Pohocogo, LLC, Appellant,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2018).

STATE OF MINNESOTA
IN COURT OF APPEALS
A19-0280

Pohocogo, LLC,
Appellant,

vs.

Paul Cassidy, et al.,
Respondents.

Filed September 9, 2019
Affirmed
Worke, Judge

Olmsted County District Court
File No. 55-CV-16-5304

Daniel P. Doda, Doda & McGeeney, Rochester, Minnesota (for appellant)

David J. Jones, Jones Law Firm, Rochester, Minnesota (for respondents)

Considered and decided by Jesson, Presiding Judge; Worke, Judge; and Bratvold,
Judge.
U N P U B L I S H E D O P I N I O N
WORKE, Judge
In this construction case, appellant-property -owner challenges the district court’s
denial of its unjust-enrichment and fraud claims brought against respondent-subcontractor
for alleged overbilling. We affirm.
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FACTS
Appellant Pohocogo LLC buys and sells commercial real estate. James Gander is
part-owner of Pohocogo. Gander also owns a daycare facility that is on Pohocogo’s
property. In 2015, Pohocogo planned to expand the facility and received bids from general
contractors. TLS Companies submitted a bid that included a price of $50,000 for
earthwork. On July 15, 2015, Pohocogo and TLS entered into a contract for the project.
On July 20, 2015, Gander talked to respondent Paul Cassidy who owns respondent
Irish Excavating Inc. (collectively referred to as Cassidy). Cassidy had done projects for
Gander. Gander showed Cassidy the plans for the project and asked if he would be
interested in doing the earthwork on a time-and-materials basis. Cassidy said that he would
and could bring the cost under $50,000. Gander contacted TLS and instructed them to have
Cassidy do the earthwork. Pohocogo and Cassidy did not enter into a written contract.
The project began on August 3, 2015. On August 13, Cassidy told Gander that he
encountered problems with the soil that could cost an additional $30,000. Gander told
Cassidy to keep working and to keep track of costs. On August 15, Cassidy told Gander
that the situation worsened and that it could cost an additional $100,000. Gander, again,
told Cassidy to keep track of costs.
By mid-September, Cassidy had not been paid, although he had submitted invoices
totaling $158,000. On September 15, 2015, Cassidy assured Gander that the invoices were
accurate. Gander gave Cassidy a check for $71,250, which Cassidy did not believe was
fair. Gander then contemplated a fair amount to pay Cassidy, and asked other excavators
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and general contractors for opinions. Gander gave Cassidy a check for $70,000.1 Gander
requested that Cassidy provide his backup invoices—invoices from Cassidy’s
subcontractors and suppliers supporting the amounts invoiced to Pohocogo—s o that they
could be compared to Cassidy’s invoices. Cassidy told Gander that he would provide the
invoices. When Cassidy failed to submit backup invoices, Pohocogo sued Cassidy for
unjust enrichment and fraud. During discovery, Cassidy provided backup invoices, which
Gander believed showed that Cassidy overbilled $41,093.01.
During a court trial, Gander testified that he has over 35 years of experience in
construction projects and has hired many subcontractors, including excavators. Gander
testified that his preferred, and most commonly used, method of hiring subcontractors is
based on time and materials, which involves a subcontractor billing for actual time worked
and materials used. He testified that an invoice from an excavator will generally include
the hours an excavator is using the equipment, but not for time the machine is idle. Gander
testified that Cassidy’s invoices for materials concerned him because none were itemized.
Gander testified that Cassidy’s invoices for time were concerning because they indicated
that six machines were being operated 12 hours a day, which would mean that six people
were running the machines all day, and Cassidy told Gander that he did not have any
employees.
TLS’s owner testified that he has 16 years of experience as a general contractor and
has hired many excavators. He testified that on a time-and -materials basis, he pays for

1 Pohocogo paid Cassidy $141,250. Cassidy refunded $13,065 after detecting a billing
error. The total amount that Pohocogo paid Cassidy was $128,185.
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material that i s supported with a receipt and equipment for the time it is operated. He
testified that on a time- and-materials basis, an excavator is not paid for equipment sitting
idle, but admitted that he was unaware of Gander and Cassidy’s agreement.
Cassidy testified that when Gander told him about the project, he “had a footing
plan and [they] went out to the site.” Cassidy testified that the project “looked pretty basic,
and “[n]othing stood out or concerned [him].” When Cassidy began working and had
access to site plans and civil-engineering plans, he realized the scope of the job, which
included a water main removal and installatio n. Cassidy testified that he called Gander
and told him to “expect it to cost $30,000 extra.” Cassidy also told TLS that they needed
a soil engineer. After the soil engineer’s analysis, Cassidy told Gander that it “could be up
to $100,000 extra.” The district court asked: “[W]as that $100,000 . . . extra to the $30,000
extra you had already told him?” Cassidy replied: “Yes.” The district court asked:
“[Y]ou’re saying it may be up to $180,000?” Cassidy replied: “Yes.”
Cassidy testified that during the project he used a Komatsu excavator, a Bobcat, and
numerous trucks. Cassidy testified that he owns the Komatsu, the Bobcat, and a dump
truck, and operated all three. Cassidy testified that he worked seven days a week, “twelve
hours a day nonstop.” Cassidy testified that he hired two individuals to drive trucks and
paid them in cash.
Cassidy testified that on soil-correction work, he bills for equipment on site, even
when they are not being used. Cassidy testified that this is standard billing in the industry.
Cassidy testified that he billed the Komatsu at $150/hour, the Bobcat at $100/hour, and the
dump truck at $100/hour, which included machine and operator. He billed the drum-roller
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attachment to the Bobcat at $400/day, and service trucks at either $45 or $50/hour. Thus,
on one day, Cassidy billed 60 hours of work when he used five pieces of equipment that
were on site 12 hours. Cassidy testified that he billed consistent with an earlier job he did
for Gander; he billed 9.5 hours on the Komatsu because he was on site for 9.5 hours, even
though he operated the Komatsu for three hours.
Regarding the difference between what Cassidy billed Pohocogo for m aterials and
what Cassidy’s backup invoices showed he actually paid, Cassidy testified that there were
two possible explanations: he initially included an upcharge that he failed to remove from
the final bill, or he misplaced an invoice to support his billing.
The district court concluded that Pohocogo failed to show that Cassidy had been
unjustly enriched or committed fraud, because there was nothing “morally wrong or
unconscionable” about his billing, and he did not make false representations of material
fact. This appeal followed.
D E C I S I O N
Unjust enrichment
Pohocogo argues that Cassidy was unjustly enriched by retaining the overpayment
that exceeded the value of time and ma terials contributed by Cassidy. Pohocogo asserts
that Cassidy’s backup invoices show that Cassidy overbilled Pohocogo $41,093.01 —
$1,600.51 in materials; $10,902.50 in subcontractor costs; and $28,590 for Cassidy’s actual
hours. Unjust enrichment is an equitable doctrine. Southtown Plumbing, Inc. v. Har- Ned
Lumber Co., 493 N.W.2d 137, 140 (Minn. App. 1992). Appellate courts review a district
court’s denial of an unjust-enrichment claim for an abuse of discretion. See City of Cloquet
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v. Cloquet Sand & Gravel, Inc., 251 N.W.2d 642, 644 (Minn. 1977) (stating that standard
of review in equitable-relief cases is whether the district court abused its discretion).
A party succeeds on an unjust-enrichment claim by establishing that (1) a party
knowingly received something of value, (2) the recipient was not entitled to the thing of
value, and (3) it would be unjust to allow the recipient to retain the benefit. Schumacher
v. Schumacher, 627 N.W.2d 725, 729 (Minn. App. 2001). Generally, an unjust-enrichment
claim does not lie simply because a party benefits from the efforts of another; instead, “it
must be shown that a party was unjustly enriched in the sense that the term unjustly could
mean illegally or unlawfully.” First Nat’l Bank of St. Paul v. Ramier, 311 N.W.2d 502,
504 (Minn. 1981) (quotation omitted); see Cady v. Bush, 166 N.W.2d 358, 361-62 (Minn.
1969) (“The theory of unjust enrichment . . . has been invoked in support of claims based
upon failure of consideration, fraud, mistake, and in other situations where it would be
morally wrong for one party to enrich himself at the expense of another.”); see also Park-
Lake Car Wash, Inc. v. Springer, 394 N.W.2d 505, 514 (Minn. App. 1986) (stating that
unjust can also mean “unconscionable by reason of a bad motive”).
The district court concluded that “there was no evidence that Cassidy’s billing
method was immoral, illegal, unconscionable, inappropriate, or in bad motive.” The
district court further concluded that it would not be morally wrong for Cassidy to retain the
payment received.
The record supports a conclusion that, while Cassidy might have overbilled
Pohocogo for materials because he could not sufficiently explain the discrepancy at trial,
he did not do anything illegal or immoral. The issue came down to whether the district
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court believed that Cassidy’s approach was standard for him or, if in a time-and-materials
agreement, equipment is billed only when it is used. Without a written agreement, the
district court had to make a credibility determination, and the district court took “Cassidy
at his word.” We generally defer to a fact-finder’s assessment of witness credibility. See
Minn. R. Civ. P. 52.01 (“[D]ue regard shall be given to the opportunity of the [district]
court to judge the credibility of the witnesses.”). Further, there was evidence that Cassidy
billed in this manner during another project with Gander, and Gander and Cassidy both
testified that there was no issue with Cassidy’s billing on that project.
Based on the record, the district court did not abuse its discretion in denying
Pohocogo’s claim for unjust enrichment because although Cassidy received something of
value, Pohocogo failed to show that Cassidy is not entitled to retain the benefit or that his
“billing method was immoral, illegal, unconscionable, inappropriate, or in bad motive.”
Fraud
Alternatively, Pohocogo asserts that the district court erred in denying its fraud
claim, alleging that Cassidy made false representations of material facts. On appeal from
a bench trial, this court does not reconcile conflicting evidence, and gives great deference
to the district court’s factual findings, which will not be set aside unless clearly erroneous.
Id.; Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn. 1999). But this court
is not bound by the district court’s decision on a purely legal issue. Frost-Benco Elec.
Ass’n v. Minn. Pub. Utils. Comm’n, 358 N.W.2d 639, 642 (Minn. 1984). When reviewing
mixed questions of law and fact, this court will correct “erroneous applications of law, but
accord the [district] court discretion in its ultimate conclusions and review such
8
conclusions under an abuse of discretion standard.” Rehn v. Fischley, 557 N.W.2d 328,
333 (Minn. 1997).
To establish fraud, Pohocogo must prove that Cassidy made a false representation
of a past or existing material fact, that Cassidy knew that the representation was false or
did not know whether it was true or false, that Cassidy intended to induce Pohocogo to act
in reliance on the false representation, that the representation caused Pohocogo to rely on
it, and that Pohocogo suffered pecuniary damages as a result of the reliance. See Valspar
Refinish, Inc. v. Gaylord’s, Inc., 764 N.W.2d 359, 368 (Minn. 2009). District courts
evaluate reliance in fraud cases “in the context of the aggrieved party’s intelligence,
experience, and opportunity to investigate the facts at issue.” Id. at 369.
The district court determined that no representations by Cassidy were false
representations of material facts. Pohocogo asserts that Cassidy made two false
representations of material fact: one, that the invoices submitted were accurate, and two,
that Cassidy would provide backup invoices.
The record supports the district court’s finding that Cassidy did not make a false
representation of material fact. First, Cassidy testified that he told Gander that it “could be
up to $100,000 extra.” The district court clarified that Cassidy meant that “it may be up to
$180,000.” Cassidy initially billed $158,000, but ended up receiving $128,185. Gander
testified that he thought the projec t would run up to $100,000. But a misunderstanding
between Gander and Cassidy does not mean that Cassidy falsely represented a material fact
that the project could cost up to $180,000, and that the invoiced amount of $158,000 was
accurate.
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Further, Cassidy stood by his invoices. The issue, again, seems to surround what
Gander believed time-and-materials billing meant, and how Cassidy billed for time and
materials. The main contention relates to Cassidy billing for idle equipment. Gander
testified that Cassidy should have billed only for the time the equipment was being used.
The record seemingly supports Gander’s contention because Cassidy testified that the
hourly rate for each piece of equipment included equipment plus operator. It would seem
that billing an hourly rate for “equipment and operator” would mean when the operator is
operating the equipment. However, Cassidy testified that that is not his standard billing
practice and that he bills for the hours the equipment is on site regardless of whether it is
being operated. The district court determined that this was reasonable. Further, there is no
evidence in the record that Cassidy represented to Gander that he would bill only for the
time he operated the equipment.
Pohocogo apparently contends that it paid Cassidy based on Cassidy falsely
representing that he would provide backup invoices. Pohocogo claims that it detrimentally
relied on this false representation because the backup invoices showed, only after the
lawsuit was commenced, that Cassidy overbilled. But Cassidy maintained that the invoices
were accurate and that the billing was standard in the industry. The district court
determined that Cassidy was credible and the billing reasonable. Thus, there is no evidence
of a false representation of material fact. Therefore, the district court appropriately denied
Pohocogo’s fraud claim.

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Findings of fact
Pohocogo also challenges several of the district court’s findings of fact. Again, on
appeal from a bench trial, this court gives great deference to the district court’s factual
findings and will not set them aside unless clearly erroneous. Minn. R. Civ. P. 52.01,
Fletcher, 589 N.W.2d at 101. Based on the record, not only are the challenged findings of
fact not clearly erroneous, but they are hardly relevant to Pohocogo’s claims.
First, Pohocogo argues that the district court e rred in finding that witnesses “could
not speak to the agreement between Cassidy and Gander as to what ‘time and materials’
meant.” True, TLS’s owner testified about his understanding of a ti me-and-materials
agreement, but he also admitted that he was not aware of Gander and Cassidy’s agreement.
Gander and Cassidy did not have a written contract. And the record shows that TLS’s
owner was not present when Gander and Cassidy agreed to work together. The record
supports a finding that, although witnesses could testify generally about a time-and-
materials contract, they could not testify about Gander and Cassidy’s agreement.
Second, Pohocogo argues that the district court erred in finding that Gander failed
to establish the terms of the time -and-materials contract. Gander testified to his
understating of a time -and-materials contract , but he did not establish the terms of his
agreement with Cassidy.
Third, Pohocogo argues that the district court erred in a finding regarding Gander
and Cassidy’s communications regarding the cost increases. Pohocogo urges this court to
“reverse the [d]istrict [c]ourt’s mistake and order a finding the project could cost up to
$100,000.” Cassidy testified that he told Gander that the project could cost up to $180,000.
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The district court credited Cassidy’s testimony and found that “Cassidy stated that the poor
soil conditions would cost up to an additional $100,000 on top of the $80,000 estimate.”
Reversal of this finding would require this court to reevaluate the evidence, make a
credibility determination, and engage in fact-finding, all of which we do not do. See Cohen
v. Steinke, 26 N.W.2d 843, 846 (Minn. 1947) (stating that it is improper for an appellate
court to reweigh the evidence or reassess witness credibility); Fontaine v. Steen, 759
N.W.2d 672, 679 (Minn. App. 2009) (stating that an appellate court does not determine
issues of fact on appeal); Novack v. Nw. Airlines, Inc., 525 N.W.2d 592, 598 (Minn. App.
1995) (stating that an appellate court is required to give deference and due regard to the
district court’s credibility determinations).
Fourth, Pohocogo argues that the district court erred in finding the rate at which
service trucks were billed. Cassidy concedes that there is an inconsistency between
Cassidy’s testimony and the documentary evidence regarding the rate for the service trucks.
Cassidy billed the trucks at $100/hour, but he testified that he “believe[d]” that the rate was
“50 bucks an hour, $45,” he could not recall. Cassidy billing $100/hour and then testifying
that he believed that he billed at $45 or $50/hour does not affect the unjust-enrichment and
fraud claims. Cassidy’s inability to recall the rate during his testimony does not result in
his billing being illegal or immoral, nor does it lend to a conclusion that he made a false
representation of material fact.
Fifth, Pohocogo argues that the district court clearly erred in finding:
Cassidy billed this project as he bill s other projects of
this type. Cassidy typically adds an upcharge to materials
purchased from suppliers but chose not to in this project to
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keep costs down. All equipment was billed at a standard hourly
or daily rate, depending on the pieces of equipment, and
Cassidy billed according to its standard practices for all
equipment at the site.

Pohocogo argues that “Cassidy’s inconsistent testimony, and his inconsistent billing
practices on this project, and a prior project, makes [his] testimony incredible, and his
billing practices non-standard.”
But Cassidy testified that he billed other soil -correction work “in similar ways.”
He also testified that his “standard practice is to add an upcharge,” but that he did not add
an upcharge because “Gander was having a problem with the costs.” Finally, Cassidy
testified to the hourly or daily rate th at he charges for his equipment. Thus, Cassidy’s
testimony supports the district court’s findings.
Pohocogo asserts that Cassidy billed another project with Gander differently, which
supports a determination that Cassidy does not regularly charge for idle equipment .
Cassidy testified that on a previous project, he billed for 9.5 hours for the Komatsu even
though he used it only three hours. Pohocogo asserts that Cassidy’s testimony and billing
practices are inconsistent because the invoice for the prior project shows that Cassidy also
billed for “[ e]quipment move” and “17 tons of sand,” but did not bill for the “dump
truck . . . on the site” for 9.5 hours. But this invoice does not establish that Cassidy had a
dump truck on site for 9.5 hours, only that he billed for “[ e]quipment move” and sand.
Therefore, there is no glaring inconsistency that would result in this court concluding that
the district court’s finding is clearly erroneous.
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Sixth, Pohocogo argues that the district court erred in finding that there was no
agreement that Cassi dy would bill only for time on the equipment and that was not
Cassidy’s standard method of billing. There was no written agreement memorializing
Gander and Cassidy’s agreement, and the district court believed Cassidy’s testimony
regarding his standard method of billing. This finding is not clearly erroneous.
Seventh, Pohocogo argues that the district court clearly erred in finding “Cassidy
billed for 16 days of work, starting on August 7, 2015, and ending on September 2, 2015.”
Pohocogo urges this court to reverse this finding “and order a finding that Cassidy worked
a total of 134 actual hours for 16 days of work, starting on August 7, 2015, and ending on
September 2, 2015, and that Cassidy’s actual costs for its time equals $20,100.” But this
court does not make factual findings. See Fontaine, 759 N.W.2d at 679. Additionally, the
district court’s finding is accurate; just because Pohocogo wishes to extrapolate and include
additional language to the finding does not make it clearly erroneous.
Finally, Pohocogo argues that the district court erred in finding that “Cassidy
refused Gander’s refund request because charging for all equipment regardless of actual
use was his standard billing practice. Cassidy testified that while working on a project, he
bills full rate for all of his equipment that is on the site.” Pohocogo argues that this finding
is clearly erroneous because Cassidy’s “actual billing on this project, and a prior project,
contradicts [his] testimony.” However, the district court’s finding that this was Cassidy’s
testimony is accurate.
None of the district court’s challenged findings are clearly erroneous. The issue
appears to stem from the fact that the parties did not have a written agreement and
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ultimately disagreed as to what a time-and- materials invoice would include. This
disagreement, however, does not indicate that Cassidy was unjustly enriched or that he
committed fraud. Accordingly, the district court did not abuse its discretion in denying
Pohocogo’s claims.
Affirmed.