SCI Minnesota Funeral Services, Inc. v. Washburn-McReavy Funeral Corp., 795 N.W.2d 855

SCI Minnesota Funeral Services, Inc. sold Crystal Lake Cemetery Association to Corinthian Enterprises, LLC in a stock sale for $1 million; the stock sale, and a parallel share sale to Washburn-McReavy Funeral Corporation, did not mention two vacant lots (Colorado and Burnsville) that were assets of Crystal Lake; those lots were previously owned by SCI and were not used in the cemetery operations; the parties intended to structure the deal as a stock sale for legal reasons but classify for tax purposes as an asset sale; SCI could have excluded non-operational assets but did not remove the vacant lots before the transaction; the district court granted Washburn summary judgment, concluding no rescission or reformation could be granted on mutual mistake, and SCI and Corinthian appealed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether rescission is available for mutual mistake in a stock sale	SCI/Corinthian rely on mutual mistake; Costello bars rescission in stock sales	Washburn argues Costello controls; no mutual mistake or public policy to rescind	No rescission based on mutual mistake under Costello
Whether rescission is available for lack of mutual assent	There was no meeting of the minds to include the vacant lots	There was mutual assent to sell Crystal Lake stock including all assets	No mutual assent defeat; objective standard shows assent to stock including vacant lots
Whether reformation is available to reflect the true intent	Reformation should reflect intent to exclude vacant lots	Costello barred reformation in stock sale and stock-transfer context; no basis to depart	No reformation; Costello applies and elements not satisfied

Costello v. Sykes, 143 Minn. 109, 172 N.W. 907 (Minn. 1919) (mutual mistake in stock sale generally not rescissible; value-related mistake insufficient)
Clayburg v. Whitt, 171 N.W.2d 623 (Iowa 1969) (look beyond form to substance in closely held assets context (non-Minn.))
Medica, Inc. v. Atlantic Mutual Insurance Co., 566 N.W.2d 74 (Minn. 1997) (de novo review of legal questions in equity-based summary judgments)
Citizens State Bank v. Raven Trading Partners, Inc., 786 N.W.2d 274 (Minn. 2010) (discussed standard of review for equity summary judgments; de novo possible when facts undisputed)
Nadeau v. Cnty. of Ramsey, 277 N.W.2d 520 (Minn. 1979) (abusive discretion standard for rescission decisions after trial; equity context)
Leamington Co. v. Nonprofits’ Ins. Ass’n, 615 N.W.2d 349 (Minn. 2000) (articulation of high burden of proving reformation with clear/convincing evidence)
Specialized Tours, Inc. v. Hagen, 392 N.W.2d 520 (Minn. 1986) (stock vs. asset transfer and the impact on transfer of liabilities)
Zutz v. Nelson, 788 N.W.2d 58 (Minn. 2010) (stare decisis and reluctance to overrule precedent without compelling reason)