Drummer Development, Inc., Appellant,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).

STATE OF MINNESOTA
IN COURT OF APPEALS
A16-1933

Drummer Development, Inc.,
Appellant,

vs.

Baxter BBQ, Incorporated,
Defendant,

Charles Torgerson, Jr.,
Respondent,

Randy Jernberg,
Respondent.

Filed May 30, 2017
Affirmed
Jesson, Judge

Blue Earth County District Court
File No. 07-CV-15-1963

Michael M. Sawers, Justin P. Weinberg, Briggs and Morgan, P.A., Minneapolis, Minnesota
(for appellant)

Mathew M. Meyer, Meyer Law Office, Shakopee, Minnesota (for respondents)

Considered and decided by Jesson, Presiding Judge; Halbrooks, Judge; and Worke,
Judge.
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U N P U B L I S H E D O P I N I O N
JESSON, Judge
A barbecue restaurant had business difficulties after leasing commercial space in
Mankato. The landlord, which sought to sell the property to a third party, and the restaurant
agreed to terminate the lease early. Appellant Drummer Development , although not the
landlord listed on the lease, sued the restaurant’s owners who signed a guaranty for unpaid
rent, claiming that it had been assigned rights under the lease. The district court concluded
that Drummer Development did not have standing to pursue claims under the lease and
dismissed the case. We affirm.
FACTS
In 2006, Mankato BBQ Inc. was formed for the purpose of operating a Famous
Dave’s restaurant in Mankato. The owners of Mankato BBQ included respondents Randy
Jernberg and Ch arles Torgerson, Jr. , as well as Michael Drummer , owner of Drummer
Development.
Michael Drummer and his wife own Drummer Properties, a separate entity, and in
January 2006, Mankato BBQ entered into a ten -year lease with Drummer Properties for
the use of c ommercial property in Mankato. The lease set forth a monthly rent schedule
and i ncluded a guaranty signed by Torgerson and Jer nberg. Under the guaranty, the
guarantors promised the landlord , Drummer Properties, full performance of the terms of
the lease, including payment of rent.
According to an affidavit from Michael Drummer, Drumm er Properties assigned
the lease to Jacob Holdings, another of Michael Drummer’s companies, for management
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and collection of lease payments, and then Jacob Holdings assigned “the rent receivables”
to Drummer Development. It is unclear when these purported assignments occurred.
The Famous Dave’s restaurant operated by Mankato BBQ struggled and fell behind
on the rent. Michael Drummer received an offer to sell the commercial property, and
Drummer Properties and Mankato BBQ agreed to terminate the lease early. A termination-
of-lease agreement was executed in June 2012 by lessors Michael Drummer and his wife,
individually and doing business as Drummer Properties, and by lessee Mankato BBQ .
Michael Drummer subsequently sold the commercial property.
The parties disagreed on the intended effect of the termination -of-lease agreement
on past-due rent. In August 2014, Drummer Development served a complaint against
several parties, including Torgerson and Jernberg. The complaint alleged three counts, but
the only count relevant to this appeal, count one, alleged breach of the original lease and
breach of guaranty obligations by Torgerson and Jernberg.
Drummer Development moved for summary judgment, arguing that Torgerson and
Jernberg owed obligations under the lease and guaranty. Torgerson and Jernberg moved
for summary judgment, arguing that Drummer Develo pment lacked standing ; notice of
default was never provided under the terms of the lease ; and the termination of the lease
precluded the relief sought by Drummer Development.
In a thorough opinion, the district court denied Drummer Development’s motion
and granted Torgerson’s and Jernberg’s motions for summary judgment. Count one was
dismissed with prejudice. The district court concluded that Drummer Development did not
have standing to pursue the bre ach-of-lease and guaranty claim s because Drummer
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Development was not a party to, and was not validly assigned , the lease . This appeal
follows.
D E C I S I O N
Summary judgment is proper when “the pleadings, dep ositions, 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. O n appeal from summary judgment, appellate
courts review de novo “whether there are any genuine issues of material fact and whether
the district court erred in its application of the law to the facts.” Commerce Bank v. W.
Bend Mut. Ins. Co., 870 N.W.2d 770, 773 (Minn. 2015).
Although Drummer Development raises a number of issues on appeal, we need only
address the legal question of standing, which we review de novo. Rukavina v. Pawlenty,
684 N.W.2d 525, 531 (Minn. App. 2004), review denied (Minn. Oct. 19, 2004). To have
standing, a party must have a sufficient stake in the controversy to be decided. Id. “A
sufficient stake may exis t if the party has suffered an ‘injury-in-fact’ or if the legislature
has conferred standing by statute. ” Id. A party commencing an action “must show some
personal stake in the outcome . . . to assure adverseness and injury or threat of injury to a
legally recognized, rather than personal, interest.” Envall v. Indep. Sch. Dist. No. 704, 399
N.W.2d 593, 596 (Minn. App. 1987), review denied (Minn. Mar. 25, 1987).
Drummer Development claims that Torgerson and Jernberg breached the terms of
the lease and guaranty. Generally, only a party to a contract may seek to enforce it. N.
Nat’l Bank of Bemidji v. N . Minn. Nat’l Bank of Duluth , 244 Minn. 202, 208, 70 N.W.2d
5
118, 123 (1955). Drummer Development was not a party to the lease or guaranty and
would ordinarily have no rights to enforce those agreements.1 Envall, 399 N.W.2d at 596.
But Michael Drummer asserts that Drummer Properties assigned the lease to Jacob
Holdings, and Jacob Holdings assigned “the rent receivables” to Drummer Development.
This non-specific assertion is insufficient to establish Drummer Development’s standing
for four reasons.
First, there is a lack of evidence that Jacob Holdings was assigned the lease by
Drummer Properties . There is nothing in writing. See Minn. Stat. § 513.04 (2016)
(prohibiting assignment of a lease exceeding one year, unless in writing or by operation of
law). Further, the termination-of-lease agreement does not reflect such an assignment. The
termination-of-lease agreement was not executed by Jacob Holdings or Drummer
Development; it was executed by Michael Drummer and his wife, individually and doing
business as Drummer Properties. This is an additional undisputed fact (beyond the lack of
a written assignment) indicating that no assignment occurred. See Hardle v. Preston
Energy, Inc. , 374 N.W.2d 807, 809 (Minn. App. 1985) (concluding that there was
insufficient evidence of an assignment when there was no evidence of relinquishment of
control).
Second, because there is insufficient evidence of an assignment of the lease to Jacob
Holdings, it follows that there is insufficient evidence that Jacob Holdi ngs assigned an

1 Although intended third -party beneficiaries of a contract may in some instances obtain
rights under a contract, Drummer Development has made no argument that it is a third -
party beneficiary.
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interest in the lease to Drummer Development. Jacob Holdings could not transfer an
interest that it did not possess.
Third, even if there was evidence of an assignment to Jacob Holdings, the lease
itself required that rent “shall be paid” to the “Landlord,” which was Drummer Properties.
And the lease prohibited provisions of the lease from being “amended or added to except
by agreement in writing signed by the parties or their respective successors in interest .”
There is no signed writi ng amending the lease to indicate payment of rent to either Jacob
Holdings or Drummer Development.
Finally, there is nothing in the record suggesting when the purported assignments
occurred, and Michael Drummer’s wife an d business p artner in Drummer Prope rties
offered no clarification regarding any assignments. If the assignments had occurred prior
to the termination-of-lease agreement, that document does not reflect those assignments.
And there is no assertion in Michael Drummer’s affidavit that Drummer Development was
assigned rights under the termination-of-lease agreement.
Drummer Development argues that Torgerson and Jernberg cannot attack the lack
of written assignments because Torgerson and Jernberg were not parties to the assignments.
See Parkside Mobile Estates v. Lee , 270 N.W.2d 758 , 762 n.4 (Minn. 1978) (stating that
nonparties to an assignment could not assert the statute of frauds in their favor). Torgerson
and Jernberg assert that this argument was not raised below and has been forfeited.
Generally, we will not consider matters not argued to and considered by the district court.
Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988).
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While we conclude that Drummer Development’s argument was properly raised
below, it does not change our dete rmination that there is insufficient evidence of an
assignment. As the party resisting summary judgment, Drummer Development needed to
“do more than rest on mere averments.” DLH, Inc. v. Russ , 566 N.W.2d 60, 71 (Minn.
1997). Given the dearth of evidence of an assignment, Michael Drummer’s mere assertion
that one occurred is insufficient to create a genuine issue of material fact. See Hardle, 374
N.W.2d at 809.
Neither Michael Drummer, individually, nor Drummer Development was a party to
the lease or guaranty. See Anderson v. First Northtown Nat’l Bank, 361 N.W.2d 116, 117-
18 (Minn. App. 1985) (holding that sole shareholder of corporation did not have standing
to sue on corporation’s behalf , despite the fact that he signed documents for the
corporation). And there is insufficient evidence to create a genuine issue of material fact
over whether Drummer Development was assigned an interest under the lease or guaranty.
Therefore, Drummer Development does not have standing, and the district court properly
granted summary judgment to Torgerson and Jernberg.
Affirmed.