Opinion
No. C4-01-1117.
Filed March 26, 2002.
Appeal from the District Court, Wright County, File No. C5001230.
Craig D. Greenberg, Huffman, Usem, Saboe, Crawford Greenberg, P.A., (for appellant)
David S. Rochlin, Rochlin Law Firm, Ltd., (for respondent Floe Int'l)
Patrick J. Neaton, Neaton, Puklich Klassen, (for respondent Delano Sports)
Considered and decided by Crippen, Presiding Judge, Peterson, Judge, and Halbrooks, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Appellant Brinkman's, Inc., challenges the district court's judgment of dismissal following its grant of summary judgment to respondent Floe International, Inc., and the dismissal of Brinkman's claim against respondent Delano Sports Center, Inc. Brinkman's argues that the district court erred in concluding that there was no franchise contract between itself and Floe, that Minn. Stat. § 80E (2000) is inapplicable, and that there are no genuine issues of material fact as to whether Floe and Delano had or intended to have a franchise agreement. Because we conclude that the district court did not err, we affirm.
FACTS
Appellant Brinkman's, Inc., is a retail trailer dealership that buys snowmobile trailers from respondent Floe International, Inc., a trailer manufacturer. Brinkman's and Floe began doing business with one another in 1996. On September 27, 1996, Wayne Floe, Floe's president, signed and sent Brinkman's a state-prepared form entitled "Minnesota Motor Vehicle Dealer License, Manufacturer's / Franchise Agreement" (the "certificate"). The certificate states:
Brinkman's, Inc. has an agreement with us at the present time for the sale * * * of new motor vehicles of our manufacture. This is a written agreement with Rory Brinkman as owner-president and will begin on 9-26-96 to continuous [sic] until cancelled.
Wayne Floe completed, signed, and sent a similar form to Brinkman's on March 20, 1997. Neither certificate was ever signed by Brinkman's. There were no other written agreements between the parties.
As part of their business relationship, Floe required Brinkman's to purchase a minimum number of trailers in its initial order. But, thereafter, Floe did not impose any purchase requirements on Brinkman's. Brinkman's never paid a franchise fee to Floe, but Floe listed Brinkman's as a "dealer" for its products and Brinkman's considered itself a franchised dealer. Wayne Floe described their arrangement by saying, "We'll deliver you trailers if you pay for them and if you do a good job for us we'll keep the relationship alive." Brinkman's concurred with this assessment, characterizing its responsibilities under the arrangement as to "order the product and pay for it."
In July 1997, Floe informed Brinkman's that it wanted to discontinue their relationship, but reconsidered after Brinkman's threatened legal action. A month later, Brinkman's sent Floe a letter to confirm that
[o]rders previously placed by Brinkman's, Inc. will be filled in the ordinary course of business and Brinkman's, Inc. will continue to be a recognized dealer of Floe International, Inc.
In 1997, Delano started buying Floe's snowmobile trailers from other dealers and reselling them. Delano is located 7/10 of a mile from Brinkman's. Delano ordered directly from Floe in March 2000, but Delano's first order of trailers was mistakenly delivered to Brinkman's. As a result, Brinkman's learned that Floe and Delano were doing business together. Brinkman's sought an injunction and damages based on Floe's alleged violation of Minn. Stat. § 80E.14 (2000).
Brinkman's alleged that it had a contract with Floe that Delano intentionally interfered with and that Floe violated Minn. Stat. § 80E.14 by failing to give Brinkman's notice of its intention to make Delano a new dealer in the area. As an alternative theory, Brinkman's contended that Floe had misrepresented that Floe and Brinkman's had a contract.
Floe moved for summary judgment as to the claim brought under Minn. Stat. § 80E.14 on the ground that Brinkman's was unable to prove that the parties had a contract that triggered section 80E or that Floe and Delano had a franchise agreement. For purposes of that motion, in an effort to obviate additional discovery, Floe stipulated that it was the industry standard to use the state certificate as a franchise agreement, that Floe and Brinkman's acted in a manner consistent with section 80E, and that they had a course of dealing that evinced their respective rights and liabilities. The district court denied Floe's motion, holding that there were genuine issues of material fact as to whether a valid contract, written or unwritten, existed between Brinkman's and Floe and concerning whether or not Floe had sought to enter into a franchise arrangement with Delano.
Following discovery, Floe brought a second summary-judgment motion, which the court granted. The district court concluded that there was no contract between Floe and Brinkman's and no evidence to establish a contract between Floe and Delano. As a result, the court concluded that Minn. Stat. § 80E.14 was inapplicable to Brinkman's claims and that there was no evidence to establish the elements of the claims of intentional interference or misrepresentation. This appeal follows.
We note the district court appropriately disregarded the prior stipulations because they were in effect only for Floe's first summary-judgment motion. See Lappinen v. Union Ore Co., 224 Minn. 395, 407-08, 29 N.W.2d 8, 17 (Minn. 1947) (stating that a stipulation is binding on all involved only so long as it is in effect).
DECISION
Summary judgment is appropriate when there are no genuine issues of material fact and a party is entitled to judgment as a matter of law. Minn.R.Civ.P. 56.03. On appeal from a dismissal following summary judgment, we determine whether there are any genuine issues of material fact and whether the district court erred in applying the law. Lubbers v. Anderson, 539 N.W.2d 398, 401 (Minn. 1995). In doing so, we view the evidence in the light most favorable to the non-moving party by resolving all factual inferences and doubts against the moving party. Funchess v. Cecil Newman Corp., 632 N.W.2d 666, 672 (Minn. 2001). But summary judgment is appropriate when a party fails to make a sufficient showing on all of the requisite elements of its claim. Iacona v. Schrupp, 521 N.W.2d 70, 72 (Minn.App. 1994).
Brinkman's fundamental contention is that Floe violated Minn. Stat. § 80E.14, subd. 1 (2000), by contracting with Delano to sell snowmobile trailers without giving Brinkman's the required statutory notice. Minn. Stat. § 80E.14, subd. 1, states, in part:
In the event that a manufacturer seeks to enter into a franchise establishing an additional new motor vehicle dealership * * * within or into a relevant market area where the line make is then represented, the manufacturer shall, in writing, first notify each new motor vehicle dealer in this line make in the relevant market area of the intention to establish an additional dealership or to relocate an existing dealership within or into that market area. The relevant market area is a radius of ten miles around an existing dealership. Within 30 days of receiving the notice or within 30 days after the end of any appeal procedure provided by the manufacturer, the new motor vehicle dealership may commence a civil action in a court of competent jurisdiction pursuant to section 80E.17 challenging the establishing or relocating of the new motor vehicle dealership.
"Franchise" is defined in Minn. Stat. § 80E.03, subd. 8 (2000), as the written agreement or contract between any new motor vehicle manufacturer and any new motor vehicle dealer which grants to the dealer the right to market motor vehicles and which purports to fix the legal rights and liabilities of the parties to the agreement or contract.
The applicability of Minn. Stat. § 80E.14, subd. 1, is governed by Minn. Stat. § 80E.02 (2000), which provides that the section applies to "all * * * contracts existing between new motor vehicle dealers and manufacturers on May 1, 1981 and to all subsequent contracts."
"Motor vehicle" includes trailers because Minn. Stat. § 80E.03, subd. 2 (2000), adopts the definition of Minn. Stat. § 168.011, subd. 4 (2000), which provides, "`Motor vehicle' means * * * any vehicle propelled or drawn by a self-propelled vehicle."
In order to prevail on its claim under section 80E.14, Brinkman's must establish that it had a contract with Floe for the sale of snowmobile trailers. A contract requires an offer, acceptance, and consideration. Cohen v. Cowles Media Corp., 457 N.W.2d 199, 202 (Minn. 1990).
The district court concluded there was no contract between Floe and Brinkman's because there was no evidence of any negotiation, offer and acceptance, consideration, or recitation of Brinkman's and Floe's rights and obligations in either the certificates, which were signed only by Floe and were unsolicited by Brinkman's, or in Brinkman's August 1997 letter to Floe. Brinkman's argues that there is a contract, or at least an issue of material fact regarding one, because the certificates explicitly state that the parties have an agreement and Floe's president testified in his deposition that there was an agreement to "deliver [Brinkman's] trailers if [they] pay for them and if [they] do a good job for us we'll keep the relationship alive."
Legal relationships arise from the law, not from the parties' labels. See, e.g., Upper Midwest Sales Co. v. Ecolab, Inc., 577 N.W.2d 236, 241 (Minn.App. 1998) (stating that franchise status is conferred by the law, not by the terminology used by parties in agreements). Thus, despite the characterization of the business relationship as an "agreement" for the sale of trailers, Floe and Brinkman's did not have an enforceable contract unless their agreement satisfies the law's requirements. In this case, we agree with the district court's conclusion that there was no enforceable contract between the two companies.
Consideration requires that the parties to a contract be mutually obligated to one another by either promising to act or to forbear from acting.
The factor that distinguishes an unenforceable promise from an enforceable contract is consideration, or the voluntary assumption of an obligation by one party upon condition of an act or forbearance by the other.
Murray v. MINNCOR, 596 N.W.2d 702, 704 (Minn.App. 1999) (quotation omitted), review denied (Minn. Sept. 28, 1999).
Brinkman's alleges that consideration is evidenced by the fact that Floe delivered the trailers that Brinkman's ordered and Brinkman's paid Floe for them. But a contract requires more than recurring conduct; it requires obligations. Brinkman's does not contend that it was obligated to Floe in any way other than to pay Floe for whatever trailers it purchased. Brinkman's never paid Floe for the certificate, any franchise fee, or for advertising. Indeed, beyond its initial order, Brinkman's had no obligation to purchase additional trailers from Floe.
Because there is no evidence in the record of consideration, the district court did not err in finding that there was no contract and, therefore, that Minn. Stat. § 80E.14 is inapplicable. Given the absence of an enforceable contract between Floe and Brinkman's, it follows that the district court did not err in dismissing Brinkman's claim against Delano for interference with the alleged contract. See Kjesbo v. Ricks, 517 N.W.2d 585, 588 (Minn. 1994) (stating that an element of intentional interference with a contractual relationship is the existence of a contract).
Brinkman's final argument is that the district court erred in granting summary judgment on the claim of intentional misrepresentation. To prove a claim of intentional misrepresentation, Brinkman's must show a representation relating to a past or present fact that (1) is false, (2) is material, (3) is susceptible of knowledge, (4) the representer either knows is false or asserts without knowing its truth or falsity, (5) the representer intends to induce the other person to act or they would be justified in acting upon it, (6) the person acts in reliance on the representation, and (7) the person suffers damage that is proximately caused by the misrepresentation. S. Minn. Mun. Power Agency v. City of St. Peter, 433 N.W.2d 463, 469 (Minn.App. 1988).
In this case, the alleged misrepresentation that the certificate was a contract is a representation of law, not fact. Pieh v. Flitton, 170 Minn. 29, 30, 211 N.W. 964, 964 (1927) (stating that a representation as to the legal effect of an instrument is a representation of law). Misrepresentations of law are not actionable unless (a) the party misrepresenting the law is knowledgeable in the field and took advantage of the other's solicited trust, or (b) the parties stand in a fiduciary relationship to one another or one of similar trust and confidence. Northernaire Prods., Inc. v. County of Crow Wing, 309 Minn. 386, 388-89, 244 N.W.2d 279, 281-82 (1976). In addition,
[a] misrepresentation, though involving matter of law, will be held actionable if it amounts to an implied assertion that facts exist that justify the conclusion of law which is expressed.
Miller v. Osterlund, 154 Minn. 495, 496, 191 N.W. 919, 919 (1923) (citations omitted).
Nothing in this record indicates that Floe was more knowledgeable in the field than Brinkman's or that the parties had a fiduciary-like relationship. The record fails to contain support for other elements of the misrepresentation claim as well. Brinkman's did not make a sufficient showing on the elements of falsity and reliance. Floe's representation that there was an agreement was true insofar as Brinkman's was authorized to sell Floe's trailers. Brinkman's and Floe had the same understanding with respect to any ongoing obligation to purchase trailers. Finally, Brinkman's has made no showing that it was damaged by Floe's actions.