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Before the Minnesota Supreme Court

February 2018


Summaries prepared by the Supreme Court Commissioner’s Office

Monday, February 5, 2018

Supreme Court Courtroom, State Capitol Building, Second Floor 

Staffing Specifix, Inc., Appellant vs. TempWorks Management Services, Inc., individually and d/b/a TMS Staffing, et al., Respondents – Case No. A16-1146: Appellant Staffing Specifix, Inc. (“Staffing”) and respondent TempWorks Management Services, Inc. (“TMS”) entered into a business agreement under which TMS provided payroll and other services for Staffing’s temporary staffing agency business. The contract governing the relationship was drafted by TMS. When the business relationship came to an end, Staffing sued TMS and other parties on claims including breach of contract, and TMS asserted breach-of-contract counterclaims against Staffing.

Before the start of trial, the district court found that the contract was ambiguous and allowed the parties to present parol evidence to show the parties’ intent. Following the trial, the district court instructed the jury, over TMS’s objection: “If you find the contract is ambiguous, you should determine the intent of the parties. When contract language is reasonably susceptible to more than one interpretation, the ambiguous contract terms are to be construed against the drafter.” The jury found that TMS breached the contract with Staffing and awarded $451,732.77 in damages. A divided panel of the court of appeals reversed.

On appeal to the supreme court, the following issues are presented: (1) whether the jury must be instructed as to which terms of a contract are ambiguous; (2) whether the jury must be instructed to construe ambiguous terms against the drafter only as a last resort if the parties’ mutual intent cannot be determined from the evidence; and (3) whether any error in the instructions provided to the jury resulted in substantial prejudice to TMS. (Hennepin County)

State of Minnesota, Respondent vs. Miguel Angel Vasquez, Appellant – Case No. A17-0683: A grand jury returned an indictment charging appellant Miguel Vasquez with first- and second-degree murder and second-degree arson for the death of Amber Lechuga. Vasquez asserted the defenses of not guilty and not guilty by reason of mental illness or deficiency and waived his right to a jury trial. Prior to trial, the district court granted the State’s motion to admit into evidence Vazquez’s medical records for the time period September 25-27, 2014. The district court found Vazquez guilty of all charges.

On appeal to the supreme court, the issue presented is whether the district court committed reversible error by finding that Vasquez had waived his physician-patient privilege by signing a Bureau of Criminal Apprehension medical release form and by admitting privileged information regarding his medical records and opinions from his treating physicians against him at trial. (Brown County)

Tuesday, February 6, 2018

Supreme Court Courtroom, State Capitol Building, Second Floor

St. Jude Medical, Inc., Respondent vs. Heath Carter et al., Appellants – Case No. A16-2015: Appellant Heath Carter worked for respondent St. Jude Medical, Inc. (“SJM”) from 2007 until 2015. When Carter joined SJM, he signed an at-will employment agreement. The agreement prohibited Carter, for 1 year after leaving SJM, from providing services in connection with any product that competes with any SJM product on which Carter worked during his employment with SJM. The employment agreement also prohibited Carter from disclosing or using certain confidential information belonging to SJM. Finally, the employment agreement provided that if Carter breached the agreement, “irreparable injury will result to SJM . . . and . . . SJM shall be entitled to an injunction to restrain the continuing breach.”

After Carter resigned from SJM and joined appellant Boston Scientific Corporation (“BSC”), SJM sued both Carter and BSC. A jury found that Carter breached the non-competition provision of the employment agreement, but that BSC did not intentionally cause the breach. In determining whether to grant an injunction, the district court found that SJM had not suffered irreparable harm, and that it was not appropriate to infer irreparable harm. The district court therefore dismissed SJM’s breach-of-contract claim against Carter because SJM was not entitled to the only relief it sought – namely, an injunction. The court of appeals reversed and remanded.

On appeal to the supreme court, the issue presented is whether the trial court is required to follow language in a restrictive covenant that mandates issuance of an injunction when the court finds no evidence of irreparable harm. (Hennepin County)

Craig Dewitt, Cross-Appellant vs. London Road Rental Center, Inc., Respondent, Jach’s, Inc., d/b/a The Tower Tap & Restaurant, et al., Appellants, Marlee Enterprise, Inc., Defendant – Case No. A16-1794: Appellants Jach’s, Inc., d/b/a The Tower Tap & Restaurant, and Chester Morgan (collectively “Tower Tap”) rented folding picnic tables from respondent London Road Rental Center, Inc. (“London Road”) in order to provide seating for customers at a festival event. Upon delivery of the tables, Tower Tap signed a rental agreement that contained both exculpatory and indemnity clauses in favor of London Road. The indemnity clause required Tower Tap to indemnify London Road for all claims “except to the extent directly resulting from [its] intentional misconduct.” Days later, cross-appellant Craig Dewitt attended the festival and was injured when one of the tables collapsed.

Dewitt sued both Tower Tap and London Road, who filed cross-claims against each other. The district court dismissed Dewitt’s claims, but ruled that London Road could enforce the exculpatory and indemnity clauses against Tower Tap.

The court of appeals reversed the dismissal of Dewitt’s claim against Tower Tap, but affirmed the enforceability of the exculpatory and indemnity clauses. With respect to the indemnity clause, the court of appeals acknowledged that the indemnity clause did not specifically mention that it applied to claims asserting negligence by London Road, and that indemnity clauses “are not construed in favor of indemnification unless such intention is expressed in clear and unequivocal terms, or unless no other meaning can be ascribed to it.” Yang v. Voyagaire Houseboats, Inc., 701 N.W.2d 783, 791 (Minn. 2005). But the court of appeals reasoned that because the last phrase of the indemnity clause excluded only claims involving London Road’s “intentional misconduct,” the indemnity clause necessarily applied to claims alleging negligence.

On appeal to the supreme court, the issue presented is whether the court of appeals erred when it interpreted the indemnity clause to apply to alleged acts of negligence by London Road. (St. Louis County)

Wednesday, February 7, 2018

Nonoral: David Holtslander, Respondent vs. Granite City Roofing, Inc. and SFM Mutual Insurance Company, Relators, Granite City Roofing, Inc. and CNA/National Fire Insurance Company, Respondents – Case No. A17-0955: Respondent David Holtslander suffered work-related injuries to his shoulder, knee, and back on several occasions from 1997 to 2000, while working for respondent Granite City Roofing. Eventually, he had surgery for those injuries and in 2002 filed a petition seeking workers’ compensation benefits. Holtslander received wage-loss, medical, and permanent partial disability benefits. The parties reached a settlement in late 2002 that resolved contribution issues between Granite City’s two different insurers, SFM Mutual Insurance and CNA Insurance, and provided Holtslander with a lump-sum payment as a “full, final, and complete” resolution of the outstanding issues, other than medical expenses, related to injuries to his spine, elbow, and shoulder.

Since the settlement, Holtslander had at least three more surgeries on his back. He also alleged on-going headaches related to neck injuries and significant back pain that interferes with his ability to work. Holtslander eventually qualified for social security-disability benefits. He suffered additional injuries due to falls, which his doctor has attributed to instability resulting from his earlier, work-related back injuries.

Holtslander filed a petition to vacate the award on stipulation, based on mutual mistake of fact or a substantial change in medical condition. The Workers’ Compensation Court of Appeals (WCCA) found that at most there was only a unilateral mistake of fact, not a mutual mistake, but the WCCA concluded the evidence was sufficient to establish a substantial change in medical condition for Holtslander’s low back, based on a multi-factor test adopted in Fodness v. Standard Café, 41 W.C.D. 1054 (Minn. WCCA 1989).

On appeal to the supreme court, the following issues are presented: (1) whether the WCCA abused its discretion when it set aside the employee’s stipulated award of benefits when the medical evidence relied upon by the WCCA was legally insufficient to vacate the award; and (2) whether the WCCA’s reliance on the factors set forth in Fodness v. Standard Café, 41 W.C.D. 1054 (Minn. WCCA 1989) is improper and an abuse of its discretion. (Workers’ Compensation Court of Appeals)

Nonoral: Thomas James Fox, Appellant vs. State of Minnesota, Respondent – Case No. A17-0518: Following a jury trial, appellant Thomas Fox was found guilty of two counts of first-degree murder for the death of Lori Baker. The Minnesota Supreme Court affirmed his conviction on direct appeal. Fox filed a petition for postconviction relief, which the district court summarily denied.

On appeal to the supreme court, the following issues are presented: (1) whether the district court abused its discretion by denying Fox’s postconviction petition without an evidentiary hearing; (2) whether the claims in Fox’s postconviction petition are barred by State v. Knaffla, 243 N.W.2d 737 (Minn. 1976); and (3) whether the claims in Fox’s postconviction petition are meritless. (Washington County)