Waseca County v. Minnesota Department of Transportation ( 2016 )

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA
IN COURT OF APPEALS
A15-1850
Waseca County, et al.,
Appellants,
vs.
Minnesota Department of Transportation,
Respondent.
Filed June 27, 2016
Affirmed
Schellhas, Judge
Steele County District Court
File No. 74-CV-15-991
Justin P. Weinberg, Jonathan P. Schmidt, W. Knapp Fitzsimmons, Briggs and Morgan,
P.A., Minneapolis, Minnesota (for appellants)
Lori Swanson, Attorney General, Stephen D. Melchionne, Assistant Attorney General, St.
Paul, Minnesota (for respondent)
Considered and decided by Schellhas, Presiding Judge; Peterson, Judge; and Reyes,
Judge.
UNPUBLISHED OPINION
SCHELLHAS, Judge
Appellants challenge the district court’s rule-12.02(e) dismissal of their complaint.
We affirm.
FACTS
We set forth the facts as alleged in the complaint and its exhibits. See Walsh v. U.S.
Bank, N.A., 851 N.W.2d 598, 601, 606 (Minn. 2014) (stating that, when reviewing the rule-
12.02(e) dismissal of a complaint, “[appellate courts] accept the facts alleged in the
complaint as true and construe all reasonable inferences in favor of the nonmoving party”).
In December 2012, respondent Minnesota Department of Transportation (MnDOT)
released to appellants Waseca County and Steele County (the counties) portions of Old
Trunk Highway No. 14 (Old Highway 14) that were located in the counties. The counties
initiated separate lawsuits, which were later consolidated, alleging, among other things,
that MnDOT was not permitted to “revert [Old Highway 14] to the Counties without an
agreement in place at the time of the reversion.”
In January 2014, the counties and MnDOT executed a settlement agreement and
release. The settlement agreement requires MnDOT to perform certain work at its expense
on several segments of Old Highway 14. As to Waseca County Segments 1, 3, and 5 and
Steele County Segment 2 (subject highway segments), which are at issue in this case,
MnDOT agreed to “reclaim to aggregate the existing shoulders.”1 And MnDOT agreed that
all of its work would “be completed in accordance with applicable Minnesota Statutes,
MnDOT Rules, and MnDOT [T]echnical Design Standards.”
1
“[A]ggregate” means “[t]he mineral materials, such as sand or stone, used in making
concrete.” The American Heritage Dictionary of the English Language 33 (4th ed. 2006)
[hereinafter American Heritage Dictionary].
2
In April 2015, the counties sued MnDOT, claiming that MnDOT-issued Technical
Memorandum No. 12-12-TS-06 (technical memorandum) requires, “at least in part, paved
shoulders” for the subject highway segments and alleging that MnDOT ignored the
technical memorandum’s design requirements by instructing a third-party design engineer
that the shoulders of the subject highway segments should be aggregate. The counties
sought a declaratory judgment that the shoulders of the subject highway segments must be
paved in accordance with the technical memorandum. MnDOT moved to dismiss the
counties’ complaint for failure to state a claim on which relief can be granted. The district
court granted MnDOT’s motion.
This appeal follows.
DECISION
“When reviewing a case dismissed pursuant to Minn. R. Civ. P. 12.02(e) for failure
to state a claim on which relief can be granted, the question before [an appellate] court is
whether the complaint sets forth a legally sufficient claim for relief.” Hebert v. City of Fifty
Lakes, 744 N.W.2d 226, 229 (Minn. 2008). “[Appellate courts] review de novo whether a
complaint sets forth a legally sufficient claim for relief.” Walsh, 851 N.W.2d at 606.
Although “[appellate courts] accept the facts alleged in the complaint as true and construe
all reasonable inferences in favor of the nonmoving party,” id., “a legal conclusion in the
complaint is not binding on [an appellate court],” Bahr v. Capella Univ., 788 N.W.2d 76,
80 (Minn. 2010).
A pleading must “contain a short and plain statement of the claim showing that the
pleader is entitled to relief and a demand for judgment for the relief sought.” Minn. R. Civ.
3
P. 8.01. “A claim is sufficient against a motion to dismiss for failure to state a claim if it is
possible on any evidence which might be produced, consistent with the pleader’s theory,
to grant the relief demanded.” Walsh, 851 N.W.2d at 603.
In this case, the district court dismissed the counties’ complaint, concluding that
“the plain and unambiguous language of the [settlement agreement] requires only that
[MnDOT] reclaim the shoulder of the [subject highway segments] to aggregate.” The
counties argue that the district court erred in its interpretation of the settlement agreement
because the agreement incorporates MnDOT’s technical design standards and those
standards require paved shoulders on the subject highway segments. “In deciding a motion
to dismiss, [a] court ‘may consider the entire written contract when the complaint refers to
the contract and the contract is central to the claims alleged.’” Baker v. Best Buy Stores,
LP, 812 N.W.2d 177, 180 (Minn. App. 2012) (quoting In re Hennepin Cty. 1986 Recycling
Bond Litig., 540 N.W.2d 494, 497 (Minn. 1995)), review denied (Minn. Apr. 25, 2012).
A settlement agreement is a contract, and [appellate courts]
review the language of the contract to determine the intent of
the parties. When the language is clear and unambiguous,
[appellate courts] enforce the agreement of the parties as
expressed in the language of the contract. But if the language
is ambiguous, parol evidence may be considered to determine
intent. Whether a contract is ambiguous is a question of law
that [appellate courts] review de novo. The language of a
contract is ambiguous if it is susceptible to two or more
reasonable interpretations.
Dykes v. Sukup Mfg. Co., 781 N.W.2d 578, 581–82 (Minn. 2010) (citations omitted).
4
Paragraph 2 of the settlement agreement describes the “Work” or “Project” that
MnDOT agreed to complete, at its expense, on several segments of Old Highway 14. As
to the subject highway segments, paragraph 2A provides:
MnDOT agrees to complete highway preservation work as
follows: mill of up to 4[ inches] (including appropriate
patching), and pave a 5[-inch] unbonded concrete overlay with
a width of 24[ feet] consistent with MnDOT Rules and
Technical Design Specifications (construction means and
methods will, at a minimum, satisfy the requirements of
MnDOT’s State-Aid Rules), in the above-referenced sections,
as shown in attached Exhibit D. MnDOT will reclaim to
aggregate the existing shoulders.
(Emphasis added.) Exhibit D to the settlement agreement contains five diagrams of the four
subject highway segments; each diagram shows a point at which to “RECLAIM TO AGG
SHOULDER.” And the notes to Exhibit D state, “NEW CLASS 2 SHOULDER
AGGREGATE BASE WHICH WILL CONSIST OF RECLAIMED BITUMINOUS
SHOULDERS TO BE UTILIZED TO BRING NEW SHOULDERS FLUSH WITH NEW
CONCRETE SURFACE.”2
Paragraph 9 of the settlement agreement provides that “[a]ll of MnDOT’s Work will
be completed in accordance with applicable Minnesota Statutes, MnDOT Rules, and
MnDOT [T]echnical Design Standards.” The counties argue that paragraph 2A requires,
“at a minimum,” that MnDOT restore the shoulders of the subject highway segments to
2
“[B]ituminous” means “[l]ike or containing bitumen,” which is “[a]ny of various
flammable mixtures of hydrocarbons and other substances, occurring naturally or obtained
by distillation from coal or petroleum, that are a component of asphalt and tar and are used
for surfacing roads and for waterproofing.” American Heritage Dictionary, supra, at 189.
5
aggregate but that paragraph 9 incorporates the technical memorandum and requires
MnDOT to pave the shoulders on the subject highway segments. We are not persuaded.
First, the specific terms of the settlement agreement govern over the general terms
of the agreement. See Burgi v. Eckes, 354 N.W.2d 514, 519 (Minn. App. 1984) (stating
that “the specific in a writing governs over the general”); see also Egner v. States Realty
Co., 223 Minn. 305, 314, 26 N.W.2d 464, 470 (1947) (stating, when interpreting a contract,
that “the definite prevails over the indefinite”). We conclude, as did the district court, that
the language in paragraph 2A of the settlement agreement—that “MnDOT will reclaim to
aggregate the existing shoulders”—is more specific than the general language in paragraph
9, which incorporates MnDOT’s rules and design standards. (Emphasis added.)
Second, the purpose of the technical memorandum is “to update the MnDOT
shoulder width design criteria,” which “will provide for more design flexibility in roadway
shoulder design.” MnDOT recognized in the technical memorandum that “[m]any state
transportation departments have been turning to flexible design as a solution to resolving
various transportation challenges” and that “[t]he benefits of flexible design allow for a
greater sensitivity to the design needs of multiple travel modes, the local community, and
the surrounding environment.” Nothing in the technical memorandum requires rigid
adherence to the “[g]uidelines” that it provides.
The counties also argue that paragraph 2A and paragraph 9 conflict, resulting in
ambiguity as to the parties’ intent. “Where there is an apparent conflict between two clauses
or provisions of a contract, it is the court’s duty to find harmony between them and to
reconcile them if possible.” Oster v. Medtronic, Inc., 428 N.W.2d 116, 119 (Minn. App.
6
1988) (citing Lawton v. Joesting, 96 Minn. 163, 167, 104 N.W. 830, 832 (1905)).
“[Appellate courts] are to interpret a contract in such a way as to give meaning to all of its
provisions.” Brookfield Trade Ctr., Inc. v. Cty. of Ramsey, 584 N.W.2d 390, 394 (Minn.
1998); see also Chergosky v. Crosstown Bell, Inc., 463 N.W.2d 522, 526 (Minn. 1990)
(stating that “[appellate courts] will attempt to avoid an interpretation of the contract that
would render a provision meaningless”). “[Appellate courts] construe a contract as a whole
and attempt to harmonize all clauses of the contract.” Chergosky, 463 N.W.2d at 525; see
also Burgi, 354 N.W.2d at 518 (“Terms in a contract should be read together and
harmonized where possible.” (citing Country Club Oil Co. v. Lee, 239 Minn. 148, 151–52,
58 N.W.2d 247, 249 (1953))).
Paragraph 2A clearly and unambiguously provides that “MnDOT will reclaim to
aggregate the existing shoulders.” We conclude that to read paragraph 9 as requiring
MnDOT to pave the shoulders of the subject highway segments would render meaningless
the quoted language from paragraph 2A. “[The supreme court] ha[s] consistently stated
that when a contractual provision is clear and unambiguous, courts should not rewrite,
modify, or limit its effect by a strained construction.” Valspar Refinish, Inc. v. Gaylord’s,
Inc., 764 N.W.2d 359, 364–65 (Minn. 2009). We therefore harmonize paragraph 2A and
paragraph 9 by reading paragraph 2A as establishing the scope of MnDOT’s work under
the settlement agreement and paragraph 9 as providing guidance as to the manner in which
the agreed-upon work will be performed if not otherwise set forth by the parties in
paragraph 2.
7
We conclude that the clear and unambiguous language of the settlement agreement
precludes the relief demanded by the counties and that the counties’ complaint therefore is
legally insufficient. See Walsh, 851 N.W.2d at 603 (“A claim is sufficient against a motion
to dismiss for failure to state a claim if it is possible on any evidence which might be
produced, consistent with the pleader’s theory, to grant the relief demanded.”). The district
court did not err in dismissing the complaint for failure to state a claim on which relief can
be granted.
Affirmed.
8