Roanaq Osman, Respondent,

This opinion is nonprecedential except as provided by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
A24-1931

Roanaq Osman,
Respondent,

vs.

Girum Tibebu,
Appellant.

Filed July 21, 2025
Reversed and remanded
Ross, Judge

Hennepin County District Court
File No. 27-CV-24-9175

Ronald J. Walsh, Walsh Law, Maple Grove, Minnesota (for respondent)

Mark J. Manderfeld, Minneapolis, Minnesota (for appellant)

Considered and decided by Ross, Presiding Judge; Connolly, Judge; and Wheelock,
Judge.
NONPRECEDENTIAL OPINION
ROSS, Judge
Landlord Roanaq Osman and tenant Girum Tibebu entered into a five-year lease of
property for commercial use. Tibebu continued to lease the property for more than 10 years.
Osman delivered a notice of lease nonrenewal, which he followed with an eviction action.
The district court referee presiding over the eviction hearing concluded that the lease had
not been extended, meaning that a month-to -month lease was in effect and that the
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landlord’s notice of nonrenewal was therefore effective. Tibebu argues on appeal that the
lease did not require lease extensions to be in writing, that the lease had extended by
performance or oral agreement, and that the district court’s findings are inadequate to
support its decision. Because we hold that the lease did not require extensions to be in
writing, we reverse and remand for further proceedings and findings.
FACTS
Roanaq Osman entered into a written “Commercial Lease Agreement” with Girum
Tibebu. That October 2013 agreement obligated Tibebu to pay Osman $27,000 annually
to possess auto-repair and related office space in Minneapolis for a five-year term through
September 2018. Tibebu then operated an auto-repair shop on the premises for over 10
years. In March 2024, Osman gave Tibebu a document entitled, “Notice of Non-Renewal
of Lease.” Tibebu did not vacate and, about three months later in June 2024, Osman sued
to evict him.
The eviction action resulted in a bench trial before a district court referee, and a
central issue was whether the parties had orally extended the original five-year lease to run
through 2028. The dispute focused on two clauses in the written agreement. The first is the
extension clause, which gave Tibebu the right to extend the lease but does not specify how
or when he could act on the right:
After the Term of five years the Tenants will have the first right
to either extend or purchase the premises in “AS IS” condition
as the last day of their lease.
The second is the amendment clause, which expressly requires lease amendments or
modifications to be in writing:
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No amendment, modification, or waiver of any condition,
provision, or term of this Lease shall be valid or of any effect
unless made in writing, signed by the party or parties to be
bound, or its duly authorized representative, and specifying
with particularity the extent and nature of such amendment,
modification, or waiver.

The parties provided somewhat inconsistent testimony about their understandings of the
lease and the nature of Tibebu’s tenancy.
Both parties gave competing testimony about whether the original lease had been
extended. Tibebu testified that he and Osman twice orally agreed to additional five-year
lease terms, meaning that the lease was currently in its third five-year term that would end
in September 2028. He said that he and Osman signed no written agreement other than the
original lease. Osman testified that, after the first five-year term, he told Tibebu that if he
wanted an extension, a new written lease was required. He said that he gave Tibebu a copy
of a lease to sign but that Tibebu did not sign it. Neither party entered a copy of this
proposed lease into evidence. Osman testified that he believed that the lease converted to
a month-to-month tenancy at the end of the original lease term. But h e said that he had
“never written to [Tibebu]” to tell him he was a month-to-month tenant. Tibebu testified
that the first time he heard the term “month-to-month” was after the eviction action
commenced.
Witnesses testified differently about discussions between January and March 2023
concerning a new lease. Tibebu testified that they spoke in January 2023, when Osman
asked him to pay increased rent or face eviction. Tibebu said that he refused to sign written
lease agreements that Osman and his real-estate agent brought for him to sign in January
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and February 2023. Osman testified that in January 2023 he offered to sell the property to
Tibebu based on the right to purchase in the extension clause in the 2013 lease agreement.
Tibebu claimed that the parties had engaged in a third round of discussions in
August 2023. He testified that he had met with Osman shortly before the purported second
five-year extension was set to expire, and that Tibebu understood that he and Osman had
agreed to extend the lease for a third five-year term. Tibebu stated that they shook hands
and that Osman did not bring up the possibility of signing a new lease.
The referee signed a proposed order evicting Tibebu, believing that “[t]he sole issue
in this case is whether the parties reached an agreement whereby a five . . . year extension
is valid.” He found that “[t]here was credible testimony from both parties that [in
September 2018] an oral agreement extended the lease term for an additional . . . five years”
and that no new written lease was ever executed. The referee reasoned that any purported
oral extension was invalid because “the lease is vague as to how many times the tenancy
may be renewed” but was “definitive” that no amendment to the lease is enforceable unless
it is in writing. The referee therefore determined that the parties could not orally agree to a
five-year extension at any time during the tenancy. The referee held that the agreement had
converted to a month- to-month tenancy and had remained so since the original lease
expired in fall 2018. He concluded that, therefore, the March 2024 notice of nonrenewal
validly ended the tenancy. He made no finding as to whether a lease extension occurred in
August 2023.
Tibebu sought judicial review. The district court judge filed an order affirming the
decision. The district court held that the referee had not “clearly err[ed].” Any oral
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agreement to extend the lease, the court reasoned, was irrelevant because the lease did not
allow for oral extension, meaning that the tenancy had been month -to-month since fall
2018. The district court’s order also observed that rent had increased in October 2018,
changing a lease term.
Tibebu appeals.
DECISION
Tibebu raises several interrelated issues on appeal, arguing principally that the
district court erroneously determined that the lease required extensions to be in writing,
that he extended the lease by oral agreement or performance, and that the district court
failed to make necessary findings to support its decision. The threshold argument requires
us to interpret a contractual agreement, a task we undertake de novo, Travertine Corp. v.
Lexington-Silverwood, 683 N.W.2d 267, 271 (Minn. 2004), while we review the district
court’s related factual findings for clear error, see Rasmussen v. Two Harbors Fish Co.,
832 N.W.2d 790, 797 (Minn. 2013). For the following reasons, this review leads us to
conclude that the district court’s decision rests on its erroneous construction of the lease
agreement and that it therefore failed to make necessary fact findings.
Tibebu convincingly contends that the district court erred by determining that the
lease’s amendment clause, which required amendments to be in writing, applied to the
lease’s extension clause. The amendment clause expressly applies to alterations of a
“condition, provision, or term” of the agreement itself. Exercising the extension clause,
which afforded Tibebu “the first right to either extend or purchase the premises” after “the
Term of five years,” does not constitute an alteration of a term of the agreement. It instead
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would constitute the application of an express term of the agreement. Caselaw confirms
this plain understanding, as we have explained that an extension “merely continues the
original lease.” Unity Invs. Ltd. P’ship v. Lindberg, 421 N.W.2d 751, 754 (Minn. App.
1988). Exercising the contracted right to extend does not in the ordinary sense or in the
context of the specific language at issue here require any change to any term of the lease,
and therefore is not an amendment. We hold that the amendment clause, including its
writing requirement, does not apply to the extension clause.
The district court erred not only by determining that the amendment clause required
the extension right to be exercised in writing; it relatedly erred by implicitly finding that
the parties entered into a 2018 oral agreement to extend but by then invalidating that oral
agreement. Because the written lease agreement is silent as to how Tibebu could exercise
his right to extend, the district court should have determined how the right must be
exercised, perhaps by considering the parties’ conduct. This is because the primary goal of
contract interpretation is to determine and enforce the parties’ intent, Vermillion State Bank
v. Tennis Sanitation, LLC, 969 N.W.2d 610, 622 (Minn. 2022) , and a court may augment
its interpretation of a contract to address gaps or omissions in the contractual language by
looking to the parties’ course of performance, see J.J. Brooksbank Co. v. Budget Rent-A-
Car Corp., 337 N.W.2d 372, 375–76 (Minn. 1983). The district court’s finding that “[t]here
was credible testimony from both parties that an oral agreement extended the lease term
for an additional five . . . years” might aid it in determining what Osman and Tibebu
understood about whether the original lease could be extended by oral agreement. But the
district court made insufficient findings about how the 2018 oral agreement—or any of the
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parties’ other conduct—reflected their understanding of the extension clause. And unlike
the district court, this court does not engage in fact finding. See Johnson v. Johnson, 84
N.W.2d 249, 254 (Minn. 1957). We therefore must remand the case to the district court to
decide how the parties intended the extension clause to be exercised and to include fact
findings based on the evidence presented by the parties.
After construing the lease based on the evidence, which may include but need not
be limited to the parties’ conduct, the district court must also determine whether Tibebu
asserted his contractual right to extend and whether Osman acquiesced to any assertion of
that right. Although the district court implicitly found that Osman and Tibebu orally agreed
to extend the lease in 2018, it made no findings as to whether Osman orally asserted a right
to extend in 2023. W e further observe that the district court may consider whether the
extension clause remains operational after a first extension and, if so, whether Tibebu
asserted his right to extend by performance. See Quade v. Fitzloff, 1 00 N.W. 660, 661
(Minn. 1904); Kean v. Story & Clark Piano Co., 140 N.W. 1031, 1032 (Minn. 1913).
Without factual findings on whether Tibebu in 2023 asserted his right to extend, assuming
he had the right at that point, and whether Osman acquiesced, we cannot determine the
nature of Tibebu’s leasehold when he received the notice of nonrenewal in March 2024.
Osman suggests that Tibebu’s failure to extend in writing means that, under the
lease’s holdover clause, Tibebu converted to a month-to-month lease in October 2018. The
holdover clause provides that, if Tibebu remained in possession of the premises with
Osman’s permission “after the expiration of [the] Lease without the execution of a new
Lease, [he] shall be deemed to be occupying the Premises as a Tenant[] from month- to-
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month.” For the same reasons we have just outlined, however, the district court’s findings
are not sufficient for us to determine whether the original lease was extended or had instead
expired in March 2024. We cannot determine whether the holdover clause applies.
If the district court determines on remand that Tibebu properly asserted his right to
extend and that Osman acquiesced, it must also determine, for the purposes of the statute
of frauds, whether the purported extension s were in fact extensions or were instead
renewals, a determination that may depend on whether the parties must negotiate lease
terms before beginning a new lease period:
If any contractual term for the additional period must be
negotiated or determined, the statute of frauds requires a new
lease, and the new period is a renewal. If the lease is continued
by the party holding the option merely on timely notice or on
some other condition, no new lease is required, and the option
is an extension.
Med-Care Assocs., Inc. v. Noot, 329 N.W.2d 549, 551 (Minn. 1983). If the district court
finds on remand that Tibebu extended the lease in 2018 and 2023, no new written lease
would be required, and the lease period would not be void under the statute of frauds. See
id.; Minn. Stat. § 513.05 (2024). But if the district court finds that either of the purported
extensions required additional negotiations or determinations for lease terms and were
therefore actually renewals, the absence of a written lease means that the agreement would
be void under the statute of frauds. See Med -Care, 329 N.W.2d at 551; Minn. Stat.
§ 513.05. These legal questions hang on findings as to whether Tibebu’s purported
extensions were, in fact, extensions.
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The district court may also consider whether the statute-of-frauds exception for part
performance applies here. The supreme court has recognized that the doctrine of part
performance may remove an oral agreement to “ extend” a lease —whose terms have
changed—from the statute of frauds. Atwood v. Frye, 273 N.W. 85, 86–87 (Minn. 1937);
see also Pierce v. Hanson, 179 N.W. 893, 894 (Minn. 1920) (“The part performance
necessary to remove the bar of the statute from an oral contract varies with the nature and
purposes of the contract.”). But we cannot determine whether the part-performance
exception applies here because we lack sufficient findings regarding the parties’ post-2023
performance.
Osman last suggests that the lack of a definite end date in the lease means that it is
a perpetual contract. A perpetual contract is one that continues forever unless there is a
breach or mutual agreement to end the contract. See Glacial Plains Coop. v. Chippewa
Valley Ethanol Co., 912 N.W.2d 233, 237 (Minn. 2018). Perpetual contracts are disfavored
as a matter of public policy. Id. at 236. We need not decide whether the lease could be
extended in perpetuity because that question is not properly before us. The question
presented is not whether the lease could be extended perpetually but whether Osman and
Tibebu in fact extended it in 2018 and again in 2023, leaving Tibebu on a term lease when
Osman delivered his notice of nonrenewal. We express no opinion on how the perpetuity
argument should be decided.
Tibebu asks us for additional relief, including ruling on allegedly contradictory
district court findings, expunging the eviction judgment against him, awarding him costs
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and disbursements, and ordering the district court to release funds it holds. We leave these
issues for the district court to first address.
We have highlighted the issues that the district court should address with fact
findings and consequent legal determinations. We emphasize that some findings and
consequent legal conclusions might render the need to make other suggested findings
unnecessary. In further proceedings, the district court may rely on the existing record to
make the necessary findings or it may, in its discretion, reopen the record for additional
evidence and argument.
Reversed and remanded.