This opinion will be unpublished and
may not be cited except as
provided by
Minn. Stat. § 480A.08, subd. 3
(1998).
IN COURT OF APPEALS
20/20
Group, Inc., d/b/a
Opportunities
in Business,
Respondent,
vs.
Pure
Golf, Inc., d/b/a
Lava
Links, et al.,
Appellants.
Affirmed
Hennepin County District Court
File No. 9810634
Ronald J. Walsh, 8525 Edinbrook Crossing,
Suite 107A, Brooklyn Park, MN 55443
(for respondent)
Mark A. Levine, Davis, Dodd, Levine &
Miller, Ltd., 1219 Marquette Avenue South, Suite 200, Minneapolis, MN 55403 (for appellants)
Considered and decided by Schumacher, Presiding Judge, Peterson, Judge, and Anderson, Judge.
PETERSON, Judge
In this appeal from a judgment, appellants Pure Golf, Inc. and Peter A. Nasvik argue that the trial court erred by concluding that Pure Golf breached a listing agreement with respondent 20/20 Group, Inc., and, therefore, owed 20/20 a commission. Appellants also challenge the amount of contract damages awarded. We affirm.
FACTS
Appellant Peter A. Nasvik, the president of appellant Pure Golf, Inc., entered into a written exclusive listing agreement with Peggy Scheeler, a broker representing respondent 20/20 Group, Inc., for the sale of Pure Golf’s indoor-recreation and golf-entertainment center called Lava Links. Nasvik contends that before he signed the listing agreement, Scheeler told him that 20/20 would only be entitled to a commission if Lava Links was sold.
The listing agreement stated in pertinent part:
Peter A Nasvik/ Pres. (owner) hereby employs the 20/20 Group, Inc. (Broker) and gives the SOLE AND EXCLUSIVE RIGHT to sell, lease, trade or otherwise dispose of all or any part of [Lava Links] (the Business) on the Proposed Terms set forth above, or for any other price and terms which OWNER may agree, until 12:00 o’clock midnight on Sept. 3, 1997 (the “sole and exclusive period”). Owner agrees to pay Broker Eight (8%), but in any event not less than $8,000, of the purchase price, if
A. BROKER procures a purchaser ready, willing and able to purchase the Business on the Proposed Terms set forth above; or
B. OWNER sells, leases, trades, or otherwise disposes of all or any part of the Business during the Sole and Exclusive Period * * *; or
* * * *
E. OWNER sells, leases, trades or otherwise disposes of all or any part of the Business within TWO YEARS from the termination date of the Sole and Exclusive Period to any person, firm or entity referred to the Business by BROKER, or who became aware of the Business through the efforts of BROKER during the Sole and Exclusive Period. The BROKER has 72 hours from the termination date of Listing Agreement to provide Seller with a protective list.
20/20 attempted to match Pure Golf with a prospective buyer, but no sale occurred before the exclusive listing period expired. 20/20 provided Pure Golf with a protective list and letter informing Pure Golf that according to the terms of the listing agreement, it would be entitled to a commission if Pure Golf “sold, leased, traded, or otherwise disposed of” Lava Links to a party on the protective list within two years after the listing agreement expired. It is undisputed that Jeffrey and Stephanie Kelley were named on the protective list.
On December 23, 1997, Pure Golf entered into an agreement with the Kelleys to lease Lava Links, with a future option to purchase. 20/20 requested payment of a $13,464.68 commission. Pure Golf refused to pay, claiming that Scheeler had told it that 20/20 would not be entitled to a commission unless the Kelleys actually purchased Lava Links. 20/20 brought a breach of contract action against Pure Golf and Nasvik, arguing that because Pure Golf leased Lava Links to someone on the protective list, 20/20 is entitled to 8% of the lease price, or $8,000, whichever is greater. Appellants asserted counterclaims for breach of contract and fraud.
20/20 moved for summary judgment, arguing that it was undisputed that Pure Golf breached the listing agreement and that it was entitled to a $14,256 commission and attorney fees. The district court concluded that Pure Golf breached the listing agreement and granted 20/20 summary judgment for 8% of the consideration Pure Golf received from the Kelleys under the lease. The district court also dismissed appellants’ counterclaims. Following a trial on the issue of damages, judgment was entered against Pure Golf and Nasvik for $13,464.68, plus $5,783.87 for costs and attorney fees.
D E C I S I O N
On appeal from summary judgment, this court must review the record to determine whether there are any genuine issues of material fact and whether the district court erred in applying the law. Offerdahl v. University of Minn. Hosps. & Clinics, 426 N.W.2d 425, 427 (Minn. 1988). This court must view the evidence in the light most favorable to the nonmoving party. Id. The nonmoving party, however,
cannot rely on the pleadings alone to defeat a summary judgment motion but instead must produce specific facts which establish the existence of a genuine issue for trial
Krogness v. Best Buy Co., 524 N.W.2d 282, 285 (Minn. App. 1994) (citation omitted), review denied (Minn. Jan. 25, 1995).
[S]ummary judgment on a claim is mandatory against a party who fails to establish an essential element of that claim, if that party has the burden of proof, because this failure renders all other facts immaterial.
Lloyd v. In Home Health, Inc., 523 N.W.2d 2, 3 (Minn. App. 1994) (citation omitted).
1. Ambiguous Language
Summary judgment is not appropriate when the terms of a contract are ambiguous or reasonably susceptible to more than one interpretation. Emerick ex rel Howley v. Sanchez, 547 N.W.2d 109, 112 (Minn. App. 1996), see also Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn. 1979) (when contract is ambiguous, its construction is issue of fact for jury). An appellate court may determine whether a contract is ambiguous without deferring to the district court’s determination. Boe v. Christlieb, 399 N.W.2d 131, 133 (Minn. App. 1987).
Appellants argue that because the listing agreement is ambiguous, the district court erred by granting summary judgment. We disagree. The listing agreements states:
Owner agrees to pay Broker Eight (8%), but in any event not less than $8,000, of the purchase price, if
* * * *
E. OWNER sells, leases, trades or otherwise disposes of all or any part of the Business within TWO YEARS from the termination date of the Sole and Exclusive Period to any person, firm or entity referred to the Business by BROKER, or who became aware of the Business through the efforts of BROKER during the Sole and Exclusive Period. The BROKER has 72 hours from the termination date of Listing Agreement to provide Seller with a protective list.
Appellants contend that the use of the term “purchase” in the listing agreement makes it ambiguous whether 20/20 was to be paid a commission if Lava Links were leased without being sold. But the contract unambiguously states that the owner agrees to pay a commission if the owner “sells, leases, trades or otherwise disposes of” the business to any person who became aware of the business through 20/20’s efforts. It is undisputed that Lava Links was leased to the Kelleys and that the Kelleys became aware of the business through 20/20’s efforts and were identified on the protective list provided to Pure Golf.
Appellants also claim that the term “owner” as used in the listing agreement is ambiguous because it is unclear whether Nasvik or Pure Golf is the owner. But the listing agreement states, “Peter A. Nasvik/ Pres. (owner) hereby employs the 20/20 Group, Inc. (Broker) * * * to sell, lease, trade or otherwise dispose of all or any part of the business described above,” and the business name listed above is Lava Links. Lava Links is a business owned by Pure Golf. Although Pure Golf’s name does not appear in the listing agreement, Nasvik signed the listing agreement as president, not as an individual, and in his affidavit, Nasvik states that he is an officer of Pure Golf, Inc., which does business as Lava Links. Given this evidence, there is no genuine fact issue whether Pure Golf is the owner referred to in the listing agreement. See DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997) (“[T]here is no genuine issue of material fact for trial when the nonmoving party presents evidence which merely creates a metaphysical doubt as to a factual issue and which is not sufficiently probative with respect to an essential element of the nonmoving party’s case to permit reasonable persons to draw different conclusions.”).
2. Fraudulent Inducement
Appellants argue that summary judgment was inappropriate because a material fact issue exists concerning whether 20/20’s material misrepresentations induced Nasvik to enter the listing agreement, and, therefore, the listing agreement is voidable. Appellants claim that before Nasvik signed the listing agreement, Scheeler told Nasvik that 20/20 would be entitled to a commission only if Lava Links was sold and that when Nasvik signed the listing agreement, he believed that it contained the terms and conditions that were orally agreed upon. Appellants contend that Nasvik was unaware that 20/20 drafted the listing agreement with different terms and conditions.
Generally, the parol evidence rule excludes evidence outside the written agreement, including oral discussions before or contemporaneous with the execution of the agreement, if the evidence contradicts the plain terms of the agreement. Material Movers, Inc. v. Hill, 316 N.W.2d 13, 17 (Minn. 1982). But the fraud exception to the parol evidence rule permits admission of evidence regarding fraudulent oral representations made by one party that induce another party to enter into a written contract. Hanson v. Stoerzinger, 299 N.W.2d 401, 404 n.4 (Minn. 1980); Martin v. Guarantee Reserve Life Ins. Co., 279 Minn. 129, 136, 155 N.W.2d 744, 748 (1968).
A contract is voidable if a party’s assent is induced by either a fraudulent or a material misrepresentation by the other party, and is an assertion on which the recipient is justified in relying.
Carpenter v. Vreeman, 409 N.W.2d 258, 260-61 (Minn. App. 1987) (citation omitted).
However, “[w]here reliance on the misrepresentation is demonstrated, but is not justified, relief may be denied.” Id. at 261. Reliance upon an oral representation is unjustified as a matter law if the written contract provision plainly contradicts the claimed oral representation. Johnson Bldg. Co. v. River Bluff Dev. Co., 374 N.W.2d 187, 194 (Minn. App. 1985), review denied (Minn. Nov. 18, 1985); see also Dahmes v. Industrial Credit Co., 261 Minn. 26, 34-35, 110 N.W.2d 484, 489-90 (1961) (reliance on oral representations explicitly contradicted by written contractual terms unjustified as matter of law).
In his affidavit, Nasvik stated that before he signed the listing agreement, Scheeler told him that 20/20 would be entitled to a commission only if Lava Links was sold. But the listing agreement explicitly states that the owner agrees to pay a commission if the owner
sells, leases, trades or otherwise disposes of all or any part of the Business within TWO YEARS from the termination date of the Sole and Exclusive Period.
The district court concluded that there was no evidence that Scheeler’s statements were anything more than inadmissible evidence of negotiations and did not consider whether reliance on Scheeler’s statements by appellants was reasonable. We conclude that even if Scheeler made the statement appellants claim she made, reliance on the statement was unjustified as a matter of law because the oral representation was plainly contradicted by the written terms of the listing agreement, and there is no evidence that Nasvik did not have an opportunity to read the written agreement. Therefore, summary judgment on the fraudulent inducement claim was appropriate as a matter of law because appellants failed to establish the reliance element of the claim. See Krogness, 534 N.W.2d at 287 (appellate courts “will affirm a summary judgment if it can be sustained on any grounds”).
3. Damages
Appellants argue that even if Pure Golf owes 20/20 a commission under the listing agreement, a genuine issue of material fact exists with respect to the amount of the commission. In making this argument, appellants attempt to apply the standard of review applicable to a summary judgment to the judgment awarding damages. But the trial court awarded damages after a trial on the damages issue. The existence of a genuine issue of material fact is not a basis for relief from a judgment entered following a trial on the merits.
Affirmed.