Brandow Properties, LLC, Appellant,

This opinion is nonprecedential except as provided by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
A21-1182

Brandow Properties, LLC,
Appellant,

vs.

Katherine M. Melander, et al.,
Respondents.

Filed May 31, 2022
Reversed and remanded
Segal, Chief Judge

Hennepin County District Court
File No. 27-CV-20-2033

Keith D. Johnson, Law Office of Keith D. Johnson, P. L.L.C., Roseville, Minnesota (for
appellant)

Richard J. Thomas, Chris Angell, Burke & Thomas, PLLP, Arden Hills, Minnesota (for
respondents)

Considered and decided by Slieter, Presiding Judge; Segal, Chief Judge; and
Bratvold, Judge.
NONPRECEDENTIAL OPINION
SEGAL, Chief Judge
Appellant challenges the grant of summary judgment for respondents in this legal-
malpractice case. Because appellant has demonstrated the existence of genuine issues of
material fact, we reverse and remand.

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FACTS
The facts summarized below are undisputed except as otherwise noted. Appellant
Brandow Properties, LLC (the LLC) owns a commercial property at 205-207 Water Street
in Excelsior, Minnesota (the building). A restaurant and gift shop had been tenants in the
building. When they decided not to renew their leases, t he LLC retained r espondent-
attorney Katherine Melander, a partner at respondent law firm Heley, Duncan & Melander,
PLLP, to draft and negotiate a lease for a new tenant.
Tim Brandow, one of the owners of t he LLC, secured a new tenant who wanted to
operate a steak house in the building . The tenant decided not to open the steakhouse but
paid rent to the LLC until another tenant was found. Brandow claims that several potential
restaurant tenants expressed interest in leasing the building , including Compagno
Hospitality, LLC. Compagno identified a number of building improvements that it wanted
if it was to enter into a lease. These included improvements to the interior of the restaurant
space, which the parties called “tenant improvements,” and improvements to the building
itself, which the parties called “landlord improvements.”
Brandow alleges that he instructed Melander that the lease should be drafted so that
Compagno would pay back, over time, 82% of the cost of the items identified as “landlord
improvements.” Brandow claims that he chose the 82% figure because Compagno would
be leasing approximately 82% of t he square footage in the building . The president of
Compagno, however, stated in his deposition that he expected that the LLC would pay for
the “landlord improvements ” to the building, except for certain costs related to the
building’s sprinklers and insulation which were to be shared. He also stated that Compagno
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would not have entered into a lease that required it to pay for the bulk of the “landlord
improvements.”
Melander prepared a draft lease for Compagno’s proposed tenancy. As relevant
here, the lease provided that Compagno would pay a “pro rata share ” of the LLC’s
“operating expenses” as “additional rent.” The phrase “operating expenses” was defined
as including “any portion of any capital expenditures or improvements made to the
Building.” Under the heading of “pro rata share,” the final version of the lease stated that
Compagno “agrees to pay eighty-two percent (82%) of the operating expenses .” Another
provision stated that the LLC “will complete the construction of the im provements . . .
outlined in Exhibit D attached hereto.” That same provision stated that Compagno “agrees
to pay its share of Landlord’s improvements as identified in Exhibit D.”
Brandow prepared the initial draft of e xhibit D , which contained a list of the
“landlord improvements” to be made to the building . At some point during the lease
negotiations, Melander sent Brandow a draft of the lease that contained, among other
changes, a new sentence at the bottom of exhibit D. The added language, de noted by an
asterisk and printed in bold, stated: “*Unless otherwise noted, the improvements described
above shall be paid by Landlord .” Only the costs related to the building’s sprinklers and
insulation were “otherwise noted” in exhibit D. For those two items, the final draft of the
the exhibit stated that the LLC and Brandow were to split the costs 50 -50. Other major
items, such as installing an elevator, removing and rebuilding the rear 20 feet of the
building to strengthen the floor and roof, and building stairways from the lower level to the
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roof, were not “otherwise noted” in the exhibit. The LLC and Compagno executed the
lease with the new provision (the asterisk language) included in exhibit D.
Brandow alleges that Melander added the asterisk language and that she never
discussed or explained the change and its impact on cost sharing. Brandow asserted in his
deposition that he would not have made the “landlord improvements” to the building
without having a source of reimbursement from the tenant. He also stated in his deposition
that he could have rented the building to other restaurant tenants and that the building did
not need the improvements.
During and after the construction process, disputes arose between the LLC and
Compagno concerning which party was responsible for paying for various improvements.
The LLC sued to evict Compagno and to enforce Brandow’s contention that the lease terms
required Compagno to pay, over time, 82% of all “landlord improvements” aside from the
sprinkler and insulation improvements. The litigation was eventually resolved after the
district court determined that Compagno was correct in its interpretation of the lease that it
did not bear any liability for the cost of “landlord impr ovements” other than the sprinkler
and insulation improvements.
The LLC then filed this legal-malpractice action against Melander and the law firm.
The LLC alleged in the lawsuit that Melander negligently added the asterisk language to
the lease and failed to explain the impact of the change. After the close of discovery,
respondents brought a motion for summary judgment asserting that, even if Melander was
negligent, the alleged negligence was not the but-for cause of the LLC’s damages or, in the
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alternative, that the LLC did not suffer any damages. The LLC cross-moved for partial
summary judgment on the issue of liability.
The district court denied the LLC’s motion , granted respondents’ motion for
summary judgment, and dismissed the LLC’s legal-malpractice claim. The district court
determined that the LLC could not establish the but-for cause element of legal malpractice.
The district court did not address respondents’ argument that they were entitled to summary
judgment because the LLC failed to demonstrate that it suffered damages. The LLC
requested reconsideration, which the district court denied. The LLC appeals.
DECISION
A grant of summary judgment is appropriate “ 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.” Mi nn. R. Civ. P. 56.01. This court “ review[s] the grant of summary judgment
de novo to determine whether there are genuine issues of material fact and whether the
district court erred in its application of the law.” Montemayor v. Sebright Prod., Inc., 898
N.W.2d 623, 628 (Minn. 2017) (quotation omitted).
In determining whether a genuine issue of material fact exists, this court must “view
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). This court “need not adopt the reasoning of the district court” and “may affirm a
grant of summary judgment if it can be sustained on any grounds.” Doe v. Archdiocese of
St. Paul, 817 N.W.2d 150, 163 (Minn. 2012).

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I.
To succeed on a claim for legal malpractice, a plaintiff must prove four elements:
“(1) the existence of an attorney -client relationship; (2) acts constituting negligence or
breach of contract; (3) that such acts were the proximate cause of the plaintiff’s damages;
and (4) that but for defendant ’s conduct the plaintiff wo uld have been successful in the
prosecution or defense of the action.” Blue Water Corp. v. O’Toole, 336 N.W.2d 279, 281
(Minn. 1983). When a case —like this one —involves a transactional matter, the fourth
element is “modified to require a plaintiff to sho w that, but for defendant’s conduct, the
plaintiff would have obtained a more favorable result in the underlying transaction than the
result obtained.” Jerry’s Enter s., Inc. v. Larkin, Hoffman, Daly & Lindgren, Ltd. , 711
N.W.2d 811, 819 (Minn. 2006).
Here, the district court granted summary judgment to respondents based on the
fourth element—that, but for the alleged negligence, the plaintiff would have obtained a
more favorable result.1 “When applying the ‘but for’ test [in a legal-malpractice case], we
must envision what would have occurred but for the negligent conduct.” Schmitz v. Rinke,
Noonan, Smoley, Deter, Colombo, Wiant, Von Korff & Hobbs, Ltd., 783 N.W.2d 733, 741
(Minn. App. 2010) (quotation omitted), rev. denied (Minn. Sept. 21, 2010). “As a matter
of law, but -for causation is not shown by speculative potential outcomes.” Id. at 743
(quotation omitted). To show that a more favorable result would have occurred, a plaintiff

1 There is no dispute concerning the existence of an attorney -client relationship between
the LLC and respondents, and respondents conceded , for the purposes of their motion for
summary judgment, the issue of negligence. Respondents based their summary-judgment
motion on the elements of but-for causation and damages.
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“must introduce concrete evidence of w hat the plaintiff would have done but for the
defendant’s negligence and what those actions would have reasonably produced .” Id. at
741 (quotation omitted).
The district court , in granting summary judgment, relied on the undisputed
testimony of Compagno’s president that the company would never have entered into a lease
with the LLC that required Compagno to pay 82% of all “landlord improvements.” The
district court reasoned that the LLC thus could not have obtained the more favorable
result—a lease where Compagno would pay 82% of the cost of “landlord improvements”—
and that the LLC therefore could not establish that Melander’s alleged negligence was the
but-for cause of the LLC’s alleged damages.
The LLC, however, argues that the district court erred by failing to consider that not
entering into a lease with Compagno may have been a more, not a less, favorable result for
the LLC. The LLC maintains that, if it had been advised by Melander about the change in
cost sharing for “landlord improvements,” it would have refused to enter into the lease and
that no lease was a more favorable result for the LLC than entering into the lease as written.
In support of its argument, the LLC points to the fact that it incurred over $1.3 million in
construction costs for the “landlord improvements ” without the expected source of
revenue, Compagno, to reimburse those costs. Brandow testified in his deposition that the
“landlord improvements” required by Compagno, such as “[p]utting all new bathrooms in,
. . . [m]oving the stairway to the downstairs[,] . . . additional storage areas[, and] . . .
put[ting] an elevator in . . .—those are the kinds of things that are major expenses that I
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would not have done if I knew that I had to pay for that entirely by myself.” Brandow
further testified in his deposition that “the building was good as it was.”
The LLC also put forward evidence that there were at least two other interested
restaurant tenants at the time. Brandow testified in his deposition:
I had . . . two tenants that I had pushed aside because [the
president of Compagno] was so convincing that he had all of
this money that he was going to invest in the building and do a
wonderful job. And I got a lot of heat from one of my potential
tenants . . . because I chose [Compagno] over their
[restaurant].[2]

Finally, Br andow testified in his deposition that , if he had been advised of the
alleged impact of the asterisk language in exhibit D, the LLC “would not have signed [the
lease with Compagno]. Period.” The LLC has thus provided evidence to support its claim
that no lease may have been a more favorable result for the LLC than entering into the
lease with Compagno.
Respondents contend that our opinion in Schmitz undercuts the viability of the
LLC’s argument that no lease would have been a more favorable result. In Schmitz, the
plaintiff alleged that the law firm negligently failed to advise him not to send a letter to the
buyer of plaintiff’s interests in certain companies. Id. at 736. After the letter was sent, the
buyer claimed that plaintiff had breached their agreement. Id.
We affirmed the district court’s grant of judgment as a matter of law in favor of the
law firm in Schmitz because, among other grounds , the plaintiff failed to bring forward

2 Brandow claims the discussions with one of the potential tenants got to the point of
preparing a draft lease.
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sufficient evidence that, but for the law firm’s alleged negligence, the plaintiff would have
obtained a more favorable result. Id. at 741. We noted, in particular, plaintiff’s failure to
“introduce concrete evidence of what the plaintiff would have done but for the defendant’s
negligence and wha t those actions reasonably would have produced.” Id. (quotation
omitted). We placed weight on the fact that the plaintiff never “actually testif[ied] that he
would not have sent the letter if [his lawyer] had advised him not to.” Id. By contrast, in
this case, we have Brandow’s deposition testimony that the LLC would not have entered
into the lease if the cost-sharing change had been explained to him by Melander. Schmitz
is thus distinguishable and is not controlling here.
We thus conclude that the L LC submitted sufficient evidence to demonstrate a
genuine issue of material fact on but -for causation and that the district court erred in
granting summary judgment based on this element.
II.
Respondents, however, go on to argue that, even if the no-lease alternative may have
been a “more favorable result,” summary judgment was still warranted because the LLC
cannot establish that it suffered any damages. While the district court did not rule on
respondents’ damages argument, respondents presented this argument to the district court,
both parties briefed this issue to our court, and we may affirm a grant of summary judgment
if it can be sustained on any grounds . Doe, 817 N.W.2d at 163. We thus address
respondents’ argument in the interests of judicial economy.
“As this court has recognized, damages are intertwined with causation.” Schmitz,
783 N.W.2d at 743. To succeed in a legal -malpractice claim, a plaintiff must show not
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only that a defendant’s negligence was the but-for cause of the less favorable outcome, but
that the plaintiff suffered damages as a result . Blue Water Corp. , 336 N.W.2d at 281
(noting that the proximate-cause element of legal malpractice requires that a defendant’s
negligence be “the proximate cause of the plaintiff’s damages”).
Respondents argue that the LLC suffered no damages because it now has a building
with a value increased by the $1 .3 million in capital improvements. Respondents argue
that the LLC thus came out even. Respondents also assert that, even if the building’s value
increased by less than what the LLC spent on i mprovements, the LLC did not offer any
evidence about the building’s fair market value and thus failed to create a genuine issue of
material fact.
The LLC responds that the fair market value of the building is not relevant and that
it has been damaged in the amount of the $1.3 million it spent on the “landlord
improvements” that it would not have spent but for Melander’s alleged negligence.
Respondents maintain that this is not a proper measure of damages and that it could result
in a double recovery. We need not, however, resolve this issue because the LLC submitted
other evidence related to its damages. The LLC submitted evidence that it incurred over
$100,000 in litigation costs in the suit against Compagno concerning the interpretation of
the lease. These costs are sufficient to create a genuine issue of material fact on the issue
of damages.
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Because of the existence of genuine issues of material fact on but-for causation and
damages, we reverse the district court’s grant of summary judgment for respondents.3
Reversed and remanded.

3 The LLC has asked this court , in its briefing, to reverse the denial and grant its motion
for partial summary judgment on the issue of liability . We note that the LLC has not
demonstrated to this court the necessary grounds to support its motion, and we decline to
address its request further in this appeal.