## United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 07-2520

___________ Kevin Bores; Jennifer Huber; * Christopher McCormick; Blue Earth * Enterprises, Inc.; Mid America Pizza, * LLC; Rising Dough, Inc.; RJ Inc.; * Galleons Inc.; J Triple T, Inc.; FBN, * Inc.; Try Our pizza Inc.; M&M Pizza, * Appeal from the United States * District Court for the District of Plaintiffs - Appellees, * Minnesota.
* v. *
* Domino's Pizza, LLC, *
* Defendant - Appellant. *

___________ Submitted: March 12, 2008 Filed: June 20, 2008

___________ Before BYE, SMITH, and COLLOTON, Circuit Judges.

___________ BYE, Circuit Judge. Domino's Pizza, LLC, appeals the districtcourt's grant of summary judgment holding Domino's may not require franchisees to purchase Domino's custom-designed, integrated computer system. We reverse.-2- I

Domino's is a national pizza franchise. The plaintiffs are owners of various Domino's franchises located in Minnesota, Maine, Missouri, and Ohio. When they became Domino's franchisees, the plainti ffs executed Domino's Standard Franchise Agreement. Of relevance here is Section 8.2, which provides:

We will provide you with specifications for pizza, other authorized food and beverage preparatio n, dispensing, storage and display equipment, delivery and related motor vehicles, other equipment, fixtures, furniture, computer hardware and software , exterior and interior signs and decorating required by the Store. You may purchase items meeting our specifications from any source

. (Emphasis supplied). The present dispute concerns Domi no's PULSE system, a "proprietary, comprehensive computer syst em created specifically for Domino's Pizza stores" which "allows better communication, service, . . . information gathering and reporting, and coordination" among Domino's United States stores. Domino's created PULSE in the 1990s and began installing it in corporate stores in 2001. It has since advised all franchisees they must purchase and install PULSE by June 30, 2008. PULSE computer hardware can only be purchasedfrom IBM, and PULSE computer software can only be purchased from Domino's.

Plaintiffs argue Domino's mandated the purchase and use of its PULSE system solely to generate additiona l revenue from franchisees. Plaintiffs have refused to install PULSE, arguing under Section 8.2 of the franchise agreements Domino's must provide the "specifications" for PULSE and allow them to purchase computer hardware and software meeting those sp ecifications "from any source," not solely from Domino's.1 Plaintiffs have not cross-appealed the dismissal of their other claims and the only claim before us on appeal is the contract claim.
-3- The dispute over PULSE culminated in pl aintiffs filing this litigation, alleging: 1) breach of contract; 2) fraud; 3) neglig ent misrepresentation; 4) breach of the implied covenant of good faith and fair dealing; 5) violation of the Minnesota Franchise Act; and 6) promissory estoppel. Domino's counterclaimed for breach of contract and indemnification and sought declaratory relief allowing it to require franchisees to purchase and install the PULSE system.

Plaintiffs moved for summary judgmen t and Domino's moved for dismissal of plaintiffs' claims. The distri ct court granted Domino's motion on five of plaintiffs' six claims, but granted plaintiffs' motion fo r summary judgment on the claim for breach of contract. 1 The court concluded the franchise agreements did not allow Domino's to require franchisees to purchase the PU LSE system. On appeal, Domino's argues the district court misinterpreted the pl ain language of the franchise agreements.

II

We review a grant of summary judgmen t de novo, applying the same standard as the district court. Jaur equi v. Carter Mfg. Co., Inc. , 173 F.3d 1076, 1085 (8th Cir. 1999). Summary judgment is proper if there ex ists no genuine issue as to any material fact and the moving party is entitled to judgm ent as a matter of law. Fed. R. Civ. P. 56(c). When ruling on a summary judgment motion, a court must view the evidence "in the light most favorable to the nonmovi ng party." Dush v. Appleton Elec. Co. , 124 F.3d 957, 962-63 (8th Cir. 1997). Howe ver, a "nonmovant must present more than a scintilla of evidence and must adva nce specific facts to create a genuine issue of material fact for trial." F.D.I.C. v. Bell , 106 F.3d 258, 263 (8th Cir. 1997).-4- This diversity action is governed by st ate substantive law, Erie R.R. Co. v. Tompkins , 304 U.S. 64, 78 (1938), and we apply the law of Minnesota, Maine, Missouri, and Ohio, respectively, to the breach of contract claims.

The interpretation of an unambiguous contract is a matter for the court. Travertine Corp. v. Lexington-Silverwood , 683 N.W.2d 267, 271 (Minn. 2004); Hawkes v. Commercial Union Ins. Co. , 764 A.2d 258, 266-67 (Me. 2001); J.E. Hathman, Inc. v. Sigma Alpha Epsilon Club , 491 S.W.2d 261, 264 (Mo. 1973); Saunders v. Mortensen , 801 N.E.2d 452, 454 (Ohio 2004). When interpreting a contract, the goal is to divine the parties' intent. Travertine , 683 N.W.2d at 271; Apgar v. Commercial Union Ins. Co. , 683 A.2d 497, 500 (Me. 1996); J.E. Hathman , 491 S.W.2d at 264; Saunders , 801 N.E.2d at 454. If a co ntract is unambiguous, the parties' intent is manifest from the terms of the contract itself. Travertine , 683 N.W.2d at 271; Apgar , 683 A.2d at 500-01; J.E. Hathman , 491 S.W.2d at 264; Saunders , 801 N.E.2d at 454. The district court found the language of the franchise agreements unambiguous. On appeal, the parties agr ee but advance different interpretations of Section 8.2. See Bank Midwest v. Lipetzky , 674 N.W.2d 176, 179 (Minn. 2004) (holding mere disagreement over the inte rpretation of contract language does not render the contract ambiguous); M oody v. State Liquor & Lottery Comm. , 843 A.2d 43, 49 (Me. 2004) ("Language is ambiguous when 'it is reasonablysusceptible to different interpretations.'") (emphasi s supplied); Robbins v. McDonnell Douglas Corp. , 27 S.W.3d 491, 496 (Mo. Ct. App. 2000) ("An ambiguity does not exist merely because the parties dispute the meaning of the contract."); Amd ee, Inc. v. Jacobson , No. 52800, 1987 WL 17914, *4 (Ohi o Ct. App. October 1, 1987) (unpublished) ("In deciding whether more than one reasona ble interpretation renders the language ambiguous, the court rules whether each propos ed interpretation is reasonable.").

Section 8.2 provides, in relevant part: " We will provide you with specifications for

. . . computer hardware and software . . . . You may purchase items meeting our specifications from any source ." (Emphasis supplied). Th e district court, relying on-5- a partial dictionary definition of "speci fication," concluded Do mino's was required to provide franchisees with the information n ecessary to guide them through the process of constructing a system comparable to Domino's PULSE computer system, and could not specify they purchase the PULSE system. The district court held specifications referred to the component parts and technol ogy necessary to construct a product, e.g., a computer system and computer software pr ogram, and not to a finished product, i.e., Domino's PULSE system. In other words, the franchise agreement only allowed Domino's to mandate a comparable computer system, not a specifi c computer system.

In addition, the district court noted S ection 8.2 permitted franchisees to obtain the specified computer hardware and software"from any source." It concluded "from any source" only had meaning if the sp ecified items could be obtained from multiple sources. Because the computer hardware was only available from IBM, and the PULSE software only from Domino's, the district court held the agreement had to be interpreted as allowing franchisees the ability to construct a comparable system using materials and technology available from multiple sources.

Domino's argues the district court relie d on an unduly restrictive interpretation of specification. According to Domino's, specification refers not only to a plan or written description embodying the manner a nd process of making, constructing, compounding, and using an item, but also to "[a] single item or article that has been specified." Applying this broader de finition, Domino's argues the franchise agreements allow it to speci fy a computer system capable of performing specific functions or to specify a single computer syst em – the PULSE system. Domino's further argues its interpretation of specifi cation is not affected by language allowing franchisees to obtain specified items "from any source." It cont ends any source does not mean the items have to be available from multiple sources. Instead, the American Heritage Dictionary define s "any" to include "[o]ne, some, every, or all without specification." American Heritage Dicti onary 81 (4th ed. 2000). Thus, any source can mean only one source.-6- We conclude the definition of specification applied by the district court was unnecessarily narrow. The American Herita ge Dictionary defines specification as:

1. The act of specifying. 2.a. sp ecifications. A detailed exact statement of particulars, especially a statemen t prescribing materials, dimensions, and quality of work for something to be built, installed, or manufactured. b. A single item or article that has been specified. 3. An exact written description of an invention by an applicant for a patent.

Id. at 1669.

The Webster's Unabridged Dictionary definition of specification includes:

n. 1. the act of specifying. 2. Usually, specifications. a detailed description or assessment of requireme nts, dimensions, materials, etc., as of a proposed building, machine, bridge, etc. 3. a particular item, aspect, calculation, etc., in such a de scription. 4. something specified, as in a bill of particulars; a speci fied particular, item, or article. Webster's Unabridged Dictionary 1832 (2d ed. 1997).

Webster's Third International Dictionary defines specification, in part, as:

4: a detailed, precise, explicit presentation . . . of something or a plan or proposal for something: as a: a written statement containing a minute description or enumerati on of particulars . . . : also : a single article, item, or particular or an allegation of a specific act . . . .

Webster's Third International Dictiona ry 2187 (1986) (emphasis in original). Plaintiffs contend specification, as usedin the franchise agreements, can only mean the list of the parts and technol ogy from which Domino's PULSE system is constructed. Applying the above definiti ons, however, it is apparent the plain and ordinary meaning of specification includes both a list of the component parts-7- necessary to construct or describe an item, as well as a single, finished, product. For example, specification encompasses a de tailed description of the particular characteristics desired in an automobile or simply identifying a particular make and model; in each instance specifications are provi ded. Thus, we conclude the plaintiffs' arguments unreasonably focus on only one of the commonly understood definitions of specification; nothing in the franchi se agreements limits the meaning of specification to a single usage. Applying the commonly understood definition of specification, the agreements permit Domi no's to specify a computer system with comparable capabilities or the PULSE system.

We further conclude Section 8.2's la nguage permitting franchisees to obtain the specified computer software and hardware"from any source" does not change the meaning of specification. Plaintiffs argue "any" means multiple sources, and interpreting specification to include items only available from one source would render "from any source" meaningless. Wedisagree. From any source is necessarily limited to available sources, and, as Domino's points out, the definition of "any" includes "one, some, every or all." Ameri can Heritage Dictionary 81 (4th ed. 2000). Thus, the franchise agreements merely a llow plaintiffs to purchase the specified computer system – PULSE – from any available sources, be they one or many. Further, plaintiffs' assertion they are not permitted to purchase the PULSE system from multiple sources is factually unsupported. Domino's is the most likely source from which the PULSE system could be obtai ned, but not necessarily the only source. For example, the franchise agreement w ould not preclude franchisees from obtaining a used PULSE system from another franchisee.-8- III

Accordingly, we reverse the district c ourt's grant of summary judgment in favor of plaintiffs and remand with instructions to grant Domino's motion to dismiss and enter judgment in its favor.

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