Knox v. Impact MHC Management, LLC
0:24-cv-04235
D. MinnesotaMay 2, 2025Background
- Plaintiffs are current and former tenants of Sartell Mobile Home Park (SMH Park) in Minnesota.
- Plaintiffs allege the Defendants—various LLC entities and individuals Reynolds and Rolfe—engaged in harmful practices, including failing to maintain sewage systems, overbilling utilities, and fraudulently inducing new lease agreements.
- Ownership and management of SMH Park has changed hands through various entities controlled or operated by some Defendants since 2014.
- Plaintiffs assert state-law claims (breach of habitability, MERA violations, negligence, nuisance, and statutory consumer claims) related to property conditions, utility billing, and coerced lease terms.
- Defendants moved to dismiss based on lack of personal jurisdiction, failure to state a claim, mootness, and statute of limitations grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal Jurisdiction over Reynolds & Rolfe | They directed/fraudulently orchestrated actions in MN through alter ego entities | Not personally involved; only acted via LLCs; lack of specific allegations | Dismissed for lack of personal jurisdiction; allegations insufficient under Rule 9(b) |
| Statute of Limitations (Sewage claims) | Claims excepted due to negligence in maintenance/operation (not construction defect) | Claims are untimely under two-year real property improvement statute | Exception applies; claims subject to six-year statute for maintenance negligence |
| Breach of Habitability – Enforcement Route | Lease is a contract; covenants enforceable through breach of contract action | Only rent-escrow (statutory) actions allowed, not contract claims | Fritz allows breach of contract enforcement in addition to rent-escrow actions |
| Standing on Negligence, Nuisance, Statutory | Sewage issues impact all residents or threaten them (particular injury not needed) | Only Knox alleges particularized injury from sewage backups | Skaj/Eich/Bandas claims for negligence dismissed; but nuisance/statutory threats sufficient to survive for now |
| Lease/Consumer Claims (Fraud, MCFA, MDTPA) | Deceptive notices and new oppressive leases caused harm; all tenants injured by scheme | Only signers of new leases were injured/reliant; moot relief against past owners | Only Skaj and Bandas' fraud claims proceed; Knox’s MCFA claim survives (attorney expense); MDTPA against Impact Defendants is moot |
| Injunctive Relief after Ownership Change | Impact Defendants should be subject to injunctive remedies for utility/lease issues | Relief moot as they no longer own/operate SMH Park | Relief moot as to former owners; surviving claims directed at current owners only |
Key Cases Cited
- Epps v. Stewart Info. Servs. Corp., 327 F.3d 642 (8th Cir. 2003) (burden on plaintiff to establish personal jurisdiction and set out standard for prima facie showing)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (standard for pleading sufficiency under Rule 12(b)(6))
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for Rule 12(b)(6) motion)
- Fritz v. Warthen, 213 N.W.2d 339 (Minn. 1973) (tenants may enforce covenants of habitability through breach-of-contract action)
- Siewert v. N. States Power Co., 793 N.W.2d 272 (Minn. 2011) (nature of causes of action for negligent maintenance)
- Engstrom v. Whitebirch, Inc., 931 N.W.2d 786 (Minn. 2019) (private attorney general statute injury requirement in consumer actions)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing requirements)