Opinion
Nos. C5-96-283, C7-96-284, C9-96-285.
Filed August 27, 1996.
Appeal from the District Court, Hennepin County, File No. 9417990.
Grover C. Sayre, III, Michael R. O'Brien, Leonard, O'Brien, Wilford, Spencer Gale, Ltd., (for Appellants).
Surell Brady, Minneapolis City Attorney, Michael T. Norton, James A. Moore, Assistant City Attorneys, (for Respondents the Minneapolis Community Development Agency and the City of Minneapolis).
Michael C. Mahoney, Stephen P. Laitinen, Mahoney, Hagberg Rice, P.A., (for Respondent LSGI, Inc.).
Considered and decided by Harten, Presiding Judge, Davies, Judge, and Willis, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1994).
UNPUBLISHED OPINION
Property owners appeal from a rule 12 dismissal for failure to state a claim. We affirm in part, reverse in part, and remand.
FACTS
Respondents City of Minneapolis (the City) and Minneapolis Community Development Agency (MCDA) entered into a development contract with respondent La Societe Generale Immobiliere (LSGI) to develop a shopping center that would cover three and one-half blocks of property owned by appellants and others on the Nicollet Mall in downtown Minneapolis. Although the City appraised the property for condemnation, the development contract was terminated and no eminent domain proceedings were commenced.
La Societe Generale Immobiliere is a French corporation and LSGI, Inc. is a Delaware corporation. Although both were defendants in this case, only the latter is a respondent in this appeal. "LSGI" in the instant case thus refers to the Delaware corporation.
Appellants brought suit. The district court dismissed their action under rule 12 for failure to state a claim. This appeal resulted. Appellants' claims are substantially identical to those of similarly situated property owners decided in 614 Co. v. Minneapolis Community Dev. Agency , 547 N.W.2d 400 (Minn.App. 1996), review denied (Minn. July 10, 1996) and Siegel v. Minneapolis Community Dev. Agency , No. C0-95-1637 (Minn.App. May 7, 1996), review denied (Minn. July 10, 1996), except that appellants also sued LSGI. Appellants' cases were consolidated with Siegel for hearing in the district court.
DECISION
The standard of review in cases dismissed for failure to state a claim on which relief can be granted is "whether the complaint sets forth a legally sufficient claim for relief." Elzie v. Commissioner of Pub. Safety , 298 N.W.2d 29, 32 (Minn. 1980). Pleadings are adequate unless it appears "to a certainty" that there are no facts, consistent with the pleadings, sufficient to establish a right to relief. Northern States Power Co. v. Franklin , 265 Minn. 391, 395, 122 N.W.2d 26, 29 (1963).
Although the district court granted a rule 12 dismissal, it treated the motion as one for summary judgment. See Minn. R. Civ. P. 12.02 (when "matters outside the pleadings are presented *the motion shall be treated as one for summary judgment").
1. Takings Claims
The district court characterized appellants' claims for state and federal due process and equal protection as takings claims. As in 614 Co. and Siegel , the district court dismissed the takings claims on the basis that appellants' economic losses did not constitute a taking under either the state or federal constitution. In 614 Co. , this court reversed and remanded, holding that the pleadings in that action were sufficient to state a cause of action for taking. 547 N.W.2d 400. Because the pleadings in the instant case are virtually identical to those in Siegel , we hold that appellants' pleadings are sufficient to withstand rule 12 scrutiny. Under 614 Co. , we reverse and remand as to the takings claims.
2. Other Claims Against the City and MCDA
The district court also dismissed appellants' causes of action against the City and MCDA for negligence, third-party beneficiary breach of contract, tortious interference with prospective business advantage, and tortious interference with contract. Virtually identical claims were also raised in 614 Co. and Siegel , and this court affirmed dismissal of those claims. We likewise affirm dismissal of these claims against the City and MCDA.
3. Claims Against LSGI
a. Slander of Title
Appellants brought a slander of title claim against LSGI for filing a notice of lis pendens against the property. The notice was filed on June 9, 1989, the day after LSGI filed suit against MCDA and the City for breach of contract. Minn. Stat. § 557.02 (1994) authorizes filing a notice of lis pendens:
In all actions in which the title to, or any interest in or lien upon, real property is involved or affected, or is brought in question by either party, any party thereto, at the time of filing the complaint, or at any time thereafter during the pendency of such action, may file for record with the county recorder * * * a notice of the pendency of the action, containing the names of the parties, the object of the action, a description of the real property in such county involved, affected or brought in question thereby.
Filing a notice of lis pendens can be the basis for a slander of title action if the notice contains false information and is done maliciously. Bly v. Gensmer , 386 N.W.2d 767, 769 (Minn.App. 1986). There is no claim if a defendant acts in good faith and "does no more than file for record an instrument which he has a right to file." Kelly v. First State Bank , 145 Minn. 331, 333, 177 N.W. 347 (1920). A complaint for slander of title must allege special damages. Quevli Farms, Inc. v. Union Sav. Bank Trust Co. , 178 Minn. 27, 29, 226 N.W. 191, 191 (1929).
Appellants' complaint alleges that LSGI "falsely, maliciously and without cause or legal authority" filed the notice of lis pendens and that it was done "to hinder and harass" appellants and "to slander and cloud the title to the Subject Property." The complaint also includes substantial detail with respect to damages. From our review of the complaint, we conclude that appellants' allegations are sufficient to state a cause of action for slander of title. Therefore we reverse and remand as to that claim.
b. Negligence
Appellants brought a negligence claim against LSGI, alleging that it had a duty to them to exercise due care in filing the notice of lis pendens. The district court found that this claim was merely a restatement of the slander of title claim. We agree with the district court that slander of title is an intentional tort and appellants have provided no statutory or caselaw authority to show that unintentional slander of title can form the basis for a negligence cause of action.
c. Tortious Interference Claims
Appellants brought tortious interference with contract and prospective business advantage claims against LSGI. For such causes of action, the plaintiff must show that the defendant's conduct was not "justified by a lawful object that [the defendant] had a right to pursue." Langeland v. Farmers State Bank , 319 N.W.2d 26, 32 (Minn. 1982). As the district court stated, LSGI's actions were justified because it was acting under a contractual obligation with the City. Therefore, these claims were properly dismissed.
d. Third Party Beneficiary of Contract
The district court dismissed appellants' third party beneficiary claim against LSGI. In 614 Co. , this court held that the property owners in the redevelopment area were not intended beneficiaries of the contract. 547 N.W.2d at 410. Thus, that claim was properly dismissed.