This opinion will be unpublished and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

C6-01-1958

 

Peggy Greer,

Respondent,

 

vs.

 

Michael Greer, et al.,

Appellants.

 

Filed ­­­April 16, 2002

Reversed and remanded

Harten, Judge

 

Hennepin County District Court

File No. MC0014001

 

S. Todd Rapp, S. Todd Rapp, P.A., 15025 Glazier Avenue, Suite 401, Apple Valley, MN 55124 (for appellants)

 

Richard D. Kampa, Jr., Peterson, Engberg & Peterson, 700 Old Republic Title Building, 400 Second Avenue South, Minneapolis, MN 55401 (for respondent)

 

            Considered and decided by Stoneburner, Presiding Judge, Harten, Judge, and Anderson, Judge.

U N P U B L I S H E D   O P I N I O N

 

HARTEN, Judge

 

            Appellants challenge the denial of their motion for relief from operation of a district court order based on a valuation of their property by a realtor rather than the licensed appraiser that the parties had intended in their settlement agreement.  Because the district court abused its discretion by appointing the realtor without notice to the parties, we reverse and remand.

FACTS

 

In 1998, respondent Peggy Greer entered into a purchase agreement to sell her homestead property to her son, appellant Michael Greer, his wife, appellant Michelle Greer, and their corporation, appellant New Tradition Homes, Inc.  In exchange for the homestead, appellants agreed to subdivide the property into lots and construct a home for respondent on one of the lots.  In 1999, after a home was constructed, an appraiser valued it at $225,500. 

In 2000, respondent brought this action against appellants, alleging that appellants had engaged in fraud, misrepresentation, and undue influence to induce her to sign the purchase agreement, or in the alternative, that they had breached the agreement.  The parties met for a pre-trial conference and, after negotiations, reached a settlement that the district court read into the record.  In relevant part, it provided:

That the parties have agreed that the court would appoint an appraiser to value the home * * * .  That upon receipt of that appraisal, the court will fix the value of the home, taking into account that there is about 10 percent cost of sale * * * saved by this transfer.

 

* * * *

 

[Respondent will have] 60 days to pay the difference between that value of the home that’s fixed as a current market value after $152,500 is deducted. 

 

So the process will be that [the court] will receive an appraisal, consider that appraisal, fix the price, taking into account money saved on not an arms length transaction * * * . [A]nd then $152,500 will be deducted from that number to arrive at the buyout number for [respondent] to own this home without any interest of  [appellants].

 

Both after reading the settlement into the record and at the conclusion of the hearing, the court asked the parties’ attorneys if anything should be added or changed, and both replied in the negative.

            After numerous phone calls failed to locate a licensed appraiser, the district court, without advising the parties, appointed a realtor who was not a licensed appraiser.  The district court accompanied the realtor when he viewed the property, which he valued at $210,000.  Based on this value, the district court issued an order setting the amount for which respondent could purchase the home.

Appellants moved for relief pursuant to Minn. R. Civ. P. 60.02(f), providing that a court may grant relief for “[a]ny other reason justifying relief from the operation of the judgment,” on the ground that the realtor was not a licensed appraiser and did not use an appraisal process to set the value.  At the hearing on appellants’ motion, the district court gave her own observations of the property to explain why she agreed with the realtor’s value.

            So, I went with [the realtor] to view this property, because I wanted to know what he was basing his appraisal on * * * .

 

* * * *

 

And I will tell you it is a unique property.  * * * When we talk about presence, or presentability, it has none.  It has no curb appeal.  Zero.  * * * And you approach to a double garage.  And the double garage has a white door and a brown door. 

 

I think its value could be improved by the finishing of the lower level.  * * * There is the beginning of a rough-in room.  And there is a sliding glass door that is a walk out.  So the outside structure is there.

            But to consider that space livable at this point, it just isn’t.

 

* * * *

 

I am satisfied based on the process that I saw, and oversaw, that this is a fair market value.

 

* * * *

 

And there are some additional reasons for that.  The way this house is set up with very, very small bedrooms.  There is no such thing as a master bedroom there.  And they are like ten by ten or ten by twelve.  This is not typical, new construction.

 

            Also, there is no dining room.  You have a living area that kind of merges into a very small kitchen.  It is a little L.

 

* * * *

 

            [I]t is not what people are paying upwards of $250,000.00 for. 

 

            * * * *

 

I am satisfied that this is a good market value.  I don’t know that it is a perfect market value.  I don’t know that any are.  

 

The district court denied appellants’ motion, and they challenge that denial.[1]

D E C I S I O N

            A district court’s application of Minn. R. Civ. P. 60.02 will not be reversed absent an abuse of discretion.  Carter v. Anderson, 554 N.W.2d 110, 115 (Minn. App. 1996), review denied (Minn. Dec. 23, 1996).  The district court rejected appellants’ argument that her use of a realtor instead of a licensed appraiser entitled them to relief from the operation of her order.  Appellants claim that she abused her discretion in denying their motion for relief.

            The district court offered no legal basis for denying appellants’ motion, but during the hearing she gave three reasons for rejecting their argument.  First, she said that appellants had not specified that the court was to appoint a “licensed” appraiser.  However, the court also explained that she initially attempted to hire a licensed appraiser, so she presumably thought that was the parties’ intent. 

Second, the district court said that appellants’ real objection was not to the person who performed the process but to its result: appellants’ earlier appraisal had given the property value as $225,500 instead of $210,000.  Appellants conceded that, if the realtor’s valuation had been the same as or greater than the earlier appraisal, they would not have challenged it, but they also said that, if a licensed appraiser had set the lower value, they would have accepted it.

Third, the court said that she personally had participated in the realtor’s inspection of the property and found many reasons for it to be valued at less than appellants wanted.  Appellants replied that they could and would pay for a licensed appraiser to appraise the property.

We agree that appellants have the right to an appraisal done by a licensed appraiser or an otherwise qualified appraiser in accord with the parties’ agreement that the district court would appoint “an appraiser.”  We reverse the denial of appellants’ motion for relief and remand for the district court to appoint a licensed appraiser. 

Reversed and remanded.



[1] Appellants also argue that the district court abused her discretion by formulating and relying on her own opinion of the property’s value.  We cannot review this issue because appellants made no motion to remove pursuant to Minn. R. Gen. Pract. 106, so there is nothing to review; however, we note that the district court’s level of personal involvement in the valuation process probably invited appellants’ argument.