Opinion
Civil No. 99-832 (JRT/FLN)
March 21, 2003
Gary W. Leydig, WORKER, SITKO, HOFFMAN, Chicago, IL, and David M. Jaffee, LEONARD STREET AND DEINARD, Minneapolis, MN, for plaintiff.
John Edward Connelly, FAEGRE BENSON, Minneapolis, MN, and James B. Niehaus, FRANTZ WARD, Cleveland, OH, for defendant.
MEMORANDUM OPINION AND ORDER
Plaintiff Minnesota Supply Corporation ("Minnesota Supply") filed this action alleging that The Raymond Corporation ("Raymond") violated the Minnesota Heavy and Utility Equipment Manufacturers and Dealers Act ("MHUEMDA") by terminating, without cause, the parties' dealership agreement. Trial is scheduled to begin on May 19, 2003. This Order addresses two motions in limine remaining before this case goes to trial.
I. Plaintiff's motion to exclude evidence and argument regarding the "Termination by Mutual Consent Agreement" or the purported defenses of promissory estoppel or releaseIn its pretrial submissions, defendant indicated that it would argue that an agreement between the parties, the Termination by Mutual Consent Agreement ("termination agreement"), provides a defense for the termination of the dealership agreement. In response, plaintiff filed this motion in limine, objecting to any mention of the termination agreement because the Court has already determined that the termination agreement is not binding.
In September 2000, the Court addressed the validity of the termination agreement in the context of cross-motions for summary judgment. At issue in those summary judgment motions was whether the termination agreement, which contained a release clause, was a valid and binding contract-either because it had been executed and delivered, or on a promissory estoppel theory. After considering the motion on stipulated facts, the Court found that the termination agreement was ineffective because defendant did not give sufficient notice of acceptance. The Court also barred defendant from pleading promissory estoppel in this case in the future.
Despite this clear admonition, defendant argues that new evidence compels the Court to revisit the September 18, 2000 Order. Specifically, defendant argues that after the summary judgment order was issued, attorneys for defendant discovered that defendant provided indemnification of plaintiff in a product liability lawsuit and more importantly, plaintiff admitted that it understood that the indemnification would not have been provided had the termination agreement not been in effect.
The indemnification occurred in late 1997, and defendant clearly knew that the indemnification occurred. Even if the Court credits defendant's argument that it did not realize the impact of the indemnification until April of 2001 when it deposed the then president of Minnesota Supply, defendant's attempt to reintroduce this issue, brought at least fourteen months after the discovery of the evidence, is untimely. The question of the efficacy of the release was clearly settled in September of 2000, and the Court will not revisit its decision at this late date. Had defendant brought the newly discovered evidence to the Court's attention in a more timely fashion, the Court might have entertained a motion for reconsideration. At this late date, however, the risk of prejudice to plaintiff is too great to disrupt this long-settled issue.
Defendant argues that the termination agreement might be relevant for some purpose other than to prove waiver. The Court reserves ruling on its admissibility for some alternate purpose.
II. Plaintiff's motion to prevent defendant from introducing evidence or argument with regard to "good cause" the defense having been waived
Plaintiff argues that "good cause" is an affirmative defense, and that defendant waived the defense by failing to specifically plead good cause. An affirmative defense is one in which the defendant accepts, rather than contradicts the plaintiff's allegations. See Bobbitt v. Victorian House, Inc., 532 F. Supp. 734, 736-37 (N.D.Ill. 1982) (providing general definitions as a defense "that generally admits the matters in a complaint but suggests some other reason why there is no right of recovery" or a defense that "raises a matter outside the scope of plaintiff's prima facie case and is thus a matter not raised by a simple denial").
In this case, it is clear from defendant's preliminary pleadings that defendant did not admit that it lacked good cause in terminating the agreement. Plaintiff was clearly on notice that good cause, or the lack of it, would be an issue in this case. See, e.g., Allied Chem. Corp. v. Mackay, 695 F.2d 854, 855 (5th Cir. 1983) (even where defendant failed to plead affirmative defense, technical failure to comply with the pleading rule held not fatal where there was no prejudice to plaintiff). The Court finds that "good cause" is not an affirmative defense, and further that plaintiff had appropriate notice of the issue. The motion, therefore is denied.
The determination that good cause is not an affirmative defense does not settle an additional issue argued at length in the parties' briefs: namely, which party has the burden of proving good cause, or lack of it. The burden of proof usually rests on the person seeking to show entitlement to the benefits of a statutory provision, see In re Application of City of White Bear Lake, 247 N.W.2d 901, 904 (Minn. 1976), in some instances, however, statutes shift the burden of persuasion to the party opposing the statutory benefit. MHUEMDA does not explicitly shift the burden to the opposing party (in this case, defendant). See Minn. Stat. § 325E.0681. The Court nonetheless finds that given the purpose of the statute, the practicalities of MHUEMDA disputes, and relevant case law, defendant bears the burden to prove that it had good cause to terminate the relationship. See e.g., Midwest Great Dane Trailers, Inc. v. Great Dane Limited Partnership, 977 F. Supp. 1386, 1394 (D.Minn. 1997) (holding that plaintiff dealer had stated a claim under MHUEMDA by alleging that defendant manufacturer acted without good cause, and reasoning that "under the MHUEMDA, manufacturers must demonstrate "good cause.").
ORDER
Based on the foregoing, all the records, files, and proceedings herein, IT IS HEREBY ORDERED that:
1. Plaintiff's motion to exclude evidence and argument regarding the "Termination by Mutual Consent Agreement" or the purported defenses of promissory estoppel or release [Docket No. 99-5] is GRANTED;
2. Plaintiff's motion to prevent defendant from introducing evidence or argument with regard to "good cause" the defense having been waived [Docket No. 99-6] is DENIED.