Opinion
No. C7-96-608.
Filed September 24, 1996.
Appeal from the District Court, Dakota County, File No. C1949910.
Cooper S. Ashley, Mark W. Lee, Michael C. McCarthy, Maslon, Edelman, Borman Brand, P.L.L.P., (for Appellants)
James G. Golembeck, Pierre N. Regnier, Jardine, Logan O'Brien, P.L.L.P., (for Respondent)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § subd. 3 (1994).
UNPUBLISHED OPINION
Appellant Lysdale Family Trust (the trust) challenges summary judgment granted to respondent City of South St. Paul (the city). The trust contends (1) the city's Airport Advisory Board (the AAB) had apparent authority to enter into a contract on behalf of the city with Jack Lysdale to convey a hangar and (2) genuine issues of material fact exist regarding whether a valid contract was formed. We affirm.
FACTS
In June 1990, Lysdale told the AAB that he was interested in renovating Hangar 1, a deteriorated building at the South St. Paul Municipal Airport (the airport). On June 26, 1990, in response to Lysdale's proposal, the AAB passed the following motion:
We authorize Jack Lysdale to conduct feasibility study regarding salvage of hangar #1. Subject to findings of that study we recommend that Jack Lysdale enter into negotiations with the City of So.St.Paul to acquire the structure and salvage it rather than demolish it entirely. We give Jack Lysdale permission to realign the sides of the building so that the roof is in place. Assuming it is feasible, the acquisition of the building by Jack Lysdale would be subject to the award of a thirty-year standard ground lease. Approval of said lease is recommended by the Airport Advisory Board.
Lysdale began to salvage Hangar 1. Following Lysdale's death in 1992, the trust, as successor to his interests, continued the work and now alleges that total expenditures were $16,329.19.
In December 1992, the city council passed a resolution announcing the city's intention to sell Hangar 1 to Lysdale's business
for its fair market value * * * subject to the satisfaction of all of the following conditions:
(a)of the sale by appropriate federal and state agencies.
(b)definitive agreement setting forth the terms and conditions concerning the sale transaction acceptable to the parties.
(c)ground lease for the site of the Hangar acceptable to the parties.
(d)commitment in form satisfactory to the City with regard to repairs, renovations and improvements to be made to the Hangar by Lysdale['s business].
In 1994, negotiations for the city to convey Hangar 1 to the trust ended, and the trust filed a complaint against the city, claiming breach of contract and estoppel. In December 1995, the district court granted summary judgment, holding that there was no contract enforceable against the city.
DECISION
On appeal from summary judgment, the reviewing court evaluates (1) whether any genuine issues of material fact exist and (2) whether the district court erred in applying the law. State by Cooper v. French , 460 N.W.2d 2, 4 (Minn. 1990). Summary judgment is proper only if the evidence viewed in the light most favorable to the nonmoving party shows that the moving party has clearly sustained its burden of proving that no genuine issues of material fact exist and that it is entitled to judgment as a matter of law. Vacura v. Haar's Equip. , 364 N.W.2d 387, 391 (Minn. 1985).
The trust contends the city breached its June 1990 contract with Lysdale by refusing to convey Hangar 1. "A contract requires a meeting of the minds concerning its essential elements." Minneapolis Cablesystems v. City of Minneapolis , 299 N.W.2d 121, 122 (Minn. 1980). "Negotiations for a contract do not constitute a contract in themselves." 451 Corp. v. Pension Sys. for Policemen Firemen of Detroit , 310 N.W.2d 922, 924 (Minn. 1981). The trust offered evidence of negotiations to convey Hangar 1 to Lysdale but did not allege facts sufficient to establish the existence of a contract.
The trust does not dispute the district court's finding that the AAB "had no legal authority to bind the city to any contract." Instead, the trust argues that the AAB had apparent authority to contract on behalf of the city. "Apparent authority is that authority which a principal holds an agent out as possessing, or knowingly permits an agent to assume." Foley v. Allard , 427 N.W.2d 647, 652 (Minn. 1988).
[T]he party dealing with the agent must have actual knowledge that the agent was held out by the principal as having such authority or had been permitted by the principal to act on its behalf; and the proof of the agent's authority must be found in the conduct of the principal, not the agent.
Hockemeyer v. Pooler , 268 Minn. 551, 562, 130 N.W.2d 367, 375 (1964). This court, however, has stated that parties dealing with municipalities cannot rely on an agent's apparent authority:
"All persons contracting with municipal corporations are conclusively presumed to know the extent of the authority possessed by the officers with whom they are dealing." Jewell Belting Co. v. Village of Bertha , 91 Minn. 9, 12, 97 N.W. 424, 425 (1903). [The plaintiff] was required to ascertain whether the board had passed a resolution authorizing the [alleged agreement], or act at his peril.
Morris v. Perpich , 421 N.W.2d 333, 336 (Minn.App. 1988), review denied (Minn. May 16, 1988). The record here contains no evidence of any act by the city authorizing the AAB to enter into contracts on the city's behalf.
The trust also alleges estoppel, arguing that (1) the doctrines of estoppel and apparent authority may be used interchangeably and (2) the city should be estopped from renouncing its representation that the AAB had full control of Fleming Field. We disagree. Estoppel can be applied against the government "if justice so requires," weighing the public interest frustrated by the estoppel against the equities advanced by the individual. Mesaba Aviation Div. of Halvorson v. County of Itasca , 258 N.W.2d 877, 880 (Minn. 1977). Wrongful conduct on the part of a government official, however, is central to equitable estoppel. Ridgewood Dev. Co. v. State , 294 N.W.2d 288, 293 (Minn. 1980). There is no evidence that any representative of the AAB or the city told Lysdale that the AAB could contract with him without city approval. In fact, the AAB's June 1990 motion put Lysdale on notice that the AAB had no authority to contract on behalf of the city.
The trust contends the existence of a contract between Lysdale and the AAB is a fact question for the jury. The "existence of a contract is primarily a question of fact to be determined *on the basis of the evidence presented and the surrounding circumstances." Malmin v. Grabner , 282 Minn. 82, 86, 163 N.W.2d 39, 41 (1968). The AAB, however, had no authority, apparent or actual, to execute a contract on behalf of the city. Moreover, the record contains no evidence to prove the existence or the terms of a contract between Lysdale and the city. See Minneapolis Cablesystems , 299 N.W.2d at 122 (holding that no valid contract existed between the city and the appellant based on a resolution that left the city the option to veto any proposed ordinance prior to its final adoption). Although a former member of the AAB testified in deposition that he believed the AAB made a deal with Lysdale to sell Hangar 1 for "one dollar and other consideration," there is no evidence that the city agreed to such a contract. Rather, the evidence shows only that the AAB agreed to make certain recommendations to the city.
Finally, the city contends any alleged contract between Lysdale and the city is barred by the statute of frauds. Because we affirm the district court's determination that, for other reasons, a contract was not formed, we need not address this issue.