This opinion will be unpublished and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
d/b/a Bellboy Import Corporation,
d/b/a Richmond Meat Packers & Exporters Limited,
Filed February 7, 2006
Hennepin County District Court
File No. 03-12335
Daniel J. Boivin, Meshbesher & Spence, Ltd.,
Jeffrey C. Brown, Thomas R. Johnson, Merchant & Gould, P.C., 3200 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402-4131 (for respondent)
Considered and decided by Worke, Presiding Judge; Willis, Judge; and Minge, Judge.
U N P U B L I S H E D O P I N I O N
In these consolidated appeals, appellant challenges the award of summary judgment and costs and disbursements. Appellant argues that a genuine fact issue exists as to whether respondent failed to mitigate its damages. Appellant also argues that the district court erred and abused its discretion by awarding costs and disbursements (a) without taking oral testimony or making findings as to reasonableness and necessity; (b) without verifying disbursements; (c) determined prior to taxation by the court administrator; and (d) that include the costs of computerized research. We affirm on each issue except the award of costs of computerized research.
This appeal involves two separate
commercial transactions between appellant Bellboy Corporation, a
In February 2000, appellant ordered cartons of bull testes valued at $39,600 from respondent. Appellant sued respondent alleging that the bull testes did not meet its specifications because respondent did not remove the bull testes’ epididymis or individually wrap them. Additionally, some cartons indicated that the bull testes came from animals slaughtered prior to November 1999, and appellant had specified that the bull testes not come from animals slaughtered prior to that date.
Around October 2000, the parties entered
into a contract for the sale of boneless beef.
The contract required respondent to transport the beef on the ship M. Moldovanov, which was estimated to
arrive on November 28, 2000. At the time
appellant placed the order, it was aware of the yearly import limit on beef
The district court consolidated the two cases, and respondent moved for summary judgment. Following a hearing, the district court granted respondent’s motion and dismissed appellant’s claims. Specifically, the district court ruled that appellant did not specify in the contract that the epididymises were to be removed or that the bull testes were to be individually wrapped. But, because appellant specified that the bull testes not come from animals slaughtered prior to November 1999, and respondent conceded that 22 cartons did not conform, respondent breached the contract in that respect. The district court also ruled that respondent had fulfilled its obligation under the boneless-beef contract and that appellant’s breach, in not accepting the beef, caused respondent to incur expenses and a loss on resale—a total of $34,832 in damages, less $1,320—the cost of the cartons of non-conforming bull testes. The district court ordered that appellant pay respondent $33,512 in damages, plus costs and disbursements.
As the prevailing party, respondent moved for an award of costs and disbursements under Minn. Stat. §§ 549.02, .04 (2004) and the cost-shifting provisions of Minn. R. Civ. P. 68. The district court awarded costs and disbursements totaling $20,591. These consolidated appeals follow.
D E C I S I O N
In reviewing a summary judgment, this court asks whether there are
any genuine issues of material fact and whether the district court erred in its
application of the law. State by Cooper v. French,460 N.W.2d 2, 4 (
Appellant does not dispute that it breached the boneless-beef contract.
While it is well established in
argues that the district court erred by granting summary judgment without considering
the issue of mitigation. Under Minn.
Stat. § 336.2-703 (d) (2004), “[w]here the buyer wrongfully rejects or
revokes acceptance of goods or fails to make a payment . . . the aggrieved
seller may resell and recover damages[.]”
the seller may resell the goods concerned or the undelivered balance thereof. Where the resale is made in good faith and in a commercially reasonable manner the seller may recover the difference between the resale price and the contract price together with any incidental damages allowed under the provisions of this article (section 336.2-710), but less expenses saved in consequence of the buyer’s breach.
Here, the district court in addressing respondent’s mitigation of damages
noted that the beef arrived on November 28, 2000—the estimated time of arrival
provided for in the contract, but found that appellant refused to accept or pay
for the beef. The district court surmised
that appellant attempted to renegotiate the price, in part because of the dispute
over the bull testes, and continued to attempt renegotiating until nearly the
end of December and after the import quota had been met. As a result, respondent resold the beef in mid-January
2001 at a loss of $14,454. The district court
concluded that respondent mitigated its damages by reselling the beef in a
commercially reasonable manner. Further,
appellant did not provide any evidence as to the amount by which respondent
could have mitigated its damages by storing the beef, or establish that
Costs and Disbursements
The decision to allow costs and disbursements is discretionary
with the district court and will not be reversed absent an abuse of discretion. Jonsson v. Ames
N.W.2d 560, 563 (Minn. App. 1987), review denied (Minn. Sept. 30, 1987). “Costs and disbursements shall be allowed as
provided by statute.”
“In actions commenced in the district court, costs shall be allowed . . . [t]o [the] defendant  [u]pon discontinuance or dismissal or when judgment is rendered in the defendant’s favor on the merits, $200.” Minn. Stat. § 549.02, subd. 1. Appellant does not dispute that respondent is entitled as the prevailing party to this statutory allowance.
“[T]he prevailing party . . . shall be allowed reasonable disbursements paid or incurred[.]” Minn. Stat. § 549.04, subd. 1. “The standard by which the court’s discretion is measured is whether expenditures are reasonable. Therefore, absent a specific finding that the costs were unreasonable, the court shall approve recovery of disbursements.” Jonsson, 409 N.W.2d at 563. Here, respondent was the prevailing party and has a right to recover reasonable costs and disbursements paid or incurred.
As a separate basis, respondent sought recovery under Minn. R. Civ. P. 68. For parties that offer settlement, rule 68 provides that “[i]f the judgment finally entered is not more favorable to the offeree than the offer, the offeree must pay the offeror’s costs and disbursements.” “[A]n award of costs and disbursements under the rule is not discretionary.” Imperial Developers, Inc. v. Seaboard Sur. Co., 518 N.W.2d 623, 628 (Minn. App. 1994), review denied (Minn. Aug. 24, 1994). Appellant does not dispute that respondent made two settlement offers. On November 8, 2002, respondent offered appellant $15,000. Appellant rejected that offer, demanding $50,000. On February 23, 2004, respondent offered appellant $20,000. Appellant rejected that offer, demanding $80,000. Because appellant rejected respondent’s offers and the final judgment was favorable to respondent, appellant must pay respondent’s costs and disbursements.
Appellant argues, however, that the district court abused its
discretion and erred by failing to take oral testimony and by failing to make
findings on the reasonableness and necessity of the costs and disbursements. Relying on Buller v. A.O. Smith Harvestone Prods., Inc.,
518 N.W.2d 537 (
While a hearing is not required, costs and disbursements must be
reasonable and necessary. Stinson v.
Clark Equip. Co.,473
N.W.2d 333, 338 (Minn. App. 1991), review denied (Minn. Sept. 13,
1991). When a party has challenged the
reasonableness or necessity of an award, we have remanded to the district court
for findings on that issue. See
Illinois Farmers Ins. Co. v. Brekke Fireplace Shoppe, Inc., 495 N.W.2d 216, 222 (
Appellant argues that the district court failed to make findings
on the reasonableness and necessity of travel expenses. Appellant argues that travel costs should be
limited to 28 cents per mile. See
Appellant also challenges the award of costs and disbursements for
deposition costs because the depositions were
not necessary to the outcome. The award of
deposition costs to the prevailing party is within the discretion of the
district court. Larson v. Hill’s Heating & Refrigeration of
Appellant also challenges the award that appellant refers to as “miscellaneous unexplained costs.” The district court has discretion to award miscellaneous costs and disbursements, such as costs of photocopying, long-distance phone calls, FAX charges, parking, and courier services. Stinson, 473 N.W.2d at 338. Respondent submitted a detailed statement of all miscellaneous costs, and appellant failed to present any evidence to refute the reasonableness and necessity of those costs. The district court did not find that miscellaneous costs were unreasonable. Therefore, the district court did not abuse its discretion in awarding costs and disbursements for miscellaneous costs.
Appellant next argues that the district
court erred in awarding costs and disbursements because the disbursements were
unverified. “[D]isbursements shall be stated in
detail and verified by affidavit[.]”
Appellant also argues that there was an irregularity
in the proceedings. Appellant argues
that costs and disbursements may be taxed, in the first instance, by the court administrator,
and only by the court on an aggrieved party’s appeal from the determination of
Finally, appellant argues that the district
court erred in awarding costs for computerized research. Respondent claimed costs of $2,659.44 in
computerized research. “It is well settled
that computer-aided research, ‘like any other form of legal research, is a component
of attorneys’ fees and cannot be independently taxed as an item of cost.’” Ryther v. KARE 11, 864 F. Supp. 1525,
1534 (D. Minn. 1994) (quoting Leftwich v. Harris-Stowe State Coll., 702 F. 2d 686, 695 (8th Cir. 1983)). Costs under rule 68 do not include attorney
fees. Bucko v. First
Finally, respondent moved this court to impose sanctions on appellant and/or its attorneys pursuant to Minn. Stat. § 549.211 (2004); that motion is denied.
Affirmed as modified; motion denied.
 “Demurrage” is the detention
of a ship or other cargo conveyance during loading and unloading beyond the
scheduled time of departure. The