Title: Morgan Co. v. Minnesota Min. & Mfg. Co.
Citation: 246 N.W.2d 443
Docket Number: 46232
State: Minnesota
Issuer: Minnesota Supreme Court
Date: September 17, 1976

246 N.W.2d 443 (1976) The MORGAN COMPANY, Appellant, v. MINNESOTA MINING &amp; MANUFACTURING CO., Respondent. No. 46232. Supreme Court of Minnesota. September 17, 1976. *445 Meagher, Geer, Markham, Anderson, Adamson, Flaskamp &amp; Brennan, R. Gregory Stephens and O. C. Adamson II, O'Connor &amp; Hannan, Joe A. Walters and Kenneth B. Jones, Jr., Minneapolis, for appellant. Richards, Montgomery, Cobb &amp; Bassford, Greer E. Lockhart and James B. Proman, Minneapolis, for respondent. Heard before TODD, YETKA and SCOTT, JJ., and considered and decided by the court en banc. YETKA, Justice. This is an appeal from a judgment of the district court granting defendant's motion for partial summary judgment limiting its liability to $250. We affirm. Plaintiff is a corporation engaged in the retail and wholesale jewelry business. In July of 1973 it entered into an agreement with defendant whereby defendant agreed to install and service a central station burglar alarm system at plaintiff's place of business. In return, plaintiff agreed to pay defendant $605 upon completion of the installation and $82 a month thereafter. The system was apparently connected by two wires to a telephone wire distributor board located in a room adjacent to plaintiff's business office. The board contained numerous multicolored wires of various sizes. Attached to each of the two wires servicing plaintiff's system were identification tags. One tag said, "3M Alarm Service, Telephone line to Morgan's Jewelry 1740 black/yellow not used," and the other said, "3M Alarm Serviceholdup alarm, do not cut." On or about February 3, 1974, plaintiff's business was burglarized. The investigating officer found that the alarm system had been bypassed by attaching "alligator clamps" to the tagged wires. As a result of the burglary, plaintiff sustained a loss of $957,740.10. Its insurer, Continental Casualty Company, reimbursed plaintiff for $610,000. In October of 1974 plaintiff commenced this action against defendant for damages in the amount of its total loss, alleging negligence and breach of implied warranty. Defendant moved for partial summary judgment limiting recovery to $250 pursuant to the provisions of the agreement. In response, plaintiff moved to amend its complaint to include allegations of breach of express warranty, willful, wanton and intentional wrongful acts, and strict liability, and fraud and misrepresentation. Defendant's motion was granted with respect to the allegations of negligence, breach of implied and express warranties, and strict liability, and denied as to the allegations of fraud and intentional wrongdoing. Plaintiff was permitted to amend its complaint to include the latter claims. Plaintiff thereafter made a motion to have judgment entered pursuant to Rule 54.02, Rules of Civil Procedure, as to the grant of defendant's motion for partial summary judgment, claiming that important issues of law were involved which should be reviewed and resolved before proceeding with the balance of its action. The court denied the motion. Thereafter plaintiff dismissed its amended complaint, and directed the following letter to the district court clerk: The clerk entered judgment August 8, 1975. The district court file does not contain any order from the court directing the entry of judgment. 1-2. The only issue raised by the parties on appeal is the effect of the provisions in the agreement of the parties limiting defendant's liability to a maximum of $250. Before reaching the merits, however, there exist several questions regarding appealability. In Financial Relations Board, Inc. v. Pawnee Corp., Minn., 240 N.W.2d 565 (1976), we held that a "partial summary judgment"[1] granted pursuant to Rule 56.04, Rules of Civil Procedure, is final, and therefore appealable, only when the trial judge makes an express determination that there is no just reason for delay and upon an express direction for the entry of judgment. Here the trial court refused to do just that. Plaintiff attempted to circumvent that refusal by dismissing that portion of its amended complaint to which the trial court's order for summary judgment did not attach, i. e., willful and wanton negligence, intentional misconduct, and fraud and misrepresentation, and directing the clerk to enter judgment. Whatever authority plaintiff relied on for that action certainly escapes us. While certain claims were thereby eliminated from its action, there nevertheless remained the issue of liability on the theories of ordinary negligence, warranty, and strict products liability. The order for summary judgment determined only the issue of damages. Under the circumstances of this case the only proper method by which plaintiff could secure review of the district court's decision was under Rule 105, Rules of Civil Appellate Procedure, providing for discretionary review. Certainly it was not by securing an unauthorized judgment from the district court clerk. However, since the matter is now before us, and because defendant does not contest appealability, we shall treat the appeal as a request for discretionary review of the trial court's order for partial summary judgment and grant it. 3. Language limiting defendant's liability appears throughout the written agreement. In paragraph 1 setting forth defendant's obligations there is the following limitation: Paragraph 5 provides: Paragraph 21, in addition to further language of limitation, specifically limits damages to a maximum amount of $250. Provisions limiting liability and the amount of damages under burglar alarm service agreements, such as contained in Paragraph 21, have been uniformly upheld, International Distrib. Co. Inc. v. American Dist. T. Co., 385 F. Supp. 871 (D.D.C.1974); Better Food Markets v. American Dist. Tel. Co., 40 Cal. 2d 179, 253 P.2d 10, 42 A.L.R.2d 580 (1953); Niccoli v. Denver Burglar Alarm, Inc., 490 P.2d 304 (Colo.App.1971); Bargaintown of D. C., Inc. v. Federal Engineering Co., Inc., 309 A.2d 56 (D.C.App. 1973); Nicholas v. Miami Burglar Alarm Co., 266 So. 2d 64 (Fla.App.1972); Alan Abis, Inc. v. Burns Electronic Security Serv. Inc., 283 So. 2d 822 (La.App.1973); Foont-Freedenfeld Corp. v. Electro-Protective Corp., 126 N.J.Super. 254, 314 A.2d 69 (1973), affirmed, 64 N.J. 197, 314 A.2d 68 (1974); Wedner v. Fidelity Security Systems, Inc., 228 Pa.Super. 67, 307 A.2d 429 (1973), affirmance by an equally divided court; Schepps v. American District Telegraph Co. of Texas, 286 S.W.2d 684 (Tex.Civ.App. 1955). The cited decisions apply both principles of liquidated damages and limitation of damages. We are inclined, as were the members of the Pennsylvania court in support of affirmance in Wedner v. Fidelity Security Systems, Inc., supra, to rely on the latter theory. They stated: We hold that the trial court was correct in granting partial summary judgment on the issue of damages with respect to ordinary negligence, express and implied warranty, and strict liability insofar as the latter term applied to product liability. We are not persuaded that the contract was unconscionable or against public policy under the circumstances of this case. Therefore, the order of the trial court is affirmed and the case may proceed to trial on the remaining issue of liability. 4. With respect to those claims which have been dismissed by plaintiff willful and wanton negligence, intentional misconduct, and fraud and misrepresentationit may pursue those claims to a full recovery since the limitation of damages does not apply to those claims. Affirmed. OTIS, J., took no part in the consideration or decision of this case. [1] In 2 Hetland &amp; Adamson, Minnesota Practice, Civil Rules Ann., at pp. 582 to 583 the authors point out that while the expression "partial summary judgment" is generally used in referring to a Rule 56.04 order, the rule "provides only for an order specifying what facts appear without substantial controversy and directing trial on the other parts of the action. * * * The order under Rule 56.04 is similar in nature and effect to a Rule 16 pre-trial order. * * * By recognizing Rule 56.04 as merely an order limiting the scope of the trial, difficulties regarding the appealability of partial judgments are removed." The authors are correct in concluding that questions of appealability would be resolved if a Rule 56.04 order is treated as a Rule 16 order. In Empire Fire &amp; Marine Ins. Co. v. Hill, 287 Minn. 58, 176 N.W.2d 757 (1970), this court held that a pretrial order specifying the measure of, and limitations upon, the amount of damages in the event of a recovery was not appealable. Moreover, if viewed as an order granting partial summary judgment, it still is nonappealable, LeRoy v. Figure Skating Club of Minneapolis, 281 Minn. 576, 162 N.W.2d 248 (1968); Crum v. Anchor Casualty Co., 264 Minn. 378, 119 N.W.2d 703 (1963). [2] This court has recognized the validity of exculpatory provisions in other contexts where they do not violate some established public policy, Great Northern Oil Co. v. St. Paul Fire &amp; Marine Ins. Co., 291 Minn. 97, 189 N.W.2d 404 (1971); Independent School Dist. No. 877 v. Loberg Plumbing &amp; Heating Co., 266 Minn. 426, 123 N.W.2d 793 (1963); Weirick v. Hamm Realty Co., 179 Minn. 25, 228 N.W. 175 (1929).