Robert McDonald, Respondent, vs. Roger E. Olson, a/k/a R. Emil Olson, Appellant.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C2-03-276

 

Robert McDonald,
Respondent,
 
vs.
 
Roger E. Olson,
a/k/a R. Emil Olson,
Appellant.

 

Filed November 18, 2003

Affirmed

Wright, Judge Concurring specially, Harten, Judge

 

Dakota County District Court

File No. CX0111207

 

 

Thomas P. Malone, Edward P. Sheu, Barna, Guzy & Steffen, Ltd., 400 Northtown Financial Plaza, 200 Coon Rapids Boulevard, Minneapolis, MN  55433 (for appellant)

 

Andrew V. Moran, Moran Law Office, 501 East Highway 13, #114, Burnsville, MN  55337 (for respondent)

 

            Considered and decided by Wright, Presiding Judge; Harten, Judge; and Anderson, Judge.

U N P U B L I S H E D  O P I N I O N

 

WRIGHT, Judge

 

Appellant challenges the district court's denial of his motion for judgment notwithstanding the verdict (JNOV) or, in the alternative, a new trial after a jury found that appellant breached his contract with respondent and awarded damages in the amount of $72,704.73.  We affirm.

FACTS

 

On May 19, 2000, appellant Roger Olson and respondent Robert McDonald entered into a written contract in which Olson agreed to assign McDonald a judgment in the amount of $163,369.86 in exchange for payment of $37,500.  The relevant terms of the parties' agreement are as follows:

1.         Assignment: Roger Olson agrees to assign Robert McDonald the Judgment of Rochester Sand & Gravel, Inc. Pension Plan dated October 20, 1997 in the amount of $163,369.86 which was assigned to Olson on or about November 12, 1998.  In exchange Robert McDonald agrees to pay Roger E. Olson the sum of $37,500.00 on or before May 19, 2000 and to release any and all claims related in any way to the Judgment against Roger E. Olson, his successors, assigns and heirs.

 

. . . .

 

            3.         Representations and Warranty: Notwithstanding paragraph 2 above, Roger E. Olson hereby represents and warrants that he has not been paid any money by Freeborn-Mower Ltd. on the judgment from Rochester Sand & Gravel, Inc. dated October 20, 1997, and that said judgment in the amount of $163,369.86, plus interest is valid and outstanding.

 

            4.         Entire Agreement: This Agreement sets forth the entire Agreement between the parties hereof. 

 

McDonald subsequently discovered that the judgment had been partially satisfied prior to the assignment.  As a result, the judgment's value was reduced by $66,235.50. 

            McDonald sued Olson, alleging fraud by misrepresentation, negligent misrepresentation, and breach of contract.  McDonald sought to recover $66,235.50, the difference between the judgment's face value and its actual value.  The jury awarded McDonald $72,704.73 in damages after finding that Olson breached the contract.  The jury also dismissed McDonald's misrepresentation claims, finding that he did not justifiably rely on Olson's misrepresentations.  The district court subsequently denied Olson's motions for JNOV or, alternatively, a new trial.  This appeal followed. 

D E C I S I O N

 

The denial of a motion for JNOV is reviewed de novo.  Pouliot v. Fitzsimmons, 582 N.W.2d 221, 224 (Minn. 1998).  JNOV is proper when the verdict is manifestly against the entire evidence.  Id.  A reviewing court must affirm the district court's denial of the motion for JNOV, unless the evidence is practically conclusive against the verdict.  Id.  We consider the evidence in the light most favorable to the prevailing party, and we will not set aside the verdict "if it can be sustained on any reasonable theory of the evidence."  Id.  The decision to grant or deny a new trial lies "within the sound discretion of the trial court and will not be disturbed absent a clear abuse of that discretion."  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, an appellate court should not set aside a jury verdict unless it is manifestly and palpably contrary to the evidence viewed as a whole and in the light most favorable to the verdict.

 

Raze v. Mueller, 587 N.W.2d 645, 648 (Minn. 1999) (quotation omitted).

I.

In construing a contract, we discern the parties' intention from the instrument as a whole, not from isolated clauses.  Telex Corp. v. Data Products Corp., 271 Minn. 288, 295, 135 N.W.2d 681, 686-7 (1965).  A contract is ambiguous if it is susceptible to more than one construction.  Republic Nat'l Life Ins. Co. v. Lorraine Realty Corp., 279 N.W.2d 349, 354 (Minn. 1979).  Where the contract language is ambiguous, we may resort to extrinsic evidence to determine its meaning.  Id.  But extrinsic evidence may not be used to vary the terms of a written contract when the contract is neither incomplete nor ambiguous.  Alpha Real Estate Co. of Rochester v. Delta Dental Plan of Minn., 664 N.W.2d 303, 312 (Minn. 2003). 

Neither party disputes that a contract exists.  Olson argues, however, that a breach did not occur because the circumstances surrounding the contract's formation evidence McDonald's intent to use the judgment solely to prevent junior liens from foreclosing on the subject property, which he succeeded in doing.  In support of his argument, Olson urges us to use extrinsic evidence to determine McDonald's intent in purchasing the judgment.  Because the contract is neither ambiguous nor incomplete, we decline to do so.

Construing the contract as a whole, the parties agreed that Olson would assign McDonald a judgment in the amount of $163,369.86.  Olson warranted that "said judgment in the amount of $163,369.86, plus interest is valid and outstanding."  The terms of the agreement are unambiguous, and they do not limit or qualify the assignment.  Moreover, the contract contained a merger clause, establishing that "the parties intended the writing to be an integration of their agreement."  Alpha Real Estate Co.,664 N.W.2d at 312 (citing Richard A. Lord, Williston on Contracts § 33:21 (4th ed. 1999)).

A party breaches a contract when it renounces liability under the contract, totally or partially fails to perform, or makes performance of its obligations under the contract impossible.  Assoc'd Cinemas of Am. v. World Amusement Co., 201 Minn. 94, 99, 276 N.W. 7, 10 (1937).  By its terms, the contract provided that McDonald would receive a "valid and outstanding" judgment in the amount of $163,369.86.  At trial, Olson testified that, prior to the assignment, he was aware that the judgment had been partially satisfied, which reduced the judgment's value by approximately $66,000, and he did not disclose this information to McDonald.  It is undisputed that McDonald fulfilled his end of the bargain.  Olson breached the contract when he assigned McDonald a judgment valued at $97,000 rather than $163,369.86.  When viewedin the light most favorable to the verdict, the record contains ample evidence to support the jury's verdict that Olson breached the contract.  The district court's denial of Olson's motion for JNOV or a new trial, therefore, was proper as to liability. 

II.

 

Having determined that Olson breached the terms of the agreement, we next address Olson's contention that he did not cause McDonald's damages.  In contract, the damage award should place the nonbreaching party where it would have been if the contract were performed.  Lesmeister v. Dilly, 330 N.W.2d 95, 102 (Minn. 1983).  In determining the amount of damages to be awarded, the jury is not bound by any strict or precise mathematical rules in reaching an amount. Cummins v. Rachner, 257 N.W.2d 808, 814 (Minn. 1977).  We will not disturb a damage award "unless its failure to do so would be shocking or would result in plain injustice."  Hughes v. Sinclair Mktg., Inc., 389 N.W.2d 194, 199 (Minn. 1986). 

Olson argues that, because McDonald never attempted to collect on the judgment, Olson did not proximately cause McDonald's damages.  This argument is flawed in two respects.  First, Olson's argument presumes the parties' agreement was conditioned on McDonald attempting to collect on the judgment.  The parties' agreement, however, contains no terms outlining a specific method for enforcing the judgment.  McDonald's efforts in collecting the judgment are, therefore, not determinative of whether McDonald suffered any damages.  Second, McDonald testified that he began enforcing the judgment by attempting to acquire clear title in the property that was subject to the judgment.  Moreover, a judgment survives for ten years after its entry and is subject to renewal.  Minn. Stat. § 548.09, subd. 1 (2000).  Thus, McDonald's future ability to enforce the judgment in the amount of $163,369.86is substantially impaired by Olson's breach.

As to the amount of damages, the record establishes that (1) the contract purported to assign a judgment worth $163,369.86 plus interest; (2) the judgment was partially satisfied in the amount of $66,235.50 prior to the assignment; and (3) the interest accruing on the amount partially satisfied equaled $12,319.05.  The jury determined that the sum of $72,704.73 would fairly and adequately compensate McDonald for damages directly caused by Olson's breach. 

Olson next argues that McDonald had a duty to mitigate the damages by either checking whether there had been a partial satisfaction of the judgment recorded or accepting Olson's rescission offer.  Upon a breach of contract, an injured party must use reasonable diligence to minimize the damages.  Costello v. Johnson, 265 Minn. 204, 208, 121 N.W.2d 70, 74 (Minn. 1963).  McDonald, however, could not, as Olson suggests, mitigate his damages by checking for a partial satisfaction after the contract was breached.  Indeed, after McDonald fulfilled his contractual obligation, McDonald's knowledge of the judgment's partial satisfaction merely confirmed that a breach had occurred.  Olson's rescission argument is similarly unpersuasive.  Rescission is a remedy available to the party that is adversely affected.  Johnny's, Inc. v. NJAKA, 450 N.W.2d 166, 168 (Minn. App. 1990) (noting that rescission is available where the injury caused by the breach of contract is irreparable, or where the damages would be inadequate or difficult to determine).  Olson, who breached the contract, sought to rescind it.  McDonald rejected Olson's offer and expressed his willingness to settle the matter for $66,235.50the difference between the judgment's face value and its actual value.  McDonald was not obligated to accept the offer to rescind the contract.  McDonald never requested rescission, and the record clearly supports the jury's determination that rescission did not occur. 

On this record, we affirm the district court's denial of Olson's motion for JNOV or a new trial as to liability and damages.

            Affirmed.

HARTEN, James (concurring specially)

            I concur with the opinion in all respects.  I write separately to emphasize what appears to be inescapable.  Olson brazenly signed a contract knowing that he specifically warranted that the $163,369.86 judgment was totally "valid and outstanding," when he knew that it was not.  Olson demonstrated deliberate disregard and willful indifference toward McDonald's rights.  Under the circumstances, Olson's claims in this court are notably weak.