Cusick v. Mozey's Concrete & Masonry Inc.

• Decision Date: 11 May 2020
• Docket Number: A19-1293
• Court: Minnesota Court of Appeals
• Parties: Andrew Cusick, et al., Respondents, v. Mozey's Concrete & Masonry Inc., and SullivanDay Construction, Inc., defendants/third-party plaintiffs, Respondents, v. Demo Unlimited, Incorporated, third-party defendant, Appellant.

Andrew Cusick, et al., Respondents, v. Mozey's Concrete & Masonry Inc.,and SullivanDay Construction, Inc., defendants/third-party plaintiffs, Respondents, v. Demo Unlimited, Incorporated, third-party defendant, Appellant.

A19-1293

STATE OF MINNESOTA IN COURT OF APPEALS

May 11, 2020

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2018).

Affirmed

Bratvold, Judge

Hennepin County District Court

File No. 27-CV-17-16170

Alicia N. Sieben, Matthew J. Barber, Schwebel, Goetz, & Sieben, P.A., Minneapolis, Minnesota (for respondents Andrew Cusick, et al.)

Deborah C. Eckland, Elizabeth L. Taylor, Matthew G. Nelson, Goetz & Eckland P.A., Minneapolis, Minnesota (for respondent Mozey's Concrete)

Michael J. Tomsche, James C. Kovacs, Tomsche, Sonnesyn & Tomsche, P.A., Golden Valley, Minnesota (for respondent SullivanDay Construction)

Mark G. Pryor, Elizabeth J. Roff, Brown & Carlson, P.A., Minneapolis, Minnesota, and

Timothy Poeschl, Laura Johnson, Grotefeld, Hoffman, Gordan, Ochoa & Evinger LLP, Minneapolis, Minnesota (for appellant) Considered and decided by Bratvold, Presiding Judge; Jesson, Judge; and Bryan, Judge.

UNPUBLISHED OPINION

BRATVOLD, Judge

In this appeal from a final judgment, appellant challenges the district court's order granting respondents' motions to enforce a settlement agreement signed by all parties at a mediation. Appellant argues the district court erred when it concluded that (1) the settlement agreement "was a global release of all claims," which included appellant's increased-premium claim, and (2) appellant's attorney had "authority to settle its increased-premium claim." Because we conclude that the district court did not err when it enforced the settlement agreement and when it determined that appellant's attorney had authority to enter a mediated settlement under Minn. Stat. § 481.08 (2018), we affirm.

FACTS

This dispute arises from respondent Andrew Cusick's workplace injury. Respondent SullivanDay Construction Inc. (SullivanDay) was the general contractor for a project that involved converting a bank into a Montessori school in Golden Valley. SullivanDay hired appellant Demo Unlimited Incorporated (Demo), Cusick's employer, to perform demolition work at the project site. SullivanDay also hired respondent Mozey's Concrete & Masonry Inc. (Mozey's) as a subcontractor to remove a bank-vault door, among other tasks. Mozey's removed the door, and "left [it] leaning against the wall outside the vault." Cusick was near the door when "[s]omehow the vault door fell on Cusick's left leg and he sustained severe injuries."

Cusick received workers' compensation benefits and sued SullivanDay and Mozey's for damages. In his amended complaint, Cusick alleged negligence, breach of contract, joint enterprise, vicarious liability, and res ipsa loquitur. SullivanDay and Mozey's filed separate answers denying liability, filed cross-claims against each other, and filed third-party complaints against Demo. Mozey's alleged contribution and indemnity against Demo. SullivanDay alleged contractual and common-law contribution and indemnity, breach of contract, negligent misrepresentation, and negligent supervision against Demo. Demo answered both third-party complaints and denied liability.

On February 20, 2019, all parties participated in mediation and executed a settlement agreement. The settlement agreement is two typed pages, with a few handwritten notes in the margin, and states, in part:

Now, therefore, in consideration of the mutual covenants herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be bound pursuant to Minn. Stat. § 572.35, and with the intent of resolving any and all claims that have been brought or could have been brought in the Legal Action, hereby agree as follows:

1. Defendant shall pay Plaintiff and Plaintiff's Attorney the sum of seven hundred fifty thousand Dollars (750,000.00) in full and final settlement of all claims, except for no-fault benefits, which were made, or could have been made in the Legal Action as to the settling parties.

. . . .

5. Plaintiff shall execute a Release of All Claims and the settling parties shall execute a Stipulation of Dismissal with Prejudice of the legal Action.

(Emphasis added.) The right margin includes handwritten notes that read "Naig: 730,000," "Reverse Naig 20,000, Demo agrees to no comp future credit."

After the mediation, Mozey's circulated proposed release language by email. Demo responded that the proposed release language was "overbroad" and sent a revised draft that removed Demo from the proposed release. Mozey's rejected Demo's revised draft. Each party moved to enforce the settlement. Cusick asked the district court to enforce the settlement agreement signed at the mediation and to permit the parties to distribute funds as directed by the handwritten notes. Demo asked the district court to enforce a settlement that excluded Demo's claim for increased workers' compensation premiums against Mozey's and SullivanDay, both of whom separately moved to enforce the settlement agreement as signed by the parties at mediation.

After a hearing, the district court issued a written order, finding that the settlement agreement was unambiguous and by its plain terms "settles, resolves and provides for the release and stipulated dismissal, of any and all claims that were brought or could have been brought as part of this action." The district court granted Mozey's and SullivanDay's motions and dismissed with prejudice "[a]ll claims, cross-claims, counterclaims, and third party claims and counterclaims brought by the parties or which could have been brought, including any claim by Demo for increased worker's compensation premiums." Finally, the district court denied Demo's motion, but did not direct entry of judgment.

Demo then filed a counterclaim against Mozey's and SullivanDay for increased workers' compensation premiums. The district court dismissed the attempted counterclaim and directed entry of judgment. Demo filed a letter with the district court seekingpermission to move to reconsider the order enforcing the settlement agreement. The district court denied Demo's request in a written order, stating it found "no equitable reason to put the settlement aside."

Demo appeals.

DECISION

I. The district court did not err when it enforced the mediated settlement agreement as including a global settlement of all claims.

A settlement agreement is "contractual in nature." Voicestream Minneapolis, Inc. v. RPC Props., Inc., 743 N.W.2d 267, 271 (Minn. 2008). When determining whether a contract is ambiguous, the court gives contractual language "its plain and ordinary meaning." Current Tech. Concepts, Inc. v. Irie Enter., Inc., 530 N.W.2d 539, 543 (Minn. 1995). A contract is ambiguous if its language is "reasonably susceptible to more than one interpretation." Id. A contract must be interpreted to give effect to all of its provisions. Id. Whether a contract is ambiguous is a question of law that this court reviews de novo. Storms, Inc. v. Mathy Const. Co., 883 N.W.2d 772, 776 (Minn. 2016). Appellate courts review a district court's decision to enforce a settlement agreement for an abuse of discretion and will "not [] reverse[] unless it be shown that the court acted in such an arbitrary manner as to frustrate justice." Johnson v. St. Paul Ins. Co., 305 N.W.2d 571, 573 (Minn. 1981) (quotation omitted).

Demo argues that the mediated settlement agreement is unambiguous and that the "only reasonable interpretation is that the parties did not intend to settle [Demo's] increasedpremium claim." Demo makes three arguments why the settlement agreement does not include its increased-premium claim, which we will discuss in turn.

First, Demo argues that this case is not a "run of the mill" personal-injury case because it requires an understanding of workers' compensation. Demo points out that an increased-premium claim is a cause of action for an insured employer to recover increased workers' compensation premiums against a third-party tortfeasor under Minn. Stat. § 176.061, subd. 5(c) (2018). Here, the settlement agreement refers to a Naig settlement, which is "an agreement between the injured employee and the third-party tortfeasor that settles only those damages that are not recoverable under workers' compensation law." Drake v. Reile's Transfer & Delivery, Inc., 613 N.W.2d 428, 432 n.2 (Minn. App. 2000) (citing Naig v. Bloomington Sanitation, 258 N.W.2d 891, 893 (Minn. 1977)). And the settlement agreement refers to a reverse-Naig settlement, which is "when the tortfeasor settles potential subrogation claims for workers' compensation benefits with the employer and the employer's workers' compensation insurer." Fish v. Ramler Trucking, Inc., 923 N.W.2d 337, 339 n.1 (Minn. App. 2019) (quotation and citations omitted), aff'd, 935 N.W.2d 738 (Minn. 2019).

With this background, Demo argues that the settlement agreement resolved only Naig and reverse-Naig claims, and did not include its increased-premium claim against Mozey's and SullivanDay. Demo relies on the handwritten comments in the margin referring to "Naig" and "reverse-Naig" and contends that this language "narrowed the broad release language." Mozey's argues that if we adopt Demo's reading of the settlement agreement, it would "require the Court to ignore the unambiguous global settlementlanguage wholesale." Because a contract should be interpreted to give meaning to all contract provisions, see Current Tech. Concepts., 530 N.W.2d at 543, SullivanDay contends that the handwritten comments should be interpreted "to allocate how the settlement funds would be distributed."

The settlement agreement provides that it is a "full and final settlement of all claims, except for no-fault benefits, which were made, or could have been made in the Legal Action as to the settling parties." (Emphasis added.) We...