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`IN SUPREME COURT
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`A08-583
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`Dietzen, J.
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`Filed: May 13, 2010
`Office of Appellate Courts
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`Court of Appeals
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`Virgil Dykes and Connie Dykes
`d/b/a Dykes Farms,
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`Respondents,
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`vs.
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`Sukup Manufacturing Company,
`defendant and third-party plaintiff,
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`Appellant,
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`vs.
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`Superior, Inc., third-party defendant,
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`Respondent.
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`________________________
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`William D. Mahler, Will Mahler Law Firm, Rochester, Minnesota, for respondents Virgil
`Dykes and Connie Dykes d/b/a Dykes Farms.
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`Patrick D. Reilly, Leon R. Erstad, Erstad & Riemer, P.A., Minneapolis, Minnesota, for
`appellant.
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`Charles A. Bird, Bird, Jacobsen & Stevens, P.C., Rochester, Minnesota, for amicus curiae
`Minnesota Association for Justice.
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`Diane B. Bratvold, Jessica J. Stomski, Briggs and Morgan, P.A., Minneapolis,
`Minnesota, for amicus curiae Minnesota Defense Lawyers Association.
`________________________
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`1
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`S Y L L A B U S
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`1.
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`A settlement agreement that does not manifest an intent to release,
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`discharge, or relinquish claims against a party to the agreement does not operate to
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`discharge an alleged joint tortfeasor.
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`2.
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`A judgment of dismissal with prejudice and on the merits is a final
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`determination and an adjudication as to the claims asserted by the parties in the lawsuit.
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`Affirmed in part, reversed in part, and remanded for further proceedings.
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`DIETZEN, Justice.
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`O P I N I O N
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`Respondents Virgil Dykes and Connie Dykes, d/b/a Dykes Farms, commenced
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`this lawsuit against appellant Sukup Manufacturing Company asserting claims of
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`consumer fraud, negligence, and breach of warranty arising out of the purchase and
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`operation of an allegedly defective grain-moving system manufactured by Sukup. Sukup
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`denied the allegations of the complaint and moved for summary judgment alleging that
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`when the Dykes released and dismissed their claims against the equipment dealer,
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`Superior, Inc., in a mediated agreement arising from a prior lawsuit, the Dykes also
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`released their claims against Sukup. The district court granted Sukup’s summary
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`judgment motion and dismissed the Dykes’ claims. The court of appeals reversed and
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`remanded on the grounds that there were fact issues regarding the scope of the mediated
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`agreement. We affirm the decision of the court of appeals in part, reverse in part, and
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`remand for further proceedings.
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`2
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`The Dykes operate a farm in southern Minnesota. Sukup manufactures farm
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`machinery, including grain-moving equipment. Sukup markets its products through a
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`network of independent dealers. Superior is a Sukup dealer.
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`Prior to 2002, the Dykes transferred their harvested corn between a grain dryer and
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`large capacity storage bins using a portable auger. In the summer of 2001, the Dykes
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`were introduced to Sukup’s “Cyclone Pneumatic Grain Moving System,” which moves
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`the corn from grain bins to a grain dryer using blowers and air transfer tubes rather than
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`augers. In June 2002, the Dykes contacted Superior to discuss the Sukup equipment and
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`to request a bid. Subsequently, the Dykes entered into a contract with Superior for the
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`purchase and installation of the “Cyclone” equipment. In September 2002, Sukup
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`delivered its components for the grain-moving system to the Dykes’ farm, where
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`Superior installed the system. The Cyclone system was operational in October. Superior
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`billed the Dykes $33,390 for the equipment, labor, and change orders related to the
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`installation.
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`Shortly after installation, problems with the system developed. According to the
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`Dykes, the corn was being blown through the tubes at a very high rate of speed with no
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`way to slow it down, resulting in damage to the corn. Because of that problem, the
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`Dykes stopped using the equipment on October 20, 2002. The Dykes later determined
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`that 75,000 bushels of corn had been damaged. The Dykes made repeated phone calls to
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`Superior to try to resolve the problem, but were not successful. Finally, a Sukup
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`representative inspected the equipment on November 15, 2002, and made modifications
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`to the equipment. Despite the modifications, the system did not function properly.
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`3
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`When the Dykes refused to pay Superior’s invoices, Superior filed a mechanic’s
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`lien and commenced a lawsuit to enforce its lien. The lawsuit named the Dykes and two
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`of the Dykes’ lenders—Security State Bank of Pine Island and Wells Fargo Financial
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`Leasing, Inc. The Dykes counterclaimed for damages exceeding $50,000. Following
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`mediation in August 2003, the parties executed a document entitled “Mediated
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`Agreement.”
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`The mediated agreement is one page in length, and includes an introductory
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`paragraph stating that Superior and the Dykes “reached the following agreement relating
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`to all issues growing out of the above noted lawsuit.” The four paragraphs of the
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`agreement provide that (1) Superior “will take down and remove” the grain-moving
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`system installed on the Dykes’ property; (2) Superior will remove an auger it installed;
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`(3) Superior will remove its lien from the Dykes’ property, and the parties will dismiss
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`the complaint, answer, and counterclaim; and (4) Superior will return two uncashed
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`checks to the Dykes. When the terms of the agreement were satisfied, the parties
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`executed a stipulation for dismissal “with prejudice and on [the] merits.”
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`In August 2006, the Dykes commenced this lawsuit against Sukup asserting claims
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`including consumer fraud, negligence, and breach of warranty, and ultimately claimed
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`damages of $2.5 million arising out of the operation of the allegedly defective grain-
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`moving system manufactured by Sukup. Sukup denied the allegations of the complaint
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`and asserted a third-party complaint against the dealer, Superior, for contribution and
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`indemnity. Subsequently, Sukup brought a motion for summary judgment to dismiss the
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`complaint on the grounds that the Dykes had previously settled their claims against
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`4
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`Superior, and that the mediated agreement between the Dykes and Superior had the effect
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`of releasing Sukup. Virgil Dykes submitted an opposing affidavit in which he stated that
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`“[a]t the mediation there were no discussions about Sukup’s liability,” they did not
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`“discuss the issue of damages in any detail,” the mediated agreement did not release any
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`claims, and the Dykes did not receive full compensation. The district court agreed with
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`Sukup and granted its motion for summary judgment dismissing the complaint.
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`The court of appeals reversed and remanded, holding that a settlement agreement
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`that releases one or more joint tortfeasors does not release other tortfeasors from joint and
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`several liability unless the parties to the settlement agreement “manifested such an intent,
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`or if the injured party received full compensation for the damages sought against the
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`other tortfeasors.” Dykes v. Sukup Mfg. Co., 761 N.W.2d 892, 893 (Minn. App. 2009).
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`As a result, the court remanded the case for resolution of the fact issues. Subsequently,
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`we granted review.
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`Sukup argues that there are no genuine issues of material fact that preclude
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`summary judgment and that the court of appeals erred in failing to affirm the summary
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`judgment. Essentially, Sukup argues that the mediated agreement entered into by the
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`Dykes and Superior released Superior from liability and, because the Dykes did not
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`preserve their claims against Sukup, they thereby released Sukup. The Dykes argue that
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`the mediated agreement is not a general release, does not manifest an intent to release
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`Sukup, and does not provide for full compensation; therefore, the court of appeals should
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`be affirmed.
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`5
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`On appeal from summary judgment, we examine whether there are genuine issues
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`of material fact that preclude summary judgment and whether the lower court properly
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`applied the law. Kratzer v. Welsh Cos., LLC, 771 N.W.2d 14, 18 (Minn. 2009). When
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`reviewing the application of law, we apply a de novo standard of review. Id.
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`The outcome of this dispute turns on the meaning of the mediated agreement and
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`the consequences of the dismissal with prejudice and on the merits. Thus, we must
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`examine whether the legal effect of the agreement was to release Sukup. A settlement
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`agreement is a contract, Ryan v. Ryan, 292 Minn. 52, 55, 193 N.W.2d 295, 297 (1971),
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`and we review the language of the contract to determine the intent of the parties, Valspar
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`Refinish, Inc., v. Gaylord’s, Inc., 764 N.W.2d 359, 364 (Minn. 2009). When the
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`language is clear and unambiguous, we enforce the agreement of the parties as expressed
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`in the language of the contract. Id. at 364-65. But if the language is ambiguous, parol
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`evidence may be considered to determine intent. Flynn v. Sawyer, 272 N.W.2d 904, 908
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`(Minn. 1978). Whether a contract is ambiguous is a question of law that we review de
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`novo. Carlson v. Allstate Ins. Co., 749 N.W.2d 41, 45 (Minn. 2008). The language of a
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`contract is ambiguous if it is susceptible to two or more reasonable interpretations. Id.
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`Historically, the release of one joint tortfeasor released all other joint tortfeasors.
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`Frey v. Snelgrove, 269 N.W.2d 918, 921 (Minn. 1978); see generally W. Prosser & W.
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`Page Keeton, Prosser and Keeton on Torts § 49, at 332 (5th ed. 1984) (explaining that at
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`common law the release of one joint tortfeasor released all others because, in the eyes of
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`the law, there was but one cause of action against those liable for the same acts). In
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`Gronquist v. Olson, 242 Minn. 119, 128, 64 N.W.2d 159, 165 (1954), we considered
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`6
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`whether the release of one joint tortfeasor operated to discharge the other from liability.
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`We modified the common law rule, concluding that when the injured party receives part
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`of the damages from one tortfeasor, but “the receipt [is] not [] understood to be in full
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`satisfaction of the injury,” the release does not discharge the others from liability. Id. at
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`126, 64 N.W.2d at 164. We stated that the factors “determinative of whether a release of
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`one of several joint tortfeasors will operate to release the remaining wrongdoers should
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`be and are: (1) [t]he intention of the parties to the release instrument, and (2) whether or
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`not the injured party has in fact received full compensation for his injury.” Id. at 128, 64
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`N.W.2d at 165; see also Couillard v. Charles T. Miller Hosp., Inc., 253 Minn. 418, 426-
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`27, 92 N.W.2d 96, 102 (1958).
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`We have observed that the court does not favor one type of settlement agreement
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`over another. Pac. Indem. Co. v. Thompson-Yaeger, Inc., 260 N.W.2d 548, 558 (Minn.
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`1977). Rather, we examine such agreements “on a case-by-case basis and assess their
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`validity and effect.” Id. Moreover, we have never prescribed specific language that is
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`necessary to create a valid release of claims. At a minimum, however, the agreement
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`must manifest an intent to release, discharge, or relinquish a right, claim, or privilege by a
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`person in whom it exists to a person against whom it might have been enforced to be a
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`release. Gronquist, 242 Minn. at 125, 64 N.W.2d at 163-64. Further, to release all joint
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`tortfeasors the release must manifest an intent to release all joint tortfeasors and the
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`claimant must have received full compensation for the injury. Id. at 128, 64 N.W.2d at
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`165.
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`7
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`The mediated agreement does not state that the Dykes release and discharge their
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`claims against Superior. The operative language merely states that “Superior, Inc. will
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`remove its lien it placed upon this property and dismiss its complaint and Virgil L. Dykes
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`and Constance E. Dykes will dismiss their answer and counter complaint.” Thus, the
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`agreement does not manifest an intent to release Superior. Moreover, the agreement does
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`not state that the Dykes were fully compensated for their injuries. We conclude that the
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`mediated agreement did not expressly manifest an intent to release, discharge, or
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`relinquish the Dykes’ claims against Superior or Sukup. Consequently, we reverse the
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`court of appeals’ conclusion that the modified agreement released the Dykes’ claim
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`against Superior.
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`The mediated agreement, however, also provided that when certain conditions
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`were satisfied, the parties would dismiss the complaint, answer and counterclaim.
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`Pursuant to the agreement, the conditions were satisfied, and the parties executed and
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`filed a stipulation dismissing the Superior lawsuit, including the Dykes’ counterclaim,
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`“with prejudice and on [the] merits.” Judgment of dismissal was entered by the district
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`court, and based upon that judgment, Sukup argues that the Dykes’ claims against it were
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`discharged.
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`A dismissal with prejudice and on the merits executed by both parties is “a final
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`determination and is equivalent to an adjudication on the merits” regarding the claims
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`asserted or which could have been asserted by the parties to that lawsuit, subject to
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`8
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`certain exceptions not applicable in this case.1 Butkovich v. O’Leary, 303 Minn. 535,
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`536, 225 N.W.2d 847, 848 (1975). Thus, a stipulation of dismissal and the resulting
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`judgment operates as a bar to a subsequent lawsuit by either party to the original lawsuit,
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`which asserts claims raised or which could have been raised in the original lawsuit. See,
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`e.g., Favorite v. Minneapolis St. Ry. Co., 253 Minn. 136, 139, 91 N.W.2d 459, 462
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`(1958) (concluding that “dismissal with prejudice was binding upon the parties and stood
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`as a bar to the bringing of another action on the same cause”); cf. Coleman v. Franken,
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`767 N.W.2d 453, 467 n.18 (Minn. 2009) (barring claims on certain ballots because
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`parties had stipulated to dismiss with prejudice any claims regarding those ballots); see
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`also 1A David F. Herr & Roger S. Haydock, Minnesota Practice—Civil Rules Ann.
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`§ 41.7 (4th ed. 2003) (explaining that a stipulation to dismiss with prejudice is effective
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`to bar subsequent actions).
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`Applying these principles to the facts of this case, we conclude that the legal effect
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`of the dismissal of the Superior lawsuit, including the Dykes’ counterclaim “with
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`prejudice and on [the] merits,” was an adjudication of the Dykes’ claims against Superior
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`for claims raised or which could have been raised in the original lawsuit. See Favorite,
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`253 Minn. at 139, 91 N.W.2d at 462. Consequently, the judgment of dismissal with
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`prejudice and on the merits was an adjudication that extinguished and discharged the
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`1
`The exceptions are fraud, collusion, mistake of fact or law, or where the trial court
`determines the dismissal was improvidently made and in equity and good conscience
`should not be allowed to stand. Butkovich v. O’Leary, 303 Minn. 535, 536, 225 N.W.2d
`847, 848 (1975).
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`9
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`right of the Dykes to bring claims against Superior in a subsequent lawsuit, which were
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`raised or could have been raised in the original lawsuit.
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`The question remaining is whether the judgment that bars the Dykes from bringing
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`a subsequent lawsuit against Superior also extends to bar the Dykes’ claims against
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`Sukup. Based on the record before us, we are unable to resolve that question. The
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`parties have not briefed whether a judgment of dismissal that extinguished the Dykes’
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`claims against Superior would bar the Dykes’ claims against Sukup. Thus, we must
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`remand the case to the district court to consider the legal effect of the judgment of
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`dismissal on the Dykes’ claims against Sukup. See Hart v. Cessna Aircraft Co., 276
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`N.W.2d 166, 167 (Minn. 1979).
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`In summary, we affirm the court of appeals’ decision to reverse the district court’s
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`dismissal of the Dykes’ claim against Sukup. We reverse, however, the court of appeals’
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`determination that the mediated agreement released the Dykes’ claims against Superior,
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`and its order of remand to the district court. Our reversal is predicated on our conclusion
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`that the mediated agreement did not manifest an intent to release Superior. Finally, we
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`are unable to determine on this record the legal effect of the judgment of dismissal of the
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`Dykes’ claims against Sukup, and therefore we remand to the district court to make that
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`determination.2
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`2
`Amicus curiae Minnesota Defense Lawyers Association (MDLA) argues that if
`the Dykes are allowed to pursue their claims against Sukup, the court should provide
`instructions to the district court upon remand to ensure that Sukup does not pay more
`than its fair share. Specifically, the MDLA contends that the jury instructions should
`include a special verdict interrogatory that requires the jury to allocate the percentage of
`(Footnote continued on next page.)
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`10
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`Affirmed in part, reversed in part, and remanded for further proceedings consistent
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`with this opinion.
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`(Footnote continued from previous page.)
`fault attributable to the Dykes, Sukup, and Superior; and that the district court should be
`instructed that Sukup’s liability should be no greater than the percentage of fault
`determined by the jury. The MDLA concedes that those issues were not raised by either
`party at the district court or court of appeals, and therefore were not properly preserved
`for appeal. Generally, issues not presented to the trial court may not be raised for the first
`time on appeal. See Domtar, Inc. v. Niagara Fire Ins. Co., 563 N.W.2d 724, 741 n.10
`(Minn. 1997). We have reserved the right in rare cases to examine such an issue not
`considered by the trial court as the interests of justice may require. Minn. R. Civ. App. P.
`103.04; see also Greene v. Comm’r of Minn. Dep’t of Human Servs., 755 N.W.2d 713,
`725 n.9 (Minn. 2008). We decline to reach the issues raised by the MDLA.
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`11