Rooney v. Dayton-Hudson Corp.

• Decision Date: 10 September 1976
• Docket Number: DAYTON-HUDSON,No. 45574,45574
• Citation: 310 Minn. 256,246 N.W.2d 170
• Parties: V. R. ROONEY, Appellant, v.CORPORATION, et al., Respondents.
• Court: Minnesota Supreme Court

Page 170

246 N.W.2d 170

310 Minn. 256

V. R. ROONEY, Appellant, v. DAYTON-HUDSON CORPORATION, et al., Respondents.

No. 45574.

Supreme Court of Minnesota.

Sept. 10, 1976.

Syllabus by the Court

1. The agreement of the parties made August 21, 1973, was an Option to purchase and not a Contract to purchase, and thus expired by its own terms.

2. Though appellant claims an oral agreement to extend the August 21, 1973, agreement to January 15, 1974, was made, he could not fulfill the terms of the option in any event on January 15, 1974, because he did not have the purchase funds available on that date.

3. The facts were not in dispute in this case and the decision of the trial court was made on questions of law only, so summary judgment was the proper remedy in this case.

Geimer, Rice & Arnold, John D. Rice and Charles R. Carmichael, Minneapolis, for appellant.

Faegre & Benson, Gordon B. Conn, Jr. and Gordon S. Busdicker, Minneapolis, Briggs & Morgan and David J. Spencer, St. Paul, for respondents.

Heard before TODD, YETKA and BREUNIG, JJ., and considered and decided by the court en banc.

YETKA, Justice.

This is an action for specific performance or, in the alternative, damages arising out of an agreement relating to the sale of the downtown Dayton's department store building in Rochester. The district court, upon the motion of defendants, granted summary judgment against plaintiff, and he takes this appeal from the judgment. We affirm.

The agreement upon which this action rests is embodied in a number of documents relating to the Dayton property, including a warranty deed, an assignment of lease, and a bill of sale. All of these documents were deposited August 21, 1973, with defendant Chicago Title Insurance Company, as escrow agent, along with a letter of instruction to Chicago Title. The latter document is the more important in construing the whole agreement and therefore must be set forth in some detail.

After reciting the deposit of the above documents and two checks, one in the amount of $10,000 and the other $20,000, the letter instructed the escrow agent as follows:

'3. On or before October 31, 1973, V. R. Rooney shall deposit with you the additional sum of $540,000, which together with the $10,000 presently held in escrow equals the purchase price ($550,000) of the real estate, all improvements and the leasehold interest represented by the deed and Assignment of Lease. Upon receipt of such additional sum of money,

'a) you may turn over to V. R. Rooney the deed and the Assignment of Lease (after inserting in the space for the effective date of the assignment the then present date) together with his check in the amount of $20,000.

'b) issue upon proper recording, the title insurance policies represented by commitments #26427 and #26426 covering this transaction. (By executing this agreement, all the parties hereto acknowledge receipt of a copy of each commitment and agree that title as shown thereon, after proper recording of required instruments, is acceptable.)

'c) forward to Dayton-Hudson Corporation and Eighth Street Development Company, in care of Robert Nys, Suite 1304, 777 Nicollet Mall, Minneapolis, Minnesota 55402, a copy of the deed and Assignment of Lease, together with the full purchase price of $550,000, and a statement of costs for the issuance of the title policies described in b) above, together with a copy of each such policy.

'd) to collect if necessary any taxes paid by Dayton-Hudson Corporation or Eighth Street Development Company as provided herein.

'e) Thereupon this escrow shall terminate.

'4. In the event V. R. Rooney does not make the additional deposit of money as required hereunder, you are to forward to Dayton-Hudson Corporation and Eighth Street Development Company, in care of Mr. Robert Nys, the deed, Assignment of Lease, the $10,000 in cash and the check in the amount of $20,000, altogether with a statement of your fees as escrow agent. Thereupon this escrow shall terminate.'

Following those instructions, the letter contained the following agreement:

'Agreement between the parties hereto:

'1. In the event this escrow terminates pursuant to the provisions of Section 3 above,

'a) V. R. Rooney shall be responsible for the payment of all taxes, general and special, and all special assessments against the premises payable on or after June 30, 1973. Should it be necessary for either Dayton-Hudson Corporation or Eighth Street Development Company to pay any such taxes during the period of this escrow agreement, they shall promptly submit receipts therefor to you and the amount so paid shall be added to the $550,000 purchase price and collected by you from V. R. Rooney simultaneously with the transfer of the Deed and Assignment of Rents.

'b) Dayton-Hudson Corporation and Eighth Street Development Company have prior hereto delivered to V. R. Rooney title commitments #26426 and #26427 which have been reviewed and are acceptable to V. R. Rooney.

'c) Dayton-Hudson Corporation and Eighth Street Development Company hereby agree to pay a real estate commission to A. D. Strong Co., Inc. in the amount of $31,500.00.

'd) V. R. Rooney has examined the premises and improvements located thereon and agrees to accept them in their present condition.

'2. In the event this escrow terminates pursuant to the provisions of Section 4 above,

'a) there shall be no real estate commission paid to A. D. Strong Co., Inc.

'b) V. R. Rooney shall have no right of redemption or any other claim or right against the premises or against Dayton-Hudson Corporation and Eighth Street Development Company.

'c) Dayton-Hudson Corporation and Eighth Street Development Company shall cash the V. R. Rooney check and shall retain the $20,000 therefrom together with the $10,000 in cash as liquidated damages, and shall have no further remedies pursuant to any agreement between the parties nor under law or equity.

'3. This letter of instruction and escrow hereby cancels and supersedes any and all other agreements and understandings between the parties hereto, including but not limited to the agreement dated June 29, 1973, between Dayton-Hudson Corporation and Eighth Street Development Company, as Seller, and V. R. Rooney, as Buyer, covering the subject premises.

'4. Seller hereto agrees to indemnify and hold Chicago Title Insurance Company harmless from any and all actions taken by it in accordance with the instructions herein contained.

'5. If the premises are destroyed by fire or other casualty prior to October 31, 1973, buyer shall have the option by 10 days notice of terminating this agreement and all amounts deposited hereunder by buyer shall be refunded to buyer within 10 days. Buyer will insure the improvements on said premises during the escrow period for their full insurable value and shall provide to Seller a Certificate of Insurance which shall provide that said Certificate shall not be canceled except upon 10 days notice to seller.' (Italics supplied.)

The letter was signed by defendant sellers, the real estate broker, and plaintiff.

The A. D. Strong Company through one Charles Towle acted as defendant sellers' real estate agent in securing plaintiff as buyer. While Towle apparently did not have a listing or agency agreement, he was authorized verbally to secure a buyer for which he would be paid a commission upon a sale of the property.

Prior to the above agreement, the parties had entered into a purchase agreement dated June 29, 1973, which provided that plaintiff would purchase the Dayton property for $550,000, with $10,000 deposited as earnest money. Closing was set for July 26, 1973. In the event of plaintiff's nonperformance, the sellers were to retain the earnest money as liquidated damages or proceed with other available remedies including specific performance. Plaintiff was unable to arrange financing by the closing date; however, it does not appear the sellers retained the earnest money or pursued other remedies. Rather, the earnest money of $10,000 became the $10,000 deposit under the agreement in question. Thereafter, the parties continued negotiations respecting the sale of the Dayton property culminating in the August 21 agreement.

Plaintiff again was unable to arrange financing acceptable to him and did not deposit the $540,000 with the escrow agent by October 31, 1973, as called for in the agreement. On that date plaintiff telephoned the sellers' representative, Jerry Amundson, and requested an extension of time within which to perform. That request was refused. Accordingly, on November 1, 1973, Chicago Title delivered to the sellers the conveyancing documents and the $20,000 check drawn by plaintiff on his account. The $10,000 check had been cashed when received and its proceeds were also delivered. On January 14, 1974, the property was sold to a third party.

Plaintiff contends that the sellers, through their conduct and representations Subsequent to October 31, extended the time for his performance until January 15, 1974. They deny this. The trial court in granting summary judgment ruled that any extension not in writing was barred by the statute of frauds and that the agreement as modified was unenforceable.

The dispositive issues raised by plaintiff involve (1) the applicability of the notice of cancellation provision in Minn.St. 559.21, ¹ and (2) the application of the statute of frauds, Minn.St. 513.05.

1. Plaintiff argues that the agreement between the parties is a contract for the conveyance of land and as such can be terminated only by the 30-day notice prescribed in Minn.St. 559.21. Defendants concede that notice was not given but take the position that Minn.St. 559.21 is inapplicable to the parties' agreement for the reason that it is merely an option to purchase and not a contract of conveyance. Wurdemann v. Hjelm, 257 Minn. 450, 102 N.W.2d 811, certiorari denied, 364 U.S. 894, 81 S.Ct. 222, 5 L.Ed.2d 187 (1960); Joslyn v. Schwend, 85 Minn. 130, 88 N.W. 410 (1901).

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