Jerry A. Hill, appellant, vs. Frederic D. Nemer, Respondent.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

  STATE OF MINNESOTA

IN COURT OF APPEALS

A03-138

 

Jerry A. Hill,
appellant,
 
vs.
 
Frederic D. Nemer,
Respondent.

 

Filed September 23, 2003 Affirmed

Peterson, Judge

Dissenting, Klaphake, Judge

 

Hennepin County District Court

File No. MC01019485

 

Steven E. Rau, Elizabeth A. Moffitt, Flynn, Gaskins & Bennett, L.L.P., 2900 Metropolitan Centre, 333 South Seventh Street, Minneapolis, MN  55402 (for appellant)

 

Charles S. Zimmerman, Timothy J. Becker, Zimmerman Reed, P.L.L.P., 651 Nicollet Mall, Suite 501, Minneapolis, MN  55402 (for respondent)

 

            Considered and decided by Klaphake, Presiding Judge, Peterson, Judge, and Willis, Judge.

U N P U B L I S H E D   O P I N I O N

PETERSON, Judge

Appellant Jerry A. Hill brought an action under Minn. Stat. § 548.14 (2002) to set aside a judgment, alleging that respondent Frederic D. Nemer perjured himself to fraudulently procure the judgment. The district court concluded that even if Nemer lied during the previous action, the judgment was not obtained as a result of those lies, and granted summary judgment to Nemer.  We affirm.

FACTS

            In 1992, Hill worked for Real Estate Equities (REE).  Nemer invested funds in REE through a partnership in which he and Daniel Spiegel were partners.  Spiegel invested additional funds in REE through another partnership that he formed with his father, Maurice Spiegel.  After Hill told Nemer and the Spiegels about a kickback scheme involving their accountant and REE, they sued REE alleging fraud and concealment of commissions.

Hill assisted Nemer and the Spiegels in the REE litigation and eventually left REE.  Hill suffered financially, and Nemer loaned him more than $85,000.  The parties executed a promissory note, and when Hill failed to make payment, Nemer brought an action to collect the debt.  Hill raised a set-off defense, arguing that Nemer owed him money because Nemer and the Spiegels had promised to pay his legal fees in the REE litigation and to give him a portion of any settlement or judgment they received in the REE litigation.  Hill also asserted that Nemer owed him for consulting work.

Nemer asserted in the collection action that he "never promised to reimburse [Hill] for any costs he has incurred in the [REE litigation]" and that "[a]t no time ever was [Hill] promised ‘a substantial amount of money.'"  Nemer obtained a judgment against Hill in the amount of $110,436.49, which included interest and court costs.

            The district court granted summary judgment in favor of the defendants in the REE litigation.  Nemer and the Spiegels appealed, and the parties reached a $300,000 settlement.  The settlement proceeds were distributed among Nemer and the Spiegels.  Nemer was dissatisfied with the distribution of the settlement proceeds and sent a letter to the Spiegels stating that he thought the settlement distribution was unfair and requesting $20,000 to $40,000 "as reasonable payment to me in lieu of any payment to [Hill]."  Daniel Spiegel sent Nemer two checks totaling $20,000 with a note stating, "With the enclosed checks, my father and I now consider this matter closed."  Nemer cashed the checks, but he told Daniel Spiegel that the payment was insufficient, and he brought an action against the Spiegels for an unspecified amount of additional damages.  Nemer never credited the loan he made to Hill for the funds he received from the Spiegels.

            Nemer telephoned Hill and told him about the REE settlement proceeds and how the Spiegels refused to pay Hill any portion of the settlement as previously agreed.  In an August 2000 deposition in connection with the Spiegel litigation, Nemer testified:

Many times with deaf ears always I discussed, asked and pleaded with [Daniel Spiegel] to fulfill his father's promise to [Hill], which, "If we get money, you'll get money." That was stated clearly at that [June or July 1992] meeting at the Point of France. That was a contract as of that moment. [Hill] understood clearly what that meant. It meant if we get money from the success of this lawsuit, you'll get money.

 

Nemer also testified that Hill had a financial interest in the REE litigation and that "[Hill's] financial interest was that he was told that he will be given money if we succeed in the lawsuit financially."

Based on Nemer's statements that Hill had a financial interest in the REE litigation, which contradicted the statements Nemer made during his collection action, Hill brought an action against Nemer seeking to have the judgment obtained in the collection action set aside.  Following discovery, the parties filed cross-motions for summary judgment.  The district court denied Hill's motion and granted Nemer's motion. D E C I S I O N "On an appeal from summary judgment, we ask two questions:  (1) whether there are any genuine issues of material fact and (2) whether the lower courts erred in their application of the law."  State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990) (citation omitted).  A motion for summary judgment should be granted when

the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that either party is entitled to a judgment as a matter of law. On appeal, the reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted.

 

Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993) (citation omitted).

When the district court grants summary judgment based on the application of a statute to undisputed facts, the result is a legal conclusion, reviewed de novo by the appellate court.  Lefto v. Hoggsbreath Enters., Inc., 581 N.W.2d 855, 856 (Minn. 1998).

Minn. Stat. § 548.14 (2002) provides:

Any judgment obtained in a court of record by means of perjury, subornation of perjury, or any fraudulent act, practice, or representation of the prevailing party, may be set aside in an action brought for that purpose by the aggrieved party[.] . . . In such action the court may either enjoin the enforcement of the judgment or command the satisfaction thereof, may compel the party procuring the same to restore any property received by virtue thereof, and may make such other or further order or judgment as justice shall require[.]

 

Application of the statute is to be determined on a case-by-case basis.  Hass v. Billings, 42 Minn. 63, 67, 43 N.W. 797, 798 (1889).  Mere allegations of perjury by an aggrieved party are not sufficient to bring a cause of action within the meaning of the statute. Id. at 67, 43 N.W. at 799.  The party challenging the judgment must establish that the judgment was obtained by reason of fraudulent and false testimony. Dart v. Richardson, 96 Minn. 249, 253, 104 N.W. 1094, 1096 (1905).  The statute is not intended to be used as a forum for re-litigation of the original trial issues.  Betcher v. Midland Nat'l Bank, 167 Minn. 484, 485, 209 N.W. 325, 326 (1926).

In the collection action, Nemer denied having promised Hill a portion of any REE litigation proceeds and having promised to reimburse Hill for his legal costs incurred in the REE litigation.  Then, in later litigation against the Spiegels, Nemer testified that Hill did have a financial interest in the REE litigation and that Hill was told that he would "be given money if [Nemer and his partners] succeed[ed] in the lawsuit financially."  In his deposition, Nemer stated that he never promised Hill that he would pay his legal fees, but rather that he told Hill that he and the Spiegels would "fulfill a commitment" to Hill.

Hill argues that if, during the collection action, Nemer had admitted to the oral promises, the judgment against Hill would have been lower.  Therefore, Hill argues, the judgment against him was obtained as a result of Nemer's false testimony.  Hill's argument assumes that Nemer's false statements alone require that the judgment against him be overturned.  However, Hill must also establish that the judgment was obtained as a result of Nemer's false statements.  See Dart, 96 Minn. at 253, 104 N.W. at 1096.

The district court concluded that Nemer's lies did not materially affect the outcome of the judgment against Nemer because even if Nemer made promises to Hill, the promises were not enforceable.  We agree.

1. Promise to pay portion of REE litigation proceeds.

The terms of a contract must be definite and certain.  Greenfield v. Peterson, 141 Minn. 475, 480, 170 N.W. 696, 698 (1919).  A court can only enforce a contract if it can determine its terms. Ham v. Johnson, 55 Minn. 115, 117, 56 N.W. 584, 585, (1893).

The deposition testimony of both Nemer and Hill establishes that the amount that Hill was to be paid was never determined.  Because the promise to pay some amount is too indefinite, any promise made by Nemer was not enforceable. See Bolles v. Sachs, 37 Minn. 315, 318, 33 N.W. 862, 864 (1887) (stating courts cannot enforce contracts when they lack certainty).

2. Promise to pay Hill for his consulting work.

Like the promise to pay Hill a portion of the REE litigation proceeds, the promise to pay him for his consulting work was vague.  Hill's testimony that he never sent Nemer an invoice and did not know the amount that Nemer allegedly owed him establishes that any promise that Nemer made was too indefinite to be enforceable. See Greenfield, 141 Minn. at 480, 170 N.W. at 698; Bolles, 37 Minn. at 318, 33 N.W. at 864.

3. Promise to pay Hill's legal fees associated with REE litigation.

"To support a promise to pay the debt of another previously incurred, there must be some new consideration." Luing v. Peterson, 143 Minn. 6, 7, 172 N.W. 692, 693 (1919).  It is undisputed that Hill's legal fees were incurred before the promise to pay them was made, and Hill does not argue that any new consideration was given. Therefore any promise that Nemer made to pay Hill's legal fees is not enforceable.[1]

Because the promises that Nemer made to Hill were not enforceable, we conclude that the district court did not err in applying Minn. Stat. § 548.14.

            Alternatively, Hill argues that public policy demands that this court reverse the district court's order and set aside Nemer's judgment against him.

            A judgment may be set aside at any time for after-discovered fraud upon the court.  Where a court is misled as to material circumstances, or its process is abused, resulting in the rendition of a judgment which would not have been given if the whole conduct of the case had been fair, the court has inherent power to vacate for fraud and that power includes as well the power to modify. 

 

Halloran v. Blue & White Liberty Cab Co., 253 Minn. 436, 442, 92 N.W.2d 794, 798 (1958) (citations omitted).

            During his collection action against Hill, Nemer falsely denied that he had promised to make payments to Hill.  However, these false statements were not material circumstances in the collection action because the promises that Nemer lied about were not enforceable, and, therefore, the promises were not a basis for rendering a different judgment in the collection action.  Because Nemer's lies did not mislead the court as to any material circumstances, they did not result in the rendition of a judgment that would not have been rendered if the court had known that Nemer made the promises.

            Affirmed.

 

KLAPHAKE, Judge (dissenting)

            I respectfully dissent.  The majority concludes that respondent's promise of payment to appellant is unenforceable because the terms were too indefinite to enforce.  Despite the fact that respondent has admitted that appellant was promised a share of the recovery in respondent's lawsuit against REE, both the district court and this court have concluded that because no amount was specified, appellant has failed to demonstrate an enforceable contract. 

            The majority overlooks the fact that appellant was promised reimbursement for his legal fees incurred in the earlier lawsuit.  This amount is easily quantifiable.  Certainly, in the posture of this case, the promise of reimbursement for attorney fees represents a genuine issue of material fact that precludes summary judgment.  Minn. R. Civ. P. 56.03. 

            On appeal from summary judgment, this court must view the evidence in a light most favorable to the party against whom judgment is granted.  Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).  The evidence here does not unequivocally negate the existence of an ascertainable contract.  The determination of whether a contract exists is better left for the factfinder.  Gresser v. Hotzler, 604 N.W.2d 379, 382 (Minn. App. 2000). 

            Further, the majority relies on Halloran v. Blue & White Liberty Cab Co., 253 Minn. 436, 442, 92 N.W.2d 794, 798 (1958) for the proposition that fraud on the court occurs only if the court is misled as to material circumstances.  However, Halloran also states that the court has "inherent power to vacate for fraud" where "its process is abused, resulting in the rendition of a judgment which would not have been given if the whole conduct of the case had been fair."  Permitting respondent to commit perjury without legal consequence is both repugnant and an abuse of process.  Respondent's credibility was and remains in question.  To conclude that the judgment Hill seeks to vacate was wholly unaffected by respondent's deceit is not a proper determination for summary judgment or for this court on appeal. 

 

[1] The dissent contends that the majority has overlooked the fact that Hill was promised reimbursement for his legal fees.  The dissent contends further that the amount of these fees is easily quantifiable.  But even if the amount of the fees can be easily determined, Nemer's promise to pay the fees is not enforceable because the promise was made after the fees were incurred and there was no new consideration.