Theros v. Phillips

• Court: Minnesota Supreme Court
• Writing for the Court: MacLAUGHLIN
• Citation: Theros v. Phillips, 256 N.W.2d 852 (Minn. 1977)
• Decision Date: 15 July 1977
• Docket Number: No. 46732,46732
• Parties: Frank THEROS, et al., Appellants, v. Elly PHILLIPS, Individually, and as Trustee of the Trusts Created under the Last Will and Testament of Nicholas B. Phillips, Deceased, Respondent.

Page 852

256 N.W.2d 852

Frank THEROS, et al., Appellants, v. Elly PHILLIPS, Individually, and as Trustee of the Trusts Created under the Last Will and Testament of Nicholas B. Phillips, Deceased, Respondent.

No. 46732.

Supreme Court of Minnesota.

July 15, 1977.

Syllabus by the Court

1. In this proceeding involving a boundary-line dispute between adjacent property owners the trial court did not err in its finding that the evidence did not support a reformation of the legal description of the boundary line.

2. The trial court correctly determined that there should be no judicial action to establish a boundary line pursuant to Minn.St. 559.23.

3. The trial court erred in not granting defendant a permanent injunction prohibiting plaintiffs from parking their own motor vehicles or motor vehicles owned or operated by their patrons on defendant's property.

Mastor & Mattson and Charles A. Bassford, Jr., and Richard J. Gunn, Minneapolis, for appellants.

Leonard, Street & Deinard and Morris M. Sherman and Stephen J. Davidson, Minneapolis, for respondent.

Heard before MacLAUGHLIN, SCOTT, and STAHLER, JJ., and considered and decided by the court en banc.

MacLAUGHLIN, Justice.

This is an action arising out of a dispute between adjacent property owners involving the location of the boundary line separating their premises. Plaintiffs, Frank, Eugenia, George, and P. Robert Theros, and Kings Inn, Inc., sued defendant, Elly Phillips, seeking an order of the district court (1) to reform the legal description of the boundary line as contained in a deed dated August 4, 1941, to reflect what plaintiffs maintain was the true intent of the parties to that deed; or, in the alternative, (2) to have the boundary line judicially determined pursuant to Minn.St. 559.23. ¹ Defendant counterclaimed seeking a permanent injunction ² to restrain allegedly repeated trespasses by plaintiffs upon her property and alleged interference by plaintiffs with her enjoyment of an easement which she previously had been granted over their property.

After trial without a jury, the district court issued its findings of fact, conclusions of law, and order for judgment denying in its entirety the relief sought by plaintiffs. The trial court failed to rule on defendant's counterclaim for permanent injunctive relief and denied her motion for amended and additional findings in that respect. Judgment was entered in favor of defendant and against plaintiffs on their claims for relief. Plaintiffs have appealed from that judgment and defendant has filed a notice of review ³ seeking review of the district court order denying her motion for amended and additional findings of fact relating to her right to permanent injunctive relief.

The specific transactions leading to this dispute took place over a period of 3 decades. A complete statement of all the facts would be detailed and lengthy, and to repeat all of them would serve little purpose. Instead, we will recite only the most crucial aspects of those transactions.

In the spring of 1940 Nicholas B. Phillips, defendant's husband, purchased the entire tract of land located in the northeast quadrant of the intersection of State Trunk Highway No. 100 and Excelsior Boulevard in St. Louis Park, Minnesota. ⁴

In 1941 Phillips formed a corporation, Lilac Lanes Company, Inc. (Lilac Lanes), for the purpose of constructing, owning, and operating a bowling alley and restaurant on the northern portion of the tract. Apparently prior to the commencement of construction by Lilac Lanes, Phillips divided the property by survey and by deed based thereon. That deed conveyed the northern portion ⁵ of the tract to Lilac Lanes on August 4, 1941. In both the deed and survey a certain line, 434 feet long, was denoted as the boundary between the northern and southern parcels carved out of the tract. Sometime in 1941, subsequent to the division of the property and subsequent to the commencement of construction on the northern parcel, plaintiff Frank Theros purchased an interest in Lilac Lanes.

On October 9, 1941, out of an apparent need to finance construction of the bowling alley and restaurant, Lilac Lanes executed a mortgage on the northern parcel. While there is no evidence in the record of precisely when the actual construction on the northern parcel commenced, presumably the mortgage was granted before or at the time of the first visible improvement. ⁶ The bowling alley and restaurant were thereafter constructed by Lilac Lanes on the northern parcel in late 1941 and 1942. The area along the boundary line between the northern and southern portions of the original tract became a parking lot.

Lilac Lanes went bankrupt in 1942, and in 1944 the mortgagee foreclosed on the northern parcel. In all of the documents relating to the mortgage foreclosure, the 434-foot line was identified as the boundary separating the northern parcel from the southern parcel. On January 5, 1944, a second corporation by the name of Lilac Lanes Enterprises, Inc. (Enterprises), was organized by Phillips, plaintiff Frank Theros, D. N. Karalis, and John N. Karalis for the purpose of purchasing the northern parcel. A January 1944 mortgage loan survey again showed the 434-foot line as the boundary between the parcels. D. N. Karalis and John N. Karalis quickly withdrew from Enterprises, and their stock was redistributed to Mr. and Mrs. Phillips, Frank Theros, and Theros' wife, Eugenia.

The description in the deed which eventually conveyed the northern parcel to Enterprises in 1952, pursuant to its purchase of the land in 1944 under a contract for deed, also used the same 434-foot line as the boundary, as did a survey conducted in connection with the delivery of the deed.

Phillips died in June 1958 and his interest in Enterprises was devised to a trust, of which defendant, Elly Phillips, was trustee. From 1941 until his death, Phillips had owned the entire southern parcel and had operated the Lilac Way Shopping Center which he had constructed on that parcel.

Following Phillips' death, a deadlock occurred within the board of directors of Enterprises. In 1959, due to certain conflicts between the owners of Enterprises, Frank Theros instituted a lawsuit against defendant. That action was ultimately settled by a stipulation dated December 4, 1959. As part of the settlement, Frank Theros purchased defendant's interest in Enterprises. The settlement documents clearly and graphically depicted the 434-foot line as the boundary between the northern and southern parcels.

The settlement also granted defendant an easement over a narrow strip of the northern parcel, immediately north of and running along the 434-foot line, and again reaffirmed the 434-foot line as the boundary between the northern and southern parcels.

In 1964, Kings Inn, Inc., was organized by plaintiffs George Theros and P. Robert Theros. During that same year, Kings Inn, Inc., leased and assumed management of the restaurant from Enterprises. The bowling alley was closed in 1966.

Various condemnation actions commenced by the State Highway Department in 1966, and by the city of St. Louis Park in 1971 and 1972, again confirmed the 434-foot line as the boundary between the northern and southern parcels.

During Phillips' lifetime there had been no fixed policies as to parking and the entire parking area on both the northern and southern parcels had been used interchangeably for parking by customers of the bowling alley, the restaurant, and the shopping center. From 1959, the time when Theros purchased the full interest in the northern portion of the property, until 1972, the customers of the bowling alley and restaurant continued to park in the shopping center parking lot. This parking occurred with the full knowledge of plaintiffs and extended south beyond the area which plaintiffs have now placed in dispute. On at least six different occasions, defendant's attorneys directed letters to plaintiffs or their attorneys, demanding that parking on the shopping center parking lot by plaintiffs and their customers cease. Since 1960, defendant and her tenants have caused numerous signs, fences, barriers, parking stripes, and chains to be placed on or adjacent to the shopping center parking lot, at or near the 434-foot line, so as to give plain and clear notice that the parking area south of the 434-foot line was for the exclusive use of customers of the shopping center. In addition defendant personally complained to plaintiffs' parking attendant because he was directing customers to park their cars south of the 434-foot line.

The problems underlying this lawsuit erupted in May 1972, when a tenant of the shopping center, with the permission of defendant, erected a snow fence on or near the boundary line between the northern and southern parcels over the objections of plaintiffs.

1. A written instrument, including a deed, can be reformed by a court using its equitable powers only when it is proved that (1) there was a valid agreement between the parties expressing their real intentions; (2) the written instrument allegedly evidencing the agreement failed to express the real intentions of the parties; and (3) this failure was due to a mutual mistake of the parties, or a unilateral mistake accompanied by fraud or inequitable conduct by the other party. Fritz v. Fritz, 94 Minn. 264, 102 N.W. 705 (1905). See, also, Theisen's, Inc. v. Red Owl Stores, Inc., Minn., 243 N.W.2d 145 (1976); Cool v. Hubbard, 293 Minn. 349, 199 N.W.2d 510 (1972).

The evidence supporting reformation of a written instrument, including a deed, must be consistent, clear, unequivocal, and convincing. Fritz v. Fritz, supra; Theisen's, Inc. v. Red Owl Stores, Inc. supra; Golden Valley Shopping Center v. Super Valu Realty, 256 Minn. 324, 98 N.W.2d 55 (1959).

The trial court found, as a finding of fact, after considering both the direct and circumstantial evidence presented at trial that there had been no mistake or error concerning...