may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1994).
STATE OF MINNESOTA
IN COURT OF APPEALS
Brainchild Software, Inc.,
a New York corporation,
Open Systems, Inc.,
a Minnesota corporation,
Filed January 7, 1996
Hennepin County District Court
File No. 95-011826
Steven S. Hoge, Kevin D. Hofman, Jacobson, Harwood, Bennett & Erickson, P.A., 3800 Multifoods Tower, 33 South Sixth Street, Minneapolis, MN 55402 (for appellant)
David Potter, Michael Keyes, Elizabeth Wefel, Oppenheimer, Wolff & Donnelly, 3400 Plaza VII Building, 45 South Seventh Street, Minneapolis, MN 55402 (for respondent)
Considered and decided by Huspeni, Presiding Judge, Parker, Judge, and Lansing, Judge.
Appellant Brainchild Software, Inc., commenced this lawsuit alleging breach of contract, tortious interference, unjust enrichment, misrepresentation, and promissory estoppel. The district court granted summary judgment to respondent Open Systems, Inc., on all claims. We affirm.
[j]udgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that either party is entitled to a judgment as a matter of law.
Minn. R. Civ. P. 56.03.
A party seeking summary judgment has the burden of demonstrating "an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S. Ct. 2548, 2554 (1986). Here, the evidence was so one-sided as to present no triable issue. See id. at 323, 106 S. Ct. at 2552 (complete failure of proof concerning an essential element of nonmoving party's case necessarily renders all other facts immaterial); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256-57, 106 S. Ct. 2505, 2514-15 (1986) (nonmoving party must offer significant probative evidence tending to support its complaint; discredited testimony is not normally considered sufficient basis for drawing contrary conclusion) (quoted in Carlisle v. City of Minneapolis, 437 N.W.2d 712, 715 (Minn. App. 1989)).
1. The allegations Brainchild raised as to the breach of contract claim are based, in most part, upon speculation. See Carlisle, 437 N.W.2d at 715 (nonmoving party may not rely upon surmise, speculation, or general statements of fact to defeat a motion for summary judgment). Under rule 56, an adverse party may not rest upon mere averments or denials of the adverse party's pleadings, but must present specific facts showing that a genuine issue exists for trial. Minn. R. Civ. P. 56.05. As the district court determined, the record fails to provide sufficient facts showing that Open Systems had any contract with Brainchild.
Brainchild commenced this action in June 1995, and Eisenhoff's deposition was taken in early December of that year. Open Systems moved for summary judgment on March 6, 1996, and a hearing date of April 1 was set. On March 16, Eisenhoff produced an affidavit in opposition to summary judgment and moved to amend the complaint and to compel discovery. Eisenhoff's affidavit, produced three months after his deposition and about two weeks before the summary judgment hearing, consisted of conclusory and self-serving statements which contradicted his earlier, damaging deposition testimony. Such affidavits have been held inadequate to create genuine issues of material fact and insufficient to defeat a motion for summary judgment under Minn. R. Civ. P. 56.03. See Banbury v. Omnitrition Int'l, Inc., 533 N.W.2d 876, 881 (Minn. App. 1995) (citing Camfield Tires, Inc. v. Michelin Tire Corp., 719 F.2d 1361, 1365 (8th Cir. 1983)) (a self-serving affidavit that contradicts earlier, damaging deposition testimony is not sufficient to create a genuine issue of material fact). This court has recognized the Eighth Circuit's rationale for this rule:
If a party who has been examined at length on deposition could raise an issue of fact simply by submitting an affidavit contradicting his own earlier testimony, this would greatly diminish the utility of summary judgment as a procedure for screening out sham issues of fact.
Id. (quoting Camfield, 719 F.2d at 1365); accord Trans-Orient Marine Corp. v. Star Trading & Marine, Inc., 925 F.2d 566, 572 (2d Cir. 1991) ("a party may not create a material issue of fact by submitting an affidavit disputing his own prior sworn testimony"). Thus, we hold Eisenhoff's affidavit insufficient, as a matter of law, to raise any genuine issues of material fact.
Next, Brainchild focuses on the June 6, 1991, letter from Open Systems, which allegedly created a contract between the parties. By its own terms, the letter memorialized the parties' "mutual understanding to enter into an agreement" and was an agreement to negotiate in the future. Minnesota law is well settled that no contract exists
where two parties consider the details of a proposed agreement, perhaps settling them one by one, with the understanding during this process that the agreement is to be embodied in a formal written document and that neither party is to be bound until he executes the document.
1A Corbin, Contracts, § 30 at 97 (1973 ed.) (quoted in Hansen v. Phillips Beverage Co., 487 N.W.2d 925, 927 (Minn. App. 1992), and Northway v. Whitting, 436 N.W.2d 796, 799 (Minn. App. 1989)).
Even though Brainchild seeks to create a binding contract out of the June 1991 letter, the record shows that both parties expressed their understanding that a final written contract was necessary before Open Systems would begin marketing Open Financial Wonder. Indeed, Eisenoff sent a letter to Open Systems noting unresolved issues of price list, royalties, and minimum price; Eisenoff repeatedly requested a draft contract; and the parties exchanged contract drafts as late as February 1992. Further, the June 1991 letter lacks essential contract terms; the letter does not specify the contract price, commission, or time frame for performance. Moreover, Eisenhoff's deposition testimony reveals that he knew the parties' agreement to market Open Financial Wonder would be final only once they signed a written contract.
We are not persuaded by Brainchild's claim that the parties had reached a contract price during earlier negotiations and had omitted it from the letter because it was a "given." If, as Brainchild contends, the June 1991 letter created a binding written contract, then all prior negotiations are deemed incorporated into it, and we may not refer to prior oral agreements to establish contract terms. See Jara v. Buckbee-Mears Co., 469 N.W.2d 727, 730 (Minn. App. 1991), review denied (Minn. Aug. 2, 1991) (applying parol evidence rule to bar evidence of oral promises made during contract negotiations).
We conclude the undisputed facts provided show, at most, that the June 1991 letter created an unenforceable agreement to negotiate the contract at a later time. Because Brainchild did not raise any material fact issues as to the existence of an enforceable contract, we conclude that the district court appropriately granted summary judgment for Open Systems on the breach of contract claim.
2. To establish a claim of unjust enrichment, a claimant must show that "a party has knowingly received something of value, not being entitled to the benefit, and under circumstances that would make it unjust to permit its retention." Southtown Plumbing, Inc. v. Har-Ned Lumber Co., Inc., 493 N.W.2d 137, 140 (Minn. App. 1992). Relief under this theory is not available when an adequate remedy exists at law. Id. The claim is available "if one party is unjustly enriched in the sense that the term unjustly could mean illegally or unlawfully." Thompson Plumbing Co., Inc. v. J.E.C., Inc., 422 N.W.2d 26, 28 (Minn. App. 1988).
The record contains no facts suggesting that Open Systems benefited lawfully or unlawfully from Brainchild's actions. Open Systems correctly points out that to recover under the equitable theory of unjust enrichment, a plaintiff must provide evidence that defendant was actually and wrongfully enriched. See Marking v. Marking, 366 N.W.2d 386, 387 (Minn. App. 1985) (refusing to grant recovery for unjust enrichment where defendants received no benefit from improvements and were in no way wrongfully enriched). The district court properly determined that no issues of fact exist over whether Open Systems was unjustly enriched as a result of the relationship between the parties. Summary judgment for Open Systems on this claim was appropriate.
3. The doctrine of promissory estoppel requires a clear and definite promise with which the promisor intends to induce reliance, which does in fact induce reliance, and which must be enforced to avoid injustice. Ruud v. Great Plains Supply, Inc., 526 N.W.2d 369, 372 (Minn. 1995). Brainchild had the burden to raise an issue of fact on all four elements in order to maintain the cause of action for promissory estoppel. See id. (holding failure to establish that "clear and definite promise" existed was fatal to application of promissory estoppel).
Brainchild seeks to enforce an alleged promise that arose from the June 1991 negotiations and letter. Although the record demonstrates that the parties proceeded with developing the Open Financial Wonder product after June 1991, evidence of the negotiations and the letter reveal nothing more than an agreement to proceed toward a contract. The very language of the letter states that the parties "have a mutual understanding to enter into an agreement." The letter, which memorialized the conversations between Eisenoff and Waterman, does not by its language create a clear and definite promise on behalf of Open Systems to co-label and market the Open Financial Wonder product. Rather, the letter expresses the parties' intent to formalize their agreement into a contract at some later date. Indeed, that price, commission, and time frame are missing further demonstrates the letter was not a clear and definite promise. Brainchild's claim for promissory estoppel must fail, because it has not raised an issue of material fact over the existence of a clear and definite promise. See Ruud, 526 N.W.2d at 372 (holding that lack of one element defeats claim). Summary judgment for Open Systems was appropriate on the promissory estoppel claim.
4. The district court dismissed Brainchild's fraud and misrepresentation claims, because Brainchild could not show that any representations made by Open Systems were false. To oppose summary judgment, Brainchild submitted Eisenoff's affidavit discussing details of the negotiations between the parties, including intent to contract, estimated number of sales, royalties, and product distribution. When a motion for summary judgment is brought under Minn. R. Civ. P. 56.03, however, the opposing party cannot rely on mere averments in pleadings or unsupported allegations. O'Neill v. Kelly, 307 Minn. 498, 499, 239 N.W.2d 231, 231-32 (1976); Musicland Group, Inc. v. Ceridian Corp., 508 N.W.2d 524, 530-31 (Minn. App. 1993), review denied (Minn. Jan. 27, 1994).
As discussed earlier, the conclusory allegations of Eisenoff's affidavit cannot create an issue of material fact to support a fraud claim merely because they contradict damaging deposition testimony that was subject to cross-examination. See Banbury, 533 N.W.2d at 881. In addition, the affidavit refers to negotiations over future events, which are not relevant to fraud or misrepresentation claims. See Florenzano v. Olson, 387 N.W.2d 168, 174 n.4 (Minn. 1986) (to be actionable, representation must have been false and related to past or present fact); Wojtkowski v. Peterson, 234 Minn. 63, 69, 47 N.W.2d 455, 458 (1951) (fraud claim "cannot be predicated on a mere promise or intention to perform"). We conclude that Brainchild failed to produce evidence sufficient to resist summary judgment on the fraud and misrepresentation claims.
5. Brainchild argues that the district court erred in granting summary judgment on its claim for tortious interference with prospective business relations. To establish a claim for tortious interference with respect to business relations, "a plaintiff must prove the defendant intentionally committed a wrongful act which improperly interfered with the prospective business relationship." Hunt v. University of Minn., 465 N.W.2d 88, 95 (Minn. App. 1991) (citing United Wild Rice, Inc. v. Nelson, 313 N.W.2d 628, 633 (Minn. 1982)). The district court properly dismissed this claim. In his deposition, Eisenoff admitted that Open Systems did not actively interfere with any potential business relationship. We agree with the trial court that there is "no indication in the record that * * * Open Systems in any way or manner interfered with [Brainchild's] economic advantage." See Minn. R. Civ. P. 56.05.
6. Finally, Brainchild contends the district court abused discretion by failing to order discovery of Open Systems' customer lists and marketing documents. Ordering discovery rests within the discretion of the district court. Erickson v. MacArthur, 414 N.W.2d 406, 407 (Minn. 1987). We will not disturb that decision absent an abuse of that discretion. Id.
At the root of all claims at issue here was the existence of a contract between Brainchild and Open Systems. Brainchild sought discovery of documents that were not in any way relevant to its contract or tort claims. See Minn. R. Civ. P. 26.02(1) (allowing parties to obtain discovery regarding any matter "relevant to the subject matter involved in the pending action"). Any information regarding customer lists or marketing plans would have been relevant only if a contract had indeed existed. Because the record shows without question that no contract existed, the district court's refusal to compel discovery was not an abuse of discretion. We also note for the record that Brainchild has not appealed the denial of the motion to amend the complaint and thus has waived that issue on appeal.