John Aydt, et al., Appellants,

This opinion will be unpublished and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
A17-0448

John Aydt, et al.,
Appellants,

vs.

Steven A. Hensel, et al.,
Respondents,

City of St. Michael,
Defendant.

Filed December 18, 2017
Affirmed in part, reversed in part, and remanded
Ross, Judge

Wright County District Court
File No. 86-CV-15-2072

John T. Peterson, Johnson, Larson & Peterson, P.A., Buffalo, Minnesota (for appellants)

John P. Brendel, Brendel and Zinn, Ltd., Lake Elmo, Minnesota (for respondents)

Considered and decided by Connolly, Presiding Judge; Ross, Judge; and Schellhas,
Judge.
U N P U B L I S H E D O P I N I O N
ROSS, Judge
Steven and Lois Hensel built a shed about a foot away from the boundary that
divided their property from John and Sheila Aydt’s property, mistakenly believing the shed
was ten feet away. When the Hensels arranged to sell their home 15 years later, a survey
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revealed the correct boundary. The Aydts disrupted the sale by filing a notice of lis pendens
to represent that they had an interest in the Hensels’ property. After a bench trial between
the Hensels and the Aydts over ownership of the ten-foot swath and the propriety of the
Aydts’ notice of lis pendens, the district court found in favor of the Hensels. Because the
evidence supports the district court’s finding that the Hensels adversely possessed the
disputed land for the requisite adverse-possession period and because it acted within its
discretion by awarding punitive damages, we affirm in part. But because the district court
miscalculated special damages, we reverse in part.
FACTS
Steven and Lois Hensel own property that abuts the lot of neighbors (and relatives)
John and Sheila Aydt in St. Michael. (John is Lois’s nephew.) The Hensels own a 2.5-acre
lot with a northern bo rder that edges the Aydts’ 77.5-acre lot. The Hensels bought the
property from Lois Hensel’s parents (John Aydt’s grandparents) in 1993 after a 1992
survey defined the boundaries. In 1996 the Hensels obtained a variance to the city’s 30-
foot setback requirement to build a large storage shed at the northern end of their property.
Based on the survey, they believed that the shed’s planned location would barely meet the
variance’s ten-foot setback requirement. They built the shed, and for 15 years all was well.
But in 2012 the Hensels tried to sell their property, and trouble began. John Aydt
intimated that the shed was closer to the boundary than ten feet. A new survey revealed
that the 1992 survey had been wrong and that the Hensels’ northern border sat ten feet
south of where they had thought. This meant that the shed sat only one foot, not ten feet,
from the Aydts’ property. And it meant that the Hensels had been mistakenly using the ten-
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foot swath just north of the actual boundary as their own. They had been using the 10-by-
545-foot portion for different things, depending on its varying topography. For example,
the district court found that they had planted a vegetable garden and raspberry bushes. They
planted evergreen trees. They ran a discharge pipe from their swimming pool into the area.
They occasionally backed their “travel trailer” onto the strip. Their children rode all-terrain
vehicles, snowmobiles, and dirt bikes on it. They piled snow onto it to create a snow fence.
And they grew and maintained grass on its flat portion.
When the Aydts learned of the 2012 survey results, this dispute erupted. The Aydts
sued the Hensels for trespass and nuisance for the Hensels’ use of the ten-foot portion. The
Hensels countered by securing a new variance from the city, which allowed the shed to
have no setback at all. The Aydts then sued the city for issuing this variance (but that suit
was dismissed and presents no direct issue in this appeal). The Hensels found a buyer and
scheduled a closing, but the Aydts filed a notice of lis pendens against the Hensel property
on the eve of closing, jeopardizing the sale. The Hensels’ attorney wrote to the Aydts’
attorney. He protested that the Aydts had no legal basis to file the notice of lis pendens,
demanded that the Aydts discharge the notice, and warn ed that their failure to discharge
the notice would result in their liability for slander of title and damages arising from the
likely loss of the sale. The Aydts’ attorney all but acknowledged that the Aydts’ notice of
lis pendens lacked merit, saying , “My clients understand . . . that they do not have a
protectable property interest or property right in your client’s property.” But he
nevertheless refused to discharge it. Instead, he attempted to leverage a land swap.
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The Aydts did not discharge their notice of lis pendens, the sale agreement
crumbled, and the Hensels filed a counterclaim alleging slander of title. The litigation
percolated for two years, during which time the district court discharged the notice of lis
pendens, the Aydts appealed, and we affirmed . See Aydt v. Hensel, No. A15-1406 (Minn.
App. Mar. 21, 2016). The Hensels added counterclaims for adverse possession and sought
punitive damages , and both parties attempted, mostly unsuccessfully, to prevail by
summary judgment. The dispute culminated in a bench trial after which the district court
found that the Hensels had adversely possessed the disputed land for the requisite period
and that the Aydts had slandered their title. The court awarded the Hensels $132,149 in
special damages for slander of title based on the Aydts’ false lis pendens filing and an
additional $5,000 in punitive damages for refusing unreasonably to discharge the filing
after acknowledging that they had no legal or factual basis to maintain it. It also dismissed
the Aydts’ trespass and nuisance claims.
The Aydts appeal.
D E C I S I O N
The Aydts argue that the district court erred in three respects. The y first maintain
that the district court abused its discretion by concluding that the Hensels proved the
adverse- possession claim. They next maintain that the district court erroneously found that
the Aydts acted maliciously by filing their notice of lis pendens and that the Hensels proved
special damages. And they maintain finally that the district court improperly awarded
punitive damages. We address each argument.

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I
The Aydts challenge the district court’s determination that the Hensels became the
owners of the disp uted ten-foot stretch by adverse possession. Whether a plaintiff proves
adverse possession is a question of fact. Ganje v. Schuler, 659 N.W.2d 261, 266 (Minn.
App. 2003) (citing Wortman v. Siedow, 173 Minn. 145, 148, 216 N.W. 782, 783 (1927)).
We will not reverse a district court’s findings of fact unless we identify a clear error. Minn.
R. Civ. P. 52.01 (2017). And we will not identify a clear error unless our review leaves us
“with the definite and firm conviction that a mistake has been made.” Rasmussen v. Two
Harbors Fish Co., 832 N.W.2d 790, 797 (Minn. 2013). Persons claiming ownership by
adverse possession must show by clear and convincing evidence that they possessed the
land of another actually, openly, continuously, exclusively, and hostilely for 15 years. Ehle
v. Prosser, 293 Minn. 183, 189, 197 N.W.2d 458, 462 (1972). The Aydts argue that the
district court wrongly decided each of these elements.
Whether the Hensels “actually” possessed the disputed land is not controlled by any
precise test. Which uses establish actual use will depend on the purpose for which the land
“may be ordinarily fit and adapted, and reasonably used.” Dean v. Goddard, 55 Minn. 290,
299, 56 N.W. 1060, 1063 (1893). F or example, a portion of an agricultural field might be
actually possessed by someone who is farming the land. See Dean, 55 Minn. at 298–99, 56
N.W. at 1063. By contrast, a small wooded area in the corner of a residential yard might
be actually possessed b y someone removing wood, dumping compost, and planting
wildflowers. See Ganje, 659 N.W.2d at 264, 267–68. Another component to actual
possession is the constancy of the use, as uses that are merely sporadic or occasional do
6
not satisfy the element. Romans v. Nadler, 217 Minn. 174, 179–180, 14 N.W.2d 482,
485−86 (1944). We apply these principles here.
We are satisfied that the district court had a sufficient evidentiary basis to conclude
that the Hensels actually possessed the disputed land. Although the Aydts argue over some
of the details, the trial testimony sufficiently supports the district court’s findings that the
Hensels planted a vegetable garden, planted raspberry bushes, planted trees, installed a
discharge pipe f rom their swimming pool, parked their trailer, rode all manner of
recreational vehicles, piled snow, and maintained a lawn in various areas of the disputed
10-by-545-foot parcel. We agree with the Aydts that some of these uses are merely
“sporadic and occasional” and therefore do not demonstrate actual possession. But
although the occasional recreational uses do not establish actual possession, the same
cannot be said of the garden placement, the tree planting, and the raspberry bush planting.
And although mowing grass over a boundary from one lawn into a neighboring lawn will
not, in most circumstances, amount to anything more than an occasional use, see Romans,
217 Minn. at 180–81, 14 N.W.2d at 486 (“It is a well-known fact that many thousands of
hom[e]owners have no boundary fences and that adjoining owners occasionally trespass
on their neighbors’ lands in cutting grass . . . .”), here the record implies that the Hensel s
planted and maintain ed their lawn adjacent to the Aydts’ readily distinguishable
agricultural use, supporting a finding that the establishment of the lawn evidence s actual
possession.
We also find support for the district court’s conclusion that the Hensels’ use
constituted “open possession.” “Open possession” includes possession that is “visible from
7
the surroundings, or visible to one seeking to exercise his rights.” Hickerson v. Bender, 500
N.W.2d 169, 171 (Minn. App. 1993). Not only would a hypothetical reasonable landowner
have discovered the Hensels’ possession, John Aydt actually did. He observed the length
of the ten-foot strip as he farmed, and he said that he knew the Hensels installed the pipe
to discharge water from their pool. The trees and garden were likewise openly visible.
The Aydts dispute the district court’s determination that the Hensels “continually
and exclusively” possessed the strip for the requisite 15- year period. They argue that the
district court could not eliminate the possibility that John Aydt farmed some portion of the
ten-foot strip between 1996 and 2002 because the evidence did not show where the trees
were planted and Lois Hensel could not definitively say that the Aydts never farmed the
strip. Evidence establishing the beginning of the Hensels’ possession is sketchy, but on our
deferential review of district court factual findings, we cannot say the district court clearly
erred. The record includes photographs of the evergreen trees and the raspberry bushes the
Hensels say they planted, and both Lois and Steven Hensel testified about when and where
they planted the trees. An exhibit includes an aerial perspective of the property with hand-
drawn lines by one of the Hensels’ children marking the location of the garden and bushes.
And John Aydt testified acknowledging the trees and bushes in the area. The district court
weighed this evidence and found that the Hensels planted the trees and bushes in the
disputed portion in 1996. A district court that sits without a jury “is the sole judge of the
credibility of witnesses and may accept all or only part of any witness’[s] testimony.” Roy
Matson Truck Lines, Inc. v. Michelin Tire Corp, 277 N.W.2d 361, 362 (Minn. 1979). The
8
district court believed the Hensels, not the Aydts , and the Aydts do not demonstrate on
appeal that the district court’s findings were clearly erroneous.
We turn to the disputed finding that the Hensels established “hostile” possession.
The issue here is whether the Hensels’ use was hostile, as opposed to merely permissive.
To show hostility in possession, the possessor must “enter and take possession of [the land]
as if [it] were his own with intent to hold [it] for himself to the exclusion of all others.”
Thomas v. Mrkonich, 247 Minn. 481, 481, 78 N.W.2d 386, 386 (1956). Competing
presumptions were arguably at play here —one that favors hostility and one that opposes
it. On one hand, hostility is presumed where, as here, all other elements of adverse
possession are satisfied. Boldt v. Roth, 618 N.W.2d 393, 396 (Minn. 2000). But on the other
hand, a “close family relationship between the claimant of land and the record owner
[creates] an inference, if not [a] presumption” that the possession was merely permissive.
Norgong v. Whitehead, 225 Minn. 379, 383, 31 N.W.2d 267, 269 (1948). We must decide
whether the district court applied the right presumption.
The district court refused to presume permissive use based on a close familial
relationship because it found that “the Hensels and the Aydts were relatives in name only.”
Whether family members have a sufficiently close familial relationship is a question of fact
for the trial court. See Adams v. Johnson, 271 Minn. 439, 443– 44, 136 N.W.2d 78, 81–82
(1965) (affirming district court’s conclusion that family relationship was too distant to raise
the inference of permissive occupation). The Aydts insist that the evidence undermines the
district court’s finding here, pointing to statements that Lois Hensel made when the Hensels
applied for the zero-lot-line variance in 2012. She had explained to the board that her family
9
should have resolved the boundary dispute with the Aydts directly, and she “apologize[d]
to the board on behalf of both parties.” She added that they had not addressed the issue
immediately because “we figured if our family wanted to farm close to our shed, we didn’t
think [it was] any big deal.”
Although this evidence might have supported a finding of a close family
relationship, other evidence countered it. For example, the district court emphasized that
the Hensels had visited the Aydts’ home only once in the 15 years after the Hensels built
their shed. It observed that the Hensels did not inform the Aydts that they were selling their
property, leaving the Aydts to learn of it only when they saw the “for sale” sign in the
Hensels’ front yard. Lois Hensel testified that the Hensels and Aydts had a strained
relationship. In this circumstance of conflicting evidence, it is within the district court’s
province to decide between competing factual conclusions. Our role on appeal is limited;
we examine the record for any reasonable evidence that supports the district court’s
finding. See Rasmussen, 832 N.W.2d at 797. The evidence is not overwhelming, but it is
enough to establish that the district court did not clearly err by finding that the Aydts and
Hensels maintained a family relationship that was too chilly to presume that the Aydts had
merely permitted the Hensels to use the land. We are in no position to substitute our
interpretation of the competing evidence for the district court’s. We therefore do not disturb
the district court’s presumption that the Hensels’ use was hostile, as the Aydts identify
nothing in the record that required the district court to treat that presumption as rebutted.
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Because the record supports the district court’s factual determinations about the
nature and timing of the Hensels’ use of the disputed land, we affirm its adverse-possession
holding. We turn to the Aydts’ challenge to the district court’s slander-of-title conclusions.
II
The Aydts contest the district court’s determination that the Hensels proved all the
elements of their slander-of -title claim . A plaintiff proves a slander-of-title claim by
establishing that the defendant (1) made a false statement about the plaintiff’s ownership
of real property, (2) published the false statement, (3) acted with malice in making the false
statement, and (4) caused special damages. Paidar v. Hughes, 615 N.W.2d 276, 279–80
(Minn. 2000); see also Kelly v. First State Bank of Rothsay, 145 Minn. 331, 332, 177 N.W.
347, 347 (1920). The Aydts concede that their filing of the notice of lis pendens, which had
no factual or legal support, establishes the first two elements. They challenge the district
court’s finding that they acted with malice and caused special damages. For the following
reasons, we believe the record partly, but not entirely, supports the district court’s
conclusions.
A
We first address the Aydts’ challenge to the district court’s finding that they
published their notice of lis pendens with malice. Malice, in slander -of-title actions, is a
reckless disregard for the truth or falsity of a matter “despite a high degree of awareness of
probable falsity or entertaining doubts as to its truth.” Brickner v. One Land Dev. Co., 742
N.W.2d 706, 711–12 (Minn. App. 2007) (quotation omitted). Malice is presumed when the
publication is false and made by someone who has no ownership or possessory interest in
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the subject property. Virtue v. Creamery Package Mfg. Co., 123 Minn. 17, 46, 142 N.W.
1136, 1136 (1913). Without dispute here, the Aydts’ notice of lis pendens was false, and
they had no interest in the Hensels’ titled property. But defendants can overcome the
presumption of malice by showing good faith in their publication of the false statement, id.
at 47, 142 N.W. 1136, and the Aydts attempt to rebut the presumption of malice by pointing
to evidence of their good faith. The difficulty with the Aydts’ argument is that the district
court found, as a matter of fact, that their good-faith assertion lacked credibility , and the
finding has sufficient evidentiary support.
The district court’s credibility finding rejecting the Aydts’ good-faith argument is
not clearly erroneous. The district court heard all the evidence and, summarizing the issue,
explained its reasoning for rejecting the Aydts’ claim of good faith:
Sheila Aydt made it clear that she was unhappy with the sale
of the property outside of the family and she was willing to use
any means necessary to stop the sale of the property. In her
deposition, Mrs. Aydt answered the question “did you care
what means you used to thwart [the Hensels’] sale of their
property?” with “No, I did not.” On the second day of the trial,
Mrs. Aydt indicated that she knew the lis pendens would
prevent the Hensels from selling their property but that she did
not care if the house did not sell.

The notice of lis pendens was recorded only days before
the closing on the property. The Aydts personally received
specific notice of the inappropriate lis pendens and the
potential for a slander of title claim prior to the closing on the
property. Instead of rescinding or discharging the notice, the
Aydts’ attorney acknowledged the Aydts’ lack of a property
interest in the Hensels’ property and attempted to coerce a
settlement in the form of a land swap. The sale of the property
was held hostage by the Aydts.

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The district court’s reasoning is unassailable. The Aydts’ reckless disregard of the fact that
they lacked any legitimate property interest in the Hensels’ land preceded their notice of
lis pendens despite knowing that their notice would probably derail the Hensels’ pending
sale. This defeats the Aydts’ claim of good faith and leaves them unable to avoid the
presumption of malice. We hold that the district court did not clearly err by finding that the
Aydts published their notice of lis pendens maliciously.
B
The Aydts’ challenge to the district court’s finding of $132,149 in special damages,
however, is compelling. “Special damages are those [that] ‘are the natural, but not the
necessary and inevitable result of a wrongful act.’” Paidar, 615 N.W.2d at 277 n.1. In
slander-of-title actions, special damages frequently manifest in the form of a lost sale. And
in Paidar, the supreme court included attorney fees as special damages. 615 N.W.2d at
281. The Aydts urge us to reverse based on three arguments. They argue first that the
district court improperly included as special damages the attorney fees the Hensels accrued
while prosecuting their adverse possession claim and defending against the Aydts’ trespass
and nuisance claims. They argue second that special damages cannot include any loss after
the Aydts discharged their notice of lis pendens. They argue third that the special damages
award should be reduced because the Hensels failed to mitigate their losses.
Special Damages Award for Collateral Litigation
The district court awarded special damages of $35,511.92 for attorney fees charged
by Barna, Guzy & Steffen, Ltd., and $33,491.76 charged by Brendel and Zinn, Ltd. The
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district court made an ambiguous finding to explain its award of attorney fees as special
damages:
The attorneys’ fees expended by the Hensels were appropriate
and necessary to defend against the Aydts’ [trespass and
nuisance] claims as well as assert the [adverse possession,
prescriptive easement, slander of title, and punitive damages]
counterclaims in this matter. Because the pending litigation
cast a pall over the property and because the litigation needed
to be resolved prior to being able to sell the property, the
attorneys’ fees incurred by the Hensels even after the discharge
of the lis pendens are damages suffered by the Hensels.

While the district court found a causal connection linking the attorney fees and “the
litigation,” it failed to account for any distinction between “the litigation” over the Hensels’
slander-of-title claim, the Aydts’ trespass and nuisance claims, and the Hensels’ adverse-
possession claim. Although the Hensels’ slander-of-title claim arose from the Aydts’ lis
pendens filing, the other claims did not. We agree with the Aydts that the Hensels’ legal
fees accrued to defend against the Aydts’ trespass and nuisance claims were not a direct
consequence of the Aydts’ notice of lis pendens. In fact the Aydts brought these claims,
and the Hensels began defending against them, even before the Aydts filed their notice of
lis pendens. The district court suggests instead that virtually all the legal fees accrued by
the Hensels directly resulted from the false lis pendens notice.
The record reveals that the district court carefully reviewed the attorney fees owed
to Barna, Guzy & Steffen to assess any relationship between those fees and the notice of
lis pendens. But the record does not indicate that the district court similarly scrutinized the
fees generated by Brendel and Zinn . This omission is especially problematic given that
each of the Brendel firm’s invoices includes an entry at the top indicating, “Total Billed to
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Date,” and the latest of these invoices designates the accumulated total to be $33,491.76—
the precise amount awarded by the district court as special damages for the Brendel firm’s
work. It is apparent that not all of that firm’s work addressed the lis pendens filing. One of
the invoices, for example, includes an itemized charge to “Draft Amended Counterclaim
to include Count for Adverse Possession.” And another entry covers “Legal research
regarding motion for summary judgment on issues of trespass and nuisance.” To the extent
the district court legally erred by treating all components of the litigation as caused by
slander of title, or it factually erred by failing to accurately calculate and limit special
damages only to compensate for fees incurred to address the slander of title, we must
reverse. We remand for the district court to recalculate special damages and to award as
special damages only those attorney fees that the Hensels accrued as a direct consequence
of the Aydts’ notice of lis pendens.
Special Damages Award For Costs Incurred After Lis Pendens Discharge
The Aydts also maintain that no special damages can be awarded for costs incurred
after they discharged their notice of lis pendens because the Hensels’ property became
transferable again. Whether certain damages may be recovered as “special damages” is a
question of law that we review de novo. Paidar, 615 N.W.2d at 279. The district court
found the Aydts’ argument “technically accurate” but practically flawed. It awarded
damages incurred after the discharge up to the conclusion of the prior appeal to this court
because of the “reality that real estate agents did not want to engage in a sale/purchase of
the property while the discharge of the notice of lis pendens was on appeal.” The district
court’s explanation is well reasoned.
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The Aydts rely on Minnesota Statutes section 557.02 (2016) to support their
argument that damages accrued after the notice was discharged cannot be counted as
special damages. That statute provides that a discharged notice of lis pendens is “void and
of no force or effect.” We do not read this statute as establishing the standard for special
damages but, rather, as explaining the legal effect of a discharge. And whether a loss
qualifies as a special damage arising from slander of title depends not on the false
statement’s legal effect but on whether the loss directly resulted from the statement. See
Paidar, 615 N.W.2d at 281 (permitting recovery of attorney fees even though plaintiff sold
his land while it was encumbered by the false statement). It appears that the district court
operated with this understanding when it determined that the Hensels still suffered special
damages that were a direct result of the false statement even after the false statement had
been discharged. We see no error in the district court’s reasoning.
Special Damages Award and Duty to Mitigate
The Aydts argue next that the district court erred when it failed to reduce the
Hensels’ special-damages award because the Hensels failed to mitigate their losses.
Wronged parties generally must use “reasonable diligence and good faith” to mitigate their
damages. Wavra v. Karr, 142 Minn. 248, 251, 172 N.W. 118, 120 (1919). Whether a party
used reasonable diligence and good faith is a question of fact, reviewed only for clear error.
See id. at 251, 172 N.W. at 119. The district court found that the Hensels did contact real
estate agents to relist the property after their sale fell through. And it also found that agents
avoided becoming involved because the notice of lis pendens was being disputed on appeal.
The Aydts argue that the Hensels ruined other opportunities to sell by telling prospective
16
buyers about the litigation. The Aydts do not (and we presume cannot) cite any authority
for the peculiar notion that sellers who inform potential buyers that they have sued to
remedy a false claim of ownership that a third party has filed against the property thereby
lose their right to recover special damages caused by the false claim. We see no clear error
in the district court’s factual finding that the Hensels used reasonable diligence and good
efforts to mitigate the losses they suffered from the Aydts’ unjustified filing against the
Hensels’ property.
III
The Aydts finally challenge the district court’s award of punitive damages. We
review a challenge to an award of punitive damages for an abuse of discretion. Ray v. Miller
Meester Advert. Inc., 664 N.W.2d 355, 371 (Minn. App. 2003) (citing Cooper Indus., Inc.
v. Leatherman Tool Group, Inc., 532 U.S. 424, 433, 121 S. Ct. 1678, 1684 (2001)). The
district court may award punitive damages if it finds by clear and convincing evidence that
the defendant acted with a “deliberate disregard for the rights or safety of others.” Minn.
Stat. § 549.20 (2017). A plaintiff makes this showing by establishing that the defendant
knew of facts creating “a high probability of injury to the rights or safety of others” and
consciously, deliberately, or indifferently acted in a manner that disregarded this high
probability of injury. Id., subd. 1(b).
The Aydts argue that because they filed their notice of lis pendens in good faith, the
district court could not rightly conclude that the filing was in “deliberate disregard” of
probable harm to the Hensels’ rights. We have already affirmed the district court’s finding
that the Aydts did not file the notice in good faith, and this affirmation defeats the Aydts’
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argument here. B ut we still must reverse. T he district court decided to award punitive
damages and determined the amount in part by “consider[ing] the substantial compensatory
damages being awarded.” Becaus e we are reversing and remanding the special damages
determination for recalculation for the reasons we have identified, and because the district
court rested its punitive-damages award in part on the amount of those damages, on remand
the district court should also reconsider what, if any, punitive damages to award.
Affirmed in part, reversed in part, and remanded.