Morgan Co. v. Minnesota Min. & Mfg. Co.

• Decision Date: 17 September 1976
• Docket Number: No. 46232,46232
• Citation: 246 N.W.2d 443,310 Minn. 305
• Court: Minnesota Supreme Court
• Parties: The MORGAN COMPANY, Appellant, v. MINNESOTA MINING & MANUFACTURING CO., Respondent.

Page 443

246 N.W.2d 443

310 Minn. 305

The MORGAN COMPANY, Appellant, v. MINNESOTA MINING & MANUFACTURING CO., Respondent.

No. 46232.

Supreme Court of Minnesota.

Sept. 17, 1976.

Syllabus by the Court

1. A party cannot unilaterally dismiss a portion of its complaint in order to limit the scope of an order of the district court already issued granting summary judgment in order that it may appeal from that judgment before going to trial on the remaining issues not dismissed by the court's order.

2. Plaintiff's proper method to seek review was to request discretionary review under Rule 105, Rules of Civil Appellate Procedure.

3. The parties by agreement may limit the liability of one of the parties for ordinary negligence, or for warranty, express or implied.

4. The agreement of the parties does not foreclose or limit liability on the issues of willful and wanton negligence, intentional misconduct, or fraud.

Meagher, Geer, Markham, Anderson, Adamson, Flaskamp & Brennan, R. Gregory Stephens and O. C. Adamson II, O'Connor & Hannan, Joe A. Walters and Kenneth B. Jones, Jr., Minneapolis, for appellant.

Richards, Montgomery, Cobb & Bassford, Greer E. Lockhart and James B. Proman, Minneapolis, for respondent.

Heard before TODD, YETKA and SCOTT, JJ., and considered and decided by the court en banc.

YETKA, Justice.

This is an appeal from a judgment of the district court granting defendant's motion for partial summary judgment limiting its liability to $250. We affirm.

Plaintiff is a corporation engaged in the retail and wholesale jewelry business. In July of 1973 it entered into an agreement with defendant whereby defendant agreed to install and service a central station burglar alarm system at plaintiff's place of business. In return, plaintiff agreed to pay defendant $605 upon completion of the installation and $82 a month thereafter.

The system was apparently connected by two wires to a telephone wire distributor board located in a room adjacent to plaintiff's business office. The board contained numerous multicolored wires of various sizes. Attached to each of the two wires servicing plaintiff's system were identification tags. One tag said, '3M Alarm Service, Telephone line to Morgan's Jewelry--1740 black/yellow not used,' and the other said, '3M Alarm Service--holdup alarm, do not cut.'

On or about February 3, 1974, plaintiff's business was burglarized. The investigating officer found that the alarm system had been bypassed by attaching 'alligator clamps' to the tagged wires. As a result of the burglary, plaintiff sustained a loss of $957,740.10. Its insurer, Continental Casualty Company, reimbursed plaintiff for $610,000.

In October of 1974 plaintiff commenced this action against defendant for damages in the amount of its total loss, alleging negligence and breach of implied warranty. Defendant moved for partial summary judgment limiting recovery to $250 pursuant to the provisions of the agreement. In response, plaintiff moved to amend its complaint to include allegations of breach of express warranty, willful, wanton and intentional wrongful acts, and strict liability, and fraud and misrepresentation.

Defendant's motion was granted with respect to the allegations of negligence, breach of implied and express warranties, and strict liability, and denied as to the allegations of fraud and intentional wrongdoing. Plaintiff was permitted to amend its complaint to include the latter claims.

Plaintiff thereafter made a motion to have judgment entered pursuant to Rule 54.02, Rules of Civil Procedure, as to the grant of defendant's motion for partial summary judgment, claiming that important issues of law were involved which should be reviewed and resolved before proceeding with the balance of its action. The court denied the motion. Thereafter plaintiff dismissed its amended complaint, and directed the following letter to the district court clerk:

'In order that we may appeal Judge Stone's Order dated June 23, 1975 we have determined that we have to dismiss our Amended Complaint alleging intentional wrongdoing and fraud. Consequently, we have dismissed said Amended Complaint pursuant to Rule 41.01(1).

'Consequently, we have a final order from which to appeal.

'Therefore, please enter judgment on the Order dated June 23, 1975.'

The clerk entered judgment August 8, 1975. The district court file does not contain any order from the court directing the entry of judgment.

1--2. The only issue raised by the parties on appeal is the effect of the provisions in the agreement of the parties limiting defendant's liability to a maximum of $250. Before reaching the merits, however, there exist several questions regarding appealability.

In Financial Relations Board, Inc. v. Pawnee Corp., Minn., 240 N.W.2d 565 (1976), we held that a 'partial summary judgment' ¹ granted pursuant to Rule 56.04, Rules of Civil Procedure, is final, and therefore appealable, only when the trial judge makes an express determination that there is no just reason for delay and upon an express direction for the entry of judgment. Here the trial court refused to do just that. Plaintiff attempted to circumvent that refusal by dismissing that portion of its amended complaint to which the trial court's order for summary judgment did not attach, i.e., willful and wanton negligence, intentional misconduct, and fraud and misrepresentation, and directing the clerk to enter judgment. Whatever authority plaintiff relied on for that action certainly escapes us. While certain claims were thereby eliminated from its action, there nevertheless remained the issue of liability on the theories of ordinary negligence, warranty, and strict products liability. The order for summary judgment determined only the issue of damages. Under the circumstances of this case the only proper method by which plaintiff could secure review of the district court's decision was under Rule 105, Rules of Civil Appellate Procedure, providing for discretionary review. Certainly it was not by securing an unauthorized judgment from the district court clerk. However, since the matter is now before us, and because defendant does not contest appealability, we shall treat the appeal as a request for discretionary review of the trial court's order for partial summary judgment and grant it.

3. Language limiting defendant's liability appears throughout the written agreement. In paragraph 1 setting forth defendant's obligations there is the following limitation:

'3M agrees to install or cause to be installed and service, Without liability and not as an insurer * * *.' (Italics supplied.)

Paragraph 5 provides:

'5. 3M's LIABILITY. 3M Does not represent or warrant that the System may not be compromised or circumvented; that the System will prevent any loss by burglary, hold-up, fire or otherwise; or that the System will in all cases provide the protection for which it is installed or intended. Subscriber acknowledges that 3M is not an insurer, that Subscriber assumes all risk for loss or damage to Subscriber's premises or to its contents; that 3M has made no representation or warranties, nor has Subscriber relied on any representations or warranties, express or implied, except as set forth herein and Subscriber acknowledges that he has read and understands, particularly Paragraphs 10 and 21 of this Agreement which set forth 3M's obligation and maximum liability in the event of any loss or damage to Subscriber.'

Paragraph 21, in addition to further language of limitation, specifically limits damages to a maximum amount of $250.

'21. 3M NOT AN INSURER AND LIQUIDATED DAMAGES. It is understood and agreed by and between the parties hereto that 3M is not an insurer. Insurance, if any, will be obtained by Subscriber. Charges are based solely upon the value of the services provided for, and are unrelated to the value of Subscriber's premises. The amounts payable by Subscriber are not sufficient to warrant 3M assuming any risk of consequential or other damages to Subscriber due to 3M's negligence or failure to perform. Subscriber does not desire this contract to provide for the liability of 3M and Subscriber agrees that 3M shall not be liable for loss or damage due directly or indirectly to any occurrence or consequences therefrom, which the service is designed to detect or avert. From the nature of the services to be performed, it is impractical and extremely difficult to fix the actual damages, if any, which may proximately result from the failure on the part of 3M to perform any of its obligations hereunder, or the failure of the System to properly operate with the resulting loss to Subscriber. If 3M should be found liable for loss or damage due to a failure on the part of 3M or its System, in any respect, its liability shall be limited to the refund to Subscriber of an amount equal to six (6) times the total...