Opinion ID: 785450
Heading Depth: 2
Heading Rank: 1

Heading: Default Under the Lease

Text: 13 The district court determined that Eaton defaulted under section 17(a) of the Lease by failing to make required Lease, late-charge, and property-tax payments for the equipment in 2001, failing to properly pack, ship, and return all of the equipment as required in section 7, and failing to properly maintain the equipment under the MSMAs required in section 8. 8 14 Eaton argues that it did not default under section 17(a) of the Lease because, although it now concedes that it made late payments of Lease Charges, 9 , 10 it argues for the first time here that section 17(a) required Winthrop to give Eaton notice and twenty days to cure any potential default. Section 17(a) of the Lease provides in pertinent part: 15 The occurrence of any of the following events shall constitute an event of default under this Lease Agreement or any Lease Schedule: 16 (a) The nonpayment by Lessee of any Lease Charges when due, or the nonpayment by Lessee of any other sum required hereunder to be paid by Lessee which nonpayment continues for a period of twenty (20) days after written notice thereof from Lessor. 17 The district court determined that this section unambiguously provides that default occurs if Eaton failed to pay Lease charges when due. Eaton argues that the district court incorrectly interpreted the plain, unambiguous language of section 17(a). 18 To interpret the terms of a contract under Minnesota law, we must initially determine whether a contract term is ambiguous. Porous Media Corp. v. Midland Brake, Inc., 220 F.3d 954, 959-960 (8th Cir.2000) (citing Green Tree Acceptance, Inc., v. Wheeler, 832 F.2d 116, 117 (8th Cir.1987) (applying Minnesota law)). The determination that a contract is or is not ambiguous is a legal determination, and no deference is paid to the trial court's decision on this issue. Maurice Sunderland Architecture, Inc. v. Simon, 5 F.3d 334, 337 (8th Cir.1993); Blattner v. Forster, 322 N.W.2d 319, 321 (Minn.1982). If the contract is unambiguous, the interpretation is a question of law and is reviewed de novo. Lakeland Tool & Eng'g, Inc. v. Thermo-Serv, Inc., 916 F.2d 476, 481 (8th Cir.1990) (applying Minnesota law). 19 However, if a contract is ambiguous, the meaning of the contract becomes a question of fact, City of Virginia v. Northland Office Properties Ltd. Partnership, 465 N.W.2d 424, 427 (Minn.Ct.App.1991), and summary judgment is inappropriate. In re Turners Crossroad Dev. Co., 277 N.W.2d 364, 368 (Minn.1979). In interpreting the meaning of an unambiguous contract, the court cannot consider anything other than the contract. Carl Bolander & Sons, Inc. v. United Stockyards Corp., 298 Minn. 428, 215 N.W.2d 473, 476 (1974). However, if a contract term is ambiguous, extrinsic evidence can be considered by the trier of fact to help it determine the parties' intent. Material Movers, Inc. v. Hill, 316 N.W.2d 13, 17 (Minn.1982). 20 We believe the district court properly interpreted and applied the plain language of section 17(a). Section 17(a) provides two ways Eaton could default through nonpayment: 1) nonpayment of any Lease Charges when due, or 2) nonpayment of any other required sum which nonpayment continues for a period of twenty days after written notice. Grammatically, this language describes alternative nonpayment default triggers. It consists of two independent clauses, separated by a comma and the disjunctive or, with no comma before the word which in the second clause. This clearly indicates that the sentence contains two separate provisions under which default may occur. Section 17(a) unambiguously provides that default occurred when Eaton failed to make timely payment of Lease charges. As such, we affirm the district court's determination that Eaton defaulted under section 17(a) of the Lease.