This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA IN COURT OF APPEALS A16-0877
Larry Grimlie, Appellant, Linda Grimlie, Plaintiff,
vs.
AgStar Financial Services, FLCA, Respondent.
Filed December 27, 2016 Affirmed Stauber, Judge
Wright County District Court File No. 86-CV-15-5799; 86-CV-15-6186
Larry Grimlie and Linda Grimlie, Monticello, Minnesota (pro se appellants)
David J. Meyers, Benjamin B. Bohnsack, Rinke Noonan, St. Cloud, Minnesota (for respondent)
Considered and decided by Stauber, Presiding Judge; Worke, Judge; and Bratvold,
Judge.
UNPUBLISHED OPINION
STAUBER, Judge
Appellant challenges the district court’s dismissal of their foreclosure-based
claims, arguing that the foreclosure is void because respondent failed to strictly comply
with statutory requirements. We affirm. FACTS
In 1982, appellant Larry Grimlie and his wife, plaintiff Linda Grimlie, purchased
80 acres of land in Wright County. In 1986, the Grimlies obtained a mortgage secured by
the five acres of their land on which their homestead was located. The Grimlies did not
formally split the land into two parcels and would be unable to make this division
because Wright County required parcels in the general agriculture zoning district to be no
less than 10 acres.
In 2002, the Grimlies obtained a mortgage from respondent AgStar Financial
Services, FLCA, which was secured by the 75 acres that did not include their homestead.
In 2004, Larry Grimlie filed for Chapter 7 bankruptcy, and included the AgStar mortgage
in his schedule of debts. Larry Grimlie was not discharged from bankruptcy until
October 2012.1
AgStar began its foreclosure proceedings in 2013.2 A sheriff’s sale was held on
August 21, 2013, and the one-year redemption period ended on August 21, 2014. The
Grimlies did not redeem the property. Following expiration of the redemption period,
AgStar successfully asked Wright County to assign separate property identification
numbers to a 70-acre parcel and an additional five-acre parcel surrounding the Grimlies’
five-acre homestead property. This was necessary because AgStar could not sell the
1 Grimlie’s bankruptcy was prolonged due to allegations of fraudulent transfer. Grimlie v. Georgen-Running, 439 B.R. 710 (2010). 2 AgStar’s first foreclosure attempt was unsuccessful because the notice of intent to foreclose contained an error; the second successful attempt occurred eight months later.
2 property it acquired by foreclosure, as the Grimlies would then be left with a five-acre
property, in violation of Wright County zoning ordinances.
AgStar began eviction proceedings against the Grimlies as to the 70-acre parcel.
When the parties failed to agree to the transfer of the newly created five-acre parcel, the
district court issued another eviction order directing the Grimlies to remove their personal
property from AgStar’s five-acre parcel. After the second hearing, the Grimlies filed a
complaint and a petition for a temporary injunction prohibiting AgStar from selling the
70-acre parcel. AgStar offered to transfer the newly created five-acre parcel to Grimlies
free of charge after the Grimlies’ complaint was filed, but they refused to accept it.
The district court denied the Grimlies’ motion for a temporary injunction in an
April 4, 2016 order. A hearing on AgStar’s motion to dismiss the Grimlies’ complaint
was held on February 3, 2016; the district court’s order dismissing the Grimlies’
complaint was reduced to judgment on April 5, 2016. This order is the subject of this
appeal.
DECISION
Although the district court analyzed this as a motion to dismiss for failure to state
a claim under Minn. R. Civ. P. 12.02(e), it considered materials outside of the pleadings.
“If, on a motion asserting the defense that the pleading fails to state a claim upon which
relief can be granted, matters outside the pleading are presented . . . , the motion shall be
treated as one for summary judgment and disposed of as provided in Rule 56.” Minn. R.
Civ. P. 12.02. Minn. R. Civ. P. 56.03 provides that a court shall grant summary judgment
if the record and supporting affidavits demonstrate that there are no genuine issues of
3 material fact and either party is entitled to judgment as a matter of law. We review the
district court’s grant of summary judgment to determine whether there are genuine fact
issues and whether the district court erroneously applied the law. Larson v. Nw. Mut. Life
Ins. Co., 855 N.W.2d 293, 299 (Minn. 2014).
I.
Larry Grimlie argues that the district court erred by ruling that the Farmer-Lender
Mediation Act (FLMA), Minn. Stat. §§ 583.20-.32 (2014), does not apply to their
foreclosure. He raises two arguments: (1) AgStar failed to show that his annual income
for the sale of agricultural products was less than $20,000; and (2) the district court
contradicted itself by stating that the act did not apply, but cited to the act to support that
conclusion.
The legislature enacted the FLMA to alleviate severe financial stress in the state
agricultural sector. Minn. Stat. § 583.21. The FLMA applies to creditors which are
either (1) the United States or one of its agencies; (2) corporations, partnerships, and
other business entities; or (3) individuals. Minn. Stat. § 583.24, subd. 1(a). The FLMA
also applies to (1) debtors who are individuals running a family farm; (2) a family farm
corporation; or (3) an authorized farm corporation. Id., subd. 2(a). It does not apply to
debtors who own or lease fewer than 60 acres and have annual income of less than
$20,000 from the sale of agricultural products. Id., subd. 2(b). But the FLMA “does not
apply to a debt . . . for which a proof of claim form has been filed in bankruptcy by a
creditor or that was listed as a scheduled debt, of a debtor who has filed a petition in
bankruptcy after July 1, 1987.” Id., subd. 4(1).
4 While Larry Grimlie and AgStar would fit within the list of covered creditors and
debtors, the debt is not subject to mediation because Larry Grimlie included it as a
scheduled debt in his bankruptcy petition and AgStar filed a proof of claim in that
proceeding. Therefore, AgStar did not need to demonstrate that Larry Grimlie’s annual
farm income was less than $20,000 because the debt was not subject to mediation under
this chapter. His argument that the district court contradicted itself by ignoring some
provisions of the statute but relying on other provisions is meritless. “Every law shall be
construed, if possible, to give effect to all its provisions.” Minn. Stat. § 645.16 (2014).
The district court could not have applied one section of the FLMA without considering
all of the provisions governing applicability.
The fact of the bankruptcy filing is not disputed, and under the statute AgStar is
entitled to judgment as a matter of law. The district court did not err by granting
summary judgment on the issue of the relevancy of the FLMA.
II.
Larry Grimlie argues that AgStar failed to comply with the technical requirements
of foreclosure by advertisement, specifically citing Minn. Stat. §§ 580.021, subd. 2;
582.039; and 582.043, subd. 2 (2014).
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This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA IN COURT OF APPEALS A16-0877
Larry Grimlie, Appellant, Linda Grimlie, Plaintiff,
vs.
AgStar Financial Services, FLCA, Respondent.
Filed December 27, 2016 Affirmed Stauber, Judge
Wright County District Court File No. 86-CV-15-5799; 86-CV-15-6186
Larry Grimlie and Linda Grimlie, Monticello, Minnesota (pro se appellants)
David J. Meyers, Benjamin B. Bohnsack, Rinke Noonan, St. Cloud, Minnesota (for respondent)
Considered and decided by Stauber, Presiding Judge; Worke, Judge; and Bratvold,
Judge.
UNPUBLISHED OPINION
STAUBER, Judge
Appellant challenges the district court’s dismissal of their foreclosure-based
claims, arguing that the foreclosure is void because respondent failed to strictly comply
with statutory requirements. We affirm. FACTS
In 1982, appellant Larry Grimlie and his wife, plaintiff Linda Grimlie, purchased
80 acres of land in Wright County. In 1986, the Grimlies obtained a mortgage secured by
the five acres of their land on which their homestead was located. The Grimlies did not
formally split the land into two parcels and would be unable to make this division
because Wright County required parcels in the general agriculture zoning district to be no
less than 10 acres.
In 2002, the Grimlies obtained a mortgage from respondent AgStar Financial
Services, FLCA, which was secured by the 75 acres that did not include their homestead.
In 2004, Larry Grimlie filed for Chapter 7 bankruptcy, and included the AgStar mortgage
in his schedule of debts. Larry Grimlie was not discharged from bankruptcy until
October 2012.1
AgStar began its foreclosure proceedings in 2013.2 A sheriff’s sale was held on
August 21, 2013, and the one-year redemption period ended on August 21, 2014. The
Grimlies did not redeem the property. Following expiration of the redemption period,
AgStar successfully asked Wright County to assign separate property identification
numbers to a 70-acre parcel and an additional five-acre parcel surrounding the Grimlies’
five-acre homestead property. This was necessary because AgStar could not sell the
1 Grimlie’s bankruptcy was prolonged due to allegations of fraudulent transfer. Grimlie v. Georgen-Running, 439 B.R. 710 (2010). 2 AgStar’s first foreclosure attempt was unsuccessful because the notice of intent to foreclose contained an error; the second successful attempt occurred eight months later.
2 property it acquired by foreclosure, as the Grimlies would then be left with a five-acre
property, in violation of Wright County zoning ordinances.
AgStar began eviction proceedings against the Grimlies as to the 70-acre parcel.
When the parties failed to agree to the transfer of the newly created five-acre parcel, the
district court issued another eviction order directing the Grimlies to remove their personal
property from AgStar’s five-acre parcel. After the second hearing, the Grimlies filed a
complaint and a petition for a temporary injunction prohibiting AgStar from selling the
70-acre parcel. AgStar offered to transfer the newly created five-acre parcel to Grimlies
free of charge after the Grimlies’ complaint was filed, but they refused to accept it.
The district court denied the Grimlies’ motion for a temporary injunction in an
April 4, 2016 order. A hearing on AgStar’s motion to dismiss the Grimlies’ complaint
was held on February 3, 2016; the district court’s order dismissing the Grimlies’
complaint was reduced to judgment on April 5, 2016. This order is the subject of this
appeal.
DECISION
Although the district court analyzed this as a motion to dismiss for failure to state
a claim under Minn. R. Civ. P. 12.02(e), it considered materials outside of the pleadings.
“If, on a motion asserting the defense that the pleading fails to state a claim upon which
relief can be granted, matters outside the pleading are presented . . . , the motion shall be
treated as one for summary judgment and disposed of as provided in Rule 56.” Minn. R.
Civ. P. 12.02. Minn. R. Civ. P. 56.03 provides that a court shall grant summary judgment
if the record and supporting affidavits demonstrate that there are no genuine issues of
3 material fact and either party is entitled to judgment as a matter of law. We review the
district court’s grant of summary judgment to determine whether there are genuine fact
issues and whether the district court erroneously applied the law. Larson v. Nw. Mut. Life
Ins. Co., 855 N.W.2d 293, 299 (Minn. 2014).
I.
Larry Grimlie argues that the district court erred by ruling that the Farmer-Lender
Mediation Act (FLMA), Minn. Stat. §§ 583.20-.32 (2014), does not apply to their
foreclosure. He raises two arguments: (1) AgStar failed to show that his annual income
for the sale of agricultural products was less than $20,000; and (2) the district court
contradicted itself by stating that the act did not apply, but cited to the act to support that
conclusion.
The legislature enacted the FLMA to alleviate severe financial stress in the state
agricultural sector. Minn. Stat. § 583.21. The FLMA applies to creditors which are
either (1) the United States or one of its agencies; (2) corporations, partnerships, and
other business entities; or (3) individuals. Minn. Stat. § 583.24, subd. 1(a). The FLMA
also applies to (1) debtors who are individuals running a family farm; (2) a family farm
corporation; or (3) an authorized farm corporation. Id., subd. 2(a). It does not apply to
debtors who own or lease fewer than 60 acres and have annual income of less than
$20,000 from the sale of agricultural products. Id., subd. 2(b). But the FLMA “does not
apply to a debt . . . for which a proof of claim form has been filed in bankruptcy by a
creditor or that was listed as a scheduled debt, of a debtor who has filed a petition in
bankruptcy after July 1, 1987.” Id., subd. 4(1).
4 While Larry Grimlie and AgStar would fit within the list of covered creditors and
debtors, the debt is not subject to mediation because Larry Grimlie included it as a
scheduled debt in his bankruptcy petition and AgStar filed a proof of claim in that
proceeding. Therefore, AgStar did not need to demonstrate that Larry Grimlie’s annual
farm income was less than $20,000 because the debt was not subject to mediation under
this chapter. His argument that the district court contradicted itself by ignoring some
provisions of the statute but relying on other provisions is meritless. “Every law shall be
construed, if possible, to give effect to all its provisions.” Minn. Stat. § 645.16 (2014).
The district court could not have applied one section of the FLMA without considering
all of the provisions governing applicability.
The fact of the bankruptcy filing is not disputed, and under the statute AgStar is
entitled to judgment as a matter of law. The district court did not err by granting
summary judgment on the issue of the relevancy of the FLMA.
II.
Larry Grimlie argues that AgStar failed to comply with the technical requirements
of foreclosure by advertisement, specifically citing Minn. Stat. §§ 580.021, subd. 2;
582.039; and 582.043, subd. 2 (2014). The Grimlies did not raise the issue of failure to
comply with section 582.039 in their complaint. Matters not raised or argued in the
district court may not be raised for the first time on appeal. Fontaine v. Steen, 759
N.W.2d 672, 679 (Minn. App. 2009).
The Grimlies alleged in their complaint that AgStar did not comply with the
requirements of Minn. Stat. § 580.02 (2014), which sets forth the basic requirements for
5 foreclosure by advertisement. Section 580.02 requires that (1) there is a default in a
mortgage condition; (2) no other action to collect the debt has been maintained; (3) the
mortgage has been recorded; (4) a notice of pendency has been recorded and the
foreclosing party has complied with section 580.021; and (5) the foreclosing party has
complied with section 582.043, if applicable. Minn. Stat. § 580.02. Larry Grimlie
contests the last two requirements.
Under Minn. Stat. § 580.021, subd. 2, the foreclosing party must provide notice of
foreclosure prevention counseling services. But this subdivision applies only to
properties consisting of one to four family dwelling units, one of which is occupied by
the owner as his or her principal residence. Id., subd. 1 (2014). The property securing
the mortgage here was agricultural land without a residential dwelling. Larry Grimlie
argues that the entire 80-acre parcel included the homestead, thus making him eligible for
mortgage-foreclosure requirements related to owner-occupied properties. But the portion
of the property securing the mortgage was clearly described as a 75-acre portion of the
entire property that did not include an owner-occupied dwelling. See Bailey v. Galpin, 40
Minn. 319, 321-22, 41 N.W. 1054, 1055 (1889) (stating that legal title to land can pass by
deed if “the description is sufficient to identify the land”); see also Rochat v. Emmett, 35
Minn. 420, 421, 29 N.W. 147, 147 (1886) (“The [property owner] had power to convey it
by such terms of description as he might select, provided the description designated the
land intended to be conveyed with certainty, or so that it could be ascertained with
certainty.”). The legal description in the AgStar mortgage identified the property
securing the mortgage to exclude the Grimlies’ homestead acreage.
6 Minn. Stat. § 582.043, subd. 5, requires a mortgage servicer to notify a mortgagor
about loss mitigation options, and to offer and evaluate loss-mitigation options upon
application by a mortgagor. Again, this section applies only to owner-occupied
residential real estate consisting of no more than four dwelling units, including the
principal residence of the owner, and does not apply to this situation.
Affirmed.