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Conagra, Inc. v. Seeland

Minnesota Court of Appeals
Oct 3, 2000
No. C6-00-315 (Minn. Ct. App. Oct. 3, 2000)


No. C6-00-315.

Filed October 3, 2000.

Appeal from the District Court, Hennepin County, File No. 997602.

Lewis A. Remele, Jr., Shalanda D. Ballard, (for respondent)

M.T. Fabyanske, Patrick W. Noaker, (for appellant)

Considered and decided by Crippen, Presiding Judge, Willis, Judge, and Huspeni, Judge.

Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1998).


Appellant challenges the district court's order granting summary judgment to ConAgra. We affirm.


In May 1995, appellant Meldon Seeland, who worked for respondent ConAgra, Inc., in Grand Forks, North Dakota, accepted a new job with ConAgra as its Systems Administrator in Minneapolis. As part of the parties' agreement regarding the new position, ConAgra loaned appellant $15,000, interest-free, for three years and agreed to forgive $5,000 of the loan for every year that Seeland remained employed by ConAgra. The parties executed a promissory note that provided, in relevant part, that if Seeland

voluntarily terminate[d] [his] employment * * * any unforgiven amount of principal shall become immediately due and payable, and the unforgiven amount of principal shall bear interest at ConAgra's cost of short term borrowing from the date of employee's termination until paid.

The promissory note also provided that $5,000 of the loan would be forgiven on June 17 of 1997, 1998, and 1999.

In February 1998, ConAgra announced that it was moving its Minneapolis operations to Omaha, Nebraska. As a result, ConAgra eliminated Seeland's position in Minneapolis and offered him the same position in Omaha with the same pay and benefits. Seeland declined ConAgra's offer and resigned his employment in August 1998.

When Seeland resigned, the outstanding balance on the loan was $5,000. ConAgra demanded that Seeland pay the amount due on the loan pursuant to the terms of the promissory note; Seeland refused, and ConAgra sued for the balance. Seeland counterclaimed, arguing that ConAgra had constructively discharged him when it moved its operations out of state and that it unjustifiably hindered him from continuing employment with ConAgra for the three-year term.

Both Seeland and ConAgra moved for summary judgment on ConAgra's claim that Seeland breached the promissory note. The district court denied Seeland's motion and granted ConAgra's motion. Seeland appeals.


On appeal from summary judgment this court determines whether any genuine issues of material fact exist and whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). The evidence must be viewed in the light most favorable to the party against whom judgment was granted. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).

I. Unjustifiable Hindrance of Contract Performance

Seeland argues that transferring his position to Omaha unjustifiably hindered him from performing the terms of the promissory note. In Minnesota, "every contract includes an implied covenant of good faith and fair dealing requiring that one party not `unjustifiably hinder' the other party's performance of the contract." Midwest Sports Mktg., Inc. v. Hillerich Bradsby of Canada, Ltd., 552 N.W.2d 254, 268 (Minn.App. 1996) (quoting In re Hennepin County 1986 Recycling Bond Litig., 540 N.W.2d 494, 502 (Minn. 1995)). Contract performance by one party is generally excused when performance is hindered or made impossible by the other party. Zobel Dahl Constr. v. Crotty, 356 N.W.2d 42, 45 (Minn. 1984).

Seeland argues that whether one party has unjustifiably hindered another party's performance of a contract is a fact question presenting a genuine issue for trial. See Midwest Sports Mktg., Inc., 552 N.W.2d at 268. We agree. But Seeland points to no facts in the record that show ConAgra hindered his performance of the terms of the note. The note evidences only an agreement by which ConAgra agreed to forgive the $15,000 it loaned to Seeland in installments over a three-year period so long as Seeland remained employed by ConAgra. The note does not provide that Seeland's employment with ConAgra will be at any particular location.

The dissent concludes that there is a fact question regarding whether there was an implied contract that Seeland's employment would remain in Minneapolis for three years. But we find no ambiguity in the terms of the contract between the parties. See Williams v. Harris, 518 N.W.2d 864, 867 (Minn.App. 1994) (noting that whether contract is ambiguous is legal rather than factual issue). This court must, therefore, determine the parties' intent solely from the contract's written content. Id. A party cannot alter the unequivocal language of a contract with speculation regarding an unexpressed intent of the parties. Metropolitan Sports Facilities Comm'n v. General Mills, Inc., 470 N.W.2d 118, 123 (Minn. 1991). Thus, as the district court concluded, the only way that ConAgra could interfere with Seeland's ability to comply with the terms of the note would be to prevent him from working at the company. ConAgra did just the opposite; it invited Seeland to transfer to Omaha while retaining the same position, salary, and benefits. ConAgra also offered him a bonus equal to six months' salary and a mortgage subsidy for his first five years in Omaha. The district court did not err by concluding that ConAgra did not interfere with Seeland's ability to comply with the terms of the note.

II. Constructive Discharge

Seeland also claims that he was constructively discharged when ConAgra transferred his position. A constructive discharge occurs when an employee resigns to escape intolerable working conditions caused by discriminatory or otherwise illegal action by his or her employer. See Continental Can Co. v. State, 297 N.W.2d 241, 251 (Minn. 1980); Huyen v. Driscoll, 479 N.W.2d 76, 81 (Minn.App. 1991 ), review denied (Minn. Feb. 10, 1992). A transfer to another location may be so intolerable that a finding of constructive discharge is warranted. See Christensen v. Equitable Life Assurance Soc'y of U.S., 767 F.2d 340, 343 (7th Cir. 1985) (concluding that choice employer gave employee between transfer and termination constituted constructive discharge for purposes of employment-discrimination claim); Spagnuolo v. Whirlpool Corp., 717 F.2d 114, 118 (4th Cir. 1983) (holding that reinstatement in distant part of country of wrongfully discharged employee did not meet requirement of job-reinstatement order that position offered be equivalent). But see Gartman v. Gencorp, Inc., 120 F.3d 127, 130 (8th Cir. 1997) (holding in gender-discrimination case that employer's request that employee resign or accept transfer to plant with uncertain future in another state was not objectively intolerable where employee retained the same position, pay, and benefits).

Seeland argues that ConAgra's request that he transfer to Omaha rendered his working conditions intolerable because it would have required him to move his family to another state just 19 months after moving to Minneapolis. Seeland further argues that the transfer was particularly intolerable because the move to Minneapolis was difficult for his family, and he would have been forced to compromise his family's emotional well-being to perform the terms of the promissory note.

Whether an employee's working conditions are intolerable is a question of fact. See Bersie v. Zycad Corp., 399 N.W.2d 141, 146 (Minn. App. 1987). Seeland contends that it was error for the district court to grant summary judgment because a reasonable jury could have found that requiring Seeland to relocate created an intolerable working condition that forced him to resign. But constructive discharge is a "companion tort" that requires a showing of an "underlying illegality." Huyen, 479 N.W.2d at 81; see also Barrett v. Omaha Nat'l Bank, 726 F.2d 424, 428 (8th Cir. 1984) (stating that "[a]n employee is constructively discharged when he or she involuntarily resigns to escape intolerable and illegal employment requirements") (citing Younger v. Southwestern Sav. and Loan Ass'n, 509 F.2d 140, 144 (5th Cir. 1975)). And Seeland presents no facts to support a finding that an illegal employment practice by ConAgra rendered his working conditions intolerable. Therefore, the district court did not err in concluding that ConAgra did not constructively discharge Seeland.

III. Employment Contract

Seeland argues that the district court erred by concluding that the promissory note did not create an employment contract for a term of three years. Absent an agreement to the contrary, an employee is presumed terminable at will. Pine River State Bank v. Mettille, 333 N.W.2d 622, 627 (Minn. 1983). The district court concluded that the promissory note unambiguously set forth only the "the terms and conditions of a $15,000 loan, making no alteration of the employment-at-will relationship between the parties."

The determination of whether a contract is ambiguous is a question of law, which is determined in the first instance by the district court. Kenko, Inc. v. Lowry Hill Constr. Co., 392 N.W.2d 18, 20 (Minn.App. 1986). On appeal this court will determine whether the district court was correct in finding the existence or nonexistence of an ambiguity. See Employers Liab. Assurance Corp. v. Morse, 261 Minn. 259, 263-64, 111 N.W.2d 620, 624 (1961). A contract is unambiguous if the court, without looking to extrinsic evidence, can determine the meaning of its language. See ICC Leasing Corp. v. Midwestern Mach. Co., 257 N.W.2d 551, 554 (Minn. 1977). If contract terms are unambiguous, the court must determine the parties' intent solely from the writing. Metropolitan Sports Facilities Comm'n, 470 N.W.2d at 123. The court must determine the meaning of a contract by what was written and not by what was intended by the parties. Carl Bolander Sons Inc. v. United Stockyards Corp., 215 N.W.2d 473, 476 (Minn. 1974).

First, Seeland argues that the promissory note on its face indicates modification of his at-will status because it contains the clause

If [ConAgra] should terminate [Seeland's] employment without cause, any principal of this Promissory Note not already forgiven by the above schedule, shall be immediately forgiven in full.

Seeland contends that the "without cause" language is ambiguous and that a reasonable explanation for the ambiguity is that the parties intended to modify Seeland's at-will status to give him more job security because he had to move his family to Minnesota. But this clause does not affect Seeland's at-will status by preventing ConAgra from terminating him without cause; it merely provides for what would happen to the loan should ConAgra choose to do so. And even if the parties intended to modify Seeland's at-will status, because the note is unambiguous on its face, we cannot look to outside evidence of the parties' intent.

Second, Seeland argues that the terms of the promissory note contemplate a three-year employment agreement, which modifies his at-will status. But the note merely sets forth the terms of a $15,000 loan that was to be forgiven over a three-year period. And the express terms of the note provide for what will happen to the loan if Seeland resigns or is terminated with or without cause. Therefore, the note contemplates that Seeland could be employed for less than three years.

The district court did not err in concluding that the note did not alter Seeland's at-will employment status.


The unanimity of the panel extends to this proposition, that the question of "whether one party has unjustifiably hindered another party's performance of a contract is a fact question presenting a genuine issue for trial." See Midwest Sports Mktg., Inc. v. Hillerich Bradsby of Canada, Ltd., 552 N.W.2d 254, 268 (Minn.App. 1996); see also Chadd v. Midwest Franchise Corp., 412 N.W.2d 453, 458 (Neb. 1987) (reversing summary judgment in order to permit a factual determination on franchisee's assertion that franchiser, sued on a contract to provide a building, had prevented franchisee from performing on conditions precedent). The record contains sufficient evidence to demonstrate such a fact question.

We reach a contrary conclusion, permitting the trial court's summary judgment, because "the only way that ConAgra could interfere with Seeland's ability to comply with the terms of the note would be to prevent him from working at the company."

The trial court fact-finder could determine the occurrence of unjustifiable hindrance of Seeland's continued employment in light of evidence that ConAgra: (a) specifically anticipated forgiveness of its note; (b) coupled that forgiveness with the invitation that appellant take a job in Minneapolis, requiring a move of appellant and his family from Grand Forks, North Dakota; and (c) withdrew its provision of Minneapolis employment, without prior warning to appellant, demanding instead that appellant move to Nebraska, in spite of hardship for his family, less than two years after he accepted the job in Minneapolis. This evidence permits a finding, for purposes of ConAgra's effort to require appellant's payment on the note, that the employer unjustly prevented fulfillment of the condition for discharge of the note.

It is also significant that the terms of an implied contract are issues for the trier of fact. Bergstedt, Wahlberg, Berquist Assocs., Inc. v. Rothchild, 302 Minn. 476, 479-80, 225 N.W.2d 261, 263 (1975). The evidence of ConAgra's solicitation for employment in Minneapolis, requiring a move from another state, permits a fact-finding that the promise to forgive appellant's note was impliedly premised on the availability of a job in Minneapolis for the three years during which forgiveness might occur.

In my opinion, we needn't reach appellant's employment-law arguments on principles of constructive discharge or modification of his at-will status. On the question of whether ConAgra can impose liability on its 1995 note, the record demonstrates important and genuine issues of fact, and a summary judgment for respondent is inappropriate. I respectfully dissent from the contrary conclusion.

Summaries of

Conagra, Inc. v. Seeland

Minnesota Court of Appeals
Oct 3, 2000
No. C6-00-315 (Minn. Ct. App. Oct. 3, 2000)
Case details for

Conagra, Inc. v. Seeland

Case Details

Full title:ConAgra, Inc., Respondent, vs. Meldon Seeland, Appellant

Court:Minnesota Court of Appeals

Date published: Oct 3, 2000


No. C6-00-315 (Minn. Ct. App. Oct. 3, 2000)