Allan H. Zuehlsdorf, 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This opinion will be unpublished and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
A17-0304

Allan H. Zuehlsdorf,
Appellant,

vs.

Carolyn A. Bernard, et al.,
Respondents.

Filed December 26, 2017
Affirmed in part, reversed in part, and remanded.
Reyes, Judge

Redwood County District Court
File No. 64-CV-16-311

Timothy M. Kelley, Calvin P. Hoffman, S tinson Leonard Street, L.L.P., Minneapolis,
Minnesota (for appellant)

Jeff C. Braegelmann, Seth I. Harrington, Gislason & Hunter, L.L.P., New Ulm, Minnesota
(for respondents)

Considered and decided by Reilly, Presiding Judge; Halbrooks, Judge; and Reyes,
Judge.
U N P U B L I S H E D O P I N I O N
REYES, Judge
Appellant challenges the district court’ s dismissal of his claim for specific
performance, grant of partial summary judgment to respondents, and award of $34,423.36
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to respondents in rent from 2 015 to 2016. We affirm as to the award of rent, reverse the
partial summary judgment, and remand for execution of specific performance.
FACTS
This matter involves 120 acres of real property located in Redwood County. Hilbert
and Erma Zuehlsdorf (grantors) are the pa rents of appellant Allan H. Zuehlsdorf
(Zuehlsdorf) and respon dents Carolyn A. Bernard, Jane t E. Barckholtz, and Donna E.
Beadell.
On June 17, 1996, grantors executed a wa rranty deed for 40 acres of real property
to Zuehlsdorf, reserving to themselves a life estate in th e 40 acres. In the same deed,
grantors conveyed the remaining 120 acres of property (the property), which is the subject
of this action, to respondents, and reserved to themselves a life estate in the property. The
deed also created an option w ithin an option clause that allowed Zuehlsdorf to purchase
the property from responden ts after grantors’ deaths. It st ates in relevant part that the
property is subject to an option “in accordance with the terms of an option executed during
the lifetime of the Grantors herein.”
On January 4, 2011, grantors executed an option modification, amending the deed’s
option clause and granting Zueh lsdorf the option to purchase the property at 40% of the
then-existing fair market value, and in no event at a price greater than $2,000 per acre. The
option modification provided that Zuehlsdorf’s option would last for a period of one year
from the March 1 after the death of the survivo r, to terminate on Februa ry 28 of the year
thereafter. Respondents did not dispute the creation of the option in the deed or its
subsequent modification prior to the deaths of grantors.
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Hilbert predeceased Erma, who died on Ap ril 21, 2015. On February 25, 2016,
Zuehlsdorf notified respondents of his intent to exercise his option. Respondents declined
to sell the property to Zuehlsdorf, arguing that the option was void.
Zuehlsdorf filed a complaint seeking spec ific performance for enforcement of the
option. Respondents filed an answer seeki ng a declaratory judgment for the rental value
of the property for the period when Zuehls dorf used it and a motion for partial summary
judgment seeking dismissal of Zuehlsdorf’s claim for specific performance.
The district court granted respondents’ motion for partial su mmary judgment and
ordered judgment entered on respondents’ counterclaim against Zuehlsdorf in the amount
of $34,423.36 in rent based on the fair rental price of th e property for the time period
between 2015 and 2016 when he had used the property.
This appeal follows.
D E C I S I O N
I. Grantors clearly intended to grant Zu ehlsdorf an option to purchase the
property.

Zuehlsdorf argues that the district cour t erred when it granted partial summary
judgement to respondents and dismissed his claim for specific performance of the option.
We agree.
We review a district court’s summary -judgment decision de novo, analyzing
“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). When there are no genuine issues of material fact, as here,
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we review de novo the district court’s app lication of the law to the undisputed facts.
Erdman v. Life Time Fitness, Inc. , 788 N.W.2d 50, 54 (Minn. 2010). “We view the
evidence in the light most favorable to th e 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). Finally, contract interpretation is a question of law that we review de novo. Caldas
v. Affordable Granite & Stone, Inc., 820 N.W.2d 826, 832 (Minn. 2012).
A. The intent of the grantors controls our interpretation of the option and
deed.

Zuehlsdorf argues that the district court e rred in focusing its analysis on the future
interest conveyed to respondents rather than the intent of the grantors. We agree.
We interpret options and deeds using principles of contract interpretation. Nafstad
v. Merchant , 303 Minn. 569, 571, 22 8 N.W.2d 548, 550 (19 75) (rules for construing
contracts apply to options); Danielson v. Danielson , 721 N.W.2d 335, 338 (Minn. App.
2006) (rules for construing contracts apply to deeds). We enforce the intent of the parties
as expressed by the clear and una mbiguous contract language. Storms, Inc. v. Mathy
Constr. Co., 883 N.W.2d 772, 776 (Minn. 2016). Unambiguous contract language “must
be given its plain and ordinary meaning, and sh all be enforced by the courts even if the
result is harsh.” Denelsbeck v. Wells Fargo & Co., 666 N.W.2d 339, 346-47 (Minn. 2003).
Here, the parties do not contest the dist rict court’s finding that the deed is
unambiguous, and we agree. The option’s plain language states that the property “is
subject to an option to [Zuehlsdorf] to purc hase these premises in accordance with the
terms of an option executed dur ing the lifetime of the Grantors herein.” Grantors clearly
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and unambiguously intended to convey the property to respondents subject to Zuehlsdorf’s
option to purchase. The district court erred in focusing on the future interest conveyed to
respondents rather than the overall intent of the grantors as evidenced by the plain language
of the deed.
B. The deed and option modification mu st be construed as one transaction.
Zuehlsdorf argues that the district court erred in finding that the deed did not create
his option because it did not contain the nece ssary substantive conditions of the sale.
Zuehlsdorf’s argument has merit.
When construing a contract “[s]eparate writings as part of the same transaction must
be construed together.” Wm. Lindeke Land Co. v. Kalman, 190 Minn. 601, 607, 252 N.W.
650, 652 (1934).
Where several instruments are made as part of one transaction,
they will be read together, a nd each will be construed with
reference to the other. This is true, although instruments do
not in terms refer to each other. So if two or more agreements
are executed at different times as part of the same transaction
they will be taken and construed together.

Id. at 607, 252 N.W. at 653 (quotation omitted). Moreover, “[w]here one instrument refers
to another for any purpose, the latter, for the purpose and to the extent of the reference, will
be deemed part of the former.” In re Holtorf’s Estate , 224 Minn. 220, 223, 28 N.W.2d
155, 157 (1947) (quotation omitted).
Grantors specifically include d a provision providing for the option’s subsequent
modification. Because we interpret options strictly in favor of the party creating the option,
we construe the deed and optio n modification together based on the clear intent of the
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grantors. See Abrahamson v. Abrahamson , 613 N.W.2d 418, 423 (Minn. App. 2000)
(courts must construe options strictly in favor of the grantor and accept it according to its
terms); Farrell v. Johnson, 442 N.W.2d 805, 807 (Minn. Ap p. 1989) (documents should
be treated as a single contract based on parties’ intent).
Grantors unambiguously intended to construe the deed and option modification as
one transaction. The district court erred in reading the deed in isolation and finding that it
did not contain the details necessary to create an option.
II. Minn. Stat. § 500.15 do es not bar grantors’ ex ecution of the option
modification.

Zuehlsdorf argues that the district court erred when it found that Minn. Stat.
§ 500.15, subd. 2 (2016), barred grantors’ execution of the option modification following
the creation of the deed. We agree.
The interpretation of a statute and its app lication to undisputed facts are questions
of law that we review de novo. Davies v. W. Publ’g Co. , 622 N.W.2d 836, 841 (Minn.
App. 2001), review denied (Minn. May 29, 2001).
Minn. Stat. § 500.15 states in its relevant part:
Subdivision 1. Owner’s destruction of precedent estate.
No expectant estate can be defeated or barred by any alienation
or other act of the owner of the intermediate estate or precedent
estate, nor by any destruction of such precedent estate, by
disseisin, forfeiture, surrender, merger, or otherwise.

Subdivision 2. Exception.
Subdivision 1 shall not be construed to prevent an expectant
estate from being defeated in any manner, or by any act or
means, which the party creating such estate has, in the creation
thereof, provided or authorized; nor shall an expectant estate
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thus liable to be defeated be on that ground adjudged void in
its creation.

The district court determined that Zueh lsdorf’s option was created in the option
modification, rather than in the deed’s optio n clause, and that subd ivision 2 accordingly
barred grantors’ ability to divest respondents’ expectant estate.
As previously stated, Zueh lsdorf’s option was created in the deed. Subdivision 2
provides for the permissible defeasance of re spondents’ expectant estate when grantors
provide for its defeasance with in the same instrument creating respondents’ expectant
estate. Here, the option is within subdivision 2’s exception to subdivision 1’s general rule.
Therefore, the district court erred in its interpretation of Minn. Stat. § 500.15 because
Zuehlsdorf’s option was created in the deed and is permissible under subdivision 2.
III. The district court did not err in ordering Zuehlsdorf to pay rent to respondents
from 2015 to 2016.

Zuehlsdorf argues that the district cour t erred when it awarded $34,423.36 to
respondents in rent from 2015 to 2016. We disagree.
The option modification provides “[d]uring the option period, [Zuehlsdorf] shall
have the right to rent the farm land under the same terms and conditions as existed prior to
the death of the survivor of parties of the fi rst part.” The surviving grantor died on April
21, 2015, and Zuehlsdorf did no t attempt to exercise his op tion until February 25, 2016.
During this time, Zuehlsdorf used the property. The district court did not err in assessing
rent owed to respondents for this time period.
Affirmed in part, reversed in part, and remanded.