Larry Koch, Appellant,

This opinion is nonprecedential except as provided by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
A24-1605

Larry Koch,
Appellant,

vs.

Riley Purgatory Bluff Creek Watershed District, et al.,
Respondents.

Filed June 9, 2025
Affirmed in part, reversed in part, and remanded
Larson, Judge

Hennepin County District Court
File No. 27-CV-23-18762

John R. Neve, John Hayden, Quantum Lex, PA, Minneapolis, Minnesota (for appellant)

Paul Donald Reuvers, Andrew A. Wolf, Iverson Reuvers, Bloomington, Minnesota (for
respondents)

Considered and decided by Larson, Presiding Judge; Cochran, Judge; and Slieter,
Judge.
NONPRECEDENTIAL OPINION
LARSON, Judge
Appellant Larry Koch challenges two district court decisions that resulted in the
dismissal of his complaint with prejudice for failure to post a surety bond. First, Koch
argues the district court abused its discretion when it imposed the surety bond. Second,
and in the alternative, Koch asserts the district court erred when it dismissed his Minnesota
2
Government Data Practices Act (MGDPA), Minn. Stat. §§ 13.01-.991 (2024), and
Minnesota Open Meeting Law (OML), Minn. Stat. §§ 13D.001-.08 (2024), claims for
failure to post the surety bond on the ground that those claims will not affect the public or
taxpayers. Because we do not discern the district court abused its discretion when it
imposed the surety bond, we affirm in part. But because our binding precedent dictates
that the surety-bond requirement impacts only those claims that will affect the public or
taxpayers, we reverse in part and remand for the district court to determine which claims
must be dismissed for failure to post the surety bond.
FACTS
In August 2021, respondent Riley Purgatory Bluff Creek Watershed District granted
conditional approval to a developer for a building permit on three parcels of land (the
property).1 The property is located next to land that is “maintained as passive recreation
parkland/preserve” and a natural spring. After community members expressed concern
that the development may have environmental impacts, the watershed district explored
options to acquire the property. In October 2023, the watershed district approved a plan to
purchase the property for $5,775,0 00. The watershed district approved the planned
purchase as a conservation project. Under the plan, a holding company, who previously
purchased the property from the landowners, signed an assignment agreement with the
watershed district. Under the terms of the assignment agreement, the holding company
agreed to assign and sell its “rights, title and interests in” the property to the watershed

1 Respondent Terry Jeffery is the watershed district’s administrator. We refer to the
respondents collectively as “the watershed district.”
3
district. The assignment agreement contemplated that the watershed district had until
December 2023 “to obtain project financing and complete the [necessary] statutory
processes.” See Minnesota Watershed Law, Minn. Stat. §§ 103D.001-.925 (2024).2
The watershed district initially discussed financing the purchase with long-term
bonds through Hennepin County but learned Hennepin County could not provide long-
term financing until September 2024. Then, in December 2023, the watershed district
negotiated to have a financial-services company provide short-term financing though the
purchase of a $5,804,000 “General Obligation Temporary Watershed Bond.” This would
provide the watershed district with bridge financing until Hennepin County could provide
long-term financing.
Koch—a manager on the watershed district’s board —opposed the watershed
district’s acquisition of the property. To stop the financial-services company from issuing
the temporary watershed bond, Koch brought this action against the watershed district. In
the complaint, Koch alleged the watershed district violated the following statutes in its
attempts to acquire funding to purchase the property: (1) Minn. Stat. § 103B.231 (2024);
(2) various sections of the Minnesota Watershed Law; ( 3) the MGDPA; and (4) various
sections of the OML.
Koch simultaneously moved for a temporary restraining order (TRO). In response,
the watershed district requested the district court order Koch to file a $5,804,000 surety

2 Some of the statutes relevant to the complaint were amended in 2024, but the amendments
are not relevant to the disposition of this case. See 2024 Minn. Laws. ch. 90, art. 3, §§ 34,
at 588; 37, at 589; 38, at 589. We therefore cite to the statutes in effect at the time this
opinion is issued.
4
bond under Minn. Stat. § 562.02 (2024). In a December 2023 order, the district court
denied both motions. Koch appealed, and we affirmed. See Koch v. Riley Purgatory Bluff
Creek Watershed Dist. , No. A24-0503, 2024 WL 4344868, at *1 (Minn. App. Sept. 30,
2024).
Following the December 2023 order, the watershed district exercised its option
under the assignment agreement to extend the property’s closing date to February 26, 2024,
by depositing an additional $50,000 in earnest money. But shortly thereafter, the financial-
services company informed the watershed district that it would no longer move forward
with bridge financing because of the pending litigation. Because the financial -services
company withdrew financing, the watershed district renewed its surety-bond request.3 The
watershed district claimed that Koch’s lawsuit caused the watershed district immediate
harm—and therefore caused harm to the public—by inhibiting its ability to obtain bridge
financing and close on the property and forcing it to spend an additional $50,000 to extend
the closing date.
After the district court took the matter under advisement, Koch renewed his motion
for a TRO. In their responsive letter brief, the watershed district informed the district court

3 The watershed district also brought a dispositive motion, requesting that the district court
either dismiss the complaint under Minn. R. Civ. P. 12.02(e), grant judgment on the
pleadings under Minn. R. Civ. P. 12.03, or grant summary judgment in the watershed
district’s favor under Minn. R. Civ. P. 56. Because the district court dismissed the
complaint when Koch failed to post the surety bond, the district court did not resolve the
watershed district’s dispositive motion.
5
that it intended to purchase the property via a contract for deed. 4 The watershed district
described the contract for deed as bridge financing. The district court then ordered
supplemental briefing, wherein the watershed district confirmed that it purchased the
property on April 3, 2024. In the supplemental briefing, the watershed district reduced its
requested surety-bond amount to $1,087,461—reflecting the difference between the cost
in bridge financing from the financial-services company and the contract for deed. 5
In an August 2, 2024 order, the district court determined the watershed district
“made a sufficient showing that loss or damage to the public or taxpayers may occur as a
result of the litigation,” and granted the watershed district’s motion for Koch to post a
surety bond in the amount of $1,087,461.20 by September 2, 2024. 6 When Koch did not
post the bond, the district court dismissed his entire complaint under section 562.02 with
prejudice.
Koch appeals.
DECISION
Koch challenges the district court’s decision to dismiss the entire complaint with
prejudice for failure to post a previously ordered surety bond under section 562.02. We

4 “A contract for deed is a financing arrangement which allows a buyer—the vendee—to
purchase property by borrowing the money for the purchase from the seller—the vendor.”
Kuhn v. Dunn, 8 N.W.3d 633, 637 (Minn. 2024) (quotation omitted).
5 The actual monetary difference the watershed district claimed would occur under the
contract for deed was $1,087,461.20, but the watershed district rounded down when it made
its request.
6 Koch appealed directly from the August 2, 2024 order, which we dismissed as premature.
See Koch v. Riley Purgatory Bluff Creek Watershed Dist., No. A24-1312, 2024 WL
4249719, at *2 (Minn. App. Sept. 17, 2024).
6
review a “district court’s order requiring a surety bond for an abuse of discretion.” Webb
Golden Valley, LLC v. State, 865 N.W.2d 689, 694 (Minn. 2015). A district court abuses
its discretion if it makes findings unsupported by the evidence or misapplies the law. In re
Paul W. Abbott Co., 767 N.W.2d 14, 18 (Minn. 2009). We review legal conclusions
de novo. City of Morris v. Sax Invs., Inc., 749 N.W.2d 1, 5 (Minn. 2008).
Section 562.02 provides:
Whenever any action at law or in equity is brought in
any court in this state questioning directly or indirectly the
existence of any condition or thing precedent to, or the validity
of any action taken or proposed to be taken, by any public body
or its officers or agents in the course of the authorization or
sale, issuance or delivery of bonds, [or] the making of a
contract for public improvement . . . such public body may
move the court for an order requiring the party, or parties,
bringing such action to file a surety bond as hereinafter set
forth. . . . If the court determines that loss or damage to the
public or taxpayers may result from the pendency of the action
or proceeding, the court may require such party, or parties, to
file a surety bond, which shall be approved by the court, in such
amount as the court may determine. The court must also
consider whether the action presents substantial constitutional
issues or substantial issues of statutory construction, and the
likelihood of a party prevailing on these issues, when
determining the amount of a bond and whether a bond should
be required under this section or section 473.675. . . . If such
surety bond is not filed within a reasonable time allowed
therefor by the court, the action shall be dismissed with
prejudice.

(Emphasis added.)
Koch broadly makes two arguments on appeal: (1) that the district court abused its
discretion when it required Koch to post the surety bond and (2) if the surety bond was
7
appropriately required, that the district court abused its discretion when it dismissed his
entire action with prejudice. We address each argument in turn below.
I.
Koch first challenges the district court’s decision to require Koch to post a surety
bond. Koch argues the district court abused its discretion because: (1) it did not analyze
whether Koch was likely to succeed on the merits; (2) the watershed district changed the
financing such that section 562.02 no longer applied; and (3) a $1,087,461.20 surety-bond
amount was excessive. Because we do not discern that the district court abused its
discretion, we affirm the district court’s decision to require the surety bond.
Beginning with Koch’s argument that the district court failed to assess the likelihood
of success on the merits, Koch failed to preserve this issue for appeal. Under
section 562.02, the district “court must . . . consider whether the action presents substantial
constitutional issues or substantial issues of statutory construction, and the likelihood of a
party prevailing on these issues.” (Emphasis added.) Thus, to trigger this requirement, the
complaint needed to raise a substantial constitutional or statutory -construction issue.
Because the record does not indicate that Koch argued to the district court that his
complaint raised substantial constitutional or statutory-construction issues, and we decide
“only those issues that the record shows were presented [to] and considered by the [district]
court in deciding the matter before it,” Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988)
(quotation omitted), we conclude that Koch forfeited this issue. See Walker Props. of
Woodbury II, LLC v. City of Woodbury, No. A12-2323, 2013 WL 4504431, at *3 (Minn.
8
App. Aug. 26, 2013) (declining to reach same issue on ground it was not raised in district
court), rev. denied (Minn. Nov. 12, 2013).7
We reach a similar conclusion with respect to Koch’s second argument. Koch
asserts that the district court did not have authority to require a surety bond because the
watershed district changed the financing such that the project no longer involved the
“authorization or sale, issuance or delivery of bonds, [or] the making of a contract for
public improvement.” See Minn. Stat. § 562.02. But the record demonstrates that Koch
made the opposite argument before the district court, asserting that the district court must
look to the language of the complaint —not the change in financing—when evaluating
whether to require a surety bond. Thus, we deem this argument forfeited. See Thiele, 425
N.W.2d at 582. Further, even if it were not forfeited, we would reach the same result. The
statute requires the district court to analyze the “action.” See Minn. Stat. § 562.02. The
complaint sets forth the “claims for relief” in an action, Minn. R. Civ. P. 8. 01, and the
claims in Koch’s complaint relate specifically to bonds. Therefore, because Koch did not
seek to amend his complaint to account for the change in circumstances, even if the issue
was not forfeited, we would affirm the district court on this issue.
Finally, Koch argues that the district court required him to post an excessive surety-
bond amount. Although a bond may be “viewed as excessive from the perspective of what
[the plaintiff] can likely afford to pay,” the amount is not an abuse of discretion when it “is
justified by the evidence presented to the [district] court.” Kilowatt Org., Inc. v. Dep’t of

7 This case is nonprecedential and, therefore, not binding. We cite nonprecedential
opinions as persuasive authority only. See Minn. R. Civ. App. P. 136.01, subd. 1(c).
9
Energy, Planning & Dev., 336 N.W.2d 529, 533 (Minn. 1983); see also Pike v. Gunyou,
491 N.W.2d 288, 291-92 (Minn. 1992) (upholding $30 million bond requirement when that
amount “reflect[ed] the anticipated total cost to the state and its taxpayers” resulting from
a delay caused by litigation).
Here, the district court specifically found that the public and taxpayers were at risk
of harm because of this litigation. Then, the district court found the watershed district
requested a reasonable amount for the bond, because the watershed district provided a
detailed explanation of the costs to the public associated with the pending litigation. While
Koch argues this calculation is speculative, the statute does not require the amount to be
an exact reflection of the harm. See Anderly v. City of Minneapolis, 552 N.W.2d 236, 242
(Minn. 1996) (interpreting similarly worded statute to “only require[] that loss or damage
may result from the pendency of the action” in order to award surety bond, and concluding
“the nature of the damages in any case such as this necessarily will be speculative”).
Rather, the statute provides the district court with broad discretion to determine the amount
necessary to protect the public’s interest, and we will uphold that determination when
evidence supports the potential harm to the public. See Minn. Stat. § 562.02 (stating award
shall be “in such amount as the [district] court may determine” is appropriate, based on
public/taxpayers’ damages (emphasis added) ); Pike, 491 N.W.2d at 291-92 (affirming
bond amount that “reflect[ed] the anticipated total cost to the state and its taxpayers”
(emphasis added)). Additionally, Koch’s arguments against the surety bond are
speculative; the other possible financial arrangements he posits in his brief have no support
in the record. Thus, because the surety-bond amount is logically reflected in the record as
10
the amount the public and taxpayers may be harmed by this lawsuit, the district court did
not abuse its discretion.
For these reasons, we affirm the district court’s decision to impose a $1,087,461.20
surety bond.
II.
Koch argues in the alternative that, if the surety bond was appropriately required,
the district court erred when it dismissed his entire complaint for failure to post the bond.
On this issue, we agree with Koch.
In Anderson v. Pearson, we concluded, in the syllabus, that “[a]n order dismissing
the action with prejudice [under section 562.02] for failing to file the bond must be limited
to those causes of action that the evidence has shown will affect the public or the
taxpayers.” 400 N.W.2d 210, 211 (Minn. App. 1987). Contrary to the watershed district’s
argument that this syllabus point is dictum,
8 the supreme court has stated that “the syllabus
summarizes the [authoring court’s] holding.” Albright v. Henry, 174 N.W.2d 106, 111
(Minn. 1970); see also Sefkow v. Sefkow, 427 N.W.2d 203, 214 (Minn. 1988) (citing
syllabus of prior opinion as authority). And we have followed this rule with respect to our

8 The watershed district also argues that our decision in Anderson is contrary to the general
definition of “action” in Minn. Stat. § 645.45(2) (2024) and the supreme court’s
interpretation of that word in Ellis v. Doe, 924 N.W.2d 258, 263-64 (Minn. 2019). But
Minn. Stat. § 645.45 (2024) expressly provides that the context of a statute can elicit a
different meaning for the word “action.” And the supreme court in Ellis analyzed the word
in the context of a rent-escrow statute, not the statute at issue here. See Ellis, 924 N.W.2d
at 263-64. Thus, Ellis does not conflict with our prior precedential decision in Anderson.
Compare id., with Anderson, 400 N.W.2d at 212-13. And we are bound by our prior
precedential decisions. State v. M.L.A. , 785 N.W.2d 763, 767 (Minn. App. 2010), rev.
denied (Minn. Sept. 21, 2010).
11
own precedential opinions. See, e.g., Dyrdal v. Wallenberg, No. A23-1416, 2024 WL
1987879, at *2 (Minn. App. May 6, 2024). We therefore conclude that, consistent with
Anderson, the district court erred when it did not conduct an analysis to determine whether
all of Koch’s causes of action affected the public or taxpayers in the manner contemplated
by section 562.02. See Anderson, 400 N.W.2d at 211. Accordingly, we reverse and remand
for the district court to evaluate whether any of Koch’s claims should survive his failure to
post the surety bond.
Affirmed in part, reversed in part, and remanded.