Opinion
No. C0-95-2268.
Filed September 3, 1996.
Appeal from the District Court, Hennepin County, File No. 1950914544.
James M. Neilson, Babcock, Lochner, Neilson Mannella, (for Respondent Rum River Lumber Co.).
Katherine M. Bergenthal, Coleman, Hull Van Vliet, (for Respondent Doors and Windows).
David J. LenHardt, Foster, Waldeck, Gries Lind, (for Respondent Bob Kilian Electric).
Wayne Holstad, Karen J. Fjeld, Holstad and Larson, P.L.C., (for Appellants Flynn, et al.).
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. §. 480A.08, subd. 3 (1994).
UNPUBLISHED OPINION
Appellants Scott P. Flynn and Lauren J. Heard claim that the district court should have issued a temporary restraining order (TRO) to suspend this unlawful detainer (UD) action pending resolution of title issues in other litigation. Appellants also claim that the district court erred by issuing a UD judgment. We affirm.
FACTS
In 1993, appellants entered one of several agreements under which G. Simon Construction Co. (Simon) would build a house for them and convey the house and land to appellants. Neither Simon nor appellants then owned the land. Simon later got a warranty deed for the land and mortgaged it to Construction Mortgage Investors Co. (CMIC) and to respondent Rum River Lumber Co. (Rum River). Rum River also had a mechanics lien on the property, as did the other respondents. Simon defaulted on the CMIC mortgage and CMIC bought the property at a February 1995 foreclosure sale. In June 1995, respondents sought to foreclose their mechanics' liens, and appellants started a quiet title action. In July, CMIC assigned its sheriff's certificate to Rum River. And in August, Rum River redeemed twice: first as second mortgagee and then as one of the redeeming mechanics lienors. Respondents brought this UD action to remove appellants from the property in September. The district court consolidated the quiet title and mechanics lien actions. Appellants sought a TRO to suspend this UD action pending resolution of the title claims in the consolidated action. This request was ultimately denied and, in October 1995, the UD court granted respondents a UD judgment.
DECISION
1. Appellants assert that the UD court's denial of a TRO was defective because the court made no findings. Minn. Stat. § 559.21 (termination statute), sets out how to cancel a real estate contract. Minn. Stat. § 559.211 (TRO statute), addresses a purchaser's ability to get a TRO to suspend a cancellation. Under the TRO statute, the county or district court, notwithstanding the service or publication pursuant to the provisions of section 559.21 of a notice of termination of the contract, has the authority at any time prior to the effective date of termination of the contract * * * to enter an order temporarily restraining or enjoining further proceedings to effectuate the termination of the contract, including * * * taking any action to recover possession of the real estate * * *. In the action, the purchaser may plead affirmatively any matter that would constitute a defense to an action to terminate the contract.
Minn. Stat. § 559.211, subd. 1 (emphasis added).
The emphasized portions of the TRO statute show that it is to be read in light of the termination statute. Indeed, the TRO statute is titled "RESTRAINING OR ENJOINING FURTHER PROCEEDINGS PURSUANT TO NOTICE OF TERMINATION OF CONTRACT OF SALE." Under the termination statute, "the seller may terminate the contract * * *." Minn. Stat. § 559.21, subd. 1c. Here, the property was originally owned by a third party who agreed to convey it to Simon who, in turn, agreed to convey it to appellants. This UD action by redeeming lienholders involves neither a seller of the property nor an attempt to terminate a real estate contract. It would be improper to apply the TRO statute here. See Martinco v. Hastings , 265 Minn. 490, 497, 122 N.W.2d 631, 638 (1963) ("courts cannot supply that which the legislature purposely omits or inadvertently overlooks"). Therefore, any lack of findings to support denial of the TRO is harmless. See Minn.R.Civ.P. 61 (harmless error to be ignored).
Even if the TRO statute could have applied here, a TRO must be granted "prior to" termination of the contract. Minn. Stat. § 559.211, subd. 1. Appellants' attempt to invoke the statute after expiration of the mortgage redemption periods was untimely.
2. Appellants assert that a UD action should not be decided while title claims are pending. UD actions do not determine title. See William Weisman Holding Co. v. Miller , 152 Minn. 330, 332, 188 N.W. 732, 733 (1922) (UD action "merely determines the right to the present possession of the property * * * and is not a bar to an action involving the title to the property"). Also, pending equitable actions do not require suspension of UD actions. See id. (court hearing equitable action may enjoin UD action if equities show that tenant "ought not to be ousted from possession").
3. Appellants assert that any findings which might be made by the UD court on this action will have preclusive (collateral estoppel) effect. A UD action cannot dispositively address title or equitable defenses. See Pushor v. Dale , 242 Minn. 564, 568-69, 66 N.W.2d 11, 14 (1954) (UD judgment "does not constitute a bar in subsequent actions as to questions of title or other equitable defenses"); Cole v. Paulson , 380 N.W.2d 215, 218 (Minn.App. 1986) (while UD judgment conclusive as to right of possession and facts upon which that right rests, UD proceeding is also "summary proceeding" and "does not serve as a bar to subsequent actions as to title or other equitable defenses"). While a UD judgment may be dispositive regarding facts necessary to show a right to immediate possession, it is not dispositive regarding elements of an equitable defense not necessary to show a right to possession or to the applicability of the defense itself. See id. (collateral estoppel requires, among other things, that issue in question has been "litigated and necessary to the outcome of the prior action"). Similarly, because a UD action cannot dispositively address title, a UD finding of who owns property does not necessarily preclude litigation of title outside the UD context. Cf. Sternaman v. Hall , 411 N.W.2d 18, 19 (Minn.App. 1987) ("Weisman is, for purposes of this [UD] litigation, the legal owner of the property with a superior right of possession, and the municipal court erred in failing to grant a writ of restitution to Weisman. We note, however, that respondent Hall is not precluded from asserting her equitable ownership claim in an action to quiet title").
4. Appellants assert that because UD proceedings now occur in district court, rather than municipal court, title and equitable issues could properly be addresses in a UD action. However, UD proceedings are still summary in nature. See Berg v. Wiley , 303 Minn. 247, 250, 226 N.W.2d 904, 906-07 (1975) (UD act "was drawn to provide summary disposition of disputes as to possession only" and other issues "including abandonment, surrender, material breach of the lease agreement, and voluntary waste, are clearly not amendable or appropriate to the type of summary disposition envisioned in the act"); Weisman , 152 Minn. at 332, 188 N.W. at 732-33 ("[t]he remedy provided by the [UD] statute `is summary in its nature and the mode of proceeding is of the essence of it'" (quoting Gray v. Hurley , 28 Minn. 388, 389, 10 N.W. 417, 417 (1881))). While a district court may hear title and equitable issues, UD proceedings are still truncated and are an improper forum for litigating claims other than the right to immediate possession. See Berg , 303 Minn. at 250-51, 226 N.W.2d at 907 (to allow litigation of claims other than those listed in UD statute "would * * * defeat the purpose for which these statutory provisions were enacted").
5. Appellants claim that they acquired an interest in the property superior to the CMIC construction mortgage and that because the related evidence is documentary, this court may review de novo the finding that respondents own the property. The rules were amended in 1985, and this court now defers to district court findings based on documentary evidence. See First Trust Co. v. Union Depot Place Ltd. Partnership , 476 N.W.2d 178, 181-82 (Minn.App. 1991) (explaining 1985 amendment of Minn.R.Civ.P. 52.01), review denied (Minn. Dec. 31, 1991). Here, the agreement on which appellants base their claim was made when both they and Simon were strangers to the land's title. Also, the agreement was not filed and was followed by other, differing, alleged agreements with Simon. It is far from clear that appellant's interest in the property is superior to CMIC's.
Appellants also claim that the finding that respondents are owners of the property is not a finding of fact but a conclusion of law and is subject to de novo review. Regardless of whether the district court's determination is a finding of fact or a conclusion of law, appellants do not explain how, under the circumstances mentioned above, they could have an interest in the property superior to CMIC.
6. Appellants claim that under Mastin v. May , 127 Minn. 93, 148 N.W. 893 (1914), the UD statute cannot be employed against them because they peaceably entered the property. Mastin is distinguishable. There, a potential purchaser of the property entered the premises during negotiations which later proved unsuccessful. When the owner invoked the UD statute, the supreme court held the statute inapplicable because the potential purchaser's presence on the property did not fit a category in the UD statute. Id. at 95, 148 N.W. at 894 (UD proceeding designed to recover possession of land unlawfully or forcibly taken or held could not be used to remove "mere trespasser, who entered in possession peaceably under claim of right"). Because the current UD statute may be invoked against persons holding over after "foreclosure of a mortgage" and "expiration of the time for redemption," it was properly invoked against appellants. Minn. Stat. § 566.03, subd. 1(1) (1994).