S & J Excavating, Inc., Appellant, vs. Rollo Kosbab, Respondent.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

 

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A04-186

 

S & J Excavating, Inc.,
Appellant,
 
vs.
 
Rollo Kosbab,
Respondent.

 

Filed October 19, 2004

Reversed and remanded

Wright, Judge

 

Martin County District Court

File No. C7-03-112

 

 

Matthew T. Nielsen, Scott & Nielsen, P.A., 117 North Main Street, Fairmont, MN  56031 (for appellant)

 

Peter D. Favorite, Gislason & Hunter, L.L.P., 2700 South Broadway, New Ulm, MN  56073 (for respondent)

 

 

            Considered and decided by Peterson, Presiding Judge; Stoneburner, Judge; and Wright, Judge.

 

   

 

U N P U B L I S H E D  O P I N I O N

 

WRIGHT, Judge

 

Appellant challenges the district court's entry of summary judgment in favor of respondent, arguing that the parties' contract is valid because the contract term requiring appellant to keep the gravel pit clean is adequate consideration.  We reverse and remand.

FACTS

Respondent Rollo Kosbab owns farmland in Martin County.  From 1992 through 1996, Kosbab had an agreement with Maynard Bettin that permitted Bettin to remove gravel from Kosbab's land.  Appellant S & J Excavating (S & J), through its president, Steven Frick, purchased Bettin's excavating business in 1996.  At Bettin's request, Kosbab agreed to enter into a similar agreement with S & J.  On October 10, 1996, Kosbab, the lessor, and S & J, the lessee, signed a written agreement for S & J to remove gravel from Kosbab's gravel pit.  Drafted by Bettin, the contract had the following six terms:

1.         All gravel removed from the pit must be paid for on the 1st of the following month at $1.25 per yard.

2.         The pit must be kept clean at all times.

3.         No top soil black dirt be removed from the pit.

4.         No . . . [d]ebris, [h]azardous [m]aterial or broken waste concrete to be buried in the pit.

5.         The pit must be back filled as soon as the aggregate is removed.

6.         This lease is effective from October 8, 1996 to January 1, 2007.

 

            Kosbab and S & J operated according to the terms of the agreement without significant interruption until November 2001, when Kosbab notified S & J by certified mail that the agreement was terminated immediately because S & J failed to comply with several terms of the agreement, including not making payment and not keeping the pit clean.  In response, S & J corrected only the payment issue.

            Kosbab reluctantly allowed S & J to continue removing gravel, even though S & J still did  not comply with all the terms of the agreement.  In late summer 2002, Kosbab gave S & J notice of the continuing noncompliance and "warned that if [S & J] did not immediately clean up the pit, [Kosbab] would have to hire a third party to do so and would bill [S & J for the] expense."  S & J did not comply, Kosbab contracted with a third party to clean the pit, and S & J refused to pay for the cleaning expenses Kosbab incurred.  Kosbab terminated the agreement on October 24, 2002.

            S & J sued Kosbab for breach of contract on January 29, 2003.  Kosbab brought a counterclaim against S & J for breach of contract and to recover the costs of cleaning the pit.  Kosbab subsequently moved for summary judgment.  Concluding that the parties did not have an enforceable contract supported by consideration, the district court granted summary judgment for Kosbab.  This appeal followed.

D E C I S I O N

 

On appeal from summary judgment, we determine whether genuine issues of material fact exist and whether the district court erred in its application of the law.  State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).  We view the evidence in the light most favorable to the party against whom summary judgment was granted.  Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).  Summary judgment is properly granted when the matter before the district court presents no genuine issues of material fact and a party is entitled to judgment as a matter of law.  Id. 

Whether a contract is supported by consideration is a question of law, which we review de novo.  Brooksbank v. Anderson, 586 N.W.2d 789, 794 (Minn. App. 1998), review denied (Minn. Jan. 27, 1999); see also Frost-Benco Elec. Ass'n v. Minn. Pub. Utils. Comm'n, 358 N.W.2d 639, 642 (Minn. 1984) (an appellate court need not give deference to a trial court's decision on a legal issue). 

"The factor that distinguishes an unenforceable promise from an enforceable contract is consideration, or the voluntary assumption of an obligation by one party upon condition of an act or forbearance by the other."  Murray v. MINNCOR, 596 N.W.2d 702, 704 (Minn. App. 1999) (quotation omitted), review denied (Minn. Sept. 28, 1999); see also Cederstrand v. Lutheran Brotherhood, 263 Minn. 520, 530-31, 117 N.W.2d 213, 220 (1962).  "Consideration may consist of either a benefit accruing to a party or a detriment suffered by another party."  C & D Invs. v. Beaudoin, 364 N.W.2d 850, 853 (Minn. App. 1985), review denied (Minn. June 14, 1985).  The value or amount of consideration is not relevant as long as some benefit or detriment is established.  Estrada v. Hanson, 215 Minn. 353, 356, 10 N.W.2d 223, 225-26 (1943).  Where promises are mutual, made concurrently, and incorporated into a bilateral contract, such promises are sufficient consideration for each other.  Koehler & Hinrichs Mercantile Co. v. Ill. Glass Co., 143 Minn. 344, 346, 173 N.W. 703, 704 (1919). 

            S & J does not allege that there is a question of fact that precludes summary judgment.  Rather, S & J argues that the agreed-upon requirement that S & J keep the gravel pit clean at all times is adequate consideration.[1]  Kosbab maintains that S & J did not give any consideration for the agreement; therefore, the contract is unenforceable.   Kosbab argues, in the alternative, that the agreement is unenforceable for lack of definiteness regarding the dimensions of the gravel pit.[2]

            The record supports S & J's argument that it had an unconditional obligation to keep the gravel pit clean throughout the life of the contract.  Failure to do so, regardless of whether S & J ever removed gravel from the pit, would give Kosbab the right to bar S & J from the property.  In exchange for the right to remove gravel from the pit for an 11-year period, S & J agreed to take on the obligation of keeping the gravel pit clean at all times.   While S & J has other obligations under the contract, such as pay for the gravel, not take topsoil, backfill when gravel is removed, the other obligations arise only when S & J actually removes gravel.  Keeping the pit clean, however, is not an obligation that arises only when gravel is removed.  Rather, it is S & J's obligation in exchange for the right to remove gravel.  This obligation continues regardless of whether S & J exercises the removal right, the frequency of S & J's gravel removal, and the amount of gravel removed. 

The obligation to keep the gravel pit clean at all times meets the definition of consideration.  S & J voluntarily assumed the obligation of keeping the gravel pit clean in exchange for the right to remove the gravel from Kosbab's pit for an 11-year period.  See MINNCOR, 596 N.W.2d at 704.  Under the terms of the contract, S & J suffers the detriment or cost of keeping the pit clean.  See Beaudoin, 364 N.W.2d at 853. 

            Because S & J's obligation to keep the gravel pit clean at all times is adequate consideration to establish an enforceable contract, we conclude that the district court erred in granting summary judgment for Kosbab.

            Reversed and remanded.

[1]  S & J conceded at oral argument that the issue of whether exclusive usage of the pit is adequate consideration is not before us.  Thus, we decline to decide whether this requirement supplies adequate consideration.

[2]  Because the district court did not make a ruling regarding Kosbab's claim of indefiniteness, we decline to address it on appeal.  See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (appellate court should not decide issue that was not decided by the district court).