Anderson Marketing, Inc. v. Design House, Inc. , 70 F.3d 1018 ( 1995 )


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  •                                   ___________
    No. 95-1951
    ___________
    Anderson Marketing, Inc.,             *
    *
    Plaintiff-Appellant,    *
    *
    v.                               *
    *   Appeal from the United States
    Design House, Inc.; Benson            *   District Court for the
    Manufacturing Corporation;            *   District of Minnesota.
    The Butter Hardware Co.;              *
    Roy Butter; Bruce A. Littman;         *   [TO BE PUBLISHED]
    Terry L. Mather; James A.             *
    Felber; Ed Harlin,                    *
    *
    Defendants-Appellees.   *
    ___________
    Submitted:   November 17, 1995
    Filed:   December 5, 1995
    ___________
    Before HANSEN, LAY, and MURPHY, Circuit Judges.
    ___________
    PER CURIAM.
    This is a diversity case involving an alleged breach of contract.
    We affirm the judgment of the district court.
    In 1986, Anderson Marketing, Inc. ("Anderson") entered into a sales
    representation agreement ("the 1986 Agreement") with Design House, Inc.
    ("Design House").     By its terms, Anderson was to serve as the exclusive
    marketing agent for Design House's plastic exterior shutters, bathtub and
    shower wall kits, and rain diffusion products.        The 1986 Agreement was
    terminable at will by either party upon thirty days written notice.
    In May 1991, Anderson secured an account with Menards for the
    purchase and sale of a new product, "tub-surrounds."      On October 1,
    1991, Design House advised Anderson that, effective November 1, 1991, it
    was terminating the 1986 Agreement.
    Anderson then brought this litigation against Design House, alleging
    promissory estoppel, quantum meruit, fraud, and, most important to this
    appeal, breach of contract under Minn. Stat. § 325E.37 (1994), which
    prohibits the termination of sales repre-sentation agreements without good
    cause, ninety days written notice, and sixty days to cure deficiencies in
    performance.1
    1
    Minn. Stat. § 325E.37(2) provides in relevant part:
    Termination of agreement. (a) A manufacturer . . . may
    not terminate a sales representative agreement unless the
    person has good cause and:
    (1) that person has given written notice setting
    forth the reason(s) for the termination at least 90 days
    in advance of termination; and
    (2) the recipient of the notice fails to correct the
    reasons stated for termination in the notice within 60
    days of receipt of the notice.
    The statute applies to all sales representation agreements entered
    into or renewed on or after August 1, 1990, the effective date of
    the statute.    1990 Minn. Laws, ch. 539, § 5.       In 1991, the
    Minnesota legislature clarified that an agreement is "renewed" if:
    (1) the period as specified in the agreement has expired
    or expires, but the relationship has continued or
    continues, either for a new specified period or for an
    indefinite period; or
    (2) the agreement is for an indefinite period, and "with
    the principal's consent or acquiescence, the sales
    representative solicits orders on or after" August 1,
    1990.
    1991 Minn. Laws, ch. 190, § 2(a).
    The Minnesota Court of Appeals has interpreted this provision
    as a clarification of Minn. Stat. § 325E.37 which is applicable
    retroactively to the effective date of the statute. New Creative
    Enters., Inc. v. Dick Hume & Assoc., 
    494 N.W.2d 508
    , 511 (Minn. Ct.
    -2-
    The district court granted summary judgment in favor of Design House.
    The   court      reasoned      that,   although    Minn.    Stat.   §     325E.37     applies
    retroactively to the parties' 1986 Agreement, the act thus applied violates
    the Contract Clauses of the Minnesota and United States Constitutions.                       The
    district court also dismissed Anderson's various other state law claims on
    the grounds that they do not allege a proper claim upon which relief can
    be granted.
    On appeal, although Anderson challenges virtually all of the district
    court's       rulings,   the   company     primarily   contends     the   court      erred   in
    dismissing its breach of contract claim under Minn. Stat. § 325E.37.2
    Anderson argues that the parties entered into a new and separate agreement
    governing the tub-surrounds account in 1990, subsequent to the adoption of
    Minn. Stat. § 325E.37.         If we were to accept this argument, there would be
    no need to apply the statute retroactively.                 However, we find no support
    for Anderson's claim that the parties entered into a new agreement in 1990.
    There is no dispute that the 1986 Agreement expressly precluded oral
    modifications.           Yet    Anderson    offers     no   evidence      of   any    written
    modification.      Moreover, the district court expressly rejected Anderson's
    claim in holding that the parties did not substantially or materially alter
    the 1986 Agreement; if the parties did not substantially alter the 1986
    Agreement, they certainly did not create a new agreement.3
    App. 1993).
    2
    Anderson challenges the lower court's rulings with one
    notable exception: he does not contest its ruling that, applied
    retroactively, Minn. Stat. § 325E.37 is unconstitutional. When
    asked at oral argument whether he conceded that the statute,
    applied retroactively, is unconstitutional, counsel for Anderson
    Marketing replied that a challenge to that holding was implicit in
    his other arguments. We disagree. One searches Anderson's briefs
    in vain for even hints of such an argument.
    3
    The district court observed:
    The object of any sales representation agreement,
    including the one at issue herein, is to solicit and
    obtain orders for the manufacturer. Therefore, merely
    requiring a sales representative to solicit orders with the
    principal's consent or acquiescence to trigger application of the
    -3-
    Contrary to Anderson's contention, had the lower court accepted the
    argument that there was a new agreement, it would not even have reached the
    question of retroactivity and the constitutional issue.       Thus, we think it
    is clear that, unless the statute is applied retroactively, Design House
    did not breach the 1986 Agreement when it exercised its right to terminate
    on thirty days notice.   As indicated, however, the trial court found that
    the   1986 Agreement was renewed, but held that applying the statute
    retroactively would violate the Contract Clause.
    We affirm the judgment of the district court without review of its
    constitutional   reasoning   for   two    reasons:   first,   the   record   amply
    demonstrates that the parties did not enter into a new contract after
    passage of the statute; and second, although, contrary to Anderson's
    assertions, the district court did find that the 1986 Agreement was
    renewed,4 the company raises no argument, either in its briefs or at oral
    argument, that the district court's constitutional reasoning was incorrect.
    It is a fundamental rule of federal appellate procedure that we may
    only pass on a district court's ruling if a party challenges that ruling
    on appeal by raising the issue in its opening brief.           Fed. R. App. P.
    28(a)(2), (4); see, e.g., Nolte v. Peterson, 
    994 F.2d 1311
    , 1315 (8th Cir.
    1993); Borough v. Duluth, Missabe & Iron Range Ry., 
    762 F.2d 66
    , 68 n.1
    (8th Cir. 1985); Mississippi River Corp. v. F.T.C., 
    454 F.2d 1083
    , 1085-86
    (8th Cir. 1972); Pet Milk Co. v. Boland, 
    185 F.2d 298
    , 302 (8th Cir. 1950).
    This rule
    statute is nothing more than a continuing of the contractual
    relationship. This results in [a] retroactive application of the
    statute.
    Dist. Ct. Op. at 4.
    4
    See Note 
    3, supra
    .
    -4-
    applies with even greater force in a case involving a constitutional
    question, as federal courts should be hesitant to render an unnecessary
    decision that a statute, as applied, is or is not constitutional.             Here,
    Anderson raises no argument concerning the constitutional issue.             We are
    thus precluded from addressing the constitutional reasoning of the court
    below.
    In summary, we find that the evidence does not support Anderson's
    claim that the parties entered into a second agreement after passage of the
    Minnesota statute.       We agree with the district court's conclusion that, at
    best, the evidence supports only the finding that the 1986 Agreement was
    renewed   to    include    Menards'   sales,   which   requires   the   retroactive
    application of the statute.       Since the constitutional issue is not before
    us, this finding alone requires that we affirm.              We also affirm the
    dismissal of Anderson's alternative claims of promissory estoppel, quantum
    meruit, and fraud, for the reasons set out by the district court.
    AFFIRMED.
    A true copy.
    Attest:
    CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
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