This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
Village Apartments Limited Partnership,
Rochester Lodge No. 13,
Independent Order of Odd Fellows,
a/k/a Rochester Lodge No. 13,
International Order of Odd Fellows, and as
Lodge #13 International Order of Oddfellows, and as
Rochester Lodge No. 13, I.O.O.F., et al.,
Filed June 20, 2000
Olmsted County District Court
File No. C5983369
Joanne H. Turner, Timothy J. Grande, Mackall, Crounse & Moore, P.L.C., 1400 AT&T Tower, 901 Marquette Ave., Minneapolis, MN 55402 (for appellant)
Brent R. Lindahl, Gregory M. Bistram, Briggs and Morgan, P.A., 2200 First National Bank Bldg., 332 Minnesota St., St. Paul, MN 55101 (for respondents)
Considered and decided by Peterson, Presiding Judge, Halbrooks, Judge, and Huspeni, Judge.
U N P U B L I S H E D O P I N I O N
Appellant Olympik Village Apartments brought a breach of contract action against respondent Independent Order of Odd Fellows, seeking damages and specific performance of a written easement agreement. The district court concluded that the unambiguous contract language did not provide Olympik with a right of first refusal or with an option to purchase the Odd Fellows’ building and dismissed Olympik’s action, pursuant to Minn. R. Civ. P. 12.02(e), for failure to state a claim. Olympik moved for reconsideration, claiming the district court disregarded Olympik’s allegations that its right to purchase the Odd Fellows’ building arose from various oral and written statements made by Odd Fellows. The district court, in denying the motion, determined that any modifications needed to be in writing. Because the district court did not err in dismissing Olympik’s action, or in denying the motion for reconsideration, we affirm.
Appellant Olympik Village Apartments Limited Partnership (Olympik) and respondent Independent Order of Odd Fellows (Odd Fellows) own adjacent buildings in downtown Rochester. Odd Fellows also owns an alley adjacent to these two buildings. In 1986, Odd Fellows and the prior owners of Olympik’s building signed an easement agreement conveying from Odd Fellows to the prior owners of Olympik’s building an access easement through the alley. Among other rights conveyed between the building owners, the easement agreement gave the prior owners of Olympik’s building the right to receive notice that Odd Fellows intended to sell the Odd Fellows’ building and the right to submit a purchase offer. Olympik subsequently acquired all rights under the easement agreement when it purchased its building.
In October 1998, Odd Fellows entered into a written purchase agreement to sell the Odd Fellows’ building to a third party. Odd Fellows provided Olympik with notice of its intent to sell and with a copy of the purchase agreement. Olympik submitted an offer to purchase the Odd Fellows’ building. Odd Fellows rejected Olympik’s offer and sold the building to the third party.
Olympik brought a breach of contract action against Odd Fellows, seeking damages and specific performance of the easement agreement. The district court dismissed Olympik’s action for failure to state a claim.
In reviewing cases dismissed for failure to state a claim on which relief can be granted, the only question before this court is whether the complaint sets forth a legally sufficient claim for relief. Elzie v. Commissioner of Pub. Safety, 298 N.W.2d 29, 32 (Minn. 1980). A claim is legally sufficient if it is possible on any factual evidence that might be produced, consistent with the pleadings, to grant the relief demanded. Northern States Power Co. v. Franklin, 265 Minn. 391, 395, 122 N.W.2d 26, 29 (1963). Generally, pleadings are not required to allege facts or every element of a cause of action. Id. The reviewing court must take as true any factual allegations made in the complaint. See Minn. R. Civ. P. 12.03 (providing for motion to dismiss on the pleadings); D.A.B. v. Brown, 570 N.W.2d 168, 170 (Minn. App. 1997). The court may consider a key document on which the complaint is premised. Johnson v. State, 536 N.W.2d 328, 332 (Minn. App. 1995).
Olympik argues that the written easement agreement contains ambiguous terms requiring extrinsic evidence, which precludes dismissal for failure to state a claim. Olympik also contends that the language of the agreement creates a right of first refusal to purchase the Odd Fellows’ building and that any other interpretation would render the clause meaningless.
On appeal, a reviewing court may determine whether a contract is ambiguous without regard to the district court’s determination. Blackburn, Nickels & Smith v. Erickson, 366 N.W.2d 640, 643 (Minn. App. 1985), review denied (Minn. June 24, 1985). Whether a contract is ambiguous is a question of law. Current Tech. Concepts, Inc. v. Irie Enters., Inc., 530 N.W.2d 539, 543 (Minn. 1995). A contract provision is ambiguous if its language is reasonably susceptible to more than one interpretation. ICC Leasing Corp. v. Midwestern Mach. Co., 257 N.W.2d 551, 554 (Minn. 1977). In determining whether ambiguity exists, a court does not consider extrinsic evidence. Blattner v. Forster, 322 N.W.2d 319, 321 (Minn. 1982). The plain and ordinary meanings of words must be considered within the context of the entire contract and must be interpreted so as to give a reasonable meaning to all terms. Current Tech. Concepts, 530 N.W.2d at 543; Country Club Oil Co. v. Lee, 239 Minn. 148, 151-52, 58 N.W.2d 247, 249 (1953).
The easement agreement here provides:
In the event the Oddfellows receive an offer to buy or intend to transfer, convey or dispose of its interest in the Oddfellows Building, it hereby agrees to notify [the prior owners of Olympik’s building], prior to unconditionally agreeing to sell or transfer its property and to allow [the prior owners of Olympik’s building] 10 business days to offer to purchase the Oddfellows’ interest in the Oddfellows building, before irrevocably agreeing to sell or transfer the Oddfellows building.
The district court determined that the agreement language was not ambiguous. We agree. The language is not reasonably susceptible to more than one meaning and unambiguously establishes only that Odd Fellows would provide Olympik’s predecessor in interest the right to receive notice of its intent to sell and the opportunity to submit a purchase offer. Without this clause, Odd Fellows could have sold its building to any third party without informing Olympik and without providing Olympik the opportunity to submit a purchase offer. The provision at issue here entitles Olympik to make an offer, but it does not require Odd Fellows to accept that offer even if the terms of Olympik’s offer match (or are better than) those of a third party. Contrary to Olympik’s argument, the language is not meaningless if it is construed to be something less than a right of first refusal.
An examination of the entire easement agreement reveals the presence of a provision giving Odd Fellows an option to buy, under a separate agreement and on different terms, property different from that in the current litigation. The parties had little difficulty in stating with specificity an option to buy in connection with that separate property. Had Odd Fellows intended to provide Olympik with such purchase rights to the Odd Fellows’ building, the easement agreement could also have stated that specifically. The district court did not err in determining that the plain language of the easement agreement was unambiguous.
Olympik also argues that Odd Fellows’ subsequent oral statements created a binding oral option contract to sell the property to the highest bidder. The district court determined that the agreement to sell real property fell within the statute of frauds; therefore, the easement agreement could not be modified orally. We agree with the determination of the district court.
An agreement granting an easement is subject to the statute of frauds. Berg v. Carlstrom, 347 N.W.2d 809, 812 (Minn. 1984). Likewise, the statute of frauds requires a contract for the sale of real property to be in writing. Minn. Stat. § 513.05 (1998). A contract subject to the statute of frauds cannot be modified orally. Rooney v. Dayton-Hudson Corp., 310 Minn. 256, 266, 246 N.W.2d 170, 175 (Minn. 1976).
Appellant argues, based on Shaughnessy v. Eidsmo, 222 Minn. 141, 23 N.W.2d 362 (1946), that an option to purchase real property need not be in writing. Shaughnessy is distinguishable from this case. Shaughnessy involved an oral contract with an oral option to buy real estate and subsequent part performance of the oral option. Id. at 143-44, 23 N.W.2d at 364. While recognizing the validity of the oral agreements in that case, the supreme court has cautioned that, although part performance may take a contract out of the statute of frauds, options should be reduced to writing. Rooney, 310 Minn. at 265 n.5, 246 N.W.2d at 175. The supreme court has further cautioned that, with an oral option contract to purchase real property, oral statements cannot be relied on to establish a part of the written contract of sale. Id.
The initial agreement in this case was in writing, there was no part performance, and the alleged subsequent changes to the original written rights between the parties were oral and thus could not be relied on to establish a part of the written agreement. Therefore, Olympik’s reliance on Shaughnessy is misplaced.
Olympik’s reliance on Short v. Sun Newspapers, Inc., 300 N.W.2d 781 (Minn. 1980), is also misplaced. Short did not involve the sale of real property subject to the statute of frauds; rather the sale of “soft” business assets was at issue there. Id. at 786. Also, the initial offer to sell the newspaper’s assets to the highest bidder was in writing. Id. at 786-87. Here, the purchase deals with the sale of real property subject to the statute of frauds; and the alleged subsequent offer to sell to the highest bidder was oral. The written easement agreement governs the relationship between the parties regarding the sale of the Odd Fellows’ building. Any oral modifications of these rights established within the plain language of the agreement are, therefore, barred by the statute of frauds.
The district court did not err in dismissing Olympik’s breach of contract action for failure to state a claim.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.