text:
    2004 SD 28
    KEYSTONE PLAZA CONDOMINIUMS ASSOCIATION, Plaintiff and Appellee, v. Ron EASTEP, Defendant and Appellant.
    No. 22732.
    Supreme Court of South Dakota.
    Considered on Briefs Nov. 17, 2003.
    Decided March 3, 2004.
    Scott A. Roetzel of Johnson, Eiesland, Huffman & Clayborne, Rapid City, South Dakota, Attorneys for plaintiff and appel-lee.
    Kenneth E. Jasper of Jasper Law Office Rapid City, South Dakota, Attorney for defendant and appellant.
   KONENKAMP, Justice.

[¶ 1.] Keystone Plaza Condominiums Association sued Ron Eastep, owner of a condominium unit controlled by the association. The complaint alleged that Eastep failed to open his business for 99 days between the months of May and September of 2001, in contravention of association bylaws. The association sought a judgment for liquidated damages. Eastep responded that the association did not have the authority to levy liquidated damages against him. His response was based in part on a previous decision in magistrate court concluding that the association’s noncompliance section of its bylaws providing that a fine be levied for noncompliance with the rules of the association was void. Following arguments of counsel and consideration of briefs, the circuit court granted summary judgment for the association. Eastep appeals, and we reverse.

Background

[¶2.] Since 1990, Eastep has owned a unit in the Keystone Plaza Mall. Currently, he owns Unit No. 15, which he purchased in 1997. Keystone Plaza Condominiums was created by a master deed, in accordance with SDCL 43-15A-3 and 43-15A-4. The deed was recorded with the Pennington County Register of Deeds. Relevant here, the deed provided that unit owners must “comply with the provisions of this Deed, the Bylaws, and decisions and resolutions of the council of co-owners, or its representatives, as determined or amended from time to time....” It further stated that “failure to comply with any such provisions or resolutions” would be “grounds for an action to recover sums due for damages or for injunctive relief.” (Emphasis added.) In addition, the deed provided:

All present or future owners, tenants, future tenants, or any other person that might use the facilities of the project in any manner are subject to the provisions of this Deed, and the mere acquisition or rental of any of the units of the project or the mere act of occupancy of any of the units shall signify that the provisions of this Deed are accepted and ratified.

[¶ 3.] Along with recording the deed, Keystone filed the Bylaws of Keystone Plaza Condominiums Council of Co-Owners. Relevant portions of the amended bylaws provide:

Article III Section 3:
Annual fall meetings shall be held at a time convenient for the majority of the members of the Association.... There shall also be an annual spring meeting held at a time convenient for the majority of the members of the association. At such meeting there shall be approved the current year’s budget and approval of the current year’s assessments. The owners may also transact such other business of the association at such meetings as may properly come before them.
Article III Section 4:
It shall be the duty of the president to call a special meeting of the owners at any time the majority of owners shall determine it is necessary or in their best interest to hold a meeting. No business shall be transacted at a special meeting except as stated in the notice.
Article III Section 5:
It shall be the duty of the secretary to mail a notice of each annual or special meeting, stating the purpose thereof, as well as the time and place of the meeting, to each owner of record, at least five (5) but not more than ten (10) days prior to such meeting. The mailing of notice in the manner provided in this section shall be considered notice served....
Article VII Section 6(G):
Months of normal operation for the Keystone Mall shall be Memorial Day through Labor Day. Owners or tenants may be open prior to and after these dates at their discretion."' In an "extreme emergency written notification and reasonable reasons for not opening must be made to the board.
Article IX Section 1:
These bylaws may be amended by the association in a duly, constituted meeting for such purpose, and no amendment shall take effect unless approved by owners representing at least two-thirds (2/3) of all units in the project as shown in the master deed.
Article XI Section 2:
After written notice of a violation, the continuing failure to comply with any of the bylaws will result in a fine of not more than .Fifty Dollars ($50.00) per day being'levied against the owner of record by the board of directors for each day the violation continues. The board of directors shall have the responsibility of notifying the offending party and setting the absolute day of compliance, (not to be more than ten (10) days from date of notification). Should the offending party not remedy the non-compliance by the specified date, the board of directors shall appropriate the fine and may instruct the association treasurer to begin small claims proceedings or file a lien to force compliance and collect all fines and costs from the offending party. The daily fine may be increased above Fifty Dollars ($50.00), but to not more than One Hundred Dollars ($100.00) per day with the written consent of the owners of at least two-thirds (2/3) of the units. No meeting of members shall be required to assess said fine.

[¶4.] In a previous action, brought in September 2000, the association sued Eas-tep, alleging that he had failed to open his business for sixteen days during the months of June, July, and August of 2000, in contravention of Article VII Section 6(G) of its bylaws. Because of this noncompliance, the association reasoned that it could assess a “fine” of $100 per day under Article XI Section 2 against Eastep. The case was heard in magistrate court.

[¶ 5.] Not yet having received the magistrate’s decision, Eastep sent a letter to the president of the association requesting that he be granted an exemption in 2001 from the opening requirements delineated in Article VII Section 6(G). The association’s president responded to Eastep’s request in a letter dated June 10, 2001:

As you know, the by-laws are very clear that all stores in the Keystone Mall must be open Memorial Day through Labor [D]ay each year. At the fall meeting last season, the association approved the requirement of seven consecutive hours of operation daily.
Ron, be on notice that the association has approved afine of $100.00 per day starting Memorial Day, May 28, 2001, and will continue for each day that you are not open through Labor Day, September 03, 2001.

(Emphasis added.) Meanwhilé, the magistrate issued a decision to the parties from the earlier litigation. As a result of that opinion, both the association and Eastep submitted proposed findings of fact and conclusions of law. On June 29, 2001, the magistrate accepted Eastep’s findings and conclusions, which incorporated the memorandum opinion. The opinion stated:

The court has reviewed the Amended Bylaws Article [XI] sections 1 and 2. Section 2 provides a fine of not more than a $100.00 per day to be levied against the owner of record for noncompliance with any of the by-laws. The section does not say that the fine is to be paid as a compensation for any damage suffered by the Keystone Plaza Condominiums. Certainly in the present case it might be difficult to ascertain an exact amount of damages. In such a case an agreement for payment of liquidated damages would be appropriate. However, in the present case the language of the by-laws seems to set out a penalty. There is no language that would lead one to believe that the fine was meant to be liquidated damages. At best the court cannot determine whether the by-laws provide for a penalty or liquidated damages. Because of this the court finds that Section 2 Article [XI] sets out a penalty and is thus void.

[¶ 6.] After this point, the record is unclear on what happened next. According to an affidavit submitted by one of the association’s members, the association held its spring meeting on July 6, 2001. The affiant asserted that Eastep received proper notice of the meeting. However, beyond the affidavit, nothing in the record shows that Eastep was so notified. The affiant further claimed that during that meeting, Article XI Section 2 was amended to clarify its import. The document provides:

We, the undersigned, representing owners and voting members of the Keystone Plaza Condominium association do hereby adopt and ratify the following amendment to the Bylaws of Keystone Plaza Condominium Association, to-wit:
We hereby ratify and affirm that any and all provisions of the current Bylaws affecting the damages for units being closed in violation of the Bylaws, those provisions are amended to reflect that the voting members of the association acknowledge that such closures have a detrimental effect on all of the businesses of the mall as a whole. However, damages for such closures are difficult to ascertain with exact certainty and, therefore, the association agrees that the liquidated damages for such wrongful closures shall be equal to $100 per day for each day that the unit is not open. This amount shall be levied against the unit owner at such reasonable intervals as determined by the association and shall be due within ten (10) days following notice to the owner of the imposition of the liquidated damages. Failure to pay such amounts when due will subject the unit owner to litigation and other remedies as the association sees fit and the unit owner shall be responsible for all costs incurred in the prosecution of such actions, including reasonable attorneys’ fees, together with reimbursement of the association at a rate of $35 per member, per hour for each hour spent by the members of the association in pursuing the action.
This amendment is intended to clarify the Bylaws and to confirm that the intent of the association was that all such provisions in prior Bylaws are provisions for liquidated damages and not fines. This amendment shall also be retroactive to the beginning of the 2001 tourist season which season began on or about May 28, 2001. The association further agrees that this amendment can be recorded against the property generally known as the Keystone Mall and shall run with the land.
Dated this 6th day of July, 2001.

Despite the fact that the document begins by stating, “We the undersigned,” and sixteen signature lines appear on the bottom, the document was not signed.

[¶ 7.] In November 2001, the association notified Eastep that he owed liquidated damages of $100 per day for the 99 days his unit was wrongfully closed between Memorial Day and Labor Day 2001. Eastep did not pay. In April 2002, the association again brought a complaint against Eastep. It requested that a judgment be entered against him for liquidated damages and attorney’s fees. The matter was heard in circuit court. Both parties moved for summary judgment. The court granted summary judgment for the association. Eastep appeals, asserting that (1) the court misapplied the standards for summary judgment, (2) the association could not proceed against him when it had not filed a fictitious name statement, and (3) res judicata bars the current action.

Analysis and Decision

[¶ 8.] Under our familiar standard for reviewing summary judgments, we decide only whether genuine issues of material fact existed and whether the law was correctly applied. SDCL 15-6-56; Bozied v. City of Brookings, 2001 SD 150 ¶ 8, 638 N.W.2d 264, 268 (citation omitted). Summary judgment is not the proper method to dispose of factual questions. Id. Only when fact questions are undisputed will issues become questions of law for the court. Id. We will affirm the trial court’s decision when we find any legal basis to support it. Id. Statutory and contract interpretation are questions of law reviewed de novo. Id. The existence of a legal duty is also a question of law. Id.

[¶ 9.] The association argues that in response to the magistrate’s earlier decision, it either clarified its prior bylaws or amended them to comport with the decision. The association contends that notice of either a special meeting or the spring meeting was sent to all owners of the association and that Eastep “chose” not to attend the meeting. The association asserts also that the amendment or clarification for liquidated damages was adopted at that meeting.

[¶ 10.] Whether the July 7, 2001 document was an amendment or a clarification is not particularly significant here. While we will not venture an in-depth analysis of the two, it is sufficient to say that whether the document was an amendment or a clarification, certain procedural steps delineated in the master deed and bylaws of the association would have to have been followed. In either instance, whether an amendment or a clarification, the effect was the same. The record does not sufficiently demonstrate that the association’s own procedures were followed to accomplish the end it seeks here.

[¶ 11.] Whether the July 7, 2001 meeting was a special meeting or a biannual meeting is significant. If, as argued in the association’s brief, the meeting was a special meeting, the association bylaws clearly state that special notice of the meeting is to be given. Under Article III Section 4 of the association bylaws, only that subject matter specifically described in the notice of the meeting may be acted upon without approval of four-fifths of the members present. There is nothing in the record to indicate that such a procedure was followed.

[¶ 12.] Regardless of whether the meeting was a special meeting or a biannual meeting, the association bylaws plainly require notice of such a meeting. While the association argues that Eastep “chose” not to attend the meeting, the association presented no documentary evidence to prove that such notice was actually given. Only the affidavit presented by the association attests to this notice. However, the affiant’s account is refuted by Eastep who insists that he did not receive such notice.

[¶ 13.] Furthermore, the record does not demonstrate that the July 7, 2001 amendment was ever adopted. No signatures were placed on it. The document uses language indicating that signatures are required for the amendment to take effect. It begins with the declaration, “We the undersigned.” However, it ends without signatures.

[¶ 14.] Finally, the July 7, 2001 amendment states that owners not in compliance with the bylaws will be assessed liquidated damages “at such reasonable intervals as determined by the association.” Whether the association notified Eastep at such “reasonable intervals” also remains unresolved. While the document leaves such a determination to the association, the association is bound by its own language. Although circumstances may have dictated that the association could not reasonably notify Eastep of the liquidated damages assessed against him until November 2001, those circumstances are not shown in the record.

[¶ 15.] In sum, whether the July 7, 2001 document constitutes an amendment, whether proper notice was given to Eas-tep, whether the meeting held on that date was a special or biannual meeting, whether Eastep received notice of such meeting, whether the document was ever adopted by the association members, and whether the association notified Eastep at reasonable intervals of liquidated damages assessed against him are all genuine issues of material fact that remain unresolved in the current record. The association, as the moving party, has not carried its burden to show that no genuine issues of material fact remain unresolved. “[S]um-mary judgment is not a substitute for trial; a belief that the non-moving party will not prevail at trial is not an appropriate basis for granting the motion on issues not shown to be a sham, frivolous or unsubstantiated; summary judgment is an extreme remedy and should be awarded only when the truth is clear[;] and reasonable doubts touching upon the existence of a genuine issue of material fact should be resolved against the movant.” St. Onge Livestock Co., Ltd. v. Curtis, 2002 SD 102, ¶ 25, 650 N.W.2d 537, 544 (quoting Tibke v. McDougall, 479 N.W.2d 898, 904 (S.D. 1992)) (bracketed material in original text). Therefore, summary judgment was improperly granted in this case.

[¶ 16.] On remand, the trial court should consider whether Eastep received notice of the changes the association claims they properly adopted. While we understand that South Dakota law does not require notice of amendments to bylaws by recordation, the association did regularly record its amendments. It is not unreasonable to assume that Eastep relied on such regular behavior of the association. The July 7, 2001 document was never filed or recorded. There is nothing in the record suggesting that anyone other than those in attendance of the July 7, 2001 meeting were aware of the document. Surely, some reasonable form of notice to current and prospective owners must be given. The record reflects that Eastep was not made aware of a liquidated damages provision and its assessment until he owed $9,900 in such damages. It is not difficult to conclude that this type of unfair dealing is a factor that has led other states to determine that all such amendments must be recorded.

[¶ 17.] In sum, Eastep must have some notice of the consequences of his actions. This is especially true where he previously obtained a judgment voiding any penalties for noncompliance. While we concede that by purchasing a unit, Eastep agreed to certain restrictions, we do not believe that those restrictions can be imposed on an owner who may be unaware of a liquidated damages provision. It is important to note that under present circumstances, Eastep would not have been unaware from lack of diligence, but from the association’s failure to notify him that his reliance on the previous court order was no longer valid.

[¶ 18.] Lastly, we address whether the liquidated damages provisions could be retroactively applied. The issue here is not whether an association might adopt certain provisions that may adversely affect current owners who purchased a unit when no such provisions existed when the owner purchased the unit. Rather, the issue is whether Eastep could be subject to liquidated damages before the amendment existed. On its face, it seems unreasonable that the association could retroactively attach an automatic remedy to forbidden conduct where a court order proclaimed that the forbidden conduct had no enforceable automatic remedy provision. This is not to say that the forbidden conduct had no remedy whatsoever. Plainly, the master deed contemplates that “damages” may be levied against those who fail to comply with the provisions of the master deed, the bylaws, or amendments. However, under the master deed, the association is charged with proving such damages.

[¶ 19.] Reversed.

[¶ 20.] GILBERTSON, Chief Justice, and SABERS, ZINTER, and MEIERHENRY, Justices, concur.

      . While the affidavit provided to the trial court contended that the meeting held on July 6, 2001 was the association's annual spring meeting, in its brief the association states, "Notice was sent to all owners requesting a special meeting and even with notice, Eastep failed to attend said meeting.”

      . There is no way to discern from the record whether the association intended the document to be an "amendment” or a "clarification” of the previous section. During the summary judgment hearing, counsel for the association argued that the document represented a "clarification” of the previous amendment and was not "a, quote, unquote, amendment per se ... they just ratified or clarified in writing what their understanding was way back when, when this thing first came into being.” However, in its brief, the association states, "The meeting was held and the amendment for liquidated damages was adopted without argument from Eastep.” (Emphasis added.)

      . Because we reverse summary judgment and remand for further development of the record, we decline to reach Issue 3. Furthermore, in Issue 2, Eastep contends that under SDCL 37-11-1, this condominium association is required to register a fictitious name statement. This statute requires persons or co-partnerships that "engage in or conduct a business for profit in this state” to file with the register of deeds a statement "showing the name, post-office address, and residence address of each person interested in the business and the address where the main office of the business is to be maintained.” However, Eastep has not established that the condominium association is a "business for profit.”


source: Caselaw Access Project

author: /s/ Paul H. Anderson Associate Justice

license: Public Domain

text:
    In re Petition for Disciplinary Action against Thomas Joseph WHITE, a Minnesota Attorney, Registration No. 222823.
    No. A03-107.
    Supreme Court of Minnesota.
    April 5, 2004.
   ORDER

The Director of the Office of Lawyers Professional Responsibility filed a petition for disciplinary action and supplementary petitions alleging that respondent Thomas Joseph White committed professional misconduct warranting public discipline, including misappropriation of client funds, misrepresentations regarding the misappropriation, trust account shortages, issuing insufficient funds trust account checks, commingling funds, failure to maintain trust account books and records, neglect of a client matter, failure to communicate with a client, misrepresentations to a client and others about the status of a matter, failure to cooperate with the Director’s investigation, failure to file individual income and employer withholding tax returns timely, and failure to timely pay the taxes due thereon, in violation of Minn. R. Prof. Conduct 1.3, 1.4, 1.15(a), 1.15(c)(3), 1.15(h), 4.1, 8.4(c) and 8.4(d), and Rule 25, Rules on Lawyers Professional Responsibility (RLPR).

On January 9 and 15, 2004, a hearing on the petitions was held before Supreme Court Referee John C. Lindstrom. The referee has filed with this court his February 26, 2004, findings of fact, conclusions of law and recommendation for disbarment.

The Director and respondent have entered into a stipulation in which respondent agrees that the referee’s findings of fact and conclusions of law are conclusive and waives further proceedings pursuant

to Rule 14, RLPR, and they jointly recommend that the appropriate discipline is disbarment under Rule 15, RLPR, payment of $900 in costs, plus disbursements, under Rule 24, RLPR, and compliance with Rule 26, RLPR.

This court has independently reviewed the file and approves the jointly recommended disposition.

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that respondent Thomas Joseph White is disbarred effective immediately. Respondent shall pay $900 in costs, plus disbursements, under Rule 24, RLPR, and shall comply with Rule 26, RLPR.

BY THE COURT:

/s/ Paul H. Anderson Associate Justice


author: KALITOWSKI, Judge.

text:
    Daniel J. POMRENKE, Relator, v. COMMISSIONER OF COMMERCE, Respondent.
    No. A03-497.
    Court of Appeals of Minnesota.
    March 2, 2004.

      Robert B. Bauer, Severson, Sheldon, Dougherty & Molenda, P.A., Apple Valley, for relator.
    Mike Hatch, Attorney General, Michael J. Tostengard, Assistant Attorney General, St. Paul, for respondent.
    Considered and decided by STONEBURNER, Judge; KALITOWSKI, Judge; and HALBROOKS, Judge.
   OPINION

KALITOWSKI, Judge.

Relator Daniel Pomrenke challenges the Minnesota Department of Commerce’s (Department) order concluding that relator had submitted residential mortgage applications with false and misleading statements and altered title work, in violation of Minn.Stat. § 58.12, subd. l(b)(2)(i), (iv), (v) (2000) and Minn.Stat. § 58.13, subd. 1(9) (2000), and barring him from engaging in mortgage origination or servicing in the state. On appeal, relator argues: (1) the Department did not have jurisdiction to initiate disciplinary proceedings against him; (2) the Department’s order barring him from engaging in mortgage origination or servicing unconstitutionally infringes on his right to earn a living; (3) the Department’s actions during discovery prejudiced relator; and (4) the Department’s decision is not supported by the evidence.

FACTS

At all relevant times, relator Daniel Pomrenke worked as a loan officer for Real Estate Funding, Inc. Real Estate Funding is currently licensed with the Department as a mortgage originator. In January 2001, relator submitted two loan applications to Paragon Bank: one loan application for relator and his wife Connie for approximately $63,000 (Pomrenke loan) and a second application for William and Cherilyn Fecho for approximately $57,000 (Fecho loan). Contrary to Paragon Bank’s policy, the submitted loan applications were not signed or dated.

The Pomrenke loan application contained many false statements: (1) the application listed Real Estate Funding owner and president Steven Watts as a “face-to-face” interviewer, but Watts told Department senior investigator Cheryl Costello that he was in Florida at the time the application was submitted, and relator had completed the application; (2) the application stated that Pomrenke and his wife did not have any dependents; in fact, they have one child; (3) the application stated that relator had been working the past four years at Homestar USA as a manager for Remax; relator provided a check stub from Homestar as verification of his employment; but relator was not and has never been employed at Homestar and is not licensed as a real estate agent; and (4) the application stated that relator’s wife had been working at Sterling Optical as an optometrist for several years; but relator’s wife is not an optometrist and is currently a stay-at-home mother.

The Fecho loan also contained several false statements. The application stated that Fecho had been working the past several years at PFG, Inc. as a chief estimator for construction. But Fecho worked with relator at Real Estate Funding as a receptionist. In addition, the phone number given for PFG, Inc. was the same number given for Homestar USA on the Pomrenke loan application. The administrative law judge (ALJ) and the Department determined that no entity by the name of PFG, Inc. exists in Minnesota.

The Pomrenke and Fecho loans were also submitted to Paragon Bank with altered title work. At the time the loan applications were submitted, the Pom-renke and Fecho properties were each encumbered with two mortgages. But when the title work was submitted to Paragon Bank, the second mortgages were either omitted or listed as paid, giving Paragon Bank the impression that it was in a second, instead of a third, lien position. Paragon Bank vice president Michael Hart testified that he spoke to relator about the situation, and relator indicated that he had directed a Colonial Title employee to delete the second mortgages off of the title work. Relator told Hart that he should not have directed the employee to delete the mortgages, and that he would rectify the situation. When Paragon Bank discovered the altered documents, it demanded the Pomrenkes and Fechos to immediately pay the loans in full.

In April 2001, Hart filed a “suspicious activity” complaint against relator with the Department and other agencies. Costello investigated the complaint and interviewed relator, Watts, and a Colonial Title employee. The parties failed to resolve the matter informally, and on April 8, 2002, the Department served on relator a notice of and order for hearing, notice of prehear-ing conference, and statement of charges alleging: (1) relator had demonstrated he was untrustworthy, financially irresponsible, or otherwise incompetent or unqualified to act as a mortgage loan originator, in violation of Minn.Stat. § 45.027, subd. 7(4) (2000) and Minn.Stat. § 58.12, subd. l(b)(2)(v) (2000); (2) relator had engaged in fraudulent, deceptive or dishonest acts, in violation of Minn.Stat. § 58.12, subd. l(b)(2)(iv); and (3) relator had made false, deceptive or misleading statements or representations in connection with a residential loan application, in violation Minn.Stat. § 58.13, subd. 1(9) (2000). Pursuant to Minn.Stat, § 45.027, subds. 6, 7 (2000), the Department ordered relator to appear at a scheduled hearing before an ALJ.

In a letter dated July 17, 2002, the ALJ instructed the parties that: (1) they were required to exchange written exhibits and final witness lists at least one week before the hearing; (2) the Department was required to provide its file to relator within two days; (3) motions to dismiss needed to be filed by a certain time; and (4) the discovery deadline was September 10, 2002. Relator subsequently moved to dismiss, but the ALJ denied his motion, concluding that the Department had jurisdiction over relator, and discovery proceeded.

On August 20, 2002, the Department sent a request for admissions to relator, erroneously directing Joseph Csedo, instead of relator, to make admissions. Relator subsequently informed the Department that he would not be responding to the request for admissions because it was directed at Csedo, and in the event the Department correctly addressed the request to him, he would invoke his Fifth Amendment rights. On August 22, 2002, relator sent the Department discovery requests, and on September 17, the Department sent relator a list of the exhibits and witnesses it intended to present at the hearing. The exhibits included the Pom-renke loan application, the Fecho loan application, an affidavit from the Minnesota Board of Optometry, and the Department’s request for admissions. The witnesses included Hart and Costello. Relator moved to exclude the Department’s witnesses and dismiss the charges, arguing that the Department’s disclosure of exhibits and witnesses was not timely. The ALJ did not respond to relator’s motion prior to the hearing.

A hearing was held before the ALJ on September 24, 2002. Prior to the admission of witness testimony, relator argued that he was prejudiced by the Department’s failure to timely disclose and identify witnesses and exhibits, claiming that the Department was required to respond within ten days of his discovery request. The ALJ agreed with relator that the Department should have disclosed its witnesses and exhibits so that relator received them at least one week before the hearing, pursuant to administrative rules. But although the ALJ determined that the Department should have responded to relator’s discovery request by September 10, he concluded that relator had not been sufficiently prejudiced to justify a dismissal.

After the ALJ ruled on the discovery issues, the Department presented the testimony of Hart and Costello. Relator thoroughly cross-examined Hart, but in the course of cross-examining Costello, it became clear that the Department had not given relator its entire file. The ALJ ordered a continuance for relator to obtain and review the entire file and scheduled another hearing at a later date.

The Department delivered its entire file to relator on October 7, 2002. In addition, relator deposed Costello on October 30, 2002. On November 6, 2002, a second hearing was held before the same ALJ. Relator resumed his earlier cross-examination of Costello, but did not recall Hart to testify. And relator did not present the testimony of any additional witnesses.

On December 20, 2002, the ALJ filed his findings of fact, conclusions, and recommendation. The ALJ: (1) found that relator had submitted the Pomrenke and Fecho loan applications, made multiple misrepresentations in the applications, and admitted to Hart that he had altered the title work; (2) determined that the Department had jurisdiction over relator, that relator was given proper and timely notice, and that the Department had complied with all relevant substantive and procedural requirements; (3) determined that at all relevant times, relator was employed as a loan officer for a mortgage originator; (4) concluded that while relator was exempt from the licensing requirements of chapter 58, he was subject to all other provisions of chapter 58; (5) concluded that relator had engaged in fraudulent, deceptive, or dishonest acts by preparing and submitting residential mortgage loan applications containing false, deceptive, or misleading statements; and (6) recommended that the Department discipline relator.

The Department’s assistant commissioner adopted the ALJ’s findings in their entirety in an order dated April 10, 2003. The Department concluded that relator had violated Minn.Stat. § 58.12, subd. l(b)(2)(i), (iv), (v), and Minn.Stat. § 58.13, subd. 1(9). Based on these violations, the Department barred relator from engaging in mortgage origination or servicing in the state. This appeal followed.

ISSUES

1. Did the Department have jurisdiction to initiate disciplinary proceedings against relator?

2. Did the Department’s order barring relator from engaging in mortgage origination or servicing unconstitutionally infringe on relator’s right to earn a living?

3. Did the Department’s actions during discovery prejudice relator?

4. Is the Department’s decision supported by the evidence?

ANALYSIS

In reviewing an agency’s decision in a contested case, this court may reverse or modify the decision .if the substantial rights of the petitioner have been prejudiced because the administrative findings, inferences, conclusions, or decisions are in excess of the agency’s statutory authority or jurisdiction. Minn.Stat. § 14.69 (2000).

I.

Relator argues that the Department did not have jurisdiction to pursue disciplinary proceedings against him. We disagree. In 1998, the legislature enacted the Minnesota Residential Originator and Servicer Licensing Act (Act) to regulate the residential mortgage origination and servicing industry. See Minn.Stat. §§ 58.01-58.17 (2000). Under the Act, mortgage originators and servicers are required to obtain a license from the Department. Minn.Stat. § 58.04. Certain individuals and entities are exempt from the licensing requirement, including employees of licensed mortgage originators and/or servicers. Minn.Stat. § 58.04, subds. 1(b)(1), 2(b). But exempt individuals are still bound by the other provisions of the Act. Minn.Stat. § 58.05. While there is no caselaw interpreting Minn.Stat. §§ 58.01-58.17, we conclude that the plain language of the statute grants the Department jurisdiction to initiate disciplinary proceedings against relator. Because relator was an employee of Real Estate Funding, a licensed mortgage originator, relator was exempt from the licensing requirement. But relator was still subject to the other provisions of the Act.

Despite the plain language of the Act, relator argues that the Department did not have jurisdiction over him because he was not a licensee or a license applicant. Specifically, relator argues that under Minn. Stat. § 45.027, subds. 6, 7 (2000), the Department is authorized to pursue disciplinary proceedings only against a licensee or a license applicant. But relator fails to acknowledge that the Department charged him with violations of Minn.Stat. §§ 58.01-58.17.

Further, Minn.Stat. § 45.027, subds. 6, 7, grant the Department jurisdiction over relator. Minn.Stat. § 45.027, subd. 6, provides that the commissioner of the Department can impose a civil penalty “upon a person who violates any law, rule, or order related to the duties and responsibilities entrusted to the commissioner unless a different penalty is specified.” And while Minn.Stat. § 45.027, subd. 7, is titled “Actions against licensees,” it provides in relevant part: “In addition to any other actions authorized by this section, the commissioner may, by order, deny, suspend, or revoke the authority or -license of a person subject to the duties and responsibilities entrusted to the commissioner, as described under section 45.011, subdivision 4, or censure that person ... [under certain conditions].” (Emphasis added.) “Duties and responsibilities entrusted to the commissioner” include administration of several chapters of Minnesota statutes, including chapters 45 and 58. Minn.Stat. § 45.011 (2000). Therefore, we conclude that the Department had jurisdiction over relator under Minn.Stat. §§ 58.01-58.17 and Minn.Stat. § 45.027, subds. 6, 7.

II.

Relator contends that Minn.Stat. § 58.12, as applied to him, is unconstitutional. A reviewing court presumes that Minnesota statutes are constitutional. Minn.Stat. § 645.17(3) (2000); Associated Builders & Contractors v. Ventura, 610 N.W.2d 293, 308 (Minn.2000). And the party challenging a statute has the burden of establishing a constitutional violation beyond a reasonable doubt. In re Haggerty, 448 N.W.2d 363, 364 (Minn.1989).

Relator argues that the Department’s order barring him from engaging in mortgage origination or servicing unconstitutionally infringes upon his property right to earn a living. We disagree. Courts have recognized that an individual has a property interest in pursuing private employment. See Greene v. McElroy, 360 U.S. 474, 492, 79 S.Ct. 1400, 1411, 3 L.Ed.2d 1377 (1959) (stating that an individual has a property interest in holding private employment and following a chosen profession free from unreasonable government interference); Brooks v. Int’l Bhd. of Boilermakers, 262 Minn. 253, 263, 114 N.W.2d 647, 654 (1962) (noting that an individual’s occupation is, property within the meaning of the law and entitled to protection as such); State ex rel. Pavlik v. Johannes, 194 Minn. 10, 19, 259 N.W. 537, 540-41 (1935) (stating that the right to earn one’s livelihood in any legitimate business is a right of property, and any unlawful or unreasonable interference with that right is a restriction of the liberty of the citizen as guaranteed by the Constitution); Fosselman v. Comm’r of Human Servs., 612 N.W.2d 456, 461 (Minn.App.2000) (finding that registered nurses had property interest in working in positions that' involved direct contact with patients); Humenansky v. Minn. Bd. of Med. Exam’rs, 525 N.W.2d 559, 566 (Minn.App.1994) (stating that a license to practice medicine is a property right deserving constitutional protection), revieiv denied (Minn. Feb. 14, 1995).

But courts have also recognized that this property interest is not absolute. Minn. Ass’n of Pub. Schs. v. Hanson, 287 Minn. 415, 424, 178 N.W.2d 846, 853 (1970) (concluding-that a teacher’s contractual right acquired under a tenure statute was “subject to a proper exercise of the police power of the state — the power of the state to impose restraints upon'private rights when necessary for the betterment of the general welfare”); Humenansky, 525 N.W.2d at 566 (stating that appellant’s right to practice medicine was subject to the strict regulation under the state’s police power).

Further, before a reviewing-court can hold that an exercise of the police power, such as the enactment of the Minnesota Residential Mortgage Originator and Servicer Licensing Act, is unconstitutional, it must find that the exercise has no substantial relationship to public health, safety, morals, or general welfare. County of Freeborn v. Claussen, 295 Minn. 96, 100-01, 203 N.W.2d 323, 326 (1972). The legislature primarily determines what best furthers public welfare. Id. Where an economic regulation is involved, due process only demands that it: (1) serves to promote a public purpose; (2) not be an unreasonable, arbitrary, or capricious interference; and (3) the means chosen are rationally related to the public purpose sought to be served. Inv. Co. Inst. v. Hatch, 477 N.W.2d 747, 749 (Minn.App.1991).

Here, the Department barred relator from engaging in mortgage origination and servicing after concluding that relator violated the Act by preparing and submitting two loan applications that contained false, deceptive, and/or misleading statements and directing a title company employee to falsify title work. See Minn.Stat. § 58.12, subd. l(b)(2)(iv), (v), .13, subd. 1(9). The Act authorizes the Department to discipline a “residential mortgage originator, servicer, applicant, or other person, an officer, director, partner, employee, or agent or any person occupying a similar status or performing similar functions, or a person in control of the originator, servi-cer, application or other person” if the person has violated any provision of the Act and the discipline is in the public interest. Minn.Stat. § 58.12, subd. 1(b)(1), (2). Under the statute, the Department can: (1) bar a person from engaging in residential mortgage origination or servicing; (2) deny, suspend, or revoke a residential mortgage origination or service license; (3) censure a licensee; (4) impose a civil penalty; or (5) revoke an exemption or certificate of exemption. Minn.Stat. § 58.12, subd. 1(a).

We conclude that the Act is a legitimate exercise of the state’s police power. Therefore, the Department’s order, issued pursuant to the Act and after relator was given an opportunity to be heard, does not unconstitutionally infringe on relator’s right to pursue private employment. Relator’s property interest in pursuing employment in the mortgage origination/servicing industry is subject to the economic regulations implemented pursuant to the state’s police power.

We reject relator’s argument that because he claims never to have been a mortgage originator/servicer, the Department’s order unconstitutionally bars him from a future occupation. While Costello testified that she did not consider relator a mortgage originator, she also testified that she considered the entity, Real Estate Funding, the mortgage originator. According to Costello, she distinguished the originator/entity from an individual who performs mortgage origination services. More importantly, while Costello may have distinguished between an entity and an individual, the Act does not. MinmStat. § 58.02, subd. 19 (defining a residential mortgage originator as “a person,” who for actual or expected compensation, solicits, accepts, or offers to solicit or accept, an application for a residential mortgage loan from a borrower, or makes such a loan); Minn. Stat. § 58.02, subd. 20 (defining a residential mortgage servicer as “a person” who engages in servicing a residential mortgage); Minn.Stat. § 58.02, subd. 16 (defining “person” to include a natural person, as well as various business entities, and the officers, directors, employees, and agents of those entities). Therefore, we conclude that relator was a mortgage originator within the meaning of the Act, exempt from licensure only because he was an employee of a licensed mortgage originator. Thus, the Department’s disciplinary action did not improperly bar him from a future occupation.

III.

Appellant claims the Department’s order must be reversed because he was prejudiced and denied due process when the Department failed to give relator its entire file within the time prescribed by the ALJ. We disagree. In a letter dated July 17, 2002, the ALJ required the Department to provide its file to relator within two days. The Department gave some of the contents of its file to relator, but at the contested hearing on September 24, 2002, it became clear that the Department had not given relator the entire file. The ALJ granted a continuance for relator to obtain and review the entire Department file. Relator received the entire file on October 7, 2002, which apparently contained 172 new pages. Relator deposed Costello later that month and subpoenaed additional evidence from Paragon Bank. The contested hearing was reconvened on November 6, 2002, and relator used some of the evidence he obtained after the first hearing to cross-examine Costello. The ALJ found relator’s claim of prejudice to be without merit because the continuance gave relator sufficient time to examine the missing documents and to prepare effective cross-examinations of the Department’s witnesses. We agree and conclude that the 1 1/2 month continuance remedied any potential prejudice that may have resulted from the Department’s failure to initially produce its entire investigative file.

Appellant also claims that he was prejudiced and denied due process because the Department failed to disclose its witnesses and exhibits in a timely manner. We disagree. Relator and the Department had disagreed concerning whether the Department was required to respond to relator’s discovery request within 10 days, pursuant to Minnesota Rule 1400.6700, subp. 1, or within 30 days under the Minnesota Rules of Civil Procedure. Notwithstanding the disagreement, the Department mailed its exhibit and witness lists to relator one week prior to the hearing. Although the ALJ concluded that the Department should have adhered to the administrative rules rather than the civil procedure rules, the ALJ properly found that relator was not prejudiced because the 1 1/2 month continuance remedied any potential prejudice and gave relator ample time to obtain and review additional information and further prepare his defense.

IV.

Relator contends that the Department failed to carry its burden in proving the allegations contained in its statement of charges. But based on evidence presented at the hearing, the ALJ and the Department found that relator submitted two loan applications that contained numerous false statements and that relator directed a title company employee to fraudulently alter title work. This court gives great deference to an agency’s findings of fact. Info Tel. Communications, L.L.C. v. Minn. Pub. Utils. Comm’n, 592 N.W.2d 880, 884 (Minn.App.1999), revieio denied (Minn. July 28,1999).

When an agency acts in a quasi-judicial capacity, an appellate court applies the substantial evidence test on review. In re Petition of Northern States Power Co., 416 N.W.2d 719, 723 (Minn.1987). Substantial evidence is defined as: “(1) such relevant evidence as a reasonable mind might accept as adequate to support a conclusion; (2) more than a scintilla of evidence; (3) more than some evidence; (4) more than any evidence; or (5) the evidence considered in its entirety.” Minn. Ctr. for Envtl. Advocacy v. Minn. Pollution Control Agency, 644 N.W.2d 457, 466 (Minn.2002) (citation omitted). Under the substantial evidence test, the reviewing court evaluates the evidence relied upon by the agency in view of the entire record as submitted. Cable Communications Bd. v. Nor-West Cable Communications P’ship, 356 N.W.2d 658, 668 (Minn.1984). If an agency engaged in reasoned decision-making, a reviewing court will affirm, even though it may have reached a different conclusion than the agency. Id. at 669.

Here, Costello investigated the complaint made against relator. Costello talked with Hart, reviewed the Pomrenke and Fecho loan applications and accompanying documents, and interviewed relator, Watts, and a Colonial Title employee. Costello and Hart testified at the contested hearing. Hart denied that he encouraged or assisted relator in submitting the fraudulent loan applications. Hart also testified that relator admitted to altering the title work and relator promised to rectify the situation. Costello testified that the two loans contained numerous false statements. Relator did not testify on his own behalf and did not present any witnesses of his own. We conclude that the Department’s findings of fact and conclusions are supported by substantial evidence.

DECISION

Because relator violated the Minnesota Residential Originator and Servicer Licensing Act, the Department of Commerce had jurisdiction over relator, even though relator was exempt from the Act’s licen-sure requirement. Further, the Department’s order barring relator from engaging in mortgage origination and servicing did not unconstitutionally infringe upon relator’s property interest in pursuing private employment. The Department’s actions in the proceedings did not prejudice relator; any potential prejudice was remedied by a 1 1/2 month continuance. Finally, substantial evidence in the record supports the Department’s findings of fact and conclusions of law.

Affirmed.


author: HALBROOKS, Judge.

text:
    TNT PROPERTIES, LTD., Appellant, v. TRI-STAR DEVELOPERS LLC, et al., Respondents.
    No. A03-1186.
    Court of Appeals of Minnesota.
    March 23, 2004.

      Mark J. Kallenbach, Minneapolis, MN, for appellant.
    Richard M. Carlson, Minneapolis, MN, for respondents.
    Considered and decided by TOUSSAINT, Presiding Judge, HALBROOKS, Judge, and HUSPENI, Judge.

       Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const, art. VI, § 10.

   OPINION

HALBROOKS, Judge.

After reaching a settlement in their real estate transaction, the agreement was read into the record in open court, and all parties expressly assented to its terms. Appellant later refused to honor the agreement, arguing that respondents had breached the agreement by failing to timely tender the first installment payment or, in the alternative, that the agreement was unenforceable under the statute of frauds. Respondents moved to compel settlement, and the district court granted the motion. We affirm.

FACTS

On February 3, 2003, appellant TNT Properties, Ltd., and respondents Tri-Star Developers, LLC, Homoudi Sabri, Sabri Holding, LLC, Kenneth W. Sorteberg, and LandDevCo Corporation, appeared before the district court to resolve an ongoing dispute over the sale of several commercial properties. After lengthy negotiation, Richard Carlson, counsel for respondents, advised the court that the parties had reached a settlement agreement and wished to orally place it on the record. Respondents’ co-counsel, Richard Morris, stated the terms of the agreement as follows:

The purchase price, Your Honor, will be $3,100,000 ... paid by ... $50,000 in earnest money, $25,000 of which will [be] paid one week from today. The second $25,000 will be paid two weeks from today.
In addition to those two payments, a promissory note will be given executed by myself for $50,000.
In the event that this transaction does not close as and when agreed, the $50,000 earnest money will be forfeited and the promissory will become due and payable.
The closing will occur on or before June 1 of 2003. At the closing, $300,000 will be paid by the purchaser to the seller....
... to the extent we don’t close on or before June 1, 2003, the penalty is a forfeiture of $50,000 that was paid and the $50,000 note becoming due and payable.
And of course ... a cancellation of the agreement.

None of the parties objected to Morris’s recitation of the terms. Instead, the attorneys and appellant’s representatives, Floyd Olson and Ted Olson, engaged in a colloquy with the court, discussing more specific aspects of the agreement.

At the conclusion of the discussion, the court stated, “[Y]ou have entered into an agreement now. And again it is a promise to make a promise, technically, but it’s an agreement. It relies upon the good faith of the parties here and satisfies the Court at least at this point.” Each of the parties then expressly agreed to be bound by the terms of the agreement. Respondents also agreed to memorialize the agreement in writing and to send copies to appellant along with the first installment payment.

Respondents did not tender payment on February 10. On February 11, after learning that appellant believed that the agreement had been breached, Morris contacted appellant’s counsel, Mark Kallen-bach. Morris told Kallenbach that the settlement documents were prepared and on schedule for February 12, the date that he believed they and the first installment payment were due. Kallenbach then directed Morris to send the documents and the $25,000 check to him.

Appellant received the settlement documents and the $25,000 check on February 12, but refused to sign the documents and directed Kallenbach to return them. Kal-lenbach’s letter informed respondents that his clients were objecting because (1) the payment was untimely and (2) the settlement documents did “not comport with the settlement agreement stated on the record.” But according to Carlson, when he told Kallenbach that “[appellant] well knew that the payments were always due on Wednesdays, [Kallenbach] did not deny [the] statement but only referenced that Mr. Morris stated to the Court that the first earnest money payment was due one week from Monday, February 3, 2003, and his client was basing its refusal to accept the earnest money on that statement.”

Nonetheless, on February 17, Carlson sent Kallenbach the second earnest payment. In the attached letter, Carlson acknowledged that he had “inadvertently excluded a provision” from the agreement, but stated that he had “no objection to the inclusion of [the] provision” and noted that his clients were “willing to provide you whatever reasonable documentation you feel is necessary.” Carlson’s letter also stated that

[a]s you are well aware ... you agreed that since [Morris] was drafting [the agreement] from memory without a transcript that if there are any items that you wish included we would cooperate in redrafting the Agreement as proposed. You assured Mr. Morris that that was understandable and would not be a problem.

Appellant received the second payment, but again directed Kallenbach to return it to respondents.

Respondents moved to enforce the settlement agreement. The district court recognized that the parties had a “long and somewhat acrimonious history,” including “a pattern of contractual compliance problems on the part of [respondents] and an atmosphere of distrust,” which may have contributed to appellant’s reaction. But the court granted respondent’s motion, holding that (1) the settlement agreement was an enforceable purchase agreement, (2) the tender of the first payment less than 48 hours from when it was due was not a material breach, (3) even if the breach were material, appellant would be required to cancel the contract under Minn.Stat. § 559.21 (2002), giving respondents an opportunity to cure, and (4) an agreement entered on the record is a writing sufficient to satisfy the statute of frauds. Based on this reasoning, the court directed the parties to fully perform the agreement, subject to several amended dates. This appeal follows.

ISSUES
1. Is the statute of frauds, Minn.Stat. § 513.04 (2002), satisfied when a settlement agreement involving the conveyance of real property is orally placed on the record in open court?
2. Was there mutual assent between the parties with respect to the terms and conditions of the agreement?
3: Should respondents have been permitted to cure their default pursuant to Minn.Stat. § 559.21 (2002)?
4. Did the district court abuse its discretion by amending the dates of payment in the agreement?

ANALYSIS

I.

Appellant argues that the district court erred in determining that “an agreement entered on the court’s record is a writing sufficient to satisfy the statute of frauds.” This issue presents a question of law, which we review de novo. Employers Mut. Cas. Co. v. A.C.C.T., Inc., 580 N.W.2d 490, 493 (Minn.1998).

The statute of frauds provides, in relevant part:

No ... interest in lands ... shall hereafter be created, granted, assigned, surrendered, or declared, unless by act or operation of law, or by deed or conveyance in writing, subscribed by the parties creating, granting, assigning, surrendering, or declaring the same, or by their lawful agent thereunto authorized by writing.

Minn.Stat. § 513.04 (2002).

The district court cited Beach v. Anderson, 417 N.W.2d 709 (Minn.App.1988), review denied (Minn. Mar. 23, 1988), for the proposition that “the principle of the statute of frauds, to guard against leaving the proof of a contract dependent upon the memory and truthfulness of witnesses, is served where an oral agreement is memorialized before a court reporter and not left to the memory of witnesses.” See id. at 713-14. Appellant contends that the court’s reliance on Beach is misplaced because the transfer in Beach involved partnership property, or personalty, rather than real property. Appellant also contends that the district court’s holding is erroneous because (1) an oral agreement does not constitute a “writing” under section 513.04 and (2) neither appellant nor its principals subscribed the agreement.

We disagree. In Beach, this court addressed whether the statute of frauds is satisfied when the parties stipulate to a restrictive non-compete covenant on the record. Beach, 417 N.W.2d at 713. In holding that the statute of frauds did not bar the covenant, the court found that

[t]he agreement here was memorialized before a court reporter, not left to the memory of witnesses. Technical requirements regarding memoranda are only aids to discern where the truth lies in a given case. A court will not blindly apply technicalities if they lead to a conclusion repugnant to comment sense.
Both [appellants] were present during negotiations and when the stipulation was recited. Both acknowledged that they understood its terms and agreed to be bound by them. If a note or memorandum exists as evidence of an oral contract, it will be enforced. Public policy inhibits perversion of the statute of frauds by those who would deny an oral contract.

Id. at 713-14 (citation omitted). Because the writing requirement under the statute of frauds is the same for conveyances of real property and non-compete covenants, we conclude that the rule in Beach is applicable here.

Additionally, courts in other jurisdictions have recognized that the statute of frauds is satisfied under facts similar to those presented here. For example, in Kalman v. Bertacchi, 57 Ill.App.3d 542, 15 Ill.Dec. 204, 373 N.E.2d 550 (1978), the court held that where an agreement involving the transfer of real property

was arrived at by the parties and stated in open court; it was dictated to a court reporter and made a matter of record; each of the parties and their respective attorneys agreed to and understood the terms of the agreement [and][t]he entire proceeding was under the guidance and supervision of the court ... the mis-chiefs anticipated by the Statute of Frauds could not arise[.]

Id. at 556. The court also recognized that

[w]hile recorded testimony has no signature, a signature’s only purpose is authentication, and this is amply supplied in the case of an admission in court.... The purpose of the [statute of frauds, therefore,] is not forsaken in view of the fact that proof of the existence of an agreement is a matter of court record and cannot be disputed.

Id. (citations omitted). Likewise, in Snyder v. Tompkins, 20 Wash.App. 167, 579 P.2d 994 (1978), where an agreement for the sale of real property “was presented in open court before a court reporter, thus solemnly memorializing that which the parties, through their counsel, represented as the agreement,” the court held that the statute of frauds had no application. Id. at 998.

Here, the parties’ agreement was the product of extensive negotiation, it was read into the record, and -all parties advised the court, with counsel present, that they assented to be bound by the agreement. See Beach, 417 N.W.2d at 711-12. Moreover, by making a record of the agreement in open court, the safeguards of the statute of frauds have been satisfied. See Olson v. Ronhovde, 446 N.W.2d 690, 692 (Minn.App.1989) (holding that “[t]he basic purpose of the statute of frauds is only to provide reasonable safeguards to insure honest dealing ... it was not enacted to make a fetish of literal statutory compliance” (quotation omitted)). Therefore, we conclude that by placing the terms of the agreement onto the record in open court and expressly assenting to those terms, the writing and subscription requirements of the statute of frauds have been satisfied “by act or operation of law.” See Minn.Stat. § 513.04.

In reaching this conclusion, we reject appellant’s argument that the agreement was nothing more than an outline of “deal-points” that would subsequently be reduced to writing. In Massee v. Gibbs, 169 Minn. 100, 210 N.W. 872 (1926), an action for damages for breach by the vendor of a contract to convey land, the court distinguished between cases where “there has been a mere reference to a future contract in writing” and those where “the reduction of the agreement to writing and its signature has been made a condition precedent to its completion.” Id. at 103, 210 N.W. at 873 (quotation omitted). Concluding that “the question is mainly one of intent,” the court held that

[i]f the written draft is viewed by the parties merely as a convenient memorial, or record of their previous contract, its absence does not affect the binding force of the contract; if, however, it is viewed as the consummation of the negotiation, there is no contract until the written draft is finally signed.

Id.; see also Asbestos Products, Inc. v. Healy Mechanical Contractors, Inc., 306 Minn. 74, 78, 235 N.W.2d 807, 809 (1975) (stating that “[w]here the parties have assented to all the essential terms of the contract and proceed to perform in reliance upon it, the mere reference to a future contract in writing will not negative the existence of the present, binding contract”).

The district court found that the agreement was “intended to settle all claims of the action” and “to be a substitute for the contract agreement which was the subject of the lawsuit.” We agree. As the record demonstrates, no one declared an intention not to be bound until the signing of the formal agreement. To the contrary, each party explicitly stated that he would be bound by the agreement made on February 3. Moreover, as Carlson’s February 17 letter indicates, the parties agreed that, because Morris was drafting the settlement documents from memory without a transcript, if the formal documents contained discrepancies, the parties would cooperate in redrafting the agreement “as proposed” — i.e., to comport with the parties understanding on February 3. Therefore, under these facts, the absence of a signed, written memorial does not alter the binding force of the agreement.

II.

Appellant argues that the parties did not mutually assent to the essential terms of the agreement. A settlement of a lawsuit is contractual in nature, and to constitute a full and enforceable settlement, there must be a definite offer and acceptance with a meeting of the minds on the essential terms of the agreement. Jallen v. Agre, 264 Minn. 369, 373, 119 N.W.2d 739, 743 (1963). Generally, the existence of a contract, as well as the terms of that contract, are questions of fact to be determined by the fact-finder. Bergstedt, Wahlberg, Berquist Assocs., Inc. v. Rothchild, 302 Minn. 476, 225 N.W.2d 261, 263 (1975). But where the relevant facts are undisputed, the existence of a contract is a question of law, which this court reviews de novo. Vezina v. Best Western Inn Maplewood, 627 N.W.2d 324, 328 (Minn.2001); Triple B & G, Inc. v. City of Fairmont, 494 N.W.2d 49, 53 (Minn.App.1992).

To support the argument that the parties had no “meeting of the minds,” appellant contends that, while appellant believed that the first payment was due on Monday, February 10, with failure to perform rendering the agreement null and void, respondents believed that the payment was due Wednesday, February 12. Respondents assert that the parties always understood that payments would be due on Wednesdays, that Morris mistakenly believed that they were in court on Wednesday, and that when Morris said “one week from today,” he meant February 12, not February 10. Respondents further argue that February 12 was always the agreed-upon date of payment, and that appellant is attempting to take unfair advantage of Morris’s misstatement in court. Although this issue was raised to the district court, the court did not specifically address the mutual-assent argument. The court simply found that “the settlement agreement is an enforceable purchase agreement.”

Our first inquiry is whether the date of the first installment payment is an “essential term’.’ of the agreement. A binding contract can exist despite the parties’ failure to agree on a term if the term is not essential or can be supplied. Restatement (Second) of Contracts § 201, cmt. d (1981). The statute of frauds requires contracts for the sale of land to include terms specifying the (1) consideration, (2) parties to the contract, (3) land to be conveyed, and (4) general terms and conditions of the sale. Malevich v. Hakola, 278 N.W.2d 541, 544 (Minn.1979) (concluding that no written contract was formed where many essential terms, including down payment, installments, interest, and time of conveyance, were left to future agreement). These terms, as well as others, were contained in the parties’ agreement. The term in dispute relates only to the first $25,000 installment of a $50,000 earnest payment, intended simply to secure the underlying $3.1 million agreement. Therefore, under these facts, we do not agree that the term is “essential” to the agreement.

But even if it weré an essential term, appellant’s argument still fails. This court has held that “an agreement should be upheld where, despite some incompleteness and imperfection of expression, the court can reasonably find the parties’ intent by applying the words as the parties must have understood them.” Triple B & G, 494 N.W.2d at 53. Minnesota follows the objective theory of contract formation, under which an outward manifestation of assent is determinative, rather than a party’s subjective intent. Speckel by Speckel v. Perkins, 364 N.W.2d 890, 893 (Minn.App.1985) (finding that where attorney offered $50,000 to settle claim, but intended to offer only $15,000, the district court “correctly disregarded [the attorney’s] protestations that the offer was unintended” and properly disregarded “the fact that the letter contained the unintended amount as the result of a mistake”).

Here, Morris clearly stated that the first installment payment would be due “one week from today.” This is an unambiguous statement; there is no dispute that “today” was February 3, and that “one week from today” was February 10. At best, Morris’s statement was a unilateral mistake, but because there is no evidence of ambiguity, fraud, or misrepresentation, there is no basis for rescission. See id. at 893 (holding that a “unilateral mistake in entering a contract is not a basis for rescission unless there is ambiguity, fraud, misrepresentation, or where the contract may be rescinded without prejudice to the other party”). Furthermore, unlike in Speckel, Morris’s statement does not raise a “presumption of error” that would impose on appellant a duty to inquire. See id. (finding that where the offeror’s letter contained palpable inconsistencies, the facts raised a “presumption of error” that imposed a duty to inquire on the offeree). Therefore, disregarding respondents’ subjective intent, we conclude that the outward manifestation of assent to the phrase “one week from today” is sufficient to establish mutual assent to the February 10 due date.

Although appellant does not raise the issue of material breach in its brief, and issues not argued in the appellant’s brief are deemed waived, see In re Application of Olson for Payment of Services, 648 N.W.2d 226, 228 (Minn.2002), we nonetheless address the issue and hold that respondents did not materially breach the agreement. In Coddon v. Youngkrantz, 562 N.W.2d 39 (Minn.App.1997), this court held that “delay in a single installment payment is not the type of material breach or substantial failure of performance that cancels a contract for deed.” Id. at 43; see also Tarpy v. Nowicki, 286 Minn. 257, 262, 175 N.W.2d 443, 447 (1970) (holding that the rights of a purchaser under a contract for deed are “not forfeited merely by delinquency in making an installment payment”). We agree with the district court’s reasoning that

[t]he agreement calls for a closing on or before June 1, 2003. The $50,000 earnest money would be forfeited and the promissory note would become due and payable only in the event that the transaction failed to close as and when agreed. The court believes that the defendants made an honest mistake in their belief that the first $25,000 was due on February 12 rather than February 10. The tender two days late, of an amount representing less than 1% of the $3.1 million deal and intended only as security if a closing does not occur, is not enough to nullify the entire deal.

Therefore, we conclude that there was an enforceable agreement between the parties and that the agreement was not breached by respondents’ delay in making a single installment payment.

III.

Appellant contends that the district court erred in concluding that because the parties had a “valid purchase agreement governed by Minn.Stat. § 559.21 [2002],” appellant was required to cancel the agreement and give respondents an opportunity to. cure. Minn.Stat. § 559.21, subd. 2a, provides that “[i]f a default occurs in the conditions of a contract for the conveyance of real estate ... that gives the seller a right to terminate” the contract. The seller may terminate the contract by serving notice specifying the conditions in default. Id. The buyer then, within the applicable statutory period, must comply with the conditions of default to maintain the contract in.force. Id.

The provisions of Minn.' Stat § 559.21 do not apply to 'all purchase agreements. The test for determining whether the statute applies is:

whether the agreement is a contract for the conveyance of real estate or any interest therein. This means a contract where both parties are bound by its terms.... And ordinarily it must be a contract where ... either party can require performance by the other. In other words, the agreement must be sufficiently certain and complete in its essential terms that ordinarily specific performance, will lie.... [W]hen the parties have left open an essential term for further negotiations, the court declines to make a contract for the parties and specific performance will not lie.... [T]he inquiry is whether a term essential to the final bargain is left open for further negotiations or is dependent on a contingency.

Jones v. Amoco Oil Co., 483 N.W.2d 718, 724 (Minn.App.1992) (quoting Romain v. Pebble Creek Partners, 310 N.W.2d 118, 122 (Minn.1981)), review denied (Minn. May 15,1992).

Appellant asserts that the specific terms of the agreement contemplate that the agreement would be “null and void and of no consequence to either party” if respondents failed to perform. To support its argument that this language,- rather than Minn.Stat. § 559.21, should control, appellant seems to argue that because the settlement agreement is unenforceable as a matter of law under the statute of frauds, the agreement does not trigger Minn.Stat. § 559.21.

Appellant’s argument is flawed for two reasons. First, as previously discussed, there is a valid, binding agreement; essential, terms were not left to future negotiations, and the agreement does not rest on a contingency.. See Romain, 310 N.W.2d at 122 (noting that proper inquiry is “whether a term essential to the final bargain is left open for further negotiations or is dependent on a contingency”); cf. Jones, 483 N.W.2d at 724 (where contingency that one party would obtain suitable financing was not met, other party was not required to follow procedures in section 559.21). Consequently, appellant cannot succeed in arguing that the agreement could not have triggered Minn.Stat. § 559.21.

Second, looking at the language of the agreement in context, it is clear that the parties intended the contract to be “null and void” only if respondents did not pay $300,000 at 'the closing on June 1, 2003. The transcript indicates that the following discussion took place:

TED OLSON: The thing that I have a problem with is going into a ... nor'mal. cancellation ... if they don’t come up with the $300,000 to close.
FLOYD OLSON: If there isn’t any performance, can’t, we stipulate, that this agreement is null and void and with no consequence to either party at that point?
MR. MORRIS: Your honor, under 559.21, you can’t waive it....
MR. KALLENBACH: They’re not in possession. And obviously it’s clear that until the $300,000 comes there’s no possession, right?
MR. MORRIS: Right.
MR. MORRIS: So, Your Honor, our agreement is that if there is not performance prior to June 1, the sellers will have the right to cancel the agreement in accordance with [Minn.Stat. § ] 559.21. Possession will not be relinquished by the sellers, but the cancellation — the 30-day cancellation can go forward and, of course, the $100,000 will be forfeited.
MR. KALLENBACH: That’s fine with me. Ted, look, I can’t change the statutory law. 559.21 says what it says.
TED OLSON: I understand that.
FLOYD OLSON: Just make it clear that nobody can take over possession without it being given.
MR. KALLENBACH: $300,000.

This exchange contradicts appellant’s argument that the parties agreed that the contract would be null and void if respondents were late in making the first earnest payment. Rather, it indicates that the agreement would be null and void only if respondents did not close with $300,000 on June 1, 2003. Moreover, the record makes clear that the parties understood that Minn.Stat. § 559.21 would be applicable in the event of a default. While respondents did not default on the agreement, we conclude that, even if they had, respondents would have been entitled to cure the default under Minn.Stat. § 559.21.

IV.

Appellant’s final argument is that the district court abused its discretion by sua sponte amending the terms of the agreement to change the dates of performance, asserting that this decision “is against logic and the facts in the record” because the parties did not agree to those dates. We disagree. Because the dates in the original agreement passed while the motion to enforce the settlement was pending, the district court was required to amend the dates to a time when performance of the agreement was possible. Without amended dates, no effect could be given to the court’s order. We conclude that on this record the district court did not abuse its discretion by amending the dates of the parties’ agreement.

DECISION

Because the parties orally recited the terms of their settlement agreement on the record in open court and expressly assented to be bound by the agreement, the district court did not err in determining that the writing and subscription requirements of the statute of frauds were satisfied. Because we conclude that there was a meeting of the minds on the essential terms of the agreement, we also affirm the district court’s decision that the agreement constitutes an enforceable purchase agreement. Because we conclude that the district court did not err in ruling that, even if respondents had materially breached the agreement, they would have been entitled to an opportunity to cure their default under Minn.Stat. § 559.21 (2002), we affirm on that issue. Finally, we find no abuse of discretion in the district court’s decision to amend the dates of performance to make compliance with the court’s order possible.

Affirmed.

      . We note that appellant's argument is inconsistent in that it relies on the terms of the agreement, claiming the agreement is null and void for lack of performance, while at the same time arguing that there was no agreement due to lack of mutual assent.

      . Appellant also points to a discrepancy in the transcript concerning which of respondents' attorneys would guarantee the payment. Morris states in his affidavit that he, not Carlson, had agreed to guarantee the payment. This is not an "essential” term of the agreement.


author: LANSING, Judge.

text:
    UNBANK CO., LLP, Appellant, v. MERWIN DRUG COMPANY, INC., Respondent.
    No. A03-1029.
    Court of Appeals of Minnesota.
    April 6, 2004.

      Norman J. Baer, Mark D. Wisser, Anthony Ostlund & Baer, P.A., Minneapolis, MN, for appellant.
    George W. Soule, Amy B. Pinske, Kevin Curry, Bowman & Brooke LLP, Minneapolis, MN, for respondent.
    Considered and decided by LANSING, Presiding Judge, PETERSON, Judge, and WILLIS, Judge.
   OPINION

LANSING, Judge.

In this declaratory judgment action, a currency-exchange licensee seeks a declaration construing a distance limitation in the licensing requirements imposed by Minn.Stat. § 53A.02, subd. 2 (2002), and an injunction restraining another currency-exchange licensee from operating within one-half mile. Because the statute at issue defines the licensing authority of the commissioner of commerce and the commissioner is not a party to this action, we affirm the district court’s dismissal as modified.

FACTS

Unbank Co., a limited liability partnership, has operated a currency exchange at 913 West Broadway in Minneapolis since 1984. Merwin Drug Co., Inc., obtained a currency exchange license for its location at 700 West Broadway in 1990. Merwin failed to renew its license, and it expired on December 31, 1991. In 1992 the Minnesota legislature amended Minn.Stat. § 53A.02 (1990) to provide that the commissioner of commerce may not issue or renew a currency-exchange license to a currency exchange located within one-half mile of an existing currency exchange. 1992 Minn. Laws ch. 504, §§ 2, 9.

In April 2002, Merwin stipulated to entry of a consent order that prohibited it from operating its currency exchange until it became properly licensed. Several months later, Merwin submitted an application to the department of commerce, and the commissioner issued Merwin a currency-exchange license.

Unbank brought this declaratory judgment action against Merwin in January 2003, seeking a declaration that “the issuance of a currency exchange license to Merwin for its West Broadway location is prohibited” and also seeking an injunction restraining Merwin from operating a currency exchange at its West Broadway location. Unbank notified the commerce commissioner of the lawsuit but did not sue the commissioner or join the commissioner as a party. Only Merwin was named as a defendant.

Merwin moved to dismiss the complaint. The district court concluded that Unbank’s complaint had not established a justiciable controversy between Unbank and Merwin, that Unbank lacked standing to obtain a declaratory judgment, and that the court could not issue a declaratory judgment affecting Merwin’s licensing status in an action in which the commissioner was not a party. The district court dismissed the declaratory action with prejudice, and this appeal followed.

ISSUE

May the district court issue a declaratory judgment determining a currency-exchange licensing controversy under Minn. Stat. § 53A.02 (2002) without the presence of the commissioner of commerce?

ANALYSIS

The Minnesota Declaratory Judgment Act empowers courts to declare rights, status, and other legal relations that are affected by a statute, ordinance, contract, or franchise. MinmStat. §§ 555.01, .02 (2002). A declaratory action presents a justiciable controversy if it “(a) involves definite and concrete assertions of right that emanate from a legal source, (b) involves a genuine conflict in tangible interests between parties with adverse interests, and (c) is capable of specific resolution by judgment rather than presenting hypothetical facts that would form an advisory opinion.” Cincinnati Ins. Co. v. Franck, 621 N.W.2d 270, 273 (Minn.App.2001). In an action for a declaratory judgment, “all persons shall be made parties who have or claim any interest which would be affected by the declaration.” Minn.Stat. § 555.11 (2002).

Unbank seeks a declaration that Merwin’s operation of a currency exchange at the West Broadway location violates the licensing requirement imposed by Minn. Stat. § 53A.02, subd. 2 (2002), and an injunction restraining Merwin from operating a currency exchange at that location. The specific text that Unbank requests the court to construe provides:

No license may be issued or renewed under this chapter [Chapter 53A Currency Exchanges] if the place of business to be operated under the license is located or proposed to be located within one-half mile of another licensed currency exchange.

MinmStat. § 53A.02, subd. 2. “A person may not engage in the business of a currency exchange without first obtaining a license from the commissioner [of commerce].” Minn.Stat. § 53A.02, subd. 1 (2002).

The district court determined that the absence of the commissioner in Unbank’s declaratory judgment action to construe section 53A.02, subd. 2, was a fatal defect. We agree. Merwin’s currency-exchange license, which is at issue in this declaratory judgment action, was granted by the commissioner. The department of commerce indisputably has an interest in its licensing decisions and the legal interpretation of its governing act. The Minnesota Supreme Court has previously recognized that an administering state board has an interest in the act it administers that is affected by a declaratory judgment, as defined by Minn.Stat. § 555.11, and that a declaration of rights cannot be made when that entity is not a party to the action. See Frisk v. Bd. of Educ. of Duluth, 246 Minn. 366, 382, 75 N.W.2d 504, 514 (1956) (declining to declare rights under teacher’s retirement act when administering board not a party to declaratory action); see also Minneapolis-St. Paul Sanitary Dist. v. City of St. Paul, 231 Minn. 379, 43 N.W.2d 219 (1950) (concluding that city is necessary party in declaratory judgment action construing provision for erection and maintenance of sewage disposal plant).

Unbank and Merwin dispute whether the joinder rules set forth in Minn. R. Civ. P. 19, 20, and 21 or the definition of parties in Minn.Stat. § 555.11 should govern the determination of whether the commissioner is an indispensable party. The Minnesota Supreme Court has held that the rules of civil procedure apply to the provisions of the declaratory judgment act. See State Auto. & Cas. Underwriters v. Lee, 2A1 N.W.2d 573, 575-76 (Minn.1977) (providing that Uniform Declaratory Judgménts Act is subject to provisions of Minn. R. Civ. P. 19). The rules of civil procedure supplement the provisions of MinmStat. § 555.11, which expressly provide that “[w]hen declaratory relief is sought,, all persons shall be made parties who have or claim any interest which would be affected by the declaration.” Thus the joinder requirement in Minn.Stat. § 555.11 is consonant with but broader than the joinder requirement in rule 19. See Minn. R. Civ. P. 19 (listing factors for determining whether party is indispensable).

The commissioner is a necessary party to this declaratory judgment action under both Minn. R. Civ. P. 19 and Minn.Stat. § 555.11. If the district. court entered judgment declaring that Merwin could not operate its currency exchange because it violates Minn.Stat. § 53A.02, subd. 2, the commissioner’s interest in issuing a license and its policies in interpreting its licensing authority would be affected without providing a full' opportunity to litigate the issue or a full adjudication of the commissioner’s rights.

The commissioner’s interest is readily demonstrated by the underlying controversy. Unbank contends that the 1992 distance-limitation amendment to the currency-exchange statute is unambiguous and precludes Merwin from possessing a license. Merwin, on the other hand, argues that the plain language of the distance-limitation amendment applies only to “licenses issued for new places of business that begin operating on or after [April 24, 1992],” 1992 Minn. Laws. ch. 504 § 9 (emphasis added). Merwin maintains that it is undisputed that it began operating before April 24, 1992, and therefore MinmStat. § 53A.02 does not prohibit its possession of a license. Merwin and Unbank invoke conflicting authority from other jurisdictions to support their respective positions. Compare Glastonbury Co. v. Gillies, 209 Conn. 175, 550 A.2d 8 (1988) (interpreting grandfather provision in insurance licensing statute to apply to an organization’s licenses that had lapsed for periods from one to nine years), with Coe v. City of Sevierville, 21 S.W.3d 237 (Tenn.Ct.App.2000) (restricting application of grandfather clause in licensing procedure to include only existing lawful activities).

If courts, through a declaratory judgment action, undertake to decide administrative-licensing issues without the participation of the licensing authority, the coequal branches of government relinquish a necessary balance. See Minn. Const, art. Ill, § 1 (dividing powers of government into three distinct departments and restricting exercise of powers belonging to another department). Licensees cannot confer licensing power on courts by tactical litigation that excludes consideration of the power and discretion of the licensing authority. The district court properly determined that the commissioner was a necessary party to the declaratory action.

For the same reason that the declaratory judgment action cannot go forward without the commissioner as a party, the action lacks justiciability. Section 53A.02, subdivision 2, imposes restrictions on the commerce commissioner’s power to license currency exchanges. Specifically, the commissioner may not issue or renew a currency-exchange license if the applicant is located within one-half mile of another licensed currency exchange. Id. It is the commissioner’s licensing power that is fixed by the statute, not the respective rights of the licensees. As the district court correctly observed, there is no evidence of a genuine conflict between the parties over a tangible legal right belonging to Unbank.

Furthermore, issuing a declaratory judgment without the presence of the commissioner would prevent rather than promote the efficient and final termination of the controversy, since the attendant licensing issues would remain unresolved. See Minn.Stat. § 555.06 (2002) (court may refuse to enter declaratory judgment if it would not terminate uncertainty or controversy); see also Cincinnati Ins. Co., 621 N.W.2d at 275 (noting that joinder of all necessary parties in a declaratory judgment allows efficient and final determination of a controversy).

Unbank maintains that it has standing to bring this action under Minn. Stat. § 8.31, subd. 3a (2002), because that statute specifically authorizes private persons to bring actions to enforce chapter 53A, the currency-exchange statute. Un-bank may have standing to seek enforcement of the provisions of the currency-exchange statute under section 8.31, subdivision 3a, in a properly constituted suit. But the presence of standing does not dispense with the requirements that a declaratory judgment must include all affected parties and must raise a justiciable issue. Standing and justiciability are related doctrines, but standing does not equate to justiciability. And proceeding under the private-attorney-general statute does not- mean that it is unnecessary to join the commissioner of commerce when the commissioner’s interest is affected. See Seiz v. Citizens Pure Ice Co., 207 Minn. 277, 285, 290 N.W. 802, 805-06 (1940) (presence of attorney general in declaratory judgment action does not resolve problem of failing to sue agency that is necessary to justiciability).

We conclude that the district court did not err in dismissing Unbank’s action, brought solely against Merwin, for its failure to join the commissioner of commerce as required by the declaratory judgment act and the Minnesota Rules of Civil Procedure.

We do not find a basis, however, for dismissing the action with prejudice. We recognize that a district court’s designation of “with prejudice” or “without prejudice” must be viewed in light of the basis for the dismissal and is not automatically dispositive of whether a second suit is barred. See Branstrom & Assocs., Inc., v. Cmty. Mem’l Hosp., 296 Minn. 366, 367 n. 1, 209 N.W.2d 389, 390 n. 1 (1973) (concluding that a dismissal without prejudice was, in effect, a dismissal with prejudice); see also Hulmes v. Honda Motor Co., 924 F.Supp. 673, 683 (D.N.J.1996) (characterization of “with prejudice” or “without prejudice” is not dispositive of whether second suit is barred); Minn. Fed’n of Teachers v. Mammenga, 485 N.W.2d 305, 310 (Minn.App.1992) (dismissal of federal action “with prejudice” did not constitute adjudication on the merits entitled to pre-clusive effect in successor suit in state court), review denied (Minn. June 30, 1992). Nonetheless, we note that the dismissal for failure to join the commissioner and the attendant lack of justiciability did not constitute an adjudication on the merits. Consequently the dismissal should not be designated as a dismissal with prejudice. See Minn. R. Civ. P. 41.02 (failure to join indispensable party pursuant to rule 19 does not operate as adjudication on merits).

DECISION

We affirm the district court’s dismissal of Unbank’s declaratory judgment action for Unbank’s failure to join the commissioner of commerce.

Affirmed as modified.