Citizens Independent Bank, Involuntary Co-Plaintiff, v. Northwest Asphalt, Inc., Defendant. (2012)

ORDER

BASED ON THE FILE, RECORD, AND PROCEEDINGS, AND FOR THE FOLLOWING REASONS:

This appeal was filed on April 24, 2012. Appellant City of Golden Valley (the city) seeks review of a judgment entered on February 24, 2012, that grants a claim brought by Steven and Andrea Dargi (the Dargis) for inverse condemnation. The underlying order filed on January 4, 2012, notes that Citizens Independent Bank (the bank) was added as a party in accordance with the district court's order filed on November 19, 2010. The Dargis moved to dismiss the appeal on the ground that the bank is an adverse party and that the city failed to timely serve the notice of appeal on the bank. The city filed a response opposing the motion to dismiss.

A judgment in a mandamus action brought by an omitted property owner to compel the state to condemn his property is appealable under Minn. R. Civ. App. P. 103.03(a). Thomsen v. State by Head, 284 Minn. 468, 476, 170 N.W.2d 575, 581 (1969). In this case, the appeal period expired on April 24, 2012, which was 60 days after judgment was entered on February 24, 2012. See Minn. R. Civ. App. P. 104.01, subd. 1.

An appeal is made by filing a notice of appeal with the clerk of the appellate courts and serving the notice on the “adverse party or parties” within the appeal period. Minn. R. Civ. App. P. 103.01, subd. 1. The city timely filed the appeal with the clerk of the appellate courts on April 24, 2012. The city timely served the notice of appeal on the Dargis by mail on April 24, 2012. See Minn. R. Civ. App. P. 125.03 (stating that service by United States mail is complete on mailing).

The city did not serve the notice of appeal on the bank within the appeal period. The city argues that service of the notice of appeal on the bank was not required because the bank is not an adverse party to the appeal and the judgment entered on February 24, 2012, is divisible.

An “adverse” party is any party who would be prejudiced by a reversal or modification of an order, award, or judgment. Larson v. LeMere, 220 Minn. 25, 27-28, 18 N.W.2d 696, 698 (1945). The question of whether the bank would be prejudiced by a reversal or modification of the judgment granting the inverse-condemnation claim is resolved by the district court's order filed on November 19, 2010, granting the city's motion to dismiss the Dargis' inverse-condemnation claim on the ground of the failure to join the bank as an indispensable party. The city argued, and the district court agreed, that the bank has an interest which would be affected by an order directing the city to initiate inverse-condemnation proceedings because the bank was an owner of the property and, absent a payment by the city for a taking, the bank may be unable to recover the funds it had already put into the house given the questionable prospects of the parties' sale.

Following the order filed on November 19, 2010, the Dargis served and filed a second amended complaint naming the bank as an involuntary co-plaintiff. In their response to the motion to dismiss, the city argues that the Dargis never properly joined the bank.

A reviewing court must generally consider only those issues that the record shows were presented and considered by the district court in deciding the matter before it. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988). The district court's order filed on January 24, 2012, acknowledges that the bank was joined as an involuntary co-plaintiff. Because the city did not raise any objection to the joinder of the bank in the district court proceeding, we decline to consider the city's claim in the response to the motion to dismiss that the bank was not properly joined.

The city argues that the bank's interest as a mortgage holder will not be affected by the outcome of this appeal. The city points out that on December 23, 2011, the district court issued an order incorporating the stipulation between the Dargis and the bank that set aside the foreclosure sale and reinstated the mortgage and the note. But the district court's order filed on November 19, 2010, adopts the city's argument that the bank has an interest in the inverse-condemnation claim because, under the mortgage agreement, any proceeds paid by the city as a result of inverse-condemnation proceedings must first go to pay the underlying mortgage.

In the order filed on January 24, 2012, the district court concluded that the city's actions resulted in the destruction of the Dargis' home. The bank would be prejudiced by reversal or modification of the judgment entered on February 24, 2012, granting the inverse-condemnation claim because, as the district court stated in the order filed on November 19, 2010, absent a payment by the city for a taking, the bank may be unable to recover the funds it has put into the property.

Timely service of the notice of appeal on an adverse party has long been jurisdictional. Hansing v. McGroarty, 433 N.W.2d 441, 442 (Minn. App. 1988), review denied (Minn. Jan. 25, 1989). When an adverse party has not been served with notice of appeal from a judgment or order which is divisible, the appeal need not be dismissed but appellate review is limited to issues between appellant and the parties properly served with the notice. Thayer v. Duffy, 240 Minn. 234, 255, 63 N.W.2d 28, 40 (1953). But if the judgment is indivisible so that it must be affirmed, modified, or reversed as to all parties, notice of appeal must be given to every party whose interest in the subject of the appeal is in direct conflict with an affirmance, reversal, or modification of the judgment or order appealed. Id. at 254-55, 63 N.W.2d at 40.

In this case, the judgment granting the Dargis' inverse-condemnation claim cannot be divided between the Dargis and the bank. Reversal or modification of the judgment directing the city to proceed with a condemnation action will affect both the Dargis and the bank. Both the Dargis and the bank are parties to the condemnation proceeding as “owners” of the property. See Minn. Stat. § 117.025, subd. 3 (2010) (defining the term “owner” in a condemnation proceeding as including all persons with any interest in the property subject to a taking, whether as proprietors, tenants, life estate holders, encumbrancers, beneficial interest holders, or otherwise).

Because the bank is an adverse party and the judgment entered on February 24, 2012, is indivisible, the city's failure to timely serve the notice of appeal on the bank requires dismissal of the city's appeal. The Dargis' notice of related appeal shall proceed.

IT IS HEREBY ORDERED:

1. The motion by respondents Steven and Andrea Dargi to dismiss the direct appeal filed by the City of Golden Valley is granted.

2. The notice of related appeal filed by Steven and Andrea Dargi shall proceed.

3. The case caption for the appeal shall henceforth be as follows: “Steven Dargi, et al., Appellants, Citizens Independent Bank, Involuntary Co-Plaintiff, vs. City of Golden Valley, Respondent, Northwest Asphalt, Inc., Respondent.”

4. Briefing in the appeal filed by Steven and Andrea Dargi shall proceed pursuant to Minn. R. Civ. App. P. 131.01.

5. The clerk of the appellate courts shall provide copies of this order to the Honorable Bruce A. Peterson, to counsel of record, and to the district court administrator.

BY THE COURT

/s/ _

 Judge Randolph W. Peterson