Murphy v. South Central Minnesota Multi-County Housing & Redevelopment Authority

UNPUBLISHED OPINION

Watonwan County District Court File No. 83-CV-12-177.

William Starr, Wayzata, Minnesota; and Charles A. Beckjord, St. Paul, Minnesota (for appellant)

Brock P. Alton, Gislason & Hunter, Minneapolis, Minnesota (for respondent)

Considered and decided by Bjorkman, Presiding Judge; Peterson, Judge; and Connolly, Judge.

PETERSON, Judge

In this appeal from a summary judgment, appellant, who operated a mobile-home park owned by respondent, argues that (1) the district court erred in ruling that equitable relief was unavailable due to the existence of a contract between the parties, and (2) fact questions existed regarding appellant's claims for promissory estoppel and unjust enrichment. We affirm.

FACTS

This lawsuit arose out of appellant Kathleen B. Murphy's operation of the Madelia Manufactured Home Park (the park), which is located on property owned by respondent South Central Minnesota Multi-County Housing and Redevelopment Authority. When respondent bought the property, respondent entered into a deferred-loan-repayment agreement and mortgage (the loan agreement) with the Minnesota Housing Finance Agency (the MHFA). The loan agreement was made under the MHFA's publicly owned neighborhood land trust program pursuant to Minn. Stat. §§ 462A.202, subd. 6. .30, .31 (1994).

The loan agreement permitted respondent to lease the park by way of a primary ground lease to either a nonprofit organization or to low- to moderate-income families or individuals. Respondent entered into a 99-year ground lease with the Minnesota Affordable and Accessible Housing Corporation (the MAAH), a nonprofit entity that owned the mobile homes located in the park. The lease required the MAAH to provide utilities services; maintain the park's streets, common areas, and lots; and pay operating expenses.

In 2001, the property-management firm that the MAAH had hired to manage the park resigned. After the management firm resigned, Steven Pierce, who served on the boards of directors for both the MAAH and respondent, visited the park and found it in a state of disrepair. On March 13, 2001, the MAAH invoked the lease's six-month termination provision and stated that it would stop operating the park effective September 15, 2001.

In September 2001, David Hunter, who is experienced in the construction industry, began managing the park for the MAAH, and the MAAH rescinded its notice of termination. Hunter, who worked with appellant buying and refurbishing residential and business properties for resale, began negotiating with Pierce for appellant to take over the MAAH's lease. On January 16, 2002, appellant entered into a contract with the MAAH to buy the mobile homes in the park for $125, 000. The contract between the MAAH and appellant states that appellant "shall assume the balance of the 99-year lease of the real property on which the [park] is situated, along with all of the responsibilities and conditions connected with said lease."

On January 30, 2002, respondent passed a resolution authorizing the assignment of the lease to appellant. Respondent's attorney drafted an assignment that included signature blocks for the MAAH, appellant, and respondent and for approval by the MHFA. Appellant, Pierce on behalf of the MAAH, and Keith Luebke on behalf of respondent, signed the draft agreement but did not obtain approval from the MHFA. Appellant and Hunter took over operating the park.

In 2005, appellant entered into a purchase agreement with Northcountry Cooperative Development Foundation for Northcountry to buy appellant's interests in the park. Northcountry wrote to the MHFA asking whether the transfer of the lease to appellant was a valid transfer. The MHFA responded that approval by the MHFA and the finance commissioner were required for ...