ENGEBRETSON v. NORTHERN TOOL AND EQUIPMENT COMPANY INC (2025)

SPECIAL TERM OPINION

This appeal follows the district court's adoption of a jury verdict in a disability-discrimination action determining damages against appellant and denial of postdecision motions. Respondent moves to remand this appeal to the district court. We understand respondent's motion to assert that this appeal must be dismissed as premature because, given his then-pending motion for attorney fees at the time the appeal was filed, the judgment was not final. In an order filed on January 28, 2025, we construed the appeal as taken from a June 25, 2024 merits judgment, determined that the appeal is not premature, and denied the motion to remand, with an opinion to follow. We now explain that we deny the motion to remand because a pending request for attorney fees under the Minnesota Human Rights Act, Minn. Stat. § 363A.33, subd. 7, is in the nature of a pending request for costs and does not render an appeal from a judgment adjudicating claims under that act premature.

DECISION

In 2020, respondent Daniel Engebretson commenced this action against appellant Northern Tool and Equipment Company, asserting claims of disability discrimination and reprisal under the Minnesota Human Rights Act (the MHRA), Minn. Stat. §§ 363A.01-.50 (2024). The complaint contained a request for “attorneys’ fees, costs, and disbursements.” In 2022 and 2024, the district court denied Northern Tool's summary-judgment motions on Engebretson's claims.

In 2024, a jury found that Northern Tool discriminated against Engebretson based on Engebretson's disability and awarded Engebretson damages. On May 8, 2024, the district court issued an order adopting the jury's verdict.

Northern Tool filed a motion for judgment as a matter of law (JMOL) or a new trial. Engebretson filed a motion requesting (1) attorney fees, pursuant to Minn. Stat. § 363A.33, subd. 7, of the MHRA, (2) leave to file a motion for an award of additional attorney fees as necessary, (3) prejudgment interest, and (4) assessment of a civil penalty. On June 25, 2024, the district court entered judgment on its May 8, 2024 order adopting the jury's verdict. We focus on the finality of this judgment to determine whether the appeal is premature.

In an October 28, 2024 order, the district court denied Northern Tool's JMOL and new-trial motions. In a separate October 28, 2024 order, the district court awarded Engebretson attorney fees incurred through the date of the judgment pursuant to the MHRA, added prejudgment interest, and imposed a civil penalty as directed by the MHRA.¹ The district court also granted Engebretson leave to seek supplemental attorney fees incurred in connection with postdecision motions. In November, Engebretson requested supplemental attorney fees. Shortly after this appeal was filed, the district court entered judgment on the October 28, 2024 attorney-fee order.

An appeal may be taken from a final judgment. Minn. R. Civ. App. P. 103.03(a). “Entry of judgment shall not be delayed for the taxation of costs, and the omission of costs shall not affect the finality of the judgment.” Minn. R. Civ. P. 58.01. The time to appeal a judgment “shall not be extended by the subsequent insertion therein of costs and disbursements.” Minn. R. Civ. App. P. 104.02.

Minnesota courts have concluded that attorney fees authorized by statute are akin to costs and disbursements, as distinguished from damages. In T.A. Schifsky & Sons, Inc. v. Bahr Construction, LLC, the Minnesota Supreme Court addressed whether a judgment that determined the validity and amount of a mechanics’ lien but reserved a party's request for attorney fees was an appealable final judgment. 773 N.W.2d 783, 785 (Minn. 2009). The supreme court concluded that the outstanding request for attorney fees did not affect the finality of the judgment because the attorney-fee request was “not a separate claim independent of the merits of the action, namely, the validity of the lien and the fair and reasonable value of the lien.” Id. at 789. The supreme court reasoned that the request for attorney fees was not a separate claim because the court had “specifically held that attorney fees in mechanics’ lien cases are, pursuant to statute and our case law, costs that may be awarded by the court.” Id. (emphasis added). The supreme court contrasted the statute-based attorney fees available in mechanics’ lien cases with “[f]ees incurred as a direct result of an insurer's breach of the contractual duty to defend” in a case raising a claim of bad-faith refusal to defend, which it characterized as “damages owed by the breaching insurer.” Id. at 788-89 (emphasis added). In determining finality and appealability of a merits judgment, Schifsky distinguished attorney fees that are in the nature of costs from attorney fees that are in the nature of damages. Id.

In United Prairie Bank-Mountain Lake v. Haugen Nutrition & Equipment, LLC, the supreme court elaborated on the “important distinctions between fee requests based on a statute and those based on a contract.” 813 N.W.2d 49, 62 (Minn. 2012). The supreme court concluded that the contract-based claim for attorney fees in United Prairie was a “legal claim with an attendant right to a jury trial” under the Minnesota Constitution. Id. at 51, 63. The supreme court noted that “[s]tatutory attorney fees often involve matters of public policy or equitable considerations that are not present in cases involving contractual indemnity provisions.” Id. By contrast, the supreme court explained that contract-based requests for attorney fees are claims for “contractual indemnity” and that attorney fees are the “money damages” for those claims. Id. at 63.

Engebretson contends in the motion to remand that Northern Tool's notice of appeal “is premature, of no legal effect, and should be remanded to the district court” until Engebretson's pending request for attorney fees has been adjudicated. Engebretson argues that his request for attorney fees is part of his damages claims because he “requested attorneys’ fees as part of the damages available on his [MHRA] claims, such fees are permitted under the MHRA, and because they are obviously linked to [Northern Tool]’s related appeal of the district court's grant of attorneys’ fees.” We disagree that Engebretson's request for attorney fees, or the characterization of that request in his complaint, amounts to damages under the MHRA.

The MHRA protects an individual's right to an “opportunity to obtain employment, housing, and other real estate, and full and equal utilization of public accommodations, public services, and educational institutions without ․ discrimination.” Minn. Stat. § 363A.02, subd. 2; see also Anderson v. Hunter, Keith, Marshall & Co., 417 N.W.2d 619, 625 (Minn. 1988) (stating that the MHRA embodies “the public policy of eradicating discrimination”). In support of this policy, the MHRA includes an attorney-fee provision providing that “[i]n any action or proceeding brought pursuant to this section the court, in its discretion, may allow the prevailing party a reasonable attorney's fee as part of the costs.” Minn. Stat. § 363A.33, subd. 7. The plain language of this subdivision instructs that attorney fees under the MHRA are in the nature of costs, not damages.

The statute as a whole reinforces this conclusion. See Am. Fam. Ins. Grp. v. Schroedl, 616 N.W.2d 273, 277 (Minn. 2000) (explaining that appellate courts read and construe statute as a whole and must interpret each statutory provision in light of surrounding provisions). Separate subdivisions in section 363A.33 provide for damages and other remedies for violations of the MHRA. See Minn. Stat. § 363A.33, subds. 8, 9.² Thus, the structure of the MHRA sets forth damages and other remedies separate from attorney fees and other costs.

Because Minn. Stat. § 363A.33, subd. 7, allows the district court to award attorney fees in an MHRA proceeding “as part of costs,” Engebretson's request for attorney fees is in the nature of a statute-based request for costs and disbursements. And because Engebretson's request for attorney fees under the MHRA is a statute-based request for costs, that request, like the attorney-fee request in the mechanics’ lien proceeding in Schifsky, does not affect the finality of the district court's June 25, 2024 merits judgment. See 773 N.W.2d at 789. Northern Tool's appeal is not premature because the district court's June 25, 2024 merits judgment is final. We therefore deny Engebretson's motion to remand this appeal to the district court.

Motion denied.

FOOTNOTES

1.   Northern Tool filed a separate appeal seeking review of the October 28, 2024 order awarding attorney fees and requiring Northern Tool to pay the civil penalty. We dismissed that appeal after Northern Tool filed a notice of voluntary dismissal in response to our order questioning jurisdiction.

2.   The legislature added subdivisions 8 and 9 to Minn. Stat. § 363A.33 in 2024. 2024 Minn. Laws ch. 105, §§ 18-19, at 1078-79. But the authority provided to the district court in these subdivisions is not new. Prior to the 2024 amendments, Minn. Stat. § 363A.33 required the district court to direct “appropriate relief as provided by section 363A.29, subdivisions 3 to 6.” Minn. Stat. § 363A.33, subd. 6 (2022). Minnesota Statutes section 363A.29 governs the relief that an administrative-law judge (ALJ) may award in administrative proceedings under the MHRA. And subdivisions 4 and 5 of that section authorize ALJs to award damages and other remedies, employing nearly identical language to Minn. Stat. § 363A.33, subds. 8 and 9. Because the 2024 amendment to Minn. Stat. § 363A.33 merely inserted language that was previously incorporated by reference and makes no substantive change relevant to our analysis, we cite the 2024 version of Minn. Stat. § 363A.33. See Interstate Power Co. v. Nobles Cnty. Bd. of Comm'rs, 617 N.W.2d 566, 575 (Minn. 2000) (recognizing “general rule” that “appellate courts apply the law as it exists at the time they rule on a case” with exception for amendments that affect vested rights).

FRISCH, Chief Judge