Shari Monica Kristo, Respondent,

This opinion will be unpublished and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
A18-1762

Shari Monica Kristo,
Respondent,

vs.

David R. Johnson, et al.,
Appellants.

Filed September 16, 2019
Affirmed
Hooten, Judge

Hennepin County District Court
File No. 27-CV-17-18771

Richard L. Hendrickson, Richard L. Hendrickson, P.A., Osseo, Minnesota; and

Karen R. Cole, Karen Cole Law Office, Minneapolis, Minnesota (for respondent)

David E. Krause, David E. Krause Law Office, Chtd., Minneapolis, Minnesota (for
appellants)

Considered and decided by Connolly, Presiding Judge; Hooten, Judge; and Smith,
John, 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
HOOTEN, Judge
Appellants challenge the district court’s temporary injunction preventing the
cancellation of a contract for deed that they entered into with respondent. They argue that
the underlying temporary restraining order ( TRO) did not prevent the cancellation of the
contract for deed because it did not take effect until after the 60 -day statutory window to
correct a default had run. Appellants also argue that the district court misinterpreted the
contract for deed when it granted the temporary injunction and erred in granting injunctive
relief because respondent came before the district court with unclean hands. We affirm.
FACTS
In August 2012, respondent Shari Kristo entered into a contract for deed with
appellants David Johnson and Barbro Johnson. The contract was for the purchase of real
property in Minneapolis that was being rented to multiple tenants. Two versions of the
signed contract exist, one belonging to appellants and one belonging to respondent. Each
is of the same typed form with blanks where the details of the terms can be filled in by
hand. Both versions show that the sale price was $175, 000, with a $5,000 down payment
and $1,200 monthly payments. And those numbers are written in by hand on both forms.
Each version also has typed language describing a balloon payment with a blank where a
date can be filled in by hand . But a ppellants’ version includes a handwritten balloon
payment date of October 1, 2017 , while respondent’s version of the contract had no such
date because the blank was left empty . After entering into the contract, r espondent took

3
possession of the property and claims to have invested at least $30,000 in improvements to
the property.
On October 29, 2017, appellants served respondent with a notice of cancellation of
the contract for deed pursuant to Minn. Stat. § 559.21, subd. 2a (2018 ). The notice gave
respondent 60 days to pay $139,361.72 for the balloon payment . This led to respondent
filing a summons and complaint in district court on December 11 , asking for declaratory
judgment that she had made all required payments under the contract and was not in default.
She also moved for a TRO to prevent the cancellation of the contract for deed. Appellants
received service of the summons, complaint, and motion for a TRO on December 18, and
the next day the district court held a hearing on the motion . Appellant David Johnson
attempted to attend the hearing, but was unable to do so. On December 20 , the district
court issued an order granting respondent’s motion for a TRO.
On January 9, 2018, appellants filed an answer to respondent’s complaint and
requested that the district court vacate the TRO. The district court did so on March 9,
reasoning that it lacked personal jurisdiction over appellants when it granted the TRO
because they had not been properly served. A few days later, respondent requested that
the district court reconsider its order, and the district court granted the request. A hearing
was held, and on June 15 , the district court vacated its March 9 order, thereb y reinstating
the TRO. Among other things, the district court determined that it was previously incorrect
in concludi ng that appellants had not been properly served since the applicable statute
allowed for service by mail, which respondent had done. The district court then held an
evidentiary hearing to decide respondent’s motion for a temporary injunction. And on

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August 30, the district court granted the temporary injunction. It reasoned that the
underlying TRO had been properly granted and that respondent was likely to win on the
merits of her case because she was more credible on the question of whether the parties
had discussed a balloon payment as a term of the contract. This appeal follows.
D E C I S I O N
Appellants challenge the issuance of the temporary injunction. “A temporary
injunction is an extraordinary remedy. Its purpose is to preserve the status quo until
adjudication of the case on its merits.” Haley v. Forcelle, 669 N.W.2d 48, 55 (Minn. App.
2003) (quotations and citation omitted) , review denied (Minn. Nov. 25, 2003). The
decision whether to grant a temporary injunction is left to the discretion of the district court.
Id. So we review a district court’s decision whether to grant a temporary injunction for an
abuse of that discretion. Fannie Mae v. Heather Apartments Ltd. P’ship, 811 N.W.2d 596,
599 (Minn. 2012).
I. TRO
Appellants first argue that under Minn. Stat. § 591.21, subd. 2, the TRO did not take
effect until after the 60 -day window to correct a default had run, and that the contract for
deed was already cancelled at the time the TRO was issued. Appellants claim that, under
these circumst ances, the status quo that the subsequent temporary injunction sought to
preserve—a non-cancelled contract for deed —was nonexistent. Appellants maintain that
their argument succeeds for two reasons. First, they claim that because the TRO could not
take effect before respondent posted the required bond, which she did not do until after the
expiration of the 60-day window, it was ineffective. Second, it was ineffective because the

5
TRO could not take effect before appellants received actual notice of it, which also did not
take place until after the expiration of the 60-day window.
Respondent counters that the TRO ’s very wording indicates that it took effect
immediately and was not contingent on the payment of the bond, and she argues that under
Minn. R. Civ. P. 65.04, actual notice is not required in order to restrain a party to a TRO.
The district court, when it reinstated the TRO in June, agreed with these two arguments. It
also favorably compared the facts of the case to D.J. Enterprises of Garrison, Inc. v. Blue
Viking, Inc., 352 N.W.2d 120 (Minn. App. 1984), review denied (Minn. Oct. 11, 1984).
Even assuming, without deciding, that appellants are correct about the bond and
actual-notice requirements, D.J. Enterprises controls the outcome of this c ase. In D.J.
Enterprises, the respondent had purchased a restaurant from appellant using a contract for
deed. 352 N.W.2d at 120. Nine months later, appellant served respondent with a notice of
cancellation of the contract for deed, and the notice gave respondent 90 days to remedy the
default or secure an order to enjoin cancellation of the contract in accordance with Minn.
Stat. § 559.21 (1982). Id. at 121. Respondent moved for an injunction and filed a
complaint in district court more than three weeks before the expiration of the 90 -day
window. Id. The district court took the motion under advisement and did not issue the
injunction until about a month after the expiration of the 90-day window. Id. The question
on appeal was whether the district court had jurisdiction to issue the injunction beyond the
90-day window. Id. Our court answered affirmatively, favorably quoting a Minnesota
Supreme Court case that dealt with the cancellation of a land contract and explained:

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However drastic the statutory procedure, it cannot be that the
legislature intended equity to be entirely powerless and
deprived of all its former beneficent jurisdiction in such
matters . . . . It is because we are confident that the legislature
did not intend such complete tying of hands of equity that we
are using its power here.
Id. at 121–22 (quoting Follingstad v. Syverson, 200 N.W. 90, 92 (Minn. 1924)). Our court
then looked at the facts of the case and explained that it was relevant that: the respondent
was in possession of the property; the respondent had been operating the restaurant for over
a year; the respondent had either paid for directly or assumed debts amounting to 75% of
the purchase price of the property, standing to lose half of a million dollars; the appellant
would not be prejudiced by judicial intervention; and appellant’s interests were protected
by the $12,000 bond posted by respondent. Id. at 122. With these facts in mind, we
affirmed the district court’s exercise of its equitable powers in granting a temporary
injunction outside of the 90-day window. Id.
The district court in the present case analyzed the facts and found that they were
similar to D.J. Enterprises because: respondent filed her summons, complaint, and motion
for a TRO within the 60-day window and a hearing on the motion for a TRO was held over
a week before the end of the 60 -day window ; appellants had notice of the hearing;
respondent had owned the apartment building for over a year ; she had continued to make
payments according to the contract for deed; and she had built significant amounts of equity
in the building. The district court also pointed out that the TRO was issued before the
expiration of the 60 -day window. Appellants point to no errors in the district court’s
findings of fact. In analyzing this issue, we are mindful of the “broad latitude” accorded

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to courts of equity in the exercise of their equitable powers. Bolander v. Bolander , 703
N.W.2d 529, 548 (Minn. App. 2005), review dismissed (Minn. Nov. 15, 2005). In light of
the holdings of D.J. Enterprises and the district court’s analysis of the facts of this case,
we conclude that even if the TRO did not take effect until a few days after the expiration
of the 60-day window because of the bond and actual-notice requirements, it was within
the district court’s equitable power to determine that the TRO prevented cancellation of the
contract for deed and the district court therefore did not abuse its discretion in granting the
temporary injunction.
II. Interpretation of the Contract
Appellants next argue that the temporary injunction should be overturned because
the district court erred in its interpretation of the contract for deed. In determining whether
a district court abused its discretion in granting a temporary injunction, we look to the five
Dahlberg factors. Metro. Sports Facilities Comm’n v. Minn. Twins P’ship , 638 N.W.2d
214, 220–21 (Minn. App. 2002) (citing Dahlberg Bros. v. Ford Motor Co. , 137 N.W.2d
314, 321–22 (Minn. 1965)), review denied (Minn. Feb. 4, 2002) . One of those factors is
the likelihood of success on the merits. Id. at 221. In deciding whether to grant this
temporary injunction, the district court looked a t the Dahlberg factors and specifically
focused on respondent’s likelihood of success. The district court concluded that respondent
would “probably” prevail on the merits . It based its conclusion in large part on its
determination that respondent was mor e credible than appellant David Johnson when she
testified that they never discussed a balloon payment when agreeing to the terms of the
contract for deed. In essence, b y making this determination, the district court found that

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respondent’s copy reflected the actual terms, not appellants’ copy. It is this finding, and
its effect on the likelihood-of-success Dahlberg factor, that appellants dispute.
Appellants argue that the contract at issue was an unambiguous written contract and
that the district court erred by relying on parol evidence to determine that a balloon
payment was not a part of the contract. It is true that a district court may not rely on parol
evidence when a contract is unambiguous. Mollico v. Mollico , 628 N.W.2d 637, 642
(Minn. App. 2001). But this argument is a red herring. The district court was not using
parol evidence to interpret an unambiguous contract. Rather, the district court noted that
there were two written versions of the contract, one with the balloon payment and one
without, and that it was disputed whether the parties discussed the balloon -payment term.
The district court determined that respondent’s testimony was more credible as to whether
the term was discussed, noting that appellant David Johnson testified that he did not clearly
recall the conversation.
The district court then went on to address appellants’ argument that a balloon -
payment term should be implied into the contract. The district court correctly noted that
the contract for deed is governed by the statute of frauds, Minn. Stat. § 513.05 (2018), and
that appellants would have to demonstrate by clear and convincing evidence that the parties
had orally agreed to a balloon-payment term, see Christie v. Estate of Christie, 911 N.W.2d
833, 839 (Minn. 2018) (“ [C]lear and convincing evidence is the appropriate standard for
proving the existence of an oral cont ract for the sale of land . . . .”). The district court
reiterated that respondent was more credible in her testimony on this issue than appellant
David Johnson. And it noted that “the Contract either omitted the term entirely, or there

9
were at least two versions, with the version given to [respondent] omitting the disputed
term.” Based on the testimony and conflicting versions of the contract, the district court
concluded that appellants could not m eet their high burden of clear and convincing
evidence in order to have the term implied into the contract.
The district court concluded in its analysis of this Dahlberg factor by saying that it
could not “find that [respondent] intended that the Contract would be subject to a” balloon
payment and that respondent “will probably succeed on the merits.” Given the arguments
on appeal, we cannot say that the district court misapplied the law in its assessment of
respondent’s likelihood of success, or that the district court abused its discretion in granting
the temporary injunction on this basis.1
III. Unclean Hands
Finally, appellants argue that the district court should not have granted the
temporary injunction because respondent came to a court of equity with unclean hands .
Respondent’s hands are unclean, they argue, because she violated the district court’s order
that she continue to make monthly payments to them during the pendency of the litigation.
It is true that Minnesota courts “subscribe to the maxim that he who seeks equity must do
equity, and he who comes into equity must come with c lean hands.” Hruska v. Chandler
Assocs., Inc., 372 N.W.2d 709, 715 (Minn. 1985) (quotation omitted). In defining what
constitutes “unclean hands,” the Hruska court explained that:
The misconduct need not be of such a nature as to be actually
fraudulent or constitute a basis for legal action. The plaintiff

1 Our conclusion on this issue in no way purports to decide or foreclose the legal arguments
that either party could make about the terms of the contract at trial.

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may be denied relief where his conduct has been
unconscionable by reason of a bad motive, or where the result
induced by his conduct will be unconscionable either in the
benefit to himself or the injury to others.
Id. (quoting Johnson v. Freberg , 228 N.W. 159, 160 (Minn. 1929)). The district court
explained in its order granting a temporary injunction that the required payments “have
been held by [respondent’s] attorney. The Court does not find that there was an intentional
violation of the Cou rt’s order and understands [respondent’s] concern that she will lose
these funds if she doe s not prevail on the merits.” Appellants do not dispute the finding
that respondent’s attorney is holding onto the money. This conduct does not appear to be
“unconscionable by reason of a bad motive”—as the district court said, respondent’s worry
over losing the funds is reasonable —nor does it appear that the “result induced by [the]
conduct will be unconscionable” since the money is being held, apparently in trust.
Accordingly, we are not convinced that the district court clearly erred in not determining
that respondent came before the district court with “unclean hands,” and we thereby
conclude that the district court did not abuse its discretion in granting the t emporary
injunction.
Affirmed.