This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2012).
STATE OF MINNESOTA
IN COURT OF APPEALS
A14-0807
Gary A. Meiners, et al.,
Respondents,
vs.
Kruckow Companies, LLC, defendant and third party plaintiff,
Appellant,
vs. Anthony R. Hammell, et al., third party defendants,
Respondents.
Filed January 5, 2015
Affirmed
Smith, Judge
Houston County District Court
File No. 28-CV-12-739
Robert G. Benner, Dunlap & Seeger, PA, Rochester, Minnesota (for respondents
Meiners, et al.)
Paula Duggan Vraa, Patrick H. O’Neill, Jr., Jennifer L. Young, Larson King, LLP, St.
Paul, Minnesota (for appellant)
James R. Forsythe, Streater & Murphy, P.A., Winona, Minnesota (for respondents
Hammell, et al.)
Considered and decided by Ross, Presiding Judge; Smith, Judge; and Harten,
Judge.*
*
Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
UNPUBLISHED OPINION
SMITH, Judge
We affirm the district court’s grant of summary judgment in favor of respondents
on both their claim for a declaratory judgment and appellant’s reformation counterclaim
because the lease is unambiguous and respondents are entitled to judgment as a matter of
law. We also affirm the district court’s award of attorney fees and costs because we
affirm the grant of summary judgment to respondents.
FACTS
At some point before February 2008, respondent Gary Meiners asked Gary
Kruckow, the chief manager of appellant Kruckow Companies, whether the company
would be interested in purchasing his parents’ homestead, which his parents had lost
through foreclosure so that his parents could continue to live on the property. Kruckow
Companies purchased the homestead and sold the property to Gary Meiners and his wife
on a contract for deed. In exchange, the Meinerses granted Kruckow Companies a right
to quarry and an option to purchase certain other land.
On the same day as the contract for deed was signed, the Meinerses and Kruckow
Companies signed a first-right-of-refusal contract, giving Kruckow Companies the first
right to refuse to purchase other property from the Meinerses. The property was
described as “[t]he NW1/4 of the SW1/4 lying East of the public highway in Section 5,
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Township 101 North of Range 5 West of the Fifth Principal Meridian, excepting
Highway Right of Way” (Parcel 2).1
On January 22, 2009, the Meinerses and Kruckow Companies signed a quarry-
lease-with-option-to-purchase contract. The Meinerses leased to Kruckow Companies
“[t]he quarry located in the NW1/4 of the SW1/4 lying East of the public highway in
Section 5, Township 101 North of Range 5 West of the Fifth Principal Meridian,
excepting Highway Right of Way. The quarry is the existing hole and all future
reserves.” Under the lease agreement, Kruckow Companies was required to pay the
Meinerses $200.00 per year in rent and $0.25 “per cubic yard of rock removed.” The
option to purchase the quarry also contained the same legal description of the quarry and
the language regarding “future reserves.”
On December 1, 2011, the Meinerses conveyed Parcel 1, the disputed property, to
respondents Anthony and Luan Hammell in a quit claim deed:
The Southeast Quarter of the Northeast Quarter and the
Northeast Quarter of the Southeast Quarter of Section 5,
Township 101 North, of Range 5 West of the Fifth Principal
Meridian.
The East Half of the Northwest Quarter in Section 8,
all that part of the Southwest Quarter of the Northwest
Quarter of Section 8 lying East of the public highway; the
Northwest Quarter of the Northeast Quarter of Section 8; the
Southwest Quarter of the Southeast Quarter of Section 5 and
the Southeast Quarter of the Southwest Quarter of Section 5,
all in Township 101 North of Range 5 West.
1
The tracts of land were identified as Parcel 2 and Parcel 1 in the district court’s order. It
is for that reason that we use these descriptions.
3
The Southwest Quarter of the Southeast Quarter of
Section 19, Township 102 North, Range 5 West.
The Northwest Quarter of the Southeast Quarter of
Section 19, Township 102 North, Range 5 West.
Shortly after this conveyance, Kruckow Companies’ attorney wrote to the Meinerses and
Hammells, expressing Kruckow Companies’ intent to exercise its option to purchase the
quarry land. Kruckow Companies believed that some of the land involved in the quarry
lease may have been conveyed to the Hammells.
All three of the contracts signed by the Meinerses and Kruckow Companies were
drafted by attorney Michael Murphy. According to Gary Kruckow, he told Murphy “that
the [quarry lease] agreement needed to include the right to quarry and option to purchase
land containing future reserves, including the [d]isputed [l]and.” Murphy indicated that
the language, “[t]he quarry is the existing hole and all future reserves,” accomplished
this. Gary Kruckow alleges that both he and Gary Meiners intended for the quarry lease
and option to include Parcel 1. In contrast, Gary Meiners alleges that he never discussed
future reserves with Gary Kruckow.
Murphy stated in his deposition that he represented both the Meinerses and
Kruckow Companies because “they came in and they . . . seemed to be on the same page
as to what they wanted to do.” According to Murphy, the parties discussed the location
of the quarry but did not discuss limiting or expanding the quarry lease to other property.
Murphy acknowledged that he had never visited the quarry and did not know where the
quarry was located. As a result, he “would have no way of knowing” the location of the
future reserves. Murphy explained that he understood “future reserves” to mean “what
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could be quarried.” The parties did not ask Murphy to add the future-reserves language
to the contract. Instead, he added the language because he did not know the exact
location of the quarry and because his attorney-father had used this language in other
quarry leases. Murphy explained that he would have discussed the language with the
parties when they went through the contract before signing it.
On August 13, 2012, the Meinerses sued Kruckow Companies, requesting a
declaratory judgment regarding the meaning of “future reserves” in the quarry lease and
option to purchase. The Meinerses argued that, according to the legal description, the
quarry lease and option to purchase only involved Parcel 2. The Meinerses also alleged
that Kruckow Companies had breached the quarry lease by failing to pay rent and fees for
the removed rock, and requested an accounting of the balance the Meinerses owed under
the contract for deed and the rock removed from the quarry.
In response, Kruckow Companies requested a declaratory judgment that the quarry
lease included Parcel 1 and reformation of the quarry lease to include this land. Kruckow
Companies brought counterclaims against the Meinerses for promissory estoppel,
equitable estoppel, fraud and intentional misrepresentation, negligent misrepresentation,
and unjust enrichment. Kruckow Companies also brought a third-party complaint against
the Hammells, claiming that some of the land conveyed to them in the quit claim deed
(Parcel 1) was included in the quarry lease and option to purchase. Kruckow Companies
again requested a declaratory judgment and reformation of the quarry lease and alleged
claims for promissory estoppel, equitable estoppel, and unjust enrichment.
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The Meinerses moved for partial summary judgment on their claim for a
declaratory judgment. The district court granted partial summary judgment to the
Meinerses. The district court concluded that the language in the quarry lease and option
to purchase and in the first right of refusal was unambiguous, stating:
Pursuant to the plain and ordinary meaning of the language in
the legal description, the quarry is limited to the existing hole
and all future reserves located in Parcel 2. The description
does not expand the quarry beyond Parcel 2. It does not
describe the quarry as the existing hole and all future reserves
outside of Parcel 2. The first sentence in the legal description
locates the quarry; the second sentence explains what
components make up the quarry within that location.
The district court also concluded that the quarry lease and first right of refusal were
integrated and that the parol-evidence rule prohibited the introduction of extrinsic
evidence regarding the parties’ agreement. Finally, the district court concluded that
Kruckow Companies’ reformation and other counterclaims did not preclude partial
summary judgment.
The Meinerses then moved for attorney fees and costs. The Meinerses argued that
the grant of partial summary judgment resolved their request for a declaratory judgment
and rendered their claims for breach of contract and an accounting moot. Kruckow
Companies filed its own motion for attorney fees and costs, arguing that the Meinerses
were not entitled to fees and costs because they “lost a majority of their claims and
should not be considered the prevailing party in this litigation.”
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The district court granted the Meinerses’ motion for attorney fees and denied
Kruckow Companies’ motion. The district court found that the Meinerses were the
prevailing party and awarded them $39,251.80 in attorney fees.
On March 19, 2014, the parties stipulated that the Meinerses would dismiss their
breach-of-contract and accounting claims against Kruckow Companies
on the condition that [the Meinerses] agree not to assert such
claims or to sue Kruckow [Companies] regarding such claims
unless the [district c]ourt’s [o]rder for [p]artial [s]ummary
[j]udgment or the judgment upon which it is based is reversed
on appeal and this matter is remanded to [the district court]
for further proceedings.
The parties also stipulated to the entry of the attorney-fees judgment against Kruckow
Companies for $39,251.80 and stipulated that the partial-summary-judgment order should
be amended to dismiss Kruckow Companies’ claims against the Hammells. The district
court ordered dismissal of the Meinerses’ breach-of-contract and accounting claims and
Kruckow Companies’ claims against the Hammells, and entered judgment against
Kruckow Companies for $39,251.80. According to the parties’ agreement, the district
court stayed enforcement of the attorney-fees judgment pending this appeal by Kruckow.
DECISION
I.
A district court shall grant summary judgment “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact and that either party is entitled
to a judgment as a matter of law.” Minn. R. Civ. P. 56.03. “We review a district court’s
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summary judgment decision de novo.” Riverview Muir Doran, LLC v. JADT Dev. Grp.,
LLC, 790 N.W.2d 167, 170 (Minn. 2010). “On appeal from summary judgment, we must
review the record to determine whether there is any genuine issue of material fact and
whether the district court erred in its application of the law.” Dahlin v. Kroening, 796
N.W.2d 503, 504 (Minn. 2011). “We view the evidence in the light most favorable to the
party against whom summary judgment was granted.” STAR Ctrs., Inc. v. Faegre &
Benson, L.L.P., 644 N.W.2d 72, 76-77 (Minn. 2002). But
there is no genuine issue of material fact for trial when the
nonmoving party presents evidence which merely creates a
metaphysical doubt as to a factual issue and which is not
sufficiently probative with respect to an essential element of
the nonmoving party’s case to permit reasonable persons to
draw different conclusions.
DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997).
Kruckow Companies first argues that the district court erred by finding that the
quarry lease is unambiguous. “[A] lease is a form of a contract.” Metro. Airports
Comm’n v. Noble, 763 N.W.2d 639, 645 (Minn. 2009). “A contract is ambiguous if its
language is reasonably susceptible to more than one interpretation.” Id. (quotation
omitted). “Unambiguous contract language must be given its plain and ordinary
meaning.” Id. “Where the terms of a contract are clear and unambiguous, there is no
room for construction or interpretation.” Colangelo v. Norwest Mortg., Inc., 598 N.W.2d
14, 18 (Minn. App. 1999) (quotation omitted), review denied (Minn. Oct. 21, 1999).
“The determination of whether a contract is ambiguous is a question of law, but the
8
interpretation of an ambiguous contract is a question of fact for the jury.” Denelsbeck v.
Wells Fargo & Co., 666 N.W.2d 339, 346 (Minn. 2003) (citation omitted).
The first right of refusal involved “[t]he NW1/4 of the SW1/4 lying East of the
public highway in Section 5, Township 101 North of Range 5 West of the Fifth Principal
Meridian, excepting Highway Right of Way.” The quarry lease and the option to
purchase involved “[t]he quarry located in the NW1/4 of the SW1/4 lying East of the
public highway in Section 5, Township 101 North of Range 5 West of the Fifth Principal
Meridian, excepting Highway Right of Way. The quarry is the existing hole and all
future reserves.” The legal descriptions of the property involved in these agreements are
identical and concern only Parcel 2. The legal descriptions are not “reasonably
susceptible to more than one interpretation.” See Noble, 763 N.W.2d at 645 (quotation
omitted).
But Kruckow Companies argues that “future reserves” could reasonably be
interpreted as referring either to reserves located in Parcel 2 or to “all future reserves in
the adjacent parcels.” No Minnesota case defines “reserves” or “future reserves.” As a
result, Kruckow Companies cites two foreign cases. In Vt. Marble Co. v. Town of W.
Rutland, the Vermont Supreme Court discussed the value of two quarries, their “proven
and exposed reserve[s],” and their “probable reserves.” 360 A.2d 91, 92-93 (Vt. 1976).
But Vt. Marble Co. does not define or discuss the location of the reserves, and is not
relevant to this appeal. Similarly, in Knox Lime Co. v. Me. State Highway Comm’n, the
Maine Supreme Judicial Court did not define reserves, but stated that the value of the
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mineral reserves involved in the case was “the value of the limestone.” 230 A.2d 814,
825 (Me. 1967).
Kruckow Companies suggests that these cases define “reserves” as “all available
rock that could be mined.” Even if the foreign cases support that definition, and we do
not believe that they do, this definition does not require the reserves to include adjoining
property. The quarry lease refers to a quarry located in Parcel 2. There is no indication
that “future reserves” includes rock outside of Parcel 2, the only property described in the
lease. As the district court explained, “[t]he first sentence in the legal description locates
the quarry; the second sentence explains what components make up the quarry within that
location.” “Future reserves” cannot reasonably refer to the disputed property outside of
Parcel 2.
Kruckow Companies next argues that the district court erred by refusing to
consider extrinsic evidence of the parties’ agreement to include Parcel 1 in the quarry
lease and option to purchase. The parol-evidence rule precludes evidence of oral
agreements made prior to or contemporaneous with the execution of an integrated and
unambiguous written agreement. Norwest Bank Minn., N.A. v. Midwestern Mach. Co.,
481 N.W.2d 875, 881 (Minn. App. 1992), review denied (Minn. May 15, 1992). Because
the contract is unambiguous, the district court properly refused to consider extrinsic
evidence of the parties’ alleged oral agreement prior to their execution of the written
agreement. See id.
Because the quarry-lease-and-option-to-purchase agreement is unambiguous and
refers only to property in Parcel 2, the district court properly concluded that there was no
10
genuine issue of material fact remaining for trial. See DLH, Inc., 566 N.W.2d at 71
(“[T]here is no genuine issue of material fact for trial when the nonmoving party presents
evidence which merely creates a metaphysical doubt as to a factual issue and which
[does] not . . . permit reasonable persons to draw different conclusions.”). The Meinerses
and the Hammells are entitled to judgment as a matter of law, and we therefore affirm the
district court’s grant of partial summary judgment on the Meinerses’ declaratory-
judgment claim.
II.
Kruckow Companies argues that, if the quarry lease is unambiguous, “summary
judgment should still be reversed on the reformation claim.” Kruckow Companies does
not challenge the district court’s decision regarding its other counterclaims.
“Reformation is an equitable remedy that is available when a party seeks to alter
or amend language in a contract so that the contract reflects the parties’ true intent when
they entered into the contract.” SCI Minn. Funeral Servs., Inc. v. Washburn-McReavy
Funeral Corp., 795 N.W.2d 855, 864 (Minn. 2011).
A written instruction can be reformed by a court if the
following elements are proved: (1) there was a valid
agreement between the parties expressing their real
intentions; (2) the written instrument failed to express the real
intentions of the parties; and (3) this failure was due to a
mutual mistake of the parties, or a unilateral mistake
accompanied by fraud or inequitable conduct by the other
party.
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Nichols v. Shelard Nat’l Bank, 294 N.W.2d 730, 734 (Minn. 1980). The elements of
reformation “must be established by evidence which is clear and consistent, unequivocal
and convincing.” Id.
The district court concluded that Kruckow Companies did not establish a genuine
issue of material fact regarding any of the three elements required for reformation. As a
result, the district court granted summary judgment sua sponte to the Meinerses on the
reformation counterclaim, an action that was permissible. See Del Hayes & Sons, Inc. v.
Mitchell, 304 Minn. 275, 280-81, 230 N.W.2d 588, 591-92 (1975). And Kruckow
Companies does not challenge the district court’s authority to grant summary judgment
on the reformation counterclaim.
Regarding the first and second elements, Kruckow Companies alleges that the
parties agreed to include Parcels 1 and 2 in the quarry lease and option to purchase and
that the written agreement failed to express the parties’ intention. In his affidavit, Gary
Kruckow alleges that he and Gary Meiners agreed that the quarry lease and option to
purchase would include Parcels 1 and 2. Gary Kruckow also alleges that he told Murphy
of this agreement and that Murphy responded that the written agreement accomplished
the parties’ intent to include the disputed land. Viewing the evidence in the light most
favorable to Kruckow Companies, see STAR Ctrs., Inc., 644 N.W.2d at 76-77, Kruckow
Companies appears to have raised genuine issues of material fact regarding the first two
elements required for reformation of the agreement.
But Kruckow Companies has not raised a genuine issue of material fact regarding
the third element required for reformation. The third element requires either a mutual
12
mistake “or a unilateral mistake accompanied by fraud or inequitable conduct by the
other party.” Nichols, 294 N.W.2d at 734. At oral argument before this court, Kruckow
Companies explained that it was only alleging a mutual mistake, not a unilateral mistake
caused by fraud or inequitable conduct on the part of the Meinerses. “[I]n order to have a
mutual mistake, it is necessary that both parties agree as to the content of the document
but that somehow through a scrivener’s error the document does not reflect that
agreement.” Id. Here, there is no mutual mistake and no evidence of a scrivener’s error
because the written agreement reflects the Meinerses’ understanding of the parties’
agreement. See id. According to his affidavit, only Gary Kruckow described the location
of the reserves to Murphy. And only Kruckow Companies alleges that the parties
intended a different agreement than that found in the written agreement. This case
involves only a unilateral mistake on the part of Kruckow Companies, which is “not a
ground for reformation.” See id.; see also SCI Minn. Funeral Servs., Inc., 795 N.W.2d at
866-67 (stating that “any mistake was a unilateral mistake” and that the appellants did not
challenge the district court’s conclusion that there was no evidence of fraud or
inequitable conduct).
III.
“We review the district court’s award of attorney fees or costs for abuse of
discretion.” Brickner v. One Land Dev. Co., 742 N.W.2d 706, 711 (Minn. App. 2007),
review denied (Minn. Mar. 18, 2008). “Recovery of attorney fees must be based on
either a statute or a contract.” Schwickert, Inc. v. Winnebago Seniors, Ltd., 680 N.W.2d
79, 87 (Minn. 2004). The quarry lease provides for the recovery of attorney fees:
13
In the event that any action is filed in relation to this lease
agreement, the unsuccessful party in the action shall pay to
the successful party, in addition to all the sums that either
party may be called upon to pay, a reasonable sum for the
successful party’s attorney’s fees and costs.
Kruckow Companies argues that a reversal of the district court on the above issues
requires a reversal of the attorney-fees award. It does not challenge the attorney-fees
award in the event that we affirm the district court’s order. Because we affirm the district
court’s order, we also affirm the award of attorney fees to the Meinerses.2
Affirmed.
2
In their brief, the Meinerses request additional attorney fees incurred on appeal.
Because the Meinerses did not submit a motion regarding their request for attorney fees
on appeal, we decline to consider their request. See Minn. R. Civ. App. P. 139.06, subd.
1 (“A party seeking attorneys’ fees on appeal shall submit such a request by motion under
Rule 127.”).
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