St. Louis County District Court File No. 69DU-CV-11-758
John D. Kelly, David L. Tilden, Hanft Fride, Duluth, Minnesota (for respondents)
Jerome D. Feriancek, Thibodeau, Johnson & Feriancek, PLLP, Duluth, Minnesota (for appellants)
Considered and decided by Hudson, Presiding Judge; Schellhas, Judge; and Stauber, Judge.
In this interlocutory appeal, appellants argue that respondents lack standing and their claims are moot and that the district court therefore erred by denying their motion for summary judgment. We affirm and remand.
This dispute arises from the purchase of a Duluth home (the property) by respondents Kraig Erickson and Tracy Erickson (Ericksons) from appellants Thomas Bothwell; Natalie Bothwell (Bothwells); and Joseph Bothwell, the Bothwells' son, who is not a party in this case. When the parties entered into a purchase agreement for the property in October 2009, Bothwells delivered to Ericksons a Seller's Property Disclosure Statement, which disclosed that Bothwells acquired the house in February 2009, had no problems with flooding or damages caused by flooding, and had no knowledge of any problems with mold in the house. Later, in an addendum to a counteroffer, Bothwells again represented that they had never had an issue with moisture in the basement of the home. But, in both the Seller's Property Disclosure Statement and the addendum to a counteroffer, Bothwells disclosed that the previous owner had apparently had problems with water seepage and leakage into the basement when the sump pump burned out. Ericksons moved into the property about 30 days before closing and paid Bothwells rent until the closing in December 2009. Ericksons financed their purchase of the property by granting a $167, 902 mortgage to Bank of America.
In August 2011, Ericksons sued Bothwells, alleging (1) fraudulent misrepresentation; (2) negligent misrepresentation; (3) misrepresentation by omission; (4) failure to disclose; (5) breach of express warranty; (6) breach of contract; (7) unjust enrichment; (8) detrimental reliance; and (9) deceptive trade practices. Ericksons claim that, during the spring and summer of 2010, the basement flooded repeatedly and they discovered signs of long-term water damage and mold issues when they attempted to repair the flood damage. They also claim that tests revealed "highly elevated levels" of airborne mold and that they suffered respiratory problems and therefore moved out of the home in August 2010 and have not re-occupied the home. Ericksons allege that Bothwells knew about the long-term water damage and mold and deliberately concealed it and that Ericksons have "suffered damages and incurred expense in excess of $50, 000 for clean-up, testing, hotels, mileage, loss of income and other costs directly associated with the problems created by the water damage, water intrusion and mold in the home."
Bothwells moved for summary judgment on all of Ericksons' claims. The district court granted summary judgment on Ericksons' negligent-representation, contract, warranty, and trade-practices claims and denied Bothwells summary judgment as to Ericksons' fraudulent-misrepresentation or misrepresentation-by-omission claim and unjust-enrichment claim.
During the district court proceedings, the Ericksons defaulted on their mortgage. Bank of America foreclosed the mortgage by advertisement and purchased the property at a foreclosure sale on October 2, 2012. Bothwells then moved for summary judgment, requesting that the district court amend its scheduling order to permit the summary-judgment motion and arguing that the court should dismiss Ericksons' remaining claims because the mortgage-foreclosure sale deprived Ericksons of standing and rendered their claims moot. The district court permitted Bothwells to argue their summary-judgment motion and denied the motion on November 27, 2012.
This interlocutory ...