United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 99-1813

___________

Children's Broadcasting Corporation, *

a Minnesota corporation, *

*

Plaintiff - Appellant, *

* Appeal from the United States

v. * District Court for the

* District of Minnesota.

The Walt Disney Company, a Delaware *

corporation; ABC Radio Networks, *

Inc., a Delaware corporation, *

*

Defendants - Appellees. *

___________

Submitted: February 16, 2000

Filed: April 10, 2001

___________

Before McMILLIAN, LAY, and JOHN R. GIBSON, Circuit Judges.

___________

JOHN R. GIBSON, Circuit Judge.

Children's Broadcasting Corporation appeals from an order of the district court

that set aside a jury verdict for Children's on its claims for breach of contract and

misappropriation of trade secrets against ABC Radio Networks, Inc. and The Walt

Disney Company. The court concluded that Children's had not presented sufficient

evidence of causation and damages. In addition to granting judgment as a matter of law

for ABC Radio and Disney, the district court granted their alternative motion for a new
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trial. We reverse the grant of judgment as a matter of law and affirm the grant of a new

trial limited to the issue of damages. We also affirm the district court's pre-trial grant

of summary judgment against Children's on four claims.

In the early 1990s, Children's created Radio AAHS, a 24-hour radio format

aimed at children age twelve and under and their parents. Also during that time period,

ABC Radio considered starting a children's radio network and approached Disney with

a proposal. At that time, Disney decided not to go forward.

By 1995, Radio AAHS was reaching around thirty percent of the United States

through company-owned and affiliated radio stations. Early that year, Children's

solicited ABC Radio to become its strategic partner, and executives from the two

companies discussed options. ABC Radio's plan to invest in Children's stalled after

Disney announced in July that it was purchasing Capital Cities/ABC, Inc., the parent

corporation of ABC Radio. Bob Callahan, the president of ABC Radio, informed

Christopher Dahl, the president of Children's, that ABC Radio would not be investing

in other companies pending the outcome of the Disney purchase. After waiting a while,

Dahl approached ABC Radio to see if the two companies could work out a deal.

In November 1995, Children's and ABC Radio entered into a letter agreement

under which ABC Radio agreed to provide certain services for Radio AAHS, including

advertising sales, affiliate development, and consulting. Children's agreed to pay ABC

Radio $25,000 per month for services plus commissions on advertising sales.

Children's also gave ABC Radio a warrant to buy Children's stock. Although ABC

Radio agreed that it would not represent any third-party children's radio formats

without Children's consent, the contract specifically provided that ABC Radio could

represent "any format developed by ABC, its parent, subsidiary or affiliated companies,

as constituted now and in the future." Both parties agreed to keep information

developed during the term of the agreement confidential and to use this information
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only for the purposes of the agreement. The agreement was terminable at will upon

ninety days written notice by either party.

Around the same time ABC Radio entered into the agreement, it was considering

entering the children's radio field with Disney. In January 1996, the two companies had

not yet decided to enter the market, but they continued to make plans for a network

called Radio Disney throughout the first half of 1996. Disney acquired Capital

Cities/ABC, Inc. on February 6, 1996.

On June 21, 1996, ABC Radio executives David Kantor and Scott McCarthy

met with executives of Children's in Minneapolis. Kantor informed them that ABC

Radio was considering developing its own children's radio network, and he invited

Children's to become a "superaffiliate," carrying Radio Disney programming instead

of Radio AAHS programming. Dahl rejected this offer.

On June 27, Callahan sent a memo to Michael Eisner and Michael Ovitz

recommending the development of a children's radio network, beginning with a fourmonth test period of Radio Disney in three markets. By letter dated July 25, ABC

Radio notified Children's that it was terminating the contract. The ninety-day notice

period expired on October 24, and the Radio Disney test began on November 18.

Children's continued to broadcast Radio AAHS until January 1998.

Children's brought this suit on September 26, 1996, alleging a variety of claims,

among them fraud, breach of contract, misappropriation of trade secrets, breach of

fiduciary duties, and negligent misrepresentation. Children's moved for leave to amend

its complaint to seek punitive damages; the district court denied this motion. After

discovery, ABC Radio and Disney moved for summary judgment, and the district court

granted this motion on all but three claims. These claims (breach of contract for failure

to use reasonable efforts to sell advertising and develop affiliates, breach of the
1The verdict form included the question of whether ABC Radio's breach was

material because Children's owed $91,000 under the contract. If the jury found the

breach to be material, Children's performance (and thus the payment) would be

excused.

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contractual duty of confidentiality, and misappropriation of trade secrets) were tried to

a jury in a three-week-long trial.

The jury found that ABC Radio breached the contract with respect to advertising

sales and confidentiality and awarded $20 million to Children's for this breach. The

jury rejected Children's claim that ABC Radio breached the affiliate development

provision of the contract. The jury also found that two of the seven items submitted by

Children's as trade secrets were valid trade secrets: a list of Children's advertisers sold

and proposed and their rates and Children's techniques and processes for Radio AAHS

programming. The jury found that ABC Radio and Disney had misappropriated only

the advertiser list, awarding Children's $10 million from ABC Radio and $10 million

from Disney on this claim. The jury determined that ABC Radio's breach of contract

was not a material breach.1

ABC Radio and Disney moved for judgment as a matter of law or, in the

alternative, a new trial. The district court found that the evidence supported the jury's

finding that ABC Radio breached the contract and that ABC Radio and Disney

misappropriated the advertiser list, but concluded that Children's had not presented

sufficient evidence of causation or damages.

In reaching its conclusion about causation, the district court discussed primarily

the testimony of Stephen Willis, one of Children's experts. It concluded that Willis's

testimony was nothing more than speculation; that it lacked any credible analysis to

support his causation theory; and that no facts supported his conclusions. The court

found that Children's offered no evidence that any particular breach or misappropriation
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was the direct cause of a specific amount of damages. In addition, according to the

district court, Willis failed to address other factors that may have limited the success

of Radio AAHS.

The district court further found that Children's failed to present reliable evidence

of damages. It concluded that Willis's testimony that Children's was damaged in the

amount of $177 million was based on unreliable financial projections that were created

with an assumption that Children's would have a long-term relationship with ABC

Radio and that did not take into account the fact that Radio AAHS had to compete with

Radio Disney. Thus, the court found that Willis's damages projections went so far

beyond realistic optimism as to be "fairy-tale-like." The jury had no other evidence on

which to base a damage award, according to the district court, and it was forced to

resort to speculation and conjecture. The court therefore granted judgment as a matter

of law to ABC Radio and Disney.

The district court also granted a conditional new trial on the issues of causation

and damages. The district court stated that the reasoning supporting its grant of

judgment as a matter of law applied to the motion for new trial, that the findings on

causation and damages were unsupported by the evidence, and that the verdict

conflicted with the weight of the evidence. It also stated that it had erred by allowing

Willis's testimony to stand and that this testimony had tainted the trial, thus requiring

a new trial.

I.

We review a grant of judgment as a matter of law de novo, viewing the evidence

in the light most favorable to the nonmoving party while giving that party the benefit

of all reasonable inferences. Van Steenburgh v. Rival Co., 171 F.3d 1155, 1158 (8th

Cir. 1999). Judgment as a matter of law is warranted only when all the evidence points

in one direction and no reasonable interpretations support the jury's verdict. Mears v.
2The verdict form, the district court's order, and the parties' briefs segregate

causation from damages on both the contract claim and the trade secret claim. Our

analysis mirrors this segregation.

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Nationwide Mut. Ins. Co., 91 F.3d 1118, 1122 (8th Cir. 1996); see also Fed. R. Civ.

P. 50(a)(1). 

The district court upheld the jury's findings of breach and misappropriation, and

ABC Radio and Disney do not appeal these determinations. We agree that Children's

presented evidence from which a reasonable jury could conclude that ABC Radio

breached its contractual duties with respect to advertising sales and confidentiality and

that ABC Radio and Disney misappropriated a list of Children's advertisers. We

conclude the district court erred, however, by determining that ABC Radio and Disney

were entitled to judgment as a matter of law on the issues of causation and damages.2

A.

Children's presented evidence that ABC Radio's breach of the contract caused

damage. Dahl testified that Children's was relying on ABC Radio to sell advertising.

Willis testified that ABC Radio's failure to exercise reasonable efforts in advertising

sales led to a decline in Children's revenues. Lynne Gross, an expert who testified on

Children's behalf, concluded that if ABC Radio failed to perform under the contract,

as it related to both affiliate development and advertising sales, Children's would be

damaged.

Gross testified regarding her understanding of the "first mover" advantage: when

a business is the first of its kind and it gets to a certain level, competitors will have a

difficult time unseating it. Her opinion was that Children's had the potential to obtain

such an advantage. A memo written by ABC Radio's Bart Catalane to Callahan and

Kantor supports this idea: "This market will only support one major player--it's not big
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enough to support two--even Disney. The people who get there first and in the biggest

way will win. Radio Aahs has a huge head start." Gross also testified that ABC Radio

and Disney were able to accelerate their entry into the market by using information,

particularly information about advertising and marketing, they obtained from Children's.

ABC Radio documents show that its executives believed that it could use the

deal with Children's to "take control of how we enter or CBC exits the market." An

ABC Radio management review of Radio AAHS/Children's prepared by McCarthy

discussed the following defensive strategy: "Keep someone else from buying or

aligning with CBC. Could be largely accomplished with existing CBC/ABC

agreement."

Children's also presented evidence that the misappropriation of its list of

advertisers and rates caused damage. Gross testified that information about advertising

rates actually charged to a customer was valuable because a competitor could then

undersell by a small amount and get the advertiser. The ABC Radio management

review prepared by McCarthy discussed Radio AAHS's advertisers: "Several accounts

have been developed into significant dollars. However, competing venture could target

same accounts with same pitch." Finally, a planning document for Radio Disney

asserted that "Radio Disney network spots will be priced aggressively versus AAHS

(Radio Disney's spot rates are not projected to reach Radio AAHS'[s] current spot rates

until 1999)."

Viewing this evidence in the light most favorable to Children's, we conclude that

it supports the jury's finding that the breach of contract and the misappropriation of the

advertiser list caused harm to Children's. ABC Radio and Disney were not entitled to

judgment as a matter of law on causation.
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B.

Children's presented evidence that supports the jury's award of damages. Under

Minnesota law, damages for breach of contract must be proved to a reasonable

certainty, and a party cannot recover speculative, remote, or conjectural damages.

Leoni v. Bemis Co., 255 N.W.2d 824, 826 (Minn. 1977); see also Cardinal Consulting

Co. v. Circo Resorts, Inc., 297 N.W.2d 260, 266-67 (Minn. 1980). "Once the fact of

loss has been shown, the difficulty of proving its amount will not preclude recovery so

long as there is proof of a reasonable basis upon which to approximate the amount."

Leoni, 255 N.W.2d at 826. Damages for misappropriation of a trade secret "can

include both the actual loss caused by misappropriation and the unjust enrichment

caused by misappropriation that is not taken into account in computing actual loss."

Minn. Stat. § 325C.03(a) (1998).

The district court found that the only damages evidence offered by Children's

was Willis's testimony. To the contrary, the jury had a variety of evidence to consider.

Willis himself testified that if there were reasons for the decline in Children's value

other than the unlawful conduct of Disney and ABC Radio, adjustments would have

to be made to his $177 million calculation. Dahl testified that the market value of

Children's at one time was close to $100 million and that ABC Radio valued Children's

in the $20 million range. McCarthy stated in the ABC Radio management review that

it would cost between $60 million and $90 million to acquire Children's. There were

dozens of exhibits in the record before the jury that included Children's revenues and

losses (both actual and projected), valuations of Children's assets, and actual and

potential advertising sales. The jury's award does not have to match any particular

figure in the evidence as long as the award "is within the mathematical limitations

established by the various witnesses and is otherwise reasonably supported by the

evidence as a whole." Carroll v. Pratt, 76 N.W.2d 693, 697 (Minn. 1956).
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The Minnesota Court of Appeals upheld a jury award of $7,000 where the only

damages evidence presented placed the amount at $10,500. Fudally v. Ching Johnson

Builders, Inc., 360 N.W.2d 436 (Minn. Ct. App. 1985). The defendant argued that the

verdict was not supported by the evidence because nothing specific supported the jury's

calculation. Id. at 438-39. The court held that the award "was within the parameters

established by the evidence" and that the specificity urged by the defendant was

unnecessary to sustain the award. Id. at 439. 

The jury was entitled to sort through the evidence presented at trial and to arrive

at what it considered to be the damages caused by the conduct it found to be wrongful.

In short, there was evidence from which the jury could approximate the amount of

damages sustained by Children's. ABC Radio and Disney were not entitled to

judgment as a matter of law on damages.

II.

We review a conditional grant of a new trial for abuse of discretion. Dominium

Mgmt. Servs., Inc. v. Nationwide Hous. Group, 195 F.3d 358, 366 (8th Cir. 1999). A

motion for a new trial may be

bottomed on the claim that the verdict is against the weight of the

evidence, that the damages are excessive, or that, for other reasons, the

trial was not fair to the party moving; and may raise questions of law

arising out of alleged substantial errors in admission or rejection of

evidence or instructions to the jury.

Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251 (1940). The district court

must articulate its reasons for granting a new trial to permit meaningful review of its

decision. Dominium, 195 F.3d at 366; see also Fed. R. Civ. P. 50(c)(1). "When

evidence is erroneously admitted or excluded or where the trial court has erred in the

instructions to the jury, the trial court is considered in a better position to correct a
3Before trial, ABC Radio and Disney moved to exclude Willis's testimony under

Daubert, on the ground that it was unreliable speculation. The district court denied this

motion and overruled the majority of the various objections to Willis's testimony that

ABC Radio and Disney made at trial. Only when the district court considered the

motion for a new trial did it conclude that it should not have allowed Willis's testimony.

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manifest injustice in ruling on the motion for new trial." Fireman's Fund Ins. Co. v.

Aalco Wrecking Co., 466 F.2d 179, 186 (8th Cir. 1972).

Here, the district court gave two reasons for granting a new trial. First, it

concluded that "the jury's findings on causation and damages were unsupported by the

evidence presented at trial and the verdict conflicts with the weight of the evidence on

these issues." Second, it determined that it should have excluded or struck Willis's

testimony under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993),

and that this testimony "tainted" the trial by exposing the jury to an "exaggerated sum"

of damages.3

Had the district court actually excluded Willis's testimony, we would have

reviewed its decision for abuse of discretion. See General Elec. Co. v. Joiner, 522 U.S.

136, 138-39 (1997). "When evaluating the admissibility of expert testimony under

Federal Rule of Evidence 702, the district court must look to both the relevancy and the

reliability of the testimony." Blue Dane Simmental Corp. v. American Simmental

Ass'n, 178 F.3d 1035, 1040 (8th Cir. 1999). Here, the district court found that Willis's

testimony was unreliable, stating that it was "speculative and based solely on

conjecture."

Willis applied an uncontroversial accounting method called discounted cash flow

to determine what the value of Children's would have been in the absence of the alleged

wrongful conduct. He acknowledged, however, that he did not take into account the

announcement of Radio Disney as a competitor when drawing his conclusions. The
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agreement between Children's and ABC Radio did not include a non-compete clause,

and the establishment of Radio Disney cannot be considered wrongful conduct. The

existence of Radio Disney was relevant to Children's value, but Willis did not consider

it. Cf. Blue Dane, 178 F.3d at 1040-41 (where economist used typical method of

analysis, but did not consider all independent variables that could affect his conclusion,

district court did not abuse discretion by excluding testimony). 

Willis's testimony at trial was that any breach of contract, any use of confidential

information, or any misappropriation of any trade secret caused the exact same amount

of damage to Children's:

But as a result of my studies, it was my judgment that the damage

determination that I made and testified to earlier would be the same

regardless of whether some or all of this information was found to have

been used and, similarly, with respect to the efforts or lack of efforts

regarding the affiliates, the development or lack of development of

affiliates or revenues.

. . . .

[I]f any one of the items we've talked about--the failure to use reasonable

efforts regarding affiliates or the failure to achieve advertising sales or the

use of any piece or all of the confidential information, including the trade

secrets--were or were not a finding of liability, all you need is any one of

them and the damage calculation would be what my determination was.

The assertion that any or all of the alleged wrongful acts would have caused the same

outcome is dubious. Children's argues that, under Daubert, a court can review only the

methodology of the expert, not his or her conclusions. "But nothing in . . . Daubert .

. . requires a district court to admit opinion evidence that is connected to existing data

only by the ipse dixit of the expert. A court may conclude that there is simply too great

an analytical gap between the data and the opinion proffered." Joiner, 522 U.S. at 146.

Furthermore, Willis based his testimony on a report prepared with the assumption that

ABC Radio and Disney had engaged in a variety of wrongful conduct contained in the
4When a breaching party has the power to terminate a contract upon notice, the

general rule is that the calculation of damages is limited to the notice period. See

Western Oil & Fuel Co. v. Kemp, 245 F.2d 633, 638-42 (8th Cir. 1957); Pappas v.

Stark, 142 N.W. 1046, 1048 (Minn. 1913); 3 E. Allan Farnsworth, Farnsworth on

Contracts 150 (2d ed. 1998).

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original complaint. Only three counts from the original complaint survived summary

judgment, but Willis's damages theory remained the same. 

Willis failed to consider the effect of competition on Children's, his theory of

causation was questionable, and his testimony was based on a report prepared before

Children's claims were narrowed for trial. The district court did not abuse its discretion

by concluding that it should have excluded Willis's testimony.

The court found that a new trial was necessary because Willis's testimony tainted

the trial. When assessing the impact of improperly admitted evidence, the district court

is in the best position to measure the effect on the jury. See Neely v. Martin K. Eby

Constr. Co., 386 U.S. 317, 325 (1967) (trial judge has "first-hand knowledge of

witnesses, testimony, and issues" and a "'feel' for the overall case"); Fireman's Fund,

466 F.2d at 186. Cf. United States v. Wilkins, 139 F.3d 603, 604-05 (8th Cir. 1998)

(in criminal case, district court in best position to judge whether evidence regarding

dismissed charges tainted jury's consideration of another count). Even though the jury

did not award $177 million, the damages amount to which Willis testified, the jury's

award of $20 million to Children's for breach of a contract that was terminable at will

with ninety days notice suggests to us that Willis's testimony gave the jury an

unrealistic idea of the appropriate measure of damages.4 The district court's discussion

of Willis's testimony supports its grant of a new trial on the issue of damages, and we

affirm on that issue.
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The district court did not suggest, however, that Willis's testimony tainted the

causation findings. Although the court concluded that "the jury's findings on causation

. . . were unsupported by the evidence presented at trial" when articulating its first

reason for granting a new trial, our discussion in Section I of this opinion demonstrates

that evidence other than Willis's testimony supported a finding that the breach of

contract and the trade secret misappropriation caused some damage to Children's. On

numerous occasions, we have made clear that the district court has a duty to articulate

its reasons for overturning the jury's verdict when it grants a conditional motion for a

new trial on the ground that the verdict is against the weight of the evidence. E.g.,

Dominium, 195 F.3d at 366; White v. Pence, 961 F.2d 776, 781 (8th Cir. 1992). The

district court's summary conclusion that the verdict on causation conflicted with the

weight of the evidence is insufficient to support the grant of a new trial on this issue.

See Stafford v. Neurological Med., Inc., 811 F.2d 470, 474 (8th Cir. 1987).

III.

Children's asks us to reconsider several claims on which the district court granted

summary judgment before trial. We review a grant of summary judgment de novo,

viewing the evidence in the light most favorable to the non-moving party and upholding

summary judgment where there are no genuine issues of material fact and the moving

party is entitled to judgment as a matter of law. Wayne v. Genesis Med. Ctr., 140 F.3d

1145, 1147 (8th Cir. 1998) (per curiam); Fed. R. Civ. P. 56(c).

A.

Children's argues that the district court erred by granting summary judgment on

its negligent misrepresentation claim. A required element of this claim "is that the

alleged misrepresenter owes a duty of care to the person to whom they are providing

information." Smith v. Woodwind Homes, Inc., 605 N.W.2d 418, 424 (Minn. Ct. App.

2000). Under Minnesota law, no duty of care exists between sophisticated equals
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negotiating a business transaction unless the parties have a special relationship. Id. at

424-25;see also Safeco Ins. Co. of Am. v. Dain Bosworth Inc., 531 N.W.2d 867, 871-

72 (Minn. Ct. App. 1995). Because there is no evidence that ABC Radio and

Children's had a special relationship, ABC Radio owed no duty of care to Children's.

The claim for negligent misrepresentation necessarily fails.

B.

Children's argues that the district court erred by granting summary judgment on

its fraud claim. Under Minnesota law, the elements of fraud are the making of 

a false representation of a past or existing material fact, susceptible of

knowledge, knowing it to be false or without knowing whether it was true

or false, with the intention of inducing the person to whom it was made

to act in reliance upon it or under such circumstances that such person

was justified in so acting and was thereby deceived or induced to so act

to his damage.

Berryman v. Riegert, 175 N.W.2d 438, 442 (Minn. 1970).

Children's alleges that ABC Radio represented that it would enter the children's

radio market only with Children's and that Disney had no intention of entering the

market. The evidence cited by Children's to support its claim that someone at ABC

Radio made these representations is scant. At his deposition, Dahl testified that Kantor

said that ABC and Disney would not enter the children's radio market without

Children's. At trial, however, Dahl testified that Kantor never said that ABC and

Disney would not independently pursue children's radio. Dahl also testified that

Callahan said that ABC Radio wanted to try children's radio with Children's, "And if

it doesn't work with you, we're going to probably--not probably. I think he said we're

going to abandon our efforts." Dahl's deposition testimony calls this trial testimony into

question. At his deposition, he stated that he could not remember anyone other than
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Kantor assuring that ABC Radio and Disney would not enter the children's radio

market. Dahl's inconsistent testimony does not create a genuine issue of material fact.

This leaves only the testimony of Lance Riley, the in-house attorney for

Children's. At his deposition, he testified that a person from ABC Radio whom he

believed to be Kantor said that there would be no point in entering into the agreement

with Children's if ABC Radio intended to compete with Children's. Riley clarified that

no one at ABC Radio said that it would not compete after the term of the agreement.

We cannot conclude that this evidence sufficed to create a genuine issue on the first

element of a fraud claim: the making of a false representation.

Furthermore, even if the evidence supported Children's contentions that ABC

Radio represented that neither it nor Disney would enter the children's radio market,

Children's would not have been justified in relying on these representations. Fraud

must be proved with reference to the specific intelligence and experience of the party

alleging it. Murphy v. Country House, Inc., 240 N.W.2d 507, 512 (Minn. 1976). A

memo written by Jim Gilbertson of Children's indicates that Children's was well aware

that ABC Radio and Disney might enter the children's radio market. Also, there is no

indication that Children's actually relied on any such representations. At trial, Dahl was

asked why he considered it unlikely that Disney and ABC Radio would enter the

market without Children's, and he responded, "Well, number one, we had the contract

with ABC. And I regarded that as an extremely important document that would prevent

them from doing that." He did not say that someone represented that ABC Radio and

Disney would not enter the market. The agreement on which Dahl purported to rely

does not contain a non-compete clause. In fact, its language seems to contemplate that

ABC Radio or Disney, its future parent, might develop a children's radio format:

"Nothing herein shall be deemed to prevent ABC from representing or selling national

advertising time in connection with any format developed by ABC, its parent,

subsidiary or affiliated companies, as constituted now and in the future." (emphasis
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added.) Cf. Henvit v. Keller, 15 N.W.2d 780, 782 (Minn. 1944) (element of reliance

lacking where written stipulations of lease contradicted alleged representations). 

Children's further claims that ABC Radio's representations that it would keep

information confidential and use reasonable efforts to perform were fraudulent.

"[U]nder Minnesota law, a representation or expectation of future events is not

sufficient to support an action for fraud simply because the represented act or event did

or did not take place." Exeter Bancorporation, Inc. v. Kemper Sec. Group, Inc., 58

F.3d 1306, 1313 (8th Cir. 1995). A misrepresentation of a present intention to do

something in the future could constitute fraud if there is affirmative evidence that the

promisor had no intention of keeping the promise at the time it was made. Id. at 1312.

Because Children's offers no evidence that ABC Radio did not intend to perform when

it entered into the agreement, its allegations do not support a claim for fraud

independent of the breach of contract claim. 

Children's also alleges that ABC Radio failed to disclose several facts: its

discussions with Disney about creating a children's radio network, its intention to use

the contract as paid education, and its "self-serving" interpretation of the confidentiality

clause. "The general rule is that one party to a transaction has no duty to disclose

material facts to the other." L & H Airco, Inc. v. Rapistan Corp., 446 N.W.2d 372, 380

(Minn. 1989) (internal quotation omitted). A duty may exist when a fiduciary

relationship exists between the parties, when disclosure is necessary to clarify

information previously disclosed, or when one party has special knowledge of material

facts to which the other does not have access. Id. The third situation is the only one

that may apply here, and the Minnesota Supreme Court has "rarely addressed that

particular theory of fraud." Id.

Children's claim that ABC Radio should have disclosed its interpretation of the

confidentiality provision makes little sense. We see no support in Minnesota law for

imposing a duty on sophisticated parties negotiating a contract at arms' length to
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disclose their particular interpretations of its provisions. With regard to the remaining

two alleged nondisclosures, ABC Radio had no "special knowledge" that it should have

imparted to Children's. Children's was aware that ABC Radio and Disney might form

a competing network, and it was also aware that ABC Radio would learn about

children's radio through the agreement.

The district court did not err in granting summary judgment against Children's

on its fraud claim.

C.

Children's alleges that ABC Radio acted as its agent, that it had fiduciary duties

to Children's, and that it breached these duties. Although the existence of an agency

relationship is generally a question of fact, summary judgment may be appropriate if

the evidence is conclusive. Smith, 605 N.W.2d at 423. "[B]efore a court will impose

a legal obligation on a person to act like an agent, the plaintiff must first introduce

factual evidence that he sought this arrangement and that the alleged agent consented

to it." PMH Props. v. Nichols, 263 N.W.2d 799, 803 (Minn. 1978). See also Nerlund

v. Schiavone, 84 N.W.2d 61, 65 (Minn. 1957) ("No one can become the agent of

another without the consent, either express or implied, of the principal."). Neither

Children's nor ABC Radio consented to a principal-agent relationship. In fact, they

expressly disclaimed any such relationship in their contract:

Nothing contained in this Agreement shall create or be deemed to create

any association, partnership, joint venture or the relationship of principal

and agent or employer and employee between the parties hereto, it being

understood that ABC and CBC shall perform all of their obligations

hereunder as fully independent parties.

This disclaimer binds Children's and precludes its claim for breach of fiduciary duties.

Cf. Board of Trade v. Hammond Elevator Co., 198 U.S. 424, 437 (1905) (implying that
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express disclaimer of principal-agent relationship would be decisive between the parties

involved in the disclaimer); Norsul Oil & Mining Co. v. Texaco, Inc., 703 F. Supp.

1520, 1545-46 (S.D. Fla. 1988); Wardley Corp. v. Welsh, 962 P.2d 86, 89 (Utah Ct.

App. 1998). Summary judgment on this claim was appropriate.

D.

Children's argues that the district court erred by granting summary judgment on

its claim that ABC Radio breached the contract's research provision. This provision

provides: "Upon request, ABC shall assist CBC in working with Arbitron, Radar and

other research companies to refine and further develop measurement methodologies for

CBC's audience." William McClenaghan, the person at ABC Radio who was

responsible for responding to Children's research requests, stated in his affidavit: "CBC

never made any requests to me to assist CBC in working with Arbitron, Radar or other

research companies to refine and further develop measurement methodologies for

CBC's audience."

Children's directs us to McClenaghan's deposition testimony, where he stated,

"AAHS wanted to go out and do more audience surveys, and I said that is not the way

to go." Children's also cites Gilbertson's deposition testimony, where he was asked,

"[D]o you know if anybody at CBC ever made a request to ABC to work with any of

the research companies to refine and further develop measurement methodologies for

CBC's audience?" Gilbertson responded, "Again, I just don't recall if we asked in that

context. It's possible. . . . I don't recall. I know I asked Mr. McClenaghan basically

for his aid in research." Gilbertson was then asked, "Did you ask him to assist you to

refine or develop measurement methodologies for CBC's audience?" His response was,

"I don't recall whether we did or not. I just don't recall if we asked that specific

question." This testimony does not raise a genuine issue regarding whether Children's

asked ABC Radio to assist it in the specific way contemplated by the contractual
5Our opinion should not be read to imply that the conduct that the jury found

wrongful caused any particular type of damage to Children's or that Children's is

entitled to any particular amount of damages.

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provision. Without such a request, there could be no breach. The district court did not

err by granting summary judgment against Children's on this claim.

IV.

Finally, Children's argues that the district court erred by barring it from seeking

punitive damages on its commercial tort claims. In light of our disposition of these

claims in Section III, we need not address this argument. We reverse the district court's

grant of judgment as a matter of law and remand the case for a new trial limited to

damages.5

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.