This opinion will be unpublished and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
C7-98-421

Joyce Witzman,
Appellant,

vs.

Blair Wolfson,
Respondent.

Filed October 13, 1998
Reversed and remanded
Harten, Judge

Hennepin County District Court
File No. 9712514

John F. Bonner, III, Malkerson, Gilliland Martin LLP, 1500 AT&T Tower, 901 Marquette Avenue, Minneapolis, MN 55402 (for appellant)

Mary C. Powell, Brooks Poley, Winthrop & Weinstine, P.A., 3000 Dain Bosworth Plaza, 60 South Sixth Street, Minneapolis, MN 55402 (for respondent)

Considered and decided by Lansing, Presiding Judge, Harten, Judge, and, Anderson, Judge.

U N P U B L I S H E D   O P I N I O N

HARTEN, Judge

Appellant Joyce Witzman appeals from an order of the district court granting respondent Blair Wolfson summary judgment on her fraudulent inducement and breach of settlement agreement claims. Because genuine issues of material fact exist as to those claims, we reverse and remand.

FACTS

Joyce Witzman is a beneficiary of three testamentary family trusts created by her parents, Wilfred and Elizabeth Wolfson. In December 1993, Witzman filed three petitions adverse to her brother, Blair Wolfson, as trustee of the family trusts. The petitions alleged that Wolfson had breached his fiduciary duty to Witzman and to the trusts by failing to file accountings and failing to provide Witzman with accurate information about the trusts.

In October 1994, Witzman entered into a settlement agreement with Wolfson in which she received over $4,000,000 in trust assets. By its terms, the agreement constituted a full and complete settlement of the probate claims that Witzman asserted or could have been asserted against Wolfson. In settling her claims, Witzman approved the final accountings for all the years the trusts were in existence and relinquished her rights as beneficiary of the trusts. The parties also executed mutual releases. The settlement agreement provided that upon execution of the respective releases, neither party would have any continuing legal obligation to the other. But the agreement expressly reserved claims against the trust accountant and attorney by either Witzman or Wolfson and provided that "the parties shall cooperate with each other to the extent that litigation is commenced."

In orders dated November 15, 1994, the probate division judge allowed and approved the annual accounts of the trustees, ratified the acts of the trustees during the accounting periods, approved the settlement agreement and distributions from the trust, and discharged the obligations of the trusts and trustee. Pursuant to the probate court's orders, the obligations of the trusts and trustees were to be fully satisfied and discharged upon the distribution of all assets of the trusts. Witzman's interests in the trusts were to terminate thereafter.

In August 1995, Witzman filed a motion contesting the settlement agreement. Witzman alleged that Wolfson had breached the agreement by, among other things, failing to transfer title to two California properties known as Hermosa Beach and Camarillo ("HB&C properties"). She also alleged that Wolfson had induced her to reach the settlement agreement by misrepresenting the ownership status of the HB&C properties.

On December 14, 1995, finding that Wolfson had not breached the settlement agreement or induced Witzman to enter into it by misrepresentation, the probate court denied Witzman's motion, ordered the parties to implement the agreement within thirty days, and ordered entry of judgment. Judgment, however, was never entered; the parties did not appeal from the probate court's order.

Witzman subsequently commenced actions against the trusts' accountant and attorney. She requested that Wolfson cooperate in the litigation by providing additional financial information and by appointing her as co-trustee of the family trusts. Wolfson refused to do either. The actions were eventually dismissed by court order.

In August 1997, Witzman filed the instant action against Wolfson. Witzman's complaint alleges that Wolfson (1) breached the settlement agreement by failing to cooperate in Witzman's litigation against the trust attorney and trust accountant, and (2) fraudulently induced the settlement agreement by misrepresenting that he had transferred all assets owned by the Wilfred Wolfson estate to the trusts and that he intended to cooperate in future litigation. Witzman also requested an order vacating the probate court's final settlement order that, among other things, allowed distribution of assets and discharged the personal representative.

Wolfson moved for summary judgment on Witzman's claims. The district court granted Wolfson's motion, holding, among other things, that (1) the cooperation clause in the settlement agreement was ambiguous as a matter of law, but "it is most logical" that the parties "intended the cooperation clause to serve as a means to end the relationship between the parties," and (2) the fraudulent inducement claim had been litigated in the action that culminated in the 1994 settlement agreement and was therefore precluded by res judicata. The district court also denied Witzman's request for an order vacating the probate court's order. This appeal followed.

D E C I S I O N

On appeal from summary judgment, we must determine whether the case raises genuine issues of material fact and whether the trial court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). We are not to determine the merits or consider credibility. Forsblad v. Jepson, 292 Minn. 458, 459-60, 195 N. W.2d 429, 430 (1972). We will reverse if the full record, viewed in the light most favorable to the non-moving party, discloses genuine issues of material fact. See Betlach v. Wayzata Condominium, 281 N.W.2d 328, 330 (Minn. 1979).

1. Refusal to Dismiss Probate Court Final Settlement Order.

We first address Witzman's request for an order vacating the probate court's November 1994 final settlement order that distributed assets and discharged the personal representative.

To the extent that the district court declined to vacate the probate court's 1994 order enforcing the settlement agreement, we concur. The probate court order is a final, appealable order under Minn. R. Civ. App. P. 103.03(e). Speckel v. Perkins, 364 N.W.2d 890, 892-93 (Minn. App. 1985). See also Minn. Stat. 525.71 (1996) (probate court appealable orders). Witzman cannot vacate it by asserting new grounds for relief in an independent action. Douglas D. McFarland & William J. Keppel, 3 Minnesota Civil Practice 2533 (2d ed. 1990). Witzman's proper remedy was an appeal. We therefore concur with the district court's apparent refusal to vacate the November 1994 probate court order.

2. Summary Judgment: Dismissal of Breach of Contract Claim.

We next consider whether the district court erred in granting Wolfson summary judgment on Witzman's breach of contract claim. Viewed in the light most favorable to Witzman, the record discloses a genuine issue of material fact as to the meaning of the cooperation clause.

Count I of Witzman's complaint alleges that Wolfson breached the settlement agreement by refusing to cooperate with her. Paragraph "U" of the settlement agreement provides that

the parties shall cooperate with each other to the extent that litigation is commenced against Harvey Z. Flom, Lehrman, Lehrman & Flom, Bert M. Gross, or Phillips, Gross & Aaron, P.A., and * * * information produced and/or supplied in association with the Actions may be utilized in any such proceedings.

Specifically, the complaint cites Wolfson's refusal to appoint Witzman as co-trustee and to produce personal and proprietary financial information.

The district court held that:

In the instant case * * * it is most logical that the parties intended the cooperation clause to serve as a means to end the relationship between the parties. When looking at the lengthy history of this action, the court finds it apparent that the spirit and purpose of the clause [imply] that the parties intended to sever any ties between them by entering into the settlement agreement.

We disagree. The meaning of the word "cooperate" in paragraph "U" of the settlement agreement raises a material issue of fact and precludes summary judgment. See, e.g. Barry v. Barry, 78 F.3d 375, 382 (8th Cir. 1996) (reversing summary judgment because of ambiguity of the term "sale" used in a contract). Generally, the construction of a contract is a question of law for the court. Turner v. Alpha Phi Sorority House, 276 N.W.2d 63,66 (Minn. 1979). Whether a contract is ambiguous is a legal determination in the first instance. Blattner v. Forster, 322 N.W.2d 319, 321 (Minn. 1982). A contract is ambiguous if its terms are susceptible to more than one meaning. Lamb Plumbing & Heating v. Kraus-Anderson, 296 N.W.2d 859, 862 (Minn. 1980). Where the contract is ambiguous and construction depends upon extrinsic evidence the question is one for the factfinder unless the extrinsic evidence is conclusive and undisputed and renders the meaning of the contract clear. Town & Country Shopping Center v. Swenson Furniture Co., 261 Minn. 100, 104, 110 N.W.2d 525, 528 (1961).

Here, the cooperation clause is susceptible to more than one interpretation and is therefore ambiguous as a matter of law. Although the parties agree that the cooperation clause requires them to cooperate with each other in litigation against the accountant and the attorney for the trusts, they disagree about the extent of the cooperation required. Therefore, the district court may resort to extrinsic evidence to ascertain the parties' intent at the time they negotiated the settlement agreement. The parties presented extrinsic evidence. In an affidavit, Witzman claims that the parties intended that Wolfson would "do whatever our attorneys required of him in order to pursue our claims against [the accountant and the attorney for the trusts]." Wolfson, on the other hand, claims that correspondence between the attorneys who negotiated the settlement agreement suggests that one intention of the parties was "to effect a closure of all the Trusts and a severance of the parties' business relations beyond those at issue in the litigation."

Thus, because reasonable minds could draw different conclusions as to what the parties intended by the term "cooperate," the construction of the settlement agreement raises a question of material fact, which precludes summary judgment. We therefore reverse summary judgment and remand for trial on the issue of whether the parties intended the term "cooperate" to encompass the disclosure of the information requested of Wolfson and the appointment of Witzman as co-trustee.(1)

3. Summary Judgment: Dismissal of Fraudulent Inducement Claim.

Finally, we turn to Witzman's claim that Wolfson fraudulently induced her to enter into the settlement agreement by misrepresenting that the assets of the Wilfred Wolfson estate had been transferred to the trusts and that he intended to cooperate in litigation against the attorney and the accountant for the trusts. The district court granted summary judgment on Witzman's claim, holding that it had been previously litigated and was therefore precluded by res judicata. We disagree.

Under the principle of res judicata, once a claim has been considered and adjudicated, the judgment precludes further action. McFarland & Keppel, 3 Minnesota Civil Practice 2533 (2d ed. 1990). The preclusion extends to all matters that are included within the claim, whether or not they were presented to the court, that is, all issues that were or could have been litigated. Id. In the absence of a judgment, a court order may support a res judicata plea. See, e.g., Dow v. Sandstrom, 291 Minn. 531, 190 N.W.2d 471 (1971).

Wolfson argues that res judicata precludes Witzman's fraudulent inducement claim because she could have discovered the misrepresentations that form the basis of her current fraud claim before she executed the settlement agreement. According to Wolfson, Witzman had complete access to all the trust accountings, including those for the residuary and the marital trusts that are successors-in-interest of the Wilfred Wolfson estate. Witzman conducted an independent review of the accountings with the assistance of counsel and subsequently moved to vacate the settlement agreement on grounds of fraud. Her challenge to the settlement agreement was adjudicated; it culminated in the probate court's December 1995 order compelling performance of the agreement. Therefore, Wolfson contends, Witzman is now precluded from relitigating that fraud claim and any other issue that could have been litigated in 1995. We disagree.

In our view, there is a genuine issue of material fact as to whether Witzman's new allegations of fraud involving the assets of the Wilfred Wolfson estate could have been litigated at the time Witzman first challenged the settlement agreement on grounds of fraud. Witzman did not discover, and possibly could not have discovered, the alleged new fraud until after the probate division approved the settlement agreement and compelled its performance. Res judicata does not compel summary judgment on Witzman's present fraudulent inducement claim.

Moreover, summary judgment on Witzman's fraudulent inducement claim is not appropriate because disputed issues of fact remain as to the reasonableness of Witzman's reliance on Wolfson's alleged misrepresentation. To establish fraudulent inducement, Witzman must show that (1) Wolfson made a misrepresentation of material fact, (2) he either knew the misrepresentation was false or asserted it without regard to its falsity, (3) he intended Witzman to act in reliance on it, and (4) Witzman reasonably relied on it to her detriment. See Cohen v. Appert, 463 N.W.2d 787, 789 (Minn. App. 1990) (citing Davis v. Re-trac Mfg. Corp., 276 Minn. 116, 117, 149 N.W.2d 37, 38-39 (1967)). Wolfson argues that Witzman's reliance on his alleged misrepresentation is unreasonable as a matter of law. He relies on Taylor v. Sheehan, 435 N.W.2d 575, 577 (Minn. App. 1989) ("[t]he general rule is that a [party] cannot undertake an independent investigation, rely upon the information thereby obtained, and later successfully assert that he was misled") (quoting Goldfine v. Johnson, 208 Minn. 449, 452, 294 N.W. 459, 460 (1940), review denied (Minn. Apr. 24, 1989)). The rule does not apply, however, when the independent investigation is partial or cursory. See Taylor, 435 N.W.2d at 577.

Wolfson claims that because Witzman conducted a full review of the trust accountings and the documents on which the trust accountings were based before she executed the settlement agreement in 1994, she cannot now successfully assert that she reasonably relied on Wolfson's allegedly fraudulent misrepresentation as a matter of law. But the record contains a letter from Witzman's lawyer to Wolfson's lawyer suggesting that Witzman did not examine the past or future transactions of the trusts or the valuation of real estate before she executed the settlement agreement.(2) Accordingly, there is a genuine issue of material fact as to the reasonableness of Witzman's reliance on Wolfson's alleged misrepresentation. Thus, we conclude that the district court erred in granting summary judgment on Witzman's fraudulent inducement claim and remand it for trial.(3)

Reversed and remanded.

1. We note that under Minnesota law, the settlement agreement does not preclude a subsequent breach of contract action. JCA Partnership v. Wenzel Plumbing & Heating, Inc., 978 F.2d 1056, 1061 (8th Cir. 1992) (interpreting Minnesota law and noting that settlement agreements do not preclude breach of contract claims); see also Barry, 78 F.3d at 381.

2. The letter provides as follows in relevant part: "The structure of the October 7, 1994 settlement agreement * * * does not contemplate an examination of the past or future transactions of the trusts and avoids a detailed examination of the valuation of the real estate which is to be distributed to Mr. Wolfson. The Witzmans accepted that structure because, among other things, it facilitated a quick and uncomplicated financial separation."

3. We express no opinion on the ultimate merit of Witzman's claims.