Source: http://mn.gov/law-library-stat/archive/supct/0307/OP012259-0703.htm
Timestamp: 2017-11-20 19:13:10
Document Index: 749079238

Matched Legal Cases: ['Sui Generis', 'Sui Generis', 'Sui Generis', 'sui generis', 'sui generis', 'sui generis', 'sui generis', '§ 33', '§ 33', '§ 1320', '§ 62', '§ 150']

Alpha Real Estate Company of Rochester, petitioner, Appellant, vs. Delta Dental Plan of Minnesota, et al., Respondents. C7-01-2259, Supreme Court, July 3, 2003.
C7-01-2259
Alpha Real Estate Company
of Rochester, petitioner,
Delta Dental Plan of Minnesota, et al.,
1) Motions for a new trial pursuant to Minn. R. Civ. P. 59.01, while permissive, are not a prerequisite for appellate review of a substantive question of law that was properly raised and decided in the district court.
2) When a written agreement contains the entire agreement by the parties and is unambiguous, it is error for the district court to engage in a practical construction of the agreement based on the conduct of the parties or to use extrinsic evidence to modify or reform the plain language of the agreement.
3) Reformation of a written agreement because of either mutual mistake or scrivener’s error is inappropriate when based solely on the parties’ failure to negotiate a change from an earlier agreement.
4) Absent ambiguity, fraud, or misrepresentation, a mistake of only one party as to the subject matter of the contract is not grounds for reformation of a written agreement.
The 1995 agreement provides that Delta’s nominee, Sui Generis, will purchase real estate in Rochester, construct a dental clinic on the property, and purchase equipment to furnish the clinic. In return, Alpha would lease the property from Sui Generis over a 20‑year term and provide dental care on a preferred basis to persons covered under dental programs sold or serviced by Delta. Under the terms of the 1995 agreement, the monthly lease payments consist of Sui Generis’ principal and interest loan payments plus a nominal administrative fee. In addition, the 1995 agreement contains a five percent additional rent clause:
We first address the proper scope of appellate review under these facts. Following the bench trial, Alpha did not move for a new trial pursuant to Minn. R. Civ. P. 59.01 but instead appealed directly to the court of appeals. At the court of appeals, Alpha argued that the district court erred in using extrinsic evidence to interpret the 1997 lease and in finding that the five percent additional rent clause did not violate federal and state antikickback statutes. Because Alpha had failed to move for a new trial, the court of appeals applied a narrow scope of review to these issues: “whether the evidence sustains the findings of fact and whether such findings sustain the conclusion of law and the judgment.” Alpha Real Estate Co. of Rochester v. Delta Dental Plan of Minn., No. C7-01-2259, 2002 WL 1840897, at *4 (Minn. App. Aug. 13, 2002) (quoting Gruenhagen v. Larson, 310 Minn. 454, 458, 246 N.W.2d 565, 569 (1976)). Alpha asserts that the court of appeals impermissibly restricted the scope of review and that we should give full de novo review to the contractual and statutory interpretation issues.
In limiting the scope of review, the court of appeals reasoned that generally a motion for a new trial is a prerequisite to appellate review and if a motion for a new trial is not made, appellate review is limited to the Gruenhagen scope of review. Alpha Real Estate, 2002 WL 1840897, at *4 (citing Sauter v. Wasemiller, 389 N.W.2d 200, 201 (Minn. 1986)). The court of appeals then noted that in previous cases it applied a “question of law” exception to this rule. But, in light of this court’s reasoning in Tyroll v. Private Label Chems., Inc., 505 N.W.2d 54, 57 (Minn. 1993), the court of appeals concluded that the question of law exception is not a legitimate exception and refused to apply it to the present case. The court reasoned that Tyroll distinguishes sui generis rights, which are reviewable, from routine questions of law, which are not reviewable. Thus, the court concluded that because Alpha’s contractual and statutory interpretation issues did not involve sui generis rights, and because Alpha failed to move for a new trial, its review was limited to the Gruenhagen scope of review.
Considering whether the jury trial issue was properly reserved for appellate review, we first reiterated the Sauter rule: “matters such as trial procedure, evidentiary rulings and jury instructions are subject to appellate review only if there has been a motion for a new trial in which such matters have been assigned as error.” Tyroll, 505 N.W.2d at 56 (quoting Sauter, 389 N.W.2d at 201). Next, we addressed the question of law exception applied by the court of appeals. Reasoning that, with ingenuity, most issues can be converted into questions of law, we warned, “if the [question of law] exception were to be allowed, it would soon swallow up Sauter.” Id. at 57. Thus, we concluded that the question of law exception is incompatible with our well‑established case law. Id. Turning to the issue of whether Sauter barred appellate review of the jury trial issue, we stated that the “threshold issue” is whether the contested issue is a matter of trial procedure. Id. Applying this standard, we reasoned that the right to a jury trial is more than procedural; it is also sui generis because “it defines the basic nature of the decisionmaking process itself.” Id. Thus, we reviewed the jury trial issue. Id.
Alpha argues the court of appeals misconstrued Tyroll. We agree and conclude that Tyroll does not stand for the proposition that we will review non sui generis questions of law only when the appellant has made a motion for a new trial. In this instance, the questions of law at issue before us were fully briefed and argued at the district court in the summary judgment memoranda and post-trial prejudgment briefs. While we did reject a broad question of law exception in Tyroll, we nevertheless reviewed the issue of whether the defendant was entitled to a jury trial. Our warning that “[w]ith a little ingenuity, most questions can be converted into so-called ‘questions of law’” was directed at the practice of attempting to convert procedural, evidentiary, and jury instruction issues into questions of law. Id. Thus, we conclude that the Sauter rule does not apply to substantive questions of law that were properly raised during trial.[5] Any holding to the contrary would be akin to requiring a motion for reconsideration of all rulings before the appellate courts could properly address substantive questions of law.
Moreover, we have consistently enunciated the Sauter rule in terms of “trial procedure, evidentiary rulings and jury instructions.” Tyroll, 505 N.W.2d at 56 (quoting Sauter, 389 N.W.2d at 201); see also, Heise v. J.R. Clark Co., 245 Minn. 179, 191, 71 N.W.2d 818, 826 (1955). We have classified matters such as trial procedure, evidentiary rulings and jury instruction as “issues arising during the course of trial.” Sauter, 389 N.W.2d at 202. The motion for a new trial aids the district court in reconsidering objections to issues that arose during trial. When objections are made during the course of trial, the court must make quick, on-the-spot decisions. The motion for a new trial gives the court time to consider the context of the objection and the effect the error may have had on the outcome of the case. This permits the court to more fully develop the record for appellate review or to correct its own mistake and alleviate the need for appellate review. Moreover, we give deference to the court’s decisions regarding such matters that arise during the course of trial. Hilligoss v. Cargill, Inc., 649 N.W.2d 142, 147 (Minn. 2002) (stating that district courts have broad discretion in determining jury instructions); Gross v. Victoria Station Farms, Inc., 578 N.W.2d 757, 760-61 (Minn. 1998) (stating that the district court has “considerable” discretion in determining whether to admit an expert opinion). Thus, a general demarcation line can be drawn as to when post-trial motions are required for assignments of error relating to the conduct of the trial that reside within the district courts’ discretion and substantive questions of law.
In contrast to matters arising during the course of trial, we do not give deference to the district court’s conclusions of law and we review questions of law de novo. Kornberg v. Kornberg, 542 N.W.2d 379, 384 (Minn. 1996); Boldt v. Roth, 618 N.W.2d 393, 396 (Minn. 2000). Here, Alpha raises two such issues on appeal: (1) whether the 1997 lease was fully integrated; and (2) whether the five percent additional rent clause violates federal or state law. This is not the situation we expressed concern about in Tyroll. Alpha is not ingeniously converting a procedural issue into a question of law. In addition, the policy reasons supporting our Sauter decision are not implicated here. One purpose for requiring post-trial motions is to flesh out the reasoning behind a district court’s ruling. Alpha raised the two issues twice during the course of trial, in a pretrial summary judgment motion and in a post-trial, prejudgment brief. Thus, the district court had ample opportunity to consider these issues and did not need more time to flesh out or refine its reasoning. Moreover, a new trial would not alter the court’s conclusions of law; there is no evidence to exclude, no erroneous jury instructions to correct, and no trial procedures to alter. For the above reasons, we conclude that, while permissive, motions for a new trial pursuant to Minn. R. Civ. P. 59.01 are not a prerequisite for appellate review of substantive questions of law when a genuine issue of law is properly raised and considered at the district court level. Accordingly, we hold that the court of appeals erred in using the Gruenhagen scope of review.
Alpha argues that the 1997 lease is a complete integration and, therefore, extrinsic evidence [the terms of the 1995 agreement], cannot be used to supplement the terms of the 1997 lease. In response, Delta contends that the parties intended to have their relationship governed by both the 1995 agreement and the 1997 lease. The parol evidence rule “prohibits the admission of extrinsic evidence of prior or contemporaneous oral agreements, or prior written agreements, to explain the meaning of a contract when the parties have reduced their agreement to an unambiguous integrated writing.” Richard A. Lord, Williston on Contracts § 33:1 (4th ed. 1999). Accordingly, “when parties reduce their agreement to writing, parol evidence is ordinarily inadmissible to vary, contradict, or alter the written agreement.” Hruska v. Chandler Assoc’s., Inc., 372 N.W.2d 709, 713 (Minn. 1985).
However, “where a written agreement is ambiguous or incomplete, evidence of oral agreements tending to establish the intent of the parties is admissible.” Gutierrez v. Red River Distrib., Inc., 523 N.W.2d 907, 908 (Minn. 1994) (quoting Material Movers, Inc. v. Hill, 316 N.W.2d 13, 17 (Minn. 1982)). If it appears from the circumstances surrounding the case that the parties did not intend the agreement to be a complete integration, then parol evidence can be used to prove the existence of a separate consistent oral agreement. Bussard v. Coll. of St. Thomas, Inc., 294 Minn. 215, 224, 200 N.W.2d 155, 161 (1972) (citing Phoenix Publ’g Co. v. Riverside Clothing Co., 54 Minn. 205, 206, 55 N.W. 912 (1893)). We articulated the following rule to determine whether a contract is a complete integration:
Although Bussard states the writing “must be read in light of the situation of the parties, the subject matter and purposes of the transaction, and like attendant circumstances,” Bussard did not involve an agreement that included a merger clause. A merger clause establishes that the parties intended the writing to be an integration of their agreement. Richard A. Lord, Williston on Contracts § 33:21 (4th ed. 1999). In some jurisdictions a merger clause is “conclusive evidence of the parties’ intent to consider the agreement integrated.”[6] Id.
Nichols v. Shelard Nat’l Bank, 294 N.W.2d 730, 734 (Minn. 1980). To demonstrate mutual mistake based on scrivener’s error, “it is necessary that both parties agree as to the content of the document but that somehow through a scrivener’s error the document does not reflect that agreement.” Id. Here, there is no evidence of a drafting error; nor is there evidence of mutual mistake, fraud, misrepresentation or inequitable conduct. Reformation was not an appropriate remedy. Moreover, as found by the district court, the 1997 lease was drafted by Delta’s counsel. Even if there were an ambiguity in the 1997 lease, any such ambiguity would be construed against the party who drafted it. Hilligoss, 649 N.W.2d at 149.
[4] See 42 U.S.C. § 1320a-7b(b) – 7b(f) (2000) and related statutes and regulations; Minn. Stat. § 62J.23, subd. 1 (2002) and Minn. Stat. § 150A.11, subd. 4 (2002).
[5] Black’s Law Dictionary defines substantive law as “The part of the law that creates, defines, and regulates the rights, duties, and powers of parties.” Blacks Law Dictionary 1443 (7th ed. 1999). In contrast, procedural law is defined as “The rules that prescribe the steps for having a right or duty judicially enforced, as opposed to the law that defines the specific rights or duties themselves.” Id. at 1221.
[6] See e.g., Crown Pontiac, Inc. v. McCarrell, 695 So.2d 615, 618 (Ala. 1997) (“[W]e hold that the merger clause in the second retail buyer’s order form bars the enforcement of any previous agreements of the parties and makes the final retail buyer’s order form the final contract of the parties.”); Nelson v. Elway, 908 P.2d 102, 107 (Colo. 1996) (holding that “merger clauses preclude consideration of extrinsic evidence to ascertain the intent of the parties”); Brown v. Grow, 144 N.E. 403, 404 (Mass. 1924) (“[W]hen in a written contract is a stipulation that the contract recites all the inducements to its execution, that no representation not embodied therein shall be binding and no agent has power to modify or waive any of its terms, evidence extraneous and contradictory to its terms is not admissible.”).