Summit House Co. v. Gershman - 502 N.W.2d 422 (Minn. Ct. App. 1993)

Rule:

A contract for deed vendor has a choice of remedies when the contract for deed vendee defaults on the contract. The vendor may either seek specific performance on the contract or may cancel the contract. The doctrine of election of remedies is designed to prevent double recovery for a single wrong, and therefore the vendor cannot seek both specific performance and contract cancellation. A contract can be canceled either by judicial termination or by statutory cancellation under Minn. Stat. § 559.21 (1990). By pursuing specific performance to a determinative conclusion, the vendor chooses not to cancel the contract, but to affirm it.

Facts:

The sellers contracted to sell their condominium to the buyers. The buyers subsequently sued to terminate the contract. The sellers counterclaimed for specific performance and were awarded summary judgment. The buyers failed to pay the judgment. The sellers levied execution on the buyers' interest in the condominium and purchased that interest at a sheriff's sale. The buyers moved for an order that the judgment had been satisfied by the sheriff's sale. The district court denied the buyers' motion, concluding that the execution sale had not canceled the contract. The district court also awarded attorney fees to the sellers. The buyers appealed.

Issue:

1. Did the sellers’ execution on the buyers’ contract for deed vendee’s interest at a sheriff’s sale, after having obtained a judgment for specific performance of the contract for deed, constitute a cancellation of the contract for deed that satisfied the judgment?
2. Did the district court err in awarding attorney fees to the sellers? 

Answer:

1) No. 2) No.

Conclusion:

The court affirmed. The court noted that the sellers had a choice of either seeking specific performance or of seeking rescission. By choosing specific performance, the sellers chose not to cancel the contract but to affirm it. Once the execution sale took place, the action was taken out of the context of a contract action and, instead, became one to enforce a money judgment. The court; finding that the buyers' motion was frivolous, without merit, and brought to harass the sellers; concluded that the award of attorney fees was proper.