Stepnes v. Trautman
| Decision Date | 20 April 2020 |
| Docket Number | A19-0865 |
| Parties | Paul Stepnes, Appellant, v. Beth Trautman, et al., Respondents. |
| Court | Minnesota Court of Appeals |
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2018).
Affirmed; motion denied
Hennepin County District Court
Lisa Lodin Peralta, Peralta Appellate Law, PLLC, St. Louis Park, Minnesota (for appellant)
Daniel W. Voss, The Law Offices of Daniel W. Voss, PLLC, Minneapolis, Minnesota (for respondents)
Considered and decided by Reyes, Presiding Judge; Bratvold, Judge; and Bryan, Judge.
UNPUBLISHED OPINION
Following removal of his conciliation-court claim for real-estate commission to district court and its dismissal, appellant argues that the district court (1) improperly granted summary judgment to respondents because (a) respondents forfeited their claims; (b) a genuine issue of material fact exists; and (c) appellant has standing because his bankruptcy estate did not have an interest in his commission and (2) improperly denied his motion for summary judgment based on a claimed agreement to settle the underlying claim. We affirm.
Appellant Paul Stepnes is a licensed real-estate agent. He has worked with respondent Beth Trautman to market properties that Trautman purchases to remodel and resell. On February 2, 2018, Stepnes filed for Chapter 7 bankruptcy. He did not report any earned real-estate commissions or any contingent or unliquidated claims in his bankruptcy filings. On February 8, 2018, Trautman listed a property with Bridge Realty on which Stepnes had previously worked, but that had not sold, and listed herself as the listing agent and Stepnes as the co-listing agent. The listing cover sheet provided for zero-percent commission for each party. The property sold on February 21, 2018, and closed on March 29, 2018. Trautman did not make any profit on the sale or pay a commission to Stepnes.
On June 13, 2018, Stepnes brought an equitable claim in conciliation court for $15,000 in commission. In his statement of claim, Stepnes referenced working for eight months as the listing agent, "marketing the property with open houses etc. and even finding the buyers." The conciliation court issued a $10,070 judgment for Stepnes, stayed until October 24, 2018, to allow time for removal to district court.
The parties discussed a settlement agreement via email under which Trautman would pay Stepnes $7,500 for a release of all claims against her related to her properties, but Stepnes did not agree with the release Trautman presented to him. As the parties discussed the settlement, Trautman filed for removal to district court the day before the endof the stay of the conciliation court judgment. The district court vacated the judgment pursuant to Minn. Gen. R. Prac. 521(d).
Stepnes filed motions to dismiss, to vacate "the order vacating the judgment on appeal," to enforce the settlement agreement, and for penalties. The district court construed these motions as "advancing a motion for summary judgment premised on the alleged agreement to compromise the underlying claim." Without filing any other responsive pleading, Trautman filed a motion for summary judgment based on (1) Stepnes's lack of standing and (2) a bar under Minn. Stat. § 82.85 (2018) against claims for commission on the sale of real property without a written agreement. The district court granted Trautman's motion because it determined that Stepnes lacked standing, and it did not reach her statutory argument. It denied Stepnes's motion. This appeal follows.
Stepnes moved to strike portions of Trautman's brief the evening before oral arguments on the basis that Trautman referred to materials outside of the record. The appellate record is limited to "documents filed in the trial court, the exhibits, and the transcript of the proceedings, if any." Minn. R. Civ. App. P. 110.01. Because these portions are not relevant to our analysis and we did not rely on them, we deny Stepnes's motion as moot. See In re Purported Fin. Statement in Dist. Court of Ramsey Cty., 745 N.W.2d 878, 882 (Minn. App. 2008) ().
Stepnes argues that the district court improperly granted summary judgment to Trautman because (1) Trautman forfeited1 both of the issues on which she sought summary judgment by not raising either as an affirmative defense; (2) a genuine issue of material fact exists; and (3) he had standing because his bankruptcy estate did not have an interest in his commission. We address each issue in turn.
We review a grant of summary judgment de novo to determine "whether there are genuine issues of material fact and whether the district court erred in its application of the law." Montemayor v. Sebright Prods., Inc., 898 N.W.2d 623, 628 (Minn. 2017) (quotation omitted).
Stepnes argues that Trautman forfeited her challenge to his standing as well as her argument that section 82.85 bars his claim by raising them in a motion for summary judgment and not pleading either issue as an "affirmative defense." We disagree.
As an initial matter, Stepnes did not argue forfeiture to the district court, so he cannot now argue it on appeal. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988). Even if we consider his claim, however, it lacks merit.
First, standing requires a litigant to suffer an injury in fact or to have a "sufficient stake in the outcome." See Cochrane v. Tudor Oaks Condo. Project, 529 N.W.2d 429, 433(Minn. App. 1995) (), review denied . Whether a bankruptcy estate or debtor has an interest in disputed property raises an issue of standing. See Leffler v. Leffler, 602 N.W.2d 420, 422-23 (Minn. App. 1999). Trautman argues that any claim for commission that Stepnes has is the property of his bankruptcy estate and that he therefore lacks standing to pursue the commission. Trautman's argument raises an issue of standing that may be addressed at any time. See In re Custody of D.T.R., 796 N.W.2d 509, 512 (Minn. 2011); Davidner v. Davidner, 232 N.W.2d 5, 7 (Minn. 1975).
Second, as Stepnes argues, a defense based on a statute of frauds, such as section 82.85, is an affirmative defense. See Minn. R. Civ. P. 8.03. "Every defense . . . shall be asserted in the responsive pleading thereto if one is required." Minn. R. Civ. P. 12.02. Generally, failure to include an affirmative defense in a responsive pleading results in forfeiture. See Sletten v. Ramsey Cty., 675 N.W.2d 291, 299 (Minn. 2004). However, "[i]ssues litigated by either express or implied consent are treated as if they had been raised in the pleadings." Septran, Inc. v. Indep. Sch. Dist. No. 271, 555 N.W.2d 915, 919 (Minn. App. 1996) (quotation omitted), review denied (Minn. Feb. 26, 1997). Accordingly, we have found no forfeiture when a party raises an issue for the first time in a motion for summary judgment if the nonmoving party does not object to the defense, the district court hears the issue, and the parties litigate the issue. See, e.g., Bradley v. First Nat. Bank of Walker, N.A., 711 N.W.2d 121, 128 (Minn. App. 2006) (); Wessling v. Johnson, 424 N.W.2d 795, 799 (Minn. App. 1988) (), review denied (Minn. July 28, 1988).
Here, Stepnes addressed Trautman's claims in his response to Trautman's motion for summary judgment. The district court heard arguments from each party on the claims at a motion hearing. Stepnes argued at the hearing and in his written response that the bankruptcy estate had no interest in his claim and that the parties met the requirements of section 82.85. Because Stepnes did not object, he litigated the issues, and the district court heard the issues, we treat them as though Trautman raised them in her pleadings. See Septran, 555 N.W.2d at 919.
The cases to which Stepnes cites to support his forfeiture argument do not involve situations in which no pleadings were required or filed or in which the parties litigated the issue by consent. See Beutz v. A.O. Smith Harvestore Prod., Inc., 431 N.W.2d 528, 532 n.3 (Minn. 1988) (); Minnesota-Iowa Television Co. v. Watonwan T.V. Imp. Ass'n, 294 N.W.2d 297, 301, 305 (Minn. 1980) (); Kilton v. Richard G. Nadler & Assocs., 447 N.W.2d 468, 471 (Minn. App. 1989) (), review denied (Minn. Jan. 12, 1990). Neither these cases nor Minn. R. Civ. P. 8.03 or 12.02, which address how a partyrequired to file a responsive pleading must preserve an affirmative defense, preclude Trautman's claims.
Stepnes next argues that he raised a genuine issue of material fact regarding what portion of his work marketing the property occurred after his bankruptcy petition. We are not persuaded.
We review the existence of a genuine issue of material fact de novo. STAR Ctrs., Inc. v. Faegre & Benson, L.L.P., 644 N.W.2d 72, 76-77 (Minn. 2002). A fact is material if its resolution will affect the case outcome. Zappa v. Fahey, 245 N.W.2d 258, 259-60 (Min...
To continue reading
Request your trial