Knox v. Impact MHC Management
Marcie Knox; Cheryl Skaj; Janet Eich; and Bradley Bandas; individually and on behalf of all others similarly situated v. Impact MHC Management, LLC; Sartell MHP, LLC; Sartell MHP 2, LLC; Gemstone Communities, LLC; and Sartell MHC, LLC
- Laura Provinzino
- 0:24-cv-04235
- U.S. District Court · District of Minnesota
- 25
In Knox v. Impact MHC Management, Judge Provinzino granted final approval of a class action settlement requiring sewage repairs, utility monitoring, and lease protections for mobile home park tenants, and awarded $15,000 in attorneys' fees and $5,000 service awards to each named plaintiff.
Current and recent tenants of Sartell Mobile Home Park who lived there between June 14, 2024, and May 27, 2026, will receive sewage system repairs and ongoing maintenance, soil testing and remediation, water billing monitoring, and the ability to replace allegedly illegal leases with fairer terms. The four named plaintiffs each receive a $5,000 service award. Tenants' ongoing claims against the prior owners and managers of the park (Impact Defendants) are not resolved by this order.
What happened
In Knox v. Impact MHC Management, LLC, four tenants of Sartell Mobile Home Park in Sartell, Minnesota brought a class action lawsuit alleging that the park's owners and managers failed to maintain sewage systems, illegally overbilled residents for water use, and pressured residents to sign fraudulent leases with illegal terms. After Gemstone Communities, LLC and Sartell MHC, LLC purchased the park, those defendants negotiated a settlement with plaintiffs that provides comprehensive corrective action: sewage system repairs and ongoing inspections, soil testing and remediation, monitoring of water billing, and the effective cancellation of the challenged leases — allowing all residents to choose a month-to-month lease or a standard form lease instead.
The court certified a settlement class of all individuals who resided at Sartell Mobile Home Park between June 14, 2024, and May 27, 2026 — more than 100 people. The court found the settlement satisfied all required legal standards for class certification under Federal Rule of Civil Procedure 23, including that class members shared common legal questions, the named plaintiffs' claims were typical of the class, and the relief — all of which is injunctive, meaning it requires the defendants to take or stop certain actions — applies equally to all class members. The court also found no settlement class members had objected after receiving notice.
Judge Provinzino granted the motion for final approval of the class action settlement, finding it fair, reasonable, and adequate under both the applicable federal rule and case law standards. The settlement gives plaintiffs nearly everything they sought in the lawsuit despite significant legal risks, including uncertainty about whether Gemstone Defendants — who bought the park after most alleged misconduct occurred — could be held liable for problems caused by prior owners. The court also granted the motion for attorneys' fees, awarding $15,000 (well below the calculated value of work performed), and granted $5,000 service awards to each of the four named plaintiffs — Marcie Knox, Cheryl Skaj, Janet Eich, and Bradley Bandas — in recognition of their active participation in the litigation. All claims against Gemstone Communities, LLC and Sartell MHC, LLC were dismissed with prejudice, while litigation against the remaining defendants continues.
The detailed version
- Knox v. Impact MHC Management · No. 0:24-cv-04235
- Laura M. Provinzino
- May 27, 2026
Background
Plaintiffs Marcie Knox, Cheryl Skaj, Janet Eich, and Bradley Bandas are tenants of Sartell Mobile Home Park ("SMH Park") in Sartell, Minnesota. They filed a putative class action — a lawsuit brought on behalf of themselves and all others similarly situated — originally in Minnesota state court. Defendants Impact MHC Management, LLC, Sartell MHP, LLC, and Sartell MHP 2, LLC (collectively, "Impact Defendants") owned, operated, or managed SMH Park at various times from 2014 to 2024. In June 2024, Gemstone Communities, LLC purchased SMH Park through a subsidiary, Sartell MHC, LLC (collectively, "Gemstone Defendants"), which now operates the park.
Plaintiffs alleged three categories of misconduct: (1) failure to maintain the park's water and sewage infrastructure, resulting in unsanitary and uninhabitable conditions; (2) use of Neptune ProCoder 5/8 T-10 water and sewage meters that produced inaccurate readings and inflated utility bills; and (3) pressure on residents to sign new leases in late 2023 containing allegedly illegal terms, including new transaction fees, early rent-payment requirements, an increased security deposit, new pet and late fees, and a returned check fee.
Defendants removed the case to federal court on November 20, 2024. The court previously granted in part motions to dismiss filed by Impact Defendants and two individuals, dismissing all claims against those individuals and some claims against Impact Defendants. Litigation against Impact Defendants continues and is unaffected by this order.
Settlement with Gemstone Defendants
After removal, Gemstone Defendants expressed willingness to work with plaintiffs. The parties negotiated at arm's length, exchanging informal discovery including expert reports on sewage issues and data on utility billing. The resulting settlement agreement requires Sartell MHC, at its own expense, to:
- Complete repairs to the sewage system as recommended by the parties' experts; - Conduct semi-annual physical inspections and full camera scoping of the sewage system every four years; - Promptly remediate any sewage backups or leaks; - Conduct soil testing for contaminants and remediate if results warrant; - Continue monitoring water usage to identify instances where a resident's usage materially deviates above 2,000 gallons per month beyond their six-month average (noting that Sartell MHC had already provided refunds for prior overbilling); and - Allow all residents to continue under a month-to-month lease or execute a standard form lease, effectively setting aside the challenged 2023 leases.
The settlement authorizes plaintiffs to seek up to $15,000 in attorneys' fees and costs, and $5,000 service awards for each named plaintiff. The settlement's approval is not contingent on approval of the fee and service award requests.
Class Certification
The court certified the following settlement class under Federal Rule of Civil Procedure 23: all individuals who resided at Sartell Mobile Home Park between June 14, 2024, and May 27, 2026.
Rule 23(a) Requirements
Numerosity
The proposed class exceeds 100 members. The court also noted that many residents are low-income (making individual lawsuits impracticable) and that plaintiffs alleged past retaliation by defendants against residents who raised concerns, which could deter individual suits against the current landlord.
Commonality
The court identified five common contentions capable of class-wide resolution: negligent maintenance of the sewage system in violation of state law; breach of the implied covenant of habitability; sewage discharges violating Minnesota environmental standards; improper utility billing; and invalidity of the challenged leases. The court acknowledged that not all residents were identically affected but found that, because the settlement provides only injunctive relief (court-ordered actions rather than individual monetary damages), individual factual differences were largely irrelevant.
Typicality
All class members' claims arise from the same challenged course of conduct — sewage maintenance failures, meter operation, and lease procurement — and seek the same remedies. A finding in plaintiffs' favor would affect all class members equally.
Adequacy of Representation
Named plaintiffs actively participated in the litigation by preserving documents, assisting with settlement strategy, responding to discovery, and attending appointments with counsel. Class counsel from Robins Kaplan LLP and Mid-Minnesota Legal Aid (MMLA) have substantial experience in class actions and housing law and successfully opposed most of Impact Defendants' motion to dismiss.
Rule 23(b)(2)
The court certified the class under Rule 23(b)(2), which applies when the party opposing the class has acted on grounds generally applicable to the class so that injunctive or declaratory relief is appropriate for the class as a whole. All relief in the settlement is injunctive; the sewage repairs, soil remediation, utility monitoring, and lease rescission apply to all class members uniformly. The court found the class sufficiently "cohesive" because a single injunction provides relief to each member.
Appointment of Class Counsel
The court appointed Robins Kaplan LLP and Mid-Minnesota Legal Aid as class counsel for purposes of the settlement with Gemstone Defendants, citing their experience in class action and housing law litigation and their work in this case.
Final Approval of the Settlement
The court evaluated the settlement under the "Van Horn factors" used in the Eighth Circuit Court of Appeals and the factors listed in Rule 23(e)(2).
Van Horn Factors
Merits vs. Settlement Terms (most important factor)
The court found the settlement an "excellent result" because it gives plaintiffs nearly all the injunctive relief sought in the complaint. However, the case against Gemstone Defendants was uncertain: most alleged misconduct occurred during Impact Defendants' prior ownership, creating a real risk that Gemstone Defendants would avoid liability by attributing fault to Impact Defendants. This factor weighed in favor of approval.
Defendants' Financial Condition
No party disputed Gemstone Defendants' ability to fulfill settlement obligations. The court found this factor neutral.
Complexity and Expense of Further Litigation
The court found continued litigation would be expensive and complex, involving environmental, housing, and tort law claims, requiring expert testimony on technical issues of soil and water pollution, and potentially involving post-trial motions and appeals that could further delay relief. The settlement provides immediate benefit to residents facing ongoing health and safety hazards. This factor weighed in favor of approval.
Objections
No settlement class members objected after receiving notice by mail, posting at the park office, and posting on MMLA's website. The lack of objections strongly supported approval.
Rule 23(e)(2) Factors
The court found all four Rule 23(e)(2) factors satisfied: class representatives and counsel adequately represented the class; the settlement was negotiated at arm's length after months of negotiation and informal discovery exchange; the relief is adequate given the litigation risks and provides immediate benefits; and the settlement treats all class members equitably because the injunctive relief benefits all equally.
Attorneys' Fees
The court applied the "lodestar" method — multiplying hours reasonably expended by reasonable hourly rates. Robins Kaplan attorneys spent 134.8 hours on Gemstone-related settlement work at hourly rates between $450 (associates) and $925 (partners). MMLA attorneys spent 69.97 hours at hourly rates between $295 and $450. The combined lodestar calculation totaled $112,591.70. Plaintiffs sought only the negotiated cap of $15,000 — an 86.7% reduction from the lodestar — which the court found eminently reasonable. The court granted $15,000 in attorneys' fees. Because this amount reached the negotiated maximum of $15,000 for fees and costs combined, the court did not separately rule on costs and expenses.
Service Awards
The court granted $5,000 service awards to each of the four named plaintiffs — Marcie Knox, Cheryl Skaj, Janet Eich, and Bradley Bandas — recognizing their active participation in the litigation from its outset, including preserving documents, assisting with settlement strategy, responding to discovery, and attending numerous appointments with counsel. The court also noted that plaintiffs reported that their participation had caused social hardship, with other SMH Park residents becoming fearful of associating with them due to concern about retaliation by defendants.
Disposition
The court granted the motion for final approval of the class action settlement (ECF No. 101) and granted the motion for attorneys' fees, costs, and service awards (ECF No. 89). All claims against Gemstone Communities, LLC and Sartell MHC, LLC were dismissed with prejudice. Litigation against Impact Defendants continues and is unaffected by this order.
Read the full 25-page opinion on CourtListener, the free public archive maintained by the Free Law Project.