Take the Truck, Leave the House: How External Factors Influence Legal Decisions

When I’m consulting with potential clients on possible lawsuits, I often hear them say that “this case is a slam dunk.”  When I hear this, I feel that it is my job, as someone with experience in handling legal disputes, to educate these individuals that that there is no such thing as a “slam dunk” and the odds of victory in any lawsuit is, at best, 50-50.

I do not give this caution because I doubt my skills or those of my colleagues in litigation matters.  Rather, during my time in law school, I was taught that the law is not always black and white.  Often times, for better or for worse, the particular facts of the case, the personalities of the parties and public policy can all weigh into a court’s decision in a particular case.  My experience in practice has borne this out.

My contracts law professor taught us about the 1917 case of Wood v. Lucy, Lady-Duff Gordon, where the famous Justice Cardozo of the New York Court of Appeals established new legal precedent when he held Lucy to a contract that assigned the sole right to market her name to her advertising agent, Otis F. Wood, despite the fact that the contract lacked explicit consideration for her promise.  Lucy, a leading British fashion designer in her time, and her husband had been passengers on the ill-fated maiden voyage of the RMS Titanic in 1912, and many rumors had circulated that they had bribed their lifeboat crew not to return to save swimmers for fear that the boat would be overloaded and sink itself.  Some have noted Judge Cardozo’s disdain for Lucy in parts of his opinion, and my professor used this case to explained to us how Lucy’s wealth and negative image may have inspired the court to make new law in order to find against her.

The ability of factors other than controlling legal precedent continue to influence court decisions to this day.  Take, for example, a recent Minnesota Supreme Court decision, W3ckUiD3aPc:_Yyc:aULPQL7PQLanchO7DiUsr”>David Lee Laase vs. 2007 Chevrolet Tahoe.  In this case, the Minnesota Supreme Court held that if two Minnesotans own something together, and one of them commits a crime that causes that property to be seized, the innocent co-owner is not entitled to get it back.  The Laase case involved a woman who was arrested for drunken driving and, as a result, had her 2007 Chevrolet Tahoe seized.  Her husband, the co-owner of the truck, argued that he was an “innocent owner” and should not lose his 2007 Chevrolet Tahoe pickup truck because of his wife’s actions.  The Minnesota Supreme Court disagreed, and stated that too often the “innocent owner” defense has been used to put a jointly-owned vehicle back in the hands of the dangerous driver.  Certainly, public policy in favor of prevention of drunken driving weighed into the Court’s decision, where Justice Lori Gildea wrote: “Because interests cannot be apportioned, the Legislature seemingly intended that what happens to one owner should happen to all owners.”

Why is this an interesting case?  Because five years ago, the same court (with a few different justices) stood for the opposite proposition.  The case of Kipp v. Sweno, 683 N.W. 2d 259 (Minn. 2004) involved a couple who obtained a personal judgment against the builder of their home.  After obtaining the judgment, the couple sought to foreclose upon the builder’s home, which he owned jointly with his wife (at the time of the case, Minnesota’s homestead exemption for judgments was only $200,000, and the builder apparently had that amount of equity in the home based upon his interest in the home). 

In the Kipp v. Sweno case, the Supreme Court’s finding did not support the proposition that “what happens to one owner should happen to all owners”, as it stated in the Laase case.  Instead, the Court carefully analyzed the longstanding policy in Minnesota to protect the homestead and noted that, by allowing this personal judgment to be foreclosed, the joint tenancy between the builder and his spouse would be severed and she would lose her interest in the home even though she was not liable for the debt.

Are the Laase and Kipp v. Sweno cases inconsistent?  Perhaps, as the Minnesota Supreme Court seems to be saying that, even if you have done nothing wrong, you will nonetheless be held responsible if your spouse drives drunk but not if your spouse has a judgment against them.  I do not necessarily disagree with the Court’s decision in Laase, as I certainly want the courts to do everything necessary to put drunk drivers behind the wheel.  As an attorney who represents several small lenders, I do take issue with the earlier Kipp v. Sweno as it has created difficulties in the area of personal guaranties on large real estate loans.  However, my point in writing this is to point out that there is never a sure thing in our court system.  Public policy, the particular facts of the case, or the litigants’ personalities and demeanor in court can all, for better or for worse, weigh in the court’s decision in a particular case, regardless of what controlling legal precedent might be.