from the District Court of Grand Forks County, Northeast
Central Judicial District, the Honorable Lolita Hartl
DeWayne A. Johnston, Grand Forks, ND, for petitioner and
S. Madison (argued), St. Paul, MN, and Jeffrey R. Strom
(appeared), Hillsboro, ND, for respondent and appellee
Commissioner of Minnesota Department of Revenue.
L. Rogneby (on brief), Bismarck, ND, for respondent and
appellee Edward Jones.
VANDEWALLE, CHIEF JUSTICE.
1] David Knapp appealed from a judgment dismissing his
petition for a writ of prohibition against the Commissioner
of the Minnesota Department of Revenue and Edward Jones and
from an order denying his motion to vacate the judgment. We
conclude the district court did not abuse its discretion in
denying Knapp's petition for a writ of prohibition, and
we affirm the judgment and the order.
2] In August 2016, the Commissioner issued an order assessing
personal liability against Knapp, a North Dakota resident,
for $65, 843.80 in unpaid Minnesota sales and use taxes
relating to his interest in a business in Bemidji, Minnesota.
In December 2016, the Commissioner issued a third-party levy
on securities held by Edward Jones for Knapp by sending a
notice to Edward Jones at its Missouri office. The
third-party levy said Edward Jones must sell Knapp's
securities under Minn. Stat. Ann. 270C.7101(7) and send the
Minnesota Department of Revenue payment up to the amount due.
The levy instructed Edward Jones not to send money that was
exempt or protected from the levy and cautioned that state
law allowed the Commissioner to assess debt to businesses,
officers, or other individuals responsible for honoring the
levy, including assessing the total amount due plus a
twenty-five percent penalty.
3] Knapp petitioned the district court to dissolve the levy
and for a writ of prohibition against the Commissioner and
Edward Jones to prohibit them from taking any further action
to levy on his account. Knapp alleged that the Commissioner
had no jurisdiction in North Dakota to levy on his North
Dakota property and that his property was exempt from the
levy. The district court issued a preliminary writ of
prohibition to stay the levy pending the filing of an answer
showing cause under N.D.C.C. § 32-34-05.
4] In an amended answer, the Commissioner asserted that the
district court lacked personal jurisdiction over the
Commissioner and the State of Minnesota and that the
requirements for a writ of prohibition had not been met.
Edward Jones answered, alleging that the petition failed to
state a claim against it and that Knapp failed to exhaust his
legal remedies in Minnesota.
5] The Commissioner moved for judgment on the pleadings,
asserting that the district court lacked personal
jurisdiction over the Commissioner and that the requirements
for a writ of prohibition had not been met. After an April
28, 2017 hearing, the court dismissed Knapp's petition,
ruling that it lacked personal jurisdiction over the
Commissioner and that Knapp failed to satisfy the
requirements for issuance of a writ of prohibition because he
failed to exercise his legal remedies in Minnesota. A
judgment was entered dismissing Knapp's petition.
6] Knapp moved for relief from the judgment under
N.D.R.Civ.P. 52, 59 (b)(1) and (6), and 60 (b)(3) and (6).
Knapp argued that North Dakota courts have in rem
jurisdiction over his Edward Jones account. After an August
10, 2017 hearing, the district court denied Knapp's
motion, ruling he failed to establish he had no adequate
remedy in Minnesota to contest the Commissioner's
imposition of the assessment and levy against him and he was
not entitled to dissolution of the levy. The court also
explained it did not have personal jurisdiction over the
Commissioner and declined to address Knapp's argument
about in rem jurisdiction over his Edward Jones account
because he failed to raise that issue until his motion for
relief from the judgment. The court concluded Knapp failed to
establish he was entitled to relief under N.D.R.Civ.P. 52,
59(b)(1) and (6), and 60 (b)(3) and (6).
7] A writ of prohibition is a special proceeding governed by
the rules of practice for a civil action to the extent the
rules are not inconsistent with the statutory provisions for
the writ. N.D.C.C. §§ 32-32-01, 32-32-03, 32-32-05,
32-32-06. See also N.D.R.Civ.P.81(a) and Table A;
Tormaschy v. Tormaschy, 1997 ND 2, ¶¶
11-16, 559 N.W.2d 813 (applying North Dakota Rules of Civil
Procedure to proceedings in N.D.R.Civ.P. 81 to fill in gaps
for excepted statutes). A writ of prohibition is an
extraordinary remedy to prevent an inferior tribunal,
corporation, board, or person from acting without or in
excess of jurisdiction when there is not a plain, speedy, and
adequate remedy in the ordinary course of law. N.D.C.C.
§§ 32-35-01, 32-35-02; Old Broadway Corp. v.
Backes, 450 N.W.2d 734, 736 (N.D. 1990). The issuance of
a writ of prohibition is discretionary, and the denial of the
writ will not be overturned on appeal absent an abuse of
discretion. Backes, at 736. A district court abuses
its discretion when it acts in ...