Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
Spectro Alloys Corporation,
Toussaint, Chief Judge
Dakota County District Court
David J. Hoekstra, Jardine, Logan & O'Brien, P.L.L.P., 2100 Piper Jaffray Plaza, 444 Cedar Street, St. Paul, MN 55101-2160 (for appellant)
Ansis V. Viksnins, Lindquist & Vennum, P.L.L.P., 80 South Eighth Street, 4200 IDS Center, Minneapolis, MN 55402-2205 (for respondent)
Considered and decided by Toussaint, Chief Judge, Short, Judge, and Norton,
*Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10
Appellant David R. Madsen sued his former employer, respondent Spectro Alloys Corporation (Spectro), for breach of contract after Spectro stopped making payments under
a severance agreement between the parties. Madsen was a Spectro employee for 16 years, serving as its president in his final two years. The parties mutually agreed to terminate Madsen's employment and signed a severance agreement. Under the agreement, Madsen continued to receive his regular weekly salary payments for one year after his termination. Spectro discontinued these payments upon notice that Madsen accepted other employment inconsistent with the severance agreement. On the parties' cross-motions for summary judgment, the district court entered summary judgment in favor of Spectro. Because the district court did not err in granting Spectro summary judgment, awarding Spectro $14,810.48 on its counterclaim, and denying Madsen's summary judgment motion, we affirm.
Summary judgment is proper if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that either party is entitled to judgment as a matter of law. Minn. R. Civ. Pro. 56.03. Summary judgment is inappropriate if reasonable people could draw different conclusions from the evidence presented. Illinois Farmers Ins. Co. v. Tapemark Co., 273 N.W.2d 630, 633 (Minn. 1978).
On appeal from summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact and (2) whether the lower court erred in applying the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). The reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). If the reviewing court finds that material issues of fact need to be determined, the case is to be remanded to the trial court without a decision on the legal issues. Caledonia Community Hosp. v. Liebenberg, 308 Minn. 255, 258-59, 248 N.W.2d 279, 281 (1976).
Interpretation of a contract is a question of law appropriate for summary judgment. Iowa Kemper Ins. Co. v. Stone, 269 N.W.2d 885, 887 (Minn. 1978). Summary judgment is inappropriate when the terms of the contract are ambiguous or reasonably susceptible to more than one interpretation. Emerick v. Sanchez, 547 N.W.2d 109, 112 (Minn. App. 1996). An appellate court may determine whether a contract is unambiguous without deference to the district court's determination. Boe v. Christlieb, 399 N.W.2d 131, 133 (Minn. App. 1987).
On appeal, Madsen argues that the phrase "in any market" in the following underlined portion of the severance agreement is ambiguous:
For one year following your resignation date, you [Madsen] agree not to directly or indirectly engage in, obtain ownership in or perform services for, in any capacity, any business, person, or entity involved in the business of secondary aluminum ingot smelting in any market in which Spectro does business in the United States.
***[I]f you [Madsen] violate either this paragraph or paragraph 3 above [the confidentiality provision], all payments under . . . this agreement will immediately cease.
The determination of whether a contract is ambiguous is a question of law. Lamb Plumbing & Heating Co. v. Kraus-Anderson of Minneapolis, Inc., 296 N.W.2d 859, 862 (Minn. 1980). In making that determination, a court must give the contract language its plain and ordinary meaning. Employers Mut. Liab. Ins. Co. v. Eagles Lodge, 282 Minn. 477, 279, 165 N.W.2d 554, 556 (1969). A contract is ambiguous if it is reasonably susceptible to more than one construction when judged by the language alone. Blackburn, Nickels & Smith, Inc. v. Erickson, 366 N.W.2d 640, 644 (Minn. App. 1985), review denied (Minn. June 24, 1985); Landwehr v. Landwehr, 380 N.W.2d 136, 138 (Minn. App. 1985).
We agree with the district court that the severance agreement's plain language is unambiguous. The ordinary meaning of the term "market" in this context is "a geographic region considered as a place for sale." American Heritage College Dictionary 830-31 (3d ed. 1997). Black's Law Dictionary similarly defines "market" as "place of commercial activity in which goods, commodities, securities, services, etc. are bought and sold" and "the regions in which any commodity or product can be sold." Black's Law Dictionary 669 (abridged 6th ed. 1991). The ordinary meaning of the term "business" is "commercial, industrial, or professional dealings," American Heritage Dictionary 190. Taken in entirety, the plain and ordinary meaning of the clause at issue is any geographic region in the United States in which Spectro has commercial dealings specific to secondary aluminum smelting.
The contract's plain language is not reasonably susceptible to the interpretation advanced by Madsen. Madsen contends that the non-compete clause's language is ambiguous because it does not delineate the precise geographic areas that constitute Spectro's "market." He further interprets "market" to mean the five upper Midwest states where he claims the majority of Spectro's business occurred. Madsen's geographically limited interpretation does not comport with the plain language of the contract. The contract expressly covers the entire United States. In addition, the word "any" preceding "market" encompasses all states in which Spectro had commercial dealings. The record indicates that Spectro had commercial dealings in states other than the five listed by Madsen, including Tennessee, Illinois, and Indiana, where one of its largest customers is based. The record also establishes that Madsen performed services for Secondary Aluminum Smelters, LP, a secondary aluminum smelter in Tennessee whose major customer is located in Illinois. Based on this evidence, the district court's determination that Madsen accepted employment inconsistent with the severance agreement is not erroneous.
Madsen also argues that the scope of Spectro's "market" is limited to its business territory as of September 19, 1995, the date the severance agreement was entered into. We decline to adopt this overly narrow interpretation. The contractual language clearly suggests that Spectro's "market" is its business territory up to the point of breach. Here, Madsen accepted employment with Secondary Aluminum Smelters, LP in contravention of the severance agreement as early as October 1995 and certainly by January 1996. Moreover, Spectro submitted business records showing that even as of September 19, 1995, it had sales and transactions in Illinois and Tennessee, markets where Secondary Aluminum Smelters, LP was involved in the secondary aluminum smelting business.
Contrary to Madsen's assertions, Ecolab, Inc. v. Gartland, 537 N.W.2d 291 (Minn. App. 1995), does not mandate a different result. In Ecolab, the court found the non-compete agreement at issue was ambiguous. In this case, the district court found, and we concur, that the non-compete agreement is unambiguous.