Maday v. Grathwohl

805 N.W.2d 285, 2011 Minn. App. LEXIS 135, 2011 WL 5515435
CourtCourt of Appeals of Minnesota
DecidedNovember 14, 2011
DocketNo. A11-721
StatusPublished
Cited by4 cases

This text of 805 N.W.2d 285 (Maday v. Grathwohl) 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
Maday v. Grathwohl, 805 N.W.2d 285, 2011 Minn. App. LEXIS 135, 2011 WL 5515435 (Mich. Ct. App. 2011).

Opinion

OPINION

CONNOLLY, Judge.

Appellant land owner challenges the district court’s grant of summary judgment dismissing his breach-of-contract claim against respondent farmers, contending that the district court erred in determining that evidence related to a prior oral agreement between the parties was inadmissible under the parol evidence rule. We affirm.

FACTS

Respondents Tim Grathwohl, Jason Grathwohl, and Randy Grathwohl are brothers who together own and operate respondent-partnership Grathwohl Brothers LLP. Respondents own and manage hog barns to raise hogs for other entities. In 2001, respondents desired to expand their operations and executed an agreement to raise hogs for Christensen Farms in barns to be located in Iowa. At the time, Randy Grathwohl worked for appellant Thomas J. Maday. Grathwohl asked Ma-day if he would be willing to sell some of his land in Iowa to respondents. Maday and his wife ultimately sold six acres of land to respondents in two separate transactions in the spring and summer of 2001, and respondents began operating the barns on the land in September 2001.

In order to secure lender financing to purchase the land and complete the barns, respondents needed a manure easement to ensure locations were established to appropriately dispose of manure from the barns. On July 31, 2001, Maday and respondents entered into a “Manure Easement Agreement,” wherein Maday agreed to convey an easement over portions of his property “for purposes of hauling and applying manure and other animal waste generated by the livestock facilities leased or owned by [respondents] and located on the Facility Site,” where the barns were built. The easement agreement, drafted by Christensen Farms, documented that Maday would “receive the benefit” of reduced fertilizer costs and expenses in exchange for allowing respondents “to apply manure” generated by their facilities on Maday’s farmland. The agreement did not require Maday to otherwise compensate respondents for the manure, nor did it otherwise require respondents to provide manure, emphasizing that respondents made “no warranty as to the quality or quantity of manure to be delivered.” The agreement also stated that “[t]he foregoing constitutes the entire Agreement between the parties.”

From 2002 to 2009, Maday emptied respondents’ manure pits and applied the manure to his farmland pursuant to the easement. On three occasions, when Ma-day did not use all of the manure, Maday made other arrangements to empty the manure pits. In 2009, respondents began selling the manure from the Iowa pits to third parties, and did so again in 2010, reducing the amount of manure otherwise available to spread on Maday’s land. Ma-day initiated this action, alleging that re[287]*287spondents breached an oral agreement with Maday to supply all of the manure produced in the hog barns to Maday at no cost, as an additional condition “for the conveyance of the Facility Site and the manure easement.” Respondents moved for summary judgment, and the district court granted the motion, determining that evidence related to the oral agreement constituted inadmissible parol evidence in light of the written easement agreement. This appeal follows.

ISSUE

Did the district court err in granting summary judgment in favor of respondents after determining that evidence related to a prior oral agreement was inadmissible under the parol evidence rule?

ANALYSIS

“On an appeal from summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact and (2) whether the [district court] erred in [its] application of the law.” State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that either party is entitled to a judgment as a matter of law.” Minn. R. Civ. P. 56.03. “On appeal, the reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted.” Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993). The interpretation of a written contract is a question of law, which this court reviews de novo. Borgersen v. Cardiovascular Sys., Inc., 729 N.W.2d 619, 625 (Minn.App.2007).

The district court granted summary judgment after determining that the alleged oral agreement between Maday and respondents “is inadmissible under the parol evidence rule.” “The parol-evidence rule is not a rule of evidence, but a substantive rule of contract interpretation.” Danielson v. Danielson, 721 N.W.2d 335, 338 (Minn.App.2006). The parol evidence rule “prohibits the admission of extrinsic evidence of prior or contemporaneous oral agreements, or prior written agreements, to explain the meaning of a contract when the parties have reduced their agreement to an unambiguous integrated writing.” Alpha Real Estate Co. of Rochester v. Delta Dental Plan of Minn., 664 N.W.2d 303, 312 (Minn.2003) (quotation omitted). Thus, “[w]hen parties reduce their agreement to writing, parol evidence is ordinarily inadmissible to vary, contradict, or alter the written agreement. But parol evidence is admissible when the written agreement is incomplete or ambiguous to explain the meaning of its terms.” Flynn v. Sawyer, 272 N.W.2d 904, 907-08 (Minn.1978). “Whether an agreement is completely integrated and therefore not subject to variance by parol evidence is an issue of law.” Borgersen, 729 N.W.2d at 625.

In determining that the oral agreement is inadmissible under the parol evidence rule, the district court determined that the agreements “have similar subject matter” but “are inconsistent.” The district court noted that “Maday was responsible for the application of the manure under the oral agreement,” while respondents are responsible under the easement agreement, and Maday received “no property rights in the manure” in the easement. The district court also emphasized that Maday received “similar consideration” under both agreements: “the fertilization of his land with manure from the pig barns.” Because the district court determined that the agreements are inconsistent, and because the [288]*288consideration for both agreements is the same, the district court concluded that “the parties would have been expected to include any rights Maday had in the manure in the Easement Agreement.”

Maday contends that the oral agreement “is consistent with the easement” and addresses terms that would naturally be contained in a “separate agreement” such that the oral agreement is “not superseded by the easement agreement.” See W.R. Millar Co. v. UCM Corp., 419 N.W.2d 852

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805 N.W.2d 285, 2011 Minn. App. LEXIS 135, 2011 WL 5515435, Counsel Stack Legal Research, https://law.counselstack.com/opinion/maday-v-grathwohl-minnctapp-2011.