This opinion will be unpublished and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
Willard O. Vetter, as Trustee for
Vetter Stone Employees Savings and
Retirement Plan and Vetter Stone Co.,
Money Purchase Pension, et al.,
Security Continental Insurance Company,
a Delaware life insurance company,
(f/k/a Inter-American Insurance Company of Delaware),
Raymond G. Anker,
Beaven/Inter-American Companies, Inc.,
a Delaware corporation,
Filed March 31, 1998
Blue Earth County District Court
File No. C8941236
Scott A. Smith, Hinshaw & Culbertson, 3200 Piper Jaffray Tower, 222 South
Ninth Street, Minneapolis, MN 55402; and
Donald L. Mrozek, Julian C. Campbell, Daniel K. Ryan, Hinshaw & Culbertson,
222 North LaSalle Street, Suite 300, Chicago, IL 60601 (for respondent
Security Continental Insurance Company)
Clarance E. Hagglund, William C. Weeding, Hagglund & Weimer, 4000 Water
Park Place, 5101 Olson Memorial Highway, Minneapolis, MN 55422; and
Jeffrey I. Bleiweis, The Beaven Companies, Inc., 233 North Michigan Avenue,
Suite 2204, Chicago, IL 60601 (for appellant Beaven/Inter-American
Considered and decided by Lansing, Presiding Judge, Crippen, Judge, and
U N P U B L I S H E D O P I N I O N
Appellant Beaven Companies (Beaven) challenges the grant of summary judgment
to respondent Security Continental Insurance Company (Security). Beaven
contends the district court erred in concluding: (1) Security is an intended
beneficiary of a stock purchase agreement with the right to enforce the
agreement; (2) the stock purchase agreement does not time-bar the suit; and (3)
there is no reason to delay enforcement of the district court's order. We
D E C I S I O N
In reviewing the grant of summary judgment, this court determines
whether any genuine issues of material fact exist, and whether the district
court erred in applying the law. State by Cooper v. French, 460
N.W.2d 2, 4 (Minn. 1990). The interpretation of a clear and unambiguous
contract is a matter of law for the court. Tishman Midwest Management
Corp v. Wayne Jarvis, Ltd., 500 N.E.2d 431, 434 (Ill. App. Ct. 1986).
All parties agree that Illinois law governs the contract in question.
Illinois law presumes that parties are contracting for themselves and only
direct, not incidental beneficiaries. Stamp v. Inamed Corp., 777
F. Supp. 623, 625 (N.D.Ill. 1991). A party becomes a direct beneficiary to a
contract if "the contracting parties expressed an intent to confer a benefit
upon the third party." Id. Such intent is found by the
contract's "express language and surrounding circumstances at the time of
contracting," and the beneficiary need not be directly named in the contract.
Id. If the benefit to the third party is direct and not simply
incidental, then that party may sue to enforce the benefit. Carson Pirie
Scott & Co. v. Parrett, 178 N.E. 498, 501 (Ill. 1931).
Section 6.3 of the stock purchase agreement between Beaven and Delta Dental
states that Beaven will have
all responsibility with respect to all litigation based on, or arising out
of, matters occurring prior to Closing to which IAIC [since renamed Security
Continental Insurance Company, respondent] is, or may become, a party.
Thus, although Security was not a party to the contract, the express language
of section 6.3 conferred a benefit on Security. Because Security was the
subject of this section of the stock purchase agreement, we conclude the
district court did not err in concluding Security has rights as a beneficiary
to sue for its enforcement.
Beaven contends the district court erred in denying its argument that
the stock purchase agreement limited to two years the time under which claims
arising out of the agreement could be made. We disagree. Because agreements
purporting to restrict applicable statutes of limitation are disfavored,
Illinois law strictly construes them against the party invoking them.
Michigan Ave. Nat'l Bank v. Evans, Inc., 531 N.E.2d 872, 880
(Ill. App. Ct. 1988). Before a statutory right can be ceded, there must be
"distinct declaration" within the contract of an intent to limit liability.
Id. In Illinois, the applicable statute of limitations for
contractual rights is ten years. 735 Ill. Comp. Stat. Ann. 5/13-206 (West
1992). We conclude that section 12.2 of the stock purchase agreement does not
contain the required distinct declaration. As the district court stated in
construing section 12.2: "[I]t is clear that this provision limits only the
representations and warranties relied upon by the parties, not the entire Stock
Purchase Agreement * * *." We agree with the district court's distinction
between claims for representations and warranties made prior to the stock
purchase and claims arising out of the contract itself, including
indemnification. Thus, we conclude the district court did not err in
determining the parties did not intend to limit the applicable statutes of
limitation by the boilerplate language under the heading Survival of
Representations and Warranties in section 12.2.
In reviewing whether a district court properly found no just reason
for delay in certifying a judgment for immediate appeal pursuant to Minn. R.
Civ. P. 54.02, the reviewing court must determine whether the district court
abused its broad discretion. Olson v. Tufford, 392 N.W.2d 281,
283 (Minn. App. 1986), review denied (Minn. Oct. 29, 1986).
Security's argument that there is no final determination of its liability was
rendered moot by the Minnesota Supreme Court's affirmance of the judgment
against Security in favor of the original plaintiffs. Vetter v. Security
Continental Ins. Co., 567 N.W.2d 516 (Minn. 1997). Thus, we conclude
the district court did not abuse its broad discretion by certifying its
judgment for immediate appeal.