may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
Dennis J. Carlson,
James R. Carlson,
Filed August 17, 1999
St. Louis County District Court
File No. C9-97-300878
Arvid Nasi, Nasi Building, 2012 First Avenue, Hibbing, MN 55746 (for respondent)
James Andrew Borland, 1907 Third Avenue East, Suite 1, PO Box 37, Hibbing, MN 55746 (for appellant)
Considered and decided by Klaphake, Presiding Judge, Anderson, Judge, and Foley, Judge.
Appellant James R. Carlson challenges the trial court's imposition of a constructive trust for the benefit of respondent Dennis J. Carlson on the proceeds from the sale of the parties' deceased parents' homestead. Appellant argues the trial court (1) erred by placing the burden on appellant to prove respondent conveyed appellant his interest in the homestead as a gift and (2) abused its discretion by imposing an equitable remedy. We affirm. Respondent requests fees on appeal, which we deny.
Appellant and respondent are brothers. In order to avoid probate, their parents conveyed the family homestead in 1992, retaining a life estate. The parties' mother died in 1993, and their father died in 1996.
Shortly after their mother's death, around November 1, 1993, appellant and respondent met at a bar and discussed their interests in the property. The parties differed over what was said during that discussion. Respondent claimed they discussed the value of the property and determined its worth at approximately $90,000. Respondent asserted that an agreement was reached whereby he would deed his one-half remainder interest in the homestead to appellant in exchange for $40,000 from appellant, payable when their father died. Respondent further asserted that he wrote the terms of the deal on a napkin, but later could not find the napkin.
Appellant countered that there was never any agreement for payment and that the conveyance from respondent was a gift, although he admitted that the $40,000 amount came up in the discussion. Appellant asserted respondent gave him his share in the homestead so that each of them would have a house and a lake cabin.
On November 4, 1993, respondent executed a quitclaim deed, transferring his interest in the homestead to appellant. Following their father's death, appellant sold the homestead for $62,500. After deductions for costs associated with the sale, the net proceeds were $57,031.03.
Respondent brought the instant action, seeking damages for breach of the alleged oral contract or, in the alternative, one-half interest in the property. The matter was tried to the court. The trial court found there had been no "meeting of the minds," and therefore no contract was formed. The trial court went on to conclude appellant had failed to establish by clear and convincing evidence that the transfer of property was a gift. The trial court determined appellant was not the "true and rightful owner of the property" and exercised its equitable powers to impose a constructive trust on the proceeds from the sale of the property, ordering appellant to pay respondent a one-half share of those proceeds. Appellant moved for amended findings of fact, conclusions of law and order or, in the alternative, for a new trial. That motion was denied and this appeal followed.
Appellant asserts the trial court erred by placing the burden on appellant to prove the conveyance by quitclaim deed was a gift. This court is not bound by and need not give deference to a trial court's decision on a purely legal issue. Frost-Benco Elec. Ass'n v. Minnesota Pub. Utils. Comm'n, 358 N.W.2d 639, 642 (Minn. 1984).
Preparation and delivery of a deed to a grantee is not sufficient to convey title absent an intent to convey title on the part of the grantor. Slawick v. Loseth, 207 Minn. 137, 139, 290 N.W. 228, 229 (1940). A party asserting that the transfer of property constituted a gift bears the burden of proving the alleged gift by clear and convincing evidence. Oehler v. Falstrom, 273 Minn. 453, 457, 142 N.W.2d 581, 585 (1966).
Appellant takes the position that because the deed was properly executed and recorded, he was the rightful owner of the property and therefore the trial court should not have required him to prove it was a gift. See Yliniemi v. Mausolf, 371 N.W.2d 218, 222 (Minn. App. 1985) (stating "where a deed is regular on its face and duly recorded, the burden of proof is on the party attacking it to show facts establishing its invalidity"). But Yliniemi is distinguishable from the instant case. There, an action was brought to reform a deed. Id. at 221. The issue was what property the deed was intended to describe. Id. at 222. Yliniemi did not involve a claim that the deed was executed as a gift. Here, by contrast, the issue was whether the deed was intended to convey the property by contract or as a gift. The record clearly shows that respondent voluntarily executed a deed conveying his remainder interest in their parents' homestead to appellant. The issue placed before the trial court, however, was what the parties intended with respect to that conveyance.
In Oehler, plaintiff delivered two checks totaling $5,500 to defendants for a downpayment on a house. Oehler, 273 Minn. at 454, 142 N.W.2d at 583. He later sued to recover the money, claiming it was a loan. Id. at 454-55, 142 N.W.2d at 583-84. The supreme court held that once plaintiff had made out a prima facie case of ownership, the burden rested on defendants to establish a gift by clear and convincing evidence. Id. at 457, 142 N.W.2d at 585; see also Kiecker v. Estate of Kiecker, 404 N.W.2d 881, 883 (Minn. App. 1987) (alleged donee of amount owed on contract for deed bore the burden of proof by clear and convincing evidence).
In the instant case, appellant testified, and asserted in his trial brief, that the conveyance was a gift. The trial court followed Oehler and Kiecker and placed the burden on appellant to establish that the conveyance was a gift by clear and convincing evidence. We conclude the trial court properly applied the law.
Appellant next argues that the district court incorrectly determined that he failed to meet his burden of proving a gift by clear and convincing evidence. A trial court's findings shall not be set aside unless clearly erroneous. Minn. R. Civ. P. 52.01.
In order to prove a valid gift, a party must show: (1) intent to make the gift; (2) delivery; and (3) absolute disposition of the property given. Oehler, 273 Minn. at 456-57, 142 N.W.2d at 585. The trial court found appellant failed to prove respondent intended the conveyance as a gift. Appellant contends the fact that a minimal deed tax of $1.65 was paid demonstrates that the conveyance was a gift. See Minn. Stat. § 287.21, subd. 1 (1998) (providing that a deed tax of $1.65 must be paid on a sale of property for less than $500). But there is no evidence in the record supporting appellant's assertion that the deed tax was $1.65. The deed was not offered at trial, and there was no testimony regarding the deed tax. We therefore disregard appellant's references to the deed tax. See AFSCME, Council No. 14 v. County of Scott, 530 N.W.2d 218, 222-23 (Minn. App. 1995) (holding a court may selectively disregard improper references to evidence outside the record without striking the entire brief), review denied (Minn. May 16 and June 14, 1995).
The evidence before the trial court was contradictory. Respondent testified there was an oral contract for the sale of the property. Appellant testified the conveyance was a gift, but he also admitted the $40,000 amount was discussed at the original meeting and had been mentioned by respondent on subsequent occasions. In light of the state of the evidence and giving deference to the trial court's credibility determinations, see Minn. R. Civ. P. 52.01, we conclude the trial court's finding of a lack of donative intent was not clearly erroneous.
2. Equitable Remedy
Appellant further argues the trial court's imposition of an equitable remedy was improper. "Granting equitable relief is within the sound discretion of the trial court. Only a clear abuse of that discretion will result in reversal." Nadeau v. County of Ramsey, 277 N.W.2d 520, 524 (Minn. 1979).
A court may fashion equitable remedies based on the exigencies and facts of each case in order to accomplish a just result. Clark v. Clark, 288 N.W.2d 1, 11 (Minn. 1979). A court of equity will not allow the pleadings to prevent it from reaching the right result. Prince v. Sonnesyn, 222 Minn. 528, 538, 25 N.W.2d 468, 474 (1946). In fashioning equitable relief, form gives way to substance. Id.
Appellant focuses on respondent's failure to prove the existence of a contract. Although the trial court did not find an oral contract, equitable relief of the type fashioned by the trial court is not based on the existence of a contract, but rather on the principle of avoiding unjust enrichment. See Tompkins v. Sandeen, 243 Minn. 256, 262, 67 N.W.2d 405, 409 (1954). "Under the unjust enrichment theory the parties are to be restored to the status quo as far as practicable." Id.
The trial court determined that respondent, "upon failure to prove the existence of an oral contract, would be locked entirely out of his own inheritance, a conclusion which seems to this Court improper in light of the evidence presented." In order to remedy that situation, the court restored the parties to their status quo as far as practicable (given that the homestead had been sold). The result reached by the trial court was equitable and prevented appellant from being unjustly enriched. We therefore conclude the trial court did not abuse its broad discretion.
3. Fees on Appeal
In his brief, respondent requests attorney fees on appeal. A request for attorney fees under Minn. Stat. § 549.211 (1998) must be brought by separate motion. Minn. Stat. § 549.211, subd. 4(a). Because respondent has failed to meet the procedural requirements of Minn. Stat. § 549.211, subd. 4(a), his request for attorney fees is denied.
[*] Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.