This opinion will be unpublished and

may not be cited except as provided by

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




Eustolio Benavides, III,



Neighborhood House Association, Inc.,


Patrick Mascia, et al.,


Filed September 15, 1998


Huspeni, Judge

Ramsey County District Court

File No. C69612521

Manuel P. Guerrero, 162 College Ave. W., Suite 3, St. Paul, MN 55102 (for appellant)

Donald W. Selzer, Jr., Andrew J. Voss, Littler Mendelson, P.C., Multifoods Tower, Suite 3970, 33 S. Sixth St., Minneapolis, MN 55402 (for respondent)

Considered and decided by Huspeni, Presiding Judge, Norton, Judge,[*] and Holtan, Judge.[**]



Appellant challenges summary judgment dismissing his breach of contract claim. Because appellant was not entitled to a hearing and because his admitted conduct was grounds for termination under the parties' employment contract, we affirm.


Appellant Eustolio Benavides was executive director of respondent Neighborhood House from December 4, 1989, until June 14, 1996. In March of 1996, an employee of respondent submitted a complaint pursuant to respondent's personnel policies. After receiving the complaint, respondent hired a third-party consultant to investigate the employee's allegations. In her report dated March 18, 1996, the consultant found that appellant engaged in the following conduct with the employee: (1) asking her to perform personal tasks for him during work hours; (2) screaming profanity at her and other employees; (3) questioning her about her personal life and her plans to marry; (4) telling her that he was in love with her; and (5) touching her after she asked him to refrain from touching her anymore. Appellant did not deny these allegations, but questioned whether they were misconduct. Based on the consultant's findings respondent, through its board of directors, decided to terminate appellant, attempting first to settle the matter amicably. After several months of unsuccessful negotiations, respondent terminated appellant.

Based on the undisputed fact record, the district court ruled that respondent properly discharged appellant for misperformance under the terms of the contract, relying on the following provision:

This agreement may be terminated by the Agency under the following circumstances:

* * * *

* * * [T]he negligent or wilful misperformance by the Executive Director of his obligations under this agreement.

Accordingly, the district court dismissed appellant's breach of contract claims.


This court reviews a grant of summary judgment de novo to determine whether (1) there are material facts in dispute, and (2) the district court correctly applied the law. Zip Sort, Inc. v. Commissioner of Revenue, 567 N.W.2d 34, 37 (Minn. 1997). On review, evidence is viewed in the light most favorable to the party against whom summary judgment was granted. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). This court will affirm a grant of summary judgment if it can be sustained on any ground. Winkler v. Magnuson, 539 N.W.2d 821, 828 (Minn. App. 1995), review denied (Minn. Feb. 13, 1996).

Appellant argues that under respondent's personnel policies, he was entitled to a "due process" hearing before he could be discharged. Respondent argues, however, that it adequately disclaimed any contractual rights based on the personnel policy. We recognize that provisions in an employee handbook may give rise to contractual rights. Pine River State Bank v. Mettille, 333 N.W.2d 622, 626-27 (Minn. 1983). We need not reach the issue of disclaimer, however, because we conclude appellant received all the process he was due.

Respondent's personnel policy states, "Employees may be dismissed with specific cause or reason subject only to the grievance procedure." The grievance procedure encourages employees to report problems and gives them the opportunity to appeal adverse decisions ultimately to the board of directors. The board's decision on the issue is final. Because appellant was the executive director, the decision to discharge him was determined by the board under the terms of the parties' employment contract. Unlike the employee in Pine River, appellant had no progressive disciplinary steps available to him. See 333 N.W.2d at 631 (holding breach of employment contract because employee was not allowed to correct deficiencies in accordance with employee handbook). The board's decision was final and the grievance procedure had nothing more to offer appellant.

Appellant also argues that the district court erred because genuine fact issues remain as to whether his admitted conduct was misconduct or misperformance under the parties' employment contract. Board policies, including provisions of the personnel policy, applied to appellant's performance as stated by the following provisions of the employment contract:

4. During the term of this agreement, the Executive Director shall:

* * * *

(b) Implement the policies adopted by the Board through his personal actions and through exercise of executive authority over the resources and personnel of the Agency.

* * * *

(e) Direct the actions of staff, * * * employ and discharge staff * * * all within the limitations and guidelines imposed by policies adopted by the Board * * *.

(f) Be accountable to the Board for the discharge of his duties described in subparagraphs (a) through (e) above, and for the responsible use of power entrusted to him by the Board.

The personnel policy was adopted by the board and defined the following under section N, "Employee Conduct and Discipline":

Significant Offenses: * * * discourtesy or use of abusive language toward * * * personnel.

Major Offenses: * * * threatening, intimidating, coercing [or] harassing * * * others.

Employment contracts are governed by the same rules of construction as other contracts. Fredrich v. Independent Sch. Dist. No. 720, 465 N.W.2d 692, 695 (Minn. App. 1991), review denied (Minn. Apr. 29, 1991). 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 of more than one interpretation. Emerick v. Sanchez, 547 N.W.2d 109, 112 (Minn. App. 1996).

While appellant suggests that the terms misconduct and misperformance are ambiguous, the undisputed facts establish that appellant "misperformed" by failing to fulfil his obligations under 4(b), (e), and (f) of the parties' employment contract. The language of the personnel policy is reasonably susceptible of only one interpretation. Instead of implementing the board's personnel policies, appellant violated them.

Appellant argues that he is entitled to an inference that the touching he engaged in was not sexual and therefore whether this amounted to misconduct under the contract is a question of fact precluding summary judgment. We disagree. Even applying the inference as argued by appellant, his argument does not create an issue of material fact. The personnel policy says nothing about sexual touching. Under its plain language it prohibits threatening and harassing behavior. Under the undisputed facts of this case, appellant's admitted acts of verbal abuse and continued unwanted touching were threatening and harassing. Cf. Harvet v. Unity Medical Center, 428 N.W.2d 574 (Minn. App. 1988) (reversing summary judgment where handbook failed to define theft and facts raised an issue as to whether conduct was theft).

At oral argument, appellant asserted that he was appealing the dismissal of his defamation claim against respondent. In his complaint, however, appellant alleged a defamation claim only against the individually named trial defendants based solely on their conduct. The district court also entered summary judgment dismissing appellant's claims against the individually named trial defendants. Appellant subsequently dismissed his appeal against these individual defendants. In neither his complaint nor in the district court proceedings did appellant allege conduct on the part of the corporate respondent to establish a defamation claim. Having failed to raise the issue of defamation on the part of the corporate respondent before the district court, appellant may not raise it for the first time on appeal. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (appellate courts do not decide issues not decided by district court).


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

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