Opinion
No. C5-99-1187.
Filed January 25, 2000.
Appeal from the District Court, Ramsey County, File No. C5975263.
Paul W. Iversen, Williams Iversen, P.A., (for appellants)
Sarah Crippen Madison, Best Flanagan, P.L.L.P., (for respondents)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1998).
UNPUBLISHED OPINION
Appellants Service Employees International Union, (SEIU), and Deborah Schneider, as trustee of SEIU Local 1980, filed this action on May 27, 1997, seeking an injunction requiring Local 1980's officers and staff to cooperate with the trustee appointed by SEIU's president to manage the affairs of Local 1980. Respondent, Minnesota School Employees Association (MSEA) counterclaimed for a declaratory judgment that it had disaffiliated and for damages for tortious interference with the contractual relationship between MSEA and its members. On June 2, 1997, appellants filed a motion for a preliminary injunction. At the June 25 hearing on that motion, the parties filed affidavits with the court rather than taking testimony. Subsequently, at a status conference, the parties agreed to consolidate the hearing and trial on the merits and submit the matter for final judgment based on affidavit evidence presented to the court at the hearing on the preliminary injunction motion.
On July 21, 1997, the district court granted final judgment in favor of respondents on the ground that Local 1980 had disaffiliated with SEIU in accordance with the Affiliation Agreement. On May 19, 1998, this court reversed, holding that the affiliation agreement was clear on its face and had expired in 1988. See Service Employees Int'l Union v. Roach, No. C9-97-2015, 1998 WL 252365, *4 (Minn.App. 1998) ( SEIU I). Although this court concluded that the district court had erred as a matter of law in determining that the affiliation agreement did not expire in 1988, the opinion also addressed "whether the parties by their conduct impliedly continued the agreement." Id. at *5.
In SEIU I, this court discussed the continuation-by-implication doctrine, which states that parties can impliedly agree to continue an expired contract through the objective manifestations of their conduct. See Fischer v. Pinske, 309 Minn. 202, 204-06, 243 N.W.2d 733, 735 (1976) (holding that the continuation of a business relationship "without any change" after the term specified in a contract constitutes a continuation of the contract by implication); see also Tynan v. KSTP, Inc., 247 Minn. 168, 183, 77 N.W.2d 200, 209 (1956) (explaining that where two contracting parties mutually assent to the continuation of the contractual relationship after the contract has expired, the written contract is considered to have continued in effect); House v. Baxter, 371 N.W.2d 26, 29 (Minn.App. 1985) (explaining that continuing to behave as if bound by the original contract demonstrates an implied waived of the requirement of a written contract extension). SEIU attempted to distinguish House and Fischer because those cases only dealt with one contract. While this court agreed that the SEIU constitution created a valid contract between SEIU and MSEA binding MSEA, it concluded that the affiliation agreement superseded the SEIU constitution on any conflicting terms. SEIU I, 1998 WL 252365, at *5. Specifically, this court rejected SEIU's argument that where parties enter into two contracts, one of which waives some provisions of the other for a defined period, the parties may not extend the time-limited contract by implication. Id.
In footnote 5 of the prior opinion, this court explained that although MSEA relied on Tynan, it was not relevant because it involved a contract that explicitly required annual renewal unless modified. SEIU I, 1998 WL 252365, at *5 n. 5.
See SEIU I, 1998 WL 252365, at *5 (holding "SEIU is correct that a union constitution has been described as a contract" and citing Lipka v. Minnesota Sch. Employees Ass'n, Local 1980, 550 N.W.2d 618, 621 n. 8 (Minn. 1986) (discussing effect of constitution on relationship between local and members)).
See SEIU I, 1998 WL 252365, at *5 (concluding that "under the language of the affiliation agreement, MSEA became bound by the SEIU constitution except where its terms were superceded by the affiliation agreement.")
In summary, this court already held that MSEA and SEIU could impliedly continue the 1984 affiliation agreement after 1988, but if they did not do so, MSEA would be bound by the provisions of the SEIU constitution, including the disaffiliation procedure. However, since the district court made no express findings and could not have decided the question on summary judgment because it involved disputed issues of material fact, this court could not decide whether MSEA and SEIU continued the affiliation agreement by implication. Id. at *6. Therefore, this court remanded the limited issue of "whether the parties impliedly continued the affiliation agreement after its 1988 expiration." Id.
Following remand, appellants challenge the district court's grant of respondent's motion for summary judgment and its holding that the parties agreed to extend the affiliation agreement by implication. Appellants argue that the district court erred in finding that the parties agreed to extend the affiliation agreement, that respondent presented evidence of the implied extension, and that appellants failed to present evidence raising any genuine issues of material fact. Because this court already held the parties could extend the affiliation agreement by implication and because appellants failed to offer evidence of a change in the parties' relationship, we affirm the district court's grant of summary judgment for respondent.
DECISION
"[S]ummary judgment is appropriate where the `pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact' and either party is entitled to judgment `as a matter of law.'"
W.J.L. v. Bugge, 573 N.W.2d 677, 680 (Minn. 1998) (quoting Minn.R.Civ.P. 56.03). On appeal from a grant of summary judgment, this court must determine 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). "[T]he reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted." Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993) (citation omitted).
No genuine issue of material fact exists "[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party ." DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn. 1997) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356 (1986)). To resist summary judgment, the nonmoving party "must do more than rest on mere averments." Id. at 71. A genuine issue for trial must be established by substantial evidence. Id. at 69-70 (quoting Murphy v. Country House, Inc., 307 Minn. 344, 351, 240 N.W.2d 507, 512 (1976)).
I.
Whether the Parties Could Extend the Affiliation Agreement by Implication
Appellants challenge the district court's grant of respondent's summary judgment motion and its finding that the parties entered into an implied agreement to extend the affiliation agreement beyond its express expiration date in 1988. Appellants argue the parties were unable to extend the affiliation agreement because an implied contract cannot alter the express terms of a contract, no additional consideration was given for an extension, and extending the agreement would breach its express terms. However, SEIU I already established that the parties could, by their conduct, extend the affiliation agreement by implication. SEIU I, 1998 WL 252365, at *5.
"An appellate court's decision on a given issue establishes `the law of the case' and must be followed on remand and subsequent appeals." McClelland v. McClelland, 393 N.W.2d 224, 226 (Minn.App. 1986) (citations omitted) , review denied (Minn. Nov. 17, 1986). "[O]rdinarily[,]" law of the case applies "where an appellate court has ruled on a legal issue and has remanded the case to the lower court for further proceedings." Loo v. Loo, 520 N.W.2d 740, 744 n. 1 (Minn. 1994) (citations omitted). On remand, a district court is charged with the duty of executing the appellate court's mandate "strictly according to its terms." See Halverson v. Village of Deerwood, 322 N.W.2d 761, 766 (Minn. 1982) (citation omitted). Here, in its explicit directions for remand to the district court, this court explained:
We therefore reverse the district court's grant of summary judgment and remand for a finding of fact on the issue of whether the parties impliedly continued the affiliation agreement after its 1988 expiration, so that the disaffiliation procedure described in the affiliation agreement continued to supersede the "rule of seven" provision in the SEIU constitution * * *.
SEUI I, 1998 WL 252365, at *6.
Having already decided that the parties could continue the affiliation agreement by implication, this court confined the remanded issue to whether the parties did impliedly continue the agreement. Id. Since there is no indication that the parties did not fully litigate the issue of whether the parties could extend the affiliation agreement by implication in SEIU I, the law-of-the-case doctrine applies. Therefore, to the extent appellants contend that the affiliation agreement could not be continued by implication, the law-of-the-case doctrine forecloses arguments on that issue on this appeal.
II.
Whether the Parties Extended the Affiliation Agreement by Implication
On appeal from a grant of summary judgment, this court must determine whether there are any genuine issues of material fact and whether the district court erred in applying the law. French, 460 N.W.2d at 4. Because this court rejected appellants' attempts to distinguish House and Fischer in SEIU I, the law of the case forecloses appellants' argument that the district court misapplied the law regarding continuation-by-implication doctrine on remand. Therefore, the propriety of the district court's grant of summary judgment in favor of respondent turns on whether the evidence creates any genuine issues of material fact.
In Minnesota, a contract is continued by implication where the parties continue to behave as if still bound by the original agreement. Fischer, 309 Minn. at 204-06, 243 N.W.2d at 735; Tynan, 247 Minn. at 183, 77 N.W.2d at 209; House, 371 N.W.2d at 29. A contract may be implied where an objective manifestation of mutual assent can be inferred from the parties' conduct. See Gryc v. Lewis, 410 N.W.2d 888, 891 (Minn.App. 1987) (stating that the proponent of an implied contract bears the burden of proof). The existence of an implied contract is a question of fact. Eide v. State Farm Mut. Auto. Ins. Co., 492 N.W.2d 549, 555 (Minn.App. 1992). Similarly, whether a contract has been continued by implication involves a factual determination. See Fischer, 309 Minn. at 205, 243 N.W.2d at 735 (suggesting that the parties, by their conduct, "could be found" to have impliedly continued the contract); House, 371 N.W.2d at 29 (explaining that determination of implied continuation requires examination of the parties' conduct and intent).
On remand, the district court stated that, "[appellants] have completely failed to demonstrate any material change in [their] relationship with [respondent] after 1988." Appellants correctly argue that respondent bears the burden of showing that the parties' relationship did not change because the proponent of an implied contract bears the burden of proving its existence. Gryc, 410 N.W.2d at 891. However, because the burden of proof requires demonstrating continuity in the parties' relationship, respondent could satisfy that burden by refuting any alleged change or by presenting evidence of the lack of change in the parties' conduct after the 1988 expiration of the affiliation agreement.
The dispositive issue in this case is whether the parties, by their objective conduct and considering all the circumstances, continued their relationship "without any change" and "behaved as if bound by the original conduct." Fischer, 309 Minn. at 204-05, 243 N.W.2d at 735. With regard to the parties' conduct, the district court explained that "every indication exists that plaintiffs and defendants continued to operate as if the 1984 affiliation agreement remained in full force and effect." There is undisputed evidence that SEIU continued to honor waivers to provisions of the SEIU Constitution given to MSEA in the affiliation agreement well after 1988.
Although appellants concede that they continued to honor the waivers, they argue that specific conduct relating to each paragraph and provision of the affiliation agreement is not probative or relevant because other affiliated locals received the same treatment and because SEIU had no authority to enforce provisions waived in the affiliation agreement. On the contrary, the parties' conduct after 1988 relating to each paragraph of the affiliation agreement is dispositive. Appellants also argue that they presented sufficient evidence to raise a genuine issue of material fact as to whether the parties' relationship remained unchanged after 1988. After considering all the evidence before it, the district court found that there was no genuine issue of material fact and concluded that the parties, by their objective conduct, continued the affiliation agreement by implication. Because appellants did not present any evidence of a change in the parties' relationship after 1988 on remand, summary judgment in favor of respondent was appropriate.