This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2000).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C3-01-878

 

Diane Dunlap,

Respondent,

 

vs.

 

Trustees of Hamline University of Minnesota,

Appellants.

 

Filed December 11, 2001

Reversed and remanded

Mulally, Judge*

 

Ramsey County District Court

File No. CX005089

 

Deborah H. Mande, 1043 Grand Avenue, Suite 364, St. Paul, MN 55105 (for respondent)

 

Edward M. Laine, Sarah Beuning, Oppenheimer Wolff & Donnelly LLP, 3400 Plaza VII Building, 45 South Seventh Street, Minneapolis, MN 55402 (for appellant)

 

            Considered and decided by Anderson, Presiding Judge, Peterson, Judge, and Mulally, Judge.

U N P U B L I S H E D  O P I N I O N

MULALLY, Judge

The parties settled a lawsuit that respondent had brought against appellants.  Pursuant to the terms of the settlement, appellant took early retirement, for which she received benefits.  During her retirement, respondent changed the benefits for retirees generally by capping its premium contributions.  Respondent sued, contending that her benefits were frozen on the date that her early retirement commenced.  The district court granted respondent summary judgment.  We reverse and remand.

FACTS

In 1992, Diane Dunlap was hired by Hamline University as dean of the graduate school.  She had been granted tenure, meaning that she was guaranteed employment at Hamline until the age of 72.  During the summer of 1996, Larry Osnes, the university president, became dissatisfied with Dunlap’s performance.  Nevertheless, she was reappointed dean on November 22, 1996, at the same rate of compensation.  Less than a month later, on December 18, 1996, Osnes demoted Dunlap to a faculty-member position in the school of education, reducing her salary 42% to $52,000 per year.

Dunlap retained counsel who wrote to the university, alleging that it had breached its contract with Dunlap and demanding that the university abide by the terms of the reappointment letter.  After the parties exchanged correspondence debating the legal significance of the reappointment letter, it became clear that neither party wished their relationship to continue and the parties entered into settlement negotiations.

The 55-year-old Dunlap was concerned about her ability to find new employment. According to her affidavit, she sought to have her health-care costs set at a fixed rate to match the fixed income she expected upon retirement.  After extended negotiations, the parties agreed to a settlement consisting of three significant parts: (1) salary continuation for a period of time at a specified pay rate; (2) a lump-sum payment of $50,000; and (3) early retirement.  The final executed settlement agreement states, in relevant part:

1.         Effective October 31, 1997, Dunlap shall resign her employment at Hamline and be granted an early retirement.

Benefits available to Dunlap upon retirement shall be in accordance with the rules, regulations and policies of existing plans at the time including Hamline’s TIAA Plan, Hamline’s CREF Plan, Hamline’s SRA Plan, and Hamline’s Medical and Dental Plans.

(Emphasis added).

In August 1999, the board of trustees passed a resolution capping the employer’s contribution for post-retirement benefits at $164 per month.  This cap has caused Dunlap to pay a portion of her benefits, starting at $48.01 per month and rising to $125 per month.

Dunlap commenced this action, contending that under the terms of the settlement agreement, Hamline was obligated to maintain her benefits according to the policies in effect at the time of her retirement.  Upon cross-motions, the district court granted Dunlap summary judgment, and this appeal followed.

D E C I S I O N

On appeal from summary judgment, this court asks (1) whether there are any genuine issues of material fact, and (2) whether the district court erred in its application of the law.  State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).  The construction and effect of a contract are questions of law, reviewed de novo.  Affiliated Banc Group, Ltd. v. Zehringer, 527 N.W.2d 585, 587-88 (Minn. App. 1995).  It is only when ambiguity exists that there is a question of fact.  City of Virginia v. Northland Office Props., Ltd., 465 N.W.2d 424, 427 (Minn. App. 1991), review denied (Minn. Apr. 18, 1991).

The key language here is the clause, “[b]enefits available to Dunlap shall be in accordance with the rules regulations and policies of existing plans at the time.”  Hamline argues that the “at the time” language unambiguously refers “at any time,” i.e., at the time when benefits are received.  Dunlap argues that the same language unambiguously refers to the time of her resignation.

Each point of the agreement is numbered separately.  That section of the agreement at issue begins by noting the date of Dunlap’s resignation.  “At the time” therefore refers to the date of Dunlap’s resignation.  But this conclusion does not necessarily remove all ambiguity from the agreement.  Ambiguity arises when the language is subject to more than one reasonable interpretation.  City of Virginia, 465 N.W.2d at 427.  Even if the “time” unambiguously refers to the specific date of October 31, 1997, the effect of this provision remains unclear.

Dunlap argues that it means that her benefits were to be frozen on that date.  But we think another reasonable interpretation is that the clause “at the time” modifies not “the policies, etc.,” but “the existing plans.”  Under that interpretation, as long as Dunlap is receiving the benefits of the plans that existed on October 31, 1997 (listed as Hamline’s TIAA, CREF, SRA, medical, and dental plans), Hamline would not be in breach of the settlement agreement.  The settlement agreement does not unambiguously require Dunlap’s benefits and plans to be maintained exactly as they existed on October 31, 1997.

Although the parties argue extensively about the meaning of extrinsic evidence, where such evidence is admitted, the meaning of the ambiguous language is a question of fact.  Id.  The existence of such questions of fact renders summary judgment improper.  Id.

Reversed and remanded.



* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.