Summary
holding that a contract between a pork company and its marketer was not of indefinite duration because performance was called for "as long as" the pork company kept a particular breed of hog in its herd
Summary of this case from Lamoureux v. MPSC, Inc.Opinion
No. C9-02-619.
Filed December 17, 2002.
Appeal from the District Court, Faribault County, File No. C000208.
Matthew L. Benda, Peterson, Savelkoul, Schlichting Davies, Ltd., (for respondent)
Robert D. Sturtz, Goldman, Sturtz Halvorsen, and
Daniel P. Bracht, pro hac vice, Law Offices of Daniel P. Bracht, P.C., (for appellant)
Considered and decided by Hudson, Presiding Judge, Peterson, Judge, and Anderson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
On appeal from a jury verdict in this commercial-contract dispute, appellant argues that the trial court erred by: (a) rejecting appellant's proposed jury instruction; (b) denying appellant's two motions for directed verdict; and (c) denying appellant's motions for JNOV and a new trial. We affirm.
FACTS
In early 1994, appellant Smeal Pork Company (Smeal Pork) purchased boars and gilts from respondent Roger Legred (Legred) and produced a crossbreed of purebred hogs called F-1 gilts. In the summer of 1995, Smeal Pork and Legred entered into a marketing agreement (contract). The contract was oral, with the exception of Legred's handwritten note memorializing their agreement. Under the contract, Legred advertised and marketed the F-1 gilts. Legred and Smeal Pork shared any premium received above the market price equally. The parties later modified the contract so that Smeal Pork marketed and sold the F-1 gilts, increasing Smeal Pork's share of the premium to 60%, and Legred's share decreased to 40%.
In 1998, the hog industry took a downturn, and on August 11, 1999, Smeal Pork wrote to Legred suggesting they further amend the contract, further decreasing Legred's premium. Legred opposed the modification and demanded Smeal Pork's compliance with the parties' 60/40 agreement. Legred continued to perform marketing services, assuming the 60/40 agreement was still valid. Smeal Pork continued to sell the F-1 gilts but considered the 60/40 marketing agreement terminated as of August 11, 1999. As of that date, Smeal Pork stopped making premium payments to Legred.
In April, 2000, Legred sued Smeal Pork for breach of contract. At trial, Smeal Pork moved for directed verdict at the close of Legred's case and again at the close of evidence. The trial court denied both motions. The trial court also rejected Smeal Pork's proposed jury instruction. A verdict was returned in favor of Legred. Smeal Pork made a posttrial motion for JNOV or, in the alternative, a new trial. The trial court denied the motion. This appeal followed.
DECISION I
Smeal Pork argues that the trial court erred by refusing to give the jury its proposed instruction. District courts are allowed considerable latitude in choosing the language in jury instructions. Alhom v. Wilt, 394 N.W.2d 488, 490 (Minn. 1986). We reverse a district court's decision only where the instructions constitute an abuse of discretion. See id. Fundamental error in a jury instruction occurs where the instruction destroys the "substantial correctness" of the entire jury charge, results in a "miscarriage of justice," or leads to substantial prejudice to a party. Lindstrom v. Yellow Taxi Co. of Minneapolis, 298 Minn. 224, 229, 214 N.W.2d 672, 676 (1974). Generally, a contract of indefinite duration, express or implied, may be terminated at will by either party upon reasonable notice. Benson Co-op. Creamery Ass'n v. First Dist. Ass'n, 276 Minn. 520, 526, 151 N.W.2d 422, 426 (1967); Hayes v. Northwood Panelboard Co., 415 N.W.2d 687, 691 (Minn.App. 1987), review denied (Minn. Jan. 28, 1988). Lastly, the construction and effect of a contract present questions of law for the trial court. Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn. 1979).
Smeal Pork initially argued that the Minnesota Uniform Commercial Code (Minn. Stat. § 336.2-309(2) (2002) was applicable, but conceded at oral argument it did not apply.
Smeal Pork asked the court to instruct the jury that "a contract having no definite duration term is terminable by either party at will." Smeal Pork contends that because the parties' contract was for an indefinite duration, Smeal Pork could lawfully terminate the contract at any time and was entitled to have the jury so instructed. We disagree.
The parties agree that the contract between Smeal Pork and Legred would last as long as F-1 gilts remained in Smeal Pork's herd. But Smeal Pork contends this uncertainty as to the end of the genetic line of the F-1 gilts made the contract indefinite as to its duration. Legred counters that, while it may be uncertain when the genetics will no longer be in the herd, it is a certainty that at some point the genetic line of the F-1 gilts would end. We agree. As Legred testified, "That would have finished off our relationship if they would have emptied their barns of our genetics." In fact, by the time of trial, all the F-1 gilts in the Smeal Pork herd had been sold.
We conclude as a matter of law this was not a contract of an indefinite duration because the contract ended when there were no more F-1 gilts in the herd. The contract implicitly included a durational term: as long as Legred's F-1 gilts were in the Smeal Pork herd. Because the contract had a definite duration, Smeal Pork was not entitled to its proposed instruction. See H Window Co. v. Cascade Wood Prods., Inc., 596 N.W.2d 271, 277 (Minn.App. 1999) (stating party entitled to instruction only where supported by evidence and applicable law), review denied (Minn. Aug. 17, 1999). By declining Smeal Pork's proposed instruction, the court implicitly rejected Smeal Pork's contention that theirs was a contract of indefinite duration, terminable at will by either party. The trial court stated that the " Hayes instruction" was inappropriate given the facts of this case because it would confuse the jury and divert them from the main factual elements in dispute, namely whether a contract existed and, if so, whether it had been breached. In addition, the trial court ruled that the "termination issue" was essentially subsumed within the court's instruction to the jury which focused the jury on whether a contract existed and, if so, whether it was breached.
Although there was much discussion about appellant's proposed jury instruction, the trial court did not expressly rule that the contract was of definite duration. Notably, however, Smeal Pork did not ask the trial court for a ruling on ambiguity of the contract's duration.
Had the trial court believed this was a contract of indefinite duration, it would not have given CIVJIG 20.45, because Smeal Pork would then have legal justification for nonperformance. Moreover, the trial court remarked that this contract comports with the statute-of-frauds because it could possibly be completed within one year. We conclude that the contract was not indefinite as to duration and that the trial court properly instructed the jury. The trial court acted within its discretion by refusing to give appellant's proposed instruction.
The trial court instructed the jury:
Definition of a breach of contract. A contract is breached when there is failure without legal justification to perform a substantial part of the contract. This breach occurs when one party fails to carry out part of the contract that required immediate performance, fails to carry out a term of the contract by preventing or hindering the term being completed, repudiates or denies that the contract exists.
4 Minnesota CIVJIG 20.45 (2000) (emphasis added).
Even if this was a contract of indefinite duration, Smeal Pork's proposed jury instruction was properly rejected because it was not an accurate statement of the law as it omitted the reasonable notice requirement. Hayes, 415 N.W.2d at 691 ("[a] contract having no definite duration term, express or implied, is terminable by either party at will upon reasonable notice ") (emphasis added)).
Smeal Pork's argument that it was prevented from fully arguing its case because the jury did not hear the proposed instruction is similarly flawed. The trial court specifically advised counsel that he was free to argue Smeal Pork's theory of the case — that it had validly terminated the contract by its August 11, 1999, letter — and the record indicates that Smeal Pork did so. Therefore, Smeal Pork has failed to show that the trial court's refusal to give its proposed instruction resulted in prejudice.
II
Smeal Pork contends that the trial court erred by denying its motions for a directed verdict and JNOV. A motion for directed verdict poses a question of law for the district court: whether sufficient evidence exists to present the jury with a fact question. Claflin v. Commercial State Bank, 487 N.W.2d 242, 247 (Minn.App. 1992), review denied (Minn. Aug. 4, 1992). The district court should grant a directed verdict only where, viewing the evidence as a whole, the verdict is manifestly contrary to the evidence or to the law. Id. The district court must assume that all evidence favorable to the non-moving party is true, including the reasonable inferences drawn from that evidence. Id. We apply the same standard when reviewing the denial of a directed verdict motion. Id.
Similarly, we review denial of a JNOV motion under this same standard. Blatz v. Allina Health Sys., 622 N.W.2d 376, 383 (Minn. 2001). We review the denial of a JNOV motion de novo, and affirm so long as the record contains "any competent evidence reasonably tending to sustain the verdict." Pouliot v. Fitzsimmons, 582 N.W.2d 221, 224 (Minn. 1998) (quotation omitted). JNOV should be granted where reasonable minds could not reach a different conclusion because the evidence is so overwhelmingly one-sided. Lamb v. Jordan, 333 N.W.2d 852, 855 (Minn. 1983).
Smeal Pork contends the trial court erred by denying its motions because it presented evidence that it could and did lawfully terminate the parties' contract. Smeal Pork further argues that it presented evidence that all compensation owed to Legred up to the August 11, 1999, termination letter had been paid. Since no damages could have been proven, Smeal Pork claims it was entitled to a directed verdict or JNOV. We disagree.
Smeal Pork's argument remains flawed because the contract was definite in duration and could not be terminated at will — therefore Smeal Pork breached its contract with Legred. In light of the uncontroverted evidence that the contract ended when Legred's F-1 gilts were no longer in the Smeal Pork herd, the jury reasonably found that Smeal Pork breached the contract by discontinuing premium payments to Legred beginning August 11, 1999.
Even if this had been a contract of indefinite duration, Smeal Pork's August 11, 1999, letter creates a question of fact as to whether Smeal Pork gave reasonable notice of termination and indeed whether the contract had in fact been terminated. First, Smeal Pork stated it had decided to "alter," not terminate, its relationship with Legred. Second, Smeal Pork stated it "would still like to have Rainbow Acres market as many gilts as possible * * *." Third, Smeal Pork stated, "I hope the above is acceptable and we may still have a working relationship in the future." Contrary to Smeal Pork's claim that the August 11, 1999, letter terminated the contract, these statements reflect Smeal Pork's desire to continue its relationship with Legred if Legred would agree to the proposed modifications.
Conversely, Smeal Pork presented testimony that in a meeting with Legred sometime after August 11, 1999, it orally terminated the contract:
A:* * * He wanted to go back to the old terms of the agreement and I said we can't financially do it, and then he tried to — I know to get — say it again a couple more times. I said Roger, I said, if we can't go to this new agreement, it's over.
Q: So at that point was it clear to you that you had said this arrangement is over?
A: Yes.
Q: And you conveyed that to Mr. Legred?
A: Yes, he was standing right in front of me when I said it.
Here, the evidence presented would allow the jury to go either way. The jury simply disbelieved Smeal Pork's contention that it lawfully terminated the contract. On appeal, we do not weigh the evidence or assess the credibility of the witnesses. Conry v. Book Automation, Inc., 398 N.W.2d 657, 662 (Minn.App. 1987) (stating reviewing court cannot weigh evidence or judge witness credibility when looking for competent evidence to sustain verdict). Because the record contains competent evidence to sustain the verdict, the trial court properly denied appellant's directed verdict and JNOV motions. See Pouliot, 582 N.W.2d at 224. Accordingly, we will not disturb the verdict of the jury.
III
Lastly, Smeal Pork argues that the trial court's failure to give its proposed jury instruction constituted material error requiring a new trial. On appeal from denial of a new trial, we let the verdict stand unless it is "manifestly and palpably contrary to the evidence." ZumBerge v. N. States Power Co., 481 N.W.2d 103, 110 (Minn.App. 1992) (citation omitted), review denied (Minn. Apr. 29, 1992). Trial courts enjoy broad discretion to grant a new trial on the grounds of erroneous jury instructions. Lindstrom, 298 Minn. at 230, 214 N.W.2d at 677. If the instructions read as a whole correctly state the applicable law, we will not grant a new trial. State Bank of Hamburg v. Stoeckmann, 417 N.W.2d 113 (Minn.App. 1987), review denied (Minn. Feb. 17, 1988).
Here, the trial court instructed the jury on the applicable law — breach of contract. Because the parties' contract was definite in duration and because Smeal Pork's proposed instruction misstated the law, the trial court did not abuse its discretion in refusing to give the instruction. The trial court properly instructed the jury and its refusal to give an erroneous instruction is not material error entitling Smeal Pork to a new trial.