Minn. Stat. sec. 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
San Benito Medical Associates,
Filed February 3, 1998
File No. C3-96-9315
Michael C. Lindberg, David H. Stern, Johnson & Lindberg, P.A., 8500 Normandale Lake Blvd., Ste. 1610, Minneapolis, MN 55437-3828 (for appellant)
Kay Nord Hunt, James C. Cuneo, Lommen, Nelson, Cole & Stageberg, P.A., 1800 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for respondent)
Considered and decided by Harten, Presiding Judge, Huspeni, Judge, and Klaphake, Judge.
A jury found that a medical clinic owed a referral fee to an employment search firm for the referral of a physician whom the clinic hired. The medical clinic argues that the jury's verdict is based on improper evidentiary rulings. We affirm.
Mary Dolan and Associates, Inc. (Dolan) is an employment search firm specializing in the recruitment and placement of physicians. San Benito Medical Associates (San Benito) is a medical clinic located in San Benito, Texas.
In early October, 1994, Julie Dolan DeGrendele, a recruiter at Dolan, called Dr. Kanaan to interest her in Dolan's job placement assistance. Dr. Kanaan indicated that she was looking for a position. DeGrendele sent Dr. Kanaan a form questionnaire about job preferences, which Dr. Kanaan completed and returned to Dolan. Dr. Kanaan expressed her interest in practicing medicine in Arizona, California, Florida, Kentucky, Nevada, Tennessee, or Texas.
On October 19, 1994, DeGrendele called San Benito's director, Tom LaMotte, to inquire about physician opportunities at San Benito. LaMotte indicated that his clinic was looking for a physician, and on October 31, 1994, he signed a contingency fee agreement enabling Dolan to refer interested candidates to him. On November 2, 1994, DeGrendele faxed to LaMotte a cover sheet and a one-page preliminary curriculum vitae of Dr. Kanaan.
LaMotte claimed that he simply discarded the information on Dr. Kanaan because he had spoken with her shortly before he received the Dolan referral and she was not interested in practicing at San Benito. DeGrendele maintained that she spoke with Dr. Kanaan on November 1, 1994, telling her about the position at San Benito, and that Dr. Kanaan had not heard of the position before. DeGrendele also declared (and LaMotte denied) that LaMotte called her after he received the fax and told her that he was very interested in Dr. Kanaan and would call her.
In April 1995, another recruiting firm, MSI Physician Recruiters (MSI), referred Dr. Kanaan to San Benito. San Benito eventually hired Dr. Kanaan in October 1995, for which it paid MSI a referral fee.
When Dolan contacted Dr. Kanaan about another position in June 1996, DeGrendele discovered that Dr. Kanaan had accepted employment at San Benito within the two years covered by the October 1994 contingency fee agreement. That agreement provided in relevant part:
The placement fee is owed for any placement occurring within two (2) years of our last contact with you or the candidate regarding your position. For the purposes of this Agreement, "placement" is defined as either of the following: (1) your hiring of our candidate in any capacity, or (2) your directly or indirectly establishing a contractual or informal business relationship with our candidate after the candidate has moved to your geographical area.
Dolan demanded a referral fee and, when San Benito refused to pay, filed this lawsuit.
The district court denied Dolan's motion for summary judgment because it found that there was a genuine issue of material fact as to whether Dolan had Dr. Kanaan's authorization to submit her credentials to San Benito, and hence, whether Dolan had made a "referral" under the terms of the contingency fee agreement. The agreement defined "referral" as
the oral or written submission of a potential candidate's name, address, and partial or complete credentials, which has been made after receiving the candidate's authorization to be referred.
The district court limited the trial issues to (1) whether Dr. Kanaan authorized Dolan to submit her name to San Benito and (2) whether Dolan made a referral of Dr. Kanaan to San Benito. In so ruling, the district court tacitly decided that Dolan had submitted Dr. Kanaan's "credentials" to San Benito.
Both parties brought motions in limine to exclude certain testimony. The district court granted San Benito's motion to exclude hearsay statements allegedly made by Dr. Kanaan to DeGrendele. The district court also granted Dolan's motions to (1) exclude LaMotte from testifying that he had previously spoken with Dr. Kanaan and (2) to prohibit San Benito from offering evidence that it had paid MSI a fee for referring Dr. Kanaan.
The jury found that Dr. Kanaan had authorized Dolan to submit her name to San Benito and that Dolan had referred Dr. Kanaan to San Benito within terms of the agreement. The district court entered judgment against San Benito for Dolan's referral fee and attorney fees. San Benito moved for a new trial, which the district court denied. This appeal followed.
D E C I S I O N
The decision to admit or exclude evidence rests within the broad discretion of the trial court, and its ruling will not be disturbed on appeal unless it is based on an erroneous view of the law or constitutes an abuse of discretion. Uselman v. Uselman, 464 N.W.2d 130, 138 (Minn. 1990). "Entitlement to a new trial on the grounds of improper evidentiary rulings rests upon the complaining party's ability to demonstrate prejudicial error." Id. Thus, a new trial is warranted only if it appears that the wrongly excluded evidence might reasonably have changed the result of the trial had the evidence been admitted. Hendrickson v. Magney Constr. Co., 402 N.W.2d 194, 196 (Minn. App. 1987).
1. Exclusion of Evidence
San Benito argues that the district court prejudicially erred by precluding LaMotte from testifying about his prior conversation with Dr. Kanaan and by excluding evidence that San Benito paid a referral fee to MSI. We disagree.
First, even assuming that Dr. Kanaan had previously told LaMotte that she was not interested in working at San Benito, she could have changed her mind between the time LaMotte spoke with her and the time she allegedly authorized Dolan to submit her credentials to San Benito. Given that Dr. Kanaan eventually accepted a position at San Benito, she obviously changed her mind at some point. But because San Benito made no offer of proof regarding when the prior conversation between LaMotte and Dr. Kanaan occurred, it is difficult to find the alleged conversation relevant to whether Dr. Kanaan authorized her referral.
Second, the fact that San Benito paid a fee to MSI for referring Dr. Kanaan is not relevant to whether Dr. Kanaan authorized Dolan to refer her to San Benito because it is possible that Dr. Kanaan allowed both firms to refer her to San Benito. Under the terms of the contingency fee agreement, San Benito owed Dolan a referral fee for any candidate it hired within two years of Dolan's referral, regardless of whether another firm referred the same candidate. San Benito was obliged to keep track of which recruiting firm had first referred the candidate and which firm was properly entitled to a referral fee.
Accordingly, we conclude that the district court did not abuse its discretion in prohibiting LaMotte from testifying about any prior conversation with Dr. Kanaan and in excluding evidence that San Benito had paid a referral fee to MSI.
At trial, the district court admitted into evidence the fax cover sheet and Dr. Kanaan's preliminary curriculum vitae, including the statement DeGrendele had handwritten on the cover sheet, "She is interested in your opportunity!" San Benito's counsel initially did not object to the cover sheet's admission, but moments later, after realizing that it was offered with DeGrendele's handwriting, counsel objected to the statement on the grounds of hearsay.
We need not decide whether the district court erred in determining that the statement was admissible as part of a business record because it was admissible under the state of mind hearsay exception, Minn. R. Evid. 803 (3). The writing could reflect a comment of Dr. Kanaan, or simply DeGrendele's own mental "reading" of the recruitment process. If the former, the writing is admissible as proof that, acting in conformity therewith, Dr. Kanaan authorized Dolan to refer her to San Benito. See Scott v. Prudential Ins. Co., 203 Minn. 547, 552, 282 N.W. 467, 470 (1938) (state of mind hearsay admissible to prove that declarant subsequently acted in conformity with it). On the other hand, it may be the then-existing state of mind of DeGrendele, a witness who was subject to cross-examination.
3. Unambiguity of Term "Credentials"
San Benito argues that "credentials" has a special meaning in the medical field and is therefore ambiguous and that the jury should have been allowed to decide whether Dolan had submitted Dr. Kanaan's "credentials" to San Benito. In framing the issues for the jury, the district court decided the factual issue of whether Dolan submitted Dr. Kanaan's "credentials" to San Benito pursuant to the agreement.
The referral agreement partially defined a referral as "the oral or written submission of a potential candidate's name, address, and partial or complete credentials." "Credentials" was not further defined in the agreement. The parties agree that the only documents submitted were the fax cover sheet and the one-page, informal preliminary curriculum vitae.
Given the broad language of the agreement in defining "referral" and the lack of a specific definition of "credentials," it is improbable that "credentials" was meant to have the limited meaning that San Benito proposes. But even assuming that the preliminary curriculum vitae fell short of constituting complete credentials, it easily was within the plain and ordinary meaning of "partial credentials," an alternative credentials option within the parties' agreement. We therefore conclude that the district court's summary decision on the issue of whether Dolan had submitted Dr. Kanaan's "credentials" to San Benito was proper.
4. Attorney Fees
The contingency fee agreement provided:
If [Dolan has] to initiate a lawsuit in order to collect [its] placement fee * * * [San Benito] will be responsible for all costs of the suit, including reasonable attorney's fees.
Dolan requests attorney fees on appeal. Dolan shall serve and file documentation of the required attorney fees within 15 days of the release of this opinion. San Benito shall have five days after service to respond.
 Only DeGrendele and LaMotte testified at trial. Although neither party was required to call Dr. Kanaan as a witness or depose her, we are troubled that the parties' tactical choice not to call Dr. Kanaan arguably adversely affected the interests of justice; we also note the district court's failure under the circumstances to invoke its power under Minn. R. Evid. 614 to call and question Dr. Kanaan itself.