This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1998).




The Equitable Life Assurance Society

of the United States,



Erin, Inc.,

d/b/a Midas Muffler,


Filed May 18, 1999

Affirmed in Part, Reversed in Part, and Remanded

Davies, Judge

Hennepin County District Court

File No. 9710121

Dean C. Eyler, Bricker L. Lavik, Dorsey & Whitney, L.L.P., Pillsbury Center South, Suite 1300, 220 South Sixth St., Minneapolis, MN 55402 (for respondent)

Thomas J. Flynn, Daniel L. Bowles, Larkin, Hoffman, Daly & Lindgren, Ltd., 1500 Norwest Financial Center, 7900 Xerxes Ave. South, Bloomington, MN 55431-1194 (for appellant)

Considered and decided by Peterson, Presiding Judge, Davies, Judge, and Halbrooks, Judge.



This is an appeal from summary judgment holding appellant liable for breach of a commercial lease. We affirm in part, reverse in part, and remand.


On October 7, 1982, appellant Erin, Inc., d/b/a Midas Muffler, signed a 15-year lease for a free-standing building at Southdale Center. The lease was first with Allied Central Stores, Inc., which subsequently sold its interest in the rental property to CPS Realty Partnership, which then, in 1990, sold its interest to respondent Equitable Life Assurance Society (Equitable). About the time Equitable commenced this action for payments allegedly owed under the lease during its ownership, it sold the property to yet another owner.

The lease required appellant to pay a common-area maintenance charge and 50% of all property taxes and special assessments on the leased property. Appellant has not, however, paid the taxes or common-area maintenance charge since 1984. And, but for a single letter from respondent in January 1996, it appears that none of the first three landlords (those named above) tried to collect the property taxes or the common-area maintenance charge from appellant after 1984. But then, in June 1997, respondent sued appellant seeking payment of the tax obligation.

Appellant's answer denied liability, claiming the lease had been orally modified to delete the tax obligation.[1] Appellant's answer also raised a counterclaim for recoupment based on respondent's construction of a ring road on the Southdale property. Appellant asserts that the ring road has interfered with its possession of the leased property. On September 8, 1998, the district court entered summary judgment, denying the counterclaim and awarding respondent back taxes, along with costs and attorney fees. This appeal followed.


In reviewing summary judgment, this court determines: (1) if there is a genuine issue of material fact; and (2) whether the prevailing party was entitled to judgment as a matter of law. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). All documents and facts must be viewed in the light most favorable to the party against whom judgment was entered. Id.


The statute of frauds prevents oral modification of a lease if the lease is for longer than a year. Minn. Stat. § 513.05 (1998); Alexander v. Holmberg, 410 N.W.2d 900, 901 (Minn. App. 1987). But the statute of frauds does not apply to modification of a lease to the extent the parties have performed as modified. Alexander, 410 N.W.2d at 901. In that circumstance, "[i]t remains for the trier of fact to determine if and when the lease was modified, what were the terms, and appropriate damages." Id.

This case is similar to Alexander in that both cases involve a tenant not paying according to the lease and alleging that the contract had been orally modified. See id. at 900 (tenant claimed rent was modified). Here, as in Alexander, appellant offers evidence that payments less than the contractual amount were accepted. See id. (tenant offered evidence of receipts for monthly payments less than contractual amount). And, as in Alexander, whether the lease was orally modified is a question of fact and summary judgment was inappropriate. Id. The summary judgment is therefore reversed, and the matter remanded for trial on that question.

We do not reach the estoppel issues. Appellant asserts the exact same facts for its estoppel claims as for its part-performance claim. If it prevails in establishing these facts and proving part performance, its estoppel claim is superfluous. Similarly, if it cannot establish the facts necessary for its part-performance argument, it cannot prevail in the estoppel argument.


Appellant concedes that the ring road that is the subject of its counterclaim for recoupment was built in 1990 and that the counterclaim was not raised until 1997, but argues that the court erred by concluding the claim was barred by the statute of limitations. The statute of limitations for trespass upon real estate is six years. Minn. Stat. § 541.05, subd. 1(3) (1998). The statute of limitations begins to run when a claim becomes actionable. Capitol Supply Co. v. City of St. Paul, 316 N.W.2d 554, 555 (Minn. 1982).

Appellant argues that the ring road is a continuous trespass and the statute of limitations, thus, has not run. But the supreme court has long held that building a road on another's property is a single act and not a continuous trespass. Ziebarth v. Nye, 42 Minn. 541, 544, 44 N.W. 1027, 1028 (1890). The single act of building the road was the end of the offense and only the injury lingers. Id.

For the proposition that the ring road is a continuous interference, appellant cites Northern States Power Co. v. Franklin, 265 Minn. 391, 397, 122 N.W.2d 26, 30 (1963). But appellant's reliance is misplaced. "The problem of whether the trespass is continuing, or a single permanent trespass * * * depends on the character of the invasion and the structures erected * * * ." Id. at 397, 122 N.W.2d at 31. In Franklin, the failure to remove two steel towers, as demanded, supported the theory of continuing trespass. Id. at 397, 122 N.W.2d at 30. But, here, the character of the invasion is precisely the same as in Ziebarth, a road built on the property of the claimant. The Ziebarth court decided the road was not in the character of a continuing trespass and we conclude that the same is true for the ring road here. The offense was not "continuous," and the statute of limitations ran from construction of the ring road.

Alternatively, appellant argues that, even if the statute of limitations has run on its trespass claim, it should be able to bring the claim as one in recoupment. But a recoupment defense is allowed only if the recoupment arises from the same transaction as the claim against which recoupment is asserted. Household Fin. Corp. v. Pugh, 288 N.W.2d 701, 704 (Minn. 1980).

Appellant relies on Hoppman v. Persha, 190 Minn. 480, 252 N.W. 229 (1934), for the proposition that its claim sounds in recoupment and is not barred by the statute of limitations. But Hoppman did not involve the statute of limitations.

"Considerations of basic fairness underlie the special treatment afforded a recoupment defense relative to a limitation period." Pugh, 288 N.W.2d at 704. That is why the doctrine is limited to defenses "`arising out of some feature of the transaction upon which the plaintiff's action is grounded.'" Id. at 705 (quoting Bull v. United States, 295 U.S. 247, 262, 55 S. Ct. 695, 700 (1935)). Here, the parties' claims arise from distinct transactions--building a road and failing to pay under the

terms of a written lease. And applying the statute of limitations works no unfairness. We affirm the summary judgment on appellant's counterclaim.

Affirmed in part, reversed in part, and remanded.

[1] Before the 1990 property purchase, appellant gave respondent two estoppel letters. The first letter stated that the common-area maintenance charge and then the tax obligation had been orally deleted from the lease. The second estoppel letter stated that appellant would, beginning in 1991, pay property taxes as the lease specified. The direct estoppel effect of these letters was not reached by the district court, the issue was not raised on appeal, and we express no opinion on the legal effect of the letters.