This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1994).




Lynette R. Aurzada and Steven C. Aurzada, as Trustees for the Next of Kin of

Henrietta Windhurst, Decedent, and Clark H. Windhurst, as Trustee for

the Next of Kin of Donald C. Windhurst, Decedent,



Bonita I. Swanson, d/b/a Bonnie Swanson Agency, et al.,


Filed May 21, 1996

Reversed and remanded

Peterson, Judge

Hennepin County District Court

File No. 9413390

James C. Wicka, Jeffrey M. Ellis, Messerli & Kramer, P.A., 1800 Fifth Street Towers, 150 South 5th Street, Minneapolis, MN 55402 (for Appellants)

John M. Bjorkman, Richard H. Krochock, Eric Magnuson, Rider, Bennett, Egan & Arundel, P.L.L.P., 2000 Metropolitan Centre, 333 South 7th Street, Minneapolis, MN 55402 (for Respondents)

Considered and decided by Peterson, Presiding Judge, Huspeni, Judge, and Harten, Judge.



On appeal from a summary judgment, appellants argue the district court erred in holding that their settlement agreement with the tortfeasor fully and unconditionally released him from all liability for their tort claims and thereby extinguished his claims against his insurance agent and his insurer, which he had assigned to appellants. We find that the settlement agreement is ambiguous and reverse and remand.


Donald and Henrietta Windhurst were killed when the car in which they were riding was hit by a car driven by Michael Henderson. Appellants, as trustees for the Windhursts' next-of-kin, sued Henderson for wrongful death. Henderson's automobile was insured by respondent Mid-Century Insurance Company (Mid-Century). Respondent Bonita Swanson d/b/a Bonnie Swanson Agency is the agent who sold Henderson his policy. When Henderson tendered defense of appellants' action to Mid-Century, Mid-Century denied coverage on grounds that his policy had been cancelled or had expired.

Appellants obtained a $500,000 default judgment against Henderson, then signed an agreement with him, which provides:


Upon tender of the consideration set forth in paragraph B, [appellants] agree to release and discharge Defendant Henderson ("Defendant") from any and all claims they possess (not including UM subrogation claims) against Defendant growing out of or resulting from an accident which occurred on or about November 26, 1992, ("the Accident"), and agree to relieve Defendant from his individual liability for the judgements entered in their favor against him in the above-captioned matter.


In consideration for the foregoing, Defendant agrees to hereby assign all of his claims, * * *, against [respondents] growing out of or resulting from [respondents'] performance as agent and under its contract of insurance with Defendant ("the Policy") in connection with the Accident * * *. Defendant agrees to lend his full cooperation and best efforts to assist [appellants'] prosecution of [these] Claims. By cooperation it is anticipated that term would include such things as * * * testifying at the time of any trial. If Defendant fails to so cooperate, [appellants] have the right to have judgment entered against Defendant in an amount equal to the unsatisfied portion of [appellants'] judgments against Defendant. If necessary, the issue of non-cooperation by Defendant will be determined by the Hennepin County District Court.

Appellants sued Swanson and Mid-Century for negligence, negligent misrepresentation, breach of fiduciary duty, and breach of contract. These claims were based on Henderson's allegations that Swanson, acting as Farmers' agent, mistakenly cancelled his insurance, misapplied his premiums to the wrong policy, assured him that she would take care of these mistakes, but did not do so, and told him after the accident that her file showed he had insurance. Henderson claimed respondents' actions caused him damages of at least $500,000 because appellants said they would have settled for his policy limits if his insurance had been valid.

The district court granted respondents' motion for summary judgment. The court found that the settlement agreement released Henderson from all liability for the judgment against him and preserved no claims against him. The court stated that the full and unconditional release of Henderson extinguished any claims he may have had against Swanson and Mid-Century. Thus, appellants, as Henderson's assignees, also had no claims against respondents.


On appeal from a summary judgment, we must examine the record to determine whether any genuine issues of material fact exist and whether the district court erred in applying the law. Offerdahl v. University of Minn. Hosps. & Clinics, 426 N.W.2d 425, 427 (Minn. 1988). We are not bound by the district court's decision on a question of law. Frost-Benco Elec. Ass'n v. Minnesota Pub. Utils. Comm'n, 358 N.W.2d 639, 642 (Minn. 1984).

Whether an agreement is ambiguous is a question of law. Fena v. Wickstrom, 348 N.W.2d 389, 390 (Minn. App. 1984). A contract is ambiguous if it is "susceptible to more than one reasonable construction." Id. When the language of a contract is ambiguous, construction is a question of fact unless the evidence is conclusive. Empire State Bank v. Devereaux, 402 N.W.2d 584, 587 (Minn. App. 1987).

Appellants argue that the district court erred in concluding that the settlement agreement fully and unconditionally released Henderson from liability. We agree.

In paragraph A of the settlement agreement, appellants agreed to relieve Henderson from individual liability upon tender of the consideration set forth in paragraph B, which included an assignment of Henderson's claims against respondents, and Henderson's assistance to appellants in their action against respondents. In paragraph B of the settlement agreement, Henderson agreed to assign his claims and to assist appellants in consideration for the release granted in paragraph A. Thus, each party's duty to perform under the agreement was conditioned on the other party's performance. The agreement, however, does not state which party was to perform first.

The agreement can be reasonably interpreted to mean that Henderson is released from all liability, and, in exchange for his release, he will assign his claims to appellants and assist appellants in their action on the claims. However, the agreement also can be reasonably interpreted to mean that Henderson will assign his claims and assist appellants, and, for doing both of these things, he will be released from all liability. Accordingly, the settlement agreement is susceptible to more than one reasonable conctruction and, therefore, is ambiguous.

The purpose of contract interpretation is to give effect to the parties' intent. Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn. 1979). The evidence of the parties' intent here is not conclusive. We therefore reverse and remand for the district court to decide this fact issue. Given our decision, we need not address appellants' other arguments.

Respondents argue that if the case is remanded, we should hold that Henderson has no bad faith claims against them. The district court, however, explicitly stated that it would not reach this issue. Therefore, we will not address this matter for the first time on appeal. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (review on appeal limited to issues actually decided by district court).

Reversed and remanded.