The holding in the court’s own words
And because we hold that appellant is not entitled to its additional costs, we need not address appellant’s alternative arguments.
Quoted verbatim from the opinion — no paraphrase, nothing generated. Not yet human-reviewed. How we find the holding.
Cited by
- EDF-RE US Development, LLC v. RES America Construction, Inc. Minn. Ct. App. 2024
Authorities cited
Identified automatically; this list may not be exhaustive.
- Alpha Real Estate Co. of Rochester v. Delta Dental Plan of Minnesota 671 N.W.2d 213
- Storms, Inc. v. Mathy Construction Co. 883 N.W.2d 772
- Glacial Plains Coop. v. Chippewa Valley Ethanol Co., LLLP 912 N.W.2d 233
- Denelsbeck v. Wells Fargo & Co. 666 N.W.2d 339
- Capistrant v. Lifetouch Nat'l Sch. Studios, Inc. 916 N.W.2d 23
- Mrozik Construction, Inc. v. Lovering Associates, Inc. 461 N.W.2d 49
- A19-1654 A19-1541
- City of Saint Paul v. Eldredge 788 N.W.2d 522
- City of Saint Paul v. Eldredge 800 N.W.2d 643
- Country Club Oil Co. v. Lee 58 N.W.2d 247
- National City Bank of Minneapolis v. St. Paul Fire & Marine Insurance Co. 447 N.W.2d 171
- In re the Discipline of Ray 275 N.W.2d 32
- Thiele v. Stich 425 N.W.2d 580
- Meuwissen v. H. E. Westerman Lumber Co. 16 N.W.2d 546
- Chergosky v. Crosstown Bell, Inc. 463 N.W.2d 522
- Pella Products, Inc. v. Arvig Telephone Co. 488 N.W.2d 316
- Porch v. General Motors Acceptance Corp. 642 N.W.2d 473
- Rasmussen v. Two Harbors Fish Co. 832 N.W.2d 790
- 977 N.W.2d 862 not in our corpus
- Plowman v. Copeland, Buhl & Co., Ltd. 261 N.W.2d 581
- Dunham Associates, Inc. v. Group Investments, Inc. 223 N.W.2d 376
- Great West Cas. Co. v. Barnick 529 N.W.2d 504
- Delyea v. Turner 118 N.W.2d 436
- Cox v. First National Bank of Aitkin 415 N.W.2d 385
- Hayle Floor Covering, Inc. v. First Minnesota Construction Co. 253 N.W.2d 809
- ServiceMaster of St. Cloud v. GAB Business Services, Inc. 544 N.W.2d 302
- Illinois Farmers Insurance Co. v. Glass Service Co. 683 N.W.2d 792
- Ryan Contracting Company v. O'Neill & Murphy, LLP 883 N.W.2d 236
- State v. Profit 591 N.W.2d 451
- Scott Parks, Appellant, A21-1396
- BRIDGEWATER TELEPHONE COMPANY, INC. v. City of Monticello 765 N.W.2d 905
- State v. Baxter 686 N.W.2d 846
Opinion text
This opinion is nonprecedential except as provided by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
A21-1669
EDF-RE US Development, LLC,
Appellant,
vs.
RES America Construction, Inc.,
Respondent.
Filed December 12, 2022
Affirmed
Connolly, Judge
Murray County District Court
File No. 51-CV-19-54
Dean B. Thomson, Hugh D. Brown, Alexander B. Athmann, Fabyanske, Westra, Hart &
Thomsom, P.A., Minneapolis, Minnesota (for appellant)
James J. Hartnett, Joshua T. Peterson, Faegre Drinker Biddle & Reath LLP, Minneapolis,
Minnesota (for respondent)
Considered and decided by Connolly, Presiding Judge; Bjorkman , Judge; and
Jesson, Judge.
NONPRECEDENTIAL OPINION
CONNOLLY, Judge
Appellant, the developer of a wind energy project, challenges the district court’s
findings after a bench trial that , under the parties’ contract, appellant was not entitled to
liquidated damages that it did not invoice for, it was not entitled to off-site demurrage, and
it was not entitled to additional delay and delivery costs. In its cross-appeal, respondent,
2
the contractor for the project, challenges the district court’s finding that it was not entitled
to its mechanic’s liens. Because the district court did not err, we affirm.
FACTS
In March 2018, appellant EDF- RE US Development, LLC and respondent RES
America Construction, Inc. entered into the Engineering, Procurement and Construction
Services Agreement (the Agreement). Under the Agreement, respondent agreed to
engineer and construct the Stoneray Wind Project (the Project), a one-hundred- megawatt
wind energy project, for approximately $32 million. The Project was located in Murray
and Pipestone counties and was comprised of 39 wind turbine generators (WTGs) and their
supporting electrical and civil infrastructure.
Under the Agreement, appellant agreed to purchase the WTGs from Siemens, the
supplier of the WTGs, and respondent was responsible for “offloading, assembling,
erecting, and installing [the] WTGs.” The district court found that, upon substantial
completion of the project, in the normal course of their business operations, appellant had
assigned ownership of the WTGs to Stoneray Power Partners, LLC (SPP). Appellant is an
affiliate of SPP.
The parties agreed to specific date milestones for (1) mechanical completion of the
WTGs; (2) individual circuit completion; and (3) connection of each circuit with Xcel
Energy’s transmission system. The parties also agreed to a “Guaranteed Project Substantial
Completion Date.” The Agreement provided for liquidated damages for delays in meeting
each milestone.
3
Timely completion of the project and each guaranteed completion date was
important to appellant. Delay could have led to lost revenue from selling energy on the
open market and could have delayed the date on which appellant could obtain tax benefits.
Tax benefits were crucial because “[r]oughly half of the project [was] financed through tax
credits.” To obtain the tax credits, appellant needed to meet deadlines imposed by the IRS.
In May 2018, respondent began to work on the Project. Soon after construction
began, the area experienced periods of heavy rain. In late June and early July, respondent
submitted two notices to appellant, requesting a time extension and claiming that force
majeure events, as defined by the Agreement, had occurred on June 30-July 3. Appellant
denied respondent’s requests for June 30-Ju ly 2, asserting that the Agreement’s force
majeure event requirement was not met. Appellant extended the deadline one day for the
July 3rd force majeure event.
Respondent was behind schedule and having problems before the claimed force
majeure events. Respondent built the laydown yard in a low spot that had poor drainage;
its entrance and parking lot were mud pits. On the access roads, respondent did not strip
the soil to the subgrades and used only partial aggregate, which resulted in failed roads.
By July 12, 2018, respondent was behind schedule, and the parties met to discuss
the schedule delays. Respondent asserted that rainfall and high ground water were
impacting the project but confirmed that they would be ready to accept deliveries of the
WTGs as scheduled.
Siemens scheduled the delivery of the WTGs for July 30, 2018. But on July 25,
2018, respondent notified appellant that the site was not ready for the delivery because of
4
the alleged force majeure events and differing site conditions due to high groundwater.
Because respondent notified appellant of the delay only a couple of days before the
scheduled delivery, the delivery trucks could not be redirected, and Siemens incurred
standby costs to keep the trucks available to deliver the WTGs.
Siemens invoiced appellant for the standby costs. Appellant paid Siemens because
appellant’s investors required that appellant obtain an “estoppel certificate” from Siemens,
which Siemens would not sign until appellant paid the delay damages. Appellant paid for
the standby costs without receiving records from Siemens to confirm the demurrage or
investigating whether the WTGs were ready to ship and on stand-by when Siemens said
they were.
1
1 Demurrage generally means the compensation paid for the “[d]etention of a ship, freight
car, or other cargo conveyance during loading or unloading beyond the scheduled time of
departure.” The American Heritage Dictionary of the English Language 484 (4th ed.
2006). Under the Agreement, here, demurrage is specifically defined as and means,
the charges required as compensation to [appellant] for
equipment (including but not limited to WTG Special Tools
materials, and/or trucks arriving to the Project Site that
[respondent] is responsible for unloading and receiving on
behalf of [appellant], that are not unloaded in accordance with
the Requirements of this Agreement, and that cannot access the
Designated Delivery Location. Demurrage also applies to the
charge required as compensation to [appellant] for equipment
(including but not limited to WTG Special Tools) and materials
leaving the Project Site that [respondent] is responsible for
packing, loading, and making available for pick-up on behalf
of [appellant], that is not packed, loaded, and made av ailable
in accordance with the Requirements of this Agreement.
The Agreement has an opening parenthesis before the first “including” in the definition of
“demurrage” but does not have a closing parenthesis.
5
On August 20, 2018, the first deliveries of WTGs arrived, but mud continued to
cause issues for the delivery process. Respondent had four hours to unload the trucks but
was often behind schedule. Siemens billed appellant for the delayed unloading of the
trucks and for additional work and equipment provided for the Project, which included
expenses for additional Siemens’ staff and tool-rental costs for the additional days.
In October 2018, appellant informed respondent that it was responsible for the
demurrage from the delayed delivery pursuant to the demurrage provision in the
Agreement. Respondent again claimed it was not responsible due to force majeure and
differing site conditions.
Along with the delayed delivery, respondent was late in completing all the
milestones in the Agreement.2 The guaranteed completion date for the Xcel circuit feeders
was September 16, 2018, but they were not completed until September 29, 2018. The
guaranteed completion date for the first WTG was September 26, 2018, but it was not
completed until October 18, 2018. The guaranteed completion date for the first circuit was
October 20, 2018, but it was not completed until November 20, 2018. The guaranteed
substantial completion date was November 17, 2018, but the Substantial Completion
Certificate was not executed by respondent until December 22, 2018, 35 days late.
Appellant sent respondent two liquidated-damages invoices for the delays. On
September 21, 2018, appellant invoiced respondent for the missed guaranteed completion
date for circuit feeders to Xcel for the dates of September 17- 21, 2018, in the amount of
2 The four initial Guaranteed Completion Date s were moved one day forward by Change
Order No. 2.
6
$10,000. On October 24, 2018, appellant invoiced respondent for the missed circuit feeders
to Xcel deadline for September 22-30, 2018, in the amount of $45,000. Appellant
continued to send respondent missed milestone letters but notably did not send any more
invoices for the duration of the project.
In late October 2018, the parties met. Respondent believed that the parties reached
an agreement at the meeting that appellant would waive liquidated damages if respondent
achieved substantial completion in 2018. Appellant’s representative testified that it did not
reach such an agreement, but around this time, appellant stopped sending invoices for
liquidated damages.
In March 2019, appellant filed suit against respondent, seeking damages based on
the delayed project completion and failure to timely receive the shipments of WTGs. In
April 2019, respondent filed its answer and asserted counterclaims. Respondent pleaded a
breach-of-contract claim based on appellant’s refusal to pay. Around the same time,
respondent filed mechanic’s liens without providing appellant with statutory pre-lien
notices. Respondent filed a line lien on the WTGs under Minn. Stat. § 514.04 (2020), and
a land lien on the real property under Minn. Stat. § 514.01 (2020). 3 In respondent’s
3 A line lien under Minn. Stat. § 514.04 attaches to contributions made
for the construction, alteration, or repair of any line of railway,
or any structure or appurtenance of such railway, or of any
telegraph, telephone, or electric light line, or of any line of
pipe, conduit, or subway, or any appliance or fixture pertaining
to either, the person performing such labor, or furnishing such
skill, material, or machinery.
A land lien under Minn. Stat. § 514.01 attaches to “the improvement, and upon the land on
which it is situated.”
7
counterclaims, it requested an order adjudging the validity, enforceability, and superiority
of its mechanic’s liens.
The parties moved for summary judgment. Appellant argued that respondent was
not entitled to a line lien on the WTGs under Minn. Stat. § 514.04. The district court denied
appellant’s motion on the mechanic’s-lien issue, determining that respondent could file a
line lien on the WTGs under Minn. Stat. § 514.04. Respondent argued that it was entitled
to relief under the Agreement’s force majeure provision. The district court also denied
respondent’s motion on the force-majeure issue, concluding that the rain events were not
force majeure events under the Agreement.
In October 2020, the district court held a two- week bench trial. On October 20, at
the start of the trial, appellant filed a request for judicial notice of county property record
filings as evidence of SPP’s ownership interest. The filings were the assignment of land
contracts and easement agreements from appellant to SPP. Appellant assigned eight
contracts to SPP from July 31, 2018, to October 23, 2018, and recorded the same with the
county. On October 29, 2020, respondent moved to amend the pleadings to add SPP as a
party.
After the bench trial, the district court awarded appellant its final completion
damages, its invoiced liquidated damages, and its on-site demurrage. It concluded that
respondent had missed milestones that would have entitled appellant to recover $5,766,500
in liquidated damages. But the district court determined that the Agreement required
appellant to invoice respondent for liquidated damages and that appellant was only entitled
to the $55,000 in liquidated damages that it invoiced.
8
The district court further concluded that the Agreement did not permit appellant to
recover its off-site demurrage because equipment had to arrive at the project site before
appellant was entitled to recover demurrage. Appellant also claimed that it was entitled to
damages for additional tool-rental costs, but the district court determined that there was
“no testimony presented that [appellant’s] claim for the additional tool[] rental was
invoiced or based on the daily rental rates of [e]xhibit D.2.3.” The district court also
determined that appellant was not entitled to damages for other costs that appellant paid to
Siemens because delay liquidated damages were the exclusive remedy for delay in reaching
the milestones.
The district court awarded respondent damages for final contract completion and
offset this amount against appellant’s claims. The district court determined that respondent
was not entitled to the mechanic’s liens. The district court found that respondent did not
perfect its line lien under Minn. Stat. § 514.04 because there was no evidence in the record
that respondent filed the line lien with the Minnesota Secretary of State or that it served the
line lien on appellant. The district court found that respondent could not foreclose on its
land lien under Minn. Stat. § 514.01 because appellant did not have a property interest in
the Project’s real property when the land lien was filed.
This appeal follows.
DECISION
1. Liquidated Damages
Appellant contends that the district’s court’s interpretation of the liquidated
damages provision was against the plain language of the Agreement. We disagree.
9
“When the intent of the parties can be determined from the writing of the contract,
the construction of the instrument is a question of law for the court to resolve, and this
court need not defer to the district court’s findings.” Alpha Real Estate Co. of Rochester
v. Delta Dental Plan of Minn., 671 N.W.2d 213, 221 (Minn. App. 2003) (quotation
omitted), rev. denied (Minn. Jan. 20, 2004). “Whether language in a contract is plain or
ambiguous is a question of law that we review de novo.” Storms, Inc. v. Mathy Constr.
Co., 883 N.W.2d 772, 776 (Minn. 2016); see also Glacial Plains Coop. v. Chippewa Valley
Ethanol Co., 912 N.W.2d 233, 236 (Minn. 2018). “If a contract is unambiguous, the
contract language must be given its plain and ordinary meaning, and shall be enforced by
courts even if the result is harsh.” Denelsbeck v. Wells Fargo & Co., 666 N.W.2d 339,
346-47 (Minn. 2003) (quotation omitted).
At issue is whether an invoice is a condition precedent under the Agreement to
payment of liquidated damages. A condition precedent is a contract provision that “calls
for the performance of some act or the happening of some event after the contract is entered
into, and upon the performance or happening of which the promisor’s obligation is made
to depend.” Capistrant v. Lifetouch Nat’l Sch. Studios, Inc. , 916 N.W.2d 23, 27 (Minn.
2018) (quotation omitted). The contract language must unambiguously create a condition
precedent. Mrozik Constr., Inc. v. Lovering Assocs., Inc., 461 N.W.2d 49, 52 (Minn. App.
1990). To create a condition in a contract, “[p ]arties typically use terms such as ‘unless,’
‘contingent upon,’ ‘subject to,’ ‘provided that,’ ‘as soon as,’ and ‘after,’ among others.”
10
Trooien v. Talon OP, L.P., A19-1541, 2020 WL 2840230, at *4 (Minn. App. June 1, 2020)
(emphasis added), rev. denied (Minn. Aug. 25, 2020).4
Appellant contends that the district court’s interpretation of the Agreement,
requiring appellant to invoice respondent for liquidated damages, was against the plain
language of the Agreement. We disagree. Section 7.6(a) of the Agreement provides:
[I]f [respondent] has not achieved WTG Mechanical
Completion, for each WTG, by the Guaranteed WTG
Mechanical Completion Dates, then [respondent] will be liable
for, and will pay to [appellant], the liquidated damages as se t
forth in Exhibit A.2 per Day until the WTG Mechanical
Completion Date, for each WTG, has been achieved.
Exhibit A.2 provides:
Any Delay Liquidated Damages [respondent] is
obligated to pay to [appellant] will be due and payable within
seven (7) Days after [appellant] has invoiced [respondent] for
such amounts. [Respondent] will continue to pay any Delay
Liquidated Damages payable under this Exhibit A.2 and
ARTICLE 7 until the achievement of the applicable
Guaranteed Completion Date, at which time [respondent] will
pay all previously accrued and unpaid applicable Delay
Liquidated Damages. Any Delay Liquidated Damages not
paid when due will bear interest at a rate calculated in
accordance with Section 3.7.
Under exhibit A.2 of the Agreement, liquidated damages “will be due and payable
within seven (7) Days after [appellant] has invoiced [respondent] for such amounts.”
(Emphasis added.) Here, the Agreement uses the term “after” to make invoices a condition
precedent to payment of liquidated damages. See Trooien, 2020 WL 2840230, at *4
4 We recognize that nonprecedential cases are not binding, but they may be persuasive.
City of St. Paul v. Eldredge, 788 N.W.2d 522, 526- 27 (Minn. App. 2010), aff’d, 800
N.W.2d 643 (Minn. 2011).
11
(stating parties typically use terms such as, “‘unless,’ ‘until,’ ‘contingent upon,’ ‘subject
to,’ ‘provided that,’ ‘as soon as,’ and ‘after’” to create a condition precedent). The plain
language of the Agreement creates a condition precedent. Thus, appellant must satisfy the
invoice condition precedent before payment of liquidated damages is due.
Appellant contends that the second sentence of the provision at issue and other
provisions in the Agreement do not mention an invoice. We disagree because the other
provisions reference exhibit A.2. The second sentence of the liquidated damages provision
does not explicitly refer to the invoice requirement, but it provides that liquidated damages
are payable under the provision at issue: “[Respondent] will continue to pay any Delay
Liquidated Damages payable under this Exhibit A.2 and ARTICLE 7.” (Emphasis added.)
Moreover, other provisions in the Agreement reference exhibit A.2: sections 7.6(a)-(b),
(d)-(e) provide, “[respondent] will be liable for, and will pay to [appellant], the liquidated
damages as set forth in Exhibit A.2.” (Emphasis added .) Thus, the other provisions
reference exhibit A.2 as laying out how liquidated damages can be obtained: appellant must
send respondent an invoice, and only then must respondent pay liquidated damages.
Appellant also contends that this interpretation would render the second sentence of
this provision superfluous. Appellant’s argument is not persuasive. The second sentence
provides that, on the guaranteed completion date, respondent “will pay all previously
accrued and unpaid applicable Delay Liquidated Damages.” The dictionary defines
“accrue” as “[t]o increase, accumulate, or come about as a result of growth.” American
Heritage, supra, at 12. It defines “unpaid” as “[n]ot yet paid.” Id. at 1885. Under the
plain language of the Agreement, liquidated damages will “accumulate” when appellant
12
invoices respondent and respondent does not pay within the seven-day period. The
damages not paid within the period will go “unpaid.” Thus, the first sentence creates the
invoice condition precedent, and the second sentence provides that, on the guaranteed
completion date, respondent will pay all liquidated damages that have been invoiced but
not paid.
Therefore, the plain language of the Agreement provides that an invoice is a
condition precedent to the payment of liquidated damages. The invoice requirement also
makes sense because the parties agreed on different milestones for the completion of
different components of the Project, and the Agreement provided for different liquidated
damages amounts based on which milestone respondent missed. Thus, the requirement of
separate invoices for liquidated damages served to put respondent on notice as to which
milestone was not being met and what its exposure was under the Agreement.
In the alternative, appellant contends that it was excused from performing because
sending invoices to respondent would have been futile. In support of its argument,
appellant cites Country Club Oil Co. v. Lee, 58 N.W.2d 247, 251 (Minn. 1953). In Lee,
the supreme court excused the tender of the purchase price for the purchase of property,
concluding that it would have been “futile and useless” because the property owner had
repudiated the contract, refused to go through with the transaction, and sold the property
to another person. 58 N.W.2d at 251.
Appellant’s argument is not persuasive because, even if sending respondent an
invoice would have been futile, appellant was still required to do so. Futility does not
excuse performance of the invoice requirement. See Nat’l City Bank of Minneapolis v. St.
13
Paul Fire & Marine Ins. Co., 447 N.W.2d 171, 178 (Minn. 1989) (stating that “no legal
principle permits violation of a contract condition to be completely ignored[;] [a] precedent
condition must be performed or happen before a duty of immediate performance arises”
(quotation and emphasis omitted)). The general rule under Minnesota law is that
conditions precedent “must be literally met or exactly fulfilled, or no liability can arise on
the promise qualified by the condition.” Capistrant, 916 N.W.2d at 27-28 (quotation
omitted). Sending an invoice that might go unpaid is not like tendering payment for
property already owned by another. See Lee, 58 N.W.2d at 251. The Agreement required
appellant to send respondent an invoice before it was entitled to liquidated damages, and
appellant was not excused from this requirement even if it would have been futile.
Appellant also contends that it satisfied the invoice requirement when it filed its
complaint and when it sent respondent the “demand letter” dated February 8, 2019. We
disagree. The Agreement does not define “invoice.” When interpreting a provision of a
contract, appellate courts must give the terms “their plain, ordinary and popular meaning.”
Columbia Heights Motors, Inc. v. Allstate Ins. Co., 275 N.W.2d 32, 34 (Minn. 1979)
(quotation omitted). The dictionary defines “invoice” as, “[a] detailed list of goods shipped
or services rendered, with an account of all costs; an itemized bill.” American Heritage,
supra, at 921.
Neither the demand letter, that appellant sent to respondent, nor appellant’s
complaint satisfy the invoice requirement. The complaint alleges, “[appellant] has been
damaged in an amount in excess of $11.4 million, the exact amount to be proven at trial.”
14
The complaint was not an invoice because it did not specify the amount due or itemize
liquidated damages.
Moreover, the letter from appellant’s counsel to respondent was not an invoice. In
one sentence buried in the second page of a two-page letter with a heading that stated,
“Stoneray Wind Project-Payment Application Number 10” and that otherwise describes
disputed change orders and punch lists, appellant wrote, “[respondent] currently owes
[appellant] at least $4,490,135 in demurrage charges, and another $5,583,000 in liquidated
damages.” While the letter does specify an amount, the amount is not the amount that
appellant is now claiming, and the letter does not itemize liquidated damages as required
by the Agreement. Without an itemized account of the charges, respondent could not have
determined if they agreed with the amount claimed or what specific milestone they were
missing. Thus, the complaint and demand letter do not satisfy the Agreement’s invoice
requirement.
In a footnote, appellant asks this court to clarify that, if an invoice is required to
obtain liquidated damages, it should be permitted to now invoice respondent for liquidated
damages. However, appellant did not make this argument below, and therefore it is not
properly before us. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) ( stating that
“[a] reviewing court must generally consider only those issues that the record shows were
presented and considered by the [district] court in deciding the matter before it” (quotation
omitted)).
15
The district court did not err in concluding that appellant was only entitled to
liquidated damages that it invoiced because, under the Agreement, an invoice is a condition
precedent to payment.
Alternatively, appellant contends that it is entitled to recover its actual damages.
This argument fails because the parties agreed that liquidated damages were the only
remedy for respondent’s failure to meet the guaranteed completion dates. Section 7.6(f) of
the Agreement provides that “payment of the Delay Liquidated Damages will constitute . . .
the sole and exclusive remedy for the [respondent’s] failure to meet the Guaranteed
Completion Dates.” The Agreement unambiguously provides that liquidated damages are
appellant’s only remedy for the failure to meet the guaranteed completion dates. See
Denelsbeck, 666 N.W.2d at 346–47 (stating “[i]f a contract is unambiguous, the contract
language must be given its plain and ordinary meaning, and shall be enforced by courts
even if the result is harsh” (quotation omitted)). Therefore, the Agreement provides that
appellant is not entitled to actual damages.
Appellant also contends that it is entitled to its actual damages because the district
court’s interpretation of the Agreement rendered the liquidated damages provision
unenforceable. Appellant cites Meuwissen v. H.E. Westerman Lumber Co., 16 N.W.2d
546, 549 (Minn. 1944). In Meuwissen, the supreme court determined that if liquidated
damages are found to be an unenforceable penalty, a party is entitled to their actual
damages. 16 N.W.2d at 549.
Appellant’s argument fails because the district court did not find that the liquidated
damages provision was unenforceable. Unlike Meuwissen, here, appellant did not receive
16
its full liquidated damages because it did not comply with the Agreement’s invoice
requirement, not because the district court found the that the provision was unenforceable.
The district court did award appellant liquidated damages for liquidated damages that it
invoiced respondent for. Therefore, actual damages are not available.
2. Demurrage
Appellant contends that the district court erred by concluding that appellant was not
entitled to the off-site demurrage that it incurred as a result of the delayed shipment of
WTGs pursuant to the plain language of the Agreement.
The language in an unambiguous contract “must be given its plain and ordinary
meaning.” Denelsbeck, 666 N.W.2d at 346 -47. The interpretation of the demurrage
provision in the Agreement is a question of contract interpretation that this court reviews
de novo. See Alpha Real Estate, 671 N.W.2d at 221.
The Agreement defines demurrage as:
[C]harges required as compensation to [appellant] for
equipment (including but not limited to WTG Special Tools
materials, and/or trucks arriving to the Project Site that
[respondent] is responsible for unloading and receiving on
behalf of [appellant], that are not unloaded in accordance with
the Requirements of this Agreement, and that cannot access
the Designated Delivery Location.
(Emphasis added.)
Under section 4.10(b) of the Agreement, a WTG is delivered
[W]hen the [appellant] or its designated subcontractor, as
applicable, makes the WTGs available in accordance with
Exhibit D.3, and the Requirements of this Agreement on the
delivery dates specified in the Critical Path Project Schedule at
17
the WTG Foundation locations designated by [respondent]
(the “Designated Delivery Locations”). . . .
(Emphasis added.)
If delivery of the WTGs to the designated delivery location is impossible due to
respondent’s acts or omissions, section 4.10(b) provides that
the WTGs will be deemed Delivered at the Project Site Entry
Laydown Area or at such other accessible location on the
Project Site as mutually agreed upon by the Parties. In such
case, [respondent] will be responsible for and will assume all
costs and delays to the Project Schedule related to the
transportation, stand-by, unloading, storage and transport from
the Project Site Entry Laydown Area or other Project Site
location to the Designated Delivery Location of the subject
WTG.
(Emphasis added.)
Under section 4.10(e), respondent is responsible for demurrage “if [respondent]
fails to timely unload the WTGs delivered as described above or trucks cannot access the
Designated Delivery Location. These charges include waiting time, delays, double
handling . . . , storage and security.” (Emphasis added.)
Appellant contends that “demurrage” includes trucks that cannot access the
designated delivery location even if the truck is detained somewhere off site, citing the
definition of demurrage. We disagree because when the “Designated Delivery Location”
and “demurrage” provisions are read together, the plain language of the Agreement
provides that only on-site demurrage is available. See Chergosky v. Crosstown Bell, Inc.,
463 N.W.2d 522, 525 (Minn. 1990) (stating that appellate courts “construe a contract as a
whole and attempt to harmonize all clauses of the contract”). The definition of demurrage
18
applies to trucks that are arriving to the Project site. Further, if trucks cannot access the
delivery location, section 4.10(b) provides that the WTGs will be deemed delivered at an
alternative on-site location, which the Agreement describes as the “Project Site Entry
Laydown Area or at such other accessible location on the Project.” (Emphasis added.)
Section 4.10(b) provides that respondent is responsible for the costs associated with the
transportation, stand-by, unloading, storage and transport of the WTGs from the “Project
Site Entry Laydown Area or other Project Site location to the Designated Delivery
Location.” (Emphasis added.) Therefore, appellant can only recover on-site demurrage
because the Agreement specifies that, if trucks cannot access the site, the WTGs will be
deemed delivered at an alternative on-site location.
Appellant further contends that section 4.10(e) supports its position; section 4.10(e)
provides that demurrage “charges include waiting time, delays, double handling, (loading,
unloading, and extra manipulation), storage and security.” Appellant contends that it does
not make sense that storage costs or double handling could be incurred if demurrage only
applied to on-site demurrage.
We disagree because the Agreement contemplates on-site storage and double
handling costs. Section 4.10(e) provides that, if delivery to the designated delivery location
is not possible, respondent will be responsible for costs and delays relating to the
“transportation, stand- by, unloading, storage and transport from the Project Site Entry
Laydown Area or other Project Site location to the Designated Delivery Location of the
subject WTG.” It also provides that respondent will be responsible for “providing
transportation (including unloading and re-loading of WTG components if required) from
19
the Project Site Entry Laydown Area to the Designated Delivery Location.” Thus, the fact
that the Agreement makes respondent liable for storage and double handling costs does not
necessarily mean that it provides for off-site demurrage.
Appellant also contends that the district court’s decision was economically
irrational. But the district court’s interpretation of the Agreement was not irrational
because it applied the plain language of the Agreement. Appellant is a sophisticated party
with access to legal counsel. The parties negotiated the Agreement and agreed that
demurrage applied to delivered WTGs. “If a contract is unambiguous, the contract
language must be given its plain and ordinary meaning, and shall be enforced by courts
even if the result is harsh.” Denelsbeck, 666 N.W.2d at 346-47 (quotation omitted).
3. Additional Costs
Additional Tool Rental
Appellant contends that the district court erred in finding that appellant failed to
offer evidence that the additional tool rental was invoiced because it did not cite a provision
in the Agreement that requires invoicing. Appellant’s argument is not persuasive because,
as we have already discussed, the plain language of the Agreement demonstrates that an
invoice is a condition precedent to payment.
The plain language of the Agreement provides that an invoice is required to receive
payment for the additional tool-rental costs. In support of its finding, the district court cited
exhibit D.3. Exhibit D.3 provides that if respondent fails to make the tools available for
transport within the time specified, it must pay appellant within 30 days “after
[respondent’s] receipt of [appellant’s] valid invoice therefor.” (Emphasis added.) “After”
20
is a term typically used to create a condition precedent in a contract. Here, like the plain
language of the liquidated damages provision, the term “after” creates a condition
precedent. The additional tool-rental costs are not due until “after” respondent’s receipt of
an invoice. Appellant did not invoice respondent for the tool-rental costs; therefore, the
district court did not err when it rejected appellant’s claim for additional tool-rental costs.
Other Costs
Appellant also contends that it is entitled to damages for its other costs that arose
out of its expenses for technical field hours, daily expenses related to field hours, generators
for pre-commissioning WTGs, and site infrastructure costs. We disagree b ecause the
parties agreed that liquidated damages were the sole remedy for delay in meeting the
guaranteed completion dates.
“When the intent of the parties can be determined from the writing of the contract,
the construction of the instrument is a questi on of law for the court to resolve, and this
court need not defer to the district court’s findings.” Alpha Real Estate, 671 N.W.2d at
221 (quotation omitted).
Section 7.6(f) of the Agreement provides that “payment of Delay Liquidated
Damages will constitute the sole and exclusive . . . remedy for the [respondent’s] failure to
meet the Guaranteed Completion Dates.” Appellant contends that respondent did not
establish that the delays related to the guaranteed completion dates. But appellant concedes
that it “incurred extra costs under its [contract] with Siemens because [respondent’s] delays
required it to rent special equipment used for installation of the WTGs for a longer period
and to use more Siemens commissioning staff time.” The extra costs that appellant
21
incurred from Siemens arose out of the delayed installation of the WTGs. Appellant agreed
in the Agreement that liquidated damages were its only remedy for delays related to the
guaranteed completion dates, and it may not receive damages for the tool rental and other
costs it paid Siemens.
Therefore, because the parties agreed that liquidated damages were the exclusive
remedy for failure to meet the guaranteed completion dates, appellant is not entitled to
recover its other costs. And because we hold that appellant is not entitled to its additional
costs, we need not address appellant’s alternative arguments.
5
4. Mechanic’s Liens
Line Lien
In its cross appeal, respondent contends that the district court erred by invalidating
its line lien. We disagree because there is no evidence in the trial record that respondent
filed the lien statement with the Minnesota Secretary of State and served it on appellant.
“[M]echanics’ liens exist only by statute, which must be strictly followed with
regard to all requirements upon which the right to a lien depends.” Pella Prods., Inc. v.
Arvig Tel. Co., 488 N.W.2d 316, 318 (Minn. App. 1992), rev. denied (Minn. Sept. 30,
1992). Contractors must file a statement of the claim “for record with the county recorder
or, if registered land, with the registrar of titles of the county in which the improved
premises are situated, or, if the claim is made under section 514.04, with the secretary of
5 In its cross appeal, respondent requests review of the district court’s force majeure,
differing site conditions, and owner delay rulings only if we reverse the district court’s
finding on liquidated damages. Because we affirm the district court’s finding regarding
liquidated damages, we will not address these arguments on appeal.
22
state” and serve real property owners personally or by certified mail. Minn. Stat. § 514.08,
subd. 1 (2020).
On appeal from a bench trial, “[w]e give the district court’s factual findings great
deference and do not set them aside unless clearly erroneous.” Porch v. Gen. Motors
Acceptance Corp., 642 N.W.2d 473, 477 (Minn. App. 2002), rev. denied (Minn. June 26,
2002). We view the evidence in the light most favorable to the verdict and “examine the
record to see if there is reasonable evidence in the record to support the court’s findings.”
Rasmussen v. Two Harbors Fish Co., 832 N.W.2d 790, 797 (Minn. 2013) (quotations and
citations omitted). “To conclude that findings of fact are clearly erroneous we must be left
with the definite and firm conviction that a mistake has been made.” Id. (quotations and
citations omitted).
The district court found that respondent did not perfect its line lien because there
was “no evidence in the record that [respondent] filed that lien for record with the
Minnesota Secretary of State as required by Minn. Stat. § 514.08, subd. 1(1) or that it
served that lien on [appellant].” Respondent contends that it filed its lien statement with
the secretary of state and served it on appellant by attaching evidence of the filing to its
counterclaim. However, a pleading is not evidence. See NY Properties, LLC v. Schuette,
977 N.W.2d 862, 866 (Minn. App. 2022) (refusing to consider documents attached to the
complaint that were not offered or received into evidence during the hearing); see also
Plowman v. Copeland, Buhl & Co., 261 N.W.2d 581, 583 (Minn. 1977) (“It is well settled
that an appellate court may not base its decision on matters outside the record on appeal,
and that matters not produced and received in evidence below may not be considered.”) .
23
Respondent had to offer evidence into the record at trial that it filed the lien statement with
the Minnesota Secretary of State and served it on appellant. It did not. Thus, because the
trial record did not include evidence of filing and service, the district court did not clearly
err.
Respondent contends that whether the lien statement was properly filed and served
was not disputed by the parties because the district court decided the issue on summary
judgment, and the issue was therefore settled by trial. In support of its argument,
respondent cites a heading in the district court’s 38-page order on plaintiff’s second motion
for partial summary judgment: “[respondent] has a valid mechanic’s lien under Minn. Stat.
§ 514.04, provided no pre-lien notice was required.” It also refers to the district court’s
first statement under that heading: “[respondent] filed a mechanic’s lien under Minn. Stat.
§ 514.04.” Respondent also points to appellant’s first motion for partial summary
judgment, to which appellant attached a declaration that included the lien filings as an
exhibit. We are not persuaded. A heading does not constitute a finding. Moreover, the
district court’s discussion following the heading did not mention whether the lien was
properly filed and served. Instead, it discussed whether the line lien could be asserted on
the WTGs.
Even if the district court did err by finding that there was no evidence in the record,
respondent’s line lien fails because the district court found that appellant had transferred
its ownership interest in the WTGs to SPP. See Dunham Assocs., Inc. v. Grp. Invs., Inc.,
223 N.W.2d 376, 384 (Minn. 1974) (“[I]t is incumbent upon plaintiff to show what interest
the defendants own in the land in order that it can be ordered sold to satisfy the lien . . .”).
24
In its findings of fact, the district court determined that “[appellant] purchased the [WTGs]
from Siemens, but upon substantial completion of the Project, assigned the ownership of
the [WTGs] to SPP, in the normal course of [appellant’s] operations.” At trial, the Vice
President of Engineering for appellant testified that, after substantial completion of the
project in December, appellant assigned ownership of the WTGs to SPP. The district court
did not clearly err because the evidence at trial supports its finding. See Rasmussen, 832
N.W.2d at 797 (stating “[t]o conclude that findings of fact are clearly erroneous we must
be left with the definite and firm conviction that a mistake has been made” (quotations
omitted)).
Pre-Lien Notice
Respondent contends that appellant was not entitled to pre-lien notice based on the
owner-contractor exception. But the district court did not address this argument in its
findings of fact, so this court will not decide it on appeal. See Great W. Cas. Co. v. Barnick,
529 N.W.2d 504, 506 (Minn. App. 1995) (“This was not decided by the district court and
will not be reviewed on appeal.”).
Land Lien
Additional Compensation
Respondent first contends that the district court erred when it concluded that
respondent did not have a valid lien because it did not prove entitlement to additional funds.
The district court found that respondent was not entitled to additional compensation
because it has received its full value for its work.
25
“To deprive the [lien] claimant of [the] right to a lien under [the] statute there must
be a showing of fraud, bad faith, or an intentional demand for an amount in excess of that
due.” Delyea v. Turner, 118 N.W.2d 436, 440 (Minn. 1962). This is a fact question for
the district court and the district court’s determination will not be overturned unless clearly
erroneous. Cox v. First Nat’l Bank of Aitkin , 415 N.W.2d 385, 388 (Minn. App. 1987),
rev. denied (Minn. Jan. 20, 1988). “To conclude that findings of fact are clearly erroneous
we must be left with the definite and firm conviction that a mistake has been made.”
Rasmussen, 832 N.W.2d at 797 (quotations omitted).
The district court relied on Ha yle Floor Covering, Inc. v. First Minn . Constr. Co.,
253 N.W.2d 809, 812 (Minn. 1977). In Hayle Floor Covering, the supreme court reversed
the district court’s finding of a lien because its lien was for extra materials that were not
authorized by the contract. 253 N.W.2d at 812.
Hayle Floor Covering does not support the district court’s conclusion that, if a party
has received full value for its work, it may not maintain a lien on a property. There was no
evidence presented that respondent acted fraudulently, in bad faith, or intentionally
demanded more than that due. See Delyea, 118 N.W.2d at 440. Therefore, the district
court’s conclusion was error.
However, even though the district court erred by invalidating the lien based on its
conclusion that respondent was not entitled to additional compensation, the land lien is
invalid because appellant did not have a lienable property interest.
26
Lienable Interest
Respondent argues that the district court’s findings that appellant did not have a
lienable property interest in the Project’s real property were clearly erroneous. We
disagree.
“[W]e review the district court’s factual findings for clear error.” Rasmussen, 832
N.W.2d at 797. “To conclude that findings of fact are clearly erroneous we must be left
with the definite and firm conviction that a mistake has been made.” Id. (quotations and
citations omitted).
The district court found that appellant did not possess a lienable property interest in
the Project’s real property when the liens were filed, and it could not order foreclosure
against an interest appellant did not have. The record supports the district court’s finding.
From July to October 2018, appellant assigned eight land and easement contracts to SPP
and recorded the same with the relevant counties.
Respondent contends that its liens are valid because the district court could have
foreclosed on the improvements owned by appellant, the WTGs. Respondent cites Minn.
Stat. § 514.01, contending that, under the statute, its lien attached “upon the improvement,
and upon the land on which it is situated.”
However, as discussed above, the district court determined that appellant assigned
its interest in the WTGs upon the substantial completion of the Project. Appellant thus did
not have a lienable interest in the WTGs for the district court to foreclose upon.
Respondent also contends that its liens were valid based on appellant’s
representations in its pleadings that it was the owner. We disagree.
27
A plaintiff must establish that a defendant owns the land. In Dunham, the defendant
admitted in its answer the plaintiff’s allegations that it had a contract interest in the parcel
of land at issue, and, during the contracting phrase, defendant represented that it owned the
property. 223 N.W.2d at 379, 384. However, there was no evidence that defendant had an
interest in the property. Id. at 384. The supreme court upheld the district court’s
invalidation of the lien, holding that “it is incumbent upon plaintiff to show what interest
the defendants own in the land in order that it can be ordered sold to satisfy the lien.” Id.
Respondent attempts to distinguish Dunham from this case, contending that
(1) appellant does have a lienable interest in the [WTGs] unlike the defendants in Dunham;
(2) in Dunham, the actual landowners did not have knowledge of or consent to th e
improvements, but here SPP knew of the Project; (3) the plaintiff in Dunham misidentified
the fee owners, unlike here where respondent contends that it identified appellant as the
owner because appellant claimed it was; and (4) the plaintiff in Dunham did not make
“consistent misrepresentations about its ownership status” as respondent contends
appellant did.
Dunham is not distinguishable from this case because ultimately it stands for the
proposition that the plaintiff must show what interest the defendants own in the land so that
it can be ordered sold to satisfy the lien. Id. Respondent attempted to foreclose against
property that appellant did not have an ownership interest in. That SPP knew that
respondent was doing work for appellant does not cha nge appellant’s lienable interest in
this land. In fact, in its lien statements, respondent asserts that the “name of the present
owner of the Property. . . is” attached in “[e]xhibit B” and SPP is named in exhibit B. Even
28
though appellant called itself the owner, if respondent had checked the county record
filings, they would have revealed that appellant had assigned its interests to SPP. It is
respondent’s duty to show appellant’s ownership interest in the land and it did not do so
here.
In the alternative, respondent contends that appellant should be equitably and
judicially estopped from arguing it was not the “owner” for purposes of respondent’s lien
action. We disagree.
“It is clear that mechanics liens are purely creatures of statute and that the lien exists
only within the terms of the statute.” Id. at 383. Mechanic’s lien statutes “must be strictly
followed with regard to all requirements upon which the right to a lien depends.” Pella
Prods., 488 N.W.2d at 318. If a party has an adequate legal remedy, they may not seek
equitable relief. ServiceMaster of St. Cloud v. GAB Bus. Servs., Inc., 544 N.W.2d 302, 305
(Minn. 1996). “Should a contractor elect not to seek the protection of the clear and
effective method available under the statute, this court will not come to its aid, absent
compelling circumstances . . . .” Id. at 306.
Equitable and judicial estoppel are unavailable because respondent had the legal
remedy of mechanic’s liens. Respondent did not file its foreclosure action against a party
with a lienable interest despite naming SPP as a “present owner of the property” and having
record notice that SPP had ownership interests in the property. In an answer to
respondent’s interrogatories questioning what entities had a financial interest in the Project,
appellant answered that, after tax equity financing, the Project was transferred to its
subsidiary. In its lien statements, respondent asserts that the “name of the present owner
29
of the Property. . . is” attached in “[e]xhibits A-1 through A-2 and [e]xhibit B.” SPP is
named in exhibit B. Moreover, appellant assigned land and easement contracts to SPP and
recorded the same with the county. These circumstances are not sufficiently compelling
to warrant this court’s aid. See ServiceMaster of St. Cloud, 544 N.W.2d at 305.
Moreover, we will not apply judicial estoppel to this case. “Judicial estoppel is an
equitable doctrine that prevents a party from assuming inconsistent positions in the course
of litigation.” Ill. Farmers Ins. Co. v. Glass Serv. Co., 683 N.W.2d 792, 800 (Minn. 2004).
Generally, “when a party assumes a certain position in a legal proceeding, and succeeds in
maintaining that position, he may not thereafter, simply because his interests have changed,
assume a contrary position, especially if it prejudices the party who acquiesced in the
position taken by him.” Ryan Contracting Co. v. O’Neill & Murphy, LLP, 883 N.W.2d
236, 248 (Minn. 2016).
Our supreme court has not adopted judicial estoppel. State v. Profit , 591 N.W.2d
451, 462 (Minn. 1999). In Profit, the state used evidence to obtain search warrants and
then used the evidence in front of the grand jury but later claimed that the same evidence
was irrelevant and inadmissible at trial. Id. The supreme court declined to apply judicial
estoppel because there was no evidence that the state ever lied or tried to mislead a judicial
body. Id. Further, the supreme court determined that judicial estoppel did not apply in Ill.
Farmers Ins., where at different points in the litigation, the parties both demanded and
opposed arbitration. 683 N.W.2d at 801.
In a recent nonprecedential case, this court applied judicial estoppel when a party
took a position directly contrary to a position they had taken in a different proceeding.
30
Parks v. Covidien Holding, Inc., No. A21-1396, 2022 WL 2124933, at *2 (Minn. App.
June 13, 2022).6 In Parks, the plaintiff filed for bankruptcy, asserting that he had no claims
against third parties, but later filed a product-liability claim arising out of a surgery he had
before filing for bankruptcy. Id. at *1. We determined that the district court did not err by
applying judicial estoppel. Id. at *2.
Respondent contends that judicial estoppel applies here because appellant “took the
position during the summary judgment stage that it was the owner and leaseholder to
convince the district court that it was entitled to raise a pre-lien notice defense,” and the
district court ruled in appellant’s favor. We disagree. The district court did not rule in
appellant’s favor on summary judgment, it only stated that it was “undisputed that
[appellant] was the owner of a leasehold interest in real property.” At that time, ownership
was undisputed, and the district court was not deciding the issue. This case is unlike Parks,
where the party took two contrary positions in different proceedings. This is more like the
cases in which the supreme court determined that judicial estoppel did not apply, Illinois
Farmers Ins. Co. and Profit, where the parties changed their positions throughout a single
proceeding.
Thus, the district court did not err when it determined that respondent could not
foreclose on the land lien because appellant did not have a lienable interest in the property.
6 While nonprecedential cases are not binding, they may be persuasive. Eldredge, 788
N.W.2d at 526-27.
31
Motion to Amend the Pleadings
Respondent also contends that the district court abused its discretion by not
permitting it to amend its pleadings to join SPP as a party. We disagree.
After a responsive pleading has been served, “a party may amend a pleading only
by leave of court or by written consent of the adverse party.” Minn. R. Civ. P. 15.01.
“Leave to amend pleadings should be freely granted unless it results in prejudice to the
other party.” Bridgewater Tel. Co. v. City of Monticello, 765 N.W.2d 905, 915 (Minn.
App. 2009), rev. denied (Minn. June 16, 2009). “The district court has broad discretion to
grant or deny leave to amend a complaint, and its ruling will not be reversed absent a clear
abuse of that discretion.” State v. Baxter, 686 N.W.2d 846, 850 (Minn. App. 2004).
Here, respondent moved to amend its pleadings on the penultimate day of trial. The
district court denied respondent’s motion because it was untimely and prejudicial. The
district court determined that it would prejudice appellant because it would cause
substantial delay and because the action would likely be limited by the one-year limitation
on mechanic’s liens. Thus, the district court did not abuse its discretion by denying
respondent’s motion to amend its pleadings because the parties had fully litigated the
matter and completed a two-week bench trial.
Affirmed.