Brunsoman v. Lexington-Silverwood

385 N.W.2d 823, 1986 Minn. App. LEXIS 4211
CourtCourt of Appeals of Minnesota
DecidedApril 15, 1986
DocketC3-85-1727
StatusPublished
Cited by4 cases

This text of 385 N.W.2d 823 (Brunsoman v. Lexington-Silverwood) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brunsoman v. Lexington-Silverwood, 385 N.W.2d 823, 1986 Minn. App. LEXIS 4211 (Mich. Ct. App. 1986).

Opinions

OPINION

RANDALL, Judge.

Appellant Lexington-Silverwood, a Minnesota limited partnership, appeals from judgment entered after a bench trial in favor of respondent, Jerry Brunsoman, for breach of contract.

FACTS

In a contract for deed dated June 30, 1982, appellant, through its general partner Douglas Seitz, agreed to purchase respondent’s condominium located in Winter Park, Colorado. Appellant agreed to assume a $25,000 promissory note respondent owed to Silverado Development (the developer of the property), pay $15,000 as a down payment, and assume the outstanding mortgage. The down payment was paid by a ninety-day promissory note, signed by Seitz, for $15,000. The parties agree that the note also required appellant to reimburse respondent for mortgage payments respondent made after June 30.1 Annual payments of the balance of the purchase price were provided for. Appellant agrees that he has made no payments on the promissory note. After a bench trial the court awarded damages under the promissory note, finding appellant owed respondent $15,000 plus mortgage payments of $1,174.99 each for July through November, 1982. The trial court denied appellant’s motion for a new trial.

ISSUES

1. Did the trial court err by refusing to reform the contract?

2. Did the trial court err by not ruling that the parties rescinded the contract?

3. Did the trial court err by sustaining respondent’s objection to certain cross-examination?

ANALYSIS

I.

Reformation

Appellant claims that (1) the contract for deed and the promissory note were made under a mistake of fact and they should therefore be reformed and (2) pertinent terms and conditions were omitted by clerical error and the instruments should therefore be reformed.

A written instrument can be reformed only if [825]*825Nichols v. Shelard National Bank, 294 N.W.2d 730, 734 (Minn.1980).

[824]*824(1) there was a valid agreement between the parties expressing their real intention; (2) the written instrument failed to express the real intentions of the parties; and (3) this failure was due to the mutual mistake of the parties or a unilateral mistake accompanied by fraud or inequitable conduct by the other party.

[825]*825Seitz was respondent’s attorney and financial advisor from early 1981 through November, 1982. Respondent approached Seitz in March, 1982, proposing to sell Seitz his condominium. Respondent needed cash due to the liquidation of his dental practice partnership, and the developer had called in the $25,000 demand promissory note. At the time, appellant was purchasing condominiums in Colorado for investment purposes. Initially Seitz was reluctant to purchase respondent’s condominium, but he eventually negotiated a written contract with respondent.

Seitz claims that he told respondent that he would purchase the condominium only if respondent purchased five units of Lexington-Silverwood partnership at $15,000 per unit, and only if the term of the $25,000 note to Silverado could be extended. He claims that these terms were erroneously omitted from the contract for deed and promissory note because the documents were drafted hurriedly. Alternatively, Seitz seeks reformation of the contract for deed, claiming that these terms were agreed to and that neither the contract for deed nor the note reflect the parties’ agreement.

At Seitz’ insistence, the parties met hurriedly on June 30 because Seitz had determined that purchase of the condominium would not make business sense unless appellant could obtain seven months of depreciation in 1982. The documents were hurriedly drawn up to ensure the depreciation should the deal ultimately go through.

At trial, respondent testified that he never agreed to the additional terms and that it would not have made sense for him to agree to the terms because he would have been required to make a cash outlay of $75,000 at a time when he was trying to increase his cash flow.

The trial court found that respondent did not agree to the disputed conditions. This court will not reverse unless the finding is clearly erroneous. Preferred Risk Mutual Insurance Co. v. Anderson, 277 Minn. 342, 152 N.W.2d 476 (1967). Because the finding is supported by Brunso-man’s testimony, we hold that the trial court made no clear error. The written contract for deed and promissory note contained the agreement of the parties, and the trial court did not err in refusing to reform the written contract.

II.

Rescission or Abandonment

Appellant claims that, by mutual agreement, the parties either rescinded or abandoned the contract for deed and promissory note. The party claiming rescission must prove it by clear and convincing evidence. Desnick v. Mast, 311 Minn. 356, 365, 249 N.W.2d 878, 884 (Minn.1976). For a court to approve rescission, it must find the acts of the parties to be inconsistent with the existence of the contract. Generally, both parties must intend to rescind the contract. Minnesota Ltd., Inc. v. Public Utilities Commission of Hibbing, 296 Minn. 316, 318, 208 N.W.2d 284, 285 (1973).

Appellant claims that respondent rescinded the contract in early November, 1982, when, supposedly at respondent’s request, Seitz presented respondent with a financial analysis which indicated that respondent should retain the condominium because of the tax advantages. Respondent testified that he never requested the financial analysis and did not agree with Seitz’ assessment that he should keep the condominium. Respondent testified repeatedly that he needed cash to invest in a different project in which he was interested. In reviewing the record, we find respondent’s testimony was consistent with an intention to complete the sale to appellant and inconsistent with appellant’s claim of mutual rescission. Moreover, respondent testified that Seitz made a unilateral attempt to abandon the contract for deed after the two had a personal argument in November, 1982.

The trial court found that “the parties did not mutually agree that Brunsoman [826]*826would cancel the contract and retain the Colorado condominium. * * * Seitz * * * terminated the attorney-client relationship with Brunsoman and abandoned the defendant’s obligations under the contract for deed.” We defer to the fact finder’s resolution of the conflicting testimony on this point and find no error. In the absence of mutual agreement there can be no rescission.

Appellant also claims that respondent either rescinded or repudiated the contract for deed by signing, with a realtor, a listing agreement which did not list the contract for deed among the encumbrances on the condominium. We agree with the trial court that, because the listing occurred after appellant’s abandonment of the contract in December, 1982, it was not relevant. The listing merely showed respondent’s effort to mitigate damages.

The.

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Brunsoman v. Lexington-Silverwood
385 N.W.2d 823 (Court of Appeals of Minnesota, 1986)

Cite This Page — Counsel Stack

Bluebook (online)
385 N.W.2d 823, 1986 Minn. App. LEXIS 4211, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brunsoman-v-lexington-silverwood-minnctapp-1986.