Pine Valley Meats v. Canal Capital Corp. - 566 N.W.2d 357 (Minn. Ct. App. 1997)

Rule:

A plaintiff alleging breach of contract is limited to damages flowing from the breach except in exceptional cases where the defendant's breach of contract is accompanied by an independent tort.

Facts:

In 1936, the St. Paul Union Stockyards Company (the Stockyards Company) sold Morris Rifkin approximately one-half acre of land for the purpose of operating a meat packing plant. The parties subsequently entered into an indenture and a separate agreement that created certain rights and responsibilities regarding the land Rifkin had purchased. As part of the 1936 Agreement, the Stockyards Company agreed to provide and maintain a suitable, fenced passageway for the movement of livestock between the land of Rifkin and the Saint Paul Union Stockyards. Appellant Canal Capital Corporation (Canal) was the successor to the Stockyards Company.  In 1986, respondent Pine Valley Meats, inc. (Pine Valley) purchased Rifkin's meat packing plant and obtained a nonrecourse assignment of Rifkin's interest in the 1936 Agreement. In 1994, appellant Housing and Redevelopment Authority of the City of South St. Paul (the HRA) purchased from Canal a parcel of land, a small portion of which the cattle walkway crossed. In 1995, Canal ordered the demolition of the cattle walkway without any notice to Pine Valley. Pine Valley soon closed its meat packing plant and commenced the present lawsuit against appellants Canal and the HRA. The trial court granted Pine Valley's motion for temporary injunction and ordered Canal to reconstruct the cattle walkway. A. jury then returned a verdict in favor of Pine Valley and against Canal on the claims of breach of contract, promissory estoppel, tortious interference with prospective business relations, and trespass, and awarded $ 350,000 in compensatory damages and $ 50,000 in punitive damages. The jury also found in favor of Pine Valley on its breach of contract claim against the HRA, although Pine Valley sought no damages.

Issue:

Under the circumstances, did the appellant commit tortious interference against respondent, thereby warranting the award of punitive damages in favor of respondent?

Answer:

No.

Conclusion:

The court examined an agreement between the parties and an accompanying indenture, which identified a perpetual easement for the passage of vehicles and persons along a private roadway, but made no mention of the cattle walkway. The court held that even if the appellant acted maliciously, intentionally, and in bad faith when it destroyed the cattle walkway, the appellant’s obligation to maintain the cattle walkway arose from the contractual agreement. The respondent was therefore limited to damages for breach of contract and the trial court erred by submitting the tort claims to the jury. The court further reversed the punitive damages awarded because no independent tort claims accompanied the breach of contract.