This opinion will be unpublished and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
ALLETE, Inc., f/k/a Minnesota Power, Inc.,
d/b/a Minnesota Power
& Light Company, et al.,
St. Louis County District Court
File No. 69-C9-03-601595
Eric J. Nystrom, Mark H. Zitzewitz, Lindquist & Vennum, PLLP, 4200 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for respondent)
James A. Wade, Roy J. Christensen, Johnson, Killen & Seiler, P.A., 230 West Superior Street, Suite 800, Duluth, MN 55802 (for appellants)
Considered and decided by Toussaint, Chief Judge; Peterson, Judge; and Minge, Judge.
This appeal involves disputes over whether the contracts between the parties authorize respondent to run a cable from its leased space inside appellants’ building to the exterior wall and whether the discrepancies between the jury’s verdict and the district court’s declaratory judgment are reconcilable. Appellants challenge the district court’s grant of declaratory judgment and submission of respondent’s intentional-interference-with-a-contract claim to the jury. Respondent challenges the district court’s denial of its motion for judgment notwithstanding the verdict or a new trial. Because the district court did not err in granting declaratory judgment, submitting the challenged claim to the jury, and denying appellants’ motion for judgment notwithstanding the verdict; and because the district court did not abuse its discretion in denying appellants’ motion for a new trial, we affirm.
Onvoy, Inc. and appellants ALLETE, Inc. (formerly known as
The fiber agreement acknowledged that ALLETE could, in its discretion, permit Onvoy to use ALLETE’s substation and office sites, but that the terms and conditions for such activity had to be set out in a separate agreement. In April 1996, ALLETE and Onvoy entered into such a separate agreement leasing 430 square feet of space in the GOB, “for use and occupancy as a telecommunication equipment room.” The lease permits some degree of connection between Onvoy’s equipment and the equipment of other entities:
Tenant shall have the right, upon written notice to and consent of Lessor, which consent will not be unreasonably withheld, to allow collocation of telecommunications equipment of local exchange carriers (LECs), competitive access providers (CAPs) or interexchange carriers (IXCs) in Tenant’s leased space provided such collocation of telecommunications equipment is for the purpose of interconnecting Tenant’s network with the network(s) of the collocated party(ies).
Onvoy alleges that both the fiber agreement and the GOB lease were entered into under the assumption that they would permit Onvoy to establish a “point of presence” (POP) for its telecommunications operation in the GOB. Onvoy further alleges that both parties understood that the POP could only become operational if it were physically connected by cable to the equipment of other telecommunications service providers outside the GOB. ALLETE maintains that Onvoy must negotiate another agreement, including another fee, in order to run this cable from the leased premises to the exterior of the GOB.
Onvoy claims that its dealings with ALLETE deteriorated after ALLETE acquired Enventis, which is a competitor in the telecommunications industry. Onvoy sued ALLETE and Enventis for breach of contract, sued Enventis for intentional interference with contractual relations, and requested declaratory judgment, reformation of the contract, and damages for unjust enrichment. ALLETE and Enventis brought motions for summary judgment, which the district court denied, reasoning that the contracts between the parties involve technical terms and that there were “legitimate factual disputes over intent and meaning.”
Onvoy’s legal claims were tried to a jury and the equitable claims were tried to the district court. The jury found that ALLETE did not breach its lease with Onvoy and responded “zero” to the following question: “What amount of money, if any, will fairly and adequately compensate Plaintiff Onvoy, Inc. for the breach of the General Office Building Lease?” The jury also found that Enventis intentionally interfered with the lease, but awarded no damages.
With regard to Onvoy’s equitable claims, the jury made an advisory finding that
[b]efore entering into the General Office Building Lease . . . Plaintiff Onvoy, Inc. and Defendant [ALLETE had] a valid agreement that Plaintiff Onvoy, Inc. would use the General Office Building space for the collocation of equipment in order to interconnect Plaintiff Onvoy, Inc.’s network with other telecommunications carriers’ networks by running cable through the General Office Building and outside of Plaintiff Onvoy, Inc.’s leased space[.]
The jury further found that the lease failed to express this earlier agreement not because of a mutual mistake, but because of Onvoy’s unilateral mistake, without inequitable conduct by ALLETE.
Although the district court found no unjust enrichment, and did not rule on the reformation claim, it granted Onvoy’s request for declaratory-judgment relief. The district court determined that the GOB lease was entered into for the purpose of connecting Onvoy’s telecommunications network with other networks. It also found that ALLETE knew this was the purpose and specifically agreed to it. Moreover, the district court concluded that ALLETE knew that achieving connection required running cable to the exterior of the GOB, that Onvoy had requested that ALLETE allow such interconnection, and that ALLETE had refused to allow such access to the exterior of the building unless Onvoy entered into a new agreement and paid an additional fee as proposed by ALLETE. Finally, the district court determined that the agreement and fee proposed by ALLETE were unreasonable and contrary to the intent of Onvoy and ALLETE in entering into both the fiber agreement and the GOB lease. The district court accepted the above-quoted special-verdict finding regarding the intention of the parties prior to the GOB lease to allow cable to run to the outside of the GOB. The district court went on to conclude that:
[T]he GOB Lease provides Onvoy with a right to run cables into its leased space from outside the GOB in order to connect Onvoy’s equipment with collocated equipment of third parties within Onvoy’s lease space.
The district court further concluded and declared that:
Onvoy is entitled to a right of access to facilities or conduit space sufficient to allow Onvoy to interconnect its telecommunications equipment located in its lease[d] space within the GOB with the telecommunications equipment of third party telecommunications service providers, without requiring Onvoy or collocated third parties to enter into separate agreements with Allete or make financial payments to Allete or its wholly-owned subsidiary, Enventis Telecom, Inc.
ALLETE brought a motion for amended findings and conclusions of law, and Onvoy brought a motion for judgment notwithstanding the verdict or, in the alternative, a new trial. The district court denied these motions. ALLETE and Enventis appealed, and Onvoy filed a notice of review.
The first issue is whether the district court erred in granting declaratory judgment in favor of Onvoy. “On appeal from a declaratory judgment, we apply a clearly erroneous standard to the factual findings, but review the trial court’s determination of questions of law de novo.” Rice Lake Contracting Corp. v. Rust Env’t & Infrastructure, Inc., 549 N.W.2d 96, 98-99 (Minn. App. 1996), review denied (Minn. Aug. 20, 1996).
argues that the district court erred when it entered a declaratory judgment
that Onvoy was entitled to use space in the GOB outside of the area specified
in the lease, because the jury had already rejected that construction of the
lease when the jury found that ALLETE did not breach the lease and that verdict
foreclosed further consideration of that factual issue. A declaratory-judgment action requires a
We agree with ALLETE that the jury verdict and the district court’s declaratory judgment appear to be irreconcilable. However, we defer to both the jury and the district court in their respective roles and if there is a reasonable basis for reconciling their decisions we will do so and uphold both. How a jury reaches its verdict and findings in a complex case is impossible to determine, especially where the parties presented voluminous evidence, multiple bases for decision, and several questions for the jury’s consideration.
The jury found that ALLETE did not breach its GOB lease with Onvoy. Although ALLETE argues that this finding necessarily implies that the jury also found that the lease did not require ALLETE to permit Onvoy to run cable from its leased premises in the GOB to the exterior and to connect with other companies, we conclude that the jury’s finding does not command that conclusion. The finding does not indicate whether the jury determined that (a) the lease prohibited Onvoy’s use of additional physical space or (b) the lease permitted such use, but ALLETE had not refused the use, so it had not breached the contract. ALLETE presented testimony that Onvoy only requested collocation with one other network and ALLETE permitted that collocation. The jury may have accepted this testimony. Although the record indicates that the other network paid ALLETE for the connection, we cannot tell from the verdict and the record whether the jury determined that was a gratuitous or inconsequential payment or an amount justified by other considerations.
Although the district court found a past refusal by ALLETE to allow Onvoy to run fiber-optic cable to the exterior of the building, this finding was not a condition of its declaratory-judgment decision that the GOB lease allowed such use. If we disregard that finding, the jury’s and district court’s decisions are reconcilable. Thus, we conclude the district court did not err in granting declaratory judgment despite the jury’s finding that ALLETE did not breach the contract.
also argues that the district court’s declaratory-judgment findings contradict
several of the jury’s advisory findings.
The district court is not bound by the findings of an advisory jury
unless both parties agree to that status for an advisory finding. See
notes the jury’s advisory finding that, prior to the GOB lease, the parties had
agreed that Onvoy could run cables through the GOB. ALLETE argues that the jury found that this
prior agreement was not included in the GOB lease when it answered the
following question in the affirmative: “Did the General Office Building Lease
between Plaintiff Onvoy, Inc. and Defendant Minnesota Power, Inc. fail to
express this earlier agreement because of a unilateral mistake by Plaintiff
Onvoy, Inc.?” The persuasive force of this jury answer is somewhat
weakened by the fact that its focus appears to be the reason the agreement was left out of the lease rather than whether it was left out. We note that this special verdict form previously
asked the advisory question whether failure to include the earlier agreement
was due to a mutual mistake. But
again we note that even if the jury construed the lease differently than the
district court, it was in the context of advisory findings. As previously stated, advisory findings do
not bind the district court, and therefore do not provide a basis for
finally argues that the district court improperly ignored an integration clause
in the GOB lease when the district court relied on the jury’s advisory finding of
an earlier agreement between the parties regarding use of the GOB as indicating
the meaning of the GOB lease. The integration
clause in the GOB lease states that it “contains the entire agreement between
the parties.” ALLETE asserts that this
precludes consideration of the earlier agreement. But prior agreements illuminating the
parties’ intent in entering into subsequent agreements are admissible if the subsequent
agreement is ambiguous. See Material Movers, Inc. v. Hill, 316
N.W.2d 13, 17 (
In its denial of ALLETE’s motion for summary judgment, the district court found that at that earlier stage in the litigation, it could not interpret the lease because there were “legitimate factual disputes over intent and meaning.” Although we agree with ALLETE that the GOB lease does not explicitly address access from the leased space inside the building to the exterior, the ambiguity is the significance of the omission and how to view and resolve the problem. ALLETE thought the matter sufficiently ambiguous to present the testimony of two attorneys involved in drafting the documents. Given the ambiguities in this proceeding, we conclude that the district court properly considered the prior agreement between the parties regarding use of the GOB in determining their intent in entering into the GOB lease.
second issue is whether the district court erred in permitting the jury to
decide if Enventis intentionally interfered with ALLETE’s contract with
Onvoy. ALLETE argues that the jury
should not have considered Onvoy’s intentional-interference-with-a-contract
claim because a wholly owned subsidiary cannot interfere with the contracts of
its parent corporation. But ALLETE did
not raise this argument before the district court. This court generally will not consider
matters not argued and considered in the court below. Thiele
v. Stich, 425 N.W.2d 580, 582 (
third issue is whether the district court erred in denying Onvoy’s motion for
judgment notwithstanding the verdict (JNOV).
This court reviews the district court’s denial of a motion for JNOV de
novo. Pouliot v. Fitzsimmons, 582 N.W.2d 221, 224 (
A. Breach-of-contract claim
Onvoy first argues that the district court should have granted JNOV on the jury’s rejection of Onvoy’s breach-of-contract claim. As we previously noted, how a jury reaches its verdict in a complex case is problematic and difficult to determine. Without detailing the possible constructions of the GOB lease that the jury could have accepted, we acknowledge, as ALLETE’s arguments indicate, the language of the GOB lease could be read as not permitting Onvoy to run cable in the GOB outside of the 430 square-foot leased space. If the jury believed that the collocation had to occur “in Tenant’s leased space,” that position would support the verdict. The language of the fiber agreement also supports the verdict because it indicates that Onvoy’s use of additional space would have to be negotiated in a separate agreement. The language of the parties’ separate agreement regarding the Arrowhead substation shows that a possible interpretation of the situation was that if ALLETE had intended to allow third parties access to use space outside the leased area, it could have done so.
Although witness testimony presented conflicting interpretations of the lease, Priscilla McNulty, an attorney for ALLETE who participated in the negotiation of the GOB lease, testified that the understanding between the parties at the time the lease was written was that Onvoy would have to negotiate for additional space if it later determined it wanted more space, and that Onvoy did not have the right to use space outside of its 430 square-foot leased premises. McNulty testified that the lease itself shows this intention through the use of the limiting term “premises” in the paragraph on collocation with other networks. Ingrid Johnson, an attorney for ALLETE who participated in discussions with Onvoy regarding the GOB lease after it was written, testified that she interpreted the lease to permit a sublease between Onvoy and other carriers that Onvoy wished to allow to collocate in the GOB for the purpose of connecting the two networks. She did not interpret the lease to authorize Onvoy to use space outside of Onvoy’s leased premises.
Considered in the light most favorable to ALLETE, the evidence presents a reasonable theory on which the verdict can be sustained. That such a theory differs from the district court’s determination in the declaratory judgment does not compel JNOV. The district court could have simply deferred to the jury on claims of past injury and reconciled the decisions as we discussed earlier.
also argues that the district court should have granted JNOV on the jury’s
special-verdict finding of zero damages.
A plaintiff in a contract action has the burden of proving damages. D.H.
Blattner & Sons, Inc. v. Firemen’s Ins. Co., 535 N.W.2d 671, 675 (
Onvoy first argues that JNOV was warranted based on the jury’s finding of zero damages on Onvoy’s breach-of-contract claim. Because the special-verdict interrogatory asked what amount of money would compensate Onvoy for breach of the lease, and because substantial evidence supports the finding that there was no breach, the jury’s finding of zero damages on that claim may be sustained on that theory of the evidence.
also argues that JNOV was warranted based on the finding of zero damages on
Onvoy’s intentional-interference-with-a-contract claim. ALLETE cites a number of problems with the
damages Onvoy alleges. For example, ALLETE
points out that Onvoy arguably had no loss because its actual revenues for the
fourth issue is whether the district court erred in denying Onvoy’s motion for
a new trial. Because the district court
has the discretion to grant a new trial, we will not disturb the decision
absent a clear abuse of that discretion.
See Halla Nursery, Inc. v.
Baumann-Furrie & Co., 454 N.W.2d 905, 910 (
A. Evidentiary rulings
Onvoy first argues
that the district court improperly allowed two ALLETE attorneys to testify as
to their legal opinions regarding the meaning of the lease and that because of
that error, the district court should have granted Onvoy’s motion for a new
trial. Absent an erroneous
interpretation of the law, the question of whether to admit evidence is within
the district court’s discretion. Kroning v. State Farm Auto. Ins. Co.,
567 N.W.2d 42, 45-46 (
regarding legal issues are ordinarily not admissible.” Safeco
Ins. Co. of Am. v. Dain Bosworth, Inc., 531 N.W.2d 867, 873 (
two attorneys gave their opinions on the interpretation of the GOB lease. “The interpretation of a contract is a
question of law if no ambiguity exists, but if ambiguous, it is a question of
fact and extrinsic evidence may be considered.” City of
The testimony of attorney McNulty focused on the parties’ intent at the time the GOB lease was negotiated and drafted, which is a factual issue, rather than on her legal opinion. Attorney Johnson addressed each paragraph of the lease and explained what she thought each paragraph meant. This court has ruled against allowing such attorney testimony and its exclusion in this proceeding may have been preferable. However, we note the claimed ambiguities in the fiber agreement and the GOB lease and the arguable importance of the parties’ intent. Based on these considerations, we conclude that the district court did not abuse its discretion in allowing the testimony.
B. Sufficient evidence to support the verdict
also argues that the district court abused its discretion in denying Onvoy’s
motion for a new trial on the basis that the verdict was not supported by
sufficient evidence. An appellate court
“will not set aside a jury verdict on an appeal from a district court’s denial
of a motion for a new trial unless it is manifestly and palpably contrary to
the evidence viewed as a whole and in the light most favorable to the verdict.”
Navarre v. S. Washington County Schs., 652 N.W.2d 9, 21 (
Minn. R. Civ. P. 59.01(e), a new trial may be granted because of “[e]xcessive
or insufficient damages, appearing to have been given under the influence of
passion or prejudice.” “If the verdict
is manifestly and palpably against the weight of the evidence, this court may
interfere with the damages award to prevent an injustice.” Carnahan
v. Walsh, 416 N.W.2d 187, 189 (
 At the same time, ALLETE and Onvoy entered into a lease agreement that permitted Onvoy to use land at ALLETE’s Arrowhead substation to construct a building for connecting equipment and utilization of the fiber-optic lines. That agreement is not at issue in this proceeding.
 Appellants’ brief recognizes that the jury findings on the equitable reformation claim were advisory. However, at oral argument appellants asserted that all the jury findings were determinative of the relevant facts and that even though equitable issues were to be decided by the court, none of the jury findings were clearly advisory.
 The district court did not explain how it reconciled its declaratory-judgment determinations with the jury’s findings. While such an explanation is important and helpful to review, we do not deem the lack of an explanation reversible error if we are able to reconcile the differences.
 ALLETE also points to the lease to Onvoy of space at ALLETE’s Arrowhead location. That lease expressly allowed for Onvoy to run cable from its leased site to the perimeter of the Arrowhead site. Because of the differing clauses in the various agreements and apparently different drafting settings, we conclude that the terms of the Arrowhead lease are not determinative of the GOB lease. Although the Arrowhead lease supports ALLETE’s claim for a contrary result, it does not require that result.