Faith Technologies, Inc., Respondent, Biosar America, LLC, Respondent, Frattalone Companies, Inc., et al., Plaintiffs,

This opinion will be unpublished and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
A19-1639

Faith Technologies, Inc.,
Respondent,
Biosar America, LLC,
Respondent,
Frattalone Companies, Inc., et al., Plaintiffs,

vs.

Aurora Distributed Solar LLC,
Appellant,
Aurora Land Holdings, LLC, et al., Defendants.

Filed June 15, 2020
Affirmed in part and remanded
Reyes, Judge

Wright County District Court
File No. 86-CV-17-2033

Dean B. Thomson, Hugh D. Brown, Thomas C. Schram, Alexan der B. Athmann,
Fabyanski, Westra, Hart & Thomson, P.A., Minneapolis, Minnesota (for respondent Faith
Technologies)

David E. Suchar, David F. Herr, Jevon C. Bindman, Maslon LLP, Minneapolis, Minnesota;
and

Anthony J. Barron (pro hac vice), Nixon Peabody LLP, San Francisco, California (for
respondent Biosar America)

Bruce Jones, Patrick J. O’Connor, Jr., Aaron D. Van Oort, James J. Hartnett, Joshua T.
Peterson, Faegre Drinker Biddle & Reath LLP, Minneapolis, Minnesota (for appellant
Aurora Distributed Solar)

2
Considered and decided by Reyes, Presiding Judge; Bratvold, Judge; and Bryan,
Judge.
U N P U B L I S H E D O P I N I O N
REYES, Judge
Following the district court’s confirmation of arbitration awards in this $30 million
mechanic’s lien dispute, appellant -solar-power-plant owner argues that the district c ourt
erred by upholding an award because the arbitrator exceeded the scope of his authority by
granting equitable relief and attorney fees. Appellant also argues that it did not waive a
contractual limitation on the arbitrator’s authority. By notice of related appeal, respondent-
subcontractor argues that the district court abused its discretion by denying respondent-
subcontractor’s motion for attorney fees under Minn. Stat . §§ 514.14, 572B.25(c) (2018),
and that it is entitled to attorney fees in this appeal. We affirm in part and remand.
FACTS
In 2016, appellant Aurora Distributed Solar LLC (Aurora) entered into a n
Engineering, Procurement, and Construction Agreement (the EPC agreement) with
respondent Biosar America LLC (Biosar) to design and construct s olar-power generators
for approximately $90 million (the project). Biosar agreed to complete the project by the
end of 2016, and it entered into a subcontract with respondent and cross -appellant Faith
Technologies Inc. (Faith) to provide labor, materials, and services for the project. Issues
arose with the project, leading to numerous lawsuits, which the Minnesota Supreme Court
assigned to a single district court judge. See In Re Aurora Solar Project Mechanic’s Lien
Litigation, A17-0804 (Minn. May 13, 2017) (order).

3
Section 14.2 of the EPC agreement (the arbitration clause) requires arbitration “of
any controversy, claim, or dispute between [Aurora and Biosar] arising out of or rel ated”
to the EPC agreement and prohibits the arbitrator from awarding nonmonetary, injunctive,
or equitable relief. In addition, the arbitration clause adopts the Comprehensive Arbitration
Rules of JAMS, a private arbitration service (JAMS rules) and provide s that the EPC
agreement trumps any conflicting JAMS rule. The subcontract between Biosar and Faith
also requires mandatory arbitration of all disputes arising out of the subcontract.
In 2017, Aurora and Biosar asserted claims arising out of disputes on the project
against each other in a JAMS arbitration proceeding. Biosar also commenced a separate
JAMS arbitration proceeding against Faith. JAMS later consolidated the two arbitration
proceedings. In March 2018, the three parties agreed to, and filed with the district court, a
stipulation to stay litigation and submit claims to binding arbitration, “to finally and
expeditiously resolve all their claims against each another in one forum” (the stipulation).
The parties agreed through the stipulation that the JAMS rules and the Federal Arbitration
Act (FAA) govern the dispute , looking to applicable Minnesota state law and to federal
law within the Eighth Circuit, respectively. See Davies v. Waterstone Capital Mgmt., L.P.,
856 N.W.2d 711, 716 (Minn. App. 2014) (noting Minnesota courts may apply state law to
motions to confirm or vacate arbitration awards unless FAA preempts state law) , review
denied (Minn. Feb. 25, 2015); see also In re Gillette Children’s Specialty Healthcare, 867
N.W.2d 513, 519 (Minn. App. 2015) ( noting this court is bound by opinions of United
States Supreme Court and Minnesota Supreme Court when interpreting federal statute s),
aff’d 883 N.W.2d 778 (Minn. 2016).

4
The parties participated in arbitration hearings in September and October 2018. The
arbitrator first issued a partial final award, finding that Aurora abandoned the EPC
agreement with Biosar due to the parties’ departure from the strict terms of the EPC
agreement and Aurora stepping into Biosar’s shoes with respect to subcontractors . The
arbitrator then determined that Biosar prevailed on the merits of its dispute with Aurora
and issued the final award, granting (1) Biosar $3,258,676 in attorney fees, related costs,
and expert fees, and Faith (2) $20,698,789 on its claims, (3) $4,867,902 in prejudgment
interest, (4) $4,108,607 in attorney fees, related costs, and expert fees, and (5) 10% per
annum postjudgment interest on $29,675,361 until paid in full.
The district court confirmed the arbitrator’s awards. It determined that the arbitrator
acted within the scope of his authority because (1) the stipulation supplanted the arbitration
clause, allowing it to award equitable relief; (2) any potential ambiguity on the scope of
the stipulation required resolution in favor of arbitration; and (3) the arbitrator determined
that the parties intended to arbitrate all claims, including abandonment, to which the district
court must defer under section 10(a)(4) of the FAA . Next, the district court determined
that it lacked the authority to grant A urora’s request to vacate the arbitrator’s award of
attorney fees to Biosar. The district court declined to examine Aurora’s claims on the
merits because the parties agreed to submit all claims to arbitration , including contract
abandonment. Lastly, the district court confirmed the arbitrator’s award to Faith and Biosar
because the award had not been vacated, modified, or corrected , as prescribed in sections
10 and 11 of the FAA. These appeals follow.

5
D E C I S I O N
I. Aurora waived its right to challenge the arbitrator’s authority to find that
Aurora abandoned the contract.

Aurora argues that it did not waive its right to argue that the arbitrator exceeded the
scope of his authority when he found that Aurora abandoned the EPC agreement. We
disagree.
A. Standard of Review

We defer to an arbitrator’s findings of fact and determinations of law. Phillips v.
Dolphin, 776 N.W.2d 755, 758 (Minn. App. 2009), review denied (Minn. Mar. 16, 2010).
But we assess the scope of an arbitrator’s authority, including assessments of arbitrability,
de novo.1 See Seagate Tech., LLC v. W. Digital Corp. , 854 N.W.2d 750, 760 -61 (Minn.
2014). We will not set aside an arbitration award unless the arbitrator has clearly exceeded
the scope of the powers granted by the arbitration agreement. Id. The party objecting to
an arbitration award and the arbitrator’s authority has the burden of proof. Id. at 761. We
must exercise every reasonable presumption “in favor of the finality and validity of the
award.” Id. (quotation omitted).
Even though the district court made several findings equating to waiver, which we
review for clear error, see id. at 757, we review whether Aurora waived its challenge to the
arbitrator’s authority to find contract abandonment de novo because the JAMS rules outline

1 “Arbitrability” refers to “[t]he status of a dispute’s being or not being within the
jurisdiction of arbitrators to resolve, based on whether . . . the dispute is within the scop e
of the arbitration agreement . . . and whether the applicable law p ermits the arbitrators to
resolve the subject matter of the dispute.” Black’s Law Dictionary 124 (10th ed. 2014).

6
when waiver occurs, see Onvoy, Inc. v. SHAL, LLC , 669 N.W.2d 344, 349 (Minn. 2003)
(providing that appellate courts review arbitration clauses, such as JAMS rules, de novo).
B. The waiver issue is properly before us.
Aurora contends that we cannot decide the waiver issue because the arbitrator made
no factual findings on it.2 None of the parties raised the waiver issue before the arbitrator.
To the contrary, the parties agreed to the arbitrator deciding all issues raised , without
objection. Aurora stated that it had no “procedural, arbitrability or selection of arbitrator
objections related to the claims, counterclaims, and defenses between Aurora and Biosar,”
and these claims included contract abandonment . Biosar and Faith did no t argue waiver
until after Aurora challenged in the district court the arbitrator’s authority to find that
Aurora abandoned the contract.
Similarly, Aurora contends that we cannot decide waiver because the district court
made no factual findings on it. But the district court found that “[n]o party objected to the
[a]rbitrator’s jurisdiction over the issues raised during the hearing.” These issues included
contract abandonment. Moreover, the district court found that, “Aurora never asserted that
the issue of abandonment was outside the scope of the [a]rbitrator’s powers. Aurora instead
argued the factual and legal merits of Biosar’s abandonment claim to the [a]rbitrator.”
(Footnote omitted). The record supports these findings.3

2 As elaborated below, no factual finding of waiver is required for two reasons. First, the
parties agreed to submit all issues to the arbi trator. Second, Aurora never asserted during
the arbitration that abandonment was outside the scope of the arbitrator's decision.
3 The record also belies Aurora’s contention that it had no notice of an abandonment claim.

7
C. The arbitrator viewed the stipulation as a source of his authority for the
joint arbitration.
Aurora argues that the arbitrator vie wed the EPC arbitration clause , as opposed to
the stipulation, as the source of his authority over the Aurora -Biosar dispute because he
acknowledged that the parties agreed to arbitrate their disputes under that arbitration clause,
he referenced the clause numerous times in the partial and final awards, he expressly relied
on the arbitration clause to award attorney fees to Biosar , and the stipulation did not
reference the arbitration clause’s limitations.
The arbitrator expressly acknowledged in his award that his authority derived from
the EPC agreement and the stipulation by listing both the stipulation and article XIV of the
EPC agreement, containing the arbitration clause , as arbitration agreements in the
“Contracts, Arbitration Agreements and Rules” section of the partial final award. The
stipulation is a three-party agreement governing “all claims, co unterclaims, and defenses
by, between, and among Faith, Aurora, and Biosar.”
Aurora contends that the arbitrator referred to the stipulation as governing only the
dispute between Aurora and Faith because the arbitrator characteriz ed the stipulation as
representative of an arbitration agreement “between Faith and Aurora ,” showing that he
thought the stipulation did not govern the scope of his authority for the purpose of awarding
relief. Aurora also contends that we must interpret the arbitrator’s references to the
stipulation in their context, which does not demonstrate a reference to the joint arbitration.
In the “Parties and Jurisdiction” section of the partial final award, the arbitrator identifi es
the stipulation twice : in the context of determining whether the parties were properly

8
named and whether he had jurisdiction to decide the lien claims by Faith against Aurora.
But Aurora’s arguments are contrary to the plain language of the stipulation , which gives
the arbitrator broad authority over all claims between all three parties. Even if we were to
assume that the arbitrator’s analysis of the scope of his authority is ambiguous, we construe
this ambiguity in favor of confirming the award. United Food & Commercial Workers,
Local No. 88 v. Shop ‘N Save Warehouse Foods, Inc., 113 F.3d 893, 895 (8th Cir. 1997);
see Seagate, 854 N.W.2d at 760-61. It is more appropriate to interpret these contextual
qualifications as specific examples of the arbitrator’s authority, not as limitations. Aurora’s
arguments to the contrary fail.
D. Having adopted the JAM S rules in the stipulation, Aurora waived the
right to challenge the arbitrator’s authority to decide abandonment.

Aurora contends that its conduct did not meet the definition of waiver under Wells
Fargo Bank, N.A. v. WMR e-PIN, LLC, 653 F.3d 702, 711-12 (8th Cir. 2011), which Aurora
contends requires a failure to object and an invocation of relief similar to that disputed.
However, the stipulation expressly incorporates the JAMS rules, which provide a different
waiver analysis than Wells Fargo. Under JAMS Comprehensive Arbitration Rules, 9(f),
“jurisdictional challenges under rule 11 shall be deemed waived, unless asserted in a
response to a [d]emand or counterclaim or promptly thereafter, when circumstances first
suggest an issue of arbitrability.” JAMS rule 11(b) governs jurisdictional and arbitrability
disputes, including disputes over the scope of the agreement under which arbitration is
sought. JAMS Comprehensive Arbitration Rules, 11(b). Thus, the JAMS rule controls,
and Wells Fargo is inapplicable.

9
Aurora also contends that the EPC agreement’s no-waiver clause4 prevented waiver.
But, to the extent that the EPC agreement is inconsis tent with the JAMS rules, the
stipulation incorporates the JAMS rules and overrides any inconsistencies , including the
no-waiver clause . To avoid waiver under the JAMS rules, Aurora had to assert the
arbitrator’s lack of authority over the abandonment claim, which it did not do until after
the arbitration concluded . Thus, by entering into the st ipulation, Aurora waived the no -
waiver clause. See Pollard v. Southdale Gardens of Edina Condo. Ass’n, Inc., 698 N.W.2d
449, 453 (Minn. App. 2005) (“[A] nonwai ver clause may be modified by subsequent
conduct, [and] the mere presence of a nonwaiver clause does not automatically bar a waiver
claim.”). Even though the EPC arbitration clause provides that “in the event of any conflict
between the procedures herein and [JAMS,] the procedures herein shall control,” as noted
above, the stipulation supplanted this arbitration clause and adopted the JAMS rules
wholesale.
Finally, Aurora argues that the arbitrator exceede d his authority by granting
nonmonetary and equitable relief by finding that the agreement was “abandoned, and
rescinded,” and by allowing Biosar to pursue a claim against A urora for quantum meruit.
But when “a case is submitted to arbitration by order of a court, the scope of the issues
submitted is controlled by the court’s order.” Latenser v. John Latenser & Sons, Inc., 347
N.W.2d 486, 490 (Minn. 1984). Here, the stipulation filed with the district court gave the
arbitrator the broad power to decide “all claims, counterclaims, and defenses . . . arising

4 The clause states, “To be effective, a waiver of any obligation or right must be in writing
and signed by the Party waiving such obligation or right.”

10
out of and related to the Project.” Moreover, under the JAMS rules, “[t]he [a]rbitrator may
grant any remedy or relief that is just and equitable and within the scope of the [p]arties’
agreement, including, but not limited to, specific performan ce of a contract or any other
equitable or legal remedy.” JAMS Comprehensive Arbitration Rules, 24(c).
By entering into the stipulation and failing to object to the arbitrator’s impending
ruling on abandonment, Aurora intentionally and knowingly waived its right to challenge
the arbitrator’s authority to award equitable relief. See Frandsen v. Ford Motor Co., 801
N.W.2d 177, 182 (Minn. 2011) (“Waiver is the intentional relinquishment of a known
right.”). Because the stipulation provided the arbi trator with broad authority to award
equitable and nonequitable relief, we need not decide whether the arbitrator found the
contract to be rescinded as opposed to abandoned.
E. The district court did not overrule the arbitrator’s interpretation of his
authority.
Aurora contends that, because the arbitrator referred to article XIV (sections 14.1 -
14.4) of the EPC agreement as the source of his authority, and because arbitrator
determinations of their own authority are binding , the district court erred by determining
that the stipulation supplanted the EPC arbitration clause (section 14.2). 5 Aurora’s
contention is misguided.
The district court did not overrule the arbitrator’s interpretation of his authority. As
explained above, the arbitrator viewed both the stipulation and the EPC agreement as

5 The district court noted that the stipulation supplanted the EPC arbitration clause
“regardless of the arbitrator’s finding that his authority was derived from the EPC
contract.”

11
sources of his authority. Moreover, the district court acknowledged the stipulation as
providing the arbitrator authority. It noted that “the [a]rbitrator issued his award on the
belief that the parties intended to arbitrate the claims Aurora is now challenging,” referring
to the arbitrator’s incorporation of the stipulation as a basis for the arbitrator deciding the
issues before him, which included abandonment. Finally, the district court confirmed the
arbitrator’s decision and in turn confirmed his decision that he had authority to decide the
abandonment issue.
II. Biosar prevailed at arbitration, entitling it to attorney fees.

Aurora argues that the arbitrator erred and exceeded the scope of his authority
because section 14.3 of the EPC agreement only allows a “prevailing party” to receive
attorney fees, which Biosar did not qualify as because the arbitrator did not award it any
damages. We disagree.
The arbitrator examined the EPC agreement’s definition of “prevailing party”6 and
assessed the qualification of a prevailing party holistically as one who prevails on the
underlying merits , regardless of whether the party received compensation. See, e.g. ,
Borchet v. Maloney , 581 N.W.2d 838, 840 (Minn. 1998) ( noting that, “[t]he prevailing
party in any action is one in whose favor the decision or verdict is rendered and judgment
entered.”). Under that reasoning, the arbitrator concluded that Biosar prevailed on the

6 The final arbitration award stated, “[T]he party to the action or proceeding who is entitled
to recover its costs of suit for the proceeding, whether or not the same proceeds to final
judgment. A party not entitled to recover its costs shall not recover attorneys’ fees.” The
fact that the arbitrator assessed the EPC agreement’s definition of “prevailing party” further
supports the conclusion that he did not consider the stipulation to have supplanted the entire
EPC agreement.

12
merits of its claim that Aurora abandoned the contract. We must defer to the arbitrator’s
legal determination that a party need not be entitled to receive damages to qualify as a
prevailing party, so long as it prevails on the underlying merits of its claim. See Phillips,
776 N.W.2d at 758 (noting that appellate courts defer to arbitrators’ determinations of law).
Aurora also argues that we must overturn the arbitrator’s attorney -fee award to
Biosar because the district court concluded that the stipulation supplanted article XIV of
the EPC agreement while inconsistently confirming the arbitrator’s award of attorney fees
based on the arbitration clause within article XIV. We are not persuaded.
The district court never determined that the stipulation supplanted the entire dispute-
resolution article of the EPC agreement, article XIV.7 Instead, it determined that “the
parties’ stipulation and proposed order supplanted the EPC’s arbitration provision,” and
later referred to the EPC “arbitration provision” as “the arbitration clause.” The district
court’s reference to a single “clause” cannot be interpreted to extend to all of article XIV,
which contains five clauses (sections 14.1-14.5). Rather, the district court determined that
the stipulation supplanted the arbitration clause in se ction 14.2 but not the attorney -fee
clause in section 14.3.

7 Aurora refers to the district court’s language that, “Aurora does point out that the
[a]rbitrator apparently thought the EPC contract was the source of his power with respect
to the claims between Aurora and Biosar. Even if this is true, it does not change the fact
that the parties’ [s]tipulation and [p]roposed [o]rder should govern.” The district court
referenced Aurora’s argument without deciding the point. And its reference to the
stipulation does not imply that the stipulation supplanted article XIV in its entirety, as
explained below.

13
The district court determined that, even if the language in the arbitrator’s written
determination of his own authority is ambiguous, it must construe that authority in favor
of supporting the arbitrator’s award. At most, the arbitrator presented an unclear
determination of his own authority by acknowledging both the stipulation and article XIV,
which have some inconsistent provisions . Construing this ambiguity to support the
arbitration award, we conclude that the arbitrator determined that certain sections of article
XIV still provided him with authority. See United Food, 113 F.3d at 895; Seagate, 854
N.W.2d at 760-61.
The arbitrator noted that the survival clause8 in section 14.5 of the EPC agreement
allowed the attorney -fee clause to survive Aurora’s partial abandonment of the EPC
agreement.9 Reading the survival clause as preserving the attorney -fee clause but not the
arbitration clause is consistent with the stipulation supplanting only the arbitration clause.
Thus, Aurora fails to meet its burden of establishing that the arbitrator clearly exceeded the
scope of his authority by applying the attorney-fee clause of the EPC agreement to award
Biosar attorney fees. See Seagate, 854 N.W.2d at 760-61.
III. The arbitrator’s award to Faith stands.
Aurora contends that Faith’s award must be vacated as well , based on the
assumption that the arbitrator erred by awarding attorney fees to Biosar, because the FAA

8 “The provisions set forth in this Article XIV shall survive t he termination or expiration
of this Agreement.”
9 Although the arbitrator referenced the impact of the termination clause as something that
“Biosar notes,” the arbitrator discussed the termination clause under the section of his
award entitled “Arbitrato r’s Determinations – Prevailing party,” based on which he
awarded Biosar attorney fees.

14
does not permit severance of an arbitration award and the awards to Biosar and Faith are
inextricably linked. Because we affirm the arbitrator’s award to Biosar, this argument fails.
IV. The district court abused its discretion by not providing a rationale for why it
denied Faith’s request for attorney fees inc urred on its motion to confirm the
arbitrator’s award.
Faith argues that the district court abused its discretion by denying its request for
attorney fees because (1 ) Minn. Stat. § 572A.25 (2018), a section of the Uniform
Arbitration Act, and Minn. Stat. § 514.14, the mechanic’s lien statute, entitled it to receive
attorney fees; (2) it reserved the right to submit a rule 119.02 affidavit until after the district
court determined whether Faith was en titled to receive attorney fees; and (3 ) the district
court could not have based its decision on a strict application of rule 119 because it did not
mention that rule. We agree that the district court failed to provide a rationale for its
decision.
We review a district court’s decision on attorney fees for an abuse of discretion.
Carlson v. SALA Architects, Inc., 732 N.W.2d 324, 331 (Minn. App. 2007), review denied
(Minn. Aug. 21, 2007). “A district court has discretion to strictly enforce or to waive the
requirements of rule 119 when considering a motion for attorney fees.” Rooney v. Rooney,
782 N.W.2d 572, 577 (Minn. App. 2010). Rule 119 requires, in part, a party requesting
attorney fees in excess of $1,000 to submit a motion and accompanying affidavit describing
the work performed, time spent, and ho urly rate. Minn. R. Gen. Prac. 119.01, 02.
However, a district court abuses its discretion by denying a motion for attorney fees without
providing a rationale. See Richard Knutson, Inc. v. Westchester, Inc. , 374 N.W.2d 485,
490 (Minn. App. 1985).

15
Here, Faith submitted neither a motion nor an accompanying affidavit per rule
119.02. Instead, Faith argued why it was entitled to receive attorney fees, and “request[ed]
leave to submit an affidavit proving the amount of its reasonable attorneys’ fees.” The
district court did not comment on Faith’s argument and did not grant it attorney fees.
We cannot determine whether the district court denied Faith attorney fees because
Faith did not submit a rule 119 affidavit or because Faith failed on the merits of its request.
Because we have no rationale to review, w e remand for the district court to articulate a
reason for a decision on Faith’s request for attorney fees incurred.
V. We decline to award Faith attorney fees incurred on this appeal.
Faith argues that it is entitled to recover attorney fees incurred on what it
characterizes as an interlocutory appeal of a partial judgment pursuant to Minn. R. Civ. P.
54.02 because the appeal is necessary to setting the value of a mechanic’s lien. We decline
to reach the issue.
Under Minn. R. Civ. App. P. 139.05, subd. 1, “a party seeking attorney [] fees on
appeal shall submit such a request by motion under Rule 127 .” See Minn. Stat. § 645.44,
subd. 15 (2018) (providing that “shall” is mandatory). Rule 139.03 impose s a 1 4-day
limitation for submitting this request to the court of appeals . See Minn. R. Civ. App. P.
139.03, subd. 1 (providing that , “[a] prevailing party seeking taxation of costs and
disbursements shall file and serve a notice of tax ation of costs and disbursements within
14 days of the filing of the court’s order or decision”); Minn. R. Civ. App. P. 139.05, subd.
1 (providing that, “all motions for fees must be submitted no later than within the time for
taxation of costs”). If a party has appropriately made a request, we may award attorney

16
fees on appeal when a statute enables it or a contract authorizes it, see Barr/Nelson, Inc. v.
Tonto’s, Inc., 336 N.W.2d 46, 53 (Minn. 1983) , or as a sanction, Minn. R. Civ. App. P.
139.05 1998 comm. cmt. Because Faith has not submitted a motion requesting attorney
fees on appeal, we decline to reach the issue.
Affirmed in part and remanded.