Opinion
No. C8-02-1521.
Filed June 3, 2003.
Appeal from the Kanabec County District Court, File No. C800479.
Arthur D. Walsh, A.D. Walsh Associates, (for appellant)
Alan T. Tschida, (for respondents)
Considered and decided by Stoneburner, Presiding Judge, Lansing, Judge, and Klaphake, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
James P. Fritz appeals judgment for respondents in his lawsuit that sought specific performance of a real estate purchase agreement, or in the alternative, damages based on his allegations that (1) respondent Dorothy Schroeder breached the agreement by failing to use "best efforts" to make the title marketable; (2) respondent Clifford Schroeder is estopped from failing to provide marketable title; or (3) Clifford Schroeder is liable for damages for negligent or intentional misrepresentation. We affirm.
FACTS
In August 1999, respondent Dorothy M. Schroeder listed 266 acres in Kanabec County for sale. At the time the property was listed, Dorothy Schroeder's son, Clifford Schroeder, was the record owner and Dorothy Schroeder held an unrecorded quitclaim deed from Clifford Schroeder, dated October 20, 1995.
Appellant James P. Fritz, who was interested in purchasing recreational property, visited the property twice. Although he met Dorothy Schroeder, Clifford Schroeder showed him the property, answered questions about the property and appeared to Fritz to be the person with knowledge of and authority over the property. Fritz never discussed title to the property with either Clifford or Dorothy Schroeder or with their realtor.
In October 1999, Fritz and Dorothy Schroeder signed a purchase agreement with a closing date of February 1, 2000. The agreement provided that:
Fritz apparently never saw the signed purchase agreement and asserts that he did not know that it was signed only by Dorothy Schroeder.
Seller shall use Seller's best efforts to provide marketable title by the date of closing. In the event Seller has not provided marketable title by the date of closing, Seller shall have an additional 30 days to make title marketable or, in the alternative, Buyer may waive title defects by written notice to the Seller. In addition to the 30 day extension, Buyer and Seller may by mutual agreement further extend the closing date. Lacking such extension, either party may declare this Purchase Agreement null and void; neither party shall be liable for damages hereunder to the other and earnest money shall be refunded to Buyer; Buyer and Seller shall immediately sign a cancellation of Purchase Agreement.
The agreement provided that "time is of the essence."
On January 28, 2000, a title examination revealed that Clifford Schroeder's former wife has a potential marital interest in portions of the property that had not been dealt with in their dissolution judgment. The title examiner recommended that a deed be obtained from the former wife and recorded to make the title marketable.
Clifford Schroeder asked Fritz to extend the closing to February 7, 2000, believing that he could obtain a deed from his former wife. The closing was extended, but the ex-wife, after first agreeing to sign a deed, ultimately refused to do so, despite Dorothy Schroeder's attempt, in a telephone conversation, to convince her to complete the paperwork necessary to clear the title to the property.
The parties did not mutually agree to extend the closing date beyond the 30 days provided in the purchase agreement. Fritz's attorney suggested that Clifford Schroeder move to modify the dissolution judgment, but Clifford Schroeder was opposed to reopening his "extremely bitter divorce." And Dorothy Schroeder did not want to start "bitter, costly litigation within her family." By the letter dated April 25, 2000, Dorothy declared the purchase agreement with Fritz to be null and void, under the terms of the agreement.
Although the purchase money was not returned with the letter, the Schroeders make no claim to that money and acknowledge that it must be returned to Fritz under the terms of the agreement. The money is in the realtor's escrow account available to Fritz on request.
Four months later, Fritz sued Dorothy and Clifford Schroeder seeking specific performance, or, in the alternative, damages for Dorothy Schroeder's breach of the purchase agreement and for Clifford Schroeder's negligent or intentional misrepresentation of the condition of the title and its marketability. Fritz also alleged that Clifford Schroeder is estopped from contending that he has no responsibility to make the title marketable. The case was tried to the district court, which found that the purchase agreement was properly cancelled, precluding specific performance or damages, and that Fritz had not proved misrepresentation by Clifford Schroeder. Judgment was entered in favor of the Schroeders. Fritz moved for amended findings and a new trial. That motion was denied. This appeal followed.
DECISION
The scope of review in a case tried by the court without a jury is limited to determining whether the court's findings are clearly erroneous and whether it erred in its conclusions of law.
Schweich v. Ziegler, Inc., 463 N.W.2d 722, 729 (Minn. 1990). "If there is reasonable evidence to support the district court's findings, we will not disturb them." Rogers v. Moore, 603 N.W.2d 650, 656 (Minn. 1999) (citation omitted).
1. Contract remedies
Absent ambiguity, the construction and effect of a written contract are questions of law, reviewed de novo. Wolfson v. City of St. Paul, 535 N.W.2d 384, 386 (Minn.App. 1995), review denied (Minn. Sept. 28, 1995). Specific performance of a contract to convey real estate is not a matter of absolute right. Boulevard Plaza Corp. v. Campbell, 254 Minn. 123, 136, 94 N.W.2d 273, 284 (1959). Specific performance is an equitable remedy within the sound discretion of the district court. Lilyerd v. Carlson, 499 N.W.2d 803, 811 (Minn. 1993). We will not interfere with a district court's denial of specific performance unless the district court clearly abuses that discretion. Flynn v. Swayer, 272 N.W.2d 904, 910 (Minn. 1978).
Fritz alleges that Dorothy Schroeder breached the purchase agreement by failing to use "best efforts to provide marketable title by the date of closing" and was therefore precluded from taking advantage of her right to cancel the purchase agreement. See Space Center, Inc. v. 451 Corp., 298 N.W.2d 443, 445 (Minn. 1980) (stating that "[a] contract clause making a purchase agreement null and void, in the event there is a title defect, does not render the agreement null and void where the defect in marketable title is the legal responsibility of the vendor."). But the district court found that the title defect was created by a third person (Clifford Schroeder's former spouse), and found that Dorothy Schroeder was not responsible for the title defect. Additionally, the district court found that because Dorothy Schroeder could not compel Clifford Schroeder, who was not a party to the purchase agreement and did not warrant the title, to seek an amended decree of dissolution, and because no evidence established that Dorothy Schroeder could have completed a quiet title action within the 30 days allowed in the purchase agreement, Dorothy Schroeder did not breach the purchase agreement's requirement that she use "best efforts" to make the title marketable prior to closing. Despite lack of case law defining "best efforts" in the context of making title marketable, we cannot say that Fritz has shown these findings to be clearly erroneous based on the record in this case.
The purchase agreement contained a remedy-limiting clause for inability to make title marketable, a standard clause found in purchase agreements used throughout Minnesota. See Nostdal v. Morehart, 132 Minn. 351, 157 N.W. 584 (1916) (holding that parties to a contract to convey land may stipulate that if title is not good and cannot be made good, the contract shall be inoperative); Henschke v. Young, 224 Minn. 339, 342, 28 N.W.2d 766,768 (1947) (holding that parties to a contract may provide for its annulment or cancellation by incorporating conditional provisions in the contract, thereby limiting liability of each to the other in event of a failure of performance).
Dorothy Schroeder exercised her right to cancel the agreement, which by the terms of the purchase agreement, made the agreement null and void and precluded either party from being liable for damages under the agreement. The district court did not err by concluding that the purchase agreement was null and void, precluding an action for specific performance. See Boulevard Plaza, 254 Minn. at 136, 94 N.W.2d at 284 (indicating that specific performance will not be granted where the contract has been terminated).
2. Tort remedies
Fritz asserts, in the alternative, that Clifford Schroeder is liable, by reason of misrepresentation or estoppel, for damages caused by his actions, statements and undertakings in connection with the transaction. The district court found that neither Clifford Schroeder nor Dorothy Schroeder made any false representations to Fritz regarding title to the property. But Fritz asserts in his brief that he relied on Clifford Schroeder's
actions in generating an aura of responsibility for property matters at the time he was in fact the record owner, and most especially in his continuation of the closing on the assurance that he, Clifford, would clear the title so that the transaction could close.
In an action for misrepresentation:
There must be a representation;
That representation must be false;
It must have to do with a past or present fact;
That fact must be material;
It must be susceptible of knowledge;
The representer must know it to be false, or in the alternative, must assert it as of his own knowledge without knowing whether it is true or false;
The representer must intend to have the other person induced to act, or justified in acting upon it;
That person must be so induced to act or so justified in acting;
That person's action must be in reliance upon the representation;
That person must suffer damage; [and]
That damage must be attributable to the misrepresentation, that is, the statement must be the proximate cause of the injury
Davis v. Re-Trac Manufac. Corp., 276 Minn. 116, 117, 149 N.W.2d 37, 38-39 (1967) (citation omitted). The district court, acknowledging that Fritz's claim is based only on Clifford Schroeder's actions during Fritz's viewings of the property and in trying to make the title good, specifically noted that Fritz failed to show that Clifford Schroeder made any false representations regarding the title to the land. The district court further found that Fritz did not act in reliance on any such representations. Fritz has failed to demonstrate how this finding could be considered clearly erroneous, given the deference due to the district court's opportunity to judge the credibility of witnesses. See Minn.R.Civ.P. 52.01.
Some of the "findings of fact" in the judgment in this case are not true findings because they are merely recitations of the evidence. See Dean v. Pelton, 437 N.W.2d 762, 764 (Minn.App. 1989) (stating recitation of parties' assertions is not making true findings). And many actual findings are labeled "conclusions of law." A fact found by the district court but expressed as a conclusion of law may be treated on appeal as a finding of fact unless this treatment would render otherwise clear and specific findings indefinite and conflicting. See 2 David F. Herr and Roger S. Haydock , Minnesota Practice § 52.5 (1998); see also Graphic Arts Educ. Fund v. State, 240 Minn. 143, 145-6, 59 N.W.2d 841, 844 (1953) (stating "a fact found by the court, although expressed as a conclusion of law, will be treated on appeal as a finding of fact.").
Although estoppel was not specifically addressed by the district court, absence of a representation by Clifford Schroeder as to title and reliance by Fritz is equally fatal to Fritz's estoppel claim. See Olson v. Ronhovde, 446 N.W.2d 690, 692-93 (Minn.App. 1989) (stating that equitable estoppel requires conduct on part of defendant amounting to representation or concealment of material facts, committed with intent that it will be acted on by other party, and is in fact relied on and acted on by other party to his detriment).
The judgment provided that Fritz "shall take nothing by his causes of action." We conclude that the district court, based on the Schroeders' Answer, which asserted that Fritz is entitled to return of the purchase money, considered that the purchase money was not an issue at trial and did not intend the judgment in any way to impede return of the purchase money.
Appellant moved to strike portions of respondents' appendix and statements in their brief, arguing that respondents were attempting to introduce facts outside the record on appeal. Our holding in this case renders the motion to strike moot.