This opinion will be unpublished and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
Mark A. Ravich, et al.,
Hennepin County District Court
File No. CT04015446
Thomas B. Hatch, Robins, Kaplan, Miller & Ciresi, L.L.P., 2800 LaSalle Plaza, 800 LaSalle Avenue, Minneapolis, MN 55402 (for appellants)
Eric J. Magnuson,
Rider Bennett, LLP,
John A. McCauley, Venable LLP, Suite 1800, Two Hopkins Plaza, Baltimore, MD 21201 (for respondent)
Considered and decided by Willis, Presiding Judge; Shumaker, Judge; and Stoneburner, Judge.
Appellants challenge judgment on the pleadings on their claim for a premium payment under the terms of secured convertible promissory notes they purchased from respondent. Appellants argue that the district court erroneously concluded that the notes unambiguously precluded their claim. We affirm.
Appellants Richard Broms and Mark Ravich, along with about 20 other investors, purchased secured convertible promissory notes from respondent Datakey, Inc. At issue in this lawsuit is the interpretation of a clause governing payment of the notes in the event of an acquisition transaction. Each note provides in relevant part that:
[i]f [Datakey] consummates an Acquisition Transaction prior to . . . the payment or other satisfaction in full by [Datakey] of this Note, . . . then, within three (3) days of such Acquisition Transaction, [Datakey] shall pay the Holder hereof, in complete satisfaction of this Note, an amount equal to all outstanding principal and accrued interest plus such Holder’s pro rata share of a premium payment of Five Hundred Thousand Dollars ($500,000), which shall be payable to all Holders, in the aggregate.
(Emphasis added). “Acquisition Transaction” is defined in the notes, in relevant part, as meaning that Datakey “has entered into an agreement which provides for the occurrence of any . . . consolidation or merger to which [Datakey] is a party . . . .”
Prior to satisfaction of the notes,
Datakey entered into a merger agreement with SafeNet, Inc. The 70-page agreement provides that Datakey
will be purchased by and subsequently merged with a wholly owned subsidiary of
SafeNet, and continue its corporate existence under
Approximately four days after signing the agreement with SafeNet, Datakey paid appellants and other investors the principal and all interest due on the notes. Appellants, on behalf of themselves and as agents for the other investors, brought this action claiming, in relevant part, that Datakey breached the contract by consummating an acquisition transaction, as defined in the notes, without paying the premium provided for in the notes. Datakey moved for judgment on the pleadings, contending that “consummates an Acquisition Transaction,” as used in the notes to trigger payment of the premium, unambiguously refers to fully completing a merger, not simply entering into a merger agreement. The district court agreed and granted judgment on the pleadings on the first count of appellants’ complaint. Appellants subsequently dismissed the second count of their complaint so that they could appeal from judgment on the pleadings.
Judgment on the pleadings is proper
when the dispute centers around the meaning of a contract and the contract
language unambiguously entitles the movant to judgment. McReavy
v. Zeimes, 215
In construing a contract, a court
must “give effect to the intention of the parties as expressed in the language
they used in drafting the whole contract.”
Art Goebel, Inc. v. N. Suburban
Agencies, Inc., 567 N.W.2d 511, 515 (
Datakey argues that the verb “consummate” is precise and unambiguous and means “to bring to completion,” “to bring to the highest point or degree,” or “to make perfect,” citing Webster’s Third International Dictionary of the English Language Unabridged 490 (2002). Appellants do not dispute the precise meaning of consummate, but appellants contend that under the unambiguous terms of the note, an acquisition transaction is “consummated” when an agreement providing for the occurrence of a merger (or other action described in the definition of acquisition transaction) is entered into. Datakey argues that because “Acquisition Transaction” is defined as an agreement that Datakey “has entered into,” “consummation” of such an agreement unambiguously means completion of the action provided for in the agreement. We agree.
The district court relied in part on
caselaw to conclude that, as a matter of law, “consummate,” as used in the
notes, means completion of the proposed merger—not mere execution of the
agreement. Appellants argue that the
court improperly looked outside the contract to make a finding of fact that the
common and accepted meaning of “consummate,” in the context of mergers and
acquisitions, refers to the ultimate joining of the companies, because
extrinsic evidence may be considered only if the writing is ambiguous. See
Pioneer Peat, Inc. v. Quality Grassing & Servs. Inc., 653 N.W.2d 469,
case law to determine the plain meaning of this contract, we note that courts
frequently look to dictionaries and case law when determining the “plain and
ordinary” meaning of a contract term. See, e.g., Bank Midwest, Minn., Iowa, N.A. v. Lipetzky, 674 N.W.2d 176, 179-181,
180 n.7 (Minn. 2004) (describing the supreme court’s consideration of caselaw,
statutory definitions, and Black’s Law Dictionary to determine plain and unambiguous
meaning of “transfer”); see also Brookfield
Trade Ctr. Inc. v. County of Ramsey, 584 N.W.2d 390, 394 (Minn. 1998)
(finding an agreement unambiguous based on plain meaning of language and
stating that “our long-established case law mandates this interpretation”); Red & White Airway Cab Co. v. Transit
Cas. Co., 305
Because this case is resolved by the contract language, we do
not reach the argument that the district court improperly based its conclusion,
in part, on its determination that the parties cannot have intended for Datakey
to have had to pay the premium even if the merger did not ultimately occur. See
Carl Bolander & Sons, Inc. v. United Stockyards Corp., 298
 No party asserts that Datakey’s continued existence under the agreement affects the premium clause of the notes.
 The parties agreed at oral argument, that under the circumstances of this case, our standard of review is the same whether the motion is considered to have been brought under rule 12.03 or rule 56.
 In the alternative, appellants argue that the language triggering the premium payment is ambiguous, requiring consideration of extrinsic evidence and precluding summary judgment.