Fraser v. Fraser

• Citation: 642 N.W.2d 34
• Decision Date: 19 March 2002
• Docket Number: No. C8-01-813., No. C6-01-812
• Parties: Gerald R. FRASER, Respondent, v. Jayne C. FRASER, Appellant, James L. Fraser, Respondent, and In re the Marriage of James L. Fraser, petitioner, Respondent, v. Jayne C. Fraser, Appellant, v. Gerald R. Fraser, individually and as Trustee of the Gerald R. Fraser Revocable Intervivos Trust, Respondent.
• Court: Court of Appeals of Minnesota

642 N.W.2d 34

Gerald R. FRASER, Respondent, v. Jayne C. FRASER, Appellant, James L. Fraser, Respondent, and In re the Marriage of James L. Fraser, petitioner, Respondent, v. Jayne C. Fraser, Appellant, v. Gerald R. Fraser, individually and as Trustee of the Gerald R. Fraser Revocable Intervivos Trust, Respondent.

Nos. C6-01-812, C8-01-813.

Court of Appeals of Minnesota.

March 19, 2002.

Kenneth Robert Hertz, Columbia Heights, and Steve Nichols, Minneapolis, (for appellant).

Paul W. Chamberlain, Chamberlain Law Firm, Wayzata, and Richard S. Eskola, Fridley, (for respondent).

Considered and decided by SCHUMACHER, Presiding Judge, HANSON, Judge, and PORITSKY, Judge.¹

OPINION

HANSON, Judge.

Appellant-wife and respondent-husband bought a house on contract-for-deed from husband's father.² After husband brought an action to dissolve the marriage, father gave notice of the cancellation of the contract for deed. Initially, the district court joined father as a third-party respondent in the dissolution action and enjoined him from canceling the contract for deed. On reconsideration, the district court vacated the injunction and held that it lacked personal jurisdiction over father and subject matter jurisdiction over his property rights; that its order enjoining cancellation was void ab initio; and that the period to cure the cancellation of the contract for deed had expired.

Father then brought an eviction action against wife and her tenants and the same district court judge ruled in father's favor, holding that wife's service defenses were precluded because they had been previously rejected in the dissolution action and that wife's equitable defenses were outside the scope of an eviction action. Wife appealed from the district court's rulings in both cases and the two appeals were consolidated.

Because the dissolution action is not "an action under or in relation to" a contract for deed, for purposes of enjoining cancellation under Minn.Stat. § 559.211 (2000), we affirm the district court's determination that it lacked jurisdiction in the dissolution action to enjoin father. But because the district court lacked jurisdiction in the dissolution action to decide questions concerning the cancellation of the contract for deed, wife was not foreclosed from litigating her service defenses in the eviction proceeding. Further, because wife's equitable defenses were not precluded by the expiration of the period to cure the cancellation of the contract for deed, the district court must determine whether the eviction action provides the only opportunity to litigate those defenses, in which case wife may assert those defenses in the eviction action. Thus, we remand the eviction action for further proceedings.

FACTS

Husband and wife acquired a home by buying it from the sellers, quitclaiming it to husband's father, and entering a contract for deed with father. During the marriage, father periodically accepted late contract-for-deed payments from husband and wife.

Husband petitioned to dissolve the marriage. Under the temporary order, the district court awarded wife the use of the home and ordered husband to make the contract-for-deed payments. Husband tendered father a check for the July 2000 payment but father refused to accept it because there were insufficient funds in husband's account. Father later refused to accept the August and September payments from husband.

Father then attempted to serve husband and wife with a Notice of Cancellation of the contract for deed. Service on wife was made on wife's adult daughter, who allegedly lived in a basement apartment in the home. Wife moved in the dissolution action to have husband held in contempt for not making the contract-for-deed payments, to join father as a third-party respondent and to suspend father's ability to cancel the contract for deed. The district court initially joined father as a respondent to the dissolution action and enjoined him from canceling the contract for deed. The district court also found husband in contempt, but suspended his sentence to the extent that he made timely payments to wife's attorney of the amounts due under the contract for deed.

On father's request for reconsideration, the district court reversed itself and vacated the injunction, ruling that (a) the dissolution action was not a cause of action "under or in relation to" the contract for deed, which is a prerequisite under Minn. Stat. § 559.211 (2000), for an action to suspend cancellation of a contract for deed; (b) the court lacked jurisdiction in the dissolution action to address father's property rights because the dissolution action was not an in rem proceeding and because service on father was defective; and (c) third-party practice was inappropriate in a dissolution action. Therefore, the district court concluded that its earlier injunction order was void ab initio and that the period to cure the contract-for-deed defaults had expired.

Father filed an eviction action against wife and her tenants. Wife raised the defenses that the contract for deed was actually an equitable mortgage and could only be foreclosed by action; that service of the notice of cancellation was defective; and that father lacked standing to sue. The district court entered an eviction judgment, ruling that father was entitled to immediate possession of the house, but stayed the writ of recovery. Wife appealed both the eviction judgment and the dissolution order vacating the injunction. This court consolidated the appeals.

ISSUES

I. Is a dissolution action "an action arising under or in relation to a contract for the conveyance of real estate or any interest therein" for purposes of seeking an injunction under Minn.Stat. § 559.211 (2000)?

II. Were wife's defenses in the eviction action precluded by determinations made in the dissolution action?

ANALYSIS

I

The district court vacated its injunction and refused to suspend father's cancellation of the contract because (1) "third party practice is not allowed in a marriage dissolution" and (2) a dissolution action does not qualify under Minn.Stat. § 559.211 (2000). We disagree with the district court's first reason but agree with the second.

Third-Party Practice

The district court focused its discussion of third-party practice in a dissolution action on Oldewurtel v. Redding, 421 N.W.2d 722 (Minn.1988). Oldewurtel addressed the question of whether third parties who had been granted security interests in marital and nonmarital property by a husband had priority over the interests granted to wife in the dissolution action. Id. This court had approved the joinder of the secured parties to the dissolution action, stating that it "reduce[d] the multiplicity of lawsuits which would result if [the wife] were forced to institute independent legal proceedings." Redding v. Oldewartel,³ 411 N.W.2d 231, 234 (Minn.App. 1987). The supreme court approved the joinder, but on different grounds. Oldewurtel, 421 N.W.2d at 726. It held that the secured parties had "waived" any objections to improper joinder by not making timely objections, and that the district court's statutory obligation to assure an equitable division of marital property was "sufficient to allow the dissolution court jurisdiction to join [the secured parties.]" Id. (Citation omitted.) 421 N.W.2d at 726. Without defining the limits of Oldewurtel, we can at least conclude, contrary to the district court's ruling, that third-party practice is not categorically prohibited in dissolution proceedings.⁴

Minn.Stat. § 559.21

This does not mean that third-party practice was appropriate here. Wife sought to join father to the dissolution action in order to enjoin father's attempt to cancel the contract for deed. But the authority to enjoin the cancellation of a contract for deed is limited, by statute, to "an action arising under or in relation to a contract for the conveyance of real estate or any interest therein." Minn.Stat. § 559.211, subd. 1 (emphasis added). In rejecting wife's arguments that a dissolution action could qualify under section 559.211, the district court said:

"Marriage dissolution is a statutory action and the scope of the Court's authority in such an action is limited to that as is granted by statute."

The court noted the narrow scope of dissolution actions, as discussed in Melamed v. Melamed, 286 N.W.2d 716, 718 (Minn. 1979), where the supreme court held that the district court did not have the power to award a property interest to the parties' children because "no statute confers such authority on the court."

Wife argues that the district court's analysis is defective because, after Melamed, the legislature amended Minn.Stat. § 518.58 (1978) to include provisions authorizing the district court, in a dissolution action, to order the sale of marital assets. See 1981 Minn. Laws ch. 349, § 7 (now codified, with amendments, at Minn.Stat. § 518.58, subd. 3 (2000)). While the amended statute allows a district court to direct the sale of a marital asset (here, husband-and-wife's vendee's interest in the contract for deed), the statute does not authorize the district court to adjudicate the interests of third parties.

Alternatively stated: While a dissolution action that utilizes Minn.Stat. § 518.58, subd. 3, could be said to relate to the married parties' interests in a contract for deed, we cannot say that it relates to the contract for deed. And, because it is obvious that the dissolution did not arise "under" the contract for deed, we conclude that a dissolution proceeding is not an "action under or relating to" the contract for deed under Minn.Stat. § 559.211. See Smith v. Spitzenberger, 363 N.W.2d 470, 472 (Minn.App.1985)

(stating that "[u]nder Section 559.211 and principles of equity, a trial court may not grant injunctive relief unless an underlying cause of action exists. `Injunctive relief is a remedy and not, in itself, a cause of action and a cause of action must exist...