Motorsports Racing Plus v. Arctic Cat Sales

• Decision Date: 24 July 2003
• Docket Number: No. C4-02-530.,C4-02-530.
• Parties: MOTORSPORTS RACING PLUS, INC., Petitioner, Appellant, v. ARCTIC CAT SALES, INC., Respondent, Polaris Sales, Inc., Respondent, Bombardier Motor Corporation of America, a Delaware corporation, Respondent, Yamaha Motor Corporation, a California corporation, Respondent, International Snowmobile Racing, a Wisconsin corporation, Respondent, International Snowmobile Manufacturers Association, a Michigan corporation, Respondent.
• Court: Minnesota Supreme Court

666 N.W.2d 320

MOTORSPORTS RACING PLUS, INC., Petitioner, Appellant, v. ARCTIC CAT SALES, INC., Respondent, Polaris Sales, Inc., Respondent, Bombardier Motor Corporation of America, a Delaware corporation, Respondent, Yamaha Motor Corporation, a California corporation, Respondent,

International Snowmobile Racing, a Wisconsin corporation, Respondent,

International Snowmobile Manufacturers Association, a Michigan corporation, Respondent.

No. C4-02-530.

Supreme Court of Minnesota.

July 24, 2003.

Wood R. Foster, Jr., Jordan M. Lewis, Vickie L. Loher, Siegel, Brill, Greupner, Duffy & Foster, P.A., Minneapolis, MN, for appellants.

Annamarie A. Daley, Gary L. Wilson, Christopher A. Seidl, Robins, Kaplan, Miller & Ciresi, LLP, Minneapolis, MN, for respondent Arctic Cat Sales Inc.

George W. Soule, Daniel J. Brennan, Bowman & Brooke, LLP, Minneapolis, MN; and J. Robert Robertson, Andrew A. Kassof, Kirkland & Ellis, Chicago, IL, for respondent Polaris Sales, Inc.

Robert A. Schwartzbauer, Paul J. Robbenolt, Scott M. Stearns, Dorsey & Whitney LLP, Minneapolis, MN, for respondent Bombardier Motor Corporation of America.

James L. Volling, Jason K. Walbourn, Jesseca R.F. Grassley, Faegre & Benson LLP, Minneapolis, MN; and Theodore Whitehouse, Willkie, Farr & Gallagher, Washington, DC, for respondent Yamaha Motor Corporation, U.S.A.

Kay Nord Hunt, Stacey A. DeKalb, Stephen C. Rathke, Lommen, Nelson, Cole & Stageberg, P.A., Minneapolis, MN, for respondent International Snowmobile Manufacturers Association.

Heard, considered, and decided by the court en banc.

OPINION

HANSON, Justice.

Appellant Motorsports Racing Plus, Inc. (MRP) filed suit against the respondents, several snowmobile manufacturers and their trade association (Manufacturers), alleging antitrust violations and commercial torts. The district court determined that MRP had standing to bring the suit but granted summary judgment dismissing it because MRP had failed to present sufficient evidence to show injury in fact caused by Manufacturers. The court of appeals reversed the district court's determination on standing and remanded with directions to order summary judgment for Manufacturers on the issue of standing. We reverse the court of appeals on the issue of standing and remand to that court for further proceedings.

MRP is a Minnesota company that developed and operated a snowmobile racing circuit in the United States. The peak of MRP's business occurred in January 1998 when MRP reached an agreement with cable sports network ESPN to televise MRP's races as part of ESPN's Winter X-Games. Respondents are snowmobile manufacturers whose products gained exposure on MRP's racing circuit.

Around the time of the 1998 Winter X-Games, two contract agents of MRP, Joe Duncan and Scott O'Malley, twice offered to buy MRP from its owner, Jerome Dillon. Duncan and O'Malley had provided marketing services to MRP and were instrumental in the growth of the business and securing the relationship with ESPN. Dillon declined to sell. In March 1998, Duncan and O'Malley started their own snowmobile racing circuit, the World Snowmobile Association (WSA). ESPN immediately terminated its agreement to televise MRP races and negotiated an agreement with WSA to organize races for the 1999 Winter X-Games.

MRP's revenues dropped precipitously after it lost its agreement with ESPN. In July 1998, MRP sold the snowmobile racing circuit portion of its business to WSA under an Agreement to Acquire Snowmobile Racing Program (Agreement). As required by a non-competition clause that was part of the Agreement, MRP has been out of snowmobile racing since then.

Two provisions of the Agreement have received attention in this litigation. The first defined the assets being sold as follows:

1.1 "Assets" shall mean Snowmobile Racing Program, and all right to promote, sanction and operate MRP race dates; information regarding racers, officials, sponsors and site officials, including all electronic database information; all permits, all sponsor rights and any intangibles and goodwill related to the Snowmobile Racing Program, and race dates identified on Exhibit A.

(Emphasis added.) The second contained MRP's representation as follows:

6.6 Litigation. There are no claims, actions, suits, proceedings, or investigations (whether or not purportedly on behalf of Seller) pending or threatened against or affecting Seller or the Assets * * *. There is no reasonable basis for any claim, action, suit, proceeding, or investigation against or affecting Seller or the Assets.

(Emphasis added.)

MRP's complaint alleged that the defection of Duncan and O'Malley, the formation of WSA and the agreement between WSA and ESPN were all engineered pursuant to a conspiracy between Manufacturers, Duncan and O'Malley; that the conspirators' "motivation was simple: they believed they could pay less in advertising and sponsorship and increase their sales if they collectively controlled their own snocross racing circuit, built with the experience, background and contacts of the two former MRP representatives"; and that Manufacturers' actions violated Minnesota antitrust law and constituted the common law torts of interference with contractual relations, interference with prospective business advantage and civil conspiracy.

Manufacturers moved for summary judgment on the ground that MRP lacked standing to bring the action. Manufacturers made three arguments regarding standing: (1) that MRP had assigned all causes of action when it sold the snowmobile racing business to WSA; (2) that the quoted provisions of the Agreement expressly transferred all causes of action to WSA; and (3) that MRP failed to allege sufficient facts to show an injury in fact caused by Manufacturers.

The district court rejected Manufacturers' first two standing arguments. As to the third, the court agreed with Manufacturers that MRP had failed to allege sufficient facts to show anything more than "a theoretical dispute as to whether [Manufacturers] actually conspired against MRP to drive it out of business." The court concluded that, "[c]onsequently, MRP has no standing, and summary judgment [for Manufacturers] is proper here." Although the district court used the term "standing" to describe the legal basis for its decision, the court of appeals and all parties treat the district court's order as a conclusion that MRP did have standing but that MRP's failure to allege sufficient facts on causation of antitrust injury was a decision on the merits, not on standing. See Motorsports Racing Plus, Inc. v. Arctic Cat Sales, Inc., 653 N.W.2d 204, 205-06 (Minn.App.2002)

(MRP). We will adopt the same nomenclature, using the term "standing" to refer to the argument that MRP assigned all causes of action to WSA and the term "causation" to refer to the argument that MRP failed to show that it sustained injury in fact caused by Manufacturers.

The court of appeals did not address the causation arguments relied upon by the district court but instead held that MRP did not have standing to bring the suit because it sold its right to bring the suit to WSA. Id. at 207. The court based its ruling on the two contractual provisions quoted above and the decision in In re Milk Products Antitrust Litigation, 195 F.3d 430 (8th Cir.1999). MRP, 653 N.W.2d at 206-07.

MRP petitioned for review and Manufacturers filed a conditional cross-petition, asking us to also review the causation grounds for summary judgment if we reversed the court of appeals on standing. We granted MRP's petition but denied Manufacturers' cross-petition. Thus, the standing issue is before us, but the causation issue is not.

Although the court of appeals reversed the district court and vacated the summary judgment that the district court had entered on causation, the court of appeals' remand directed the district court to enter summary judgment dismissing MRP's complaint for lack of standing. Thus, our standard of review remains that applicable to a grant of summary judgment, which is reviewed de novo. Sentinel Mgmt. Co. v. Aetna Cas. & Sur. Co., 615 N.W.2d 819, 827 (Minn.2000). Further, for purposes of that review, we will accept as true the claim of MRP that Manufacturers conspired with Duncan and O'Malley to put MRP out of business, and that the sale to WSA was made at a discounted price that reflected the harm that the conspiracy had visited on MRP.¹

The question before us is whether MRP and WSA intended that the asset sale included the assignment to WSA of any antitrust or other commercial tort claims that MRP might have against Manufacturers. That question is not explicitly addressed in the Agreement. Further, there is no evidence that the subject was specifically discussed in the negotiations between MRP and WSA. In fact, WSA disclaims any knowledge that MRP was contemplating any claims and MRP argues that it did not learn of the factual basis for its claims until sometime after the Agreement was finalized. Thus, the question becomes whether the intent to assign the claims should be inferred from either the words that were used in the Agreement or the context in which they were used.

We have said that the primary goal of contract interpretation is to determine and enforce the intent of the parties. Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn.1979). Where the parties express their intent in unambiguous words, those words are to be given their plain and ordinary meaning. Minneapolis Pub. Hous. Auth. v. Lor, 591 N.W.2d 700, 704 (Minn.1999) (citing Bob Useldinger & Sons, Inc. v. Hangsleben, 505 N.W.2d 323, 328 (Minn.1993)). But those words are not to be viewed in isolation. Republic Nat'l Life Ins. Co. v. Lorraine Realty Corp., 279 N.W.2d 349, 354 (Minn.1979).

Intent is ascertained, not by a process of dissection in which words or phrases are isolated from their context, but rather from a process of synthesis in which the words and phrases are given a meaning in accordance with the

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