A16-2066 Precedential Affirmed Processed

William P. Brady, et al., Respondents,

Minnesota Court of Appeals · Filed May 30, 2017

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Opinion text

This opinion will be unpublished and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
A16-2066

William P. Brady, et al.,
Respondents,

vs.

Christopher Michael Hilger, et al.,
Appellants.

Filed May 30, 2017
Affirmed
Randall, Judge*

Ramsey County District Court
File No. 62-CV-14-4370

Henry M. Helgen, III, Bryan J. Morben, Anderson, Helgen, Davis & Cefalu, P.A.,
Minneapolis, Minnesota (for respondents)

D. Charles Macdonald, Charles F. Webber, Michelle E. Weinberg, Faegre Baker Daniels
LLP, Minneapolis, Minnesota (for appellants)

Considered and decided by Peterson, Presiding Judge; Smith, Tracy M., Judge; and
Randall, Judge.

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.

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U N P U B L I S H E D O P I N I O N
RANDALL, Judge
Appellants, owners of the residential property adjacent to the residential property
owned by respondents, challenge the judgment in favor of respondents, arguing that the
district court (1) erred by holding as a matter of law that there was a valid restrictive
covenant in force and by submitting to a jury the question of which land was restricted, and
(2) abused its discretion by refusing to give appellants’ requested jury instructions and by
denying appellants’ motion for judgment as a matter of law (JMOL) or a new trial. We see
no error and no abuse of discretion. Affirmed.
FACTS
Appellants Christopher and Ann Hilger and respondents William and Julie Brady
own adjacent pieces of residential property divided by an east-west line. Appellants own
the north property; respondents own the south property. The dividing line runs through a
rectangular piece of land known as Lot 12, which is roughly 80 feet from north to south
and runs from the west to the east boundaries of the properties. Appellants own the north
50 feet and respondents the south 30 feet of Lot 12.
In 1948, the owners of the two properties agreed to a restrictive covenant (the
covenant) providing in relevant part that “the space and area between the said dwellings
. . . shall be graded to a uniform level , and . . . maintained in perpetuity” and that “no
buildings or structures shall be erected upon the space or area between the dwellings.” The
covenant was duly recorded on the certificates of title of both properties. In 1978, the
covenant expired by operation of Minn. Stat. § 500.20, subd. 2a (2 016) (providing that
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restrictive covenants automatically expire after 30 years). However, neither those who
owned it then nor any subsequent owners were aware that the covenant had expired until
2012. The only structure ever erected on Lot 12 was a small dirt-floor storage shed, built
by the owners of the north property sometime between 1979 and 1987.
In 1987, Benson and Mary Whitney (the Whitneys) purchased the north property,
and in 2002, respondents purchased the south property. Both the Whitneys and respondents
believed there was a covenant in force and that it restricted Lot 12.
Acting on this belief, respondents in 2002 asked the Whitneys’ approval of an
addition to respondents’ home that would extend onto Lot 12. Respondents drafted an
“Agreement and Partial Release of Restrictive Covenant” (the a greement), providing that
respondents’ addition could extend onto the southern 15 feet of Lot 12, releasing the 1948
covenant with respect to that addition, and continuing “[ a]ll other terms of the 1948
[covenant].” The agreement was recorded on both certificates of title.
In 2010, appellants purchased the north property from the Whitneys. Appellants
were provided with, but did not read, copies of the covenant and the agreement. Appellants
added a porch to the southeast corner of their house that did not extend onto Lot 12, and
respondents, believing that the covenant restricted only Lot 12, did not object to appellants’
porch.
But respondents did object when appellants began building a two-story garage on
Lot 12. Believing that the garage would violate the covenant and the agreement,
respondents served a complaint and sought a temporary restraining order (TRO).
Appellants opposed the TRO, arguing that the agreement restricted not Lot 12, but rather
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the plot of land bordered on the north by the south side of appellants’ house, on the south
by the north side of respondents’ house, on the west by a line running from the southwest
corner of appellants’ house to the northwest corner of respondents’ house, and on the east
by a line running from the southeast corner of appellants’ house to the northeast corner of
respondents’ house (the four-corner plot). Appellants also filed a counterclaim, seeking to
remove the agreement from the certificates of title, and moved for summary judgment.
Respondents moved to convert the TRO into a temporary injunction.
The district court denied appellants’ summary-judgment motion, finding that there
was a fact issue as to which land was restricted by the agreement, and granted respondents’
motion for a temporary injunction. 1 Appellants again moved for summary judgment,
reiterating their argument that the agreement restricted the four-corner plot, not Lot 12, and
arguing in the alternative that the a greement was invalid per se because the covenant
expired in 1978 under Minn. Stat. § 500.20, subd. 2a. Because the parties’ properties were
Torrens properties, they stipulated that a report from the Ramsey County Examiner of
Titles (the examiner) was required to determine whether the agreement could be removed
from the certificates of title. 2

1 After the first summary judgment ruling, the district court judge who had been involved
with the case until this point retired, and a new judge was assigned. The term “district
court” is used to refer to both judges.
2 See Minn. Stat. § 508.71, subd. 2 (2016) (providing that a registered owner who seeks to
alter a certificate of title may petition the court for an order and “The Court may hear and
determine the petition after notice given to all parties in interest, as determined by the
examiner of titles . . . .”).
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The parties to the agreement, i.e., respondents and the Whitneys, were deposed as
to their intent when they made the agreement. The examiner’s report was based in part on
their depositions and stated:
This [e]xaminer is aware of no law that would prevent
owners of properties previously subject to restrictive covenants
from subjecting their properties to similar restrictions by
reference to the expired restrictions. It is my opinion that the
[2002] agreement . . . created valid restrictions on the subject
properties.
. . . .
A mutual mistake of fact can void an agreement, but
only if it is material. Based on the evidence in the Court file
the parties to the [2002] agreement were mistaken about the
current validity of the restrictions on their properties, but
intentionally and voluntarily re-established them by their
subsequent agreement. [Respondents and the Whitneys]
intended that the properties be subject to restrictions as
modified, so the validity of the prior restrictions was not
material. The mutual mistake of fact does not affect the actions
of the parties to the [2002] agreement.
At the time that [appellants] acquired their portion of
the subject properties the original agreement and the [2002
a]greement both appeared as memorials on the certificate of
title for [appellants’ property]. Those documents at the very
least put potential buyers on inquiry [n]otice of the possible
evidence of restrictions on the property. A prudent buyer
would have inquired of the seller or the adjoining property
owner as to the existence of such restrictions.

The examiner recommended that the district court enter an order stating “that the
restrictions contained in [the agreement] are valid encumbrances on the subject properties
. . . .” Following a hearing on whether the examiner’s report should be adopted, the district
court adopted the report in part.
3 In its order, the district court found:

3 The district court rejected the examiner’s report as to specifically what land was restricted
by t he agreement, noting that “the [e]xaminer exceeded his authority in making a
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9. [One respondent’s] intent behind the 2002 agreement
was to reestablish and confirm the restrictions of the 1948
agreement except as modified to allow expansion of his home.
“This was intended to be a new agreement to continue the
limitations on Lot 12, but allow for an exception for the
construction that encroaches into Lot 12. That’s what the
intent was.”
10. [The other respondent] acknowledged the 1948
restrictions and stated that there was a general understanding
“among the four of us” that there was a restriction there that
they all wanted to see maintained.
11. Benson Whitney, former owner of [appellants’]
property and party to the 2002 agreement, stated his purpose in
making the 2002 agreement “[] was to try to preserve a
restriction on the property–to keep a restriction on the property,
because I thought it was a benefit . . . my intention was to have
an agreement.” Benson Whitney intended the 2002 agreement
to be a reaffirmation of the restrictive terms found in the 1948
agreement with the exception of a one-time variance for
[respondents’] home expansion.
12. Mary Whitney, former owner of [appellants’] property
and party to the 2002 agreement, intended the 2002 agreement
to be a new agreement that continued “the spirit” of the 1948
agreement. Her intent was to “continue” with the restrictions
because she wanted to protect herself and her children; she
liked her space and her privacy. She did not consider it an
amendment, but stated it was a new agreement to continue the
spirit of the 1948 agreement.

The district court concluded that the agreement imposed valid restrictions on the parties’
properties as a matter of law but denied appellants’ second summary -judgment motion,
reiterating that there was a fact issue as to what land is restricted
by the agreement.
Appellants requested a trial to resolve the fact issue; respondents opposed the
request. The district court rejected respondents’ argument that the case involved only an

determination as to the meaning to be given the terms of the agreement” because the district
court had already ruled that the term “the space and area between the said dwellings” was
ambiguous when it denied appellants’ first motion for summary judgment.
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equitable claim that could be resolved by a declaratory judgment and an injunction and set
a trial date.
Before trial, appellants proposed a jury instruction on the construction of restrictive
covenants; during trial, they submitted another instruction on the construction of contracts.
The district court rejected these two instructions and instructed the jury that:
This case is about a restrictive covenant . . . created in 2002
between [respondents] and the Whitneys. A restrictive
covenant is a type of contract that runs with the land upon
which it is placed. This means that the contract is binding on
all future purchasers of the property after the agreement is
made.
There is no issue about the validity of the 2002 contract.
You are to decide the facts. Do not take anything the court has
said or ruled as a sign of what your verdict should be.
The issue left to you, as the jury[,] to decide is the
meaning of the 2002 restrictive covenant at the time it was
made.
In determining the meaning of the contract, you are to
determine what the parties [respondents] and the Whitneys
reasonably meant to accomplish in view of:
1. [T]he contract as a whole;
2. [I]ts plain language;
3. [T]he circumstances surrounding the making of the
contract;
4. [T]he intent of the parties at the time the contract was
made;
5. [T]he conduct of the parties to the contract,
[respondents] and the Whitneys, after the contract was made.

The jury determined that the covenant and agreement restricted Lot 12, not the four-
corner plot, and the district court adopted the jury’s verdict. Appellants moved for
judgment as a matter of law (JMOL) or a new trial; their motion was denied.
Appellants now challenge the denials of their motion for summary judgment,
arguing that the district court erred by holding as a matter of law that the 2002 agreement
8
imposed a valid restrictive covenant on appellants’ property and by submitting the
interpretation of the covenant to a jury instead of interpreting it in appellants’ favor as a
matter of law. Appellants also challenge the denial of their motion for JMOL or a new
trial, arguing that the district court abused its discretion by refusing to give appellants’
requested jury instructions.
D E C I S I O N
1. Denial of Appellants’ Motion for Summary Judgment
While the denial of a motion for summary judgment is not generally within the scope
of appellate review of a judgment entered after a jury verdict, this rule does not apply when
the denial of summary judgment was based on a legal conclusion on an issue that was not
presented to the jury. Bahr v. Boise Cascade Corp., 766 N.W.2d 910, 918-19 (Minn.
2009); Schmitz v. Rinke, Noonan, Smoley, Deter, Colombo, Wiant, Von Korff and Hobbs,
Ltd., 783 N.W.2d 733, 744 (Minn. App. 2010). The denial of a motion for summary
judgment is reviewed “to determine whether a genuine issue of material fact exists and
whether the law was correctly applied.” Dunn. v. Nat’l Beverage Corp., 729 N.W.2d 637,
644 (Minn. App. 2007), aff’d 745 N.W.2d 549 (Minn. 2008). This court reviews both
determinations de novo. STAR Centers, Inc. v. Faegre & Benson, L.L.P., 644 N.W.2d 72,
76 (Minn. 2002).
A. Validity of the 2002 Agreement
Both respondents and both Whitneys testified that, by the 2002 agreement, they
intended to confirm and preserve the restrictions imposed by the 1948 covenant, with the
sole exception of allowing respondents to build an addition to their home extending 15 feet
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into Lot 12. The district court agreed with the examiner that respondents’ and the
Whitneys’ mistaken belief that the 1948 covenant was still in force in 2002 was irrelevant
to their agreement to impose its restrictions on their properties and denied appellants’
motion for summary judgment on that ground.
Appellants argue that the agreement was merely an unsuccessful attempt to revive
or resurrect the expired 1948 covenant. But appellants provide no evidence or authority
that respondents and the Whitneys were not free in 2002 to impose restrictions on their
properties and to memorialize those restrictions in the agreement. Appellants also argue
that, because respondents and the Whitneys did not substitute new language in the
agreement but instead agreed that “All other terms of the 1948 [covenant] shall remain in
full force and effect except as modified by this [agreement],” they did not specifically agree
that nothing would be built on Lot 12. But the district court’s conclusion that the agreement
imposed valid restrictions on “the space and area between the said dwellings” did not
attempt to define what that phrase meant. The district court did not err in concluding, as
the examiner had concluded, that the agreement imposes valid restrictions on some part of
both properties.
2. Submitting the Interpretation of the Covenant to a Jury
When a restrictive covenant is ambiguous, “extrinsic evidence is necessary to
determine the intent of the parties.” State by Crow Wing Env’t Prot. Ass’n v. City of Breezy
Point, 363 N.W.2d 778, 781 (Minn. App. 1985), review denied (Minn. May 20, 1985). The
district court here concluded that the agreement was ambiguous as to the land to which it
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applied—either Lot 12 (as respondents argued) or the four-corner plot (as appellants
argued)—and submitted the issue to a jury.
Appellants argue that the district court erred by not interpreting the covenant
language as a matter of law to restrict the four -corner plot and therefore permit appellants
to build a garage on Lot 12. For this argument, they rely on language from Mission
Covenant Church v. Nelson, 253 Minn. 230, 233
, 92 N.W.2d 440, 442 (1958).
[I]nasmuch as the law leans in favor of the unrestricted use of
property[,] a strained construction will not be adopted in favor
of restrictions. There is much authority that covenants and
agreements restricting the free use of property are strictly
construed against limitations upon such use. Such restrictions
will not be aided or extended by implication or enlarged by
construction and doubt will be resolved in favor of the
unrestricted use of property.

Id. at 233, 91 N.W.2d at 442 (citation omitted).
Appellants’ reliance is misplaced; Mission Covenant Church is distinguishable. It
concerned three tracts of property, A, B, and C. Id. at 232, 91 N.W.2d at 441. A and C
were conveyed to another owner by deeds restricting various uses of the tracts; the
restrictions were for “the benefit of the grantor and its successors and assigns and for the
benefit of any person or persons hereafter purchasing tract B.” Id. at 232, 92 N.W.2d at
441. The supreme court addressed “whether the deeds from [the grantor] covering tracts
A and C created implied restrictions or so-called reciprocal negative easements against the
part retained by [the grantors], thereby restricting tract B to the same uses permitted in
tracts A and C,” and concluded that “the conveyances of tracts A and C [did not] create
any implied restrictions or reciprocal negative easements against tract B.” Id. at 232-33,
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91 N.W.2d at 442, 444. That issue is different from the issue here: it is undisputed that the
covenant restricts some of each party’s land; the question is which land it restricts.
Appellants’ view that the rule requiring strict construction of covenants means that
any dispute concerning use of property must be resolved in favor of the owner would make
covenants meaningless. See Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 67
(Minn. 1979) (holding, in the context of contracts, that the rule requiring ambiguous terms
to be construed against the drafter does not “ineluctably lead to the conclusion that the
drafter is to lose”). Providing a jury with evidence of the parties’ intent and asking it to
resolve the ambiguity was not error.
The district court did not err in denying appellants’ motion for summary judgment
either on the ground that the 2002 agreement was invalid as a matter of law or on the ground
that appellants were entitled to a judgment that the covenant restricted the four-corner plot
as a matter of law.
3. Denial of Appellants’ Motion for JMOL or a New Trial
Appellants do not challenge the accuracy of the jury instructions given, but they
argue that they are entitled to JMOL or a new trial because the district court rejected two
instructions appellants proposed. “District courts are allowed considerable latitude in
selecting language used in the jury charge and determining the propriety of a specific
instruction.” Morlock v. St. Paul Guardian Ins. Co., 650 N.W.2d 154, 159 (Minn. 2002).
“If a trial court’s instruction contains a co mplete and correct statement of the law, denial
of the requested instruction, even if such instruction accurately states the law, is not ground
for a new trial.” Larson v. Powder Ridge Ski Corp., 432 N.W.2d 774, 776 (Minn. App.
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1988); see also Hilligoss v. Cargill, Inc., 649 N.W.2d 142, 147 (Minn. 2002) (“Where
instructions overall fairly and correctly state the applicable law, appellant is not entitled to
a new trial.”). But whether a trial court must give a particular jury instruction raises an
issue of law that this court reviews de novo. State v. Bashire, 606 N.W.2d 449, 452 (Minn.
App. 2000), review denied (Minn. Mar. 28, 2000).
Appellants proposed specific instructions on the construction of restrictive
covenants and on the construction of contracts. But “[appellate] court[s] prefer[] a general
instruction where practical, in order to avoid overemphasis in favor of a party, or jury
confusion.” Fallin v. Maplewood-North St. Paul Dist. No. 622, 362 N.W.2d 318, 322
(Minn. 1985) (concluding that “sub mission of the reasonable care standard and not
elaborating on the plaintiff’s four theories of negligence neither destroyed the substantial
correctness of the charge nor resulted in substantial prejudice”).
A. Instruction on Restrictive Covenants
Appellants filed a proposed additional jury instruction based on Mission Covenant
Church:
Covenants and agreements restricting the free use of property
are strictly interpreted against limiting the use of the property.
Any doubt about the meaning of a restrictive covenant should
be resolved in favor of the unrestricted use of property.

The district court gave three reasons for its rejection of appellants’ proposed instruction on
this topic. See Mission Covenant Church, 253 Minn. at 233, 91 N.W.2d at 442.
First, the district court found, “there was ample evidence as to the intent of the
drafters of the 2002 agreement.” Appellants argue that evidence of the drafters’ intent was
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irrelevant because any language in the a greement deemed ambiguous had to be construed
in appellants’ favor, regardless of the drafters’ intent. But appellants present no support
for the view that ambiguity in a restrictive covenant inevitably results in a decision for the
landowner. See Turner 276 N.W.2d at 67 (holding that construing am biguous terms
against the drafter does not “ineluctably lead to the conclusion that the drafter is to lose”).
Second, the district court observed, “[Appellants] had no factual basis for arguing
that the jury should conclude that no restrictions existed at all.” The jury was told that
restrictions existed and asked only to determine which land was affected by those
restrictions. Appellants rely on McKush v. Hecker , 559 N.W.2d 725, 728 (Minn. App.
1997) (citing Mission Covenant Church, 253 Minn. at 233, 91 N.W.2d at 442, for the
proposition that “agreements restricting the free use of property are strictly construed
against limits on use”), to argue that this rule applies “when the parties agree that some
restriction exists, but disagree on the extent of the restriction.” But the question here is not
the extent of the restriction: it is the location of the land restricted. It is unclear why
appellants, who built a porch on part of the four-corner plot in 2010 with no permission or
objection from respondents, now claim that a covenant restricting the four-corner plot is
less restrictive than a covenant restricting Lot 12, on which they wish to build a garage.
Third, the district court noted, “[N]o evidence was presented that the interpretation
of the 2002 Agreement advanced by [appellants] was in any way less restrictive than that
testified to by the drafters of the 2002 Agreement.” Appellants claim that they have been
“arguing for a less restrictive interpretation of the covenant: they argued that the covenant
did not cover all of Lot 12 and did not prohibit their proposed garage, while [respondents]
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argued that it did.” But appellants provide no evidence that the covenant restricts neither
the four-corner plot (on which appellants built their porch) nor Lot 12, on which they now
wish to build a garage.
Finally, appellants note that the district court “identified no legal misstatement or
other defect in [appellants’] proposed instructions regarding the strict-construction rule for
restrictive covenants.” But “denial of [a] requested instruction, even if such instruction
accurately states the law, is not ground for a new trial.” Larson, 432 N.W.2d at 776. The
rejection of appellants’ proposed instruction on restrictive covenants does not entitle them
to a new trial.
B. Instruction on Construing Contract Ambiguities
During trial, appellants proposed a jury instruction based on Turner:
The words of an agreement are to be taken most strongly
against the party using them. If a contract is prepared by one
of the parties and the language is ambiguous, it should be
construed most strongly in favor of the opposing party —but
read in the sense in which a prudent and reasonable person
would have understood it.

See Turner, 276 N.W.2d at 66. Appellants argue that the district court erred in rejecting
this instruction. But Turner is distinguishable: in that case, “[n]o evidence was introduced
as to the meaning which the parties attached to the ambiguous term and, accordingly, the
[district] court instructed the jury consistently with this rule.” Id.; see also Ecolab, Inc. v.
Gartland, 537 N.W.2d 2 92, 292 (Minn. App. 1995) (“Where no evidence is presented
regarding the parties’ intent at the time a[n] . . . agreement is signed, ambiguities in the
agreement’s language must be construed against the drafter and the agreement’s
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restrictions must be read narrowly.” (Emphasis added)). Here, as the district court found,
“there was ample evidence as to the intent of the drafters of the 2002 agreement.” The
record supports this finding: all four signers of the agreement testified as to their intent
during depositions and again at trial. Thus, there was no basis for the instruction.
As the district court observed, appellants, who are arguing for their interpretation of
the agreement, were not parties to the agreement, and they provide no support for their
view that their interpretation has precedence over the intent of those who were parties to
the agreement. “When construing an ambiguous contract, the court has a duty to give effect
to the intent of the parties.” Id. at 295.
Appellants are not entitled to a new trial. The district court did not abuse its
discretion by rejecting their proposed jury instructions or by denying their motions for
summary judgment.
Affirmed.