Minn. Stat. §480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Arnold Sauber, et al.,
File No. C3968374
John G. Westrick, Westrick & McDowall-Nix, P.L.L.P., 400 Minnesota Building, 46 East Fourth Street, St. Paul, MN 55101 (for appellant)
Stephen H. Fochler, LeVander, Gillen & Miller, P.A., 633 South Concord Street, Suite 400, South St. Paul, MN 55075 (for respondents)
Considered and decided by Peterson, Presiding Judge, Davies, Judge, and Forsberg, Judge.**
Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
In this appeal from an order denying a motion to set aside a partial judgment, appellant argues that: (1) genuine issues of material fact precluded summary judgment, and (2) the district court improperly applied the statute of frauds sua sponte. We affirm.
The following clause, initialed by both of the Saubers, but not by Sommerville, appears at lines 127-28 of the purchase agreement: "Property to be used for Residential or Agricultural Purposes only. See Addendum." The addendum states that it is an amendment to the purchase agreement dated December 2, 1994. It provides:
The property shall be subject to a declaration of covenants filed prior to execution of the contract for deed that imposes on the property use restrictions limiting use of the land and structures to agricut., farming, nursery and single-family residential purposes. The restrictions shall last twenty (20) years. The restrictions shall run with the land and be binding upon the owners, their heirs and assigns. The restrictions shall be for the benefit of other land in the area owned by Sellers and their heirs and assigns and shall be specifically enforceable.
The addendum is signed by Arnold and Ethel Sauber and by Bill Schoenecker as the selling agent. Schoenecker's signature is dated December 8, 1994, and the Saubers' signatures are dated December 9, 1994. Sommerville did not sign the addendum. Sommerville submitted an affidavit stating that when he signed the purchase agreement on December 2, 1994, the Saubers had already signed it. Sommerville's affidavit states that his recollection is that the restrictive use provision was not added to the purchase agreement until after the Saubers had signed it. Sommerville states that he agreed to the restrictive use provision even though he and the Saubers had already executed the purchase agreement because the provision was consistent with township ordinances.
A proposed amendment to the December 2, 1994, purchase agreement dated February 16, 1995 and signed by Sommerville on that date, states:
The buyer is purchasing the noted property at 9XXX 225th St. Lakeville (60 ac) for his future residence. The buyer will adhere to all twsp. and county restrictions which pertain to this property.
The Saubers did not sign the amendment, and their attorney informed Sommerville that it was unacceptable to them because it did not afford the Saubers a private right of action. Sommerville's attorney proposed that the Saubers' attorney draft proposed covenants affording the Saubers a private right of action. Sommerville did not accept the proposed covenants drafted by the Saubers' attorney. The parties continued to negotiate but were unable to reach an agreement.
Sommerville brought suit to enforce the purchase agreement. The Saubers filed a counterclaim for slander of title. The Saubers moved for summary judgment. The district court found that as matter of law the parties had not entered into a binding contract and granted summary judgment in favor of the Saubers on Sommerville's claim.
direct the entry of a final judgment on one of the claims if the court makes "an express determination that there is no just reason for delay and upon an express direction for the entry of judgment."
Novus Equities Corp. v. Em-Ty Partnership, 381 N.W.2d 426, 428 (Minn. 1986) (quoting Minn. R. Civ. P. 54.02). A partial summary judgment does not become final and, therefore, is not appealable until the district court expressly finds that there is no just reason for delay and directs the entry of judgment. Barry v. Johnson, 350 N.W.2d 498, 498 (Minn. App. 1984), review denied (Minn. Sept. 12, 1984). The district court did not expressly find that there was no just reason for delay and direct the entry of judgment until it issued the order denying Sommerville's motion to set aside the summary judgment. This appeal, therefore, essentially is an appeal from a summary judgment.
On appeal from a summary judgment, this court must determine whether any genuine issues of material fact exist and whether the district court erred in applying the law. Offerdahl v. University of Minn. Hosps. & Clinics, 426 N.W.2d 425, 427 (Minn. 1988). This court must view the evidence in the light most favorable to the nonmoving party. Id. The nonmoving party, however,
cannot rely on the pleadings alone to defeat a summary judgment motion but instead must produce specific facts which establish the existence of a genuine issue for trial.
Krogness v. Best Buy Co., 524 N.W.2d 282, 285 (Minn. App. 1994), review denied (Minn. Jan. 25, 1995).
"Determination of offer and acceptance in real estate contracts is governed by the mirror image rule." Rose v. Guerdon Indus., Inc., 374 N.W.2d 282, 284 (Minn. App. 1985).
An acceptance, to be valid and to give rise to a binding contract, must be made in unequivocal and positive terms which comply exactly with the requirements of the offer. If the acceptance seeks to vary, add to, or qualify the terms of the offer, it is not positive and unequivocal, and constitutes a rejection of the offer and a counteroffer. A valid acceptance must not only embrace the terms of the offer with exactitude, but it must be unequivocally expressive of an intent to create thereby, without more, a contract.
Id. (quoting Minar v. Skoog, 235 Minn. 262, 265-66, 50 N.W.2d 300, 302 (1951) (emphasis in original)).
In its order, the district court found:
[Sommerville's] offer of December 2, 1994 was rejected by [Arnold Sauber] when he made a counteroffer that modified the terms of the purchase agreement and added the addendum. This counteroffer was rejected by [Sommerville] on February 16, 1995 when [Sommerville] made another counteroffer by signing and attaching the addendum to the contract. [The Saubers] did not accept this final counteroffer, and no contract was ever formed.
Sommerville contends on appeal that when he signed the purchase agreement on December 2, 1994, the Saubers had already signed it, and the restrictive use provision had not yet been added to the purchase agreement. Therefore, he argues, whether his signing the purchase agreement constituted an acceptance of the Saubers' offer, and thereby formed a contract, is a genuine issue of material fact that precluded summary judgment.
The Saubers argue that Sommerville should not be allowed to argue on appeal that the parties executed a contract without the restrictive use provision because Sommerville's counsel before the district court conceded that the purchase agreement with the restrictive use provision constituted a counteroffer. We agree. Sommerville's trial counsel stated in a memorandum to the district court that:
The [respondents'] chief argument is that the signed purchase agreement, with the covenant restrictions, was a counteroffer to the [appellant] which he purportedly failed to accept. As stated above, [appellant] has stipulated to that fact.
Sommerville's counsel also argued in the district court that the purchase agreement with the restrictive use provision constituted a counteroffer and that Sommerville accepted the counteroffer. Sommerville is precluded from changing his argument on appeal. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (this court will not review an issue raised before the district court but argued under a different theory on appeal).
Sommerville also argued in the district court that Schoenecker's affidavit supported his position that the parties entered into a binding contract. Schoenecker's affidavit indicates that he understood that the parties had reached an agreement and were merely finalizing the details. Citing the statute of frauds, the district court found that Schoenecker's affidavit did not create a factual dispute regarding the existence of a contract. We agree. A real estate agent's testimony is not sufficient to establish the existence of a contract to purchase real estate because the statute of frauds requires such a contract to be in writing. See Rose, 374 N.W.2d at 284 (real estate broker's statement to appellant that he thought the parties had a deal was insufficient to create a fact issue on the existence of contract because real estate contracts must be in writing under the statute of frauds).
Citing Doe v. Brainerd Int'l Raceway, Inc., 514 N.W.2d 811, 822 (Minn. App. 1994) (finding trial court's grant sua sponte of summary judgment in error when adverse party given no opportunity to oppose), rev'd on other grounds 533 N.W.2d 617 (Minn. 1995), Sommerville argues that the district court erred in relying on the statute of frauds to support its summary judgment because the parties did not raise that legal theory before the court. We disagree. The Saubers raised the statute of frauds issue in their memorandum opposing Sommerville's summary judgment motion, and Sommerville addressed the statute of frauds issue in his memorandum responding to the Sauber's memorandum. The statute of frauds issue was discussed at the hearing on Sommerville's summary judgment motion and at the hearing on his motion to set aside the summary judgment.
Sommerville also argues that the statute of frauds should not be applied to shield the Saubers because they signed the purchase agreement. See Olson v. Ronhovde, 446 N.W.2d 690, 692 (Minn. App. 1989) (policies underlying statute of frauds do not support applying it as a sword to allow a party to avoid liability on a contract he signed). We disagree. The statute of frauds requires a contract for the sale of real estate to be in writing. Minn. Stat. § 513.04 (1996). Here, there is no writing documenting the existence of a contract. There are only writings documenting offers and counteroffers.
The documentary evidence shows that Sommerville made an offer to buy the Saubers' property. The Saubers did not accept the exact terms of Sommerville's offer, but rather added the restrictive use provision as set forth in the addendum to the purchase agreement. The restrictive use provision added by the Saubers constituted a rejection of Sommerville's offer and a counteroffer. Because Sommerville neither initialed the restrictive use provision nor signed the addendum, Sommerville did not accept the Saubers' counteroffer in writing.
The Saubers argue that the district court should not have considered Schoenecker's affidavit because Sommerville did not present it to the court until several months after the court decided the summary judgment motion. But under Minn. R. Civ. P. 54.02, when an action involves multiple claims, a judgment is subject to revision at any time before the entry of a judgment adjudicating all the claims unless the court has expressly determined that there is no just reason for delay and expressly directed the entry of judgment. The district court did not expressly determine that there was no just reason for delay and direct the entry of judgment until it issued the order denying Sommerville's motion to set aside the summary judgment.