Affordable Home Builders, Inc., 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This opinion will be unpublished and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
A19-0729

Affordable Home Builders, Inc.,
Respondent,

vs.

Bear Road LLC,
Defendant,

Gregory P. Smith,
Appellant.

Filed December 16, 2019
Affirmed in part, reversed in part, and remanded
Cochran, Judge

Morrison County District Court
File No. 49-CV-18-1576

Jonathan D. Wolf, Rinke Noonan, St. Cloud, Minnesota (for respondent)

A. Chad McKenney, Bradley D. Hendrikso n, Donohue McKenney, LTD., Maple Grove,
Minnesota (for appellant)

Considered and decided by Cochran, Presiding Judge; Johnson, Judge; and
Smith, John P., Judge.


 Retired judge of the Minnesota Court of A ppeals, serving by appoi ntment 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
COCHRAN, Judge
Appellant Gregory P. Smith challenges the district court’s grant of summary
judgment in favor of respondent Affordable Home Builders, Inc., arguing that genuine
issues of material fact exist regarding the election of remedies and the appropriate amount
of damages under a contract for deed. Becaus e genuine issues of material fact exist
regarding the amount owed under the cont ract, we reverse and remand for further
proceedings.
FACTS
In March 2017, appellant Gregory P. Smith and defendant Bear Road LLC
(collectively, the buyers) entered into a contract for deed with respondent Affordable Home
Builders, Inc. (AHB) to purchase a property. The contra ct required the buyers to make
monthly payments to AHB for one year and then a balloon payment in March 2018. It is
undisputed that the buyers de faulted on the contract by fa iling to make several monthly
payments and the balloon payment.
Among other terms, the contract provided that if the buyers defaulted, AHB could
cancel the contract or “elect any other remedy available at law or in equity.” An addendum
to the contract further provided that upon default AHB could immediately demand the
entire unpaid balance of the purchase price plus interest and commence an action to collect
any amounts due. A second addendum contained the following provision:
If cancellation of the Contract for Deed occurs or the
businesses close for more than consecutive 7 days, at the option
of the Seller, the assignment of all income and rents shall be

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enforced and Seller shall have full right to re-open an[d] protect
the businesses.[1]

The second addendum further provided that if AHB were to exercise this provision, it was
required to assign the income earned in operating the business first to the “costs of taking
control and managing the Property” and then to the “sums secured by the Contract for
Deed.”
In June 2018, AHB served a summons and complaint against Smith and Bear Road
for breach of contract and unjust enrichment. AHB sought damages for amounts due and
owing under the contract.2 Alternatively, AHB sought a judicial determination that AHB
was entitled to cancel the c ontract. In November 2018, AHB moved for summary
judgment.
In opposing the motion for summary judgm ent, Smith argued that a genuine issue
of material fact existed regarding which remedy AHB had elected. Smith argued that,
under the election-of-remedies doctrine, AHB was precluded from making a claim of
damages because AHB had retaken possession of the property and effectively cancelled
the contract. Smith alleged through affidavi ts and supporting documents that Bear Road
turned over the keys to the pr operty to AHB and that agents of AHB were operating a
business on the property. AHB ultimately conceded at the summary-judgment motion
hearing that it reopened a business on the property, but argued that it was allowed to do so

1 The “businesses” referenced in the contract are apparently a bar/restaurant located on the
property.

2 Bear Road did not participate in district court and is not participating in this appeal.

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under the second addendum and argued that its breach-of-contract claim was consistent
with the election-of-remedies doctrine and the contract itself. In response, Smith continued
to maintain that the election-of-remedies doctrine precluded AHB from seeking monetary
damages because it had repossessed the property. Alternatively, he argued that a genuine
issue of material fact existed regarding the amount of income AHB had earned by operating
a business on the property and whether any of that income was required to be used to offset
the outstanding balance of the contract debt under the second addendum. Moreover, Smith
argued that there was a factual dispute regarding whether a $5,000 payment made by Smith
to AHB in February 2018 must be deducted in the calculation of any amounts owing under
the contract.
The district court granted AHB’s moti on for summary judgment and entered a
judgment against Smith for the full amount due under the contract as calculated by AHB
in its motion filings. The order and judgment do not address or reflect any income made
by AHB from operating a business on the property and do not consider the $5,000 payment
that Smith made to AHB in February 2018 prior to the filing of the complaint.
Smith appeals.
D E C I S I O N
A district court must grant summary judgment if the “movant shows that there is no
genuine issue as to any material fact and the movant is entitled to judgment as a matter of
law.” Minn. R. Civ. P. 56.01. Appellate courts review the grant of summary judgment
de novo to determine “whether there are genui ne issues of material fact and whether the
district court erred in its application of the law.” Montemayor v. Sebright Prods., Inc. ,

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898 N.W.2d 623, 628 (Minn. 2017) (quotation omitted). To preclude summary judgment,
a “genuine issue” of material fact must be established by substantial evidence. DLH,
Inc. v. Russ, 566 N.W.2d 60, 70 (Minn. 1997). A re viewing court views the evidence “in
the light most favorable to the 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). “All doubts
and factual inferences must be re solved against the moving party.” Montemayor,
898 N.W.2d at 628 (quotation omitted). Su mmary judgment is “inappropriate when
reasonable persons might draw different c onclusions from the evid ence presented.”
Id. (quotation omitted).
Smith argues that the district court e rred in granting summary judgment in AHB’s
favor. Smith contends that genuine issues of material fact exist regarding the election of
remedies and, alternatively, regarding the appropriate amount of damages. We address
each issue in turn.
I. No genuine issue of material fact ex ists regarding the election of remedies.

Smith argues that the district court e rred in granting summary judgment because
genuine issues of material fact exist rega rding whether the election-of-remedies doctrine
precludes AHB from seeking damages for the out standing debt under the contract. He
maintains that genuine issues of material fact exist regarding wh ether AHB effectively
cancelled the contract by retaking possession of the property and operating a business there.
We are not persuaded.
The election-of-remedies doctrine applies where “a party adopts one of two or more
inconsistent remedies.” Kosbau v. Dress, 400 N.W.2d 106, 110 (Minn. App. 1987). The

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purpose of the doctrine is “not to prevent recourse to a potentia l remedy but to prevent
double redress for a single wrong.” Id. “It is for this reason that once an available remedy
is taken to its conclusion, th e party cannot thereafter asse rt a new theory to enhance
recovery.” Nw. State Bank, Osseo v. Foss, 197 N.W.2d 662, 666 (Minn. 1972). As applied
to contracts, the election-of-remedies doctrin e requires a plaintiff “to choose whether to
affirm or disaffirm a contract.” Loppe v. Steiner, 699 N.W.2d 342, 349 (Minn. App. 2005).
But, “[g]enerally, a party is not bound by an election unless he has pursued the chosen
course to a determinative conclusion or has procured advantage therefrom, or has thereby
subjected his adversary to injury.” Kosbau, 400 N.W.2d at 110 (quotation omitted).
Consequently, when a buyer under a contr act for deed defaults , the seller has an
option of remedies. “The law in this state is clear that wh en there is a default in the
performance of a contract for deed for the purchase of real estate the [seller] has his option
of suing on the contract or canceling the same.” Wayzata Enterprises, Inc. v. Herman ,
128 N.W.2d 156, 158 (Minn. 1964). Thus, because cancellation of the contract is
inconsistent with remedies such as monetary damages or specific performance, a seller who
chooses to cancel a contract is prevented from seeking breach-of-contract remedies.
See Rudnitski v. Seely, 452 N.W.2d 664, 666 (Minn. 1990 ) (“Ordinarily when [the seller
chooses to cancel the contract], the [seller] will be held to have elected a remedy and will
thereafter be prevented from receiving double recovery by seeking damages for breach of
contract.”); Kosbau, 400 N.W.2d at 108 (“Specific performance and cancellation are
inconsistent remedies because the former assumes and affirms the contract while the latter
denies or unmakes it.”).

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Smith argues that a genuine issue of mate rial fact exists regarding whether AHB
pursued the remedy of cancellation prior to bringing its breach-of-contract claim and
seeking damages. He maintains that by taking possession of the property, and by earning
income from operating a business on the property, AHB elected to cancel the contract and
is precluded by the election-of-remedies doc trine from bringing its breach-of-contract
claim. AHB counters that the contract expr essly allowed it to retake possession of the
property. Thus, AHB maintains that there is no genuine issue of material fact regarding
what remedy it elected because AHB’s actions that purportedly demonstrate that it
cancelled the contract were specifically pe rmitted by the terms of the second addendum,
and there is no evidence in the record that it disaffirmed the contract.
We conclude that no genuine issues of mate rial fact exist regarding the election of
remedies and that there are no grounds for revers ing the district court on this basis. As
argued by AHB, the contract for deed expr essly allowed it to take possession of the
property and operate the business under these circumstances. Smith agreed to the second
addendum that authorized these actions. Consequently, AHB has not pursued inconsistent
remedies. In summary, even looking at the re cord in the light most favorable to Smith,
AHB was following the contract provisions when it took possession of the property and
re-opened for business, and c ould not have disaffirmed the contract by doing so. Thus,
there is no genuine issue of material fact regarding whether AHB pursued inconsistent
remedies.3

3 Our decision only reflects whether there exists a genuine issue of material fact regarding
the election of remedies at the time of the district court’s judgment. We do not address any

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II. A genuine issue of material fact exis ts regarding the appropriate amount of
damages under the contract.

Smith next argues that the district cour t erred in granting summary judgment in
AHB’s favor because there exists a genuine issue of material fa ct as to the amount of the
unpaid debt under the contract. Specifically, he contends that there is a genuine issue of
material fact regarding how much AHB earne d operating a business on the property after
it took possession under the second addendum a nd how much of those earnings must be
applied to reduce the buyers’ i ndebtedness. Smith also argues that there exists a genuine
issue of material fact regarding whether the $5,000 payment to AHB in February 2018
should offset the contract debt.
AHB argues that the district court did not err in granting summary judgment for the
full amount of the unpaid debt as calculated by AHB without considering any income AHB
earned by its operation of the business. W ith regard to the $5,000 payment, AHB
acknowledges the payment but clai ms that its calculation of th e unpaid debt included the
payment. We find Smith’s argument that there is a genuine issue of material fact regarding
the amount of the unpaid debt owing to be persuasive.
The contract for deed provides that AHB must assign the income it earns in
operating the business first to the “costs of taking control and managing the Property” and
then to the “sums secu red by the Contract for Deed.” AHB asserts that it has not made

other right of the parties under the contract , including any right of Smith to retake
possession of the property or any right of AHB to maintain possessi on after the entry of
final judgment.

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sufficient income operating the business to offset any of the contract debt. But there is no
information in the record to support this assertion. This court has said:
To survive summary judgment, the nonmoving party generally
has the burden to show that a genuine issue of fact exists. But
when the nonmoving party has been allowed only minimal
discovery and the information that party needs to survive
summary judgment is in the moving party’s sole possession,
summary judgment may be premature. The relative
availability of evidence to the parties is a circumstance to be
considered in determining what should be required for making
a submissible case.

U.S. Bank Nat’l Ass’n v. Angeion Corp. , 615 N.W.2d 425, 433- 34 (Minn. App. 2000)
(quotations and citations omitted), review denied (Minn. Oct. 25, 2000).
In reviewing the record, we conclude th at the district court erred by granting
summary judgment on the issue of damages. Smith submitted evidence that demonstrated
that AHB was operating a business on the property. AHB conceded that it was conducting
business there after taking possession of the pr operty. But, there is no evidence in the
record regarding AHB’s income from operating the business, a necessary consideration in
determining whether any of the income from the business is available to offset the
outstanding contract debt. Considering the evidence that AHB was operating a business
on the property, and the lack of evidence regarding AHB’s financial gains (or losses) from
operating that business, we conclude that Smith meets his burden of presenting a genuine
issue of material fact regarding the approp riate measure of damages under the contract.
4

4 We also observe that Smith’s attorney noted at the summary-judgment hearing that little
discovery had been conducted, and that any evidence about AHB’s income from operating
the property, if any, would be in AHB’s possession.

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See DLH, Inc., 566 N.W.2d at 69 (“When a motion for summary judgment is made and
supported, the nonmoving party must present specific facts showing that there is a genuine
issue for trial.” (quotation omitted)). We reverse and remand the district court’s judgment
for further proceedings regarding damages.
On remand, the district court should also consider whether the judgment should be
reduced by the $5,000 that Smith paid AHB. The payment does not appear to be in dispute,
but the district court’s findings, order, and judgment do not appear to reflect that the amount
was previously paid.
Affirmed in part, reversed in part, and remanded.