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STATE OF MINNESOTA IN COURT OF APPEALS A08-0458 In the Matter of the Petition of Crablex, Inc. In Relation to Certificate of Title No. 1091583, issued for land in the County of Hennepin and State of Minnesota, and for a new Certificate of Title after Mortgage Foreclosure Sale. Filed February 10, 2009 Affirmed Lansing, Judge Hennepin County District Court File No. 27-ET-CV-32646 James Christoffel, Christoffel & Elliott, P.A., Suite 1111, 444 Cedar Street, St. Paul, MN 55101 (for appellant Crablex, Inc.) Joel A. Mintzer, Robins, Kaplan, Miller & Ciresi, LLP, 2800 LaSalle Plaza, 800 LaSalle Avenue, Minneapolis, MN 55402-2015; and James A. Dueholm, 3722 Jenifer Street Northwest, Washington, DC 20015 (for intervenor Fine Associates, LLC) John M. LeFevre, Peter G. Mikhail, Suite 470, 200 South Sixth Street, Minneapolis, MN 55402 (for respondent City of Minneapolis) James M. Lockhart, Christopher R. Grote, Karla M. Vehrs, Lindquist & Vennum, P.L.L.P., 4200 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for respondents Riverside Plaza Limited Partnership, Minneapolis Community Development Agency, and Capmark Finance, Inc.) Robert Salmon, Meagher & Geer PLLP, Suite 4400, 33 South Sixth Street, Minneapolis, MN 55402 (for respondent Cedar Cultural Center) Considered and decided by Klaphake, Presiding Judge; Lansing, Judge; and Worke, Judge.

SYLLABUS I. A valid foreclosure of a mortgage terminates all easement interests in the

foreclosed real estate that are junior to the mortgage being foreclosed and whose holders are properly joined or notified in the foreclosure action. II. A mortgage, by a declaration of its mortgagee, may be made subordinate

in priority to an easement on the mortgaged real estate. OPINION LANSING, Judge This appeal from summary judgment in a Torrens proceeding raises issues on the effect of a mortgage foreclosure on easements that were memorialized on the certificate of title after the mortgage. Because the mortgagee subordinated the mortgage to five of the easements, and the holders of the remaining easements were not named parties in the mortgage foreclosure action, we affirm the district court's determination that the interests, as they currently exist, should not be omitted from the certificate of title. FACTS The Cedar-Riverside Land Corporation (CRLC) obtained a loan from First Trust Company of Saint Paul in December 1971. The loan was secured by a mortgage on real property that CRLC owned in the Cedar-Riverside area of Minneapolis. First Trust assigned the CRLC mortgage to Crablex, Inc. in 1994. Crablex filed an action to foreclose the CRLC mortgage in 1995. The parties to the action included CRLC, Minneapolis Community Development Agency (MCDA), Riverside Plaza Limited Partnership (Riverside Plaza), and Mellon Mortgage Company. 2

The district court entered a decree of foreclosure in February 2005. The decree ordered the sheriff to sell the property that was encumbered by the CRLC mortgage at a public sale. Crablex was the successful bidder at the sheriff's sale, and in May 2005 the sheriff issued Crablex a certificate of sale, subject to a six-month redemption period. One day after it purchased the property at the sheriff's sale, Crablex negotiated a sale of the property to Fine Associates, LLC. Crablex and Fine Associates entered into a purchase agreement and signed amendments to the purchase agreement in December 2005, May 2006, and September 2007. Because of a dispute over the terms and

conditions of the purchase agreement and amendments, Crablex and Fine Associates did not close the sale. At the time this appeal was argued, they were still litigating that dispute in a separate lawsuit. About ten months after Crablex purchased the property at the sheriff's sale, Crablex, under the Torrens act, petitioned the district court to direct the registrar of titles to enter a new certificate of title for the CRLC foreclosure property free and clear of specified encumbrances that were registered after December 13, 1971, the date on which the CRLC mortgage was registered. Based on the examiner of title's assessment of Crablex's petition, the district court issued an order to show cause why the proposed certificate of title should not be entered. The order was sent to forty-six parties. The dispute that underlies this appeal involves five parties' responses to the order to show cause: MCDA; Riverside Plaza; Capmark Finance, Inc. (successor in interest to Mellon Mortgage Company); City of Minneapolis; and Cedar Cultural Center. Each of these parties claims interests in registered easements that would be omitted in the new 3

certificate of title. Crablex and the five responding parties filed cross-motions for summary judgment in December 2006. The district court denied Crablex's motion and granted the motions of the five responding parties, determining that the easements were valid, in full force and effect, and would continue to encumber the property. Crablex appealed the district court's summary judgment in March 2008, and oral arguments were scheduled for November 2008. Two weeks before the scheduled

arguments, counsel for Crablex sent a letter to both Crablex and Fine Associates stating that, unless Crablex clarified how it wished to proceed in the appeal, counsel would withdraw from representation of Crablex. Fine Associates responded by filing an

emergency motion to substitute parties and attorneys. The next day the attorneys for Crablex filed a notice withdrawing as counsel. We granted Fine Associates' emergency motion "to the extent it [sought] to preserve Fine Associate[s]' interest in the property and its attendant right to protect that interest on appeal," thereby permitting counsel for Fine Associates to participate in the oral argument. Crablex did not participate in oral argument. ISSUES I. II. What is the status of Fine Associates in this litigation? Did the district court err when it granted the respondents' motions for summary judgment?

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ANALYSIS I In permitting Fine Associates to participate in oral argument, we construed their emergency party-substitution motion as a motion to intervene. Because substitution results in the elimination of a party to the action, it is appropriate only when the record establishes that the party that would be eliminated can no longer claim any interest in the lawsuit. Walker v. Sanders, 103 Minn. 124, 127, 114 N.W. 649, 650 (1908). The record indicates that Crablex has a continuing interest in the property, and, therefore, we decline to substitute Fine Associates for Crablex in the litigation. Fine Associates may, however, protect its interests in the property as an intervenor. See Jacobs v. Jacobs, 227 Minn. 451, 456, 35 N.W.2d 611, 615 (1949) (stating that if party to be eliminated "retains any substantial interest . . . or may become liable to the [party seeking substitution] if the action fails, intervention . . . , and not substitution, is the proper remedy"). The Minnesota Rules of Civil Procedure govern intervention of right in district court proceedings. Under rule 24.01, a nonparty is entitled to intervene if it (1) makes a timely application; (2) has an interest relating to the property or transaction that is the subject of the action; (3) demonstrates that the disposition of the action may as a practical matter impair or impede the party's ability to protect that interest; and (4) shows that it is not adequately represented by the existing parties. Minn. R. Civ. P. 24.01; Minneapolis Star & Tribune Co. v. Schumacher, 392

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N.W.2d 197, 207 (Minn. 1986). Minnesota has a "policy of encouraging all legitimate interventions." Costley v. Caromin House, Inc., 313 N.W.2d 21, 28 (Minn. 1981). The requirements of Minn. R. Civ. P. 24.01 provide guidance for appellate intervention, and Fine Associates meets each of the four intervention requirements. It satisfies the first requirement because it promptly moved for inclusion in the litigation upon learning of Crablex's potential withdrawal and because it essentially seeks rulings only on the merits of Crablex's appeal and, therefore, its intervention will not unduly delay or prejudice the rights of the other parties. See Brakke v. Beardsley, 279 N.W.2d 798, 801 (Minn. 1979) (stating that, although posttrial motions to intervene are not viewed favorably, they are not prohibited); Engelrup v. Potter, 302 Minn. 157, 165-66, 224 N.W.2d 484, 488-89 (1974) (noting that timeliness is determined on case-by-case basis and depends in part on whether existing parties will be prejudiced). It has an interest in the CRLC foreclosure property evidenced by its purchase agreement. See Stiernagle v. County of Waseca, 511 N.W.2d 4, 5 (Minn. 1994) (recognizing that binding contract for sale of real estate vests equitable title in purchaser). The disposition of this action affects Fine Associates' ability to challenge easements encumbering the property. And the failure of Crablex to participate in oral argument demonstrates that Fine Associates' interest was not adequately represented by the existing parties. We, therefore, conclude that Fine Associates may intervene. Because Crablex, through its appellate brief, and Fine Associates, in its intervention, raise the same issues and seek to protect the same property interest, we refer to them collectively as Crablex.

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II "On appeal from summary judgment, we determine whether there are any genuine issues of material fact and whether a party is entitled to judgment as a matter of law." Yang v. Voyagaire Houseboats, Inc., 701 N.W.2d 783, 788 (Minn. 2005). In assessing the evidence, we take the view most favorable to the party against whom judgment was granted. Motorsports Racing Plus, Inc. v. Arctic Cat Sales, Inc., 666 N.W.2d 320, 323 n.1 (Minn. 2003). But, if the nonmoving party fails to raise a genuine issue of fact on any element essential to establishing its case, summary judgment is appropriate. Lubbers v. Anderson, 539 N.W.2d 398, 401 (Minn. 1995). When the material facts are not in dispute, we review the district court's application of law de novo. In re Collier, 726 N.W.2d 799, 803 (Minn. 2007). The summary judgment in this case was granted in a proceeding under the Torrens act. The Torrens act establishes recording requirements so that interested

parties can easily determine the status of title, id. at 804, and provides for proceedings in the nature of a quiet title action. 25 Eileen M. Roberts, Minnesota Practice

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