This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2006).
DIETZEN, Judge.
Appellants, who are vendors on a contract for deed, challenge the district court order granting a temporary injunction restraining its cancellation, arguing that the district court erred in not requiring respondent to file a complaint as required by Minn. Stat. § 559.211 and in failing to properly analyze the Dahlberg factors. We reverse and remand.
FACTS
Appellants Raymond and Joan Welsh are the owners of a home located on Wellesley Avenue in St. Paul that is subject to a contract for deed between appellants and respondent Daniel Lumbar and his wife Mary Lumbar. Mary Lumbar is the daughter of appellants.
Respondent and Mary Lumbar were married in October 1994 and entered into a contract for deed with appellants to purchase the subject home that same month. The purchase price was $150,000 with a down payment of $7,500, and the balance to be paid at the rate of $750 per month, plus some partial balloon payments, as set forth in the written agreement. The contract for deed contains a default provision that provides "should purchaser fail to timely perform any of the terms of this contract, seller may, at seller's option, elect to declare this contract cancelled and terminated by notice to purchaser in accordance with applicable law."
In February 2006, respondent and Mary Lumbar separated and divorce proceedings were commenced. The primary asset of the marriage was the subject home. In May 2006, appellants served respondent and Mary Lumbar with a notice of cancellation of contract for deed, asserting that respondent and Mary Lumbar had defaulted under the terms of the agreement and demanding that, in accordance with the contract, payment be made in full, plus attorney fees, for a total amount owing of about $188,000. The statutory cancellation period expired on July 1, 2006.
Respondent applied for and received notice that he qualified for a loan in an amount sufficient to cure the alleged default. Respondent then served appellants with a motion for temporary injunction to restrain the cancellation of the contract for deed, which was heard on June 22, 2006. The district court did not conduct an evidentiary hearing but did consider affidavits and depositions. During the hearing, appellants argued that respondent's failure to file a complaint under Minn. Stat. § 559.211 was fatal. The district court ordered respondent to file a complaint "immediately." Respondent pointed to a letter from appellants' attorney to the title company that was working on a title commitment for the property, notifying it of the pendency of the action. Respondent argued that by sending the letter, appellants were interfering with his ability to close on a loan to pay off the contract for deed. Appellants denied that the letter was unjustified or unlawful.
On June 27, the district court issued an order granting a temporary injunction restraining the cancellation of the contract for deed. The district court rested its decision entirely on respondent's oral-modification-of-contract claim and did not reach respondent's other potential claims. The order provided that respondent "shall continue to make the scheduled payments on the contract for deed," and "Without further order of this court, the order enjoining the cancellation of the contract for deed shall expire no later than July 31, 2006. . . ." On July 17, 2006, respondent served appellants and defendant Mary Lumbar with a summons and complaint and filed the same with the court. This appeal follows the district court's June order for temporary injunction.
Mary Lumbar refused to join respondent's motion for temporary injunction, and was named as a defendant in respondent's subsequent cause of action against appellants. She is not a party in this appeal.
On July 25, the district court denied appellants' motion to dissolve the temporary injunction, thereby continuing the temporary injunction during the appeal, and provided that appellants were not required to answer the complaint and respondent was not obligated to make any payments until further order of the court.
DECISION I.
Appellants argue that the district court lacked authority under Minn. Stat. § 559.211 (2006) to consider respondent's motion for temporary injunction until after respondent served and filed his summons and complaint. Statutory interpretation is a question of law, which we review de novo. Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 393 (Minn. 1998). When interpreting a statute, we give words their plain and ordinary meaning. All Metro Supply, Inc. v. Warner, 707 N.W.2d 1, 5 (Minn.App. 2005); see also Minn. Stat. § 645.08(1) (2006) (words and phrases are construed according to their common and approved usage).
Minn. Stat. § 559.21 (2006) sets forth a procedure for cancellation of a contract for the conveyance of real estate in the event that a default occurs. The statute provides that, to terminate the contract, the seller must serve the buyer with a notice of cancellation stating the events of default and that the contract will be terminated in 60 days unless the buyer complies with the conditions in default, makes all payments due under the contract through the date that payment is made, and pays costs and the required amount of attorney fees. Minn. Stat. § 559.21, subd. 2a. If the buyer complies with the requirements of the notice of cancellation before the termination date, the contract is reinstated. The purpose of the statute is to avoid the harsh result of forfeiture by allowing buyers a reasonable time to remedy their default. Thomey v. Stewart, 391 N.W.2d 533, 535 (Minn.App. 1986).
Courts have the authority, before the termination date and subject to the provisions of the statute and Minn. R. Civ. P. 65.02, to enter an order granting a temporary injunction restraining the termination of the contract. Specifically, Minn. Stat. § 559.211, subd. 1, provides:
In an action arising under or in relation to a contract for the conveyance of real estate or any interest therein, the district court, . . . has the authority at any time prior to the effective date of termination of the contract and subject to the requirements of rule 65 of the Rules of Civil Procedure for the District Courts to enter an order temporarily restraining or enjoining further proceedings to effectuate the termination of the contract,. . . .
Appellants argue that the statute requires the party seeking injunctive relief to file a complaint setting forth a cause of action that justifies enjoining the termination of the contract. We agree.
The statute contemplates the existence of an underlying action. Minn. Stat. § 559.211 uses the phrases "[i]n an action arising under or in relation to a contract" and "[i]n the action, the purchaser may plead affirmatively any matter that would constitute a defense to terminate the contract." Minn. R. Civ. P. 65.02 has the same requirement, stating "[b]efore or after the commencement of the hearing on a motion for temporary injunction, the court may order the trial of the action. . . ." (Emphasis added.) We conclude that the words "an action" of Minn. Stat. § 559.211, are not superfluous and require that a motion for temporary injunction be preceded by an underlying complaint setting forth the causes of action and supporting facts. The purpose of the requirement is two-fold — it puts the defendant on notice of the plaintiff's causes of action so that the action can be defended and the supporting facts challenged, and it affords the district court the ability to critically analyze the legal theories and underlying facts of the case.
Existing caselaw supports our conclusion. In Smith v. Spitzenberger, 363 N.W.2d 470, 472 (Minn.App. 1985), the sellers on a contract for deed argued that the district court lacked authority to issue a temporary injunction under Minn. Stat. § 559.211 because respondent purchasers did not establish that an action was pending. Our court agreed, holding that "under section 559.211 and principles of equity, a trial court may not grant injunctive relief unless an underlying cause of action exists." Id. (emphasis added). The Spitzenberger court reasoned that injunctive relief is a remedy and not a cause of action and that "a cause of action must exist before injunctive relief may be granted." Id. Because personal service was made on the appellant sellers, and the motion hearing was held before the redemption period ended, the court held that the district court did not abuse its discretion in granting the temporary injunction. Id. at 472-73.
Based on the express language of Minn. Stat. § 559.211, Minn. R. Civ. P. 65.02, and our holding in Spitzenberger, the district court lacked authority to grant a temporary injunction before the filing of the complaint. It has long been the law that time is of the essence in contract for deed cancellation proceedings. Here, respondent delayed filing a complaint until July 17, which was over 70 days from when he received notice of cancellation, and well after the motion hearing and the order granting the injunction. Respondent could have filed the complaint in May when the situation he faced should have been clear to him. Had respondent acted promptly as required by statute, he would have avoided the problem. Thus, the district court erred in failing to apply the statute.
II.
Respondent argues that we should address the underlying merits of the district court's order granting the temporary injunction in the interests of fairness and equity. See D.J. Enters. of Garrison, Inc. v. Blue Viking, Inc., 352 N.W.2d 120, 121-22 (Minn.App. 1984). We agree to review the claims considered by the district court, even though we conclude that respondent failed to satisfy the requirements of the statute and rule 65.02.
We review the decision to grant a temporary injunction enjoining the cancellation of a contract for deed for an abuse of discretion. Eide v. Bierbaum, 472 N.W.2d 193, 194 (Minn.App. 1991). A temporary injunction is an extraordinary equitable remedy. Miller v. Foley, 317 N.W.2d 710, 712 (Minn. 1982). It is meant to preserve the status quo pending an adjudication on the merits. Id. The grant of a temporary injunction neither establishes the law of the case nor constitutes an adjudication of the issues on the merits. Indep. Sch. Dist. No. 35 v. Engelstad, 274 Minn. 366, 370, 144 N.W.2d 245, 248 (1966).
Minn. R. Civ. P. 52.01 requires that the district court set forth the findings of fact that constitute the grounds of its action in granting or refusing the temporary injunction. Ensco Int'l, Inc. v. Blegen, 410 N.W.2d 11, 13 (Minn.App. 1987). Absent exceptional circumstances, the district court's failure to make findings of fact when granting a motion for temporary injunction is an abuse of discretion. State v. Gartenberg, 488 N.W.2d 496, 498 (Minn.App. 1992). Here, the district court failed to make specific findings of fact.
Minnesota courts have developed a five-factor test to consider in determining whether an injunction should be issued. Dahlberg Bros., Inc. v. Ford Motor Co., 272 Minn. 264, 274-75, 137 N.W.2d 314, 321-22 (1965). The third Dahlberg factor, which is a likelihood that one party will prevail on the merits, is the most important factor. See Minneapolis Fed'n of Teachers, AFL-CIO, Local 59 v. Minneapolis Pub. Sch., Special Sch. Dist. 1, 512 N.W.2d 107, 110 (Minn.App. 1994) (stating that probability of success in the underlying action is a "primary factor" in determining whether to issue a temporary injunction), review denied (Minn. Mar. 31, 1994). The party seeking the temporary injunction must demonstrate a reasonable probability of success at trial on the merits of the action. Queen City Construction, Inc. v. City of Rochester, 604 N.W.2d 368 (Minn.App. 1999), review denied (Minn. Mar. 14, 2000).
Here, the district court's decision to grant the temporary injunction relied on respondent's oral-modification-of-contract claim. The district court concluded that "based on the relationship of the parties, there may have been modifications to the contract for deed that were not in writing. If modifications were made, there is a serious question concerning whether there actually is a breach of the contract for deed. Due to the question of whether there is actually a breach, this factor weighs in favor of granting injunctive relief." (Emphasis added). We disagree.
Article 28 of the agreement provides: "This contract may not be modified, amended or changed orally, but only by an agreement in writing signed by Purchaser and Seller." Respondent argues that the contract was modified in a conversation between Mary Lumbar and appellants. Specifically, he contends that they mutually agreed that late payments would not constitute a default under the agreement.
Contracts for the sale of land are subject to the statute of frauds. Minn. Stat. § 513.05 (2006); McLaughlin v. Heikkila, 697 N.W.2d 231, 233 (Minn.App. 2005), review denied (Minn. Aug. 24, 2005). But the method or time of performance under a land-sale contract may be modified orally without violating the statute of frauds. Thoe v. Rasmussen, 322 N.W.2d 775, 777 (Minn. 1982). When a party asserts that there has been an enforceable oral modification of the terms of a written contract, that party has the burden of proving the modification of the written contract by clear and convincing evidence; the burden is not met by a mere preponderance of the evidence. Bolander v. Bolander, 703 N.W.2d 529, 541 (Minn. 2005), review dismissed (Minn. Nov. 15, 2005).
Here, the relevant admissible facts do not support a reasonable probability of success on respondent's oral-modification-of-contract claim. Specifically, the affidavit of Mary Lumbar states, "[A]t no time did we make any oral agreement changing or modifying the terms of the Contract for Deed." Appellant Raymond Welsh also submitted an affidavit of similar import. During his deposition, respondent conceded that he did not know if the contract was modified and that appellants never stated to him that the contract was modified. Further, the contract specifically provides that the failure to enforce a right or remedy for a late payment "shall not be a waiver" of such right or remedy or preclude the exercise of the right at a future date.
Second, we are compelled to address the issue of respondent's potential claim of tortious interference with prospective contractual relations. The district court wisely did not reach respondent's potential claim in its order, and respondent did not brief the issue on appeal. Consequently, we do not reach the issue on appeal. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (statute-of-limitations issue that had been raised in, but not decided by, the district court would not be addressed on appeal); see also In re Petition for Improvement of County Ditch No. 86, 625 N.W.2d 813, 816 n. 2 (Minn. 2001) (holding when reviewing the grant of a temporary injunction, appellate courts will "not decide" legal issues that have not yet been addressed by the district court); Rehberger v. Project Plumbing Co., 295 Minn. 577, 578, 205 N.W.2d 126, 127 (1973) (stating that even though a question was raised in the district court, it should not be decided on appeal "if it was not passed on by the [district] court."
We do observe, however, that respondent's claim relied on a letter from appellants' attorney to the title company to support his argument. But respondent failed to introduce any admissible evidence establishing that the letter notifying the title company of the pendency of the action was unjustified or unlawful. See Minn. Stat. § 557.02 (2006) (stating that in all actions involving an interest to real property, any party may file for record with the county recorder notice of the pendency of the action). Minn. R. Civ. P. 65.02 requires that an order granting a temporary injunction be based on relevant admissible evidence. Id. ("A temporary injunction may be granted if by affidavit, deposition testimony, or oral testimony in court, it appears that sufficient grounds exist therefor.").
Appellants' counsel's letter to the title company may not be sufficient as a matter of law to establish a claim for torious interference with contractual relationships. See United Wild Rice, Inc. v. Nelson, 313 N.W.2d 628, 633 (Minn. 1982); see also R.A., Inc. v. Anheuser-Busch, Inc. 556 N.W.2d 567, 570 (Minn.App. 1996) (stating that the elements of the claim are (1) existence of a contract; (2) alleged wrongdoer's knowledge of the contract; (3) wrongdoer's intentional procurement of its breach; (4) without justification; and (5) damages); see also Minn. Stat. § 557.02.
We also observe that the procedural posture of this case is unique. Specifically, the temporary injunction enjoining cancellation of the contract has remained in effect during the pendency of the appeal, or about ten months. And respondent has now filed a complaint setting forth his causes of action and the supporting facts. Thus, the circumstances may have changed, and the district court may choose to review the motion for temporary injunction and conduct an evidentiary hearing in light of the complaint.
Reversed and remanded.