Moe v. Moe, No. A04-953 (MN 2/15/2005), A04-953.

CourtSupreme Court of Minnesota (US)
Writing for the CourtWright
PartiesKennard E. Moe, Respondent, v. Maxine L. Moe, Appellant.
Docket NumberNo. A04-953.,A04-953.
Decision Date15 February 2005

Page 1

Unpublished Opinion

Kennard E. Moe, Respondent,
Maxine L. Moe, Appellant.
No. A04-953.
Court of Appeals of Minnesota.
Filed February 15, 2005.

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).

Appeal from the District Court, Beltrami County, File No. C1-02-001647.

Stephen R. Young, Drahos Young & Kieson, P.A., (for appellant).

Duane Kragness, Kragness Law Office, (for respondent).

Considered and decided by Kalitowski, Presiding Judge; Lansing, Judge; and Wright, Judge.



Respondent former-husband sued appellant former-wife, alleging fraud and seeking as damages an interest in a parcel of land owned by appellant. The district court concluded that appellant had committed fraud and ordered the parcel sold and the proceeds divided between the parties. Appellant now argues that (1) the record does not support several of the district court's findings; and (2) the district court misapplied the law of damages, compensating respondent in excess of his out-of-pocket costs. We affirm.


Appellant and respondent were married in 1981. In September 1995, after agreeing to dissolve their marriage, the parties executed and filed a marital termination agreement that divided their marital assets. Respondent retained counsel; appellant did not. The agreement awarded appellant legal title to the "forty-acre parcel" and awarded respondent the "Lakewood parcel" and a mobile home. Respondent immediately conveyed his interest in the forty-acre parcel to appellant.

A short time later, the parties reconciled and resumed living together on the Lakewood parcel, where they had resided during the marriage. In late October 1995 at a meeting with two attorneys shortly after the death of appellant's adult son, respondent heard one attorney advise appellant that the divorce could be undone. In early November, appellant received a copy of the final divorce decree mailed to her at her father's home. Respondent's attorney drafted a letter to respondent dated November 2, 1995, attached the final divorce decree, and mailed it to respondent at the Lakewood property. Respondent testified that he never saw the letter. Shortly after the Christmas following the death, respondent asked appellant about the dissolution papers. Appellant told respondent that "she had burned them." She then stated that "everything had been taken care of." Although judgment had been entered, respondent believed that the dissolution action had been terminated and that he and appellant remained married.

The parties' relationship continued as if they were married. In 1996, the parties moved onto the forty-acre parcel and began improving the property. Because neither the divorce decree nor the accompanying deed was recorded until 2001, property tax statements continued to show appellant and respondent as co-owners of the forty-acre parcel. In July 1997, the parties sold the Lakewood parcel, executing the deed as husband and wife. Respondent testified that he used the $19,000 in proceeds from the sale of the Lakewood parcel to improve the forty-acre parcel, contributing at least $14,258. At the time of trial, the forty-acre parcel with improvements was valued at $58,260.

The parties filed joint income tax returns representing that they were married for the 1997, 1998, and 1999 tax years. And appellant never told her neighbors or respondent's co-worker that she and respondent had divorced. The parties lived together until mid-2000 when respondent decided to initiate dissolution proceedings. Appellant then informed him that their marriage had already been dissolved.

Respondent sued appellant, alleging fraud and unjust enrichment. Respondent sought a decree awarding him the forty-acre parcel. Respondent alleged that appellant misrepresented that their dissolution had been cancelled, causing him to sell his property (the Lakewood parcel) and use the proceeds to improve appellant's property (the forty-acre parcel). As a result of the fraud, respondent alleged, he was left with no land. The matter proceeded to trial, after which the district court concluded that appellant fraudulently misrepresented that the dissolution had been terminated. The district court ordered the sale of the forty-acre parcel and division of the proceeds equally between the parties. Appellant moved for amended findings, or in the alternative, a new trial. The district court denied the motion. This appeal followed.


Appellant challenges several of the district court's factual findings. On review, we view the record in the light most favorable to the findings to determine whether they are clearly erroneous. Minn. R. Civ. P. 52.01; Johnson Bldg. Co. v. River Bluff Dev. Co., 374 N.W.2d 187, 195 (Minn. App. 1985), review denied (Minn. Nov. 18, 1985). The findings will be sustained absent a firm conviction that a mistake has been made. Vangsness v. Vangsness, 607 N.W.2d 468, 472 (Minn. App. 2000). As such, the district court's findings will not be disturbed as long as the record reasonably supports them. Hubbard v. United Press Int'l, 330 N.W.2d 428, 441 (Minn. 1983). Furthermore, we neither weigh or reconcile conflicting evidence, nor do we decide issues of witness credibility. Porch v. Gen. Motors Acceptance Corp., 642 N.W.2d 473, 477 (Minn. App. 2002), review denied (Minn. June 26, 2002); see also Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988) (stating that appellate courts shall defer to district court credibility determinations). These matters are exclusively the province of the fact-finder. Porch, 642 N.W.2d at 477. Moreover, an error that does not affect the substantial rights of the party cannot serve as the basis for reversal. Minn. R. Civ. P. 61.

To establish fraud, a plaintiff must demonstrate

that [the] defendant (1) made a representation (2) that was false (3) having to do with a past or present fact (4) that is material (5) and susceptible of knowledge (6) that the representor knows to be false or is asserted without knowing whether the fact is true or false (7) with the intent to induce the other person to act (8) and the person in fact is induced to act (9) in reliance on the representation [and] (10) that the plaintiff suffered damages (11) attributable to the misrepresentation.

Heidbreder v. Carton, 645 N.W.2d 355, 367 (Minn. 2002) (emphasis added). Appellant challenges fivespecific factual findings supporting the district court's conclusion that appellant committed fraud.1


Appellant first challenges the district court's finding that "[she] informed [respondent] that she had terminated the dissolution action." A fraudulent representation is an affirmative statement, not merely an inference from surrounding circumstances. Id.; see also Northwestern State Bank of Luverne v. Gangestad, 289 N.W.2d 449, 453 (Minn. 1979) (finding no representation when bank never stated it would continue to finance defendant).

Appellant denied making any comment about the status of the dissolution documents. But respondent testified that when he asked appellant about the dissolution papers, appellant responded, "[I] burned them and . . . everything ha[s] been taken care of." This response clearly is an affirmative statement that the dissolution papers were destroyed. And when considered in light of respondent's understanding that the divorce could be "undone," appellant's response that "everything ha[s] been taken care of" plainly indicated to respondent that appellant had terminated the dissolution action. Indeed, there is conflicting evidence as to appellant's statement, and the lawyer's statement is not a beacon of clarity. But when viewing the evidence in the light most favorable to the findings and affording deference to the district court's credibility determinations when resolving such conflicting evidence, we conclude that the district court did not clearly err in finding that "[appellant] informed [respondent] that she had terminated the dissolution." See Sefkow, 427 N.W.2d at 210.2


Appellant next challenges the district court's finding that "[respondent] reasonably believed that the dissolution action had been terminated and that the parties were still married." In doing so, appellant contends that the evidence is insufficient to establish reasonable reliance. Appellant does not contest that respondent relied on her statement. Rather, she argues that respondent should have consulted his divorce lawyer to obtain his marital status and, because he did not, his reliance on appellant's representation was not reasonable.

To establish fraud, the plaintiff must demonstrate reasonable reliance on a representation, which resulted in damages. Simplex Supplies, Inc. v. Abhe & Svoboda, 586 N.W.2d 797, 803 (Minn. App. 1998), review denied (Minn. Feb. 24, 1999). Whether such reliance is reasonable ordinarily is a question of fact, Nicollet Restoration, Inc. v. City of St. Paul, 533 N.W.2d 845, 848 (Minn. 1995), judged under a subjective standard of "a person of the capacity and experience of the [plaintiff]," Berg v. Xerxes-Southdale Office Bldg. Co., 290 N.W.2d 612, 616 (Minn. 1980). The nature of the relationship between the parties is relevant to assessing whether reliance is reasonable. For instance, it is reasonable to rely on statements made by a party that the plaintiff trusts, based on a relationship or pattern of fair dealing. See Spiess v. Brandt, 230 Minn. 246, 254, 41 N.W.2d 561, 566-67 (1950) (reasoning the added factor of special trust in the perception of a genuine friendship bolstered justifiable reliance finding); Lampert Lumber Co. v. Ram Constr., 413 N.W.2d 878, 882 (Minn. App. 1987) (finding justifiable reliance when supplier trusted statement by long-standing customer because he did not want to threaten the relationship); see also Burns v. Valene, 298 Minn. 257, 263, 214 N.W.2d 686, 690 (1974) (noting that receiving assurances from one...

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