Hayes v. Northwood Panelboard Co.

415 N.W.2d 687, 1986 Minn. App. LEXIS 5128
CourtCourt of Appeals of Minnesota
DecidedNovember 24, 1987
DocketC2-87-802
StatusPublished
Cited by25 cases

This text of 415 N.W.2d 687 (Hayes v. Northwood Panelboard Co.) 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
Hayes v. Northwood Panelboard Co., 415 N.W.2d 687, 1986 Minn. App. LEXIS 5128 (Mich. Ct. App. 1987).

Opinion

OPINION

PARKER, Judge.

Duane Hayes brought this action against Northwood Panelboard Company, alleging breach of contract, promissory estoppel, fraud and negligent representation resulting primarily from a letter written by Northwood’s manager expressing its intention to purchase pulpwood from Hayes. Hayes appeals from the entry of the trial court’s judgment and denial of Hayes’ motion for a new trial. Before trial, the trial court granted partial summary judgment, ruling as a matter of law that if a contract existed between Hayes and Northwood, it was for an indefinite duration. At trial and after the close of the case, the trial court granted Northwood’s motion for a directed verdict, dismissing Hayes’ claims of promissory estoppel, fraud, negligent misrepresentation and punitive damages because of insufficient evidence to create a fact question for the jury. The case proceeded on the remaining breach-of-contract claim. The jury found that no contract existed, and judgment was entered for Northwood. The trial court subsequently denied Hayes’ post-trial motion for a new trial and Hayes appeals. We affirm.

FACTS

In 1979 Duane Hayes, together with Paul Hurd, formed H & H Lumber, which initially operated a sawmill and later expanded into the logging business. At about the same time, Northwood decided to build a plant near Bemidji, Minnesota, to produce waferboard, a plywood substitute. Brad Warren, Northwood’s manager, was responsible for procuring pulpwood for that plant. Both Hayes and Hurd met with Warren in the summer of 1980 to discuss possible wood sales to Northwood. Although no agreement resulted from that meeting, Warren expressed Northwood’s intention to make future purchases of wood from H & H Lumber.

Hayes and Hurd decided to split up their corporation in the spring of 1981, with Hayes taking over the logging operation. Hayes subsequently met with Warren because he was concerned that the division of the corporation might affect what he understood to be a prior oral agreement with Northwood for the purchase of pulpwood. *689 At the meeting, Hayes requested written confirmation of Warren’s oral expression of intent to make purchases from Hayes. Shortly after the meeting, Warren drafted a letter which he mailed to Hayes.

The letter, dated April 29,1981, states, in material part:

It is our intention, subject to construction delays or other unforeseen circumstances, to purchase 1,000 to 2,000 cords of aspen pulpwood from Mr. Duane Hayes during the summer of 1981. It is also our intention to purchase 5,000 to 7,000 cords of aspen pulpwood annually from Duane Hayes when our plant reaches full production, probably in the summer of 1981.

Northwood’s purchases during the 1981-82 season were consistent with statements in the Warren letter. During the 1982-83 season, however, Northwood failed to purchase 5,000 to 7,000 cords from Hayes as suggested in the letter. In November 1982 Hayes complained to Warren about the deficient purchases and was told that North-wood did not consider the letter to be a binding contract, because Northwood did not enter into long-term contracts with loggers.

In May 1983 Hayes hired an attorney who wrote to Northwood stating that it should comply with the terms of Warren’s letter or face legal action. Northwood thereafter refused to do business with Hayes. During meetings in July and August 1983, Warren informed Hayes that a condition of further business dealings between them was that Hayes terminate representation by his attorney and sign a release of any claims he might then have against Northwood. Hayes refused, commencing this action in June 1985.

Before trial, the trial court granted Northwood’s motion for partial summary judgment, ruling as a matter of law that if a contract existed between Hayes and Northwood, it was for an indefinite duration. At trial the court also granted North-wood’s motion for a directed verdict on Hayes’ claims of promissory estoppel, fraud, and negligent misrepresentation, on the ground that any reliance by Hayes on Northwood’s representations was unreasonable. The case then proceeded on Hayes’ breach-of-contract claim alone. The jury found that no contract existed, and judgment was entered for Northwood. The trial court subsequently denied Hayes’ post-trial motion for a new trial. Hayes appeals from the judgment entered on March 11, 1987, and the trial court’s order dated March 30, 1987, denying his motion for a new trial.

ISSUES

1. Did the trial court properly grant Northwood’s motion for a directed verdict on Hayes’ claims of promissory estoppel, fraud, negligent misrepresentation and punitive damages?

2. Did the trial court properly exercise its discretion in excluding evidence of a liability release and in admitting into evidence a graph illustrating Northwood’s production?

3. Did the trial court properly rule and instruct the jury that if a contract existed between Hayes and Northwood, it was for an indefinite duration?

DISCUSSION

I

The trial court directed verdicts for Northwood on Hayes’ promissory es-toppel, intentional fraud, negligent misrepresentation and punitive damages claims. In reviewing a directed verdict, an appellate court must make an independent assessment of its appropriateness. Citizen’s National Bank of Willmar v. Taylor, 368 N.W.2d 913, 917 (Minn.1985). A motion for a directed verdict presents a question of law for the trial court on whether the evidence is sufficient to present a fact question for the jury to decide. Id. A directed verdict should be granted only if, in light of all the evidence, it would be the trial court’s duty to set aside a contrary verdict as manifestly contrary to the evidence or contrary to the law applicable in the case. Id. In considering the motion, the court must accept as true the evidence favorable to the adverse party and all reasonable *690 inferences which can be drawn from the evidence. Id.

To avoid a directed verdict, Hayes must set out cognizable claims of fraud and misrepresentation against Northwood. To prove a prima facie case of fraud, the plaintiff must show that

defendant made a false representation of a past or existing material fact, susceptible of knowledge, knowing it to be false or without knowing whether it was true or false, with the intention of inducing the person to whom it was made to act in reliance upon it or under such circumstances that such person was justified in so acting and was thereby deceived or induced to so act to his damage.

Berryman v. Riegert, 286 Minn. 270, 275, 175 N.W.2d 438, 442 (1970). See Kramer v. Bruns, 396 N.W.2d 627, 630-31 (Minn.Ct.App.1986).

Statements made with an intent to act in the future are insufficient to constitute actionable fraud.

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Bluebook (online)
415 N.W.2d 687, 1986 Minn. App. LEXIS 5128, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hayes-v-northwood-panelboard-co-minnctapp-1987.