North Country Tire and Auto, Inc., et al., Appellants,

This opinion will be unpublished and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
A17-1734

North Country Tire and Auto, Inc., et al.,
Appellants,

vs.

David Leonard Anderson, et al.,
Respondents.

Filed October 15, 2018
Affirmed
Kirk, Judge

Cass County District Court
File No. 11-CV-15-1456

Richard C. Kenly, Backus, Minnesota (for appellants)

John E. Valen, Walker, Minnesota (for respondents)

Considered and decided by Kirk, Presiding Judge; Reilly, Judge; and Smith, John,
Judge.

 Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.

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U N P U B L I S H E D O P I N I O N
KIRK, Judge
Appellants challenge the dismissal of their breach -of-contract claim, arguing that
the district court erred by failing to dete rmine which party breached the parties’ contract
first and by failing to award damages under a theory of unjust enrichment. We affirm.
FACTS
Appellants Kenneth Poliwoda and Cynthia Cressy jointly own and operate appellant
North Country Tire and Auto, Inc. (North Country). Respondent David Anderson brought
a 2003 Ford truck to North Country for repairs in June, October, and N ovember of 2013.1
Anderson paid the service bill in full for the June repairs, put down only $400 for the
October repairs, and paid nothing for the November repairs. After the November repairs,
North Country returned the truck to Anderson.
In January o f 2014, Poliwoda, Cressy, and Anderson orally agreed that Anderson
would install kitchen cabinets, a center island, vanities, and linen cabinets in Poliwoda and
Cressy’s home for a flat fee of $12,500, which would first be credited to the cost of the
unpaid truck repairs. The y anticipated that past and future truck repairs would cost less
than $12,500 and Poliwoda and Cressy would pay Anderson the difference. They did not
memorialize their agreement to exchange services.

1 The complaint also listed David Anderson’s parents as defendants because his truck was
titled under their names. However, the district court found that David Anderson was the
equitable owner of the truck and dismissed his parents from th e action. No party has
challenged the district court’s decision to dismiss David Anderson’s parents from the
action, and although they are nominally respondents, they have not filed a brief in this
appeal.

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In February 2014, Anderson took the truck to North Country for further repairs, and
work on the truck continued through April 2014. Poliwoda, Cressy, and Anderson disputed
whether Anderson approved all of the work on the truck and whether Anderson saw work
orders for the repairs as the repairs were being made . Anderson did not receive bills,
invoices, or work orders for any repairs done after October 2013. Following attempts to
repair the truck, Poliwoda and Cressy determined that the truck needed a new engine, and
in June 2014 , they purchased and installed a used engine for the truck. Poliwoda and
Cressy did not return the truck to Anderson at that time because they wanted him to finish
the cabinets first.
When Anderson began working on th e cabinets in January 2014, Poliwoda gave
Anderson a check for $3,000 for building materials. Poliwoda testified that he also gave
Anderson cash payments, but Anderson denied that he received any ca sh payments.
Anderson did not provide Poliwoda or Cressy with any regular billing statements or
receipts for any cash that he may have received. As of September 2014, Poliwoda and
Cressy appeared to be satisfied with Anderson’s work, as Cressy sent him a text noting that
the work that Anderson had done so far looked beautiful.
As of the spring of 2015, Poliwoda and Cressy still were in possession of the truck,
and the cabinet s had not been completed. They brought the truck from North Country’s
storage area to their home because they were concerned that Anderson would try to take it.
Anderson confronted Poliwoda about the location of the truck, and a physical altercation
ensued. Following the altercation, Anderson did not do any more work on the cabinets .
Poliwoda testified that , after the altercation , he was “done” with Anderson. Anderson

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testified that he would not complete the cabinets until Poliwoda and Cressy returned his
truck. Cressy then obtained an estimate from a third party to finish the cabinets.
In July 2015, Anderson received a bill for the truck repairs in the amount of $16,612,
which he testified was the first time he was told the cost of the repairs . After seeing the
amount of the bill, Anderson went to Poliwoda and Cressy’s home and took back the truck.
Upon retrieving the truck, Anderson noted several signs that someone else had driven it,
including dents in the door, dog hair and french fries in the seats, and missing personal
items. Anderson asserted that Cressy had been using the truck regularly for personal
reasons, but she only admitted to using the truck on one occasion.
Appellants ultimately brought suit for breach of contract to recover the cost of the
truck repairs, as well as the money that Poliwoda and Cressy p aid Anderson for the
unfinished cabinet work. Anderson countersued for breach of contract, claiming damages
based on an hourly rate for the work he had done and the cost of materials. Following a
bench trial, the district court dismissed all claims. The district court concluded that
Poliwoda, Cressy, and Anderson formed an oral contract to exchange services, but that no
party met its burden to prove a breach-of-contract claim, and that no party was entitled to
damages under a theory of unjust enrichment. This appeal follows.
D E C I S I O N
I. The district court did not clearly err in finding that appellants did not prove
that Anderson breached the contract first.

On appeal from the decision of a district court sitting without a jury, appellate courts
“determine whether the evidence sustains the findings of fact and whether the findings

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sustain the conclusions of law and judgment. ” Roberts v. Brunswick Corp. , 783 N.W.2d
226, 230 (Minn. App. 2010), review denied (Minn. Aug. 24, 2010). We apply the clear-
error standard of review, give due regard to the district court’ s credibility findings , and
view the evidence in the light most favorable to the district court’s findings. Minn. R. Civ.
P. 52.01; see In re Pamela Andreas Stisser Grantor Trust , 818 N.W.2d 495, 507 (Minn.
2012) (applying the clear -error standard of review to a claim that a trust pay a personal
representative compensation and attorney fees). Findings of fact are clearly erroneous
when “we are left with a definite and firm conviction that a mistake has been made.”
Stisser, 818 N.W.2d at 508 (quotation omitted). The district court is not entitled to any
deference on purely legal conclusions. Roberts, 783 N.W.2d at 230.
To establish a breach -of-contract claim, a party must prove three elements:
“(1) formation of a contract, (2) performance by plaintiff of any conditions precedent to
his right to demand performance by the defendant, and (3) breach of the contract by
defendant.” Park Nicollet Clinic v. Hamann , 808 N.W.2d 828, 833 (Minn. 2011). The
claimant bears the burden of proving the essential elements of a claim “by a fair
preponderance of the evidence.” Carpenter v. Nelson, 101 N.W.2d 918, 921 (Minn. 1960).
“Both the existence and terms of an oral contract are issues of fact, generally to be decided
by the fact-finder.” Rios v. Jennie-O Turkey Store, Inc., 793 N.W.2d 309, 315 (Minn. App.
2011). When a material breach has occurred, the non -breaching party is excused from
further performance and may sue for damages. BOB Acres, LLC v. Schumacher Farms ,
LLC, 797 N.W.2d 723, 728 (Minn. App. 2011), review granted (Minn. June 14, 2011) and
appeal dismissed (Minn. Aug. 12, 2011) . Generally, the materiality of a breach is a

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question of fact. Cloverdale Foods of Minn., Inc. v. Pioneer Snacks, 580 N.W.2d 46, 49-
50 (Minn. App. 1998).
In this case, the district court found that Poliwoda, Cressy, and Anderson formed an
oral contract and that no party proved which party was the first to materially breach the
contract. Appellants argue that the district court erred in not finding that Anderson
breached the contract first because they fixed the truck and therefore did not breach the
contract. However, Poliwoda and Cressy did not return the truck to Anderson once it was
fixed in June 2014. Instead, they maintained possession of the truck for nearly one year.
Although the record is not clear as to whether the contract required Poliwoda and Cressy
to return the truck after it was repaired, Anderson initially maintained possession of the
truck, despite outstanding repair bills . This suggests that the contract did not provide for
Poliwoda and Cressy to keep the truck indefinitely as collateral and that they may have
materially breached the contract by doing so.
Appellants argue that Anderson breached the contract by f ailing to complete the
cabinets. The record does not indicate that Anderson was required to complete the cabinets
by any specific time . Poliwoda and Cressy were satisfied with the work thr ough at least
September of 2014. The work on the cabinets continued into the spring of 2015, at which
point, the decision to end the work appears to have been mutual . Accordingly, it is not
clear if or when Anderson may have breached the contract by failing to c omplete the
cabinets. Appellants also argue that Anderson breached the contract by unilaterally
changing the contract to charge Poliwoda and Cressy an hourly rate for his work. However,

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Anderson never told Poliwoda and Cressy that he would charge them an hourly rate and
only asserted that he should be paid hourly after litigation began.
This record contains evidence that could support either a finding that Poliwoda and
Cressy initially breached the contract or that Anderson initially breached the contract. Each
party had the burden to prove its respective claims. On this record, we cannot conclude
that the district court clearly erred in finding that appellants did not prove that Anderson
breached the contract first.
II. The district court did not abuse its discretion by declining to award damages
under the theory of unjust enrichment.

“In order to establish a claim for unjust enrichment, the claimant must show that
another party knowingly received something of value to which he was not entitled, and that
the circumstances are such that it would be unjust for that person to retain the benefit .”
Schumacher v. Schumacher, 627 N.W.2d 725, 729 (Minn. App. 2001). It is not enough to
show that one party benefited from the efforts of another; the benefit must be unjust in the
sense that it is illegal or morally wrong. Id. Recovery under an unjust-enrichment theory
is an equitable remedy. Southtown Plumbing, Inc. v. Har -Ned Lumber Co., Inc. , 493
N.W.2d 137, 140 (Minn. App. 1992). Appellate courts review a district court’ s decision
regarding equitable relief for an abuse of discretion . City of Cloquet v. Cloquet Sand &
Gravel, Inc., 251 N.W.2d 642, 644 (Minn. 1977).
In this case, the district court found that “each party owes the other roughly the same
amount” and that “ [b]alancing the equities of the parties’ trades, and the parties ’
conduct . . . on the whole, the equities balance.” Poliwoda, Cressy, and Anderson offered

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conflicting evidence about the valu e and quality of the services that they provided. Each
also offered testimony of bad conduct on the part of the other party, including Anderson’s
testimony that Poliwoda and Cressy did work on the truck without his approval, used the
truck for personal reasons, and took his personal items from the truck. On this record, the
district court did not abuse its discretion in finding that the equities balance and declining
to award damages under a theory of unjust enrichment.
Affirmed.