Cloverdale Foods of Minnesota, Inc. v. Snacks

580 N.W.2d 46, 1998 Minn. App. LEXIS 654, 1998 WL 297167
CourtCourt of Appeals of Minnesota
DecidedJune 9, 1998
DocketC8-97-1616
StatusPublished
Cited by15 cases

This text of 580 N.W.2d 46 (Cloverdale Foods of Minnesota, Inc. v. Snacks) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cloverdale Foods of Minnesota, Inc. v. Snacks, 580 N.W.2d 46, 1998 Minn. App. LEXIS 654, 1998 WL 297167 (Mich. Ct. App. 1998).

Opinions

OPINION

PETERSON, Judge.

In this unlawful detainer action, appellant Cloverdale Foods of Minnesota, Inc., appeals from a jury verdict in favor of its tenant, respondent Pioneer Snacks, Inc. We reverse and remand.

FACTS

Cloverdale leased a commercial food packaging and processing plant to Pioneer. The lease agreement provided:

Tenant agrees to comply with all laws, ordinances, orders, rules or regulations (state, federal, municipal or promulgated by other agencies or bodies having any jurisdiction thereof) relating to the use, condition or occupancy of the Leased Premises.
* * * *
* * * Tenant will not make any alterations, repairs, additions or improvements in or to the leased premises or add or subtract plumbing or wiring therein without the prior written consent of the Landlord (which will not be unreasonably withheld) as to the character of the alterations, additions, or improvements to be made to the Leased Premises.

The lease also provided that if the tenant defaulted on any of the lease conditions and the default continued for ten days after the landlord gave the tenant written notice of the default, the landlord had the option to declare the lease agreement forfeited and its term ended.

Robert George, president of Pioneer, testified that Pioneer was required to make alterations to the plant to comply with United States Department of Agriculture (USDA) regulations. USDA agent Arlen Stegenga testified that the USDA directed Pioneer to make changes to the equipment wash room and in product flow to reduce the possibility of contamination. Stegenga testified that he had authority to shut down a plant for noncompliance with USDA regulations.

To comply with the USDA directives, Pioneer added and altered walls, floor drains, doors, and electrical work. Pioneer did not apply for building permits before making the changes. George testified that Larry Huether, Cloverdale’s plant manager, visited the Pioneer plant during the spring of 1996, before the changes were made, and that Pioneer staff showed Huether exactly what changes were going to be made to the plant. George testified that Huether did not object to any of the proposed changes and commented that the proposed changes looked “really good.”

After the changes had been made, Clover-dale sent Pioneer a letter stating that Pioneer was in default under the lease agreement for failing to obtain building permits and Cloverdale’s consent before making the changes. The letter specified the changes to which Cloverdale objected. The letter stated that if Pioneer failed to cure the defaults within ten days, the lease would be terminated.

When Pioneer failed to cure the alleged defaults within ten days, Cloverdale began this unlawful detainer action. Pioneer denied that the changes it had made to the plant constituted a material breach of the lease agreement. Pioneer also contended [49]*49that Cloverdale brought this action in retaliation for Pioneer’s assertion of its rights in an unrelated federal breach of contract action between Pioneer and Cloverdale.

After Cloverdale began this action, Pioneer applied to the City of Mankato for building permits for the changes. George testified that Pioneer was working with city inspectors to bring the plant into compliance with city regulations and that the only remaining problems were safety issues, such as fire extinguishers and exit signs.

ISSUES

I. Did the trial court err in denying Cloverdale’s motion for a directed verdict?

II. Is the retaliatory eviction defense applicable to this case?

III. Did the trial court err in admitting evidence about the federal action between Cloverdale and Pioneer?

ANALYSIS

I.

A motion for a directed verdict presents a question of law regarding the sufficiency of the evidence to raise a fact question for the jury’s decision. For purposes of the motion, the trial court must consider the record as a whole and treat as credible the evidence for the adverse party and all inferences which may reasonably be drawn from the evidence.

Midland Nat’l Bank v. Perranoski, 299 N.W.2d 404, 409 (Minn.1980) (citation omitted).

An unlawful detainer action is “a summary proceeding to quickly determine present possessory rights.” Eagan East Ltd. Partnership v. Powers Investigations, Inc., 554 N.W.2d 621, 622 (Minn.App.1996).

The plaintiff must plead and prove facts which show the defendant is in unlawful possession of property. Generally the only issue for trial is whether the facts alleged in the complaint are true.

Mac-Du Properties v. LaBresh, 392 N.W.2d 315, 317 (Minn.App.1986), review denied (Minn. Oct. 29,1986).

Cloverdale argues that it was entitled to a directed verdict because the undisputed facts showed that Pioneer made alterations to the plant without obtaining building permits and Cloverdale’s consent and that Pioneer did not cure those alleged defaults within ten days after being given notice by Cloverdale. But the general rule applicable to contracts is that rescission of a contract is justified only by a material breach or substantial failure in performance. Cut Price Super Markets v. Kingpin Foods, Inc., 256 Minn. 339, 351, 98 N.W.2d 257, 266 (1959). The general rule is consistent with the principle that forfeitures are disfavored. Kostakes v. Daly, 246 Minn. 312, 318, 75 N.W.2d 191, 195 (1956) (reversing judgment in favor of plaintiff in unlawful detainer action when plaintiff “stood idly by while [defendant] invested a large sum of money in the property”); see also Trollen v. City of Wabasha, 287 N.W.2d 645 (Minn.1979) (upholding trial court’s conclusion that equity relieved lessee from strict compliance with lease provision requiring that notice of renewal be given six months prior to expiration of rental period). As a result, to determine present possessory rights in this case, it was necessary to determine not only the truth of the allegations in the complaint, but also whether the allegations, if found to be true, demonstrated a material breach of the lease agreement. Cf. LaBresh, 392 N.W.2d at 318-19 (trial court erred by faffing to make findings on whether nonpayment of rent breached provisions in lease agreement),

Pioneer presented evidence that it was working with city inspectors to bring the plant into compliance with city regulations and that no significant problems existed. Pioneer also presented evidence that Huether orally approved the changes before they were made. Finally, the lease provided that Cloverdale could not unreasonably withhold consent to improvements, and Pioneer presented evidence that many of the alterations were required to comply with USDA regulations.

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Cloverdale Foods of Minnesota, Inc. v. Snacks
580 N.W.2d 46 (Court of Appeals of Minnesota, 1998)

Cite This Page — Counsel Stack

Bluebook (online)
580 N.W.2d 46, 1998 Minn. App. LEXIS 654, 1998 WL 297167, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cloverdale-foods-of-minnesota-inc-v-snacks-minnctapp-1998.