may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Cedar Riverside Land Company,
Minneapolis Community Development
Agency, et al.,
Filed November 25, 1997
Reversed and remanded
Hennepin County District Court
File No. 95-0018455
James R. Dorsey, Bradley J. Gunn, Marc D. Simpson, Leonard, Street, and Deinard, P.A., 150 South Fifth Street, Minneapolis, MN 55402 (for appellant Riverside Plaza Limited Partnership)
David B. Olsen, Henson & Efron, P.A., 400 Second Avenue South, 1200 Title Insurance Building, Minneapolis, MN 55401 (for respondent Crablex)
Robert W. Junghans, 6000 Wolfberry Lane, P.O. Box 27022, Minneapolis, MN 55427 (for respondent Cedar Riverside Land Company)
Considered and decided by Randall, Presiding Judge, Lansing, Judge, and Harten, Judge.
The district court granted respondents' motion for summary judgment, ruling that three of four easements on the property in question were terminated by a 1974 Relocation Agreement. Appellants argue the district court erred because the agreement is ambiguous and there are genuine issues of material fact regarding its interpretation; the Relocation Agreement should be reformed because of a mutual mistake of fact; and easements by implication were created. We reverse and remand.
In December 1971, an Easement Agreement creating four driveway easements was executed by Keith Heller on behalf of Stage I Land Company, CRLC, and Cedar-Riverside Properties in favor of Riverside Plaza. This original Easement Agreement (Original Agreement) was dated December 3, 1971, and was recorded on February 23, 1972. The legal description of the driveway easements was attached as Exhibit B to the Original Agreement. Also, on February 23, 1972, Stage I, CRLC, and CRP entered into and recorded an Amendment to Easement Agreement (Amendment), adding two of the original driveway easements over the CRLC Properties for the benefit of the Riverside Plaza property.
During the course of construction of the Riverside Plaza complex, the McKnight Driveway was constructed in a location slightly different from the legal description of the McKnight Driveway Easement contained in the Original Agreement. Consequently, an Agreement for Relocation of Easements (Relocation Agreement) was executed and recorded on July 3, 1974, by Stage I, the owner of the properties benefited by the driveway easements, and CRLC and CRP, the owners of the properties burdened by the driveway easements. The operative language of the Relocation Agreements reads as follows:
Exhibit B attached to and made a part of the Original Agreement which describes the strips of land subject to the Driveway Easements is amended by substituting in lieu of such original description the parcel set forth in Exhibit B attached hereto and made a part hereof.
While Exhibit B to the Original Agreement contains the legal description of the four separate driveway easements, Exhibit B to the Relocation Agreement contains the legal description of only the McKnight Driveway easement as built.
The parties dispute whether the three driveway easements other than the McKnight Driveway easement continue in existence or have been terminated by the language contained in Exhibit B of the Relocation Agreement.
Appellants argue that the 1974 Relocation Agreement is ambiguous and that it did not terminate the three driveway easements. The district court disagreed, finding the language of Exhibit B of the Relocation Agreement to be clear and unambiguous and having the effect of terminating the driveway easements, except for the McKnight Driveway easement.
"A written instrument is ambiguous if it is reasonably susceptible [to] more than one interpretation based on its language alone." In re petitions of Zahradka, 472 N.W.2d 153, 155 (Minn. App. 1991), review denied (Minn. Aug. 29, 1991). When examining a written agreement, "a court must give the contract language its plain and ordinary meaning." Current Tech. Concepts, Inc. v. Irie Enters, Inc., 530 N.W.2d 539, 543 (Minn. 1995). Contracts relating to the same transaction that are put into several instruments shall be read together and construed with reference to each other. Anchor Cas. Co. v. Bird Island Produce, Inc., 249 Minn. 137, 146, 82 N.W.2d 48, 54 (1957).
It is undisputed that the Original Agreement created four separate driveway easements. The Original Agreement also provides:
All Driveway Easements shall run with the land for the joint use and benefit of the owners and encumbrancers of PARCELS D, B-1, B-2, B-3, and C for the purpose of providing ingress and egress between such PARCELS and the public streets, however, subject to the terms and conditions hereinafter set forth.
The effect of the court's decision is to deprive Parcel B-1, which is composed of E Building, its surface parking lot, the loading docks servicing the entire Riverside Plaza complex, and the complex parking ramp, of all access to public streets. This is inconsistent with the parcels' access rights granted by the Original Agreement. The Original Agreement and the Amended Agreement provide for multiple driveway easements for ingress and egress to the public streets. Under the district court's interpretation, only the McKnight Driveway easement would provide public street access to the entire Riverside Plaza complex. The effect of the language in the new Exhibit B is inconsistent with the grant of multiple public street access contained in the Original Agreement. This creates an ambiguity with respect to the number of driveway easements that were intended to provide access to the complex.
Concluding that the language of Exhibit B of the Relocation Agreement is ambiguous, we find genuine issues of material fact exist that preclude summary judgment. When ambiguities exist regarding the express grant of an easement, the circumstances surrounding the grant may be considered. Hwy. 7 Embers, Inc. v. Northwestern Nat'l Bank, 256 N.W.2d 271, 275 (Minn. 1977); see also Blackburn, Nickels & Smith, Inc. v. Erickson, 366 N.W.2d 640, 643 (Minn. App. 1985) (holding that where terms of contract are ambiguous, "resort may be had to extrinsic evidence"), review denied (Minn. June 24, 1985). Where there is ambiguity, and construction may depend on extrinsic evidence, there are questions of fact for the jury. Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn. 1979).
The evidence presented by appellants suggests that the reason the parties entered into the Relocation Agreement was primarily to have the legal description of the McKnight Driveway easement correspond to its actual location. Because the legal description in Exhibit B to the Relocation Agreement overlaps extensively with the fourth legal description contained in Exhibit B of the Original Agreement, it appears, at least reasonably arguable, that the new Exhibit B was intended to replace only the fourth legal description (the McKnight Driveway easement) in the old Exhibit B and not to terminate the three other easements. This strongly suggests that a mistake was made in preparing the new Exhibit B language.
The evidence also indicates that by their conduct, the parties to the Relocation Agreement did not understand the three easements to be terminated. For over 20 years, the owners, tenants, invitees, and others used the driveways for ingress and egress to the Riverside Plaza complex. Heller stated that he did not become aware or believe that the Relocation Agreement terminated the easements until sometime in 1986, nearly 12 years after the Relocation Agreement was executed. By the parties conduct alone it appears that no one understood, as a matter of law, that the Relocation Agreement terminated the three driveway easements. These complex issues present questions of fact better left to the trier of fact.
We note that courts strictly construe the limitation or derogation of property rights. Here, the parties involved are major players in the real estate investment field, assisted by large and experienced law firms that know how to specifically add or delete parcels of real estate. It would have been simple enough at the time of the Relocation Agreement to clearly spell out that either: (1) the Relocation Agreement was intended to correct the legal description of the McKnight Driveway Easement, or (2) that it was to eliminate the other three easements by name. The ambiguity of the Relocation Agreement leads to the logical argument that it was drawn broadly, and perhaps loosely. At the time it was drafted, only the necessary reformation of the McKnight Driveway Easement was at issue. No one, at the time, may have contemplated that it would completely eliminate the three other easements. We do not decide this as a matter of law. But we do conclude that this presents a reasonable argument that requires answers to several fact questions before it can be decided.
Next, appellants argue that even if the Relocation Agreement is not ambiguous, the district court erred in granting summary judgment because a genuine issue material fact exists as to whether the parties to the Relocation Agreement made a mutual mistake of fact. Appellants contend that the Relocation Agreement should be reformed to reflect the true intent of the parties. We agree.
A written instrument may be reformed if it is shown, by clear and convincing evidence, that
(1) there was a valid agreement between the parties expressing their real intentions; (2) the written instrument failed to express the real intentions of the parties; and (3) this failure was due to a mutual mistake of the parties, or a unilateral mistake accompanied by fraud or inequitable conduct by the other party.
Nichols v. Shelard Nat'l Bank, 294 N.W.2d 730, 734 (Minn. 1980). Extrinsic evidence is admissible to establish the mutual mistake and to show how the instrument should be reformed to reflect the parties' actual intent. Johnson v. Johnson, 379 N.W.2d 215, 219 (Minn. App. 1985). Ambiguity is not a prerequisite to the reformation of an instrument to conform to the parties'intention. Metro Office Parks Co. v. Control Data Corp., 295 Minn. 348, 353, 205 N.W.2d 121, 124 (Minn. 1973).
As noted previously, the evidence offered by appellants indicates that the parties did not intend to terminate the four driveway easements contained in the Original Agreement. Most notable is the fact that Heller did not believe that the driveway easements had been terminated until sometime in 1986. In addition, the affidavit of Dick Buddingh, area counsel for HUD from 1971 through 1985, further suggests that a mutual mistake had been made by the parties. In his affidavit, Buddingh states that Bruce Burton, an attorney who purported to represent Heller and the Cedar-Riverside entities controlled by Heller, informed him that mistakes had been made in a previous relocation agreement concerning the easements for the Riverside Plaza Complex. Viewing the evidence in the light most favorable to appellants, as we must, we conclude that genuine issues of material fact exist, precluding summary judgment on the issue of whether the parties made a mutual mistake of fact.
Lastly, we do reject appellants' argument that easements by implication were created. The district court was correct when it concluded that the Torrens Act generally bars easements by implication. Under the Torrens Act, "[n]o title to registered land in derogation of that of the registered owner shall be acquired by prescription or by adverse possession." Minn. Stat. § 508.02 (1996). In addition, Minn. Stat. § 508.25 (1996) provides that:
Every person receiving a certificate of title pursuant to a decree of registration and every subsequent purchaser of registered land * * * shall hold it free from all encumbrances and adverse claims, excepting only the estates, mortgages, liens, charges, and interests as may be noted in the last certificate of title * * *.
Here, it is undisputed that each of the claimed easements lies, in whole or in part, across registered Torrens property. None of the easements were registered on the certificates of title. The purpose of the Torrens Act is to
"establish an indefeasible title free from any and all rights or claims not registered with the registrar of titles, with certain unimportant exceptions, to the end that anyone may deal with such property with the assurance that the only rights or claims of which he need take notice are those so registered."
Mill City Heating & Air Conditioning Co. v. Nelson, 351 N.W.2d 362, 364 (Minn. 1984) (quoting In re Juran, 178 Minn. 55, 58, 226 N.W. 201, 202 (1929)). The district court properly found that the Torrens Act precludes the creation of any easements by implication.
Reversed and remanded.