Judy L. Loppe, f/k/a Judy L. Bethel, petitioner, Appellant, vs. Bradley J. Steiner, Respondent.
Annotate this CaseThis opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480 A. 08, subd. 3 (2004).
STATE OF MINNESOTA
IN COURT OF APPEALS
A05-2383
Judy L. Loppe, f/k/a Judy L. Bethel, petitioner,
Appellant,
vs.
Bradley J. Steiner,
Respondent.
Filed August 15, 2006
Affirmed
Minge, Judge
Hennepin County District Court
File No. DC 03-12588
John G. Westrick, Kirk M. Anderson, Westrick & McDowall-Nix, P.L.L.P., 450 Degree of Honor Building, 325 Cedar Street, St. Paul, MN 55101 (for appellant)
Stanford P. Hill, Bassford Remele, P.A., 33 South 6th Street, Suite 3800, Minneapolis, MN 55402 (for respondent)
Considered and decided by Minge, Presiding Judge; Worke, Judge; and Forsberg, Judge.*
U N P U B L I S H E D O P I N I O NMINGE, Judge
On appeal in this real-estate sale dispute, appellant argues that the district court erred by determining, with respect to her damages claim, that she abandoned her interests in the purchase agreement. Because of appellant's failure to tender payment, equivocation over the terms of the purchase, reversion to a landlord-tenant relationship, and delay in asserting any claim from the purchase agreement, we conclude that the district court's decision was not erroneous and affirm.
FACTSThis appeal arises from the district court's decision on remand from this court in Loppe v. Steiner, 699 N.W.2d 342 (Minn. App. 2005). The facts, as set forth in that opinion, concern the parties' claims over a certain Minneapolis rental property.
The litigation began with respondent filing an action to evict appellant from the property for nonpayment of rent in July 2003. Two weeks later, appellant filed a separate suit, claiming that respondent breached the purchase agreement for the property, and sought specific performance or damages.
The district court consolidated the actions. After a bench trial, the district court entered judgment dismissing appellant's claims with prejudice and ordering her to vacate the property. The district court subsequently amended its conclusions of law to state in part that:
[Appellant's] attempt to reduce the contract price to $52,500 and her subsequent failure to initiate a specific performance action within the six (6) months specified by the black letter of the purchase agreement constitute an abandonment of the purchase agreement by [appellant]. [Appellant] has also failed to establish the reasonableness of her failure to exercise her rights pursuant to the black letter of the purchase agreement and, as such, has failed to prove up the elements of her claim for relief.
The district court's attached memorandum also stated that respondent "concedes that [appellant] may be correct that her demand for a $52,500.00 actual purchase price did not constitute a rejection of the purchase agreement."
In the earlier appeal, this court considered in part whether appellant abandoned her interests in the purchase agreements, thus abandoning her claim for damages. Loppe, 699 N.W.2d at 350. Concluding that the district court erred by failing to specifically address appellant's claim for damages, this court noted the presence of several facts that were inconsistent with abandonment. Id.at 351. We further determined that "[b]ased on the record in this proceeding, we cannot conclude that as a matter of law there is clear and convincing evidence that appellant abandoned the purchase agreement for purposes of a damages claim." Id. Thus, we remanded to the district court for a determination of whether appellant abandoned her interests and, if she had not, a determination of the damages due. Id.
On remand, the district court directed the parties to submit memoranda on the issues and ultimately decided that with respect to the damages claim appellant had abandoned her interest in the purchase agreement. The district court based its finding of abandonment on appellant's "demand that the purchase price of the property at issue be reduced to $52,500 and her actions subsequent to the [scheduled] May 2001 closing date." This appeal follows.
D E C I S I O NI.
The basic issue is whether the record supports the district court's determination that with respect to the damages claim appellant abandoned her interests in the purchase agreement. Whether a purchase agreement has been abandoned is a mixed question of law and fact. See Langford Tool & Drill Co. v. Phenix Biocomposites, L.L.C., 668 N.W.2d 438, 442 (Minn. App. 2003). "When reviewing mixed questions of law and fact, we will correct erroneous applications of law, but accord the trial court discretion in its ultimate conclusions and review such conclusions under an abuse of discretion standard." Id.(quotation omitted).
As this court noted in our first decision in this case,
Abandonment is the "voluntary relinquishment of an interest by the owner with the intent of terminating his ownership." Melco Inv. Co. v. Gapp, 259 Minn. 82, 85, 105 N.W.2d 907, 909 (1960). "A finding of abandonment depends upon the intentions of the parties and is not predicated on any single factor . . . ." In re Application of Berman, 310 Minn. 446, 452, 247 N.W.2d 405, 408 (1976). A "party seeking to prove abandonment of a contract must present clear and convincing evidence of an intention by the other party to abandon its rights." Republic Nat'l Life Ins. Co. v. Marquette Bank & Trust Co. of Rochester, 295 N.W.2d 89, 93 (Minn. 1980). The intention to abandon a contract may be found "from the facts and circumstances surrounding the transactions and may be implied from the acts of the parties." Id. Abandonment "must be clearly expressed, and acts and conduct of the parties to be sufficient must be positive, unequivocal, and inconsistent with the existence of the contract." Desnick v. Mast, 311 Minn. 356, 365, 249 N.W.2d 878, 884 (1976).
Loppe v. Steiner,699 N.W.2d 342, 350 (Minn. App. 2005). We further discussed the Berman opinion, noting that the factors outlined there could be used to determine abandonment of a purchase agreement: "(1) failure to pay on the contract for long period of time; (2) failure to take or retain possession of the property; (3) failure to pay real estate taxes; and (4) awareness of the seller's intent to terminate the contract-for-deed interest, coupled with failure to assert any right to the property." Id.(citing In re Application of Berman, 310 Minn. 446, 452, 247 N.W.2d 405, 408 (1976)). We also noted that the possession factor may not be particularly applicable in the case of purchase agreements. Id.
Appellant relies heavily upon this court's emphasis of the facts contradictingabandonment in our first review of the case, when we stated
appellant took steps to proceed with the closing, checked title to the property, retained possession of the abstract of title, arranged for homeowner's insurance, extended the interest rate commitment from her lender, requested a new closing date, remained on the premises albeit as a tenant, and ultimately refused to pay rent to force resolution of the matter. During this entire time, the parties represented to Hennepin County that because of appellant's occupancy of the property with a claim of ownership, the property was entitled to homestead treatment for purposes of property taxation.
Id. at 351. But, as this court has previously stated, "the record presents a mixed picture" about whether appellant abandoned her interests in the purchase agreement. Id. at 351.
On remand, the district court determined that, together with her actions after the planned closing date, appellant's post-purchase agreement demand that the purchase price of the property be reduced to $52,500 constituted an abandonment of the purchase agreement as to appellant's right to pursue damages. The district court pointed particularly to the facts that appellant failed to pay respondent under the contract, including a failure to pay any earnest money, and that she waited until two years after the scheduled closing date to assert her rights under the contract. The district court also noted that appellant continued to pay rent as respondent's tenant after the scheduled closing date.
Appellant contends that because the purchase agreement did not limit the time in which a claim for damages can be brought, the six-year statute of limitations applies to her claim. See Minn. Stat. § 541.05, subd. 1(1) (2004). Appellant contends that she did not abandon her claim because she brought it well within the statute of limitations period. The statute of limitations is a legislative declaration limiting the time period in which a claim may be brought: "[t]he purpose of a statute of limitations is to prescribe a period within which a right may be enforced and after which a remedy is unavailable for reasons of private justice and public policy." Entzion v. Ill. Farmers Ins. Co., 675 N.W.2d 925, 928 (Minn. App. 2004). Thus, the key consideration in a statute-of-limitation's action is the lapse of time.
Abandonment operates independently of the statute of limitations, and a contract may be abandoned before the statute of limitations for a claim runs. Lapse of time may show an intent to abandon, but it is not the sole indicator of abandonment. See Berman, 310 Minn. at 452, 247 N.W.2d at 408 (listing lapse of time as one of many elements to consider when deciding whether abandonment has occurred). "[V]oluntary relinquishment" serves as an immediate divestiture "of an interest by the owner" when it coexists "with the intent of terminating his ownership." Melco Inv. Co. v. Gapp, 259 Minn. 82, 85, 105 N.W.2d 907, 909 (1960) (defining abandonment where four-month delay in payment insufficient to constitute abandonment); Boulevard Plaza Corp. v. Campbell, 254 Minn. 123, 134-35, 94 N.W.2d 273, 283 (1959) (noting abandonment of purchase agreement by buyer's failure to make any payments, including payment of taxes, for 18 months following closing date); Herron v. Whiteside, 782 S.W.2d 414, 416 (noting that abandonment is complete when voluntary relinquishment and intent unite) (citing 1 C.J.S. Abandonment § 4 (1985)). Although a claim may be lost to the statute of limitations only by lapse of time, a claim may be abandoned before the statute of limitations runs when an owner of a right or interest voluntarily relinquishes such right or interest and intends to abandon it.
Real estate purchase agreements are invariably short-term contracts to bind the parties until they complete the transaction with a closing. The limiting time for specific performance in this case and in the standard forms is designed to avoid title disputes. Although damage claims are not similarly limited in this document, a party who walks away from the purchase situation demonstrates a lack of interest in the transaction. As the controversy before us indicates, the fluctuating value in property and the parties' understanding of the temporary nature of the agreement make the principle of abandonment crucial. Stale claims expose participants in the real estate market to far-reaching risks.
We recognize that the circumstances in this case could lead to more than one conclusion. In the period shortly after the closing date, appellant took steps to protect her position as a purchaser and indicated her willingness to close. She alludes to her romantic relationship with appellant as an explanation of why she did not move more aggressively. However, she did ask for a better deal, paid rent, and allowed the situation to simply sit for almost two years.
The district court conducted a trial in this case, heard the witnesses, and was in the best position to determine the credibility of witnesses and the intentions of the parties. The district court found that appellant decided to abandon the purchase. Based on this finding, appellant does not have a claim under the purchase agreement for damages. We conclude that in this area of real estate purchase agreements, the district court did not misapply the law and that its ultimate conclusions are not an abuse of discretion.
Finally, we note that appellant argues that the district court erred in determining that appellant failed to produce sufficient evidence to determine the amount of damages. Because we affirm the district court's determination that appellant abandoned her interests in the purchase agreement as to damages, we do not reach this issue regarding the calculation of damages.
Affirmed.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
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