Opinion
No. A05-1470.
Filed June 6, 2006.
Appeal from the District Court, Hennepin County, File No. Ac 04-8930.
Michael A. Fondungallah, Margaret E. Noubissie, Fondungallah, Kigham Noubissie, LLC, (for appellants).
Douglass E. Turner, Hanbery Carney, P.A., (for respondent).
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
Appellants challenge the district court's order and resulting judgment reducing the jury's award of damages to the amount pleaded in their complaint, arguing that a plaintiff's recovery for damages is not limited to the amount pleaded in the complaint. We affirm.
FACTS
In December 2003, appellants Olivier Nkwonkam and Lydia Nchotu leased an apartment unit in St. Louis Park, Minnesota, from respondent Courtyard Apartments. During the initial tour of the apartment building, appellants allege that respondent's representative stated that they were entitled to use the storage locker with the number corresponding to their apartment unit. Appellants subsequently stored personal property in what they believed to be the appropriate storage locker.
In March 2004, respondent provided written notification to its tenants that all storage lockers would be emptied unless tenants informed respondent that they were currently using a locker. Because appellants were new tenants and were using the storage locker identified by respondent's representative as belonging to their unit, appellants did not respond to the notice. Respondent then broke the lock to appellants' storage locker, emptied the locker, and disposed of the property.
Appellants filed a claim in conciliation court, alleging that respondent wrongfully disposed of a large collection of books, suitcases full of clothing and decorations, and boxes of family documents, photographs, and letters. Appellants sought $5,500 in damages plus costs, and the conciliation court referee ordered judgment against respondent for $5,555. Respondent appealed the judgment and demanded removal of the case to district court for a trial de novo.
Before trial, respondent brought a motion to limit appellants' recovery to the amount pleaded in the conciliation court complaint because appellants had not amended the complaint upon removal to district court. The district court granted the motion, stating "since there is no amended complaint, [appellants] are limited to the amount pled in the complaint, which is $5,500, plus costs. . . ."
At trial, the district court did not include the limitation on damages in its instructions to the jury. In a special verdict form, the jury answered affirmatively that respondent wrongfully converted appellants' property and awarded appellants $35,000 in damages.
Following the verdict, respondent moved for judgment notwithstanding the verdict (JNOV), arguing that the evidence did not support the verdict and that appellants' recovery was limited to the amount pleaded in the conciliation court complaint. The district court denied respondent's motion for JNOV, but granted respondent's request to reduce the amount of damages to the amount stated in the complaint under its pretrial ruling. The district court entered judgment in favor of appellants and against respondent for an amount of $5,500. This appeal follows.
DECISION
Appellants argue that the district court abused its discretion by ordering remittitur of the damage award to the amount pleaded in the conciliation court complaint because it is well settled that a plaintiff's recovery for damages is not limited to the amount pleaded in the complaint. Respondent contends that appellants' argument ignores the district court's pretrial order limiting appellants' recovery to the amount pleaded in the conciliation court complaint and that the district court properly reduced the amount of damages based on this order.
The district court has discretion to remit a jury verdict; this court will not reverse unless the district court improperly exercised its discretion. Kinikin v. Heupel, 305 N.W.2d 589, 596 (Minn. 1981). As a general rule, a "plaintiff's recovery is not limited to the amount stated in the complaint unless the defendant is prejudiced." Ahrenholz v. Hennepin County, 295 N.W.2d 645, 647 (Minn. 1980) (emphasis added); see also Wallace v. Nelson, 287 Minn. 438, 445, 178 N.W.2d 698, 703 (Minn. 1970) ("It is settled law in this state that under our liberalized rules of pleading plaintiff is not limited to the amount stated in the complaint in the absence of extenuating circumstances which might prejudice defendant.").
In Stephenson v. F.W. Woolworth Co., the Minnesota Supreme Court discussed the prejudice exception to the general rule, noting the importance of protecting a defendant who is led to believe that recovery will not exceed a certain amount. 277 Minn. 190, 196, 152 N.W.2d 138, 144 (Minn. 1967). The supreme court held that "where a party chooses to sue for an amount that will or may deprive another party of a right he may have, the plaintiff is bound by such choice unless he takes action to amend his complaint within such time as will enable the defendant to assert the right which he has." Id. at 197, 152 N.W.2d at 145. In so holding, the supreme court analogized to default judgments, "where the party sued is entitled to rely on the fact that judgment may not be taken against him for more than the amount prayed for." Id. at 196, 152 N.W.2d at 144-45. In such cases, the supreme court determined that the district court should instruct the jury that they may not return a verdict for more than the amount sued for, but "[i]n the absence of such request the [district] court should reduce the recovery, if greater than that sued for, to the amount demanded in ad damnum clause of the complaint." Id. at 197, 152 N.W.2d at 145.
Here, the district court granted respondent's motion in limine to limit appellants' recovery to the amount pleaded in the ad damnum clause of the complaint; thus, respondent reasonably concluded that damages were limited to $5,500 plus costs and understandably had no expectation of liability over that amount. Respondent argues that its trial preparation and methods would have varied considerably had it been aware of the possibility of damages far exceeding the $5,000 range.
It is fundamental that lack of notice as to the full extent and nature of a plaintiff's claims or damages may infringe on a defendant's preparation of an adequate defense and, therefore, result in prejudice. See Minn. R. Civ. P. 15.01 (permitting late amendment of a pleading "only by leave of court or by written consent of the adverse party"); Wilson v. City of Eagan, 297 N.W.2d 146, 151 (Minn. 1980) (noting that, under rule 15.01, prejudice is critical to deciding whether to allow a party to amend a complaint); cf. Swenson v. Emerson Elec. Co., 374 N.W.2d 690, 696 (Minn. 1985) (holding that, when defendants had sufficient notice of essential elements of a new claim, late assertion did not infringe on defendants' preparation of adequate defense). Here, had respondent been given notice of a substantial increase in the prayer for relief, it likely would have more closely considered settlement options, conducted additional discovery, engaged in more vigorous cross-examination, called additional witnesses, and dedicated more time to trial preparation and strategy.
Consequently, we conclude that respondent was prejudiced by the excess jury award and that the district court properly reduced the award to the amount pleaded in appellants' ad damnum clause under its pretrial order.