UNITED STATES v. SCHEUNEMAN
United States Court of Appeals, Eighth Circuit
712 F.3d 372 | 381
III. CONCLUSION
For the reasons stated above, we Affirm Scheuneman’s conviction and sentence.
ANNEX PROPERTIES, LLC, Plaintiff-Appellant v. TNS RESEARCH INTERNATIONAL, formerly known as Research International USA, Inc., Defendant-Appellee.
No. 12-2619
United States Court of Appeals, Eighth Circuit.
Submitted: Dec. 11, 2012. Filed: April 1, 2013.
712 F.3d 381
Josh Jacobson, argued, Minneapolis, MN, for appellee.
Before LOKEN, MELLOY, and COLLOTON, Circuit Judges.
PER CURIAM.
This is a commercial lease dispute governed by Minnesota law. The parties’ predecessors entered into a renewable five-year lease of office space in Bloomington, Minnesota, that expired on May 31, 2011. The lease provided that if the Tenant, TNS Research International (“TNS”), did not vacate the premises upon expiration, “Tenant shall be a tenant at will for the holdover period.” In early May, TNS’s real estate agent emailed the Landlord, Annex Properties, LLC (“Annex”), that TNS would not renew the lease but would hold over until “the end of June, worst case a couple weeks into July,” while construction of its new office was completed.
TNS timely paid the June rent. On July 6, 2011, having heard nothing further, Annex called TNS’s office in Ohio to request that a neighboring tenant be allowed access to a hallway in the leased premises. Annex was told that TNS “had moved out.” On July 7, Annex received a letter from a TNS vice president stating:
Please be advised that we have vacated the [premises] on June 30, 2011 thereby ending the holdover period as described in section 1.3 of the referenced Lease. Our obligation to pay rent ceased with the end of the holdover period. We have properly removed our furniture and trade fixtures.
On July 8, Annex responded: “We disagree with your letter dated July 7, 2011. I [have] attached the updated rent statement for your reference.”
On October 7, 2011, Annex filed an Amended Complaint in Minnesota state court seeking $91,956.16 in unpaid rent and penalties owed under the lease for the months of July, August, September, and October 2011. TNS removed the action. Responding to the parties’ cross motions for summary judgment, the district court concluded that the Supreme Court of Minnesota would no longer follow earlier decisions requiring strict compliance with a Minnesota statute that requires notice to terminate an at-will lease,
Although the tenancy at will has a long history in Anglo-American common law, in Minnesota this real property estate is governed by statute. See
(a) A tenancy at will may be terminated by either party by giving notice in writing. The time of the notice must be at least as long as the interval between the time rent is due or three months, whichever is less.
Prior to enactment of this language in 1999, the same substantive limitation on the right to terminate an at-will lease was part of every codification of Minnesota landlord-tenant law since territorial days, with the earlier statutes using a synonym for termination that today seems rather archaic: “All estates at will ... may be determined by either party, by three month’s notice given to the other party....” Rev. Stat. (Terr.) 1851, ch. 49, § 34; compare
In this case, it is undisputed that, by holding over after the term lease expired, TNS created a tenancy at will. Under Minnesota law, TNS’s continuing obligation to pay monthly rent could then be terminated only by (i) Annex agreeing to a surrender of the premises, or (ii) a notice of termination that complied with
In Grace v. Michaud, 50 Minn. 139, 140-41, 52 N.W. 390, 391 (Minn.1892), the tenant in a month-to-month lease notified the landlord that he was surrendering possession and returned the key to the premises. The landlord refused to accept possession and, some months later, sued for four months’ rent. The Court affirmed a judgment for the landlord after a bench trial, concluding that the tenant’s notice of surrender did not comply with the precursor to
The notice to quit is technical, and is well understood. It fixes a time at which a tenant is bound to quit, and the landlord has a right to enter at a time at which the rent terminates. The rights of both parties are fixed by it, and are dependent on it.... [W]hen such consequences depend upon the notice to be given the notice should fix with reasonable exactness the time at which these consequences may begin to take effect.
Id. at 141, 52 N.W. 390. In Eastman v. Vetter, 57 Minn. 164, 58 N.W. 989 (Minn. 1894),1 the tenant under a holdover lease returned the keys to the landlord on Au-
Such a tenancy could only be terminated by one month’s notice in writing.... [The tenant’s notice] was clearly insufficient. It did not terminate the tenancy on the day named, and could not, by mere lapse of time, become effectual to terminate it on some other and later date.
Id. at 166, 58 N.W. 989 (emphasis added). Annex argues that Grace and Eastman are controlling decisions that require judgment in its favor for the four months’ rent at issue.
In interpreting and applying Minnesota law in this diversity case, we must follow controlling decisions of the Supreme Court of Minnesota. The task is not to mechanically apply past decisions of that Court. Rather, “it is the duty of the [federal court] in every case to ascertain from all the available data what the state law is.” West v. A.T. & T. Co., 311 U.S. 223, 237, 61 S.Ct. 179, 85 L.Ed. 139 (1940). Therefore, we will not follow even clear precedent from the Supreme Court of Minnesota if that Court has given “clear and persuasive indication” that it would no longer follow that precedent. Id. at 236, 61 S.Ct. 179; see AIG Centennial Ins. Co. v. Fraley-Landers, 450 F.3d 761, 767 (8th Cir. 2006).
The district court agreed with TNS’s contention that there is “some conflict” between Grace and Eastman and two later decisions of the Supreme Court of Minnesota that require “substantial” rather than “strict” compliance with the notice requirement of
We disagree with the district court’s reading of these Minnesota precedents. It is wrong to posit that the “substantial compliance” standard in Heinsch and Hyman represented an evolution away from the standard in earlier cases. The Supreme Court of Minnesota expressly applied the “substantial compliance” standard in Alworth v. Gordon, 81 Minn. 445, 84 N.W. 454 (1900), in affirming a jury verdict for a landlord who had given timely but deficient notice to terminate a month-to-month lease:
It is true that a notice to quit only a part of the demised premises ... is insufficient to terminate the tenancy.... But we must construe the notice ... in a practical and common-sense way; for substantial, not technical, accuracy is all that is required in a notice to quit, given for the purpose of determining a tenancy.
Id. at 456 (emphasis added). One year later, in Waggoner v. Preston, 83 Minn. 336, 86 N.W. 335, 335 (1901), the Court repeated the statement in Alworth “that
Proceeding on that basis, the question of statutory compliance in this case cannot turn, as the district court reasoned, on the fact that TNS’s July 7 letter reflected its “clear intent” to vacate the premises. A notice that the tenant is vacating the premises is, standing alone, indeterminate. It may signify abandonment (for example, if the tenant is insolvent); it may be a request that the landlord accept surrender, in which case the lease will terminate by agreement; or it may reflect the intent to terminate the lease unilaterally. As the Court explained in Grace, when the landlord’s rights depend upon whether the tenant intends to unilaterally terminate, “the [statutory] notice should fix with reasonable exactness the time at which these consequences may begin to take effect.” 50 Minn. at 141, 52 N.W. 390.
Viewed from this perspective, TNS’s July 7 letter, even read in the context of its earlier May email, did not substantially comply with a statutory notice requirement that the Supreme Court of Minnesota has repeatedly said requires reasonable exactness. First, the letter was not a notice; rather, it responded to a landlord inquiry that reasonably assumed the holdover lease was still in effect. Second, the letter declared that TNS had vacated the premises. Under well-established Minnesota law, simply vacating leased premises does not terminate a lease unless the landlord accepts surrender of the premises. Finally, the letter made no mention of lease termination. In referring to TNS’s prior action, it did not name a wrong termination date; it named no date at all, other than to confirm the oral advice that TNS had “moved out.” No landlord with any familiarity with Minnesota law would construe this letter as a statutory notice of termination. Thus, Annex was on sound legal ground when it promptly responded that it did not accept surrender, a response which meant that a statutory notice of termination was required to terminate this holdover lease. In these circumstances, the letter’s statements that the holdover lease had ended and no more rent was owing were nothing more than erroneous legal conclusions. If the letter had clearly stated, “TNS intends to end
For these reasons, we conclude that Annex is entitled to the relief requested in this lawsuit, four months’ rent. The judgment of the district court is reversed, and the case is remanded to the district court for further proceedings not inconsistent with this opinion.
LOKEN, Circuit Judge, with whom MELLOY, Circuit Judge, joins, concurring.
I join the opinion of the court. I write separately to address an additional issue that is certain to arise on remand. In a second action filed in the district court, which is being held pending our disposition of this appeal, Annex seeks rent for the months of November 2011 through May 2012. Annex Properties, LLC v. TNS Custom Research, Inc., No. 12-1174, Complaint (D.Minn. May 15, 2012). And at oral argument, Annex’s counsel took the position that TNS continues to owe rent under the at-will tenancy because it has never sent a notice of termination that complies with
This continuing, open-ended remedy is without precedent in the reported Minnesota cases. Although many landlords have prevailed when the statutory notice was not sent or was insufficient, the remedy with one exception has never exceeded more than a few months’ rent. See Hunter v. Frost, 47 Minn. 1, 49 N.W. 327 (1891) (six months); Finch v. Moore, 50 Minn. 116, 52 N.W. 384 (1892) (“at least 2 months”); Grace, 50 Minn. 139, 52 N.W. 390 (five months); Eastman, 57 Minn. 164, 58 N.W. 989 (two months); Prendergast v. Searle, 74 Minn. 333, 77 N.W. 231 (1898) (two months); Van Brunt v. Wallace, 88 Minn. 116, 92 N.W. 521 (1902) (two months); King, 126 Minn. 452, 148 N.W. 297 (two months); Oesterreicher v. Robertson, 187 Minn. 497, 245 N.W. 825 (1932) (one month); Maze, 184 Minn. 5, 237 N.W. 612 (four months). The exception is Markoe, which cited the “strict statutory compliance” principle in affirming an award of more than one year’s rent. But in that case, a subtenant who had agreed to pay monthly rent until his property was removed abandoned the premises without any written notice to the landlord, leaving property the landlord “hauled away and dumped as junk” pursuant to an order of the fire marshal sixteen months later. 226 N.W.2d at 290. These facts are so distinguishable that the decision provides no guidance in crafting an appropriate remedy in this case.
The remedial issue raised in Annex’s second action, and argued more aggressively at oral argument in this case, has not been previously decided by the Supreme Court of Minnesota, which means the district court in the second action must predict how the issue would likely be resolved by that Court. In 1976, the American Law Institute adopted a more lenient remedial standard than Annex urges: “if the date stated in the notice for termination is not the end of a period or is too short a time before the end of a period, the notice will be effective to terminate the lease at the earliest possible date after the date stated.” Restatement (Second) of Property, Landlord & Tenant, § 1.5, cmt. f (1977) (emphasis added). Many state courts have since adopted the Restatement rule in cases involving both contractual and statutory notice-of-termination provisions. See Steffen v. Paulus, 125 Ill. App.3d 356, 80 Ill.Dec. 675, 465 N.E.2d 1021, 1024 (1984); Foster v. Schwickerath, 780 N.W.2d 746, 749-50 (Iowa App.2009); Orebaugh v. Leatherwood, 27 Kan.App.2d 730, 8 P.3d 55, 58 (2000); Sage v. Rogers, 257 Mont. 229, 848 P.2d 1034, 1039 (1993); P.2d 753, 757” court=“N.M.” date=“1981“>T.W.I.W., Inc. v. Rhudy, 96 N.M. 354, 630 P.2d 753, 757 (1981); Mercer Cnty. Agric. Soc’y v. Barnhardt, 313 Pa.Super. 206, 459 A.2d 811, 815 (1983); Morrison v. Smith, 757 S.W.2d 678, 681 (Tenn.App.1988); cf. 49 Am.Jur.2d, Landlord and Tenant, § 225.
Annex would no doubt respond that this rule, even if adopted, would not apply in this case because TNS never sent a notice of termination, unlike cases in which the tenant or landlord sent a notice of termination naming the wrong date or no date at all. But that assertion is questionable. TNS’s Answer to the Amended Complaint in this case asserted that its May and July communications provided written notice of termination, and its entire posture in the ongoing litigation has communicated its clear intent and belief that the holdover tenancy at will has terminated. Though we disagree with its legal conclusion in this case, I believe TNS’s conducting of the litigation provides an unambiguous notice of intent to terminate the holdover lease that, applying the Restatement rule, would be effective “at the earliest possible date after the date stated,” that is, no later than the filing of TNS’s Answer in this case.
Although this reading of the Restatement’s remedial rule would be contrary to a literal reading of the opinion in Eastman, and arguably the opinion in Grace, it is not in conflict with the remedy upheld in either case. And there is good reason to apply the Restatement rule in this fashion. The harm that Annex seeks to remedy by its prayer for an open-ended rent obligation is not harm addressed by