The County of Polk, Respondent, vs. Minnesota Dehydrated Vegetables, Inc., Appellant.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (1998).

STATE OF MINNESOTA

IN COURT OF APPEALS

C6-99-2137

The County of Polk,
Respondent,
 
vs.
 
Minnesota Dehydrated Vegetables, Inc.,
Appellant.

Filed June 27, 2000

Affirmed
Klaphake, Judge

Polk County District Court

File No. C8-98-1510

Wayne Swanson, Polk County Attorney, Crookston Professional Center, 223 E. 7th St., Suite 101, Crookston, MN  56716 (for respondent)

Charles A. Stock, Johannson, Rust, Fagerlund, Yon & Stock, P.A., 407 North Broadway, P.O. Box 605, Crookston, MN  56716 (for appellant)

            Considered and decided by Kalitowski, Presiding Judge, Klaphake, Judge, and Foley, Judge.*

KLAPHAKE, Judge

            Appellant Minnesota Dehydrated Vegetables, Inc. (MDV) contracted with respondent Polk County (the county) to purchase steam to operate its facility.  After the facility was destroyed by fire, MDV failed to pay the county's bill of $79,763.57.  The county sued for breach of contract and MDV counterclaimed, alleging promissory estoppel. 

            The district court granted summary judgment to the county, determining that the parties' contract required modifications to be in writing and that the statute of frauds disallowed oral modification of the written contract.  The court further determined that even if there had been an agreement to modify, there was no agreement on the terms. 

            MDV appeals.  Because we conclude that the statute of frauds requires any modification of this contract to be in writing and that no material facts exist regarding a claim for promissory estoppel, we affirm.

            "On an appeal from summary judgment, we must examine two questions, whether there are any genuine issues of material fact and whether the lower courts erred in their application of the law."  Cummings v. Koehnen, 568 N.W.2d 418, 420 (Minn. 1997) (citation omitted).  Where the nonmoving party merely creates metaphysical doubt as to a factual issue that is not sufficiently probative to permit reasonable persons to draw different conclusions, summary judgment is appropriate.  DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997).  The evidence must be viewed, however, in the light most favorable to the party against whom summary judgment was granted.  Vetter v. Security Continental Ins. Co, 567 N.W.2d 516, 520 (Minn. 1997).

            Statute of Frauds

            MDV argues that the parties orally agreed to modify the contract.  By its own terms, the contract could not be "modified, except by an instrument in writing executed by MDV and [the county]."  At common law, parties were not prevented from modifying a contract orally, even though the contract might require modifications to be in writing.  See John D. Calamari & Joseph M. Perillo, The Law of Contracts, § 5.14, at 240 (4th ed. 1998) (common law rule states that even where contract includes no modification clause, parties may alter contract by parol); but see Patano v. McGowan, 530 N.W.2d 912, 915 (Neb. 1995) (affirming trial court's order sustaining demurrer to counterclaims where counterclaims were based on oral modification of written agreements and agreements plainly required modifications to be in writing).  Under Minnesota's statute of frauds, however, any modification to this contract was required to be in writing because the contract was for a five-year term and could not be performed within a year.  See Minn. Stat. § 513.01(1) (1998) ("[n]o action shall be maintained * * * upon any agreement, unless such agreement * * * is in writing" if agreement, by its terms "is not to be performed within one year from the making thereof"); see also Wohajn v. Faul, 235 Minn. 397, 399, 51 N.W.2d 97, 99 (1952).

MDV attempts to circumvent the statute of frauds by arguing that the parties' oral modification was susceptible of being performed within one year.  This argument is without merit because the modification pertained to price and did not alter the underlying five-year term of the contract.  MDV further argues that the partial performance exception to the statute of frauds applies.  See Matheson v. Gullickson, 222 Minn. 369, 372-73, 24 N.W.2d 704, 706-07 (1946) (statute of frauds did not bar promisee's obtaining equitable trust in property where promisee sufficiently performed oral contract to serve farmer and his wife if they left their farm to promisee).  However, neither party changed its position after the alleged modification.  Thus, we conclude that the statute of frauds bars MDV from maintaining an action based on an oral modification to the contract.

Promissory Estoppel

            MDV claims that material fact issues exist on whether promissory estoppel applies in this case.  MDV argues that the county promised to restructure and reduce its price formula during the fall of 1996, retroactive to July 1, 1996.  MDV further claims that it relied on this promise by continuing in business through that winter when, without a price reduction, it would have gone out of business.

            The elements of a promissory estoppel claim are as follows:

(1) a promise has been made; (2) the promisor should have reasonably expected the promise to induce action by the promisee; (3) the promisee does in fact act; and (4) justice requires enforcement of the promise.

McNeill & Assocs., Inc. v. ITT Life Ins. Corp., 446 N.W.2d 181, 186 (Minn. App. 1989) (citation omitted), review denied (Minn.  Dec. 1, 1989).   

            The record does not show that a definite promise was made in this case.  Because price was an essential element of this contract, any contract modification to alter price would necessarily include the amount of the price change.  MDV concedes that the parties never agreed on an amount to reduce the price, and the parties continued to deal under the existing contract until the facility burned on May 4, 1997.  Thus, any promise made to MDV was too nonspecific and indefinite to be enforceable.  See Ruud v. Great Plains Supply, Inc., 526 N.W.2d 369, 372 (Minn. 1995) (in promissory estoppel claim, promise must be "clear and definite" to be actionable). 

            Nor is there any injustice here that requires enforcement of the promise.  In business dealings involving negotiations over price changes to a written contract, there is little "injustice" in enforcing the written terms of the existing contract where any modifications to the contract do not meet required formalities.  See Faimon v. Winona State Univ., 540 N.W.2d 879, 883-84 (Minn. App. 1995) (where university promised instructor that non-tenured position would remain available for another year, and instructor had held position for three prior years this court found injustice element lacking in university's making the position tenured, commenting that case did not call for "special judicial action in the name of avoiding injustice"), review denied (Minn.  Feb. 9, 1996); see also Milliken & Co. v. Eagle Packaging Co., 295 N.W.2d 377, 381 (Minn. 1980) (where only proof of modification to written contract is oral exchanges, the written contract controls; any alleged performance or reliance on oral modification must be "unequivocally referable" to oral modification). 

            We conclude that the alleged oral modification of the contract is barred by the statute of frauds and that no material facts exist relating to promissory estoppel.  The district court therefore did not err in granting summary judgment to the county on its claim that MDV owed it $79,763.57 under the contract.

            Affirmed.

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.