A20-0744

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A20-0335
A20-0744

Red Star Group, LLC, d/b/a Cheers,
Appellant,

vs.

1933 Lyndale, LLC,
Respondent.

Filed February 8, 2021
Affirmed
Bjorkman, Judge

Hennepin County District Court
File No. 27-CV-19-19017

Jared M. Goerlitz, Goerlitz Law, PLLC, St. Paul, Minnesota (for appellant)

Rebecca F. Schiller, Jack E. Pierce, Bernick Lifson, P.A., Minneapolis, Minnesota (for
respondent)

Considered and decided by Larkin, Presiding Judge; Johnson, Judge; and Bjorkman,
Judge.
NONPRECEDENTIAL OPINION
BJORKMAN, Judge
Appellant Red Star Group, LLC challenges the conditions the district court imposed
on temporary injunctive relief and th e grant of summary judgment dismissing this action
involving the purchase of commercial re al estate. Red Star argues that the district court

2
abused its discretion by requiring an excessive bond amount and erred by granting
summary judgment on a basis respondent 1933 Lyndale, LLC did not assert. We affirm.
FACTS
Red Star agreed to purchase a commercial property it was leasing from 1933
Lyndale. Paragraph 4.0 of the July 2, 2019 purchase agreement required 1933 Lyndale to
secure a commitment for title insurance, including copi es of title -related documents (the
title commitment) within three days. Paragraph 5.0 provided that “[w]ithin seven (7) days
after receiving” the title commitment from 1933 Lyndale , Red Star “shall make written
objections . . . to the content” of the title commitment, “if any.” Paragraph 5.0 further
declared that “[a]ny matter disclosed” by the title commitment “and not objected to” by
Red Star becomes a “Permitted Exception.” And Paragraph 11.0 provided that at closing,
1933 Lyndale was required to deliver “marketable fee simple title ,” subject to “ [a]ny
‘Permitted Exception.’” Closing was scheduled for October 30, 2019.
1933 Lyndale timely secured the title commitment for the property and provided it
to Red Star. The title commitment excluded a 2013 mortgage in excess of $2.3 million in
favor of CorTrust Bank, N.A. ( the CorTrust mortgage). Red Star did not object to the
contents of the title commitment —including the CorTrust mortgag e—within the seven
days allotted under the purchase agreement. Accordingly, the draft limited warranty deed
1933 Lyndale prepared in advance of closing excluded the CorTrust mortgage.
In late October, Red Star expressed concern about the CorTrust mortgage and
requested information about the payoff amount. The closing agent provided Red Star an
unsigned copy of a partial release from CorTrust, which did not include a payoff amount.

3
An hour and a half before the scheduled closing, Red Star informed 1933 Lyndale that it
would not accept title subject to the CorTrust mortgage. In response, 1933 Lyndale
informed Red Star it had confirmed a payoff amount for the mortgage and again provided
the partial release as well as assurances the CorTrust mortgage would be satisfied and
released. Red Star did not appear at the closing, instead advising 1933 Lyndale that it had
breached the purchase agreement by failing to provide marketable title.
Red Star later commenced this action alleging breach of contract and unjust
enrichment, and seeking damages and injunctive relief. Red Star also moved the district
court to issue tem porary injunctions permitting it to remain in possession of the property
during the litigation. The district court issued a temporary injunction conditioned on Red
Star posting a bond in the amount of the purchase price and continuing to make the monthly
lease payments, but Red Star failed to meet these conditions and the injunction was
rescinded.1
While this action proceeded, 1933 Lyndale brought an eviction action against Red
Star. Red Star ultimately agreed to vacate the property and give up any rights to possession
under prior leases between the parties. Red Star also voluntarily dismissed its claims for
permanent injunctive relief in this action.

1 At the hearing on Red Star’s second motion for a temporary injunction, the district court
noted that Red Star could have retained possession by posting a bond and paying rent, but
failed to do so. The court declined to issue a second injunction, determining Red Star had
not met its burden under Dahlberg. See generally Dahlberg Bros., Inc. v. Ford Motor Co.,
137 N.W.2d 314 (Minn. 1965).

4
In February 2020, 1933 Lyndale moved for summary judgment, arguing that it had
complied with the purchase agreement and Red Star had not presented any material facts
supporting its claim s of breach. 1 933 Lyndale attached the purchase agreement to its
motion papers, and specifically argued , among other things, that the CorTrust mortagage
did not rende r title unmarketable because it was a “Permitted Exception.” Red Star
opposed the motion on the ground that 1933 Lyndale did not provide admissible evidence
that it could have provided marketable title at closing.
The district court granted the motion, reasoning that the CorTrust mortgage was a
“Permitted Exception” because Red Star failed to object within seven days of receiving the
title commitment, 1933 Lyndale was prepared to provide marketable title at closing, and
1933 Lyndale had no obligation to clear the CorTrust mortgage from the title prior to
closing. Red Star appeals the district court’s decisions on the temporary injunctions and
summary judgment.
DECISION
I. Red Star’s breach-of-contract claim fails as a matter of law.
Summary judgment is warranted if “there is no genuine issue as to any material fact”
and the moving party “is entitled to judgment as a matter of law.” Minn. R. Civ. P. 56.01.
A party is entitled to summary judgment when the nonmoving party fails to esta blish an
essential element of its claim. Bebo v. Delander, 632 N.W.2d 732, 737 (Minn. App. 2001),
review denied (Minn. Oct. 16, 2001). There is no genuine issue of material fact if the
record as a whole could not lead a rational decision -maker to decide for the nonmoving
party. Frieler v. Carlson Mktg. Grp., Inc., 751 N.W.2d 558, 564 (Minn. 2008). We review

5
de novo whether there are genuine issues of material fact and whether the district court
properly applied the law. Riverview Muir Doran, LLC v. JAD T Dev. Grp., LLC , 790
N.W.2d 167, 170 (Minn. 2010).
To prevail on a claim for breach of contract, a plaintiff must prove “(1) formation
of a contract, (2) performance by plaintiff of any conditions precedent to his right to
demand performance by the defendant, and (3) breach of the contract by defendant.” Park
Nicollet Clinic v. Hamann, 808 N.W.2d 828, 833 (Minn. 2011).
A. The district court did not sua sponte grant summary judgment.
Red Star contends that the district court erred because it granted summary judgment
on its own theory rather than a theory 1933 Lyndale advanced in its motion. Red Star
asserts that 1933 Lyndale sought summary judgment on the ground that Red Star did not
establish the third element of its contract claim —breach—rather the second element —
failure of Red Star to perform a condition precedent. This argument is unavailing for two
reasons.
First, rule 56.06 expressly permits a district court to grant summary judgment “on
grounds not raised by a party.” Minn. R. Civ. P. 56.06(b). And a court may “consider
summary judgment on its own initiative after identifying for the parties the material facts
that may not be genuinely in dispute.” Minn. R. Civ. P. 56.06(c). A district court may do
so even where a party has brought a motion seeking summary judgment on other grounds.
See Septran, Inc. v. Indep. Sch. Dist. No. 271, 555 N.W.2d 915, 920-21 (Minn. App. 1996)
(affirming summary judgment in favo r of the school district on a claim for which the
district “did not move for summary judgment”), review denied (Minn. Feb. 26, 1997). This

6
case doe s not present disputed facts; its resolution turns on the interpretation and
application of the purchase agr eement. Thus the district court did not grant summary
judgment sua sponte when its decision was based on the same purchase agreement
identified by the moving party, even if its decision was based on a theory not raised by the
moving party.
Second, 1933 Lyndale did seek summary judgment based on Red Star’s failure to
timely object to the CorTrust mortgage. In its supporting memorandum, 1933 Lyndale
cited three provisions of the purchase agreem ent that define its obligation to provide
marketable title, including Paragraph 5.0, which required Red Star to timely object to the
content of the title commitment or any exception would become a “Permitted Exception.”
The district court cited and relied on the same three provisions in determining 1 933
Lyndale did not breach the purchase agreement. The fact Red Star chose not to address
them in responding to 1933 Lyndale’s motion d oes not change the fact that 193 3 Lyndale
raised the argument s to the district court . The district court thus did not g rant summary
judgment on its own initiative or on grounds other than those advanced by the moving
party.
B. 1933 Lyndale did not breach the purchase agreement.
Red Star does not contend that the terms of the purchase agreement are ambiguous.
It only conte sts that 1933 Lyndale had provided competent evidence that the CorTrust
mortgage would in fact be released at closing. Red Star otherwise does not dispute the
sequence of events from the signing of the purchase agreement in July through its refusal
to close on the purchase at the end of October. The undisputed terms of the purchase

7
agreement and the facts leading up to closing demonstrate 1933 Lyndale did not breach the
purchase agreement.
The purchase agreement required 1933 Lyndale to deliver m arketable fee simple
title at closing. Red Star alleged that 1933 Lyndale did not meet this requirement because
title was conditioned on the CorTrust mortgage. But the purchase agreement provides that
title is not defective if it is delivered subject to a permitted exception. A “ Permitted
Exception” is any condition listed on 1933 Lyndale’s title commitment to which Red Star
did not object within seven days. Red Star did not timely object to the content of the title
commitment in any respect. The CorTrust mortgage thus became a “Permitted Exception”;
it did not violate 1 933 Lyndale’s contractual obligation to deliver marketable title.
Moreover, 1933 Lyndale’s obligation was to deliver marketable title at closing, which did
not occur because Red Star did not appear.2 On this record, 1933 Lyndale did not breach
the purchase agreement as a matter of law , because its obligation to deliver title had not

2 Given that 1933 Lyndale’s duty to deliver title had not yet arisen when Red Star refused
to appear for closing, Red Star appears to advance the theory of anticipatory breach —that
1933 Lyndale had demonstrated its inability to deliver marketable title, so Red Star was
entitled to treat the purchase agreement as if it had been breached. See Space Ctr., Inc. v.
451 Corp., 298 N.W.2d 443, 450 (Minn. 1980) (“ Where a party to an executory contract
places itself in a position where it cannot perform the contract, or where the party otherwise
prevents performance of the contract, the other contracting party may treat the contract as
anticipatorily breached.”); Bell v. Olson, 424 N.W.2d 829, 833 (Minn. App. 1988) (“In the
absence of express unqualified repudiation, inability to perform may constitute anticipatory
breach.”). Because Red Star did not argue anticipatory breach before the district court, it
forfeited this argument on appeal. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988)
(“A reviewing court must generally consider only those issues that the record shows were
presented and considered by the trial court in deciding the matter before it .” (quotation
omitted)).

8
yet arisen and that obligation was subject to permitted exceptions such as the CorTrust
mortgage.
II. Challenges relating to temporary injunctive relief are moot.
Red Star argues that the district court abused its discretion by conditioning the first
temporary injunction on an excessive bond and refusing to issue a second temporary
injunction. We need not cons ider these arguments in light of our decision affirming the
dismissal of this action.
“An issue is moot if an event occurs pending appeal that makes a decision on the
merits unnecessary or an award of effective relief impossible.” Farm Bureau Mut. Ins. Co.
v. Schwan, 687 N.W.2d 388, 391 (Minn. App. 2004) (quotation omitted). The purpose of
temporary injunctive relief is “to preserve the status quo until judgment.” Upper Midwest
Sales Co. v. Ecolab, Inc. , 577 N.W.2d 236, 244 (Minn. App. 1998) . Because we affirm
summary judgment dismissing Red Star’s action, injunctive relief is no longer necessary
to preserve the status quo. In short, the entry of final judgment renders the issue of an
injunction moot.
Affirmed.