Hughes v. Sinclair Marketing, Inc.

389 N.W.2d 194, 1986 Minn. LEXIS 811
CourtSupreme Court of Minnesota
DecidedJune 13, 1986
DocketC7-84-2062
StatusPublished
Cited by41 cases

This text of 389 N.W.2d 194 (Hughes v. Sinclair Marketing, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hughes v. Sinclair Marketing, Inc., 389 N.W.2d 194, 1986 Minn. LEXIS 811 (Mich. 1986).

Opinion

YETKA, Justice.

On May 10, 1978, respondents Donald Hughes and Clair Anderson brought suit in Hennepin County District Court against appellant Sinclair Marketing. The district court, pursuant to a jury verdict, rendered judgment for the plaintiffs on July 3, 1984, and denied the appellant’s post-trial motions on July 30,1984. Sinclair appealed to the court of appeals, which affirmed the district court, 375 N.W.2d 875. Appellant then petitioned this court for further review, and the court granted the petition on January 17, 1986. We affirm the court of appeals in part and reverse in part.

In early 1972, respondents Donald Hughes and Clair Anderson decided to become business partners and began investigating their opportunities. Answering an advertisement, they contacted the appellant concerning a Sinclair service station franchise at 36th Street and Douglas Drive North in Crystal, Minnesota. 1 Sinclair’s representative told respondents that the company wanted a dealer on a long-term basis. He did not, at that time, inform them that Sinclair leased the station property from the Minnesota-Ohio Oil Company or that the lease terminated in December 1976. 2 Hughes and Anderson signed a dealer agreement and station lease in April 1972, which were regularly renewed until 1976. Under the respondents’ operation, the Sinclair station posted losses in 1972 and 1976, but was profitable during 1973-75 and sold in excess of $2.2 million in gasoline. During this period, however, Sinclair began to convert its franchises into company-owned stations with salaried managers.

Since the Sinclair/Minnesota-Ohio lease was scheduled to run out in December 1976, the parties entered negotiations that fall. Sinclair intended to purchase the property and reached a preliminary price of $80,000 in October 1976. The parties did *196 not, at that point, sign a purchase agreement. 3

Respondents maintain that Sinclair represented it was negotiating to purchase the property in order to renew their franchise and that it would be necessary for them to vacate before the sale could be completed. They received documents from Sinclair in June and December of 1976 reminding them of the Sinclair/Minnesota-Ohio lease and requiring them to vacate. They signed a cancellation agreement in December 1976 and vacated at the end of the month. In January 1977, Sinclair presented, and respondents signed, a release of respondents’ contractual and franchise rights in consideration for $2,000 and Sinclair’s good faith effort to purchase the station for $70,000 or less. They were not aware that the preliminary purchase price Sinclair and Minnesota-Ohio had reached in October 1976 was $80,000. The release also contained an ambiguous clause reciting that Sinclair, upon purchase, would run the station as a “company Sinclair service station.” Furthermore, Sinclair had retained a right of first refusal on any purchase of the station. Over the next several months, it became clear to Hughes and Anderson that Sinclair was neither going to purchase the Douglas Sinclair station nor offer them an alternative franchise.

Respondents brought suit against Sinclair on May 10, 1978. The complaint and amended complaints alleged, inter alia, that Sinclair violated the Minnesota franchise act by improper non-renewal and misrepresentation and committed common law misrepresentation. Sinclair denied the allegations, maintaining that the cancellation and release document signed by Hughes and Anderson estopped them from asserting their claims and that the franchise act does not allow damages for improper non-renewal.

The matter was tried to a jury, which found Sinclair liable as follows:

1. Improper non-renewal — damages of $144,164;
2. Misrepresentation under the act— damages of $144,164;
3. Common law misrepresentation— damages of $144,164;
4. Total damages suffered by plaintiffs —$144,164.

Pursuant to the jury’s answer, the court entered its findings of fact, conclusions of law and order for judgment on July 3, 1984. The court awarded Hughes $69,440 in damages and Anderson $74,724 (totaling $144,164). Attorney fees and costs were entered in the amount of $52,662.45 plus interest. In the court’s conclusions of law and order for judgment, however, it based liability solely on improper termination of a franchise under the act. The district court found no evidence in the record of any out-of-pocket losses to support an award of actual damages for either common law misrepresentation or misrepresentation under the franchise act.

Sinclair made post-trial motions for judgment NOV, remittitur, and a new trial, which the court denied on July 30, 1984. In its memorandum, the court held that injunctive relief was not the plaintiffs’ exclusive remedy under the franchise act, especially since such relief was not available to the plaintiffs due to Sinclair’s misrepresentations.

Sinclair appealed to the Minnesota Court of Appeals, which affirmed in part and remanded in part. Hughes v. Sinclair, 375 N.W.2d 875 (Minn.App.1985). The court ruled that, while it had reservations about the district court’s findings concerning the improper non-renewal and common law misrepresentation claims, it would sustain the jury’s award of damages based on misrepresentation under the franchise act. Such damages are not, the court held, limited to out-of-pocket losses, but include lost *197 future profits. The court further held that appellant’s objections to the evidence used in calculating damages was not properly preserved for appeal and that the amount awarded was not manifestly incorrect. Finally, the court remanded to determine attorney fees for the appeal and whether a multiplier should be applied to the fees awarded.

Sinclair petitioned this court for further review, which was granted on January 17, 1986.

The issues raised on appeal are:

I.Whether there is evidence sufficient to support liability on the basis of misrepresentation or improper non-renewal under the Minnesota franchise act or common law misrepresentation;
II.Whether the damages awarded are allowed under the act;
III. Whether the evidence presented was sufficient to support the amount awarded; and
IV. Whether the respondents are entitled to a remand to determine attorney fees on appeal and application of a fee multiplier.

The issues in this case narrowed considerably after oral argument because, at that time, appellant’s attorney all but conceded that if there is evidence to support the jury’s findings of fact, he is bound by those findings. The appeal, therefore, is not complicated by the fact that the lower courts apparently based liability on different jury findings.

I.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Marie Delores Green v. BMW of North America, LLC
Court of Appeals of Minnesota, 2014
Larson v. Lakeview Lofts, LLC
804 N.W.2d 350 (Court of Appeals of Minnesota, 2011)
Rooney v. Rooney
782 N.W.2d 572 (Court of Appeals of Minnesota, 2010)
Lorberbaum v. Huff
765 N.W.2d 919 (Court of Appeals of Minnesota, 2009)
In Re Margolis Revocable Trust
765 N.W.2d 919 (Court of Appeals of Minnesota, 2009)
Fontaine v. Steen
759 N.W.2d 672 (Court of Appeals of Minnesota, 2009)
Dunn v. National Beverage Corp.
745 N.W.2d 549 (Supreme Court of Minnesota, 2008)
Voicestream Minneapolis, Inc. v. RPC Properties, Inc.
743 N.W.2d 267 (Supreme Court of Minnesota, 2008)
Dunn v. National Beverage Corp.
729 N.W.2d 637 (Court of Appeals of Minnesota, 2007)
Van Guilder v. National Freight, Inc.
686 N.W.2d 339 (Court of Appeals of Minnesota, 2004)
Thompson v. Hughart
664 N.W.2d 372 (Court of Appeals of Minnesota, 2003)
VanLandschoot v. Walsh
660 N.W.2d 152 (Court of Appeals of Minnesota, 2003)
Holiday Hospitality Franchising, Inc. v. H-5, Inc.
165 F. Supp. 2d 937 (D. Minnesota, 2001)
Astleford Equipment Co. v. Navistar International Transportation Corp.
611 N.W.2d 33 (Court of Appeals of Minnesota, 2000)
Russell v. Johnson
608 N.W.2d 895 (Court of Appeals of Minnesota, 2000)
Gopher Oil Co. v. American Hardware Mutual Insurance Co.
588 N.W.2d 756 (Court of Appeals of Minnesota, 1999)
Johns v. Harborage I, Ltd.
585 N.W.2d 853 (Court of Appeals of Minnesota, 1998)
Zitzow v. Wal-Mart Stores, Inc.
568 N.W.2d 549 (Court of Appeals of Minnesota, 1997)
Franklin v. Western National Mutual Insurance Co.
558 N.W.2d 277 (Court of Appeals of Minnesota, 1997)

Cite This Page — Counsel Stack

Bluebook (online)
389 N.W.2d 194, 1986 Minn. LEXIS 811, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hughes-v-sinclair-marketing-inc-minn-1986.