Dynamic Energy Solutions, LLC, 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This opinion is nonprecedential except as provided by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
A22-0912

Dynamic Energy Solutions, LLC,
Respondent,

vs.

Danna, LLC, d/b/a Catalyst Modern Energy,
Defendant,

FK Construction Funding, LLC,
Appellant.

Filed April 3, 2023
Reversed and remanded
Gaïtas, Judge

Ramsey County District Court
File No. 62-CV-21-3534

Aron J. Frakes, Kyle W. Ubl, Fredrikson & Byron, P.A., Minneapolis, Minnesota (for
respondent)

Daniel J. Cragg, Vince C. Reuter, Robert T. Dube Jr., Eckland & Blando LLP,
Minneapolis, Minnesota (for appellant)

Considered and decided by Ross, Presiding Judge; Gaïtas, Judge; and Wheelock,
Judge.
NONPRECEDENTIAL OPINION
GAÏTAS, Judge
Appellant FK Construction Funding, LLC (FK), challenges the district court’s rule
12.02(e) dismissal of its counterclaims for breach of contract and promissory estoppel
2
against respondent Dynamic Energy Solutions, LLC (Dynamic). FK argues that the district
court erred by dismissing the breach-of-contract counterclaim for lack of consideration
because FK’s pleading alleges that it detrimentally relied on Dynamic’s promises, which
was consideration. FK also contends that the district court erroneously dismissed the
alternative promissory-estoppel counterclaim because, contrary to the district court’s
determination, FK’s pleading alleges an independent promise made by Dynamic to FK.
Because FK pleaded sufficient facts to support both of its counterclaims for breach of
contract and promissory estoppel, we reverse and remand.
FACTS1
Dynamic is a contractor for solar photovoltaic projects. For two such projects,
Dynamic subcontracted work to Danna, LLC, which operates under the name Catalyst
Modern Energy (Catalyst).
FK is a factoring company, which is a type of finance company. Catalyst entered
into a factoring agreement with FK in July 2020. FK agreed to purchase Catalyst’s
accounts receivable in exchange for the right to receive payment directly from Catalyst’s
account debtors, including Dynamic. Under the terms of the factoring agreement, FK
“may, but need not purchase from [Catalyst] such Accounts as [FK] determines to be
Eligible Accounts.”

1 In reviewing a district court’s grant of motions to dismiss, the appellate court accepts the
factual allegations in the complaint as true. See Abel v. Abbott Nw. Hosp., 947 N.W.2d 58,
64 n.2 (Minn. 2020). Except for facts necessary to provide context, our recitation of the
facts is based on the allegations in FK’s pleading and its attached exhibits, and we accept
the factual allegations in those materials as true.
3
In a separate payment agreement between Dynamic and Catalyst, Dynamic agreed
to pay FK instead of Catalyst. Between August and November 2020, Dynamic paid FK
instead of Catalyst, as required by the payment agreement.2
Dynamic later brought multiple causes of action against Catalyst “for Catalyst’s
defective, deficient, and untimely performance under the Catalyst Subcontracts, including
claims for material breach of the Subcontracts and breach of warranties.” Catalyst failed
to respond to Dynamic’s complaint, and Dynamic moved for default judgment. The district
court entered judgment against Catalyst, awarding Dynamic over $2 million in damages.
Dynamic also brought a declaratory judgment claim against FK regarding the rights
of the parties under various agreements or purported agreements between FK and Catalyst.
Dynamic sought a declaration that “FK is not entitled to any money from Dynamic
because: (1) there is no contract between Dynamic and FK; (2) any estoppel claim fails as
a matter of law; and (3) in any event, Dynamic is entitled to offset the damages caused to
Dynamic by Catalyst, which far exceed any amount allegedly owed to FK.”
In its answer to Dynamic’s complaint, FK asserted counterclaims against Dynamic
for breach of contract and promissory estoppel. As a factual basis for the counterclaims,
FK’s pleading allege s that, on three occasions between September and October 2020,
Dynamic entered into three “estoppel agreements” with FK via email. O n September 9,
2020, an FK employee emailed a Dynamic employee, stating, in relevant part:

2 Although Dynamic and Catalyst entered into two separate construction subcontracts—
one for each solar photovoltaic project— just one of the construction subcontracts is
relevant to the issues FK raises on appeal.
4
[Catalyst] has advised us that you are indebted to them on the
pay application invoice amount set forth below. So that we
may continue extending financial accommodations as well as
funds control services to [Catalyst] in reliance on the pay
application invoice amount, kindly respond -by-reply to this
email with the word “Agreed” to confirm your promise and
representation that
• the contract amount including all change orders is
$1,274,960.78,
• the job is located at [an address in Illinois],
• the pay application invoice amount is correct and will be
paid to us in full within 90 days from today’s date . . . .

The invoice amount was $128,558.78. The Dynamic employee, who had authority to bind
Dynamic, sent a reply email stating, “Agreed.” According to FK’s pleading, two
subsequent—and “nearly identical”— email exchanges occurred between the FK employee
and the Dynamic employee involving invoice amounts of $1,500 and $19,858 .
3 In total,
FK’s pleading alleges, Dynamic promised to pay FK $149,947.78.
For FK’s breach-of-contract counterclaim, its pleading alleges:
29. Dynamic Energy agreed to pay FK $149,947.78
pursuant to the Estoppel Agreements.

30. As consideration for the Estoppel Agreements,
Dynamic Energy induced FK to fund Catalyst to ensure that
the Catalyst Subcontract could be performed and FK did
indeed fund in reliance on Dynamic Energy’s promise.

31. Dynamic Energy failed to pay FK any of the
amounts owed to it.

32. Dynamic Energy therefore committed a breach of
contract by failing to pay FK monies properly owed in an
amount equal to $149,947.78 that FK was entitled to receive
under the Estoppel Agreements.

3 FK included several exhibits in support of its counterclaims, including the factoring
agreement and the alleged emails between FK and Dynamic.
5

As to FK’s promissory-estoppel counterclaim, the pleading alleges:
34. Dynamic Energy made clear and definite promises
to FK, as detailed . . . , including an agreement to pay FK
$149,947.78.

35. Dynamic energy intended to induce FK to rely upon
Dynamic Energy’s promises to ensure that FK funded Catalyst
so that Catalyst would perform the work on Dynamic Energy’s
Project.

36. FK reasonably, actually, and in good faith, relied
upon the promises made by Dynamic Energy to its detriment,
funding Catalyst $149,947.78 that FK has not been paid back
for.

37. All funds advanced to Catalyst were advanced in
reliance on Dynamic Energy’s promise to pay FK.

Dynamic moved to dismiss FK’s counterclaims pursuant to Minnesota Rule of Civil
Procedure 12.02(e). It argued that FK’s pleading failed to allege facts showing that any
contract existed between Dynamic and FK or that Dynamic had made any independent
promises to FK.
The district court granted Dynamic’s motion and dismissed FK’s counterclaims
with prejudice. It determined that FK’s breach-of-contract counterclaim failed because
there was no contract between Dynamic and FK. Specifically, the district court found that
FK’s pleading did not identify any consideration supporting a contract between the parties.
The district court rejected FK’s promissory-estoppel counterclaim because FK’s pleading
failed to establish that there was any independent promise to FK. Rather, according to the
6
district court, FK’s right to payment was entirely rooted in the contract between Dynamic
and Catalyst, and FK’s status as an assignee of Catalyst.4
FK appeals the dismissal of its counterclaims against Dynamic.
DECISION
FK argues that the district court erred in dismissing FK’s counterclaims against
Dynamic as legally invalid. According to FK, its pleading stated sufficient grounds for
both the breach-of-contract and promissory-estoppel counterclaims. Dynamic responds
that the district court correctly dismissed the counterclaims because FK’s pleading failed
to establish the existence of a contract or any enforceable promise between Dynamic and
FK.
“Minnesota is a notice-pleading state.” Halva v. Minn. State Colls. & Univs., 953
N.W.2d 496, 500 (Minn. 2021) (quotation omitted). A plaintiff may plead a claim “by way
of a broad general statement which may express conclusions rather than, as was required
under code pleading, by a statement of facts sufficient to constitute a cause of action.” Id.
(quoting N. States Power Co. v. Franklin, 122 N.W.2d 26, 29 (Minn. 1963)). “‘[A]bsolute
specificity in pleading’ is not necessary; rather, ‘information sufficient to fairly notify the
opposing party of the claim against it’ is satisfactory.” Id. at 500-01 (quoting Hansen v.
Robert Half Int’l, Inc., 813 N.W.2d 906, 917-18 (Minn. 2012)). “The focus is on the

4 In ruling on Dynamic’s motion to dismiss, the district court relied heavily on its earlier
decision in a similar matter involving a factoring agreement, Factor King, LLC v. Zenith
Tech, Inc., No. 62-CV-19-2706, 2020 WL 4012715 (Minn. Dist. Ct. Feb. 24, 2020). The
decision in that case was not appealed.
7
‘incident’ rather than on the specific facts of the incident.” Id. at 501 (quoting Walsh v.
U.S. Bank, N.A., 851 N.W.2d 598, 605 (Minn. 2014)).
When a pleading fails to state a claim upon which relief can be granted, a party may
move to dismiss the pleading pursuant to Minnesota Rule of Civil Procedure 12.02(e). “[A]
claim is sufficient to survive a motion to dismiss for failure to state a claim if it is possible
on any evidence which might be produced, consistent with the pleader’s theory, to grant
the relief demanded.” Walsh, 851 N.W.2d at 600. Therefore, “a pleading will be dismissed
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.” Franklin, 122 N.W.2d
at 29. And “courts are to construe pleadings liberally.” Home Ins. Co. v. Nat’l Union Fire
Ins. of Pittsburgh, 658 N.W.2d 522, 535 (Minn. 2003).
In reviewing a district court’s decision to dismiss claims under rule 12.02(e), the
appellate court considers de novo whether the pleading “sets forth a legally sufficient claim
for relief.” Walsh, 851 N.W.2d at 606; see also Engstrom v. Whitebirch, Inc., 931 N.W.2d
786, 790 (Minn. 2019). The appellate court must “accept the facts alleged in the complaint
as true and construe all reasonable inferences in favor of the nonmoving party.” Walsh ,
851 N.W.2d at 606. An appellate court will not affirm the dismissal of claims under rule
12.02(e) “if it is possible on any evidence which might be produced, consistent with the
pleader’s theory, to grant the relief demanded.” Martens v. Minn. Mining & Mfg. Co., 616
N.W.2d 732, 739-40 (Minn. 2000) (quoting Franklin, 122 N.W.2d at 29).
Applying these standards, we now turn our attention to FK’s two counterclaims.
We address each in turn.
8
A. Breach of Contract
The district court determined that FK failed to adequately plead a breach-of-contract
counterclaim because there was no contract between FK and Dynamic. According to the
district court, a contract did not exist because FK’s pleading failed to establish any
consideration.
“The formation of a contract requires communication of a specific and definite offer,
acceptance, and consideration.” Thomas B. Olson & Assocs., P.A. v. Leffert, Jay &
Polglaze, P.A., 756 N.W.2d 907, 918 (Minn. App. 2008) (quoting Com. Assocs., Inc. v.
Work Connection, Inc. , 712 N.W.2d 772, 782 (Minn. App. 2006)), rev. denied (Minn.
Jan. 20, 2009). “Determining whether sufficient consideration exists for an agreement is a
question of law.” Brooksbank v. Anderson, 586 N.W.2d 789, 794 (Minn. App. 1998)
(citing Concordia Coll. Corp. v. Salvation Army, 470 N.W.2d 542, 546 (Minn. App. 1991),
rev. denied (Minn. Aug. 2, 1991)), rev. denied (Minn. Jan. 27, 1999).
“Consideration may consist of either a benefit accruing to a party or a detriment
suffered by another party.” C & D Invs. v. Beaudoin, 364 N.W.2d 850, 853 (Minn. App.
1985), rev. denied (Minn. June 14, 1985). A detriment incurred need not “pass from the
promisee to the promisor to be valid.” Clausen & Sons, Inc. v. Theo. Hamm Brewing Co.,
395 F.2d 388, 390 (8th Cir. 1968) (citing Ellingson v. State Bank of Hoffman, 234 N.W.
867, 868 (Minn. 1931); Home Supply Co. v. Ostrom, 204 N.W. 647, 647-48 (Minn. 1925);
West v. Kidd, 239 N.W. 157, 158 (Minn. 1931); Estrada v. Hanson, 10 N.W.2d 223, 225
(Minn. 1943)).
9
“Minnesota follows the long-standing contract principle that a court will not
examine the adequacy of consideration as long as something of value has passed between
the parties.” C & D Invs., 364 N.W.2d at 853 (citing Estrada, 10 N.W.2d at 225-26)).
Consideration exists “if the promisee, being induced by the agreement, does anything legal
which he is not bound to do . . . [.] [I]t is sufficient that something valuable flows from
him, or that he suffers some prejudice or inconvenience, and that the agreement is the
inducement to the transaction.” Ostrom, 204 N.W. at 647.
In pleading its breach-of-contract counterclaim, FK stated that Dynamic “induced
FK to fund Catalyst to ensure that the Catalyst Subcontract could be performed and FK did
indeed fund in reliance on Dynamic Energy’s promise.” Dynamic argued to the district
court that the counterclaim should be dismissed because FK’s pleading failed to identify
any benefit to Dynamic that Dynamic was not already entitled to receive under its
subcontract with Catalyst. FK responded that its pleading established consideration in the
form of a detriment to FK, arguing, “FK unquestionably incurred a detriment by advancing
funds to Catalyst based on Dynamic’s representation that it would pay those amounts to
FK.” Alternatively, FK contended that Dynamic benefitted from FK’s advancement of
funds to Catalyst because Dynamic “received the benefit of Catalyst’s lower prices and
continued work on the project where it otherwise might not have.”
The district court concluded that FK had failed to plead consideration for any
contract. According to the district court, “FK’s provision of funding to Catalyst to enable
Catalyst to complete its work did not provide Dynamic with any new benefit that it did not
already have under the Subcontract[].”
10
We agree with the district court. FK maintains on appeal that Dynamic benefited
because FK’s funding allowed Catalyst to complete its work. However, as noted by the
district court, because Catalyst was already obligated to complete the work based on the
subcontract, Dynamic did not receive any additional benefit. We therefore reject FK’s
argument that the consideration for a contract between FK and Dynamic was Dynamic’s
benefit.
But the district court did not consider FK’s primary argument — that FK suffered a
detriment by relying on Dynamic’s promise. FK contends that it purchased specific
invoices from Catalyst in reliance on Dynamic’s promise to pay FK those invoice amounts
within 90 days. And, according to FK, its detrimental reliance on Dynamic’s promise
constituted sufficient consideration for a contract.
Dynamic responds that FK’s purchase of Catalyst’s invoices cannot be
consideration because “there is an inherent, fatal disconnect between the alleged
consideration and the actual bargain.” Citing Abbott v. Western Union Telegraph Co. for
the fundamental precept that an independent contract must be supported by independent
consideration, 90 N.W. 1, 1 (Minn. 1902), Dynamic argues that FK advanced funds to
Catalyst as part of the factoring agreement between FK and Catalyst, and not as part of any
new contract with Dynamic.
However, Dynamic does not acknowledge that, under the terms of the factoring
agreement, FK was not obligated to buy any invoices. And Dynamic points to no law
requiring independent consideration for a party’s contracts with two separate parties. The
independent-consideration concept traditionally applies to additional agreements between
11
the same two parties to an existing contract. See, e.g., Nat’l Recruiters, Inc. v. Cashman,
323 N.W.2d 736, 741 (Minn. 1982) (holding that a noncompete agreement separate from
an employment agreement requires additional consideration beyond the consideration
supporting the employment agreement).
Further, consideration can be directed to a party other than the other party to the
agreement. Southdale Ctr., Inc. v. Lewis , 110 N.W.2d 857, 863 (Minn. 1961). For
example, it is well settled under Minnesota law that a landlord or lender’s extension of a
lease or loan to X in reliance on Y’s guaranty constitutes consideration for Y’s guaranty,
even if no benefit accrues to Y. See id. “[T]he detriment suffered by [landlord] in relying
on [Y’s] guaranty is in itself adequate consideration although no benefit whatever accrued
to [Y].” Id. Notably, it does not appear to matter that X is obligated under the lease or
loan to pay the landlord or lender. See id. The fact that the tenant or borrower gives
consideration to the landlord or lender in the form of a promise to pay does not affect the
conclusion that the guaranty agreement is supported by consideration in the form of the
landlord or lender’s detriment in entering into the lease or loan with the tenant or borrower.
See id.; see also Minn. Bank & Tr. v. 11 Water LLC, No. A21-0008, 2021 WL 4059751, at
*4 (Minn. App. Sept. 7, 2021) (applying Southdale), rev. denied (Minn. Dec. 14, 2021).
5
FK’s pleading alleges that it suffered a detriment by entering into a purchase of
specific invoices from Catalyst in reliance on Dynamic’s promise to pay FK those invoices.

5 We are not bound by our nonprecedential opinions but may consider them as persuasive
authority. See Minn. R. Civ. App. P. 136.01, subd. 1(c) (“Nonprecedential opinions and
order opinions are not binding authority except as law of the case, res judicata, or collateral
estoppel, but nonprecedential opinions may be cited as persuasive authority.”)
12
Under Minnes ota law, the alleged detriment can be consideration for a contract. And
analogizing from the guaranty realm, the fact that Catalyst provided consideration to FK
for the purchases is immaterial to the issue of whether FK’s detriment constitutes
consideration.
Given the low pleading standard that the Minnesota Supreme Court reiterated in
Halva, 953 N.W.2d at 500, we conclude that FK alleged sufficient consideration in the
form of a detriment to survive dismissal under rule 12(e).6 We therefore reverse the district
court’s dismissal of the counterclaim for breach of contract.7
B. Promissory Estoppel
The district court determined that FK’s promissory-estoppel counterclaim failed as
a matter of law. According to the district court, there were no promises between FK and
Dynamic that did not already exist under express contracts, thus precluding FK’s claim that
a contract between Dynamic and FK should be implied.
Promissory estoppel is an equitable doctrine that applies when there are no
contractual rights. Greuling v. Wells Fargo Home Mortg. Inc. , 690 N.W.2d 757, 761

6 FK cites several nonprecedential federal decisions that, applying the laws of other states,
reach a similar conclusion. “[A]lthough we are not bound to follow precedent from other
states or federal courts, these authorities can be persuasive.” State v. McClenton, 781
N.W.2d 181, 191 (Minn. App. 2010), rev. denied (Minn. June 29, 2010). Because we are
able to resolve the issues in this case by applying Minnesota law, we do not consider or
rely on these decisions from other jurisdictions.

7 Dynamic argued to the district court— but does not argue here—that Minnesota Statutes
section 336.9-404 (2022) barred FK’s breach-of-contract counterclaim. The district court
determined that “FK’s claims are not barred by section 336.9-404.” As noted, Dynamic
does not pursue its argument under section 336.9-404 here. We therefore do not address
the argument or the district court’s analysis of it.
13
(Minn. App. 2005). A promissory-estoppel claim has three elements: (1) a promise,
(2) detrimental reliance, and (3) injustice. Olson v. Synergistic Techs. Bus. Sys., Inc., 628
N.W.2d 142, 152 (Minn. 2001). But even when these three elements can be established,
“an express contract covering the same subject matter will preclude the application of
promissory estoppel.” Greuling, 690 N.W.2d at 761. Whether a plaintiff’s allegations,
accepted as true, “rise to the level of promissory estoppel” presents a question of law. Id.
An appellate court gives no deference to the district court’s decisions on questions of law.
Modrow v. JP Foodservice, Inc., 656 N.W.2d 389, 393 (Minn. 2003).
In pleading its promissory-estoppel counterclaim, FK stated that (1) Dynamic
promised to pay FK $149,947.78, (2) Dynamic “intended to induce FK to rely on [the]
promises to ensure that FK funded Catalyst” so that Catalyst could fulfill its contractual
obligations to Dynamic, (3) FK relied on Dynamic’s promises to its detriment by “funding
Catalyst $149,947.78 that FK has not been paid back,” and (4) “all funds FK advanced to
Catalyst were advanced in reliance on” Dynamic’s promises to pay FK.
In dismissing FK’s promissory-estoppel counterclaim, the district court first noted
that the doctrine of promissory estoppel applies only when there are no contractual rights
between the parties. See Greuling, 690 N.W.2d at 761. Then, relying on this fundamental
principle, the district court determined that, because FK’s rights as an assignee are entirely
rooted in the subcontract between Catalyst and Dynamic, there could be no separate
implied contract under a promissory-estoppel theory.
However, as with the breach-of-contract counterclaim, FK’s pleading alleges
separate promises between FK and Dynamic. FK claims that Dynamic made direct
14
promises to pay FK by responding to FK’s emails and assuring FK that Dynamic owed the
amounts FK identified. Although these promises to pay were based on FK’s status as an
assignee and its rights under the payment agreement between Catalyst and Dynamic, FK’s
pleading suggests that the promises were distinct in that they involved specific invoices
and were intended to induce FK to further fund Catalyst. And FK’s pleading alleges that,
in reliance on Dynamic’s promises, it advanced funds to Catalyst that were never paid back.
Because FK’s pleading identifies promises that were separate from the payment
agreement between Dynamic and Catalyst and alleges that FK detrimentally relied on these
promises, we determine that it is sufficient to state a claim of promissory estoppel under
Minnesota’s minimal pleading standard. Indeed, FK’s promissory-estoppel counterclaim
is merely an equitable alternative to its breach-of-contract counterclaim. If FK can produce
evidence supporting its assertion that the “estoppel agreement” emails were valid contracts,
then its promissory -estoppel counterclaim will fail due to the existence of contractual
rights. But if FK cannot produce such evidence, it may still have a promissory-estoppel
claim based on the same promises. Accordingly, we reverse the district court’s dismissal
of the promissory estoppel counterclaim.
Reversed and remanded.