Opinion
No. C6-97-1128, C7-97-1168.
Filed May 18, 1998.
Appeal from the District Court, St. Louis County, File Nos. C196101393 and C596101302.
Andrew J. Phillips, and John J. Killen, (for respondents CAMM Properties, Inc. and Mike Rice, et al.)
Stephanie A. Ball, Shawn M. Dunlevy, Fryberger, Buchanan, Smith Frederick, P.A., (for respondent CreditAmerica Savings Company)
Stacey J. Peacock, (pro se appellant)
John E. Valen, (for respondents Minnesota Realty Group, et al.)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
In four consolidated appeals, appellant Stacey Peacock challenges the district court's denial of her motion for a new trial in her suit against respondents, its award of summary judgment against her in an unlawful detainer action, and its two orders requiring her to return personal property to the contract for deed vendors. Respondent CreditAmerica moves to strike Peacock's supplemental record and portions of her brief and appendix. It also moves to dismiss the unlawful detainer appeals. We affirm the district court in part, reverse and remand in part, and deny CreditAmerica's motions.
FACTS
In June 1993, appellant Stacey Peacock bought a resort on a contract for deed from CAMM Properties, Inc., and its principals, Michael and Ann Rice. Minnesota Realty Group, Inc., was the listing realtor for the property, and Alan Mohler was the agent involved in the transaction.
CreditAmerica Savings Company held mortgages on the resort. Pursuant to a security agreement executed in connection with a June 1993 loan from CreditAmerica, CAMM assigned to CreditAmerica the seller's interest in Peacock's contract for deed. The security agreement describes the assignment as a security interest or collateral. In January 1995, CreditAmerica made another loan to CAMM and CAMM again assigned CreditAmerica the seller's interest in Peacock's contract and executed a quitclaim deed to the resort property in favor of CreditAmerica. David Logue of CreditAmerica and Michael Rice both testified at trial that the assignments and quitclaim deed were intended only as security for CAMM's borrowing and were to be effective only in the event CAMM defaulted.
Peacock defaulted on the contract for deed in October 1995. She instituted a bankruptcy proceeding, which the bankruptcy court dismissed. After Peacock's default on the contract for deed, the Rices and CAMM began an unlawful detainer action against her in July 1996, and, on Peacock's motion, the district court joined CreditAmerica as an involuntary party plaintiff to that action. In an order entered August 19, 1996, the district court found that CAMM's cancellation of the contract for deed was effective July 30, 1996.
While the unlawful detainer action was pending, Peacock brought a separate action against the Rices, CAMM, CreditAmerica, Minnesota Realty, and Mohler, alleging insufficient notice in canceling the contract for deed, fraudulent misrepresentation in the sale of the resort, breach of fiduciary duty by Minnesota Realty and Mohler, and unjust enrichment. The court dismissed Peacock's insufficient notice and fraudulent misrepresentation claims against the Rices and CAMM. Peacock claimed that Minnesota Realty and Mohler breached their fiduciary duty by intentionally and negligently misrepresenting to her the condition of the property and financial statements regarding the property. Peacock made CreditAmerica a defendant in the action because she claimed that it was the real party in interest as a result of CAMM's assignment of the seller's interest in Peacock's contract for deed. CreditAmerica moved for summary judgment, contending that the assignment was as collateral only. The court denied CreditAmerica's motion.
The jury returned a special verdict that awarded Peacock damages against Minnesota Realty and Alan Mohler for negligently misrepresenting the accuracy of the figures regarding the expenses and income involved in running the resort and the condition of the septic system. The jury also found that Mohler either knew that the representations were false or presented them as his own knowledge without knowing whether they were true or false. The jury found against Peacock on all other claims against all defendants. The jury determined Peacock's damages to be $38,000 but also found she was 50% negligent, based on her inspection of the resort, reducing her award to $19,000. Peacock moved for a new trial on the grounds that the court wrongly excluded certain evidence and the jury instructions misstated the law. The district court denied the motion.
After conclusion of the trial, the district court entered summary judgment against Peacock in the unlawful detainer action and issued two orders directing Peacock to return personal property to the resort. The court also ordered Peacock to deposit with the court the $19,000 awarded her in the unjust enrichment action, pending a determination of "replacement costs, cost of repairing, re-attaching, [and] restoring" both personal property and fixtures at the resort.
This court consolidated four appeals by Peacock: one each from the judgments in the unjust enrichment and unlawful detainer actions and one from each of the postjudgment orders in the unlawful detainer action. CreditAmerica moves to strike Peacock's "Supplemental Record" and references to it in Peacock's brief. CreditAmerica also moves to dismiss that part of the consolidated appeal that relates to the unlawful detainer action.
DECISION 1. Motion to Dismiss
CreditAmerica claims that this court should dismiss as moot Peacock's appeal from the unlawful detainer action on the grounds that she abandoned the property and did not preserve any interest in the property during foreclosure. We will hear only live controversies and if, pending appeal, an event makes decision unnecessary or award of effective relief impossible, "the appeal will be dismissed as moot." In re Inspection of Minnesota Auto Specialties, Inc. , 346 N.W.2d 657, 658 (Minn. 1984).
A tenant's voluntary vacation of a premises will moot an unlawful detainer appeal. Lanthier v. Michaelson , 394 N.W.2d 245, 246 (Minn.App. 1986), review denied (Minn. Nov. 26, 1986). There are three affidavits in the record regarding Peacock's vacation of the resort property, but none addresses whether Peacock left the property voluntarily. Because on this record we cannot conclude that Peacock voluntarily left the resort property, we do not dismiss the appeal on that ground.
CreditAmerica also contends that the unlawful detainer appeals are moot because Peacock "failed to preserve of record any interest in the resort property" during the foreclosure proceedings. Only a party who has sustained injury to a legally protected right has standing to bring an appeal. City of St. Paul v. LaClair , 479 N.W.2d 369, 371 (Minn. 1992). If the foreclosure deprived Peacock of any interest in the property, it is impossible for this court to award effective relief and the appeal is moot. See Minnesota Auto Specialties , 346 N.W.2d at 658. Because the foreclosure sale occurred after Peacock filed the last of these consolidated appeals, the record before us does not thoroughly address the foreclosure, and we cannot determine whether Peacock's interest in the property was extinguished by the foreclosure sale. Cf. Truesdale v. Friedman , 267 Minn. 402, 404, 127 N.W.2d 277, 279 (1964) (stating that party seeking appellate review has duty to present appellate court with record showing all alleged errors and matters necessary for review). Furthermore, CreditAmerica has failed to provide any authority for its argument that foreclosure necessarily deprived Peacock of an interest in the property. See Schoepke v. Alexander Smith Sons Carpet Co. , 290 Minn. 518, 519-20, 187 N.W.2d 133, 135 (1971) ("assignment of error based on mere assertion and not supported by any argument or authorities in appellant's brief is waived and will not be considered on appeal unless prejudicial error is obvious on mere inspection"). We therefore decline to dismiss the appeals on this ground.
2. Motion to Strike
CreditAmerica argues that this court should strike Peacock's supplemental record and portions of her brief on the ground that they contain documents not part of the district court record. The record on appeal comprises "[t]he papers filed in the trial court, the exhibits, and the transcript of the proceedings, if any." Minn.R.Civ.App.P. 110.01. This court may not consider matters outside the record on appeal and must strike any such documents. Mitterhauser v. Mitterhauser , 399 N.W.2d 664, 667 (Minn.App. 1987). There are no documents in Peacock's supplemental record that were not a part of one of the district court files. Furthermore, CreditAmerica does not specify which portions of Peacock's brief or appendix it claims this court should strike. We therefore deny CreditAmerica's motion to strike.
3. Denial of Motion for New Trial
The decision to grant a new trial is within the sound discretion of the district court, and this court will not disturb the decision absent a clear abuse of that discretion. Halla Nursery, Inc. v. Baumann-Furrie Co. , 454 N.W.2d 905, 910 (Minn. 1990). But where the district court based its order on an error of law, this court reviews the decision de novo. Id.
a. Excluded evidence
Peacock argues that the district court abused its discretion in excluding from the trial of her suit against respondents certain evidence from her bankruptcy proceeding. The district court has broad discretion to determine whether to admit or exclude evidence, and this court will not disturb that determination absent an abuse of discretion or unless it is based on an erroneous rule of law. Kroning v. State Farm Auto. Ins. Co. , 567 N.W.2d 42, 45-46 (Minn. 1997). For an error in the exclusion of evidence to be a ground for a new trial, the evidence must be so material that it "might reasonably have changed the result of the trial if it had been admitted." Poppenhagen v. Sornsin Constr. Co. , 300 Minn. 73, 79-80, 220 N.W.2d 281, 285 (1974).
Peacock contends that the district court abused its discretion in "excluding" Michael Rice's testimony from Peacock's bankruptcy proceedings because, she claims, the testimony demonstrates that CreditAmerica, rather than CAMM, is the real party in interest. But Peacock did not offer that evidence at trial, and, therefore, we do not consider the issue here. See Thiele v. Stich , 425 N.W.2d 580, 582 (Minn. 1988) (stating that appellate courts will not address issues and theories not raised to or decided by district court).
Peacock also claims that the district court abused its discretion in excluding evidence of CreditAmerica's testimony in her bankruptcy proceeding and in an earlier appeal to this court in the unlawful detainer action. Peacock claims that CreditAmerica told neither the bankruptcy court nor this court that CAMM had executed a quitclaim deed to CreditAmerica and that had the courts known, they would have determined that CreditAmerica was the owner of the vendor's interest in the contract for deed and therefore was the real party in interest in Peacock's suit against respondents. Only relevant evidence is admissible. Minn.R.Evid. 402. Relevant evidence is
evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.
Minn.R.Evid. 401. "The general test in determining whether evidence is relevant is to ask whether in some degree it advances the inquiry and thus has probative value." State v. Carlson , 268 N.W.2d 553, 559 (Minn. 1978).
The fact that CreditAmerica failed to volunteer information to the bankruptcy court or this court in the earlier appeal that CAMM had executed a quitclaim deed to it is not relevant to determining whether CreditAmerica was the real party in interest. The quitclaim deed itself was admitted into evidence at trial, and there was testimony about CreditAmerica and CAMM's intent regarding the deed. We therefore conclude that the district court did not abuse its discretion in refusing to admit at trial Peacock's allegations of CreditAmerica's omissions in prior proceedings.
Peacock also contends that the district court abused its discretion in refusing to allow her attorney to read into the record several documents that the court had already admitted into evidence. Peacock did not raise this issue to the district court, and we therefore do not consider it. See Thiele , 425 N.W.2d at 582.
b. Jury instructions
Peacock argues that the jury instructions at trial were erroneous. She first argues that the district court failed to submit jury instructions regarding "legal definitions of assignments or deeds" and the "face value presumptions of commercial documents." Peacock did not raise this argument to the district court, and we do not consider it here. See Thiele , 425 N.W.2d at 582.
Second, Peacock contends that the jury instructions regarding whether CreditAmerica was the real party in interest did not correctly state the applicable law. We will not reverse a district court's decision in selecting the language in jury instructions unless the instructions constituted an abuse of discretion. Alholm v. Wilt , 394 N.W.2d 488, 490 (Minn. 1986). Where instructions fairly and correctly state the applicable law, an appellate court will not grant a new trial. Alevizos v. Metropolitan Airports Comm'n , 452 N.W.2d 492, 501 (Minn.App. 1990), review denied (Minn. May 11, 1990).
The district court gave the following jury instruction:
An assignment of a contract for deed may be conditional or absolute. An assignment for collateral security does not constitute an absolute assignment. * * * * When determining if an assignment is conditional or absolute, you should take into consideration the intentions of the parties regarding the assignment, as shown by the evidence presented, including the testimony of the parties.
* * * The essential elements of delivery [of an executed deed] are (1) surrender of control of the deed by the grantor and (2) intent to convey title. Both elements are required in order to find that the deed was delivered. * * * * You may determine the intent of the parties from the evidence presented during the trial, including any testimony by the parties.
The jury instruction fairly and correctly stated the law regarding intent to deliver a deed. See Dereschuk v. Knudsen , 280 N.W.2d 42, 44 (Minn. 1979) (holding that assignment for collection only or for collateral security does not constitute an absolute assignment); Slawik v. Loseth , 207 Minn. 137, 290 N.W. 228, 229 (1940) (stating that essential "elements of delivery are the surrender of its control by the grantor, together with an intent to convey title thereby" (internal quotes omitted)). Peacock cites no support for her claim that "the assignment is absolute unless there is convincing evidence to the contrary," and we therefore do not consider the argument. See Schoepke , 290 Minn. at 519-20, 187 N.W.2d at 135.
Finally, Peacock argues that the district court should not have instructed the jury on the law of comparative fault because the court had dismissed her "negligence claims." But the district court dismissed only her insufficient notice and fraudulent misrepresentation claims against the Rices and CAMM. It is not clear to what claims Peacock refers; the only negligence she asserted was against Minnesota Realty and Mohler, which arose from her breach of fiduciary duty claim. The court did not dismiss that claim. Minnesota law provides that a district court
may, and when requested by any party shall, direct the jury to find separate special verdicts determining the amount of damages and the percentage of fault attributable to each party and the court shall then reduce the amount of damages in proportion to the amount of fault attributable to the person recovering.
Minn. Stat. § 604.01, subd. 1 (1996).
When two or more persons are jointly liable, contributions to awards shall be in proportion to the percentage of fault attributable to each, except that each is jointly and severally liable for the whole award.
Minn. Stat. § 604.02, subd. 1 (1996). Because the jury could find that Peacock herself was responsible for some of the damage she suffered, it was proper for the court to instruct the jury on comparative fault. Although Peacock argues that the jury instruction does not suggest that the jury could find Peacock to have had no fault, the special verdict form required the jury to find first that Peacock was negligent before it could assign a percentage of fault.
Peacock also contends that the comparative fault instruction creates an inconsistency between her justifiable reliance on the realtor's misrepresentation and her own negligence. Peacock did not argue this to the district court, and we do not consider it. See Thiele , 425 N.W.2d at 582.
4. Summary Judgment in Unlawful Detainer Action
Peacock argues that the district court erred in awarding summary judgment against her in the unlawful detainer action. In summary judgment appeals, we must determine whether genuine issues of material fact exist and whether the district court erred in applying the law. State by Cooper v. French , 460 N.W.2d 2, 4 (Minn. 1990). The evidence must be viewed "in the light most favorable to the party against whom judgment was granted." Fabio v. Bellomo , 504 N.W.2d 758, 761 (Minn. 1993).
Peacock asserts that a material fact question exists as to whether CreditAmerica was the party with the vendor's interest in the resort by virtue of the assignment of the contract for deed and whether the Rices, Minnesota Realty, and Alan Mohler were guilty of fraud in inducing her to enter into the contract for deed. In granting summary judgment against Peacock, the district court applied principles of collateral estoppel and res judicata. Collateral estoppel applies where
(1) the issue was identical to one in a prior adjudication; (2) there was a final judgment on the merits; (3) the estopped party was a party or in privity with a party to the prior adjudication; and (4) the estopped party was given a full and fair opportunity to be heard on the adjudicated issue.
Johnson v. Consolidated Freightways, Inc. , 420 N.W.2d 608, 613 (Minn. 1988). Res judicata applies where there is
(1) a final judgment on the merits; (2) a second suit involving the same cause of action; and (3) identical parties or parties in privity.
Demers v. City of Minneapolis , 486 N.W.2d 828, 830 (Minn.App. 1992) (citations omitted). In Peacock's suit against respondents, the district court dismissed her fraud claims against the Rices and CAMM. The jury made findings regarding negligent and intentional misrepresentations by Minnesota Realty and Mohler. The jury also found that the Rices and CreditAmerica did not intend the assignment of the contract for deed to be absolute nor did the Rices intend to convey title to the resort to CreditAmerica by the quitclaim deed. She has not challenged these findings nor the court's order dismissing her fraud claim against the Rices and CAMM on appeal. Because there was a final judgment on the merits in that case involving issues identical with Peacock's defenses to the unlawful detainer action, collateral estoppel and res judicata bar her from arguing that they are genuine issues of material fact precluding summary judgment. We conclude that the district court did not err in granting summary judgment against Peacock in the unlawful detainer action.
5. Disposition of Property
Noting that Peacock had defaulted on the contract for deed, the district court ordered Peacock to return all items of personal property that were included in the resort sale, based on the court's interpretation of the contract for deed and other sale documents. See Rudnitski v. Seely , 452 N.W.2d 664, 668 (Minn. 1990) (holding vendor who cancels contract for deed entitled to recover personal property included in contract for deed). Peacock contends that the district court erred in ordering return of the personal property because it was not described in the contract for deed but rather was the subject of a separate bill of sale. While personal property was transferred here by a bill of sale, a separate security agreement between Peacock and CAMM made the personal property security for the debt on the contract for deed. Furthermore, the purchase agreement for the resort is for both personal and real property. Viewing all documents together, there is an ambiguity regarding whether the parties intended personal property to be included in the contract for deed. See City of Virginia v. Northland Office Properties Ltd. Partnership , 465 N.W.2d 424, 427 (Minn.App. 1991) (holding that whether contract terms are ambiguous is legal question), review denied (Minn. Apr. 18, 1991).
The meaning of ambiguous contract terms is a question of fact, and the court may consider extrinsic evidence in resolving the issue. Id. We do not set aside a district court's findings of fact unless they are clearly erroneous. Minn.R.Civ.P. 52.01. Peacock and Michael Rice both testified at trial that $50,000 of the purchase price for the resort reflected in the contract for deed was apportioned to the personal property identified in the purchase agreement, security agreement, and bill of sale. Given this testimony, we cannot conclude that the district court's implicit finding that the contract for deed included personal property was clearly erroneous.
Peacock also argues that the district court erred in finding she damaged the resort property. There is ample evidence in the record to support that finding, and it was, therefore, not clearly erroneous. See Minn.R.Civ.P. 52.01.
Peacock contends that even if the district court correctly found that she damaged the resort property, she is not liable for these damages. If a contract for deed vendee defaults on the contract, the vendor has the option to cancel the contract pursuant to Minn. Stat. § 559.21 (1996). When a vendor has effected statutory cancellation, all rights under the contract are terminated, including the vendor's right to sue for general damages at common law. Zirinsky v. Sheehan , 413 F.2d 481, 484-85 (8th Cir. 1969). If a contract for deed includes an "express prohibition against waste or a liquidated damage clause mentioning waste," waste by the vendee is a breach of the contract. Rudnitski , 452 N.W.2d at 666. Cancellation of the contract terminates a vendor's right to recover for a vendee's breach. Id.
The contract for deed here contained both an express prohibition against waste and a liquidated damages clause. When the Rices cancelled the contract for deed and retained the contract payments that Peacock had made, they lost their right to recover damages she may have caused to the resort property before the cancellation. But vendors who cancel a contract for deed are barred only from bringing a subsequent action for waste that occurred "while the [vendee was] in lawful possession." Id. at 667 (emphasis added). The record is unclear as to what damages may have occurred before cancellation of the contract for deed and what may have occurred after cancellation, when Peacock no longer had lawful possession of the resort. For these reasons, we reverse the district court's order and remand for (1) findings determining the amount of the damages, if any, that occurred after the cancellation of the contract for deed, and (2) an order directing Peacock to pay damages in that amount, if any.
We express no opinion on how the district court should decide the remanded issues.