                            This opinion will be unpublished and
                            may not be cited except as provided by
                            Minn. Stat. § 480A.08, subd. 3 (2014).

                                 STATE OF MINNESOTA
                                 IN COURT OF APPEALS
                                       A15-1850

                                    Waseca County, et al.,
                                        Appellants,

                                              vs.

                          Minnesota Department of Transportation,
                                      Respondent.

                                     Filed June 27, 2016
                                          Affirmed
                                      Schellhas, Judge

                                 Steele County District Court
                                   File No. 74-CV-15-991

Justin P. Weinberg, Jonathan P. Schmidt, W. Knapp Fitzsimmons, Briggs and Morgan,
P.A., Minneapolis, Minnesota (for appellants)

Lori Swanson, Attorney General, Stephen D. Melchionne, Assistant Attorney General, St.
Paul, Minnesota (for respondent)

         Considered and decided by Schellhas, Presiding Judge; Peterson, Judge; and Reyes,

Judge.

                           UNPUBLISHED OPINION

SCHELLHAS, Judge

         Appellants challenge the district court’s rule-12.02(e) dismissal of their complaint.

We affirm.
                                          FACTS

       We set forth the facts as alleged in the complaint and its exhibits. See Walsh v. U.S.

Bank, N.A., 851 N.W.2d 598, 601, 606 (Minn. 2014) (stating that, when reviewing the rule-

12.02(e) dismissal of a complaint, “[appellate courts] accept the facts alleged in the

complaint as true and construe all reasonable inferences in favor of the nonmoving party”).

In December 2012, respondent Minnesota Department of Transportation (MnDOT)

released to appellants Waseca County and Steele County (the counties) portions of Old

Trunk Highway No. 14 (Old Highway 14) that were located in the counties. The counties

initiated separate lawsuits, which were later consolidated, alleging, among other things,

that MnDOT was not permitted to “revert [Old Highway 14] to the Counties without an

agreement in place at the time of the reversion.”

       In January 2014, the counties and MnDOT executed a settlement agreement and

release. The settlement agreement requires MnDOT to perform certain work at its expense

on several segments of Old Highway 14. As to Waseca County Segments 1, 3, and 5 and

Steele County Segment 2 (subject highway segments), which are at issue in this case,

MnDOT agreed to “reclaim to aggregate the existing shoulders.”1 And MnDOT agreed that

all of its work would “be completed in accordance with applicable Minnesota Statutes,

MnDOT Rules, and MnDOT [T]echnical Design Standards.”




1
  “[A]ggregate” means “[t]he mineral materials, such as sand or stone, used in making
concrete.” The American Heritage Dictionary of the English Language 33 (4th ed. 2006)
[hereinafter American Heritage Dictionary].

                                             2
       In April 2015, the counties sued MnDOT, claiming that MnDOT-issued Technical

Memorandum No. 12-12-TS-06 (technical memorandum) requires, “at least in part, paved

shoulders” for the subject highway segments and alleging that MnDOT ignored the

technical memorandum’s design requirements by instructing a third-party design engineer

that the shoulders of the subject highway segments should be aggregate. The counties

sought a declaratory judgment that the shoulders of the subject highway segments must be

paved in accordance with the technical memorandum. MnDOT moved to dismiss the

counties’ complaint for failure to state a claim on which relief can be granted. The district

court granted MnDOT’s motion.

       This appeal follows.

                                       DECISION

       “When reviewing a case dismissed pursuant to Minn. R. Civ. P. 12.02(e) for failure

to state a claim on which relief can be granted, the question before [an appellate] court is

whether the complaint sets forth a legally sufficient claim for relief.” Hebert v. City of Fifty

Lakes, 744 N.W.2d 226, 229 (Minn. 2008). “[Appellate courts] review de novo whether a

complaint sets forth a legally sufficient claim for relief.” Walsh, 851 N.W.2d at 606.

Although “[appellate courts] accept the facts alleged in the complaint as true and construe

all reasonable inferences in favor of the nonmoving party,” id., “a legal conclusion in the

complaint is not binding on [an appellate court],” Bahr v. Capella Univ., 788 N.W.2d 76,

80 (Minn. 2010).

       A pleading must “contain a short and plain statement of the claim showing that the

pleader is entitled to relief and a demand for judgment for the relief sought.” Minn. R. Civ.


                                               3
P. 8.01. “A claim is sufficient against a motion to dismiss for failure to state a claim if it is

possible on any evidence which might be produced, consistent with the pleader’s theory,

to grant the relief demanded.” Walsh, 851 N.W.2d at 603.

       In this case, the district court dismissed the counties’ complaint, concluding that

“the plain and unambiguous language of the [settlement agreement] requires only that

[MnDOT] reclaim the shoulder of the [subject highway segments] to aggregate.” The

counties argue that the district court erred in its interpretation of the settlement agreement

because the agreement incorporates MnDOT’s technical design standards and those

standards require paved shoulders on the subject highway segments. “In deciding a motion

to dismiss, [a] court ‘may consider the entire written contract when the complaint refers to

the contract and the contract is central to the claims alleged.’” Baker v. Best Buy Stores,

LP, 812 N.W.2d 177, 180 (Minn. App. 2012) (quoting In re Hennepin Cty. 1986 Recycling

Bond Litig., 540 N.W.2d 494, 497 (Minn. 1995)), review denied (Minn. Apr. 25, 2012).

              A settlement agreement is a contract, and [appellate courts]
              review the language of the contract to determine the intent of
              the parties. When the language is clear and unambiguous,
              [appellate courts] enforce the agreement of the parties as
              expressed in the language of the contract. But if the language
              is ambiguous, parol evidence may be considered to determine
              intent. Whether a contract is ambiguous is a question of law
              that [appellate courts] review de novo. The language of a
              contract is ambiguous if it is susceptible to two or more
              reasonable interpretations.

Dykes v. Sukup Mfg. Co., 781 N.W.2d 578, 581–82 (Minn. 2010) (citations omitted).




                                               4
       Paragraph 2 of the settlement agreement describes the “Work” or “Project” that

MnDOT agreed to complete, at its expense, on several segments of Old Highway 14. As

to the subject highway segments, paragraph 2A provides:

              MnDOT agrees to complete highway preservation work as
              follows: mill of up to 4[ inches] (including appropriate
              patching), and pave a 5[-inch] unbonded concrete overlay with
              a width of 24[ feet] consistent with MnDOT Rules and
              Technical Design Specifications (construction means and
              methods will, at a minimum, satisfy the requirements of
              MnDOT’s State-Aid Rules), in the above-referenced sections,
              as shown in attached Exhibit D. MnDOT will reclaim to
              aggregate the existing shoulders.

(Emphasis added.) Exhibit D to the settlement agreement contains five diagrams of the four

subject highway segments; each diagram shows a point at which to “RECLAIM TO AGG

SHOULDER.” And the notes to Exhibit D state, “NEW CLASS 2 SHOULDER

AGGREGATE BASE WHICH WILL CONSIST OF RECLAIMED BITUMINOUS

SHOULDERS TO BE UTILIZED TO BRING NEW SHOULDERS FLUSH WITH NEW

CONCRETE SURFACE.”2

       Paragraph 9 of the settlement agreement provides that “[a]ll of MnDOT’s Work will

be completed in accordance with applicable Minnesota Statutes, MnDOT Rules, and

MnDOT [T]echnical Design Standards.” The counties argue that paragraph 2A requires,

“at a minimum,” that MnDOT restore the shoulders of the subject highway segments to




2
   “[B]ituminous” means “[l]ike or containing bitumen,” which is “[a]ny of various
flammable mixtures of hydrocarbons and other substances, occurring naturally or obtained
by distillation from coal or petroleum, that are a component of asphalt and tar and are used
for surfacing roads and for waterproofing.” American Heritage Dictionary, supra, at 189.

                                             5
aggregate but that paragraph 9 incorporates the technical memorandum and requires

MnDOT to pave the shoulders on the subject highway segments. We are not persuaded.

       First, the specific terms of the settlement agreement govern over the general terms

of the agreement. See Burgi v. Eckes, 354 N.W.2d 514, 519 (Minn. App. 1984) (stating

that “the specific in a writing governs over the general”); see also Egner v. States Realty

Co., 223 Minn. 305, 314, 26 N.W.2d 464, 470 (1947) (stating, when interpreting a contract,

that “the definite prevails over the indefinite”). We conclude, as did the district court, that

the language in paragraph 2A of the settlement agreement—that “MnDOT will reclaim to

aggregate the existing shoulders”—is more specific than the general language in paragraph

9, which incorporates MnDOT’s rules and design standards. (Emphasis added.)

       Second, the purpose of the technical memorandum is “to update the MnDOT

shoulder width design criteria,” which “will provide for more design flexibility in roadway

shoulder design.” MnDOT recognized in the technical memorandum that “[m]any state

transportation departments have been turning to flexible design as a solution to resolving

various transportation challenges” and that “[t]he benefits of flexible design allow for a

greater sensitivity to the design needs of multiple travel modes, the local community, and

the surrounding environment.” Nothing in the technical memorandum requires rigid

adherence to the “[g]uidelines” that it provides.

       The counties also argue that paragraph 2A and paragraph 9 conflict, resulting in

ambiguity as to the parties’ intent. “Where there is an apparent conflict between two clauses

or provisions of a contract, it is the court’s duty to find harmony between them and to

reconcile them if possible.” Oster v. Medtronic, Inc., 428 N.W.2d 116, 119 (Minn. App.


                                              6
1988) (citing Lawton v. Joesting, 96 Minn. 163, 167, 104 N.W. 830, 832 (1905)).

“[Appellate courts] are to interpret a contract in such a way as to give meaning to all of its

provisions.” Brookfield Trade Ctr., Inc. v. Cty. of Ramsey, 584 N.W.2d 390, 394 (Minn.

1998); see also Chergosky v. Crosstown Bell, Inc., 463 N.W.2d 522, 526 (Minn. 1990)

(stating that “[appellate courts] will attempt to avoid an interpretation of the contract that

would render a provision meaningless”). “[Appellate courts] construe a contract as a whole

and attempt to harmonize all clauses of the contract.” Chergosky, 463 N.W.2d at 525; see

also Burgi, 354 N.W.2d at 518 (“Terms in a contract should be read together and

harmonized where possible.” (citing Country Club Oil Co. v. Lee, 239 Minn. 148, 151–52,

58 N.W.2d 247, 249 (1953))).

       Paragraph 2A clearly and unambiguously provides that “MnDOT will reclaim to

aggregate the existing shoulders.” We conclude that to read paragraph 9 as requiring

MnDOT to pave the shoulders of the subject highway segments would render meaningless

the quoted language from paragraph 2A. “[The supreme court] ha[s] consistently stated

that when a contractual provision is clear and unambiguous, courts should not rewrite,

modify, or limit its effect by a strained construction.” Valspar Refinish, Inc. v. Gaylord’s,

Inc., 764 N.W.2d 359, 364–65 (Minn. 2009). We therefore harmonize paragraph 2A and

paragraph 9 by reading paragraph 2A as establishing the scope of MnDOT’s work under

the settlement agreement and paragraph 9 as providing guidance as to the manner in which

the agreed-upon work will be performed if not otherwise set forth by the parties in

paragraph 2.




                                              7
        We conclude that the clear and unambiguous language of the settlement agreement

precludes the relief demanded by the counties and that the counties’ complaint therefore is

legally insufficient. See Walsh, 851 N.W.2d at 603 (“A claim is sufficient against a motion

to dismiss for failure to state a claim if it is possible on any evidence which might be

produced, consistent with the pleader’s theory, to grant the relief demanded.”). The district

court did not err in dismissing the complaint for failure to state a claim on which relief can

be granted.

       Affirmed.




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