Steven G. Howe, Appellant, vs. Sheri L. Scheldorf, her successors and/or assigns, David Kleindl and Fehr Land Ltd., a Minnesota Business Corporation, Respondents.

This opinion will be unpublished and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

A04-776

 

Steven G. Howe,

Appellant,

 

vs.

 

Sheri L. Scheldorf,

her successors and/or assigns,

David Kleindl and Fehr Land Ltd.,

a Minnesota Business Corporation,

Respondents.

 

Filed ­­­December 7, 2004

Affirmed

Crippen, Judge*

 

Stevens County District Court

File No. C8-02-259

 

Ronald R. Frauenshuh, Jr., 129 Northwest Second Street, Ortonville, MN 56278 (for appellant)

 

Lowell H. Nelson, Martin, Nelson, Glasrud, Klopfleisch, 109 East Sixth Street, P.O. Box 66, Morris, MN 56267 (for respondent Sheri L. Scheldorf)

 

Terry A. Karkela, Svingen, Hagstrom, Karkela, Cline & Dirks, P.L.L.P., 450 West Main, P.O. Box 160, Perham, MN 56573 (for respondent David Kleindl)

 

Robert W. Bigwood, Pemberton, Sorlie, Rufer & Kershner, P.L.L.P., 110 North Mill Street, P.O. Box 866, Fergus Falls, MN 56538-0866 (for respondent Fehr Land)

 

            Considered and decided by Toussaint, Chief Judge; Lansing, Judge; and Crippen, Judge.

U N P U B L I S H E D   O P I N I O N

 

CRIPPEN, Judge

 

            The district court granted appellant the remedy of specific performance on his claim that he had been wrongly denied the right of first refusal on the sale of land lost in a foreclosure.  Appellant disputes the court's denial of his additional claim for money damages for loss of use of the land between the date when he should have been given the right of first refusal and the occasion approximately two years later when his right to purchase was upheld.  Because the record sustains the court's finding that appellant failed to show he could have purchased the property when it was first sold, we affirm.

FACTS

 

            This dispute concerns rights to agricultural land in Stevens County that was briefly owned by respondent Fehr Land Ltd. (Fehr Land).  Fehr Land sold the property to appellant Steven G. Howe in 1997 on a contract for deed.  When Howe failed to make several contract payments between 1997 and 2000, Fehr Land initiated cancellation proceedings that permitted Howe's redemption for 60 days following March 7, 2001.  Howe did not redeem.  Later in March, before the cancellation was final, Fehr Land assigned its contract interest in the property to respondent David Kleindl.  The assignment of contract for deed document was prepared in recordable form in June 2001.  When selling to Kleindl, Fehr Land failed to notify Howe of his right of first refusal for repurchase of the property, a right provided by Minn. Stat. § 500.245 (2002).[1]  By partial summary judgment, the district court granted Howe specific performance of his right of first refusal. [2]

D E C I S I O N

            "Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous."  Minn. R. Civ. P. 52.01.

The district court found unpersuasive Howe's testimony that, if he had been notified of his right of first refusal in June 2001, he could have obtained the financing necessary to buy the property at that time.  As the court observed, this testimony was undermined by evidence that Howe was unable to obtain financing to redeem the original contract for deed before its cancellation was effective on May 6, 2001.  The redemption period coincided closely with the time during which Howe had the right of first refusal, a 65-day right that evidently began in March 2001 and certainly began not later than May 2001.  The court also took into account that Howe's testimony on the subject was solely an "unsubstantiated hearsay statement" that he could have obtained financing from his family.  Because the evidence permits this factual analysis of the claim, the district court's finding is not clearly erroneous and must be affirmed.

            As additional proof that he would have been able to immediately exercise his right of first refusal, Howe notes that he was able to keep his 2001 real-estate taxes current and rid himself of debt through a bankruptcy proceeding.  But these factors do not diminish either the weight of the district court's factual analysis or our burden to uphold it.   We are also mindful that proof of Howe's ability to pay taxes does not, by itself, establish his ability to pay repurchase costs and that the record fails to explain the impact of Howe's bankruptcy on his ability to repurchase.

            Finally, Howe argues that the district court's posture required him to prove a negative, an impossible burden.  But the burden of proof rested with Howe to show the occurrence of damages, and showing his ability to buy the property in 2001 would not have required him to prove a negative.

            Fehr Land asserts alternative bases for affirming the district court's decision.  The court found suspect the amount of damages that Howe claimed, and, as Fehr Land asserts, there is no evidence to sustain the claim that Howe suffered damages in excess of $76,000.  Fehr Land also argues that Howe's claim may be inappropriate as a matter of law, given the general proposition that a former owner, denied the right of first refusal, is entitled to the remedy of specific performance.  Because of the district court's finding on whether a loss occurred and the weight we must give to that finding, we need not further explore these alternative contentions.

            Affirmed.

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

[1] Minnesota law provides a right of first refusal in foreclosure cases when "[a] state or federal agency, limited partnership, corporation, or limited liability company" seeks to sell or lease agricultural land acquired by enforcing a debt against the agricultural land or farm homestead.  Minn. Stat. § 500.245, subd. 1 (2002).

[2] Once the district court announced its decision to grant Howe specific performance of his right of first refusal on July 2, 2003, Howe succeeded in repurchasing the property from Kleindl in an arrangement where Howe reimbursed him for the payments Kleindl made during the time Kleindl possessed the property.