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Tollefson Development, Inc. v. McCarthy

September 16, 2003

TOLLEFSON DEVELOPMENT, INC., APPELLANT,
v.
PATRICK MCCARTHY, ET AL., RESPONDENTS.



Dakota County District Court File No. C2-02-11275

Considered and decided by Harten, Presiding Judge, Hudson, Judge, and Wright, Judge.

SYLLABUS BY THE COURT

An equitable interest, obtained pursuant to a purchase agreement with unfulfilled contingencies, constitutes an insufficient interest in real property to maintain a partition action.

The opinion of the court was delivered by: Wright, Judge

Affirmed

OPINION

On appeal from the dismissal of its action for failure to state a claim on which relief could be granted, appellant argues that the settlement of a separate action to enforce a purchase agreement to transfer real property creates an equitable interest in the land sufficient to sustain this action for partition. We affirm.

FACTS

James McCarthy and respondent Patrick McCarthy were brothers and owners as tenants in common of a parcel of real property located in Eagan. On August 17, 2000, James McCarthy signed a purchase agreement to sell his interest (approximately 60 acres) in this parcel to appellant Tollefson Development, Inc. Pursuant to this agreement, the sale was conditioned on appellant's fulfillment of nine contingencies. Patrick McCarthy was not a party to this purchase agreement.

Appellant sued James McCarthy to enforce the purchase agreement and to compel the sale of the property. On April 30, 2002, appellant and James McCarthy reached a settlement, providing for a payment of $4.2 million from appellant to James McCarthy in exchange for his interest in the parcel and requiring the sale of the property to close before November 14, 2002.

Before the sale could close, however, James McCarthy died intestate. Patrick McCarthy is James McCarthy's sole heir at law and was appointed personal representative of James McCarthy's estate. Appellant moved to enforce the settlement agreement. In its October 16, 2002, settlement order, the district court concluded that appellant and James McCarthy reached a binding settlement agreement but that "Patrick McCarthy was not a party bound by the terms and conditions of the settlement agreement." Although the motion was brought and the settlement order was issued months after James McCarthy's death, the order neither addresses his death nor the means by which appellant may enforce the settlement on James McCarthy's estate.

Because the estate of James McCarthy took no action to sell the interest in the property to appellant as dictated by the settlement agreement, appellant sued Patrick McCarthy and any unknown claimants to an interest in the property on October 20, 2002, seeking partition of the property. On October 29, 2002, appellant also filed a claim in probate court asserting rights to the real property.*fn1 On December 10, 2002, Patrick McCarthy brought a motion to dismiss the partition action under Minn. R. Civ. P. 12.02(e), arguing that appellant's interest in the property was not sufficient to support a claim for partition. On February 5, 2003, the district court granted Patrick McCarthy's motion to dismiss appellant's complaint with prejudice for failure to state a claim on which relief could be granted. This appeal followed.

ISSUE

Did the district court err in granting the motion to dismiss because appellant, relying solely on the equitable interest obtained from a purchase agreement for real estate with unfulfilled contingencies, ...


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