TNT Properties, Ltd. v. Jacobs, No. A07-1773 (Minn. App. 8/26/2008)
| Decision Date | 26 August 2008 |
| Docket Number | No. A07-1773.,A07-1773. |
| Parties | TNT Properties, Ltd., Appellant, v. Donald P. Jacobs, et al., Respondents. |
| Court | Minnesota Court of Appeals |
Appeal from the Stearns County District Court, File No. 73-C9-06-003372.
Mark J. Kallenbach, Minneapolis, MN (for appellant)
Susan Marie Dege, Rajowski Hansmeier Ltd., St. Cloud, MN (for respondents)
Considered and decided by Johnson, Presiding Judge; Kalitowski, Judge; and Shumaker, Judge.
UNPUBLISHED OPINION
Appellant real estate buyer challenges the district court's denial of its action for specific performance, arguing that the court erred in concluding that appellant had not entered into a purchase agreement through its authorized agent. Because the evidence supports the conclusion that appellant's agent bound appellant to the purchase, we reverse, and we remand for further proceedings.
After a bench trial of this action for specific performance of a real estate purchase agreement, the district court concluded that the agreement lacked mutuality of obligation because the person who signed on behalf of buyer did not have authority to bind buyer. The court ordered judgment in sellers' favor.
Respondent-sellers Donald and Dorothy Jacobs own various farmlands in Minnesota. Appellant-buyer TNT Properties, Ltd. owns a parcel of land adjacent to one of the Jacobses' properties in Stearns County, which TNT uses for an automobile racetrack. The sole and equal shareholders of TNT are Timothy and Ted Olson, the former being the corporation's president. Floyd Olson, Timothy and Ted's father, is a licensed real estate broker. TNT is Floyd Olson's main client, and he frequently acts as agent for the corporation in buying real estate.
On October 25, 2005, the Jacobses signed a purchase agreement for the sale of approximately 35 acres of their property to TNT. Floyd Olson designated TNT as buyer and signed the agreement as TNT's "Reg. Agent or real estate agent." The Jacobses accepted Floyd Olson's earnest money check in the sum of $100.
The purchase agreement required a payment of $40,000 on closing, which was set for "Jan. 15, 2006 or ASAP to be determined by Jan. 5, 2006," and required the balance of the $130,000 purchase price to be paid in installments by a contract for deed. The agreement also required the Jacobses to furnish to TNT an abstract of title or a registered property abstract "within a reasonable time after approval of [the] agreement," allowed 10 days for examination and objections, and provided for 120 days to cure and make title marketable.
As of January 5, 2006, the parties had had no further communications, and the Jacobses had not supplied an abstract to TNT. Floyd Olson contacted the Jacobses on January 6, 2006, to schedule a closing of the sale. The Jacobses were in Arizona at the time and told Floyd Olson that they would contact him when they returned.
The Jacobses returned to Minnesota and gave an abstract to Floyd Olson on February 6, 2006. Thereafter, they attempted on several occasions to contact Floyd Olson to schedule a closing but could not reach him. They had hoped to close by January 15, 2006, so that they could use the $40,000 as down payment on property they planned to purchase in Arizona. They later learned that they owed additional real estate taxes on the property because it was designated as "sold" in the county auditor's records.
During May and June 2006, the Jacobses attempted several times to reach Floyd Olson to cancel the transaction. They finally were able to schedule a meeting with him on June 28, 2006, to get their abstract back. To that meeting, TNT's president, Timothy Olson, brought a check for $40,000 and a contract for deed for the Jacobses to sign. The Jacobses refused to sign, and ultimately TNT sued them for specific performance.
Although the district court found that Timothy Olson "acknowledged that he considered Floyd Olson to be an agent of the corporation," the court also found that there was no written grant of authority for Floyd Olson to act as such and that neither of TNT's shareholders had signed the purchase agreement. The court then concluded that there could be no specific performance of the purchase agreement "because the purchase agreement was never executed by [TNT] or by someone with the authority to bind [TNT]." TNT did not move for amended findings or conclusions or for a new trial, but rather brought this direct appeal.
"[O]n appeal from a judgment where there has been no motion for a new trial[,] the only questions for review are whether the evidence sustains the findings of fact and whether such findings sustain the conclusions of law and the judgment." Gruenhagen v. Larson, 310 Minn. 454, 458, 246 N.W.2d 565, 569 (1976). In reviewing the decision of a district court sitting without a jury, this court will give due deference to the district court's credibility determinations and will set aside the district court's findings only if clearly erroneous. Patterson v. Stover, 400 N.W.2d 398, 400 (Minn. App. 1987) (citing Minn. R. Civ. P. 52.01). "Findings of fact are clearly erroneous only if the reviewing court is left with the definite and firm conviction that a mistake has been made." Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn. 1999) (quotation omitted).
A purchase agreement, prepared on a standard form and containing explicit terms and requirements for the parties' future performance, is a binding contract as of the time it is executed. Buresh v. Mullen, 296 Minn. 150, 152, 207 N.W.2d 279, 281 (1973). As long as it is supported by consideration and is fair and equitable, it is binding on both parties, whose rights under it should be fully protected and enforced through specific performance. Austin v. Wacks, 30 Minn. 335, 339, 15 N.W. 409, 410 (1883). The district court here concluded that "[TNT] is not entitled to specific performance because the purchase agreement is not mutually enforceable," as it "was never executed by [TNT] or by someone with authority to bind [TNT]." On appeal, we must determine whether this conclusion is sustained by findings supported by the evidence.
The Jacobses argue that lack of mutual enforceability was only one factor in the district court's decision denying specific performance. "[S]pecific performance of a contract to convey real estate is not a matter of absolute right, and if enforcement would be unconscionable or inequitable, performance will not be decreed." Hilton v. Nelsen, 283 N.W.2d 877, 881 (Minn. 1979) (alteration in original) (quotation omitted). The Jacobses contend that the district court considered and "balance[d] the equities present in this case to determine if specific performance was appropriate," and they point to several findings of fact in support of that contention. But the issue before this court is whether the district court's conclusions of law are sustained by its findings of fact. Even though the district court may have made findings regarding the diligence of the parties or the fairness of this transaction, those findings do not support or even inform the district court's conclusion regarding mutuality of obligation.
Because the district court concluded that Floyd Olson had no authority to act as TNT's agent and execute a purchase agreement on TNT's behalf, only those findings pertaining to this conclusion are relevant to our review. Accordingly, we focus on three findings:
25.. . . Timothy Olson acknowledged that he considered Floyd Olson to be an agent of the corporation however, there is no written documentation of this grant of authority.
26. Neither [TNT shareholder] ever signed the purchase agreement with the Jacobs.
27. The only communication between the Jacobs and TNT Properties, Ltd. was through Floyd Olson. The Jacobs had no other contact information for TNT Properties, Ltd.
Although each of these findings is supported by the evidence, none of these findings support the conclusion that Floyd Olson had no authority to bind TNT to this purchase agreement.
Upon review of this record, we find certain uncontroverted evidence significant: that TNT was Floyd Olson's main real estate client; that Floyd Olson had a prior practice of buying properties on behalf of TNT; that TNT's president, Timothy Olson, testified that Floyd Olson had authority to act as TNT's agent; and that both Floyd and Timothy Olson appeared for what they considered—albeit perhaps erroneously—to be the closing and there tendered to the Jacobses on behalf of TNT the requisite down payment and a proposed contract for deed. Based on this evidence and on the following analysis, we conclude that the district court clearly erred in its decision.
It is well-established that a writing is not required to establish an agency relationship. PMH Props. v. Nichols, 263 N.W.2d 799, 803 (Minn. 1978). And in a contract for the sale of land governed by the statute of frauds, it is the only the seller who must demonstrate an agency relationship through a writing:
Every contract for . . . the sale of any lands . . . shall be . . . in writing and subscribed by the party by whom the lease or sale is to be made, or by the party's...
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