R&S Crossing, LLC, Respondent,

This opinion will be unpublished and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
A19-0967

R&S Crossing, LLC,
Respondent,

vs.

AF Enterprises, LLC, et al.,
Appellants.

Filed January 27, 2020
Affirmed
Cochran, Judge

Dakota County District Court
File No. 19HA-CV-18-4481

Christopher R. Grote, Jenna K. Johnson, Ballard Spahr LLP, Minneapolis, Minnesota (for
respondent)

Kassius O. Benson, Sarah B. Perlmutter, Kassius Benson Law, P.A., Minneapolis,
Minnesota (for appellants)

Considered and decided by Reilly, Presiding Judge; Bjorkman, Judge; and
Cochran, Judge.
U N P U B L I S H E D O P I N I O N
COCHRAN, Judge
In this breach-of-contract and breach-of-guaranty action, appellants AF Enterprises,
LLC, George Ficocello, and As hok Patel challenge the district court’s grant of summary
judgment to respondent and the district court’s denial of ap pellants’ motion to vacate the

2
judgment under Minn. R. Civ. P. 60.02. Appe llants argue that the district court (1) erred
by granting summary judgment when there were genuine issues of material fact, and
(2) abused its discretion in denying rule 60.02 relief. We affirm.
FACTS
In November 2016, appellant AF Enterprises, LLC (AF) entered into a 60-month
commercial lease with landlord-respondent R&S Crossings, LLC (R&S) to rent a premises
(the premises). Appellants George Ficocello and Ashok Patel signed a personal guaranty,
which guaranteed full performance of AF’s obligations under the lease.
In March 2018, R&S brought an eviction ac tion in housing court against AF. The
action was resolved in April pursuant to a written settlement. Th e settlement agreement
provided that “[t]he parties stipulate and agree that they are settling only claims regarding
the possession of the Leased Premises. The parties neither release [n]or waive any contract
claims under the Lease [or] the Lease Guar antees.” The settlement agreement also
provided that AF agreed to “terminate the tenancy a nd vacate the premises by
June 1, 2018.”
In October 2018, R&S commenced a civil su it that asserted clai ms of breach of
contract against AF (for breach of the lease) and breach of contract against Ficocello and
Patel (for breach of the guaranty), and sought a declaratory judgment against all parties
declaring the rights and obligations under the lease and guaranty. R&S alleged that AF
vacated the premises on June 1, 2018, that AF breached the lease by failing to make
monthly payments required under the lease since June 2018, and that Ficocello and Patel

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breached the guaranty agreement by failing to satisfy the guaranty and make the payments
that AF had failed to make.
Appellants filed an answer that admitted to the existence of the lease, admitted that
AF made late rent payments during the lease term, and admitted that AF had not paid rent
since June 2018. Appellants denied that they were obligated to make any payments under
the lease after AF and R&S entered into the settlement agreement. They asserted a defense
that alleged that the settlement agreement terminated their obligation to pay monthly rent
because the agreement noted that AF “agrees to terminate the tenancy.” They alleged that
enforcing the lease after the settlement agreement was unconscionable and that the lease
was “void for lack of consideration” after th e settlement agreement. AF also asserted a
counterclaim that alleged that R&S was liable for damages under Minn.
Stat. §§ 504B.172, .178 (2018), due to its refusal to return a $5,000 security deposit.
On January 23, 2019, R&S moved for summary judgment. The district court held
a hearing to address the motion on February 21, 2019. Neither appellants nor their attorney
appeared for the hearing. R&S’ s counsel indicated to the dist rict court that, although the
appellants had not filed an answer to the December amended complaint or a response to
the summary judgment motion, th e e-filing system showed th at appellants’ counsel had
accessed the summary judgment motion. The district cour t heard R&S’s arguments for
summary judgment and took the matter under advisement.
On February 22, 2019, the district court entered an order granting R&S’s motion for
summary judgment and dismissing the counter claims. The order directed entry of
judgment of sums due under the lease, dire cted R&S to submit an affidavit setting forth

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any other sums due under the lease (including unpaid rent accrued while the litigation was
pending, attorney’s fees, and litigation expens es) to be determined at a later date, and
granted a declaratory judgment providing that appellants remain liable for any obligations
arising for the remainder of the lease term.
On March 15, 2019, appella nts brought a motion to vacate the judgment under
Minn. R. Civ. P. 60.02(a), which provides the district court the discretion to relieve a party
from final judgment because of “[m]istake, inadvertence, surprise, or excusable neglect.”
Appellants asserted that they had several defenses to R&S’s claims for breach of contract,
including unjust enrichment, estoppel, and other challenges to the validity of the lease
following the settlement agreement. Appellants also asserted that there was a reasonable
excuse for failing to respond to the summary judgment motion.
The district court held a hearing on the motion to vaca te on April 23, 2019. On
April 25, 2019, the district court filed an order that denied the motion to vacate. The district
court entered final judgment on June 19, 2019, which incl uded the additional sums
referenced in the order granting summary judgment.
AF, Ficocello, and Patel appeal, arguing that the district court erred in granting
summary judgment and abused its discretion in denying the motion to vacate.
D E C I S I O N
Appellants argue that the district c ourt erred by granting summary judgment
regarding AF’s obligations under the le ase—and therefore Ficocello and Patel’s
obligations under the personal guaranty—and by denying the appellants’ motion to vacate

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the judgment under Minn. R. Civ. P. 60.02(a). We first address the argument concerning
summary judgment and then turn to the order denying the motion to vacate.
I. The district court did not err in gran ting summary judgment in R&S’s favor.
Appellants argue that the district court erred in granting summary judgment because
the lease was ambiguous when considered with the terms of the settlement agreement.
R&S disagrees that there is any ambiguity or that there is a ny disputed issue of material
fact precluding summary judgment. R&S maintains that the settlement agreement
expressly provided that the agreement only settled claims regarding possession of the
premises and that appellants remained liable for rent under the lease even after they vacated
the premises. Consequently, R&S argues that the district court did not err in granting
summary judgment because there was no dispute that appellants breached their obligations
under the lease and guaranty.
A district court must grant summary judgment if the “movant shows that there is no
genuine issue as to any material fact and the movant is entitled to judgment as a matter of
law.” Minn. R. Civ. P. 56.01. Appellate courts review the grant of summary judgment
de novo to determine “whether there are genui ne issues of material fact and whether the
district court erred in its application of law.” Montemayor v. Sebright Prods., Inc. ,
898 N.W.2d 623, 628 (Minn. 2017) (quotation omitted). To preclude summary judgment,
a “genuine issue” of material fact must be established by substantial evidence. DLH,
Inc. v. Russ, 566 N.W.2d 60, 70 (Minn. 1997). A re viewing court views the evidence in
the light most favorable to the party against whom summary judgment was granted. STAR
Ctrs., Inc. v. Faegre & Benson, L.L.P., 644 N.W.2d 72, 76-77 (Minn. 2002). “All doubts

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and factual inferences must be re solved against the moving party.” Montemayor,
898 N.W.2d at 628. Summary judgment is “inappropriate when reasonable persons might
draw different conclusions from the evidence presented.” Id. (quotation omitted).
There is no doubt that, under the terms of the lease viewed in isolation, appellants
remained liable for rent until th e expiration of the lease term and therefore that failure to
pay rent constituted a br each of the lease. By its term s, the lease requi red AF to pay
monthly rent and certain othe r additional charges during the 60-month lease term. Thus,
in our de novo review, we must consider whether the district court erred by concluding that
there was no genuine issue of material fact regarding whet her the settlement agreement
terminated appellants’ rent obligations unde r the lease and the guaranty. We are not
persuaded by appellants’ arguments that a genuine issue of material fact existed.
A settlement agreement is itself a contract. Dykes v. Sukup Mfg. Co., 781 N.W.2d
578, 581-82 (Minn. 2010). The goal of interpreting a contract is to determine the intent of
the parties. Id. at 582. The construction and effect of a contract is a question of law unless
the contract is ambiguous. Denelsbeck v. Wells Fargo & Co. , 666 N.W.2d 339, 346
(Minn. 2003). Whether a contract is ambiguous is also a question of law. Id. “The terms
of a contract are ambiguous if they are susceptible to more than one reasonable
interpretation. A contract’s terms are no t ambiguous simply because the parties’
interpretations differ.” Staffing Specifix, Inc. v. Tempworks Mgmt. Servs., Inc. ,
913 N.W.2d 687, 692 (Minn. 2018) (citation omitted). If a contract is ambiguous, parties
may introduce parol eviden ce to determine intent, and summary judgment is not
appropriate. Dykes, 781 N.W.2d at 582; see also Donnay v. Boulware , 144 N.W.2d 711,

7
716 (Minn. 1966) (“It is generally recogniz ed that summary judgment is not appropriate
where the terms of a contract are at issue and any of its provisions are ambiguous or
uncertain.”).
To support their argument that the dist rict court erred in concluding that the
settlement agreement did not terminate AF’s obligations under the lease, appellants point
to a provision in the agreement that provides that “[t]enant agrees to terminate the tenancy
and vacate the premises on or before June 1, 2018.” In response, R&S highlights the first
provision of the settlement agreement, which provides that “[t]he parties stipulate and agree
that they are settling only clai ms regarding the possession of the Leased Premises. The
parties neither release [n]or waive any cont ract claims under the Lease [or] the Lease
Guarantees.” Based on this provision, R&S argues that the lease was not terminated by
the settlement agreement and that appellants remained obligated to pay rent under the lease.
After reviewing both the settlement agreement and the provisions of the lease, we conclude
that the settlement agreement unambiguously did not relieve AF of its rent obligation under
the lease.
It is a “basic rule of contract interpreta tion” that a contract must be interpreted to
give effect to all of its provisions. Metropolitan Airports Comm’n v. Noble, 763 N.W.2d
639, 645 (Minn. 2009). Here, the first provision of the settlement agreement expressly and
unambiguously states that “[t]he partie s stipulate and agree that they are settling only
claims regarding the possession of the Leased Premises. The parties neither release [n]or
waive any contract claims under the Lease [or] the Lease Guarantees.” (Emphasis added).
We find no ambiguity in the provision and conclude that the agreement clearly and

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unambiguously states the intent of the par ties to settle “only claims regarding the
possession of the Leased Premises.”
We also conclude that the settlement agreement is not ambiguous based on the
provision that “[t]enant agrees to terminat e the tenancy and vacate the premises on or
before June 1, 2018.” While the use of the phrase “terminate the tenancy” in isolation may
appear to relieve AF of any obligation under the lease, the language of the lease is
inconsistent with that interpretation. The default provisions of the lease specify that if AF
vacated the premises, R&S could relet the pr emises without accepting AF’s surrender of
the premises, and could require AF to pay R&S for any deficiency between the rent
collected from the new tenants and the rent prov ided for under the lease. The lease also
provides that R&S could “terminate” the leas e, take possession of the premises, remove
AF, and determine loss and damages under tw o alternative measures of damages. One
measure of damages contemplates that R&S would attempt to relet the premises, and that
until the premises was relet, AF would pay rent each month as provided by the lease. Thus,
it appears that the use of the word “terminate” in the settlement agreement was not intended
to relieve AF of its obligation to pay rent under the lease going forward.
Considering the clear statement of intent in the settlement agreement, and the default
provisions of the lease, we conclude that no genuine issues of material fact exist regarding
whether the settlement agreement terminated AF’s rent obligations under the lease. Neither
the settlement agreement nor the lease are ambiguous. We also conclude that the district
court did not err as a matter of law in interpreting the contract to require AF to pay monthly
rent after the settlement agreement—as described above, we reach the same conclusion in

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our de novo review. Because no genuine issues of material fact existed and because the
district court properly applied the law in inte rpreting the contracts, we conclude that the
district court did not err in granting summary judgment to R&S on its breach-of-lease and
breach-of-guaranty contract claims based on the conclusion that AF breached the lease by
failing to pay rent obligations owed under the lease.
We also conclude that the district court did not err by di smissing appellants’
counterclaim against R&S alleging a wrongful retention of AF’s security deposit.
Appellants’ briefing on this point is inadequate and, consequently, waived. See State Dept.
of Labor and Indus. v. Wintz Parcel Drivers, Inc., 558 N.W.2d 480, 480 (Minn. 1997). But
we also note that the counte rclaim is meritless. The coun terclaim asserted was based on
statutes that apply only to residential leases. See Minn. Stat. §§ 504B.172, .178; see also
Kaeding v. Auleciems , 886 N.W.2d 658, 664 (Minn. App. 2016) (noting that section
504B.178 “governs security depo sits in residential rental agreements”). Because these
statutes do not apply to the commercial lease at issue here, the district court did not err in
dismissing the claims.
II. The district court did not abuse its disc retion by denying appellants’ motion to
vacate the judgment.

Appellants argue that the district court abused its discretion by denying their motion
to vacate under Minn. R. Civ. P. 60.02(a). Rule 60.02(a) provides that the court may relieve
a party from a final judgment and order a new tr ial or grant other reli ef in the event of
“[m]istake, inadvertence, surprise, or excusable neglect.” Whether relief under this rule is
appropriate is “committed to the sound discretion of the district court and is based upon all

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the surrounding circumstances of each case.” Cole v. Wutzke , 884 N.W.2d 634, 637
(Minn. 2016).
A party seeking to set aside summary judgment under Rule 60.02(a) must:
(1) Possess a reasonable defens e on the merits, (2) have a
reasonable excuse for the failure or neglect involved, (3) have
acted with due diligence after notice of the entry of judgment,
and (4) show that no substan tial prejudice will result to the
other party.

Carter v. Anderson , 554 N.W.2d 110, 115 (Minn. App. 1996), review denied (Minn.
Dec. 23, 1996) (emphasis omitted). These factors are known as the Finden factors, based
on the opinion in Finden v. Klaas, 128 N.W.2d 748 (Minn. 1964). A party seeking relief
under Minn. R. Civ. P. 60.02(a) must establish all four Finden factors. Cole, 884 N.W.2d
at 637; see also Gams v. Houghton , 884 N.W.2d 611, 620 (Min n. 2016) (rejecting the
notion that a party seeking relief under Minn. R. Civ. P. 60.02 need not “categorically
establish all four” of the Finden factors (quotation omitted)). The district court determined
that appellants failed to esta blish the first and second Finden factors, and that relief was
therefore not warranted under Rule 60.02(a).
Appellants argue that the district court abused its discretion when it concluded that
they failed to establish the first two Finden factors. Based on our careful review of the
record, we conclude that the district court correctly determined that appellants failed to
establish the first Finden factor—that they possessed a reas onable defense on the merits.
Given that appellants fa iled to establish this Finden factor, we need not address their
arguments on the second factor because failure to establish one Finden factor is fatal to a
motion to vacate under Minn. R. Civ. P. 60.02(a). Id.

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In their motion to vacate, appellants raised three specifi c defenses: unjust
enrichment, equitable estoppel, and a theory that the lease was unconscionable under the
circumstances. In denying the motion to vacate, the district court rejected these defenses,
concluding that appellants relied “on conclusory statements, often sounding in equity.” We
address each defense raised by appellants in turn.
A. Unjust Enrichment
“Unjust enrichment is an equitable doctrin e that allows a plaintiff to recover a
benefit conferred upon a defendant when retention of the benefit is not legally justifiable.
It is commonly referred to as a quasi-contract or a contract implied-in-law claim.”
Caldas v. Affordable Granite & Stone, Inc., 820 N.W.2d 826, 838 (Minn. 2012). But unjust
enrichment does “not apply when there is an enforceable contract that is applicable.” Id.
The supreme court has explained:
To establish an unjust enrichment claim, the claimant must
show that the defendant has k nowingly received or obtained
something of value for which the defendant in equity and good
conscience should pay. Unjust enrichment claims do not lie
simply because one party benefits from the efforts or
obligations of others, but instead it must be shown that a party
was unjustly enriched in the se nse that the term ‘unjustly’
could mean illegally or unlawfully.

ServiceMaster of St. Cloud v. GAB Business Servs., Inc. , 544 N.W.2d 302, 306
(Minn. 1996) (citations and quotations omitted).
Unjust enrichment is an affirmative claim, not a defense. Moreover, a contract (the
lease) existed here, and thus, unjust enrichment is inapplicable. Because unjust enrichment
is neither a defense to R&S’s claims nor applicable under these circumstances, the district

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court did not abuse its discretion by determining that appellants’ assertion of this “defense”
did not demonstrate a reasonable defense on the merits.
B. Equitable Estoppel
“Equitable estoppel prevents the assertion of otherwise valid rights where one has
acted in such a way as to indu ce another party to detrimentally rely on those actions.”
Pollard v. Southdale Gardens of Edina Condo. Ass’n, Inc. , 698 N.W.2d 449, 454 (Minn.
App. 2005) (quotation omitted). A party seeking to invoke the doctrine must
prove: “(1) that promises or inducements were made; (2) that they reasonably relied upon
the promises; and (3) that they will be harmed if estoppel is not applied.” Id. T h e
application of the doctrine is ordinarily a question of fact, “unless only one inference may
be drawn from the facts.” Id.
There is no evidence to support the claim of equitable estoppel in the record—only
a conclusory claim by appellants in their motion to vacate that “promises were made that
the eviction dispute was settled and an accord and satisfacti on was reached.” Appellants
did not submit an affidavit demonstrating the claimed promises. Nor did they submit any
other evidence to support their claim that R&S made promises.
Relying on Charson v. Temple Israel , 419 N.W.2d 488 (Mi nn. 1988), appellants
argue that their mere assertion that promises were made is sufficient “specific information”
to establish a reasonable defense on the merits. We conclude that Charson is
distinguishable and does not s upport appellants’ position. The party seeking to vacate a
judgment under Minn. R. Civ. P. 60.02(a) must “establish to the satisfaction of the court
that it possesses a meritorious claim.” Charson, 419 N.W.2d at 491. “[T]he existence of

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a meritorious claim must ordinarily be demonstrated by more than conclusory allegations
in the moving papers.” Id. (emphasis added). In Charson, the record as a whole established
the existence of a meritorious claim. Id. at 492. Here, the only evidence of promises made
by R&S surrounding the settlement agreement is a conclusory allegation in appellants’
moving papers.
Because there is no evidence in the record to support appellants’ claim that equitable
estoppel provides a reasonable defense to R&S’s claims, we conclude that the district court
did not abuse its discretion in dismissing this alleged defense in denying appellants’ motion
to vacate.
C. Unconscionable Contract
Finally, appellants assert that the lease is unenforceable because its terms are
unconscionable. “Whether a contract provision is unconscionable is a question of law for
the court.” Osgood v. Medical, Inc. , 415 N.W.2d 896, 901 (Minn. App. 1987), review
denied, (Minn. Feb. 12, 1988). “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 no honest and fair man
would accept on the other.” Overholt Crop. Ins. Serv. Co., Inc. v. Bredeson ,
437 N.W.2d 698, 702 (Minn. App. 1989) (quotation omitted). Appellants’ briefing on this
issue is scant. They make no argument regarding the applicable law. The record is also
devoid of any evidence supportin g appellants’ claim that the l ease is unconscionable. It
appears that appellants argue that the lease is unconscionable because they are required to
pay “damages” in the form of rent after vacating the premises.

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But appellants are not require d to “pay damages in exch ange for nothing” as they
assert in their brief. When they entered into the lease agreement with R&S, they enjoyed
the benefit of possessing the property and operating a business there. The lease
contemplated that, if AF breached, it was liable for rent under the contract until R&S leased
the property to a new tenant. The lease m itigates the damages by reducing AF’s liability
under the lease by the rents co llected from new tenants once R&S relets the premises.
Without any evidence of unconscionability, and considering only th e general arguments
made by appellants, we cannot say that no reasonable person would enter into the lease,
and therefore conclude that the district court did not abuse its discretion in concluding that
unconscionability was not a reasonable defense to R&S’s claims.
In summary, the district court did not abuse its discretion in determining that AF did
not possess a reasonable defense on the merits and that AF did not present any evidence
that would have prevented entry of summary judgment. Because appellants did not present
sufficient evidence to demonstrate that they possessed a reasonable defense on the merits,
it was not appropriate to vacate the summary ju dgment under Minn. R. Civ. P. 60.02(a).
See Gams, 884 N.W.2d at 620.
Affirmed.