Law School Case Brief
SCI Minn. Funeral Servs., Inc. v. Washburn-McReavy Funeral Corp. - 795 N.W.2d 855 (Minn. 2011)
Reformation and rescission are different forms of equitable relief. In reformation, a contract is modified to reflect the parties' true intent, whereas in rescission, the entire contract is voidable.
Appellant SCI Minnesota Funeral Services, Inc. (SCI) sold Crystal Lake Cemetery Association (Crystal Lake) to appellant Corinthian Enterprises, LLC (Corinthian) in a stock sale agreement. Corinthian subsequently sold and assigned Crystal Lake to respondent Washburn-McReavy Funeral Corporation (Washburn) in a share purchase agreement. SCI and Corinthian brought the present action contending the parties did not intend to include the vacant lots in the sale of Crystal Lake, and they sought equitable relief to remedy this claimed mistake. The district court held that SCI and Corinthian were not entitled to reformation or rescission based on mutual mistake, and the court of appeals affirmed.
Were the parties entitled to the relief of either reformation or rescission?
The state supreme court found that rescission was not available because the transaction was supported mutual assent; indeed, the relevant transaction documents did not specifically mention the vacant lots, but gave the one seller the right to remove all assets owned by the cemetery association that were not being used to operate the cemetery association's business and the one seller did not remove the two vacant lots. It also found reformation was not available because no showing was made that the transaction agreement did not represent the parties' true intentions.
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