Larry Wajda, Respondent,

This opinion will be unpublished and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
A18-0060

Larry Wajda,
Respondent,

vs.

Jamie S. Schmeichel,
Appellant.

Filed November 26, 2018
Reversed
Florey, Judge

Hennepin County District Court
File No. 27-CV-HC-17-4221

Larry Wajda, Minneapolis, Minnesota (pro se respondent)

Paul Birnberg, Samuel Spaid, HOME Line, Minneapolis, Minnesota (for appellant)

John T. Sullivan, Michael A. Brey , Dorsey & Whitney, L.L.P., Mi nneapolis, Minnesota
(for amicus curiae InquilinXs UnidXs por Justicia)

Considered and decided by Florey, Presiding Judge; Ross, Judge ; and Reyes, Judge.
U N P U B L I S H E D O P I N I O N
FLOREY, Judge
In this appeal from an eviction judgment based on breach of lease and holdover after
notice to quit, under Minn. Stat. § 504B.285, subd. 1(a)(2), (3) (Supp. 2017), in conjunction
with unlawful occupancy, under Minn. Stat. § 504B.301 (2016), a ppellant-tenant argues
that there is no basis for eviction under respondent-landlord’s pleaded claims and that the

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district court erred by relying on section 504B.301, which was not pleaded, as a basis for
eviction.
We conclude that eviction for breach of lease is improper because the lease is void
on public-policy grounds, and eviction for holdover after notice to quit is improper because
respondent did not give proper written notice to appellant term inating the tenancy at will.
Eviction for unlawful occupancy under section 504B.301 is improper because respondent
was not unlawfully occupying the property; she maintained a tenancy at will at the time of
the eviction. We therefore reverse the eviction and award of costs and disbursements.
FACTS
In October 2011, respondent-landl ord Larry Wajda rented the upp er level of his
Minneapolis duplex to appellant-tenant Jamie S. Schmeichel. Th e parties entered into a
six-month written lease for $575 per month. Under the terms of the lease, appellant could
vacate the property after the six-month term with proper notice of one month and one day,
or elect to remain after the six-month term “with a month to month lease.” Appellant was
responsible for paying for electricity, and respondent was responsible for all other utilities.
Respondent did not have a license to rent the property. Appellant learned that respondent
was unlicensed, and beginning in the first half of 2017, stopped paying rent.
In July 2017, respondent filed an eviction action alleging nonpayment of rent. The
action proceeded to housing court but was dismissed and later e xpunged. On August 2,
2017, the City of Minneapolis ord ered that the property be vaca ted by appellant by
September 2, 2017, due to the unlawful occupancy (single-family d w e l l i n g u s e d a s a
duplex), and this deadline was later changed by the city to October 1, 2017.

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On September 1, 2017, respondent filed a second eviction action, and it is from this
action that the present appeal arises. In the complaint, respondent alleged that the parties
entered into a written lease covering October 2011 to November 2012, with current rent of
$630 per month. 1 The stated grounds for eviction were failure to pay rent and utilities
($4,280 total); failure to vacat e by August 1, 2017, after writ ten notice provided on July
24, 2017; and breach of the lease for failure to pay rent and utilities.
On September 18, 2017, a trial was held before a housing-court referee. Appellant
testified that she stopped payin g for electricity in May 2016 b e c a u s e s h e w a s b e i n g
overcharged and was not being properly billed. She did not dis pute that she failed to pay
rent. After the trial, the refe ree’s confirmed order awarded respondent a writ of recovery
and costs and disbursements. The referee found that respondent d i d n o t h a v e a r e n t a l
license and therefore did not have a right to collect rent, but appellant’s occupancy was
unlawful because she had “no right to retain possession,” and therefore eviction is proper
under Minn. Stat. § 504B.301. The referee concluded that no no tice is required under
section 504B.301, but appellant had notice that respondent wanted her to vacate since July
24, 2017. The referee effectively admitted that section 504B.301 was not pleaded, but cited
to Minn. R. Civ. P. 15.02 in a footnote, noting that issues not raised may be tried by implied
consent of the parties.

1 Although this amount does not coincide with the written lease, the district court found
that the rent was $630 per month, and no party disputes this finding on appeal. It appears
that the rent was raised at some point.

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Appellant sought review from the district court. The district court examined the
plain language of Minn. Stat. § 504B.285, subd. 1(a)(2), and co ncluded that, although a
person without a rental license may not collect rent, no statutory language requires a person
to possess a rental license in order to evict for failure to pa y rent, breach of lease, or
unlawful occupancy. The court determined that the housing cour t did not err in finding
that appellant unlawfully occupie d the property “for failure to pay rent,” and appellant
breached the lease agreement by failing to pay rent and utiliti es. The court further found
that the housing court did not er r by finding that a ppe llant fa iled to vacate after notice
because a 30-day notice is not r equired under section 504B.301, and appellant received
“ample and repeated notice to vacate.” The court affirmed the referee’s confirmed findings
of fact and conclusions of law. This appeal followed.
D E C I S I O N
Eviction actions are summary in nature, limited in scope, and determine only present
possessory rights. Minn. Stat. § 504B.001, subd. 4 (2016); Lilyerd v. Carlson, 499 N.W.2d
803, 812 (Minn. 1993); Dahlberg v. Young, 42 N.W.2d. 570, 576 (Minn. 1950). We review
a district court’s findings of fact supporting an eviction for clear error, and we review a
district court’s legal conclusions de novo. Nationwide Hous. Corp. v. Skoglund , 906
N.W.2d 900, 907 (Minn. App. 2018), review denied (Minn. Mar. 28, 2018); Cimarron Vill.
v. Washington, 659 N.W.2d 811, 817 (Minn. App. 2003).
The district court relied upon three interconnected bases for e viction. The court
relied upon breach of lease and holdover after notice to quit in determining that appellant’s
occupancy was unlawful, and the court then relied upon unlawful occupancy under section

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504B.301 as the primary basis for eviction. Respondent also pleaded nonpayment of rent,
governed by Minn. Stat. § 504B.29 1 (2016), but neither the refe ree nor the district court
addressed that statutory basis for relief, and therefore we do not address the merits of that
basis. See Minn. Cent. R.R. Co. v. MCI Telecomm. Corp. , 595 N.W.2d 533, 539 (Minn.
App. 1999) (stating that “[a] reviewing court will not address an issue raised in the district
court if the district court did not rule on the issue”), review denied (Minn. Sept. 14, 1999).
We first address breach of lease.
I. Eviction for breach of lease, under section 504B.285, subdivision 1(a)(2), is
improper because the lease is void on public-policy grounds.

Appellant asserts that respondent’s claim of breach fails because the rent and utility
terms in the lease are illegal. We agree. The lease is void a nd unenforceable on public-
policy grounds. A landlord may not seek eviction for breach of a lease if the landlord is
unlicensed and commits a criminal act by entering into a lease and renting a dwelling.
In Minneapolis, it is a crime t o rent out a dwelling without a license. Under
Minneapolis, Minn., Code of Ordinances (MCO) § 244.1810 (2017):
No person shall allow any dwelling unit to be occupied,
or let or offer to let to another any dwelling unit for occupancy,
or charge, accept or retain rent for any dwelling unit unless the
owner has a valid license, administrative registration, short
term rental registration or provisional license under the terms
of this article.

Under MCO § 244.1980 (2017):

A person who allows to be occupied, lets or offers to let
to another, any dwelling unit, without a license as required by
this article, is guilty of a misdemeanor . . . .

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In Minnesota, the general rule is that a contract entered into for business, in violation
of a statute that prohibits such business if unlicensed, is voi d if the statute as a whole
indicates that the legislature intended such a contract to be i llegal. Dick Weatherston’s
Assoc. Mech. Servs., Inc. v. Minn. Mut. Life Ins. Co., 100 N.W.2d 819, 824 (Minn. 1960).
Whether a contract is void as a matter of law is an issue decided de novo. Isles Wellness,
Inc. v. Progressive N. Ins. Co., 725 N.W.2d 90, 92 (Minn. 2006). Although we are dealing
with Minneapolis city ordinances and not statutes, we see no reason why the ordinances at
issue should be given any less e ffect. Minneapolis is a home-r ule charter city with the
power to legislate in regard to municipal affairs and enact ord inances that promote health
and safety. Bicking v. City of Minneapolis , 891 N.W.2d 304, 306 (Minn. 2017); City of
Morris v. Sax Invs., Inc. , 749 N.W.2d 1, 6 (Minn. 2008); A.C.E. Equip. Co. v. Erickson ,
152 N.W.2d 739, 741 (Minn. 1967); see also Lew Bonn Co. v. Herman, 135 N.W.2d 222,
223-24 (Minn. 1965) (considering whether failure to file plans and specifications as
required by city ordinance resulted in contract being void).
“Not every illegal contract must be voided in order to protect public policy,” and
we must examine the particular contract “to determine whether the illegality has so tainted
the transaction that enforcing the contract would be contrary t o public policy.” Isles
Wellness, Inc., 725 N.W.2d at 92-93. Here, we examine “the nature and circumstances of
the [lease] in light of the applicable . . . ordinance.” Lew Bonn Co., 135 N.W.2d at 225.
The Minneapolis rental-dwelling- license ordinances make no refe rence to the
validity of lease agreements entered into without proper licensing, but they strongly imply
that such agreements are void and unenforceable on public-polic y grounds. See MCO

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§§ 244.1800-.2020 (2017). As st ated, MCO § 244.1810 not only p rohibits renting a
dwelling without a license, but it prohibits even offering a dw elling, and it expressly
prohibits “charg[ing], accept[ing] or retain[ing] rent.” MCO § 244.1980 criminalizes
renting a dwelling without a licen se. MCO § 244.1970 requires a dwelling occupied
without a license to be vacated within a “reasonable time,” indicating that any contractual-
lease term is effectively void. These ordinances are designed to ensure that dwellings meet
minimum health and safety standards. See MCO § 244.1910 (licensing standards). While
respondent seeks only eviction, deeming the lease valid would d irectly contradict the city
ordinances and signals to landlords that they may sidestep the minimum health and safety
standards inherent in rental licensure. It is simply illogical to conclude that appellant
breached her duty to pay rent when MCO § 244.1810 prohibits respondent from charging
or accepting rent. Respondent cannot rely upon the lease to seek eviction.
II. Eviction for holdover after notice to quit, under section 504B.285, subdivision
1(a)(3), is improper because appellant received insufficient notice.

Appellant was a tenant at will. As previously discussed, appellant took possession
under a void lease. A tenant who takes possession under a void lease and makes payments
accepted by the landlord becomes a tenant at will. Fisher v. Heller, 219 N.W. 79, 80 (Minn.
1928).
Minnesota Statutes section 504B.135 (2016) governs termination of a tenancy at
will. Section 504B.135 requires notice in writing “at least as long as the interval between
the time rent is due or three months, whichever is less,” and f or failure to pay rent, “14

8
days notice to quit in writing.” Only eight days of notice was provided in this case.
Respondent notified appellant on July 24, 2017, that she must move out by August 1, 2017.
A notice to terminate a tenancy a t will “is a distinct act, whi ch must be sufficient
and complete of itself, without r eference to subsequent events or proceedings,” and it
matters not “which party attempts to terminate the tenancy.” Eastman v. Vetter, 58 N.W.
989, 989-90 (Minn. 1894). Here, there was insufficient notice. Thus, appellant was not a
holdover tenant, and eviction for holdover after notice to quit was improper.
III. Eviction for unlawful occupancy under section 504B.301 is improper because
appellant was a tenant at will and therefore lawfully occupying the residence.

The district court relied upon section 504B.301 to evict appellant. Appellant argues
that eviction under section 504B.301 is improper because it pro vides no independent
statutory basis for eviction,2 and respondent failed to plead it as a basis for eviction. We
need not reach appellant’s argum ents because, even assuming tha t section 504B.301
provides an independent basis for relief and was properly raise d, eviction under section
504B.301 is improper.

2 Section 504B.301, titled “eviction action for unlawful detenti on,” covers instances were
real property is “forcibly occupied,” a scenario that Minn. Sta t. § 504B.285, subd. 1(a)
(2016) does not reference. See Davis v. Woodward, 19 Minn. 174, 174 (1872) (discussing
unlawful detainer “by force and strong hand”). It also covers instances where property is
being unlawfully detained because the tenant is using the prope rty to store certain
contraband or controlled substances. See Minn. Stat. §§ 504B.301, 609.5317, subd. 1
(2016). This language indicates that it provides a basis for eviction independent of section
504B.285, subdivision 1(a). See also Minn. Stat. § 327C.09, subd. 5 (2016) (providing for
eviction from a manufactured-home park).

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Under Minn. Stat. § 504B.301, “A person may be evicted if the p erson has
unlawfully or forcibly occupied or taken possession of real property or unlawfully detains
or retains possession of real property.” Appellant had a right to possession as a tenant at
will, and her tenancy had not been properly terminated prior to the commencement of the
eviction action. The district court relied upon breach of lease and holdover after notice to
quit to conclude that appellant unlawfully occupied the residen ce, but as previously
discussed, these were not proper bases to terminate appellant’s tenancy. At the time of the
eviction, appellant was not unlawfully or forcefully occupying the property or unlawfully
detaining or retaining possession of the property. Even accepting that the city’s notice that
appellant’s occupancy was unlawful as sufficient proof of an un lawful occupancy for
purposes of section 504B.301, th e city gave appellant until Oct ober 1, 2017, to vacate.
Respondent’s complaint was filed, and the eviction trial occurr ed, prior to this deadline.
Therefore, appellant’s occupancy was not unlawful for purposes of eviction under section
504B.301.
While we conclude that an eviction was not proper, in part, be cause respondent
lacked a rental license, respon dent and those in his situation are not without recourse.
Respondent could have obtained an eviction with proper notice t o quit. We reverse the
eviction and any award of costs and disbursements.
Reversed.