HomeStar Property Solutions, LLC v. Safeguard Properties, LLC et al
Filing
279
MEMORANDUM OPINION AND ORDER granting in part and denying in part 161 Defendant Safeguard Properties' Motion for Summary Judgment on Homestar's Claims. (Written Opinion) Signed by Judge Susan Richard Nelson on 2/27/2019. (SMD)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
HomeStar Property Solutions, LLC,
Case No. 14-cv-4531 (SRN/DTS)
Plaintiff,
v.
Safeguard Properties, LLC, and Bank of
America, N.A.,
Defendants,
MEMORANDUM OPINION
AND ORDER
and
Safeguard Properties, LLC,
Counterclaim Plaintiff,
v.
HomeStar Property Solutions, LLC,
Counterclaim Defendant.
Andrew D. Parker, Anthony G. Edwards, Christopher M. Daniels, Russell M. Spence, Jr.,
and Elizabeth S. Wright, Parker Daniels Kibort LLC, 123 North Third Street, Suite 888,
Minneapolis, MN 55401, and Todd C. Pearson, Pearson Law Office, 601 Carlson Parkway,
Suite 1050, Minnetonka, MN 55305 for Plaintiff and Counterclaim Defendant.
Joseph J. Santoro and Markus E. Apelis, Gallagher Sharp, Sixth Floor Buckley Building,
1501 Euclid Avenue, Cleveland, OH 4115, and Brian A. Wood, Lind Jensen Sullivan &
Peterson, PA, 901 Marquette Ave South, Suite 1300, Minneapolis, MN 55402 for
Defendants and Counterclaim Plaintiff.
SUSAN RICHARD NELSON, United States District Judge
As the Court noted in its recent Order addressing this same case, this is a
complicated commercial litigation matter between two businesses that “preserve
properties” on behalf of banks while those properties are in foreclosure: Plaintiff
Homestar Property Solutions LLC (hereinafter “Homestar”) and Defendant Safeguard
Properties LLC (hereinafter “Safeguard”). (See also Feb. 6, 2019 Counterclaim Order
[Doc. No. 254] (“Counterclaim Order”).) 1 Homestar, which served as an independent
contractor for Safeguard for approximately two years, accuses Safeguard of failing to pay
it (and/or underpaying it) for services it provided, thereby causing it to fall behind on its
bills and, eventually, go out of business. Safeguard adamantly rejects this narrative, and,
in turn, accuses Homestar of failing to abide by the companies’ contract regarding
mechanics’ liens, which it alleges caused it to incur damages.
After years of on-and-off again discovery, punctuated by a final settlement and
judgment that was later vacated (see generally Doc Nos. 127-54), Safeguard moved for
summary judgment on the following claims: (1) Homestar’s breach of contract claim; (2)
Homestar’s unjust enrichment claim; (3) Homestar’s promissory estoppel claim; (4)
Homestar’s account stated claim; and (5) Safeguard’s breach of contract counterclaim
against Homestar. (See Safeguard’s Br. in Support of Summ. J. [Doc. No. 163]
(“Safeguard Primary Br.”); Safeguard’s Br. in Support of Summ. J. on its Counterclaim
[Doc. No. 168] (“Safeguard Counterclaim Br.”).) In addition, Bank of America, also
represented by Safeguard’s counsel, per an indemnification agreement between the two
1
This Counterclaim Order may also be found at Homestar Prop. Sols., LLC v.
Safeguard Props., LCC, 2019 WL 469317 (D. Minn. Feb. 6, 2019).
2
companies, moved for summary judgment on (6) Homestar’s solo unjust enrichment
claim against it. (See Bank of America’s Summ. J. Br. [Doc. No. 173] (“BANA Br.”); see
id. at n.7 (noting this indemnification agreement).) Homestar opposed all of these
motions. (See Homestar’s Br. in Opp. to Summ. J. [Doc. No. 189] (“Homestar Primary
Opp. Br.”); Homestar’s Br. in Opp. to Counterclaim Summ. J. [Doc. No. 207]
(“Homestar Counterclaim Opp. Br.”); Homestar’s Br. in Opp. to Bank of America
Summ. J. [Doc. No. 209] (“Homestar BANA Opp. Br.”).) 2
On September 20, 2018, following an extensive oral argument on Safeguard’s
primary summary judgment motion (i.e., counts 1-4 listed above), the Court denied
summary judgment from the bench. (See Sept. 20, 2018 Minute Entry [Doc. No. 223].)
The Court then took Safeguard’s counterclaim summary judgment motion and Bank of
America’s unjust enrichment summary judgment motion under advisement (i.e., counts
5-6 listed above), to be decided on the papers. (Id.) 3
On February 6, 2019 the Court granted in part Safeguard’s counterclaim summary
judgment motion and granted in full Bank of America’s summary judgment motion. (See
Counterclaim Order.) The Court will now render its written decision as to Safeguard’s
primary summary judgment motion. Although the Court orally denied this motion from
the bench with limited explanation, the Court will now take this opportunity to clarify
2
Safeguard and Bank of America also filed reply briefs. (See Safeguard Primary
Reply Br. [Doc. No. 215]; Safeguard Counterclaim Reply Br. [Doc. No. 217]; BANA
Reply Br. [Doc. No. 219].)
3
The Court has since set this case for trial on its August 19, 2019 trial calendar.
(See Second Amended Trial Notice [Doc. No. 268].)
3
that it is granting Safeguard’s motion in part and denying it in part. The Court hopes this
ruling clarifies, for both parties, what issues remain in play for trial. 4
I.
BACKGROUND
This case centers around arguably hundreds of disputed work orders, fees, and
account statements, and to what extent those disputes cumulatively led Homestar to incur
lost profits and other consequential damages. Although both sides agree that the
Safeguard-Homestar relationship was governed by a series of written contracts (see
Compl. [Doc. No. 1] ¶ 81; Am. Answer [Doc. No. 17] ¶ 81), they do not agree if
Safeguard properly paid Homestar for all the work Homestar did on Safeguard’s behalf
between 2012 and 2014 pursuant to those written contracts. Specifically, Homestar
produced an “Accounts Receivable” spreadsheet during discovery (the “AR
Spreadsheet”) that detailed 578 allegedly unpaid and/or underpaid work orders, totaling
$1,752,435.40 in direct damages. (See Safeguard Ex. A-1 [Doc. No. 164-2] (“AR
Spreadsheet”).) The work orders detailed in this spreadsheet lie at the heart of this
dispute.
In support of its summary judgment motion, Safeguard, by way of its Assistant
Vice President of High Risk and Investor Compliance, Steve Meyer, reviewed the AR
4
The Court also acknowledges Safeguard’s November 15, 2018 “emergency
motion in limine” to exclude approximately 1,500 belated, “unauthenticated” “Homestar
accounting documents, profit and loss statements, and income statements.” (See Doc.
Nos. 229-231.) In light of the Magistrate Judge’s recent ruling on Safeguard’s closelyrelated “emergency motion for sanctions” (see Feb. 27, 2019 Order Denying Motion for
Sanctions [Doc. No. 277]), the Court will defer ruling on Safeguard’s November 15
motion in limine until a date closer to trial.
4
Spreadsheet alongside Safeguard’s relevant internal records and produced a
countervailing, detailed spreadsheet. Safeguard’s spreadsheet alleges that, in fact,
Safeguard only owes Homestar $129,123.86, arising out of 89 work orders. (See
Safeguard Ex. A-2 [Doc. Nos. 164-4 to 164-9] (“Safeguard AR Analysis”).) Safeguard
does not contractually owe Homestar money for the other 489 work orders, Safeguard
argues, because either (a) it paid Homestar’s invoice in full (145 work orders); (b)
Safeguard properly applied “chargebacks” to Homestar’s invoices “based on Homestar’s
failure to comply with Safeguard’s policies, procedures, and guidelines, including failing
to provide photographs showing work was completed, failing to complete the approved
scope of work, and/or Safeguard application of a bill penalty due to Homestar’s failure to
timely complete the repairs” (85 work orders); (c) Safeguard adjusted Homestar’s
invoices to reflect “reasonable pricing standards,” in accordance with the contract (22
work orders); (d) the invoice listed on the AR Spreadsheet was duplicative of another
invoice on the Spreadsheet (74 work orders); (e) Safeguard approved payment of certain
work orders but ultimately did not pay those work orders because of “uncollected and
outstanding chargebacks applied to Homestar’s account” (11 work orders); or (f) “other”
reasons justified Safeguard not paying the invoice (152 work orders). (See Safeguard
Primary Br. at 13-14 (describing categories detailed in Safeguard AR Analysis).)
Homestar, in turn, agrees that Safeguard owes it money for the aforementioned 89
work orders, and also concedes that it cannot contest either the 145 work orders that
Safeguard contended it had “paid in full” (i.e., $349,120.07 in claimed direct contract
damages, per Mr. Meyer’s analysis), or 19 of the 74 work orders Safeguard listed as
5
“duplicative” (i.e., approximately $17,365 in claimed direct contract damages, per the
Court’s analysis of Mr. Meyer’s “duplicates spreadsheet” [Doc. No. 164-10]). (See
Homestar Primary Opp. Br. at 19.) However, Homestar does contest Safeguard’s
accounting for a substantial number of the remaining 325 work orders. As such, with
respect to direct contract damages, Homestar appears to allege approximately
$1,256,826.47 in payments owing, in comparison to Safeguard’s proposed $129,123.86.
In particular, Homestar argues that (a) Safeguard’s penalties for lack of
photographic documentation are factually wrong, either because Homestar did in fact
upload the photo documentation actually required by the contract, or, if it did not, that
was because “Safeguard’s own website often malfunctioned” (69 work orders); (b)
Safeguard had no right to assess penalties for alleged untimeliness, either because the
overarching contract (see Safeguard Ex. E [Doc. No. 164-15] (“Safeguard Policy
Manuals”)) did not describe such penalties, or because a Safeguard employee, Paul
Dinehart, allegedly agreed with Homestar’s co-owner, Michael Breese, to withhold those
penalties (see Breese Aff. [Doc. No. 208] ¶ 12) (28 work orders); (c) Safeguard
inappropriately reduced Homestar’s invoices for being “in excess of industry standards”
without any support for that determination, and in contradiction to Mr. Dinehart’s alleged
2014 representation to Mr. Breese that Homestar was Safeguard’s “least expensive
contractor” (id. ¶ 13) (70 work orders); (d) Safeguard incorrectly asserted that
Homestar’s work was “not authorized, not actually performed, or not documented,”
when, in fact, “all work billed by Homestar was directed by Safeguard, or, in a few
instances, performed in the interest of safety and [making] homes [HUD-complaint]” (id.
6
¶ 14) (102 work orders); (e) Safeguard failed to establish a basis for the “chargebacks” it
assessed on the eleven work orders listed in category “e” of Safeguard’s analysis above,
and, indeed, contradicted Mr. Dinehart’s alleged representation to Mr. Breese that
“Safeguard would refrain from taking chargebacks, and that Safeguard would repay
Homestar for any chargebacks it had taken in the past” (id. ¶ 22) (11 work orders); (f)
Safeguard inaccurately reduced certain “special projects” payments based on an
“reconciliation meeting” in summer 2014 that, according to Homestar employee Keegan
Wallace, did not result in the reductions Safeguard listed (see Wallace Aff. [Doc. No.
205] ¶ 3) (90 work orders); and (g) 55 of the work orders Safeguard claims are
“duplicates,” are not, in fact, duplicates because “they have different work order
numbers, invoice numbers, and/or billed amounts” (Homestar Primary Opp. Br. at 19)
(55 work orders). 5
Importantly, though, Homestar also asserts two other forms of “contractual”
damages. First, Homestar argues that Safeguard owes it consequential and/or
“reputational” damages because, Homestar alleges, Safeguard’s “slow paying” caused
Homestar to default on its credit obligations, which in turn “ruined Homestar’s reputation
in the industry,” “fractured [Homestar’s] relationships with its subcontractors,” and “took
Homestar from being a company worth more than $16,000,000 (based on an offer to
5
Together, Homestar noted 425 work orders in its opposition brief, which, when
Homestar’s concessions are taken into account, is 100 work orders higher than the
highest possible number of disputed work orders (325). However, because Homestar
listed many work orders in multiple categories, the actual number of directly disputed
work orders is approximately 273 (out of 325). As such, it does not appear that Homestar
is attempting to collect the full $1,256,826.47 it claims in direct contract damages.
7
purchase Homestar received in 2013) to being an insolvent entity.” (Breese Aff. ¶ 21;
accord Compl. Prayer for Relief (requesting damages for harm done to Homestar’s
“business reputation”).) However, in contrast to the specific work orders it cited in
support of its direct damages claim, Homestar does not introduce any specific evidence of
Safeguard’s “slow paying,” nor does it point to a contractual provision Safeguard
breached by “slow paying.” (See also Safeguard Reply Br. at 4 n.3 (noting that
Homestar’s invoices “did not contain a payment due date or payment deadline,” and
citing examples).)
Second, Homestar argues that, regardless of whether it can prove its direct
contractual damages of $1,256,826.47, Safeguard owes it $1,700,000 (i.e., approximately
the amount listed on the AR Spreadsheet), under a “promissory estoppel” theory. (See
Homestar Primary Opp. Br. at 22-23.) This is so because, in summer of 2014, Safeguard,
through Mr. Dinehart, allegedly promised to pay Homestar that amount “in satisfaction
of” Safeguard’s contractual obligations. (See Breese Aff. ¶¶ 18-19; but cf. Safeguard
Reply Br. at 24-26 (noting that Mr. Breese’s deposition testimony directly contradicts his
affidavit); Safeguard Primary Br. at 22 (noting that, in his affidavit, Mr. Dinehart flatly
denied that such a promise was ever made).)
II.
DISCUSSION
A. Standard of Review
A court may grant a party summary judgment if there are no disputed issues of
material fact and the moving party is entitled to judgment as a matter of law. See Fed. R.
Civ. P. 56(a). A party opposing summary judgment “‘must set forth specific facts
8
showing that there is a genuine issue for trial,’ and ‘must present affirmative evidence in
order to defeat a properly supported motion for summary judgment.’” Ingrassia v.
Schafer, 825 F.3d 891, 896 (8th Cir. 2016) (quoting Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 256-57 (1986)). However, in considering a summary judgment motion, the
Court must “view[] the evidence in the light most favorable to the nonmoving party,”
Grinell Mut. Reinsurance Co. v. Schwieger, 685 F.3d 697 (8th Cir. 2012), and must not
“weigh the evidence and determine the truth of the matter itself,” Nunn v. Noodles & Co.,
674 F.3d 910, 914 (8th Cir. 2012). “In essence,” the question is “whether the evidence
presents a sufficient disagreement to require submission to a jury or whether it is so onesided that one party must prevail as a matter of law.” Anderson, 477 U.S. at 251-52.
B. Breach of Contract
To prevail on a breach of contract claim under Minnesota law, a 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.” Lyon Fin. Servs., Inc. v. Ill. Paper & Copier Co., 848 N.W.2d
539, 543 (Minn. 2014). Further, “in a breach of contract case, [a] plaintiff is limited to
damages flowing only from such breach”; “damages which are speculative, remote, or
conjectural are not recoverable.” In re RFC & ResCap Liquidating Trust Litig., 332 F.
Supp. 3d 1101, 1191 (D. Minn. 2018) (cleaned up); accord St. Jude Med., S.C., Inc. v.
Biosense Webster, Inc., 994 F. Supp. 2d 1033, 1046-47 (D. Minn. 2014) (observing that
Minnesota law bars a plaintiff from recovering “consequential damages” in a contract
action unless the damages were “reasonably foreseeable by the contracting parties at the
9
time of the breach”). Moreover, with respect to lost profits, a plaintiff must show that “(a)
profits were lost, (b) the loss was directly caused by the breach . . . , and (c) the amount
of such causally related loss is capable of calculation with reasonable certainty rather
than benevolent speculation.” Hinz v. Neuroscience, Inc., 538 F.3d 979, 984 (8th Cir.
2008) (quoting B & Y Metal Painting, Inc. v. Ball, 279 N.W.2d 813, 816 (Minn. 1979));
accord Reuter v. Jax, Ltd., Inc., 711 F.3d 918, 920 (8th Cir. 2013). 6
Here, with respect to Homestar’s breach of contract claim, there are clear, material
factual disputes as to Homestar’s performance and Safeguard’s breach on dozens of work
orders. Although Safeguard argues that Mr. Breese’s affidavit and accompanying
documentation are not specific enough to rebut Mr. Meyer’s detailed accounting, the
Court finds that such arguments merely go to Mr. Breese’s credibility. See Anderson, 477
U.S. at 255 (“Credibility determinations, the weighing of the evidence, and the drawing
of legitimate inferences from the facts are jury functions.”). On any number of the 270some work orders Homestar specifically referenced in its opposition motion, a reasonable
juror might find that Homestar fully performed on its contractual obligation, and that
6
Although Safeguard correctly points out in its reply brief that “[i]n general, extracontractual damages, including those for emotional distress, are not recoverable for
breach of contract except in those rare cases where the breach is accompanied by an
independent tort,” Lickteig v. Alderson, Ondov, Leonard & Sween, P.A., 556 N.W.2d
557, 561 (Minn. 1996), Safeguard incorrectly extends this holding to argue that “business
reputation losses” are a kind of “extra-contractual damage” and that Homestar therefore
“cannot recover lost reputation damages as a matter of law.” (Safeguard Reply Br. at 45.) To the contrary, Minnesota law holds that, in a breach of contract suit, “injury to
business reputation is compensable by money damages.” Upsher-Smith Lab., Inc. v.
Mylan Lab., Inc., 944 F. Supp. 1411, 1436 (D. Minn. 1999). Of course, the same
limitations outlined above apply to “business reputation losses,” too.
10
Safeguard breached its duty when it failed to pay Homestar the amount listed under
Homestar’s invoice, or the amount the parties had agreed to through subsequent
modifications. (See Breese Aff. ¶¶ 12, 13, 22; accord Mollico v. Mollico, 628 N.W.2d
637, 642 (Minn. Ct. App. 2001) (“Parol evidence is admissible to show a subsequent
modification of an original contract.”).) This is especially so for work orders where
Safeguard reduced Homestar’s invoice based on arguably ambiguous contractual criteria,
such as the property photograph requirements or the “reasonable industry standard”
requirements. (See Homestar Primary Opp. Br. at 10-12, 14; accord Denelsbeck v. Wells
Fargo & Co., 666 N.W.2d 339, 346 (Minn. 2003) (“[T]he interpretation of an ambiguous
contract is a question of fact for the jury.”).) 7
However, the Court also finds that Homestar has not raised a genuine dispute of
material fact with respect to its alternative argument that Safeguard’s pattern of “slow
paying” caused Homestar to suffer lost profits and reputational damage. (See supra at 8.)
As the Court noted above, Homestar adduced no evidence in support of this argument;
indeed, it does not even point to to a contractual provision that Safeguard conceivably
could have breached with respect to payment timing. As such, because there is no
7
The Court acknowledges the two, unpublished Northern District of Ohio opinions
cited by Safeguard, in which the District Court granted Safeguard summary judgment
based on a nearly-identical analysis to the one Mr. Meyer performed here. See Moni 2,
Inc. v. Safeguard Props., LLC, No. 15-cv-307 (CAB), 2016 WL 4801378 (N.D. Ohio
Sept. 14, 2016); II Scorpion, Inc. v. Safeguard Props., LLC, No. 15-cv-636 (PAG), 2016
WL 4439993 (N.D. Ohio Aug. 23, 2016). Although the two cases are similar to this one
(albeit with far fewer disputed work orders), the Court nonetheless finds that, upon close
inspection of the record, Homestar has submitted more detailed evidence that either
“Moni 2” or “II Scorpion,” particularly with respect to various promises that Mr.
Dinehart allegedly made to Homestar, on behalf of Safeguard.
11
material evidence of an underlying breach with respect to Safeguard’s “slow payments,”
Homestar cannot ask the jury to award it damages for “lost profits,” “consequential
damages,” or “business reputation losses” “flowing . . . from” that conduct. In re RFC &
ResCap Liquidating Trust Litig., 332 F. Supp. 3d at 1191; accord Moni 2, 2016 WL
4801378, at *3 (granting Safeguard summary judgment where plaintiff “failed to produce
admissible evidence to support the contention that Safeguard breached the contract by
failing to pay in a timely manner”); II Scorpion, 2016 WL 4439993, at *3 (same). Rather,
to recover damages at trial beyond those listed on the AR Spreadsheet, Homestar must
prove, by a preponderance of the evidence, that (a) Safeguard breached the parties’
contract(s) on a certain number of unpaid and/or underpaid work orders, while proving
each breach on a work order-by-work order basis, (b) those specific breaches “directly
caused” additional losses, which were reasonably foreseeable by the contracting parties at
the time of the breach, and (c) “the amount of such causally related loss is capable of
calculation with reasonable certainty rather than benevolent speculation.” Hinz, 538 F.3d
at 984.
Accordingly, with the exception of the aforementioned limitation, the Court denies
Safeguard’s motion for summary judgment as to Homestar’s breach of contract claim.
C. Promissory Estoppel
To prevail on a promissory estoppel claim under Minnesota law, a plaintiff must
show that “(1) a clear and definite promise was made, (2) the promisor intended to induce
reliance and the promisee in fact relied to his or her detriment, and (3) the promise must
be enforced to prevent injustice.” Martens v. Minn. Mining & Mfg. Co., 616 N.W.2d 732,
12
746 (Minn. 2000). However, because promissory estoppel is an “equitable doctrine that
implies a contract in law where none in fact exists,” id. (citation omitted), “an express
contract covering the same subject matter will preclude the” doctrine’s “application.”
Grueling v. Wells Fargo Home Mortg., Inc., 690 N.W.2d 757, 761 (Minn. Ct. App.
2005). As such, Minnesota courts routinely bar promissory estoppel claims as a matter of
law when there is no dispute that a written contract governs the at-issue conduct. See,
e.g., City Center Realty Partners, LLC v. Macy’s Retail Holdings, No. 17-cv-528
(SRN/TNL), 2017 WL 4081896, at *9-10 (D. Minn. Sept. 13, 2017); Reisdorf v. i3, LLC,
129 F. Supp. 3d 751, 763, 771 (D. Minn. 2015); Banbury v. Omnitrition Intern., Inc., 533
N.W.2d 876, 881 (Minn. Ct. App. 1995).
Here, both parties acknowledge that a series of written contracts governs the work
orders Homestar is seeking damages for. (See Compl. ¶ 81; Am. Answer ¶ 81.) As such,
there is no need to keep a freestanding promissory estoppel claim available as an
alternative argument in case the jury rules that a contract does not, in fact, exist. See, e.g.,
Krutchen v. Zayo Bandwidth NE, LLC, 591 F. Supp. 2d 1002, 1018 (D. Minn. 2008)
(denying motion to dismiss promissory estoppel claim “pled in the alternative,” because,
although it appeared that the existence of a written contract barred the claim as a matter
of law, the defendant had “not yet answered” and it was “unclear” whether the existence
of a contract would be “challenged”). In tacit acknowledgement of this fact, Homestar
instead argues that Safeguard’s alleged “$1.7 million oral promise” to resolve the
disputed work orders (i.e., to pay the entire amount listed on the AR Spreadsheet)
constituted a “separate and distinct” obligation on Safeguard’s party, and that “the
13
presence of a binding contract” therefore “has no effect on, and certainly does not bar,
Homestar’s claim for promissory estoppel.” (Homestar Primary Opp. Br. at 22.)
The Court disagrees. Homestar’s promissory estoppel claim is inseparable from its
breach of contract claim; they are simply two different ways of arguing to the jury that
Safeguard owes it money for the allegedly unpaid and/or underpaid work orders listed on
the AR Spreadsheet. Indeed, to allow Homestar to argue to the jury that Safeguard owes
it $1.7 million in promissory estoppel damages based on the word of Mr. Breese alone
would be to allow Homestar to evade its obligation of proving its breach of contract case.
This is especially concerning given Homestar’s concession in its opposition brief that it
cannot even prove breach and damages on almost $370,000 of the $1.7 million it claims
Safeguard owes it. (See supra at 6.) As Judge Frank of this Court noted when addressing
an analogous set of facts, “[p]romissory estoppel does not provide a means to evade the
fact that the claimant failed to establish breach of the contract; rather, it provides an
equitable basis for recovery of a promised benefit where the requirements for the
formation of an enforceable contract cannot be met.” Reisdorf, 129 F. Supp. 3d at 771
(rejecting promissory estoppel claim as a matter of law). Likewise here, the Court will
not allow Homestar to use promissory estoppel as “a means to evade the fact” that it
might not succeed on proving all or some of its breach of contract claim. Id.
Accordingly, the Court grants Safeguard summary judgment as to Homestar’s
promissory estoppel claim.
D. Unjust Enrichment
14
“Unjust enrichment is an equitable doctrine that allows a plaintiff to recover a
benefit conferred upon a defendant when retention of the benefit is not legally
justifiable.” Caldas v. Affordable Granite & Stone, Inc., 820 N.W.2d 826, 838 (Minn.
2012). However, as with promissory estoppel, a plaintiff is barred from bringing an
unjust enrichment claim “when there is an enforceable contract that is applicable.” Id.;
accord U.S. Fire Ins. Co. v. Minn. State Zoological Bd., 307 N.W.2d 490, 497 (Minn.
1981) (“[E]quitable relief cannot be granted where the rights of the parties are governed
by a valid contract”). Consequently, as with promissory estoppel, courts routinely bar
unjust enrichment claims as a matter of law when there is no dispute that a written
contract governs the at-issue conduct. See, e.g., City Center Realty Partners, 2017 WL
4081896, at *11; St. Jude Medical, 994 F. Supp. 2d at 1053; see also Ventura v. Kyle, 825
F.3d 876, 887-88 (8th Cir. 2016) (dismissing unjust enrichment claim where an
“adequate remedy at law,” i.e., a defamation claim, was available).
Here, because a written contract governs the relevant subject matter, and because
Homestar does not point to any facts distinguishing its unjust enrichment claim from its
breach of contract claim, Homestar’s claim fails as a matter of law. Accord City Center
Realty Partners, 2017 WL 4081896, at *11 (dismissing unjust enrichment claim “as a
matter of law” where “the facts that support[ed] [plaintiff’s] breach of contract claim
[were] the same facts that support[ed] its unjust enrichment claim,” and plaintiff “ha[d]
not alleged or indicated why its legal remedy [was] inadequate”). Although Homestar
correctly notes that it is entitled to “plead [an] unjust enrichment claim in the alternative
to [a] breach-of-contract claim without fear of dismissal” (Homestar Primary Opp. Br. at
15
20-21), that rule does not apply when there is no doubt that a written contract applies. Cf.
Motley v. Homecomings Fin., LLC, 557 F. Supp. 2d 1005, 1014 (D. Minn. 2008)
(denying motion to dismiss unjust enrichment claim “pled in the alternative” when it
“could not be readily discerned from the complaint whether [defendant] was a party to
plaintiffs’ mortgage contracts”).
Accordingly, the Court grants Safeguard summary judgment as to Homestar’s
unjust enrichment claim.
E. Account Stated
“An account stated is ‘a manifestation of assent by a debtor and creditor to a stated
sum as an accurate computation of an amount due the creditor.’” Mountain Peaks Fin.
Servs. v. Roth-Steffen, 778 N.W.2d 380, 387 (Minn. Ct. App. 2010) (quoting Cherne
Contracting Corp. v. Wausau Ins. Cos., 572 N.W.2d 339, 345 (Minn. Ct. App. 1997)). To
prevail on an account stated claim under Minnesota law, a plaintiff must show “(1) a
prior relationship as debtor and creditor, (2) a showing of mutual assent between the
parties as to the correct balance of the account, and (3) a promise by the debtor to pay the
balance of the account.” Id. However, because an account stated claim is merely “an
alternative means of establishing liability for a debt other than a contract claim,” Westside
Equip. Installers, Inc. v. North of Sixty Flying, Inc., No. A06-1618, 2007 WL 2107197, at
*5 (Minn. Ct. App. July 24, 2007) (citing Am. Druggists Ins. v. Thompson Lumber
Co., 349 N.W.2d 569, 573 (Minn. Ct. App. 1984)), Minnesota courts have barred an
account stated claim when there is no dispute that a written contract governs the disputed
account. See, e.g., Tapemark Co. v. E-Z Cleaners, LLC, No. 10-cv-813 (RHK/TNL),
16
2012 WL 246053, at *7 (D. Minn. Jan. 25, 2012); cf. Nelson v. First Nat. Bank of
Omaha, No. A04-579, 2004 WL 2711032, at *2 (Minn. Ct. App. Nov. 30, 2004) (“When
proof of an express contract does not exist, liability for a particular debt may be
established pursuant to the doctrine of account stated.”).
Just as with the prior two claims, the undisputed existence of a written contract
bars Homestar’s account stated claim as a matter of law. Indeed, in its opposition brief,
Homestar does not offer any particularized evidence in support of this claim, and only
asserts that the Court should not dismiss this claim because Homestar “has the right to
plead in the alternative, even if it is not permitted to recover the same damages under
multiple claims.” (Homestar Primary Opp. Br. at 24.) However, as the Court noted with
respect to Homestar’s unjust enrichment claim, that argument is inapposite under the
circumstances.
Accordingly, the Court grants Safeguard summary judgment as to Homestar’s
account stated claim.
III.
ORDER
Based on the submissions and the entire file and proceedings herein, Defendant
Safeguard Properties’ Motion for Summary Judgment on Homestar’s Claims [Doc. No.
161] is GRANTED IN PART AND DENIED IN PART. Homestar’s promissory
estoppel, unjust enrichment, and accounted stated claims are DISMISSED WITH
PREJUDICE.
Dated: February 27, 2019
s/Susan Richard Nelson
SUSAN RICHARD NELSON
United States District Judge
17
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?