This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
Filed September 26, 2006
St. Louis County District Court
File No. 69-C4-03-603383
Robin C. Merritt, Anna C. Mickelson, Hanft Fride, P.A., 1000 U.S. Bank Place, 130 West Superior Street, Duluth, MN 55802-2094 (for respondent)
Jacqueline A. Dorsey, Mary L. Hahn, Hvistendahl, Moersch & Dorsey, P.A., 311 South Water Street, P.O. Box 651, Northfield, MN 55057-0651 (for appellant)
Considered and decided by Willis, Presiding Judge; Dietzen, Judge; and Ross, 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 awarding respondent the deed to a house in Duluth, appellant argues that the district court erred by finding that there was an enforceable oral contract for deed between the parties, that the oral contract was taken out of the statute of frauds by respondent’s complete performance, and that appellant was estopped from denying the existence of the parties’ oral contract. Because the record supports the district court’s findings of an oral contract for deed and respondent’s complete performance, we affirm.
dispute here concerns a house in
In January 1996, Eckart asked for assistance from his then-friend Gerald Engelking, an officer of appellant Engelking Corporation. Eckart and Engelking agreed that Eckart would pay Engelking $6,500, and Engelking would then purchase the house out of foreclosure and sell it to Eckart for the purchase price that Engelking paid, plus any expenses incurred. The parties agreed that Eckart would pay Engelking $6,500 each year toward the price that Engelking paid to purchase the house. Eckart claims that these payments were also to be applied to any ownership expenses Engelking incurred; Engelking asserts that Eckart was to pay all ownership expenses, including utilities, property taxes, insurance, and maintenance and repair costs, and that the $6,500 payments were to be applied only to the amount Engelking paid for the house and expenses related to that purchase. Although Engelking testified that he “expected some return on [his] money,” no rate of interest was agreed on.
On January 26, 1996, Eckart paid Engelking $6,500. On February 2, 1996, Engelking purchased the house out of foreclosure for $19,141.49. On January 29, 1997, Eckart paid Engelking an additional $6,500. In March 1997, Engelking received an insurance check for $6,418.01 for smoke damage at the house. Eckart repaired the malfunctioning furnace and the smoke damage at his own expense and testified that Engelking agreed to apply the insurance proceeds to the amount Eckart owed to purchase the house.
In January 1999, Eckart paid Engelking $39,688.73 that Eckart inherited from his father. Eckart believed that this lump-sum payment and the previous payments completed his agreement with Engelking and that Engelking would give him a deed to the house. After the lump-sum payment, Eckart had paid Engelking a total of $59,106.74. But in May 1999, in a letter to Eckart’s son, who had power of attorney for Eckart, Engelking stated that the “purchase price” for the house was then $43,700, that there were “credits against that purchase price” of $37,771.22, and that Eckart still owed $6,337.53. Eckart made no additional payments to Engelking and continued to live in the house.
In September 2003, Engelking served
Eckart with a notice of cancellation of contract for deed. In response, in November 2003, Eckart filed a
suit, seeking, inter alia, specific performance of the parties’ oral contract
for deed for the
September 2005, the district court issued an order finding that the parties had
entered into an oral agreement regarding the
The district court recognized that, in addition to the purchase price, Engelking incurred other expenses relating to the house. At trial, Engelking claimed to have paid $13,629 in property taxes; $1,500 for utilities; approximately $1,000 in documented miscellaneous expenses and repairs; approximately $2,000 to $3,000 for repairs of damage caused when pipes at the house froze; and between $1,300 to $1,600 annually for homeowner’s insurance, although only a $400 payment in 1996 was documented. The district court found that Engelking “incurred expenses in connection with the property including the initial purchase and interest calculated at the statutory rate, in a total amount that was less than or equal to the amount paid by [Eckart] to [Engelking].” The district court ordered Engelking to execute and deliver the deed to the house to Eckart. This appeal follows.
D E C I S I O N
Engelking argues that no enforceable oral contract for
deed existed between the parties because there was no meeting of the minds as
to essential contract terms, such as the purchase price for the property and
the interest rate. Generally, the
existence of a contract and the terms of the contract are questions of fact for
the district court. TNT Properties, Ltd. v. Tri-Star Developers LLC, 677 N.W.2d 94, 101
contract requires a meeting of the minds concerning its essential
Here, the district court found that
[Eckart] and [Engelking] reached an oral agreement whereby [Engelking] would purchase the property out of foreclosure and sell it to [Eckart]. The agreement called for [Eckart] to make an initial payment to [Engelking] in the amount of $6,500, before [Engelking’s] purchase of the property, and annual payments of $6,500 until the amount paid by [Engelking] had been reimbursed, including any expenses incurred by [Engelking] with respect to the property, unless sooner repaid.
The record supports the district court’s finding. Both Eckart and Engelking testified that it was agreed that Eckart would pay Engelking $6,500, Engelking would purchase the house out of foreclosure, and Engelking would then sell the house to Eckart for the purchase price that Engelking paid for the house. The parties disagree on who was to be responsible for paying ownership expenses, including property taxes, but the record shows that Engelking paid many of these expenses and included them in the balance that Engelking claimed that Eckart owed. Although the parties did not agree on a specific dollar amount for the purchase price of the house, the district court found that the parties did agree on how to determine the purchase price of the house at any given time: Eckart was to reimburse Engelking for Engelking’s expenditures to that date relating to the house.
record also shows that Engelking told Eckart that he wanted a return on his investment
but that he did not specify an interest rate.
on the record, the district court did not err by finding that the parties
entered into an oral agreement for the sale of the
Engelking argues that the district
court erred by finding that the parties’ oral agreement for Eckart’s purchase of
Here, the district court found that (1) “as of January 1999, when [Eckart] made the [lump-sum] payment, [Eckart] had paid substantially more than was due under the parties’ oral agreement”; (2) Eckart’s payments to Engelking “were made in reliance of [Engelking’s] promise to provide a deed for the property upon completion of the payment obligations of the oral agreement”; (3) Eckart lived in the house in reliance on the oral agreement; and (4) Eckart made improvements and repairs to the house in reliance on the oral agreement. Based on these findings, the district court concluded that the parties’ oral agreement was “taken out of the Statute of Frauds, Minn. Stat. § 551.04, by reason of [Eckart’s] complete performance.”
A. Complete Performance
argues that the district court’s finding of complete performance is error
because Eckart did not prove at trial that he was living in the house in
reliance on the parties’ oral agreement or that Eckart made any substantial
improvements to the house. Engelking
argues that because Eckart “had been living in the [p]roperty since 1980” as a
renter, he “could not show that his [continued] possession of the premises was
in reliance on the parties’ alleged oral contract.” See
Nybladh v. Peoples State Bank of Warren,
acts constituting partial performance “are unequivocally referable to a
vendor-vendee relationship under an oral contract is a question of fact to be
determined by the trier of fact.” Johnson v. Quaal, 250
B. Ability to Complete Contract Within One Year
Engelking also argues that the parties’ oral agreement is subject to the statute of frauds because it “could not have been completed within one year.” Engelking cites Block v. Rahman, No. A03-269, 2003 WL 22784502, at *2 (Minn. App. Nov. 25, 2003), in which this court held that “[a]lthough the doctrine of part performance removes a contract for the sale of land from the purview of Minn. Stat. § 513.04 [(requiring that a conveyance of real property be in writing)], part performance does not excuse an oral contract from the one-year time limit of Minn. Stat. § 513.01 [(requiring that a contract that cannot be completed within one year from its making be in writing)].”
district court concluded that the parties’ oral agreement could be performed
within one year. The statute of frauds
has no application if an oral contract, by its terms, can be performed within
one year, although the contract runs for an indefinite time. Bannitz
v. Hardware Mut. Cas. Co. of
C. Specific Performance
argues that Eckart is not entitled to specific performance or any other
equitable relief. When there is partial
performance of an oral contract, a district court may exercise its power of
equity by ordering specific performance as the district court did here. See
(a) must be established by clear, positive and convincing evidence; (b) it must have been made for an adequate consideration and upon terms which are otherwise fair and reasonable; (c) it must have been induced without sharp practice, misrepresentation, or mistake; (d) its enforcement must not cause unreasonable or disproportionate hardship or loss to the defendants or to third persons; and (e) it must have been performed in such a manner and by the rendering of services of such a nature or under such circumstances that the beneficiary cannot be properly compensated in damages.
Johnson v. Johnson, 272
Engelking argues that “the alleged contract was not established by clear, positive or convincing evidence.” But the district court found that the parties had entered into an oral agreement, and we have concluded that the record supports the district court’s finding. Engelking makes no argument that any of the other factors required to establish a right to specific performance is lacking here.
also argues that the district court should have denied Eckart’s request for
equitable relief because Eckart has “unclean hands.” 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) (quoting Creative Comm’ns
Consult., Inc. v. Gaylord, 403 N.W.2d 654, 658 (Minn. App. 1987)). “Unclean hands” requires more than “improper
purpose” or recklessness; the doctrine requires illegal or unconscionable
conduct or a showing of bad faith.
Because we affirm the district court on the ground of complete performance we do not reach Engelking’s arguments against the district court’s alternative estoppel grounds for awarding Eckart the property in question.
 Although Engelking Corp. is the named appellant in this matter and all payments made by and to Engelking were in the name of the corporation, Engelking was acting on behalf of Engelking Corp. at the time of the events here, and for convenience we will refer to him alone.
 Unpublished opinions of the court of appeals are not precedential. Minn. Stat. § 480A.08, subd. 3(c) (2004).