Huebsch Laundry Company, Appellant, vs. Deluxe Diecutting, Inc., Respondent.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2000).

STATE OF MINNESOTA

IN COURT OF APPEALS

C5-00-1228

Huebsch Laundry Company,

Appellant,

vs.

Deluxe Diecutting, Inc.,

Respondent.

Filed February 20, 2001

Affirmed

Kalitowski, Judge

Hennepin County District Court

File No. CT995331

Ned E. Ostenso, Thomas K. Cambre, Merrigan, Brandt & Ostenso, P.L.L.P., 25 Ninth Avenue North, P.O. Box 458, Hopkins, MN 55343 (for appellant)

David R. Knodell, Knodell Law Office, P.O. Box 99, Hamel, MN 55340-0099 (for respondent)

            Considered and decided by Kalitowksi, Presiding Judge, Randall, Judge, and Crippen, Judge.

U N P U B L I S H E D   O P I N I O N

KALITOWSKI, Judge

            Appellant Huebsch Laundry Company challenges the judgment entered on the district court's order granting respondent's motion for a directed verdict.  It contends:  (1) the district court erred in determining that the contract terms pertaining to liquidated damages on the reverse side of the agreement were not part of the contract; and (2) the district court should have awarded it liquidated damages and attorney fees, or, in the alternative, it is entitled to a remand to establish its actual damages resulting from respondent's breach of contract.  We affirm.

D E C I S I O N

I.

A motion for a directed verdict

presents a question of law for the [district] court: whether the evidence is sufficient to present a fact question for a jury to decide.  A directed verdict should be granted only where, in light of the evidence as a whole, it would be the duty of the [district] court to set aside a contrary verdict as manifestly contrary to the evidence or to the law.  Finally, in considering the motion, the [district] court must accept as true the evidence favorable to the adverse party and all reasonable inferences which can be drawn from that evidence. 

Claflin v. Commercial State Bank, 487 N.W.2d 242, 247 (Minn. App. 1992) (citations omitted), review denied (Minn. Aug. 4, 1992).  "On appeal from a directed verdict, we make an independent determination of whether the evidence was sufficient to present a fact question to the jury."  Boone v. Martinez, 567 N.W.2d 508, 510 (Minn. 1997) (citation omitted).  "In making such a determination, we review the evidence in a light most favorable to the nonmoving party."  Id. (citation omitted).  Where the district court grants a motion for a directed verdict, we determine whether the evidence and its inferences could reasonably sustain a contrary verdict.  Northwestern State Bank v. Gangestad, 289 N.W.2d 449, 453 (Minn. 1979).  There is no meaningful distinction between a directed verdict and a dismissal.  Kozak v. Weiss, 348 N.W.2d 798, 802 (Minn. App. 1984); Paradise v. City of Minneapolis, 297 N.W.2d 152, 155 (Minn. 1980).

            Appellant contends the district court erred in determining as a matter of law that the terms on the reverse side of its 1998 service agreement with respondent are not enforceable parts of the contract.  We disagree.  When terms appear

below the signature, or on the back of the instrument, * * * a signature authenticates only the matter intended by the parties to be included as part of the instrument.

Brown v. State Auto Ins. Ass'n, 216 Minn. 329, 337, 12 N.W.2d 712, 716 (1944).  This intent "must be manifested either by express reference or by internal evidence in the writings involved from which an inference of such intention follows."  Id.  In the absence "of an express reference above the signature," internal evidence "must be supplied * * * showing that the provisions above the signature refer to those not above it."  Id. at 338, 12 N.W.2d at 716.

            Terms 1 through 6 of the agreement appear above the signatures on the front side of the document, while terms 7 through 13 are located on the back, below the signatures.  Appellant first contends that because the terms of the agreement are numbered 1 through 13, there is sufficient evidence that the terms on the reverse side of the agreement were intended to be read in conjunction with the terms on the front  above the signatures.  We disagree.  There is no reference in the contract terms above the signatures to any additional terms on the reverse side.  Therefore, the numbering system alone is insufficient to demonstrate the requisite intent.  See id. at 339, 12 N.W.2d at 717 (concluding that matter beneath the signature was part of the contract because this matter was referred to in the body of the contract above the signature); Sitterly v. Gray Co., 199 Minn. 475, 477, 272 N.W. 387, 388 (1937) (finding no contract where there was no reference above the signature to matter printed below the signature on the reverse side of the agreement).

            Appellant also contends the terms below the signatures are part of the contract because term 4 on the first page discusses termination of the agreement, an issue also discussed on the reverse side of the agreement.  But the reference to termination on the front side of the agreement is fully explained in clause 4 and does not alert the reader that the clause must be read in light of the termination clause on the back.

            Finally, appellant contends its past business relationship with respondent demonstrates sufficient evidence that the terms below the signature were intended by the parties to be included in the entire contract.  We disagree.  The parties signed a contract in 1995 virtually identical to the 1998 agreement at issue in this case.  At most the testimony of respondent's part-owner concedes that it is possible that if respondent was aware of terms 1 through 13 contained in the 1995 agreement, it also might have been aware of these same terms below the signatures on the 1998 agreement.  But alleged prior knowledge is not the standard articulated in Brown for determining whether parties intended matter below the signatures to be included in a contract.  Rather, the intention of the parties must be manifested either by express reference or by internal evidence in the writings.  216 Minn. at 337, 12 N.W.2d at 716.

            Because the liquidated damage clause is located below the signatures, and no intention was expressed by the parties to include the termination clause on the reverse side of the agreement, the district court properly determined that the contract between the parties only consisted of the terms above the signatures.  Thus, there was no fact question to be determined regarding the issue of liquidated damages, and the district court did not err in granting respondent's motion for directed verdict. 

II.

            Appellant contends that if it is not entitled to recover liquidated damages, this case should be remanded to the district court for a determination of actual damages caused by respondent's early termination of the contract.  We disagree.  Appellant put on its entire case and had the opportunity to fully address the issue of actual damages in district court.  But, it elected to focus on the issue of liquidated damages, and presented no specific evidence by which the district court could award damages for the breach.  We therefore conclude that the district court did not err in failing to award actual damages to appellant and that appellant is not entitled to a remand to present additional evidence.

            Affirmed.