Wild v. Rarig, 44238

Citation302 Minn. 419,234 N.W.2d 775
Decision Date10 January 1975
Docket NumberNo. 44238,44238
PartiesJohn J. WILD, M.D., Respondent, v. Frank M. RARIG, et al., Appellants.
CourtSupreme Court of Minnesota (US)

Syllabus by the Court

1. Where the prejudicial misconduct of plaintiff and of counsel for both parties permeated the proceedings in the trial court and was of such serious and pervasive nature as to deny the litigants a fair trial, the trial court committed an abuse of discretion in denying defendants' motion for a new trial through defendants had failed to object to some of the incidents of misconduct and though the trial court had in other instances given cautionary instructions to the jury.

2. Though this court will not normally discuss other contentions of the parties after granting a new trial on one ground, where the law governing the issues raised by the parties was unclear and the trial court would be called upon the rule upon these issues upon retrial, this court may exercise its discretion under Rules of Civil Appellate Procedure, Rule 103.04, and review a number of issues so as to avoid another appeal.

3. The admission of opinion testimony by plaintiff, a layman, that defendant had breached a contract allegedly existing between the parties was error, for the testimony went to an ultimate fact issue and invaded the province of the jury.

4. Where plaintiff researcher and defendant foundation-administrator agreed at the time of application for a Public Health Service research grant that the expenditure of funds would be governed by Public Health Service policies and where the notification of grant award stated that the grantee was obligated to administer funds in accordance with Public Health Service policies, the trial court erred in excluding from evidence a 1963 Public Health Service Grants Manual which contained provisions governing termination of research projects by the grantee institution which provisions were relevant to the issue of the propriety of defendant's termination of plaintiff's research project, and in ruling that a contract was in existence and that the proffered exhibit would alter the terms of that contract, thereby improperly taking a fact issue from the jury.

5. Where evidence was not conclusive on the question of whether the relationship between plaintiff and defendant was that of employer-employee or independent contractors, the issue was for the jury, and an instruction that plaintiff was not an employee was erroneous.

6. Damages for breach of contract are limited to the actual damages flowing from the breach unless the breach constitutes, or is accompanied by, an independent tort, and a plaintiff is not entitled to recover a tort measure of damages for the malicious breach of an implied covenant of good faith.

7. Though the tort of wrongful interference with business relationships as a property tort is generally included in Minn.St. 541.05, the 6-year statute of limitations, rather than Minn.St. 541.07, the 2-year statute of limitations, where the cause of action for interference with business relationships arises out of defendant's defamation of the plaintiff, the 2-year statute of limitations applicable to the defamation claim will be applied to the interference-with-business-relations claim as well.

8. Where a fact question existed as to whether defendants had fraudulently concealed a continuing conspiracy to defame the plaintiff, the trial court upon retrial should apply to the facts the general rule that fraudulent concealment, consisting of an affirmative statement or act which is designed to and does prevent discovery of a cause of action, will toll the statute of limitations either until discovery of the existence of the cause of action or until reasonable opportunity for discovery by the exercise of ordinary diligence.

9. Deposition of an out-of-state resident containing assertions that another person unavailable to testify had attended a meeting of a hospital research committee at which defendant Rarig made disparaging remarks about plaintiff, which remarks allegedly formed the basis for the hospital's refusal to sponsor plaintiff's research project, was hearsay and not within an exception to the hearsay rule and thus its admission, if permitted for use as substantive evidence, was erroneous.

10. By placing into evidence the deposition of a person who was unavailable to testify, plaintiff made the deponent his witness under Rules of Civil Procedure, Rule 26.06, and thus admission of plaintiff's impeachment evidence showing prior inconsistent statements by deponent was improper as plaintiff was not genuinely surprised.

11. A letter written by three members of plaintiff's scientific staff criticizing plaintiff's competence as director of the staff was properly excluded as hearsay and was not admissible as a business record under Minn.St. 600.02, as it is not the type of record entry which is regularly and systematically kept and, therefore, likely to be reasonably trustworthy.

12. A witness' testimony as to statements made by a person [302 Minn. 422] now deceased which in turn related comments allegedly made by a member of a foundation board concerning the reasons for the foundation's termination of plaintiff's research project was double hearsay, did not come within an exception to the hearsay rule, and thus was improperly admitted as substantive evidence.

13. Where a witness testified that he had no recollection of a 1963 telephone conversation regarding plaintiff with a Minneapolis attorney now deceased, testimony of a person present in the office of the deceased attorney at the time of the alleged conversation recounting the deceased attorney's summary of the conversation was improperly admitted as impeachment evidence, as no foundation was laid to establish the identity of the person on the other end of the telephone conversation.

Dorsey, Marquart, Windhorst, West & Halladay and William P. Luther and Robert L. Hobbins, Minneapolis, Altman, Geraghty, Mulally & Weiss and James W. Kenney, St. Paul, for appellants.

James Malcolm Williams and John Remington Graham, Minneapolis, for respondent.

[302 Minn. 423] Considered and decided by the court en banc. *


This is an appeal from a judgment and from an order denying a new trial. We reverse and grant a new trial with directions.

On December 3, 1966, Dr. John J. Wild, a research scientist, commenced a multiple-count action seeking combined damages of $35,000,000 against Amherst H. Wilder Foundation and Minnesota Foundation, both Minnesota nonprofit corporations, and against Frank M. Rarig and Julian Baird. Frank Rarig was executive director and secretary and Julian Baird was president of each respective foundation. In essence, the complaint contended that Dr. Wild was developing ultrasonic techniques to detect cancer in women's breasts and that the defendants were liable for contract and tort damages allegedly resulting from the manner in which Minnesota Foundation, as the grantee institution, withdrew its sponsorship from a cancer research grant awarded by the United States Public Health Service

to Minnesota Foundation and Dr. Wild, who was the project's principal investigator

Specifically Dr. Wild contended that Minnesota Foundation had breached its contract with him by withdrawing sponsorship; that the defendants were negligent in handling the administration of the grant from the Public Health Service; that defendants unreasonably interfered with the administration of the grant by attacking the scientific and professional standing of Dr. Wild as principal investigator of the project, by attempting to interfere with his laboratory staff, and, finally, by attempting to destroy the cancer project and Dr. Wild's scientific reputation; that in the process the defendants interfered with Dr. Wild's prospective business and professional advantages; that the defendants[302 Minn. 424] had defamed Dr. Wild in communications to the Public Health Service, Mount Sinai Hospital, and others; and that punitive damages were called for because of defendants' malicious behavior.

On January 4, 1967, the defendants individually answered the complaint, denying liability and pleading as an affirmative defense to the tort claims the 2-year statute of limitations found in Minn.St. 541.07.

On October 16, 1972, the case came to trial before a jury in Hennepin County District Court. At the close of the case, the parties' motions for directed verdict were denied, but defendant Baird was dismissed from the case. 1 Final arguments and instructions were given on Monday, November 27, 1972. The trial court submitted to the jury four causes of action: (1) Breach of contract, (2) bad-faith termination of contract, (3) interference with contract and professional business relationships, and (4) defamation of plaintiff. The negligence cause of action was not submitted to the jury. The court instructed as a matter of law that Dr. Wild was not an employee of Minnesota Foundation and that both foundations were liable for the acts of their agent, Rarig.

On December 6, 1972, the trial court signed its order for judgment, pursuant to the jury's special verdict, against defendants Rarig, Minnesota Foundation, and Wilder Foundation, in the cumulative amount of $16,277,300, of which $5,452,300 was for compensatory damages and $10,825,000 was for punitive damages. 2 The defendants' motions for judgment notwithstanding [302 Minn. 425] the special verdict and for amended findings or, in the alternative, for a new trial were denied on January 19, 1973. After judgment was entered and filed, defendants appealed to this court. On March 12, 1973, the justices of the supreme court recused themselves because of possible conflicts of interest. 3 Subsequently, a temporary body

of nine district judges was appointed to sit on this case. 4

[302 Minn. 426] Dr. Wild, a native of England and holder of numerous degrees from Cambridge, is licensed...

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