may not be cited except as provided by
Minn. Stat. sec. 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Filed February 17, 1998
File No. 9610565
Peter W. Johnson, Johnson & Wood, P.A., 1055 E. Wayzata Blvd., Ste. 300, Wayzata, MN 55391 (for appellants)
Jan Stuurmans, Law Offices of Jan Stuurmans, 1800 Rand Tower, 527 Marquette Avenue, Minneapolis, MN 55402 (for respondents)
Considered and decided by Harten, Presiding Judge, Huspeni, Judge, and Klaphake, Judge.
Rohr sued Fenning in a 13-count complaint arising out of two separate land transactions. Several of the counts were voluntarily dismissed before the summary judgment. Rohr appeals adverse summary judgment on two of his counts, breach of contract and breach of fiduciary duty. We affirm as modified.
In the summer and fall of 1993, Rohr and Fenning agreed to develop property that belonged to Marvin and Myrtle Oldenburg. It consisted of two parcels--an 80-acre parcel, designated Phase I, and an adjacent 40-acre parcel, designated Phase II. The Phase I parcel also contained two smaller parcels later identified as Outlots A and B. An access road connecting Phase I with Phase II traversed Outlot A, thus making Outlot A important to the development of Phase II.
In December 1993, Rohr, with Fenning's financing, closed a deal with the Oldenburgs to purchase Phase I by contract for deed, and to purchase an option on Phase II. Rohr's Phase II option was good through December 31, 1995. The contract for deed between the Oldenburgs and Rohr legally described the Phase I property as
[t]he Northeast Quarter of the Northwest Quarter of Section 27, Township 114, Range 22, Scott County, Minnesota. AND: Government Lot 3, Section 27, Township 114, Range 22, Scott County, Minnesota.
This legal description contained Phase I and Outlots A and B.
The next significant events occurred on or about October 6, 1994, when Rohr sold Phase I to Fenning. According to Rohr, he sold Phase I to Fenning and ended their business relationship because he lost confidence in Fenning's integrity. The Rohr-Fenning transaction utilized a purchase agreement and a quitclaim deed with the same legal description that was used in the Oldenburg-Rohr contract for deed. The quitclaim deed transferred to Fenning all Rohr's interest in Phase I that he had received from the Oldenburgs, including Outlots A and B, but not Phase II. As part of the transaction, Fenning obtained a right of first refusal and an option to purchase the Phase II property. Fenning's option to buy Phase II expired on October 1, 1995.
Rohr contends that the purchase agreement and other documents (except the quitclaim deed) involved in the October 6, 1994, Rohr-Fenning transaction contain references demonstrating that the parties understood that Rohr would develop Phase II if Fenning decided not to exercise his option to purchase it. Fenning's unexercised option expired on October 1, 1995. At that time, Rohr still retained his own option to purchase Phase II, which was to expire on December 31, 1995. But Rohr claims that he could not exercise that option because he had mistakenly quitclaimed to Fenning Outlot A, the parcel of land that provided access to Phase II. Fenning claims that Outlot A was not transferred by mistake. Fenning points out that before Rohr's option expired, Fenning offered to sell Outlot A to Rohr, but Rohr refused.
On December 31, 1995, Rohr's option to buy Phase II expired. In January 1996, Fenning purchased Phase II from the Oldenburgs and began to develop Phase II lots. Rohr then commenced this action against Fenning. The district court granted Fenning summary judgment. This appeal followed.
On appeal from summary judgment, we review the record to answer two questions: (1) whether any genuine issues of material fact exist, and (2) whether the district court erred in its application of the law. Offerdahl v. Univ. of Minn. Hosps. & Clinics, 426 N.W.2d 425, 427 (Minn. 1988).
Rohr claims that the district court erred when it granted Fenning summary judgment on Rohr's breach of contract action. Rohr claims that Fenning's failure to convey Outlot A to him after he notified Fenning that it had been mistakenly conveyed, amounted to a breach of contract. Rohr claims he was unable to develop Phase II because he did not have an interest in Outlot A, which was necessary for access from Phase I to Phase II.
We review the facts in a light most favorable to Rohr. Rohr asserts that because Fenning had an express obligation to cooperate with him in his development of Phase II, Fenning should have returned Outlot A to him. The record, however, does not demonstrate any obligation, much less an express obligation, requiring Fenning to cooperate with Rohr's development of Phase II or to return Outlot A to Rohr. We agree with the district court that no viable breach of contract claim exists on this record.
Rohr also argues that Fenning had an obligation to return Outlot A because Fenning, who had loaned Rohr money to begin the development, owed him a fiduciary duty under Klein v. First Edina National Bank, 293 Minn. 418, 196 N.W.2d 619 (1972). In Klein, the supreme court held that a bank
has no special duty to counsel the customer and inform him of every material fact * * * unless special circumstances exist, such as where the bank knows or has reason to know that the customer is placing his trust and confidence in the bank and is relying on the bank so to counsel and inform him.
Id. at 422, 196 N.W.2d at 623.
Rohr argues that Fenning, as his creditor, obtained valuable information about Phase II that Fenning then used for his own gain when he purchased Phase II. The information was that Phase II had "significantly better profit potential than Phase I of the project." According to Rohr, Fenning had a duty to disclose to Rohr that he had obtained Outlot A through the October 6, 1994, quitclaim deed and a further duty to return Outlot A to Rohr.
But Rohr is unable to show that there are genuine issues of material fact suggesting that the Rohr-Fenning exchange of Outlot A resulted from Rohr's trust in Fenning as his fiduciary. Indeed, the opposite is true. Rohr sold the property to Fenning because he lost confidence in Fenning. Even if Rohr once had seen Fenning as a "counselor" sufficient to establish a special relationship under Klein, at the time of the Phase I transfer in October 1994, it is clear that Rohr no longer trusted Fenning. Klein is inapplicable.
We modify the district court judgment by correcting the mistaken factual findings as indicated. Viewing the facts in a light most favorable to Rohr, we conclude that summary judgment for Fenning was appropriate because Rohr failed to set forth a viable basis for his breach of contract and breach of fiduciary duty claims.
Affirmed as modified.