Woods v. K.R. Komarek, Inc. et al

Filing 93

ORDER granting 64 Motion for Summary Judgment; granting in part 67 Motion for Summary Judgment (Written Opinion) Signed by Senior Judge David S. Doty on 5/26/2017. (DLO)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 15-4155(DSD/BRT)
Bobby J. Woods,
Plaintiff,
v.

ORDER

K.R. Komarek, Inc., and
Brady-McCasland, Inc.,
Defendants.
Kevin S. Sandstrom, Esq., 1809 Northwestern
Stillwater, MN 55082, counsel for plaintiff.

Avenue,

Calvin P. Hoffman, Esq. and Stinson Leonard Street, LLP, 150
South 5th Street, Suite 2300, Minneapolis, MN 55402, counsel
for defendant K.R. Komarek, Inc.
Stephen M. Harris, Esq. and Meyer & Njus, 200 South 6th Street,
Suite 1100, Minneapolis, MN 55402, counsel for defendant
Brady-McCasland, Inc.

This matter is before the court upon the motions for summary
judgment by defendant K.R. Komarek, Inc. and plaintiff Bobby J.
Woods d/b/a Controls Plus.

Based on a review of the file, record,

and proceedings herein, and for the following reasons, the court
grants Komarek’s motion and grants Woods’s motion in part.

BACKGROUND
This commercial dispute arises out of Woods’s purchase of
industrial equipment from Komarek on behalf of defendant BradyMcCasland, Inc. (BMI).

Woods is an engineer who specializes in

industrial instrumentation and controls.

Woods Dep. at 7:22-9:23.

Woods previously worked at Hosokawa Bepex where he helped BMI
design a control system for its facility.1
16.

Id. at 10:2-10; 11:8-

While working on the BMI project, Woods met BMI’s plant

manager, Alan Johnson.

Id. at 26:13-27:3.

Woods later formed

Controls Plus, a company that provides consulting and design
services.

Id. at 15:14-16:13.

In 2000 or 2001, Johnson asked

Woods to help him locate a new source of manufacturing equipment.
Id. at 30:1-20.

Woods recommended Komareck, a manufacturer of

custom briquetting and compacting equipment.

Id.

From 2003

through 2014, Johnson ordered equipment for BMI from Komarek and
other manufacturers through Woods.

Id. at 30:21-32:16.

Johnson

would place an order with Woods, who would then order the equipment
from Komarek or another manufacturer for delivery to BMI.
35:9-37:9.

BMI did not pay the manufacturer directly.

BMI paid Woods, and Woods paid the manufacturer.
No. 4 Ex. B; Sandstrom Aff. Ex. 6, at 1-2.

Id. at

Instead,

See, e.g., ECF

Although the equipment

was sent directly to BMI, BMI claims that Woods represented that he
would store the equipment.
Beginning in 2005 or 2006, Woods started giving Johnson cash
incentive payments.

Id. at 139:2-12.

Under this arrangement,

Johnson would request a quote from Woods, who would then contact a
manufacturer to obtain a price.

1

Id. at 47:15-48:18.

Woods

BMI is a Missouri corporation that manufactures chemicals
for the oil and gas industry. Fox Dep. I at 7:1-12.
2

testified that he would decide how much to charge BMI solely based
on the quoted price.

Id.

But he also testified that his prices

reflected the value he added to the transaction such as ensuring
that the ordered parts met BMI’s specification.

Id. at 55:1-20.

Johnson, who needed approval for the purchases, told Richard Fox,
BMI’s owner, that the quoted prices were a “good price, a fair
price, and a fair deal for the company.”2

Fox Dep. II at 16:23-

17:2.

Fox Dep. I at 30:3-4.

Fox routinely approved the orders.

Woods would then pay Johnson 10 to 20 percent of the profits from
each order.

Woods Dep. at 114:1-8.

paid Johnson over $132,833.

From 2011 through 2015, Woods

See Harris Aff. Ex. C, ECF No. 27.3

Fox was not aware of the arrangement between Woods and Johnson.
Woods Dep. at 167:10-12.
Three specific orders are at issue in this case.

First, in

January 2014, Woods ordered $32,170 worth of equipment from Komarek
to be delivered to BMI (First Order).
ECF No. 12 ¶ 3.

ECF No. 4 ¶ 6; Id. Ex. A.;

It is undisputed that Woods made an initial

payment of $9,291 but failed to pay the balance of $22,879 after

2

From 2010-2014, Johnson was the sole point of contact
between BMI and Woods. Woods Dep. at 46:14-47:47:14; Fox I Dep. at
29:25-30:15.
3

Although some of the checks to Johnson appear to be for
consulting services, Woods does not dispute BMI’s characterization
that these payments were incentive payments.
3

Komarek shipped the goods to BMI.4

See ECF No. 12 ¶¶ 4-5.

Second, in August 2014, Johnson requested a quote from Woods
for industrial equipment (Second Order).
Ex. B; ECF No. 12 ¶ 6.

See ECF No. 4 ¶ 10; id.

Woods contacted Komarek who offered the

equipment at a price of $278,550 with a thirty percent downpayment, a thirty percent mid-way payment, and the balance due
within thirty days after shipment.
¶ 11.

Woods quoted BMI a price of $389,970, a forty percent

markup, on the same payment terms.
2.

See ECF No. 4 Ex. B; Compl.

See Sandstrom Aff. Ex. 6, at 1-

It is undisputed that BMI accepted the quote and made the

initial thirty percent and mid-way payments to Woods but failed to
pay the remaining balance of $155,988.
24:16-25:16.

See id. at 3; Fox Dep. I at

The parties also agree that Woods paid Komarek the

initial thirty percent payment and the mid-way payment but failed
to pay his remaining balance of $111,420.

See ECF No. 4 ¶¶ 12-14;

id. Ex. C; ECF No. 12 ¶¶ 7-9.
Third, Johnson placed a separate equipment order with Woods in
August 2014 for the quoted price of $75,960 (Cancelled Order).
Compl. ¶ 25; BMI Second Am. Ans. ¶ 23; Harris Aff. Ex. F.

BMI paid

Woods in full before receiving the equipment with the understanding
that Woods would order the equipment and then store it for BMI.
Compl. ¶ 25; BMI Am. Ans. ¶ 25; Fox Dep. I 15:17-25; Harris Aff.

4

Woods disputes the exact amount owed.

5.
4

See ECF No. 12 ¶¶ 4-

Ex. F.

Sometime after this order, Alan Johnson retired from BMI

and was replaced by Chris Pierce.5
On June 3, 2015, Pierce contacted Komarek about the Cancelled
Order and discovered that Woods had never placed an order for the
equipment.

See Harris Aff. Exs D, E.

BMI also learned that Woods

did not actually store the equipment despite his representations to
the contrary.

See Harris Aff. Ex. F; Fox Dep. I at 13:18-14:9.

In

his conversations with Komarek, Pierce also learned that BMI could
buy equipment directly from Komarek at a cheaper price.6
I at 10:8-12:8; Kelly Decl. Ex. 7 at 6-7.

Fox. Dep.

On the same day, BMI

canceled its order with Woods, and it also advised him that it
would

no

longer

place

orders

with

him

because

he

charged

a

significantly higher price and misrepresented his involvement in
ordering and storing equipment for BMI.7

Fox Dep. I at Fox Dep. I

at 10:8-19, 12:16-13:22; Woods Dep. at 62:5-11.

Woods did not

refund any part of the $75,960 to BMI. Woods Dep. at 160:20-161:3.
On October 21, 2015, Woods filed suit in state court asserting
claims of breach of contract, unjust enrichment, account stated,
and wrongful repudiation of contract against BMI and declaratory

5

The record is unclear as to the exact date Johnson retired
and how soon thereafter Pierce replaced him.
6

Although Woods testified that he placed the order with
Komarek, there is no corroborating evidence in the record. See
Woods Dep. at 148:6-152:15.
7

It is unclear when BMI discovered Woods’s arrangement with
Johnson.
5

judgment,

tortious

interference

with

prospective

economic

advantage, and tortious interference with contract against Komarek.
On November 18, defendants timely removed, and Komarek filed an
answer

asserting

counterclaims

of

breach

of

contract,

unjust

enrichment/quantum meruit, and account stated against Woods.

On

November 24, BMI filed an amended answer asserting counterclaims of
misrepresentation/fraud, breach of contract, and breach of the
covenant of good faith and fair dealing against Woods. Komarek now
moves for summary judgment on Woods’s claims and its counterclaim.
Woods also moves for summary judgment on its breach of contract and
account stated claims and BMI’s counterclaims.8

DISCUSSION
I.

Standard of Review
“The court shall grant summary judgment if the movant shows

that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”

Fed. R. Civ.

P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
A fact is material only when its resolution affects the outcome of
the case.
(1986).

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

A dispute is genuine if the evidence is such that it could

8

At the hearing, Woods conceded that there is no evidence to
support his claims of tortious interference with prospective
economic advantage and tortious interference with contract against
Komarek.
Accordingly, the court dismisses those claims with
prejudice.
6

cause a reasonable jury to return a verdict for either party.

See

id. at 252 (“The mere existence of a scintilla of evidence in
support of the plaintiff’s position will be insufficient ....”).
On a motion for summary judgment, the court views all evidence
and inferences in a light most favorable to the nonmoving party.
Id. at 255.

The nonmoving party, however, may not rest upon mere

denials or allegations in the pleadings but must set forth specific
facts sufficient to raise a genuine issue for trial.
U.S. at 324.

Celotex, 477

A party asserting that a genuine dispute exists - or

cannot exist - about a material fact must cite “particular parts of
materials in the record.”

Fed. R. Civ. P. 56(c)(1)(A).

If a

plaintiff cannot support each essential element of a claim, the
court must grant summary judgment because a complete failure of
proof regarding an essential element necessarily renders all other
facts immaterial.
II.

Celotex, 477 U.S. at 322-23.

Breach of Contract and Account Stated Against BMI
Woods argues that summary judgment should be granted on his

breach of contract claim, or alternatively, his accounted stated
claim, because it is undisputed that BMI has failed to pay him the
balance of $155,988 on the Second Order without justification. BMI
responds that there are genuine issues of material fact as to its
affirmative defenses of fraudulent misrepresentation and equitable

7

estoppel, which preclude summary judgment.9
A.

Fraudulent Misrepresentation
Fraudulent misrepresentation is an affirmative defense to a

breach of contract claim where the party asserting the defense
establishes that:
(1) there was a false representation by a party of a past
or existing material fact susceptible of knowledge; (2)
made with knowledge of the falsity of the representation
or made as of the party’s own knowledge without knowing
whether it was true or false; (3) with the intention to
induce another to act in reliance thereon; (4) that the
representation caused the other party to act in reliance
thereon; and (5) that the party suffer[ed] pecuniary
damage as a result of the reliance.
Hoyt Props., Inc. v. Prod. Res. Grp., L.L.C., 736 N.W.2d 313, 318
(Minn. 2007) (alteration in original) (quoting Specialized Tours,
Inc. v. Hagen, 392 N.W.2d 520, 532 (Minn. 1986)).
BMI argues that it relied on Woods’s false claim that he
stored the equipment that he ordered on its behalf.

BMI points to

the note section of an invoice in support of its argument.
Harris Aff. Ex. F.

See

But the invoice referenced is not for the

Second Order, which is the only order at issue in Woods’s breach of
contract claim.

See id.

The invoice for the Second Order does not

mention storage, and BMI points to no evidence otherwise.
Sandstrom

Aff.

Ex.

6.

Therefore,

9

BMI’s

See

fraudulent

BMI also asserts a defense of setoff/recoupment.
As
discussed below, Woods is liable to BMI for breach of contract.
Therefore, insofar as BMI is liable to Woods, its award will be
reduced accordingly.
8

misrepresentation defense is without merit.
B.

Equitable Estoppel
BMI next contends that there are genuine issues of material

fact as to its equitable estoppel defense.

Under Minnesota law,

“[e]stoppel is an equitable doctrine ‘intended to prevent a party
from taking unconscionable advantage of his own wrong by asserting
his strict legal rights.’”

Minn. Commercial Ry. Co. v. Gen. Star

Indem. Co., 408 F.3d 1061, 1063 (8th Cir. 2005) (quoting N.
Petrochemical Co. v. United States Fire. Ins. Co., 277 N.W.2d 408,
410 (Minn. 1979)).

In order to establish this defense, BMI must

demonstrate that “[Woods] made representations or inducements, upon
which [it] reasonably relied, and that [it] will be harmed if the
claim of estoppel is not allowed.”
N.W.2d at 410.

N. Petrochemical Co., 277

There is no dispute that Woods did not make any

affirmative misrepresentations to BMI.

Therefore, BMI must show

that Woods had a duty to speak but failed to do so.

Vill. of Wells

v. Layne-Minn. Co., 60 N.W.2d 621, 627 (Minn. 1953); Pollard v.
Southdale Gardens of Edina Condo. Ass’n, Inc., 698 N.W.2d 449, 454
(Minn. Ct. App. 2005).
BMI argues that Woods had a duty to disclose his payments to
Johnson because those payments unfairly increased the price of the
equipment.

This omission is fraudulent only if Woods had a legal

or equitable obligation to disclose it.

Richfield Bank & Tr. Co.

v. Sjogren, 244 N.W.2d 648, 650 (Minn. 1976).

9

Generally, under

Minnesota law, “one party to a transaction has no duty to disclose
material facts to the other.”

Id.

A duty to disclose may exist,

however, “in special circumstances such as: when a confidential or
fiduciary relationship exists; when disclosure is necessary to
clarify misleading information already disclosed; or when one party
has special knowledge of material facts to which the other party
does not have access.”

Am. Comput. Tr. Leasing v. Boerboom Int’l,

Inc., 967 F.2d 1208, 1211-12 (8th Cir. 1992) (internal quotation
marks omitted)(quoting L&H Airco, Inc. v. Rapistan Corp., 446
N.W.2d 372, 380 (Minn. 1989)).

Under Minnesota law, “material

facts are facts concerning the contract’s subject matter or the
parties’ ability to perform.”

Lakeland Tool & Eng’g, Inc. v.

Thermo-Serv, Inc., 916 F.2d 476, 479 (8th Cir. 1990).

In other

words, material facts “lie at the heart of the contract.”

Id.

Here, the price BMI paid Woods for the equipment is material
to the contract.

There is a genuine issue as to whether Woods

defrauded BMI by unfairly increasing the price of the equipment.
BMI points to Woods’s testimony that the sole factor in determining
the price charged to BMI was the amount of profit he wanted to
make.

But Woods also testified that the increased price was

justified because he provided value to BMI beyond sourcing the
equipment. Whether the price was unfairly increased as a result of
the alleged kickback scheme or a legitimate markup for Woods’s
services is a factual issue that cannot be resolved at summary

10

judgment. Further, only Woods knew that Johnson was profiting from
his relationship with Woods at BMI’s expense.

Based on these

facts, a jury could reasonably infer that Woods defrauded BMI by
failing to disclose that he and Johnson personally profited from
the equipment sales. As a result, Woods is not entitled to summary
judgment on his breach of contract or account stated claims.
III. BMI’s Counterclaims
A.

Breach of Contract
BMI asserts a breach of contract claim to recoup its advance

payment on the Cancelled Order.

There is no dispute that BMI made

an advance payment of $75,960 to Woods pursuant to the parties’
contract.

See Sandstrom Ex. 7 at 6; Harris Aff. Ex. F.

Although

Woods asserts that he ordered the equipment from Komarek, he
submits no evidence that he actually did so.
establishes otherwise.

Indeed, the record

See Kelley Decl. Ex. 8(email from Komarek

to Pierce confirming that it did not receive an order from BMI or
Woods).

Woods acknowledges that he owes $53,172 of the advance

payment to BMI but argues that he is entitled to keep the remaining
thirty percent as a cancellation fee. See Harris Aff. Ex. F; Woods
Dep.

at

160:20-161:3.

But

the

contract

does

not

include

a

cancellation fee provision. See Sandstrom Ex. 5. As a result, BMI
is entitled to the entirety of its advance payment - $75,960.10
10

The court finds in favor of BMI on its breach of contract
claim even though it did not move for summary judgment because the
facts establishing that claim are undisputed.
The court,
11

B.

Unjust Enrichment
BMI also brings a counterclaim for unjust enrichment based on

Woods’s payments to Johnson.

To succeed on a claim for unjust

enrichment BMI must show that (1) Woods received a benefit, (2)
which he knowingly accepted and (3) would be inequitable for him to
retain.

Dahl v. R.J. Reynolds Tobacco Co., 742 N.W.2d 186, 195-96

(Minn. Ct. App. 2007). BMI argues that Woods was unjustly enriched
by the several contracts he secured from BMI by means of the
alleged fraudulent scheme.

See Anderson v. DeLisle, 352 N.W.2d

794, 796 (Minn. Ct. App. 1984) (“An action for unjust enrichment
may be based on failure of consideration, mistake, and situations
where it would be morally wrong for one party to enrich himself at
the expense of another.”); see also Dahl, 742 N.W.2d at 196 (“[I]t
must be shown that a party was unjustly enriched in the sense that
the term ‘unjustly’ could mean illegally or unlawfully.”).
Woods

argues

that

an

unjust

enrichment

claim

asserted where, as here, there is a valid contract.

cannot

be

See Caldas v.

Affordable Granite & Stone, Inc., 820 N.W.2d 826, 838 (Minn. 2012)
(“[Unjust enrichment] does not apply when there is an enforceable
contract that is applicable.”).

But “where the claims are outside

the scope of the contract between the parties, unjust enrichment
and quantum meruit claims are nonetheless actionable.”

Teng Moua

therefore,
need
not
address
BMI’s
counterclaims
for
misrepresentation/fraud and breach of good faith and fair dealing,
which are also based on the Cancelled Order.
12

v. Jani-King of Minn., Inc., 810 F. Supp. 2d 882, 893-94 (D. Minn.
2011); see also Ventura v. Titan Sports, Inc., 65 F.3d 725, 730
(8th Cir. 1995). BMI’s unjust enrichment claim is not based on the
terms of a contract; rather, the claim is based on Woods’s alleged
self-enrichment at the expense of BMI.

Therefore, the unjust

enrichment claim lies outside the scope of the contract.

Because,

as discussed above, there is a genuine issue as to whether Woods
defrauded

BMI,

summary

judgment

on

the

unjust

enrichment

counterclaim is not warranted.
C.

Fraudulent Concealment
Woods argues that summary judgment should be granted on BMI’s

fraudulent

concealment

counterclaim

because

it

is

barred

by

Minnesota’s economic loss doctrine, Minn. Stat. § 604.101.

The

court

the

disagrees.

Section

604.101

“‘exhaustively

states

economic loss doctrine’ and thus abrogates the common law version
of the doctrine.”

Johnson v. Bobcat Co., 175 F. Supp. 3d 1130,

1144-45 (D. Minn. 2016) (quoting Ptacek v. Earthsoils, Inc., 844
N.W.2d 535, 538-39 (Minn. Ct. App. 2014)). Section 604.101 subdiv.
4

states

that

“[a]

buyer

may

not

bring

a

common

law

misrepresentation claim against a seller relating to the goods sold
or leased unless the misrepresentation was made intentionally or
recklessly.”

Here, BMI’s misrepresentation claim is not based on

the purchased equipment, it is based on the allegedly inflated
prices it paid as a result of an alleged kickback scheme. Further,

13

as already discussed, a reasonable jury could conclude that Woods
intentionally defrauded BMI.

As a result, BMI’s claim is not

barred.
Woods next argues that the fraudulent concealment claim should
be dismissed because he had no duty to disclose the payments to
BMI.

For the reasons already discussed, this argument fails.
The court also rejects Woods’s unpersuasive argument that the

counterclaim should be dismissed because Johnson’s knowledge of the
fraud was imputed to BMI.

It is well established that an agent’s

knowledge is not imputed to his principal when he acts for his own
personal interest rather than the benefit of the principal. Sussel
Co. v. First Fed. Sav. & Loan Ass’n of St. Paul, 238 N.W.2d 625,
627 (Minn. 1976).
In

order

to

The counterclaim, however, fails on the merits.
establish

fraudulent

concealment,

BMI

must

demonstrate that (1) Woods engaged in a course of conduct to
conceal evidence of his alleged wrongdoing and (2) BMI failed to
discover the facts giving rise to [its] clam despite the exercise
of due diligence.

Block v. Toyota Motor Corp., 5 F. Supp. 3d 1047,

1059 (D. Minn. 2014); see also Williamson v. Prascinuas, 661 N.W.2d
645,

650

(Minn.

Ct.

App.

2003).

The

concealment

“must

be

fraudulent or intentional and, in the absence of a fiduciary or
confidential

relationship,

there

must

be

something

of

an

affirmative nature designed to prevent, and which does prevent,
discovery of the cause of action.”

14

Wild v. Rarig, 234 N.W.2d 775,

795 (Minn. 1975).

“[M]ere silence or failure to disclose may not

in itself constitute fraudulent concealment.”

Id.

Even assuming that BMI exercised due diligence, there is no
evidence that Woods took affirmative action to conceal his payments
to Johnson.

At most, Woods failed to disclose a material fact,

which is insufficient to establish fraudulent concealment.
result,

the

court

grants

summary

judgment

on

the

As a

fraudulent

concealment claim.
D.

Civil Conspiracy
A civil conspiracy clam that is not supported by an underlying

tort must be dismissed.

See D.A.B. v. Brown, 570 N.W.2d 168, 172

(Minn. Ct. App. 1997) (“[A] conspiracy count fails [when] it is not
supported by an underlying tort.”).

Because all of BMI’s tort

counterclaims have been dismissed, summary judgment must be granted
on the civil conspiracy claim as well.11
IV.

Komarek’s Breach of Contract Counterclaim
Komarek argues that it is entitled to summary judgment on its

breach of contract counterclaim because there is no dispute that
Woods failed to fully pay Komarek for the First and Second Orders.
The court agrees.

Woods contends that he should be excused from

payment because Komarek materially breached the parties’ customary
practice by shipping the equipment to BMI before he had a chance to

11

BMI’s remaining counterclaim of unjust enrichment is a
quasi-contract claim and not a tort claim.
15

inspect the equipment or demand payment from BMI.

Woods argues

that he could have paid Komarek had he secured payment from BMI.
This argument has no merit.
First, there is no evidence that Woods and Komarek had a
customary practice of allowing Woods to inspect the equipment
before shipment.12

Second, even if there were sufficient evidence

of this customary practice, Komarek’s actions could not have
prevented Woods from making payment because BMI was not obligated
to pay Woods until thirty days after shipment.
6 at 1; Woods Dep. at 180:5-8.

See Sandstrom Ex.

Woods’s reliance on BMI’s payment

does not excuse Woods from his obligation to pay Komarek.

As a

result, Komarek is entitled to summary judgment on its breach of
contract

claim.

Further,

Woods’s

declaratory

judgment

claim

against Komarek is dismissed with prejudice.13
V.

Prejudgment Interest
Woods and Komarek dispute the rate of prejudgment interest

that should accrue on the amount of money Woods owes Komarek.
12

The only evidence Woods cites to is his own deposition
testimony and affidavit, which are insufficient to defeat summary
judgment. See Conolly v. Clark, 457 F.3d 872, 876 (“[A] properly
supported motion for summary judgment is not defeated by selfserving affidavits.”); see also Davidson & Assocs. v. Jung, 422
F.3d 630, 638 (8th Cir. 2005) (“A plaintiff may not merely point to
unsupported self-serving allegations, but must substantiate
allegations with sufficient probative evidence that would permit a
finding in the plaintiff’s favor.”).
13

Because the court grants summary judgment on the breach of
contract claim, it need not address Komarek’s alternative claims
for unjust enrichment or account stated.
16

Komarek claims that the interest should accrue at an annual rate of
ten percent pursuant to Minn. Stat. § 549.09.

Woods responds that

the correct interest rate is six percent per year pursuant to Minn.
Stat.

§

334.01.

Minnesota

courts

have

issued

inconsistent

decisions on how § 549.09 interacts with § 334.01.

Hogenson v.

Hogenson, 852 N.W.2d 266, 273 (Minn. Ct. App. 2014).

In relying

on Nelson v. Ill. Farmers Ins. Co., 567 N.W.2d 538 (Minn. Ct. App.
1997), the court previously held that § 549.09 applied to breach of
contract actions.

Best Buy Stores, L.P. v. Developers Diversified

Realty Corp., 715 F. Supp. 2d 871, 877-78 (D. Minn. 2010).
Since Best Buy, however, the Minnesota Court of Appeals has
clarified that § 549.09 applies only to claims for which “damages
are not readily ascertainable, or when a claim did not allow for
preverdict interest prior to the 1984 amendment [of § 549.09].”
Hogenson, 852 N.W.2d at 273-74.

In other words, the six percent

rate applies to a claim only when both prejudgment interest was
allowed

for

the

ascertainable.

claim

at

common

law

and

damages

are

easily

See id. at 274. (emphasis in original) (“Because

preverdict interest was allowed for conversion claims under common
law, preverdict interest should be calculated ... at 6% under
section

334.01

liquidated.”).

...

if

the

damages

are

ascertainable

or

Because Minnesota courts have since declined to

follow the reasoning in Nelson, the court’s reasoning in Best Buy
no longer applies. See id. at 273. (“Nothing in the plain language

17

of section 334.01 would lead us to conclude that it applies only to
very specific types of claims, as suggested by this court in
Nelson.”).
Prejudgment interest was calculated for breach of contract
claims under Minnesota common law.
Minnesota,
prejudgment

219

N.W.2d

interest

to

922,

926-27

breach

of

See Alley Constr. Co. v.
(Minn.
contract

Komarek’s damages are easily ascertainable.

1974)

(applying

action).

Also,

As a result, the six

percent rate under § 334.01 applies.

CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that:
1. Defendant K.R. Komarek, Inc.’s motion for summary judgment
[ECF No. 64] is granted;
2.

Plaintiff’s motion for summary judgment [ECF No. 67] is

granted in part as set forth above;
3.

Judgment shall be entered against Bobby J. Woods d/b/a

Controls Plus in favor of defendant Brady-McCasland, Inc. in the
amount $75,960 plus prejudgment interest of six percent per year;
4.

Judgment shall be entered against Bobby J. Woods d/b/a

Controls Plus in favor of defendant K.R. Komarek, Inc. in the
amount of $134,299 plus prejudgment interest of six percent per
year; and

18

5.

Defendant K.R. Komarek, Inc. is dismissed from the case.

Dated: May 26, 2017
s/David S. Doty
David S. Doty, Judge
United States District Court

19