Matrix Properties Corp. v. TAG INVESTMENTS, 20010228.

• Decision Date: 17 May 2002
• Docket Number: No. 20010228.,20010228.
• Citation: 644 N.W.2d 601,2002 ND 86
• Parties: MATRIX PROPERTIES CORPORATION, a Minnesota corporation, formerly known as E.W. Wylie Corporation, Plaintiff and Appellee, v. TAG INVESTMENTS, a North Dakota partnership, and James A. Grettum, an individual resident of North Dakota, Defendants and Appellants.
• Court: North Dakota Supreme Court

644 N.W.2d 601

2002 ND 86

MATRIX PROPERTIES CORPORATION, a Minnesota corporation, formerly known as E.W. Wylie Corporation, Plaintiff and Appellee, v. TAG INVESTMENTS, a North Dakota partnership, and James A. Grettum, an individual resident of North Dakota, Defendants and Appellants.

No. 20010228.

Supreme Court of North Dakota.

May 17, 2002.

Rehearing Denied June 5, 2002.

Sidney J. Spaeth, Vogel, Weir, Hunke & McCormick, Ltd., Fargo, for plaintiff and appellee.

Jonathan T. Garaas, Garaas Law Firm, Fargo, for defendants and appellants.

MARING, Justice.

[¶ 1] TAG Investments and James Grettum ("TAG") appealed from a post-judgment order awarding Matrix Properties Corporation, formerly known as E.W. Wylie Corporation, ("Matrix") $4,127.60 in costs, $48,642 in attorney fees, and $135,867.19 in damages for delay in conveying real property. We affirm the award of costs and attorney fees, and we modify the time for awarding damages for delay in conveying the land and remand for recalculation of those damages.

I

[¶ 2] This is the fourth reported appeal emanating from an action by Matrix against TAG for specific performance of an October 14, 1996 agreement granting Matrix an option to purchase real property from TAG. In this appeal, TAG argues there is no procedural or statutory basis, including jurisdiction, for this money judgment, and the judgment is void or voidable. TAG also argues judicial estoppel bars Matrix from asserting inconsistent prejudgment and post-judgment positions, Matrix was only entitled to costs allowed by law, Matrix was not entitled to damages for loss of use of the property, and Matrix was not entitled to attorney fees. Our analysis of the issues raised by TAG requires a brief outline of the prior proceedings.

[¶ 3] In Matrix Properties Corp. v. TAG Investments, 2000 ND 88, 609 N.W.2d 737 (Matrix I,) we affirmed a November 2, 1999 summary judgment granting Matrix specific performance of the option agreement. We held Matrix timely and unconditionally complied with the option agreement in early July 1999. Id. at ¶ 1. We rejected TAG's claims that Matrix did not precisely comply with the option's notice requirement, or allow the abstract to be procured in the manner called for in the option. Id. at ¶ ¶ 9-13. We also rejected TAG's claim that Matrix failed to comply with the option by not tendering the purchase money before the option deadline expired. Id. at ¶ 18. We concluded the term "purchase" did not require a tender of money, and the tender of the purchase price was an incident of performance, not a condition precedent to the exercise of the option. Id. at ¶ ¶ 14-18. We also concluded that, although the option to purchase had several contingencies regarding the sufficiency of TAG's title, an objective standard governed those contingencies and Matrix had a good faith duty to raise only reasonable objections to TAG's title. Id. at ¶ ¶ 23-24. We concluded that Matrix could not rescind the option at its whim, and the option was not conditional or illusory. Id. at ¶ 24.

[¶ 4] After our decision in Matrix I, Matrix sought an order declaring it was not obligated to make any additional option payments to TAG in 2000 to retain rights under the option. In a June 26, 2000 order, the trial court granted Matrix's motion, concluding "pursuant to the terms of the 1996 Option Agreement, [Matrix] is not obligated to make any Option Payments to [TAG] to retain rights under the Option Agreement and that [Matrix's] valid and timely exercise of the option in July of 1999 created a binding executory contract for the purchase and sale of real property." TAG simultaneously appealed to this Court and applied for a supervisory writ, claiming the trial court exceeded its jurisdiction, the order amended a final judgment that had been affirmed on appeal, the trial court did not have subject matter or personal jurisdiction to amend the judgment, the order was issued without due process and was in the nature of a declaratory judgment without service of a summons and complaint, and the hearing was conducted without proper notice.

[¶ 5] Meanwhile, on July 5, 2000, Matrix sought an order compelling TAG to provide Matrix with deeds for the property, or declaring the judicial transfer of the property to Matrix. On September 1, 2000, Matrix applied to this Court for a supervisory writ, asking us to clarify that the trial court retained jurisdiction to enforce the judgment despite TAG's pending appeal of the June 26, 2000 order. On September 25, we denied Matrix's application, indicating a trial court has continuing jurisdiction to enforce a judgment when no stay pending appeal has been granted.

[¶ 6] On October 24, 2000, Matrix again moved for an order compelling TAG to provide Matrix with deeds for the property, or declaring the judicial transfer of the property to Matrix. On November 8, 2000, the trial court ordered the judicial transfer of the property to Matrix on November 15. According to counsel for Matrix, counsel for TAG notified Matrix that TAG would not appear at the November 15 closing, and that TAG questioned the trial court's jurisdiction and raised a due process issue. TAG did not appear at the November 15 closing. On November 16, TAG asked this Court to vacate the November 8 order. We denied TAG's request on November 22, and on November 24, Matrix moved for an order judicially transferring the property. On December 6, 2000, TAG sought to remove the proceeding to the federal district court for North Dakota, and the federal district court remanded the case to state court on December 21.

[¶ 7] In the interim, on December 12, 2000, in Matrix Properties Corp. v. TAG Investments, 2000 ND 213, 622 N.W.2d 432 (Matrix II,) we summarily affirmed the trial court's June 26, 2000 post-judgment order under N.D.R.App. 35.1(a)(1), and we awarded Matrix double costs under N.D.R.App. 38 and 39. On December 21, the trial court ordered TAG to appear on January 5, 2001, to convey the property. On January 5, the trial court ordered conveyance of the land to Matrix under N.D.R.Civ. 70. TAG moved to vacate the January 5 order as improperly modifying the November 2, 1999 summary judgment. On February 16, the trial court denied TAG's motion to vacate the January 5 order, and Tag appealed from the November 8, 2000 order, the January 5, 2001 order, and the February 16, 2001 order. On July 13, 2001, we summarily affirmed those orders under N.D.R.App. 35.1(a)(1) and (7), and we awarded Matrix double costs under N.D.R.App. 38 and 39. Matrix Properties Corp. v. TAG Investments, 2001 ND 128, 636 N.W.2d 674 (Matrix III.)

[¶ 8] Meanwhile, in a March 26, 2001 motion, Matrix sought costs, attorney fees and damages incurred because of TAG's refusal to convey the property. The trial court continued Matrix's motion until after our decision in Matrix III. Matrix thereafter filed an amended motion, seeking litigation costs and attorney fees incurred after this Court's decision in Matrix I, and damages caused by TAG's refusal to convey the property from August 15, 1999, the date of the earliest possible closing under the option agreement, to January 5, 2001, the date the trial court ordered the transfer of the property to Matrix. The trial court awarded Matrix $4,127.60 in costs, $48,642 in attorney fees, and $135,867.19 in damages for loss of use of the property. TAG appealed.

II

[¶ 9] TAG argues there is no procedural or statutory basis, including jurisdiction, for this money judgment, and it is void or voidable. TAG argues Matrix's motion

was an unprecedented post-judgment motion for damages in a specific performance action in which a final judgment had been entered almost two years earlier. Neither Matrix, nor the lower court, identified the legal basis for the unprecedented award of "costs," "damages," and "attorney fees" two years after a final judgment had been entered. The post-judgment motion procedure sanctioned by the lower court utterly denied TAG and Grettum their right to proper pleadings notifying them of the issues of the lawsuit, discovery, trial of issues of fact and a judicial decision based upon properly introduced evidence considered in light of the law. In other words, TAG and Grettum were denied due process of law.

[¶ 10] In an action for specific performance, a purchaser may recover damages from a seller for delay in conveying real property and the costs, if any, of recovering possession of the land. See N.D.C.C. § 32-03-21; Bumann v. Maurer, 203 N.W.2d 434, 438 (N.D.1972); Orfield v. Harney, 33 N.D. 568, 579-81, 157 N.W. 124, 127 (1916); Beddow v. Flage, 22 N.D. 53, 60, 132 N.W. 637, 640 (1911); Mitchell v. Knudtson Land Co., 19 N.D. 736, 744, 124 N.W. 946, 950 (1910). See generally, Annot., Special or Consequential Damages Recoverable, On Account of Delay in Delivering Possession, by Purchaser of Real Property Awarded Specific Performance, 11 A.L.R.4th 891 (1982); Annot., Specific Performance: Compensation or Damages Awarded Purchaser for Delay in Conveyance of Land, 7 A.L.R.2d 1204 (1949); 71 Am.Jur.2d Specific Performance § 236 (2001).

[¶ 11] In Cokins v. Frandsen, 136 N.W.2d 377, 380 (N.D.1965), however, we said a judgment on the merits is conclusive between the parties, not only as to every matter that was litigated but also as to every matter arising out of the same cause of action which might have been litigated. See also Wolf v. Anderson, 422 N.W.2d 400, 401-02 (N.D.1988)

(holding prior judgment that sellers were not entitled to specific performance in action for breach of contract for deed was res judicata and precluded subsequent action for damages where both actions were based on same factual situation); Perdue v. Knudson, 179 N.W.2d 416, 421-22 (N.D.1970) (same). In Cokins, at 377-78 (Syllabus ¶ ¶ 1 and 3), we said a judgment decreeing specific performance of a contract and determining the rights of the parties is final, and any subsequent order to modify the final judgment is void unless made...