Opinion
No. C8-00-2017.
Filed May 29, 2001.
Appeal from the District Court, Ramsey County, File No. C8993818.
Timothy J. Hassett, (for respondent)
John E. Daubney, (for appellant)
Considered and decided by Anderson, Presiding Judge, Lansing, Judge, and Halbrooks, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Appellant attempted to cancel respondent's contract for deed for alleged failure to pay real estate taxes, make regular monthly installment payments, and pay late charges on each delinquent payment. Respondent filed a complaint alleging defective cancellation and sought injunctive relief and a temporary restraining order to prevent appellant from proceeding with the cancellation. The district court ruled that appellant's conduct modified the written contract for deed, respondent had not defaulted, appellant had moved to cancel the contract in bad faith, and respondent was entitled to attorney fees.
Appellant now alleges that (1) the district court should have received testimonial evidence from his son, who was previously married to respondent; (2) his conduct did not modify the contract for deed; (3) the record does not support the award of attorney fees; and (4) respondent's payment to the court administrator does not satisfy her obligation to appellant. Because we find that the exclusion of the testimony was within the district court's discretion, the record supports the award of attorney fees, the contract was modified by appellant's behavior, and the balance amount was not clearly erroneous, we affirm.
FACTS
In May 1988, appellant Richard Wybierala entered into a contract for deed for a piece of property in St. Paul with his son, Thomas Wybierala. Under the contract, the purchase price was $30,000, payable at $250 per month, including 8.5% interest per annum. The contract also specified that the purchaser would be responsible for the real estate taxes and insurance. At the time of the contract, Thomas was living with respondent Dawn Wybierala. Thomas and respondent married in 1991.
Over the next ten years, Thomas and respondent made monthly payments to appellant. The payments ranged between $250 and $500. The memorandum line of the checks indicated that any excess payment was to be applied to taxes. Respondent and Thomas never received a tax statement, claimed a homestead credit, or took any income-tax deductions for the real estate taxes. Conversely, appellant took deductions from his state and federal income-tax returns in the amount of real estate taxes paid on the property.
In late 1997, respondent and Thomas began dissolution proceedings. In July 1998, respondent wrote to appellant, telling him that she thought the contract had been paid in full based on ten years of monthly payments. She asked appellant to send her the paid contract and the second half of the 1998 tax statement. Appellant replied that the contract had not been paid off and that respondent had apparently forgotten to account for interest, taxes, and insurance.
On January 7, 1999, the dissolution between respondent and Thomas was finalized. On February 27, 1999, appellant served respondent and Thomas with a Notice of Cancellation of Contract for Deed. The notice alleged that the default included the failure to: (1) pay real estate taxes from 1988 to 1998, (2) make certain monthly installment payments, and (3) pay late charges on each delinquent payment. Respondent filed a complaint against appellant alleging, among other things, defective cancellation and sought injunctive relief and a temporary restraining order to prevent appellant from proceeding with the cancellation. Thomas was a defendant for purposes of contribution and indemnification. Respondent also sought costs including attorney fees.
In the dissolution decree, respondent received the property with a lien in favor of Thomas. The dissolution decree estimated the fair market value of the property at $50,00 to $55,000 with an outstanding "mortgage" of $22,000.
The case was heard on April 21, 2000. At the hearing, appellant attempted to call Thomas to testify. The court prohibited Thomas from testifying because (1) he had not been listed on appellant's pretrial witness list and (2) he was a defendant in default that appellant could not expect to testify.
The court issued its order and memorandum, finding that respondent had not defaulted under the contract for deed and the contract balance was $17,492.19. The court concluded that appellant was precluded from demanding that respondent pay real estate taxes because he had deducted them and never requested payment of taxes until the time of the cancellation. The court found respondent responsible for all future real estate taxes and awarded her attorney fees based on appellant's bad-faith motivation in pursuing cancellation of the contract for deed. Respondent was ordered to submit documentation of her legal expenses, and appellant was permitted to respond to any or all of the expenses claimed.
The court subsequently awarded $8,206.84 in fees. After appellant failed to attend a closing to pay off the contract, the court amended its order, declaring that upon deposit of the outstanding amount of the contract, respondent would become the property owner. Respondent posted the requisite amount. This appeal follows.
DECISION I.
Appellant first argues that the trial court erred in refusing to allow Thomas Wybierala to testify. But evidentiary rulings "are subject to appellate review only if there has been a motion for a new trial in which such matters have been assigned as error." Sauter v. Wasemiller, 389 N.W.2d 200, 201 (Minn. 1986). Here, there was no motion for a new trial. Therefore, appellant waived the issue. Even if this issue had not been waived, we find that the argument fails.
When reviewing evidentiary rulings, appellate courts must determine whether the trial court has abused its discretion. Kroning v. State Farm Auto. Ins. Co., 567 N.W.2d 42, 45-46 (Minn. 1997). To constitute reversible error, an evidentiary ruling must be prejudicial. Uselman v. Uselman, 464 N.W.2d 130, 138 (Minn. 1990). For an error in the exclusion of evidence to be grounds for new trial, it must appear that such evidence might reasonably have changed the result of the trial if it had been admitted. Poppenhagen v. Sorensin Constr. Co., 300 Minn. 73, 79-80, 220 N.W.2d 281, 285 (1974).
It is doubtful that Thomas's testimony could have influenced the result. In his July 25, 2000 affidavit, Thomas states that he was prepared to testify that the buyer under this contract for deed "was required to pay all taxes and to furnish insurance," that the excess of some monthly payments was earmarked for taxes, and concerning the marital termination agreement. But the contract, copies of cancelled checks, and respondent's testimony established these facts. Therefore, because there is no prejudice, there was no error in prohibiting his testimony.
II.
Appellant argues that the trial court abused its discretion by awarding fees, because his action was merely a good-faith dispute over contract interpretation. He also argues that the statutory requirements of notice and an opportunity to be heard have not been met.
The decision to award attorney fees is within the trial court's discretion. Uselman, 464 N.W.2d at 145; Whalen v. Whalen, 594 N.W.2d 277, 281-82 (Minn.App. 1999). A trial court has wide discretion to award the type of sanctions it deems necessary in a particular case. Kellar v. Von Holtum, 605 N.W.2d 696, 702 (Minn. 2000).
The trial court has authority to award monetary sanctions if, "after notice and a reasonable opportunity to respond, the court determines that subdivision 2 has been violated." Minn. Stat. § 549.211, subd. 3 (2000). For every court filing, the signing attorney certifies that the motion or other paper is not for "any improper purpose, such as to harass." Minn. Stat. § 549.211, subd. 2(1) (2000). The imposition of a sanction requires the minimum procedural guidelines of "fair notice of both the possibility of a sanction and the reason for its proposed imposition" and "an opportunity to respond to the notice of a possible * * * sanction." Uselman, 464 N.W.2d at 143-44 (citations omitted).
Here, the trial court found bad faith in the fact that appellant's change in position regarding payment of real estate taxes is connected to the fact that respondent and Thomas were divorced and concluded that "[i]t is clear that [appellant] has acted in bad faith in seeking the cancellation, motivated to take revenge upon his former daughter-in-law." Appellant was warned of the possibility of attorney fees in respondent's complaint. In addition, the court's order also gave appellant the opportunity to respond and object to any portion of the attorney fees claimed by appellant. Therefore, we find that the trial court's order substantially complied with the procedural requirements of Minn. Stat. § 549.211 (2000), and any minor noncompliance is harmless error.
III.
Appellant next argues that the trial court erred in finding that his conduct modified the contract, thereby suspending respondent's tax obligation. "[A] written contract may be modified after its execution by the acts and conduct of the parties * * *." Wormsbecker v. Donovan Constr. Co., 247 Minn. 32, 41, 76 N.W.2d 643, 649 (1956); see also Yaritz v. Dahl, 367 N.W.2d 616, 618 (Minn.App. 1985) ("It is well settled that the conduct of contracting parties may be evidence of a subsequent modification of their contract." (citations omitted)). "It remains for the trier of fact to determine if and when the [contract] was modified, what were the terms, and appropriate damages." Alexander v. Holmberg, 410 N.W.2d 900, 901 (Minn.App. 1987).
Here, the court estopped appellant from claiming any real estate taxes on the property prior to October 15, 2000, because he retained the tax statements and did not request payment of these taxes from respondent or Thomas until calendar year 2000. In addition, the court found that by deducting these taxes from his income taxes, he affirmed his "intent to forego collection of the taxes" and made a gift of the payment of those taxes. By these acts, the court found that appellant had modified the contract for deed.
Appellant argues that because he never advised Thomas or respondent that he did not expect them to pay the taxes and interest, and because respondent acknowledged the obligations, the contract was not modified. Appellant testified that he had told respondent and Thomas on "numerous occasions" to pay the real estate taxes and that he never told them that he would forgive the taxes.
But his actions contradicted this testimony. See In re Matter of Boss, 487 N.W.2d 256, 260 (Minn.App. 1992) (self-serving testimony is not adequate evidence to support assertion by defendant), review denied (Minn. Aug. 11, 1992); see also Banbury v. Omnitrition Int'l, Inc., 533 N.W.2d 876, 881 (Minn.App. 1995) (stating a self-serving affidavit that contradicts earlier damaging deposition testimony is not sufficient to create a genuine issue of material fact unless there is a plausible explanation for the incongruity). Over the years, respondent and Thomas made monthly payments in excess of $250 and directed that the overage be applied to the payment of taxes. But they were never given the tax statements, knew the amount owed, or took the tax deduction. Moreover, the record is void of any evidence, other than appellant's self-serving testimony, that appellant ever requested that the taxes be paid, until after respondent suggested that the contract for deed was paid in full. The assessment of witness's credibility is the unique function of the trier of fact. Tolzmann v. McCombs-Knutson Assocs., 447 N.W.2d 196, 198 (Minn. 1989). Therefore, there is more than enough evidence in the record to support the trial court's finding that the contract was modified.
IV.
Finally, appellant argues that the trial court's finding that the balance of the contract is $17,492.19 is not based on credible evidence and is clearly erroneous. The trial court's findings of fact underlying the determination will not be disturbed unless clearly erroneous. Minn.R.Civ.P. 52.01. A finding is clearly erroneous if the reviewing court is "left with the definite and firm conviction that a mistake has been made." Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn. 1999) (quotation omitted). When determining whether findings are clearly erroneous, an appellate court views the record in the light most favorable to the trial court's findings. Frauenshuh v. Giese, 599 N.W.2d 153, 156 (Minn. 1999). In general, if the trial court had reasonable evidence to support its findings, the reviewing court should not disturb those findings. Fletcher, 589 N.W.2d at 101.
Appellant argues that, based on an amortization schedule presented at trial, the true balance is $20,082.11. The amortization that was used to establish this balance assumes monthly payments from 1988 until the time of the divorce of only $250. But the evidence presented at trial, including appellant's trial exhibits, demonstrate that many payments between 1991 and 1998 exceeded $250. Alternatively, respondent's posttrial memorandum includes an amortization schedule reflecting a balance of $17,492.19 as of May 2000 based on payments actually made by respondent. This schedule uses payments from a schedule prepared by appellant entered into evidence at trial. Because evidence in the record supports this finding, we will not disturb it.