1648 Properties, LLC, et al., Appellants,

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A21-0432

1648 Properties, LLC, et al.,
Appellants,

vs.

Morrisun Sund, PLLC,
Respondent,

KAW Parks, LLC,
Respondent.

Filed January 10, 2022
Affirmed in part, reversed in part, and remanded
Slieter, Judge

Sherburne County District Court
File No. 71-CV-20-1114

John A. Cotter, Nic S. Puech ner, Larkin Hoffman Daly & Lindgren, Ltd., Minneapolis,
Minnesota; and

Daniel S. Bernheim (pro hac vice), Wile ntz Goldman & Spitzer, P.A., Philadelphia,
Pennsylvania (for appellants)

Eric G. Nasstrom, Ryan R. Dreyer, Morri son Sund PLLC, Minnetonka, Minnesota (for
respondent Morrison Sund)

Scott D. Blake, Lauren M. Weber, Felhaber Larson, Minneapolis, Minnesota (for
respondent KAW Parks)

Considered and decided by Larkin, Pres iding Judge; Johnson, J udge; and Slieter,
Judge.
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NONPRECEDENTIAL OPINION
SLIETER, Judge
Appellants 1648 Properties, LLC and Henr y Stursberg (1648 Properties) obtained a
court order that required respondent Morrison Sund, PLLC1 to release an attorney lien on
property that had a pending property sale. Because Morrison Sund did not initially comply
with the order to release the attorney lien, 1648 Properties moved the district court to hold
Morrison Sund in contempt for its delay. Morrison Sund subsequently released the
attorney lien, and 1648 Properties deposited an amount equivalent to the lien amount with
the district court.
1648 Properties claims the district court erred by (1) ruling the attorney lien issues,
which include 1648 Properties’ contempt mo tion, moot; (2) retaining the funds for
disbursement as determined by related litigation; and (3) sua sponte granting summary
judgment in favor of Morrison Sund on its breach of contract counterclaim.
The district court properly concluded attorn ey lien issues were moot and properly
exercised its discretion to order the deposited funds to be held and disbursed as determined
in the related litigation. However, because th e district court abused its discretion in sua
sponte granting Morrison Sund summary judgment on its counterclaim, we affirm in part,
reverse in part, and remand.

1 The case caption in the district court iden tified respondent as “Morrisun” Sund.
Respondent identifies itself as “Morrison” Sund in its appellate brief. The caption of this
opinion conforms with the caption used in the district court. See Minn. R. Civ. App. P.
143.01. This opinion uses the spelling respondent provides.
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FACTS
1648 Properties brought an action agai nst Morrison Sund on October 16, 2020,
seeking in part, an order requiring Morrison Sund to remove its notice of attorney lien on
property utilized as a mobile home park to which 1648 Properties possessed an interest and
which had a sale pending. Morrison Sund had represented 1 648 Properties pursuant to a
retainer agreement from Marc h 2019 to November 2019 in related litigation regarding
ownership of two mobile home parks, upon one of which (the property) Morrison Sund
recorded the $199,339.33 attorney lien.
The property was sold at a sheriff’s foreclosure sale on December 4, 2019, triggering
a one-year statutory redemption period. In September 2020, the re lated litigation was
resolved by a settlement agreement between 1648 Properties and the other parties to that
litigation, including respondent-intervenor KAW Parks, LLC. The following month, 1648
Properties commenced this action and Mo rrison Sund answered, alleging various
counterclaims, including breach of the attorney retainer agreement.
Because a pending sale of the property needed to close before the December 4, 2020
statutory redemption period deadline, the district court ordered the following on
November 20:
1. [Morrison Sund] shall discharge their Attorney’s lien on
[the property].

2. In exchange, [1648 Propertie s] shall ensure that
$199,339.33 is placed into escrow with the Clerk of
Sherburne County District Court from the proceeds of
any sale of the Property.

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Morrison Sund delayed releasing the lien because it believed it was entitled to an
additional amount involving collection costs beyond the amount identified by the notice of
attorney lien. After Morrison Sund reache d an agreement with KAW Parks and other
involved entities to recover the full lien amount and part of its claimed collection costs, it
released the attorney lien on November 27 and delivered the release to KAW Parks before
closing. The sale closed on December 1. On December 2 and in compliance with the
November 20 order, 1648 Properties deposited $199,339.99 with the district court.
Because Morrison Sund failed to immediat ely release its attorney lien following the
November 20 order, 1648 Properties moved fo r a district court order finding Morrison
Sund in contempt. The district court co nsidered 1648 Propertie s’ contempt motion on
December 17. It issued an order on March 16 that: (1) concluded that issues regarding the
validity and amount of Morrison Sund’s attorney lien were moot and, therefore, that 1648
Properties’ contempt motion was moot; (2) re tained the deposited funds to be disbursed
pursuant to the settlement ag reement resolving the relate d litigation; and (3) granted
summary judgment for Morrison Sund on its breach-of-contract counterclaim. This appeal
follows.
DECISION
I. The district court properly concluded th at all attorney lien related issues are
moot, and the district court was within its discretion to hold the deposited
funds.

Throughout this litigation, 1648 Properties’ primary goal has been removal of
Morrison Sund’s attorney lien in order to clear the way for the property to be sold. Because
the district court found, following the Dece mber 17 hearing, that Morrison Sund had
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removed its attorney lien and the property had been sold, 1648 Properties’ cause of action,
which seeks removal of the a ttorney lien, and its subseque nt contempt motion regarding
the attorney lien, are moot. The record supports the district court’s conclusion. The district
court properly exercised its discretion to require the deposited funds continue to be held by
the district court and pending resolution in the related litigation.
Attorney Lien Claim
1648 Properties does not argue in its principa l brief that the attorney lien issue is not
moot. Therefore, 1648 Properties has forfeited this issue. Ward v. El Rancho Manana,
Inc., 945 N.W.2d 439, 448- 49 (Minn. App. 2020), rev. denied (Minn. Sept. 29, 2020).
However, even if the issue had not been forfeited, the record supports the district court’s
mootness conclusion.
Mootness presents a question of justiciab ility, which is an issue of law we review
de novo. See Dean v. City of Winona , 868 N.W.2d 1, 4 (Minn. 2015). “The mootness
doctrine is not a mechanical rule that is au tomatically invoked when ever the underlying
dispute between the parties is settled or othe rwise resolved. Rath er, it is a flexible
discretionary doctrine.” Id. (quotation and citation omitted). An issue is moot if the court
is not able to grant effective relief. In re Schmidt, 443 N.W.2d 824, 826 (Minn. 1989).
Morrison Sund released the attorney lien prio r to the mobile home park sale closing.
Therefore, as of the December 17 hearing, th e district court correctly concluded that,
“[b]ecause the lien no longer exist[ed], the Court cannot grant [1648 Properties]’s
requested relief. This issue is moot.”

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Contempt
We look to the district court’s purpose when determining whether a contempt is
remedial or punitive. State v. Martin, 555 N.W.2d 899, 900 (Mi nn. 1996). For remedial
contempt, “the only objective is to secure compliance with an order presumed to be
reasonable.” Newstrand v. Arend, 869 N.W.2d 681, 692 (Minn. App. 2015) (quoting Hopp
v. Hopp, 156 N.W.2d 212, 216 (Minn. 1968)), rev. denied (Minn. Dec. 15, 2015).
1648 Properties asked the district cour t to compel Morrison Sund to release the
attorney lien and pay 1648 Prop erties’ reasonable fees. The di strict court interpreted this
as a request for remedial sanc tions and determined that 1648 Properties’ request to find
Morrison Sund in contempt was moot because “nothing remain[ed] in the 11/20 Order with
which Morrison need comply.” Because Morrison Sund had re leased its attorney lien,
contempt would serve no remedial purpose. The district court properly concluded the
contempt remedy is moot.
Deposited Funds
We review a district court’s handling of funds on deposit for abuse of discretion.
See Ed Herman & Sons v. Russell , 535 N.W.2d 803, 808 (Minn. 1995) (concluding the
district court acted within its discretion in taking funds on deposit for “extra-judicial”
reasons). The November 20 or der directed that 1648 Prop erties deposit $199,339.33,
which was to “be distributed to the appropriate party” following adjudication of Morrison
Sund’s claim for fees. Contrary to 1648 Properties’ characterization, the district court did
not “transfer” the funds by its March 16 order but ordered that “[t]he escrowed funds shall
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remain in escrow, to be disbursed” pursua nt to a settlement agre ement in the related
litigation. The record supports this decision of the district court.
1648 Properties and KAW Parks entered a settlement agreement in the related
litigation regarding ownership of the property in September 2020. This agreement allowed
KAW Parks “to pay any amount required to remove the Morrison Sund Liens” if 1648
Properties had not obtained their removal at or before closing. Additionally, the agreement
required the parties to submit “any and all disput es arising out of this Agreement” to the
district court judge who presided over the re lated litigation for “final resolution” with
“no . . . right to appeal any decision or order.”
The district court in the order now on ap peal found that KAW Parks had a potential
contractual right to the deposited funds pursuant to the settlement agreement. Because the
presiding judge in the related litigation wa s identified by all the parties as the sole
interpreter of the settlement ag reement, the district court concluded the deposited funds
should be held pending that judge’s determin ation of KAW Parks’ contractual rights.
Because the settlement agreement governe d whether KAW Parks had a right to
reimbursement from 1648 Properties and KAW Parks was properly a party through
intervention in the attorney lien litigation, the district court exercised proper discretion in
holding the funds pending determination of KAW Parks’ contractual rights.2

2 Following issuance of the March 16 order now on appeal, the presiding judge in the
related litigation ordered the deposited funds released to KAW Parks.
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II. The district court abused its discretion by sua sponte granting Morrison Sund
summary judgment.

We review summary judgments de novo. See Kenneh v. Homeward Bound, Inc. ,
944 N.W.2d 222, 228 (Minn. 2020). Where the parties do not allege procedural
irregularities, we apply the typical summary judgment standards when the district court sua
sponte grants summary judgment. See Septran, Inc. v. Indep. Sch. Dist. No. 271,
Bloomington, Minn., 555 N.W.2d 915, 920 (Minn. App. 1996), rev. denied (Minn. Feb. 26,
1997). However, when procedural irregular ities may have denied the party opposing
summary judgment a meaningful opportunity to be heard, we apply an abuse of discretion
standard. Hebrink v. Farm Bureau Life Ins. Co. , 664 N.W.2d 414, 419-20 (Minn. App.
2003).
Parties may move for summary judgment, in whole or in part, and the district court
“shall grant summary judgment if the movant shows that there is no genuine issue as to
any material fact and the movant is entitled to judgment as a matter of law.” Minn. R. Civ.
P. 56.01. A district court may also “[a]fter giving notice and a reasonable time to
respond . . . consider summary judgment on its own initiative after identifying for the
parties the material facts that may not be genui nely in dispute.” Minn. R. Civ. P. 56.06
(emphasis added).
District courts have the inherent power to grant summary ju dgment when “(a) no
genuine issues of material fact remain, (b) one of the parties deserves judgment as a matter
of law, and (c) the absence of a formal moti on creates no prejudice to the party against
whom summary judgment is granted.” Hebrink, 664 N.W.2d at 419. We will not uphold
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a sua sponte grant of summary judgment if a party can show that the court’s exercise of its
inherent power “resulted in ‘prejudice from lack of notice or other procedural
irregularities,’ or that the party ‘was not af forded a meaningful opportunity to oppose
summary judgment.’” Phelps v. State, 823 N.W.2d 891, 894 (Minn. App. 2012) (quoting
Fed. Land Bank of St. Paul v. Obermoller, 429 N.W.2d 251, 255 (Minn. App. 1988), rev.
denied (Minn. Oct. 26, 1988)). “Prejudice is una voidable when a trial court denies any
opportunity to marshal evidence in opposition to a basis for summary judgment raised sua
sponte.” Hebrink, 664 N.W.2d at 419 (quotation omitted).
We have upheld a district court’s sua sponte entry of summary judgment where the
aggrieved party had notice that summary judgment was a possible outcome of the hearing
and had an opportunity to present arguments and evidence to oppose summary judgment.
Fed. Land Bank of St. Paul , 429 N.W.2d at 255-56 (concluding sua sponte grant of
summary judgment was proper where notice rules were not strictly followed but both sides
presented affidavits and argument s regarding summary judgment); see also Del Hays &
Sons, Inc. v. Mitchell , 230 N.W.2d 588, 590, 592 (Minn. 1975) (upholding sua sponte
grant of summary judgment where the distri ct court notified the parties of a possible
dispositive defense and offered an opportunity to present evidence to counter the defense).
In contrast, we have reversed a district court’s exercise of its inherent power to grant
summary judgment when an aggrieved party had no notice of possible summary judgment.
Hebrink, 664 N.W.2d at 419 (“[H]ere, there is no ev idence in the record that indicates
appellant knew on the day of trial that he was expected to address a potential summary-
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judgment motion . . . .”); Phelps, 823 N.W.2d at 895 (“[A]ppellants were without adequate
notice that the district court was considering summary judgment.”).
Unlike the cases upholding a sua sponte grant of summary judgment, 1648
Properties had no notice that the district court would consider summary judgment and did
not, therefore, have an opportunity to respond . And because “[p]rej udice is unavoidable
when a trial court denies any opportunity to marshal evidence in opposition to a basis for
summary judgment raised sua sponte,” Hebrink, 664 N.W.2d at 419 (quotation omitted),
we reverse the district court’s summary judg ment on Morrison Sund’s breach of contract
counterclaim and remand to the district court for further proceedings.
Affirmed in part, reversed in part, and remanded.