United Artists Communications, Inc. v. Corporate Property Investors, C4-87-302
| Decision Date | 04 August 1987 |
| Docket Number | No. C4-87-302,C4-87-302 |
| Citation | 410 N.W.2d 39 |
| Parties | UNITED ARTISTS COMMUNICATIONS, INC., Appellant, v. CORPORATE PROPERTY INVESTORS, et al., Respondents. |
| Court | Minnesota Court of Appeals |
Syllabus by the Court
Under the doctrine of merger, a prior oral agreement is integrated into the subsequent written agreement. The parol evidence rule prohibits consideration of evidence of any prior or contemporaneous oral agreement when that evidence contradicts or varies the terms of the written agreement.
Rolf E. Gilbertson, Seth M. Colton, Ruth S. Marcott, St. Paul, for appellant.
Margaret M. Van Valkenburg, James A. Rubenstein, Minneapolis, for respondents.
Heard, considered and decided by FOLEY, P.J., FORSBERG and CRIPPEN, JJ.
This appeal questions the trial court's conclusion, as a matter of law, that appellant failed to prove the parties entered into an enforceable oral modification of their lease. We affirm.
In 1974, appellant United Artists Communications entered into a 25-year written lease agreement with Homart Development Company. The lease required United Artists to pay dues of $.20 per square foot of its leased space per year to the Maplewood Mall Merchants' Association, payable monthly. This provision was "subject to annual upward adjustments approved by a two-thirds majority of the outstanding vote of the members of the Association."
In December 1980, the association membership voted to increase their dues to $.30 per square foot, effective February 1, 1981. Appellant disputed the validity of the vote authorizing the increase, and ceased paying all dues on December 15, 1980.
During 1981 and 1982, United Artists and Homart negotiated to modify the lease terms. The primary topics of discussion were the increased dues and United Artists' desire to install video games in its leased space. When Homart sold Maplewood Mall to respondent Corporate Property Investors (CPI) in January 1983, United Artists continued the negotiations with the successor lessor.
On August 5, 1983, the parties entered into a written modification of the original lease. The modification was drafted primarily to allow United Artists to install video games on the premises. The agreement also included an increase in association dues to $.30, but delayed the effective date of the increase to October 15, 1982. The written modification stated that the lease, "as herein modified and supplemented, is in all other respects fully ratified and confirmed."
Appellant then paid respondent CPI $13,881.66, the total amount that had accrued in dues since the association membership voted to increase dues to $.30 per square foot. Respondent in turn credited appellant with $3,230.94, to compensate for the negotiated delay in the increase.
In January 1985, the association membership voted to increase the dues obligation to $.65 per square foot. United Artists refused to pay the increase and continued to pay dues at $.30 per square foot. Appellant claimed it had reached an oral agreement with Homart in September 1982 with respect to increases in dues. Consistent with the August 1983 written modification to the lease, appellant claimed the oral modification provided for the increase to $.30, beginning October 1982. Appellant further claimed, however, that the alleged oral modification prohibited any subsequent increases in the dues obligation. Respondents denied any oral modification to the lease.
In December 1985, respondents gave appellant written notice of default under the lease, claiming unpaid dues in the amount of $6,454.92. Appellant then brought this declaratory judgment action, attempting to enforce the alleged oral modification to the lease. Respondents answered and brought a counterclaim for recovery of the unpaid due and attorney fees.
On respondents' motion for summary judgment, the trial court dismissed appellant's complaint with prejudice. The court based its ruling on two grounds: 1) that any alleged oral modification merged into the subsequent written modification; and 2) that, as a matter of fact, there was insufficient evidence of any oral modification. The court also granted summary judgment to respondents on their counterclaim, awarding $15,720.95 in damages for accrued dues and attorney fees. Finally, the court awarded respondents $5,922.47 in bad faith attorney fees.
Did the trial court properly dismiss appellant's complaint as a matter of law?
Summary judgment is proper when:
the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that either party is entitled to a judgment as a matter of law.
Minn.R.Civ.P. 56.03. In reviewing summary judgment, this court applies the same standard the trial court uses in deciding whether to grant summary judgment and determines (1) whether there are any genuine issues of material fact and (2) whether the trial court erred in its application of the law. Lindner v. Lund, 352 N.W.2d 68, 70 (Minn.Ct.App.1984) (citing Betlach v. Wayzata Condominium, 281 N.W.2d 328, 330 (Minn.1979)).
A prior oral agreement merges with and is integrated into the subsequent written agreement. Lehman v. Stout, 261 Minn. 384, 389-91, 112 N.W.2d 640, 643-45 (1961); Restatement (Second) of Contracts Sec. 209(3) (1981) (). The parol evidence rule, which is "closely allied" to the doctrine of integration, Lehman, 261 Minn. at 389, 112 N.W.2d at 644, prohibits consideration of evidence of any prior or contemporaneous oral agreement when that evidence contradicts or varies the terms of the written agreement. Material Movers, Inc. v. Hill, 316 N.W.2d 13, 17 (Minn.1982); Restatement (Second) of Contracts Sec. 215 (1981).
The trial court found that the August 1983 written modification to the lease was incorporated into the original lease. The court found insufficient evidence of any oral modification, and further found that any such oral modification would merge into the subsequent written modification. The question of whether a contract is completely integrated and not subject to variance by parol evidence is for the trial court. Taylor v. More, 195 Minn. 448, 454-55, 263 N.W. 537, 540 (1935) (); Restatement (Second) of Contracts Sec. 209(2) (1981).
The trial court's determination on merger is supported by the statements in...
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