Paul Stepnes, Appellant,

This opinion will be unpublished and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
A19-0865

Paul Stepnes,
Appellant,

vs.

Beth Trautman, et al.,
Respondents.

Filed April 20, 2020
Affirmed; motion denied
Reyes, Judge

Hennepin County District Court
File No. 27-CV-18-17644

Lisa Lodin Peralta, Peralta Appellate Law, PLLC, St. Louis Park, Minnesota (for appellant)

Daniel W. Voss, The Law Offices of Daniel W. Voss, PLLC, Minneapolis, Minnesota (for
respondents)

Considered and decided by Reyes, Presiding Judge; Bratvold, Judge; and Bryan,
Judge.
U N P U B L I S H E D O P I N I O N
REYES, Judge
Following removal of his conciliation -court claim for real -estate commission to
district court and its dismissal , appellant argues that the district court (1) improperly
granted summary judgment to respondents because (a) respondents forfeited their claims;
(b) a genuin e issue of material fact exists; and (c) appellant has standing because his

2
bankruptcy estate did not have an interest in his commission and (2) improperly denied his
motion for summary judgment based on a claimed agreement to settle the underlying claim.
We affirm.
FACTS
Appellant Paul Stepnes is a licensed real -estate agent. He has worked with
respondent Beth Trautman to market properties that Trautman purchases to remodel and
resell. On February 2, 2018, Stepnes filed for Chapter 7 bankruptcy. He did not report any
earned real-estate commissions or any contingent or unliquidated claims in his bankruptcy
filings. On February 8, 2018, Trautman listed a p roperty with Bridge Realty on which
Stepnes had previously worked, but that had not sold, and listed herself as the listing agent
and Stepnes as the co -listing agent . The listing cover sheet provided for zero -percent
commission for each party. The property sold on February 21, 2018, and closed on March
29, 2018. Trautman did not make any profit on the sale or pay a commission to Stepnes.
On June 13, 2018, Stepnes brought an equitable claim in conciliation cou rt for
$15,000 in commission. In his statement of claim, Stepnes referenced working for eight
months as the listing agent, “marketing the property with open houses etc. and even finding
the buyers.” The conciliation court issued a $10,070 judgment for Stepnes , stayed until
October 24, 2018, to allow time for removal to district court.
The parties discussed a settlement agreement via email under which Trautman
would pay Stepnes $7,500 for a release of all claims against her related to her properties,
but Stepnes did not agree with the releas e Trautman presented to him . As the parties
discussed the settlement, Trautman filed for removal to district court the day before the end

3
of the stay of the conciliation court judgment. The district court vacated the judgment
pursuant to Minn. Gen. R. Prac. 521(d).
Stepnes filed motions to dismiss, to vacate “the order vacating the judgment on
appeal,” to enforce the settlement agreement, and for penalties. The district court construed
these motions as “advancing a motion for summary judgment premised on the alleged
agreement to compromise the underlying claim.” Without filing any other responsive
pleading, Trautman filed a motion for summary judgment bas ed on (1) Stepnes’s lack of
standing and (2) a bar under Minn. Stat. § 82.85 (2018) against claims for commission on
the sale of real property without a written agreement. The district court granted Trautman’s
motion because it determined that Stepnes lacked standing, and it did not reach her
statutory argument. It denied Stepnes’s motion. This appeal follows.
D E C I S I O N
I. Stepnes’s motion to strike portions of Trautman’s brief is denied as moot.

Stepnes moved to strike portions of Trautman’s brief the evening before oral
arguments on the basis that Trautman referred to materia ls outside of the record. The
appellate record is limited to “documents filed in the trial court, the exhibits, and the
transcript of the proceedings, if any.” Minn. R. Civ. App. P. 110.01. Because these
portions are not relevant to our analysis and we did not rely on them, we deny Stepnes’s
motion as moot. See In re Purported Fin. Statement in Dist. Court of Ramsey Cty. , 745
N.W.2d 878, 882 (Minn. App. 2008) (denying motion to strike portions of respondent’s
brief as moot when this court did not rely on material).

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II. The district court properly granted summary judgment for Trautman.

Stepnes argues that the district court improperly granted summary judgment to
Trautman because (1) Trautman forfeited1 both of the issues on which she sought summary
judgment by not raising e ither as an affirmative defense; (2) a genuine issue of material
fact exists; and (3) he had standing because his bankruptcy estate did not have an interest
in his commission. We address each issue in turn.
We review a grant of summary judgment de novo to determine “whether there are
genuine issues of material fact and whether the district court erred in its application of the
law.” Montemayor v. Sebright Prods., Inc., 898 N.W.2d 623, 628 (Minn. 2017) (quotation
omitted).
A. Trautman did not forfeit the issues of standing or the application of
Minn. Stat. § 82.85.

Stepnes argues that Trautman forfeited her challenge to his standing as well as her
argument that section 82.85 bars his claim by raising them in a motion for summary
judgment and not pleading either issue as an “affirmative defense.” We disagree.
As an initial matter , Stepnes did not argue forfeiture to the district court, so he
cannot now argue it on appeal. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988).
Even if we consider his claim, however, it lacks merit.
First, standing requires a litigant to suffer an injury in fact or to have a “sufficient
stake in the outcome.” See Cochrane v. Tudor Oaks Condo. Project, 529 N.W.2d 429, 433

1 Stepnes describes this as waiver, but forfeiture refers to “ the failure to make a timely
assertion of a right. ” See Halvorson v. B&F Fastener Supply , 901 N.W.2d 425, 429 n.1
(Minn. 2017) (quotation omitted).

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(Minn. App. 1995) (contrasting standing with capacity to sue), review denied (Minn. May
31, 1995). Whether a bankruptcy estate or debtor has an interest in disputed property raises
an issue of standing . See Leffler v. Leffler, 602 N.W.2d 420, 422-23 (Minn. App. 1999) .
Trautman argues that any claim for commission that Stepnes has is the property of his
bankruptcy estate and that he therefore lacks standing to pursue the commission.
Trautman’s argument raises an issue of standing that may be addressed at any time. See In
re Custody of D.T.R. , 796 N.W.2d 509, 512 (Minn. 2011); Davidner v. Davidner , 232
N.W.2d 5, 7 (Minn. 1975).
Second, as Stepnes argues, a defense based on a statute of frauds, such as section
82.85, is an affirmative defense. See Minn. R. Civ. P. 8.03. “Every defense . . . shall be
asserted in the responsive pleading thereto if one is required.” Minn. R. Civ. P. 12.02.
Generally, f ailure to include an affirmative defense in a responsive pleading results in
forfeiture. See Sletten v. Ramsey Cty. , 675 N.W.2d 291, 299 (Minn. 2004 ). However,
“[i]ssues litigated by either express or implied consent are treated as if they had been raised
in the pleadings.” Septran, Inc. v. Indep. Sch. Dist. No. 271, 555 N.W.2d 915, 919 (Minn.
App. 1996) (quotation omitted), review denied (Minn. Feb. 26, 1997) . Accordingly, w e
have found no forfeiture when a party raises an issue for the first time in a motion for
summary judgment if the nonmoving party does not object to the defense, the district court
hears the issue, and the parties litigate the issue. See, e.g., Bradley v. First Nat. Bank of
Walker, N.A., 711 N.W.2d 121, 128 (Minn. App. 2006) (allow ing statute-of-limitations
defense first raised in moving party’s reply memorandum to motion for summary
judgment); Wessling v. Johnson, 424 N.W.2d 795, 799 (Minn. App. 1988) (concluding no

6
forfeiture of res judicata claim first raised in motion for summary judgment), review denied
(Minn. July 28, 1988).
Here, Stepnes addressed Trautman’s claims in his response to Trautman’s motion
for summary judgment. The district court heard arguments from each party on the claims
at a motion hearing. Stepnes argued at the hearing and in his written response that the
bankruptcy estate had no interest in his claim and that the parties met the requirements of
section 82.85. Because Stepnes did not object, he litigated the issues, and the district court
heard the issues, we treat them as though Trautman raised them i n her pleadings. See
Septran, 555 N.W.2d at 919.
The cases to which Stepnes cites to support his forfeiture argument do not involve
situations in which no pleadings were required or filed or in which the parties litigated the
issue by consent. See Beutz v. A.O. Smith Harvestore Prod., Inc. , 431 N.W.2d 528, 532
n.3 (Minn. 1988) ( affirming district court’s decision to allow amendment of pleading to
include affirmative defense one week before trial); Minnesota-Iowa Television Co. v.
Watonwan T.V. Imp. Ass’n, 294 N.W.2d 297, 301, 305 (Minn. 1980) (declining to consider
on appeal respondent’s affirmative defenses not raised in pleadings or considered by
district court); Kilton v. Richard G. Nadler & Assocs., 447 N.W.2d 468, 471 (Minn. App.
1989) (concluding no error in district court requiring defendant to proceed by general
denial after failing to serve answer with affirmative defense following removal from
conciliation court, but no indication of any pretrial motions), review denied (Minn. Jan. 12,
1990). Neither these cases nor Minn. R. Civ. P. 8.03 or 12.02, which address how a party

7
required to file a responsive pleading must preserve an affirmative defense, preclude
Trautman’s claims.
B. There is no genuine issue of material fact.

Stepnes next argues that he raised a genuine issue of material fact regarding what
portion of his work marketing the property occurred after his bankruptcy petition. We are
not persuaded.
We review the existence of a genuine issue of material fact de novo. STAR Ctrs.,
Inc. v. Faegre & Benson, L.L.P., 644 N.W.2d 72, 76-77 (Minn. 2002). A fact is material
if its resolution will affect the case outcome. Zappa v. Fahey , 245 N.W.2d 258, 259 -60
(Minn. 1976). At summary judgment, t he nonmoving party must produce specific,
probative evidence of the existence of a genuine issue of material fact. DLH, Inc. v. Russ,
566 N.W.2d 60, 71 (Minn. 1997) . This requires more than “m ere averments ” by the
nonmoving party, id., and more than reference to “unverified and conclusionary allegations
in his pleading. ” Lubbers v. Anderson , 539 N.W.2d 398, 401 (Minn. 1995) (quotation
omitted).
Stepnes acknowledges that “[t]he evidence viewed most favorably to [him]
establishes that he marketed the [p]roperty for eight months total.” Yet he argues that only
his marketing services from the February 8, 2018 property list date to its February 21, 2018
sale date contributed to the sale and therefore to his commission. Stepnes did not present
evidence sufficient to controvert his statement in his pleading s that he worked for eight
months marketing the property and finding its buyer. See Russ , 566 N.W.2d at 70.
Approximately seven of the eight months he worked would have occurred before he filed

8
his ba nkruptcy petition. The district court properly concluded that Stepnes raised no
genuine issue of material fact.
C. Stepnes lacked standing to bring a claim based on pre-petition, but not
post-petition, work.

Stepnes argues that the district court incorrectly determined that his bankruptcy
estate had an interest in his suit for commission2 and that he therefore lacked standing to
pursue it. We agree.
We review de novo questions of standing, see D.T.R., 796 N.W.2d at 512, as well
as whether property is part of a bankruptcy estate , Parsons v. Union Planters Bank , 280
F.3d 1185, 1188 (8th Cir. 2002). On a motion for summary judgment, “the moving party
has the burden of proof and [] the nonmoving party has the benefit of that view of the
evidence which is most favorable to him.” Sauter v. Sauter, 70 N.W.2d 351, 353 (Minn.
1955). State law governs what is the debtor’s “property” at the time of the bankruptcy
petition, but whether it becomes property of the bankruptcy estate is a question of federal
law. In re N.S. Garrott & Sons , 772 F.2d 462, 466 (8th Cir. 1985); see also Raleigh v.
Illinois Dep’t of Revenue, 530 U.S. 15, 20, 120 S. Ct. 1951, 1955 (2000).
A bankruptcy debtor lacks standing in causes of action over property that belongs
to the bankruptcy estate, as the debtor no longer has an interest in that property. See Leffler,
602 N.W.2d at 423. When a debtor files a bankruptcy petition, “all legal or equitable
interests of the debtor in property as of the commencement of the case” become interests

2 While Stepnes did not specify a cause of action in his pleadings, he asserted in response
to Trautman’s motion for su mmary judgment that the case presents a n issue of unjust
enrichment.

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of the bankruptcy estate. 11 U.S.C. § 541(a)(1) (2014); see also Sundae v. Scot , 529
N.W.2d 362, 363 (Minn. App. 1995), review denied (Minn. May 31, 1995). Chapter 7
bankruptcy estates do not include the debtor’s earnings from post-petition services. See 11
U.S.C. § 541(a)(1); Harris v. Viegelahn , 575 U.S. 5 10, 135 S. Ct. 1829, 1835 (2015 );
Longaker v. Bos. Sci. Corp. , 715 F.3d 658, 661 (8th Cir. 2013) . When a post -petition
payment is based on “the debtor’s pre- and post-petition services, the payment is divided,
pro rata.” Longaker, 715 F.3d at 661 (emphasis added) (citing In re Wick, 276 F.3d 412,
416-17 (8th Cir. 2002)).
Here, viewing the evidence in the light most favorable to Stepnes shows that he
marketed the property for eight months, including approximately one month post-petition.
The bankruptcy estate has an interest in Stepnes’ s pre-petition work, but Stepnes has an
interest in his post-petition work.
Trautman acknowledges that Stepnes claims that he worked post -petition, but she
relies on Segal v. Rochelle , 382 U.S. 375, 380, 86 S. Ct. 511 (1966) , Parsons, 280 F.3d
1185, and Sundae, 529 N.W.2d 362, to argue that his claim “arose out of his pre -petition
marketing efforts” and is “rooted in his pre-bankruptcy past.” Trautman’s reliance on these
cases is misguided, as they did not involve payments based on the debtor’s post-petition
services. See Segal, 382 U.S. at 380-81, 86 S. Ct. at 515-16 (involving loss-carryback tax-
refund claims earned from pre-petition payment of taxes and net operating losses, which
could not be claimed until post-petition tax filing); Parsons, 280 F.3d at 1188 (concluding
debtor’s commission from pre-petition work and pre-petition property sale became estate
property because debtor entitled to commissi on at time of petition and post -petition

10
services not necessary); Sundae, 529 N.W.2d at 363, 365 (involving defamation and abuse-
of-process claims based on post -petition statements by others about pre -petition real
property already part of estate) . Here, the property sold after Stepnes’ s petition, and
Trautman points to no legal or equitable theory that would have entitled Stepnes to the
compensation he now seeks at the time of his February 2, 2018 petition.
We conclude that Stepnes has an interest in the payment based on his post-petition
work and therefore has standing.
D. Summary judgment is proper because Minn. Stat. § 82.85 bars Stepnes’s
claim.

The district court did not reach Trautman’s argument that section 82.85 bars
Stepnes’s equitable claim for commission. “[W]e may affirm a summary judgment if there
are no genuine issues of material fact and if the decision is correct on other grounds .”
Winkler v. Magnuson , 539 N.W.2d 821, 827 (Minn. App. 1995) ( quoting Northway v.
Whiting, 436 N.W.2d 796, 798 (Minn. App. 1989), review denied (Minn. Feb. 13, 1996).3
In both his response to Trautman’s motion for summary judgment and his arguments
at the summary-judgment motion hearing, Stepnes asserted that the Bridge Realty listing
cover sheet served as the written agreement needed for him to pursue a commission. The
parties do not dispute the existence or contents of this document, but only whether it meets
the requirements of a “written agreement” under section 82.85. The interpretation of a

3 Stepnes does not provide appellate briefing on this issue beyond a footnote stating that
the issue is not before this court because the district court did not reach it and that Trautman
“waived” it by not including it in an answer. Trautman provided thorough briefing on the
issue in her motion for summary judgment, and she references it on appeal.

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statute presents a question of law, which we review de novo. Cocchiarella v. Driggs, 884
N.W.2d 621, 624 (Minn. 2016).
Section 82.85 prohibits civil suits for commission for the sale of real estate without
a written agreement. Minn. Stat. § 82.85, subd. 2 (2018). We have repeatedly held that
allowing claims for commission under equitable theories such as unjust enrichment would
undermine this written -agreement requirement . See, e.g., Cityscapes Dev., LLC v.
Scheffler, 866 N.W.2d 66, 72-73 (Minn. App. 2015); Krogness v. Best Buy Co., Inc., 524
N.W.2d 282, 286 -87 (Minn. App. 1994) (interpreting Minn. Stat. § 82.33 (Supp. 1993),
renumbered to section 82.85), review denied (Minn. Jan. 25, 1995). Parties can meet the
written-agreement requir ement through substantial compliance with the 11 listing-
agreement requirements in Minn. Stat. § 82.66, subd. 1(a), (b) (2018). Rosenberg v.
Heritage Renovations, LLC, 685 N.W.2d 320, 325 (Minn. 2004) (interpreting Minn. Stat.
§ 82.195 (2002), renumbered to Minn. Stat. § 82.21, renumbered to section 82.66).
The parties here did not have a written agreement that substantially complied with
Minn. Stat. § 82.66, subd. 1 (a), (b) . The cover sheet is not signed by either party , as
required by subdivision 1(a), and it lacks a majority of the other requirements, such as “a
clear statement explaining the events or conditions that will e ntitle a broker to a
commission” and specific notice language “relating to compensation of the licensee .”
Minn. Stat. § 82.66, subd. 1(b)(5), (8). Moreover, it lists Trautman as the listing agent and
Stepnes as the co -listing agent, but, to the extent that it includes “the amount of any
compensation or commission or the basis for computing the commission ,” as required by
subdivision 1(b)(4), it lists zero-percent commission next to each party . The cover sheet

12
does not provide for the commission that Stepnes seeks, which he claim ed before the
district court “comes out of the cost of doing business and not th e profits .” Stepnes
provides no related written agreement. Because Stepnes has not produced a written
agreement between the parties that substantially complies with section 82.66, subdivision
1(a), (b) , section 82.85 bars hi s claim for commission , and summary jud gment for
Trautman is proper on that basis.
III. The district court properly denied Stepnes’s motion for summary judgment to
enforce a settlement agreement.

Stepnes argues that he is entitled to summary judgment because he and Trautman
entered into a settlement agreement , which Trautman breached by filing for removal to
district court. We disagree.
A party may seek to enforce a settlement agreement by filing a motion for summary
judgment in the underlying lawsuit. See Voicestream Minneapolis, Inc. v. RPC Properties,
Inc., 743 N.W.2d 267, 271 -72 (Minn. 2008). “A settlement agreement is a contract.”
Dykes v. Sukup Mfg. Co. , 781 N.W.2d 578, 581 -82 (Minn. 2010). The existence of a
contract is a question of fact, Morrisette v. Harrison Int’l Corp. , 486 N.W.2d 424, 427
(Minn. 1992), but summary judgment is appropriate if “a rational trier of fact could not
find for the nonmoving party” based on the record as a whole , Cargill Inc. v. Jorgenson
Farms, 719 N.W.2d 226, 232 (Minn. App. 2006). A contract requires “a definite offer and
acceptance” with assent of the parties to the essential terms of the agreement. Jallen v.
Agre, 119 N.W.2d 739, 743 (Minn. 1963).

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The district court denied Stepnes’s motion for summary judgment, determining that,
even viewing the emails between the parties in the light most favorable to Stepnes, Stepnes
and Trautman did not enter into an enforceable settlement agreement. It reasoned that
Trautman’s email to Stepnes proposing the settlement required a “full release” for “any
related properties” and contemplated a later finalized agreement. It further explained that
Stepnes’s agreement to Trautman’s email formed only an “agreement to agree,” which is
not a binding contract. See First Trust Co. v. Holt , 361 N.W.2d 476, 479 (Mi nn. App.
1985), review denied (Minn. Apr. 18, 1985); see also Northway , 436 N.W.2d at 799
(concluding preliminary agreement conditioned on later final agreement not enforceable).
The parties’ emails show that Trautman’s offer contemplated a later agreement. Her
email asks for a signed release of the judgment as well as a full release of her, her company,
and any related properties. Her email did not define these related properties. After Stepnes
responded, “Ok, I will agree,” Trautman stated that she would begin drafting the
paperwork. The release Trautman sent was the later agreement that her first email
contemplated. Stepnes rejected this agreement. The terms of the release were essential
terms on which the parties failed to agree. See Jallen, 119 N.W.2d at 741.
Stepnes nonetheless claims that these actions form an enforceable agreement. But
he characterizes the settlement agreement as an accord and cites to caselaw regarding
executory accords, such as Daly v. Chicago & N. W. Ry. Co. , 114 N.W.2d 682, 684 -85
(Minn. 1962). These cases are factually distinguishable from the case here . See Dykes,
781 N.W.2d at 581-82 (describing settlement agreements) ; see also Don Kral Inc. v.

14
Lindstrom, 173 N.W.2d 921, 923 (Minn. 1970) (describing when an accord and satisfaction
discharge prior debt).
Stepnes also argues that the district court should have construed his motion as one
to amend his pleadings to present a breach-of-settlement-agreement claim. We give “wide
discretion” to the district court’s decision to permit or deny amendments to pleadings. See
Fabio v. Bellomo , 504 N.W.2d 758, 761 (Minn. 1993). But Stepnes did not present his
motion as one to amend his pleadings, and he filed it after the 21 days within which Minn.
R. Civ. P. 15.01 allows for an amendment of pleadings. Moreover, “[a] motion to amend
a complaint is properly denied when the additional claim could not survive summary
judgment.” Bebo v. Delander , 632 N.W.2d 732, 740 (Minn. Ap p. 2001), review denied
(Minn. Oct. 16, 2001). The district court effectively determined this when it stated that the
parties did not form an agreement . The district court did not abuse its discretion by
construing his motion as one for summary judgment and not one to amend his complaint
to add an underlying breach-of-settlement-agreement claim. Because we conclude that the
undisputed evidence shows that the parties did not form a n agreement, the district court
properly denied Stepnes’s motion for summary judgment to enforce a settlement
agreement.
Affirmed; motion denied.