may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
Stoney Bridge Development, Inc.,
St. Croix Ltd.,
a Limited Partnership, et al.,
Filed April 13, 1999
Affirmed in part and reversed in part
Washington County District Court
File No. C296005145
Kevin K. Shoeberg, Kevin K. Shoeberg, P.A., Suite 600, Woodbury Business Center, 1890 Wooddale Drive, Woodbury, MN 55125 (for respondents)
Considered and decided by Crippen, Presiding Judge, Amundson, Judge, and Anderson, Judge.
Following cancellation of its predecessor's contract for deed, appellant initiated an unjust enrichment proceeding. We affirm the trial court's summary judgment, which was premised on the conclusion that appellant failed to demonstrate cause for equitable relief; we reverse the trial court's award of attorney fees and sanctions.
In 1992, appellant's predecessor in interest, a contract vendee, tendered $251,765.67 with a demand for full performance of the contract for purchase of a bowling alley. Respondents, the contract vendors, refused the tender, claiming that the contract was also security for an unpaid note originally issued in consideration for the sale of personal property connected with the bowling alley.
Appellant's predecessor subsequently defaulted and cancellation occurred. Now appellant claims unjust enrichment, contending that it was entitled to a deed upon tender of the sum due on the real estate contract for deed. Although acknowledging that the contract permitted cancellation for non-payment of the note, appellant contends nevertheless that payment of the real estate purchase price represented full performance of the contract for deed.
Ordinarily, an unjust enrichment claim will lie only if it is "shown that a party was unjustly enriched in the sense that the term `unjustly' could mean illegally or unlawfully." First Nat'l Bank of St. Paul v. Ramier, 311 N.W.2d 502, 504 (Minn. 1981) (citation omitted). An action for unjust enrichment may also lie in circumstances in which it would be immoral to keep both the real estate and money already invested in it. Anderson v. DeLisle, 352 N.W.2d 794, 796 (Minn. App. 1984).
Appellant suggests that the wrongfulness of respondents' position lies in the fact that respondents unlawfully refused the tender. Had the tender been accepted, appellant would have gained title to the real estate whether or not the note was paid. After the tender was refused, appellant was unable to avoid a cancellation because, as it acknowledges, the contract could be cancelled upon the non-payment of the note, and arrangements for payment of the note could not be completed.
Respondents contend that they had a contract right to refuse the tender. Paragraph nine of the contract for deed states that should default on the promissory note occur, "SELLER may * * * declare this Contract cancelled and terminated." Respondents contend that this paragraph has the effect of making the contract security for both debts such that full performance could occur only if both were paid.
As appellant argues, respondents may have erred in their view of the law when the tender was made. In the sale of a business, the parties chose to address the sale of real estate in a standard contract for deed with a separate price that represented a part of the total business sale. This ambiguous structure of the transaction begged for the difficulty of an attempt to close the real estate sale separately. Although the contract permits cancellation for non-payment of the note, it does not state that the note obligation is part of the consideration for the contract.
The suit for unjust enrichment does not present the occasion for a holding under the law as to whether respondents had the right to refuse a tender. Appellant's position is flawed, but not because its view of contract law is entirely untenable. Rather, appellant's failure is in translating its view of contract law into an entitlement for equitable relief after the cancellation.
There is here no evidence of a wrongful act rising to the level of being immoral. See Anderson, 352 N.W.2d at 796. Whether or not it might be presently determined that respondents had an absolute right to refuse the tender, the contract was ambiguous such that it was not "morally wrong" to claim that full performance had not occurred. Id. No bad faith could be attributed to respondents in their argument that the contract served to give it security on its note because of the cancellation provision.
We reverse the trial court's award of attorney fees and sanctions. Although it is not entitled to relief, appellant's position is not entirely lacking in merit. In the unique circumstances of this case, we are mindful that there is no evidence of any occasion for appellant's predecessor to have determined its legal rights before the cancellation occurred. Thus, appellant's position is an attractive subject for equitable relief. It fails only because appellant cannot show a sufficiently wrongful course of conduct of the vendors.
Affirmed in part and reversed in part.