This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2000).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

CX-01-540

 

 

Paul Brown, et al.,

Appellants,

 

vs.

 

Meredith M. Severson, et al.,

Respondents.

 

 

Filed December 11, 2001

Affirmed
Foley, Judge
*

 

Goodhue County District Court

File No. C6-00-272

 

 

Phillip R. Krass, C. John Jossart, Krass Monroe, P.A., 1100 Southpoint Office Center, 1650 West 82nd Street, Bloomington, MN  55431 (for appellants)

 

Thomas E. Gorman, Gorman Law Office, 1626 Old West Third Street, Red Wing, MN 55066 (for respondents)

 

            Considered and decided by Anderson, Presiding Judge, Foley, Judge, and Forsberg, Judge.*


U N P U B L I S H E D   O P I N I O N

FOLEY, Judge

            Appellants commenced an action to compel specific performance of two contracts to purchase land from respondents.  After a bench trial, the district court entered judgment dismissing appellants’ claim and assessing attorney fees against appellants. 

            Because the evidence sustains the district court’s finding that appellants failed to satisfy the condition precedent of providing a timely written commitment for financing, and because the district court did not err in refusing to grant appellants’ claim for unjust enrichment, we affirm.

FACTS

            Respondent Meredith Severson and her son, Kevin, owned approximately 30 acres of land in Red Wing, Minnesota.  Meredith owned the majority of the land; her son owned a small adjacent tract on which he built a house.  In 1999, Meredith Severson learned that the City of Red Wing (the city) sought to obtain a portion of her property to build a new roadway for an adjacent development.  The city proposed assessing the Seversons’ property in excess of $450,000.  The Seversons attempted to negotiate with the city to reach a mutually acceptable arrangement, but when that failed, the city began an action to condemn a portion of Meredith Seversons’ property for the roadway.

            In August 1999, appellant Paul Brown expressed an interest on behalf of himself and his wife, Marsha, in purchasing the property for commercial development.  The parties began negotiating the terms of a proposed sale through their attorneys.

            The Seversons’ attorney drafted two substantially identical agreements, one covering Meredith Severson’s land, and the other covering Kevin Severson’s land.  Those initial drafts contained an explicit clause requiring the Browns to provide the Seversons with a written commitment for a mortgage loan sufficient to pay the purchase price on or before October 1999.  However, that clause was changed in the final agreements, which provided:

8. Seller’s Conditions Precedent to Closing.  The obligation of Seller to sell the Property as provided herein is conditioned upon the following:

 

(a) Performance by Buyer.  Performance by Buyer of its obligations and under the terms of this Agreement and receipt of those documents and items to be delivered to Seller pursuant to terms of this Agreement within the time periods specified in this Agreement.

 

*  *  * *

 

(d) Proof of financing.  Buyer shall provide Seller with proof acceptable to Seller that Buyer can obtain financing necessary to purchase the Property subject to a condition that the Property be rezoned as provided in this Agreement on or before December 31, 1999.

 

Under the agreements, the sellers had the right to terminate the agreement if any condition was not satisfied or waived in writing by the sellers.  Paragraph 15 of the agreements further provided that all required notices or other communications “shall be in writing.”  The parties signed these agreements during September 1999, with a total purchase price of $850,000.[1] 

            Pursuant to these agreements, the Browns negotiated with the city at their own expense to have the property rezoned for commercial use.  The Red Wing City Council agreed to give the city the property it needed to construct the road and to dismiss an assessment appeal on the property in exchange for its approval of the rezoning.  On December 13, 1999, the city approved the rezoning.  In early December, the Browns also signed an agreement to sell the property to Wal-Mart for $5,488,560.  The Browns did not inform the Seversons of this agreement because of a confidentiality agreement with Wal-Mart.

            During December, the parties, through their attorneys, corresponded about the expected financing commitment, but the Browns did not provide the Seversons with a written commitment.  According to Scott Groth, a US Bank lending officer, US Bank made an internal commitment to the loan on December 20, 1999.  On Friday, December 31, 1999, the Browns’ attorney, Catherine Johnson, called Groth to check on the status of the financing commitment in preparation for a closing date in early January.  She asked if a commitment could be produced that same day.  Johnson was told that was possible, but Groth suggested the following week would be better because of Y2K issues.  Johnson then called Seversons’ attorney, Kent Speight.  Speight testified that Johnson indicated she understood the commitment was due that day and asked him whether it was acceptable to give it to him on Monday, January 3, 2000.  Speight stated that it was acceptable to receive it on Monday, but that it had to be backdated to December 31, 1999.  Johnson testified that she instructed the bank to send a commitment letter.  She believed Speight asked for it by Monday and she told him that she would try to do so, but that, in any case, that she would get it the following week.  Johnson then contacted Groth and told him that she had spoken with Speight and that nothing in writing was due that day.

            On Tuesday, January 4, 2000, Groth e-mailed a proposed commitment letter to Johnson, who delivered it to the Browns’ accountant for review.  Johnson did not contact Speight on January 4 or 5, 2000.   On January 6, Speight called Johnson and advised her that the Seversons were terminating the purchase agreements because the Browns had failed to provide written proof of financing by December 31, 1999. 

            The Browns filed this action for specific performance, and the district court allowed an amendment to the complaint adding a count of unjust enrichment.   After a bench trial, the district court entered judgment in favor of the Seversons and denied the Browns’ posttrial motion for amended findings.  The district court also assessed $67,413.87 in attorney fees against the Browns.  This appeal followed.

D E C I S I O N

            After trial, the Browns did not move the district court for a new trial.  Consequently, we only review whether the evidence sustains the findings of fact, and whether the findings of fact support the conclusions of law and the judgment.   Citizens for a Safe Grant v. Lone Oak Sportsmen’s Club, Inc., 624 N.W.2d 796, 802 (Minn. App. 2001).  

            The Browns argue that the district court erred in not granting specific performance because, in redrafting the purchase agreements, the parties omitted specific language referring to a written financing agreement.  But specific performance is an equitable remedy addressed to the sound discretion of the district court and we will not interfere unless the district court has clearly abused that discretion.  Lilyerd v. Carlson, 499 N.W.2d 803, 811 (Minn. 1993).  Here, the final purchase agreements specifically provided that the Seversons’ obligation to sell the property was conditioned on the Browns providing “proof acceptable” to the Seversons that they could obtain the necessary financing to purchase the property.  The contract also required all notices or communications to be in writing. 

            A purchase agreement does not become enforceable until a financing contingency that constitutes a condition precedent has been performed.  See Hanson v. Moeller, 376 N.W.2d 220, 223-24 (Minn. App. 1985) (actions of seller consistent with existence of contract, after default by purchaser on condition precedent, did not constitute waiver of financing contingency that was condition precedent, where seller was unaware of default on condition).  As this court has noted,

[w]hen a contractual duty is subject to a condition precedent, whether that condition is express, implied, or constructive, there is no duty of immediate performance and there can be no breach of that contractual duty by mere nonperformance, unless the condition precedent is either performed or excused.  If such a condition precedent is neither performed [n]or excused within the time that is required, such failure now makes it impossible for a breach of contract to occur.  Nonperformance of the primary contractual duty can now never operate as a breach of it; and no remedy for enforcement will ever be available.  Therefore, the contractual duty must be regarded as discharged. 

 

Id. at 226 (quotation omitted).  Here, the express terms of the agreements support the district court’s determination that a written financing commitment was a condition precedent to the Seversons’ obligation to purchase the property.

            The Browns also contend that the district court erroneously considered parol evidence when construing the agreements.  However, the Browns failed to object to the introduction of any such evidence at trial, and failed to move for a new trial.

Matters such as trial procedure, evidentiary rulings and jury instructions are subject to appellate review only if there has been a motion for a new trial in which such matters are assigned as error.

 

Sauter v. Wasemiller, 389 N.W.2d 200, 201 (Minn. 1986) (citation omitted).  Further, we will generally not consider matters not argued and considered in the court below.  Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988).[2]  Thus, we need not address the argument that the district court improperly considered parol evidence.

            In any event, when a contract is ambiguous, parol evidence may be admitted to explain the conduct of the parties subsequent to a written agreement.  H.J. Kramer Plumbing & Heating, Inc. v. Scharmer, 386 N.W.2d 742, 746-47 (Minn. App. 1986).  The actions of the parties here demonstrate conclusively that they regarded December 31, 1999, as the deadline for providing written proof of financing.  At trial, attorney Kent Speight testified that on December 31, attorney Catherine Johnson told him “[w]e’re supposed to get you a commitment for financing by today.”  Johnson admitted that Speight informed her that the commitment for financing (1) had to be in writing; (2) had to be dated by December 31, 1999; and (3) had to be delivered to him by January 3, 2000.  Although there may have been an agreement to waive the deadline date of January 3, 2000, uncontradicted evidence shows that no written proof of financing was delivered to the Seversons or their attorney on either January 3, 4, or 5, 2000.  Therefore, the Seversons were well within their rights to consider the purchase agreement terminated as of January 6, 2000.  The district court did not abuse its discretion in denying specific performance.[3]

            Nor did the court err in refusing to grant the Browns’ claim for unjust enrichment.  Preliminarily, the district court did not abuse its discretion in granting leave to amend the complaint to include a claim for unjust enrichment.  See Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993) (amendments to pleadings should be freely granted and are reviewed for abuse of discretion).  But such a claim will lie only where one party was unjustly enriched in the sense that the term “unjustly” could mean illegally or unlawfully.  First Nat’l Bank of St. Paul v. Ramier, 311 N.W.2d 502, 504 (Minn. 1981).  There is no evidence that the Seversons acted illegally or unlawfully by following the terms of the agreements and canceling them.  Although the Browns spent a substantial amount of money in obtaining the rezoning provisions, the terms of their agreements with the Seversons required them to undertake that risk, which is common in commercial development transactions.  The Browns knowingly signed a purchase agreement with Wal-Mart, without notifying the Seversons, before the financing contingency in their agreement with the Seversons had been fulfilled.  “He who seeks equity must do equity.”  Gully v. Gully, 599 N.W.2d 814, 825 (Minn. 1999) (citations omitted).  Granting relief in equity to the Browns for their own failure to adhere to the express terms of the contract, an action manifestly of their own doing, would be neither justified nor fair.

            Affirmed.



* Retired judges of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

[1] After the agreements were signed, the city adopted the initial assessments on the property.  The validity of these assessments is the subject of another pending action.  The parties also contested the condemnation of a portion of the property.  The original condemnation action was dismissed on the basis that the city had taken possession before giving the statutorily required notice.  A new condemnation action is currently pending.

[2] The Browns also raise the argument that under the doctrine of the “law of the case,” the district court should have deferred to the interpretation of the contract made by a previous district court judge in denying summary judgment.  But the Minnesota Supreme Court has previously stated that this doctrine “is not normally applied by a district court to its own decisions.”  Kornberg v. Kornberg, 542 N.W.2d 379, 386 n.2 (Minn. 1994).  We decline to do so here.

[3] We note that neither party addressed the issue of attorney fees in this appeal.  Because motions for attorney fee sanctions are considered collateral to the merits of the underlying litigation, the district court retains jurisdiction to award attorney fees after completion of the appeal on the merits.  See Kellar v. Von Holtum, 605 N.W.2d 696, 700 (Minn. 2000).