This opinion will be unpublished and

may not be cited except as provided by

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

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C1-00-92

 

In Re the Marriage of:

Betty Ann Anderson,

Petitioner Below,

 

and

 

Lloyd Charles Anderson,

Respondent,

 

vs.

 

Veblen Premium Pork, Inc.,

Appellant.

 

Filed August 22, 2000

Affirmed

Toussaint, Chief Judge

 

Kandiyohi County District Court

File No. F6-95-1283

 

John E. Mack, Mack & Daby, P.A., 26 Main Street, P.O. Box 302, New London, MN 56273 (for respondent)

 

Jerry O. Relph, William V. Faerber, Quinlivan & Hughes, P.A., 400 South First Street, Suite 600, P.O. Box 1008, St. Cloud, MN 56302-1008 (for appellant)

 

            Considered and decided by Shumaker, Presiding Judge, Toussaint, Chief Judge, and Schumacher, Judge.

U N P U B L I S H E D   O P I N I O N

TOUSSAINT, Chief Judge

Appellant obtained a judgment against respondent, a business creditor of the couple, and his former spouse.  The spouse had a lien on respondent’s homestead for any amount appellant might try to recover from her.  Appellant entered into an agreement with the spouse releasing her from liability in exchange for her lien, then petitioned the district court for a sheriff’s sale of respondent’s homestead.  The petition was denied.  Because appellant is precluded by law from enforcing a judgment lien on a homestead, we affirm.

D E C I S I O N

            Appellant Veblen Premium Pork, Inc., challenges the denial of its petition for a sheriff’s sale to enforce a lien on the homestead of respondent Lloyd Anderson.  A reviewing court need not defer to the district court’s application of the law when the material facts are not in dispute.  Hubred v. Control Data Corp., 442 N.W. 2d 308, 310 (Minn. 1989).  The parties agree on the material facts.

Respondent’s marriage was dissolved in 1995 pursuant to an agreement providing in relevant part that:

[Respondent] shall assume, pay and hold [Betty Anderson, his former spouse] harmless on and for any marital debt of the parties, and also on and for any business related debt, including any and all debt relating to [appellant.]  It is further provided that within 30 days of the date of decree herein, [respondent] shall cause the business debt of [appellant] to be refinanced, and [Betty Anderson] to be released from all personal guarantees or obligations thereunder, including all debt specified above.  Until such time as these debts are released, [Betty Anderson] shall have a lien against the homestead real property, described above, for the full amount of any obligation she may have as a result of said business debt.

 

Respondent did not refinance the debts so as to release Betty Anderson. 

In 1997, appellant obtained a judgment of $54,211.80 against respondent and Betty Anderson.   Because the only asset was respondent’s homestead, appellant was unable to collect the judgment.   In 1999, Betty Anderson and appellant entered into an agreement providing that:

The undersigned Assignor, Betty Ann Anderson, for and in consideration of being fully and completely released from any further obligation or obligations she may have to the Assignee; namely, [appellant], as a judgment debtor hereby assigns all of her right, title and interest in said marital lien to [appellant].

 

Appellant then petitioned the district court for a sheriff’s sale foreclosing its lien on the property.  The district court denied the petition.

            Appellant seeks one of two mutually exclusive remedies: either rescission of its agreement with Betty Anderson or enforcement of that agreement.^[1]  We conclude appellant is entitled to neither as a matter of law. 

A judgment debtor’s homestead is “exempt from seizure or sale under legal process * * *”).  Minn. Stat. § 510.01 (1998).  Appellant’s agreement with Betty Anderson was an attempt to circumvent this statute.  “[A] bargain which involves the commission of a crime, either as a consideration therefor or in the performance thereof, is invalid as against public policy.”  Brubaker v. Hi-Banks Resort Corp., 415 N.W.2d 680, 684 (Minn. App. 1987) (quoting Pettit Grain & Potato Co. v. Northern Pacific Ry. Co., 227 Minn. 225, 232, 35 N.W.2d 127, 131 (1948)), review denied (Minn. Jan. 28, 1988).  Rescission is available only to an innocent party.  See McCauley v. Michael, 256 N.W.2d 491, 500 (Minn. 1977) (holding that, in the context of Blue Sky Law violations, “rescission is always available to the innocent purchaser,” but “a purchaser in pari delicto with the seller may not recover.”).  Because appellant is not an innocent party, it is not entitled to rescission.

            Even if appellant were an innocent party, neither of its arguments for rescission is persuasive.  Appellant relies on Gartner v. Eikill, 319 N.W.2d 397 (Minn. 1982) to argue that mutual mistake entitles it to rescission because both it and Betty Anderson believed assigning her marital lien to appellant would give appellant the right to foreclose on respondent’s homestead.  But appellant misstates the holding of Gartner. Gartner involveda mistake of fact, in property the parties believed could be developed that could not in fact be developed.  The contract was rescinded on that basis.  Id. at 398.  

Here, the parties to the agreement were mistaken as to the law.  Betty Anderson’s right to enforce her lien was conditioned on an effort by appellant to hold her liable for the judgment debt.  Without such an effort, she had no right to enforce the lien, and she could not assign a right she did not have to appellant.  Appellant’s argument that failure of consideration entitles it to rescission also fails.  Appellant received consideration, Betty Anderson assigned her lien.  But she could not assign the right to enforce it.

            We conclude that appellant’s petition for a sheriff’s sale of respondent’s homestead was properly denied.

            Affirmed.^[2]