STATE OF MINNESOTA
IN COURT OF APPEALS
Dean Dambroten, et al.,
Filed July 13, 1999
Renville County District Court
File No. C196819
Steven D. Emmings, John W. Carey, Sieben, Grose, Von Holtum, McCoy & Carey, Ltd., Box 549, 117 South Park Street, Fairfax, MN 55332; and
Thomas W. Van Hon, Nelson & Van Hon, 19 South East Second Avenue, Fairfax, MN 55332 (for appellant)
Laurance R. Waldoch, Ansis V. Viksnins, Lindquist & Vennum P.L.L.P., 4200 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for respondent)
Considered and decided by Lansing, Presiding Judge, Crippen, Judge, and Kalitowski, Judge.
Appellants, farm operators, initially brought suit against respondent NFO to challenge the enforceability of a contract for the delivery of grain. Following the resolution of the suit in favor of respondent, the trial court held that appellantsí commencement of the lawsuit, along with their other actions, constituted anticipatory breach of the contract. The court then awarded respondent attorney fees based upon a liquidated-damages clause in the contract that permitted such an award upon a default by appellants. Appellants now challenge the award of attorney fees. Because we find merit in the trial courtís finding of anticipatory breach, we affirm.
Appellants entered into a grain marketing program with respondent NFO. Under the program contract, respondent provided grain-marketing services to appellants for a fee; it did not purchase the grain from appellants but sold the grain on behalf of appellants to various elevators and terminals. The contract between the parties involved the sale of grain from the 1996, 1997, and 1998 crops and provided that appellants would deliver grain to respondent in the autumn of each year, with deliveries first due in October and November, 1996.
On November 1, 1996, having made no voluntary deliveries before that date, appellants commenced an action against respondent, alleging various contract and tort claims. Appellants sought reformation or rescission of the contract. Respondent counter-claimed, seeking enforcement of the contract. Because appellants brought suit during the period when they were to have delivered grain to respondent and because time was of the essence, respondent sought a court order requiring appellants to make the agreed upon deliveries for 1996. On November 18, 1996, the court issued such an order, but in return respondent had to post a $1,200,000 bond and make various other arrangements ensuring appellants received payment for their grain. It is undisputed that appellants complied with the court order and delivered the grain after respondent posted the required bond; the record is unclear regarding respondentís arguments that (a) the ability of appellants to complete timely deliveries was already in jeopardy when they began their suit and (b) the ordered deliveries occurred after November 1996.
After a bench trial, the trial court held that the contract between the parties was enforceable. Except for the courtís finding of a few contract violations specific to certain appellants, appellants lost on all claims. After taking into account the deliveries made and the liquidation of some contracts, the court granted respondentís claims for liquidated damages, cover damages, costs, and attorney fees. The trial court reasoned that appellantsí initiation of a lawsuit, combined with their actions, "clearly communicated their intention to not deliver the grain when it was due under the contract * * *." This appeal followed, confined to the issue of attorney fees awarded respondent.
1. Anticipatory Breach
A reviewing court is not bound by and need not give deference to a trial courtís decision on a purely legal issue. Frost-Benco Elec. Assín v. Minnesota Pub. Utils. Commín, 358 N.W.2d 639, 642 (Minn. 1984). But on appeal, we will not set aside a trial courtís factual findings unless clearly erroneous. Minn. R. Civ. P. 52.01.
Anticipatory breach of a contract occurs "where one party to an executory contract, before the performance is due, expressly renounces the same and gives notice that he will not perform it * * *." Space Ctr., Inc. v. 451 Corp., 298 N.W.2d 443, 450 (Minn. 1980).
Framing the issue as a question of law subject to de novo review, appellants claim that the trial court wrongly determined that appellantsí commencement of a lawsuit constituted an anticipatory breach. While there is federal case law supporting appellantsí legal argument, see, e.g., In Re Chateaugay Corp., 104 B.R. 637, 645 (S.D.N.Y. 1989) (rejecting an argument that filing state and federal lawsuits seeking damages for an alleged breach of contract amounted to anticipatory repudiation of the contract), appellantsí argument fails because the issue presented to this court also raises a question of fact. The trial court did not base its finding of anticipatory breach on the mere filing of a lawsuit. Rather, the trial court held that "[t]his lawsuit, combined with [appellantsí] actions, establishes that the contracts were anticipatorily breached * * * ."
In Unique Sys., Inc. v. Zotos Intíl, Inc., 622 F.2d 373 (8th Cir. 1980), a federal case applying Minnesota law, a federal court reasoned that "[a] suggestion for modification of a contract does not amount to a repudiation unless the party makes it clear that he will not perform without the modification." Id. at 377. In the present case, the trial court found that appellants "clearly communicated their intention to not deliver the grain when it was due under the contract * * *." Such fact finding is within the purview of the trial court and appellants have presented no evidence suggesting that such a finding was clearly erroneous. Appellants materially delayed delivery while demanding court relief, despite a contract mandating timely delivery. Therefore, we affirm the trial courtís finding of anticipatory breach.
2. Attorney Fees Under the Contract
The construction of a contract presents a question of law unless an ambiguity exists. Stowell v. Cloquet Co-op Credit Union, 557 N.W.2d 567, 571 (Minn. 1997). If contract language is ambiguous, a trial courtís resolution of ambiguity in the contract will be treated as a finding of fact. Trondson v. Janikula, 458 N.W.2d 679, 682 (Minn. 1990).
The liquidated damages section of the contract provides, inter alia, for an award of attorney fees and costs upon "default" by the farm operator. The section also recites: "Disposition of this grain prior to expiration of this contract, without valid release, in any manner other than directed by NFO will be deemed a default."
Appellants argue that they did not "default" as defined in the contract and therefore the trial court improperly awarded respondent attorney fees. But the disposition-of-grain clause in the contract is merely a declared type of default, not a statement of the exclusive form of default. And, in light of the evidence in the record, the trial court could resolve in favor of respondent any ambiguity in the contract regarding the intent of the parties.
Affirmed. Although there were numerous contracts between respondent and individual appellants, they are all the same, so this opinion uses the singular term "contract."
 The trial court apportioned the judgment amount, approximately $1,201,663, a portion of which was for attorney fees, among 46 farmers.