Princeton Auto Center Inc. DLR 22118, Respondent,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2018).

STATE OF MINNESOTA
IN COURT OF APPEALS
A18-2022

Princeton Auto Center Inc. DLR 22118,
Respondent,

vs.

2010 Chevrolet Silverado Crew Cab Pickup,
VIN#3GCRKSE37AG123890,
MN License Plate 511THX,
Appellant.

Filed August 5, 2019
Affirmed
Cochran, Judge

Stearns County District Court
File No. 73-CV-17-10807

Craig E. Cascarano, Minneapolis, Minnesota (for respondent)

Kristi Stanislawski, Jovanovich , Kadlec & Athmann, P.A., St. Cl oud, Minnesota (for
appellant)

Considered and decided by Florey, Presiding Judge; Worke, Judg e; and Cochran,
Judge.
U N P U B L I S H E D O P I N I O N
COCHRAN, Judge
The City of Cold Spring (the city) appeals the district court’s o r d e r p r e c l u d i n g
forfeiture of a 2010 Chevrolet Silverado, arguing that the district court erred in finding that
respondent Princeton Auto Center Inc. (Princeton Auto), the tit leholder and registered

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owner, is an innocent owner under Minn. Stat. § 169A.63, subd. 7(d) (2018). Because we
conclude that the district court’s factual findings are not cle arly erroneous and that the
district court correctly applied the innocent-owner provision, we affirm.
FACTS
John Davis owns three car dealers hips, including respondent Pri nceton Auto.
Princeton Auto is a subchapter S corporation and John is the ma jority owner. Princeton
Auto holds, for resale, the title to a 2010 Chevrolet Silverado (the truck) that is the subject
of this case. Princeton Auto is the registered owner of the tr uck. The truck is listed on
Princeton Auto’s inventory.
John’s sons Craig and Chad, and Chad’s son Connor, live with Jo hn in his house
and work at the dealerships. Joh n’s wife also lives in the hou se. In June 2017, Connor
turned 16 years old. John gave Connor the truck for his birthday, but the title to the truck
was never transferred from Princeton Auto to Connor. John admi tted that the title
“probably should have been transferred.” John paid for an insu rance policy on the truck
that covered himself, his wife, Chad and Connor. The insurance was not purchased through
Princeton Auto. Connor had exclusive use of the truck.
In September 2017, John, Connor, and Craig were at their home. C r a i g a s k e d
Connor if he could use the truck. Connor allowed Craig to use it. Though John was at the
home, he was not with Connor and Craig when Craig asked to use the truck, and did not
know that Connor loaned the truck to Craig.
Craig had been convicted of driving while impaired four times before borrowing the
truck from Connor. On this occasion, Craig drove the truck to a bar and had several drinks.

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He then picked up Chad, who was at another bar, and drove to a fast food restaurant. Police
were dispatched to the restaurant after receiving a report of a possible intoxicated driver at
the restaurant. Police stopped Craig at the restaurant and arrested him after Craig refused
to take a breath test. Craig ultimately pleaded guilty to seco nd-degree driving while
impaired—test refusal. Craig told police that the truck was hi s and that he had insurance
for it.
The following day, police served Craig with notice of an intent to forfeit the truck.
Craig told police that his family was working on putting the truck in Connor’s name.
Craig and Princeton Auto filed petitions to the district court to preclude forfeiture
of the truck. The district court held an evidentiary hearing o n the petitions. Craig
voluntarily dismissed his petition at the beginning of the hear ing. Princeton Auto
proceeded. Princeton Auto argued it was an “innocent owner” un der Minn.
Stat. § 169A.63, subd. 7(d), and therefore the vehicle was not subject to forfeiture. The
city agreed that Princeton Auto held the title to the truck and was the registered owner, but
maintained that the “innocent owner” exception did not apply. The district court received
testimony from John, Connor, Chad, Craig, and the officer who arrested Craig. The district
court found that Princeton Auto was an “innocent owner” and gra nted Princeton Auto’s
motion to preclude forfeiture of the truck.
The city appeals.

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D E C I S I O N
Under Minn. Stat. § 169A.63 (2018), a vehicle is subject to forfeiture if it was used
in the commission of a designated offense, including second-deg ree driving while
impaired. A vehicle is not subject to forfeiture, however, if
any of its owners who petition th e court can demonstrate by
clear and convincing evidence t hat the petitioning owner did
not have actual or constructive knowledge that the vehicle
would be used or operated in a ny manner contrary to law or
that the petitioning owner took reasonable steps to prevent use
of the vehicle by the offender. If the offender is a family or
household member of any of the owners who petition the court
and has three or more prior impaired driving convictions, the
petitioning owner is presumed to know of any vehicle use by
the offender that is contrary to law [including driving while
impaired].

Minn. Stat. § 169A.63, subd. 7(d). The city argues that the di strict court erred in finding
that Princeton Auto satisfied the requirements of this statute and granting the motion to
preclude forfeiture of the truck. Specifically, the city argues that the district court erred in
finding that Princeton Auto was an “owner” of the truck and err ed in concluding that
Princeton Auto proved that it did not have actual or constructive knowledge that the vehicle
would be used in a manner contrary to law.
“When reviewing a trial court’s findings of fact, the appellate court shall not set
such findings aside unless they are clearly erroneous and due r egard shall be given to the
opportunity of the trial court to judge the credibility of the witnesses.” Rife v. One 1987
Chevrolet Cavalier, 485 N.W.2d 318, 321 (Minn. App. 1992) (quotation omitted), review
denied (Minn. June 30, 1992). We review questions of law de novo. Modrow v. JP
Foodservice, Inc., 656 N.W.2d 389, 393 (Minn. 2003).

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I. The district court did not clearly err in finding that Princ eton Auto was an
owner.

The city argues that the district court erred in determining t hat Princeton Auto is an
“owner” of the truck within the meaning of Minn. Stat. § 169A.63. The city contends that
the evidence shows that Princeton Auto is not an owner because John Davis gifted the truck
to Connor for his birthday, Connor had exclusive use of the truck, and Princeton Auto was
not connected to the insurance policy that John paid for to cover the truck. The city further
argues that the evidence shows that Princeton Auto holds the ti tle for resale, but never
intended to resell the truck after John gave it to Connor. Princeton Auto maintains that the
record supports the district court’s determination that it is an owner of the truck within the
meaning of the statute because it is the registered owner of th e truck, it holds the title to
the truck, and the truck is listed on Princeton Auto’s inventory.
The forfeiture statute at issue defines the term “owner” as follows:
“Owner” means a person legally entitled to possession, use,
and control of a motor vehicle, including a lessee of a motor
vehicle if the lease agreement has a term of 180 days or more.
There is a rebuttable presumption that a person registered as
the owner of a motor vehicle according to the records of the
Department of Public Safety is the legal owner. For purposes
of this section, if a motor vehicle is owned jointly by two or
more people, each owner’s interest extends to the whole of the
vehicle and is not subject to apportionment.

Minn. Stat. § 169A.63, subd. 1(h). This court has treated the question of ownership as a
question of fact. See Rife, 485 N.W.2d at 322 (indicating that the trial court did not clearly
err in finding that a person was the owner of a vehicle).

6
Because Princeton Auto is the registered owner of the truck, t he district court
applied the rebuttable presumption established in the statute. It found that the city failed
to rebut the presumption and that Princeton Auto is an “owner” under the statute. The
district court reasoned that, although John intended to transfer the truck to Connor, he never
transferred the title and the gift was not completed.
The city relies on Rife to support its position that Princeton Auto does not own the
truck notwithstanding the fact that Princeton Auto holds the ti tle and is the registered
owner. In affirming the district court in Rife, we concluded that the district court did not
clearly err in finding that the appellant’s daughter owned the vehicle in question despite
the fact that the appellant-father was the registered title owner of the vehicle. 485 N.W.2d
at 321-22. Before the father entered into a purchase agreement for the vehicle, the daughter
asked a court to release funds from an earlier personal-injury settlement to purchase a car.
Id. at 320. The court did not release any funds and the daughter then asked her parents for
help. Id. The father and daughter subsequently went shopping for a car and the father
testified that he entered into a contract to purchase the vehicle in question. Id. The mother,
who was the conservator of the daughter’s estate, then petitioned the court to release funds
to pay for a vehicle, tax, and insurance. Id. After the father purchased the vehicle, the
father listed the vehicle on his insurance policy and did not l ist the daughter. Id. But the
daughter, after being arrested for conspiring to sell narcotics, told police that she paid for
the vehicle and that it was registered in her father’s name only for insurance purposes. Id.
There was also evidence that the daughter always had possession and use of the vehicle.
Id. We concluded that there was su fficient evidence to sustain the district court’s finding

7
that the daughter owned the vehicle despite the presumption that the father—the registered
title owner—owned the vehicle. Id. at 321.
But, this case is procedur ally distinguishable from Rife in a critical regard. Here,
the district court found that the title holder and registered o wner—Princeton Auto—was
an “owner” as defined by Minn. S tat. § 169A.63, subd. 1(h). Th us, our review is limited
to whether that finding was clearly erroneous. Rife, 485 N.W.2d at 321.
The evidence produced at the evidentiary hearing supports the d istrict court’s
finding that Princeton Auto was an owner under Minn. Stat. § 16 9A.63, subd. 1(h). An
owner is a person or entity that is “legally entitled to possession, use, and control of a motor
vehicle.” Minn. Stat. § 169A.63, subd. 1(h) (emphasis added). As the registered owner of
the truck, Princeton Auto was presumed to be an owner. See id. Though it was undisputed
that Connor had actual possession, use, and control of the truc k, the district court found
that the truck had not been fully transferred to Connor because Princeton Auto did not
transfer the title. The finding is consistent with the requirements of a valid gift. “For a gift
to be valid, there must be dona tive intent, delivery, and absol ute disposition of the
property.” Muschik v. Conner-Muschik, 920 N.W.2d 215, 223 (Minn. App. 2018). While
John had the intent to gift the truck to Connor at some point, Princeton Auto did not
absolutely dispose of the truck because it did not transfer the title to Connor or any of the
Davises.
Moreover, although John paid for a personal insurance policy to cover the truck,
there is no evidence that either P rinceton Auto or the Davis fa mily made any effort to
comply with Minn. Stat. § 168A.11, subd. 1 (2018), which establishes the obligations of a

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dealer when transferring a vehicle being held for resale to ano t h e r p e r s o n . See Minn.
Stat. § 168A.11, subd. 1 (requiri ng the dealer to “promptly exe cute the assignment and
warranty of title” upon transferri ng the vehicle to another per son). We further note that
Connor, as a 16-year-old, was prohibited by law from owning the truck at the time that the
city attempted to forfeit it. See Minn. Stat. § 168.101, subd. 1 (2018) (making it unlawful
for a person under the age of 18 to own a passenger automobile or truck, subject to
exceptions not relevant here); see also Minn. Stat. § 168.101, subd. 2 (2018) (making it a
misdemeanor to knowingly transfer title of a passenger automobi le or truck to a person
who is prohibited from owning a passenger automobile or truck under subdivision one).
The evidence in the record sup ports the district court’s findings that Princeton Auto
held title to the truck and was the registered owner, and that Princeton Auto listed the truck
on its inventory. Under these cir cumstances, we conclude that the district court did not
clearly err in finding that Princeton Auto was legally entitled to possession, use, and control
of the vehicle and was therefore an “owner” under Minn. Stat. § 169A.63, subd. 1(h).
II. The district court did not clearly err in finding that Prin ceton Auto did not
have actual or constructive knowledge of Craig’s use of the vehicle.

We turn next to the city’s argument that the district court err ed in finding that
Princeton Auto did not have actual or constructive knowledge that Craig would operate or
use the vehicle in a manner contrary to law. The city argues t hat the district court should
have presumed that Princeton Auto knew of Craig’s illegal use of the vehicle. It maintains
that Minn. Stat. § 169A.63, subd. 7(d), imposes a presumption that John, Connor, and Chad
knew that Craig would operate the v e h i c l e c o n t r a r y t o l a w , a n d that Princeton Auto

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therefore failed to meet its burden in proving that it was an i nnocent owner under the
statute.
We must first address the question of whether the presumption o f knowledge
provided in Minn. Stat. § 169A.63, subd. 7(d) applies to Prince ton Auto or any of the
Davises under these circumstances. Minn. Stat. § 169A.63, subd . 7(d) provides that “[i]f
the offender is a family or household member of any of the owners who petition the court
and has three or more prior impaired driving convictions, the petitioning owner is presumed
to know of any vehicle use by the offender that is contrary to law.” A “family or household
member” includes a parent, brother, uncle, nephew, grandparent, o r “ p e r s o n s r e s i d i n g
together or persons who regularly associate and communicate with one another outside of
a workplace setting.” Minn. Sta t. § 169A.63, subd. 1(f)(1)-(3) . The district court
determined that the presumption did not apply to Princeton Auto. The city argues on appeal
that the district court should have applied the presumption to all of the Davises and imputed
their knowledge—particularly John’s knowledge—to Princeton Auto.
Appellate courts review issues o f statutory interpretation de n ovo. Webster v.
Hennepin County, 910 N.W.2d 420, 430 (Minn. 2018). “If a statute is unambiguo us, we
apply the statute’s plain meaning.” State v. Overweg, 922 N.W.2d 179, 183 (Minn. 2019)
(quotation omitted). The plain a nd unambiguous language of Min n. Stat. § 169A.63,
subd. 7(d), imposes the presumption of knowledge upon the petitioning owner only if the
petitioning owner is a family or household memb er of the offending driver. Cons idering
the unambiguous language of the statute, we conclude that the d istrict court did not err
when it determined that the presumption did not extend to Princ eton Auto because

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Princeton Auto is an S corporation. Princeton Auto is not a “family or household member”
to Craig as defined by Minn. Stat. § 169A.63, subd. 1(f). We s imilarly reject the city’s
argument that John, Chad, and Connor were presumed to know of Craig’s illegal use of the
vehicle because none of them were a petitioning owner.1
Having determined that the statute did not impose a presumption that Princeton
Auto, John, Chad, or Connor had knowledge of Craig’s illegal use of the truck, we review
whether the district court clearly erred in finding that Prince ton Auto did not have actual
or constructive knowledge of Craig’s illegal use of the truck. The district court found that,
even assuming that John’s knowledge could be imputed to Princeton Auto as the majority
shareholder, Princeton Auto proved by clear and convincing evid ence that John did not
have actual or constructive know ledge that Craig would drive th e vehicle at all. The
evidence supports the finding that John did not have actual kno wledge that Craig would
drive the truck because John was not present when Craig borrowed the truck from Connor.
The district court’s finding that John did not have constructiv e knowledge is also not
clearly erroneous because, althoug h John had actual knowledge t hat Craig had been
convicted of multiple driving-while-intoxicated offenses, there was no evidence to suggest
that Craig drove the truck on a ny other occasion or that Craig used vehicles belonging to
other people in the house. Connor testified that this incident was the only time that Craig
ever asked to borrow the truck. B ased on the evidence in the r ecord, we cannot say that
the district court clearly erred in determining that Princeton Auto, and John Davis, did not

1 Craig filed a petition but voluntarily dismissed his petition at the start of the hearing. The
only petition considered by the district court was the petition filed by Princeton Auto.

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have actual or constructive knowle d g e t h a t C r a i g w o u l d d r i v e t he truck in a manner
contrary to law.
The city argues that precluding forfeiture in this case will al low Craig to drive
vehicles owned by John’s dealerships without the threat that the vehicles will be forfeited.
We disagree that the innocent-owner defense will be as readily available for the dealership
in any similar future cases. Given Craig’s use of the vehicle in this case, a strong argument
can be made in future cases that the dealership has constructiv e knowledge that vehicles
owned by the dealership but used by the Davises will be used in a manner contrary to law
by Craig.
Because Princeton Auto proved by clear and convincing evidence that it did not
have actual or constructive know ledge that the vehicle would be used or operated in a
manner contrary to law, the dis trict court did not err in grant ing Princeton Auto’s motion
to preclude forfeiture of the truck.
Affirmed.