Opinion
A23-1332
03-26-2024
Lyle Hillman, et al., Respondents, v. Alan Albrecht, Appellant, Susan Albrecht, Appellant, Secretary of Housing and Urban Development, Marcia Fudge, Respondent, Alan J Albrecht, Appellant, v. Lyle Hillman, et al., Respondents, Secretary of Housing and Urban Development, Marcia Fudge, Respondent.
Crow Wing County District Court File No. 18-CV-21-2086
Considered and decided by Larkin, Presiding Judge; Segal, Chief Judge; and Bjorkman, Judge.
ORDER OPINION
Michelle A. Larkin, Judge
BASED ON THE FILE, RECORD, AND PROCEEDINGS, AND BECAUSE:
1. In 2021, respondents Lyle Hillman, et. al (the Hillmans) sued appellants Alan and Susan Albrecht (the Albrechts), alleging that the Albrechts constructed a retaining wall on the Hillmans' property. In a separate action, the Albrechts sued the Hillmans, Wells Fargo, and respondent Secretary of Housing and Urban Development, Marcia Fudge (HUD), claiming, in part, adverse possession of the land under the retaining wall. HUD held a mortgage on the Hillmans' property. The Albrechts later stipulated to the dismissal of Wells Fargo as a party.
Although Alan Albrecht brought this action, for ease of reference, we refer to "the Albrechts."
2. The district court consolidated the two actions, and in December 2022, the Hillmans and Albrechts reached a mediated settlement agreement. The Hillmans agreed to transfer part of their property, including the land under the retaining wall, to the Albrechts. The Albrechts agreed to pay the Hillmans $4,000 for the transferred land. Additionally, the Albrechts agreed to have a "landscaping professional" remove the existing retaining wall and install a landscaping block retaining wall on the Albrecht property to replace the existing retaining wall. HUD was not a party to the agreement. The Hillmans subsequently moved to enforce the agreement. The Albrechts challenged the enforceability of the agreement and requested that the matter proceed to trial.
3. In April 2023, the district court ordered that the agreement was binding on the parties. However, the district court's order was conditioned upon submission of HUD's written approval of the agreement within 30 days. In May 2023, the Hillmans asked the district court to extend that 30-day deadline. The Albrechts opposed an extension and moved for additional relief, including a determination that the agreement was unenforceable.
4. On June 14, 2023, a fully executed settlement agreement, signed by HUD, was filed with the court. On August 28, 2023, the district court ordered that judgment be entered pursuant to the settlement agreement and denied all other requests for relief. The court concluded that "all requisite terms have been met and, thus the agreement is now fully enforceable."
5. The Minnesota Civil Mediation Act, Minn. Stat. §§ 572.31-.40 (2022), defines a mediated settlement agreement as "a written agreement setting out the terms of a partial or complete settlement of a controversy identified in an agreement to mediate, signed by the parties, and dated." Minn. Stat. § 572.33, subd. 4. The effect of a mediated settlement agreement is determined under principles of contract law. Minn. Stat. § 572.36. Settlement agreements are "contractual in nature." Voicestream Minneapolis, Inc. v. RPC Props., Inc., 743 N.W.2d 267, 271 (Minn. 2008). Settlements are "greatly favored, and such agreements will not lightly be set aside by Minnesota courts." Beach v. Anderson, 417 N.W.2d 709, 711-12 (Minn.App. 1988), rev. denied (Minn. Mar. 23, 1988); see also Skalbeck v. Agristor Leasing, 384 N.W.2d 209, 212 (Minn.App. 1986) ("Settlement agreements are presumed to be valid in Minnesota."). "[District] courts have the inherent power to summarily enforce a settlement agreement as a matter of law when the terms of the agreement are clear and unambiguous." Voicestream Minneapolis, Inc., 743 N.W.2d at 272 (quotations omitted). We review a district court's decision to enforce a settlement agreement for an abuse of discretion. Johnson v. St. Paul Ins. Co., 305 N.W.2d 571, 573 (Minn. 1981).
6. The Albrechts argue that the settlement agreement is too vague to be enforced because (1) it does not specify who is financially responsible for removal of the existing retaining wall and installation of the new wall, (2) it does not specify who is responsible for the costs related to demarcation of the new boundary line, and (3) it does not create an easement for the removal of the existing retaining wall.
7. For a contract to be formed, there must be an offer, acceptance, and consideration between the parties. Com. Assocs., Inc. v. Work Connection, Inc., 712 N.W.2d 772, 782 (Minn.App. 2006). The formation of a contract "requires mutual assent among the parties involved in the transaction." SCI Minn. Funeral Servs., Inc. v. Washburn-McReavy Funeral Corp., 795 N.W.2d 855, 864 (Minn. 2011). "Mutual assent entails a meeting of the minds concerning a contract's essential elements." Id. (quotation omitted). "Whether mutual assent exists is tested under an objective standard." Id. Whether parties reach an objective meeting of the minds on the essential elements of a contract is a question of fact, which this court reviews under the clear-error standard. Morrisette v. Harrison Int'l Corp., 486 N.W.2d 424, 427 (Minn. 1992) (stating that "the existence and terms of a contract are questions for the fact finder"). A binding contract can exist despite the parties' failure to agree on a term if the term is not essential or can be supplied. Restatement (Second) of Contracts § 201, cmt. d (1981). The statute of frauds requires contracts for the sale of land to include terms specifying the (1) consideration, (2) parties to the contract, (3) land to be conveyed, and (4) general terms and conditions of the sale. Malevich v. Hakola, 278 N.W.2d 541, 544 (Minn. 1979) (concluding that no written contract was formed because many essential terms, including down payment, installments, interest, and time of conveyance, were left to future agreement).
8. Here, the parties expressly agreed that the settlement agreement would be binding and settle their disputes and that if subsequent disputes arose, the agreement would speak for itself. The agreement stated: "The parties hereby agree this is a binding settlement of their disputes and that if either party challenges this settlement in the future, this [s]ettlement [a]greement speaks for itself." The Hillmans agreed to transfer a portion of their property to the Albrechts in exchange for $4,000, and the Albrechts agreed to have a landscaping professional remove the existing retaining wall on that property and construct a new one "on the Albrecht property which will not be on the property line but set back 6" to 12" from the property line." On this record, the district court did not clearly err in finding that there was an objective meeting of the minds on the essential elements of the contract. See Morrisette, 486 N.W.2d at 427. In sum, there was an enforceable contract.
9. The Albrechts suggest that it is necessary to supply missing terms regarding financial responsibility and an easement related to the work described in the parties' agreement. The construction of a contract is a question of law if its terms are unambiguous. Denelsbeck v. Wells Fargo &Co., 666 N.W.2d 339, 346 (Minn. 2003). "A contract is ambiguous if its language is reasonably susceptible of more than one interpretation." Current Tech. Concepts, Inc., 530 N.W.2d 539, 543 (Minn. 1995).
10. The Albrechts agreed to have a landscaping professional remove the existing retaining wall and to install a new block wall on what would be their property under the agreement. It is unreasonable to conclude that the agreement requires the Hillmans to pay for landscaping on the Albrechts' property. Similarly, it is unreasonable to conclude that the agreement requires the Hillmans to pay to survey the property being transferred to the Albrechts. The only reasonable interpretation of the agreement is that the Albrechts are responsible for the expenses related to their receipt of the transferred land with the agreed upon improvements. And given the parties' agreement, it is unreasonable to conclude that the Albrechts need an express easement or additional authority to remove the existing retaining wall. In sum, the settlement agreement unambiguously requires the Albrechts to pay for the removal of the existing retaining wall, installation of the new wall, and demarcation of the new boundary line, and it does not require an easement for the removal of the existing retaining wall.
11. The Albrechts also assert that there are inconsistencies between the settlement agreement and the "proposed stipulation and proposed order," that is, the proposed orders prepared by the Hillmans' counsel. The alleged inconsistencies are immaterial because the district court did not adopt the proposed orders; rather, it adopted the parties' signed and dated mediated settlement agreement of December 22, 2022.
12. The Albrechts argue that the district court erred in concluding that the settlement agreement was binding because HUD's approval was a "condition precedent," the contract could not be enforced until HUD's approval was obtained, and a contract cannot be both "binding" and "unenforceable." "A condition precedent is a contract term that calls for the performance of some act or the happening of some event after the contract is entered into, and upon the performance or happening of which the promisor's obligation is made to depend." Capistrant v. Lifetouch Nat'l Sch. Studios, Inc., 916 N.W.2d 23, 27 (Minn. 2018) (quotation omitted). Thus, if the required event does not occur, there is no breach because no duty to perform arises. Id.
13. The settlement agreement was "conditioned" on HUD agreeing to and signing off on the agreement. Although the Albrechts may have had no duty to perform and there may have been no binding contract until HUD's signature was obtained, HUD ultimately approved and signed the settlement agreement, and the condition was therefore satisfied. As to the Albrechts' suggestion that the district court erred in determining that the settlement agreement was enforceable subject to HUD's acceptance, the Albrechts do not cite authority persuading us of the merits of their position. We do not assume error on appeal, and the Albrechts have not overcome the presumption that the settlement agreement was valid. Loth v. Loth, 35 N.W.2d 542, 546 (Minn. 1949); Luthen v. Luthen, 596 N.W.2d 278, 283 (Minn.App. 1999) (applying this aspect of Loth); see Skalbeck, 384 N.W.2d at 212.
14. The Albrechts argue that the district court erred by extending the deadline for HUD's signature. They concede that the district court appropriately imposed the initial 30-day deadline. "[W]here a contract is silent as to the time of performance, the general rule is that the contract must be performed within a reasonable time." Hill v. Okay Constr. Co., 252 N.W.2d 107, 114 (Minn. 1977). Generally, failure to specify a time for performance will not defeat the formation of a contract. Id. Here, prior to the end of the initial 30-day deadline imposed by the district court, the Hillmans requested an extension to obtain HUD's signature because of additional requirements for that signature, including a HUD-approved appraisal. The record does not suggest that the deadline for submission of the HUD signature was an essential term of the agreement. Indeed, the parties did not include a deadline in their agreement. And the Hillmans requested additional time before the initial 30-day deadline expired. Once again, settlements are "greatly favored, and such agreements will not lightly be set aside by Minnesota courts." Anderson, 417 N.W.2d at 711-12. On this record, the Albrechts have not shown that the district court erred in amending the deadline, such that the parties' agreement should be set aside. See Skalbeck, 384 N.W.2d at 212.
15. The Albrechts contend that the district court erred in concluding that the settlement agreement was enforceable because "the deed to be given by the Hillmans had to be recorded or recordable before any money was to be transferred to the Hillmans." Essentially, the Albrechts argue that a deed transferring the agreed-on property from the Hillmans to the Albrechts would not be recordable because the amended property boundary would not meet county zoning requirements concerning setbacks. But the record shows that the Albrechts could resolve any boundary concerns by simply moving a shed on their property. Given the favored status of settlement agreements, the unwillingness to set such agreements aside, and the Albrechts' ability to avoid the purported setback issue, the Albrechts' argument regarding county setback requirements does not persuade us to reverse.
IT IS HEREBY ORDERED:
1. The district court's judgment is affirmed.
2. Pursuant to Minn. R. Civ. App. P. 136.01, subd. 1(c), this order opinion is nonprecedential, except as law of the case, res judicata, or collateral estoppel.