by Sarah Squires
On Wednesday Judge Matthew Opat denied a motion made by Winona Area Public Schools (WAPS) in its lawsuit against the community group Save Our Schools (SOS). Now the court battle will be resolved in one of two ways: a settlement or trial.
The courtroom drama has its roots in WAPS’ decision to close Madison and Rollingstone schools for the 2018-2019 school year. SOS challenged the closure with an appeal to the Minnesota Court of Appeals, hoping the court would reverse the split-vote decision to shutter the schoolhouses. While that appeal was being heard, SOS filed notices of “lis pendens” on the titles of the school buildings — legal notices that alerted potential buyers that the buildings were part of pending litigation.
Then WAPS Superintendent Rich Dahman assured the School Board that the notices affixed to the building titles would not affect any potential sales, and the district sold the two properties. After the sales, citing a desire to offer the new owners “clean titles,” in another split vote the board filed a lawsuit against SOS over the notices of pending litigation. While the district’s insurance covered attorneys’ fees for the Court of Appeals case against the school closure, insurance does not cover the cost of WAPS’ ongoing litigation against SOS on behalf of the new owners.
SOS removed the notice in February from the Rollingstone building after the new owner sold it to the city of Rollingstone, and removed the notice from Madison in May after the Court of Appeals upheld the district’s decision to close the schools. However, the lawsuit against SOS over the notices continued, and in June, WAPS’ attorneys made a motion asking the court to impose all the district’s attorney fees — up to $10,600 as of May 15 — on one individual SOS member, Gretchen Michlitsch. The district also made a motion for summary judgement, asking the court to rule in favor of the district rather than go through a trial.
On Wednesday, Judge Opat ruled against that motion. In his ruling, the judge noted that the title notices and SOS’ “subsequent actions all indicate that they acted in good faith.”
WAPS’ attorneys have argued that the lis pendens notices should not have been filed, calling it a “slander of title” case. “SOS had no legal standing to file the lis pendens and refused to remove the lis pendens when requested, leading to signficant costs to both the district taxpayers and to the buyer of Rollingstone School,” Dahman said of the suit.
Judge Opat sided with the district on that issue in his ruling, noting that SOS did not have the legal standing to file the lis pendens on the titles because it had not filed a complaint in district court asserting rights to the school properties. He ruled the notices were “procedurally defective” under state law, adding that the group had no preexisting proprietary interest in the property. Because of this, Judge Opat wrote, SOS’ notice of lis pendens “was a false statement relating to the title of the school properties,” and that the notice was “void and inoperative as of the day it was filed.”
However, in order to prove a slander of title case, the district must prove that SOS knew its actions were false and acted with malice in filling the notices. SOS has maintained that it consulted an attorney and believed the notices were properly filed, and “believed they had an interest because their appeal of the school closing would necessarily halt the sale of the schools,” according to Judge Opat’s ruling. He concluded that SOS “has provided evidence that conclusively establishes a rebuttable presumption in its favor that it acted in good faith, believed their claim to be valid, and acted in order to protect that claim.”
In addition to proving SOS acted with malice, the district must also prove it suffered damages. WAPS has argued it has suffered financial damages in the form of attorney fees accrued in its suit against SOS. Additionally, co-plaintiff MC Properties, which originally purchased the Rollingstone school building, has alleged it suffered damages in delays caused by the lis pendens notice when it sought to sell the building to the city of Rollingstone. However, in Judge Opat’s ruling, he noted affidavits that showed any delays in the sale from MC Properties to the city of Rollingstone were caused by MC Properties’ failure to furnish a title commitment, along with WAPS’ failure to pay for the title policy related to the original sale of the property. The city of Rollingstone indicated it would close on the school with the lis pendens notice still in effect.
SOS argued against WAPS’ financial damages in the form of attorneys’ fees by stating the lawsuit was unnecessary, but Judge Opat rejected that arguement. “Property rights are significant and valuable, and property owners are allowed to take reasonable actions, including litigation, to defend those rights,” he wrote. The district, he added, will need to prove its damages at trial.
SOS maintains the district’s lawsuit is what is know as a SLAPP suit — a strategic lawsuit against public participation. Dr. Michlitsch suggests the lawsuit is an effort to silence SOS as it exercised its constitutional right to petition the government and appeal the decision of the School Board. “We have found no other case in which a school district has sued a community group,” she said.
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