in either Minnesota law or case law, and that the community group, serving the interest of the community, was entirely within its rights.
“My clients are an unincorporated association with a public interest. Nobody is making any money on this,” Thompson said.
The two groups also argued about whether the lawsuit was necessary at all. Langel explained that the lawsuit, both to remove the notices and recover damages, was required after SOS failed to remove the notices after multiple letters disputing the legality, while Thompson noted that the notices were removed immediately following the resolution of the appeal –– the intention from the start, he said.
The two groups were ordered to complete an order and attached memorandum for or against summary judgement, to be delivered to the court by June 17. From there, Opat will have 90 days to rule whether the case will go to a full trial. If it does go to trial, the case may not be heard until September –– more than a year after the notices were initially filed.