Source: http://injurylawstpaul.com/messages/368.htm
Timestamp: 2019-04-19 08:59:06+00:00

Document:
Court of Appeals Page, J.
Took no part, Dietzen, J.
1. An award of attorney fees under Minn. Stat. � 80C.17, subd. 3 (2006), requires that the franchisee recover some relief under the Minnesota Franchise Act, Minn. Stat. ch. 80C (2006).
2. When there is a reasonable basis on which the jury‟s special verdict answers can be reconciled with each other, this court will not disturb the verdict.
O P I N I O N PAGE, Justice.
Appellants Susan Dunn, Richard Newstrom, and Twin City Home Juice Company1 (collectively, Twin City) sued National Beverage Corp. (National Beverage) and DTM Distributing, Inc. (DTM), alleging, among other things, a violation of the Minnesota Franchise Act, Minn. Stat. ch. 80C (2006), and breach of contract. The jury found that National Beverage breached the franchise agreement between the parties and awarded 8,000 in damages for the breach. The jury also found that National Beverage violated the franchise act but awarded no damages for the violation. Twin City filed a post-trial motion for attorney fees under Minn. Stat. � 80C.17, subd. 3. The district court denied the motion, concluding that section 80C.17, subdivision 3, bars an award of attorney fees to a plaintiff who receives no relief under the franchise act. The court of appeals affirmed. We granted Twin City‟s petition for review, and, for the reasons discussed below, we affirm the court of appeals.
1 Dunn and Newstrom own Twin City Home Juice Company. Although the company‟s name subsequently was changed to Home Juice Citrus Products Mid-West, Inc., we refer to this entity by its historical name of Twin City Home Juice Company.
written permission. Included among those products was the �Mr. Pure� brand. In 1995, Chicago Home Juice extended its agreement with Twin City for another ten years.2 National Beverage acquired Chicago Home Juice in 1999. The asset purchase agreement stated that National Beverage was purchasing �[a]ll business, properties and assets of every kind and description, whether real, personal or mixed, tangible or intangible, wherever located, used or necessary in the operation of the Business.� After National Beverage acquired Chicago Home Juice, National Beverage and Twin City continued to do business in the same manner as Twin City had with Chicago Home Juice.
2 Testimony at trial indicated that Twin City contributed to an �accrual fund� that was used for marketing purposes. The jury found that the relationship between Twin City and Chicago Home Juice constituted a franchise under Minn. Stat. � 80C.01, subd. 4(a) (defining a �franchise� to require, in part, that the franchisee pay �directly or indirectly, a franchise fee�). That determination is not before us.
On August 30, 2002, Service Distributing and Twin City formally terminated the purchase of Twin City‟s assets by Service Distributing. Twin City then entered into a stock purchase agreement with another company, Tri-County Beverage & Supply, Inc. (Tri-County). But National Beverage had begun an at-will, nonexclusive distributor relationship with DTM, the company formerly acting as a sub-distributor for Service Distributing, and had been shipping products to DTM since late August. Dunn testified that National Beverage refused to sell its products to Twin City, forcing Twin City to tell its customers to buy the products from DTM instead. The purchase by Tri-County never closed, according to Twin City, because National Beverage denied the existence of an agreement with Twin City and because National Beverage told Tri-County and other resellers that DTM, not Twin City, was its distributor in the area.
business advantage by DTM and National Beverage; and (7) common law business disparagement. At trial, Twin City sought as damages the 5,000 it would have received from the stock sale to Tri-County, plus prejudgment interest, plus a variety of expenses and costs Twin City claimed it incurred and benefits it claimed it did not receive because the stock sale to Tri-County was never finalized, for a total damages claim in excess of million.
If I could make this comment now, so I don‟t forget, all of these individual claims are important. They all have legal significance. So even though you might conclude that the damages are the same for the first cause of action and the second cause of action, don‟t skip one or not do it full justice. We need answers to all of them even if the damage answer remains the same.
4 Under Minn. Stat. � 80C.14, subd. 3(b), except for circumstances not applicable here, a franchisor cannot terminate or cancel a franchise except for good cause. Further, except for circumstances not applicable here, a franchisor may not terminate or cancel a franchise without giving the franchisee notice of and an opportunity to cure any defaults under the franchise agreement. Id., subd. 3(a). 5 The jury separately awarded Twin City ,369.45 for a defamation claim against National Beverage, which award is not at issue here. 6 We note that the Minnesota Rules of Civil Procedure now use the term �judgment as a matter of law�; however, we will use the older term �judgment notwithstanding the verdict� because that was the term in effect at the time of the trial at issue. Minn. R. Civ. P. 50.01.
damages of 8,000 for the statutory violation, �should such be necessary to authorize the Court to enter its Order granting Plaintiff‟s reasonable attorneys‟ fees.� In its memorandum to the court, Twin City asserted that the same facts supporting the jury‟s breach of contract award also supported an award of damages for the franchise act violation. At the motion hearing, however, Twin City withdrew its motion for judgment notwithstanding the verdict. The district court denied Twin City‟s motions for prejudgment interest and attorney fees, as well as National Beverage‟s motion for judgment notwithstanding the verdict.
National Beverage appealed the district court‟s judgment, and Twin City cross-appealed on the denial of attorney fees. Dunn v. Nat�l Bev. Corp., 729 N.W.2d 637, 641 (Minn. App. 2007). The court of appeals affirmed the district court‟s rulings. Id. at 655. Twin City petitioned this court to further review the denial of attorney fees, and we granted review.
We first address Twin City‟s argument that an award of attorney fees under section 80C.17, subdivision 3, does not require an award of damages under the franchise act. In Martin Investors, Inc. v. Vander Bie, we rejected the argument that this provision limited awards of attorney fees to suits for monetary damages. 269 N.W.2d 868, 876 (Minn. 1978). Noting that the statute �specifically permits a claim for costs and disbursements plus reasonable attorneys fees in �[a]ny suit authorized under this section,‟ � and noting that the statute permitted suits for rescission and restitution,7 we affirmed the district court‟s award of attorney fees to plaintiffs who sought and were awarded rescission of the franchise agreement and restitution of their payments to the franchisor. Id. (quoting Minn. Stat. � 80C.17, subd. 3). Twin City asks us to go one step further and hold that a plaintiff may be awarded attorney fees under section 80C.17, subdivision 3, for a violation of the franchise act even if the plaintiff receives no relief under the act at all. We decline to stretch the statutory language that far. We hold that an award of attorney fees under section 80C.17, subdivision 3, requires that the plaintiff seek and recover some relief under the franchise act.
of damages for the franchise act violation. Thus, in short, we must determine whether the jury‟s answers on the special verdict form can be harmonized in a way that suggests the jury granted Twin City relief under the act.
Twin City argues that the jury‟s damage awards can and should be harmonized because the jury found National Beverage breached the franchise agreement and because the damages for the breach of the franchise agreement were identical to the damages requested for the violation of the act. According to Twin City, �[a] fair reading of the special verdict form confirms that the jury decided to not award damages for [the statutory violation] because such damages would be duplicative to those awarded [for the breach of agreement].� National Beverage contends that the jury �refused to award any relief� to Twin City for the statutory violation.
Generally, we will not disturb a damage award unless the �failure to do so would be shocking or would result in plain injustice.� Hughes v. Sinclair Mktg., Inc., 389 N.W.2d 194, 199 (Minn. 1986). We have said that appellate courts may not �sit as factfinders,� Raleigh v. Indep. Sch. Dist. No. 625, 275 N.W.2d 572, 576 (Minn. 1978), and are �not empowered to make or modify findings of fact.� Lumpkin v. N. Cent. Airlines, Inc., 296 Minn. 456, 462, 209 N.W.2d 397, 401 (1973).
277 Minn. 151, 155, 152 N.W.2d 63, 66 (1967). �If the answers to special verdict questions can be reconciled on any theory, the verdict will not be disturbed.� Hauenstein v. Loctite Corp., 347 N.W.2d 272, 275 (Minn. 1984). In State v. Larsen, we noted that �one of the functions of special verdicts is to eliminate the necessity of a new trial� when certain errors occur. 275 Minn. 142, 145-46, 145 N.W.2d 430, 433 (1966). Accordingly, in cases in which special jury verdict answers were inconsistent and irreconcilable, we have changed an answer to conform to the law and the evidence. E.g., Orwick v. Belshan, 304 Minn. 338, 350, 231 N.W.2d 90, 98 (1975); Reese, 277 Minn. at 156, 152 N.W.2d at 67.
After reviewing the record, we conclude that the jury‟s special verdict answers can be reconciled because the jury could have found that the breach of contract and the statutory violation, that is, the improper termination of the franchise, were separate events. For example, the jury could have found that National Beverage breached the contract when it began selling products to DTM in August 2002, in violation of the exclusivity provision in the franchise agreement. At the same time, the jury could have found that the franchise was not actually terminated, in violation of the franchise act, until National Beverage refused to sell any more product to Twin City sometime in September of 2002.
purchase agreement Service Distributing rescinded. That is, the jury reasonably could have found that the damages attributable to National Beverage‟s breach of the franchise agreement were the 8,000 that Twin City was guaranteed to receive under the sale to Service Distributing. In contrast, National Beverage‟s accounting expert testified that the damages attributable to National Beverage‟s refusal to do business with Twin City were zero because Twin City, which lost money throughout 2002, was no longer a financially viable business. There was no evidence contradicting that expert opinion. In addition, the expert opined that the agreement between Twin City and Tri-County was not bona fide.8 Nor does it appear that the jury‟s differing damage awards were either inadvertent or a mistake. As noted previously, in his closing argument, counsel for Twin City expressly told the jurors that each of the individual claims had legal significance and that, �even though [they] might conclude that the damages are the same for the first cause of action and the second cause of action, don‟t skip one or not do it full justice.� On this record, we must conclude that the jury took counsel at his word.
8 Although Twin City sought as damages the amount it would have received in the stock sale to Tri-County, the jury found there was in fact no contract between Twin City and Tri-County, a finding Twin City does not contest.
agree with the court of appeals that Twin City did not receive relief under the Minnesota Franchise Act and is, therefore, not entitled to recover attorney fees under the Act. Affirmed.
DIETZEN, J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this matter.

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