Mohrenweiser v. Blomer

• Decision Date: 06 January 1998
• Docket Number: No. CX-97-1231,CX-97-1231
• Court: Minnesota Court of Appeals
• Parties: Gary MOHRENWEISER & Greg Mohrenweiser, d/b/a G & G Partnership, Respondents, v. Mavis BLOMER, Respondent, Paul Blomer, Respondent, Gordon F. Stalker, et al., defendants and cross-claim plaintiffs, Appellants.

Page 704

573 N.W.2d 704

Gary MOHRENWEISER & Greg Mohrenweiser, d/b/a G & G Partnership, Respondents, v. Mavis BLOMER, Respondent, Paul Blomer, Respondent, Gordon F. Stalker, et al., defendants and cross-claim

plaintiffs, Appellants.

No. CX-97-1231.

Court of Appeals of Minnesota.

Jan. 6, 1998.

Review Denied Feb. 19, 1998.

Syllabus by the Court

An agreement to agree to a contract in the future is unenforceable.

Neil C. Franz, Neils, Franz & Chirhart, P.A., St. Cloud, for respondents Mohrenweiser.

Mavis (Blomer) Rule, Isle, pro se.

Paul E. Blomer, Onamia, pro se.

John E. Simonett, William J. Everett, Greene Espel, P.L.L.P., Minneapolis, for appellants.

Considered and decided by TOUSSAINT, C.J., and RANDALL and FOLEY, JJ.

OPINION

DANIEL F. FOLEY ^*, Judge.

Appellants contend the trial court erroneously allowed the jury to determine the enforceability of a contract that was unenforceable as a matter of law. We agree and reverse.

FACTS

This case arose out of two agreements to purchase the Blomer farm. Respondents Mavis and Paul Blomer owned a 160-acre farm in Mille Lacs County. In 1993, the Blomers approached their neighbors, appellants Gordon and Lynn Stalker, about purchasing Blomers' farm. The Stalkers expressed interest.

Mavis Blomer contacted her local realtor, who drafted a purchase agreement for the $30,000 transaction on June 7, 1993. The Stalkers and Mavis Blomer signed the agreement, but Paul Blomer withheld signature because he felt the purchase price was too low. By December 10, 1993, the purchase price had increased to $40,000. The realtor drafted a new purchase agreement, which the Stalkers signed. On January 10, 1994, Mavis Blomer told the Stalkers that their offer on the farm was acceptable and they could go ahead and order supplies for farming the land. She also indicated that Paul still needed more time to sign the purchase agreement. On February 23, 1994, the Blomers informed the realtor that the purchase agreement was fully signed. The realtor picked up the purchase agreement and sent a copy to the Stalkers, whereupon they surveyed the land and contacted an attorney to examine the title and the agreement.

While these negotiations were proceeding, the Blomers were simultaneously negotiating the sale of the farm with their neighbors, respondents Gary and Greg Mohrenweiser, doing business as G & G Partnership (G & G). G & G had mentioned buying the Blomer farm three or four times over the years. On February 6, 1994, when Mavis Blomer was at the Mohrenweiser farm, G & G made an offer to purchase the farm for $25,000. On February 13, 1994, G & G made a quick visit to the Blomers' farm and presented them with a letter of agreement, which contained G & G's proposal for the purchase of the farm. The Blomers and G & G signed the document. This document "outlined" the terms of the future purchase of the farm, providing that G & G would purchase the 160 acres for $150 per acre ($24,000) over the next 10 years, provide the Blomers with one Holstein calf every June 1 for 10 years, and provide 10 bales of hay per year. The document stated the parties "agree to proceed forward with a formal agreement."

Based on that letter of agreement, G & G called the Stalkers on March 16, 1994, as they prepared for the closing on the farm purchase, and informed them that G & G also had an agreement to purchase Blomers' farm. When the Stalkers called the Blomers for an explanation, the Blomers denied that they had any agreement to sell to G & G. When the realtor pressed the Blomers further in person, Mavis Bloomer said they had never signed a purchase agreement with G & G, but she did show the realtor a letter she had received from G & G. The Stalkers also received a copy of the letter. The Stalkers proceeded with the closing because they were not aware of any written contract or agreement the Blomers had signed with G & G. The Blomers and the Stalkers executed a contract for deed at the closing on March 23, 1994. The Stalkers paid a down payment, earnest money, and real estate taxes on the day of closing. They also paid the realtor, the county auditor, delinquent taxes, and real estate taxes. Thereafter, they took possession of the farmland.

G & G then brought suit against the Blomers to enforce the "letter of agreement." The Stalkers intervened in the lawsuit, claiming that the letter of agreement was not an enforceable contract. The district court denied the Stalkers' and Blomers' initial motions for summary judgment and proceeded to trial.

After a weeklong jury trial, the trial court left the issue of the enforceability of the letter of agreement to the jury. The jury returned a special verdict, finding that G & G and the Blomers, by their words, actions, conduct, and surrounding circumstances, expressed mutual assent to be bound to the letter of agreement for the sale of the farm. The jury determined the letter of agreement was a binding contract that was unambiguous and an intentional act on the part of the Blomers. The trial court denied the Stalkers' and Blomers' motion for judgment notwithstanding the verdict (JNOV).

At a court trial on the remaining damage issues, the Blomers failed to appear. The trial court issued findings of fact, conclusions of law, and order for judgment incorporating the jury's special verdict and determining that G & G Partnership was entitled to specific performance, but no loss of profit damages, because it failed to prove lost profits with the necessary degree of certainty. The court also awarded the Stalkers attorney fees and $32,286.42 in damages. The court based this award on the Blomers' reckless disregard and indifference to the rights of the Stalkers, who had entered into a contract for deed with the Blomers prior to the Blomers' negotiation with G & G.

ISSUE

Did the trial court err in allowing the jury to decide that the letter of agreement was an unenforceable contract, and in denying JNOV?

ANALYSIS

The Stalkers contend the trial court erred when it failed to rule, as a matter of law, that the letter of agreement was an unenforceable agreement to agree. They contend the issue was one of law for the court to determine and was not an issue for the jury to determine as a matter of fact. ¹

Whether a letter of agreement constitutes an enforceable contract is a question of law that this court determines de novo. See Lindgren v. Clearwater Nat'l Corp., 517 N.W.2d 574, 574 (Minn.1994) (construing de novo whether letter of intent was enforceable contract or unenforceable agreement to agree); see also A.J. Chromy Constr. v. Commercial Mech. Servs., 260 N.W.2d 579, 582 (Minn.1977) (this court reviews questions of law de novo); Marso v. Mankato Clinic, Ltd., 278 Minn. 104, 114, 153 N.W.2d 281, 288 (1967) (interpretation of an unambiguous writing is question of law for court).

In Minnesota, a letter creating an agreement to negotiate in good faith in the future is not enforceable because it does not constitute the parties' complete and final agreement. Lindgren, 517 N.W.2d at 574; see also Hansen v. Phillips Beverage Co., 487 N.W.2d 925, 927 (Minn.App.1992) (holding unenforceable a letter of intent that contained "nonbinding offer" for sale of business; holding that letter was merely agreement to negotiate in good faith in future).

The Eighth Circuit Court of Appeals acknowledges...