Opinion
No. C0-97-1769.
Filed March 31, 1998.
Appeal from the District Court, Blue Earth County, File No. C8941236.
Scott A. Smith, Hinshaw Culbertson, and
Donald L. Mrozek, Julian C. Campbell, Daniel K. Ryan, Hinshaw Culbertson, (for respondent Security Continental Insurance Company)
Clarance E. Hagglund, William C. Weeding, Hagglund Weimer, and
Jeffrey I. Bleiweis, (for appellant Beaven/Inter-American Companies)
Considered and decided by Lansing, Presiding Judge, Crippen, Judge, and Kalitowski, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
Appellant Beaven Companies (Beaven) challenges the grant of summary judgment to respondent Security Continental Insurance Company (Security). Beaven contends the district court erred in concluding: (1) Security is an intended beneficiary of a stock purchase agreement with the right to enforce the agreement; (2) the stock purchase agreement does not time-bar the suit; and (3) there is no reason to delay enforcement of the district court's order. We affirm.
DECISION
In reviewing the grant of summary judgment, this court determines whether any genuine issues of material fact exist, and whether the district court erred in applying the law. State by Cooper v. French , 460 N.W.2d 2, 4 (Minn. 1990). The interpretation of a clear and unambiguous contract is a matter of law for the court. Tishman Midwest Management Corp v. Wayne Jarvis, Ltd. , 500 N.E.2d 431, 434 (Ill.App.Ct. 1986).
I.
All parties agree that Illinois law governs the contract in question. Illinois law presumes that parties are contracting for themselves and only direct, not incidental beneficiaries. Stamp v. Inamed Corp. , 777 F. Supp. 623, 625 (N.D.Ill. 1991). A party becomes a direct beneficiary to a contract if "the contracting parties expressed an intent to confer a benefit upon the third party." Id. Such intent is found by the contract's "express language and surrounding circumstances at the time of contracting," and the beneficiary need not be directly named in the contract. Id. If the benefit to the third party is direct and not simply incidental, then that party may sue to enforce the benefit. Carson Pirie Scott Co. v. Parrett , 178 N.E. 498, 501 (Ill. 1931).
Section 6.3 of the stock purchase agreement between Beaven and Delta Dental states that Beaven will have all responsibility with respect to all litigation based on, or arising out of, matters occurring prior to Closing to which IAIC [since renamed Security Continental Insurance Company, respondent] is, or may become, a party.
Thus, although Security was not a party to the contract, the express language of section 6.3 conferred a benefit on Security. Because Security was the subject of this section of the stock purchase agreement, we conclude the district court did not err in concluding Security has rights as a beneficiary to sue for its enforcement.
II.
Beaven contends the district court erred in denying its argument that the stock purchase agreement limited to two years the time under which claims arising out of the agreement could be made. We disagree. Because agreements purporting to restrict applicable statutes of limitation are disfavored, Illinois law strictly construes them against the party invoking them. Michigan Ave. Nat'l Bank v. Evans, Inc. , 531 N.E.2d 872, 880 (Ill.App.Ct. 1988). Before a statutory right can be ceded, there must be "distinct declaration" within the contract of an intent to limit liability. Id. In Illinois, the applicable statute of limitations for contractual rights is ten years. 735 Ill. Comp. Stat. Ann. 5/13-206 (West 1992). We conclude that section 12.2 of the stock purchase agreement does not contain the required distinct declaration. As the district court stated in construing section 12.2: "[I]t is clear that this provision limits only the representations and warranties relied upon by the parties, not the entire Stock Purchase Agreement * * *." We agree with the district court's distinction between claims for representations and warranties made prior to the stock purchase and claims arising out of the contract itself, including indemnification. Thus, we conclude the district court did not err in determining the parties did not intend to limit the applicable statutes of limitation by the boilerplate language under the heading Survival of Representations and Warranties in section 12.2.
III.
In reviewing whether a district court properly found no just reason for delay in certifying a judgment for immediate appeal pursuant to Minn.R.Civ.P. 54.02, the reviewing court must determine whether the district court abused its broad discretion. Olson v. Tufford , 392 N.W.2d 281, 283 (Minn.App. 1986), review denied (Minn. Oct. 29, 1986). Security's argument that there is no final determination of its liability was rendered moot by the Minnesota Supreme Court's affirmance of the judgment against Security in favor of the original plaintiffs. Vetter v. Security Continental Ins. Co. , 567 N.W.2d 516 (Minn. 1997). Thus, we conclude the district court did not abuse its broad discretion by certifying its judgment for immediate appeal.