This opinion will be unpublished and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
and third party plaintiffs,
Filed May 23, 2006
County District Court
N. Wilson, Ryan R. Dreyer, Gislason
& Hunter, 2700 S. Broadway, P.O.
Box 458, New Ulm, MN 56073 (for respondent)
Mack, Mack & Daby, 26 Main Street, P.O. Box 302, New London, MN 56273 (for appellants)
Considered and decided by Hudson, Presiding
Judge, and Crippen,
P U B L I S H E D O P I N I O N
Orville and Elaine
Molenaar challenge the district
court’s order for partition by sale of a parcel of land in which they are
tenants in common with respondent Midwest Bank, M.V. Because the district court did not abuse its
discretion in determining that partition by sale was less prejudicial to the
rights of the owners than partition in kind, we affirm.
D E C I S I O N
a partition action under Minn. Stat. §§ 558.01-.32 (2004) is governed by
statute, the district court is guided by principles of equity. Anderson v. Anderson,
560 N.W.2d 729, 730 (Minn.
App. 1997). The district court is
obligated to follow the statutory partition procedure, but within that
framework, the district court
may exercise its general equitable powers and resort to
the most advantageous plans which the nature of the particular case admits in
effecting, without great prejudice to any of the owners, a partition of one or
more tracts, whether such partition be accomplished by a division in kind, by
sale, or by any practical combination of both methods.
Swogger v. Taylor, 243 Minn. 458, 466-67, 68 N.W.2d 376, 383
(1955). We review the district court’s exercise
of its equitable powers for an abuse of discretion. Nadeau
v. Count of Ramsey, 277 N.W.2d 520, 524 (Minn. 1979). We review findings of fact for clear
560 N.W.2d at 730.
general, partition in kind is favored over partition by sale. Swogger,
243 Minn. at
467, 68 N.W.2d at 384. The presumption
is that partition in kind will prevail, unless it cannot be done without
advancing the interests of one owner at the expense of the other owners. Id. The party requesting partition by sale “has
the burden of proving that partition in kind cannot be made without great
prejudice to the owners.” Id.
argue that a partition sale will greatly prejudice them, because they and their
son, who resides on the land, actively farm this parcel. They urge this court to order partition in
kind, with owelty if necessary. There are two problems with this approach. First, any partition by sale necessarily
prejudices the current occupant, but prejudice is also shown when the value
afforded each tenant is much lower in partition in kind than in partition by
sale. Pigeon River Lumber Co. v. McDougall,
169 Minn. 83,
87, 210 N.W. 850, 852 (1926). Here, the
testimony of the appraiser supports the district court’s finding that partition
in kind would result in a “materially decreased value for the property” because
of the difficulty in dividing the land.
appellants offered no testimony to show an appropriate division in kind and
testified that they had limited means to buy out respondent, suggesting that
they may be unable to pay owelty. While
owelty may be used when a property cannot be easily divided but a sale is
likewise disadvantageous, the supreme court has stated that “‘[o]welty should
be decreed with caution. It should not
be decreed except when necessary to make an equitable and fair division. A sale on partition may offer the preferable
560 N.W.2d at 731 (quotation omitted).
Based on the record before us, there is evidence that a partition in
kind would be prejudicial to both parties, but we have no evidence to provide a
method for partitioning in kind, with or without owelty, that would preserve
the rights of both parties. We must
therefore conclude that respondent has sustained its burden of proving great
prejudice to the rights of both parties if partition in kind were made.
also argue that in considering prejudice, the district court erred by failing
to give appropriate weight to the fact that the parcel is classified as
homestead property. Appellants’ claim
of homestead status for the property is based on Minn. Stat. § 273.124, subd. 1(d)
(2004), which classifies agricultural property as homestead property, if (1)
the occupant is closely related to the owner; (2) the owner is a Minnesota
resident; (3) the owner does not receive homestead status on any other
agricultural property in Minnesota; and (4) the owner has only one agricultural
homestead per family under the statute. Id. This statute, which is included in the
chapters devoted to property taxation, gives favorable property tax status to
certain owners of agricultural land and does not provide the protection from
seizure or sale under legal process of debt under Minn. Stat. § 510.01 (2004). Thus, the parcel’s designation as homestead
property does not weigh in our decision.
further argue that because partition is guided by principles of equity,
respondent’s violation of the corporate farming act, Minn. Stat. § 500.24
(2004), precludes partition because of the equitable clean hands doctrine. The baseline standard for such relief is that
“he who seeks equity must do equity, and he who comes into equity must come
with clean hands.” Gully v. Gully, 599 N.W.2d 814, 825 (Minn. 1999) (quotation omitted). “The doctrine of unclean hands will be
invoked only against a party whose conduct has been unconscionable by reason of
a bad motive, or where the result induced by his conduct will be
unconscionable.” Medtronic, Inc. v. Advanced Bionics Corp., 630 N.W.2d 438, 450 (Minn. App. 2001) (quotation omitted). This doctrine generally requires more than
“improper purpose” or recklessness; it requires more egregious conduct, such as
bad faith or illegal or unconscionable acts.
legislature passed Minn. Stat. § 500.24 to “encourage and protect the family
farm as a basic economic unit.” Id.
at subd. 1. This statute prohibits any
“corporation, limited liability company, pension or investment fund, trust, or
limited partnership [from engaging] in farming[,]” and restricts these entities
from acquiring any interest in agricultural land, except as a bona fide
encumbrance for security. Id.
at subd. 3. The statute excludes land
acquired by one of these entities “by process of law in the collection of
debts, or by any procedure for the enforcement of a lien or claim on the land,
whether created by mortgage or otherwise” as long as the land is disposed of
within five years. Id.
at subd. 2(x). The district court did
not rule on the merits of this claim, but respondent’s acquisition of land here
is arguably within the exception, and respondent has not demonstrated bad faith,
illegal, or unconscionable conduct that would warrant application of the clean
we understand appellants’ frustration with the partition process, we cannot
conclude on this record that the district court abused its discretion by
ordering a partition by sale.