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Bassford Remele is a full service litigation firm located in Minneapolis, Minnesota. Founded in 1882, the firm represents local, national and international clients in all areas of civil litigation and dispute resolution.
Case Law Update
Date: April 25, 2008 — Minneapolis, MN
During the week of April 25, 2008, the Minnesota appellate courts released an opinion on the following topic that may be of interest to our clients:
CONTRACT LAW - CONTRACT NOT TO SUE
- A contract not to sue that reflects an intent to temporarily refrain from bringing a cause of action, rather than an intent to extinguish the cause of action, is not a release that bars the cause of action.
Plaintiff alleged sexual harassment and other employment-related claims against defendants. To provide time for settlement negotiations and avoid litigation, plaintiff and defendants entered into an agreement to toll the statute of limitations. Under this agreement, plaintiff promised not to sue during the term of the tolling agreement and any party could cancel the tolling agreement upon ten days notice. When negotiations broke down, defendants provided notice of their cancellation of the agreement. Less than ten days later, plaintiff brought suit against defendants. After the parties proceeded through discovery, defendants moved for summary judgment. The district court granted summary judgment because plaintiff brought her action during the time period when she agreed not to initiate an action.
The Court of Appeals reversed, holding that the contract not to sue for a limited period of time did not bar plaintiff’s cause of action. The Court explained that plaintiff’s agreement was not a release because the terms of the agreement evidenced no intent to extinguish plaintiff’s cause of action and instead reflected intent to preserve the cause of action while the parties negotiated in an effort to avoid litigation.
Michelle Kunza v. St. Mary’s Regional Health Center, A07-0360, (Minn. Ct. App. 4/22/08).
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