This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
STATE OF MINNESOTA
IN COURT OF APPEALS
Filed September 13, 2005
Hennepin County District Court
File No. 02-20858
David G. Hellmuth, Erik F. Hansen, Hellmuth & Johnson, PLLC, 10400 Viking Drive, Suite 500, Eden Prairie, MN 55344 (for respondent)
Jeffrey H. Olson, Dudley and Smith, P.A., 2602 US Bank Center, 101 East Fifth Street, St. Paul, MN 55101; and
Karl A. Oliver, Suite 415, 1935 W. County Road B2, Roseville, MN 55113 (for appellant)
Considered and decided by Kalitowski, Presiding Judge, Shumaker, Judge, and Forsberg, Judge.
In 1988, appellants subdivided their lakeshore property into three separate lots. Respondent agreed to purchase one of the lots, which included an existing home, for $640,000. The parties executed a purchase agreement and an addendum on August 24, 1999; they executed an amendment on August 30 to clarify some of the terms of the purchase.
The addendum to the purchase agreement explicitly stated: “Road Changes that need to occur because of subdividing the land, are the financial responsibility of the Sellers. This includes supplying a partial new driveway, comparable to the existing one at 7012 Willow Creek. Specific enhancements are the responsibility of the Buyer.” The amendment to the purchase agreement also referred to a new driveway:
It was stated in the Purchase Agreement that the Sellers will create a partial new driveway for the Buyer. Verbally, it was stated that they, the Sellers, would replace the same amount of driveway space that was being taken away from the Buyer, because of the construction of their new home. It appears from the Plat Map that this amount of space would actually go from the new road to the existing garage. It is also understood that this driveway will be black-top, of normal blacktop thickness, and wide enough to handle one car’s average width. Any enhancements such as extra curves to accommodate a tree, or to create an “artist” look, or simply extra parking space, will be the obligation of the Buyer. It has also been represented to the Buyer that the grade is not expected to change. But if retaining walls need to be installed, it is the responsibility of the Seller to do so. ** The Purpose of this Amendment is to simply clarify what was verbally stated, but was not detailed in the written addendum.
After closing, respondent
discovered that appellants failed to disclose a developer agreement between
appellants and the City of
Respondent sued appellants, alleging that they constructed a shared driveway as contemplated by the developer agreement, but failed to construct a partial new driveway as promised by the parties’ purchase agreement, addendum, and amendment. Although respondent’s complaint makes a number of other claims against appellants, some of which were upheld by the magistrate, this appeal only involves respondent’s claim that appellants breached their agreement regarding construction of a partial new driveway.
In particular, appellants challenge the magistrate’s determination that appellants breached the agreement to construct a partial new driveway at a 1% grade and awarding respondent $285,765 in driveway-related damages. Appellants argue that because the amount of damages represents more than 45% of the total sale price, the magistrate’s interpretation of the parties’ agreement has produced a harsh, absurd, and unreasonable result that was not intended by the parties.
Interpretation of an unambiguous
contract is a question of law, which we review de novo. Travertine
Corp. v. Lexington-Silverwood, 683 N.W.2d 267, 271 (
Appellants argue that their agreement with respondent did not obligate them to construct a driveway with a 1% grade. To support their argument, appellants point to the developer agreement with the city, which they assert should be construed to insert an implied term into the parties’ contract, allowing the partial new driveway’s grade to be 10%. The developer agreement, however, was never disclosed to respondent prior to the execution of the purchase agreement. Respondent was not a party to the developer agreement and had no knowledge of its existence prior to the purchase.
Citing Knut Co. v. Knutson Constr. Co., 433 N.W.2d 149, 151 (Minn. App.), aff’d, 449 N.W.2d 143 (Minn. 1989), appellants
argue that an outside agreement can serve as parol evidence for the
interpretation of a contract, even if the agreement is unknown to a contracting
The magistrate’s interpretation of the contract is supported by the plain and unambiguous terms of these documents. The addendum specifically states that “[r]oad changes that need to occur because of subdividing the land, are the financial responsibility of [appellants]. This includes supplying a partial new driveway, comparable to the existing one[.]” (Emphasis added.) And the amendment specifically states that “[i]t has also been represented to the Buyer that the grade is not expected to change.” Because there was testimony showing that the existing driveway had a grade of 1%, the magistrate did not err in determining that the parties agreed that the new driveway would be constructed at a 1% grade.
Appellants nevertheless insist that this
interpretation of their agreement produces a harsh, absurd, and unreasonable result
given the extremely high cost of constructing such a driveway. Appellants note that the purchase agreement fails
to specify or mention the cost of the partial new driveway or describe the
percentage grade of the driveway. The doctrine
of unconscionability is designed to protect those with unequal bargaining
power, often to avoid enforcement of contracts of adhesion. See
Glarner v. Tine Ins. Co., 465 N.W.2d 591, 595-96 (
Appellants further argue that
because no evidence was submitted to show that the city would even approve a 1%
grade driveway, the contract as interpreted by the magistrate is illegal or
void as against public policy. A
contract is illegal or void as against public policy if it is “contrary to the
terms and policy of an express legislative enactment.”
challenge several evidentiary rulings made by the magistrate. This court reviews a factfinder’s rulings on
evidentiary matters for an abuse of discretion. Kroning
v. State Farm Auto. Ins. Co., 567 N.W.2d 42, 45-46 (
first criticize the magistrate’s failure to allow them to impeach the city
planner, who was their own witness. While
we agree that the magistrate erred in ruling that appellants could not impeach
their own witness, we nevertheless conclude that this error was harmless
because use of this affidavit to impeach this witness still would not entitle
appellants to a new trial. See
next challenge the magistrate’s decision to admit the testimony of an expert
witness and two exhibits, which appellants claim were not timely disclosed. If a party knows the substance of the witness’s
testimony before trial, the party cannot claim surprise or prejudice.
brought a motion in limine to exclude the expert witness and the two exhibits. Appellants had copies of the exhibits, and the
magistrate ordered that appellants be allowed to depose the expert witness
prior to trial. Because appellants knew the
substance of the expert witness’s testimony and the contents of the exhibits,
they cannot claim prejudice. Thus, any
error in the admission of this evidence was harmless. See
We therefore affirm the decision of the magistrate and the award of damages against appellants.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
 Based on the parties’ “Stipulation for Alternative Trial,” the district court entered an order appointing the “Consensual Special Magistrate.” The district court’s order authorized the magistrate to conduct a trial in this case and to “issue final orders in this matter.”