This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1998).






Superior Shores Lake Home Association,





Superior Shore Partnership, et al.,



Damberg, Scott, Gerzina, Wagner Architects, Inc.,



Mark D. Pearson,



Johnson Wilson Builders Company, Inc.,



Filed March 21, 2000


Harten, Judge


Lake County District Court

File No. C9-97-295


Kyle E. Hart, Brian L. Williams, Fabyanske, Westra & Hart, P.A., 1100 Minneapolis Centre, 920 Second Avenue South, Minneapolis, MN 55402 (for appellant)


William M. Hart, Jenneane L. Jansen, Meagher & Geer, PLLP, 4200 Multifoods Tower, 33 South Sixth Street, Minneapolis, MN 55402 (for respondents Superior Shore Partnership and Vicki Pearson)


Michael T. Tierney, Clure, Eaton & Butler, P.A., 222 West Superior Street, Suite 200, Duluth, MN 55802 (for respondent Damberg, Scott, Gerzina, Wagner Architects, Inc.)


Stanley E. Siegel, Jr., Marc Andre Al, Rider, Bennett, Egan & Arundel, 333 South Seventh Street, Suite 2000, Minneapolis, MN 55402 (for defendant Mark Pearson)


Anthony S. Downs, Steven W. Schneider, Halvorson, Watters, Downs, Reyelts & Bateman, Ltd., 700 Providence Building, Duluth, MN 55802 (for respondent Johnson Wilson Builders Co., Inc.)


            Considered and decided by Davies, Presiding Judge, Lansing, Judge, and Harten, Judge.

U N P U B L I S H E D   O P I N I O N


 Appellant, an association of condominium owners, challenges (1) the determination that respondents (the developer, the contractor, and the architect) are entitled to summary judgment on statute-of-limitations grounds because an individual who had notice of a defect in appellant’s property was appellant’s agent and (2) the granting of partial summary judgment to respondents.  Because we see no genuine issue of material fact and no error of law in the granting of summary judgment and no abuse of discretion in the entry of partial summary judgment, we affirm.


Appellant Superior Shores Lake Home Association (SSLHA) is a condominium owner association. Respondent Superior Shores Partnership (SSP) was the developer of the condominiums; its general partners were Mark Pearson and respondent Vickie Pearson.  Respondent Johnson-Wilson Builders Company, Inc. (JWB) was the general contractor; respondent Damberg, Scott, Gerzina, Wagner Architects, Inc., (DSGWA) or its predecessor, was the architect. 

In 1991, appellant contracted with Scenic Point Properties (SPP) and its president, Mark Pearson, to act as Property Manager.  The contract, or “Management Agreement,” was signed by Pearson as president of SPP.  SPP is referred to as “the Agent” throughout the contract, and Pearson is named as Property Manager.  Terms of the contract include engaging “Agent” to manage Superior Shores, to bill and collect assessments, to maintain records, to submit an operating budget, to maintain common areas and facilities and report conditions requiring attention, to hire personnel, to attend appellant’s association meetings, to maintain units to the extent necessary to prevent damage to the common areas or property damage, and to prepare an annual report.

On a walk-through of the property in July 1991, members of appellant association noticed extensive cracking in the foundation of Building 2, which had been substantially completed in 1984.  Appellant directed Pearson, in writing, to consult JWB and DSGWA about the cracking.  At appellant’s September 1991 meeting, Pearson reported that the cracks were superficial, that they had been caulked, and that JWB and DSGWA would examine them in early October.  At the November meeting, however, Pearson had not yet obtained a written report.

In December, DSGWA wrote to Pearson, telling him that the cracks were hairline, that they posed no structural problem, and that DSGWA’s structural engineer would evaluate the situation.  Appellant’s membership reviewed this letter at its February meeting.  In January 1992, a Superior Shores unit owner wrote to DSGWA and to Pearson indicating that appellant needed assurance that the cracks posed no problem from a structural engineering and architectural standpoint.  In February, DSGWA again wrote Pearson, recommending hiring a building diagnostician to determine the probable cause of the cracks.  Appellant’s membership reviewed this letter at its February meeting.

In June 1992, appellant proposed having the cracks tested by an independent consulting firm at JWB’s expense and evaluated at a July walk-through.  An independent consulting firm did examine the cracks; it reported that it appeared the cracks would not detract from the structural integrity for the next 30 years but that it would be necessary to drill and perform a boring test of the cracks.  In July, the consulting firm reported to DSGWA that the cracks were frost-related and recommended further investigation by hand-augur borings.  The firm’s second report, produced in August 1992, recommended either replacing the foundation with a bedrock-based foundation or providing proper frost protection.  In December 1992, Pearson, JWB, and DSGWA met to discuss the reports and recommendations.  No action was taken.  In April 1994 and again in April 1995, Pearson told appellant that no repairs were needed because the cracks were merely cosmetic.

By June 1997, the investigation of another consulting firm revealed significant damage to and deterioration of the foundation.  The foundation was repaired at an estimated cost of $140,000, of which appellant paid $85,000.  Appellant then brought this action against respondents and Mark Pearson, all of whom sought summary judgment on the basis of the two-year statute of limitations for defects in improvements to real property provided by Minn. Stat. § 541.051, subd. 1(a)(1996). Summary judgment was granted to all defendants except Pearson after the district court determined that Pearson was appellant’s agent and had known of the defect by December 1992.[1]  JWB, joined by DSGWA, moved for entry of partial summary judgment against appellant.  The motion was granted; summary judgment was entered for all respondents.  

            Appellant challenges the summary judgment, contending that the district court erred as a matter of law in determining that Pearson was appellant’s agent and dismissing appellant’s claims against respondents, and that it abused its discretion in entering partial summary judgment.



  Standard of Review


            “On an appeal from summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact and (2) whether the lower courts erred in their application of the law.”  State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990) (citation omitted).

1.         The Agency Relationship

            Appellant relies on PMH Properties v. Nichols, 263 N.W.2d 799, 802 (Minn. 1978), to argue that summary judgment is necessarily erroneous when an agency relationship is at issue because an agency relationship is a question of fact.  PMH, however, is distinguishable.  It concerned the assertion by PMH, a real estate partnership, that one Nichols was its agent.  Evidence on the point was conflicting.     

            Because we believe that ample evidence was introduced from which the jury could have concluded that respondent Nichols agreed to manage and resell the apartments for PMH, thereby becoming its agent, the decision of the trial court must be reversed.


Id. at 803.  Here, the evidence was not conflicting: there was a written contract between appellant and SPP, Pearson’s corporation, naming Pearson as Property Manager and referencing SPP as appellant’s “Agent.”  Further written evidence shows that appellant required Pearson to have the cracks investigated, to provide a written report of the investigation, and to hire a testing agency.  Ample written evidence supports Pearson’s status as appellant’s agent.  

            Appellant also argues that because Pearson was the developer, he could not have been an agent with respect to building defects—it would have been against his own interest to point them out.  But this alleged conflict of interest did not prevent appellant from hiring Pearson to act as Property Manager and his corporation, SPP, to be appellant’s Agent, responsible for maintenance necessary to prevent damage and emergency repairs necessary to preserve the property.  Hiring a developer as property manager may be unwise, but that does not void the hiring.

            Finally, Pearson’s own deposition testimony supports his status as appellant’s agent.  Pearson testified (1) that appellant had not authorized him to proceed with repair work, (2) that he was “99 percent sure” he gave appellant the report of the testing in 1991, (3) that appellant felt, and he concurred, that appellant should not have to pay for the 1991 testing, (4) that there was an on-site meeting of JWB, DSWGA, and “myself [Pearson] representing [appellant],” (5) that he received and discussed with appellant in 1992 the testing report recommending replacing the foundation or providing frost protection, (6) that he and appellant agreed that the bill for the 1992 testing should not be paid by appellant, (7) that he withheld nothing from appellant – “Everything I got I believe they got,” (8) that he was hired by appellant to be the “point person” to talk to DSGWA and JWB, and (9) that everything he was given was reported to appellant at its meetings.[2]

            The district court did not err as a matter of law in finding no genuine issue of material fact on Pearson’s agency status.

2.         Dismissal of the claims against respondents

            Appellant argues that, because a jury has not yet determined Pearson’s agency status, the court cannot determine respondents’ respective liabilities.      

But the court need not make such a determination.  Once it determined that Pearson, who knew of the defect in 1992, was appellant’s agent, appellant’s claims were barred by the statute of limitations.  Appellant offers no support for its implied view that summary judgment cannot be granted on statute of limitations grounds because this precludes resolution of the claims on their merits.

3.         Partial Summary Judgment

            JWB moved for partial entry of judgment pursuant to Minn. R. Civ. P. 54.02.  DSGWA supported the motion; SSP and Vicki Pearson took no position.  The district court granted the motion and entered judgment for JWB, DSGWA, SSP, and Vicki Pearson.  A district court has broad discretion to enter final partial summary judgment.  See Novus Equities Corp. v. EM-TY Partnership, 381 N.W.2d 426, 428 (Minn. 1986) (“[A] trial judge must be accorded broad discretion in deciding whether an immediate appeal of a partial summary judgment is warranted.”); Olson v. Tufford, 392 N.W.2d 281, 283 (Minn. App. 1986) (“[w]e would think it rare that a trial court could abuse its broad discretion in directing entry of final partial judgment”), review denied (Minn. Oct. 29, 1986). 

            The district court found that appellant’s claims against Pearson were clearly severable from its claims against respondents.  Appellant contends that the entry of partial summary judgment subverts the goal of judicial economy and all but guarantees piecemeal review, because appellant will probably appeal again after the trial on its claims against Pearson.  But appellant’s claims against respondents were dismissed on statute of limitations grounds; its claims against Pearson will presumably be resolved on the merits.  The court did not abuse its discretion in deciding that the claims against respondents were severable.  Moreover, a district court may enter partial summary judgment where substantial benefits to the parties will outweigh the general policy consideration against piecemeal review.  First Nat’l Bank of Windom v. Rosenkranz, 430 N.W.2d 267, 268 (Minn. App. 1988).  Here, the benefit to the parties in having their case concluded in a timely fashion is obvious.


[1] The court noted a fact issue as to whether Pearson should be equitably estopped from asserting a statute-of-limitations defense.

[2] Appellant argues that because Pearson testified his office was “more of a conduit,” there was no agency relationship.  But there is no necessary conflict between acting as a principal’s conduit and being its agent.  Indeed, the roles are complementary.