Smart Construction & Remodeling, Inc., 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This opinion is nonprecedential except as provided by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
A22-1524

Smart Construction & Remodeling, Inc.,
Appellant,

vs.

Dean Suchy,
Respondent.

Filed August 28, 2023
Affirmed
Larkin, Judge

Hennepin County District Court
File No. 27-CV-19-20086

Edward E. Beckmann, Beckmann Law Firm, LLC, Bloomington, Minnesota (for
appellant)

Courtney J. Ernston, North Star Law Group, PLLC, St. Paul, Minnesota (for respondent)

Considered and decided by Slieter, Presiding Judge; Larkin, Judge; and Hooten,
Judge.
∗
NONPRECEDENTIAL OPINION
LARKIN, Judge
Appellant construction company challenges the district court’s ruling that a
liquidated-damages clause in its contract with respondent homeowner was unenforceable

∗ Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
2
and that appellant was not entitled to equitable relief. Respondent homeowner challenges
the district court’s determination that the parties entered into a valid contract. We affirm.
FACTS
Appellant Smart Construction & Remodeling, Inc. (Smart) is a business that
provides repair and remodeling services to residential properties. Respondent Dean Suchy
is a homeowner whose home was damaged in a storm. In 2018, Suchy contacted Smart
regarding the possibility of Smart repairing the storm damage to his home. Pavel Pilich is
Smart’s owner, and he was Suchy’s primary contact at Smart.
On May 2, 2018, Pilich presented Suchy with a document labeled “CONTRACT,”
which concerned the proposed repairs to Suchy’s storm- damaged home. Pilich asked
Suchy to sign the document and to initial certain statements in the document. Suchy signed
and initialed the document as requested. Although Suchy read the statements that he
initialed, he did not read the entire document.
The six-page document stated that Smart would use its “best efforts” to work with
Suchy’s insurance company to obtain “maximum approval” and coverage for work
identified in a “scope of work” section. The terms in the document did not obligate Suchy
or Smart “in any way” unless payment for damages was approved by the insurance
company. The scope of work was identified as repair or replacement of the home’s roof,
gutters, siding, fascia, wrap, and deck, and a shed’s roof, siding, fascia, and doors. The
document stated that if the insurance company approved repairs at an amount acceptable
to Smart, then Smart would perform “all work approved” by the insurance company. The
3
document also stated that the insurance company’s “final agreed report” would “constitute
the summary of the work to be performed.”
The document contained the following liquidated-damages clause:
Customer’s cancellation, of this Contract after the rescission
period, if any or Customer’s failure to make available the work
premises may result in breach of contract, remedied by
Customer paying to [Smart], an amount equal to 30% of the
contract or Insurance Company’s Allocated amount plus cost
of all materials as a reasonable amount of agreed damages,
which are uncertain due to costs of storage, rescheduling and
other undeterminable costs, which the parties agree to liquidate
in advance of any dispute.

When Suchy signed the document, the insurance-approval process for claims related
to Suchy’s storm-damaged home had not begun. Suchy believed the document identified
items that Smart would submit to Suchy’s insurer for claim approval and that it authorized
Smart to contact and work with the insurer in an effort to finalize Suchy’s insurance claim.
In June 2018, Suchy’s insurance company issued a scope-of-loss statement totaling
$42,074.77 for repairs.1 Smart conducted a detailed inspection of the damage to the home
and used software to generate diagrams of the home’s impacted areas. On August 2, 2018,
Smart submitted a scope-of-loss statement to Suchy’s insurer that contained additional
areas of damage and estimated repairs and replacements totaling $115,509.96. Suchy’s
insurer did not accept Smart’s estimate. Around December 2018, Smart provided a second
estimate to Suchy’s insurer. The price for repairs was lowered to $109,482.32 based
primarily on reductions in expected costs to complete the work.

1 The district court found that the total was $47,074.77. This appears to be a clerical error.
4
Each estimate assumed that Smart would serve as the general contractor and use
subcontractors to complete the proposed work. The December 2018 estimate identified
$89,441.86 for the costs for labor and materials to complete the work, plus $1,793.14 for
reimbursements for sales tax, totaling $91,235. Smart’s estimate added approximately
10% of this amount ($9,123.66) for payment of its overhead and another approximately
10% ($9,123.66) for payment of its profit for the total replacement cost value estimate of
$109,482.32.
Around January 2019, Smart agreed with Suchy’s insurance provider to complete
the work described in the December 2018 estimate for a total price of $100,000. On June
27, 2019, Suchy contacted Smart and informed Smart that he did not want Smart to work
on his home. Thus, Smart did not perform any repairs to the home, and Smart did not hire
any subcontractors or purchase any materials for the anticipated repairs to Suchy’s home.
Smart demanded that Suchy pay Smart $30,000 as liquidated damages, and Suchy
refused to do so. Smart sued Suchy for breach of contract. Smart’s complaint described
the contract as an insurance-proceeds contract: Smart would perform repairs to the home
and “[t]he scope of the repairs” would be “decided” and “funded” by Suchy’s insurance
company, “except for Suchy’s deductible.” Smart’s complaint alleged that Suchy’s insurer
would not have agreed to pay $100,000 for Suchy’s storm-damage repairs but for Smart’s
efforts to explain the scope of the project.
Smart limited its request for breach-of -contract damages to liquidated damages.
Smart did not claim actual-expectation damages as an alternative remedy under the
contract. Instead, Smart asserted three equitable claims as alternative grounds for relief:
5
promissory estoppel, unjust enrichment, and quantum meruit. Finally, Smart requested
attorney fees under the “contract.”
Suchy took the position that the parties had not entered into a contract.2 Suchy also
asserted that the liquidated-damages provision imposed a penalty in violation of public
policy and that the clause was unenforceable. The parties stipulated that the enforceability
of the liquidated-damages provision was an issue to be determined by the district court
based on evidence produced at trial and facts determined by a jury. The parties also
stipulated that Smart’s claim for attorney fees would be submitted to the district court for
determination.
The matter proceeded to a jury trial, at which the jury was asked to determine
whether Smart and Suchy had entered into a contract. The jury heard testimony from Pilich
and Suchy, and numerous exhibits were admitted into evidence. Additionally, the parties
stipulated to certain general, underlying facts.
The jury returned a special verdict form indicating that there was a contract between
Smart and Suchy, that Suchy breached the contract, and that Smart was therefore entitled
to $30,000 in liquidated damages. The jury also provided advisory findings regarding
Smart’s promissory-estoppel claim. The jury found that Suchy made an enforceable
promise to Smart, that Smart reasonably relied on that promise, and that Smart suffered
loss or disadvantage in the amount of $20,000.

2 Suchy counterclaimed for breach of the duty of good faith and fair dealing. But as he
acknowledged in his brief to this court, he did not pursue that claim.
6
Suchy moved for judgment notwithstanding the verdict on Smart’s breach-of-
contract claim. Suchy asserted that the evidence did not support the jury’s finding that the
parties had formed a contract.
On July 27, 2022, the district court issued an order conclud ing that there was
sufficient evidence to support the jury’s findings that a contract had been formed and that
Suchy breached the contract. But the district court concluded that the liquidated-damages
clause was unenforceable because it constituted a penalty and violated public policy. The
court found that Smart had “declined to produce evidence to support that it had a reasonable
expectation to earn more than the 10% profit and 10% overhead stated in the insurance
estimates.” The court noted that when Pilich was asked at trial whether Smart could expect
to receive more than the amounts identified for profit and overhead in Smart’s bid, he
refused to answer because he considered the information “confidential.” The court
determined that Smart’s damages were “known amounts” and “not difficult to calculate,”
and that Smart’s liquidated damages were not related to “potential actual harm or
recoverable damages for a breach.” The district court noted that Smart had sought only
liquidated damages under the contract, and not compensatory damages.
As to Smart’s equitable claims, the district court declined to adopt the jury’s
advisory findings. The district court concluded that the existence of a contract precluded
equitable relief and that Smart also was not entitled to equitable relief on the merits.
Finally, the district court concluded that Smart was not entitled to attorney fees under the
contract. The district court dismissed Smart’s claims with prejudice.
7
Smart appealed. Suchy filed a notice of related appeal, challenging the district
court’s conclusion that the evidence supported the jury findings of a contract and breach.
This court determined that the notice of related appeal did not create a cross-appeal and
stated that Suchy could raise that issue in his respondent’s brief.
DECISION
I.
Suchy contends that the district court erred by denying his motion for judgment
notwithstanding the verdict, arguing that the document that he signed did not create a
contract. He asserts that the purported contract contained “no price, no scope of work, or
other requisite contract clauses.” We begin with that issue.
3
When a district court considers a motion for judgment notwithstanding the verdict,
“it must determine whether, viewing the evidence in the light most favorable to the
nonmoving party, the verdict is manifestly against the entire evidence or whether despite
the jury’s findings of fact the moving party is entitled to judgment as a matter of law.”
Pouliot v. Fitzsimmons, 582 N.W.2d 221, 224 (Minn. 1998). We review the district court’s
decision de novo. Id. Where judgment notwithstanding the verdict has been denied by the
district court, we will affirm the district court “if, in the record, there is any competent
evidence reasonably tending to sustain the verdict.” Id. (quotation omitted). We view the

3 Although the issue is technically moot given our decision to affirm, we address it in the
interest of thorough review. See State v. Rud, 359 N.W.2d 573, 576 (Minn. 1984) (“[T]he
mootness doctrine is a flexible discretionary doctrine, not a mechanical rule that is invoked
automatically whenever the underlying dispute between the particular parties is settled or
otherwise resolved.”).

8
evidence in the light most favorable to the verdict and will not set the verdict aside “if it
can be sustained on any reasonable theory of the evidence.” Id.
“A contract is formed when two or more parties exchange bargained-for promises,
manifest mutual assent to the exchange, and support their promises with consideration.”
Vermillion State Bank v. Tennis Sanitation, LLC, 969 N.W.2d 610, 628 (Minn. 2022)
(quotation omitted). The existence and terms of a contract are generally questions for the
fact-finder. Id.; see Morrisette v. Harrison Int’l Corp., 486 N.W.2d 424, 427 (Minn. 1992).
“[T]he law does not favor the destruction of contracts because of indefiniteness, and
if the terms can be reasonably ascertained in a manner prescribed in the writing, the contract
will be enforced.” King v. Dalton Motors, Inc., 109 N.W.2d 51, 53 (Minn. 1961) (footnote
omitted). But a contract is void if it is so vague, indefinite, or uncertain that the contract’s
meaning and the parties’ intent is left to speculation. Id. at 52. Therefore, a “purported
contract is fatally defective” if “substantial and necessary terms are specifically left open
for future negotiation.” Id.; see also Triple B & G, Inc. v. City of Fairmont, 494 N.W.2d
49, 53 (Minn. App. 1992) (“If an alleged contract is so uncertain as to any of its essential
terms that it cannot be consummated without new and additional stipulations between the
parties, it is not a valid agreement.”). “When the parties know that an essential term of
their intended transaction has not yet been agreed upon, there is no contract.” Malevich v.
Hakola, 278 N.W.2d 541, 544 (Minn. 1979).
Suchy argues that the document that he signed did not result in a contract because
“it did not provide any pricing information” or describe the work to be performed. But,
viewed in a light most favorable to the verdict, the document addressed such terms stating,
9
“When the Owner’s insurance company approves repairs for an amount acceptable to
[Smart], the Owner agrees ONLY [Smart] will be performing all work approved by
Owner’s insurance company for the price agreed by the Owner’s Ins. Company and
[Smart].”
Suchy also argues that there was no contract because the terms did not “bind Suchy
if the insurance company denied the claim” and “did not bind Smart to perform any work
if it chose not to.”
4 But Suchy does not cite legal authority or provide legal argument
indicating that such terms prevent contract formation. Instead, Suchy relies on a
nonprecedential case, LeMaster Construction, Inc. v. Mahoney, to support his argument
that the contract here is unenforceable because it was too vague. No. A06-1202, 2007 WL
1599192 (Minn. App. 2007). “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.” Minn. R. Civ. App. P.
136.01, subd. 1(c). LeMaster is factually distinguishable and therefore not persuasive. See
2007 WL 1599192, at *3 (explaining that the purported contract stated that the scope of
work would be set forth “more specifically” in a separate “attached” document and that the
separate document “was not attached”).
In denying Suchy’s motion for judgment notwithstanding the verdict, the district
court reasoned that “the December 21, 2018 estimate approved by the insurer was a

4 The district court described the contract as “a one-sided agreement in favor of [Smart]
with significant detrimental provisions and liability as to the homeowner” but nonetheless
accepted the jury’s finding that a contract had been formed.
10
sufficient statement of the ‘work’ and Loss Draft of the insurer” under the contract. When
viewed in the light most favorable to the verdict, Smart’s December 2018 estimate, which
Suchy’s insurance company accepted at the negotiated price of $100,000, sufficiently
addressed the relevant contract terms.
Again, parties need not agree on “every possible point.” Vermillion State Bank, 969
N.W.2d at 628 (quotation omitted). “Instead, the law requires merely that the parties’
intent as to the fundamental terms of the contract can be ascertained with reasonable
certainty,” and “the law does not favor the destruction of contracts because of
indefiniteness.” Id. (quotations omitted). On this record, the district court did not err by
denying Suchy’s motion for judgment notwithstanding the verdict.
II.
We now turn to Smart’s contention that the district court erred by concluding that
the liquidated-damages clause in the parties’ contract was unenforceable.
As a threshold issue, Smart argues that Suchy forfeited his right to challenge the
liquidated-damages clause because Suchy failed to read and negotiate the clause. For two
reasons, we disagree. First, Smart cites Currie State Bank v. Schmitz as support, which
states, “Parties who sign plainly written documents must be held liable, otherwise such
documents would be entirely worthless and chaos would prevail in our business relations.”
628 N.W.2d 205 , 210 (Minn. App. 2001) (emphasis added) (quotation omitted). The
contract in this case is not “plainly written.” The district court correctly described the
contract as a “lengthy” and “complex” document containing “numerous inconsistencies in
its use of terms (both defined and undefined),” as well as “ambiguous terms.” Second,
11
caselaw is replete with examples of appellate courts considering whether liquidated-
damage provisions are enforceable. See, e.g. , Willgohs v. Buerman, 115 N.W.2d 59, 60
(Minn. 1962); Dean Van Horn Consulting Assocs., Inc. v. Wold, 367 N.W.2d 556, 560
(Minn. App. 1985), rev. denied (Minn. July 17, 1985); Maslowski v. Prospect Funding
Partners LLC, 978 N.W.2d 447, 455 (Minn. App. 2022), rev. granted (Minn. Sept. 28,
2022). Adopting Smart’s argument that Suchy waived the ability to challenge the
liquidated-damages provision by not reading it and negotiating it would limit the court’s
well-established authority to invalidate a liquidated-damages provision on public policy
grounds. That approach is inconsistent with caselaw, and we do not adopt it here.
Smart also argues that it is entitled to liquidated damages because Suchy “hindered”
performance of the contract. Smart relies on Zobel & Dahl Construction v. Crotty, which
states that hinderance of performance may constitute a breach of contract. 356 N.W.2d 42,
45 (Minn. 1984). Smart essentially argues that because Suchy breached the contract, Smart
is automatically entitled to liquidated damages. But the case cited by Smart, Zobel, does
not stand for that proposition. See id. at 43 (stating that “[i]n a contract for construction of
a home, an owner who unreasonably fails to allow the contractor to complete construction
excuses the contractor’s performance and breaches the contract” and that “[i]n construction
contracts, if the work has begun and the buyer breaches, the contractor is entitled to the
unpaid contract price less the amount it would have cost to complete performance”).
Before turning to the substantive law of liquidated damages, we resolve the parties’
dispute regarding whether the liquidated- damages provision in their contract applies only
to damages stemming from Smart’s use of its “best efforts” to maximize Suchy’s recovery
12
on his insurance claim or also applies to Smart’s lost profits under the contract. Suchy
argues the former, and Smart argues the latter.
The district court treated the liquidated-damages provision as including damages
stemming from Smart’s lost profits. Specifically, in determining that the provision was
unenforceable, the district court compared the amount of damages available under the
liquidated-damages provision with the amount Smart reasonably could have anticipated
receiving as “loss of profits” if no breach had occurred and Smart had completed the
repairs.
Given the language in the provision, we agree that it encompasses lost profits. For
example, the provision states that Suchy’s “failure to make available the work premises”
may result in Suchy’s breach and imposition of liquidated damages, which may include the
“cost of all materials.” (Emphasis added.) The reference to “work premises” and
“materials” regards Smart’s completion of the anticipated repairs—which in turn relates to
Smart’s profit—and not to Smart’s best efforts to negotiate Suchy’s insurance claim.
Having resolved these preliminary issues, we turn to the law governing liquidated
damages.
The term “liquidated damages” signifies the damages
the amount of which the parties to a contract stipulate and
agree, when the contract is entered into, shall be paid in case
of breach. It is well settled that the parties to a contract may
stipulate in advance as to the amount to be paid in
compensation for loss or injury which may result in the event
of a breach of the agreement. A stipulati on of this kind is
enforceable, at least in those cases where the damages which
result from a breach of the contract are not fixed by law or are
in their nature uncertain and where the amount stipulated does
not manifestly exceed the injury which will be suffered.
13

Schutt Realty Co. v. Mullowney, 10 N.W.2d 273, 276 (Minn. 1943) (quotation omitted).
The principles governing the use of liquidated-damages provisions are explained in
Gorco Construction Co. v. Stein, 99 N.W.2d 69 (Minn. 1959). Our research indicates that
the principles set forth in Gorco remain valid today, and we therefore quote them here.
The modern trend is to look with candor, if not with favor, upon
a contract provision for liquidated damages when entered into
deliberately between parties who have equality of opportunity
for understanding and insisting upon their rights, since an
amicable adjustment in advance of difficult issues saves the
time of courts, juries, parties, and witnesses and reduces the
delay, uncertainty, and expense of litigation. Accordingly this
court has long regarded provisions for liquidated damages as
prima facie valid on the assumption that the parties in naming
a liquidated sum intended it to be a fair compensation for an
injury caused by a breach of contract and not a penalty for
nonperformance.

Although favorably disposed to giving effect to a
provision for liquidated damages, this court has not hesitated,
however, to scrutinize a particular provision to ascertain if it is
one for a penalty or one for damages. In determining the issue
neither the intention of the parties nor their expression of
intention is the governing factor. The controlling factor, rather
than intent, is whether the amount agreed upon is reasonable or
unreasonable in the light of the contract as a whole, the nature
of the damages contemplated, and the surrounding
circumstances.

The law adopts as its guiding principles that the injured
party is entitled to receive a fair equivalent for the actual
damages necessarily resulting from failure to perform the
contract and no more.

Punishment of a promisor for breach, without regard to
the extent of the harm that he has caused, is an unjust and
unnecessary remedy and a provision having an impact that is
punitive rather than compensatory will not be enforced.

14
The Minnesota rule is in accord with Restatement,
Contracts, § 339, which provides:

(1) An agreement, made in advance of breach, fixing the
damages therefor, is not enforceable as a contract and does not
affect the damages recoverable for the breach, unless
(a) the amount so fixed is a reasonable forecast
of just compensation for the harm that is caused by the
breach, and
(b) the harm that is caused by the breach is one
that is incapable or very difficult of accurate estimation.

This court has held that where the actual damages
resulting from a breach of the contract cannot be ascertained or
measured by the ordinary rules, a provision for liquidated
damages not manifestly disproportionate to the actual damages
will be sustained. On the other hand, when the measure of
damages resulting from a breach of contract is susceptible of
definite measurement, we have uniformly held an amount
greatly disproportionate to be a penalty.

Gorco, 99 N.W.2d at 74-75 (footnotes omitted) (quotations omitted).
Whether a liquidated-damages clause constitutes an unenforceable penalty under
established facts is a question of law reviewed de novo. Maslowski, 978 N.W.2d at 455.
The district court concluded that the liquidated-damages provision in this case was
unenforceable, reasoning in part that because “any expectation damages . . . can be
reasonably calculated and determined on breach,” “[t]he circumstances do not support the
need for liquidation of damages.” For the reasons that follow, we agree.
As to damages resulting from Smart’s utilization of its “best efforts” to negotiate
the insurance claim, Smart could have kept track of its related time, tasks, and expenses.
Smart argues that because it relied on the liquidated-damages provision, it did not keep
such records. If Smart had documented its efforts to negotiate the insurance claim, it could
15
have requested compensation for its actual efforts. There would be no reason to speculate
regarding its damages; actual damages could have been calculated.
As to damages in the form of lost profits, although caselaw notes that such damages
may properly be liquidated, the following language is instructive.
The function of and necessity for the stipulation for
liquidated damages is well illustrated here. The value of
goodwill in the lumber business is an item of damage which
would be extremely difficult to prove. Loss of profits might be
claimed to be due to difference in management, to the war, the
uncertainty of the times, and to other uncertain factors rather
than to competition. It is hard to conceive of damages which
would be more difficult to prove than the kind here involved.
The difficulty of proving such damages is an important factor
in determining whether or not the provision in the contract is a
penalty.

Meuwissen v. H.E. Westerman Lumber Co., 16 N.W.2d 546, 550 (Minn. 1944) (emphasis
added).
Ascertaining the potential lost profits in this case presents none of the challenges
described in Meuwissen because Smart calculated its profits as a fixed percentage.
Although the parties initially did not know whether Smart would be able to negotiate an
acceptable insurance claim, how much time and effort it would take for Smart to do so, and
the amount of any resulting claim, calculation of Smart’s damages in the event of Suchy’s
breach would not require speculation given Smart’s ability to establish its lost profits as a
fixed percentage and its ability to keep track of its efforts to negotiate that claim.
Because the measure of actual damages resulting from Suchy’s breach was
susceptible of definite measurement, we next consider whether the amount of liquidated
damages is greatly disproportionate and therefore a penalty. “The controlling factor . . . is
16
whether the amount agreed upon is reasonable or unreasonable in the light of the contract
as a whole, the nature of the damages contemplated, and the surrounding circumstances.”
Gorco, 99 N.W.2d at 74. The district court concluded that the liquidated-damages
provision was “not fair or reasonable” and that it was “not reasonably related to actual
damages, losses or harms” that would result from Suchy’s decisions not to proceed with
the repairs. Once again, for the reasons that follow, we agree.
Smart submitted an estimate to Suchy’s insurer on December 21, 2018. On January
4, 2019, Smart agreed with the insurer to complete the work described in the December 21
estimate for $100,000. The record is conflicting regarding the amount of profit Smart
likely would have made at that price. Smart’s estimate included approximately 10% for its
overhead and approximately 10% for its profit. Thus, the district court found that “for
cancelation of the Contract before work was scheduled or commenced, [Smart] could at
most establish expectation damages up to 20% of the approved estimate as the anticipated
payment for its work.”
Smart asserts that the district court erred in finding that Smart’s maximum recovery
would have been 20%, arguing that “[t]he evidence showed that Smart’s profitability would
have been 30%.” But the only evidence supporting that percentage was the testimony of
Smart’s owner, Pilich, who testified that Smart needs 30% margins to be profitable. Smart
describes that testimony as “unrebutted.” Pilich’s testimony on this point may have been
unrebutted, but the district court’s findings and conclusions indicate that it did not find
Pilich’s testimony credible. Specifically, the court found that when Pilich was asked if
there were ways that Smart could expect to receive more than the 10% amounts identified
17
for overhead and profit in Smart’s bid, “Pilich refused to answer asserting he would not
answer because he considered this information about [Smart’s] business to be
‘confidential.’” As to that response, the district court noted that it “was not asked to and
did not designate this type of evidence to be confidential or outside of the scope of relevant
evidence at trial.” Given those findings, we conclude that the district court did not credit
Pilich’s testimony that Smart would have made 30% on the project, and not 20% as
indicated in Smart’s bid. And we defer to that credibility determination. See Minn. R. Civ.
P. 52.01 (requiring that “due regard shall be given to the opportunity of the [district] court
to judge the credibility of the witnesses”).
Smart further argues that “[i]n any event, a 10% difference (20% vs. 30%) is not
‘manifestly disproportionate’ and is not unreasonable as a matter of law.” That argument
fails to recognize that the 10% difference between the 20% Smart claimed in its bid for
Suchy’s repairs—which the record estab lishes as reasonable expectation damages —and
the 30% Smart claimed in its liquidated damages provision represents a 50% difference
between the amount of actual and liquidated damages.
5 That is a significant difference in
and of itself.
Moreover, the law has less tolerance for the sizable difference in this case because,
as explained above, Smart’s prospective actual damages were not difficult to ascertain.
The solution of the question whether the amount stipulated in
a contract to be paid in case of a failure of compliance
therewith is to be treated as an agreement for liquidated

5 For example, on a contract price of $100,000, actual damages of 20% would be $20,000,
and liquidated damages of 30% would be $30,000. The $10,000 difference between those
sums reflects liquidated damages that are 50% higher than actual damages.
18
damages or as a penalty is often attended with much
difficulty. . . . An important matter for consideration as
bearing on the question is whether the actual damages
resulting from a failure to comply with the contract are
definitely fixed by some rule of law, and may be easily
determined and ascertained by the application of appropriate
rules of evidence. If they are, and the sum named in the
contract is greatly out of proportion to and much larger than
the real damage, courts uniformly hold the stipulated sum a
penalty, and require the party asserting injury to prove his
actual loss. But where the actual damages are uncertain and
difficult to ascertain or prove, are of a purely speculative
character, and the contract furnishes no data for their
ascertainment, the sum named and fixed by the parties for its
breach is to be treated and held as liquidated damages. . . . In
cases where the sum stipulated is exceedingly large and greatly
disproportionate to the real damages, and the actual damages
may be readily ascertained, the law, in the interests of justice,
reduces the parties to an equality, by compelling them to
litigate their pecuniary difference on a basis of fair
compensation; and this, too, without regard to the express
language of the contract.

Taylor v. Times Newspaper Co., 86 N.W. 760, 762 (Minn. 1901) (emphasis added).
The actual damages in this case were not uncertain and difficult to ascertain. And
any difficulty in proving damages is the result of Smart’s failure to document its work on
Suchy’s behalf. Moreover, actual damages were not speculative given Smart’s reliance on
a fixed-percentage calculation. And the accepted insurance estimate furnished data for
their ascertainment. Although agreements for liquidated damages are favored, the amount
of such damages cannot be unreasonably disproportionate to the amount of actual damages,
especially when prospective actual damages could easily be ascertained and proved.
Smart makes much of the fact that Suchy is a banker, arguing that Suchy is therefore
“sophisticated in business and financial matters.” Smart cites Meuwissen, which states that
19
“in determining the reasonableness of the amount, the court will take into consideration the
relation of the parties, their situation, the absence or presence of fraud or oppression, and
the purpose the agreement seeks to subserve.” 16 N.W.2d at 550-51. Suchy’s reliance on
Meuwissen is unpersuasive because in that ca se, “[b]oth parties were experienced” in the
business of buying, selling or dealing in lumber, millwork or coal, “knew all about the trade
territory, the extent of the goodwill, and other factors involved.” Id. at 550. Suchy may
be sophisticated in business and financial matters as a result of his position as a banker, but
as the district court found, “Suchy was not sophisticated or knowledgeable about the
insurance claims processes for repair to storm damage or the legal issues, rights and
responsibilities related to residential construction and home improvements.”
In sum, the district court concluded that the liquidated- damages provision in this
case was a penalty for Suchy’s breach of contract, reasoning that “[n]o legitimate purpose
is served by the inflated liquidated damages term” and that the excessive amount of
liquidated damages “improperly pressures the homeowner to remain in the contract, even
if the homeowner does not want to proceed with repairs or disagrees with the repairs or
materials as the work and materials are determined in the future.” The district court’s
reasoning is sound. We hold that the liquidated-damages provision in this case, which
results in a damage award approximately 50% higher than the actual damages established
by the record, constitutes an unenforceable penalty.
III.
We next address Smart’s contention that the district court erred in denying its claims
for equitable relief. We review a district court’s decision to deny equitable relief for an
20
abuse of discretion. Melrose Gates, LLC v. Moua, 875 N.W.2d 814, 819 (Minn. 2016).
But we review de novo whether equitable relief is available as a matter of law. See id. at
822 (concluding that a deferential standard of review was inappropriate when the district
court decided t hat equitable relief was not available as a matter of law); Drewitz v.
Motorwerks, Inc., 867 N.W.2d 197, 204 n.2 (Minn. App. 2015) (noting that “[t]he supreme
court has not deviated from a de novo standard of review of legal issues simply because
the claims at issue are for equitable relief” (quotation omitted)), rev. denied (Minn. Sept.
15, 2015).
“[E]quitable relief cannot be granted where the rights of the parties are governed by
a valid contract.” Midwest Sports Mktg., Inc. v. Hillerich & Bradsby of Canada, Ltd.,
552 N.W.2d 254, 268 (Minn. App. 1996) (quotation omitted)), rev. denied (Minn. Sept. 20,
1996). The district court concluded that because “the parties entered a valid contract,”
Smart’s “alternative equitable claims are precluded by the existence of that [c]ontract.”
The district court also concluded that neither the unenforceability of the liquidated-
damages provision nor Smart’s decision not to seek compensatory damages as an
alternative to liquidated damages established grounds for pursuing equitable relief “where
there existed a valid contract.” In sum, the district court concluded that “[t]he
unenforceability of the liquidated damages provision does not invalidate the existence of
the [c]ontract.”
The district court correctly determined that equitable relief under the theories
asserted by Smart—promissory estoppel, unjust enrichment, and quantum meruit— was not
available given the existence of a valid contract governing the parties’ rights. See In re
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Petition for Distribution of Attorney’s Fees between Stowman L. Firm, P.A., 870 N.W.2d
755, 759 n.2 (Minn. 2015) (stating that quantum meruit is “a claim in equity as restitution
for the value of a benefit conferred in the absence of a contract under a theory of unjust
enrichment”); Banbury v. Omnitrition Int’l, Inc., 533 N.W.2d 876, 881 (Minn. App. 1995)
(stating that “the doctrine of promissory estoppel only applies where no contract exists”);
Southtown Plumbing, Inc. v. Har- Ned Lumber Co., 493 N.W.2d 137, 140 (Minn. App.
1992) (stating that “[r]elief under the theory of unjust enrichment is not available where
there is an adequate legal remedy” and that the party seeking equitable relief “had a remedy
. . . in a breach of contract suit”).
Smart’s arguments that equitable relief was available despite the existence of a
contract are unavailing. Smart argues that because it sued for relief under the liquidated-
damages provision in the contract, it could not alternatively seek actual damages. In
briefing, Smart asserts that parties who “agree to a liquidated damages clause have elected
their sole contract remedy at law.” The two precedential cases on which Smart relies are
not on point. See Dean Van Horn Consulting Assocs., Inc., 367 N.W.2d at 559 (holding
that the district court erred by granting a directed verdict on the grounds that respondent
must prove actual damages to receive liquidated damages under a contract); Fabian v.
Sather, 316 N.W.2d 10, 13 (Minn. 1982) (holding that the vendors’ recovery was restricted
to the $1,000 liquidated-damages clause in the parties’ contract where vendor did not
contest the validity of that clause). And at oral argument to this court, Smart maintained
that it could not have pursued actual damages as an alternative to liquidated damages and
22
explained that doing so would have undercut its assertion that actual damages could not be
ascertained prospectively.
Smart does not cite, and our research does not reveal, any precedent holding that a
claimant may not pursue actual damages as an alternative to liquidated damages. In fact,
caselaw provides that “[t]he mere fact that the stipulation for damages, as embodied in a
contract, is construed as a penalty, does not render the contract a nullity. The only effect
following that conclusion is to limit recovery to actual damages, which may be recovered
under proper pleading and proof.” J. I. Case Threshing Mach. Co. v. Fronk, 117 N.W.
229, 231 (Minn. 1908); see Meuwissen, 16 N.W.2d at 549 (stating that if the provision for
liquidated damages is “in the nature of a penalty,” then a claimant “would be required to
prove actual damages”). Minnesota caselaw on this point is in accord with the Restatement
(Second) of Contracts, which states that “[p]unishment of a promisor for having broken his
promise has no justification on either economic or other grounds and a term providing such
a penalty is unenforceable on grounds of public policy,” but “[t]he rest of the agreement
remains enforceable, however, . . . and the remedies for breach are determined by the rules
stated in this Chapter, ” which permit expectation and reliance damages. Restatement
(Second) of Contracts § 356 cmt. a (1981). Thus, we are not swayed by Smart’s complaint
that the district court determined that equitable relief was not available because there was
an enforceable contract, “even though it had invalidated the liquidated damages clause.”
Moreover, at oral argument before this court, counsel for Suchy stated that Suchy
had intended to bring a pretrial dispositive motion to determine the validity of the
liquidated-damages provision. The district court requested Smart’s consent for Suchy to
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file the dispositive motion, as the scheduled time for dispositive mo tions had passed, and
Smart did not consent. Had Smart agreed to litigate the validity of the liquidated-damages
provision before trial, it would not have been in the position of choosing to forgo proof of
actual damages in a strategic attempt to avoid undermining its argument that the liquidated-
damages provision was enforceable.
Smart also argues that the contract in this case allowed “Smart to pursue ‘any option
or remedy’ for relief ‘at law or equity.’” But the relevant contract provision actually states:
“Contractor’s exercise of any option or remedy hereunder shall not preclude the exercise
of any other options or remedies available to Contractor under this Agreement, at law or
equity.” Because the parties’ rights were governed by a valid contract, the equitable
remedies Smart sought were not “available” to Smart. Moreover, the cases on which Smart
relies regard requests for injunctive relief in addition to contractual damages, and not
requests for monetary equitable relief. See Cherne Indus., Inc. v. Grounds & Assocs., 278
N.W.2d 81, 9 2 (Minn. 1979) (“The party seeking the injunction must establish that his
legal remedy is not adequate and that the injunction is necessary to prevent great and
irreparable injury.” (citation omitted)); Bell v. Olson, 424 N.W.2d 829, 830 (Minn. App.
1988) (involving request for injunctive and contractual relief). Those cases do not address
whether parties to a valid contract may obtain monetary equitable relief on the quasi-
contract theories asserted by Smart.
Finally, Smart argues that “[t]he jury found that Smart should be awarded $20,000
for the adjustment work Smart did before any repair work was done.” Even though the
district court correctly determined that equitable relief was not available given the
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existence of a contract, it also concluded that Smart’s equitable claims failed on the merits.
We discern no error in the district court’s reasoning on that issue and do not discuss it here,
except to note that the district court correctly reasoned that even if equitable relief were
available to Smart, the record is insufficient to enable a proper determination of the amount
of such relief because Smart did not document or present evidence regarding its actual
losses stemming from its efforts to negotiate the insurance claim. And although Pilich
generally testified regarding the efforts that went into negotiating the claim on Suchy’s
behalf, the record in no way supports a determination that $20,000 was a reasonable
amount of compensation for those efforts. In sum, Smart was not entitled to equitable
relief.
Conclusion
The district court correctly determined that the record supported the jury’s finding
that a contract was formed, that the contractual provision for liquidated damages is an
unenforceable penalty, and that Smart is not entitled to equitable relief. We therefore
affirm.
6
Affirmed.

6 We therefore reject Smart’s argument that “[w]ith the [district] court judgment
overturned, Smart will be the prevailing party” and “entitled to attorney fees as part of the
relief provided for by contract.” And we do not address Suchy’s request that this court
issue a precedential decision holding that the type of “price agreeable contract” in this case
is invalid and unenforceable as a matter of law.