Mike Torkelson Development, Inc., Appellant, vs. Brian Hagen, et al., defendants and third party plaintiffs, Respondents, vs. Jerry Thompson, Third Party Defendant.
Annotate this CaseThis opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480 A. 08, subd. 3 (2004).
STATE OF MINNESOTA
IN COURT OF APPEALS
A06-186
Mike
Torkelson Development, Inc.,
Appellant,
vs.
Brian Hagen, et al.,
defendants and third
party plaintiffs,
Respondents,
vs.
Jerry Thompson,
Third Party Defendant.
Filed September 26, 2006
Affirmed
Parker, Judge*
Ramsey County District Court
File No. C2-04-2762
Lawrence P. Marofsky, Lawrence P. Marofsky Law Office, 7022 Brooklyn Boulevard, Brooklyn Center, MN 55429 (for appellant)
John M. Gearin, John M. Gearin, P.A., 600 Inwood Avenue North, Suite 200, Oakdale, MN 55128 (for respondent)
Considered and decided by Halbrooks, Presiding Judge; Hudson, Judge; and Parker, Judge.
U N P U B L I S H E D O P I N I O NPARKER, Judge
In June 2003, appellant Mike Torkelson Development, Inc. (Torkelson) purchased vacant land in White Bear Township from respondents Brian and Karen Hagen (the Hagens). After the city charged Torkelson $12,600 in utility connection fees, Torkelson filed suit, claiming that (1) the Hagens did not comply with their duty under Minn. Stat. § 513.55 (2002) to disclose that utility connection fees for the property would be at least $5,292 and (2) the Hagens committed fraudulent misrepresentation in failing to do so. Torkelson contends that the district court, in granting the Hagens' motion for summary judgment, erred when it ruled that Torkelson waived the disclosure requirement as to the utility connection fees. We affirm.
D E C I S I O N
On appeal from summary judgment, we consider whether there are any genuine issues of material fact and whether the district court erred in its application of the law. Kvidera v. Rotation Eng'g & Mfg. Co., 705 N.W.2d 416, 420 (Minn. App. 2005). In doing so, we view the evidence in the light most favorable to the nonmoving party and resolve any doubts about the existence of material fact issues against the moving party. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).
I.
Because the parties do not dispute the material facts, we examine whether the district court erred as a matter of law by determining that Torkleson waived disclosure of the utility connection fees. Sellers of residential real estate are required by statute to make certain disclosures to prospective buyers. Specifically, Minn. Stat. § 513.55, subd. 1 (2002), provides that:
(a) Before signing an agreement to sell or transfer residential real property, the seller shall make a written disclosure to the prospective buyer. The disclosure must include all material facts pertaining to adverse physical conditions in the property of which the seller is aware that could adversely and significantly affect:
(1) an ordinary buyer's use and enjoyment of the property; or
(2) any intended use of the property of which the seller is aware.
(b) The disclosure must be made in good faith and based upon the best of the seller's knowledge at the time of the disclosure.
Contracting parties may waive this disclosure requirement under Minn. Stat. § 513.60 (2002), if the buyer and seller agree in writing. But a seller who fails to make a disclosure as required by sections 513.52-.60 is liable in damages to the prospective buyer. Minn. Stat. § 513.57, subd. 2 (2002).
The purchase agreement between Torkelson and the Hagens was subject to a Vacant Land Addendum, which contained the following paragraphs:
21. OTHER: Buyer assumes any and all expenses to connect to sewer and water from the street to lot.
22. Seller's expenses for these contingencies (if any) shall not exceed $500.
. . . .
32. OTHER: This offer subject to buyer determining to his satisfaction the following items: a) cost of stubbing[[1]] water and sewer that is an acceptable amount to the buyer, b) the type of structure the buyer would find acceptable to place on the property.
The Hagens completed a standard vacant land disclosure statement form, which advises potential buyers that the property was not connected to water and sewer, but that public water and sewer connections existed at the boundary of the property.
The district court determined that the terms of the purchase agreement contained in the vacant land addendum constituted a waiver of the statutory disclosure requirement as to the amount of the water and sewer connection fees. Torkelson argues that he did not waive his right to disclosure of the amount of the fees because the addendum did not use the word "waiver," and there is no evidence that he intended to waive disclosure.
Waiver is a voluntary relinquishment of a known right. Ill. Farmers Ins. Co. v. Glass Serv. Co., 683 N.W.2d 792, 798 (Minn. 2004). "The party alleging waiver must provide evidence that the party that is alleged to have waived the right possessed both knowledge of the right in question and the intent to waive that right." Id. "The question of waiver is largely one of intention. It need not be proved by express declaration or agreement, but may be inferred from acts and conduct not expressly waiving the right." Engstrom v. Farmers & Bankers Life Ins. Co., 230 Minn. 308, 312, 41 N.W.2d 422, 424 (1950). Intent generally is a question for the fact-finder. Id. But intent to waive may be determined as a matter of law when a party's conduct is "so inconsistent with a purpose to stand upon one's rights as to leave no room for a reasonable inference to the contrary." Flaherty v. Ind. Sch. Dist. No. 2144, 577 N.W.2d 229, 232 (Minn. App. 1998) (citation omitted), review denied (Minn. June 17, 1998).
Torkelson is an experienced real estate developer and former real estate agent. Notwithstanding Torkelson's assertion that the record contains no evidence of his intent to waive disclosure, Torkelson's conduct prior to the closing demonstrates that he assumed a duty to investigate the expenses associated with connecting utilities to the property. Specifically, Torkelson contacted the city's building inspector to investigate. Torkelson stated in his deposition that:
[The building inspector] was asked to come up with how much the building permit will be and any fees that might attach to the building permit. He knew the exact property. He knew the exact property I was speaking of. And he said on that particular property the normal SAC and WAC, which they call the sewer availability and the water availability charges that come with the permit, not the fee relating to having it in the street, but the fee to give you the right to hook to that from the house to the street had probably been paid for by the house that had been torn down. And that there probably wouldn't be any fee at all and the permit might only be $3000 versus what might normally be $6500.
And Torkelson confirmed with the city engineering department that there were sewer and water connections in the street, because without that information Torkelson "wouldn't dare close on the lot." But Torkelson apparently relied on the building inspector's statement that the utility connection fees likely had been paid, as evidenced by the following deposition testimony:
Q: Now, you've previously testified that [the inspector] thought they probably had been paid.
A: Yes.
. . . .
Q: So you didn't follow up with anybody else - -
A: No further.
The conduct Torkelson himself describes indicates that Torkelson believed he had a duty to investigate the expenses associated with connecting to sewer and water. Taken together with the terms of the vacant land addendum, Torkelson's conduct demonstrates his intent to waive disclosure of the amount of the utility connection fees as a matter of law.
Torkelson also maintains that Minn. Stat. § 513.60 requires express use of the word "waiver" to effectuate a valid waiver of the seller's duty to disclose. But the plain language of the section belies Torkelson's assertion. Section 513.60 provides that "[t]he written disclosure required under sections 513.52 to 513.60 may be waived if the seller and the prospective buyer agree in writing." Because paragraphs 21, 22, and 32 of the vacant land addendum constitute an agreement in writing under section 513.60, and because Torkelson's conduct constitutes evidence of intent to waive disclosure of information regarding the amount of any utility connection fees, the district court did not err when it granted the Hagens' motion for summary judgment.
II.
Torkelson also argues that the Hagens committed fraudulent misrepresentation when they failed to disclose the amount of the utility connection fees. Before nondisclosure may constitute fraud, however, a party must suppress facts that the party is under a legal or equitable obligation to communicate to the other party. Richfield Bank & Trust Co. v. Sjogren, 309 Minn. 362, 365, 244 N.W.2d 648, 650 (1976). Because Torkelson waived disclosure of the utility connection fee amount, the Hagens were under no legal or equitable obligation to communicate that information to Torkelson. Accordingly, Torkelson's fraudulent misrepresentation claim is without merit.
Affirmed.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
[1] "Stubbing" is synonymous with "connecting."
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