Opinion
No. A05-2399.
Filed October 3, 2006.
Appeal from the McLeod County, District Court, File No. C2-04-1023.
Eric J. Braaten, Nicklaus, Braaten Hollenhorst, Pllc, Chaska, Minnesota, (for respondents).
Peter J. Kasal, Keefe Kasal, Hutchinson, Minnesota, (for appellant).
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
On appeal in this dispute relating to the breach of a real estate purchase agreement, appellant-seller argues the record does not support the district court's findings that (a) her agent had actual or apparent authority to sell the property, or (b) the contract was validly formed. Because the district court's findings that appellant's agent had actual authority to sell the property and that a valid contract existed were not clearly erroneous, we affirm.
FACTS
Appellant Delores Saar is the owner of commercial real property (the property) located outside the city of Hutchinson, Minnesota. Appellant has an accountant, DuWayne Peterson, with whom she has been doing business for 30 years. In late 2003, respondent Michael Mickolichek telephoned appellant to inquire about purchasing the property. Appellant told Mickolichek to contact Peterson. Respondents then hired Lynn Otteson, a RE/MAX real estate agent, to represent them in the purchase, and Otteson subsequently prepared a purchase agreement. In January 2004, through Peterson and Otteson, appellant entered into the written purchase agreement with respondents. Appellant wanted Otteson's commission added to the purchase price, so the first page of the purchase agreement was voided and a replacement page with the new amount was written, initialed, and backdated. The purchase agreement also provided that the purchase agreement would be null and void unless the offer was accepted prior to February 6, 2004. At some point, Otteson noticed that appellant had failed to sign page four of the five-page purchase agreement and returned it to Peterson for appellant's signature. The page was signed and dated February 12, 2004. In May 2004, appellant refused to perform under the purchase agreement, and respondents brought a breach-of-contract action requesting specific performance. The matter was tried by the district court, and the district court found that appellant breached the contract and granted specific performance to respondents, ordering appellant to close on the sale of the property within 30 days. This appeal follows.
DECISION
In a case tried by the district court without a jury, this court is limited to determining whether the district court's findings are clearly erroneous and whether the court erred in its conclusions of law. Powell v. MVE Holdings, Inc., 626 N.W.2d 451, 457 (Minn.App. 2001), review denied (Minn. July 24, 2001). "Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses." Minn. R. Civ. P. 52.01. In applying rule 52.01, "we view the record in the light most favorable to the judgment of the district court." Rogers v. Moore, 603 N.W.2d 650, 656 (Minn. 1999). And "[i]f there is reasonable evidence to support the district court's findings, we will not disturb them." Rogers, 603 N.W.2d at 656.
I
First, appellant challenges the district court's findings that appellant's agent acted with either actual or apparent authority to complete the transaction. Whether an agent acted with the principal's authority is a question for the fact-finder. See Gulbrandson v. Empire Mut. Ins. Co., 251 Minn. 387, 391, 87 N.W.2d 850, 853 (1958). A principal-agent relationship results from the manifestation of mutual consent that the agent will act on the principal's behalf and subject to the principal's control. A. Gay Jenson Farms Co. v. Cargill, Inc., 309 N.W.2d 285, 290 (Minn. 1981). Actual authority is authority that the principal intentionally confers on an agent and the powers incidental to the specific powers granted. Nehring v. Bast, 258 Minn. 193, 200, 103 N.W.2d 368, 374 (1960). The principal creates the agent's actual authority by communicating either orally or otherwise to the agent the principal's expectation that the agent is to act on behalf of the principal and subject to the principal's direction. See Restatement (Second) of Agency § 7 (1958) (defining "authority" as the agent's power to affect the principal's legal relations by acting in accordance with the principal's manifestations of consent to the agent). A written contract is not required to create actual authority; instead, it may be created by acquiescence. See Vacura v. Haar's Equip. Inc., 364 N.W.2d 387, 391 (Minn. 1985) (finding that an agent had authority when the agent regularly exercised power not expressly given to it and principal tacitly sanctioned the practice). Actual authority includes both express authority, which the principal directly grants to an agent, and implied authority. Hockemeyer v. Pooler, 268 Minn. 551, 565, 130 N.W.2d 367, 377 (1964). Implied authority includes powers that are directly connected with or essential to carry out the agent's expressly delegated duties. Hornblower Weeks-Hemphill Noyes v. Lazere, 301 Minn. 462, 471, 222 N.W.2d 799, 805 (1974); see also Restatement (Second) of Agency § 50 ("[A]uthority to make a contract is inferred from authority to conduct a transaction, if the making of such a contract is incidental to the transaction, usually accompanies such a transaction, or is reasonably necessary to accomplish it."). Apparent authority is authority 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). Apparent authority must be founded on the actions of the principal, "since no agent by his own act can create evidence of authority." West Concord Conservation Club, Inc. v. Chilson, 306 N.W.2d 893, 897 (Minn. 1981).
Here, the district court found that appellant gave Peterson express, actual authority without limitation to act as her agent in selling the property. Alternatively, the district court found that "even if [appellant] had not given [Peterson] unlimited express authority with respect to selling the [property], this Court finds that [Peterson] had apparent authority to negotiate all of the terms of the purchase agreement." These findings are amply supported by the record. Peterson had been appellant's accountant for nearly 30 years, and appellant had numerous business dealings with him during the four-year period prior to the trial. And on this specific occasion, appellant acknowledged that she employed Peterson as her agent to help with the sale of the property. Further, the record includes testimony from respondent that when he called appellant to ask her about the property, she told him that the property was for sale and that he should contact Peterson because "she was 80-years-old and did not want to take on the dealings of the sale." Appellant further testified that "anybody that called because of the [property], I would send them to [Peterson]." Appellant testified that she went to Peterson's office and signed blank RE/MAX papers on January 7, 2004. Appellant testified that, because of her relationship with Peterson, she would have signed anything he asked "because he was my confidant." Further, during cross-examination appellant was asked if she felt that it was "Peterson's responsibility, acting as your agent, to negotiate a proper price." Appellant answered, "Yes." In sum, the record demonstrates that appellant relied on Peterson and held him out to be her agent, thereby giving Peterson — at a minimum — apparent authority to act on her behalf to sell the property. And if, as appellant claims, she signed a blank purchase agreement with Peterson, her conduct shows that Peterson had actual authority to negotiate the terms of the agreement as well. Moreover, if the purchase agreement was not blank when appellant signed it (as Peterson, Otteson, and respondents contend), appellant's signature on those pages demonstrates that she agreed with Peterson's negotiated terms of the purchase agreement at the time she signed the agreement. Although appellant now claims that Peterson had no authority to set the terms of the sale or to sign any documents for appellant, on this record, and in deference to the district court's credibility determinations, we conclude that the district court did not clearly err in finding that appellant gave Peterson actual authority to act as her agent in selling the property.
Peterson testified that the RE/MAX papers were complete when appellant signed them and Otteson testified that she drafted the papers on January 30, 2004.
II
Next, appellant argues that the district court clearly erred in finding that the contract was valid because the contract was not fully executed before the deadline imposed for acceptance under the terms of the contract. Generally, whether a contract actually exists, as well as the terms of the contract, are questions of fact to be determined by the fact finder. TNT Props., Ltd. v. Tri-Star Developers LLC, 677 N.W.2d 94, 101 (Minn.App. 2004). We will not set aside a district court's findings of fact unless they are clearly erroneous and due regard has been given to the district court's credibility determinations. Minn. R. Civ. P. 52.01.
Appellant argues that, under Callender v. Kalscheuer, 289 Minn. 532, 533, 184 N.W.2d 811, 812 (1971), a contract with a time limit is null and void if not accepted before that limit expires. In Callender, the supreme court affirmed summary judgment for a seller when the buyer attempted to accept seller's offer three days after the expiration of the limited offer and there was no written extension of time. Callender, 184 N.W.2d at 812.
Callender, however, is inapposite. First, in Callender the supreme court affirmed summary judgment, thus the standard of review was different from that in the present case. Callender and the instant case share some similarities but on pivotal points are factually distinguishable as well. Like Callender, the operative document here included a clause setting a specific deadline for acceptance — in this case February 6, 2004. And in Callender, the court observed that when "the time for acceptance of an offer is limited . . . the limit is absolute and time is of the essence." Id. at 812. Here, the purchase agreement included a standard clause that stated "TIME IS OF THE ESSENCE FOR ALL PROVISIONS OF THIS CONTRACT." But in contrast to Callender, here, appellant's signature on page two of the document — the primary signature page — indicates that it was signed by all parties on January 29, 2004, well within the acceptance deadline. Page one of the document — which was rewritten to provide for a new purchase price — was initialed and dated February 6, 2004, still within the deadline. When Otteson later noticed that page four of the agreement — one of two addenda — had not been signed by appellant, she returned page four to Peterson so that he could obtain appellant's signature. Appellant's signature on page four of the document shows that it was signed on February 12, 2004. The record suggests that the missing signature on page four was a technical error that was discovered and corrected shortly after the deadline set by respondents. By signing portions of the contract both before and after the deadline, it appears that the parties considered the deadline either met or waived.
Otteson testified she had subsequently prepared a new first page for the purchase agreement when appellant changed the purchase amount to shift Otteson's fees to the buyer.
Further, the time-is-of-the-essence provision was included for respondents-buyers' benefit, as they wanted to hire contractors to prepare the property for its planned use. It is also noteworthy that appellant does not dispute any of the terms of the addendum page. Indeed, the district court found that the real bases for appellant's refusal to perform was her belief that the negotiated price was too low and that she would have difficulty moving her belongings off the property by the time of the closing. On this record, the district court did not clearly err in determining that a valid contract existed.
We decline to address appellant's remaining arguments. Appellant's argument regarding lack of acceptance due to an alleged counteroffer was not raised before the district court, and we decline to consider it here. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (declining to consider issues that were not presented or decided by the district court); see also Ellingson v. Burlington N.R.R. Co., 412 N.W.2d 401, 405 (Minn.App. 1987) (stating that a party may not raise an issue for the first time in a motion for a new trial.), review denied (Minn. Nov. 13, 1987). Additionally, we decline to reach appellant's unsupported claim that her signature on page four of the document was a forgery. See State Dep't of Labor Indus. v. Wintz Parcel Drivers, Inc., 558 N.W.2d 480, 480 (Minn. 1997) (declining to address issues in the absence of adequate briefing); see also Ganguli v. Univ. of Minn., 512 N.W.2d 918, 919 n. 1 (Minn.App. 1994) (declining to address allegations unsupported by legal analysis or citation).