Law School Case Brief
Border State Bank v. Bagley Livestock Exch., Inc. - 690 N.W.2d 326 (Minn. Ct. App. 2004)
When contract language is susceptible to more than one meaning, the interpretation of the contract becomes a question of fact.
Liability for breach of contract requires proof that damages resulted from or were caused by the breach.
On review of a directed verdict, an appellate court must independently determine whether an issue of fact exists when the evidence is viewed in a light most favorable to the nonmoving party. In analyzing the propriety of a directed verdict, it reviews the evidence in a light most favorable to the nonmoving party.
An appellate court reviews de novo the district court's denial of a motion for judgment notwithstanding the verdict. On appeal, the court does not weigh the evidence or assess the credibility of the witnesses. It will affirm the denial if there is any competent evidence reasonably tending to sustain the verdict. But if the jury's verdict cannot be sustained on any reasonable theory of the evidence, the moving party is entitled to judgment notwithstanding the verdict as a matter of law.
Bert Johnson, doing business as Johnson Farms, and Hal Anderson entered into an oral cattle-sharing contract in December 1997. Approximately one month later, they memorialized the oral contract in written form. Under the written instrument, Anderson agreed to care for and breed cattle owned by Johnson and Johnson would receive a "guaranteed" percentage of the annual calf crop. The contract further provided that the cattle Johnson placed with Anderson were considered to be owned by Johnson Farms and any offspring is to be sold under Johnson Farms' name. In March 2000, Anderson negotiated with Border State Bank for loans totaling $ 155,528. To secure these loans, Anderson granted Border State Bank a security interest in, among other things, all of Anderson's rights, title and interest in all livestock then owned or thereafter acquired. In December 2000, 289 calves that had remained with Anderson were sold at Bagley Livestock Exchange. The livestock exchange knew of Border State's security interest in Anderson's livestock but, after discussing the agreement with Johnson, determined the security interest did not attach to the calves. Border State Bank sued Bagley Livestock Exchange and Johnson, contending that they had converted Border State Bank's perfected security interest in the calves sold in December 2000. In a third-party complaint, Johnson sought indemnity from Anderson, in the event that Border State Bank was successful on its conversion claim. Anderson served a counterclaim against Johnson, asserting breach of contract. The district court granted the motion, finding that under the cattle-sharing agreement, Johnson did not grant Anderson an ownership interest in the calves. Border State Bank appealed the directed verdict on its conversion claim. Following the directed verdict, Anderson presented evidence on his breach-of-contract counterclaim against Johnson, and the counterclaim was submitted to the jury. In response to special-verdict questions, the jury determined that the written contract between Anderson and Johnson had been modified, Johnson breached the contract, and Johnson's breach directly caused damages to Anderson in the amount of $ 92,360. Johnson moved for judgment notwithstanding the verdict (JNOV), or, in the alternative, a new trial or remittitur. The district court denied Johnson's post-trial motions. Johnson appealed from that denial.
Did the district court err by issuing a directed verdict against Border State Bank? Did the district court err in its decision to deny Johnson’s motion for judgment notwithstanding the verdict (JNOV)?
Yes and No.
The court reversed the district court’s order that directed the verdict on the bank’s conversion claim and ordered the district court on remand to determine Anderson’s rights in the calves under the cattle-sharing agreement. In applying the correct legal standard, the district court had to determine whether the agreement was ambiguous, the meaning of which was a question of fact to be argued by the parties.
The court held that the district court properly denied Johnson’s motion for a judgment notwithstanding the verdict as it was logical that he would have an interest in Anderson continuing to care for his cattle located on the latter’s farm. According to the court, the verdict was not so contrary to the preponderance of the evidence that it compelled a new trial.
Access the full text case
Not a Lexis Advance subscriber? Try it out for free.