Margots Kapacs, Appellant,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).

STATE OF MINNESOTA
IN COURT OF APPEALS
A16-1762

Margots Kapacs,
Appellant,

vs.

Kelly Umhoefer, et al.,
Respondents.

Filed June 19, 2017
Affirmed
Reilly, Judge

Hennepin County District Court
File No. 27-CV-15-14496

Margots Kapacs, Minneapolis, Minnesota (pro se appellant)

Susan L. Segal, Minneapolis City Attorney, Lee C. Wol f, Assistant City Attorney,
Minneapolis, Minnesota (for respondents)

Considered and decided by Johnson, Pres iding Judge; Larkin , Judge; and Reilly,
Judge.
U N P U B L I S H E D O P I N I O N
REILLY, Judge
Pro se appellant landlord challenges the district court’s handling of his claims
relating to respondent city’s revocation of his rental license. We affirm.

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FACTS
Appellant Margots Kapacs held a rental license pursuant to Minneapolis, Minn.,
Code of Ordinances (M CO) § 244.1810 (2012), 1 which authorized him to rent out two
dwelling units in a Minneapolis duplex. Kapacs’s rental-license application listed Kapacs
as both the owner-applicant and the person responsible for maintaining and managing the
rental property. 2 In late July 2014, Kapacs’s li cense application indicated that his
“residence or business street address” was th e address of another residential property in
Minneapolis (hereinafter “address on file”).
On July 21, 2014, respo ndent City of Minneapolis Department of Regulatory
Services received a complaint alleging code violations at the rental property. On July 24,
respondent Kelly Umhoefer, a department housing inspector, mailed notice of an August 8
inspection of the rental property to Kapacs at a P.O. Box address that he had provided to
Umhoefer by phone.
3 Kapacs complied with the inspection, during which Umhoefer found
code violations. Umhoefer gave Kapacs until September 30 to correct the violations.
On October 16, 2014, Umhoefer mailed noti ce of an October 21 inspection of the
rental property to Kapacs at both the address on file and the P.O. Box address, warning that

1 Because individual provisions of the Minneapolis Code of Ordinances are often revised
multiple times each year, we ci te to the year in which each specific provision was most
recently revised.
2 Under MCO § 244.1840(3) (201 5), a rental-license applic ant must “identify in the
application, by name, residence or business str eet address, telephone number, and date of
birth, a natural person who is actively invo lved in, and responsible for, the maintenance
and management of the premises.”
3 Rental licensees must permit inspection of the licensed premises “to verify compliance
with the housing maintenance code, and the fire, health, zoning and building codes of the
city.” MCO § 244.2000(c) (2015).

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inspection could be accomplished by warrant if Kapacs failed to comply. The same day,
Umhoefer procured an administrative search warrant authorizing entry of the rental
property for inspection. Kapacs did not appear at the scheduled time, and the warrant was
executed. Umhoefer’s inspectio n revealed continuing code vi olations, and she issued an
administrative citation to Kapacs.
On October 30, 2014, Umhoe fer mailed notice of a November 18 inspection of the
rental property to Kapacs at the address on file. Umhoefer attempted to inspect the rental
property at the scheduled time, but Kapacs did not appear. The next day, Umhoefer mailed
notice of a December 4 inspection of the rental property to Kapacs at the address on file.
Umhoefer attempted to inspect the rental property at the scheduled time, but again Kapacs
did not appear.
On December 5, 2014, Umhoefer mailed a Notice of Director’s Determination of
Non-Compliance (DDNC) to Kapacs at the address on file , pursuant to MCO § 244.1930
(2013). The DDNC stated that the rental prop erty was in violation of licensing standards
because Kapacs had failed to permit inspection, and it directed Kapacs to permit inspection
no later than December 18. Having heard nothing from Kapacs in response to the DDNC,
Umhoefer initiated the process to revoke Kapacs’s rental license on December 30.
On January 5, 2015, the department mailed a notice of revocation of Kapacs’s rental
license to him at the address on file, pursu ant to MCO § 244.1940 (2011). The rental
property also was placarded with a notice of li cense revocation on or about that date. On
March 5, Kapacs filed an administrative appeal of the license revocation. On April 3, the
department mailed notice of an April 21 license revocation hearing to Kapacs, who

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acknowledges receiving the notice. An admi nistrative hearing officer conducted the
revocation hearing as scheduled; Kapacs did not appear, and the hearing officer
recommended revocation of Kapacs’s rental license.
On April 27, 2015, the depa rtment mailed notice of a May 5 city council hearing to
Kapacs at both the address on file and the P.O. Box address. The notice stated that the
matter of Kapacs’s license revo cation would be addressed at the hearing and that Kapacs
would be given an opportunity to speak. Kapacs appeared at the hearing and spoke before
the city council. On or about June 1, the department gave notice of the city council’s final
decision to revoke Kapacs’s rental license; this notice was mailed to Kapacs at both the
address on file and the P.O. Box address.
Kapacs then sued the department and Um hoefer (collectively, “the city”), raising
various pro se claims in conn ection with the revocation of hi s rental license. The city
moved to dismiss for lack of subject-matter jurisdiction. Ka pacs filed a response, a first
amended complaint, and a letter to the distri ct court asking whether further action was
necessary to amend the origin al complaint. The court apparently did not respond to
Kapacs’s letter and issued an order granting in part the city’s motion to dismiss Kapacs’s
claims. After a bench trial on Kapacs’s one remaining claim, the court issued findings of
fact, conclusions of law, and an order for judgment against Kapacs. This appeal followed.
D E C I S I O N
Kapacs first asks us to reverse the district court’s dismissal of most of his claims for
lack of subject-matter jurisdiction on the ground that jurisdictional dismissal resulted from
the court’s improper refusal to allow him to amend the orig inal complaint. The city

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implicitly concedes that Kap acs was entitled to amend the or iginal complaint but asserts
that jurisdictional dismissal was based on the a llegations in the first amended complaint.
The city argues in the alterna tive that any error here is harmless because jurisdictional
dismissal is warranted on either the original complaint or the first amended complaint.
“A party may amend a pleading once as a matter of course at any time before a
responsive pleading is served . . . .” Minn. R. Civ. P. 15.01. A district court has no
discretion to refuse to allow amendment of a pleading before service of a responsive
pleading. Sharkey v. City of Shoreview, 853 N.W.2d 832, 835-36 (Minn. App. 2014). A
rule 12.02 motion to dismiss is not a responsive pleading within the meaning of rule 15.01.
Hardin Cty. Sav. Bank v. Hous. & Rede velopment Auth. of City of Brainerd, 821 N.W.2d
184, 189 (Minn. 2012); Sharkey, 853 N.W.2d at 835.
In this case, Kapacs filed the first am ended complaint after the city moved for
dismissal under rule 12.02(a) but before the city answered the original complaint. Kapacs
therefore had an absolute right to amend the original complaint, and the district court was
required to resolve the city’s motion to dismiss based on the allegations in the first amended
complaint. See Sharkey, 853 N.W.2d at 835-36 (concluding that district court erred by
refusing to allow appellant to amend complaint after respondents moved for dismissal but
before respondents answered complaint and e rred by declining to consider appellant’s
amended complaint instead of appellant’s origin al complaint, on respondents’ motions to
dismiss).
The record shows that the district cour t properly resolved the city’s motion to
dismiss based on the allegations set forth in the first amended complaint. In its order

6
granting in part the city’s motion to dism iss, the court briefly summarized Kapacs’s
allegations against the city, citing to the firs t amended complaint. The order neither cites
to the original complaint nor refers to any allegation or request for relief that appears only
in the original complaint. And in a later order addressing Kapacs’s attempt to disqualify
the district court judge for her purported failure to accept the first amended complaint, the
court stated that it had “accepted Pl aintiff’s First Amended Complaint as a matter of
course” and determined that “Plaintiff’s asserti on that the Court failed to accept the First
Amended Complaint is without any basis in fact or law.” Because we conclude that
jurisdictional dismissal did not result from a refusal by the dist rict court to allow Kapacs
to amend the original complaint, reversal is not warranted on that ground.
Kapacs also asks us to reverse the dist rict court’s jurisdictional dismissal on the
merits, conceding that the revocation of his rental license was a quasi-judicial decision but
arguing that the district court nevertheless ha s subject-matter jurisdiction over the claims
in the first amended complaint. In response the city esse ntially adopts the reasoning and
conclusion of the district court, which stated:
[T]he license revocation at i ssue here was a quasi-judicial
decision. Accordingly, the Minnesota Court of Appeals has
exclusive jurisdiction over the City’s decision to revoke
Plaintiff’s license. Thus, Plaintiff’s claims stemming from the
license revocation decision ar e dismissed for lack of
jurisdiction, with on e exception: Plaintiff’s constitutional
challenge to Minneapolis Code of Ordinances section
244.1840 . . . .

Appellate courts review subject-matter jurisdiction de novo. Zweber v. Credit River Twp.,
882 N.W.2d 605, 608 (Minn. 2016).

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A quasi-judicial decision is “reviewable only through the filing of a petition for a
writ of certiorari with the court of appeals.” Id. at 609. Likewise, “w hen the underlying
basis of [a] claim requires review of a muni cipality’s quasi-judicial decision to determine
its validity—that is, whether the decision was unreasonable, arbitrary, or capricious—then
the exclusive method of review is by certiorari.” Id. at 610 (quotation omitted). In other
words, a claim that arises from a quasi-judicial decision (derivative claim) must be raised
on certiorari appeal if “resolution of the clai m . . . depend[s] on the validity of the quasi-
judicial decision.” Id.
Certiorari review of a derivative claim is exclusive only if adjudication of the claim
“requires an inquiry into the validity of a quasi-judicial decision.” Id. at 611. The question
is not whether “an inquiry into the facts surrounding the [derivative] claim[] would involve
an inquiry into the quasi-judicial decision[].” Id. at 609-10 (quotation omitted). That is,
mere “overlap in the facts” underlying a quasi-judicial decision and a derivative claim does
not divest the district court of juri sdiction over the derivative claim. Id. at 612. And the
question is not whether the derivative claim is “separate and distinct” or “stand[s] alone”
from the quasi-judicial decision. Id. at 608, 612 (quotation omitted). But where the
derivative claim seeks to “undo,” modify, or directly compensate the plaintiff for the
negative effects of a quasi-judicial decision, the claim may be no more than “creative
pleading to bring a veiled challenge to the validity” of the quasi-judicial decision. Id. at
612-13 (quotation marks omitted).
In this case, Kapacs makes the following claims in his first amended complaint:
(1) the department violated his federal ri ghts of due process and equal protection by

8
(a) failing to give him sufficient notice of two of the inspections and the administrative
search warrant, (b) refusing to accept his P.O. Box address, and (c) failing to give him
sufficient notice and oppo rtunity to be heard before rev oking his rental license; (2) the
department “committed fraud” by (a) failing to disclose certain facts during the license
revocation hearing and (b) making intentional misrepresentations during that hearing;
(3) the department “acted arbitrarily and capriciously” by “shut[ting] down the access” to
the rental property; (4) the department “acted with intentions to harass” him and violated
his right of equal protection by (a) request ing inspections that were “impossible” and
(b) requiring eight inspections in less than a year; and (5) the inspector “commit[ed] fraud”
by (a) intentionally mailing notices to the wrong address, (b) attempting notice by mail to
the exclusion of notice by e-mail and/or phone, and (c) intentionally giving him insufficient
notice of the warrant. Construed liberally, Kapacs’s first amended complaint requests a
judgment declaring that MCO § 244.1840(3) is unconstitutional on its face and a money
judgment in the amount of his “missed rent income or all losse s resulting [from] . . .
repossess[ion]” of the rental property “for non mortgage payments.”
Kapacs’s request for declaratory relief logically connects with claim (1)(b), i.e.,
Kapacs’s constitutional attack on the department’s refusal to accept his P.O. Box address.
Because adjudication of a facial challenge to the constitutionality of an ordinance involves
no consideration of any application of that ordinance to the plaintiff, adjudication of claim
(1)(b) requires no inquiry into the validity of the license revocation, and the district court
correctly concluded that it has jurisdiction over that claim.

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Kapacs’s request for monetary relief, as his only other request for relief on the
merits, exposes the rest of his claims as ve iled challenges to the validity of the license
revocation. Kapacs’s loss of income from the rental property, his alleged inability to pay
the mortgage on the rental property, and any foreclosure on the rental property are negative
effects of the license revocation. Thus, while each of the dismissed claims alleges some
wrongdoing short of invalid license revocati on, Kapacs does not seek redress of that
purported wrongdoing. Instead, he seeks dire ct compensation for the negative effects of
the license revocation itself, on an implied th eory that the wrongdo ing invalidates the
license revocation and entitles him to compensation for its negative effects. Adjudication
of the dismissed claims therefore requires inquiry into the validity of the license revocation,
and the district court correctly concluded that it has no jurisdiction over those claims.
Finally, Kapacs assigns reversible error to the district court’s ruling against him on
the merits of claim 1(b), arguing that MCO § 244.1840(3) is facia lly unconstitutional as
violative of federal due process and equal protection. The city responds that Kapacs failed
to meet his burden to prove that the ordinance is unc onstitutional, pointing to certain
evidence presented at trial.
“A city ordinance is presumed constitutiona l, and the burden of proving that it is
unconstitutional is on the [challenging party].” McCaughtry v. City of Red Wing , 831
N.W.2d 518, 522 (Minn. 2013) (quotation om itted). That burden is a “heavy” one: the
challenging party must “demonstrat[e] beyond a reasonable doubt that the [law] violates
some constitutional provision.” Singer v. Comm’r of Revenue , 817 N.W.2d 670, 675
(Minn. 2012). “Constitutional interpretation pr esents a legal question, which [appellate

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courts] review de novo.” McCaughtry, 831 N.W.2d at 521. “However, findings of fact
made by the district court in deciding constitutional questions are reviewed for clear error.”
State v. McCormick , 835 N.W.2d 498, 509 (Minn. App. 2013), review denied (Minn.
Oct. 15, 2013).
“When legislation is not based on a suspect class and does not infringe on a
fundamental right, it need only be rationally related to a legitimate governmental purpose
in order to withstand federal equal protectio n or substantive due process challenges.”
Arcadia Dev. Corp. v. City of Bloomington , 552 N.W.2d 281, 288 (Minn. App. 1996)
(citing Fed. Commc’ns Comm’n v. Beach Commc’ns, Inc. , 508 U.S. 307, 313, 113 S. Ct.
2096, 2101 (1993), and Usery v. Turner Elkhorn Mining Co. , 428 U.S. 1, 15, 96 S. Ct.
2882, 2892 (1976)), review denied (Minn. Oct. 29, 1996). “Legislation will fail rational
basis review only when it rests on grounds i rrelevant to the achievement of a plausible
governmental objective.” Id. (citing Heller v. Doe , 509 U.S. 312, 323, 113 S. Ct. 2637,
2645 (1993)).
Here, the challenged ordinance provides in relevant part:
Every applicant [for a rental license] . . . shall identify
in the application, by name, residence or business street
address, telephone number, and date of birth, a natural person
who is actively involved in, and responsible for, the
maintenance and management of the premises. . . . A post
office box or commercial mail receiving service are not
acceptable as an address for such a person.

MCO § 244.1840(3) (emphases added). Another ordinance provides that notices relating
to rental licenses “shall be de emed sufficient if sent by firs t class mail to the owner or
owner’s designated agent at the address specif ied in the last license application.” MCO

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§ 244.2010 (2013). Thus, an owner-licensee who also maintains and manages the rental
property is prohibited from using a P.O. Box as his mailing address for notices relating to
his license.
At trial in this case, the supervisor of the department’s housin g division testified.
The district court summarized the supervisor’s testimony as follows:
The supervisor . . . testified that post office boxes are not
allowed as contact addresses because the city often has to send
out emergency notifications, such as loss of heat in the
wintertime. These emergency no tifications require that there
be a local person checking mail daily who can respond
promptly. The City’s experien ce is that phone numbers are
often out of date and, in any event, a written record is required.
The City is just beginning to us e email notifications. For that
reason, the ordinance also requires that either the owner of a
licensed rental property or a contact person live within the 16
county metropolitan area. Allo wing a post office box as the
contact address would make it easier to ignore that
requirement. The City’s rental licensing program has included
this requirement since it starte d in 1990. [The supervisor]
testified that he believes this is a common requirement of city
rental license programs.

The court accordingly fo und that the P.O. Box restriction “has been in pl ace since 1990,
applies to all applicants for a rental license, and is a common requirement of city licensing
programs.” The court further found that the purpose of the P.O. Box restriction is to
“ensur[e] prompt responses from local propert y managers to issues involving rental
property, especially emergency issues.”
Kapacs does not challenge those findings on appeal; neither does he argue that the
identified purpose of the P.O. Box restriction is not a legitimate one. Rather, he argues that
the P.O. Box restriction is not rationally related to that purpose because mail is a relatively

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slow means of communication and because a property manager will not necessarily retrieve
his mail from a mailbox at a residential or business street address more quickly than from
a P.O. Box.
But “a state [law] need not be so perfectly calibrated in order to pass muster under
the rational-basis test.” Bankers Life & Cas. Co. v. Crenshaw, 486 U.S. 71, 85, 108 S. Ct.
1645, 1654 (1988); see Walker v. Hartford L ife & Accident Ins. Co. , 831 F.3d 968, 978
(8th Cir. 2016) (“Rational-basis review does not require a perfect or exact fit between the
means used and the e nds sought.” (quotation and citation omitted)); see also ILHC of
Eagan, LLC v. County of Dakota, 693 N.W.2d 412, 423 (Minn. 2005) (“[I]mperfection is
not a constitutional defect.” (quotation omitted)). And la wmakers “may implement [a]
program step by step[,] adopting regulations that only partially ameliorate a perceived evil
and referring complete elimination of the evil to future regulations.” ILHC, 693 N.W.2d
at 423 (quotations omitted).
Thus, while Kapacs is correct that the P.O. Box restriction does not ensure that
property managers will respond promptly to rental-property issues, it need not do so to pass
constitutional muster. The P.O. Box restriction eliminates property managers’ reliance on
a means of communication that is likely to be slower than other available means of
communication. The restriction thereby promotes property managers’ prompt response to
rental-property issues, i.e., is rationally related to a legitimate purpose. We conclude that
Kapacs did not meet his heavy burden to prove that MCO § 244.1840(3) is unconstitutional
on its face.
Affirmed.