This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
IN COURT OF APPEALS
Kenneth Savik, et al.,
Affirmed in part, reversed in part
Hennepin County District Court
File No. 998451
Ronald K. Gardner, Nancy L. Lochner, Dady & Garner, P.A., 4000 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for appellant)
Dan T. Ryerson, James T. Martin, Gislason, Martin & Varpness, P.A., 7600 Parklawn Avenue South, Suite 444, Edina, MN 55435 (for respondents)
Considered and decided by Anderson, Presiding Judge, Crippen, Judge, and Amundson, Judge.
Appellant David Webb disputes the trial court decision that his pleadings failed to state a claim of tortious interference with contract, disputing more specifically the trial court’s determination that he failed to plead the existence of a contract with which respondent could have tortiously interfered. Appellant also disputes the trial court’s alternative rationale for granting judgment on the pleadings, the theory that a prior stipulation between the parties established a condition precedent to appellant’s right to reinstitute his claims against respondents, and that appellant had not met this condition precedent. Respondents contend that the trial court erred in failing to determine as a further basis for dismissal that the tortious-interference claim was barred by a statute of limitations. We affirm the trial court’s determination on the asserted statute of limitations and reverse the trial court’s dismissal of the case on the pleadings.
Appellant was a long-time franchisee of The Original Pancake House. Respondent Savik was the manager of appellant’s OPH restaurant. After OPH granted a franchise license to respondents for an OPH restaurant in the Twin Cities, appellant initiated litigation against respondents and OPH, premised on appellant’s claim of exclusive franchise rights for the Twin Cities area.
Appellant agreed, pursuant to a stipulation, to dismiss respondents from the original litigation without prejudice. Appellant and OPH then settled their dispute. Appellant subsequently reinstated his tortious-interference-with-contract claim against respondents, but the trial court dismissed the claim on the pleadings. The court determined that the applicable statute of limitations was the six-year period rather than the two-year period.
A motion for judgment on the pleadings is “not a favored way” to test the sufficiency of a pleading, and a judgment on the pleadings will not be sustained if, “by a liberal construction the pleading can be held sufficient.” Ryan v. Lodermeier, 387 N.W.2d 652, 653 (Minn. App. 1986). On appellate review of a judgment on the pleadings, the only question is whether the “complaint sets forth a legally sufficient claim for relief.” Kellar v. VonHoltum, 568 N.W.2d 186, 190 (Minn. App. 1997) (citing Elzie v. Commissioner of Pub. Safety, 298 N.W.2d 29, 32 (Minn. 1980)), review denied (Minn. Oct. 31, 1997).
1. Existence of a Contract
Respondents’ arguments suggest two possible theories to sustain the trial court’s decision that appellant’s complaint did not sufficiently allege the existence of a contract. First, respondents argue that the pleadings tie the contract claim solely to the 1977 franchise agreement between OPH and appellant, and that this contract, part of the pleadings, does not state exclusive rights. This theory has no merit for several reasons. First, appellant’s pleadings state a flat claim of an exclusive-rights contract, without specifying the form of the contract. Secondly, appellant’s description of his contract claim suggested not that the rights were stated in the 1977 agreement but rather that these rights arose in negotiations between the parties. Finally, appellant’s pleadings allege that the subsequent dealings of the parties confirmed these allegedly negotiated rights.
Respondents’ second theory, identified on appeal but evidently not raised before the trial court, is that appellant admitted the absence of a contract when appellant settled his dispute with OPH. But the settlement agreement merely provided that appellant agreed not to pursue claims, and this has no bearing on whether appellant’s claims were valid.
The pleadings must be construed liberally in favor of the party against whom judgment was asked, and the court “must give the benefit of the doubt to the nonmoving party.” Ryan, 387 N.W.2d at 653. It is immaterial whether or not appellant can prove the facts alleged in his complaint. Elzie, 298 N.W.2d at 32. Because appellant’s complaint sets forth several statements alleging the existence of exclusive franchise rights, the trial court erred in dismissing appellant’s claim on the pleadings.
2. Condition Precedent
The trial court determined that the stipulation between respondents and appellant Webb that dismissed respondents from Webb’s original suit, stating respondent Savik’s acceptance of a subsequent trial court determination on the question of whether or not appellant had contracted exclusive rights, created a condition precedent. According to the stipulation, the trial court determined, appellant, before reinstating his claims against respondents, had to obtain a court or jury determination, after a trial on the merits, recognizing his contract rights. We conclude that the stipulation merely recites the consequences of a determination of the issue by trial but does not demand that this process occur.
Respondents argue that an interpretation of the stipulation that does not require a condition precedent to appellant’s right to reinstate claims against respondents would cause the absurd result that only respondents would be affected by the clause, being bound by any trial court determination that a contract established appellant’s exclusive rights. This does not correctly characterize the issue. A trial on appellant’s contract rights did not occur, and neither party is affected by the stipulation language. And, if a trial had occurred, appellant is correct in observing that both parties would be bound by the result of a such a trial—appellant by collateral estoppel and respondents by the stipulation language.
3. Statute of Limitations
A cause of action for wrongful interference with business relations is included in the six-year statute of limitations under Minn. Stat. § 541.05. Wild v. Rarig, 302 Minn. 419, 446-47, 234 N.W.2d 775, 793 (1975). But a claim of wrongful interference with a business relationship by means of defamation is governed by the two-year statue of limitations under Minn. Stat. § 541.07. Id. at 447, 234 N.W.2d at 793; Wallin v. Minnesota Dept. of Corrections, 598 N.W.2d 393, 401 (Minn. App. 1999), review denied (Minn. Oct. 21, 1999).
Respondents argue that appellant’s interference claim was a defamation claim subject to the two-year statute of limitations rather than the six-year statute of limitations. The applicability of a statute of limitations is a question of law, which this court reviews de novo. Benigni v. County of St. Louis, 585 N.W.2d 51, 54 (Minn. 1998).
As opposed to the circumstances in Wild, the alleged defamation in this case was not central to the complaint. Rather, appellant’s allegation is that respondent, his former employee, had threatened and coerced OPH into granting him a franchise in violation of appellant’s exclusive rights, by threatening to set up an independent business in direct competition with OPH. The trial court correctly accepted appellant’s argument that the twelve paragraphs of the complaint detailing respondents’ alleged interference overshadow the “mention of disparagement,” and the trial court correctly applied the six-year statue of limitations. See, e.g. Randy’s Sanitation, Inc. v. Wright County, 65 F.Supp.2d 1017, 1031 (D. Minn. 1999) (applying six-year statute of limitations, reasoning that allegation that defendants threatened to withhold county business from entities who did business with appellants was not defamatory).
Finally, respondent contends that we should determine that part of the action, premised on threats and coercion, represents nothing more than a manifestation of business competition which is favored in the law. However favored the concept of competition, the allegations are correct in suggesting that a threat in some circumstances may represent actionable tortious interference with contract.
4. Motion to Strike
Respondents’ motion to strike material in appellant’s brief is denied, because it pertains to material not germane to our decision in the case.
Affirmed in part, reversed in part.