may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Raymond A. Storck and Dorothy M. Storck,
husband and wife,
Michael Dean Storck, et al.,
Sheila Mary Storck,
Filed April 8, 1997
Stevens County District Court
File No. C995198
Belvin L. Doebbert, Nelson Obenland & Doebbert, 605 S. Lakeshore Dr., Suite 1000, Glenwood, MN 56334 (for Appellant)
Fred Strege, Smith & Strege, Ltd., 321 Dakota Ave., P. O. Box 38, Wahpeton, ND 58074 (for Respondents)
Considered and decided by Huspeni, Presiding Judge, Parker, Judge, and Schumacher, Judge.
Appellant challenges the trial court's order of specific performance of a provision of the contract for deed by which she purchased a farm from respondents. Because we hold that there was no abuse of discretion in ordering specific performance, we affirm.
Appellant and Michael Storck borrowed $12,000 from the Stevens County Housing and Redevelopment Authority to make improvements to the house on the property. The terms of the loan provide that if either appellant or Michael Storck lives in the house until January 21, 2002, the loan will be forgiven.
When appellant and Michael Storck dissolved their marriage in December 1994, appellant received custody of their four minor daughters and received Michael Storck's interest in the dairy farm. Appellant and the children continued to live in the house on the property, but the dairy farming operation ceased. Ten months later, respondents brought this action, alleging that appellant had committed waste.
The trial court found that "[Respondents] are seeking cancellation of the contract for deed, or, in the alternative, specific performance and money damages" and that various repairs on the property would cost $9,285. The court then concluded that while appellant had not committed waste on the property, she had assumed a contractual obligation to maintain it in good condition and repair and had failed to comply with this obligation. The court also concluded that:
The most equitable remedy for this situation would be to require [appellant] to repair certain deficiencies within a reasonable period of time. If she fails to do so, then [respondents], pursuant to Paragraph 15 of the contract for deed, may complete the repairs at their cost, and that cost can then be assessed against [appellant] as an amount immediately due under the contract.
Appellant argues that the court abused its discretion in ordering specific performance because the buildings are now unused and without value.
"Specific performance is an equitable remedy addressed to the sound discretion of the trial court." Flynn v. Sawyer, 272 N.W.2d 904, 910 (Minn. 1978). In a contract for deed to convey real property, both vendor and vendee are entitled to specific performance. Thompson v. Kromhout, 413 N.W.2d 884, 885 (Minn. App. 1987), review denied (Minn. Dec. 22, 1987).
Appellant argues first that the trial court's order in effect gives respondents both specific performance and cancellation, because if appellant makes the repairs and then cannot make payments under the contract, respondents will acquire both the value of the repairs and clear title to the property. We disagree with appellant's characterization of the trial court's decision and conclude instead that the trial court fashioned an appropriate and equitable remedy.
A party possessing property that is the subject of a contract for deed sale is required to keep the property in repair even if the property is subsequently transferred. See Saliterman v. Bigos, 352 N.W.2d 494, 497 (Minn. App. 1984) (denying recovery of amount spent on property repairs pending closing to a seller who had delayed closing on contract for deed). Appellant's argument would nullify any contractual provision requiring a contract for deed vendee to maintain a premises in good repair; amounts expended on repair will always be lost if the contract is cancelled.
Moreover, if appellant fails to keep the property in repair and then defaults in payment, the contract would be cancelled and respondents would have no remedy for the deterioration of their property. Where a provision in a contract for deed is breached, and the contract is subsequently cancelled, the vendor is precluded from recovering for the breach. Rudnitski v. Seely, 452 N.W.2d 664, 666-67 (Minn. 1990) (noting that where a contract for deed prohibiting waste by the vendee is cancelled, the vendor may not bring an action to recover for waste and expanding this to hold that a vendor may not recover for waste even if the contract for deed does not include a prohibition of waste).
Appellant cites Mattson v. Greifendorf, 183 Minn. 580, 237 N.W. 588 (1931), to argue that neither specific performance nor cancellation is appropriate because her breach of the repair provision is "trifling." Mattson is distinguishable on the facts: it held that cancellation was not warranted where the amount allegedly in default was significantly less than the amount at issue here. Id. at 582, 237 N.W. at 588-89. Mattson is further distinguishable because it involved a tax default, not a default capable of causing further damage or depreciation to the property. Id. Here, testimony showed that if the repairs are not carried out, particularly on the roofs, the buildings will inevitably deteriorate.
Appellant also argues that the farm buildings cannot depreciate; that because their value is contingent on their use in a farming operation and no farming operation is now being conducted, they are already worthless. We are not persuaded. Until December 1994, the buildings were used in an active farming operation. Kept in good repair, there is no reason to believe they could not again be used in active farming. A decision not to repair them could result in the inability of a subsequent owner of the property to use them in farming.
Finally, we note that respondents, in fact, sought cancellation of the contract for deed or, in the alternative, specific performance and money damages. The trial court, in granting the relief it did, recognized the inappropriateness of cancelling the contract:
[Respondents] specifically assert that the failure of [appellant] to maintain the premises in accordance with the contract for deed is not a breach of the contract. * * * Nevertheless, [respondents] seek money damages to compensate them for the cost of completing repairs. If there is no waste and if there is no breach of contract, it is questionable whether [respondents] are entitled to money damages, particularly in light of [respondent's] testimony that the value of the property essentially is the same with the buildings in their current state of disrepair.
While the possibility of circumstances arising that could lead to cancellation of the contract existed at the time of its inception and continues at present, the trial court did not effect a cancellation of the contract in its order. It did appropriately resolve the issues presented in this case. Requiring appellant to preserve the capacity of the property to be used for dairy farming by specifically performing her contractual obligation to keep it in good repair was an effective equitable remedy to the parties' dispute. We see no abuse of discretion.