STATE OF MINNESOTA

IN COURT OF APPEALS

A05-758

Sylvia E. Stempf,
Appellant,

vs.

Gregory L. Andrzejeski,
Respondent.

Filed January 10, 2006

Reversed and remanded

Minge, Judge

Mille Lacs County District Court

File No. C8-04-0678

Richard W. Curott, Curott & Associates, 116 Second Avenue Southwest, P.O. Box 206, Milaca, MN 56353 (for appellant)

Gregg A. Bilz, Bilz Law Office, 157 South Central Avenue, Milaca MN 56353 (for respondent)

Considered and decided by Minge, Presiding Judge; Willis, Judge; and Worke, Judge.

U N P U B L I S H E D O P I N I O N

MINGE, Judge

Sylvia Stempf appeals from summary judgment dismissing her claim that Gregory Andrzejeski fraudulently contributed to the transfer of her real property to him. Because we conclude that genuine issues of material fact exist regarding whether the statute of limitations had run on Stempf’s claim, we reverse and remand.

FACTS

For over 50 years, appellant Sylvia Stempf and her husband Curtis Stempf owned and lived on the 19-acre parcel in Onamia, Minnesota (the property) that is the subject of this litigation. Sylvia became acquainted with respondent Gregory Andrzejeski in the 1980s. Andrzejeski lived with the Stempfs for several months prior to 1988. In 1988, the Stempfs deeded the property to Andrzejeski, reserving a life estate. Sylvia claims that she was unaware that she signed a deed, that she was told and believed that the document she signed was a will, and that she did not intend to transfer any interest in the property. Following the transfer, the Stempfs continued to reside and pay the taxes on the property.

Sylvia also claims that as long as Curtis Stempf was living, he took care of the property and the couple’s financial affairs; that although Andrzejeski’s name may have appeared on the property tax statements, she did not see the statements; and that it was only after Curtis died in February 2003, that she saw the then-current statement and realized that Andrzejeski’s name was on the property. Upon inquiry, she learned of the 1988 deed and its filing. Sylvia then contacted an attorney; and in April 2003, her attorney sent a letter to Andrzejeski, requesting that he sign a quitclaim deed conveying his remainder interest in the property back to Sylvia.

On May 1, 2004, Sylvia Stempf initiated this action, requesting that the transfer to Andrzejeski be declared void. She alleged that he exercised undue influence upon her and Curtis, that he conspired with Curtis to transfer the property without fairly disclosing the nature of the transaction to her, and that the transfer was the result of fraud and misrepresentation.

Andrzejeski testified at a deposition that he and Curtis Stempf had a close relationship for a period of 30 years. Andrzejeski stated that Curtis wanted him to own the property so that “the county would not take it” and so that people would not ask Sylvia to give them part of the property if he died first. Andrzejeski added that he did not want the property at the time, but that he agreed to accept it anyway, that he met with the Stempfs and their lawyer, that they signed the deed, and that he signed another document transferring the property back to them if he died before them. Andrzejeski testified that Sylvia knew that the property was being transferred and that she told him her husband felt relieved because of the transfer. Andrzejeski also testified that over the course of his relationship with the Stempfs, Andrzejeski gave them money and other things and performed many services for the benefit of the property.

In November 2004, Andrzejeski moved for summary judgment. The district court granted summary judgment on January 21, 2005, on the basis that Sylvia failed to file suit within the limitations period. The district court amended its order for summary judgment on February 15, 2005. On March 9, 2005, Sylvia moved to amend her complaint to add a claim that Andrzejeski held the property in a constructive trust for her benefit. The district court denied Stempf’s motion to amend. This appeal follows.

D E C I S I O N

The first issue is whether the district court erred by granting summary judgment to Andrzejeski on the basis that Sylvia Stempf failed to commence this action within the limitations period. On appeal from summary judgment, this court asks: (1) whether there are any genuine issues of material fact; and (2) whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). Summary judgment is proper when the evidence in the record shows there is no genuine issue of material fact and either party is entitled to a judgment as a matter of law. Minn. R. Civ. P. 56.03; DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn. 1997). “On appeal, the reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted.” Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).

Minn. Stat. § 541.05, subd. 1(6) (2004), provides a six-year limitations period for an action “[f]or relief on the ground of fraud.” Accrual begins upon “the discovery by the aggrieved party of the facts constituting the fraud.” Id. These facts “are deemed to have been discovered when, with reasonable diligence, they could and ought to have been discovered.” Kassan v. Kassan, 400 N.W.2d 346, 349 (Minn. App. 1987) (quotation omitted), review denied (Minn. April 23, 1987). A plaintiff has the burden of proving “that he did not discover the facts constituting the fraud until within six years before the commencement of the action.” Id. The determination of when a party knew or should have known of the facts constituting fraud is a question of fact. Estate of Jones by Blume v. Kvamme, 449 N.W.2d 428, 431 (Minn. 1989).

In Kassan, the appellant, the respondent, and other family members were involved in a real estate business until 1951. 400 N.W.2d at 348. Appellant and the deceased mother suspected mishandling, concealment, and improper disposition of business assets by his brother for at least eight years prior to their mother’s death. Id. In 1981, after the mother died, the appellant started the lawsuit against his brother. Id. This court affirmed the district court’s grant of summary judgment because “appellant had actual or constructive knowledge of all the respondent’s alleged acts prior to [the end of the limitations period].” Id. at 349; see also Klehr v. A.O. Smith Corp., 87 F.3d 231, 237 (8th Cir. 1996) (affirming summary judgment based on the statute of limitations because farmer was aware of silage problems more than six years before commencing an action, but the farmer failed to investigate the cause of the problems).

In contrast, the court in Kvamme held that the statute of limitations did not bar a claim. 449 N.W.2d at 431. In Kvamme, the personal representative alleged that the appellant fraudulently purchased stock from the decedent in 1966. Id. at 430. The decedent died in 1970 and the personal representative discovered the alleged fraud in 1980. Id. The supreme court upheld the jury’s decision, concluding that “neither the decedent nor [the personal representative] had reason to suspect any misrepresentation or fraud before obtaining actual knowledge . . . .” Id. at 431. See also Barry v. Barry, 78 F.3d 375, 380-81 (8th Cir. 1996) (vacating summary judgment because a fact issue existed whether the appellant exercised due diligence in investigating the possibility of fraud).

Here, the district court concluded that Sylvia Stempf did not take reasonable steps to discover the fraud. The district court focused on the following facts: Sylvia signed a warranty deed, her signature was acknowledged by a notary, she does not allege her signature was forged, the deed was recorded, and Andrzejeski’s name was on the property tax statement. But Sylvia argues that she believed she was signing a will and that her husband took care of all of their financial affairs. The fact that she signed the document is not necessarily dispositive, because where there is fraud or misrepresentation, a person signing a contract can be excused from the contract on the basis that she did not know its contents. See Huseman v. Life Ins. Co. of N. Am., 402 N.W.2d 618, 620 (Minn. App. 1987).

Andrzejeski testified that Sylvia Stempf was aware of the nature of the transaction, but she denies knowing she released her interest in the property. Also, Sylvia’s version of the events is plausible because she promptly met with an attorney and sent Andrzejeski a letter after she claims she discovered Andrzejeski’s name on the property tax statement. Thus, there are genuine issues of material fact as to whether Sylvia knew or should have known of the facts constituting the fraud she is alleging. We conclude the district court erred in granting summary judgment.

II.

The second issue is whether the district court improperly denied Sylvia Stempf’s motion to amend her complaint to add a claim for constructive trust. She moved to amend after the district court granted summary judgment against her. The district court denied the motion, but did not provide any analysis.

Where a motion to amend is brought after judgment is entered on a claim, and the proposed amendment challenges the judgment, amendments are typically allowed only if the party succeeds on a motion for relief from the judgment or a motion for a new trial. See Meyer v. Best W. Seville Plaza Hotel, 562 N.W.2d 690, 691-92, 694 (Minn. App. 1997) (noting that the proper procedure is to consider a motion to amend made after a case is dismissed under Minn. R. Civ. P. 12.02 as a motion for relief from judgment under Minn. R. Civ. P. 60.02), review denied (Minn. June 26, 1997); 6 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 1489 (1990) (noting that under the Federal Rules of Civil Procedure, most courts will not allow the filing of a post judgment amendment until the judgment is set aside or vacated).

Because of the district court’s discretion to deny amendments after judgment, the absence of any explanation by the district court for its ruling on the motion, and the changed circumstances caused by our decision on the summary judgment, we do not reach whether the district court abused its discretion in denying appellant’s motion to amend. However, we note that on remand Sylvia Stempf may renew her motion and the district court can consider it on the merits.

Reversed and remanded.