A18-1870

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2018).

STATE OF MINNESOTA
IN COURT OF APPEALS
A18-1680
A18-1870

Thomas M. Fafinski, P.A., as successor in interest
for and f/k/a BenePartum Law Group, P.A.,
Appellant,

vs.

Melrose Community, LLC,
Respondent,

Profinium, Inc.,
Respondent,

Security Bank Waconia n/k/a Security Bank & Trust Co.,
Respondent,

Arvig Enterprises, Inc.,
Respondent,

County of Stearns,
Defendant,

City of Melrose,
Respondent,

Sauk River Watershed District, et al.,
Defendants,

And Melrose Community, LLC,
Third-Party Plaintiff,

vs.

Judy Adams, third-party defendant,
Respondent.

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Filed May 28, 2019
Affirmed
Connolly, Judge

Stearns County District Court
File No. 73-CV-16-2530

Nathan W. Nelson, Steven V. Rose, Virtus Law, PLLC, Brooklyn Park, Minnesota (for
appellant)

Sarah R. Jewell, Derek C. Harvieux, Franz Hultgren Evenson, P.A., St. Cloud, Minnesota
(for respondent Melrose Community)

Andrew A. Willaert, Christopher J. Kamath, Gislason & Hunter LLP, Mankato, Minnesota
(for respondent Profinium, Inc.)

Security Bank Waconia, Glencoe, Minnesota (respondent)

Arvig Enterprises, Inc., Perham, Minnesota (respondent)

Scott Dymoke, Dymoke Law Office, P.A., Melrose, Minnesota (for respondent City of
Melrose)

Judy Adams, Lino Lakes, Minnesota (pro se respondent)

Considered and decided by Connolly, Presiding Judge; Slieter, Judge; and Smith,
John, Judge.
U N P U B L I S H E D O P I N I O N
CONNOLLY, Judge
Appellant, a law firm , challenges the district court’s finding that the mortgages
underlying appellant’s foreclosure action failed for lack of consideration; it also challenges

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

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the denial of appellant’s alternative motions for amended findings of fact, conclusions of
law, order, and order for judgment or for a new trial. Because the district court’s findings
were not clearly erroneous and there was no abuse of discretion in the denial of appellant’s
motions, we affirm.
FACTS

In March 2001, Rose Park, LLC (RP), an entity owned by third -party defendant
Judy Adams, signed a contract for deed for a mobile home park and some vacant land (the
properties), for $50,000 up front and $500,000 in monthly payments. The contract for deed
provided that the vendors, John and Linda Klein (the Kleins), would retain legal title to the
properties until the contract was paid off, when they would tender a warranty d eed. The
contract for deed was re corded. In November 2002, RP assigned its vendee’s interest in
the contract to Adams.
In 2003, Adams retained the BenePartum Law Group, P.A., headed by Thomas
Fafinski and predecessor in interest to appellant Thomas M. Fafinski, P.A., to represent her
in various corporate, business, and personal matters. She became indebted to BenePartum
for legal services.
On April 14, 2004, Adams executed a promissory note for $61,205.45 in favor of
BenePartum. The note, which had no due date, repayment plan, or repay ment period,
provided that: (1) principal and interest would be due within 30 days upon written demand
from the creditor; (2) payments would be applied first to interest, then to principal; and
(3) the note was in partial satisfaction of “the twelve (12) separate Combination Mortgages
between the parties (the Mortgages) (attached hereto as Exhibit A).” No mortgages were

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attached to the note as exhibit A; the last page of the note is headed “ Exhibit A” over the
phrase “(Mortgages Attached Hereto)” but is ot herwise blank. The note further provided
that the debtor’s obligations under it were secured “pursuant to those Mortgages between
the Debtor [i.e., Adams] and Creditor [i.e., BenePartum], of even date herewith.” No
evidence has been produced of any April 14, 2004, mortgage or any mortgage “of even
date herewith.” Finally, the note provides that, if the debtor defaults, the holder will have
the right to demand and receive “the entire unpaid principal balance hereof with all accrued
and unpaid interest thereon and all unpaid late fees.”
Adams testified that she did not dra ft the note and does not know who did. She
believed 12 combination mortgages were attached to the note; she does not know when she
signed them, but she thinks it was simultaneously with the note. Fafinski testified that he
thinks the note was drafted by a BenePartum attorney; he also thinks, but is not sure, he
reviewed the note before he signed it. Although Fafinski testified that the mortgages
existed, he did not produce any evidence of them, causing the district court to “take an
adverse inference against Fafinski.”
On April 23, 2004, Adams and Fafinski signed a letter agreement drafted by
BenePartum. It stated that: (1) Adams was indebted to BenePartum for an amount in excess
of $61,205; (2) on April 14, 2004, she had executed a promissory note for $61,205.45 and
12 mortgages, each for $45,000, as security for the note;1 (3) she could reduce the amount
owed to $45,000 by paying that amount by May 28, or to $50,000 by paying that amo unt

1 The promissory note and the mortgages totaled $601,205.45 (12 x $45,000 = $540,000;
$540,000 + $61,205.45 = $601,205.45).

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by June 28, or to $55,000 by paying that amount by July 27; and (4) if she did not make
any of these payments, she would owe the full $61,205.45. Adams did not make any of
the payments. Fafinski did not produce evidence of any mortgages executed with the note.
Although Fafinski claimed that the promissory note was enacted so Adams could
continue to receive legal services from BenePartum, neither the note nor the letter
agreement referred to continuing legal services, and the stated purpose of the lett er was to
“compromise and settle the amount of the indebtedness for legal service s rendered to the
Client [i.e., Adams] by Attorneys [i.e., BenePartum] through April 14, 2004.” Neither the
letter nor the note refer to any legal services after that date.
On June 10, 2004, Adams granted BenePartum two mortgages (the June mortgages),
one for each of the two parcels of land in which she had a vendee’s interest under the
contract for deed with the Kleins. A BenePartum attorney drafted the mortgages, which
were recorded as 31395 and 31396. The mortgages show that BenePartum paid a mortgage
registration tax of $103.50, the tax for a principal amount of $45,000. Although Adams
and Fafinski both speculated that the mortgages had not been recorded correctly, neither of
them produced any evidence of incorrect recording, and neither of them testified to direct
knowledge about the recording.
Each mortgage states that:
Mortgagor will pay to Mortgagee the principal sum of . . .
$45,000.00 according to the terms of that certain P romissory
Note of even date herewith made by Mortgagor to the order of
Mortgagee in the stated principal amount of . . . $45,000.00, all
of the terms of which are hereby made a part of this Mortgage
to the same extent and with the same effect as if they were fully
set forth herein, and shall also pay all other sums, with interest

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thereon, as may be advanced by Mortgagee in accordance with
the Mortgage to protect the lien of this Mortgage.

No evidence was produced of the June 10, 2004, promiss ory note referred to in the
mortgage or of any promissory note for $45,000.
Both Fafinski and Adams testified that the June mortgages were intended to secure
the April 14, 2004, note, but the language of the note, of the letter agreement, and of the
mortgages themselves contradicts this testimony. Adams also testified that three additional
mortgages, two dated April 30, 2004, and one dated June 30, 2004, were likewise intended
to secure the note, and that, on April 14, 2004, the date of the note, she also drafted six
letters saying she would give mortgages on certain properties. Fafinski also testified that
12 simultaneously executed combination mortgages were executed with the note but were
rejected for recording issues, so new mortgages had to be execute d, but that he was not
personally involved in this.
In September 2005, Adams, without the permission of BenePartum, transferred her
vendee’s interest in the properties by quitclaim deed to R ose Light Construction, LLC
(RLC), an entity she owned . In 2009, the Kleins, holders of the vendor’s interest, served
notice of cancellation of the contract for deed on Adams, RP, and RLC, alleging defaults
including the mortgages on the properties that Adams granted to BenePartum and giving
Adams until November 1, 2009, to correct the defaults.
Adams received legal advice on avoiding the cancellation of the contract for deed
from the Bonner & Borhart law firm, which began a lawsuit against the Kleins to enjoin

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cancellation of the contract for deed. The complaint ac knowledged that the two $45,000
June mortgages were recorded against the properties.
John Bonner of that firm was the owner of respondent Melrose Community, LLC
(Melrose). On October 29, 2009, Adams transferred all her vendee’s interest in the
properties, whether held in her name or by RP or RLC, to Melrose through an agreement
between herself and Bonner. This agreement did not involve the note between Adams and
BenePartum and did not transfer Adams’s debt to BenePartum to Melrose. The agreement
provided that Melrose would apply for financing, pay off the contract for deed, place a
mortgage on the manufactured-home community, and convey back to Adams the vacant or
non-income-producing property. Melrose received a commitment for mortgage financing
of $350, 000 but could not close on it because of issues with le gal descriptions of the
properties.
In 2012, Melrose began a proceeding subsequent to title r egistration to correct the
legal descriptions and enable it to close on financing. That proceeding result ed in two
district court orders: a March 28, 2013, order indicating that the vendee ’s interest in the
properties was assigned from Adams to RLC and subsequently to Melrose on October 29,
2009, and an August 12, 2013, final order that new certificates of ti tle be issued to the
properties, with exhibits showing the 2005 assignment to RL and the 2009 assignment to
Melrose. Melrose executed a mor tgage with respondent Profinium, Inc. and paid off the
contract for deed; the Kleins executed a warranty deed for the properties.
Appellant, successor in interest to BenePartum, brought this action against Melrose,
Profinium, and several other entities, seeking (1) a declaratory judgment that the June

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mortgages on the properties granted to it by Adams are valid, enforceable, and superior to
the interest of Melrose and of the other defendants in the properties, and (2) a demand for
relief to foreclose the mortgages and sell the properties.
Melrose brought a third -party action against Adams for equitable contribution a nd
indemnity. Adams’s attorney filed a motion to dismiss under Minn. R. Civ. P. 12.02(e).
The district court denied the motion; Adams did not serve a timely answer, and Melrose
moved for a default judgment against her. In September 2017, the district co urt granted
Melrose’s motion, noting that, because Melrose’s claims against Adams were derivative of
appellant’s foreclosure claims, Melrose would be allowed to establish the amount of its
claims after appellant’s claims had been determined.
Following a two-day trial on appellant’s claims in December 2017, the district court
issued findings of fact, conclusions of law, and order for judgment addressing appellant’s
argument that the June mortgages secured the note, thus providing consideration for the
mortgages, and the defendants’ argument that the June mortgages failed for lack of
consideration because they said they secured a “Promissory N ote of even date herewith,”
[i.e. June 10, 2004,] in the amount of $45,000, and there was no such promissory note.
The district court concluded that appellant failed to prove it was entitled to a
foreclosure of the property because the April 2004 note it had with Adams was not secured
by any mortgages: the June mortgages did not have a payment schedule, they merely
specified a “Note of even date herewith” which, like the 12 mortgages referenced in the
April note, was never produced. The district court entered judgment for the defendants
against appellant, who had failed to prove its entitlement to foreclosure on the pro perties,

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and also concluded that, because Melrose had no liability to pass on to Adams, the court
did not need to alter its September 2017 order.
Appellant filed a notice of appeal from the judgment; it also moved to amend the
findings of fact, conclusions of law, order for judgment, and judgment, or in the alternative
for a new trial. Following a hearing, the district court issued an order denying the motions,
and appellant filed a notice of appeal from the order. This court consolidated the appeals.
Appellant argues that the district court’s finding that the June mortgages were not
supported by any consideration were clearly erroneous and that the district court abused its
discretion in denying his motions.
D E C I S I O N

1. Lack of consideration for the June mortgages

“A con sideration is essential to the validity of a mortgage,” and whether a
consideration exists is a question of fact. Turpin v. Hayek , 18 N.W.2d 592, 592 (Minn.
1945). “Findings of fact, whether based on oral or documentary evidence, shall not be set
aside unless clearly erroneous, and due regard shall be given to the opportunity of the
[district] court to judge the credibility of the witnesses.” Minn. R. Civ. P. 52.01.
[W]e review the district court’s factual findings for clear error.
That is, we examine the record to see if there is reasonable
evidence in the record to support the court’s findings. And
when determining whether a finding of fact is clearly
erroneous, we view the evidence in the light most favorable to
the verdict. To conclude that findings of fact are clearly
erroneous we must be left with the definite and firm conviction
that a mistake has been made.

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Rasmussen v. Two Harbors Fish Co., 832 N.W.2d 790, 797 (Minn. 2013) (quotations and
citations omitted). “In an ordinary civil action, the plaintiff has the burden of proving
damages caused by the defendant by a fair preponderance of the evidence.” Canada By &
Through Landy v. McCarthy, 567 N.W.2d 496, 507 (Minn. 1997). “The preponderance of
the evidence standard requires that[,] to establish a fact, it must be more probable that the
fact exists than that the contrary exists”; moreover, “[i]f evidence of a fact or issue is
equally balanced, then that fact or issue has not been established by a preponderance of the
evidence.” City of Lake Elmo v. Metro. Council, 685 N.W.2d 1, 4 (Minn. 2004).
The district court found that
While Adams and Fafinski testified that they now
believe that these two [June 10] Mortga ges were intended to
secure the [April 14] Note, their testimony is also about events
that occurred more than ten years ago , lacking in specifics as
to what exactly occurred, and contradicted by the language of
both the Note, the Mortgages, and the Letter Agreement that
were contemporaneously drafted.

(Footnote omitted.)
The three documents support this finding. First, the Note, dated April 14, 2004,
states that it was “secured by twelve (12) combination Mortgages, dated of even date
herewith,” each of which was “a distinct and separate security instrument securing the
repayment of this Note” and “of even date herewith.” No copy and no evidence of any of
the 12 mortgages mentioned or of any other mortgage bearing the n ote’s April 14, 2004,
date was ever produced.
Second, the letter agreement signed on April 23, 2004, by both Adams and Fafinski
stated that, wh en Adams executed the n ote on April 14, she “simultaneously executed

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twelve (12) mortgages on certain defined real property located in Mi nnesota, each in the
amount of Forty-five Thousand Dollars ($45,000), as security for said Promissory Note.”
Neither evidence nor copies of the 12 $45,000 mortgages were ever produced.
Third, the two June mortgages that were produced were dated June 10, 2004, and
were thus not “of even date” with the April 14 note. Moreover, they stated that Adams, as
mortgagor, was to pay to BenePartum, as mortgagee,
the principal sum of Forty -Five Thousand and 00/100 Dollars
($45,000.00) according to the terms of that certain Promissory
Note of even date herewith [i.e., June 10, 2004] made by
Mortgagor to the order of Mortgagee in the stated principal
amount of Forty -Five Thousand and 00/100 Dollars
($45,000.00) (the ‘Note’), all of the terms of which are hereby
made a part of this Mortgage to the same exte nt and with the
same effect as if they were fully set forth herein.

No copy and no evidence of the note referred to in these mortgages was ever produced, nor
could the reference have been to the April 14 note, which had a different date and did not
specify $45,000 or any other amount. Thus, the two June mortgages refer to a note that is
not the April 14 note and the April 14 note refers to 12 mortgages that are not the two June
mortgages. These facts support the district court’s statement that it “[did] not find that it
has been proven by a preponderance of the evidence that the June 10, 2004 Mortgages were
intended to secure the April 14, 2004 Note” and demonstrate that the finding is not clearly
erroneous.
Nor does any other consideration support the June mortgages and, without
consideration, they are not valid. See Turpin, 18 N.W.2d at 592. The district court did not
err in finding that the June mortgages did not entitle Fafinski to foreclose.

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2. Denial of appellant’s alternative motions

A. Motion for Amended Findings
The denial of a motion for amended findings, conclusions of law, and order is
reviewed for an abuse of discretion. Zander v. Zander, 720 N.W.2d 360, 364 (Minn. App.
2006), review denied (Minn. Nov. 14, 2006) . A “motion for amended findings must be
based on the record previously submitted to the district court, and the district court may
neither go outside the record nor conside r new evidence when addressing the motion.”
Cook v. Arimitsu , 907 N.W.2d 233, 237 (Minn. App. 2018) (quotation omitted), review
denied (Minn. Apr. 17, 2018). A party moving for amended findings has the burden “to
show that there is no substantial evidence reasonably tending to sustain the [district] court’s
findings,” and a refusal to amend cannot be reversed merely because “there was evidence
to justify the proposed amended findings had they been made.” Nielsen v. City of St. Paul,
88 N.W.2d 853, 864 (Min n. 1958). “If there is conflicting evidence, a court is not
compelled to amend.” State ex rel. Fort Snelling State Park Ass’n v. Minneapolis Park
and Recreation Bd ., 673 N.W. 2d 169, 178 (Minn. App. 2003) , review denied (Minn.
Mar. 16, 2004).
Appellant sought 13 amendments to the district court’s findings of fact, conclusions
of law, order for judgment , and judgment . The district court dealt with each of them in
detail.2 For suggested amendments 4, 5, and 10, appellant requested deletions without
explaining why, and the district court declined to amend on that basis, citing Nielsen for

2 The portion of th e district court’s order denying the mot ion for amended findings runs
more than 15 pages.

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the proposition that a motion to amend must be supported by a showing that “there is no
substantial evidence reasonably tending to sustain the [district] court’s findings.” Nielsen,
88 N.W.2d at 864. The district court also relied on this proposition in declining to make
suggested amendments 3, 11, 12, and 13.3
Another proposition from Nielsen, i.e., the fact that “there was evidence to justify
the proposed amended findings had they been made” is not enough to justify the reversal
of a refusal to amend, id., was the district court’s basis for not making amendments 1, 2, 6,
7, and 8. Finally, the district court quotes the proposition that “ [i]f there is conflicting
evidence, a court is not compelled to amend,” Fort Snelling, 673 N.W.2d at 178, to support
its decision not to make suggested amendment 9 and to provide additional support for its
decision not to make other amendments.
Appellant provides no refutation of the district’s court’s explanations of its refusal
to make the suggested amendments. Instead, appellant argues that the district court should
not have relied on the fact that Fafinski and Adams were testifying about events that had
happened more than ten years earlier. This argument is based on the view that, because
the statute of limitations for mortgages is 15 years, “the legislature has deemed, in the case
of mortgages, evidence does not become stale and memori es do not fad e until after [15]
years from the date of the subject mortgage has passed.” Appel lant provides no support
for its view that the statute of limitations, governing when actions may be brought, also
governs the weight to be given to testimony.

3 Amendments 12 and 13 are misnumbered as 15 and 20 respectively in the district court’s
opinion.

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B. Motion for a New Trial

“We review a district court’s new trial decision under an abuse of discretion
standard.” Moorhead Econ. Dev. Auth. v. Anda, 789 N.W.2d 860, 892 (Minn. 2010).
Appellant moved in the alternative for a new trial on the ground that the district
court erred when it relied on the fact that Fafinski and Adams testified about events more
than ten years old, arguing that their testimony “meet[s] the preponderance of the evidence
standard and should not be discredited due to the passage of time.”
“The applicable test for granting a new trial on the basis that the evidence does not
justify the verdict is whether the verdict is so contrary to the preponderance of the evidence
as to imply that the [factfinder] failed to consider all the evidence, or acted under some
mistake . . . .” Clifford v. Geritom Med. Inc., 681 N.W.2d 680, 687 (Minn. 2004) (quotation
omitted).
The district court noted that it relied on factors other than the passage of time in
concluding that the June mortgages were not supported by consideration, citing two
passages from its order, the second of which is a footnote to the first.
While Adams and Fafinski testified that they now
believe that these two Mortgages were intended to secure the
Note, their testimony is also about events that occurred more
than ten years ago, lacking in specifics as to what exactly
occurred, and contradicted by the language of both the Note,
the Mortgages, and the Letter Agreement that were
contemporaneously drafted. . . .
Along with the passage of time, it is to be
expected that some memories would be faded.
However, Fafinski and Adams also did not have
personal knowledge about what specifically
occurred in 2004. For example, while both
Fafinski and Adams speculated that the reason

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for the differing dates on the Note and the
Mortgages may have been due to a recording
issue, neither testified that he or she was
personally involved in recording the Mortgages.

Particularly in light of the conflicts between the documentary ev idence and Adams’s and
Fafinski’s testimony and the failure to produce either the 12 mortgages that were said to be
attached to the April 14 note or the note “of even date herewith” referred to in the June
mortgages, the district court did not abuse its discretion in denying a new trial on the ground
that its verdict was not supported by the evidence.
The district court did not err in finding that the June mortgages were not valid
because they had no consideration, and it did not abuse its discretion either in declining to
amend its findings, conclusions, order for judgment, and judgment or in denying the motion
for a new trial
Affirmed.