Craig Scherber & Associates, Inc., Respondent,

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A21-0428

Craig Scherber & Associates, Inc.,
Respondent,

vs.

Matt Bullock Contracting Co., Inc.,
Appellant.

Filed February 14, 2022
Affirmed in part, reversed in part, and remanded
Slieter, Judge

Hennepin County District Court
File No. 27-CV-20-8981

John M. Miller, Halliday, Watkins & Mann, P.C., St. Paul, Minnesota (for respondent)

Justice Ericson Lindell, Greenstein Sellers , P.L.L.C., Minneapolis, Minnesota (for
appellant)

Considered and decided by Slieter, Pres iding Judge; Smith, Tr acy M., Judge; and
Gaïtas, Judge.
NONPRECEDENTIAL OPINION
SLIETER, Judge
This appeal and cross-appeal arise from a dispute over grading and soil-correction
work for a residential development project. Appellant challenges the dismissal of its
unjust-enrichment claim against respondent , arguing that the district court erred by
concluding that a mechanic’s-lien action wa s an available remedy at law for appellant
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which precluded equita ble relief. Because the mechanic’s-lien action was an available
remedy at law which precludes equitable relief, we affirm.
On cross-appeal, respondent challenges th e dismissal of its slander-of-title claim,
arguing that the district court erred by concl uding that respondent di d not allege slander-
of-title damages. Because the attorney fees necessary to clear title constitute special
damages sufficient to support respondent’s slander-of-title claim, we reverse and remand.
FACTS
Because the district court order under re view granted both parties’ dismissal
motions under rule 12.02(e), we construe the facts in favor of each party whose claim was
dismissed. See Walsh v. U.S. Bank, N.A. , 851 N.W.2d 598, 606 (Minn. 2014) (accepting
facts alleged in complaint as true and constr uing all reasonable inferences in favor of
nonmoving party).
This appeal involves parties’ claims relating to the Stonegate at Rush Creek
residential development (the development), which was initially owned by Iverson Homes,
Inc. (Iverson). In 2015, appellant Matt Bullock Contracting Co. (Bullock) contracted with
Iverson to provide grading and soil correcti on for the development. Bullock performed
work on the property, valued at $127,151.1 Iverson did not pay Bullock for this work.
In 2016, when Bu llock informed Iverson of its intent to file a mechanic’s lien,
Iverson allegedly convinced Bu llock to submit fictitious invoi ces for unperformed work.
This scheme, it was anticipated , would preserve Bullock’s ab ility to subsequently file a

1 This number does not appear in the parties’ pleadings though both parties agree as to its
accuracy.
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mechanic’s lien and allow Iverson to preserve a positive relationship with his lender. From
2016 to 2019, Bullock sent Iverson several fictitious invoices.
In 2018, respondent Craig Scherber & Associates, Inc. (Scherber) agreed to provide
supplemental financing to Iverson in exchange for a secondary mortgage on part of the
development. That same year, Iverson defaulted on its loan with Scherber. In early 2020,
Iverson, Scherber, and Iverson’s primary le nder began negotiating a work-out agreement
whereby Scherber would assume Iverson’s debt in exchange for ownership of the entire
development. While conductin g a title search on the develo pment property, and before
closing on the property purchase, Scherber discovered that Bullock filed a mechanic’s lien
in February 2020. Despite the existence of the mechanic’s lien, Sc herber closed on the
property purchase in March 2020.
Scherber’s complaint seeks a declarator y judgment determin ing that Bullock’s
mechanic’s lien is invalid and also alleges slander of title. Bullock’s counterclaim alleges
unjust enrichment. Bullock voluntarily withdrew its mechanic’s lien in April 2020.
The parties cross-moved for dismissal. Th e district court construed the parties’
motions as motions to dismiss under Minn. R. Civ. P 12.02(e) and dismissed all three
claims. Bullock and Scherber cross-appeal the dismissal of their claims.
DECISION
A district court properly dismisses an actio n pursuant to rule 12 .02(e) only if “it
appears to a certainty that no facts, which could be introduced consistent with the pleading,
exist which would support granting the relief demanded.” Walsh, 851 N.W.2d at 602
(emphasis and quotation omitted). “We review de novo whether a complaint sets forth a
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legally sufficient claim for relief.” Id. at 606. “We accept the facts alleged in the complaint
as true and construe all reasonable inferences in favor of the nonmoving party.” Id.
Bullock raises one issue in its appeal —whether the district court erred by
concluding that it had an adequate legal re medy of a mechanic’s lien, thereby precluding
equitable relief. In its cross-appeal, Scherb er argues that the district court erred by
dismissing its slander-of-title claim for lack of damages. We address Bullock’s appeal
before turning to Scherber’s cross-appeal.
I. Because Bullock possessed an adequate remedy at la w, it may not pursue an
equitable remedy.

For Bullock to prove unjust enrichment, it must show that Scherber “has knowingly
received something of value, not being entitled to the benefit, and under circumstances that
would make it unjust to permit its retention.” Southtown Plumbing, Inc. v. Har-Ned
Lumber Co., 493 N.W.2d 137, 140 (Minn. App. 1992). Unjust enrichment is an equitable
remedy. Id.
A party cannot seek an equitable remedy lik e unjust enrichment if the party has an
adequate legal remedy. ServiceMaster of St. Cloud v. GAB Bus. Servs. Inc., 544 N.W.2d
302, 305 (Minn. 1996); see also Southtown Plumbing, 493 N.W.2d at 140. A legal remedy
once available but since expired constitutes an adequate legal remedy and prevents a party
from seeking an equitable remedy. See, e.g. , Mon-Ray, Inc. v. Granity Re, Inc. , 677
N.W.2d 434, 440-41 (Minn. App. 2004), rev. denied (Minn. June 29, 2004).
2 Because

2 A party may argue “compelling circumstances” which allows courts to apply equity in
this situation, id. at 440, but Bullock does not argue any compelling circumstances.
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Bullock had, based on the mechanic’s-lien stat ute, an adequate legal remedy it chose to
forgo, it is precluded from seeking the equita ble remedy of unjust enrichment. This
conclusion is consistent with our decision in Southtown Plumbing. There, we concluded
that a contractor had an adequate legal remedy even though the contractor failed to enforce
its perfected mechanic’s lien. Southtown Plumbing, 493 N.W.2d at 140-41.
Bullock relies on Karon v. Kellogg , 261 N.W. 861 (Minn. 1935), to argue that,
because it never perfected—that is, timely filed—its mechanic’s lien, unlike the lien holder
in Southtown Plumbing, it did not have an adequate lega l remedy and it is free, therefore,
to pursue equitable relief. We are not persuaded.
Bullock misstates the supreme court’s holding in Karon. The issue in Karon did
not involve whether a mechanic’s lien, perfected or not, precluded recovery pursuant to an
unjust-enrichment claim, but whether there was a valid contract between the parties. Id. at
862; see also Lundstrom Constr. v. Dygert , 94 N.W.2d 527, 532-33 (Minn. 1959)
(describing Karon as a case involving the challenge of a valid contract for want of an
agent’s authority to represent the property owner). Moreover, the axiom that equity follows
the law is well established in Minnesota. See ServiceMaster of St. Cloud, 544 N.W.2d at
305; Kingery v. Kingery, 241 N.W. 583, 584 (Minn. 1932) (“[A] court of equity will not
disregard statutory law or grant relief prohibited thereby.”); see also U.S. Fire Ins. Co. v.
Minn. State Zoological Bd., 307 N.W.2d 490, 497 (Minn. 1 981) (denying equitable relief
when it would circumvent statutory restrictions). And, as it relates to the mechanic’s-lien
remedy, this axiom relies not on whether th e lien is perfected or unperfected but its
availability. Id. at 306 (“Should a contractor elect not to seek the protection of the clear
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and effective method available under the statute, this court will not come to its aid, absent
compelling circumstances not present here.”).3
II. Scherber’s slander-of-title claim alleged special damages.

To plead a slander-of-title claim, a party must allege that (1) there was a false
statement concerning the plaintiff’s real property, (2) the statement was published to others,
(3) the publication was malicious, and (4) p ublication of the false statement caused the
plaintiff “pecuniary loss in the form of special damages.” Paidar v. Hughes, 615 N.W.2d
276, 279-80 (Minn. 2000). The parties only contest whether Scherber pleaded the “special
damages” necessary to support its claim.
“Attorney fees and costs reasonably necessary in an action to clear clouds on title
resulting from slander of title are special damages that are recoverable in a slander-of-title
claim.” Laymon v. Minn. Premier Props., LLC , 903 N.W.2d 6, 18 (Minn. App. 2017)
(quotation omitted), aff’d, 913 N.W.2d 449 (Minn. 2018). If the attorney fees were
“necessarily incurred” and a “dir ect result” of the defendant’s tortious conduct, then the
attorney fees can support a slander-of-title claim. Id. (quotations omitted). “The defendant

3 Bullock also raises three other arguments: (1) its unjust-enrichment claim should not be
barred because its legal remedy was against a di fferent defendant, (2) the district court’s
decision conflicts with the text of the mechanic ’s-lien statute, and (3) the district court’s
decision improperly abrogates the common law. The first two arguments were not raised
to the district court and are thus forfeited, Thiele v. Stich , 425 N.W.2d 580, 582 (Minn.
1988), and the third was first ra ised in Bullock’s reply brief and is thus also forfeited,
Moorhead Econ. Dev. Auth. v. Anda, 789 N.W.2d 860, 887 (Minn. 2010) (“In the past, we
have declined to consider issues raised for the first time in a reply brief, particularly when
the theory was not raised at the district court level.”).
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is not liable for attorney fees and costs for legal actions ta ken by the plaintiff that cannot
be traced to the defendant’s tortious conduct.” Id.
Scherber argues that the attorney fees it incurred, as it alleged in its complaint,
constitute special damages. We agree. Scherb er alleged in its comp laint that it learned
about Bullock’s lien while acquiring the developm ent. After learning about the lien, the
bank contacted Bullock and sa id that, if the lien was inva lid, Bullock must immediately
release the lien. Any attorney fees incurred to clear title could be “reasonably necessary”
and thus are “special damages.” Laymon, 903 N.W.2d at 18. Therefore, we reverse the
district court’s dismissal of Scherber’s slander-of-title claim and remand.
Affirmed in part, reversed in part, and remanded.