This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).






John Kruesel,





Estate of Wayne M. Nygaard,



Filed July 3, 2006


Hudson, Judge


Olmsted County District Court

File No. C1-05-120


Kenneth R. Moen, 202 Riverside Building, 400 South Broadway, Rochester, Minnesota 55904 (for appellant)


Paul H. Grinde, Ryan & Grinde, Ltd., 407 14th Street NW, P.O. Box 6667, Rochester, Minnesota 55903-6667 (for respondent)


            Considered and decided by Hudson, Presiding Judge; Kalitowski, Judge; and Worke, Judge.

U N P U B L I S H E D   O P I N I O N


            In this appeal from summary judgment, appellant argues that, under the parties’ shareholder agreement providing for the purchase of shares upon the death of one party, (a) the court erred in ruling that under the unambiguous language of the agreement, the shares are to be valued through an appraisal of the real property rather than by using the tax base established by the county assessor; and (b) in the event the agreement is deemed ambiguous, extrinsic evidence establishes as a matter of law that the parties intended that the value of the shares was to be determined by using the tax base established by the county assessor as the value of the real property.  Because the district court correctly interpreted the unambiguous language of the contract, we affirm.


            Appellant John Kruesel and decedent Wayne Nygaard both operated businesses in a building in downtown Rochester, Minnesota.  They formed a corporation, NYSEL, Inc., and purchased the building in 1984, which was the sole asset of the corporation.  In 1994, Kruesel and decedent, who were the only shareholders of NYSEL, entered into a “shareholders’ cross-purchase agreement.”  The agreement describes a number of transfer events, including the purchase of shares upon the death of a shareholder.  It provides, in relevant part, that in the event of the death of a shareholder, the value of the building will be its tax base, unless there is a dispute as to its value, in which case the property will be appraised.

            Decedent died in 2003.  Appellant then sought to buy out decedent’s estate under the terms of the agreement as he understood it.  Using the assessed tax base value of the real property of $228,400, he calculated the amount due, considering various credits and debits, and tendered this amount to the estate, which refused to give him the shares in exchange.  Appellant then brought a declaratory judgment action, and both sides moved for summary judgment.

            Appellant asserted that the price of the shares must be based on the $228,400 value of the property set for tax purposes by the Olmsted County Assessor at the time of decedent’s death.  Respondent disputed this valuation, provided an appraisal by a commercial-real-estate agent estimating a market value of $620,000, and contended that the property must be appraised pursuant to the agreement to determine its value.

            The district court held that the contract language was unambiguous and consequently did not use extrinsic evidence to construe the contract.  Under the agreement, the district court determined that because the tax-base value was in dispute, the building’s value for purposes of setting the share purchase price must be established through appraisal by a mutually agreed-on appraiser, as provided in the agreement.  This appeal follows.


            On review of an appeal from summary judgment, the appellate court will determine whether there are genuine issues of material fact and whether the district court erred as a matter of law.  State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).  “Summary judgment is inappropriate where terms of a contract are at issue and those terms are ambiguous or uncertain.”  Bank Midwest, Minn., Iowa, N.A. v. Lipetzky, 674 N.W.2d 176, 179 (Minn. 2004).  “If, however, terms of the contract may be given their plain and ordinary meaning, construction of the contract is a matter of law for the court and summary judgment may be appropriate.”  Id.

            “A contract is ambiguous if it is susceptible to more than one interpretation based on its language alone.”  Metro. Sports Facilities Comm’n v. Gen. Mills, Inc., 470 N.W.2d 118, 123 (Minn. 1991).  “Where a written contract is unambiguous, the court must deduce the parties’ intent from the language used.”  Id.

            The language at issue provides as follows:

                        The parties agree that the value of the stock is based on the value of the building which is the only asset of the corporation.  The parties agree that the tax base of the real property as established by the Olmsted County Assessor shall be used, unless factors are known to either shareholder or their representatives to dispute the tax base value.  If that occurs, the shareholders shall have the property appraised by a qualified real estate appraiser acceptable to all parties.


(Emphasis added.)

            The district court held that under the “plain and ordinary meaning” of the agreement, “this clause applies whenever a shareholder has reason to assert that the assessed value does not accurately reflect the property’s market value.”  The district court noted that respondent offered evidence by a licensed appraiser that the property was worth more than twice the assessed value.  The district court determined that respondent’s evidence showed a dispute of tax-base value, triggering the requirement for an appraisal.

            Appellant contends that the language in the agreement specifically refers to a dispute as to the assessor’s valuation, which he asserts is a cap on the value of the building.  He notes that a tax-assessment dispute under Minn. Stat. § 278.01, subd. 1(a) (2004), is triggered when the challenger believes that the assessed value is too high, not too low.  Similarly, he contends that the exception to the use of the assessor’s valuation is triggered only if the resulting price is too high and should be adjusted downward, not when it is alleged to be too low.

            Dispute means “[a] conflict or controversy, [especially] one that has given rise to a particular lawsuit.”  Black’s Law Dictionary 485 (7th ed. 1999).  Here, respondent brought forth an appraiser’s report valuing the property at more than twice the amount it is valued at for tax purposes, triggering the contract provisions for resolving a dispute.  Contrary to appellant’s arguments, we find nothing in the contract language that would allow us to conclude that the parties intended that a dispute could arise only if the assessed value was too high or that the dispute must concern the valuation by the assessor.  There is no plain language to this effect in the contract.

            Next, while appellant asserts that he is not arguing that Minn. Stat. § 278.01 provides the only way in which a dispute as to the assessment can be resolved, we find the district court’s analysis of the applicability of that section helpful.  The district court rejected the argument that the dispute must be resolved pursuant to Minn. Stat. § 278.01 for several reasons.  First, the plain language of the contract does not refer to Minn. Stat. § 278.01.  Further, the district court observed that the contract language does not track the statutory terms.  For example, the district court noted that the statute refers to a petitioner’s “claim, defense, or objection” to the assessment, while the contract uses the word “dispute.”  See Minn. Stat. § 278.01, subd. 1(a).  The district court ruled that appellant’s proposed interpretation was too strained and that the alleged reference to the statutory procedure for objecting to the assessed value was too obscure to be reasonable.  We agree.  Further, we note that the statute requires that a petition to challenge the assessed value must be served on or before April 30 of the year in which the tax becomes payable.  Minn. Stat. § 278.01, subd. 1(c) (2004).  When the need for the valuation arises from a shareholder’s death, as in this case, it is unlikely that this requirement would be met.

            Appellant next contends that the intent of the parties is demonstrated by the stated purpose of the agreement, which is “to provide for continuity and harmonious management . . . and to provide for the disposition of its capital stock in the event of the death of any of the Shareholders . . . all in order that the capital stock of NYSEL now owned by Shareholders respectively may not pass into other hands and introduce other interests which may not be of advantage to or for the best interests of NYSEL.”  Appellant reasons that if the corporation’s sole asset, the building, were to be valued through the appraisal process, the surviving shareholder may not be able to afford the purchase price, thus forcing the sale of the asset and the demise of NYSEL, contrary to the purpose of the agreement.  Therefore, appellant contends that the intent of the parties was not to achieve the maximum amount for the sale of its shares, but to ensure continuity of ownership.  We cannot, however, ignore the plain meaning of the contract language, which clearly allows for an appraisal in the case of a dispute.  Further, under appellant’s interpretation, the final sentence of the disputed paragraph providing for an appraisal would be meaningless.

            Next, appellant disputes the district court’s implicit ruling that the parties intended that the purchase of shares in the corporation be at market value.  He contends that under the plain language in the agreement, the shares are to be valued by the property’s tax base as established by the county assessor, unless facts are known to dispute that tax base.  He contends that had the parties wished to, they could have used market value to determine the value of the building, but they did not do so.

            The paragraph at issue provides that “[t]he parties agree that the value of the stock is based on the value of the building,” not the assessed value.  (Emphasis added.)  There is no language supporting appellant’s argument.

            In conclusion, we agree with the district court that the contract language is unambiguous and hold that the district court properly construed it.  Consequently, we need not consider appellant’s argument that extrinsic evidence must be considered in the event the agreement is deemed ambiguous.