Parkos Construction Company, Inc., Appellant,

This opinion will be unpublished and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
A17-0554

Parkos Construction Company, Inc.,
Appellant,

vs.

Stargate, Inc., d/b/a B & H Petroleum Equipment Company, et al.,
Respondents.

Filed December 18, 2017
Affirmed
Peterson, Judge

Hennepin County District Court
File No. 27-CV-16-11878

Shana L. Marchand, Tim L. Droel, J. Matthew Berner, Droel, PLLC, Bloomington,
Minnesota (for appellant)

Joseph A. Gangi, William S. Partridge, Farrish Johnson Law Office, Mankato, Minnesota
(for respondents)

Considered and decided by Smith, Tracy M., Presiding Judge; Peterson, Judge; and
Halbrooks, Judge.
U N P U B L I S H E D O P I N I O N
PETERSON, Judge
Appellant challenges the summary-judgment dismissal of its claim for attorney fees
and costs under the private-attorney-general statute, Minn. Stat. § 8.31 (2016), arguing that
the district court erred by concluding that its claim to recover damages arisin g out of a

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fraudulent bid on a public -works contract by respondent-subcontractor did not meet the
statutory public-benefit requirement. We affirm.
FACTS
The parties stipulated to the facts underlying the claims of appellant Parkos
Construction Company, I nc. against respondents Stargate, Inc., d/b/a B&H Petroleum
Equipment Company; Timothy Kiezula; and Carl Hodgman. In February 2016, the City
of Hopkins solicited bids from general contractors for a public-works project. The project
included the installation of vehicle lifts, and the project plans required that the lift installer
“be certified by the [vehicle lift] manufacturer, for the installation of its lifts.”
Parkos, a general contractor, solicited bids from subcontractors for the project.
B&H submitted a $69,885.18 bid to install the vehicle lifts. Hodgman prepared the bid for
B&H, and Kiezula reviewed it. When B&H submitted the bid, Hodgman and Kiezula
knew that B&H was not certified by the vehicle-lift manufacturer.
After receiving B& H’s bid, Parkos contacted B&H to confirm the bid, and B&H
confirmed its bid. Parkos told B&H that it would include the bid in its general -contractor
project bid and then submitted its project bid to the city. The city awarded the project to
Parkos. After signing a contract with the city, Parkos learned that B&H could not perform
the vehicle -lift installations because B&H was not certified by the vehicle -lift
manufacturer.
Parkos sent B&H a letter stating that the lack of certification was causing a ma jor
problem with the contract, and B&H responded that it was unable to get recertification and
could not perform the vehicle -lift installations. B&H noted that it previously had be en

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certified by the manufacturer and it had not expected that the recertification would be an
issue, but the manufacturer had declined to recertify B&H. Parkos contracted with the
second-lowest bidder to perform the vehicle -lift installations and incurred an additional
$36,789.82 in project costs.
Parkos brought this action alleging several claims against respondents. The parties
stipulated to a $36,789 .82 judgment for Parkos on its promissory -estoppel claim against
B&H and dismissal of the remaining claims. The only remaining issue was whether Parkos
was entitled to recover attorney fees from B&H under the private -attorney-general statute
for its claim under the Prevention of Consumer Fraud Act , Minn. Stat. §§ 325F.68-.70
(2016) (consumer-fraud act). The parties filed cross -motions for summary judgment on
that issue, and the district court granted summary judgment for respondents. This appeal
followed.
D E C I S I O N
“[An appellate court] review[s] a district court’s summary judgment decision de
novo. In doing so, [the appellate court] determine[s] whether the district c ourt properly
applied the law and whether there are genuine issues of material fact that preclude summary
judgment.” Riverview Muir Doran, LLC v. JADT Dev. Grp., LLC , 790 N.W.2d 167, 170
(Minn. 2010) (citation omitted). Statutory interpretation presents a question of law, which
an appellate court reviews de novo. 500, LLC v. City of Minneapolis , 837 N.W.2d 287,
290 (Minn. 2013).
“[A]ny person injured by a violation of [the consumer-fraud act] may bring a civil
action and recover damages, together with costs and disbursements, including costs of

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investigation and reasonable attorney’s fees.” Minn. Stat. § 8.31, subd. 3a. The supreme
court has held that the private-attorney-general statute “applies only to those claimants who
demonstrate that their cause of action benefits the public. ” Ly v. Nystrom , 615 N.W.2d
302, 314 (Minn. 2000). The supreme court explained:
We believe that this conclusion is consistent with the history
and purpose of the office of the attorney general to prosecute
misrepresentations involving only matters of public interest.
Appellant was defrauded in a single one-on-one transaction in
which the fraudulent misrepresentation, while evincing
reprehensible conduct, was made only to appellant. A
successful prosecution of his frau d claim does not advance
state interests and enforcement has no public benefit, and is not
a claim that could be considered to be within the duties and
responsibilities of the attorney gene ral to investigate and
enjoin.

Id. (footnotes omitted).
In interpreting Minnesota’s private-attorney-general statute, a federal district court
stated:
To determine whether a lawsuit is brought for the public
benefit the Court must examine not only the form of the alleged
misrepresentation, but also the relief sought by the plaintiff.
Courts consistently focus their inquiry on the relief sought by
the plaintiff, and find no public benefit where plaintiffs request
only damages even when plaintiffs are suing for injuries
resulting from mass produced and mass marketed products.

In re Levaquin Prod. Liab. Litig., 752 F. Supp. 2d 1071, 1077 (D. Minn. 2010) (quotation
omitted). But “the fact that a plaintiff requests no injunctive relief does not preclude [a]
party from satisfying the public benefit requirement.” Id. (quotation omitted). The degree
to which a defendant’s alleged misrepresentation affects the public is also an important
factor. Id. at 1078.

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Parkos argues that construing the private-attorney-general statute to permit attorney
fees in this case serves the purposes of Minnesota’s public-works bidding statutes. Those
statutes are intended to eliminate opportunities for committing “such abuses as fraud,
favoritism, extravagance, and improvidence in connection with the letting of contracts ”
and to promote “hon esty, economy, and above -board dealing in the letting of public
contracts.” Sayer v. Minn. Dep’t of Transp., 790 N.W.2d 151, 156 (Minn. 2010) (quotation
omitted). Parkos asserts that B&H “knowingly submit[ ted] a fraudulent bid to a public
entity via the general contractor on a $746,500 public works project” and that “[i]t is
axiomatic that [Parkos’s] consumer fraud claim . . . furthers the public interest because
taxpayers have a vested interest in preventing contractors like [B&H] from submitting
fraudulent bids on public works projects funded with tax dollars.”
In rejecting Parkos’s argument, the district court characterized both the contract
between B&H and Parkos and the misrepresentation as “single, one-on-one” transactions.
The district court explained:
While [respondents] were on notice that their bid would be
included in some capacity in [Parkos’s] bid to the City, this is
very different from promoting misrepresentation through mass
market publicity, like through television ads or through public
meetings. . . . [Parkos] has not provided any legal citation
finding that the mere involvement of a public entity in a
contract for work brings the performance of the contract as
between the general contractor and subcontractors within the
private attorney general statute.

The misrepresentation likewise involves a single, one -
on-one transaction between a contractor and subcontractor
which supports a finding of no public benefit. Nothing in the
record sugge sts [respondents] have engaged in a pattern of
conduct regarding similar misrepresentations, or that this
occasion was anything more than a one-off circumstance.

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We agree with the district court’s analysis. The record does not indicate that the
misrepresentation was more than an isolated occurrence or that the misrepresentation
affected the public in either cost or performance of the contract. A potential public benefit
is insufficient to satisfy the public-benefit requirement. Behrens v. United Vaccines, Inc.,
228 F. Supp. 2d 965, 971-72 (D. Minn. 2002); see also Ly, 615 N.W.2d at 312 (stating that
when determining whether a party is entitled to attorney fees under the private -attorney-
general statute, a district court “ must take into account the degree to which the public
interest is advanced by the suit, otherwise, every artful counsel could dress up his dog bite
case to come u nder [the] statute ” (quotations omitted)). The district court, therefore,
properly concluded that Parkos was not entitled to recover attorney fees under the private-
attorney-general statute. Compare Collins v. Minn. Sch. o f Bus., Inc. , 636 N.W.2d 816,
821-22 (Minn. App. 2001) (determining that law suit benefited the public when a school
“promoted its sports-medicine-technician program through television advertisements and
sales presentations ” and “[b]ut for [plaintiffs ’] lawsuit, an indefinite class of potential
consumers might have been injured in the same manner as were [the plaintiffs]” ), aff’d,
655 N.W.2d 320 (Minn. 2003), with Kivel v. Wealth Spring Mortg. Corp., 398 F. Supp. 2d
1049, 1056 (D. Minn. 2005) (concluding that lawsuit alleging fraud in connection with
plaintiffs’ refinancing applicat ion did not satisfy public -benefit requirement when
complaint only alleged fraud relating to their application and “provided no indication that
defendant’s alleged conduct has affected the general public”).
Affirmed.