Opinion
No. C7-95-2557.
Filed June 11, 1996.
Appeal from the District Court, Hennepin County, File No. 954584.
Keith S. Moheban, Robert Lewis Barrows, Leonard, Street Deinard, P.A., (for Respondent).
Scott G. Harris, Skolnick Harris, P.A., (for Appellant).
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1994).
UNPUBLISHED OPINION
The district court granted summary judgment in favor of respondent Estate of Larry Sheldon Groll (the estate), concluding that Groll's right to payment under a noncompete agreement with appellant Bellboy Corporation validly passed to his estate. We affirm.
FACTS
Groll was part owner and operator of Minnesota Bar Supply for nearly 30 years. After learning he had cancer, he sold the assets and inventory of the business to Bellboy, a food and liquor distributor, in the summer of 1994. Martin Bell is the owner and president of Bellboy.
In addition to being paid for the assets and inventory, Groll wanted a payment to himself. The parties agreed that Groll would receive $100,000. On July 5, 1994, they signed a purchase agreement providing that Groll would be retained as a consultant and receive $50,000 per year for two years. It further provided that even if Groll was unable to carry out his duties, he would continue to receive the salary.
Bell then changed the agreement so that Groll's compensation was in the form of a noncompete provision rather than a consulting agreement. On July 12, 1994, the parties signed this second agreement, identical to the July 5th agreement except for the noncompete provision. The relevant portion of the agreement provided:
By virtue of this Agreement, and in consideration of the total payment of One Hundred Thousand ($100,000.00) Dollars, payable at Fifty Thousand ($50,000.00) Dollars per year, and in equal monthly installments, with the first payment due at the closing of this Agreement, Larry S. Groll agrees not to compete in the geographical areas of Hennepin County and Ramsey County, Minnesota, for a period of three years. This amount will be secured by an acceptable letter of credit provided by buyer to Larry S. Groll.
Pursuant to the agreement, Bellboy made payments to Groll through October 11, 1994. Groll died on October 13, 1994. Upon learning of Groll's death, Bellboy ceased making payments.
The estate commenced this action to collect the installments due under the noncompete provision. The district court granted the estate's motion for summary judgment.
DECISION
On appeal from summary judgment, we ask whether there are any genuine issues of material fact and whether the district court erred in applying the law. State by Cooper v. French , 460 N.W.2d 2, 4 (Minn. 1990). We "view the evidence in the light most favorable to the party against whom judgment was granted." Fabio v. Bellomo , 504 N.W.2d 758, 761 (Minn. 1993). The effect and construction of a contract is a question of law and we need not defer to the district court's conclusions. Frost-Benco Elec. Ass'n v. Minnesota Pub. Utils. Comm'n , 358 N.W.2d 639, 642 (Minn. 1984); Turner v. Alpha Phi Sorority House , 276 N.W.2d 63, 66 (Minn. 1979).
The original July 5th agreement between the parties provided that Groll would serve as a consultant to Bellboy. To avoid the expenses Bellboy potentially faced if Groll were viewed as an employee, Bellboy decided that the transaction would take the form of a noncompete agreement. Thus, the July 12th contract had, in effect, three parts: (1) the sale of the assets and inventory of Minnesota Bar Supply, (2) payments totaling $100,000 to Groll, and (3) the noncompete agreement.
Groll's death does not prevent the estate from collecting on the second part of the contract. "Contract rights survive in Minnesota unless personal in nature." Nelson v. Hacking , 225 Minn. 125, 128, 29 N.W.2d 888, 890 (1947). Death does not terminate an obligation. Id. at 129, 29 N.W.2d at 890. While we recognize that contracts for personal services can ordinarily only be performed by the person who contracted to render them, nothing in the noncompete agreement suggests that Groll was obligated to perform any services. See Egner v. States Realty Co. , 223 Minn. 305, 312, 26 N.W.2d 464, 469 (1947) (observing that person who contracts to perform personal services is only one who can perform them).
We also conclude that there is no failure of consideration. Bell himself testified that he got everything he had coming under the contract. When asked, "Is it a fair statement that you got everything you bargained for in this agreement," Bell replied, "I believe so."
We reject Bellboy's argument that the trial court erred by considering extrinsic evidence in its construction of the noncompete agreement because Bellboy did not object to the court's consideration of this evidence. In fact, Bellboy relied on deposition testimony of its president and controller throughout its memorandum to the district court. Because Bellboy itself relied on extrinsic evidence in making its arguments, it is hardly in position to now complain that the estate's arguments regarding such evidence are improper. See DeCintio v. Westchester County Medical Ctr. , 821 F.2d 111, 114 (2d Cir. 1987) (holding that where both parties included unsworn attachments to affidavits in summary judgment proceeding, it would be inappropriate to disregard appellant's unsworn statements because court considered similarly defective documents tendered by respondents), cert. denied , 484 U.S. 965 (1987).