This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. ß 480A.08, subd. 3 (1998).


Ricardo C. Garay, et al.,


Carl B. Beers, et al.,

Filed January 11, 2000
Peterson, Judge

Washington County District Court
File No. C6962586

Kevin E. Giebel, Giebel, Gilbert & Kohl, P.L.L.P., 2233 North Hamline Avenue, Suite 620, St. Paul, MN 55113 (for appellants)

Timothy J. Hasset, Paul H. Yoo, Felhaber, Larson, Fenlon & Vogt, P.A., 601 Second Avenue South, Suite 4200, Minneapolis, MN 55402-4302 (for respondents)

Considered and decided by Randall, Presiding Judge, Klaphake, Judge, and Peterson, Judge.

U N P U B L I S H E D   O P I N I O N


This appeal is from a judgment denying appellants-buyers Ricardo and Mary Jo Garay rescission of a contract under which they purchased real estate from respondents-sellers Carl and Susan Beers. Buyers argue that the district court erred by construing this courtís opinion in a previous appeal as requiring buyers to prove reasonable reliance on sellersí misrepresentation. We affirm.


Buyers wanted to buy real estate to build a home. Sellers represented that the lot at issue in this lawsuit was suitable for residential building. After purchasing the lot, buyers learned that they needed a variance from the city and Department of Natural Resources (DNR) approval to build on the lot. Buyers obtained a variance from the city but were unable to obtain DNR approval.

Buyers brought this action under the Minnesota Consumer Fraud Act, alleging that sellers falsely represented that a residential structure could be constructed on the lot. The district court found that Carl Beers negligently misrepresented that the lot was buildable, concluded that buyers were not required to prove actual reliance on the statements, and granted summary judgment in favor of buyers. The court also awarded buyers attorney fees, costs, and disbursements. Sellers appealed to this court. Based on its conclusion that buyers were required to establish both that they reasonably relied on sellersí alleged misrepresentation and that this reliance proximately caused their damages, this court reversed the summary judgment in favor of buyers and remanded the case to the district court. Garay v. Beers, No. C5-97-2268, 1998 WL 373082 (Minn. App. July 7, 1998).

A jury trial was conducted on remand. The jury found that buyers suffered damages as a direct result of Carl Beersís misrepresentation but that buyersí reliance on the misrepresentation was not reasonable. Based on the juryís verdict, the district court denied buyers rescission of the contract. Judgment was entered in favor of sellers following the district courtís denial of buyersí motion for amended findings. This appeal followed.


The appellate courts developed the law of the case doctrine to effectuate the finality of decisions. Loo v. Loo, 520 N.W.2d 740, 744 n.1 (Minn. 1994).

Law of the case applies when the appellate court has ruled on a legal issue and remanded for further proceedings on other matters. The issue decided becomes "law of the case" and may not be relitigated in the trial court or reexamined in a second appeal.

Sigurdson v. Isanti County, 448 N.W.2d 62, 66 (Minn. 1989). Law of the case applies whether the previous decision was right or wrong. Bjorgo v. First Natíl Bank, 132 Minn. 273, 274, 156 N.W. 277, 277 (1916); see also Lange v. Nelson-Ryan Flight Serv., Inc., 263 Minn. 152, 156, 116 N.W.2d 266, 269 (1962) (explaining rationale underlying law of the case).

Buyers argue that this courtís previous opinion should be construed as holding only that reasonable reliance is an element of a claim for pecuniary damages under the consumer fraud act and not addressing the issue of whether reasonable reliance is an element of a claim for rescission under the consumer fraud act. Buyersí argument is based on the following language in this courtís previous opinion:

Because [buyers] here are claiming pecuniary damages, they must establish both that they reasonably relied on [sellersí] alleged misrepresentation and that this reliance proximately caused their damages. Because these issues were not addressed in the district courtís grant of summary judgment, we reverse and remand this matter to the district court for proceedings consistent with this opinion.

Garay, 1998 WL 373082, at *3.

Buyers argue that pecuniary damages are compensation for economic loss and that a claim for rescission is not a claim for pecuniary damages. This court, however, in the context of the preverdict interest statute, has construed the term pecuniary damages more broadly, as including all monetary awards regardless of whether an award compensates for an economic loss. Skifstrom v. City of Coon Rapids, 524 N.W.2d 294, 295 (Minn. App. 1994), review granted (Minn. Dec. 6, 1994), and appeal dismissed (Minn. Oct. 25, 1995).

In the previous appeal, this court reversed the district courtís grant of summary judgment in favor of buyers on their claim under the consumer fraud act and the judgment in favor of buyers for attorney fees, costs, and disbursements. The only ground stated in the previous opinion for reversing the summary judgment on the consumer fraud claim was buyersí failure to prove reasonable reliance. The only relief buyers requested in their consumer fraud claim was the return of the purchase price and the amount they paid for property taxes in exchange for rescission of the contract. Both purchase price and property taxes are damages that can be awarded in a rescission action. See MCC Invs. v. Crystal Properties, 451 N.W.2d 243, 247-48 (Minn. App. 1990) (purpose of rescission is to return parties to status quo; explaining what buyer and seller are entitled to recover when real estate sale contract is rescinded), review denied (Minn. Mar. 27, 1990).

Because the only claim buyers made under the consumer fraud act was a rescission claim and because this court reversed the summary judgment in their favor on that claim, this courtís previous opinion can only be construed as holding that buyers were required to prove reasonable reliance to prevail on their rescission claim. Therefore, in referring to pecuniary damages, the court was using the term in the broader sense.

If buyers believed this courtís previous decision was incorrect, their remedy was to seek review in the supreme court. See Hoyt Inv. Co. v. Bloomington Commerce & Trade Ctr. Assocs., 418 N.W.2d 173, 176 (Minn. 1988) (when party failed to raise issue in petition for review on first appeal, court of appealsís first decision on that issue was law of the case and supreme court would not address issue on second appeal); see also Burgmeier v. Bjur, 533 N.W.2d 67, 69 (Minn. App. 1995) (noting that when party did not seek review of court of appealsís first decision, first decision became law of the case), review denied (Minn. Sept. 20, 1995). Buyers did not do so, and this courtís previous decision is the law of the case.