Sherwood Forest, Inc., Respondent,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).

STATE OF MINNESOTA
IN COURT OF APPEALS
A17-0333

Sherwood Forest, Inc.,
Respondent,

vs.

Arctic Cat, Inc., et al.,
Appellants.

Filed September 11, 2017
Affirmed
Toussaint, Judge

Hennepin County District Court
File No. 27-CV-15-3047

Chad McKenney, Bradley D . Hendrikson, Donohue McKenney , Ltd., Maple Grove,
Minnesota (for respondent)

Erik T . Salveson, John J . Wackman, David J . Warden, Nilan Johnson Lewis PA,
Minneapolis, Minnesota (for appellants)

Considered and decided by Smith, Tracy M., Presiding Judge; Cleary, Chief Judge;
and Toussaint, Judge.

 Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.

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U N P U B L I S H E D O P I N I O N
TOUSSAINT, Judge
In this appeal from a judgment for respondent on its breach -of-contract claims,
appellants argue that they are entitled to judgment as a matter of law (JMOL) or a new trial
because (1) the evidence does not support the amount of damages the jury awarded to
respondent, (2) the damages evidence was speculative and lacked foundation, (3) a
provision governing respondent’s fee was ambiguous, and (4) the evidence does not
support the jury’s finding that respondent performed all conditions precedent to appellants’
contractual duty to pay respondent. Because the evidence supports the jury’s findings and
because the district court did not err in its evidentiary rulings, we affirm.
D E C I S I O N
If a party moves for JMOL after a jury returns a verdict, the district court may
“(1) allow the judgment to stand, (2) order a new trial, or (3) direct entry of judgment as a
matter of law.” Minn. R. Civ. P. 50.02. “The jury’s verdict will not be set aside if it can
be sustained on any reasonable theory of the evidence.” Longbehn v. Schoenrock , 727
N.W.2d 153, 159 (Minn. App. 2007) (quotation omitted). “Courts must view the evidence
in the light most favorable to the nonmoving party and determine whether the verdict is
manifestly against the entire evidence or whether despite the jury’s findings of fact the
moving party is entitled to judgment as a matter of law.” Id. (quotation omitted). “JMOL
is appropriate when a jury verdict has no reasonable support in fact or is contrary to law.”
Id. An appellate court reviews a district court’s denial of JMOL de novo. Id.

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Under Minn. R. Civ. P. 59.01(g), a district court may grant a motion for a new trial
if “[t]he verdict . . . is not justified by the evidence, or is contrary to law.” “On appeal from
a denial of a motion for a new trial, an appellate court should not set aside a jury verdict
unless it is manifestly and palpably contrary to the evidence viewed as a whole and in the
light most favorable to the verdict.” Raze v. Mueller, 587 N.W.2d 645, 648 (Minn. 1999)
(quotations omitted). Because the district court is in a better position to determine whether
the verdict is justified by the e vidence, this court will not reverse its decision to deny a
motion for a new trial absent a clear abuse of discretion. See Baker v. Amtrak Nat ’l R.R.
Passenger Corp., 588 N.W.2d 749, 753 (Minn. App. 1999).
I.
A damages award for a breach-of-contract claim should put the injured party in the
position in which it would be had the contract been performed. Lesmeister v. Dilly , 330
N.W.2d 95, 102 (Minn. 1983). Consequential damages are those that flow naturally from
the breach of a contract or are reasonably contemplated by the parties as a probable result
of the breach. Imdieke v. Blenda –Life, Inc., 363 N.W.2d 121, 125 (Minn. App. 1985),
review denied (Minn. Apr. 26, 1985). The harmed party has the burden to demonstrate
consequential damages “with a reasonab le degree of certainty and exactness.” County of
Blue Earth v. Wingen, 684 N.W.2d 919, 924 (Minn. App. 2004) (quotation omitted).
The fact -finder “need not adopt the exact figures of any witness in determining
damages, and as long as its finding is within the mathematical limitations established by
the various witnesses and is otherwise reasonably supported by the evidence as a whole,
such finding must be sustained.” Fudally v. Ching Johnson Builders, Inc. , 360 N.W .2d

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436, 439 (Minn. App. 1985) (quotation omitted); see also Hydra-Mac, Inc. v. Onan Corp.,
450 N.W.2d 913, 921 (Minn. 1990) (affirming damages award when plaintiff presented
sufficient evidence to support a reasonable inference that its claim for lost profits resulted
directly from defendant’s breach of warranties and product-defect problems and defendant
presented no evidence to rebut that inference).
Appellants Arctic Cat Inc. and Ar ctic Cat Sales Inc. (collectively Arctic Cat) used
FedEx as their major small parcel shipping carrier, but sought to reduce their shipping
costs. In pursuit of this goal, Ar ctic Cat engaged in lengthy negotiations with UPS,
resulting in a contract signed in September 2013, which included defined shipping rates
and a quarterly rebate of $62,500 if certain volume requirements were met.
Respondent Sherwood Forest Inc. is a consulting firm that helps companies
negotiate pricing and terms in small-package shipping contracts. In May 2013, Sherwood
Forest entered into a contract with Arctic Cat to analyze shipping costs and help Arctic Cat
negotiate lower rates with shippers. Sherwood Forest would receive a percentage of the
savings achieved through its efforts. The contract specified that Arctic Cat’s then-current
agreements with FedEx would serve as a baseline for determining cost reductions. Arctic
Cat’s agreement with UPS was not final until several months after its agreement with
Sherwood Forest.
Arctic Cat refused to pay Sherwood Forest a percentage of the savings achieved
under the UPS contract, and Sherwood Forest sued for breach of contract. A jury reached
a verdict in favor of Sherwood Forest and awarded damages of $249,888.04 out of its claim
for $292,827.50 in damages.

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Arctic Cat argues that the evidence was insufficient to prove damages because
(1) the “damag es calculation [was] based almost exclusively on a percentage of the
quarterly rebate without any evidence of net savings” ; and (2) Sherwood Forest was
allowed to claim a fee for the rebate, but “the undisputed evidence conclusively proved
that Sherwood Forest did not achieve that rebate.”
In support of its damages claim, Sherwood Forest provided the testimony of its
employee, Douglas Allen, a small-package contract optimization specialist . He testified
that he used a computer program to compare the baseline FedEx contract with the UPS
final incentive program agreement (IPA) to determine the savings. Sherwood Forest’s fee
was calculated based on the total savings . Allen explained that to determine the total
savings, Sherwood Forest “take[s] the baseline FedEx agreement, the discounts and
incentives, the terms and the conditions, and we measure against the UPS contract
discounts, incentives, terms and conditions, and it will show by a line item a savings per
package.” The $62,500 quarterly rebate was included as a line-item savings.
Sherwood Forest argues that “Arctic Cat receiving a check for the $62,500 is its
own ‘financial event, ’ and since there is not comparable rebate in the Baseline FedEx
Agreement, the whole $62,500 qualifies as additional savings subject to the 33% fee under
the PSA [professional services agreement] .” Arctic Cat counters that there were no t net
savings because any savings resulting from the reba te were largely eliminated by co st
increases in the IPA that took effect in January 2014.

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In the order denying Arctic Cat’s posttrial motion, the district court stated:
Mr. Allen explained that the quarterly rebate of $62,500 is a
line-item addition. That is, because there is no quarterly rebate
in the Baseline FedEx Agreement, there is nothing to offset the
amount when running a comparison of the Final UPS
Agreement and the Baseline FedEx Agreement. According to
Mr. Allen, because the quarterly rate is its own line -item
addition, it is not reduced for billing purposes by increased
costs for other services (e.g. annual rate increases, fuel
surcharges, etc.) That is, the fee for the quarterly rate is not
affected by potential increases to Arctic Cat’s net costs – it is a
separate line item, that is compared to a similar provision, if
any, the Baseline FedEx Agreement. This understanding is
supported by the language in th e PSA’s Fee Provision that
specifies that savings will be calculated “[o]n a per service or
minute or financial event basis[.]” Arctic Cat receiving a check
for the $62,500 is its own “financial event,” and since there is
no comparable rebate in the Basel ine FedEx Agreement, the
whole $62,500 qualifies as “additional savings” subject to the
33% fee under the PSA.

The evidence presented by Sherwood Forest was sufficient to prove its damages to
a reasonable degree of certainty, the calculation methods used were explained in testimony
and consistent with the PSA’s language, and the jury’s damages award was over $40,000
less than Sherwood Forest’s claimed damages. The district court did not err in denying
Arctic Cat’s motion for JMOL or a new trial based on insufficient evidence to prove
damages.
II.
The district court has broad discretion to admit expert testimony, and rulings on
materiality and foundation will be reversed only if the district court clearly abused its
discretion. State v. Ritt, 599 N.W.2d 802, 810 (Minn. 1999). “If scientific, technical, or
other specialized knowledge will assist the trier of fact to understand the evidence or to

7
determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience,
training, or education, may testify thereto in the form of an opinion or otherwise.” Minn.
R. Evid. 7.02.
Arctic Cat argues that the district court erred in allowing Allen to testify on Arctic
Cat’s actual savings under the UPS IPA because Allen did not have firsthand kn owledge
of those savings. The actual savings calculation for the first three months was done by an
independent analyst. But Allen’s work experience included 30 years of employment with
UPS, during the last ten of which he was a national account manager managing their largest
package shipper. After leaving UPS in 2004, he worked as a consultant in contract
optimization for Sherwood Forest. The district court determined:
Mr. Allen testified that he produced reports that
calculate Arctic Cat’s savings and fees represented in Exhibit
138. Mr. Allen explained that these reports are generated by
uploading agreements into [a] software program and
comparing the agreements against one another and against
Arctic Cat’s billing detail. He explained that the terms ,
conditions, and incentives for the Baseline FedEx Agreement
had already been uploaded into [the] software program when
he did his initial analysis comparing the baseline FedEx
Agreement to the February 2013 UPS Proposal. In order to
calculate Arctic Cat ’s savings and Sherwood Forest’s
damages, Mr. Allen uploaded the Final UPS Agreement into
the software program and compared that agreement against the
Baseline FedEx Agreement.

The district court did not err in determining that Allen’s testimony was suppo rted by
adequate foundation.
Arctic Cat also objects to Sherwood Forest’s failure to disclose the analyst during
discovery and to produce reports and other documentation. See Minn. R. Evid. 1006

8
comm. cmt. (stating that the original, underlying documents “must be made available for
inspection or copying”). To obtain a new trial based on an erroneous evidentiary ruling, a
party must show that the error caused prejudice. Kroning v. State Farm Auto. Ins. Co., 567
N.W.2d 42, 45 -46 (Minn. 1997). Because Arct ic Cat has established no prejudice, any
error in lack of disclosure is not a basis for a new trial.
III.
“The primary goal of contract interpretation is to ascertain and enforce the intent of
the parties.” Valspar Refinish, Inc. v. Gaylord’s, Inc., 764 N.W.2d 359, 364 (Minn. 2009);
see also Travertine Corp. v. Lexington –Silverwood, 683 N.W.2d 267, 271 (Minn. 2004).
The parties’ intent is determined from the contract’s plain language if the agreement is
unambiguous. Id. A contract is ambiguous “if, judged by its language alone and without
resort to parol evidence, it is reasonably susceptible of more than one meaning.” Metro
Office Parks Co. v. Control Data Corp., 295 Minn. 348, 351, 205 N.W.2d 121, 123 (1973);
see also Dykes v. Sukup Mfg. Co. , 781 N.W.2d 578, 582 (Minn. 2010). We apply a de
novo standard of review to the question whether a contract is ambiguous. Carlson v.
Allstate Ins. Co., 749 N.W.2d 41, 45 (Minn. 2008). “The interpretation of a contract is a
question of law if no ambiguity exists, but if ambiguous, it is a question of fact and extrinsic
evidence may be considered.” City of V irginia v. Northland Office Props. Ltd. , 465
N.W.2d 424, 427 (Minn. App. 1991), review denied (Minn. Apr. 18, 1991).
Arctic Cat argues that the PSA’s fee provision only applies to savings that Sherwood
Forest’s work achieved for Arctic Cat. The fee provision states:

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For providing the services set forth above, [Sherwood
Forest] shall be paid a fee equal to THIRTY THREE percent
(33%) of the additional sav ings realized by [Arctic Cat]
following the involvement of [Sherwood Forest]. Additional
savings shall be calculated as follows:
For an initial term of THIRTY SIX (36) months,
commencing the first full month that cost reductions are in
place, and contin uing for THIRTY FIVE (35) consecutive
months thereafter, Actual Cost Reductions (ACR) realized by
[Arctic Cat] shall be compared to baseline costs.
. . . .
[Arctic Cat’s] current technology or services cost
and carrier agreements in force as of the date of this agreement
shall be considered as baseline for purposes of computing the
ACR. On a per service or minute or financial event as is,
[Sherwood Forest] will measure the ACR realized by [Arctic
Cat].
For Example: After [Sherwood Forest]
has achieved cost reductions for [Arctic Cat], a technology or
service may cost $9.00. If, prior to the involvement of
[Sherwood Forest], the cost for this same service would have
been $10.00, the ACR on this service is $1.00, and the
[Sherwood Forest] fee is $.33.

Based on the dictionary definition of “involvement,” the district court concluded
that the fee provision did not require a causal connection between Sherwood Forest’s work
and savings realized by Arctic Cat for Sherwood Forest to be entitled to a fee. But based
on the definition of “achieve,” the court determined that the example in the fee provision
could be interpreted to mean that Sherwood Forest is only entitled to a fee for cost
reductions that resulted from its work. The district court then determined:
At trial, Mr. Hanson testified that shipping carriers like UPS
and FedEx will often refuse to negotiate directly with third -
party consultants like Sherwood Forest. Because of this,
Sherwood Forest works “behind the scenes” by providing
negotiation advice and strategies to the client who then uses
that information to directly negotiate better contract terms with
its shipping carrier. Mr. Hanson explained that he tells clients

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Sherwood Forest will be entitled to a fee for any savings
realized by th e client after Sherwood Forest is hired because
Sherwood Forest is not privy to what information is actually
used by the client during negotiations with a shipping carrier.
This avoids any disagreement regarding who contributed what
to achieve savings. H owever, exceptions can be negotiated
into the PSA such that Sherwood Forest will not be entitled to
a fee for certain savings achieved after the PSA has been
signed. There are no exceptions written into the PSA executed
by Arctic Cat and Sherwood Forest.

The district court did not err in concluding that the PSA was ambiguous and admitting
extrinsic evidence to resolve the ambiguity.
IV.
Arctic Cat argues that the evidence proved that Sherwood Forest did not perform
any work that achieved savings for Arc tic Cat. Allen testified that the first step in his
analysis was to compare the cost of the UPS proposal to the FedEx contract based on the
number of shipping transactions and that “that was done approximately mid-June, June
18th.” Allen testified that on June 18, 2013, he had a conference call with Dave Paulson
and Vicky Sabo of Arctic Cat and gave them his recommendations for improving the UPS
proposal. John Martens of UPS proposed eliminating the signing bonus and increasing the
quarterly rebate to $62,500 in a June 12, 2013 e-mail. On July 21, 2013, Sherwood Forest
issued a three -page document with specific recommendations for changes to the UPS
proposal, and Allen reviewed it with Paulson and Sabo. On July 22, 2013, Tracy Crocker,
vice-president of Arctic Cat, sent Martens an e -mail requesting that the discounts be
changed from dollars/cents to percentages, which was what Allen had recommended.
These recommendations were incorporated into the IPA. Also, on September 19, 2013,

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before signing the fi nal IPA, Crocker reviewed Allen’s savings analysis. The evidence
supports the jury’s findings that Sherwood Forest performed all conditions precedent to
Arctic Cat’s contractual duty to pay Sherwood Forest. See Nat’l City Bank of Minneapolis
v. St. Paul Fire & Marine Ins. Co. , 447 N.W.2d 171, 17 6 (Minn. 1989) (stating that a
condition precedent is a fact or event after a contract is formed, that “must exist or occur
before a duty of immediate performance arises under the contract”).
Affirmed.