STATE OF MINNESOTA
IN COURT OF APPEALS
Maureen Tomczak, et. al.,
Koochiching County Highway Department,
Filed February 9, 1999
Koochiching County District Court
File No. C696565
Paul D. Reuvers, Erstad & Riemer, P.A., 1000 Northland Plaza, 3800 West 80th Street, Minneapolis, MN 55431 (for respondent Koochiching County Highway Department)
Considered and decided by Peterson, Presiding Judge, Schumacher, Judge, and Harten, Judge.
On appeal from entry of a partial summary judgment, Maureen and William Tomczak challenge dismissal of their contract claim and imposition of sanctions. We affirm.
At that meeting, many residents who lived near the gravel pit voiced their concerns. Initially, the board told them that the effects of the rising water in the pit were their responsibility as private landowners. Douglas Grindall, the county engineer, thought that pumping water from the pit to lower the water level by two feet might solve the problem. The board eventually authorized the highway department to furnish a pump at the county's expense. Maureen Tomczak stated that she and her husband would furnish a site for the pump and that they would keep it filled with fuel and oil.
According to Maureen Tomczak, Grindall told her that he would "pump [the pit] to two feet, to keep it safe, and then [she] had to sign a paper saying [she] wouldn't sue as long as they were pumping, I and Russell Christensen."
Grindall stated in his affidavit that the county was concerned about liability arising from pumping the pit. Therefore, before placing the pump, the county instructed him to obtain a release from the Tomczaks. He prepared the following typewritten document:
In exchange for Koochiching County furnishing a pump to dewater the abandoned gravel pit near my property, we agreed to maintain the pump by fueling and checking the oil when necessary and waived all liability to the County for any action, damages, or injury that is caused by pumping the pit.
At the bottom of the document is a handwritten note stating:
Please sign and have a neighbor witness. I'll pick up a copy tomorrow.
[signed] Douglas Grindall
After the Tomczaks signed this document, around-the-clock pumping began. The single pump, however, did not work as quickly as expected. A week later, the county installed a second, larger pump to supplement the pumping. The larger pump directed the water toward the west. When a neighbor to the west complained about flooding, the county directed both pumps toward the east, which caused flooding on another neighbor's property. The county then ran only the larger pump and limited pumping to working hours.
A week later, the county engineer advised the county board that the water level in the pit was dropping very slowly. The board authorized pumping to continue. Nevertheless, the water level once again rose due to heavy rains.
In early June, the county stopped pumping because the heavy volume of water had washed out a catch basin and another landowner complained that the pumping caused flooding on his property. In late June, the Tomczaks' house was flooded.
The Tomczaks argue that the district court erred by dismissing their contract claim. They contend that when they signed the document prepared by Grindall, they entered into a contract with the county. Under the contract, the Tomczaks contend, the county agreed to furnish a pump and they agreed to maintain the pump by fueling it and checking the oil. By withdrawing the pump, they argue, the county breached the contract. We disagree.
A contract requires valid consideration. Franklin v. Carpenter, 309 Minn. 419, 422, 244 N.W.2d 492, 495 (1976). Consideration is the exchange or price requested and received by the promisor for the promise. 1 Samuel Williston & Walter H.E. Jaeger, A Treatise on the Law of Contracts § 100, at 370 (3rd ed. 1957). A gratuitous conditional promise is unenforceable. See eg,. Smith v. Force, 31 Minn. 119, 119, 16 N.W. 704 704 (1883) (holding that arrangement between parties that defendant may take property in dispute and return it to plaintiff, if on plaintiff's writing to the post office department, the department did not claim the property as government property, was wholly without consideration and unenforceable against plaintiff's subsequent demand for return of property).
The difference between words that state a condition of a gratuitous promise and words that indicate a request for consideration has been explained as follows:
In theory it seems possible that any event may be named in a promise as fixing the moment, on the happening of which a promisor (not as an exchange for the happening but as a mere coincidence in time) will perform a promise intended and understood to be gratuitous. The same thing, therefore, stated as the condition of a promise may or may not be consideration, according as a reasonable man would or would not understand that the performance of the condition was requested as the price or exchange for the promise. If a benevolent man says to a tramp,-"if you go around the corner to the clothing shop there, you may purchase an overcoat on my credit," no reasonable person would understand that the short walk was requested as the consideration for the promise, but that in the event of the tramp going to the shop the promisor would make him a gift. Yet the walk to the shop is in its nature capable of being consideration. It is a legal detriment to the tramp to take the walk, and the only reason why the walk is not consideration is because on a reasonable interpretation, it must be held that the walk was not requested as the price of the promise, but was merely a condition of a gratuitous promise.
It is often difficult to decide whether words of condition in a promise indicate a request for consideration or state a mere condition in a gratuitous promise. An aid, though not a conclusive test in determining which interpretation of the promise is more reasonable, is an inquiry whether the happening of the condition will be a benefit to the promisor. If so, it is a fair inference that the happening was requested as a consideration. On the other hand, if, as in the case of the tramp stated above, the happening of the condition will be not only of no benefit to the promisor but is obviously merely for the purpose of enabling the promisee to receive a gift, the happening of the event on which the promise is conditional, though brought about by the promisee in reliance on the promise, will not be interpreted as consideration.
Williston, supra, § 112, at 445-46. Minnesota has applied the benefit test to determine whether an act constituted consideration. See, e.g., Skagerberg v. Blandin Paper Co., 197 Minn. 291, 300, 266 N.W. 872, 877 (1936) (employee's purchase of co-employee's house was not consideration going to, or in any way benefiting, employer to induce it to enter into contract nor did employee allege purchase benefited employer or injured employee).
Even if we assume that the county agreed that it would provide the pump until the water level in the pit was reduced by two feet, as Maureen Tomczak stated in her deposition, there is no contract because there is no consideration. Applying the benefit-to-promisor test, we conclude that the county's promise was a gratuitous conditional promise and that the Tomczaks' agreement to (1) operate the pump and (2) provide the county with a liability release was a condition of the promise. The county did no more than gratuitously promise to provide a pump. The Tomczaks' agreement to operate the pump was of no benefit to the county and was obviously merely for the purpose of enabling the Tomczaks to receive some benefit from the county's gratuitous promise.
2. Sanctions. Sanctions for violating either Minn. Stat. § 549.211 (1998) or Minn. R. Civ. P. 11 may include attorney fees and other expenses incurred as a result of the violation. The standard of review of decisions on attorney fees and costs under both the statute and the rule is whether the district court abused its discretion. Radloff v. First Am. Nat'l Bank of St. Cloud, N.A., 470 N.W.2d 154, 156 (Minn. App. 1991).
After the district court granted partial summary judgment for the county, the Tomczaks moved for reconsideration and for trial "pursuant to Rule 59.01." In a letter to the Tomzcaks' attorney, the county's attorney stated that the motions were procedurally defective and that if the motions were not withdrawn, the county would move for sanctions.
When the Tomczaks' attorney did not withdraw the motions, the county moved under Rule 11 and Minn. Stat. § 549.211 for the costs incurred in responding to the motions. The district court denied the Tomczaks' motions and imposed sanctions, concluding that the motions had no basis in law or fact and were brought in bad faith.
Minn. R. Civ. P. 59.01 does not provide any basis for moving for reconsideration or, on the facts of this case, for a trial. Rule 59.01 authorizes a motion for a new trial. Because the matter before the district court had been decided by summary judgment, and there had been no trial, the district court correctly reasoned that Rule 59.01 did not apply and the Tomczaks inappropriately invoked this rule. Imposing sanctions, especially in view of the county's prior warning to the Tomczaks to withdraw their motions, was not an abuse of discretion.