Gurvin Femrite v. City of Lowry

CourtCourt of Appeals of Minnesota
DecidedNovember 3, 2014
DocketA13-2296
StatusUnpublished

This text of Gurvin Femrite v. City of Lowry (Gurvin Femrite v. City of Lowry) 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
Gurvin Femrite v. City of Lowry, (Mich. Ct. App. 2014).

Opinion

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2012).

STATE OF MINNESOTA IN COURT OF APPEALS A13-2296

Gurvin Femrite, et al., Appellants,

vs.

City of Lowry, Respondent.

Filed November 3, 2014 Reversed and remanded Kirk, Judge

Pope County District Court File No. 61-CV-12-478

Stephen F. Rufer, Pemberton, Sorlie, Rufer & Kershner, PLLP, Fergus Falls, Minnesota; and Kent D. Marshall, Marshall Law Office, Barrett, Minnesota (for appellants)

Jason J. Kuboushek, Iverson Reuvers Condon, Bloomington, Minnesota (for respondent)

Considered and decided by Kirk, Presiding Judge; Hudson, Judge; and Stauber,

Judge.

UNPUBLISHED OPINION

KIRK, Judge

On appeal from the district court’s grant of summary judgment, appellants argue

that the district court erred by granting summary judgment on their claims for (1) breach

of contract, (2) fraud and misrepresentation, (3) equitable estoppel, (4) promissory estoppel, (5) negligence, and (6) trespass. Because genuine issues of material fact exist,

we reverse and remand.

FACTS

In 2006, respondent City of Lowry “began exploring options for rehabilitating its

existing wastewater collection and treatment systems.” The city council adopted a

resolution in January 2007 “that the mayor and council are authorized to execute

agreements to implement this project.” The city then contacted appellants Gurvin and

Myra Femrite to discuss purchasing some of their farmland to build wastewater treatment

ponds. The Femrites responded that they “[did] not like the idea of having the sewage

ponds on [their] farmland and [felt that] it diminishe[d] the value of [their] entire farm.”

Nevertheless, the Femrites offered to sell 15 acres of land to the city for $257,000.

Gurvin Femrite testified that the Femrites based their offer on land prices in the local

newspaper.

After receiving the Femrites’ offer, Mayor Bruce Larson requested an emergency

city council meeting on September 21, 2007. According to members of the city council,

the council decided that $257,000 was too high and authorized Mayor Larson to

counteroffer $100,000 or, if necessary, $150,000. City of Lowry Clerk/Treasurer Lucy

Olson testified that “[t]hat’s all [Mayor Larson] was ever authorized to do by the

council.” In contrast, Mayor Larson testified that the council agreed to pay the Femrites’

asking price if necessary. No minutes were kept of the emergency council meeting.

2 Immediately after this meeting, Mayor Larson met with the Femrites and agreed

that the city would pay $257,000 for 15 acres of land.1 Mayor Larson instructed Olson to

draft an option agreement to buy the Femrites’ property for $257,000. Olson objected to

the price but Mayor Larson responded that “this is the only option we have” and that the

other council members had already agreed to the purchase price. Olson later learned

from the other council members that they had not spoken to Mayor Larson about paying

the full $257,000 price. But Mayor Larson testified that the council met and agreed to

pay $257,000.

Minutes from the October 2, 2007 council meeting state that the city had reached

an agreement (presumably with the Femrites) “to purchase 15 acres of land to be used for

new treatment ponds.” Olson testified that Mayor Larson instructed the council not to

discuss the purchase price at this council meeting. At a meeting in 2009, the council

authorized Mayor Larson “to sign any needed documents between council meetings to

allow the wastewater project to proceed as quickly as needed.”

In January 2009, the city learned that the United States Department of Agriculture

Rural Development Agency, which was funding the city’s wastewater treatment project,

thought the price was too high and requested an appraisal. The appraiser concluded that

14.5 acres of the Femrites’ property was worth $3,400 per acre, for a total price of

$49,300. In April 2009, Rural Development drafted the conditions of its funding for the

1 Contrary to the testimony of the Femrites and other council members, Mayor Larson testified that he presented the council’s counteroffers to the Femrites at this meeting. The district court determined that Mayor Larson “failed to inform [the Femrites] of the $100,000.00 offer.”

3 wastewater system and listed the land purchase price at $49,300. Any change in cost

required Rural Development approval.

On May 31, 2009, Mayor Larson wrote to the Femrites to cancel the option

agreement and pay the required $10,000 in earnest money. Mayor Larson testified that

the city canceled the option because it only needed 12 acres, not the 15 acres in the option

agreement. According to Olson, the Femrites cashed the $10,000 check on July 9,

thereby accepting the cancellation of the option to purchase. According to Gurvin

Femrite, the Femrites cashed the check without realizing that it was intended to cancel

the option because they thought it was the first of many payments from the city.

On July 7, 2009, the Femrites signed a warranty deed, conveying property to the

city. This deed did not include the purchase price or the number of acres involved, but

listed the state deed tax due as $245.19. The Femrites also signed an agreement with

Mayor Larson that they would be able to “take away the good top soil to be removed”

from their property during construction. Minutes from the council meeting that evening

report that “the pond site property has now been purchased.” Again, there was no

discussion regarding the purchase price at the council meeting.

A June 2009 “Settlement Statement” listed the purchase price as $74,300 for 12.25

acres. According to the city’s attorney, the $74,300 price represented the $49,300

appraisal value of the property plus the estimated attorney fees if the matter had gone

through eminent domain. But the Femrites claim that they agreed to execute the warranty

deed in exchange for $74,300 after Mayor Larson assured them that the city would honor

its original agreement to pay $257,000. In affidavits, the Femrites stated that they only

4 conveyed their land to the city because they were told “countless times” that they would

receive $257,000 and that they would not have conveyed their land for anything less than

$257,000. According to Gurvin Femrite, he “assumed that [the city was] operated just

like any other form of government that’s on the straight and narrow” and he “took

[Mayor Larson] at his word that this money [would] be coming.”

In December 2010, Mayor Larson and council member Merl Farber met with the

Femrites after the Femrites were told that the city did not owe them any more money. At

this meeting, Mayor Larson stated that the Femrites would get the rest of their money

after the project was completed.2 Farber testified that Mayor Larson’s comments

surprised him because he thought the project “was over and done.” The same individuals

met again in November 2011, and Mayor Larson again stated that the Femrites would get

the rest of their money. Farber characterized Mayor Larson’s statements as a “personal

agreement” with the Femrites that they would be paid the full $257,000. But Farber did

not object to Mayor Larson’s statements at either meeting.

On October 17, 2012, the Femrites sued the City of Lowry, alleging (1) breach of

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