This opinion will be unpublished and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

C5-01-2177

 

Martin C. Jolly,

Respondent,

 

vs.

 

Glenn D. Deason,

Appellant,

 

Dianne L. Yenni,

Defendant.

 

Filed July 23, 2002

Affirmed

Hanson, Judge

 

Pine County District Court

File No. C5-00-1102

 

Michael C. Hager, Jane J. Larson, 801 Rosedale Towers, 1700 West Highway 36, Roseville, MN 55113 (for respondent)

 

Carl A. Blondin, 7475 15th Street North, Suite 204, Oakdale, MN 55128 (for appellant)

 

            Considered and decided by Klaphake, Presiding Judge, Willis, Judge, and Hanson, Judge.

U N P U B L I S H E D  O P I N I O N

HANSON, Judge

In this quiet-title action appellant-grantor alleges that the deed he delivered to respondent-grantee described the wrong property by mistake.  On appeal, grantor argues that the deed was delivered as a gift and that the district court erred by not applying gift laws to the questions of whether the gift was complete and whether the deed contained a mistaken description.  We affirm.

FACTS

            Respondent Martin C. Jolly is the son of Alvera Jolly.  Alvera acquired an interest in a lake cabin and lot in Pine County, Minnesota, known by the parties as “Grandma’s property.”  Alvera then married appellant Glenn D. Deason and together they purchased an adjacent lot and cabin known by the parties as “Glenn’s cabin.”  The district court found that during Alvera’s lifetime, she and Deason repeatedly promised Jolly that they would give Glenn’s cabin to him.  Several witnesses testified that they were aware of the promise and specifically heard Deason say that the property would be Jolly’s.  Jolly testified, and the court found, that he performed services on and made improvements to Glenn’s cabin over several years, without remuneration and in reliance on the promise that it would be given to him.

After Alvera died, Deason hired an attorney to draft a quitclaim deed to Jolly.  Deason provided the attorney with a tax statement to be used for the legal description in the quitclaim deed.  The tax statement contained the legal description of Glenn’s cabin, and this was the description placed on the deed. 

Deason signed the deed in December 1996 and delivered it to Jolly at the attorney’s office.  Jolly testified that Deason told him that it would cost $500 to record the deed and, because Jolly did not have the funds at the time, he did not record the deed until May of 2000.  Jolly and Deason agreed that Deason could retain possession of the property until the deed was recorded. 

            In 1999, Deason hired a different attorney to draft a second quitclaim deed, gifting Glenn’s cabin to his daughter from a prior marriage, defendant Dianne Yenni.  Deason knew that the deed to Jolly had not been recorded.  Deason also asked his attorney to investigate whether Deason had inherited any interest from Alvera in Grandma’s cabin.  Deason did not tell his new attorney that he had previously deeded either property to Jolly.  Yenni filed the second quitclaim deed March 16, 2000.

            When Jolly ultimately filed his deed on May 18, 2000, he discovered the Yenni deed and commenced a quiet-title action against Deason and Yenni.  Deason pleaded the affirmative defenses of material mistake and unjust enrichment and counterclaimed for reformation of the deed to Jolly to substitute the legal description for Grandma’s cabin.

            At trial, conflicting testimony was presented.  Relatives of Jolly testified about the promises to give Glenn’s cabin to Jolly, and Deason testified that he believed he was gifting to Jolly only whatever interest he had inherited from Alvera in Grandma’s cabin. 

The district court concluded that (1) the deed to Jolly was valid on its face; (2) Deason failed to show by clear and convincing evidence that there was a mistake in that deed; and (3) Deason’s delivery of the second deed to Yenni was a slander of title.  The court quieted title to Glenn’s cabin in Jolly, declared that Deason and Yenni had no
interest in the property and invalidated the deed to Yenni.  No motion for a new trial was made.  Deason appealed but Yenni did not.[1]  This appeal followed.

D E C I S I O N

The scope of review of a district court judgment following a bench trial, where no motion for a new trial has been made, is limited to whether the evidence supports the findings of fact and whether the findings support the conclusions of law and the judgment rendered.  Novack v. N.W. Airlines, Inc., 525 N.W.2d 592, 596 (Minn. App. 1995).  As to the court’s findings on disputed questions of fact, the judgment will be reversed only if the findings are “manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole.”  Tonka Tours, Inc. v. Chadima, 372 N.W.2d 723, 726 (Minn. 1985).  While we need not defer to the district court’s decision on purely legal issues, we defer to the trial court’s determination of witness’ credibility.  Frost-Benco Elec. Ass’n v. Minn. Pub. Utils. Comm’n, 358 N.W.2d 639, 642 (Minn. 1984) (legal issues); Town of Wahnena v. Dorholt, 465 N.W.2d 435, 437 (Minn. App. 1991) (witness credibility).

            Deason’s arguments about the law of gifts are somewhat unfocused and have several elements.  From the fact situation, we discern these potential issues under gift law:

(1)              Was the delivery of the deed to Jolly made as a gift?


(2)              If a gift, was it completed sufficiently to preclude revocation by Deason when he delivered a second deed to Yenni?

(3)              If a gift, does this alter the legal standard for reformation from that which is generally applied in contract cases?

(4)              If a gift, does this place the burden on Jolly to disprove the alleged mistake; i.e., would Jolly’s burden of proving donative intent include the burden of proving that the intent was to convey the property described in the deed?

The district court did not expressly address each of these potential issues, in part because Deason did not separately argue them.  We will address each issue in turn.

I

            Deason asserts that the delivery of the deed to Jolly was a gift.  Jolly does not specifically address this assertion, and the district court did not make an explicit finding on whether or not the conveyance was by gift.  The district court did make findings that could support an argument that the conveyance was supported by some consideration, sufficient to constitute a contract.  It found that Jolly

provided improvements and services to [Glenn’s cabin] without remuneration and in reliance on promises of his mother and stepfather that the property would be given to him.

 

Generally, the provision of services in reliance on the promise to convey land is sufficient consideration to create a contract to make a gift.  Lindell v. Lindell, 135 Minn. 368, 371-72, 160 N.W. 1031, 1032 (1917).  But in the absence of a finding or conclusion by the district court on the issue of gift, we will review the remaining issues under the
assumption that the conveyance was a gift, to determine whether that assumption makes a material difference to the outcome.

II

            At oral argument, Deason suggested for the first time that the delivery of the deed to Jolly was ineffective to transfer title by gift, prior to recording; that Jolly could not obtain title until he exercised some incidents of ownership; and that Deason’s deed to Yenni revoked the incomplete gift to Jolly.  This argument was not made to the district court or in Deason’s briefs to this court.  Accordingly, we decline to address it.  See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (stating that appellate courts will generally not consider matters not argued and considered in the district court).

III

            Deason urges this court to adopt a different standard for reformation when a deed is delivered as a gift.  He suggests that this issue has never been squarely addressed in Minnesota cases.  We will first review existing Minnesota caselaw on reformation and then address the legal standard that Deason proposes for application in this case.

            In general, reformation is an equitable remedy that applies to written instruments of various kinds, including deeds.  Fritz v. Fritz, 94 Minn. 264, 266-67, 102 N.W. 705, 706-07 (1905).  The general legal standard for reformation can be called a “mutuality standard.”  It requires a showing that (1) there is a mutual understanding or valid agreement between the parties expressing their real intentions; (2) the written instrument failed to express the real intentions of the parties; and (3) the failure was due to a mutual mistake of the parties or a unilateral mistake accompanied by fraud or inequitable conduct by the other party.  See Yliniemi v. Mausolf, 371 N.W.2d 218, 222 (Minn. App. 1985) (stating that a mutuality standard is required to support the reformation of a deed); see also Theros v. Phillips, 256 N.W.2d 852, 857 (Minn. 1977) (holding that the mutuality standard, required to support reformation of other written instruments, also applies to a deed).

            Deason argues that the mutuality standard expressed in Fritz and Yliniemi applies only when there is a written contract and mutual consideration.  But Minnesota decisions appear to have applied the mutuality standard to cases seeking reformation of deeds that were delivered as gifts.  See, e.g., Benson v. Markoe, 37 Minn. 30, 37-38, 33 NW 38, 42 (1887).[2]

            Deason suggests that the “general rule,” followed in other jurisdictions, is that equity will reform a voluntary conveyance (one made by gift), without a showing of mutual mistake, where the unilateral mistake was that of the grantor.  Deason cites as an example of this general rule, Westcott v. Westcott, 259 N.W.2d 545 (Iowa 1977).  There, the Iowa court distinguished the mutuality standard applicable to the reformation of contracts from the gift standard applicable to voluntary conveyances.  The court stated:

However, the rule is different where the conveyance is voluntary.  The grantor in a voluntary conveyance will be aided by the court, as where, by mistake a larger estate or more land has been granted than was intended to be conveyed.  It is immaterial that the grantee is not cognizant of the mistake.  Insofar as voluntary conveyances are concerned, they are unilateral and the court has the power to reform the deed to express the intentions of the grantor even though, strictly speaking, the mistake is not mutual.  To reform the deed, both proof that a mistake was made and proof of what was really intended must be shown by clear and convincing evidence. 

 

259 N.W.2d at 548 (citations omitted).  Other jurisdictions have applied a similar standard to the reformation of a voluntary conveyance.  See, e.g., Kinney v. Kinney, 161 So. 798, 799-800 (Ala. 1935); Lawson v. Bauman, 805 S.W.2d 769, 771, 72 (Tenn. Ct. App. 1990). 

            While we see the logic of Deason’s argument that there should be a different standard for reformation of a deed that is delivered as a gift, we are reluctant to extend or reverse Minnesota law.  “[T]he task of extending existing law falls to the supreme court or the legislature; * * * it does not fall to this court.”  Tereault v. Palmer, 413 N.W.2d 283, 286 (Minn. App. 1987) review denied (Minn. Dec. 18, 1987).  Accordingly, before considering such an extension, we will first determine whether the application of this new gift standard would alter the outcome in this case.  This brings us to the issue of burden of proof.

IV

            The district court clearly placed the burden of proving the grounds for reformation on Deason, concluding that

Defendant Deason failed to show by clear and convincing evidence that an agreement existed to deed [Grandma’s property] to Martin Jolly.  Defendant Deason also failed to show by clear and convincing evidence that there was a mistake in the deed to Jolly as to any asserted intention of the parties to transfer [Grandma’s property].

 

This placing of the burden of proof on Deason was consistent with the burden of proof generally applicable in actions to reform a deed.  We have said, “where a deed is regular on its face and duly recorded, the burden of proof is on the party attacking it to show facts establishing its invalidity.”  Yliniemi, 371 N.W.2d at 222.  The district court found that the deed to Jolly is regular on its face and was delivered to and ultimately recorded by him.  Because Deason is the one attacking the validity of the deed, the burden of proof in reformation would be normally on him to show that a mistake was made. 

            Deason counters that the burden of proof under gift law is on the donee to prove donative intent by clear and convincing evidence, citing Oehler v. Falstrom, 273 Minn. 453, 456-57, 142 N.W.2d 581, 585 (1966).  Deason suggests that proof of donative intent requires proof that the grantor intended to give the property described in the deed.  Specifically, Deason argues that Jolly had the burden to prove that Deason did not make a mistake in the description that was placed in the deed.

            While there is a potential conflict between placing the burden of proof on a donee to prove the intent to make a gift and placing the burden of proof on a grantor to prove mistake in a deed, we can resolve that conflict under our facts in favor of placing the burden of proof on Deason to show mistake.  This is because Deason admitted that he had the requisite intent to make a gift when he delivered the deed to Jolly.  Donative intent was no longer an issue.  Further, as we discussed above, Deason did not preserve any argument that the gift was incomplete upon delivery of the deed.  Accordingly, Jolly’s burden as grantee was satisfied by proof of delivery of the deed and the only remaining issue was reformation based on alleged mistake.  As to that issue, the district court appropriately placed the burden of proof on Deason.

            Returning to the gift standard enumerated in Westcott, we observe that even when reformation is allowed on a showing of unilateral mistake of the grantor, proof of the mistake must be made by clear and convincing evidence.  Westcott, 259 N.W.2d at 548.  The district court concluded that Deason “failed to show by clear and convincing evidence that there was a mistake in the deed to Jolly * * * .”  That conclusion was supported by the finding that

[Deason] has failed to provide clear and convincing evidence that [he] did not believe he was quitclaiming [Glenn’s cabin] * * * to * * * Jolly.

 

That finding was supported by sufficient evidence and would defeat reformation even under the Westcott gift standard.

Affirmed.



[1] After the appeal was filed, Deason died and his counsel filed an affidavit showing the death and naming the personal representative of Deason’s estate, pursuant to Minn. R. Civ. App. P. 143.02.

[2] See also the unpublished decision of this court in Olson v. Olson, No. C9-97-1978 (Minn. App. Apr. 14, 1998), review denied (Minn. June 17, 1998).