Opinion
No. C0-01-2166.
Filed July 2, 2002.
Appeal from the District Court, Anoka County, File No. C4-01-2019.
Frederic W. Knaak, (for appellant)
Philip R. Mahowald, (for respondent)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Respondent prevailed in a breach of contract action against appellant. Appellant challenges the district court's award of damages to respondent, arguing that the record does not support the amount of damages awarded and that the court failed to make findings as to damages. We affirm.
FACTS
Appellant Hire-Power.com is in the business of developing web sites for employers seeking to recruit new employees via the Internet. Respondent Border Foods, Inc., is in the fast-food business. On January 24, 2000, appellant and respondent entered into a contract. Under the terms of the contract, respondent paid appellant $10,000, and appellant agreed to provide various services for respondent including creating a web site, promoting the web site, and advertising respondent's job positions. The term of the agreement was from January 24, 2000 to January 1, 2001. The "Web Service Agreement" provides that appellant would "advertise each and every position placed in the database at hundreds of recruitment web sites on the Internet every working day for the [contract] period," would index respondent's "homepage at over 900 search engines and directories annually," and would place the site on approximately 500 promotional sites announcing new web pages. Respondent does not dispute that appellant created a web site under the terms of the contract.
In August 2000, respondent commenced a conciliation court action against appellant, alleging that appellant failed to provide services under the parties' contract and requesting $7,5000 in damages, the jurisdictional limit in conciliation court. See Minn. Stat. § 491A.01, subd. 3 (2000) (defining conciliation court jurisdiction for claims not exceeding $7,500). Because appellant failed to appear, the court entered default judgment against appellant. Appellant challenged the judgment that was vacated, and a trial was held on April 16, 2001, and June 1, 2001. At trial, respondent asserted that appellant failed to advertise its job positions or index its web site according to the contract's terms. One significant issue was whether respondent's job postings should be listed on Monster.com under the terms of the parties' contract.
In September 2001, the district court issued its findings of fact, conclusion of law, and order for judgment, concluding that appellant breached the terms of the contract with respondent and that respondent incurred damages of $7,500. This appeal follows.
DECISION
On appeal from a judgment where no motion for a new trial was made, "appellate review is limited to examining whether the evidence supports the findings of fact and whether those findings support the conclusions of law." Schweich v. Ziegler, Inc., 463 N.W.2d 722, 730 (Minn. 1990) (citation omitted). Appellate courts view the record in the light most favorable to the district court's judgment and will not disturb the findings if "there is reasonable evidence to support the district court's findings." Rogers v. Moore, 603 N.W.2d 650, 656 (Minn. 1999) (citation omitted).
First, appellant asserts that the evidence does not support the district court's findings of fact and conclusion of law that respondent suffered $7,500 in damages. We disagree.
In a breach of contract action, the plaintiff has the burden to prove breach and that damages arose from the breach. D.H. Blattner Sons, Inc. v. Firemen's Ins. Co. of Newark, New Jersey, 535 N.W.2d 671, 675 (Minn.App. 1995), review denied (Minn. Oct. 18, 1995). The district court found that appellant failed to advertise each and every one of respondent's job positions on hundreds of recruitment web sites and failed to index respondent's homepage at over 900 search engines, and, thus, that appellant breached the terms of its agreement. The evidence shows that appellant did post some job applications on recruitment web sites, but on several occasions, respondent checked numerous recruitment web sites and search engines but failed to find its job postings or web site listed. Because appellant alleged it could easily prove that it complied with the contract but failed to produce such evidence at trial, the district court made a permitted adverse inference. See Connolly v. Nicollet Hotel, 248 Minn. 405, 414, 104 N.W.2d 721, 728 (1960) (recognizing when party fails to produce evidence that presumably would be favorable to him, fact-finder may draw inference unfavorable to such party). Appellate courts afford great deference to the fact-finder's determination of the credibility of witnesses. Hasnudeen v. Onan Corp., 552 N.W.2d 555, 557 (Minn. 1996). Notably, appellant does not challenge the district court's conclusion that it breached the contract.
Having established breach, respondent "has the burden of proving the extent of his damages." Barbarossa Sons, Inc. v. Iten Chevrolet, Inc., 265 N.W.2d 655, 663 (Minn. 1978). Damages that are remote, conjectural, or speculative may not be recovered. Carpenter v. Nelson, 257 Minn. 424, 428, 101 N.W.2d 918, 921 (1960). But damages need not be proved with certainty; it is legally sufficient that a reasonable basis for approximating loss is shown. Polaris Indus. v. Plastics, Inc., 299 N.W.2d 414, 419 (Minn. 1980). An appellate court reviews a district court's award of damages under an abuse-of-discretion standard. Holiday Recreational Indus., Inc. v. Manheim Servs. Corp., 599 N.W.2d 179, 183 (Minn.App. 1999). The district court's findings on damages will not be reversed unless clearly erroneous. Id.
The record shows that respondent paid $10,000 for services that it did not receive. Respondent paid another company $250 to list its web site on various search engines in April 2000 because appellant failed to do so, and in August 2000, respondent placed one job posting on Monster.com at a cost of $250 for one month and received 15 completed job applications. The parties do not dispute that respondent's five or six job postings promoted by appellant resulted in a total of 69 job applications from March 10, 2000, to October 25, 2000. The parties also do not dispute that Monster.com is the "single largest traffic site for job postings on the internet." The president and general manager of appellant's parent company testified that the contract price was $10,000 and that the value of the services that respondent sought under the contract (postings on Monster.com) would cost "anywhere from $20,000 to $65,000" and that it would exceed the contract price of $10,000. And while not explicitly stating that the contract required appellant to post respondent's job positions on Monster.com, the court implied such in its findings and conclusion. We conclude respondent presented sufficient evidence regarding damages and breach to establish a prima facie case of breach of contract.
After respondent established a prima facie case of breach of contract, appellant had the burden to convince the fact-finder that the claimed damages were unreasonable or that appellant was entitled to a quantum meruit set off for some services rendered. See Pine Valley Meats, Inc. v. Canal Capital Corp., 566 N.W.2d 357, 364 (Minn.App. 1997) (recognizing that defendant in breach of contract action has burden to convince fact-finder that claimed damages are unreasonable), review denied (Minn. Sept. 18, 1997), overruled on other grounds by Myers v. Hearth Techs., Inc., 621 N.W.2d 787, 794 (Minn.App. 2001), review denied (Minn. Mar. 13, 2001). Appellant failed to introduce any evidence to establish the value of the services it provided under the contract, namely the value of the web site it created and the value of the indexing and posting that it alleged it performed. Accordingly, appellant did not establish that respondent's claimed damages were unreasonable. "Just as the determination of credibility is a function of the [fact-finder], so too is the determination of damages." Johnson v. Ramsey County, 424 N.W.2d 800, 804-05 (Minn.App. 1988), review denied (Minn. Aug. 24, 1988). We conclude the district court's damage award was within its discretion.
We note this dispute is essentially an advertising case; appellant was hired to advertise and promote respondent's job positions on the internet. When an advertiser breaches a contract to take specific advertising space, the prima facie measure of damages is the contract price less the cost of furnishing the service. See Morton v. Griggs, Cooper Co., 162 Minn. 436, 439, 203 N.W. 218, 219 (1925) (recognizing where plaintiff billboard owner sued defendant who agreed to advertise on plaintiff's billboards, plaintiff was entitled to contract price less cost of performing unperformed part of contract, less any offsets to which defendant may show it was entitled); Barron G. Collier, Inc. v. Women's Garment Store, 152 Minn. 475, 475, 189 N.W. 403, 403 (1922) (recognizing prima facie damages were contract price where defendant breached agreement to rent space to advertise its business from plaintiff who agreed to carry defendant's advertisement in designated space in streetcars); Barron G. Collier, Inc. v. Kindy, 146 Minn. 279, 281, 178 N.W. 584, 584-85 (1920) (recognizing that in case where plaintiff agreed to place defendant's advertisement in certain streetcars leased by plaintiff, advertising contract is like contract of employment and is governed by similar principles, prima facie measure of damages is contract price less cost of furnishing service, defendant was entitled to off set if plaintiff obtained other compensation from space, and burden as to such matter was on defendant). Although Morton, Women's Garment Store, and Kindy involved a breach by the company whose product was advertised rather than the company who placed the ads for public viewing (a "lost-profits" case), we find these cases persuasive here. Appellant, who was obligated under the contract to place the positions for public viewing, breached the contract, and, thus, the prima facie showing of damages is the amount of the contract, $10,000. And as in Kindy, appellant then had the burden to show it was entitled to have any amount deducted from contract price, namely the value of the services it performed under the contract. Appellant failed to produce such evidence.
Next, appellant argues that a remand is required because the district court did not make specific findings of fact regarding damages. Minn.R.Civ.P. 52.01 requires that the court "find the facts specially and state separately its conclusions of law thereon * * *." One purpose of Rule 52.01 "is to aid the appellate court by affording it a clear understanding of the ground or basis of the decision, and * * * the absence of findings may be disregarded by the appellate court if the record is so clear that the court does not need their aid." Asch v. Hous. Redev. Auth. of City of St. Paul, 256 Minn. 146, 155-56, 97 N.W.2d 656, 664-655 (1959). Usually failure to include findings requires reversal, but "findings are not required when the decision necessarily decides all the disputed facts." Minneapolis Cmty. Dev. Agency v. Mark Lee Prods., Inc., 411 N.W.2d 599, 601 (Minn.App. 1987) (concluding that even though district court did not make findings of whether tenant received ten-day notice and on what date landlord received rent check, court's conclusion that tenant had not been in default necessarily decided that issue in favor of tenant).
A review of the record reveals that the district court did not make specific findings regarding damages suffered by respondent but only concluded, "The [respondent] incurred damages in the amount of $7,500." Because respondent established a prima facie case of breach of contract, and because in an advertising breach of contract case, the prima facie measure of damages is the contract price, the record is sufficiently clear to render any error in failing to make more detailed findings harmless. Additionally, appellant presented no evidence of the value of the services it performed. No findings in favor of appellant would have been justified on this issue. See Cool v. Hubbard, 293 Minn. 349, 355, 199 N.W.2d 510, 513 n. 1 (1972) (recognizing if no findings in favor of appellant would have been justified, district court's failure to make findings is harmless error).