Metropolitan Sports Facilities Com'n v. General Mills, Inc., No. C1-90-123

• Decision Date: 31 May 1991
• Docket Number: No. C1-90-123
• Parties: METROPOLITAN SPORTS FACILITIES COMMISSION, Respondent, v. GENERAL MILLS, INC., Appellant.
• Court: Minnesota Supreme Court

Page 118

470 N.W.2d 118

METROPOLITAN SPORTS FACILITIES COMMISSION, Respondent, v. GENERAL MILLS, INC., Appellant.

No. C1-90-123.

Supreme Court of Minnesota.

May 31, 1991.

Syllabus by the Court

1. Because the unambiguous language of the contract between General Mills and the Metropolitan Sports Facilities Commission provided that a repeal of Minn.Stat. Sec. 473.568 (1978), "based solely upon the continued effectiveness of this Agreement" would not affect the contract, the repeal of section 473.568 in 1984 did not discharge General Mills from its obligations under the contract.

2. The legislature's repeal of Minn.Stat. Sec. 473.568 (1978), did not violate the separation of powers doctrine or due process liberty of contract principles, nor did the parties' agreement confer any power on the legislature to exercise a judicial function.

J.D. Jackson, Juan C. Basombrio, Dorsey & Whitney, Minneapolis, for appellant.

David R. Knodell, Minneapolis, for respondent.

Heard, considered and decided by the court en banc.

OPINION

KEITH, Chief Justice.

The parties dispute the effect the repeal of Minn.Stat. Sec. 473.568 (1978), had on a contract between respondent Metropolitan Sports Facilities Commission and petitioner General Mills that required General Mills to purchase unsold Minnesota Vikings football tickets under specified circumstances. The Commission sought a declaratory judgment and an injunction requiring General Mills to purchase tickets pursuant to the contract. The trial court, holding that the existence of Minn.Stat. Sec. 473.568 (1978), was not a condition precedent to General Mills' performance under the contract, and that the repeal of section 473.568 did not frustrate the purpose of the contract, ¹ found the agreement valid and enforceable. A divided court of appeals upheld the trial court's conclusions, rejected General Mills' constitutional arguments, and suggested that General Mills waived any right to terminate the contract by continuing to accept benefits under the contract. Metropolitan Sports Facilities Comm'n v. General Mills, 460 N.W.2d 625 (Minn.App.1990). We affirm.

I

In 1977, the Minnesota Legislature, with the intent of either renovating old Metropolitan Stadium or building a new multi-purpose sports facility, passed the Metropolitan Sports Facilities Act. Act of May 16, 1977, ch. 89, Sec. 1, 1977 Minn.Laws 141, codified at Minn.Stat. Sec. 473.551-595 (1978). The legislation established the Metropolitan Sports Facilities Commission (Commission) to accomplish this goal and to operate the facility, which would be the home of Minnesota's professional football team, the Minnesota Vikings. See generally Minn.Stat. Sec. 473.553 (1990).

The National Football League (NFL) had and still has a blackout rule in its franchise agreement with league teams including the Vikings. The blackout rule prohibits local telecasting of league football games unless the game is 100% sold-out 72 hours before gametime. The Minnesota Legislature, aware of the blackout rule and concerned that the larger seating capacity of a new stadium would result in fewer sellouts and consequently the blackout of more Vikings games, passed a statute that prohibited a tenant of the new sports facility from being a party to an agreement that would blackout the local telecast of a game when at least 90% of the tickets had been sold 72 hours before gametime. Act of May 16, 1977, ch. 89, Sec. 8, 1977 Minn.Laws 141, 147-48, codified at Minn.Stat. Sec. 473.568 (1978).

To accommodate the Vikings, who faced a dilemma due to the conflict between the NFL blackout rule and section 473.568, the 1979 legislature required as a prerequisite to the issuance of stadium construction bonds, that the Commission enter into one or more agreements with private purchasers who would purchase tickets under specified circumstances to permit the Vikings to comply with the NFL blackout rule and to allow Minnesota residents to watch the telecasts of home Vikings games when at least 90% of the tickets had been sold 72 hours before gametime. Act of May 25, 1979, ch. 203, Sec. 8, 1979 Minn.Laws 375, 381, codified at Minn.Stat. Sec. 473.581, subd. 3(m) (1980). On August 21, 1979, General Mills saved the day for the construction of the Hubert H. Humphrey Metrodome by entering into a ticket-purchase contract that satisfied the requirements of sections 473.568 and 473.581, subdivision 3(m).

The contract provided, in part:

THEREFORE, in order to satisfy the requirements of Section 473.568 of Minnesota Statutes, 1978, and of Section 473.581, Subdivision 3(m) of the Minnesota Statutes, 1978, as amended, the Commission and the Purchaser agree as follows:

1. This Agreement, and the purchase commitments set forth herein, shall be effective during each of the first twenty years of the operation of the sports facility constructed pursuant to the above statutes. Commencement of operation shall be defined as the date on which the professional football organization which is a major tenant of the facility plays its first home game in the sports facility; provided, however, this Agreement shall not be effective and General Mills shall have no further purchase commitments in the event the [sic] Section 473.568 is finally determined by a court of competent jurisdiction to be unconstitutional and void, or if Section 473.568 is otherwise ineffective except in the case of a repeal thereof based solely upon the continued effectiveness of this Agreement.

2. Purchaser agrees that, if the professional football organization which is a major tenant of the facility cannot comply with the provisions of Minnesota Statutes, 1978, Section 473.568, because of the terms of an agreement under which the professional football league of which the tenant is a member has sold or otherwise transferred all or part of the rights of the league's member organizations in the sponsored telecasting of games of the organization or otherwise, Purchaser will, whenever more than 90% but less than 100% of the tickets of admission for seats at any professional football game to be played in the facility (which tickets were available for purchase by the general public 120 hours or more before the scheduled beginning time of the game either at the sports facility where the game is to be played or at the box office closest to the facility) have been purchased 72 hours or more before the beginning time of the game, purchase or guarantee the purchase of all such tickets which remain unsold as required to permit the telecast to areas within the state which otherwise would not receive the telecast.

(emphasis added).

In addition to the good will and favorable publicity General Mills enjoyed, the contract granted General Mills one minute of free advertising on the scoreboard during each Vikings home game and convenient access to the Metrodome for its shuttle buses, regardless of whether it was required to purchase tickets.

The Vikings played their first game in the newly-constructed Metrodome in 1982. In 1983 a group of Minnesotans attempted to attract the NFL's Superbowl to the Metrodome. A Superbowl Task Force discovered that the NFL objected to the Metrodome as a potential Superbowl site because Minnesota had the statute on its books that conflicted with the league's blackout rule. As part of the successful effort to bring the Superbowl to Minnesota, the 1984 legislature repealed section 473.568 "based solely upon the continued effectiveness" of any ticket-purchase agreements entered into by the Commission. Act of May 2, 1984, ch. 607, Sec. 2, 1984 Minn.Laws 1446, 1450.

The parties disagreed about the effect of the repeal on the contract but agreed not to determine its validity until General Mills' performance was required. General Mills continued to receive advertising pursuant to the ticket-purchase contract through the 1988-89 football season. ² When the October 1, 1989, Vikings game did not sell out, the Commission brought this action.

II

A

The court's role in interpreting a contract is to ascertain and give effect to the intention of the parties. Karim v. Werner, 333 N.W.2d 877, 879 (Minn.1983). General Mills and the Commission, freely entering into this contract for the purchase of unsold Vikings tickets, prudently specified the consequences that would attach to the occurrence of several events. The parties anticipated a repeal of section 473.568 in paragraph 1 of the Agreement:

this Agreement shall not be effective * * * in the event the [sic] Section 473.568 is finally determined by a court of competent jurisdiction to be unconstitutional and void, or if Section 473.568 is otherwise ineffective except in the case of a repeal thereof based solely upon the continued effectiveness of this Agreement.

As anticipated by the parties, the legislature, in fact, repealed section 473.568:

Minnesota Statutes 1982, section 473.568, is repealed. This repeal is based solely upon the continued effectiveness of the agreement or agreements entered into by the Metropolitan Sports Facilities Commission and the purchaser or purchasers of tickets of admission as provided for by Laws 1979, chapter 203, section 8. Such agreements shall remain in effect throughout their terms and the commission shall have no authority to terminate or modify such agreements.

Act of May 2, 1984, ch. 607, Sec. 2, 1984 Minn.Laws 1446, 1450.

We hold that the trial court correctly determined that the language of the contract is unambiguous. A contract is ambiguous if it is susceptible to more than one interpretation based on its language alone. Lamb Plumbing & Heating Co. v. Kraus-Anderson, Inc., 296 N.W.2d 859, 862 (Minn.1980). When pressed to identify language in the contract that is ambiguous, counsel for General Mills argued that the language is ambiguous because the existence of section 473.568 is fundamental to the contract. The plain language of the contract, however, contemplates a situation in which section 473.568 could be repealed...