Opinion
No. CX-98-946.
Filed December 22, 1998.
Appeal from the District Court, Washington County, File No. C3971230.
Robert D. Butterbrodt, and Janel E. LaBoda, Briggs and Morgan, P.A., (for respondent).
Jack W. Clinton, Fluegel, Moynihan Clinton, and Edward F. Kautzer, Ruvelson Kautzer, Chtd., (for appellants).
Considered and decided by Willis, Presiding Judge, Toussaint, Chief Judge, and Klaphake, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
Appellants challenge summary judgment concluding that an oral contract for sale was formed at an auction of appellants' farm. We reverse.
FACTS
Appellants Duane and Doris Herman contracted with an auction company to conduct an auction to secure bids for the sale of their farm. The contract provided that the "sellers will be given the option to either accept or reject the highest offer." But the auction advertisements did not indicate that appellants retained that right, and there was no such announcement at the auction, which was held on December 3, 1996. The Hermans' attorney told the potential bidders at the auction that the highest bidders would have to sign purchase agreements.
The auctioneer divided the farm into three parcels, and respondent Charles Johnson made the highest bid on one of the parcels. After determining the highest bid for each of the parcels, the auctioneer asked for bids on the property as a whole but received none. The auctioneer ended the auction by asking all "prospective buyers" to come forward to talk with the Hermans' attorney. The auctioneer did not let the hammer fall or announce that any parcel was sold.
In accordance with the published terms of the auction, Johnson gave the Hermans' attorney a down payment, but the parties did not sign a purchase agreement. Two days later, the Hermans' attorney sent Johnson a letter stating that the Hermans were still considering other bids, and on December 19, 1997, he returned Johnson's check to him with a letter stating that the Hermans had rejected his bid.
Johnson sued for specific performance, claiming a contract for sale of the land was formed when the auctioneer ended the auction. The district court granted summary judgment to Johnson, finding that there was acceptance of his bid, an oral contract was formed, and the statute of frauds was satisfied. This appeal followed.
DECISION
On appeal from summary judgment, an appellate court asks whether there are any issues of material fact and whether the district court erred in its application of the law. State by Cooper v. French , 460 N.W.2d 2, 4 (Minn. 1990). The reviewing court views the evidence in the light most favorable to the nonmoving party. Offerdahl v. University of Minn. Hosps. Clinics , 426 N.W.2d 425, 427 (Minn. 1988). An appellate court reviews de novo whether a contract was formed where there is no dispute of material fact. Triple B G, Inc. v. City of Fairmont , 494 N.W.2d 49, 53 (Minn.App. 1992). The parties agree to the facts but dispute whether a contract was formed.
The Hermans argue that no contract was formed, claiming they did not accept Johnson's bid. "A sale by auction is complete when the auctioneer so announces by the fall of the hammer or in other customary manner." Minn. Stat. § 336.2-328(2) (1996); see Schwinn v. Griffith , 303 N.W.2d 258, 260 (Minn. 1981) (stating oral contract is generally formed "following a bid and the fall of the auctioneer's hammer"). A bid at an auction is an offer to purchase, and the fall of the hammer indicates acceptance. Anderson v. Wisconsin Cent. Ry., Co. , 107 Minn. 296, 314, 120 N.W. 39, 46 (1909).
Here, the auctioneer determined the highest bid on each of the parcels, including Johnson's bid, but, as the district court found, "[n]o sales had occurred up to this point." If the auctioneer did not accept Johnson's offer, no contract was formed. Cf. Rosenberg v. Townsend, Rosenberg Young, Inc. , 376 N.W.2d 434, 437 (Minn.App. 1985) (stating that without objective manifestation of acceptance of offer to contract, no agreement is created). When the auctioneer ended the auction, he did not let the hammer fall or announce that any parcel was sold. But section 336.2-328(2) provides that "[a] sale by auction is complete when the auctioneer so announces by the fall of the hammer or in other customary manner ." (Emphasis added.) We find no evidence of trade custom in the record, and the district court made no finding on the issue that would support a summary judgment determination. Because there is no evidence regarding whether the auctioneer announced completion of the sale in a "customary manner" other than by the fall of the hammer, we must reverse the district court's conclusion on summary judgment that a contract was formed. Because of our decision on the contract issue, we do not address appellants' argument that, even if a contract was formed, the statute of frauds prevents enforcement.