K&S Heating, Air Conditioning & Plumbing, LLC, Respondent,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).

STATE OF MINNESOTA
IN COURT OF APPEALS
A16-1505

K&S Heating, Air Conditioning & Plumbing, LLC,
Respondent,

vs.

Jeremiah J. Kramer a/k/a Jeremy Kramer,
Appellant,

XYZ Corporation, et al.,
Defendants.

Filed May 22, 2017
Affirmed
Bratvold, Judge

Rice County District Court
File No. 66-CV-15-196

John D. Scott, Hoffman, Hamer & Associates, PLLC, Faribault, Minnesota (for
respondent)

Timothy L. Morisette, Lampe Law Group, L.L.P, Northfield, Minnesota (for appellant)

Considered and decided by Kirk, Presiding Judge; Schellhas, Judge; and Bratvold,
Judge.
U N P U B L I S H E D O P I N I O N
BRATVOLD, Judge
Appellant hired respondent to install a heating, ventilation, and air -conditioning
system in his new home. After respondent installed the furnace but before completion of
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the home, the furnace became inoperable . Appellant signed a change order for a
replacement furnace and the necessary labor costs , but later refused to pay. Respondent
brought a mechanic’s lien action. After a court trial, the district court entered judgment for
respondent. On appeal, appellant raises numerous issues, several of which overlap.
Appellant argues that the district court erred because: (1) its factual findings regarding the
furnace failure were clearly erroneous ; (2) the change order wa s unenforceable ; and
(3) respondent did not provide adequate pre-lien notice. Additionally, appellant contends
that the district court abused its discretion in awarding attorney fees and denying his motion
for sanctions. Because the district court’s factual findings are supported by the record and
its legal conclusions contain no errors of law, we affirm.
FACTS
In August 2013 appellant Jeremy Kramer applied for and received a permit to build
a house in Rice County. Kramer signed the permit and indicated that he was the owner and
general contractor. While Kramer was finalizing house plans, he became acquainted with
his mother’s friend, John Colangelo, who works for both Arthur Construction, Inc. (Arthur)
and Fabricated Wood Products (F abricated Wood). Kramer hired Fabricated Wood to do
the framing, construction, and other woodwork in the house. In addition, Colangelo helped
Kramer solicit bids from other contractors.
Respondent K&S Heating, Air Conditioning & Plumbing, LLC (K&S) submitted
three bids to Colangelo including one for a heating, ventilation, and air conditioning
(HVAC) system. Along with its bids, K&S s ent a document entitled “Property Owner’s
Pre-Lien Notice” which tracked the language of Minn. Stat. § 514.011, subd. 2(a) , but
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contained several blanks where specific information about the improvements could be
inserted. Colangelo gave K&S’s bids to Kramer, who accept ed only the HVAC bid,
estimated at $17,040. Colangelo informed K&S that Kramer had accepted the bid.
K&S installed the furnace in Kramer’s home in November and December 2013 and
attached it to a liquid propane gas line. On December 11 , 2013, Kram er stopped by the
home to check on progress and called K&S because the house was cold. That evening, and
over the next several days, K&S employees tried to figure out what had caused the furnace
to fail. Ultimately, the K&S employees determined that the line running between the liquid
propane tank and the furnace had become restricted, and soot had built up in the furnace as
a result of the low gas pressure, rendering the furnace inoperable.
K&S informed Kramer that the furnace need ed to be rep laced, and submitted a
change order for an additional $3,610.76 to cover the cost. Kramer admitted that he read,
signed, scanned, and emailed the change order to K&S on December 23, 2013. Kramer
also asked K&S to revise the change order to include the findings about the restricted gas
line. K&S made the requested revision before Kramer signed the change order.
K&S installed a second furnace the next day. Later, Kramer paid the original
contract price of $17,0 40, but refused to pay the $3,610.76 for the change order. K&S
recorded a mechanic’s lien, sent it to Kramer , and sued Kramer when he refused to pay.
Kramer moved for summary judgment , which the district court denied because “there are
unresolved factual issues in this matter.”
A court trial was held in December 2015. Four K&S employees testified, along with
Colangelo, Kramer, and a technician who had inspected the damaged furnace. Testimony
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at trial focused on three issues: whether Colangelo was Kramer’s general contractor, the
change order, and the cause of the furnace’s damage.
In its initial decision, the district court found that a contract existed between Kramer
and K&S, and Colangelo was not Kramer’s general contractor; instead, Colangelo acted as
Kramer’s agent in communicating K&S’s bid and Kramer’s acceptance. The district court
also found that the contract between Kramer and K&S was modified by the change order,
which was valid and supported by consideration in the form of additional parts and l abor
from K&S and additional money from Kramer. Additionally, the court found that Kramer
breached the change order by not paying.
Regarding the cause of the furnace’s failure, the district court considered evidence
supporting two conflicting theories. The K&S employee who installed the furnace testified
that he removed the natural gas orifices on the manifold, replaced them with liquid propane
orifices, connected the furnace to the ducts, gas, and electricity, and then ignited the
furnace. He testified th at he assessed the furnace’s operation by checking the flame, gas
flows, and pressures for at least ten minutes, and that the furnace was running when he left
and on the following day. A different K&S employee later investigated the faulty furnace
and testified that he determined that the gas line was restricted and not delivering sufficient
gas to the furnace.
Kramer offered evidence that the installing employee failed to change all eight
orifices. A furnace technician who examined the failed furnace testified that the first orifice
was not attached, the cell missing an orifice was filled with soot, and other cells were clean
and unaffected. He also testified that he detected no wrench marks near the missing orifice,
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and he found an orifice inside the furnace. He acknowledged that soot in a furnace can be
created in many ways, including an improper air to fuel ratio, low gas pressure, or a cracked
manifold.
In response, K&S offered testimony that all eight orifices were present when the
furnace was installed and that the investigating K&S employee removed an orifice from
the furnace when he was attempting to figure out what had caused the failure. The district
court found that the original furnace functioned when installed and the gas line became
restricted, causing the furnace to fail . While the court found Kramer’s technician testified
credibly, it also rejected his conclusion and specifically determined tha t K&S’s evidence
was credible.
Finally, the district court determined that K&S complied with the statutory
requirements for pre -lien notice and mechanic’s lien statements , and accordingly was
entitled to recover $3,610.76 from Kramer. The district court awarded K&S attorney fees
in the amount of $18,000, denying some of the requested amount of $22,999; the court
noted that “it is reasonable in this case that the attorney’s fees far exceed the value of the
mechanic’s lien.” It also denied Kramer’s motions for sanctions and attorney fees.
Following the district court’s order, Kramer filed a motio n to amend the findings.
The district court denied the motion but granted Kramer’s motion to stay enforcement of
the judgment pending appeal. Kramer appeals.
D E C I S I O N
We review a district court’s findings of fact for clear error. Gellert v. Eginton, 770
N.W.2d 190, 194 (Minn. App. 2009), review denied (Minn. Oct. 20, 2009); Minn. R. Civ.
6
P. 52.01. If there is “reasonable evidence to support the district court’s findings, ” we will
not find clear error. Rogers v. Moore, 603 N.W.2d 650, 656 (Minn. 1999). A factual finding
is not supported only where the finding is “manifestly contrary to the weight of the
evidence or not reasonably supported by the evidence as a whole.” Id. We review the
district court’s conclusions of law de novo. Osgood v. Med ., Inc., 415 N.W.2d 896, 901
(Minn. App. 1987), review denied (Minn. Feb. 12, 1988).
I. The district court did not clearly err when it found that the furnace was
installed properly and failed for reasons not attributable to K&S.

Kramer contends that the district court clearly erred when it concluded that the
furnace was installed properly . He argues that the district court should have found that
K&S failed to install one of the eight orifices, and that this failure caused the soot to build
up and the furnace to fail.
To convince this court that the district court’s finding of fact must be reversed,
Kramer must demonstrate that the finding is contrary to the evidence as a whole, or not
supported by reasonable evidence. Rogers, 603 N.W.2d at 656. Kramer argue s that the
district court’s finding is contrary to the weight of the evidence and points to evidence that
supports his improper -installation theory .1 Kramer’s theory is supported by record
evidence. Because K&S’s theory of causation is also sup ported by record evidence, we

1 Kramer also argues that the gas line could not have been restricted. Before the furnace
was installed, the house temporarily used “pot heaters” supp lied through a liquid propane
tank. Because the two pot heaters were functioning and required 400,000 BTU of gas as
compared to the 90,000 BTU for the furnace, Kramer contests the district court’s finding .
The record, however, is devoid of evidence that wo uld support this claim, which was not
submitted to the district court; consequently, we do not consider it. See Thiele v. Stich, 425
N.W.2d 580, 582 (Minn. 1988).
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reject Kramer’s argument. It is the district court’s province to weigh the evidence and find
facts; we will not reverse the district court’s factual findings when they are supported by
record evidence. Landeen v. DeJung , 219 Minn. 287, 292 –93, 17 N.W.2d 648, 651 –52
(1945) (rejecting the argument that the adverse party’s version of the facts was not credible
where the trier of fact accepted the adverse party’s version); Kelly v. Hopkins, 105 Minn.
155, 158, 117 N.W. 396, 397 (1 908) (concluding that “where the evidence was radically
conflicting” so as “to make the question one of fact” and the evidence sustains the verdict,
it should not be overturned on appeal).
Alternatively, Kramer argues that the district court erred in finding that K&S’s poor
workmanship did not cause the damage to the furnace. He argues, “K&S hooked into [the
gas line] and obviously did nothing to determine whether the gas line was large enough to
support K&S’s furnace, ” and that the installing employee failed to check the carbon
monoxide levels. But the K&S employee who installed the furnace testified that he
observed and measured the gas pressure at the time of installation, and that he performed
all necessary installation tests, including checking the carbon monoxide levels. The record
supports the district court’s determination that K&S did not cause the furnace’s fai lure
through poor workmanship.
Moreover, we note that Kramer’s arguments assume that the gas line was restricted
at the time of installation. The district court did not make this finding, nor is the assertion
supported by record evidence. We conclude that the district court did not clearly err when
it determined that the furnace was properly installed and a restricted gas line caused the
furnace’s failure.
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II. The change order was valid and enforceable.
Kramer makes several arguments regarding the enforceability of the change order.
Preliminarily, we note that each of his arguments relies on the factual assertion that K&S
did not install a functioning furnace. Because the district court did not err in rejecting the
factual assertion underlying Kramer’s arguments, we do not further analyze this aspect of
Kramer’s arguments. We consider each of Kramer’s contentions in turn.
First, Kramer a rgues that the district court erred when it denied hi s motion for
summary judgment, including his contention that the change order was unenforceable. The
district court orally denied the motion, stating in part that there were “ unresolved factual
issues.”
Specifically I go right to that issue, who was the general
contractor. With whom was there a contract? Who had the
contract with K&S. What was the role of Arthur Construction.
What was the role of Mr. Colangelo vis-à-vis Mr. Kramer vis-
à-vis Arthur Construction vis-à-vis K&S.

Generally, we do not review a denial of a summary judgment upon an appeal from
a judgment entered after trial. Bahr v. Boise Cascade Corp ., 766 N.W.2d 910, 918 –19
(Minn. 2009). The supreme court has stated that “[w]here a trial has b een held and the
parties have been given a full and fair opportunity to litigate their claims, it makes no sense
whatever to reverse a judgment on the verdict where the trial evidence was sufficient
merely because at summary judgment it was not.” Id. at 91 8 (citations omitted).
Accordingly, we decline to consider the district court’s decision to deny summary
judgment.
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Second, Kramer argues that the change order was unenforceable because it is not
supported by adequate consideration. A contract must be suppo rted by consideration.
Baehr v. Penn -O-Tex Oil Corp. , 258 Minn. 533, 5 38–39, 104 N.W.2d 661, 665 (1960).
Consideration means the agreement is the result of a “negotiation resulting in the voluntary
assumption of an obligation by on e party upon condition of an act or forbearance by the
other.” Id. at 539, 104 N.W.2d at 665. If a party promises to do something he is already
legally obligated to do, that promise does not constitute consideration. Tonka Tours, Inc.
v. Chadima, 372 N.W.2d 723, 728 (Minn. 1985). Modifications to contracts, however, do
not always require additional consideration. T he supreme court “has consistently held . . .
that ‘Parties can alter their contract by mutual consent, and this requires no new
consideration, for it is merely the substitution of a new contract for the old one, and this is
of itself a sufficient consideration for the new.” Olson v. Penkert, 252 Minn. 334, 347, 90
N.W.2d 193, 203 (1958) (citing Rye v. Phillips, 203 Minn. 567, 282 N.W. 549 (1938) . A
contract modification does not require new consideration if the original contract is
executory and not breached. Mitchell v. Rende , 225 Minn. 145, 149, 30 N.W.2d 27, 30
(1947).
Here, the trial court concluded that the furnace change order was a valid
modification of the HVAC contract. The district court also noted that K&S “promised to
provide additional parts and labor,” and Kramer “promised to pay an additional amount of
money.” Kramer argues that the HVAC contract could not be modified because K&S
breached the contract by failing to install a functioning furnace. This claim was fully
10
addressed above.2 Accordingly, we determine that no new consideration was needed for
the change order , and even if it were, the additional furnace and labor suffice d as
consideration.
Third, Kramer claims that the change order was unconscionable. “A contract is
unconscionable if it is such as no man in his senses and not under delusion would make on
the one hand, and as no honest and fair man would accept on the other.” Kauffman Stewart,
Inc. v. Weinbrenner Shoe Co. , 589 N.W. 2d 499, 502 (Minn. App. 1999) (quotation
omitted). Whether a contract is unconscionable is a question of law that we review de novo.
Osgood, 415 N.W.2d at 901.
The district court found that the change order was not unconscionable, noting that
Kramer offered to pay the change order, negotiated the language in the change order, and
testified that he understood at the time he signed that he may have to pay the amount listed
in the change order. Kramer relies on his testimony that, when he signed the change order,
he “felt like I had no choice ” because “I wasn’t sure how I was going to get heat in the
house.” He also testified , however, that he had time to review the change order before
signing it.

2 Kramer’s claim that K&S breached the implied warranty of merchantability and fitness
also fails because the district court found K&S installed a functioning furnace. See Minn.
Stat. § 325G.18, subd. 1 (noting that consumer goods sales carry a warranty that the goods
are merchantable); see also Dougall v. Brown Bay Boat Works & Sales, Inc. , 287 Minn.
290, 294, 178 N.W.2d 217, 220 (1970) (noting that “merchantable quality” means a
product is “reasonably fit for the general purpose for which it is manufactured and sold”).

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Both parties received a benefit from the c hange order: Kramer received a
replacement furnace installation after the original furnace failed , and K&S received
additional money to cover its additional expense s in installing a new furnace. Where
“[b]oth parties obtained real and tangible benefits from the execution of [a] contract,” we
generally conclude that a contract is not unconscionable. Overholt Crop Ins. Serv. Co., Inc.
v. Bredeson, 437 N.W.2d 698, 702 (Minn. App. 1989) (holding an employment contract
was not unconscionable where the employee received “substantial income” and other
benefits and the employer received the employee’s work product and the business
generated by the employee). We conclude that the change order was not unconscionable.
The district court did not err in its determination that the change order was an enforceable
modification of the parties’ contract.
III. The district court did not clearly err in finding that Kramer was his own
general contractor, and did not err in determining no pre -lien notice was
necessary.

Kramer argues that the district court erred in concluding that K&S was entitled to a
mechanic’s lien, asserting that K&S did not comply with the pre -lien notice requirement.
To be entitled to a lien, a subcontractor must generally “cause to be given to the owner or
the owner’s authorized agent, either by personal delivery or by certified mail, not later than
45 days after . . . first furnish[ing] labor . . . a written notice” which states the party’s
statutory right to file a claim against the property for the price of the services furnished if
payment is not made. Minn. Stat. § 514.011, subd. 2(a).
Because lien notice requ irements seek “ to remedy the unfairness arising from the
foreclosure of mechanic ’s liens on property of unsuspecting owners,” Minnesota has
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recognized exceptions for cases where “the owner is not unsuspecting.” Nor-Son Inc. v.
Nordell, 369 N.W.2d 575 , 578 (Minn. App. 1985) (quotation omitted), review denied
(Minn. Sept. 13, 1985) (analyzing the general contractor pre -lien notice requirement in
Minn. Stat. § 514.011, subd. 1). The applicable subdivision contains an exception for
parties “under direct contract with the owner, ” who are not required to provide pre -lien
notices. Minn. Stat. § 514.011, subd. 2(a); see also Minn. Stat. § 514.011, subd. 4a (“The
notice required by this subsection shall not be required to be given where the contractor is
managed or controlled by substantially the same persons who manage or control the owner
of the improved real estate.”).
The district court found that K&S contracted directly with Kramer, and accordingly
did not need to provide him with a pre-lien notice. Kramer argues that this finding is not
supported by the record because Colangelo solicited the bid and communicated acceptance
to K&S. Accordingly, Kramer argues that “either [K&S was] contracted to Arthur, or if
Colangelo ‘was acting as Kramer’s agent,’ as the trial court concluded, it was contracted
to Kramer indirectl y through Colangelo or Arthur.” K&S argues that the district court’s
finding is supported by the record.
“Generally, the existence of a contract, as well as the terms of that contract, are
questions of fact to be determined by the fact -finder.” TNT Props ., Ltd. v . Tri -Star
Developers LLC, 677 N.W.2d 94, 101 (Minn. App. 2004). “ But where the relevant facts
are undisputed, the existence of a contract is a question of law, which this court reviews de
novo.” Id.
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The record supports the district court’s factual finding that Kramer was his own
general contractor and contracted directly with K&S. Kramer signed the permit to build
his own home indicating he was the general contra ctor. Kramer testified that he did not
hire Co langelo as the general contractor. Colangelo testified that neither he nor his
company were Kramer’s general contractor . K&S’s bid is addressed to Colangelo but
bears a subject line reading “Jeremy Kramer HVAC estimate.” Colangelo testified that he
received K&S’s bids, “printed them and [gave] them to [Kramer],” and Kramer determined
which bids to accept. Kramer accepted only one of K&S’s three bids. After K&S’s bid was
accepted, Colangelo introduced Kramer to K&S and told employees that Kramer was the
general contractor. Indeed, one K&S employee testified that he knew he was working for
Kramer. Accordingly, we conclude that t he record supports the district court’s
determination that K&S contracted directly with Kramer and under Minn. Stat. § 514.011,
subd. 2(a), no pre-lien notice was necessary.
Even if K&S was required to provide a pre-lien notice to Kramer, we conclude that
K&S’s pre-lien notice was adequate. The lien notice must be “a written notice in at least
10-point bold type, if printed, or in capital letters, if typewritten,” must use specific
statutory language, and must be “given to the owner or the owner’s authorized agent, either
by personal delivery or by certified mail.” Minn. Stat. § 514.011, subd. 2(a). Kramer argues
K&S did not satisfy the statutory requirements because the pre -lien notices contained
blanks and were sent by email.
Kramer’s claim fails. The applicable subdivision states, “A person entitled to a lien
does not lose the right to the lien for failure to strictly comply with this subdivision if a
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good faith effort is made to comply, unless the owner or another lien claimant proves
damage as a direct result of the failure to comply .” Minn. Stat. § 514.011, subd. 2(b). The
district court found that K&S made a good faith effort to comply with the statute and our
review confirms that this finding is supported by the record. We note that the record does
not establish how the notices were delivered to Kramer, so no analysis of email delivery is
required. We conclude that the district court did not err when it determined that K&S met
its pre-lien notice obligations.
IV. The district court did not abuse its discretion in awarding a ttorney fees to
K&S.

Kramer also argues that the district court erred in awarding attorney fees. “The trial
court has discretion to award to the prevailing party attorney fees in a mecha nics’ lien
foreclosure action.” C. Kowalski, Inc. v. Davis, 472 N.W.2d 872, 878 (Minn. App. 1991),
review denied (Minn. Sept. 13, 1991); see also Minn. Stat. § 514.02, subd. 1a. The award
should “bear a reasonable relation to the amount of the judgment secured. ” Davis, 472
N.W.2d at 878 (quotation omitted). In making this determination the district court should
consider the required time and effort, the case’s difficulty, the attorney’s skill, the value of
the interest, the trial results, loss of other employment opportunity, ability to pay,
customary charges, and certainty of payment. Id. This court “will not reverse the district
court’s decision on attorney fees absent an abuse of discretion.” Carlson v. SALA
Architects, Inc., 732 N.W.2d 324, 331 (Minn. App. 2007), review denied (Minn. Aug. 21,
2007).
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The trial court concluded that K&S was entitled to $18,000 of reasonable attorney
fees after K&S requested $22,999. In making its determination, t he district court
considered all the required factors, and emphasized that this litigation included a two-day
court trial and some post-trial work.
Kramer argues that the district court abused its di scretion because the $18,000
attorney fees award is excessive in comparison with the $3,600 lien, pointing to a case in
which we halved an attorney fees award that had been approximately equal to the judgment
“[t]o bring the award into a reasonable relationship to the amount of the judgment.” Nw.
Wholesale Lumber, Inc. v. Citadel Co., 457 N.W.2d 244, 251 (Minn. App. 1990). However,
“[a] large fee is not necessarily an unreasonable fee.” Obraske v. Woody, 294 Minn. 105,
109, 199 N.W.2d 429, 432 (Minn. 1972). Accordingly, we are not inclined to reject a
district court’s award of attorney fees “merely because they may exceed the lien amounts.”
Kirkwold Constr. Co. v. M.G.A. Const r., Inc., 498 N.W. 2d 465, 470 (Minn. App. 1993),
aff’d on other grounds, 513 N.W.2d 241 (Minn. 1994). Although the amount awarded here
was substantial, we conclude that it was not unreasonable in light of the work expended in
litigation. We conclude that the district court did n ot abuse its discretion in aw arding
attorney fees to K&S.
V. The district court did not abuse its discretion when it denied Kramer’s motion
for sanctions.

Kramer’s final argument is that the district court abused its discretion when it denied
his motion for sanctions against K&S. Under Minn. R. Civ. P. 11.01 and 11.03 , a district
court may “impose an appropriate sanction” on an attorney or party that files a pleading
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not war ranted by existing law or a non frivolous argument for extension or reversal of
existing law, or if the allegations lack factual support. Decisions regarding sanctions are
reviewed for abuse of discretion. Miller v. Lankow , 801 N.W.2d 120, 127 (Minn. 2011).
After ruling in favor of K&S, the district court denied Kramer’s motion for sanctio ns.
Because we affirm the district court’s decision on the merits, we also conclude that the
district court did not abuse its discretion when it found K&S brought a nonfrivolous and
ultimately successful claim.
Affirmed.