This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
IN COURT OF APPEALS
Hennepin County District Court
File No. MC9712514
John F. Bonner, III, Thomas F. DeVincke, Bonner & Borhart, LLP, 1500 AT&T Tower, 901 Marquette Avenue South, Minneapolis, MN 55402 (for appellant)
Brooks F. Poley, Jennifer B. Klecker, Winthrop & Weinstine, PA3000 Dain Rauscher Plaza, 60 South Sixth Street, Minneapolis, MN 55402 (for respondent)
Considered and decided by Harten, Presiding Judge, Anderson, Judge, and Stoneburner, Judge.
Appellant Joyce Witzman challenges a district court order denying her motion for summary judgment and granting respondent Blair Wolfson’s motion for summary judgment dismissing Witzman’s action to set aside a 1994 settlement agreement between the parties. Appellant also contests the denial of her motion to compel discovery. Witzman alleges that the district court (1) abused its discretion by relying on an inadmissible document submitted by Wolfson to support his summary judgment motion and by denying Witzman’s motion to compel discovery, and (2) erred by granting summary judgment to Wolfson on all of Witzman’s claims, some of which were not addressed in Wolfson’s summary judgment motion. Because we conclude that the district court did not abuse its discretion or err by granting summary judgment, we affirm.
This is the second appeal in this lawsuit. Shortly after Witzman initiated this suit, the district court granted Wolfson’s motion for summary judgment. On appeal from that decision, we reversed, concluding that material fact issues existed regarding the meaning of an ambiguous cooperation clause in the settlement agreement and the reasonableness of Witzman’s reliance on Wolfson’s alleged misrepresentations, and remanded to the district court on these issues. Witzman v. Wolfson, No. C7-98-421, 1998 WL 713484, at *3-*5 (Minn. App. Oct. 13, 1998), review denied (Minn. Dec. 22, 1998).
The parties are siblings. Wolfson served as the personal representative for their parents’ estates and as sole trustee for three trusts established by their parents. Witzman believed that she was not receiving appropriate information about the trusts and became suspicious about Wolfson’s handling of assets of the estates and the trusts. Witzman initiated claims against Wolfson in each trust. All of the claims were settled by agreement in 1994. The agreement reserved Witzman’s right to pursue claims against accountants and attorneys involved with the estates and trusts and contained the following clause:
It is further understood and agreed that the parties shall cooperate with each other to the extent that litigation is commenced against [accountants] or [attorneys], and that information produced and/or supplied in association with [the settled claims] may be utilized in any such proceeding.
Witzman later determined that she could not pursue claims against the accountants unless she was named as trustee or co-trustee of the trusts, all of which were dissolved by the 1994 settlement agreement. Wolfson declined to appoint her co-trustee, giving rise to Witzman’s claim in this lawsuit that Wolfson breached the cooperation clause. On December 10, 1999, Witzman’s petition to have herself appointed successor trustee of all three trusts was granted and she subsequently renewed her claims against the accountants. Wolfson appealed the appointment of Witzman as trustee. We reversed the appointment concluding that because the trusts were terminated in November 1994, a successor trustee could not be appointed. In re Trust of Wilfred Wolfson, C7-00-131, 2000 WL 978723, at *2 (Minn. App. July 18, 2000), review denied (Minn. Sept. 26, 2000). Witzman’s claims against the accountants were again dismissed. Witzman now claims that Wolfson breached the cooperation clause of the settlement agreement by challenging her appointment as trustee, alleging that the sole cause of the dismissal of her claims against the accountants was Wolfson’s decision to challenge Witzman’s status as trustee.
In connection with her claims against the accountants, Witzman closely examined documents that had been produced by Wolfson prior to the settlement agreement and concluded that Wolfson had misrepresented the res of the family trusts thereby fraudulently inducing her to enter into the settlement agreement.
Witzman requested extensive production of documents in connection with this lawsuit. She complains that the manner in which Wolfson produced the documents did not comply with discovery rules and specifically complains that a workpaper prepared by accountant Harvey Flom, that purports to disprove most of Witzman’s suspicions that estate assets were never transferred to the trusts, was not produced in the course of discovery but was attached to Wolfson’s second motion for summary judgment.
Witzman argues that Flom’s workpaper is inadmissible and cannot properly be relied on by the district court to disprove Witzman’s suspicions of misrepresentation. Witzman countered Wolfson’s motion for summary judgment with her own motion for summary judgment, claiming that Wolfson fraudulently induced her to sign the settlement agreement and that Wolfson’s appeal of her appointment as trustee breached the cooperation clause as a matter of law. Witzman also moved to compel production of documents that account for the proceeds from the sale of estate assets. The district court denied Witzman’s motions and granted Wolfson’s motion for summary judgment, dismissing all of Witzman’s claims. This appeal followed.
Witzman argues that the district court abused its discretion by admitting Flom’s workpaper into evidence because it is inadmissible hearsay. We disagree.
Both parties concede that Flom’s workpaper is hearsay but disagree as to whether the workpaper is admissible under the business records exception to the hearsay rule. Business records may be admitted into evidence as an exception to the hearsay rule under Minn. R. Evid. 803(6). In order to be admissible under the business records exception to the hearsay rule, Flom’s workpaper must meet the following requirements: (1) the workpaper must have been “kept in the course of a regularly conducted business activity,” (2) it must be “the regular practice of that business activity to make the * * * record, or data compilation;” and (3) the foundation for the workpaper must be laid “by the custodian or other qualified witnesses.” Nat’l Tea Co. v. Tyler Refrigeration Co., 339 N.W.2d 59, 61 (Minn. 1983).
Furthermore, a district court must consider the following questions when exercising its discretion: (1) “[w]as the opinion prepared for presentation in the case being tried,” (2) “[w]as the report made by an independent agency or a hired agency,” (3) “[w]hen was the report made;” and (4) was the “organization * * * established to do exactly the kind of work involved in preparing the report.” Id. at 62.
Flom’s original affidavit explains the workpaper and his supplemental affidavit states that he drafted the workpaper “in connection with” the Amended Final Account (AFA) with regard to the estate of the parties’ father, and that it was “prepared and maintained in the ordinary course of [his] business.” Flom’s affidavits sufficiently support admission of the workpaper. Because the workpaper was kept in the ordinary course of regularly conducted business activity, it is the regular practice of accountants to prepare such workpapers, and Flom, as draftor, is a qualified witness to support its foundation, the district court did not abuse its discretion by admitting the workpaper.
Witzman contends that Flom’s affidavits do not establish that the workpaper was made at or near the time of the events it purports to cover, making the work paper inadmissible. See Carrie Contractors, Inc. v. Blount Constr. Group of Blount, Inc., 968 F. Supp. 662, 666 (M.D. Ala. 1997) (excluding accounting records made seventeen and one-half months after events documented in records because records “were not prepared at or near the time of the contract termination.”). Carrie Contractors, as foreign authority,is not binding on this court. See Mahowald v. Minn. Gas Co., 344 N.W.2d 856, 861 (Minn. 1984) (noting that decisions from foreign jurisdictions are not binding as authority). The workpaper is dated August 31, 1976, but Flom does not attest to the exact date of preparation. Flom does not claim that the document was created at the time each covered transaction occurred, but explains that it was prepared in connection with the preparation of the AFA. It was within the district court’s sound discretion to determine that the workpaper was sufficiently contemporaneous with preparation of the AFA, and there is no evidence to suggest that the district court abused its discretion.
2. Motion to compel discovery
A district court also has broad discretion “to issue discovery orders and, absent clear abuse of that discretion,” its decision will not be overturned. Shetka v. Kueppers, Kueppers, Von Feldt & Salmen, 454 N.W.2d 916, 921 (Minn. 1990).
Witzman contends that the district court abused its discretion by denying her motion to compel discovery of documents accounting for the proceeds from the sale of estate assets. Specifically, Witzman contends that (1) Wolfson did not comply with Minn. R. Civ. P. 34, and (2) the district court erred by determining that the discovery issue was moot because Wolfson turned over Flom’s workpaper to Witzman by virtue of his summary judgment motion. The district court denied Witzman’s motion to compel discovery because “discovery was substantially complied with” by Wolfson.
A party is only required to produce requested documents if the documents are in the “possession, custody, or control” of the producing party. Minn. R. Civ. P. 34.01. Here, Witzman requested that Wolfson produce “[a]ll documents which Defendant claims account for any proceeds from the sale of any assets owned by the Estate of Wilfred Wolfson.” Witzman had access to all documents in Wolfson’s possession and in Flom’s possession when Wolfson’s attorney informed Witzman’s attorney that Flom had relevant documents in his possession and subsequently sent those documents to Witzman’s attorney. Wolfson claims to have turned over all documents to Witzman’s attorneys and asserts that, aside from the workpaper, there are no undisclosed documents relating to the request. Witzman has no evidence that undisclosed documents relating to her request exist and are in Wolfson’s possession. Under these circumstances, the district court did not abuse its discretion by denying Witzman’s motion to compel discovery.
II. Summary Judgment Rulings
A reviewing court must ask the following questions when reviewing a grant of summary judgment: “(1) whether there are any genuine issues of material fact and (2) whether the lower courts erred in their application of the law.” State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990) (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) (alteration in original) (quotation omitted). A genuine issue for trial must be established by substantial evidence. Id. at 69-70.
Witzman contends that the district court erred by granting summary judgment to Wolfson on Witzman’s breach of settlement agreement claim because Wolfson breached his obligation to cooperate in litigation against the trust accountants, as required by the agreement, when he opposed Witzman’s appointment as a successor trustee of the trusts. Witzman further contends that while Wolfson had a legal right to oppose Witzman in her action to become a successor trustee, he gave up that right by signing the settlement agreement. We disagree.
Witzman’s reliance on Farmers’ Elec. Coop. v. Missouri Dep’t of Corrections, 977 S.W.2d 266 (Mo. 1998), a Missouri Supreme Court decision, to support the proposition that a party may contract away his legal rights, is misplaced. In Farmers’ Elec. Coop., the department of corrections caused land, on which a new portion of the correctional facility was built, to be annexed by the city, making it illegal for an electricity cooperative to provide electricity to the new facility, in violation of the cooperative’s contract with the department of corrections. Id. at 267-268. The district court granted summary judgment to the department of corrections on the cooperative’s suit for breach of contract. Id. at 267. The Missouri Supreme Court concluded that while the department of corrections had a legal right to pursue annexation, it violated its obligation to act in good faith under the contract and, therefore, was liable for breach of contract. Id. at 272. Farmers’ merely reflects a principle long recognized in Minnesota, that “every contract contains an implied condition that each party will not unjustifiably hinder the other from performing.” Zobel & Dahl Constr. v. Crotty, 356 N.W.2d 42, 45 (Minn. 1984) (citing John D. Calamari & Joseph M. Perillo, The Law of Contracts, 441-444 (1977)). Wolfson did nothing to prevent Witzman from performing any of the terms of the settlement agreement.
An equally important principle of contract law is that provisions that limit a party’s legal rights are strictly construed. Harvey Constr. Co. v. Parmele, 113 N.W.2d 760, 766 (Iowa 1962). We hold that this principle precludes reading a waiver of a legal right into an ambiguous contract. Counsel for Witzman candidly admitted at oral argument that at the time the settlement was made Witzman had no idea that her claims against the accountants could only be pursued if she was a trustee. Witzman has therefore admitted that the parties did not specifically contemplate Wolfson waiving his legal right to challenge Witzman’s appointment as trustee, an appointment we concluded Witzman was not legally entitled to. Whatever the parties intended by the term “cooperate” they clearly did not intend such a waiver. Wolfson’s challenge to the appointment was legally justified and cannot form the basis of Witzman’s claim that Wolfson breached the cooperation clause. The district court did not err by granting summary judgment to Wolfson on this claim.
2. Fraudulent inducement
Summary judgment is appropriate when the movant shows that the record does not give “rise to a genuine issue for trial as to the existence of an essential element of the nonmoving party’s case.” Nicollet Restoration, Inc. v. City of St. Paul, 533 N.W.2d 845, 847-48 (Minn. 1995) (citation omitted). In order to successfully make out a claim for fraudulent inducement, Witzman must show that (1) Wolfson “made a misrepresentation of material fact,” (2) Wolfson knew the material fact to be “false or asserted [the fact] without regard to its falsity,” (3) Wolfson “intended [Witzman] to act,” (4) she “reasonably relied on the representation and acted on it to her detriment;” and (5) she suffered actual damages. See Cohen v. Appert, 463 N.W.2d 787, 789 (Minn. App. 1990), review denied (Minn. Jan. 24, 1991).
Witzman alleges that Wolfson, in an effort to induce Witzman to sign the settlement agreement, (1) misrepresented to Witzman that he would cooperate with her in any action against the trust accountants or trust attorneys, (2) misrepresented that all assets from the Wilfred Wolfson estate had been conveyed to two of the trusts, (3) failed to include the proceeds from the sale of certain properties in the decree of distribution, (4) misrepresented, in the trust accountings, the value of assets scheduled in the trusts; and (5) failed to list other assets, including an interest in a pending condemnation, in the Trust Accountings.
Discovery completed since we remanded this matter to the trial court now establishes that Witzman is unable to produce evidence to support her claim that Wolfson misrepresented the trusts’ res and thereby fraudulently induced her to enter into the settlement agreement. As explained in Flom’s affidavit, the AFA reflected receipt of cash from real estate sales that had been recorded prior to August 31, 1976 but did not list real estate sale proceeds recorded after August 31, 1976 and before May 30, 1978. Flom admitted that due to an “oversight” one property remained on the schedules, although it had been sold and receipt of sale was reflected in the AFA. The district court set out in detail the undisputed facts about all but two of Witzman’s specific alleged misrepresentations. After careful review, we conclude that those facts are supported by uncontroverted evidence. Counsel for Witzman conceded at oral argument that Witzman has no documentary or other evidence to counter Wolfson’s evidence about these properties and transactions. Witzman suspects fraud because of the delay in discovery of the Flom workpaper and the fact that supporting documentation for the workpaper no longer exists, according to Wolfson. Suspicions, however, are not sufficient to support a cause of action.
3. Failure to address all specific claims of fraud
Witzman contends that the district court erred in granting final judgment on all of her fraud claims because Wolfson failed to address her allegations that the Lake Minnetonka Estate property was undervalued and that the Final Accounting and Decree of Distribution failed to include other assets including proceeds from the sale of bonds in the estate sold before 1978. Wolfson contends that the court should decline to hear this argument because Witzman failed to raise it at the district court but that if the court addresses the issue, it should affirm the district court’s order because Witzman failed to present any evidence supporting her assertions. Witzman could not have raised this issue at the district court because she had no reason to believe that the district court would dismiss all claims and, therefore, the issue is properly before this court, but we conclude that the court did not err in granting summary judgment on these claims.
On a motion for summary judgment
the adverse party cannot preserve his right to a trial on the merits merely by referring to unverified and conclusionary allegations in his pleading or by postulating evidence that might be developed at trial.
Lubbers v. Anderson, 539 N.W.2d 398, 401 (Minn. 1995) (quotation omitted). Summary judgment is appropriate for a defendant when “the record reflects a complete lack of proof on an essential element of the plaintiff’s claim.” Id. (citation omitted).
Witzman has only the cursory allegations in the complaint, that the Lake Minnetonka property was undervalued and that the sale of the bonds was improper. Because Witzman has no evidence to create factual issues concerning Wolfson’s representations about the trust res and no evidence that Wolfson’s agreement to cooperate was a misrepresentation when made, summary judgment was appropriately granted to Wolfson and denied to Witzman on Witzman’s breach of settlement agreement and fraudulent inducement claims.
 Witzman also cites Gerbig v. Gearman, Nos. C1-95-528, C8-94-2394, 1995 WL 434422, at *8 (Minn. App. July 25, 1995) for the proposition that a record was not made at or near the time of the event and was therefore inadmissible. But untimeliness was only one of two reasons for finding that document inadmissible. Id. Furthermore, Gerbig is an unpublished case and that the “legislature has unequivocally provided that unpublished opinions are not precedential.” Dynamic Air, Inc. v. Bloch, 502 N.W.2d 796, 801 (Minn. App. 1993) (reminding “the bench and bar firmly that neither the [district] courts nor practitioners are to rely on unpublished opinions as binding precedent.”). See also Minn. Stat. § 480A.08, subd. 3(c) (2000) (“Unpublished opinions of the court of appeals are not precedential.”).