Court Opinion

ID: 9530886
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:04:52.703869+00
Date Added: 2024-06-11T13:28:16.740241
License: Public Domain

GILBERT, Justice
(dissenting).
I respectfully dissent. This case involves employment claims with many significant factual allegations based on a long-established “dual ladder” employment poli*750cy that has been the essence of 3M’s corporate employment culture for almost 50 years. It has been consistently used by 3M to recruit, retain and reward long-term employees. However, the majority dismisses on the pleadings two long-term technical employees’ colorable dual ladder claims of breach of contract, promissory estoppel and fraud. The majority holds that under no possible set of facts that the respondents might prove in this case would they be entitled to relief under the theories pleaded in the complaint.
As the majority observed, the dual ladder system began at 3M in the 1950’s. Its approach was innovative and commendable. The plan recognized the valuable contributions of scientific, technical and management personnel to 3M. It acknowledged that while management positions generally offered greater compensation and opportunities for promotion, 3M derived significant benefits from encouraging its technical personnel to remain scientists and technicians rather than crossing over into management. In order to encourage scientists and technicians to remain on the scientific and technical side of the ladder, 3M assured such personnel in all manners of communications and representations that if they did so, they would enjoy opportunities for promotion and compensation equivalent to that of management. 3M provided a written brochure explaining the dual ladder system entitled Parallel Paths of Progress. Another brochure, Laboratory Careers, specifically informs the technical employees that “for equivalent levels, pay grades and benefits are the same on both sides of the dual ladder.” (emphasis added).
To achieve any of this system’s purported goals required that the technical employees of 3M believed that 3M meant what it said. In simple terms, for this program to have been effective, the employees would have had to rely on the communications and representations of 3M management.
The majority rejects the respondents’ claims as a matter of law. This is done despite the significant benefits 3M derived from the dual ladder system, the reliance the employees of 3M may have reasonably placed on these representations and the fact that 3M may have never intended to provide such equivalent opportunities. In fact, the two sides of the dual ladder were alleged by the plaintiffs to have little in common except for the representation of equality. The management side of the ladder on a regular basis received bonuses, stock options, and higher salaries that are alleged to have been systematically denied to the technical employees. The majority’s conclusion is at odds with our prior decisions on the issues and is inappropriate at this stage of a proceeding.
This matter is presented to us on 3M’s appeal from the court of appeals’ reversal of the trial court’s Minn. R. Civ. P. 12.02(e) dismissal of respondents’ promissory es-toppel and fraud claims and of its affir-mance of the trial court’s denial of dismissal of the breach of contract claims. The only question on review of a judgment on the pleadings “is whether the complaint sets forth a legally sufficient claim for relief.” Elzie v. Comm’r of Pub. Safety, 298 N.W.2d 29, 32 (Minn.1980). If questions of fact exist, the court should not order judgment on the pleadings. See, e.g., State ex rel. Minneapolis v. Minneapolis St. Ry. Co., 238 Minn. 218, 225-26, 56 N.W.2d 564, 568 (1952). As we explained in Northern States Power Co. v. Franklin,
No longer is a pleader required to allege facts and every element of a cause of action. A claim is sufficient against a motion to dismiss based on Rule 12.02[e] if it is possible on any evidence which might be produced, consistent with the pleader’s theory, to grant the relief demanded. To state it another way, under this rule a pleading will be dismissed only if it appears to a certainty that no facts, which could be introduced consistent with the pleading, exist which *751would support granting the relief demanded. Addressing owrselves to the sufficiency of ⅜ ⅜ * [claims] under Rule 8, voe are thus required to do little more than engage in an exercise in theoretical logic.
265 Minn. 391, 395, 122 N.W.2d 26, 29 (1963) (emphasis added).
The majority here claims that all three of these issues may be dismissed on the pleadings because we may decide that there are no issues of fact to be decided. This is incorrect with respect to all three issues: contract, promissory estoppel, and fraud.
The majority blurs the standard of review. It holds that determining whether a unilateral offer was made is a question of law that must be resolved by the court. It reaches this conclusion by relying on Ruud v. Great Plains Supply, 526 N.W.2d 369 (Minn.1995) and Hunt v. IBM Mid Am. Employees Fed. Credit Union, 384 N.W.2d 853 (Minn.1986). In both those cases the court held as a matter of law that unilateral offers did not exist. See Ruud, 526 N.W.2d at 372; Hunt, 384 N.W.2d at 857. However, both of those cases involved facts and allegations that were much weaker than those stated here. In Ruud, the only fact alleged in support of the claim that there was a unilateral offer was a statement by the owner of Great Plains Supply that “Good employees [are taken] care of.” 526 N.W.2d at 370. In Hunt, the only facts alleged in support of a claim that employees could be terminated only for cause were two brief statements in an employee manual that mentioned probation and termination for serious offenses. 384 N.W.2d at 855.
In both cases, it was possible for the court, based on the minimal facts alleged, to determine that as a matter of law a unilateral contract was not created. However, in the case at hand, a much stronger and more detailed set of facts is alleged. If all of these facts are viewed in a light most favorable to the plaintiffs (now respondents), it is not possible to determine as a matter of law that a unilateral offer did not exist.
The majority claims that the dismissal of the contract claim is warranted because any representations made by 3M to its employees were simply too indefinite to constitute a valid offer. The general rule is that where the intention of the parties may be gained wholly from the writing, construction of a contract is a question of law for the court. See Donnay v. Bouliware, 275 Minn. 37, 44, 144 N.W.2d 711, 716 (1966). However, where the terms are not clear and unambiguous, construction becomes a question of fact unless extrinsic evidence is conclusive. See id. at 44, 144 N.W.2d at 716; see also Hartung v. Billmeier, 243 Minn. 148, 151, 66 N.W.2d 784, 788 (1954) (stating that where an oral contract is susceptible to more than one construction, its construction is for the jury). Here, the complaint alleges that 3M made written and oral representations that constituted a valid offer. While the complaint pleaded some specific facts, there is nothing in the complaint to suggest that those facts are exhaustive or that discovery and some factual determination would not be necessary before the exact nature of these representations is made clear.
The plaintiffs have pleaded facts to support their assertion that 3M’s representations constituted an offer that became a significant term of their employment contract. These alleged facts include 3M’s publications, oral representations by management and a substantial and continuous course of dealings with its employees. The contract term allegedly offered is that technicians and scientists would be compensated and promoted in a fashion equivalent to the management side of the “dual ladder.”1 The employees’ retention of employment constitutes the acceptance of the offer of a unilateral contract. See Pine *752River State Bank v. Mettille, 333 N.W.2d 622, 627 (Minn.1983). Importantly, there is no dispute here that there is an employment contract between the plaintiffs and 3M. However, there is no one, clear and unambiguous document from which this court may construe the terms of this employment contract. Accordingly, before we can render a legal conclusion about the definiteness of an offer, there first must be a factual determination of what offer, if any, was made. The majority position here is tantamount to a legal rule that nothing an employer could do or say to its employees will ever constitute an offer.
The majority cites to a number of our earlier decisions to justify its denial of this claim as a matter of law, however, those earlier cases are distinguishable on two important points. First, all of these earlier cases, Hunt, Pine River, and Ced-erstrand all dealt with the same issue: whether a unilateral offer contained in an employee handbook was definite enough to overcome the presumption of at-will employment. See Hunt v. IBM Am. Employees Fed. Credit Union, 384 N.W.2d at 855-57 (Minn.1986); Pine River State Bank v. Mettille, 333 N.W.2d at 625-27 (Minn.1983); Cederstrand v. Lutheran Bhd., 263 Minn. 520, 526, 117 N.W.2d 213, 217 (1962). This case does not present the contested agreement in one complete document like an employee handbook. Because there are factual questions as to exactly what agreement existed, judgment on the pleadings is inappropriate.
Second, this case does not involve an employment at-will issue. Rather, it deals with the rights created by the agreed upon dual ladder compensation scheme. These employees were not terminated; they are simply seeking the benefit of 3M’s promises. We must therefore determine what obligation an employer has who promises certain terms in exchange for an employee’s labor when an employee relies on the representation. If a person hired four people to do a particular job and agrees that they will all be paid equivalently, and then pays two of the employees bonuses it does not pay the other two, the employees who did not receive the bonus have a claim for breach of contract. Whether or not they were in fact paid equivalently is a question for the jury. While certainly more complex, that is the situation presented in this case.
The respondents next allege that 3M breached the contract terms created. They are not alleging that they were personally denied specific pay increases or promotions as the majority claims, but that they were systematically denied the opportunity for equivalent compensation benefits. First, they allege 3M limited the levels to which scientists and technicians could be promoted in a manner that management employees were not. Second, 3M systematically precluded technicians from additional compensation and bonus programs available to management employees. Next, 3M utilized a “headcount” system to limit promotions of technicians and scientists, while management promotions remained open-ended. Finally, 3M limited mobility between the technical side of the dual ladder and the management side. The precise amount of damages, if any, can be developed through discovery.
The majority also appears concerned over the remedy that plaintiffs seek in this matter. The plaintiffs do not seek specific performance, as the majority asserts, they seek damages and have asserted the damages with sufficient specificity for this stage of the proceeding. The majority expresses concern that there is no way to determine specifically what pay increases or benefits these plaintiffs were denied. Even if this proves to be true, such damages are not the only basis for recovery for a breach of contract claim. Losses resulting from a party’s reasonable reliance on performance of a contract are also recoverable in a breach of contract action. See Restatement (Second) of Contracts § 349 (1981). Even if the damages are difficult to determine, the court cannot consequently hold that a contract did not exist.
*753Further, the majority asserts that this agreement is too vague because any benefits under the dual ladder program are based on “individual job performance” and whether an employee meets “the challenge of added responsibility.” Again, the majority’s determination that such terms form a material part of any agreement is a factual determination, inappropriate for dismissal on the pleadings. More importantly, there is no dispute in this case concerning the performance of these two plaintiffs. Accepting the facts as pleaded, these are senior employees who have been repeatedly promoted and have received excellent evaluations at virtually every level. While satisfaction clauses like this one are always vague to some degree, we regularly enforce such terms. See, e.g., Steller v. Thomas, 232 Minn. 275, 284-85, 45 N.W.2d 537, 543 (1950) (citing Restatement of Contracts § 261). Judging this matter on the pleadings, we must assume these plaintiffs have met all “individual job performance” requirements.
The majority, in concluding that any representations concerning the dual ladder system are too indefinite to constitute an offer, engages in a factual analysis based on the pleadings and concludes that the plaintiffs have no claim. However, factual determinations are not the basis for dismissal on the pleadings. All of the facts have not been uncovered at this point. Discovery has not been completed. Further, the majority seems to base its entire decision on selective published statements by 3M. In doing so, it ignores other statements to the contrary as well as the statements by supervisors and a course of conduct in the context of 3M’s extensive corporate culture.
We have long held that dismissal of a contract claim for indefiniteness is disfavored. See Hartung, 243 Minn. at 151, 66 N.W.2d at 788. In Hartung, we recognized:
Although vagueness and indefiniteness may prevent the creation of a contract, it is not to be forgotten that any offer or agreement is indefinite and uncertain in some degree since words are but imperfect symbols of what each party understands and intends. A proper administration of justice does not permit an overzealous quest for subtle ambiguity to destroy the intent of the parties when the court, despite some incompleteness and imperfection of expression, can reasonably find that intent * * *.
Id. at 150-51; 66 N.W.2d at 787-88. (footnote omitted).
In this case, the majority’s quest to find incompleteness is being performed even before a proper determination has been made as to what representations were made and exactly what, if anything, constituted the agreement. Such an analysis is properly a question of fact, upon which determinations of law may then be made. See, e.g., id. at 151, 66 N.W.2d at 788; Johnson v. Urie, 405 N.W.2d 887, 891 n. 5 (Minn.1987). In Johnson, we were asked to determine whether a legal duty existed for an insurance agent to inform the insured of alternative coverage available. See Johnson, 405 N.W.2d at 889. We stated that while determining whether a legal duty existed was a question of law, if that determination turned on disputed facts, those factual determinations might be made by a jury. See id. at 891 n. 5. The court would then make its legal determination based on those findings. See id.
The present case requires a similar resolution. The terms of this agreement are bound up in a myriad of representations spanning some 50 years of 3M’s history. The pleadings indicate they were in the literature cited by the majority, but also in the statements of individual supervisors and in the context of 3M’s corporate culture and its course of dealings with its employees. All of these factors need to be taken into account before any clear factual determination may be made as to what was promised by 3M. See Donnay, 275 Minn. at 44, 144 N.W.2d at 716 (stating that course of dealings and conduct of the parties with regard to terms is persuasive *754evidence of their meaning). Once the terms of this agreement are adequately determined by a finder of fact, then a legal determination as to its definiteness may be made.
I cannot agree with the majority that, as a matter of law, the plaintiffs have failed to state a colorable claim of breach of contact on the face of their well-pleaded complaint. Accordingly, I would affirm the court of appeals’ holding on this issue.
With respect to the promissory estoppel claim, the majority errs in two fundamental respects. First, it overstates a legal element necessary to establish a promissory estoppel claim. Second, it conflates the definiteness standard for an offer with the legal standard for a promise under our case law on promissory estoppel.
The majority cites to. our holding in Ruud v. Great Plains Supply, Inc., to establish the elements required for a claim of promissory estoppel. In Ruud, citing our earlier decision in Cohen v. Cowles Media Co., 479 N.W.2d 387, 391 (Minn.1992), we stated that the elements necessary to establish a claim of promissory estopppel were:
1. Was there a clear and definite promise?
2. Did the promisor intend to induce reliance, and did such reliance occur?
3. Must the promise be enforced to prevent an injustice?
Ruud, 526 N.W.2d at 372.
The majority goes on to hold that because the promise in this case does not meet the first requirement of a “clear and definite promise,” the claim must fail as a matter of law. This analysis is problematic on two levels.
First, assuming as we must on appeal from a motion to dismiss on the pleadings, that all of the allegations of the complaint are true, as stated earlier, the representations in this case are much more definite than those made in Ruud. Respondents attached to their complaint a 3M document entitled Laboratory Careers that states: “For equivalent levels, pay grades and benefits are the same on both sides of the dual ladder.” (emphasis added). These promises were expected to induce definitive action by the 3M employees and did induce the action. These promises are thus binding if injustice can be avoided only by enforcing the conduct. See Cohen, 479 N.W.2d at 391. In Cohen, we held as a matter of law that the undisputed and unambiguous promise of anonymity given by a news reporter to a person who supplied damaging information about a candidate for political office was clear and definite. See id. In reliance on the promise, Cohen turned over the records, the promi-sor broke his promise, and Cohen lost his job. See id. We then held that the test is whether enforcement is required to prevent an injustice. See id. We then concluded the resulting harm required a remedy to avoid an injustice. See id. at 392.
Second, and more importantly however, in neither Ruud nor Cohen did we articulate a standard by which the “clearness” or “definiteness” of a given promise could be judged. Furthermore, in Cohen, the ambiguity of the promise was not in dispute. 479 N.W.2d at 391. Nor does either of these cases suggest a departure from our other holdings on promissory estoppel.
We have repeatedly relied on the articulation of promissory estoppel found in the Restatement (Second) of Contracts § 90 (1981). See, e.g., AFSCME Councils 6, 14, 65 and 96, AFL-CIO v. Sundquist, 338 N.W.2d 560, 568 (Minn.1983); Grouse v. Group Health Plan, Inc., 306 N.W.2d 114, 116 (Minn.1981).2 Section 90 states:
A promise which the promisor should reasonably expect to induce action or *755forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.
Restatement (Second) of Contracts § 90 (1981).
We have echoed this standard in the employment context stating that promissory estoppel may be used to enforce promises “which the promisor expected or should have reasonably expected to induce action of a definite and substantial character by the promisee * * Sundquist, 338 N.W.2d at 568. The common question in these statements is whether there was a promise made that was, or reasonably should have been, expected to induce reliance on the part of another.
No statement in either Ruud or Cohen is in direct conflict with these other decisions or suggests that its three-part standard is more restrictive in any way. The “clear and definite” promise is another way of saying a promise that is or reasonably should be expected to induce reliance. The majority indicates that for a promise to be a proper basis for recovery under promissory estoppel that promise must be both “clear and definite” and reasonably induce reliance. However, nothing in our prior cases suggests this to be the standard. Rather, the test is if a promise is such that “the promisor should reasonably expect [it] to induce action or forbearance on the part of the promisee,” Restatement (Second) of Contracts § 90, the promise is clear and definite enough for justice to require a remedy for losses reasonably incurred by such reliance.
Whether representations by 3M meet this “reasonable reliance” standard is a question of fact for the jury. Only in the clearest of cases, like Ruud, or in cases where the facts have been undisputed as they were in Cohen, should we decide the issue of ambiguity as a matter of law. The majority, in its rush to dismiss the respondent’s claims, makes the elements of promissory estoppel more restrictive without justification from the precedent cited. To decide this issue as a matter law is inappropriate and inconsistent with our prior rulings. If the facts pled did turn out to be true, enforcement would be required to prevent an injustice.
Further, the majority also implies that the standard for a “clear and definite” promise in promissory estoppel is the same or substantially similar to the definiteness standard for offers. As noted above, neither Ruud nor Cohen provides any justification for this view.
Promissory estoppel is a theory that rises out of the court’s equitable powers and is used “to imply a contract in law where none exists in fact.” Grouse, 306 N.W.2d at 116. Though often used as an alternative theory in contract disputes, we have stated that: “Promissory estoppel is not a substitute for acceptance, consideration, or mutuality, but a doctrine based on reliance which courts may use in a proper case to prevent injustice.” Constructors Supply Co. v. Bostrom Sheet Metal Works Inc., 291 Minn. 113, 120, 190 N.W.2d 71, 75 (1971).
To conflate the contract requirements of offer and acceptance with the promise and reliance requirements of promissory estop-pel is unjustified and contrary to the distinct nature of these theories. It is completely possible that a contract claim may fail because the offer failed for indefiniteness. But, where that same offer is found to have been a promise reasonably expected to induce reliance in the offeree, that promise may be enforced to the extent justice requires. By conflating the “clear and definite” language of Ruud and Cohen with the definiteness standard for offers, the majority has unreasonably and unjustifiably changed the law of promissory es-toppel.
For all the above reasons, I cannot agree with the majority that as a matter of law the respondents have failed to state a claim for which relief could be granted under their claim of promissory estoppel. *756As noted earlier, under the facts as alleged in the complaint, what purpose could the dual ladder system serve if 3M employees were not intended to rely on it? While 3M’s counsel asserted at oral arguments that its employees could not reasonably rely on any of these statements, it challenges credulity to suggest that 3M never intended its employees to rely on the dual ladder program. At the very least, there is a question of fact to be resolved here. I would affirm the court of appeals on this issue as well.
Finally, the majority summarily dismisses the fraud claim with the same cursory dispatch it gave to the promissory estoppel claim, once again using its indefiniteness analysis. Such a standard is as inappropriate here as it was for promissory estop-pel.
While it is true that a fraud claim must be pleaded with specificity, the respondents have done so. To establish fraud a complaint must allege “(1) False representations; (2) made with the intent to deceive; (3) plaintiffs took action or refrained from taking action in reliance on these misstatements; (4) resulting in damages; (5) which are proximately caused by the misstatements.” Atcas v. Credit Clearing Corp. of Am., 292 Minn. 334, 349, 197 N.W.2d 448, 457 (1972).
The complaint in this matter makes a detailed record of representations made and their content concerning the dual ladder program. It alleges that these representations were false and details the reasons for this belief: management employees at the same and lower levels of seniority “advance far beyond [them] in terms of compensation, responsibility and recognition;” there is a “huge annual salary disparity,” and “lost stock options [and] profit sharing;” 3M created “a covert compensation fund entitled the Performance Unit Plan (PUP), which is designed to secretly and significantly increase the compensation of 3M management employees”; “[n]o technical employee has ever been permitted to participate in the PUP Fund”; and “a ‘head count’ policy at 3M limits the number of technical employees who may advance into successively higher positions on the Dual Ladder.”
These disparities are alleged to have cost respondents lost base compensation of over $100,000 per year as well as up to $500,000 per year in lost profit sharing, stock options and other compensation, which were paid to management employees at the same level as the technical employees on the dual ladder. While they do not allege intent or knowledge with specificity, Minn. R. Civ. P. 9.02 does not require them to do so. See Minn. R. Civ. P. 9.02 (stating “malice, intent, knowledge and other condition of mind of a person may be averred generally.”).
The majority seems to claim that since the claim here failed to meet the definiteness standard under contract theory, it also fails as a representation under the fraud theory. However, we have upheld fraud verdicts on evidence similar to that which the respondents allege here. In Hollerman v. F.H. Peavey & Co., we held that statements in a brochure discussing future profits for investors in a poultry business, when combined with false statements by the poultry farm’s agent concerning the health of the chickens, were sufficient to support a jury verdict of fraud. 269 Minn. 221, 229, 130 N.W.2d 534, 540 (1964). In this case, we have numerous representations in published material, also combined with statements by supervisors and other 3M agents. Whether alone or in combination these representations constitute fraud based on 3M’s behavior is again a question of fact.
The statements contained in the publications cited by the majority would be false statements of present fact if 3M knew or should have known when it made them that the program did not offer the opportunities claimed, They may also be, as the majority asserts, statements of future fact, which 3M never intended to go through *757with. These are factual questions for a jury to decide, or to be decided on summary judgment, if no material issues of fact can be supported. It is not appropriate for this court to dismiss these claims on the pleadings. I would affirm the court of appeals on this issue as well.
As we stated in Northern States Power, we should dismiss a case on the pleadings “only if it appears to a certainty that no facts, which could be introduced consistent with the pleading, exist which would support granting the relief demanded. * * * [W]e are thus required to do little more than engage in an exercise in theoretical logic.” 265 Minn. at 395, 122 N.W.2d at 29. The majority cannot artificially limit its analysis to a few select facts and dismiss this action for a failure to state a claim. If we accept as true the well-pleaded complaint, the majority’s analysis here is tantamount to stating that under no set of circumstances may 3M’s statements to its employees be enforced, regardless of what they said. This would be so even if reliance was reasonably induced and 3M knew all along that they would never go through with the plan. I do not believe that our case law supports such a conclusion.
At this embryonic stage of a case, dismissal on the pleadings is a harsh remedy justified only when it is impossible on any evidence that might be produced to grant the relief requested. See id., 122 N.W.2d at 29. Before discovery, we do not even know what most of those facts are and their determination is not necessary at this stage of the proceeding. Respondents’ allegations on the record make dismissal inappropriate. I would affirm the decision of the court of appeals on all three issues; breach of contract, promissory estoppel and fraud, and remand to the district court for further proceedings.

. Dual is defined as " * * * containing two or being one of two often identical parts ⅜ ⅜ ⅜ " Webster’s Third New International Dictionary 697 (1993).

. Our earlier cases relied on section 90 of the Restatement of Contracts (1932) as the articulation of the standard for promissory estoppel. See, e.g., Grouse, 306 N.W.2d at 116. The language relevant to this case remains the same in Restatement (Second) of Contracts (1981).