Minn. Stat. § 549.20

Jensen v. Walsh · 2001 5 citations

+ 5 more citations in this opinion.

Baker v. Ploetz · 2000 2 citations

+ 2 more citations in this opinion.

Phelps v. Commonwealth Land Title Insurance Co. · 1995 2 citations

On appeal to this court, Commonwealth contends the court of appeals’ conclusion in dicta was erroneous because Phelps did not present any evidence of the losses the court of appeals outlined in dicta. We conclude that the court of appeals did err, however, this was an error in dicta. As such, the existence of this error is irrelevant to the resolution of this case. Commonwealth also renews its argument that the trial court abused its discretion by doubling the actual damages under Minn. Stat. § 363.071, subd. 2. Minnesota Statutes § 363.071, subd. 2 provides in relevant part: In all cases where the administrative law judge1 finds that the respondent has engaged in an unfair discriminatory practice, the administrative law judge shall order the respondent to pay an aggrieved party, who has suffered discrimination, compensatory damages in an amount up to three times the actual damages sustained. In all cases, the administrative law judge may *274also order the respondent to pay an aggrieved party, who has suffered discrimination, damages for mental anguish or suffering and reasonable attorney’s fees, in addition to punitive damages in an amount not more than $8,500. (emphasis added). Whether a trial court properly doubled the actual damages under Minn. Stat. § 363.071, subd. 2 is reviewed under an abuse of discretion standard. Melsha v. Wickes Cos., 459 N.W.2d 707, 709 (Minn.App.1990), pet. for rev. denied, (Minn. Oct. 25, 1990). Commonwealth claims the trial court abused its discretion and makes five arguments in favor of reversal. In addition, Commonwealth argues that inclusion of back pay in the amount the trial court" doubled constitutes error. I. First, Commonwealth claims the court of appeals’ determination that the trial court’s multiplication of damages was valid is inconsistent with legislative intent. If a statute is ambiguous, a court may refer to the legislative history surrounding the statute’s enactment to ascertain its legislative intent. Minn. Stat. § 645.16(7) (1994). Where the intention of the legislature is clearly manifested by plain unambiguous language, however, no construction is necessary or permitted. Lenz v. Coon Creek Watershed Dist., 278 Minn. 1, 9, 153 N.W.2d 209, 216 (1967). Thus, prior to consideration of legislative history, a determination that subdivision 2 is ambiguous is necessary. A statute is ambiguous if it is susceptible to more than one reasonable interpretation. Glen Paul Court Neighborhood Ass’n v. Paster, 437 N.W.2d 52, 56 (Minn.1989); Tuma v. Commissioner of Economic Sec., 386 N.W.2d 702, 706 (Minn.1986) (citing Beck v. City of St. Paul, 304 Minn. 438, 445, 231 N.W.2d 919, 923 (1975)); Arcadia Dev. Corp. v. County of Hennepin, 528 N.W.2d 857, 860 (Minn.1995), reh’g denied (Minn. Apr. 12, 1995). Commonwealth does not contend that subdivision 2 is susceptible to more than one interpretation. Instead, Commonwealth contends subdivision 2 “is ambiguous because it provides absolutely no guidance to trial courts in determining when compensatory damages must be multiplied.” This court, in a slightly different context, has said that failure of expression does not give rise to ambiguity. See State v. Moseng, 254 Minn. 263, 269, 95 N.W.2d 6, 11-12 (1959) (holding “[w]here failure of expression rather than ambiguity of expression concerning the elements of the statutory standard is the vice of the enactment, courts are not free to substitute amendment for construction and thereby supply the omissions of the legislature.”); see also State v. Wetsch, 511 N.W.2d 490, 492 (Minn.App.1994) (stating “[although [appellant] disagrees with the legislative decision to make failure to provide proof of insurance a strict liability offense while including a scien-ter requirement for failure to provide insurance, his disagreement does not make [the statute] ambiguous”), pet. for rev. denied (Minn. Apr. 19, 1994). Subdivision 2 contains no guidelines as to when or under what circumstances a trial court may multiply damages. The absence of guidelines or restraints on a trial court’s discretion to multiply damages does not make subdivision 2 ambiguous. In the absence of such guidelines, this court should not manufacture them, that is the province of the legislature. Accordingly, we decline to read into subdivision 2 restrictions or guidelines that the legislature has not included. Instead, we conclude subdivision 2 unambiguously vests trial courts with the discretion to multiply damages. II. Commonwealth next argues that the trial court’s award is inconsistent with standards articulated by other courts. Having found that subdivision 2 vests the trial court with the discretion to multiply actual damages in an amount up to three times the amount of damages proven at trial, we believe this argument is rendered moot. To the extent that other decisions impose restraints on a trial court’s discretion to multiply damages under subdivision 2, these decisions are erroneous. We comment here on at least two decisions that are impacted by our holding today. *275In Melsha v. Wickes Cos., the court of appeals interpreted subdivision 2 and concluded: It is within the discretion of the trial court to determine whether, in the interests of justice, the actual damages must be multiplied in order for a victim to be fully compensated. 459 N.W.2d at 709. In addition, the Minnesota federal district court, quoting Melsha, has held: Multiplied damages are permitted so as to provide victims of discrimination with ‘full and adequate compensation’ in cases when the amount of actual damages proved do not alone achieve that result. Baufield v. Safelite Glass Corp., 831 F.Supp. 713, 720 (D.Minn.1993) (quoting Melsha, 459 N.W.2d at 709). Commonwealth contends that based on Melsha, a trial court must tie the multiplication of damages to a finding that the victim was not fully compensated. Based on our conclusion that subdivision 2 unambiguously vests a trial court with discretion to multiply damages, we further conclude that after an initial finding of damages, a trial court need not make an additional finding that uncompensated damages exist prior to multiplying damages pursuant to Minn. Stat. § 363.071, subd. 2. Thus, Commonwealth’s contention that a trial court must tie the multiplication of damages to a finding of uncompensated damages is erroneous, and to the extent that Melsha and Baufield support this contention, they too are erroneous. The dissent finds it problematic for a trial court to multiply actual damages beyond those proven at trial without a specific finding that uncompensated damages exist. As the dissent points out, compensatory damages are generally understood to be those damages for which a person has actual losses. However, it is equally well settled that the phrase “actual damages” is generally regarded as a synonym for compensatory damages. Black’s Law Dictionary 390 (6th ed.1990). Thus, this court is left to discern what the legislature intends when it states: “a trial court shall award compensatory damages up to three times the amount of actual damages.” The dissent concludes that this means the trial court may multiply actual damages only if the trial court makes a finding that uncompensated damages exist. We believe that in the context of this statute, this construction is unsupported by the language of the statute, and could lead to absurd results in practice. In the absence of a statute defining compensatory damages, it is clear that compensatory damages are generally synonymous with actual damages. However, when the legislature has stepped in and defined the elements of damage that will consist of compensatory damage, we believe that the legislature’s directive governs. For example, in the context of the Uniform Commercial Code, the legislature has limited compensatory damages to compensation. See Minn. Stat. § 336.1-106 (1994) code comment (stating “compensatory damages are limited to compensation. They do not include * * * special damages * ⅜ * ”).2 Similarly, we believe, that in this case, the legislature has defined compensatory damages to be an amount up to three times the actual damages proven. In addition, in practice, the dissent’s construction of subdivision 2, tying multiple damages to a finding of uncompensated damages leads to one of two results, both of which are impractical. One possible result would be that a trial court would never be in a position to award uncompensated damages because the actual damages would reflect the sum of the amount a person has lost, thus, there would be no additional damages that could be compensated. In that case, a court could award multiple damages only if it made up damages not alleged or proven at trial. This is precisely the type of sua sponte fact finding in which the court of appeals in dicta engaged that we reject. The other possible result of adopting the dissent’s construction is that it would provide an incentive to plain*276tiff’s counsel to be sloppy in presenting damages evidence or, worse yet, to lay in the weeds deliberately withholding the evidence and later argue the need for multiplied damages to compensate for all of the uncompensated items. Each of the potential results illustrates that the dissent’s construction could lead to absurd or unreasonable results that would, in effect, render the multiplier provision meaningless. A presumption exists against statutory constructions that lead to absurd or unreasonable results. Minn. Stat. § 645.17(1) (1994). In accordance with well settled statutory construction, therefore, we believe the legislature intended the trial court to be able to multiply at its discretion. III. Third, Commonwealth contends the trial court’s failure to make findings in support of its award of multiple damages is an abuse of discretion. It further claims that this failure and the court of appeals’ holding that findings are unnecessary are both inconsistent with Sigurdson v. Isanti County where this court stated: Because of the significance of factual issues in employment discrimination cases and the attendant deference that must be accorded trial courts in making their determinations on these issues, it is important that the basis for the court’s decision be set forth clearly and explicitly so that an appellate court can conduct effective and meaningful review. 386 N.W.2d 715, 721 (Minn.1986). This quote reflects the Sigurdson court’s frustration with a trial court that had failed to make detailed findings in relation to its application of the three-part test articulated in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). Under the McDonnell Douglas test, for a trial court to conclude that discrimination occurred, the court must make findings as to each part of the test. In contrast, subdivision 2 does not require a trial court to make any findings prior to multiplying damages. If the legislature had said damages may be trebled only if the trier of fact determines that actual damages are nominal or uncompensated damages exist, then failure by the trial court to make findings prior to multiplying damages would be error. However, since the legislature has not made findings of any sort a requirement, we conclude that no findings are necessary to support a trial court’s decision to multiply damages. IV. Fourth, Commonwealth and Amici3 contend that the trial court’s award of both punitive damages and double actual damages constituted an unfair double recovery for punitive damages. In support of this contention, Commonwealth cites Johnson v. Jensen, 446 N.W.2d 664 (Minn.1989) and Amici cite Fontaine v. Ebtec Corp., 415 Mass. 809, 613 N.E.2d 881 (1993). In both cases the respective supreme courts determined that an award of punitive damages and multiple actual damages were duplicative. Johnson and Fontaine are distinguishable from the present case. Under the statute at issue in Fontaine, damages could only be multiplied upon a finding of a “knowing or reckless statutory violation.” 613 N.E.2d at 889. And under the statute at issue in Johnson, damages could only be trebled if the destruction of the trees was not casual or unknowing. 446 N.W.2d at 665. Under both statutes, the findings necessary to multiply damages were similar to the finding of willfulness necessary for the imposition of punitive damages at that time. See Minn. Stat. § 549.20, subd. 1 (1988) (stating that punitive damages shall be allowed upon a showing of willful indifference). Thus, an award under these statutes of multiplied damages and punitive damages was essentially a double recovery for punitive damages. By contrast, subdivision 2 requires no additional showing for the imposition of multiple damages. Thus, these cases are distinguishable from the present case. *277In addition, although it is unclear what damages are being compensated by the multiple damages provision, that fact alone does not necessarily make the provision punitive and thus duplicative of punitive damages. See DeJonghe v. E.F. Hutton & Co., 171 Ariz. 341, 830 P.2d 862, 866 (App.1991) (“[w]e view this [provision] as akin to the antitrust remedy of treble damages, which is intended not only to compensate for losses and to deter from misconduct but also to encourage private litigants to supplement official enforcement of important criminal laws by providing an inducement for such action.”), pet. for rev. denied, (Ariz. June 16, 1992). Legislative history indicates that one objective the legislature sought to achieve through enactment of subdivision 2 was the enticement of the private bar into bringing claims based on violations of the MHRA.4 We conclude, therefore, that multiple compensatory damages are not duplicative of punitive damages where at least one objective of multiple compensatory damages is nonpunitive. Thus, the trial court’s award of both punitive damages and double actual damages does not constitute an unfair double recovery for punitive damages. The dissent believes that any multiplication without a specific finding must necessarily be punitive. We believe that the language of subdivision 2 and other courts’ construction of that language indicates that multiple damages are distinct from punitive damages. Subdivision 2 specifically identifies the multiplied damages as compensatory and later indicates punitive damages may also be awarded. As the federal district court of Minnesota noted, although the trebling function in this statute has a deterrent effect, it is primarily a compensatory measure which is made all the more clear by the statute’s explicit labeling of the treble damages as “compensatory.” Evans v. Ford Motor Co., 768 F.Supp. 1318, 1327 (D.Minn.1991) (stating multiple damages under subdivision 2 “are compensatory in nature”); see Convent of the Visitation Sch. v. Continental Casualty Co., 707 F.Supp. 412, 416 (D.Minn.1989). Thus, by virtue of the statute’s language, and as other courts have found, the legislature seemed to intend the multiplying provision to have some other function distinct from punitive damages. V. Commonwealth next asserts a constitutional challenge to subdivision 2. This challenge was not raised at the trial court or the court of appeals. We generally decline to review the constitutionality of a statute if it has not been previously raised. Charboneau v. American Family Ins. Co., 481 N.W.2d 19, 23 (Minn.1992); Egeland v. State, 408 N.W.2d 848, 852 (Minn.1987); In re C.L.L., 310 N.W.2d 555, 557 (Minn.1981). In Cohen v. Cowles Media, Co., however, we indicated that “on rare occasions [we have] exercised our discretion to allow a party to proceed on a theory not raised at trial.” 479 N.W.2d 387, 390 (Minn.1992), remanded on reh’g, 481 N.W.2d 840 (Minn. Mar. 17, 1992). We conclude that this is not one of those rare occasions, and decline to consider the constitutionality of subdivision 2. VI. Finally, Commonwealth contends that the trial court erroneously included Phelps’ back pay award as part of the amount it doubled. Minnesota Statutes § 363.071, subd. 2 provides in relevant part: In all cases where the administrative law judge finds that the. respondent has engaged in an unfair discriminatory practice, the administrative law judge shall order the respondent to pay an aggrieved party, who has suffered discrimination, compensatory damages in an amount up to three times the actual damages sustained. *278* * *. In addition to the aforesaid remedies, in a case involving discrimination in (a) employment, the administrative law judge may order the hiring, reinstatement or upgrading of an aggrieved party, who has suffered discrimination, with or without back pay, * * *. Commonwealth claims that under the statute back pay is not an element of compensatory damages and thus, should not be included in the calculations of compensatory damages to be multiplied. We disagree. We do not believe the statute precludes the inclusion of back pay as an element of damages that is subject to multiplication. The statute gives a trial court the option of including back pay as a part of actual damages subject to multiplication, or merely awarding back pay attendant to the hiring, reinstatement, or upgrading of an aggrieved party. Thus, we conclude the trial court did not err by including back pay in the amount of actual damages that were subsequently multiplied. Affirmed.

+ 1 more citation in this opinion.

Rosenbloom v. Flygare · 1993 1 citation

+ 1 more citation in this opinion.

Admiral Merchants Motor Freight, Inc. v. O'Connor & Hannan · 1992 3 citations

+ 3 more citations in this opinion.

M.H. v. Caritas Family Services · 1992 1 citation

+ 1 more citation in this opinion.

Bucko v. First Minnesota Savings Bank · 1991 4 citations

+ 4 more citations in this opinion.

Wirig v. Kinney Shoe Corp. · 1990 2 citations

+ 2 more citations in this opinion.

Shetka v. Kueppers, Kueppers, Von Feldt & Salmen · 1990 5 citations

+ 5 more citations in this opinion.

Johnson v. Jensen · 1989 3 citations

+ 3 more citations in this opinion.

Hodder v. Goodyear Tire & Rubber Co. · 1988 4 citations

+ 4 more citations in this opinion.

Bergeson v. United States Fidelity & Guaranty Co. · 1987 1 citation

In Kaluza, we construed the phrase “intentionally obstructing,” saying that “intentional” refers to the actor desiring to cause the consequences of his act and that “obstructing” means to impede or hinder. This obstructing may occur “in any manner,” and so is not limited to active as opposed to passive conduct. We conclude, therefore, that a cause of action under section 176.82 lies where a person, such as an insurer, obstructs or hinders, whether by deliberate action or inaction, the receipt of benefits due the injured worker and does so in a manner that is outrageous and extreme, or, to put it another way, in a manner which is egregiously cruel or venal. We hold, further, that this conduct must be proven by evidence that is clear and convincing. Cf. Minn. Stat. § 549.20, subd. 1 (1986) (punitive damages for willfully indifferent conduct must be proven by clear and convincing evidence).

Phipps v. Clark Oil & Refining Corp. · 1987 2 citations

+ 2 more citations in this opinion.

Becker v. Alloy Hardfacing & Engineering Co. · 1987 2 citations

+ 2 more citations in this opinion.

Jacobsen v. Anheuser-Busch, Inc. · 1986 2 citations

392 N.W.2d 868 (1986) Earl D. JACOBSEN, et al., Respondents, v. ANHEUSER-BUSCH, INCORPORATED, Appellant. No. C7-85-2105. Supreme Court of Minnesota. August 29, 1986. Rehearing Denied October 30, 1986. *869 Steven W. Schneider, Duluth, Lawrence C. Brown, Thomas H. Bennin, Minneapolis, for Anheuser Busch. David R. Oberstar, Joseph J. Mihalek, Duluth, for Earl Jacobsen. Roland C. Amundson, David S. Johnson, Michael D. Madigan, Minneapolis, amicus curiae for Mn. Beer Wholesalers Assn. Heard, considered and decided by the court en banc. KELLEY, Justice. This case comes to us as a certified question. The question is: Does the Minnesota Beer Brewers and Wholesalers Act, Minn. Stat. §§ 325B.01, et seq., applied retroactively to a preexisting agreement between a brewer and a wholesaler as mandated by Minn. Stat. § 325B.15, unconstitutionally impair the parties' rights and obligations set forth in that preexisting agreement under art. I, § 10 of the Constitution of the United States and art. 1, § 11 of the Constitution of the State of Minnesota? The trial court denied Anheuser-Busch's motion to dismiss an action commenced by a wholesaler and its vendee seeking damages under Minn. Stat. § 325B.01 et seq. In so doing, it ruled that the Act did not unconstitutionally impair a contract between Anheuser-Busch *870 and its wholesaler, and certified the constitutional question as important and doubtful under Minn.R.Civ.App.P. 103.03(h).[1] We answer the certified question in the affirmative and reverse. Anheuser-Busch, Inc., appellant, is a brewer of malt beverages such as Michelob and Budweiser beer.[2] Its products are marketed through intermediate wholesalers who distribute the products to retailers for sale to consumers. In 1976, Earl D. and Ernest R. Jacobsen (Jacobsens) owned Saratoga Distributing Company (Saratoga). In September of that year, appellant and Saratoga entered into a written contract entitled "Anheuser-Busch Wholesaler Equity Agreement." Thereafter, and subject to the terms of that contract, Saratoga became the wholesaler for Anheuser-Busch products in the Duluth sales territory. Because Anheuser-Busch was cognizant of the fact that a wholesalership could significantly affect sales of its products, it reserved to itself the right to approve or disapprove a change in ownership of the wholesale distributorship. Moreover, Anheuser-Busch under the contract had the right to terminate the contract if it did not approve an ownership transfer.[3] Approximately nine months after the execution of the contract, the Minnesota Beer Brewers and Wholesalers Act, Minn. Stat. ch. 325B.01 et seq., became effective. Section 325B.06 of the Act provides: No brewer shall unreasonably withhold consent to any assignment, transfer or sale of the wholesaler's business whenever the wholesaler to be substituted meets the material and reasonable qualifications and standards required of its wholesalers. *871 The Act is made expressly retroactive.[4] Other sections of the Act provide substantial penalties for violation of Section 325B.06.[5] Additionally, the Act authorizes the court to grant equitable relief, award punitive damages and allow attorney fees.[6] It also places other restrictions on brewers vis-a-vis wholesalers.[7] Approximately six months after the effective date of Minn. Stat. ch. 325B, the Jacobsens negotiated an agreement with Kenneth Stretar, the sole owner of Ribbon Distributing, Inc. (Ribbon), whereby Ribbon would purchase Saratoga. The agreement was contingent upon Ribbon's ability to obtain the consent of Anheuser-Busch to handle its products. After Saratoga had submitted to Anheuser-Busch a formal request for approval of the proposed ownership change, Anheuser-Busch, citing three reasons, disapproved the proposed transfer.[8] Thereafter, the Jacobsens and Ribbons sued appellant. Following dismissals of some counts, the only claims remaining in 1985 charged Anheuser-Busch with unreasonable conduct prohibited by Minn. Stat. §§ 325B.01 to 325B.17 (1980).[9] Respondents sought actual and punitive damages plus attorney fees. Anheuser-Busch moved to dismiss. It claimed the retroactive application of the statute, Minn. Stat. § 325B.15 (1984), unconstitutionally impaired the rights and obligations of the parties to the contract executed prior to the Act's effective date under U.S. Const. art. I, § 10 and Minn. Const. art. 1, sec. 11. After "reluctantly" concluding that the impairment of contract did not rise to constitutional dimension, the trial court denied the motion but certified the question as important and doubtful. We commence our analysis of the issues raised by referring to certain rules applicable *872 in a case where the constitutionality of a legislative act is challenged. Since the certified question is solely a legal one, we need to give no deference to the trial court decision. Frost-Benco Electric Association v. Minnesota Public Utilities Commission, 358 N.W.2d 639, 642 (Minn.1984); Reserve Mining Co. v. Herbst, 256 N.W.2d 808, 824 (Minn.1977). However, every legislative enactment comes to the court with a presumption in favor of its constitutionality. Federal Distillers, Inc. v. State, 304 Minn. 28, 39, 229 N.W.2d 144, 154 (1975). Therefore, the burden rests with the challenger to demonstrate beyond a reasonable doubt that the challenged Act violates a constitutional provision. Id. Here, the sections of the Minnesota Beer Brewers and Wholesalers Act are challenged by Anheuser-Busch as violating the contract clauses of both the Constitutions of the United States and of Minnesota.[10] Though the language of the contract clauses in both Constitutions is absolute, courts have indicated the prohibitions of such contract clauses must be accommodated to the inherent police power of the state "to safeguard the vital interests of its people." Energy Reserves Group, Inc. v. Kansas Power & Light Co., 459 U.S. 400, 410, 103 S.Ct. 697, 704, 74 L.Ed.2d 569 (1983), quoting Home Building & Loan Associates v. Blaisdell, 290 U.S. 398, 434, 54 S.Ct. 231, 238, 78 L.Ed. 413 (1934). In Christensen v. Minneapolis Municipal Employees Retirement Board, 331 N.W.2d 740 (Minn.1983), we noted and applied the three-part test enunciated in Energy Reserves, 459 U.S. at 411-13, 103 S.Ct. at 704-06, to determine whether a contractual impairment was unconstitutional. Using the Energy Reserve analysis, a court initially considers whether the state law has, in fact, operated as a substantial impairment of a contractual obligation. The severity of the impairment increases the level of scrutiny to which the legislation is subjected. See Christensen 331 N.W.2d at 750-51. Secondly, if a substantial impairment exists, those urging the constitutionality of the legislative act must demonstrate a significant and legitimate public purpose behind the legislation. Id. Finally, the legislature's action is examined in the light of this public purpose to see whether the adjustment of the rights and liabilities of the contracting parties is based upon resaonable conditions and is of a character appropriate to the public purpose justifying the law's adoption. Id.[11] All parties concede that in the wholesale equity agreement with Saratoga, Anheuser-Busch reserved to itself the unrestricted right to approve or disapprove any proposed change in the ownership of Saratoga. The Minnesota Beer Brewers and Wholesalers Act, specifically made retroactive by the legislature, prohibits a brewer from "unreasonably withholding consent" to a sale of a wholesaler's business "whenever the wholesaler to be substituted meets the material and reasonable qualifications and standards required of its wholesalers." Minn. Stat. § 325B.06 (1984). From this language Anheuser-Busch contends that the Act has severely impaired its reasonable contractual expectation by stripping it of its contractual right to freely exercise its business judgment in deciding whether to approve or disapprove a franchise transfer. As the result, Anheuser-Busch points out, it now faces a judicial determination on the reasonableness of its business decision. Accordingly, it argues, the Act replaces its unfettered business discretion with statutory standards, the violation of which *873 makes the company potentially liable for unusual compensatory damages as well as punitive damages, costs, and attorney fees. To the contrary, the wholesalers assert that the contractual impairment at best was minimal, first, because the Act merely requires a brewer to be reasonable in withholding consent to a transfer of the franchise. Secondly, they assert Anheuser-Busch's reasonable contractual expectations could not have been thwarted given the extreme regulation of the liquor industry in Minnesota. They note the broad police powers given to the states to regulate traffic in liquor under the U.S. Const. amend. XXI, § 2, and likewise cite numerous provisions of the Intoxicating Liquor Act, Minn. Stat. § 340A et seq. Accordingly they claim Anheuser-Busch should have anticipated statutory changes regulating termination and transfer of wholesale franchises.[12] In ascertaining the scope of permissible contractual impairment, courts using the Energy Reserves approach will consider whether the industry involved has been regulated in the past. See, e.g., Energy Reserves, 459 U.S. at 411, 103 S.Ct. at 704. Without doubt, states possess large powers to regulate not only the importation of liquor from other jurisdictions, but also its intrastate distribution. See, e.g., California Retail Liquor Dealers Association v. Midcal Aluminum, Inc., 445 U.S. 97, 107, 100 S.Ct. 937, 944, 63 L.Ed.2d 233 (1980); State Board v. Young's Market Co., 299 U.S. 59, 57 S.Ct. 77, 81 L.Ed. 38 (1936). Nevertheless, while the 21st amendment to the United States Constitution and liquor industry regulations contained in state statutes and regulations may be relevant to the inquiry, they are not dispositive. For example, in Midcal, the Supreme Court of the United States in striking down California's wine pricing system as violating the Sherman Act commented: Both the Twenty-first Amendment and the Commerce Clause are parts of the same Constitution. Like other provisions of the Constitution, each must be considered in the light of the other, and in the context of the issues and interests at stake in any concrete case. Midcal, 445 U.S. at 109, 100 S.Ct. at 945, quoting Hostetter v. Idlewild Liquor Corp., 377 U.S. 324, 332, 84 S.Ct. 1293, 1298, 12 L.Ed.2d 350 (1964). See also Craig v. Boren, 429 U.S. 190, 97 S.Ct. 451, 50 L.Ed.2d 397 (1976) (state statute on beer sales struck on equal protection grounds). Other cases have likewise clearly demonstrated that the 21st amendment does not give the states carte blanc to override other federal constitutional rights. See, e.g., Wisconsin v. Constantineau, 400 U.S. 433, 91 S.Ct. 507, 27 L.Ed.2d 515 (1971); California v. LaRue, 409 U.S. 109, 93 S.Ct. 390, 34 L.Ed.2d 342 (1972); George Benz Sons, Inc. v. Ericson, 227 Minn. 1, 34 N.W.2d 725 (1948); Sail'er Inn, Inc. v. Kirby, 5 Cal.3d 1, 95 Cal.Rptr. 329, 485 P.2d 529 (1971). See also Federal Distillers, Inc. v. State, 304 Minn. 28, 229 N.W.2d 144 (1975). While Anheuser-Busch acknowledges that states have broad regulatory authority over the importation and distribution of liquor within their boundaries, it argues nonetheless that Anheuser-Busch could not reasonably anticipate the adoption of chapter 325B because Minnesota had never previously attempted to regulate a brewer's contractual right to disapprove a wholesaler's proposed change of ownership.[13] Particularly *874 it asserts that even if it be conceded the state has the power to enact legislation regulating the terms of distributor contracts, there exists no justification sufficient to permit its retroactive application so as to impair contracts entered into antecedent to the effective date of the legislation. The courts of several sister jurisdictions which have considered somewhat similar statutes or regulations which attempt to proscribe terminations or transfers of this nature have held such attempts to violate impairment of contract clauses of federal or state constitutions. See, e.g., Globe Liquor Co. v. Four Roses Distiller's Co., 281 A.2d 19 (Del.Supr.1971) (statute invalid as impairment of obligation of contract because of substantive changes the Act made in the rights and obligations of a distributor's contract); United States Brewers' Association v. State, 192 Neb. 328, 220 N.W.2d 544 (1974) (statute declared unconstitutional invasion of personal and property rights). Other jurisdictions have sustained the validity of similar statutes by holding the legislative enactments were not applicable to contracts in existence at the effective date of the statute, or in other words that they were not retroactive. See, e.g., Superior Motors, Inc. v. Winnebago Industries, Inc., 359 F.Supp. 773 (D.S.C. 1973); AFA Distributing Co., Inc. v. Pearl Brewing Company, 470 F.2d 1210 (4th Cir. 1973); Wipperfurth v. U-Haul Co. of Western Wisconsin, 101 Wis.2d 586, 304 N.W.2d 767 (1981). Absent Minn. Stat. ch. 325B with its retroactivity provision, Anheuser-Busch's disapproval of the transfer of the wholesale agreement would have afforded no legal recourse to Saratoga or Ribbon. The fact the disapproval gave rise to no liability based upon the contract is evidenced by respondents' voluntary withdrawal of the contract claim. Instead of being able to invoke a contract provision that was legal under the law at the time the contract was executed, the brewer now faces a trial based solely on claimed violation of the Minnesota Beer Brewers and Wholesalers Act with a measure of damages nonexistent under the prior contract law, plus possible exposure to punitive damages not available under prior contract law, Barr/Nelson, Inc. v. Tonto's, Inc., 336 N.W.2d 46, 52 (Minn.1983) (punitive damages for breach of contract are not available under either common law or Minn. Stat. § 549.20), plus an award of attorney fees normally not heretofore recoverable in this type of action, Barr/Nelson, 336 N.W.2d at 53; Jacobs v. Rosemount Dodge-Winnebago South, 310 N.W.2d 71, 79 (Minn.1981) (Both cases cite that this court has "long held that attorney fees are not recoverable in litigation unless there is a specific contract permitting or a statute authorizing such recovery."). In our view this indeed constitutes a substantial impairment. Nevertheless, even if the Act constitutes a substantial impairment of contract, if there exists a significant and legitimate purpose behind the statute such as "remedying of a broad and general social or economic problem," the Act may yet be sustained because the successful establishment of the existence of a legitimate public purpose serves to provide evidence that the state in enacting the regulation was exercising its police power instead of providing a benefit to special interests. Energy Reserves, 459 U.S. at 411-12, 103 S.Ct. at 704-05. Here, however, there exists absolutely no showing that the disruption of the contractual expectations of Anheuser-Busch and Saratoga was necessary to meet any important, broad, and general economic or social problem. Instead, the Minnesota Beer Brewers and Wholesalers Act has all the earmarks of narrow special interest *875 legislation devoid of any broad public purpose. Since 1973 in Minnesota it has been the policy of this state expressed through legislative enactment that exclusive wholesale distributorships be abolished to meet the social end of elimination of monopolistic practices and to promote price competition. 1973 Minn.Laws 664 § 3.[14]See Federal Distillers, Inc. v. State, 304 Minn. 28, 229 N.W.2d 144 (1975). Likewise, the Cash Beer Law, Minn. Stat. § 340.405 (1980), which prohibits brewers and wholesalers from extending credit to retailers of intoxicating malt liquors was addressed to the same general social policy of prevention of vertical integration of the intoxicating malt beverage industry, thereby promoting competition and restricting monopolistic market power. Haskell's, Inc. v. Sopsic, 306 N.W.2d 555 (Minn.1981). In contrast to these statutes reflecting this anti-monopolistic public policy, the Minnesota Beer Brewers and Wholesalers Act on its face is anti-competitive, contrary to the long-standing public policy of the state. Instead, it appears to be primarily special interest legislation in favor of the wholesaler distributors. Indeed, an examination of the legislative history reveals that this legislation arose not in response to any broad and general social or economic problem, but rather at the instigation and promotion of beer distributors. The prime arguments of sponsors for its enactment on the floors of the legislature demonstrate that this was an act promoted by and to serve wholesale beer distributors.[15] We can ascertain "no significant or legitimate public purpose" in the Act. While it may remedy a perceived problem of beer wholesalers, it was obviously not intended to remedy a "broad and general social or economic problem" contemplated by the language of Energy Reserves. It should be kept in mind, however, that the issue here is not whether the legislature could regulate prospectively contracts of this nature, but rather whether the statute can be retroactively applied absent a "significant and legitimate public purpose." We address no other issue than that in this opinion. Having ruled that there was no "significant and legitimate public purpose" to be remedied by the Minnesota Beer Brewers and Wholesalers Act, it is unnecessary to address the third part of the Energy Reserves test. Accordingly, our answer to the certified question is that the Minnesota Beer Brewers and Wholesalers Act, Minn. Stat. § 325B.01, et seq. applied retroactively to a preexisting agreement between a brewer and a wholesaler as mandated by Minn. Stat. § 325B.15 does unconstitutionally impair the parties' rights and obligations set forth in that preexisting agreement, U.S. Const. art. I, § 10 and Minn. Const. art. 1, § 11. Reversed. YETKA, J., dissents. YETKA, Justice (dissenting). The states are given broad police powers in regulating traffic in liquor under U.S. Const. art. XXI, § 2. Moreover, even without the passage of this act, it appears to me that plaintiffs here would have a right to recourse on the grounds that there must be some reasonable basis for denying the transfer of the franchise. The agreement between the parties itself states that Anheuser-Busch agrees to abide by both existing and future amendments to the liquor laws of Minnesota.

+ 1 more citation in this opinion.

Lewis v. Equitable Life Assurance Society of the United States · 1986 2 citations

+ 2 more citations in this opinion.

Gilchrist v. Perl · 1986 8 citations

*416 Ordinarily it would seem breach of the fiduciary duty results in complete forfeiture damages, but it is unclear if there may be exceptions in some situations where actual fraud is absent, where no actual damages are sustained, and where there are multiple client claims. If forfeiture of fees for breach of a fiduciary duty are damages, as we here hold, and if these damages have a punitive content, as we here declare, it is at least arguable that the trier of fact in awarding such damages might consider much the same factors as the trier of fact considers in making a standard punitive damages award. See Minn. Stat. § 549.20, subd. 3 (1983). 345 N.W.2d at 214 n. 5.

*416 Ordinarily it would seem breach of the fiduciary duty results in complete forfeiture damages, but it is unclear if there may be exceptions in some situations where actual fraud is absent, where no actual damages are sustained, and where there are multiple client claims. If forfeiture of fees for breach of a fiduciary duty are damages, as we here hold, and if these damages have a punitive content, as we here declare, it is at least arguable that the trier of fact in awarding such damages might consider much the same factors as the trier of fact considers in making a standard punitive damages award. See Minn. Stat. § 549.20, subd. 3 (1983). 345 N.W.2d at 214 n. 5.

*416 Ordinarily it would seem breach of the fiduciary duty results in complete forfeiture damages, but it is unclear if there may be exceptions in some situations where actual fraud is absent, where no actual damages are sustained, and where there are multiple client claims. If forfeiture of fees for breach of a fiduciary duty are damages, as we here hold, and if these damages have a punitive content, as we here declare, it is at least arguable that the trier of fact in awarding such damages might consider much the same factors as the trier of fact considers in making a standard punitive damages award. See Minn. Stat. § 549.20, subd. 3 (1983). 345 N.W.2d at 214 n. 5.

+ 5 more citations in this opinion.

Jacobs v. Farmland Mutual Insurance Co. · 1985 2 citations

SIMONETT, Justice. This appeal raises the question whether a jury, in setting aside a release fraudulently obtained by an adjuster, may award punitive damages against the adjuster and his insurance company. We reverse the award for punitive damages but affirm the trial court’s ruling granting the adjuster indemnity against his insurance company. Michael Jacobs, age 20, was killed instantly on April 30, 1981, when his truck collided at an uncontrolled rural intersection with a car driven by Marilyn Rairdon. The Rairdon car was insured by defendant Farmland Mutual Insurance Company with liability limits of $25,000 per person and $50,000 per accident. Farmland assigned defendant Frank Gentile of Alexandria Adjusting Company to the case. Gentile, after his initial investigation and taking into consideration liability factors, the policy limits, and other potential claims, put a value on Michael’s death claim of $15,000, and so reported to Farmland. Gentile then learned that Michael’s parents had lost another son in an auto accident the previous year and had settled that passenger death claim for $4,000. This suggested to Gentile that Orrin Jacobs, the father, would be “exceedingly easy” to deal with, and, having relayed this further information to Farmland, Gentile was given authority to settle for $4,000. Seven days after the auto accident, Gentile met with Orrin Jacobs at the Jacobs farm. Gentile offered $4,000 and Jacobs accepted. There was very little discussion. Jacobs said he just “wanted to get rid of him.” Jacobs did inquire about the loss of the pickup truck and some tools, and Gentile added $1,500 to the settlement for those items. Mr. Jacobs signed the release, after which Mrs. Jacobs signed also. Gentile was unaware that Mr. Jacobs could not read nor write, but Gentile testified he had explained the release to Mr. Jacobs. Some 6 months later, the Jacobses were sued by the injured passengers in the Rair-don car, and they then consulted counsel. Thereafter this lawsuit was commenced by Orrin F. Jacobs as Trustee for the heirs and next-of-kin of Michael Gordon Jacobs, deceased, and Orrin F. Jacobs and Audrey M. Jacobs, individually. Named as defendants were Marilyn Rairdon, John Rairdon, Farmland Mutual Insurance Company, and Frank Gentile. Plaintiffs’ complaint, as amended, alleged a cause of action by the plaintiff trustee against defendants Marilyn and John Rairdon for the wrongful death of Michael Jacobs, and asked for damages in excess of $50,000. The complaint further alleged that plaintiffs Orrin F. Jacobs and Audrey M. Jacobs had previously signed a release of the death claim for $4,000 “which defendants now seek to assert as a defense”; that the release had been obtained by the fraudulent misrepresentations of defendant Frank Gentile, an insurance adjuster, acting on behalf of the defendant Farmland Mutual Insurance Company; and that the release should be declared void and be set aside. Finally, the complaint asked for punitive damages against defendants Gentile and Farmland *443and in favor of plaintiffs Orrin F. Jacobs and Audrey M. Jacobs. Defendants’ answers denied liability and asserted the release as an affirmative defense. On Farmland’s motion, the issue of the validity of the release was severed from the wrongful death action and tried first. The jury, by special verdict, found that the release should be set aside because the Jacobses had been “laboring under mistake” and also because the release “was improvidently made and in equity and good conscience should not be allowed to stand.” The jury further found that defendants had shown a willful indifference to the rights of others and awarded $100,000 punitive damages. The trial court, adopting the jury’s answers as its own findings of fact, ordered judgment to be entered against Gentile and Farmland for $100,000 punitive damages, granted Gentile indemnity against Farmland, and denied Gentile’s claim for attorney fees against Farmland. Defendants’ post-trial motions, repeating their contentions that punitive damages could not be awarded against them in the absence of a finding of a separate tort, were denied. Farmland and Gentile appealed to the Minnesota Court of Appeals from the judgment and from the order denying their motions for a new trial on punitive damages. Farmland also appealed the indemnity issue, while Gentile appealed the denial of his claim for attorney fees. The court of appeals affirmed the trial court on all issues. Jacobs v. Farmland Mutual Insurance Co., 352 N.W.2d 803 (Minn.Ct.App.1984). We granted Farmland’s petition for further review. After trial of the rescission action, the trustee’s wrongful death action against the Rairdons was settled for $25,000, with Farmland paying its policy limits. The settlement expressly provided that it was without prejudice to the Jacobses’ claim for punitive damages against Farmland and Gentile. The broad issue, as we see it, is: Where one seeks an equitable rescission of a release of an unliquidated tort claim fraudulently obtained by the defendants, rather than actual damages based upon the independent tort of fraud or deceit, may punitive damages be awarded as incidental to the equitable rescission? Our inquiry begins by placing the underlying fraud question in its proper perspective, and to do so requires analysis of the parties’ contentions. In recognition that this dispute centers upon the issue of whether defendants’ conduct as found by the jury provides a basis for an award of punitive damages, the parties seem to agree that there must be an accompanying tort before punitive damages will lie. Thus plaintiffs’ brief argues that Gentile’s conduct “constitutes the tort of fraud.” Defendants disagree, but also point out that, in any event, neither the jury nor the trial court made any finding of fraud. Plaintiffs counter that a finding of fraud is implicit in the jury’s verdict. The court of appeals agreed with plaintiffs, stating that the evidence which satisfies fraud is the same evidence on which the jury found that defendants were willfully indifferent to the rights of plaintiffs. In addition, the court of appeals held that defendants had waived submission of the fraud issue to the jury by failing to request a special verdict question on the issue. Assuming it was defendants’ responsibility to request a fraud question, the record discloses, however, that defendants did make such a request, but the request was opposed by plaintiffs and denied by the trial court. Plaintiffs argue that under “the special circumstances of this case,” defendants had an affirmative duty to disclose to Mr. Jacobs either that the claim had been evaluated at $15,000 or, at least, that $4,000 was an inadequate settlement, and that failure to make such a disclosure was a fraudulent misrepresentation that $4,000 was an adequate settlement. Defendants, on the other hand, contend that there was no fiduciary relationship between the adjuster and the claimants and, therefore, they had no duty to disclose their settlement strategy to the Jacobses. The court of appeals, relying on Richfield Bank & *444Trust Co. v. Sjogren, 309 Minn. 362, 365, 244 N.W.2d 648, 650 (1976), apparently believed Gentile was under a duty to make some kind of disclosure. Defendants also claim there was no misrepresentation of any fact; rather, that, as Gentile put it, “[a] claim is worth what a party is willing to settle for.” These arguments are not dispositive and need not be reached because we view the choice of remedy, i.e., equitable rescission, as determinative. The relief sought was not recovery of monetary damages for the conduct of Gentile and his principal, Farmland, but the rescission of the release of an unliquidated tort claim so that the plaintiffs might proceed as if surrender of the claim had never occurred. Equity will set aside a release and settlement if improvident or unconscionable and will prevent one party from taking an unconscionable advantage of another’s mistake. Schoenfeld v. Buker, 262 Minn. 122, 131, 114 N.W.2d 560, 566-67 (1962). To establish entitlement to equitable rescission, the plaintiffs of necessity sought to prove that the release was improvident or the product of mistake, misrepresentation, or fraud. The jury, instructed by the trial court in a manner consistent with Schoenfeld, found that the release could not, in equity or good conscience, stand. The parties do not dispute this finding and it is the law of the case. We agree that a finding of fraud is implicit in the jury’s finding that the release be set aside on the grounds of improvidence, unconscionability, and defendants’ willful indifference to the rights of others.1 A specific finding of fraud would still have entitled the plaintiffs to only that relief sought — rescission—and no more. We do not think, however, that a showing of willful indifference, by itself, entitles one to an award of punitive damages. Minn. Stat. § 549.20, subd. 1 (1984), provides that punitive damages are allowed “only upon clear and convincing evidence that the acts of the defendant show a willful indifference to the rights or safety of others.” This language prescribes a burden of proof for punitive damages and attempts to characterize the kind of conduct required. The statute alone, however, does not entitle one to punitive damages unless certain other prerequisites are satisfied. Our case law suggests that punitive damages may be permitted only where the plaintiff is found entitled to actual or compensatory damages, Meixner v. Buecksler, 216 Minn. 586, 591, 13 N.W.2d 754, 757 (1944) (dictum); Erickson v. Pomerank, 66 Minn. 376, 69 N.W. 39 (1896), although we have allowed punitive damages without proof of actual damages in actions for defamation per se because of the “intangible harm” inflicted. Loftsgaarden v. Reiling, 267 Minn. 181, 183, 126 N.W.2d 154, 155, cert. denied, 379 U.S. 845, 85 S.Ct. 31, 13 L.Ed.2d 50 (1964); Anderson v. Kammeier, 262 N.W.2d 366, 372 (Minn.1977). Further, if plaintiff’s cause of action is for breach of contract, the damages recovered for the breach will not support an award of punitive damages unless the breach also constitutes or is accompanied by an independent tort. Wild v. Rarig, 302 Minn. 419, 440, 234 N.W.2d 775, 790 (1975), cert. *445denied, 424 U.S. 902, 96 S.Ct. 1093, 47 L.Ed.2d 307 (1976). Even if a contract is breached maliciously, punitive damages will not lie unless the maliciousness constitutes an independent tort. Barr/Nelson, Inc. v. Tonto's, Inc., 336 N.W.2d 46, 52-53 (Minn.1983); Haagenson v. National Farmers Union Property & Casualty Co., 277 N.W.2d 648, 652 (Minn.1979); Moore v. John E. Blomquist, Inc., 256 N.W.2d 518 (Minn.1977). Finally, the enactment of section 549.20, subd. 1, in 1978 did not overrule our prior case law prohibiting punitive damages for breach of contract. Minnesota-Iowa Television v. Watonwan T.V. Improvement Ass’n, 294 N.W.2d 297, 311 (Minn.1980). This is not a breach of contract case. To the contrary, by seeking rescission plaintiffs sought to establish that there was no contract at all. Neither, on the other hand, is this a tort case. Plaintiffs elected not to affirm the contract and sue in deceit for damages. “Damage is an essential element of a cause of action for fraud and deceit and is not merely a consequence flowing from it. * * * Thus, fraud without damage, while it will sustain a cause of action for rescission, will not support one at law for damages.” Dupont v. Haggard, 235 Minn. 31, 33, 49 N.W.2d 186, 187 (1951). Here, plaintiffs asserted fraud only for the purpose of setting aside the release so as to deprive the negligent tort-feasors of an affirmative defense. Fraud used in this manner is no more an independent tort cause of action than is contributory negligence. Should we allow punitive damages in an equitable action for rescission of a release for unliquidated damages where there are no actual or compensatory damages?2 The reason for the actual damages requirement seems to be a reluctance on the part of courts to permit private parties to bring actions solely to levy private fines. 70 Harv.L.Rev. 517, 528-29 (1957). This notion is sometimes expressed by stating that punitive damages are incidental to actual damages, Claude v. Weaver Construction Co., 261 Iowa 1225, 1229, 158 N.W.2d 139, 143 (1968), or that there is no separate cause of action for punitive damages, B.B. Walker Co. v. Ashland Chemical Co., 474 F.Supp. 651, 665 (M.D.N.C.1979), or that there must be an independent tort, Highland Construction Co. v. Union Pacific R. Co., 683 P.2d 1042, 1049 (Utah 1984). To put it another way, to avoid punitive damages being a loose cannon on the legal deck, courts prefer not to allow punitive damages unless the plaintiff has been harmed, and ordinarily the best way to define the harm is to require compensable harm.3 This approach encounters difficulty when punitive damages are sought in a rescission action, for ordinarily there are no compensatory damages when the parties are sim*446ply restored to the status quo ante. Some courts, nevertheless, especially in bargain transactions when there are restitutionary-type expenses recovered, are beginning to allow punitive damages in this situation,4 while others do not.5 This is not, however, our case here. The case before us is distinguishable from those rescission situations in which some courts have allowed an award of punitive damages.6 When the release here was set aside, plaintiffs were “made whole” not by an award of actual, compensatory damages but by return of their un-liquidated tort claim. Even so, although plaintiffs had neither pleaded nor reduced to judgment any actual damages in the rescission action, they had established that they had been damaged by the release in the sense that the $4,000 consideration was inadequate. We do not, however, think this type of contingent damage sufficient to warrant imposition of punitive damages. By seeking rescission, plaintiffs were not interested in recovering the difference between $4,000 and an adequate settlement proposal; rather, they were interested in recovering on their unliquidated tort claim. In this context, whether they had been actually harmed by the release was contingent on the outcome of the wrongful death tort claim against the Rairdons. There is no claim that the release, even though set aside, has somehow impaired plaintiffs’ recovery in the wrongful death action. Indeed, as it has turned out, plaintiffs have recovered not just $15,000, the evaluation figure they claim the adjuster deceitfully withheld from them, but $10,000 more. We do not think the extraordinary remedy of punitive damages should be extended to this atypical rescission situation, and it is not unfair here to require plaintiffs to abide by the consequences of their choice of remedies. We hold, therefore, that since plaintiffs have not established the requisite kind of actual or compensatory damages, punitive damages are not recoverable and the judgment for punitive damages is reversed. Farmland has also appealed the ruling that it must indemnify Gentile. We believe indemnity was properly granted and affirm that part of the judgment, since while indemnity is now moot as to punitive damages, it still applies to Gentile’s costs and disbursements. Reversed in part and affirmed in part. COYNE, J., took no part in the consideration or decision of this case.

377 N.W.2d 441 (1985) Orrin F. JACOBS, as Trustee for the Heirs and Next-of-Kin of Michael Gordon Jacobs, Deceased, and Orrin F. Jacobs and Audrey M. Jacobs, individually, Respondents, v. FARMLAND MUTUAL INSURANCE COMPANY, Petitioner, Appellant, Frank Gentile, Respondent. Nos. C5-83-2003, C5-84-52. Supreme Court of Minnesota. November 22, 1985. *442 William A. Moeller, New Ulm, for appellant. Michael T. Feichtinger, St. Cloud, for Gentile. Richard S. Roberts, Wheaton, Rufer, Hefte, Pemberton, Schulze, Sorlie, Sefkow & Kershner, Fergus Falls, for Jacobs. Heard, considered, and decided by the court en banc. SIMONETT, Justice. This appeal raises the question whether a jury, in setting aside a release fraudulently obtained by an adjuster, may award punitive damages against the adjuster and his insurance company. We reverse the award for punitive damages but affirm the trial court's ruling granting the adjuster indemnity against his insurance company. Michael Jacobs, age 20, was killed instantly on April 30, 1981, when his truck collided at an uncontrolled rural intersection with a car driven by Marilyn Rairdon. The Rairdon car was insured by defendant Farmland Mutual Insurance Company with liability limits of $25,000 per person and $50,000 per accident. Farmland assigned defendant Frank Gentile of Alexandria Adjusting Company to the case. Gentile, after his initial investigation and taking into consideration liability factors, the policy limits, and other potential claims, put a value on Michael's death claim of $15,000, and so reported to Farmland. Gentile then learned that Michael's parents had lost another son in an auto accident the previous year and had settled that passenger death claim for $4,000. This suggested to Gentile that Orrin Jacobs, the father, would be "exceedingly easy" to deal with, and, having relayed this further information to Farmland, Gentile was given authority to settle for $4,000. Seven days after the auto accident, Gentile met with Orrin Jacobs at the Jacobs farm. Gentile offered $4,000 and Jacobs accepted. There was very little discussion. Jacobs said he just "wanted to get rid of him." Jacobs did inquire about the loss of the pickup truck and some tools, and Gentile added $1,500 to the settlement for those items. Mr. Jacobs signed the release, after which Mrs. Jacobs signed also. Gentile was unaware that Mr. Jacobs could not read nor write, but Gentile testified he had explained the release to Mr. Jacobs. Some 6 months later, the Jacobses were sued by the injured passengers in the Rairdon car, and they then consulted counsel. Thereafter this lawsuit was commenced by Orrin F. Jacobs as Trustee for the heirs and next-of-kin of Michael Gordon Jacobs, deceased, and Orrin F. Jacobs and Audrey M. Jacobs, individually. Named as defendants were Marilyn Rairdon, John Rairdon, Farmland Mutual Insurance Company, and Frank Gentile. Plaintiffs' complaint, as amended, alleged a cause of action by the plaintiff trustee against defendants Marilyn and John Rairdon for the wrongful death of Michael Jacobs, and asked for damages in excess of $50,000. The complaint further alleged that plaintiffs Orrin F. Jacobs and Audrey M. Jacobs had previously signed a release of the death claim for $4,000 "which defendants now seek to assert as a defense"; that the release had been obtained by the fraudulent misrepresentations of defendant Frank Gentile, an insurance adjuster, acting on behalf of the defendant Farmland Mutual Insurance Company; and that the release should be declared void and be set aside. Finally, the complaint asked for punitive damages against defendants Gentile and Farmland *443 and in favor of plaintiffs Orrin F. Jacobs and Audrey M. Jacobs. Defendants' answers denied liability and asserted the release as an affirmative defense. On Farmland's motion, the issue of the validity of the release was severed from the wrongful death action and tried first. The jury, by special verdict, found that the release should be set aside because the Jacobses had been "laboring under mistake" and also because the release "was improvidently made and in equity and good conscience should not be allowed to stand." The jury further found that defendants had shown a willful indifference to the rights of others and awarded $100,000 punitive damages. The trial court, adopting the jury's answers as its own findings of fact, ordered judgment to be entered against Gentile and Farmland for $100,000 punitive damages, granted Gentile indemnity against Farmland, and denied Gentile's claim for attorney fees against Farmland. Defendants' post-trial motions, repeating their contentions that punitive damages could not be awarded against them in the absence of a finding of a separate tort, were denied. Farmland and Gentile appealed to the Minnesota Court of Appeals from the judgment and from the order denying their motions for a new trial on punitive damages. Farmland also appealed the indemnity issue, while Gentile appealed the denial of his claim for attorney fees. The court of appeals affirmed the trial court on all issues. Jacobs v. Farmland Mutual Insurance Co., 352 N.W.2d 803 (Minn.Ct. App.1984). We granted Farmland's petition for further review. After trial of the rescission action, the trustee's wrongful death action against the Rairdons was settled for $25,000, with Farmland paying its policy limits. The settlement expressly provided that it was without prejudice to the Jacobses' claim for punitive damages against Farmland and Gentile. The broad issue, as we see it, is: Where one seeks an equitable rescission of a release of an unliquidated tort claim fraudulently obtained by the defendants, rather than actual damages based upon the independent tort of fraud or deceit, may punitive damages be awarded as incidental to the equitable rescission? Our inquiry begins by placing the underlying fraud question in its proper perspective, and to do so requires analysis of the parties' contentions. In recognition that this dispute centers upon the issue of whether defendants' conduct as found by the jury provides a basis for an award of punitive damages, the parties seem to agree that there must be an accompanying tort before punitive damages will lie. Thus plaintiffs' brief argues that Gentile's conduct "constitutes the tort of fraud." Defendants disagree, but also point out that, in any event, neither the jury nor the trial court made any finding of fraud. Plaintiffs counter that a finding of fraud is implicit in the jury's verdict. The court of appeals agreed with plaintiffs, stating that the evidence which satisfies fraud is the same evidence on which the jury found that defendants were willfully indifferent to the rights of plaintiffs. In addition, the court of appeals held that defendants had waived submission of the fraud issue to the jury by failing to request a special verdict question on the issue. Assuming it was defendants' responsibility to request a fraud question, the record discloses, however, that defendants did make such a request, but the request was opposed by plaintiffs and denied by the trial court. Plaintiffs argue that under "the special circumstances of this case," defendants had an affirmative duty to disclose to Mr. Jacobs either that the claim had been evaluated at $15,000 or, at least, that $4,000 was an inadequate settlement, and that failure to make such a disclosure was a fraudulent misrepresentation that $4,000 was an adequate settlement. Defendants, on the other hand, contend that there was no fiduciary relationship between the adjuster and the claimants and, therefore, they had no duty to disclose their settlement strategy to the Jacobses. The court of appeals, relying on Richfield Bank & *444 Trust Co. v. Sjogren, 309 Minn. 362, 365, 244 N.W.2d 648, 650 (1976), apparently believed Gentile was under a duty to make some kind of disclosure. Defendants also claim there was no misrepresentation of any fact; rather, that, as Gentile put it, "[a] claim is worth what a party is willing to settle for." These arguments are not dispositive and need not be reached because we view the choice of remedy, i.e., equitable rescission, as determinative. The relief sought was not recovery of monetary damages for the conduct of Gentile and his principal, Farmland, but the rescission of the release of an unliquidated tort claim so that the plaintiffs might proceed as if surrender of the claim had never occurred. Equity will set aside a release and settlement if improvident or unconscionable and will prevent one party from taking an unconscionable advantage of another's mistake. Schoenfeld v. Buker, 262 Minn. 122, 131, 114 N.W.2d 560, 566-67 (1962). To establish entitlement to equitable rescission, the plaintiffs of necessity sought to prove that the release was improvident or the product of mistake, misrepresentation, or fraud. The jury, instructed by the trial court in a manner consistent with Schoenfeld, found that the release could not, in equity or good conscience, stand. The parties do not dispute this finding and it is the law of the case. We agree that a finding of fraud is implicit in the jury's finding that the release be set aside on the grounds of improvidence, unconscionability, and defendants' willful indifference to the rights of others.[1] A specific finding of fraud would still have entitled the plaintiffs to only that relief sought — rescission — and no more. We do not think, however, that a showing of willful indifference, by itself, entitles one to an award of punitive damages. Minn. Stat. § 549.20, subd. 1 (1984), provides that punitive damages are allowed "only upon clear and convincing evidence that the acts of the defendant show a willful indifference to the rights or safety of others." This language prescribes a burden of proof for punitive damages and attempts to characterize the kind of conduct required. The statute alone, however, does not entitle one to punitive damages unless certain other prerequisites are satisfied. Our case law suggests that punitive damages may be permitted only where the plaintiff is found entitled to actual or compensatory damages, Meixner v. Buecksler, 216 Minn. 586, 591, 13 N.W.2d 754, 757 (1944) (dictum); Erickson v. Pomerank, 66 Minn. 376, 69 N.W. 39 (1896), although we have allowed punitive damages without proof of actual damages in actions for defamation per se because of the "intangible harm" inflicted. Loftsgaarden v. Reiling, 267 Minn. 181, 183, 126 N.W.2d 154, 155, cert. denied, 379 U.S. 845, 85 S.Ct. 31, 13 L.Ed.2d 50 (1964); Anderson v. Kammeier, 262 N.W.2d 366, 372 (Minn.1977). Further, if plaintiff's cause of action is for breach of contract, the damages recovered for the breach will not support an award of punitive damages unless the breach also constitutes or is accompanied by an independent tort. Wild v. Rarig, 302 Minn. 419, 440, 234 N.W.2d 775, 790 (1975), cert. *445 denied, 424 U.S. 902, 96 S.Ct. 1093, 47 L.Ed.2d 307 (1976). Even if a contract is breached maliciously, punitive damages will not lie unless the maliciousness constitutes an independent tort. Barr/Nelson, Inc. v. Tonto's, Inc., 336 N.W.2d 46, 52-53 (Minn.1983); Haagenson v. National Farmers Union Property & Casualty Co., 277 N.W.2d 648, 652 (Minn.1979); Moore v. John E. Blomquist, Inc., 256 N.W.2d 518 (Minn.1977). Finally, the enactment of section 549.20, subd. 1, in 1978 did not overrule our prior case law prohibiting punitive damages for breach of contract. Minnesota-Iowa Television v. Watonwan T.V. Improvement Ass'n, 294 N.W.2d 297, 311 (Minn.1980). This is not a breach of contract case. To the contrary, by seeking rescission plaintiffs sought to establish that there was no contract at all. Neither, on the other hand, is this a tort case. Plaintiffs elected not to affirm the contract and sue in deceit for damages. "Damage is an essential element of a cause of action for fraud and deceit and is not merely a consequence flowing from it. * * * Thus, fraud without damage, while it will sustain a cause of action for rescission, will not support one at law for damages." Dupont v. Haggard, 235 Minn. 31, 33, 49 N.W.2d 186, 187 (1951). Here, plaintiffs asserted fraud only for the purpose of setting aside the release so as to deprive the negligent tortfeasors of an affirmative defense. Fraud used in this manner is no more an independent tort cause of action than is contributory negligence. Should we allow punitive damages in an equitable action for rescission of a release for unliquidated damages where there are no actual or compensatory damages?[2] The reason for the actual damages requirement seems to be a reluctance on the part of courts to permit private parties to bring actions solely to levy private fines. 70 Harv.L.Rev. 517, 528-29 (1957). This notion is sometimes expressed by stating that punitive damages are incidental to actual damages, Claude v. Weaver Construction Co., 261 Iowa 1225, 1229, 158 N.W.2d 139, 143 (1968), or that there is no separate cause of action for punitive damages, B.B. Walker Co. v. Ashland Chemical Co., 474 F.Supp. 651, 665 (M.D.N.C.1979), or that there must be an independent tort, Highland Construction Co. v. Union Pacific R. Co., 683 P.2d 1042, 1049 (Utah 1984). To put it another way, to avoid punitive damages being a loose cannon on the legal deck, courts prefer not to allow punitive damages unless the plaintiff has been harmed, and ordinarily the best way to define the harm is to require compensable harm.[3] This approach encounters difficulty when punitive damages are sought in a rescission action, for ordinarily there are no compensatory damages when the parties are simply *446 restored to the status quo ante. Some courts, nevertheless, especially in bargain transactions when there are restitutionary-type expenses recovered, are beginning to allow punitive damages in this situation,[4] while others do not.[5] This is not, however, our case here. The case before us is distinguishable from those rescission situations in which some courts have allowed an award of punitive damages.[6] When the release here was set aside, plaintiffs were "made whole" not by an award of actual, compensatory damages but by return of their unliquidated tort claim. Even so, although plaintiffs had neither pleaded nor reduced to judgment any actual damages in the rescission action, they had established that they had been damaged by the release in the sense that the $4,000 consideration was inadequate. We do not, however, think this type of contingent damage sufficient to warrant imposition of punitive damages. By seeking rescission, plaintiffs were not interested in recovering the difference between $4,000 and an adequate settlement proposal; rather, they were interested in recovering on their unliquidated tort claim. In this context, whether they had been actually harmed by the release was contingent on the outcome of the wrongful death tort claim against the Rairdons. There is no claim that the release, even though set aside, has somehow impaired plaintiffs' recovery in the wrongful death action. Indeed, as it has turned out, plaintiffs have recovered not just $15,000, the evaluation figure they claim the adjuster deceitfully withheld from them, but $10,000 more. We do not think the extraordinary remedy of punitive damages should be extended to this atypical rescission situation, and it is not unfair here to require plaintiffs to abide by the consequences of their choice of remedies. We hold, therefore, that since plaintiffs have not established the requisite kind of actual or compensatory damages, punitive damages are not recoverable and the judgment for punitive damages is reversed. Farmland has also appealed the ruling that it must indemnify Gentile. We believe indemnity was properly granted and affirm that part of the judgment, since while indemnity is now moot as to punitive damages, it still applies to Gentile's costs and disbursements. Reversed in part and affirmed in part. COYNE, J., took no part in the consideration or decision of this case. SCOTT, Justice (concurring in part, dissenting in part). I respectfully dissent from the majority's final disposition of the Jacobses' claim of fraudulent inducement. Although I agree with the majority that punitive damages cannot be awarded on a claim for rescission, I believe that the pleadings and record in this case indicate that the plaintiffs alleged an independent claim of fraud in tort on which punitive damages can be awarded. The Jacobses, therefore, should be granted a new trial and allowed to prove a claim of fraud in tort in order to establish punitive damages. In Count VI of their amended complaint, the Jacobses set forth the specific facts leading up to the signing of the insurance release. They then alleged that: Defendant Gentile * * * fraudulently offered the sum of $4,000.00 in settlement *447 for all damages sustained by [the plaintiffs], knowingly and intentionally relying upon the fraudulent misrepresentations of American Family Insurance Company and fraudulently misrepresenting the value of the claims arising out of the death of plaintiffs' decedent, and did commit said acts with the intent to induce said plaintiffs to rely upon his * * * fraudulent misrepresentations * * * and did thereby induce said plaintiffs to accept such settlement. (Emphasis added.) The Jacobses asked that the release be declared "null and void," and that the court award plaintiffs punitive damages in the amount of $50,000.00. To me, the amended complaint sets forth a general claim of fraud, rather than simply a claim of fraud sufficient to sustain only a cause of action for rescission, and the plaintiffs should not be precluded from establishing fraud in tort simply because it was not specifically pleaded. Although it is true that a party must state the circumstances constituting fraud with particularity, Minn.R.Civ.P. 9.02, it is unnecessary for a party to allege in a complaint the type of fraud he or she is intending to litigate. See Minn.R.Civ.P. 8.01. "[A]ll the Rules require is `a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 102-03, 2 L.Ed.2d 80 (1957) (footnote omitted); see 1 D. Herr and R. Haydock, Minnesota Practice: Civil Rules Annotated § 8.3, at 174-75 (2 ed. 1985) ("All that is necessary for a claim to be stated sufficiently is for the pleading to give notice of the claim and contain a reference to the occurrence or transaction with enough particularity to permit application of the doctrine of res judicata"). Here, the plaintiffs generally alleged fraud and put defendants on notice that this would be an issue at trial. They did not intend, I believe, to limit their claim of fraud only to that sufficient to support a cause of action for rescission. To so limit the plaintiffs' complaint, as the majority implicitly does by refusing to remand this case for a new trial, violates the modern rules of notice pleading and restricts the plaintiffs' ability to plead general, rather than specific, allegations. In addition, the record in this case indicates that the parties were under the assumption that an independent claim of fraud in tort was being litigated. In the discussion regarding requested jury instructions, Gentile's attorney specifically requested a written jury instruction regarding fraud. He then asked the court to verbally instruct the jurors that before punitive damages could be awarded, the jury must find that all the elements of fraud existed. This is in conformity with the law regarding punitive damages. See Wild v. Rarig, 302 Minn. 419, 440, 234 N.W.2d 775, 790 (1975), cert. denied 424 U.S. 902, 96 S.Ct. 1093, 47 L.Ed.2d 307 (1976). While Farmland's attorney objected to the submission of both the claim of fraud and punitive damages, he requested that if such claims were submitted there should first be a finding on the question of fraud and then a finding on the question of punitive damages. Similarly, the Jacobses' attorney merely objected to the form of the instruction and not to its submission. This discussion indicates that the parties assumed that a claim of fraud in tort was being litigated. There is also a question in this case of whether the plaintiffs can establish a claim of fraud in tort and whether further compensatory damages exist that can be the basis of a claim for punitive damages. Although I, too, have doubts about whether these claims can be established, I do not believe that it is this court's duty to determine these questions of fact for the plaintiffs. Our scope of review is narrow for questions of fact determined by either a jury or the trial court. See, e.g., City of Minnetonka v. Carlson, 298 N.W.2d 763 (Minn.1980) (scope of review for questions of fact determined by a trial court); Sandhofer v. Abbott-Northwestern Hospital, 283 N.W.2d 362 (Minn.1979) (scope of review for questions of fact determined by a jury). We would be violating this review standard by making assumptions as to *448 whether the plaintiffs can establish a claim of fraud or further compensatory damages in this case. Therefore, "[the plaintiffs] should be allowed to establish, if they can," a claim of fraudulent inducement under tort law. Doerr v. Clayson, 375 N.W.2d 488, 490-91 (Minn.1985). For the above-stated reasons, I dissent from that part of the majority's opinion that disposes of the Jacobses' claim of fraudulent inducement without remanding it to the trial court for further proceedings. NOTES [1] We do not think a finding of fraudulent misrepresentation is necessarily implicit in the jury's findings, but fraud is a protean legal concept, assuming many shapes and forms. In this case, Gentile was guilty of overreaching, which is a species of fraud, and the jury implicitly so found. Mr. Jacobs was a simple man, functionally illiterate, and inexperienced. This, combined with his grief, left him vulnerable to a superior negotiator. Gentile was unaware of Mr. Jacob's illiteracy, but, as an experienced adjuster, he could not have been unaware of the man's innate incapacity to negotiate effectively. This is not a case of a hard bargain fairly made but an unfair bargain unfairly made. Whether or not Gentile and Farmland had any duty to disclose their bargaining position, we do not decide. See, e.g., Kennedy v. Flo-Tronics, Inc., 274 Minn. 327, 331-32, 143 N.W.2d 827, 830 (1966) (discusses the distinction between a conscious misrepresentation of facts clearly susceptible of knowledge and "unconscionable overreaching with respect to the young, the gullible and inexperienced, or the simple and unwary"). It is enough that the defendants owed Mr. Jacobs a duty to bargain fairly and to make Mr. Jacobs a reasonable offer. Everybody agrees a reasonable offer was not made. [2] The court of appeals, noting that the parties had not asked it to address the issue of whether an award of punitive damages could be made absent an award of compensatory damages, went on to say that, in any event, "defendants have waived that issue by requesting severance of the issues involving compensatory and punitive damages which otherwise would have been tried together." We do not think defendants' request for a trial severance constituted any waiver of their position that punitive damages could not be awarded, a position that they have continued to assert at both appellate levels.

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Minneapolis Police Department v. Kelly · 2010 10 citations

The MPD also challenges the civil penalty payable to the City of Minneapolis and punitive-damage award. Because these two types of damage are interrelated, we consider them together. The ordinance specifies that punitive damages must comply with Minn. Stat. § 549.20, subd. 1(a) (2008). Ordinance § 141.50(m). Under that section, punitive damages are awarded when the offender acts with “deliberate disregard for the rights or safety of others.” Minn. Stat. § 549.20, subd. 1(a). The civil penalty is determined based on “the seriousness and extent of the violation, the public harm occasioned by the violation, whether the violation was intentional, the cost of investigation incurred by the City of Minneapolis, and the financial resources of the respondent.” Ordinance § 141.50(m). The MPD argues that (1) the factors for awarding punitive damages were not explicitly considered; (2) the civil-penalty analysis overlapped with the punitive-damage analysis; and (3) because the MPD is part of the City of Minneapolis, the MPD is paying the award to itself and civil damages are moot. The commission can award punitive damages for discrimination based on the “willful indifference” standards set forth in Minn. Stat. § 549.20. See Huygen v. Plums Enters. of St. Paul, Inc., 355 N.W.2d 149, 156 (Minn.App.1984) (invalidating a punitive damages award by a city’s human-rights commission because the standard used by the commission is inconsistent with the state willful-indifference standard embodied in Minn. Stat. § 549.20 (1982)). In Bougie v. Sibley Manor, Inc., we reversed the district court for not considering the factors in section 549.20. 504 N.W.2d 493, 499-500 (Minn.App.1993). Here, unlike in Bougie, the commission panel awarded punitive damages as a part of the special-verdict award in response to jury instructions that set forth the requisite statutory factors, finding that “by clear and convincing evidence,” the MPD “acted with deliberate disregard for the rights of [Kelly].” We note that this finding is essentially a function of the commission’s determination that the MPD wrongfully jailed Kelly based on his race. Furthermore, the presiding officer of the commission panel identified the required statutory analysis in her findings and memorandum of law. Because this explanation demonstrated application of section 549.20 and was supported by the commission’s prior findings, we conclude the commission did not err in awarding the punitive damages. The ordinance provision for the civil penalty applies on grounds similar to the punitive-damage award. Compare Ordinance § 141.50(m) with Minn. Stat. § 549.20. The MPD does not provide any legal basis for its argument that these two penalties, similar in their application, cannot be concurrently assessed on similar bases. In assessing the civil penalty, the commission’s special verdict found the ac*773tions by the MPD constituted “a serious violation which causes significant public harm by the erosion of public trust by citizens of color.” The commission concluded that the harm was intentional, serious, and detrimental to the public — all factors cited by the ordinance. The record indicates that substantial time of city employees was spent by the Minneapolis Department of Civil Rights in investigating and processing Kelly’s complaint. The MPD has not demonstrated that the $8,500 award is excessive or unsupported by substantial evidence. The MPD complains that an award of damages against the MPD for the Minneapolis general fund is unusual. It is well established, however, that “[e]very law shall be construed, if possible, to give effect to all its provisions.” Minn. Stat. § 645.16 (2008); see also Minn. Stat. § 645.17(2) (2008) (establishing presumption that legislature intends entire statute to be “effective and certain”). The ordinance plainly allows for civil penalties against all possible defendants, including public entities, and it explicitly addresses situations where the defendant is a “political subdivision” of the city. Ordinance § 141.50(m). This court does not disregard a legislative body’s decision if it is unambiguous. State by Beaulieu v. RSJ, Inc., 552 N.W.2d 695, 701 (Minn.1996). As a result, we decline to invalidate the civil penalty.6 In sum, we conclude that the award of damages based on a finding of racial discrimination is supported by substantial evidence and is not arbitrary and capricious. DECISION We affirm the commission’s finding that relator unfairly discriminated against Kelly in the decision to arrest and jail him for misdemeanor violations. We also affirm the commission’s award for emotional and punitive damages and the imposition of a civil penalty on relator. Affirmed.

The MPD also challenges the civil penalty payable to the City of Minneapolis and punitive-damage award. Because these two types of damage are interrelated, we consider them together. The ordinance specifies that punitive damages must comply with Minn. Stat. § 549.20, subd. 1(a) (2008). Ordinance § 141.50(m). Under that section, punitive damages are awarded when the offender acts with “deliberate disregard for the rights or safety of others.” Minn. Stat. § 549.20, subd. 1(a). The civil penalty is determined based on “the seriousness and extent of the violation, the public harm occasioned by the violation, whether the violation was intentional, the cost of investigation incurred by the City of Minneapolis, and the financial resources of the respondent.” Ordinance § 141.50(m). The MPD argues that (1) the factors for awarding punitive damages were not explicitly considered; (2) the civil-penalty analysis overlapped with the punitive-damage analysis; and (3) because the MPD is part of the City of Minneapolis, the MPD is paying the award to itself and civil damages are moot. The commission can award punitive damages for discrimination based on the “willful indifference” standards set forth in Minn. Stat. § 549.20. See Huygen v. Plums Enters. of St. Paul, Inc., 355 N.W.2d 149, 156 (Minn.App.1984) (invalidating a punitive damages award by a city’s human-rights commission because the standard used by the commission is inconsistent with the state willful-indifference standard embodied in Minn. Stat. § 549.20 (1982)). In Bougie v. Sibley Manor, Inc., we reversed the district court for not considering the factors in section 549.20. 504 N.W.2d 493, 499-500 (Minn.App.1993). Here, unlike in Bougie, the commission panel awarded punitive damages as a part of the special-verdict award in response to jury instructions that set forth the requisite statutory factors, finding that “by clear and convincing evidence,” the MPD “acted with deliberate disregard for the rights of [Kelly].” We note that this finding is essentially a function of the commission’s determination that the MPD wrongfully jailed Kelly based on his race. Furthermore, the presiding officer of the commission panel identified the required statutory analysis in her findings and memorandum of law. Because this explanation demonstrated application of section 549.20 and was supported by the commission’s prior findings, we conclude the commission did not err in awarding the punitive damages. The ordinance provision for the civil penalty applies on grounds similar to the punitive-damage award. Compare Ordinance § 141.50(m) with Minn. Stat. § 549.20. The MPD does not provide any legal basis for its argument that these two penalties, similar in their application, cannot be concurrently assessed on similar bases. In assessing the civil penalty, the commission’s special verdict found the ac*773tions by the MPD constituted “a serious violation which causes significant public harm by the erosion of public trust by citizens of color.” The commission concluded that the harm was intentional, serious, and detrimental to the public — all factors cited by the ordinance. The record indicates that substantial time of city employees was spent by the Minneapolis Department of Civil Rights in investigating and processing Kelly’s complaint. The MPD has not demonstrated that the $8,500 award is excessive or unsupported by substantial evidence. The MPD complains that an award of damages against the MPD for the Minneapolis general fund is unusual. It is well established, however, that “[e]very law shall be construed, if possible, to give effect to all its provisions.” Minn. Stat. § 645.16 (2008); see also Minn. Stat. § 645.17(2) (2008) (establishing presumption that legislature intends entire statute to be “effective and certain”). The ordinance plainly allows for civil penalties against all possible defendants, including public entities, and it explicitly addresses situations where the defendant is a “political subdivision” of the city. Ordinance § 141.50(m). This court does not disregard a legislative body’s decision if it is unambiguous. State by Beaulieu v. RSJ, Inc., 552 N.W.2d 695, 701 (Minn.1996). As a result, we decline to invalidate the civil penalty.6 In sum, we conclude that the award of damages based on a finding of racial discrimination is supported by substantial evidence and is not arbitrary and capricious. DECISION We affirm the commission’s finding that relator unfairly discriminated against Kelly in the decision to arrest and jail him for misdemeanor violations. We also affirm the commission’s award for emotional and punitive damages and the imposition of a civil penalty on relator. Affirmed.

The MPD also challenges the civil penalty payable to the City of Minneapolis and punitive-damage award. Because these two types of damage are interrelated, we consider them together. The ordinance specifies that punitive damages must comply with Minn. Stat. § 549.20, subd. 1(a) (2008). Ordinance § 141.50(m). Under that section, punitive damages are awarded when the offender acts with “deliberate disregard for the rights or safety of others.” Minn. Stat. § 549.20, subd. 1(a). The civil penalty is determined based on “the seriousness and extent of the violation, the public harm occasioned by the violation, whether the violation was intentional, the cost of investigation incurred by the City of Minneapolis, and the financial resources of the respondent.” Ordinance § 141.50(m). The MPD argues that (1) the factors for awarding punitive damages were not explicitly considered; (2) the civil-penalty analysis overlapped with the punitive-damage analysis; and (3) because the MPD is part of the City of Minneapolis, the MPD is paying the award to itself and civil damages are moot. The commission can award punitive damages for discrimination based on the “willful indifference” standards set forth in Minn. Stat. § 549.20. See Huygen v. Plums Enters. of St. Paul, Inc., 355 N.W.2d 149, 156 (Minn.App.1984) (invalidating a punitive damages award by a city’s human-rights commission because the standard used by the commission is inconsistent with the state willful-indifference standard embodied in Minn. Stat. § 549.20 (1982)). In Bougie v. Sibley Manor, Inc., we reversed the district court for not considering the factors in section 549.20. 504 N.W.2d 493, 499-500 (Minn.App.1993). Here, unlike in Bougie, the commission panel awarded punitive damages as a part of the special-verdict award in response to jury instructions that set forth the requisite statutory factors, finding that “by clear and convincing evidence,” the MPD “acted with deliberate disregard for the rights of [Kelly].” We note that this finding is essentially a function of the commission’s determination that the MPD wrongfully jailed Kelly based on his race. Furthermore, the presiding officer of the commission panel identified the required statutory analysis in her findings and memorandum of law. Because this explanation demonstrated application of section 549.20 and was supported by the commission’s prior findings, we conclude the commission did not err in awarding the punitive damages. The ordinance provision for the civil penalty applies on grounds similar to the punitive-damage award. Compare Ordinance § 141.50(m) with Minn. Stat. § 549.20. The MPD does not provide any legal basis for its argument that these two penalties, similar in their application, cannot be concurrently assessed on similar bases. In assessing the civil penalty, the commission’s special verdict found the ac*773tions by the MPD constituted “a serious violation which causes significant public harm by the erosion of public trust by citizens of color.” The commission concluded that the harm was intentional, serious, and detrimental to the public — all factors cited by the ordinance. The record indicates that substantial time of city employees was spent by the Minneapolis Department of Civil Rights in investigating and processing Kelly’s complaint. The MPD has not demonstrated that the $8,500 award is excessive or unsupported by substantial evidence. The MPD complains that an award of damages against the MPD for the Minneapolis general fund is unusual. It is well established, however, that “[e]very law shall be construed, if possible, to give effect to all its provisions.” Minn. Stat. § 645.16 (2008); see also Minn. Stat. § 645.17(2) (2008) (establishing presumption that legislature intends entire statute to be “effective and certain”). The ordinance plainly allows for civil penalties against all possible defendants, including public entities, and it explicitly addresses situations where the defendant is a “political subdivision” of the city. Ordinance § 141.50(m). This court does not disregard a legislative body’s decision if it is unambiguous. State by Beaulieu v. RSJ, Inc., 552 N.W.2d 695, 701 (Minn.1996). As a result, we decline to invalidate the civil penalty.6 In sum, we conclude that the award of damages based on a finding of racial discrimination is supported by substantial evidence and is not arbitrary and capricious. DECISION We affirm the commission’s finding that relator unfairly discriminated against Kelly in the decision to arrest and jail him for misdemeanor violations. We also affirm the commission’s award for emotional and punitive damages and the imposition of a civil penalty on relator. Affirmed.

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JW Ex Rel. BRW v. 287 INTER. DIST. · 2009 2 citations

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Thompson v. Hughart · 2003 2 citations

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Ray v. Miller Meester Advertising, Inc. · 2003 2 citations

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In Re Silicone Implant Insurance Coverage Litigation · 2002 4 citations

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L.M. Ex Rel. S. v. Karlson · 2002 3 citations

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Johns v. Harborage I, Ltd. · 1998 1 citation

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American Family Mutual Insurance Co. v. M.B. · 1997 2 citations

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Sullivan v. Spot Weld, Inc. · 1997 1 citation

Sullivan filed a “Motion to Reconsider,” purportedly based on Minn.R.Civ.P. 56, the rule regarding summary judgment, and Minn. Stat. § 549.20, the provision regarding punitive damages. The motion was accompanied by counsel’s affidavit stating that he had given the MDHR telephone notice of his intention to pursue a private civil action “pri- or to” February 18, 1994. In his “Reply Memorandum in Support of Motion for Reconsideration,” Sullivan alleged that the motion was authorized under Minn.R.Civ.P. 60.02.

Molenaar v. United Cattle Co. · 1996 10 citations

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Nugent v. Kerr · 1996 5 citations

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Lundman v. McKown · 1995 2 citations

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Kennedy, Matthews, Landis, Healy & Pecora, Inc. v. Young · 1994 2 citations

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Soucek v. Banham · 1994 2 citations

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Zawels v. Edutronics, Inc. · 1994 4 citations

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Kroschel v. City of Afton · 1994 1 citation

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Bougie v. Sibley Manor, Inc. · 1993 3 citations

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Independent School District No. 622 v. Keene Corp. · 1993 5 citations

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Hanks v. Hubbard Broadcasting, Inc. · 1992 2 citations

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Claflin v. Commercial State Bank of Two Harbors · 1992 2 citations

In addition to her claim that the mortgage is invalid against her interests, Margaret sought punitive damages based on the Bank’s conduct in taking the mortgage. The level of conduct required to establish punitive damages is governed by Minn. Stat. § 549.20 which provides in pertinent part:

In addition to her claim that the mortgage is invalid against her interests, Margaret sought punitive damages based on the Bank’s conduct in taking the mortgage. The level of conduct required to establish punitive damages is governed by Minn. Stat. § 549.20 which provides in pertinent part:

Kay v. Peter Motor Co., Inc. · 1992 3 citations

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Hunt v. University of Minnesota · 1991 1 citation

The trial court also properly denied Hunt’s motion to amend her complaint to allege a claim for punitive damages against Kegler. Punitive damages may be awarded when the evidence clearly and convincingly shows the defendant acted with willful indifference to the rights of others. Minn. Stat. § 549.20, subd. 1 (1988). As Hunt has neither an actionable defamation claim nor a tortious interference with prospective business relations claim, she has no grounds upon which to base her claim for punitive damages. Further, Hunt has not shown Kegler acted with willful indifference to her rights. See Wirig, 461 N.W.2d at 381 (defendant who subjectively believed in truth of statement did not act with willful indifference). Thus, the trial court properly denied Hunt’s motion to amend her complaint.

Swanlund v. Shimano Indus. Corp., Ltd. · 1990 2 citations

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Herbst v. Northern States Power Co. · 1988 1 citation

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ESTATE OF JONES BY BLUME v. Kvamme · 1988 2 citations

Kvamme argues that the jury instructions on punitive damages should have included the “clear and convincing evidence” standard of proof under Minn. Stat. § 549.20, subd. 1 (1978). We cannot agree. Section 549.20 has an effective date of April 15, 1978, to apply “to all causes of action arising on or after that date.” 1978 Minn.Laws, ch. 738, § 11. Although the fraud was discovered in 1980 after the enactment of section 549.20, the cause of action as found by the trial court arose in 1967 and, therefore, the language of the statute itself indicates that it is inapplicable. We note, further, that the trial court’s determination that the cause of action arose in 1967 is supported by case law. In Wilson

Kvamme argues that the jury instructions on punitive damages should have included the “clear and convincing evidence” standard of proof under Minn. Stat. § 549.20, subd. 1 (1978). We cannot agree. Section 549.20 has an effective date of April 15, 1978, to apply “to all causes of action arising on or after that date.” 1978 Minn.Laws, ch. 738, § 11. Although the fraud was discovered in 1980 after the enactment of section 549.20, the cause of action as found by the trial court arose in 1967 and, therefore, the language of the statute itself indicates that it is inapplicable. We note, further, that the trial court’s determination that the cause of action arose in 1967 is supported by case law. In Wilson

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Robinson v. MacK Trucks, Inc. · 1988 2 citations

+ 2 more citations in this opinion.

Johnson v. Ramsey County · 1988 2 citations

+ 2 more citations in this opinion.

Department of Human Rights Ex Rel. Cooper v. Spiten · 1988 1 citation

+ 1 more citation in this opinion.

State Ex Rel. Woyke v. Tonka Corp. · 1988 1 citation

+ 1 more citation in this opinion.

Tsudek v. Target Stores, Inc. · 1987 1 citation

+ 1 more citation in this opinion.

Nachtsheim v. Wartnick · 1987 1 citation

+ 1 more citation in this opinion.