Peters v. Mutual Ben. Life Ins. Co., No. C6-87-1564

CourtCourt of Appeals of Minnesota
Writing for the CourtLANSING
Citation420 N.W.2d 908
PartiesJohn A. PETERS, Respondent, v. The MUTUAL BENEFIT LIFE INSURANCE COMPANY, Appellant.
Docket NumberNo. C6-87-1564
Decision Date08 March 1988

Page 908

420 N.W.2d 908
John A. PETERS, Respondent,
v.
The MUTUAL BENEFIT LIFE INSURANCE COMPANY, Appellant.
No. C6-87-1564.
Court of Appeals of Minnesota.
March 8, 1988.

Page 910

Syllabus by the Court

1. Evidence of offer, acceptance, and consideration was sufficient to support finding that contract had been modified.

2. Omissions in jury instructions were not prejudicial.

3. Statute of frauds does not bar contract modification capable of performance in one year.

4. When varying terms of contract were at issue and actually litigated, awardable damages were not limited to only the contract terms alleged in the complaint.

5. Denial of new trial for excessive damages not an abuse of discretion when evidence supported award.

6. Evidentiary rulings were not an abuse of discretion requiring a new trial.

Steve G. Heikens, Minneapolis, for respondent.

Steven R. Anderson, Bruce Jones, Faegre & Benson, Minneapolis, for appellant.

Heard, considered, and decided by RANDALL, P.J., and LANSING and MULALLY *, JJ.

OPINION

LANSING, Judge.

John Peters brought this action for breach of contract, misrepresentation, and unjust enrichment following the termination of his position as general agent for appellant Mutual Benefit Life Insurance Company. Peters dismissed the unjust enrichment

Page 911

claim before trial, and the trial court dismissed the misrepresentation claim at the close of plaintiff's case. The jury returned a verdict in Peters' favor on the breach of contract claim, and Mutual Benefit appeals the trial court's denial of its motion for judgment notwithstanding the verdict or a new trial. We affirm.
FACTS

In June 1977 John Peters and Mutual Benefit executed a written general agency contract by which Peters was given the exclusive right to sell Mutual Benefit insurance in the Minneapolis region in exchange for devoting his entire energies to Mutual Benefit's business. The contract allowed Mutual Benefit to terminate the agency without cause on two months' notice.

As general agent, Peters was not a Mutual Benefit employee; he ran his own office and hired agents in return for "overrides" based on the commissions generated by the office. Mutual Benefit maintained a separate group insurance office in the Minneapolis area, staffed by Mutual Benefit employees, from which Peters also received overrides on group premiums.

In 1976, Mutual Benefit began developing a "Going Concern Value" program under which new general agents would pay outgoing general agents a sum of money for the going concern value or "goodwill" of the agency. The purpose of the program was to encourage general agents who were approaching retirement age to continue to invest their resources in promoting the business and training new agents.

At a 1977 general agents' annual meeting, which Peters attended, Mutual Benefit vice president John Mascotte presented the program and distributed a handout outlining it, although he stated that it would not be finalized until it was approved by the State of New York. The handout described the program as based on the premise that an incoming agent would be willing to pay for obtaining an ongoing agency and that the program's developers believed

that an incoming general agent would be inclined to pay an amount equal to the present value of at least three years of overrides for the privilege of acquiring the manpower represented by dollars of commission base in excess of $100,000.

The handout also set forth a specific formula by which "Going Concern Value" (GCV) would be calculated.

At another general agents' meeting in March 1978, Mascotte announced that New York had approved the program and it was now official company policy that "no one can become a general agent in this company unless he or she agrees to pay at least as much money as this formula throws off in order to become a general agent." Peters testified that he understood this announcement to mean that the GCV formula merely established a minimum price and that a new general agent would not be appointed unless he and the incoming agent agreed on a price. He also understood that he could refuse to transfer the agency to someone who would pay only the minimum established by formula. Although Peters testified that he did not change the way he ran his agency in reliance on the program, he continued to reinvest his profits into the agency.

By March 1979, the final details of the program had been worked out and the general agents' contracts were formally amended to incorporate the program. There was evidence, however, that going concern value had been paid on agency transfers before that date.

In May 1978 Mutual Benefit officials told Peters that his agency was being terminated. When Peters pointed out that the contract required 60 days' notice, the termination date was extended to August 1978. However, because Mutual Benefit refused to pay operating allowances, Peters agreed in July to a resignation backdated to June 15, 1978.

A Mutual Benefit vice president, James Peterson, succeeded Peters as general agent. Although he testified that he was willing to pay Peters the GCV as determined

Page 912

by formula, he did not make a specific offer until January 1979, when he offered approximately $12,000--Mutual Benefit's calculation of GCV. In an earlier calculation, Mutual Benefit had estimated GCV at $38,588. Its final calculation of the GCV formula in March 1979 was $35,859.

Peters' complaint alleged that Mutual Benefit breached its agreement to "pay or cause to be paid * * * a sum in cash equal to the 'Going Concern Value' " which was "to be determined in accordance with a formula set out in the contract" (emphasis added). Peters' misrepresentation claim was similarly based on a plan that would pay a general agent cash equal to the GCV at the time of termination. The misrepresentation claim further alleged damages of $404,500 for Mutual Benefit's failure to compensate Peters for the going concern value.

Although Peters did not amend his complaint, by trial he had revised his position on the terms of the compensation plan. Peters' pretrial memorandum characterized the contract as providing that

Mutual would help find a buyer and allow Peters to negotiate a sum using the going concern value as a minimum. Damages in this breach of contract case are the amount Plaintiff would have received in a sale of the general agency to a third party, using the going concern value as a minimum and with Mutual's guarantee that no new general agent would be allowed to start without an agreement with Peters on its purchase price.

(Emphasis in original).

In response, Mutual Benefit made a motion in limine to prevent Peters from producing "any evidence as to any method of calculating the 'Going Concern Value' of plaintiff's general agency other than the formula established by defendant." Mutual Benefit did not attempt to limit evidence on the terms of the alleged contract. At the hearing on this motion, Peters' attorney acknowledged the constraint of the pleadings, but argued that other evidence of value was relevant to the misrepresentation claim and also to show how value should have been calculated under the formula in the breach of contract claim. The trial court denied the motion in limine without stating its reasons.

At the close of Peters' case, Mutual Benefit moved for a directed verdict on all remaining counts, and the trial court granted the motion on the misrepresentation claim, again without stating its reasons. The jury returned a $365,000 verdict for Peters on the breach of contract count, and Mutual Benefit moved for judgment notwithstanding the verdict or a new trial. Appeal is from denial of that motion.

ISSUES

1. Was the evidence sufficient to support a finding of modification of Peters' agency contract to incorporate the GCV program?

2. Is a new trial required because of erroneous instructions on contract formation?

3. Does the statute of frauds bar modification of the contract?

4. Was the jury properly instructed on the issue of damages?

5. Was the damage award excessive and unsupported by the evidence?

6. Did the trial court's evidentiary rulings constitute an abuse of discretion?

ANALYSIS
I

In its special verdict, the jury found that Peters and Mutual Benefit had formed a contract which would allow Peters to receive payment of money upon the termination of his general agency. Mutual Benefit argues that this finding is unsupported by any evidence of offer, acceptance and consideration.

Generally speaking, a promise is an offer if it is made with the intent to

Page 913

reach a binding agreement. See Cederstrand v. Lutheran Brotherhood, 263 Minn. 520, 532, 117 N.W.2d 213, 221 (1962); 1 Corbin on Contracts Sec. 11 (1963). The intention of a party to make an offer is to be determined by outward manifestations,...

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45 practice notes
  • In re RFC & Rescap Liquidating Trust Action, Case No. 13-cv-3351 (SRN/HB)
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Minnesota
    • August 15, 2018
    ...amount which will place the plaintiff in the same situation as if the contract had been performed." Peters v. Mut. Ben. Life Ins. Co. , 420 N.W.2d 908, 915 (Minn. Ct. App. 1988). In a breach of contract case, the plaintiff "is limited to damages flowing only from such breach," Eklund v. Vin......
  • Njema v. Wells Fargo Bank, N.A., Case No. 13–CV–0519 (PJS/JSM).
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Minnesota
    • August 18, 2015
    ...v. Sherwood, 21 Minn. 225, 232 (1875) ; Kellogg v. Woods, 720 N.W.2d 845, 853 (Minn.Ct.App.2006) ; Peters v. Mut. Benefit Life Ins. Co., 420 N.W.2d 908, 915 (Minn.Ct.App.1988). In other words, to determine whether the plaintiff has been damaged by a breach of contract, the Court compares wh......
  • Ford v. AEFA, No. 20020550.
    • United States
    • Utah Supreme Court
    • August 20, 2004
    ...may neither be changed nor revoked once the offeree begins the performance requested by the offer." Peters v. Mut. Benefit Life Ins. Co., 420 N.W.2d 908, 914 (Minn.Ct.App.1988). "Where an employer represents in a written document distributed to employees that an employee will receive benefi......
  • Vfd Consulting, Inc. v. 21ST Services, No. C 04-2161 SBA.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • March 15, 2006
    ...unless the parties "agree with reasonable certainty about the same thing and on the same terms." Peters v. Mut. Ben. Life Ins. Co., 420 N.W.2d 908, 914 (Minn.Ct. App.1988). Here, there is no evidence that the parties reached agreement on the fundamental terms of the contract. Jensen v. Taco......
  • Request a trial to view additional results
45 cases
  • In re RFC & Rescap Liquidating Trust Action, Case No. 13-cv-3351 (SRN/HB)
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Minnesota
    • August 15, 2018
    ...amount which will place the plaintiff in the same situation as if the contract had been performed." Peters v. Mut. Ben. Life Ins. Co. , 420 N.W.2d 908, 915 (Minn. Ct. App. 1988). In a breach of contract case, the plaintiff "is limited to damages flowing only from such breach," Eklund v. Vin......
  • Njema v. Wells Fargo Bank, N.A., Case No. 13–CV–0519 (PJS/JSM).
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Minnesota
    • August 18, 2015
    ...v. Sherwood, 21 Minn. 225, 232 (1875) ; Kellogg v. Woods, 720 N.W.2d 845, 853 (Minn.Ct.App.2006) ; Peters v. Mut. Benefit Life Ins. Co., 420 N.W.2d 908, 915 (Minn.Ct.App.1988). In other words, to determine whether the plaintiff has been damaged by a breach of contract, the Court compares wh......
  • Ford v. AEFA, No. 20020550.
    • United States
    • Utah Supreme Court
    • August 20, 2004
    ...may neither be changed nor revoked once the offeree begins the performance requested by the offer." Peters v. Mut. Benefit Life Ins. Co., 420 N.W.2d 908, 914 (Minn.Ct.App.1988). "Where an employer represents in a written document distributed to employees that an employee will receive benefi......
  • Vfd Consulting, Inc. v. 21ST Services, No. C 04-2161 SBA.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • March 15, 2006
    ...unless the parties "agree with reasonable certainty about the same thing and on the same terms." Peters v. Mut. Ben. Life Ins. Co., 420 N.W.2d 908, 914 (Minn.Ct. App.1988). Here, there is no evidence that the parties reached agreement on the fundamental terms of the contract. Jensen v. Taco......
  • Request a trial to view additional results

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