## Facts

- The Gershmans sold a condominium to Summit House Co. under a contract for deed requiring a balloon payment by October 31, 1987.
- After condominium values declined, Summit sued on September 10, 1987, seeking to terminate the contract.
- The Gershmans counterclaimed for specific performance and obtained a money judgment of $107,605.25, with conveyance ordered upon payment of that amount.
- Summit did not pay the judgment.
- The Gershmans executed on Summit’s vendee’s interest in the contract for deed and bought that interest at a sheriff’s sale on February 22, 1991, for $73,130.18.
- Summit did not bid at the sale and did not redeem during the one-year statutory redemption period.
- After the redemption period expired, Summit moved for an order declaring the judgment satisfied based on the execution sale.

## Issues

1. Whether the sheriff’s execution sale of the debtor’s contract-for-deed vendee’s interest, purchased by the judgment creditors, fully satisfied the prior money judgment or satisfied it only to the extent of the sale proceeds, leaving a deficiency.
2. Whether attorney fees were properly awarded under Minn. Stat. § 549.21, subd. 2, based on a finding that Summit’s motion was frivolous and intended to harass.

## Decision

- The court affirmed the denial of Summit’s motion to declare the judgment satisfied.
- The court held the sheriff’s sale was an execution on a money judgment and reduced the judgment only by the sale price; Summit remained liable for the deficiency.
- The court affirmed the determination that the execution sale did not cancel the contract for deed or otherwise eliminate personal liability beyond the value realized at sale.
- The court affirmed the award of $1,875 in attorney fees under Minn. Stat. § 549.21, subd. 2, finding no abuse of discretion.

## Legal Principles

- An execution sale enforcing a money judgment satisfies the judgment only in the amount of the proceeds realized at the sale; a creditor’s purchase of the debtor’s property interest at execution does not, by itself, discharge the remaining balance.
- An execution sale of a contract-for-deed vendee’s interest is not treated as a statutory contract cancellation; absent an applicable cancellation or similar statutory mechanism, deficiency liability remains.
- A debtor’s failure to bid at an execution sale or to exercise a statutory right of redemption supports enforcement of the remaining deficiency after the sale.
- A judgment debtor is entitled to a formal satisfaction only upon full satisfaction of the judgment amount as provided by statute.
- Under Minn. Stat. § 549.21, subd. 2, attorney fees may be awarded for frivolous claims or litigation pursued to harass; appellate review is for abuse of discretion.

## Conclusion

The court held that the Gershmans’ purchase of Summit’s vendee’s interest at a sheriff’s execution sale reduced the money judgment only by the sale proceeds and did not eliminate the remaining deficiency, and it upheld attorney fees because Summit’s satisfaction motion lacked a reasonable basis and was found to be frivolous and harassing.


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