Fieseler Masonry, Inc. v. City of Mabel, Exact Construction Company, LLC

• Court: Court of Appeals of Minnesota
• Decided: September 8, 2014
• Docket: A14-246
• Status: Unpublished

Opinion

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2012).

STATE OF MINNESOTA IN COURT OF APPEALS A14-0246

Fieseler Masonry, Inc., Appellant,

vs.

City of Mabel, et al., Respondents,

Exact Construction Company, LLC, Defendant.

Filed September 8, 2014 Affirmed Schellhas, Judge

Fillmore County District Court File No. 23-CV-12-667

William L. French, Rochester, Minnesota (for appellant)

Christopher W. Harmoning, Gray, Plant, Mooty, Mooty & Bennett, P.A., St. Cloud, Minnesota (for respondents)

Considered and decided by Worke, Presiding Judge; Schellhas, Judge; and

Rodenberg, Judge. UNPUBLISHED OPINION

SCHELLHAS, Judge

In this dispute over nonpayment for construction work, appellant challenges the

district court’s grant of summary judgment to respondents on its statutory, breach-of-

contract, and equitable claims. We affirm.

FACTS

Respondents City of Mabel and Alliance Building Construction Corp. entered into

a contract for the construction of the Mabel Community Center, and Alliance posted

performance and payment bonds. Alliance and defendant Exact Construction LLC1

entered into a $112,612 subcontract for the Mabel construction work. Alliance and Exact

later executed a change order regarding masonry and burnished block that increased the

payment due to Exact under the subcontract to $150,812. Appellant Fieseler Masonry

Inc., without seeing the job site, reached an agreement with Exact to build a straight

block wall requiring 2800 block for $14,200. At the direction of Tony Braun of Alliance,

Mark Fieseler of Fieseler Masonry met with Braun at the job site on July 28, 2011. Braun

said that he wanted Fieseler Masonry to start work right away. Fieseler returned the next

day to set up the job. On August 1, 2011, Fieseler went to the job site to start work and

realized that “the job was going to be much more time consuming than Exact had led

[Fieseler Masonry] to believe.” On August 10, 2011, Exact sent Fieseler Masonry an e-

mail, “confirm[ing] . . . the agreement between Exact Construction and Fieseler Masonry

for work to be performed on the Mabel City Hall project” for payment of “the sum of

1 Exact has not participated in this appeal.

2 $14,200 for labor only in the installation of all interior burnished block and any

associated labor involved in insulation, clean up, and repairs of unsatisfactory work with

relation to the burnished block only.” Fieseler Masonry did not respond to this e-mail.

After Fieseler Masonry began work on the job, Fieseler spoke with Darin Jensen

of Exact and asked him to come to the job site to “straighten things out,” but no one from

Exact ever appeared on the job site during Fieseler Masonry’s work, and Exact did not

return Fieseler’s many calls. Ultimately, Fieseler Masonry contacted Alliance and

demanded more money, threatening to abandon the job unless it received payment.

Fieseler Masonry claims that Alliance responded that, if forced to hire a replacement, it

“would come after” Fieseler Masonry. Fieseler Masonry therefore remained on the job

and completed it on September 25. “Instead of taking one week and 120 man hours,” the

job took seven weeks and 887.5 man hours. Fieseler Masonry sent Exact one invoice for

$13,444.81 on September 1. On September 13, Exact informed Alliance that it could not

complete the remainder of its subcontract work. Due to Exact’s default, Alliance

terminated the subcontract on October 10.

In December 2011, Fieseler Masonry submitted an invoice to Alliance for

$82,983.92 and filed a mechanic’s lien against the Mabel property. Fieseler Masonry did

not file a claim under Alliance’s payment bond. In September 2012, Fieseler Masonry

commenced this lawsuit to obtain payment, seeking in part to enforce its mechanic’s lien.

On summary-judgment motions, the district court first dismissed Fieseler Masonry’s

mechanic’s lien claim and later dismissed all remaining claims.

This appeal follows.

3 DECISION

On appeal from summary judgment, appellate courts “view the evidence in the

light most favorable to the party against whom summary judgment was granted to

determine whether there are any genuine issues of material fact and whether the district

court correctly applied the law.” Dukowitz v. Hannon Sec. Servs., 841 N.W.2d 147, 150

(Minn. 2014). A district court properly grants summary judgment “if the pleadings,

depositions, answers to interrogatories, and admissions on file, together with the

affidavits, . . . show that there is no genuine issue as to any material fact and that either

party is entitled to a judgment as a matter of law.” Minn. R. Civ. P. 56.03. “No genuine

issue for trial exists when the record taken as a whole could not lead a rational trier of

fact to find for the nonmoving party.” McKee v. Laurion, 825 N.W.2d 725, 729 (Minn.

2013) (quotations omitted). Appellate courts “review de novo a district court’s grant of

summary judgment.” Dukowitz, 841 N.W.2d at 150.

In its complaint, Fieseler Masonry asserted alternate theories of recovery. Fieseler

Masonry sought to enforce a mechanic’s lien against the City of Mabel and alleged

promissory estoppel against Alliance; entitlement to payment under Minn. Stat. § 514.02,

subd. 1a (2012), against Alliance and Exact; unjust enrichment against the City of Mabel,

Alliance, and Exact; and breach of contract against Alliance.2 On appeal, Fieseler

Masonry does not challenge the district court’s dismissal of its mechanic’s-lien claim.

2 We cite the most recent version of the statutes in this opinion because they have not been amended in relevant part. See Interstate Power Co. v. Nobles Cnty. Bd. of Comm’rs, 617 N.W.2d 566, 575 (Minn. 2000) (stating that, generally, “appellate courts apply the law as it exists at the time they rule on a case”).

4 Fieseler Masonry challenges the court’s summary-judgment dismissal of its remaining

claims. We address each claim in turn.

Claim under Minn. Stat. § 514.02, subd. 1a

In dismissing this claim, the district court noted that respondents made no mention

of Minnesota Statutes section 514.02, subdivision 1a, in their motion, but the court

nevertheless concluded, in light of Minnesota Statutes section 469.155, subdivision 16

(2012), that the provisions of chapter 514, as they relate to labor and materials, are not

applicable to Fieseler Masonry’s claim because, under the City of Mabel’s requirement,

Alliance secured a performance bond.3 Minnesota Statutes section 469.155, subdivision

16, provides that if “a contractor’s payment and performance bond of the kind described

in section 574.26” is required, then “the provisions of chapter 514 relating to liens for

labor and materials are not applicable with respect to work done or labor or materials

supplied for the project.”4 See also Judd Supply Co., Inc. v. Merchs. & Mfrs. Ins. Co., 448

N.W.2d 895, 898 (Minn. App. 1989) (noting that “if a [contractor’s] bond is required

[under Minn. Stat. § 469.55, subd. 16], then the provisions of Minn. Stat. ch. 514

(relating to mechanics’ liens) are not applicable”), review denied (Minn. Feb. 21, 1990).

3 In their reply memorandum to the district court, respondents argued for summary judgment on Fieseler Masonry’s statutory claim. 4 Minnesota Statutes section 574.26, subdivision 1(a)-(b) (2012), provides that sections 574.26 to 574.32 are the “Public Contractors’ Performance and Payment Bond Act,” and that “[f]or the purposes of the act[,] . . . ‘labor and materials’ means work, skill, tools, machinery, materials, . . . and . . . ‘contract’ means a contract with a public body for the doing of public work.”

5 We review application of a statute de novo, see Anderson v. Christopherson, 816

N.W.2d 626, 630 (Minn. 2012), and conclude that the district court’s reasoning is correct.

First, we conclude that Minnesota Statutes section 514.02, subdivision 1 (2012), relates to

a lien for labor and materials. Section 514.02, subdivision 1, requires that proceeds

received by certain persons that relate “to an improvement to real estate within the

meaning of section 514.01” be “held in trust . . . for the benefit of those persons who

furnished the labor, skill, [or] material . . . contributing to the improvement.” Minnesota

Statutes section 514.01 (2012), provides that “[w]hoever . . . contributes to the

improvement of real estate by performing labor, or furnishing skill, material or machinery

. . . shall have a lien upon the improvement, and upon the land on which it is situated.”

Second, respondents correctly argue that Alliance did not violate Minn. Stat. § 514.02,

subd. 1, because Alliance posted a payment bond. See Minn. Stat. § 514.02, subd. 1(b)

(stating that no theft occurs when the recipient of the proceeds “furnished the person

making such payment . . . a payment bond in the basic amount of the contract price for

the improvement”); Amcon Block & Precast, Inc. v. Suess, 794 N.W.2d 386, 388 (Minn.

App. 2011) (noting that one element of Minn. Stat. § 514.02, subd. 1(b), is “fail[ure] to

provide the payor with a lien waiver or payment bond”).

Fieseler Masonry argues that the district court erred by granting summary

judgment sua sponte on its claim under Minnesota Statutes section 514.02, subdivision

1a. A district court may grant summary judgment sua sponte “when (a) no genuine issues

of material fact remain, (b) one of the parties deserves judgment as a matter of law, and

(c) the absence of a formal motion creates no prejudice to the party against whom

6 summary judgment is granted.” Hebrink v. Farm Bureau Life Ins. Co., 664 N.W.2d 414,

419 (Minn. App. 2003); see Del Hayes & Sons, Inc. v. Mitchell, 304 Minn. 275, 281, 230

N.W.2d 588, 592 (1975) (affirming a district court’s grant of summary judgment sua

sponte). Here, no genuine issue of material fact exists regarding Fieseler Masonry’s

statutory claim because the sole determinative fact, that Alliance posted payment and

performance bonds, is not disputed, and Alliance therefore is entitled to judgment as a

matter of law on this claim. We conclude that the district court did not err by granting

summary judgment sua sponte on Fieseler Masonry’s statutory claim. Because we affirm

based on the district court’s legal analysis, we need not reach respondents’ remaining

alternative arguments.

Breach-of-Contract Claim

Fieseler Masonry argues that the district court erred by granting summary

judgment to Alliance on its breach-of-contract claim because a fact issue exists with

respect to the existence of a contract. “[T]o state a claim for breach of contract, the

plaintiff must show (1) formation of a contract, (2) performance by plaintiff of any

conditions precedent to his right to demand performance by the defendant, and (3) breach

of the contract by defendant.” Park Nicollet Clinic v. Hamann, 808 N.W.2d 828, 833

(Minn. 2011). “The formation of a contract requires communication of a specific and

definite offer, acceptance, and consideration.” Commercial Assocs., Inc. v. Work

Connection, Inc., 712 N.W.2d 772, 782 (Minn. App. 2006) (citing Pine River State Bank

v. Mettille, 333 N.W.2d 622, 626–27 (Minn. 1983)). Whether a contract is formed is

judged by the objective conduct of the parties and not their subjective intent. See SCI

7 Minn. Funeral Servs., Inc. v. Washburn-McReavy Funeral Corp., 795 N.W.2d 855, 864

(Minn. 2011) (“Whether mutual assent exists is tested under an objective standard.”).

The district court concluded that a contract existed between Fieseler Masonry and

Exact, not between Fieseler Masonry and Alliance. Fieseler Masonry argues that it had a

contract with Alliance, not Exact. No record evidence supports Fieseler Masonry’s

argument. We therefore conclude that the district court did not err by granting summary

judgment to Alliance on Fieseler Masonry’s breach-of-contract claim.

Claims for Equitable Relief

Fieseler Masonry argues that the district court erred by granting summary

judgment to respondents on its claims of promissory estoppel and unjust enrichment. “A

party may not have equitable relief where there is an adequate remedy at law available.”

ServiceMaster of St. Cloud v. GAB Bus. Servs., Inc., 544 N.W.2d 302, 305 (Minn. 1996).

Appellate courts review de novo whether a party has an adequate remedy at law. Id. The

district court concluded that Fieseler Masonry had two adequate remedies at law: a

breach-of-contract claim against Exact and a claim against Alliance’s payment bond.

Existence of Valid Contract

“[E]quitable relief cannot be granted where the rights of the parties are governed

by a valid contract.” U.S. Fire Ins. v. Minn. State Zoological Bd., 307 N.W.2d 490, 497

(Minn. 1981), quoted with approval in Caldas v. Affordable Granite & Stone, Inc., 820

N.W.2d 826, 839 (Minn. 2012). The district court correctly concluded that Fieseler

Masonry had a contract with Exact. Fieseler Masonry argues that, even if it had a contract

with Exact, a breach-of-contract action is not an adequate remedy because Exact is “out

8 of business.” “[A] remedy at law which is practically ineffective is not an adequate

remedy.” Ostrander v. Ostrander, 190 Minn. 547, 549, 252 N.W. 449, 450 (1934).

Fieseler Masonry fails to show that a breach-of-contract claim against Exact is not an

adequate remedy at law.

Similarly, Fieseler Masonry fails to show that a claim against Alliance’s payment

bond is not an adequate remedy at law. The undisputed evidence shows that Alliance

posted and made payments under a payment bond. See generally Minn. Stat. § 574.26,

subd. 2 (2012). Fieseler Masonry could have made a claim against this payment bond

within 120 days after the completion of its project. Minn. Stat. § 574.31, subd. 2 (2012).

Fieseler Masonry’s ability to make a claim under the payment bond was an adequate

remedy that Fieseler Masonry opted not to pursue. See ServiceMaster, 544 N.W.2d at

305–06 (concluding that a party’s “right to pursue its remedy through a mechanic’s lien

was an adequate remedy at law” and that, “absent compelling circumstances,” the court

will not come to the aid of “a contractor [that] elect[s] not to seek the protection of the

clear and effective method available under the [mechanic’s lien] statute”).

Because Fieseler Masonry had adequate remedies at law, the district court

correctly granted summary judgment on Fieseler Masonry’s claims for equitable relief.

We therefore do not reach the merits of Fieseler Masonry’s equitable claims.

Affirmed.