This opinion will be unpublished and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

CX-98-168

Steve Parker Supply, Inc.,

a Louisiana corporation,

d/b/a Parker Supply Co.,

Respondent,

vs.

Ecolab Inc.,

a Delaware corporation,

Appellant.

Filed September 15, 1998

Affirmed in part, reversed in part, and remanded

Klaphake, Judge

Hennepin County District Court

File No. 95-18496

J. Michael Dady, Robert Gust, Dady & Garner, P.A., 4000 IDS Ctr., 80 S. Eighth St., Minneapolis, MN 55402 (for respondent)

Richard L. Gill, Thomas B. Hatch, Frederick R. Juckniess, Robins, Kaplan, Miller & Ciresi L.L.P., 800 LaSalle Ave., 2800 LaSalle Plaza, Minneapolis, MN 55402-2015 (for appellant)

Considered and decided by Crippen, Presiding Judge, Klaphake, Judge, and Shumaker, Judge.

U N P U B L I S H E D O P I N I O N

KLAPHAKE, Judge

Ecolab, Inc., a manufacturer of institutional and industrial janitorial products, appeals from a judgment awarding one of its former distributors, respondent Parker Supply Co., $29,000 in damages for breach of contract.[1] Ecolab challenges the trial court's denial of its motions for judgment notwithstanding the verdict (JNOV) and a new trial. Parker Supply has filed a notice of review, challenging the trial court's denial of its request for costs and disbursements.

Because the jury could reasonably find that Ecolab had breached its obligation to make a good faith effort to develop "Micro-Pro" technology and to provide Parker Supply with access to that technology, we affirm the jury's verdict. Because Parker Supply prevailed on one of its claims, we conclude it is a prevailing party under Minn. Stat. § 549.04 (1996). We therefore reverse the trial court's denial of Parker Supply's motion for costs and disbursements.

FACTS

At a meeting in 1988, Ecolab encouraged a number of its exclusive distributors, including Parker Supply, to sign an amended distributor agreement. The distributors agreed to eliminate their exclusive right to distribute Ecolab products within a specified territory in return for monetary and non-monetary opportunities. At issue here is one of the non-monetary opportunities offered -- "access to Micro-Pro technology." At the meeting, Ecolab described Micro-Pro as a mini-manufacturing system to customize products at a distributor's own location and with the distributor's own private label; Ecolab also demonstrated the system, using its current Micro-Pro prototype. Even though Ecolab had encountered a number of problems in the testing of its first three prototypes, it represented Micro-Pro as a product that was very near completion and that would be commercially viable and available during the second half of 1989.

Over the next two years, Ecolab proceeded with further testing and development of Micro-Pro, but continued to have quality control and other problems. An Ecolab senior scientist estimated that Ecolab had spent over $1,000,000 between 1985 and 1990 on the project. Although the scientist described Micro-Pro as a failure, he acknowledged that a Micro-Pro system had been installed and still was partially in use at an Ecolab division in North Dakota.

In 1990, Ecolab terminated the Micro-Pro project after interviewing three large distributors who indicated that they were not interested in Micro-Pro because it would not significantly lower their costs. Ecolab claimed that Micro-Pro's unresolved technical problems also were a factor in the decision.

D E C I S I O N

I.

Ecolab argues that the trial court erred in denying its motion for JNOV because it allowed the jury to find that Ecolab breached a contractual provision to offer to sell or lease a Micro-Pro machine to Parker Supply, a provision that did not exist in the contract at issue here. Although the terms of the contract were considered unambiguous by the trial court and the parties, Ecolab argued during closing argument that it was merely "promising to * * * perform its best, invest its money with the aim of developing successful products for both it and the distributors." Under this characterization of Ecolab's obligations,[2] the issue of breach involved whether Ecolab had substantially performed or made a good faith attempt to perform, a fact issue involving the credibility of witnesses and the weight to be given various evidence. Cf. Ylijarvi v. Brockphaler, 213 Minn. 385, 392, 7 N.W.2d 314, 319 (1942) (where evidence is in conflict, terms of contract and question whether there was substantial performance are fact questions); Service & Sec., Inc. v. St. Paul Fed. Sav. & Loan Ass'n, 211 Minn. 199, 203, 300 N.W. 811, 813 (1941) (whether there has been compliance with building contract is fact question). Thus, the issue of breach was properly before the jury.

A trial court's denial of a motion for JNOV must be affirmed if "there is any competent evidence reasonably tending to sustain the verdict." Rettman v. City of Litchfield, 354 N.W.2d 426, 429 (Minn. 1984). While some evidence in this case suggested that Ecolab continued to encounter quality control and other problems with Micro-Pro, other evidence established that Micro-Pro was nonetheless viable and that Ecolab terminated the project for financial or commercial reasons. Because competent evidence reasonably supports the jury's finding that Ecolab failed to substantially perform its obligation to provide "access to Micro-Pro technology," as promised in the 1988 agreement, the trial court did not err in denying Ecolab's motion for JNOV.

II.

Ecolab sought a new trial, arguing that it was prejudiced by the trial court's refusal to instruct the jury on its claimed defense of impracticability of performance. See Minn. R. Civ. P. 51 (new trial motion may be based on error in instructions with respect to "fundamental law or controlling principle"). Although the jury was not given a specific instruction on the impracticability defense, Ecolab was allowed to argue that even if it were obligated to provide access to Micro-Pro technology, any absence of performance was excused by the problems that arose after the 1988 agreement was signed. Cf. Van Tassel v. Hillerns, 311 Minn. 252, 257, 248 N.W.2d 313, 316 (1976) (no prejudice in denying requested instruction when party not foreclosed from arguing his theory). In addition, the trial court instructed the jury that a breach of contract "occurs when a party fails, without legal justification, to perform all or any substantial part of what is promised." Thus, Ecolab was not prejudiced by the trial court's refusal to give a specific instruction on impracticability. See J.J. Brooksbank Co. v. Budget Rent-a-Car Corp., 337 N.W.2d 372, 377 (Minn. 1983) (underlying doctrine of impracticability is basic assumption that promisor made good faith effort to perform, but performance was made impossible by unforeseen or unanticipated event).

III.

Parker Supply has filed a notice of review, challenging the trial court's denial of its motion for $217,000 in costs and disbursements under Minn. Stat. § 549.04 (1996) ("prevailing party * * * shall be allowed reasonable disbursement paid or incurred"). A trial court has the discretion to determine whether a litigant is the prevailing party for purposes of this statute. In re Will of Gerschcow, 261 N.W.2d 335, 340 (Minn. 1977). The supreme court recently explained:

In determining who qualifies as the prevailing party in an action, "the general result should be considered, and inquiry made as to who has, in the view of the law, succeeded in the action." The prevailing party in any action is one in whose favor the decision or verdict is rendered and judgment entered.

Borchert v. Maloney, 581 N.W.2d 838, 840 (Minn. 1998) (footnotes omitted).

Parker Supply argues that its recovery of less than it sought[3] does not mean that it did not prevail by recovering $29,000 from Ecolab. See In re Rosenfelt's Will, 185 Minn. 425, 434, 241 N.W. 573, 576 (1932) (affirming trial court's taxation of costs and disbursements to trust beneficiaries as prevailing parties even though "they did not obtain all they sought"); Kusniryk v. Arrowhead Reg. Corrections Bd., 413 N.W.2d 182, 184 (Minn. App. 1987) (rejecting argument that party who recovers less than initial demand is not prevailing party). Although a trial court may decline to find a plaintiff a prevailing party if no damages are awarded, the jury awarded Parker Supply $29,000 in damages. See Bachovchin v. Stingley, 504 N.W.2d 288, 290-91 (Minn. App. 1993) (trial court did not abuse discretion in determining automobile buyer not prevailing party, even though jury found fraud, when jury also found buyer sustained no actual damages). Because Parker Supply was successful on one of its claims, the trial court abused its discretion by determining Parker Supply was not a prevailing party. Cf. Shrader v. OMC Aluminum Boat Group, Inc., 128 F.3d 1218 (8th Cir. 1997) (in request for attorney fees in 42 U.S.C. § 1983 action, court must consider whether plaintiff has received "actual relief on the merits" of claim and whether that relief materially modifies defendant's behavior to plaintiff's direct benefit); Casey v. City of Cabool, Mo., 12 F.3d 799, 804 (8th Cir. 1993) ("a prevailing party is one that obtains at least some relief on the merits of his claim").

We therefore reverse the denial of costs and disbursements, but remand the issue to determine the appropriate amount, consistent with the extent of Parker Supply's success.

Affirmed in part, reversed in part, and remanded.

[1] Parker Supply originally joined several other distributors to sue Ecolab. These distributors obtained a temporary injunction requiring the parties to continue their distributor relationship. The trial court severed the various actions, and Parker Supply's action was tried first. After the jury returned its verdict in this case, the trial court dissolved the injunction with respect to Parker Supply. The trial court denied Ecolab's motion to dissolve the injunction as to the remaining distributors, but on appeal this court reversed that decision. Upper Midwest Sales Co. v. Ecolab, Inc., 577 N.W.2d 236 (Minn. App. 1998). Actions by the remaining distributors are pending this appeal.

[2] The parties' characterizations of Ecolab's obligations under the contract appear to have shifted and evolved throughout the proceedings in this case. On appeal from denial of a motion for JNOV, we must affirm the jury's verdict if supported by any plausible theory consistent with the evidence. See Rettman v. City of Litchfield, 354 N.W.2d 426, 429 (Minn. 1984).

[3] On the franchise act claim, which the jury rejected, Parker Supply sought $1.2 million in damages; on the breach of contract claim, it sought $479,000 in damages.