Opinion
No. C6-01-1717.
Filed May 14, 2002.
Appeal from the District Court, St. Louis County, File No. C699600477.
Larry B. Leventhal, David L. Garelick, and
Bruce C. Bromander, (for respondent)
Charles H. Andresen, Diana Bouschor Dodge, (for appellant)
Considered and decided by Lansing, Presiding Judge, Randall, Judge, and Stoneburner, 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This opinion will be unpublished and may not be cited except as provided by Minn.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UNPUBLISHED OPINION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 Paul Gonyea challenges the district court's denial of his motion for reimbursement for property taxes, utility bills, and other expenses he paid between the time that respondent Electric Fetus Company exercised its right of first refusal to purchase Gonyea's building and the date of the closing. Electric Fetus appeals from the district court's denial of its motion for attorney fees and its motion for a credit for utility bills paid by Electric Fetus after it exercised its right of first refusal. We affirm.
FACTS
In 1999 Electric Fetus sought specific performance of its right of first refusal contained in its lease for the purchase of Gonyea's building located in Duluth. The district court granted specific performance. Gonyea appealed, arguing that the lease did not contain a right of first refusal at the time that Gonyea received the third-party offer. This court affirmed. See Electric Fetus Co. v. Gonyea, No. C1-00-545, 2000 WL 1778906 (Minn.App. Nov. 21, 2000).
The district court ordered that Electric Fetus's rent payments made after the invocation of its right of first refusal on May 27, 1998 would be deducted from the purchase price. Between May 27, 1998 and the closing date, Gonyea paid property taxes, utilities, and other routine expenses on the building. Gonyea moved the district court for an order adding the amount of these expenditures, minus the amount of rent he received from other tenants, to the purchase price of the building. Electric Fetus opposed the motion and submitted its own motion requesting a credit for amounts it expended for repairs and utility bills between May 27, 1998 and the closing. Electric Fetus also requested attorney fees. The district court denied Gonyea's motion and noted that these expenses "did not relate to any improvements to the property." The district court denied Electric Fetus's motions without comment.
Gonyea specifically requested an "offset or addition * * * to the purchase price payable by [Electric Fetus]" but does not identify any funds he owed to Electric Fetus from which the expenses could be offset.
Gonyea appeals from the district court's denial of his motion for an addition to the purchase price for his expenditures. Electric Fetus seeks review of the district court's order denying its motion for reimbursement of its expenditures and attorney fees.
DECISION
Whether Gonyea is entitled to recover expenses incurred during the delay in closing is a question of law subject to de novo review. See Frost-Benco Elec. Ass'n v. Minn. Pub. Utils. Comm'n, 358 N.W.2d 639, 642 (Minn. 1984) (acknowledging that a reviewing court is not bound by and need not give deference to a district court's decision on a purely legal issue). The district court's findings of fact, however, will not be set aside unless they were "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.
I.
Gonyea argues that, if the closing had occurred when Electric Fetus exercised its option, the expenses he incurred would have been Electric Fetus's responsibility. Gonyea, therefore, seeks to add these expenses to the purchase price, noting that "[t]he purpose of specific performance is to put the parties in the position they would have been in had the contract been performed." Park-Lake Car Wash, Inc. v. Springer, 394 N.W.2d 505, 512 (Minn.App. 1986).
In support of his argument, Gonyea primarily relies on Park-Lake, contending that this case is "very similar" to Park-Lake. But Park-Lake is not analogous because it did not involve an addition to the purchase price for the types of expenses sought by Gonyea. Park-Lake involved an offset for improvements to property against damages claimed by the purchaser to have been caused by the delay in closing. Id. at 509-10. In Park-Lake, we said:
Minnesota courts have long recognized that parties under a contractual relationship who make improvements to the property are entitled to offset the value of those improvements against damages claimed by the rightful owner.
Id. at 514 (citation omitted).
Here, Gonyea's motion was not in response to a claim by Electric Fetus for damages caused by the delay in closing, and Gonyea did not make any improvements to the property. Park-Lake is inapplicable to the facts of this case.
Gonyea also relies on MCC Investments v. Crystal Properties, 451 N.W.2d 243 (Minn.App. 1990), review denied (Minn. Mar. 27, 1990). In the original appeal of that case we determined that Crystal Properties was entitled to rescind a contract for deed because of MCC Investments's fraudulent representations and returned the case to the district court for an accounting. MCC Investments, 451 N.W.2d at 245. On remand, the district court awarded Crystal Properties the cost of improvements it had made to the property, and we affirmed. Id. at 246, 248. We noted that "[a] purchaser is entitled to recover the reasonable value of any improvements it has made to the property prior to the recission." Id. (citing Tomkins v. Sandeen, 243 Minn. 256, 259, 67 N.W.2d 405, 408 (1954)).
Gonyea also cites Tomkins in support of his argument that this court should require Electric Fetus to pay the claimed expenses to prevent unjust enrichment. See Tompkins, 243 Minn. at 262, 67 N.W.2d at 409-10 (recognizing that "[i]t is well settled that under the unjust enrichment theory the parties are to be restored to the status quo as far as practicable, which necessarily involves the return of any benefits received by the plaintiff"). As we stated in MCC Investments, however:
The purpose of compensating the vendee is to prevent the unjust enrichment of the vendor, who receives the improvements with the return of the property.
MCC Investments, 451 N.W.2d at 248. As noted above, in the instant case, Electric Fetus is not receiving the benefit of any improvements because none were made. Neither MCC Investments nor Tompkins provide authority for the recovery Gonyea seeks.
Furthermore, Gonyea's reliance on the theory of unjust enrichment is misplaced. "An action for unjust enrichment does not lie simply because one party benefits from the efforts of others." Schumacher v. Schumacher, 627 N.W.2d 725, 729 (Minn.App. 2001) (citing First Nat'l Bank of St. Paul v. Ramier, 311 N.W.2d 502, 504 (Minn. 1981)). Instead, an action for unjust enrichment will lie only where one party was unjustly enriched "in the sense that the term `unjustly' could mean illegally or unlawfully." First Nat'l Bank of St. Paul, 311 N.W.2d at 504 (citation omitted). In this case, there is no evidence that Electric Fetus acted illegally or unlawfully, and Gonyea has not accused Electric Fetus of unconscionable conduct. See Park-Lake, 394 N.W.2d at 514 (noting that a claim for unjust enrichment may be found where a plaintiff's conduct was unconscionable by reason of a "bad motive, or where the result induced by his conduct will be unconscionable either in the benefit to himself or the injury to others") (quotations omitted).
Electric Fetus additionally argues that Gonyea's unjust enrichment claim is without merit because equitable relief is not appropriate when a binding contract establishes the rights of the parties. See United States Fire Ins. Co. v. Minn. State Zoological Bd., 307 N.W.2d 490, 497 (Minn. 1981) (holding that "equitable relief cannot be granted where the rights of the parties are governed by a valid contract") (citation omitted). The purchase agreement subject to enforcement here specifically provided that real estate taxes payable in the years prior to closing "shall be paid by seller."
Because Gonyea retained his ownership interest in the property and did not make any improvements to the property, the district court did not err by denying his motion to increase the purchase price for the expenses he incurred as a result of the delayed closing.
II.
Electric Fetus contends that the district court erred by denying its motion for reimbursement in the amount of $751.67 for utility bills and costs associated with repair work done on the building between May 1998 and the date of the closing. Electric Fetus argues that Gonyea as the owner/landlord should have been responsible for these bills. Whatever expenditures Electric Fetus incurred on behalf of Gonyea, however, were voluntarily incurred. Because Electric Fetus is unable to cite to any authority supporting its position that it is entitled to reimbursement for these costs, the district court did not err by denying Electric Fetus's motion for a credit in the amount of $751.67.
III.
Electric Fetus contends that the district court erred by denying its motion for attorney fees and asserts that Gonyea should be required to pay its attorney fees because he engaged in "misconduct." But a district court may grant attorney fees "only if provided for by statutory or contractual provision." Opus Northwest, L.L.C. v. Minneapolis Cmty. Dev. Agency, 599 N.W.2d 582, 583 (Minn.App. 1999) (citation omitted). A district court's decision regarding attorney fees is reviewed under an abuse-of-discretion standard. Id.
Electric Fetus is unable to point to any statute or contractual provision which would have enabled the district court to award attorney fees. As a result, the district court did not abuse its discretion by denying Electric Fetus's motion for attorney fees.