Bob Acres, LLC v. Schumacher Farms, LLC
2011 Minn. App. LEXIS 30
| Minn. Ct. App. | 2011Background
- Appellant Bob Acres, LLC seeks specific performance of a 2006 agreement to buy 25 acres from Schumacher Farms, LLC.
- The district court granted summary judgment concluding the contract lacked consideration due to an alleged false earnest-money recital.
- The parties agreed the earnest-money amount ($500) was not discussed, paid, or demanded until after this suit commenced.
- Closing was to occur within 60 days (by August 14, 2006), but no closing occurred; the parties engaged in easement negotiations instead.
- Respondent drafted an easement and delayed final approval, while continuing to discuss closing and title matter handling.
- Respondent later stated it would not complete the sale, leading to appellant’s suit for specific performance and counterclaims for damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was there valid consideration despite the earnest-money recital? | Acres argues exchange of promises suffices; earnest money recital does not destroy consideration. | Schumacher contends no consideration existed because earnest money was not paid as stated. | Exchange of promises constitutes consideration; false earnest-money recital does not void formation. |
| Did respondent waive the closing-date/strict performance? | Waiver occurred through conduct showing readiness to close and proceeding with easement work. | No waiver; respondent retained right to close and did not act to waive timely performance. | Waiver found; respondent’s conduct suggested continued enforceability of the contract despite the date. |
| Should specific performance be decreed given a valid contract? | Specific performance appropriate where contract valid and respondent failed to perform. | No specific performance because contract not enforceable or equitable under the circumstances. | Remand to determine appropriate remedy; the contract is valid and enforceable, so specific performance may be considered on remand. |
Key Cases Cited
- Craigmile v. Sorenson, 239 Minn. 383, 58 N.W.2d 865 (Minn. 1953) (false receipt of earnest money cannot nullify a contract)
- E.J. Baehr v. Penn-O-Tex Oil Corp., 258 Minn. 533, 104 N.W.2d 661 (Minn. 1960) (consideration required for enforceability)
- Brooksbank v. Anderson, 586 N.W.2d 789 (Minn.App. 1998) (interpretation of consideration; review de novo)
- Wolff v. McCrossan, 296 Minn. 141, 210 N.W.2d 41 (Minn. 1973) (conduct can waive contract rights; course of performance may bar claims)
- Patterson v. Stover, 400 N.W.2d 898 (Minn.App. 1987) (oral waiver of contract terms possible via conduct)
- Citizens Nat’l Bank of Madelia v. Mankato Implement, Inc., 441 N.W.2d 483 (Minn. 1989) (waiver can be found by continued contract rights despite unmet conditions)
- Boatwright Constr., Inc. v. Kemrich Knolls, 306 Minn. 519, 238 N.W.2d 606 (Minn. 1976) (breach of express condition not always material)
- Lilyerd v. Carlson, 499 N.W.2d 803 (Minn. 1993) (discretion in awarding specific performance)
- Hilton v. Nelsen, 283 N.W.2d 877 (Minn. 1979) (specific performance not automatic; equity considerations apply)