Opinion
No. C1-00-2036.
Filed July 24, 2001.
Appeal from the District Court, Chisago County, File No. C4971469.
Theresa A. Freeman, Fred L. Neff, (for appellant)
Linn Slattengren, (respondent pro se)
Considered and decided by Toussaint, Chief Judge, Stoneburner, Judge, and Foley, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
In this contract dispute, appellant challenges the district court's refusal to award it attorney fees alleging they are required by the contract, as well as the bad faith provisions of Minn.R.Civ.P. 11 and Minn. Stat. § 549.211 (2000). Appellant also alleges respondent's bad faith entitles it to treble damages under Minn. Stat. §§ 481.07, .071, and that the district court refused to fairly consider appellant's claims because appellant invoked its constitutional right to a jury trial. We affirm.
FACTS
Respondent Linn Slattengren was at times relevant the owner of several rental properties, including the two that are the subject of this litigation, 1879 East Seventh Street and 1034 Suburban Avenue. In July, August, and September 1995, appellant Glynn's Northeast Electric, Inc. performed work installing ground fault interrupt outlets (GFI's) in several bathrooms at both subject properties, pursuant to an oral contract with respondent's managing agent. From September 1995 to March 1996, appellant attempted to collect payment for its services from the two consecutive property management companies responsible for managing respondent's properties. In one letter directly from appellant to respondent, sent one year after the work was performed, appellant enclosed a copy of its "General Terms and Conditions" that included a provision regarding attorney fees. Neither party had signed this document.
Respondent forwarded a $2,000 payment to appellant in August 1996. After further attempts at collection, appellant brought suit against respondent in July 1997, claiming breach of contract and alleging payment for some services was still outstanding. Respondent counterclaimed, alleging that appellant's poor work performance prevented him from renting several units. During the course of the litigation, respondent asserted that unsatisfactory work performed by appellant resulted in the certificate of occupancy (CO) being revoked for the property at 1849 East Seventh Street, however, he never produced a copy of the revocation notice. Both parties' summary judgment motions were denied. On the day of trial, appellant presented respondent with the CO revocation notice for 1849 East Seventh Street showing it failed to state the GFIs as a reason for revocation. Respondent then dropped the claim regarding the property located at 1849 East Seventh Street and asserted the CO revocation notice based on appellant's faulty work was for the property located at 1034 Suburban.
At trial, Patricia Fish, Supervisor of Inspections for the City of St. Paul, testified that the CO revocation notice for 1034 Suburban listed GFIs as one of the items requiring correction. However, Fish also testified that the revocation notice did not prevent respondent from renting units. At the conclusion of trial, the court issued a directed verdict dismissing respondent's counterclaim. Appellant's claim went to the jury, which returned a verdict finding that a contract existed between the parties and awarded a verdict of "full." The court informed the jury that it needed to arrive at a monetary figure for damages, and it amended its verdict to award appellant $2,840.27 for labor. The monetary award returned by the jury is not challenged on appeal.
After trial, appellant brought a motion for costs, disbursements, and attorney fees. The trial court ordered statutory costs and fees, but denied appellant's motion for attorney fees sought in the amount of $85,788.23.
DECISION I.
This court will not reverse a trial court's denial of attorney fees absent an abuse of discretion. Becker v. Alloy Hardfacing Eng'g Co., 401 N.W.2d 655, 661 (Minn. 1987). Appellant argues that the "Terms and Conditions" sent to respondent after the completion of the work was part of the contract between them, that the document contained a provision requiring payment of attorney fees for enforcement of the contract, and that respondent was therefore bound to pay appellant's attorney fees incurred during trial. Appellant also argues the question of attorney fees was a matter of construction of the contract that should have been left for the jury to decide, rather than the judge.
A verdict of "full" returned by the jury did not give appellant a blank check. It is evident the jury wanted appellant to be fully compensated, but the award must be kept within reason and required a money figure. Again, that figure is not challenged on appeal. The construction and effect of a contract are questions of law for the court and only where there is ambiguity is there a question of fact for the jury. Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn. 1979). "In order to complete a contract, there must be an offer by one party and an unconditional acceptance by the other." St. Paul Fire Marine Ins. Co. v. Bierwerth, 285 Minn. 310, 317, 175 N.W.2d 136, 141 (1969). Mutual assent of the parties evaluated from an objective standard is essential for formation of a contract. Crince v. Kulzer, 498 N.W.2d 55, 57 (Minn.App. 1993). In this case, there is no evidence that respondent accepted the "Terms and Agreements" as part of the contract. The document was sent to respondent a year after the work was performed, and there is no evidence in the record that he had seen it before that time. Neither party signed the document. Because the parties never agreed to the terms and conditions, we conclude that they are not part of the contract.
Furthermore, Minnesota courts recognize that motions for attorney fee sanctions and costs and disbursements are independent of the underlying decision. Kellar v. Von Holtum, 605 N.W.2d 696, 700 (Minn. 2000). Attorney fees are not for the jury to decide, but instead they are to be decided by the court in a separate motion.
II.
This court reviews a rule 11 sanction under an abuse of discretion standard. Leonard v. Northwest Airlines, Inc., 605 N.W.2d 425, 432 (Minn.App. 2000). Levying of civil penalties is within the trial court's discretion also. State by Humphrey v. Alpine Air Prods., Inc., 490 N.W.2d 888, 897 (Minn.App. 1992), aff'd, 500 N.W.2d 788 (Minn. 1993). Appellant argues that respondent's pursuit of a counterclaim was frivolous, and therefore he should be sanctioned for attorney fees. For an award of fees to be granted under rule 11 or Minn. Stat. § 549.211, there must be some showing of bad faith on the part of the party being sanctioned. Kellar, 605 N.W.2d at 701 (citation omitted). Bad faith has been defined as "a frivolous claim which increases the opponent's costs, an unfounded position taken to delay the action or harass the opponent, or fraud upon the court." Radloff v. First Am. Nat'l Bank, 470 N.W.2d 154, 156 (Minn.App. 1991), review denied (Minn. July 24, 1991). In denying the posttrial motion, the trial court found that there was no bad faith on the part of respondent.
Appellant claims that respondent acted in bad faith because on the day of trial he changed the address where he claimed the defective work had been done. However, appellant made no motion for a continuance at that time and did not object to the amendment of the counterclaim. It appears that one of the problems in this litigation is respondent's reliance on information from property managers, which did not agree with the facts of the case. However, the record supports the trial court's findings that respondent was truly mistaken about the address where the defective work was performed and that his counterclaim was not brought in bad faith. The record shows that in the course of these proceedings respondent exhibited a flippant attitude and carried himself with a superior air at times. We are mindful that respondent is a sitting district court judge, but this does not give him any more or less rights than any other party in this case. Respondent's attitude did not rise to the level of bad faith, however, and because his conduct did not rise to the level required for sanctions under rule 11 or Minn. Stat. § 549.211, his conduct also did not rise to the standard of deceit or collusion required for treble damages under Minn. Stat. § 481.071 (2000).
Appellant's counsel is particularly provoked because she claims that respondent was disruptive and blocked discovery. Excessive zeal by appellant's counsel may also have led to some frustration on respondent's part. We note that respondent, who was not personally involved in the property management, participated in eleven and three-quarters hours of depositions on a claim involving only a minimal amount for labor and services performed; an action that, under normal circumstances, would require much less time and energy in its presentation. In view of the minimal monetary damages claimed by appellant, it is almost inconceivable that attorney fees would have been incurred in an amount exceeding $85,000. Even if bad faith had been found on the part of respondent, an award of attorney fees would never have reached the sum sought by appellant's counsel.
This case brings up for review the discretion of the trial court. We cannot hold on the totality of the record that the court abused its discretion in finding no bad faith. We do not substitute our judgment for that of the trial court. Anderson v. Lindgren, 360 N.W.2d 348, 353 (Minn.App. 1984).
III.
At issue is whether the order denying attorney fees is properly before us. Although the judgment of the underlying action was never amended to include the order that is the subject of this appeal, this court may "review any other matter as the interest of justice may require." Minn.R.Civ.App.P. 103.04. At oral argument respondent conceded this court's authority to review this issue.
IV.
Appellant seeks to have respondent's brief stricken due to violations of the rules for brief formatting, arguing (1) respondent did not support his facts with references to the record; (2) the brief was not double spaced; and (3) the written matter exceeded the page limits. We deny appellant's motion because respondent's brief was not compelling in any respect in determining whether the trial court abused its discretion.