In re A PETITION FOR INSTRUCTIONS TO CONSTRUE BASIC RESOLUTION 876 OF The PORT AUTHORITY OF the CITY OF ST. PAUL.
Nos. A07-1512, A07-1513, A07-1514
Supreme Court of Minnesota.
Sept. 10, 2009.
Rehearing Denied Nov. 6, 2009.
772 N.W.2d 488
The court states that Holt suffered no prejudice from the trial court‘s decision to hold the Schwartz hearing in chambers. But Kelsey v. State, 298 Minn. 531, 532, 214 N.W.2d 236, 237 (1974), the case cited by the court for its harmless error analysis, predates the promulgation of the Minnesota Rules of Criminal Procedure and does not mention the “harmless beyond a reasonable doubt” standard applicable to the denial of the constitutional right to be present. See State v. Bouwman, 354 N.W.2d 1, 8 (Minn.1984). In State v. Grey, 256 N.W.2d 74, 77 (Minn. 1977), we found that a defendant‘s absence from a pretrial suppression hearing was harmful error because “it [was] impossible on this record to determine what contribution or assistance to counsel defendant could have rendered had he been present to hear the oral testimony of [the testifying officer].” Not only are the facts in this case similar to Grey, Holt was a pro se defendant, and the denial of his right to be present facilitated the violation of his right to self-representation. On this record, Holt‘s exclusion from the Schwartz hearing was not harmless beyond a reasonable doubt.
I would reverse Holt‘s convictions and remand for a new trial.
ANDERSON, Paul H., Justice (dissenting).
I join in the dissent of Justice Page.
Scott G. Knudson, Paul C. Thissen, Diane B. Bratvold, Briggs and Morgan, P.A., Minneapolis, MN, for respondent Port Authority of the City of St. Paul.
Susan L. Naughton, League of Minnesota Cities, St. Paul, MN, for amicus curiae League of Minnesota Cities.
OPINION
ANDERSON, G. BARRY, Justice.
Under Basic Resolution 876, the Port Authority of the City of St. Paul issued a series of revenue bonds. The Port Au
The Port Authority of the City of St. Paul is established under
On February 14, 1974, the Port Authority adopted Basic Resolution 876. The Basic Resolution authorizes the Port Authority to “issue and sell Revenue Bonds” (876 Bonds) for the purpose of initiating revenue producing projects. Proceeds from the sale of 876 Bonds were deposited in a construction fund, from which borrowers could withdraw money to finance their projects. According to the record, 139 properties were financed by the sale of 876 Bonds, and the last 876 Bond issue occurred in May of 1991.
The Port Authority specifically covenanted to pay the principal and interest on every 876 Bond. The Basic Resolution provides that all bondholders would be repaid out of a Common Revenue Bond Fund (876 Fund).1 The 876 Fund is subsidized by all available net revenues, which include regular payments by borrowers, revenues from facilities operated by the Port Authority, and earnings on those revenues. The Basic Resolution also provides for reserve funds, in case the 876 Fund is insufficient to pay the interest and principal owed to the bondholders.2 Many borrowers defaulted on their projects, and the Port Authority was forced to repossess and manage or resell the defaulted properties,
Realizing that the 876 Fund was in dire straits, the Port Authority conducted a Dutch auction tender offer in 1996. Under this auction format, bondholders offered a price at which they would sell their bonds, and the Port Authority purchased the lowest-priced 876 Bonds using prepaid net reserves and special funds. In 2002 the Port Authority petitioned the Ramsey County District Court to allow it to conduct more Dutch auction tender offers. The court granted the petition, and the Port Authority conducted two more tender offers, once in 2002 and once in 2004. In total, the Port Authority retired over $123 million in debt at a cost of $100 million.
In 2004 the Port Authority petitioned the district court again, requesting that the interest and principal payment dates be adjusted so that payments would only have to be made semiannually instead of every month. In addition, the Port Authority asked the district court for authorization to recover ongoing administrative expenses for 876 Bonds from the net revenues. The court granted both requests. In both 2002 and 2004, the court also approved and confirmed the Port Authority‘s administration of the 876 Fund.
In 2006 the Port Authority once again petitioned the district court. This time, it asked for permission to develop a proposal to liquidate all the remaining 876 Bonds by selling off revenue streams. The Port Authority believed that this drastic move was necessary in order to protect all the bondholders’ rights to have the remaining funds “equally and ratably” distributed. Though no bondholders objected in court to the petitions in 2002 and 2004, the bondholder appellants joined together and objected to the 2006 petition. In response to the parties’ motions, the district court, among other things, issued an order on May 17, 2007, which (1) ruled that the Port Authority had proper statutory authority under
Appellants sought review of the district court‘s decision. The court of appeals, in an unpublished decision, consolidated the three cases and affirmed the district court, holding that the district court had subject-matter jurisdiction over all the petitions and that the court did not abuse its discretion by denying the appointment of a receiver. In re a Petition for Instructions to Construe Basic Resolution 876 of the Port Auth. of St. Paul, Nos. A07-1512, A07-1513, A07-1514, 2008 WL 2168643, at *8 (Minn.App. May 27, 2008). This appeal followed.
I.
The first issue before us is whether
A.
1.
In 1933 the legislature passed a law allowing trustees to “petition the court for
A companion section, under both the former chapter 501 and the current chapter 501B, clarifies the applicability of section 501B.16. In 1978 the legislature amended the law so that the procedures in section 501.35 would apply, “unless otherwise provided in the trust instrument, to trusts established in connection with bonds issued pursuant to chapter 474.”
The 1993 amendment to section 501B.25 contained another change, however, that is the source of the dispute here. The legislature added the following language to specify that the procedures in section 501B.16 also apply,
at the sole election of the issuer of bonds issued under chapter 469, without a trust indenture, to the pledges and other bond covenants made by the issuer in one or more resolutions with respect to the bonds. If the issuer so elects to apply sections 501B.16 to 501B.23, for such purposes only, the pledges and other bond covenants shall be deemed the “trust,” the resolution or resolutions shall be deemed the “trust instrument,” and the issuer shall be deemed the “trustee” notwithstanding the absence of any fiduciary responsibility owed by the “issuer” toward the bondholders. Nothing in this section shall preclude the issuer from seeking approval under sections 501B.16 to 501B.23 of the creation of any express trust under a trust indenture and the appointment of a trustee thereunder to act as a fiduciary for the benefit of the bondholders.
2.
Our next step is to determine what statutory authority permitted the issuance of the 876 Bonds. Under the Basic Resolution, the Port Authority “is authorized under the Act to initiate revenue producing projects, issue and sell Revenue Bonds for
In 1987 the legislature repealed both chapters 458 and 474, recodifying them as chapter 469. Section 458.194 became
B.
1.
Appellants argue that the 876 Bonds are not within the purview of
Black‘s Law Dictionary defines “trust indenture” as “[a] document containing the terms and conditions governing a trustee‘s conduct and the trust beneficiaries’ rights.” Black‘s Law Dictionary 784-85 (8th ed.2004). For a trust to be created, we have required a clear demonstration by external expression of the intent to create a trust. See Bond v. Comm‘r of Revenue, 691 N.W.2d 831, 837 (Minn.2005). There is no language in the Basic Resolution establishing a trust or a trustee. In fact, the Basic Resolution makes clear that the Port Authority and the City of St. Paul have limited pecuniary liability. Thus, the Port Authority could not have petitioned a district court for instructions regarding the Basic Resolution prior to the 1993 amendment of section 501B.25 because the Basic Resolution does not establish a trust in connection with the 876 Bonds.
2.
The Port Authority‘s second argument, however, is that the 1993 amendment to
Our legislature has specifically stated that “[n]o law shall be construed to be retroactive unless clearly and manifestly so intended by the legislature.”
A “retroactive law” is one that “looks backward or contemplates the past, affecting acts or facts that existed before the act came into effect.” Black‘s Law Dictionary 1343 (8th ed.2004). Moreover, it is one which affects rights, obligations, acts, transactions and conditions which are performed or exist prior to the adoption of the statute. Furthermore, a retrospective law has been defined as one intended to affect transactions which occurred or rights which accrued before it became operative and which ascribes to them effects not inherent in their nature in view of the law in force at the time of their occurrence. 73 Am.Jur.2d Statutes § 244 (2001); see also Cooper v. Watson, 290 Minn. 362, 369, 187 N.W.2d 689, 693 (1971) (quoting 50 Am.Jur. Statutes § 476 (1944)).
Here, applying to these bonds the 1993 amendment to section 501B.25 alters the contractual rights of the bondholders under Basic Resolution 876. The Basic Resolution provides limited ways for the resolution to be amended, and it does not include the chapter 501B procedures. In particular, the Basic Resolution allows the Port Authority to make changes with bondholder consent, but without bondholder consent only if those changes are “not to the prejudice of any Holders of General Revenue Bonds.” Appellants claim, and we agree, that the relief requested in the Port Authority‘s petitions, including the liquidation of all remaining 876 Bonds, may prejudice some of the holders of 876 Bonds. Thus, allowing the Port Authority to petition for instructions under section 501B.16 gives the Port Authority more procedural rights than it possesses under the Basic Resolution. Because we no longer have a distinction between retroactive laws that affect procedural and substantive rights, we hold that the district court‘s acceptance of the Port Authority‘s petitions was an impermissible retroactive application of the 1993 amendment to section 501B.25.4
II.
Appellants’ next claim is that the 2002 and 2004 orders must be vacated for lack of subject-matter jurisdiction. The district court did not address this issue because it found that the Port Authority‘s petitions in 2002 and 2004 were properly before the court. The court of appeals decided that appellants’ challenges were futile because “[t]he 2002 and 2004 orders were, and remain, as a practical matter, exhausted, dormant, and beyond effective involvement in this litigation.” Basic Resolution 876, 2008 WL 2168643, at *4.
Appellants brought their motion to vacate pursuant to
The statutes at issue in this case define whether or not the district court may exercise in rem jurisdiction over a trust or a bond.
Under
We therefore vacate the May 17, 2007, district court order in response to the Port Authority‘s 2006 petition. We reverse and remand the matter to the district court to determine whether, considering all attendant circumstances, appellants’ motion to vacate the court‘s 2002 and 2004 orders was brought within a reasonable time.
MAGNUSON, Chief Justice, took no part in the consideration or decision of this case.
DIETZEN, Justice (concurring).
Although I concur in the court‘s decision that the 2002 and 2004 orders regarding Basic Resolution 876 are void because the district court lacked in rem jurisdiction over the revenue bonds, I write separately to voice my concern about the unevenness of our cases on subject matter jurisdiction.
Appellants argue that the district court‘s lack of authority over the revenue bonds implicates the court‘s subject matter jurisdiction. Our cases have not always been clear as to the classification of matters that involve subject matter jurisdiction and, more specifically, whether in rem jurisdiction should be treated more like subject matter jurisdiction or personal jurisdiction. Compare In re Florance, 360 N.W.2d 626, 629 n. 1 (Minn.1985) (discussing in rem jurisdiction in the context of the court‘s subject matter jurisdiction), with Hoff v. Kempton, 317 N.W.2d 361, 365 n. 5 (Minn. 1982) (expressing our understanding that in rem jurisdiction is commonly grouped “under the rubric of ‘personal jurisdiction‘“).
We need not resolve the nature of the jurisdictional issue in this case, because “[a] void judgment is one rendered in the absence of jurisdiction over the subject matter or the parties.” Matson v. Matson, 310 N.W.2d 502, 506 (Minn.1981) (emphasis added). Notwithstanding our efforts in recent years to distinguish procedural tools from jurisdictional limits, see, e.g., In re Civil Commitment of Giem, 742 N.W.2d 422, 427-29 (Minn.2007), there is a need for further clarification of our jurisprudence on subject matter jurisdiction.