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Ryan v. ColorSpan Corp.

February 4, 2003


Hennepin County District Court File No. 0012896

Considered and decided by Shumaker, Presiding Judge, Lansing, Judge, and Minge, Judge.

The opinion of the court was delivered by: Gordon W. Shumaker, Judge



Appellant Thomas Ryan contends that the district court erred by failing to grant his motion for summary judgment, failing to grant a directed verdict in his favor, giving erroneous jury instructions, and submitting an improper verdict form to the jury. Appellant also argues that the trial judge engaged in judicial misconduct. Because we find no reversible error, we affirm.


Appellant Thomas Ryan sued respondents ColorSpan Corporation and, Inc., for damages for breach of an employment contract. A jury found in respondents' favor.

The case involves the respondent corporations and related subsidiaries. VirtualFund, the parent corporation of ColorSpan, a digital-graphics subsidiary, had a digital-graphics unit and an internet-services unit.

Melvin Masters was the chief executive officer of both VirtualFund and ColorSpan. Robert Wenzel was the chief operating officer of VirtualFund and the president of ColorSpan.

In 1995, Wenzel hired Ryan to be the managing director of LaserMaster Corporation, a ColorSpan subsidiary. Ryan's employment responsibilities involved VirtualFund, ColorSpan, and various subsidiaries.

In April 1996, Masters promoted Ryan to executive vice-president of ColorSpan and raised his annual salary to $175,000. Several months later, Ryan also became executive vice-president of VirtualFund. Ryan participated in business decisions affecting both VirtualFund and ColorSpan, co-signed checks for VirtualFund and subsidiaries, received stock options as a VirtualFund executive, and was listed as a VirtualFund executive with the Securities and Exchange Commission.

On October 17, 1997, Ryan sent an e-mail to Masters requesting an employment contract comparable to that which Wenzel had received in 1995. Masters responded by summarizing employment terms that included a "one-year 'no-cut' employment contract based on the form we used for Bob Wenzel." Masters indicated that he wanted to create incentives for Ryan to stay with the companies, not to leave in the event of a merger or acquisition, and "to give you some significant benefits if a third party business transaction *á* * eliminates your position in any new restructured organization." After Masters sent this e-mail, Wenzel gave Ryan a copy of Wenzel's contract. Wenzel's contract provided that the employer could terminate the agreement without cause and could terminate it upon the sale of substantially all of the company's assets. Ryan never received his own formal employment contract.

In 2000, VirtualFund sold its digital-graphics business unit. Ryan told Masters and Wenzel that he wanted to stay with the unit and work for the purchaser. Masters and Wenzel encouraged him to remain with the VirtualFund companies. On April 5, 2000, Ryan submitted a resignation letter indicating that he desired "to go along with the divestiture." On May 16, 2000, Ryan learned that the purchaser of the digital-graphics unit did not want to hire him.

Following this news, Masters, Wenzel, and Ryan met to discuss Ryan's role with the internet-services unit. Ryan stated that he did not want to work in that unit because he felt he lacked sufficient technical skills. Wenzel told him that he did not need such skills and that the company wanted him for his business skills.

On May 29, 2000, Ryan delivered a letter to Wenzel stating that the purchase of the digital-graphics unit had terminated Ryan's employment. Despite that letter, Ryan continued to receive a salary and to perform various internet-service-unit duties. Masters sent a letter to Ryan on June 13, 2000, indicating that Ryan's job had not been eliminated and that his fundamental duties had not changed. He continued to receive his $175,000 annual salary.

Ryan later inquired about his duties. Wenzel and Masters provided work for him to do, and he twice wrote notes stating that he was ready to work on his "new responsibilities." When Ryan did not appear to be performing his duties, Masters indicated that they should meet to discuss Ryan's "continuing participation on [VirtualFund's] payroll."

On July 11, 2000, Ryan met with Masters and Wenzel. Before discussing job duties, Ryan gave Masters and Wenzel a letter in which he reiterated his belief that the sale of the digital-graphics unit had eliminated his job with respondent companies. When asked whether he was resigning or refusing to work, Ryan said that the letter spoke for itself. Later that day, Masters sent an e-mail to Ryan for clarification as to whether Ryan's letter was a resignation or a refusal to work. Respondents' attorney sent a letter to Ryan's attorney indicating that if Ryan did not return to work by July 31, 2000, respondents ...

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