This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

C5-96-1790

Sheryl Lynn Logan, et al.,

Plaintiffs,

Donald Exton Anderson,

Appellant,

vs

Norwest Bank Minnesota, N.A.,

Respondent,

Voyager Guaranty Insurance Company,

Respondent,

John Doe, et al.,

Defendants.

Filed April 22, 1997

Affirmed

Norton, Judge

Hennepin County District Court

File No. CT 94-018688

Michael P. Malakoff, Malakoff Doyle & Finberg, P.C., Suite 200, The Frick Building, Pittsburgh, PA 15219-6003 (for Appellant)

Thomas J. Lyons, Sr., Lyons, Sawicki, Neese & Phelps, 1560 Beam Avenue, Suite A, Maplewood, MN 55109 (for Appellant)

Thomas J. Lyons, Jr., Consumer Justice Center, 1310 East Highway 96, Suite 110, White Bear Lake, MN 55110 (for Appellant)

Ronald S. Goldser, Gordon Rudd, Zimmerman/Reed, 5200 Norwest Center, Minneapolis, MN 55402-4123 (for Appellant)

James L. Volling, Randall E. Kahnke, Faegre & Benson, 2200 Norwest Center, 90 South Seventh Street, Minneapolis, MN 55402-3901 (for Respondent Norwest)

Bradley G. Clary, Oppenheimer, Wolff & Donnelly, First Bank Building, Suite 1700, St. Paul, MN 55101 (for Respondent Voyager)

Ronald H. Groth, Thomson, Moran & Groth, Ltd., 100 South Fifth Street, Suite 2250, Minneapolis, MN 55402-1221 (for Respondent Voyager)

Considered and decided by Norton, Presiding Judge, Peterson, Judge, and Mulally, Judge.[*]

U N P U B L I S H E D O P I N I O N

NORTON, Judge

Appellants contend the district court erred in denying their motion to vacate and in ordering summary judgment for the Bank and its insurer on appellants' claims of breach of contract and violation of the Minnesota Motor Vehicle Retail Installment Sales Act. Summary judgment was proper because the bank's actions did not constitute a breach and appellant suffered no damages. We affirm.

FACTS

Appellant Donald Exton Anderson purchased a car in 1987 and financed it through respondent Norwest Bank Minnesota, N.A. The contract required Anderson to obtain property insurance to secure the loan. Anderson was permitted to buy this insurance through the agent and company of his choice. When Anderson failed to present evidence of insurance, Norwest exercised its contractual right to purchase insurance for Anderson's vehicle. Norwest informed Anderson that it had purchased property insurance and added the $578 premium onto his loan.

Anderson filed a complaint against Norwest and its insurer, respondent Voyager Guaranty Insurance Company, alleging breach of contract and violation of the Minnesota Motor Vehicle Retail Installment Sales Act, Minn. Stat. § 168.71 (1996) (MVRISA).[1] Anderson claimed Norwest overcharged him by purchasing insurance that was not authorized by the contract and by charging him more than the actual cost of the insurance. Anderson claimed that Voyager tortiously interfered with his contract with Norwest by issuing the insurance.

Norwest moved for summary judgment; Voyager moved to dismiss the complaint. After a hearing, the district court granted summary judgment for Norwest and granted Voyager's motion to dismiss. The district court denied Anderson's motion to vacate or modify the judgment.

D E C I S I O N

The decision to vacate a judgment rests within the district court's discretion; we will not disturb that decision absent an abuse of that discretion. Safeco Ins. Co. v. Dain Bosworth, 531 N.W.2d 867, 873 (Minn. App. 1995), review denied (Minn. July 20, 1995). On review of the underlying summary judgment, this court must determine whether any genuine issues of material fact exist and whether the district court erred in its application of the law. Wartnick v. Moss & Barnett, 490 N.W.2d 108, 112 (Minn. 1992).

1. Breach of Contract

A. Damages

Anderson contends the district court erred in ruling that he had not established a breach of contract claim. To establish such a claim, Anderson, as the plaintiff, needed to show that the parties formed a contract, that Anderson performed his contractual obligations, and that Norwest breached the contract. See Industrial Rubber Applicators, Inc. v. Eaton Metal Prods. Co., 285 Minn. 511, 513, 171 N.W.2d 728, 730-31 (1969) (holding that in order to recover, plaintiff must show contract exists, plaintiff performed, and defendant breached contract).

Anderson alleges two bases for his breach of contract claim. First, he contends Norwest breached the contract when it purchased insurance for itself rather than for him. Anderson bases his argument on the language, "I also agree that, if I fail to keep any required insurance on the property, you may purchase such insurance for me." (Emphasis added.) Anderson interprets this language to require personal coverage for him rather than property coverage for the vehicle. Contract interpretation is a question of law for the court. Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn. 1979).

Contrary to Anderson's contention, when we read the contract as a whole, the plain language reveals that the purpose of the insurance was to cover the vehicle, not Anderson. See Chergosky v. Crosstown Bell, Inc., 463 N.W.2d 522, 526 (Minn. 1990) (court must not interpret certain portions of contract in way that renders other provisions meaningless); see also Current Tech. Concepts, Inc. v. Irie Enters., Inc., 530 N.W.2d 539, 543 (Minn. 1995) (when interpreting contracts, court must give language its plain and ordinary meaning); Republic Nat'l Life Ins. Co. v. Lorraine Realty Corp., 279 N.W.2d 349, 354 (Minn. 1979) (court must consider context and language of contract as whole to determine intent behind contract).

The contract required that insurance "cover all risks of physical damage to the property and the risk that the vehicle may be lost." (Emphasis added.) The "Agreement to Provide Accidental Physical Damage Insurance" that Anderson signed explained:

I understand that to provide protection from serious financial loss, should an accident or loss occur, Norwest * * * requires the collateral securing my loan to be continuously covered with insurance against risks of fire, theft, and collision.

(Emphasis added.) Finally, the certificate of coverage from Voyager informed Anderson in bold letters, "THAT COVERAGE UNDER THIS POLICY PROTECTS THE INTEREST OF THE LIENHOLDER ONLY AND DOES NOT PROTECT THE INTEREST OR EQUITY OF THE PURCHASER OR BORROWER." These provisions specifically gave Anderson notice that the insurance Norwest purchased was to cover Norwest's interest in the vehicle. In this context, the language "you may purchase such insurance for me" can only mean that Norwest would purchase insurance for the vehicle on Anderson's behalf. Anderson has not established that Norwest breached the contract by purchasing insurance to cover the vehicle.

Second, Anderson alleges that Norwest breached the contract when it purchased extra unauthorized insurance. We will not discuss the merits of that claim because, even assuming, for the sake of argument, that breach occurred, Anderson's claim must fail because he has not proven damages. See Lipka v. Minnesota Sch. Employees Ass'n, Local 1980, 537 N.W.2d 624, 631 (Minn. App. 1995) (requiring party alleging breach to prove damages before he may recover), aff'd, 550 N.W.2d 618 (Minn. 1996); see also Beaudry v. State Farm Mut. Auto Ins. Co., 518 N.W.2d 11, 13 (Minn. 1994) (test for viability of breach of contract claim is whether breach is primary cause of damages).

For purposes of summary judgment, we accept as true Anderson's claim that he paid at least $55 for 143 days of insurance coverage that Norwest procured to cover Anderson's vehicle. See Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993) (court must view evidence in light most favorable to party against whom judgment was granted). Norwest paid at least $138 for the coverage. The insurance that Anderson eventually purchased from MSI cost him $72 for 92 days of coverage.

The facts as Anderson has alleged them do not show any damages. If the parties had fully performed the contract, Anderson would have paid more to MSI for insurance coverage than he owed Norwest for the coverage it provided through Voyager. Under that scenario, Anderson would not be entitled to any expectation damages. See Restatement (2d) of Contracts § 344(a) (1981) (expectation damages put plaintiff in "as good a position as he would have been in had the contract been performed"). If the contract had never occurred, again Anderson would have paid more to MSI than he would have paid to Norwest and he would have had no reliance damages either. See Id. § 344(b) (reliance damages return plaintiff to "as good a position as he would have been in had the contract not been made").

Contrary to Anderson's contention, he received the benefit of the bargain here. He failed to perform his duty under the contract, failed to pay Norwest when it fulfilled the duty for him, and, in the end, received more insurance than he paid for. Because Anderson sustained no damages, summary judgment on the breach of contract claim was proper. See Beaudry, 518 N.W.2d at 13 (viable claim requires that breach caused damages).

B. Estoppel

Anderson contends the district court erred when it estopped him from raising a breach of contract claim because he had already accepted the benefit of the bargain. We disagree.

The district court has the discretion to estop a party from "taking unconscionable advantage of his own wrong by asserting his strict legal rights." Northern Petrochemical Co. v. United States Fire Ins. Co., 277 N.W.2d 408, 410 (Minn. 1979). Generally, "the insured is bound by the conditions found in the policy which he has accepted and retained without objection." McFarland v. St. Paul Fire & Marine Ins. Co., 46 Minn. 519, 521-22, 49 N.W. 253, 253-54 (1891) (holding that, where insurance policy stated unequivocally that use or storage of gasoline on premises would void policy, insured had voided his coverage by knowingly accepting the policy with that provision and then using a gas stove).

The facts here fall squarely under the prerequisites for estoppel. The documents that Anderson has presented show in clear and plain language the insurance coverage requirement. Anderson willfully let his own insurance lapse and made no objection when Norwest purchased insurance for his vehicle. Yet, after he had received the coverage, he contested Norwest's authority to acquire insurance under the contract and only paid a fraction of the insurance premium. The district court properly ruled that Anderson should be estopped from claiming breach of a contract from which he had already benefitted. See Suske v. Straka, 229 Minn. 408, 417, 39 N.W.2d 745, 751 (1949) ("[a] party who is free to accept or reject without serious inconvenience cannot accept and retain the benefits of a transaction and at the same time repudiate it").

2. MVRISA violations

Anderson also takes issue with the district court's determination that the additional charge of insurance premiums to Anderson's loan did not violate the Motor Vehicle Retail Installment Sales Act, Minn. Stat. §§ 168.66-.77 (1996) (MVRISA).

A. Minn. Stat. § 168.71

MVRISA requires the retail installment contract to contain the sale price, insurance charges, finance charges, and taxes, fees, and charges paid to government. Minn. Stat. § 168.71(b). Anderson seeks to invalidate his sales contract because it lacked the insurance charge at the outset. The statute does not require the insurance charge be included at the outset; rather, the contract must include "[t]he charge, if any, included in the transaction for any insurance." Id.(b)(4) (emphasis added). At the time of contract here, no additional charge for insurance was appropriate because Anderson had initially opted to provide his own insurance. The parties complied with the statute at the outset because the contract included all charges that Anderson had accrued at that time. Consequently, the failure to include the insurance charge at the outset does not invalidate the contract. Furthermore, the enforcing agency, the Minnesota Department of Commerce, submitted an affidavit in which it interpreted the statute to allow Norwest to purchase insurance as it did here and collect the expense in addition to the balance of the contract.

B. Minn. Stat. § 168.72

Next, Anderson argues that late addition of the insurance fee was an impermissible finance charge under Minn. Stat. § 168.72, subd. 1(c). We are not persuaded for various reasons. First, MVRISA's definition of "finance charge" specifically excludes insurance fees. See Minn. Stat. § 168.66, subd. 11 (finance charge "does not include the cost of any insurance and other benefits included in the retail installment contract and any permissible cost or expense incidental to the retail installment sale")

Second, Minn. Stat. § 168.72 addresses a different stage in the contract process. Section 168.72 excludes additional charges at the time of contracting. The repayment of the insurance charge here, however, arose three years after contract formation when Anderson breached his duty to provide insurance and Norwest exercised its remedy under the contract to purchase it.

Third, Anderson has invoked Minn. Stat. § 51A.385 (1994)[2] in an attempt to bring the insurance charge into the "finance charge" for purposes of MVRISA. MVRISA, however, states that a finance charge and an insurance charge incidental to the retail installment sales agreement are separate entities.

C. Minn. Stat. § 168.74

Anderson contends that, when Norwest elected to pursue its contractual remedy to purchase insurance for Anderson's vehicle, the addition of $358 to his balance was the equivalent of refinancing the loan under Minn. Stat. § 168.74. He further contends that Norwest violated section 168.74 by refinancing without obtaining a new written agreement. Again, we disagree. Section 168.74 does not apply here because the insurance charges did not result in financing or refinancing the loan. Insurance charges are not considered "finance charges" under MVRISA; they are extra charges incidental to the loan. See Minn. Stat. § 168.66, subd. 11 (defining "finance charge").

Furthermore, even if section 168.74 applied to the insurance fees, it provides that Norwest "may" extend the scheduled payment due date; it does not mandate such an action. The court observes "[t]he distinctions made in different statutes as manifested by the difference of terminology used." State v. Bolsinger, 221 Minn. 154, 562, 21 N.W.2d 480, 486-87 (1946), quoted in Kedzior v. Norwest Bank Minn., Nat'l Ass'n, 527 N.W.2d 119, 121 (Minn. App. 1995), review denied (Minn. Mar. 29, 1995). The legislature chose to use the directive "shall" for certain conduct in other sections of MVRISA; however, in section 168.74, the legislature purposely chose to use the permissive word "may." The use of the word "may" demonstrates that the legislature did not intend the extension of payment schedules to be a mandatory obligation of the bank.

D. Minn. Stat. § 168.75

Finally, Anderson argues that, even if he has not proven actual damages, MVRISA provides him with a statutory remedy. He is correct that a buyer need not establish damages in order to recover liquidated damages and reasonable attorney fees under Minn. Stat. § 168.75(c) when a seller unintentionally fails to comply with MVRISA's provisions. O'Brien v. Phillips Motors Excelsior, Inc., 288 Minn. 183, 187, 179 N.W.2d 158, 161 (1970). But even though he may not need to establish damages, his recovery still requires proof of an MVRISA violation. See Minn. Stat. § 168.75(c) (providing buyer's right to recovery in case of seller's "failure to comply with any provision" of MVRISA). As we have discussed, Anderson has failed to prove that Norwest violated any MVRISA provision. Consequently, he is not entitled to recovery.

In sum, the district court properly determined that Anderson has failed to establish how Norwest's decision to exercise its contractual right to purchase insurance and charge Anderson constituted a violation of MVRISA.

3. Tortious interference with contract

Anderson alleges the district court abused its discretion when it denied his motion to vacate the dismissal of his complaint against Voyager. This court will reverse the district court's refusal to set aside a dismissal only when an abuse of judicial discretion has occurred. Butkovich v. O'Leary, 303 Minn. 535, 536, 225 N.W.2d 847, 849 (1975).

Anderson contends that he raised a viable claim against Voyager for tortiously interfering with his contract with Norwest. We disagree. Anderson needed to present evidence sufficient to withstand summary judgment that a contract existed, the tortfeasor knew about the contract, the tortfeasor intentionally caused a breach of the contract without justification, and damages resulted from the breach. See Kjesbo v. Ricks, 517 N.W.2d 585, 588 (Minn. 1994) (listing elements of tortious interference with contract).

Essential to Anderson's claim is a showing that Norwest breached its contract with him and that he sustained damages. Anderson has failed to establish a breach of contract because he has not demonstrated any damages. Therefore, Anderson has no basis for a claim of tortious interference with contract against Voyager. The district court properly refused to vacate its order dismissing Anderson's complaint against Voyager.

Affirmed.

[ ]* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.

[ ]1 Sheryl and Roger Logan joined Anderson in bringing this action, but the group has not brought a class certification motion in district court. This appeal addresses only Anderson's claims; the district court did not rule on the Logans' claims.

[ ]2 We note for the record that the legislature repealed Minn. Stat. § 51A.385 in 1995. The language on which Anderson relies is now located in Minn. Stat. § 51A.386, subd. 2 (1996).