Minnesota Cities Magazine
More from Sep-Oct 2017 issue

From the Bench: Can the City Require Forfeiture of Totaled Vehicle’s Insurance Proceeds?

Can the City Require Forfeiture of
Totaled Vehicle’s Insurance Proceeds?VEHICLE FORFEITURE LAW
Insurance proceeds
City of Savage police officers arrested Russell Briles’ intoxicated son after he crashed Briles’ vehicle. The Police Department seized the vehicle and notified Briles of its intent to forfeit the vehicle under the impaireddriver forfeiture statute. Briles did not intend to recover the totaled vehicle, and planned instead to recover insurance proceeds. The Police Department’s attorney told Briles’ insurer to hold any insurance proceeds, implying the department had a right to them. Briles discovered that the attorney had made this representation only after the end of the deadline for filing a complaint to challenge the forfeiture through a judicial determination. Briles filed a demand for a judicial determination anyway, arguing that the vehicle had been improperly seized and that insurance proceeds are not forfeitable under the statute.

The district court rejected his filing as untimely. The Minnesota Court of Appeals affirmed in part and reversed in part, holding that an owner who claims his vehicle is not subject to forfeiture because the offense prompting the seizure occurred after the vehicle was stolen or taken in violation of law, forfeits that claim unless he raises it in a timely complaint demanding a judicial determination of the forfeiture’s validity. However, the Court of Appeals also held that the city did not have any right to the insurance proceeds, reasoning that the statute authorizes only the forfeiture of a person’s possessory and ownership interests in a seized vehicle, not a person’s contract rights to insurance proceeds. Briles v. 2013 GMC Terrain, 892 N.W.2d 525 (Minn. Ct. App. 2017).

ELECTION LAW
Misleading campaign literature
The City of Grant held a special election in which residents voted on whether the city should adopt a home rule charter. The city did not take a position on this ballot question. Before the election, a group of residents distributed pro-charter campaign literature on which the city’s logo and other city symbols were included. The city clerk filed a complaint on the city’s behalf, alleging a violation of the state Fair Campaign Practices Act because the campaign literature falsely implies that the city was endorsing the proposed charter’s adoption. After an evidentiary hearing, a panel of three administrative law judges found that the act had been violated and imposed a $250 penalty on John D. Smith, a member of the pro-charter resident group who the panel found had taken certain actions that caused the campaign literature to be sent to city residents.

The Minnesota Court of Appeals affirmed the decision, upholding the constitutionality of the act, and holding that the hearing panel did not err by concluding that the city clerk had standing to file the complaint on the city’s behalf, and that the city is an “organization” within the meaning of the act. The Court of Appeals also held that the hearing panel’s conclusion that Smith knowingly used the city’s logos and symbols in a way that “falsely implied” that the city endorsed the proposed charter’s adoption was supported by substantial evidence. City of Grant v. Smith, No. A16-1070 (Minn. Ct. App. Mar. 13, 2017) (unpublished opinion).

CRIMINAL LAW
Pistol in public
Bryan Larson was given a ride in a motor vehicle to the First National Bank Building in the City of St. Paul. Larson, who had a valid Minnesota permit to carry a pistol, held a fully closed gun case that contained an unloaded Smith & Wesson .40 caliber pistol. Larson, who was under the influence of alcohol at the time, approached the building on a public sidewalk with the gun case in his hand, entered the building, and proceeded to a gun range in the basement. Police officers located Larson in the basement and charged him with the misdemeanor statutory offense of carrying a pistol in public while under the influence of alcohol, based on his act of transporting the pistol in a case on a public sidewalk. Larson, who did not contest his intoxication, moved to dismiss the charge, arguing that the statutory term “carry” was ambiguous and that the Legislature did not intend to prohibit possession of an unloaded pistol enclosed in a gun case.

The district court denied the motion, agreeing that the term “carry” is ambiguous, but concluding that the Legislature intended to prohibit a person who is impaired by alcohol from having direct access to a pistol, by carrying it about his person in a public place. The Minnesota Court of Appeals affirmed on different grounds, holding that the plain meaning of the word “carry” refers to the act of transporting a pistol in a public place when a person is under the influence of alcohol, even if the pistol is unloaded and fully encased. State v. Larson, 895 N.W.2d 655 (Minn. Ct. App. 2017)

CONSTITUTIONAL LAW
Due process
Jason Powell went to the Iowa State Fairgrounds in 2013, stood near the main entrance but outside the gated area, and expressed his religious beliefs, through oral statements and a sign, to people entering and leaving the fair. State patrol officers told Powell he would be arrested for trespass if he didn’t leave, but also told him that he could move across the street onto non-fairground property. The next day, Powell returned and repeated his religious expression outside a different fair entrance. Officers eventually issued Powell an ejection notice, banning him from the fair, and told him that he would be criminally charged if he returned.

Powell brought a civil rights action against state fair officials and a law enforcement officer, alleging violation of his constitutional rights of due process based on the enforcement of the fairground’s unwritten rules against two types of speech: (1) speech impeding the flow of people, and (2) speech on signs attached to a pole or stick that could be used as a weapon. Powell argued that the unwritten fair rules were unconstitutionally vague and impermissibly encourage arbitrary and discriminatory enforcement. Following remand from the 8th U.S. Circuit Court of Appeals, for consideration of Powell’s due process claim seeking a preliminary injunction against the enforcement of these unwritten rules, the federal district court denied his request. The 8th Circuit affirmed, holding that either Powell’s failure to show a likelihood of irreparable harm or his failure to show a reasonable probability of success on the merits of his appeal was a sufficient reason for the district court to deny the requested injunctive relief. Powell v. Ryan, 855 F.3d 899 (8th Cir. 2017).

PUBLIC CONTRACTS
Best-value contracting
The City of Rochester provides fixed-route public transit services. In 2011, the Federal Transit Administration (FTA) informed the city that, to continue receiving federal funding, it must use a competitive process to award future contracts for the operation of these public transit services. The city decided to use a best-value contracting process consistent with FTA regulations. Therefore, the city issued a request for proposals (RFP) for public transit services for the period from July 1, 2012, to December 31, 2016 (2012 RFP). The city awarded the contract to First Transit, Inc., but Rochester City Lines (RCL), a company that had submitted a proposal that was not selected, sued, claiming the contracting process was “unreasonable, arbitrary, or capricious,” in violation of law.

Litigation regarding the 2012 contracting process was still ongoing in 2016, when the city issued a second RFP (2016 RFP) for the period from Jan. 1, 2017, to Dec. 31, 2021. Five of the eight members of the 2016 RFP evaluation committee had served as members of the 2012 RFP evaluation committee. The 2016 RFP provides a process for potential bidders to protest RFP provisions before submitting a bid, and designates a special assistant attorney to make final decisions on any pre-bid protests. Rochester City Lines filed a pre-bid protest, challenging several provisions of the 2016 RFP, including the designation of members from the 2012 evaluation committee on the 2016 evaluation committee.

The special assistant attorney denied RCL’s pre-bid protest. RCL appealed by writ of certiorari, and the Minnesota Court of Appeals reversed, holding that the 2016 RFP provision designating members of the 2012 evaluation committee on the 2016 evaluation committee creates an impermissible appearance of bias, which makes the contracting process unreasonable, arbitrary, or capricious, in violation of law. The Court of Appeals also held that the 2016 RFP process—and any contract awarded through that process—is invalid. Rochester City Lines Co. v. City of Rochester, 897 N.W.2d 792 (Minn. Ct. App. 2017).

Written by Susan Naughton, research attorney with the League of Minnesota Cities. Contact: snaughto@lmc.org or (651) 281-1232.

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