Lori E. Christensen, Relator, vs. Visual Edge, Inc., Respondent, Commissioner of Economic Security, Respondent.
This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
STATE OF MINNESOTA
IN COURT OF APPEALS
Aero Properties, LLC,
Discover Aviation Days, et al.,
A to Z Party Rental, Inc.,
A to Z Party Rental, Inc.,
Filed July 16, 2002 Affirmed Halbrooks, Judge
Hennepin County District Court
File No. PD99014617
Jerome R. Klein, Candlin & Heck, 3800 West 80th Street, #1500, Bloomington, MN 55431 (for appellant)
Donald Chance Mark, Jr., Shannon M. McDonough, Erik F. Hansen, Fafinski, Mark & Johnson, P.A., 6600 City West Parkway, Suite 300, Eden Prairie, MN 55344 (for respondents Discover Aviation and Metro. Airports Comm'n)
Steven Jackson, 1044 Lantern Lane, Lino Lakes, MN 55014 (respondent pro se)
Considered and decided by Halbrooks, Presiding Judge, Klaphake, Judge, and Hanson, Judge.U N P U B L I S H E D O P I N I O N
In this consolidated matter, appellant challenges the judgment of dismissal and the trial court's denial of its posttrial motions for judgment notwithstanding the verdict or new trial on the grounds that the court erred by (1) failing to dismiss the gross negligence count and (2) permitting the jury to determine questions of law. Because the evidence supports the verdict and the trial court acted within its discretion, we affirm.FACTS
Respondent Discover Aviation Days (DAD), a nonprofit, volunteer organization, sponsors an annual "fly-in" event at the Anoka County Airport. In the course of planning for the May 1999 event, DAD asked respondent Steven Jackson to donate his time to find vendors. Jackson arranged to rent a large tent, tables, and chairs from appellant A to Z Party Rental, Inc. (A to Z), and A to Z installed the tent on Friday, May 21, 1999. Jackson signed a receipt for the tent and equipment at approximately 8:00 p.m. Two days later, the tent pulled out of the ground and blew into an airplane owned by Aero Properties, LLC (Aero), resulting in substantial property damage. Aero sued A to Z for damages. The claim was settled for $135,000 and A to Z then sought contribution/indemnity from DAD and Jackson.
Following trial, a jury returned a verdict finding that (1) Jackson did not enter into a contract with A to Z that included any "hold harmless" language, (2) the form Jackson signed was only a receipt for the rental equipment, (3) Jackson lacked authority to bind DAD, (4) the hold-harmless language was a term added later, (5) A to Z's tent installation was grossly negligent, (6) A to Z's negligence was a direct cause of Aero's loss, and (7) DAD and Jackson were not negligent.
The trial court dismissed A to Z's claims against DAD and Jackson and denied A to Z's posttrial motions for JNOV or new trial. This appeal follows.D E C I S I O N
We review a decision to grant or deny a new trial under an abuse-of-discretion standard. Halla Nursery, Inc. v. Baumann-Furrie & Co., 454 N.W.2d 905, 910 (Minn. 1990).
On appeal from a denial of a motion for a new trial, the verdict must stand unless it is manifestly and palpably contrary to the evidence, viewed in a light most favorable to the verdict.
ZumBerge v. N. States Power Co., 481 N.W.2d 103, 110 (Minn. App. 1992) (citation omitted), review denied (Minn. Apr. 29, 1992). When the trial court denies a JNOV motion, the denial "must be affirmed, if, in the record, there is any competent evidence reasonably tending to sustain the verdict." Pouliot v. Fitzsimmons, 582 N.W.2d 221, 224 (Minn. 1998)(quotation omitted).
A jury's answer to a special-verdict question "can be set aside only if no reasonable mind could find as did the jury." Domtar, Inc. v. Niagara Fire Ins. Co., 563 N.W.2d 724, 734 (Minn. 1997) (citation omitted). We will not set aside answers to special-verdict questions unless they are "perverse and palpably contrary to the evidence" or unless the evidence is so clear that no room for differences among reasonable people exists. Hanks v. Hubbard Broad., Inc., 493 N.W.2d 302, 309 (Minn. App. 1992) (citation omitted), review denied (Minn. Feb. 12, 1993).
1. Hold-Harmless Language.
A to Z argues that the hold-harmless language on the back of the rental agreement that Jackson signed was binding as a matter of law. The questions of contract formation and its terms are to be determined by the fact-finder. Bergstedt, Wahlberg, Bergquist Assoc., Inc. v. Rothchild, 302 Minn. 476, 480, 225 N.W.2d 261, 263 (1975). The reverse side of the document contained the following language:
Customer agrees to assume risk of, and hold Dealer harmless for, property damage and personal injuries caused by the equipment and/or arising out of Dealer's negligence.
In the upper left-hand corner on the front side was printed: "This is a legal contract. The person signing this contract is bound by the terms and conditions described on both sides of this document." The jury concluded that the hold-harmless clause on the back of the form was not part of the rental agreement between the parties. The issue before this court is whether the evidence presented at trial supports the jury's conclusion.
Jackson testified that he talked to A to Z three times in the process of ordering the tent, tables, and chairs. At no time did A to Z ever explain to him that he would be required to agree to indemnify A to Z for its negligence in order to rent equipment. A to Z installed the tent without any assistance or guidance from DAD, Jackson, or anyone else. When A to Z gave Jackson the form to sign after the tent had been installed, the hold-harmless clause was not mentioned. Jackson testified that he signed the document with the understanding that he was acknowledging receipt of the rental items and nothing more. Furthermore, A to Z conceded that it did not always require signatures on its rental forms and, in fact, that roughly 25% of its forms were accepted unsigned.
In general, failure to read an agreement does not provide grounds for excusing an individual from a contract. See Gartner v. Eikill, 319 N.W.2d 397, 398 (Minn. 1982) (noting the general rule that in absence of fraud or misrepresentation, person who signs contract may not avoid it on ground that he did not read it or thought its terms to be different). The Restatement of Contracts expresses a similar principle relating to standardized forms, but notes that it is subject to limitation:
Customers do not in fact ordinarily understand or even read the standard terms [of standardized agreement forms]. They trust to the good faith of the party using the form and to the tacit representation that like terms are being accepted regularly by others similarly situated. But they understand that they are assenting to the terms not read or not understood, subject to such limitations as the law may impose.
Restatement (Second) of Contracts § 211 cmt. b (1981).
In City of Savage v. Varey, 358 N.W.2d 102, 105 (Minn. App. 1984), review denied (Minn. Feb. 27, 1985), we noted an exception to the general rule that an individual signing a contract is necessarily bound to its terms. We stated:
Where a party drafts a written contract after a verbal agreement, and presents it to the other party for signature, there is a representation that the writing conforms to the verbal agreement. If this representation is false, the misrepresentation is "inequitable conduct" justifying reformation.
Id. (quotation and citations omitted). Here, the evidence was undisputed that the parties never discussed the hold-harmless clause and A to Z presented the form to Jackson as though it were a receipt. A to Z conceded that its primary concern was receiving payment rather than obtaining a signature. We conclude that this case fits within the limitation to the general rule that an individual signing a contract necessarily assents to each of its terms. There is adequate support for the jury's finding that the indemnification clause was not part of the parties' agreement.
Because this case presents an issue of contract law, A to Z objects to the trial court's reliance on two sales-of-goods cases in the court's denial of its JNOV motion. The trial court relied on Lemmer v. IDS Properties, Inc., 304 N.W.2d 864, 870-71 (Minn. 1980), in which the supreme court held that an indemnity clause in a purchase agreement for scaffolding between IDS Properties, Inc. and Waco Scaffolding and Shoring Company was not binding on IDS Properties. The court analyzed the case under the Uniform Commercial Code to determine whether an indemnification agreement to pay attorney fees was part of IDS Properties and Waco's prior oral agreement. Id. at 870. Waco and IDS Properties agreed that they reached an oral contract for the sale of the scaffolding. Id. When Waco delivered the scaffolding to IDS Properties, Waco presented the IDS Properties building superintendent with a document for him to sign. Id. at 871. The document contained an additional term making IDS Properties liable for any attorney fees that Waco incurred in connection with a lawsuit related to the scaffolding. Id. at 867.
When some of the scaffolding collapsed, injuring Lemmer, a subcontractor's employee, Waco attempted to enforce the indemnity clause against IDS Properties. Id. at 870. The supreme court held that the indemnification clause was not binding because the building superintendent was not the individual who had negotiated the oral contract with Waco. Id. at 871. The superintendent's duties consisted of signing receipts for goods ordered by IDS Properties. Id. Because Waco did not notify the proper IDS Properties employee of the change in the contract, IDS was not bound to the hold-harmless provision. Id. Although the present case is purely an issue of contract law, the same principles apply. The record indicates that Jackson lacked authority to bind DAD to the indemnification clause, and Jackson was under the impression that the document he signed was a rental receipt for the merchandise. The trial court's reliance on Lemmer, even though it is a sales-of-goods case, was therefore appropriate.
In Cambern v. Hubbling, 238 N.W.2d 622 (Minn. 1976), also a sales-of-goods case, the issue was whether the trial court erred in excluding from the jury's consideration a receipt for cattle that bound the purchaser to a hold-harmless clause. Id. at 623. The parties had reached an oral contract for the sale of cattle. Id. at 624. When Cambern delivered the cattle to the Hubblings, Cambern presented them with a written hold-harmless provision stating that he would not be responsible if the cattle became ill or died. Id. at 623-24. Shortly after delivery, nearly half of the cattle died of bronchopneumonia, and the Hubblings were forced to sell the rest of the herd at a financial loss. Id. at 623. The supreme court noted that, when Cambern presented the document to the Hubblings, he did not direct their attention to the hold-harmless provision and they did not read the language. Id. at 624. The court held that the district court properly excluded the written agreement from the jury's consideration because the Hubblings did not agree to the hold-harmless provision. Id. Although Cambern is a sales-of-goods case, its facts are similar to this appeal and the trial court's reliance on Cambern was proper.
A to Z argues that Kaiser v. Conagra Fertilizer Co., No. C0-93-32, 1993 WL 231677, at *1-*2 (Minn. App. June 29, 1993), review denied (Minn. Aug. 16, 1993), where we upheld an indemnification clause in a rental agreement for anhydrous tank trailers, requires a decision in its favor. In Kaiser, Jacobson Transport, Inc., leased tank trailers from the ConAgra fertilizer company pursuant to a one-year lease agreement that contained a clause stating that Jacobson would indemnify and hold ConAgra harmless
against any and all losses, claims, demands, liabilities, suits or actions * * * for injuries to or death of any person or persons * * * arising in any manner out of the use or existence of the equipment leased hereunder.
Id. at *1.
Steven Kaiser, an employee of Jacobson, was hurt while using a tarp strap to secure hoses to the tank. Id. Kaiser sued ConAgra for failing to provide proper equipment to secure the hoses. Id. After settling with Kaiser, ConAgra sought indemnification from Jacobson. Id. The trial court denied ConAgra's claim. Id. We reversed because the indemnification clause in Kaiser was indisputably part of the parties' contract and because Kaiser's injuries fell within the plain language of the clause. Id. at *1-*2. Kaiser is distinguishable from this case because the indemnification clause in Kaiser was clearly part of the parties' agreement.
2. Jackson's Authority
A to Z contends that Jackson had authority to bind DAD because, as DAD's agent, Jackson had the authority to do whatever was "reasonably necessary" to rent the tent. Because Jackson signed the rental form, A to Z argues that DAD was bound to the hold-harmless clause. The jury found that Jackson lacked the authority to bind DAD to the hold-harmless provision. The evidence supports the jury's conclusion.
Whether an agency relationship exists is generally a question of fact. Vacura v. Haar's Equip., Inc., 364 N.W.2d 387, 391 (Minn. 1985). Actual authority is present when the agent has specific orders to perform a task. Winkel v. Eden Rahab. Treatment Facility, Inc., 433 N.W.2d 135, 138 (Minn. App. 1988). Apparent authority exists when the principal
held the agent out as having authority, or must have knowingly permitted the agent to act on its behalf; furthermore, the party dealing with the agent must have actual knowledge that the agent was held out by the principal as having such authority or had been permitted by the principal to act on its behalf; and the proof of the agent's authority must be found in the conduct of the principal, not the agent.
Foley v. Allard, 427 N.W.2d 647, 652 (Minn. 1988) (quoting Hockemeyer v. Pooler, 268 Minn. 551, 562, 130 N.W.2d 367, 375 (1964)).
There is no evidence that Jackson had actual authority to bind DAD. Specketer testified that he did not give Jackson the authority to bind DAD to contracts. Jackson was to rent a tent, find vendors, and fill the tent with exhibits. That testimony was consistent with Jackson's. Therefore, Jackson's actual authority did not extend to binding DAD to indemnification clauses.
Regarding apparent authority, the evidence was that DAD did not knowingly allow Jackson to bind it to an indemnification agreement. Even if Jackson had authority to bind DAD to the indemnification clause, A to Z was unaware that DAD held him out for that reason. "[E]very person who undertakes to deal with an agent is put on inquiry * * * ." Id. at 653 (quotations omitted). A to Z never asked Jackson if he had the authority to bind DAD to the hold-harmless clause. A to Z admits that Jackson never indicated he was ordering the tent on behalf of DAD. Jackson ordered the tent, himself, and paid with his personal check.
A to Z now claims that its lack of knowledge as to the scope of Jackson's authority made DAD an undisclosed principal subject to liability. But because A to Z makes this argument for the first time on appeal, we decline to consider it. See Thiele v. Stich, 425 N.W.2d 580, 582-83 (Minn. 1988) (arguments raised for the first time on appeal will not be considered).
3. Gross Negligence
A to Z argues that the trial court erred in submitting the question of gross negligence to the jury because it contends that, as a matter of law, it was not grossly negligent. Gross negligence is "negligence of the highest degree." Ackerman v. Am. Fam. Mut. Ins. Co., 435 N.W.2d 835, 840 (Minn. App. 1989) (quotation omitted). "Gross negligence is substantially and appreciably higher in magnitude than ordinary negligence." Id. (quotation omitted). DAD's expert witness, engineer Henry Daugherty, testified that A to Z thoroughly failed to install the tent properly. There was evidence that A to Z failed to note that trees or buildings were not present to act as wind buffers and did not use enough stakes to secure the tent in the loose, sandy soil. Daughtery estimated that 40 stakes would have been necessary to secure the tent under the existing conditions. A to Z used eight. Daugherty testified that A to Z did not spend enough time installing the tent and then failed to inspect the tent to ensure its stability. In spite of the weather conditions, Daugherty explained, proper installation would have avoided the accident. Daugherty also testified that A to Z's anchoring of the tent was "absolutely, totally inappropriate" and stated that A to Z was "inviting an accident" in erecting the tent in that manner. A to Z failed to counter Daugherty's testimony. Given this compelling evidence and A to Z's failure to rebut it, the trial court did not err in submitting the issue to the jury. The evidence supports the jury's finding of gross negligence on the part of A to Z.