may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
Gary W. Meyer,
Sherburne County District Court
File No. C7032110
James W. Hess, Hess Law Office, P.A., 19230 Evans Street, Suite 202, Elk River, MN 55330 (for respondent)
James B. Fleming, Metcalf, Larson, Muth & Fleming, P.C., 313 West Broadway, P.O. Box 446, Monticello, MN 55362-0446 (for appellant)
Considered and decided by Peterson, Presiding Judge; Klaphake, Judge; and Shumaker, Judge.
U N P U B L I S H E D O P I N I O N
In this appeal from a judgment granting specific performance of a real estate purchase agreement, appellant-seller argues that the district court erred in ruling that (1) the parties waived the time-is-of-the-essence provision of the agreement; (2) the parties did not abandon the agreement; (3) the financing contingency in the agreement did not fail; and (4) respondent is entitled to specific performance. We affirm.
Gary Meyer (seller) and respondent-buyer Dan Zimmerman (buyer) executed a purchase
agreement for unimproved property in
Shortly after seller executed the purchase agreement, buyer met with a loan officer at a local bank to apply for financing. The loan officer testified that the bank goes through an underwriting process to determine whether to make a financing commitment. The purchase agreement required seller to provide as evidence of title either a commitment for an owner’s policy of title insurance or a current abstract of title, but seller provided neither, and the bank’s underwriting process was slowed down, at least in part, by the lack of an abstract. By January 3, 2003, the bank had not made a financing commitment, and no closing was scheduled. Neither party appeared for a January 3 closing. At some point, seller provided an abstract to a title company, and by March 31, 2003, buyer secured a financing commitment from the bank.
Seller testified that after the January 3 closing date passed, he twice asked Phil Onstad, the real estate agent for both parties, to contact seller’s attorney and cancel the purchase agreement. On March 10, 2003, Onstad appeared at buyer’s business with a form to cancel the purchase agreement. Buyer refused to sign the cancellation and stated that he wanted to go forward with the closing. Onstad later appeared at buyer’s business with a new purchase agreement for the property. Onstad testified that he brought buyer the new purchase agreement because seller requested a clean copy of the purchase agreement. The new purchase agreement, which buyer signed, included a $158,000 purchase price and a March 31, 2003, closing date. Seller testified that he did not ask Onstad to prepare the second purchase agreement, and the first time he saw it was on March 11 when Onstad brought it to his office. Seller testified that he crossed out the $158,000 purchase price and inserted $180,000 and then signed the agreement. Buyer refused to agree to the price change in the purchase agreement and instructed Onstad to schedule the closing for March 31, 2003.
Seller did not attend the closing scheduled for March 31, 2003, or a later closing scheduled for April 4, 2003. Buyer brought suit for specific performance, and the district court granted judgment for specific performance. Seller appeals.
In a case tried by the district
court without a jury, this court is limited to determining whether the district
court’s findings are clearly erroneous and whether the court erred in its
conclusions of law. Powell v. MVE Holdings, Inc., 626 N.W.2d 451, 457 (
Seller argues that because the purchase agreement includes a time-is-of-the-essence clause and buyer did not obtain financing by the stated January 3, 2003, closing date, seller was entitled to void the purchase agreement. The purchase agreement contains a clause that states, “Time is of the essence in this Purchase Agreement.” But the district court concluded that with respect to the January 3, 2003, closing date, neither party acted as though time was of the essence, and, therefore, “[t]he parties waived the requirements that time was of the essence and that January 3, 2003 would be the closing date.”
Seller contends that the district
court erred in ruling that the parties waived the contract provision that time
is of the essence. “In order for an
action to constitute a waiver, there must be an intentional relinquishment of a
known right, and it must clearly be made to appear from the facts
disclosed.” Citizens Nat’l. Bank of
Madelia v. Mankato Implement, Inc., 441 N.W.2d 483, 487 (
Seller argues that the district court erred in ruling
that the parties did not abandon the purchase agreement. “[A]bandonment . . . must be clearly
expressed, and acts and conduct of the parties to be sufficient must be
positive, unequivocal, and inconsistent with the existence of the contract.” Desnick v. Mast, 311
Seller contends that his submission of a new purchase agreement with modified terms to buyer, coupled with his directing Onstad to deliver a notice of cancellation of the first purchase agreement provided the district court “with positive, unequivocal evidence of action and intent inconsistent with the continued existence of the original purchase agreement.” But these acts only indicate seller’s intent to abandon the purchase agreement. Seller cites buyer’s inability to obtain financing by the agreed-upon closing date, buyer’s proffer of the second purchase agreement, and buyer’s rejection of seller’s counteroffer as evidence of buyer’s intent to abandon the purchase agreement. But these acts are evidence of buyer’s intent to abandon the purchase agreement only if we accept seller’s characterization of the acts. There is evidence that seller’s failure to provide proof of title delayed buyer’s effort to secure financing in time for a January 3, 2003, closing and that buyer continued to pursue financing after the original closing date passed, which indicates that buyer did not intend to abandon the agreement. There is also evidence that Onstad brought the second purchase agreement to buyer and that buyer did not initiate action with respect to the second purchase agreement. Finally, there is evidence that buyer rejected seller’s offer to sell the property for $180,000, which is consistent with a belief by buyer that there continued to be a contract to sell the property for $159,000. Seller has not shown that the district court erred in ruling that the parties did not abandon the first purchase agreement.
Failure of financing contingency
Seller argues that the district court erred in ruling that because buyer secured financing in time for a later closing, the financing contingency in the purchase agreement did not fail. Seller contends that the district court “attempted to resurrect a failed financing contingency from an abandoned agreement by reasoning that the closing date noted in [buyer’s] new offer somehow related back to the original purchase agreement, when the evidence clearly demonstrates that the original purchase agreement had been abandoned by the parties.” But this argument rests on the premise that the parties did not waive the time-is-of-the-essence provision of the original purchase agreement and, instead, abandoned the agreement. As we have already explained, the district court rejected this premise. The district court concluded that by failing to take the steps necessary to close on January 3, 2003, the parties intentionally relinquished their right to close on that date, but buyer still intended to proceed with the transaction. The financing contingency did not state a deadline for buyer to obtain financing, and when the parties relinquished their right to close on January 3, 2003, buyer’s failure to secure financing by that date did not mean that the financing contingency failed.
[S]pecific performance of a contract to convey real estate is not a matter of absolute right, and if enforcement would be unconscionable or inequitable, performance will not be decreed. In so far as the court may take into consideration the diligence and good faith of the parties, and the fairness of the transaction, specific performance is a matter of discretion.
Boulevard Plaza Corp. v.
The district court found that “sometime after January
3, 2003, [seller] learned that new development would be occurring near the