Opinion
No. A04-1986.
Filed October 4, 2005.
Appeal from the District Court, Hennepin County, File No. CT0210637.
Robert H. Leibman, (for respondent).
Nicholas J. Eugster, John W. Lang, Messerli Kramer, (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This opinion will be unpublished and may not be cited except as provided by Minn.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UNPUBLISHED OPINION
In this appeal from a judgment awarding respondent Jeffery Hansing an undivided one-half interest in a house titled in appellant Wendy Carlson's name, Carlson argues that the district court erred in ruling that exceptions from the statute of frauds and Minnesota's anti-palimony statutes applied when there was no written contract between the unmarried cohabitants. We affirm.
FACTS
Each of the parties owned a house when they decided to buy a new house together. Because Hansing had not completed selling his old house by the time of the closing for the new house, Carlson used her savings and the proceeds from the sale of her old house to pay half of the purchase price of the new house and obtained a mortgage loan in her own name to pay the other half of the purchase price. Title to the new house was put in Carlson's name.
After the parties moved into the house, Hansing made monthly payments to Carlson, and Carlson made the monthly mortgage payments. When the parties' relationship deteriorated, Carlson obtained a court order precluding Hansing from entering the house, and Hansing sued Carlson and the mortgage lender to establish his interest in the house.
Following a trial to the court, the district court found that the parties had an oral agreement that (1) each of them would own an undivided one-half interest in the house; (2) Carlson would pay one-half of the purchase price in cash, and the parties would jointly obtain a mortgage loan to pay the other half of the purchase price; and (3) Hansing would be solely responsible for the mortgage-loan origination fee, prepaid interest at closing, and monthly mortgage payments. The district court also found that Hansing's share of the purchase price was paid with proceeds from the mortgage loan obtained in Carlson's name with the understanding that Hansing would make the mortgage payments. Finally, the district court found that Hansing made monthly mortgage payments by transferring funds or issuing a check to Carlson, who used the money to make the mortgage payments, and as of the date that Carlson excluded Hansing from the house, Hansing had fully performed his part of the parties' oral agreement, and Carlson had breached the agreement.
The district court concluded that neither the statute of frauds nor the anti-palimony statutes precluded Hansing's claims and ordered that the house be sold and the proceeds divided between the parties. A posttrial order denied the bulk of Carlson's requested relief, but made Hansing responsible for all mortgage payments.
DECISION
"The applicability of a statute is an issue of statutory interpretation, which appellate courts review de novo." Ramirez v. Ramirez, 630 N.W.2d 463, 465 (Minn.App. 2001).
I
Under the statute of frauds, "[e]very contract . . . for the sale of any lands, or any interest in lands, shall be void unless the contract, or some note or memorandum thereof, expressing the consideration, is in writing and subscribed by the party by whom the lease or sale is to be made[.]" Minn. Stat. § 513.05 (2004). The district court found that the parties had an oral agreement, but the court concluded that because Hansing had performed under the agreement, the doctrine of part performance took the parties' oral agreement out of the statute of frauds. See Berg v. Carlstrom, 347 N.W.2d 809, 812 (Minn. 1984) (stating "[a]n agreement may be taken out of the statute of frauds . . . by part performance"); Doyle v. Wohlrabe, 243 Minn. 107, 110, 66 N.W.2d 757, 761 (1954) (same).
Carlson argues that the terms of a written contract to convey land cannot be altered by parole evidence, that it is undisputed that the house was conveyed to her in her name only, and that absent some written agreement evidencing Hansing's claimed interest in the house, his claim must be barred. But the district court found that the parties originally intended to purchase the house together, and when Hansing's continued liability for his own house made him unable to obtain a favorable mortgage loan with Carlson for the new house, Carlson obtained a mortgage loan in her name only, and the parties "agreed that after the closing, they would execute a Contract for Deed whereby Carlson would convey to Hansing record title to an undivided one-half interest in The House." Thus, the district court's ruling is not based on an attempt by Hansing to alter the contract conveying the house to Carlson, but on Carlson's separate agreement to convey a one-half interest in the house to Hansing. Carlson's argument that the district court erred by not applying the statute of frauds to protect the integrity of the contract conveying the house to her is misplaced.
Carlson also challenges the district court's use of the part-performance rationale to remove the parties' agreement from the statute of frauds. While the district court noted that "payment of purchase money, standing alone, is ordinarily insufficient to remove an oral contract for the transfer of an interest in land from the statute of frauds[,]" it also stated:
Hansing's part performance went beyond the mortgage payments to include identifying the opportunity to buy The House, negotiating the sale price, taking possession of The House, and selling his house . . . Moreover, the existence of the oral agreement is corroborated by several written documents, notably Carlson's handwritten notes. In light of those factors, this case parallels [ Camenker v. Greene, 251 Minn. 106, 86 N.W.2d 708 (1957)], where the Minnesota Supreme Court applied the rule that "the taking of possession by the purchaser, acting under an oral contract for the transfer of an interest in land, coupled with the making of part payment of the purchase price, in reliance upon and with unequivocal reference to the vendor-vendee relationship . . . is sufficient to avoid the statute [of frauds]."
Carlson argues that Camenker is distinguishable because Hansing did not pay the purchase price for, take sole possession of, or sign a note and mortgage for, the house. But Carlson admits that while Hansing lived in the house, he made monthly payments to her equal to the sum of the mortgage payments and half of the monthly bills, and the district court found that "using cancelled checks and bank statements, Hansing proved that he paid for each monthly mortgage payment from August 1, 2001 until March 1, 2002 by transferring funds or issuing a check to Carlson who used that money to make the mortgage payments." Regarding possession of the property, Hansing lived in the house until Carlson obtained a court order to keep him off the property. Like Hansing, the buyer in Camenker did not take sole possession of that property. See Camenker, 251 Minn. at 108, 86 N.W.2d at 710 (noting buyer bought new locks for property that were "[all] keyed alike [and] gave one passkey for these new locks to the [seller] and [kept the other key]").
Carlson argues that the district court did not find that Hansing's part performance was coupled with what the Camenker court called an "unequivocal reference to . . . the vendor-vendee relationship." 251 Minn. at 109, 86 N.W.2d at 711. But in addition to finding that Hansing made monthly payments to Carlson, which Carlson used to make the mortgage payments, the district court also found that exhibit 56, the Settlement Statement for the new house, itemized the closing costs and "Carlson's handwriting on the Settlement Statement shows that the parties adhered to their agreement [to apportion] the closing costs: Hansing paid all of the loan origination fee ($1,750.00) and pre-paid loan interest ($341.60) and paid half of the lender's fees ($1,243.00), title and closing fees ($1,828.00), and pre-paid property taxes ($122.18)." Also, exhibit 10, Carlson's handwritten summary of the closing, refers to the mortgage loan as "Jeff's Loan." Given Carlson's admission that Hansing paid closing costs and that she referred to the mortgage loan as "Jeff's Loan," we reject Carlson's argument that Hansing's part performance was not coupled with an "unequivocal reference to the vendor-vendee relationship," and we affirm the district court's determination that Hansing's part performance of the parties' oral agreement takes the agreement out of the statute of frauds. See Johnson v. Quaal, 250 Minn. 154, 158, 83 N.W.2d 796, 799 (1957) ("Whether acts of part performance are unequivocally referable to a vendor-vendee relationship under an oral contract is a question of fact to be determined by the trier of fact.").
Because we affirm the district court's determination that part performance takes the parties' oral agreement out of the statute of frauds, we need not address Carlson's challenges to the district court's rulings regarding a constructive trust or a joint venture.
II
The Minnesota anti-palimony statute provides:
If sexual relations between the parties are contemplated, a contract between a man and a woman who are living together in this state out of wedlock, or who are about to commence living together in this state out of wedlock, is enforceable as to terms concerning the property and financial relations of the parties only if:
(1) the contract is written and signed by the parties, and
(2) enforcement is sought after termination of the relationship.
Minn. Stat. § 513.075 (2004).
Unless the individuals have executed a contract complying with the provisions of section 513.075, the courts of this state are without jurisdiction to hear and shall dismiss as contrary to public policy any claim by an individual to the earnings or property of another individual if the claim is based on the fact that the individuals lived together in contemplation of sexual relations and out of wedlock within or without this state.
Minn. Stat. § 513.076 (2004).
Citing In re Estate of Palmen, 588 N.W.2d 493, 495 (Minn. 1999), the district court concluded that these anti-palimony statutes "do not apply unless the contemplation of sexual relations was the sole consideration for the agreement." The district court then determined:
With respect to Hansing's part of the agreement, consideration consisted primarily of monetary contributions toward the purchase of The House, e.g., providing funds for the monthly mortgage payments. Since the primary consideration for the agreement was unrelated to the parties' sexual relations, Hansing's claim is not subject to the jurisdictional bar imposed by [the statutes].
Carlson argues that the district court's reliance on Palmen is misplaced. But the district court correctly read Palmen, which states, "in In re Eriksen, we explicitly held that the jurisdictional bar imposed by sections 513.075 and 513.076 applies only when the ` sole consideration for a contract between cohabiting parties is their contemplation of sexual relations * * * out of wedlock.'" 588 N.W.2d at 495 (quoting In re Eriksen, 337 N.W.2d 671, 674 (Minn. 1983)). Furthermore, because the parties' had an agreement that each of them would own an undivided one-half interest in the house, and Hansing performed under that agreement until Carlson precluded him from entering the house, the other cases that Carlson cites to support her argument are distinguishable. See Mechura v. McQuillan, 419 N.W.2d 855, 858 (Minn.App. 1988) ("No claims of unjust enrichment exist in this case where respondent provided the entire payment for the house."); Tourville v. Kowarsch, 365 N.W.2d 298, 300 (Minn.App. 1985) (noting "the trial court accepted respondent's testimony that the parties did not have an agreement that appellant had an interest in the property"); Hollom v. Carey, 343 N.W.2d 701, 704 (Minn.App. 1984) (noting "there was never a clear understanding between the parties that the property would be jointly owned").
Carlson also argues that the district court erred in relying on Palmen because Palmen only allows recovery of an individual's own property, and here Hansing did not contribute to the purchase of the house, was unable to trace any other contributions to the house, and even after completing the sale of his old home, did not contribute to the house or the mortgage. But this argument is based on factual assumptions contrary to the district court's well-supported findings. Carlson completely ignores the district court's findings that (1) the parties agreed that each of them would own an undivided one-half interest in the house; (2) Carlson obtained the mortgage loan in her name with the understanding that Hansing would make the mortgage payments; and (3) Hansing made monthly payments to Carlson who then used the money she received from Hansing to make the mortgage payments. Also, the posttrial order makes Hansing "solely liable" for the mortgage loan that is in Carlson's name.
By making Hansing liable for all mortgage payments, the district court addressed Carlson's argument that awarding Hansing a one-half interest in the house gave Hansing a windfall. Making Hansing responsible for the mortgage means that each party is responsible for half of the cost of the house. The only windfall involved is the amount by which the parties bought the house below market value and any increase in market value after the parties bought the house. Hansing would have had a one-half interest in both of those amounts if Carlson had conveyed to Hansing a one-half interest in the house, as the district court found the parties had agreed.
Citing Roatch v. Puera, 534 N.W.2d 560 (Minn.App. 1995), Carlson argues that the exceptions to the anti-palimony statutes do not apply when the claimant did not contribute equally to the purchase of the house and that Hansing's general contributions to living expenses, regardless of what debts the contributions helped pay, have no legal effect on her ownership of the house. But the district court rejected Carlson's allegation that Hansing simply made general contributions to living expenses and did not contribute to the acquisition of the house. Unlike Hansing, the Roatch claimant had contributed only minimally to the acquisition of the property and was not trying to protect her property. Id. at 564. Here, the district court found that the parties agreed that they would own the house jointly and equally and that Hansing would pay for his one-half interest by paying off the mortgage. The district court also found that when the purchase agreement was executed, the house was worth substantially more than the purchase price, which resulted in an immediate gain for the parties. Thus, Hansing is trying to protect the property that he and Carlson acquired jointly.
Carlson also cites an unpublished opinion to support her argument. But unpublished opinions are of limited value in deciding an appeal. Minn. Stat. § 480A.08, subd. 3(c) (2004); Vlahos v. R I Constr., Inc., 676 N.W.2d 672, 676 n. 3 (Minn. 2004); Powell v. Anderson, 660 N.W.2d 107, 123 (Minn. 2003); Dynamic Air, Inc. v. Bloch, 502 N.W.2d 796, 800-01 (Minn.App. 1993).
Finally, Carlson argues that Palmen does not entitle Hansing to an undivided one-half interest in the house and, even if Hansing is owed some form of relief, a forced partition sale is not equitable. We disagree. Palmen addresses the applicability of the anti-palimony statutes. 588 N.W.2d at 495. Hansing sought to enforce an agreement that entitled him to a one-half interest in the house, the district court found that the anti-palimony statutes do not apply and ruled in his favor, and Carlson has not shown that the district court's factual or legal determinations are erroneous.
The law favors partition in kind rather than a sale, and the person requesting a sale has the burden of proving that partition in kind cannot be made without great prejudice to the owners. Anderson v. Anderson, 560 N.W.2d 729, 730-31 (Minn.App. 1997). The district court did not abuse its discretion in concluding that partition in kind cannot be had without great prejudice to the owners because partition in kind would require the parties to occupy the same dwelling. See First Trust Co. of St. Paul v. Holt, 411 N.W.2d 564, 565 (Minn.App. 1987) (stating partition proceedings are governed by equity principles and courts apply equity with discretion), review denied (Minn. Nov. 18, 1985). Under the parties' agreement, Hansing is entitled to a one-half interest in the house. A sale will determine the value of Hansing's one-half interest.