Mercy Finance Group, LLC v. George A. Hormel II Trust, No. A08-2076 (Minn. App. 11/24/2009)
| Decision Date | 24 November 2009 |
| Docket Number | No. A08-2076.,No. A09-0276.,A08-2076.,A09-0276. |
| Parties | Mercy Finance Group, LLC, Appellant, v. George A. Hormel II Trust, et al., Respondents. |
| Court | Minnesota Court of Appeals |
Appeal from the District Court, Crow Wing County, File No. 18-CV-08-4486.
Richard G. Jensen, Fabyanske, Westra, Hart & Thomson, P.A., Minneapolis, MN (for appellant).
Tamara O'Neill Moreland, Larkin, Hoffman, Daly & Lindgren, Ltd., Bloomington, MN (for respondents).
Considered and decided by Larkin, Presiding Judge; Halbrooks, Judge; and Johnson, Judge.
UNPUBLISHED OPINION
Appellant challenges the district court's order denying its request for a temporary injunction. Appellant also assigns error to the district court's refusal to reconsider its order, stay enforcement of the order, and set a supersedeas bond. Because the district court did not abuse its discretion by denying appellant's request for a temporary injunction, we affirm.
This case arises from a dispute concerning a vacant-land purchase agreement. In October 2006, appellant Mercy Finance Group, LLC's predecessor-in-interest, Antony Elfelt, entered into a vacant-land purchase agreement with respondents George A. Hormel II Trust and Jamie R. Hormel (jointly, Hormel). Elfelt agreed to pay $700,000 for a 319-acre parcel of property in Garrison, which is owned by Hormel. The purchase agreement called for closing on or before January 31, 2007, and noted that Elfelt had not received a vacant-land disclosure statement or a seller's disclosure-alternatives form. The purchase agreement also stated, "Buyer acknowledges that no oral representations have been made regarding the property."
After signing the purchase agreement, Elfelt requested that Hormel complete a vacant-land disclosure statement. Hormel completed the disclosure with the assistance of George Post, Jr., who was the property's caretaker. The disclosure notes Hormel's reliance on Post, stating,
The disclosure did not indicate whether there were any encroachments on the property; the relevant line on the disclosure was left blank. The disclosure indicated that there were not any buried storage tanks, debris, or waste on the property. Finally, the disclosure indicated that there was an abandoned landfill or waste disposal site on the north side of the property. The disclosure also contained the following instructions and advisories:
INSTRUCTIONS TO BUYER: Buyers are encouraged to thoroughly inspect the property personally or have it inspected by a third party, and to inquire about any specific areas of concern. NOTE: If seller answers "NO" to any of the questions asked below, it does not necessarily mean that it does not exist on the property. "NO" may mean that Seller is unaware that it exists on the property.
On March 28, 2007, Elfelt assigned his rights under the purchase agreement to Mercy. A corresponding amendment to the agreement postponed closing to August 24, 2007. On August 28, the purchase agreement was amended a second time. The second amendment indicated that Hormel had engaged STS Consultants to conduct an environmental study of a portion of the property. The amendment provides that "[w]ithin 20 days following [Mercy]'s receipt of the [s]tudy . . . [Mercy] shall determine whether the environmental condition of the [p]roperty is acceptable to [Mercy]." The amendment postponed closing to on or before January 31, 2008, provided that Mercy had received the study at least 20 days in advance of closing. The purchase agreement was amended a third time on January 31 to postpone closing to on or before February 6.
STS sent the environmental assessment to Hormel on October 31, 2007. In an e-mail dated December 10, 2007, Mercy acknowledged receipt of a copy of the assessment. The environmental assessment indicates that the former Garrison city dump encroaches on approximately one acre of the property. The assessment notes that waste material consisting of glass, metal, plastic, and automobile parts are on the property and that the waste is up to six feet deep in some areas. Mercy advised Hormel that it expected Hormel to remove the waste in the encroaching landfill based on a possession clause in the purchase agreement, which required Hormel to "remove ALL DEBRIS AND ALL PERSONAL PROPERTY NOT INCLUDED HEREIN from the property by possession date." Mercy obtained a bid to remove the waste described in the assessment from Liesch Associates, Inc. Liesch provided Mercy with a remediation plan that estimated the overall cost of removal to be $400,000.
On or about July 8, 2008, Hormel served a notice of cancellation of the purchase agreement on Mercy alleging that Mercy had defaulted by failing and refusing to close under the terms of the purchase agreement and the amendments thereto. The notice of cancellation called for the agreement to terminate 30 days after Mercy had been served with the notice. Mercy obtained a temporary restraining order (TRO), which became effective on August 6, and restrained and enjoined Hormel from
proceeding to effectuate the termination of the [p]urchase [a]greement . . . including without limitation recording the notice of termination, recording an affidavit showing noncompliance with the terms of the notice, taking any action to convey or encumber the real property identified in the [p]urchase [a]greement or otherwise interfering with [Mercy's] lawful rights and interests in the subject property and the [p]urchase [a]greement.
The TRO required the parties to return for a temporary-injunction hearing on August 19.
On November 14, the district court issued an order denying Mercy's motion for a temporary injunction. Mercy claims that its attorney did not receive the November 14 order until November 26, which was the Wednesday before Thanksgiving. On November 26, Mercy's counsel wrote a letter to the district court requesting that it "stay enforcement of the order and set a supersedeas bond pending appeal pursuant to Minn. R. Civ. Pro. 62.02 to 62.03." Mercy filed an appeal of the district court's order on November 28. On December 3, appellant sent another letter to the district court, again requesting that the district court stay enforcement of the order and either allow Mercy to file a motion for reconsideration of the order or set a supersedeas bond pending appeal. Mercy also asked the district court to "enlarge the time to take all of those actions." Hormel replied that the purchase agreement was cancelled and as a result, the request for a stay was moot. The district court directed appellant to file a formal motion.
On January 26, 2009, the district court heard Mercy's motion to reconsider the November 14 order or, in the alternative, to stay enforcement of the order and order a supersedeas bond. On February 5, the district court issued an order denying the motion in its entirety. Mercy filed an appeal of this order on February 11. A special term panel of this court consolidated Mercy's two appeals.
Mercy raises several claims on appeal. Mercy claims that the district court erroneously concluded that the parties' purchase agreement has been statutorily terminated. Mercy also claims that the district court abused its discretion by denying its request for a temporary injunction. Finally, Mercy claims that the district court abused its discretion by refusing to set the amount of a supersedeas bond. We address each claim in turn.
We first consider whether the parties' purchase agreement has been statutorily terminated. Minnesota law provides for statutory termination of real-estate-conveyance contracts as follows:
If a default occurs in the conditions of a contract for the conveyance of real estate . . . that gives the [vendor] a right to terminate it, the [vendor] may terminate the contract by serving upon the [vendee] . . . a notice specifying the conditions in which default has been made. The notice must state that the contract will terminate 60 days . . . after the service of the notice, unless prior to the termination date the [vendee]:
(1) complies with the conditions in default;
(2) makes all payments due and owing to the [vendor] under the contract through the date that payment is made;
(3) pays the costs of service of the notice . . .;
(4) . . . pays two percent of any amount in default at the time of service . . .; and
(5) . . . pays an amount to apply on attorney[] fees actually expended or incurred. . . .
Minn. Stat. § 559.21, subd. 2a (2008). If the conditions set forth in the notice are not met, the contract is cancelled. Id., subd. 4(d) (2008).
The predecessor to Minn. Stat. § 559.21, subd. 2a, covered "any contract for the conveyance of real estate or any interest therein executed on or after May 1, 1980." Minn. Stat. § 559.21, subd. 2 (1982), repealed by 1985 Minn. Laws, 1st Spec. Sess. ch. 18, § 16, at 2780. That language had been interpreted as being "broad enough and plain enough to include purchase agreements." Romain v. Pebble Creek Partners, 310 N.W.2d 118, 121 (Minn. 1981). Purchase agreements may be cancelled on 30 days notice, unless by their terms a longer termination period applies. Minn. Stat. § 559.21, subd. 4(a).
Under Minn. Stat. § 559.211, if a temporary restraining order or injunction is granted, "the contract shall not terminate until the expiration of 15 days after the entry of the order or decision dissolving or modifying the temporary restraining order or injunction." Minn. Stat. § 559.211, subd. 1 (2008). Mercy argues that because the TRO did not contain an expiration date and because the order denying Mercy's request for a temporary injunction did not contain...
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