This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
LeSueur County District Court
File No. C80269
Jeff C. Braegelmann, Adina R. Bergstrom, Gislason & Hunter, L.L.P., 2700 South Broadway, Box 458, New Ulm, MN 56073-0458 (for appellant)
Charles R. Shreffler, Jr., Mohrman & Kaardal, P.A., Suite 4100, 33 South Sixth Street, Minneapolis, MN 55402 (for respondents)
Considered and decided by Stoneburner, Presiding Judge; Lansing, Judge; and Hudson, Judge.
Appellant Jerome Cheese Company asserts that the district court clearly erred by finding that the parties entered into a valid brokerage agreement as part of a settlement agreement placed on the record. Despite the finding, the district court granted appellant’s motion to dismiss this action with prejudice under the terms of the settlement agreement, based on its conclusion that any claims under the brokerage agreement are speculative at this time. We agree that the district court’s finding that the parties entered into a valid brokerage agreement is clearly erroneous, but affirm the dismissal on other grounds.
Appellant Jerome Cheese Company, a
division of Davisco Foods International, Inc., sells food and cheese
products. In January 2002, appellant
sued respondent Equinox Enterprises, Inc., d/b/a Dairy Specialists and U.S.
Investment LLC, for failure to pay $574,168.61 for products it purchased from
appellant. On February 14, 2002, the
parties placed the “outline” of a settlement agreement on the record. The agreement essentially had two parts. First, it required respondent to transfer
property respondent owned in
Counsel for Jerome Cheese prepared a
release and forwarded it to counsel for Equinox but the release was never
signed by both parties. By February 14,
2002, the parties had signed the security interest and the deed to the
Jerome Cheese is not in the business of producing ‘off grade’ product, however, in the event that Jerome Cheese has said product available and in the event that Equinox has valid customers for said product, then Jerome Cheese agrees to arrange sales of the product through Equinox, with profits split 50/50 between the parties. This provision is only valid if Equinox is not in default or breach of this agreement.
In a series of motions, Jerome
Cheese repeatedly attempted to enforce the provision of the agreement that
required Equinox to satisfy the mortgage on the
Ultimately, the mortgage was satisfied, but in the meantime Jerome Cheese had received $13,403.10 that it failed to disclose and that it was not entitled to retain after the mortgage satisfaction issue was resolved. Equinox, which had not responded in writing to any of Jerome Cheese’s previous motions, moved for replevin of these funds. In response, Jerome Cheese, now unrepresented, asserted for the first time that there was no agreement. In a summary judgment filed March 13, 2002, requiring Jerome Cheese to refund $13,403.10 to Equinox, the district court rejected Jerome Cheese’s argument that there was no agreement, noting that although Equinox had breached the agreement by failing to satisfy the mortgage on August 14, 2002, Jerome Cheese had never repudiated the February 14, 2002 agreement or moved to set it aside, but had repeatedly sought to enforce and put “judicial teeth” into the agreement.
Apparently emboldened by this success, Equinox moved in June 2004 to enforce the terms of the brokerage agreement contained in the release. Equinox erroneously stated in its motion that the March 2002 judgment determined that the June 6, 2002 release signed only by Equinox is an enforceable contract.
Jerome Cheese responded, asserting that the February 14, 2002 provision for a brokerage agreement was only an agreement to agree, unenforceable as a contract, and because the release was never signed by Jerome Cheese, no valid brokerage agreement exists. Jerome Cheese moved for dismissal with prejudice because all of the enforceable terms of the February 14, 2002 settlement agreement had been fulfilled.
The district court acknowledged that when the settlement agreement was put on the record on February 14, 2002, the parties made a record that the brokerage agreement was still open to negotiations, but nonetheless found that the paragraph contained in the release “is a binding brokerage agreement between the parties” because it was drafted by counsel for Jerome Cheese, signed by Equinox, and accurately re-stated language in an earlier letter from Jerome Cheese’s counsel to Equinox’s counsel purporting to state the final agreement reached by counsel on February 14, 2002. The district court further found that three conditions precedent trigger the contract: (1) Jerome Cheese has product; (2) Equinox has valid customers; and (3) Equinox did not materially breach the settlement agreement, and stated that because “[t]hese are all questions that might or might not arise
in the future they are not part of this lawsuit.” The district court denied Equinox’s motion to enforce the brokerage agreement and granted Jerome Cheese’s motion to dismiss the lawsuit with prejudice. This appeal followed. Equinox has not responded to the appeal.
Jerome Cheese argues that the
district court’s finding that the brokerage agreement provision in the June 6,
2002 release signed by Equinox constitutes a binding brokerage agreement
between the parties is clearly erroneous.
We agree. The underlying facts on
which the district court based this ultimate finding are undisputed: an
agreement was placed on the record that contemplated further negotiation of a
brokerage agreement; counsel for Jerome Cheese drafted a release that contained
a provision for a brokerage agreement in language previously sent to Equinox in
a letter from counsel for Jerome Cheese; the release was signed by Equinox with
changes to provisions other than the brokerage agreement; and the release was
never signed by Jerome Cheese. Although
the existence of a contract is generally an issue for the factfinder, when the
record does not support a rational finding that a contract exists, the issue
can be decided as a matter of law. See e.g., Gresser v. Hotzler, 604 N.W.2d 379, 382 (
In this case, the only language both
parties agreed to is the settlement agreement placed on the record on February
14, 2002. The district court in this
case specifically held in two orders that the parties reached a binding
settlement agreement on February 14, 2002.
On that date, the parties agreed only to continue negotiations for a
brokerage agreement. The district court,
in the judgment that is the subject of this appeal, correctly noted that an
“agreement to agree” holds “no legal efficacy” in
Without citing any authority, the
district court concluded that the brokerage agreement provision in the release nonetheless
constituted a binding agreement. This
conclusion is contrary to basic contract law because Equinox altered the terms
of the release prepared by Jerome Foods.
An acceptance that seeks to vary, add to, or qualify the terms of the
offer is a counter-offer, which constitutes a rejection of the original offer
and puts an end to the negotiation, unless the party who made the original
offer objectively assents to the modifications suggested. Minar
v. Skoog, 235
In this case, the district court
erroneously severed the brokerage agreement provision from the release and
concluded it was separately offered by Jerome Cheese and accepted by Equinox
when Equinox did not alter the terms of that provision. The mere fact that a contract is organized by
numbered provisions and may be divided does not make a contract severable. See
e.g., Bentley v. Edwards, 125
Minn. 179, 183, 146 N.W. 347, 349 (1914) (“The mere fact that the subject of
the contract is sold by weight or measure, and the value is ascertained by the
price affixed to each pound or yard or bushel of the quantity contracted for,
will not be sufficient to render the contract severable.”) (quotation omitted). A contract is severable only when the parties
intended to make the contract apportionable and it can be apportioned
fairly. See id. at 184, 146 N.W. at 349;
Nat’l Farmers Union Prop. & Cas. Co. v.
In this case, the language of the brokerage agreement provision itself clearly ties it to the remainder of the agreement by stating “[t]his provision is only valid if Equinox is not in default or breach of this agreement.” The provisions were not severable, and the district court’s finding that the provision could be severed and formed a binding brokerage agreement is clearly erroneous.
In addition, the district court clearly erred by finding that the issue of Equinox’s breach was not yet before the district court because the district court had previously, in the March 2003 judgment, specifically stated that Equinox breached the agreement by failing to satisfy the mortgage by August 14, 2002. Therefore, even if this court could accept the finding that a binding brokerage agreement was created by language in the release, it is undisputed that Equinox breached other terms of the settlement agreement, triggering the invalidation clause of the brokerage-agreement provision.
Because the agreement to agree to a brokerage agreement was unenforceable, or, in the alternative, because Equinox’s failure to timely satisfy the mortgage breached the parties’ agreement preventing the brokerage-agreement provision in the release from becoming binding, and because all of the enforceable terms of the agreement have been performed, the district court did not err in dismissing the lawsuit with prejudice pursuant to the enforceable terms of the February 14, 2002 settlement agreement.
 Respondent’s counsel said the “term and period of years of the brokerage agreement “is still subject to negotiation. I think we talked about two or three years,” but otherwise said that appellant’s counsel had accurately stated the broad terms of the agreement.
 The district court noted the prohibition against corporations appearing in district court without counsel, but nonetheless allowed Jerome Cheese to proceed pro se in response to Equinox’s motion.
 The summary judgment refers only to the February 14, 2002 agreement of the parties and does not mention the release Equinox signed on June 6, 2002.