Urban Retail Properties Co., a Delaware corporation, Respondent, vs. Talisman Brookdale, L.L.C., a Delaware limited liability company, 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This opinion will be unpublished and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

A03-1877

 

Urban Retail Properties Co.,

a Delaware corporation,

Respondent,

 

vs.

 

Talisman Brookdale, L.L.C.,

a Delaware limited liability company,

Appellant.

 

Filed ­­­August 10, 2004

Affirmed

Harten, Judge

 

Hennepin County District Court

File No. CT 02-018206

 

Christopher J. Dietzen, Tamara O'Neill Moreland, Larkin, Hoffman, Daly & Lindgren, Ltd., 1500 Wells Fargo Plaza, 7900 Xerxes Avenue South, Bloomington, MN 55431-1194 (for respondent)

 

Brian M. Sund, Eric G. Nasstrom, Morrison, Fenske & Sund, P.A., 5125 County Road 101, Suite 102, Minnetonka, MN 55345 (for appellant)

 

            Considered and decided by Minge, Presiding Judge, Harten, Judge, and Halbrooks, Judge.

U N P U B L I S H E D   O P I N I O N

 

HARTEN, Judge

 

            Appellant challenges the summary judgment granted to respondent in the parties' contract dispute.  Because we see no genuine issue of material fact and no error in the application of the law, we affirm.                                           

FACTS

 

            In August 2001, appellant Talisman Brookdale, L.L.C. (Talisman), owner of a shopping center, entered into an agreement with respondent Urban Retail Properties Co. (Urban Retail) to act as broker for space in the shopping center.  The parties' agreement provided that Talisman would pay Urban Retail a monthly $10,000 retainer fee.  

            The agreement terminated in August 2002.  It is undisputed that Talisman failed to pay Urban Retail the retainer fees for April-August 2002.  Urban Retail brought this action to recover the retainer fee for those months, alleging breach of contract.  Talisman, also alleging breach of contract, counterclaimed to recover the fees it had paid. 

The district court granted Urban Retail's motion for summary judgment, and judgment was entered for Urban Retail against Talisman.  Talisman challenges the summary judgment, arguing that (1) the agreement precluded a common law action for breach, (2) there is a genuine issue of material fact concerning which party first breached the agreement, and (3) the agreement was ambiguous as to payment of the retainer fees.

D E C I S I O N

 

            On appeal from summary judgment, this court asks whether there are any genuine issues of material fact and whether the district court erred in applying the law.  State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).   

1.         Does the agreement preclude an action for breach of contract?

            "The construction and effect of a contract are questions of law for the court . . . ."  Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn. 1979).  The agreement provides that

Notwithstanding any other provisions of this Agreement, either party may cancel this Agreement on ten days' prior written notice if and only if one or more [of] the following occur:

 

. . . .

 

3.         The breach of any of its obligations hereunder by either party hereto and the failure to cure such breach within ten days of written notice of such breach from the other party.

 

Talisman argues that, because the agreement provides this remedy for breach, all other remedies are precluded, including a common law action for damages.  But Talisman's argument is inconsistent with both logic and the agreement itself.

            The agreement says only that a party may cancel the agreement in the event of the other party's uncorrected breach.  It does not say that the nonbreaching party must cancel or that the nonbreaching party has no option other than cancellation.  Moreover, the agreement also provides:

In the event any suit, action or proceeding arising from or based upon this Agreement shall be instituted between [Talisman] and [Urban Retail], the prevailing party shall be entitled to recover its reasonable attorneys' fees, costs and disbursements . . . .

 

Thus, the agreement envisions the possibility of lawsuits arising out of it, presumably as the result of breach.[1]

2.         Is there a genuine issue of material fact as to which party breached first?

            The district court found that Talisman was the first breaching party when it failed to make the retainer fee payment due on 1 April 2002.  Talisman argues that a genuine issue of material fact exists as to which party breached first, but conceded in its memorandum opposing summary judgment that Urban Retail had produced evidence showing that it "performed" until 31 March 2002.   But Talisman explains neither why, if Urban Retail was not in breach as of 31 March 2002, Talisman failed to make the 1 April 2002 retainer fee payment, nor why, if Urban Retail was in breach, Talisman failed to provide the written notice of breach prescribed by the parties' agreement.

Moreover, the only substantive breach that Talisman alleges is failure to submit the monthly reports referenced in the agreement.[2]  But the agreement refers to "such progress reports in form and content required by [Talisman] to inform [Talisman] of [Urban Retail's] activities . . . ."  Talisman presents no evidence showing that it advised Urban Retail what type of reports it required or that it objected and claimed Urban Renewal was in breach when it did not receive the reports it purportedly required.  "A party's continued recognition of a contract as binding after the other party's alleged breach acts as a waiver of that breach."  Creative Communications Consultants, Inc. v. Gaylord, 403 N.W.2d 654, 657 (Minn. App. 1987).  Talisman's failure to notify Urban Retail of its alleged breach was a recognition of the parties' agreement as binding and operates as a waiver of any alleged breach.  There is no genuine issue of material fact as to which party breached first.

3.         Was the agreement ambiguous in mandating retainer fee payments?

            Talisman argues that the retainer provision of the agreement was ambiguous.  "Whether a contract is ambiguous is a legal determination in the first instance."  Blattner v. Forster, 322 N.W.2d 319, 321 (Minn. 1982).  The agreement provides explicitly that "[Talisman] shall pay [Urban Retail] a retainer of $10,000 per month, payable on the first day of each month of the term hereof . . . ."  There is no ambiguity.

Talisman argues in the alternative that "entitlement to the retainer itself hinged upon Urban Retail actually succeeding in obtaining lease renewals and extensions, and new tenants" and "[p]ayment of the retainer doubtless was conditioned upon Urban Retail taking sufficient steps to perform the Agreement."  But Talisman points to nothing in the agreement that identifies what "sufficient steps" would be or that otherwise indicates that payment of the retainer was contingent on any particular performance.

            Finally, Talisman argues that, because the agreement set out both Urban Retail's responsibilities to perform and Talisman's responsibilities to pay, the latter was contingent on the former.  But the agreement also provided for Urban Retail to receive various commissions that were contingent on its performance: the retainer fee had no such contingencies. Talisman's argument ignores the distinction between a retainer fee and a commission.

The parties' agreement did not preclude an action for breach; no genuine issue of material fact exists concerning who first breached the agreement, and the agreement was not ambiguous as to payment of the retainer fees.

Affirmed.

 

[1] Talisman relies on the district court's finding that "the parties' agreement provides that the sole remedy for breach is termination of the agreement on ten days' written notice after written notice of the breach and failure to cure such breach," but that finding was made to explain why Talisman, which had not provided notice of Urban Retail's alleged breach, was not entitled to simply stop performing.  See Carlson Real Estate Co. v. Soltan, 549 N.W.2d 376, 380 (Minn. App. 1996) ("breach does not justify [nonbreaching party] in continuing the relationship under a new or modified charter"), review denied (Minn. 20 Aug. 1996).  The district court neither explicitly nor implicitly found that Urban Retail was not entitled to bring this action.

[2] Talisman claims that Urban Retail was in breach because it failed to live up to some of the promises it allegedly made before the parties entered into their agreement.  But those claims are precluded by the integration clause in the parties' argument: "This Agreement . . . constitutes the entire Agreement between [Talisman] and [Urban Retail] with respect to the subject matter hereof and supersedes all prior discussions negotiations and agreements, whether oral or written.  All such previous agreements are hereby canceled." See Alpha Real Estate Co. of Rochester v. Delta Dental Plan of Minn., 664 N.W.2d 303, 312 (Minn. 2003) (once parties have reduced their agreement to writing, parole evidence is inadmissible to vary, contradict, or alter the agreement).