Sustainable 9, LLC d/b/a Sustainable 9 Design + Build, 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This opinion is nonprecedential except as provided by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
A24-1548

Sustainable 9, LLC d/b/a Sustainable 9 Design + Build,
Respondent,

vs.

Jacqueline Coleman,
Appellant,

Riverland Bank,
Defendant,

John Doe, et al.,
Defendants.

Filed August 18, 2025
Affirmed
Bratvold, Judge

Hennepin County District Court
File No. 27-CV-21-3320

Davis W. Cheney, North Star Law Group PLLC, St. Paul, Minnesota (for respondent)

Carl E. Christensen, William J. Rogers, Christensen Sampsel PLLC, Minneapolis,
Minnesota (for appellant)

Considered and decided by Bratvold, Presiding Judge; Bjorkman, Judge; and Harris,
Judge.
2
NONPRECEDENTIAL OPINION
BRATVOLD, Judge
On appeal from a final judgment entered after a jury trial and mechanic’s lien
proceedings in a dispute between a homeowner and a general contractor, appellant
homeowner argues that the district court erred by (1) denying her motion for judgment as
a matter of law (JMOL) on her breach-of-contract claim because the jury’s answers to
special-verdict interrogatories were irreconcilable; (2) denying her motion for attorney fees
as the prevailing party under the parties’ contract; and (3) enforcing a mechanic’s lien for
respondent contractor. Because the jury’s answers were consistent, the district court did
not err in denying JMOL on appellant’s breach-of-contract claim, and therefore, appellant
was not the prevailing party under the contract and is not entitled to attorney fees. The
district court also did not err by enforcing respondent’s mechanic’s lien. Thus, we affirm.
FACTS
In October 2019, the parties signed a contract to build a home, and construction
began in March 2020. Work continued, but disputes arose about defects in the construction
and repairs. Despite some negotiations, discussions broke down. In February 2021,
respondent Sustainable 9 LLC served and filed a mechanic’s lien statement against
appellant Jacqueline Coleman’s property with a lien amount of $129,153.57. About one
month later, Sustainable 9 sued Coleman to enforce the lien. Sustainable 9’s complaint
alleged, among other things, that Coleman had breached the contract by withholding
payment and owed $129,153.57 for Sustainable 9’s work.
3
In Coleman’s amended answer, she alleged that Sustainable 9’s damages were
“offset by its own breach of the applicable agreements, contracts and/or correspondence.”
Coleman counterclaimed for, among other things, breach of contract and negligence,
alleging that “Sustainable 9 failed to use reasonable care [in] its general contracting duties
in the performance of its work at the Property, in its selection of subcontractors under its
supervision, and its selection of materials for the construction of the home.” In May 2022,
Sustainable 9 recorded an amended mechanic’s lien statement for $112,723.26, reducing
the lien amount to reflect payments made by Coleman.
The contract and negligence claims were tried to a jury in July 2023. The following
summarizes the relevant evidence received at trial.
In October 2019, Coleman entered a cost-plus contract1 with Sustainable 9 to build
a home in Medina. Construction began in March 2020, and Coleman paid in installments,
or “draws,” as the project progressed. In September 2020, Coleman emailed one of
Sustainable 9’s owners, Chad Hanson, about gaps in the home’s roof fascia. Hanson
responded that Sustainable 9 would caulk and paint the fascia to remedy the gaps. In
December 2020, Coleman emailed Sustainable 9, expressed concerns about the final
billing statement, and offered to have “a meeting to talk through the logistics of closing out
the project.”

1 A cost-plus contract is a “contract in which payment is based on a fixed fee or a percentage
added to the actual cost incurred; esp., a construction contract in which the owner pays to
the builder the actual costs of material and labor plus a fixed percentage over that amount.”
Black’s Law Dictionary 405 (11th ed. 2019).
4
In January 2021, Coleman met with Hanson, lead project manager Vince Birdsley,
and interior designer Joe Beulow “to discuss the project closeout.” Coleman raised defects
that, according to her, required correction. The defects included the roof fascia, patio
concrete, and basement floor. Coleman also mentioned withholding further payments,
citing the defects identified and stating that Sustainable 9 appeared unwilling to provide a
repair plan.
On January 19, Coleman emailed Hanson, stating that her attorney advised her “that
not only [does she] have the legal right as an owner to withhold” further payments, but also
that she need “not pay anything additional moving forward, including the current draw,
until all outstanding items and concerns, such as the fascia and siding, are addressed.”
On January 20, Sustainable 9 worked on repairing the basement floor. On
January 25, Coleman emailed Beulow and another project manager, stating that the
basement floor looked “worse than it did before the ‘repairs.’” Coleman also stated that
there were problems with the stairs, ceiling fan, and propane tank.
On January 31, Hanson emailed Coleman, proposing that they (1) “schedule the
final walkthrough for [that] week” and (2) “sign off on a mutually agreed upon final punch
list at that meeting.” Hanson stated that Sustainable 9 would “work to complete those
punch list items as quickly as possible. ” Hanson explained in his testimony that, usually,
punch-list items “are things like paint touchups, drywall touchups, any scratches on
cabinets or . . . things of that nature” that the contractor and homeowner agree must be
completed “within 90 days of the homeowner moving in.”
5
Hanson’s email proposed to Coleman that any punch-list items “would be removed
from current and subsequent draws” and would become “due and payable” after
Sustainable 9 completed the item on the punch list. Hanson’s email also stated that
Coleman would breach the contract if she withheld payment on items completed and not
on the punch list. Hanson explained:
Not making a payment is a breach of contract under
paragraphs 14 and 15 and allows us to stop working until the
balance is paid, which under this contract includes stopping
work on all punchlist items, and it also would allow us to
terminate the contract if payment is refused.

Hanson added that Sustainable 9’s attorney advised the company to proceed with its
mechanic’s lien “if we don’t receive payment.”
The next day, on February 1, Coleman responded, “I’m done working with you and
your team.” Coleman instructed Sustainable 9 to contact her attorney and refused to pay
the December 18, 2020 draw request of $108,516.49. At that point, Coleman had paid
$1,420,506.42 on the contract.
On February 11, Coleman and Sustainable 9 completed a walkthrough of the home,
and Coleman received the keys and certificate of occupancy. During the walkthrough,
Coleman “identified concerns,” including condensation on the windows, the back-patio
concrete, and the basement floor. On February 15, Coleman emailed Hanson and Birdsley
requesting that Sustainable 9 give her 24 hours’ notice before accessing the property.
After the walkthrough, Coleman’s attorney “went back and forth with
Sustainable 9’s attorney to obtain” a punch list. On or about February 16, Coleman
received an offer of repair from Sustainable 9; the offer included a written punch list that,
6
at trial, Sustainable 9 contended was based on the walkthrough. Coleman testified and
acknowledged that the punch list did not “contain everything that [she] had raised to
Sustainable 9 during the course of the walkthrough.”
Jury Trial
The negligence and contract claims proceeded to a jury trial from July 10 to 17,
2023. The parties disputed what repairs were necessary and whether Coleman allowed
Sustainable 9 to complete repairs on the home. First, Sustainable 9 disputed $269,773 in
repairs that Coleman’s expert identified as necessary to address defects. The disputed
repairs included the basement floor, concrete stoops and patio slab, stairs and railings,
window insulation, and sheetrock. Hanson testified that the estimated cost to repair defects
in the home was substantially less—$59,456.24.
Second, Coleman testified that she did not bar Sustainable 9 from her home and that
she gave Sustainable 9 access to repair countertops, the garage door, and the HVAC
system, among other things. Hanson testified that, because Coleman “did not agree with
the [punch] list . . . she started saying that we were no longer allowed into the house.”
Hanson also testified that Coleman did not allow Sustainable 9 to complete final grading
and repair siding on the home.
The jury returned a special verdict for the contract and negligence claims, answering
14 interrogatories. For the contract claims, the jury found that Coleman breached the
contract and caused $94,951.89 in damages to Sustainable 9. The jury found that
Sustainable 9 also breached the contract, but that its breach caused no damage to Coleman.
For Coleman’s negligence claim, the jury found that Sustainable 9 was “negligent in the
7
performance of their work on Coleman’s property” and that this negligence damaged
Coleman. The jury found that Coleman was not negligent and that the total damages caused
by Sustainable 9’s negligence was $278,622.
Mechanic’s Lien and Posttrial Proceedings
The district court conducted a hearing in October 2023 to resolve the mechanic’s
lien. Coleman opposed enforcing the mechanic’s lien, arguing that (1) Sustainable 9
“committed the first breach” by violating applicable building standards and
(2) “recoupment bars the entire lien claim ” based on the negligence damages awarded to
Coleman.
In a January 2024 order, the district court found that Sustainable 9 had met the
requirements to recover on its mechanic’s lien and determined that Sustainable 9 did not
materially breach the contract because “the jury found that Sustainable 9’s breach caused
no damage.” The district court also rejected Coleman’s recoupment defense and
determined that Sustainable 9 was entitled to a mechanic’s lien for $94,951.89— the
amount the jury awarded Sustainable 9 on its contract claim . Finally, the district court
determined that “Sustainable 9 has a claim for” attorney fees incurred in enforcing its
mechanic’s lien, as provided in Minn. Stat. § 514.14 (2024). In April 2024, after additional
briefing and related submissions, the district court awarded Sustainable 9 $62,500 in
attorney fees, costs, and disbursements for its mechanic’s lien claim.
In an order for judgment following the verdict, the district court adopted the jury’s
special-verdict findings and offset Sustainable 9’s mechanic’s lien amount and attorney-fee
award from Coleman’s negligence damages. The district court ordered that judgment be
8
entered in favor of Coleman for $121,170, plus costs and disbursements, which it later
determined to be $12,962.33. The district court found that Coleman was entitled to costs
and disbursements as the “prevailing party” because “her award was more than double the
damages awarded to Sustainable 9.” The district court directed the entry of judgment based
on the jury verdict and mechanic’s lien award.
In May 2024, Coleman moved to amend findings of fact and conclusions of law, for
JMOL, and in the alternative, for a new trial. First, Coleman argued that Sustainable 9
“committed a prior material breach” that “relieved [her] of further performance” and that,
therefore, she was entitled to JMOL on Sustainable 9’s mechanic’s lien claim. Second,
Coleman contended that the district court “should change the verdict” on her contract claim
because the jury’s finding of no contract damages was irreconcilable with the jury’s finding
that Sustainable 9’s negligence caused over $250,000 in damage to the home. Third,
Coleman contended that the district court should amend its judgment on the mechanic’s
lien award because “recoupment extinguishes the entire value of the alleged lien.” Fourth,
Coleman argued that Sustainable 9 was not entitled to attorney fees related to the
mechanic’s lien award and that she was entitled to attorney fees under the contract . And
therefore, according to Coleman, the district court should enter judgment for Coleman on
her breach-of-contract counterclaim, award her attorney fees under the contract, and enter
judgment denying enforcement of Sustainable 9’s mechanic’s lien and vacating the related
attorney-fees award. Sustainable 9 opposed Coleman’s motions.
In an August 2024 order, the district court denied Coleman’s posttrial motions. The
district court (1) determined that “there are facts in the record to support that Coleman
9
breached first by not making the required payment and by not allowing Sustainable 9 to
return”; (2) reconciled the jury’s special-verdict findings; (3) declined to reconsider
Coleman’s arguments for recoupment as to the mechanic’s lien award; and (4) determined
that Coleman was not entitled to attorney fees as provided in the contract for the prevailing
party because she did not prevail on the contract claims. Coleman appeals.
DECISION
Coleman challenges the district court’s denial of her motion for JMOL, denial of
her motion for attorney fees, and Sustainable 9’s mechanic’s lien and attorney-fee award.
Coleman does not contest the negligence judgment. In her brief submitted to this court,
Coleman identifies five issues, which we reorganize for clarity. 2 We first address
arguments about the contract claims, then discuss arguments related to the mechanic’s lien
proceeding.

2 Coleman’s principal brief contends that the district court erred (1) by enforcing the
mechanic’s lien because Coleman was entitled to recoupment; (2) by awarding attorney
fees to Sustainable 9 because it is not the prevailing party after recoupment is applied,
among other reasons; (3) by determining that Sustainable 9’s breach of contract was not
material based on the special-verdict findings; (4) by its attempt to reconcile the jury’s
answers to the special- verdict interrogatories on the contract and negligence claims; and
(5) by denying Coleman’s motion for attorney fees as the prevailing party under the
contract. For relief, Coleman asks this court to reverse the mechanic’s lien award, reverse
the related attorney-fee award, direct judgment for Coleman on her contract claim, and
remand the matter for the district court to reconsider Coleman’s motion for attorney fees
and determine the amount Coleman is entitled to under the contract. Coleman does not seek
a new trial.
10
I. The district court did not err by denying Coleman’s motion for JMOL on the
contract claims.

Coleman argues that, when denying her JMOL motion, the district court improperly
reconciled the jury’s contradictory verdict. 3 Appellate courts review a district court’s
decision to deny a motion for JMOL de novo. In re Est. of Butler, 803 N.W.2d 393, 399
(Minn. 2011). In doing so, appellate courts “view the evidence in the light most favorable
to the nonmoving party,” id., and grant JMOL only when “there is no legally sufficient
evidentiary basis for a reasonable jury to find for that party on that issue,” Minn. R. Civ.
P. 50.01(a).
“[A] special verdict form is to be liberally construed to give effect to the intention
of the jury and on appellate review it is the court’s responsibility to harmonize all findings
if at all possible. ” Kelly v. City of Minneapolis, 598 N.W.2d 657, 662 (Minn. 1999).
Appellate courts must determine whether the jury’s findings “can be reconciled in any
reasonable manner consistent with the evidence and its fair inferences.” Dunn v. Nat’l
Beverage Corp ., 745 N.W.2d 549, 555 (Minn. 2008) (quotation omitted); see also
Hauenstein v. Loctite Corp., 347 N.W.2d 272, 275 (Minn. 1984) (“If the answers to special
verdict questions can be reconciled on any theory, the verdict will not be disturbed.”).
In her motion for JMOL, Coleman argued that the jury’s finding that Sustainable 9’s
breach of the contract caused no damages was irreconcilable with its finding that

3 On appeal, Coleman does not challenge the jury instructions or special -verdict
interrogatories.
11
Sustainable 9’s negligence caused $278,622 in damages. Coleman maintained, in part, that
“both causes of action are based on violation of the same applicable building standards.”
The district court reconciled the jury’s special-verdict form in two steps. First, the
district court reasoned that the jury “could, consistent with the evidence, find that the
obligations under the contract were not identical to the duties that supported the finding of
negligence.” Second, the district court reasoned that, while “[t]here is a duty to mitigate in
contract, there is not a duty to mitigate in negligence.” The district court explained:
In this case there was evidence that Coleman’s
[damages] could have been avoided if she had let Sustainable 9
back to finish and repair the work. A jury could have found that
Sustainable 9 did sloppy work, and that this damaged
Coleman, but that under the contract theory her damages could
have been avoided if she had let Sustainable 9 return.
However, since there was no duty to mitigate under the
negligence theory, the jury could—and apparently did—find
that Sustainable 9 was liable for damages under the negligence
theory. Thus, there is evidence to support the verdict.

(Emphasis added.)

On appeal, Coleman argues—and Sustainable 9 concedes —that Minnesota law
recognizes a duty to mitigate damages in contract and negligence law. We agree with
Coleman and Sustainable 9 on this point of law. See Moorhead Econ. Dev. Auth. v. Anda,
789 N.W.2d 860, 891 n.21 (Minn. 2010) (stating that a party who has “suffered damage as
a result of the negligent actions of another [has a duty] to avoid injury and to mitigate
damages”); Deutz-Allis Credit Corp. v. Jensen , 458 N.W.2d 163, 166 (Minn. App. 1990)
(stating that the nonbreaching party to a contract must use “reasonable diligence and good
12
efforts to minimize” their losses). In fact, the district court instructed the jury that Coleman
had a duty to limit or prevent damages for both the contract and negligence claims:
INSTRUCTION 30

Limiting damages for breach of contract
In determining the amount of damages for breach of
contract, take into account the fact that the party asking for
damages must act reasonably to limit his or her damages.

Duty to prevent loss
Coleman’s damages for harm to her property must not
include any loss that she could have prevented by reasonable
care.

Neither party challenges any part of the jury instructions on appeal, so these instructions
are the law of the case. See Wolner v. Mahaska Indus. Inc., 325 N.W.2d 39, 42 (Minn.
1982) (stating that “[w]here a party makes no objections to jury instructions before the jury
retires . . . the instructions are the law of the case”); Coenen v. Buckman Bldg. Corp.,
153 N.W.2d 329, 334 (Minn. 1967) (noting that unobjected-to jury instructions become the
law of the case after the district court charges the jury). Thus, we conclude that the district
court erred in stating that Coleman had no duty to mitigate negligence damages. We
therefore turn to the district court’s first reason for denying Coleman’s JMOL motion.
Coleman maintains that
[t]here is no way to reconcile the jury’s special verdict findings
that Sustainable 9’s breach of contract for failure to construct
the improvements according to applicable building standards
caused $0.00 in damages, AND that Sustainable 9’s negligent
failure to construct the improvements according to those same
applicable building standards caused $278,622.00 in damages.
13
Coleman argues that “the theory of liability and the evidence of damages were the same
for both breach of contract and negligence” and thus the jury’s answers to the
special-verdict interrogatories are irreconcilable. Coleman urges this court to amend the
special-verdict findings to state that (1) Coleman did not breach the contract and
(2) Sustainable 9’s breach of contract caused $278,622 in damages to Coleman.
Coleman’s argument is unavailing because she overlooks well-established caselaw
holding that the parties have different duties under contract and tort. These distinct duties
are easily illustrated by examining the record evidence and instructions given to the jury
before the case was submitted. We first examine the relevant law and the jury’s
special-verdict findings for the contract claim, then consider the negligence claim.
A. Breach of Contract

The district court instructed the jury that Sustainable 9’s performance was excused
if it found that Coleman hindered performance of the contract:
INSTRUCTION 17
Hindrance of Performance
Sustainable 9’s obligation to perform on the contract is
excused if Sustainable 9 was ready, willing, and able to
perform, but Coleman prevented Sustainable 9 from
performing, or made it impossible for Sustainable 9 to perform
without justification.

If upon substantial completion of the project defects are
noted and brought to the contractor’s attention, the contractor
does have the right to enter the premises to cure the defects and
complete the contract.

The parties’ contract has several provisions relevant to understanding the jury’s
special-verdict findings on the contract claim. The contract includes “Performance
14
Guidelines” that “establish the minimum standards that apply to the work and materials
covered.” The contract also incorporates state building codes and warrants that the home
will be free from defects that do not comply “with building standards.” Under the contract,
Coleman may terminate the contract or pursue legal action after giving Sustainable 9 notice
of default and the opportunity to cure. Finally, the contract requires that Coleman make
payments to Sustainable 9 as the project progresses.
The record has ample support for the jury’s finding that Coleman breached the
contract by (1) preventing Sustainable 9’s performance of punch-list work and (2) failing
to pay draw requests. Coleman notified Sustainable 9 about construction defects, and
Sustainable 9 offered to repair defects and created a punch list. Hanson testified that
Coleman “did not agree with the [punch] list,” told him that Sustainable 9 was “no longer
allowed into the house ,” and did not allow Sustainable 9 to complete repairs. Coleman’s
testimony agreed that the punch list did not “contain everything that [she] had raised to
Sustainable 9 during the course of the walkthrough.” And it is undisputed that Coleman
did not pay the December 18, 2020 draw request for work already performed by
Sustainable 9 on the home.
This evidence, when viewed in the light most favorable to Sustainable 9, shows that
Coleman hindered Sustainable 9’s performance and prevented it from repairing defects on
the punch list. Because Coleman prevented repairs, her conduct excused Sustainable 9’s
performance. See MTS Co. v. Taiga Corp., 365 N.W.2d 321, 327 (Minn. App. 1985)
(recognizing that a party cannot claim breach of contract against another party “when it has
first breached the contract itself” and listing cases), rev. denied (Minn. June 14, 1985).
15
Because Sustainable 9’s performance was excused, the jury’s finding that Coleman’s
contract damages were $0 is consistent with the evidence and the caselaw. Thus, Coleman
is not entitled to JMOL on her contract claim. See Roberts v. Brunswick Corp., 783 N.W.2d
226, 233 (Minn. App. 2010) (stating that a breach-of-contract claim fails as a matter of law
if there are no damages), rev. denied (Minn. Aug. 24, 2010).
B. Negligence

Contractors owe their clients a duty “to erect a building in a reasonably good and
workmanlike manner.” Arden Hills N. Homes Ass’n v. Pemtom, Inc., 475 N.W.2d 495, 500
(Minn. App. 1991), aff’d on other grounds, 505 N.W.2d 50 (Minn. 1993). A building is
erected in a good and workmanlike manner when it is “characterized by quality
craftsmanship” and “constructed . . . in a skillful way or method.” See Black’s Law
Dictionary, supra, at 836 (defining “good and workmanlike”). This tort duty is independent
of the contractor’s obligations under a contract. Keiper v. Anderson , 165 N.W. 237, 239
(Minn. 1917).
The district court instructed the jury about a contractor’s tort duty to perform in a
good and workmanlike manner:
INSTRUCTION 19

A subcontractor has an arrangement with the general
contractor to perform a portion of the work for which the
general contractor is responsible. A subcontractor owes a duty
to a general contractor to perform in a workmanlike manner.

16
The district court defined this duty of care to include not only reasonable care but also
evidence of standards and custom:
INSTRUCTION 21

Evidence of standards or custom is not conclusive. It is
just one piece of evidence.
1. You may consider an industrial standard to
decide whether reasonable care was used.
2. You may consider what is usually done or
customary in this industry to decide whether reasonable care
was used.
Consider this evidence along with all the other evidence
when you decide if reasonable care was used.

Coleman argues that Sustainable 9 breached its duty to perform in a workmanlike
manner by “failing to perform the work pursuant to standard practices in the construction
industry including the plans, the specifications and the building code.” Coleman’s expert
testified that Sustainable 9 violated industry standards and customs but did not refer to
specific code violations. For example, Coleman’s expert agreed that the entry stoops and
basement floors in the home did not “meet generally accepted industry standards.” This is
different from Sustainable 9’s duties under the contract, which contemplated compliance
with “building standards,” i.e., contract plans, specifications, and identified building codes
as incorporated by reference.
We agree with the district court that the jury’s special-verdict findings can be
reconciled based on the difference between Sustainable 9’s duties under contract and tort.
The jury’s finding that Sustainable 9 breached its tort duty to perform in a workmanlike
manner is supported by evidence that Sustainable 9 did not repair the disputed items on
Coleman’s list, specifically the basement floor, concrete stoops and patio, stairs and
17
railings, window insulation, and sheetrock. Coleman’s expert testified that it would cost
$269,773 to repair the disputed items on Coleman’s list,4 and the jury awarded Coleman
$278,622 in negligence damages.5
In short, the jury’s finding that Sustainable 9’s breach of the contract caused no
damages is consistent with its finding that Sustainable 9’s negligent construction caused
$278,622 in damages. Because there is a “legally sufficient evidentiary basis for a
reasonable jury to find for” Sustainable 9 on its breach-of-contract claim, we conclude that
the district court did not err by denying Coleman’s motion for JMOL. Minn. R. Civ.
P. 50.01(a).
II. The district court did not err by denying Coleman’s motion for attorney fees
and costs under the contract.

Coleman challenges the district court’s denial of her motion for attorney fees under
the contract. Whether a party is entitled to seek attorney fees under a contract turns on the
contract’s language, the interpretation of which is a question of law that appellate courts
review de novo. See Valspar Refinish, Inc. v. Gaylord’s, Inc., 764 N.W.2d 359, 364 (Minn.
2009) (“Contract interpretation is a question of law that we review de novo.” (quotation
omitted)); Northfield Care Ctr., Inc. v. Anderson, 707 N.W.2d 731, 736 (Minn. App. 2006)

4 Coleman’s expert testified to the following repair costs: $26,667 for the basement floor,
$15,107 for the concrete stoops and patio, $10,350 for the stairs and railings, $171,820 for
the window insulation, and $45,829 for the sheetrock.

5 Also, the disputed items on Coleman’s list were not included in Sustainable 9’s offer of
repair or its punch list. Because Sustainable 9 did not attempt to repair the disputed items
on Coleman’s list, Coleman’s duty to mitigate her negligence damages was not triggered,
which is consistent with the jury’s finding that Coleman was not negligent.
18
(observing that, in determining that a contract authorized attorney fees, “the district court
found that the agreement was unambiguous”). If a party may seek attorney fees under the
contract, a ppellate courts review a district court’s denial of attorney fees for abuse of
discretion. Carlson v. SALA Architects, Inc., 732 N.W.2d 324, 331 (Minn. App. 2007), rev.
denied (Minn. Aug. 21, 2007).
The parties’ contract includes the following attorney-fee provision:
The judge or arbitrator deciding any disputes under this
Contract shall have the right to award reasonable attorneys’
fees and costs to Builder or Owner, to the extent that Builder
or Owner is the prevailing party. For purposes of this Contract,
the “prevailing party” is the party who the judge or arbitrator
has determined not to be in default under this Contract and is
entitled to recover all or substantially all of the damages or
other relief alleged in the party’s complaint or arbitration
demand.

(Emphasis added.) The district court denied Coleman’s motion for attorney fees, reasoning
that Coleman was not a prevailing party on her contract claim.
On appeal, Coleman argues that “[u]pon correction of the special verdict answers to
reflect the jury’s findings and intent, the basis for denying [her] motion no longer exists.”
She asks that we remand her attorney-fee motion “for consideration of the merits and
evaluation of the amounts sought.” Sustainable 9 counters that “[t]o recover under the
Contract’s fee-shifting provision, a party must prevail specifically on the breach of contract
claim—something Coleman did not achieve.”
Because we affirm the judgment on her contract claim, Coleman is not entitled to
attorney fees and costs under the contract, which provides that the prevailing party must
not be in default under the contract. The jury found that both Coleman and Sustainable 9
19
breached the contract. As a result, neither party is entitled to recover attorney fees under
the contract. Thus, we affirm the district court’s decision to deny Coleman’s motion for
attorney fees.
III. The district court did not err by awarding Sustainable 9 relief based on the
mechanic’s lien.

Coleman seeks reversal of the mechanic’s lien award along with the related
attorney-fee award. “When reviewing a decision reached by a court sitting without a jury,
this court’s scope of review is limited to determining whether the trial court’s findings are
clearly erroneous, either without substantial evidentiary support or based on an erroneous
conclusion of law.” C. Kowalski, Inc. v. Davis , 472 N.W.2d 872, 875 (Minn. App. 1991)
(quotation omitted), rev. denied (Minn. Sept. 13, 1991). “We review a district court’s
application of the law de novo.” Harlow v. State, Dep’t of Hum. Servs., 883 N.W.2d 561,
568 (Minn. 2016).
Mechanic’s liens “are purely creatures of statute and exist only within the terms of
the statute.” Automated Bldg. Components, Inc. v. New Horizon Homes, Inc., 514 N.W.2d
826, 828 (Minn. App. 1994), rev. denied (Minn. June 15, 1994). The mechanic’s lien
statute provides that a contractor who contributes to improving property through labor,
skill, material, or machinery has a lien against the improved property. Minn. Stat. § 514.01
(2024). The purpose of a mechanic’s lien “is to reimburse laborers and material providers
who improve real estate and are not paid for their services.” Eischen Cabinet Co. v.
Hildebrandt, 683 N.W.2d 813, 816 (Minn. 2004). When, as here, an improvement was
made pursuant to a cost-plus contract, the amount of the mechanic’s lien is the unpaid
20
portion of “the reasonable value of the work done, and of the skill, material, and machinery
furnished.” Minn. Stat. § 514.03, subd. 2(b) (2024).
Coleman argues that the district court erred by (1) rejecting her recoupment defense
to reduce the amount of the mechanic’s lien; (2) rejecting her argument that Sustainable 9
was not entitled to a mechanic’s lien because it materially breached the contract first,
excusing Coleman’s performance; and (3) awarding Sustainable 9 attorney fees under the
mechanic’s lien statute. We address each argument in turn.
A. Coleman is not entitled to recoup or reduce the mechanic’s lien award
based on her negligence claim.

When a contractor’s work is defective, the amount of a mechanic’s lien may be
reduced by either the cost of repair or diminution in the improvement’s value caused by
the defects. Asp v. O’Brien, 277 N.W.2d 382, 384 (Minn. 1979). A property owner’s right
to reduce a mechanic’s lien award because of defective improvements “is one of
recoupment, not counterclaim.” Knutson v. Lasher, 18 N.W.2d 688, 692 (Minn. 1945). “In
general, recoupment is a common-law doctrine that allows a party defending a [mechanic’s
lien] claim to assert another claim for damages ‘growing out of the same transaction’ so
that ‘one claim should compensate the other, and that the balance only should be
recovered.’” Molde v. CitiMortgage, Inc., 781 N.W.2d 36, 44 (Minn. App. 2010) (quoting
Townshend v. Minneapolis Cold-Storage & Freezer Co., 48 N.W. 682, 683 (Minn. 1891));
see also Black’s Law Dictionary, supra, at 1528 (defining “recoupment” as the “right of a
defendant to have the plaintiff’s claim reduced or eliminated because of the plaintiff’s
breach of contract or duty in the same transaction”). Unlike a counterclaim, recoupment is
21
purely defensive and “can only be utilized to reduce or avoid the plaintiff’s recovery.”
Household Fin. Corp. v. Pugh, 288 N.W.2d 701, 704 & n.5 (Minn. 1980).
In its order enforcing Sustainable 9’s mechanic’s lien, the district court determined
that recoupment did not reduce the $94,951.89 lien amount because (1) “[t]he jury found
that Coleman sustained no damages for Sustainable 9’s breach of contract” and (2) the
negligence damages awarded to Coleman came from “a counterclaim, not a recoupment,”
and did not “arise in contract.”
Coleman argues that she is entitled to recoupment because the negligence damages
“arose out of the construction contract and Sustainable 9’s defective work performed
pursuant to that contract.” Coleman maintains that she “is not relying on her affirmative
counterclaims” because she separately pleaded a recoupment defense in her amended
answer. Coleman also argues that “[t]here is no requirement that the recouped damages be
awarded under a breach of contract legal theory.”
Sustainable 9 contends that Coleman’s negligence counterclaim “sought additional
money” and therefore “was not a recoupment defense.” Sustainable 9 also argues that
“when the underlying claim is for breach of contract, recoupment must derive from
damages specifically linked to that breach—not from a related but legally distinct cause of
action, such as negligence.”
Both parties and the district court rely on this court’s nonprecedential opinion in
Gopher Co. v. Reuben, No. A11-959, 2012 WL 686101, at *1 (Minn. App. Mar. 5, 2012).
6

6 Nonprecedential opinions do not bind this court but “may be cited as persuasive
authority.” Minn. R. Civ. App. P. 136.01, subd. 1(c).
22
In that case, homeowner Reuben contracted with Gopher to repair her home after it was
damaged by a tornado. Reuben, 2012 WL 686101, at *1. Reuben complained about defects
in the repairs and told Gopher she would not pay the remaining balance on the contract
“until the job was done correctly.” Id. Gopher filed a mechanic’s lien statement and
commenced an action to foreclose the lien. Id. In her answer, Reuben asserted that she was
“entitled to an offset or damages for any cost she will incur in ‘correcting’ the work done
by Gopher or in completing the items listed by her expert.” Id. at *2. Reuben also
counterclaimed, alleging breach of contract. Id. at *1. The district court granted summary
judgment to Gopher on both Gopher’s mechanic’s lien claim and Reuben’s
breach-of-contract counterclaim. Id. at *2. In its order, the district court determined that
the amount of the mechanic’s lien award would not be reduced because Reuben did not
grant Gopher access to her home to correct any “clean-up” or punch-list items. Id.
This court reversed, determining that material fact questions precluded summary
judgment on both the breach-of-contract and mechanic’s lien claims. Id. at *5. This court
explained that “Reuben’s breach-of-contract counterclaim can constitute an affirmative
defense of recoupment based on the damages caused by defects in the construction.” Id. at
*4 (citing Townshend, 48 N.W. at 683). This court reasoned that “[i]f Reuben did not deny
Gopher access to her property, Reuben is entitled to an offset for the cost of correcting the
deficiencies or for the difference in the value of the [items] as contracted for and the value
as actually built.” Id.
There are parallels between Coleman’s defense and Reuben’s defense in Reuben.
Like Reuben, Coleman asserted that Sustainable 9’s contract damages “are offset by its
23
own breach of the applicable agreements, contracts and/or correspondence.” Like Reuben,
Coleman also counterclaimed for breach of contract, which may be viewed as a recoupment
defense. See Townshend, 48 N.W. at 683 (holding a matter pleaded as a counterclaim may
be a recoupment defense). The summary judgment in Reuben, however, was reversed and
remanded for trial. 2012 WL 686101, at *5. Coleman’s breach-of-contract claim was
submitted to the jury, which found that Sustainable 9 breached the contract but did not
damage Coleman and also found that Coleman breached the contract as to Sustainable 9’s
claim. And Reuben offers no guidance on whether damages from a separate tort claim for
a contractor’s negligence may be viewed as a recoupment defense because only contract
claims were raised. See id. at *1.
Caselaw suggests that a right to seek recoupment may arise from some duties that
are closely related to a contract. In Pugh, consumers and a lender entered a consumer credit
transaction, and the consumers defaulted on the note. 288 N.W.2d at 702. When the lender
sued to enforce the contract, the consumers “admitted that the note was unpaid, but sought
recoupment . . . for [the lender’s] alleged violation” of the federal Truth in Lending Act
(TILA). Id. at 702-03. The district court rejected the TILA violation as a recoupment
defense. Id. at 703.
The supreme court reversed, noting that “recoupment or reduction of a demand is
said to arise where there is an action upon a contract, and there has been a breach of the
contract, or some divisible part of it, or obligation connected with it.” Id. at 705 (emphasis
omitted) (quotation omitted). The supreme court concluded that a TILA violation
supported the consumers’ recoupment defense because the “duties and resultant civil
24
liability of a lender arise out of the loan transaction itself” and that, “in effect, they become
a part of the contract.” Id. (quotation omitted). “As long as the two claims arise from the
same transaction and can be adjusted in the same proceeding, recoupment is available.” Id.
at 705 n.7 (quotation omitted).
Coleman contends that her negligence claim arose out of the construction contract
and was “an obligation connected with it,” thereby permitting recoupment. Id. at 705. We
disagree. Although Sustainable 9’s work on the home arose from the contract, its duty of
care under tort law was independent of the contract. It is long established that a “contractor
has a duty, independent of the contract itself, to erect a building in a reasonably good and
workmanlike manner” under applicable tort law. Pemtom, Inc., 475 N.W.2d at 500
(emphasis added). And “ [t]here may be a breach of contract without negligence” or
negligence “in the performance of a contract.” Keiper, 165 N.W. at 239. Thus,
Sustainable 9’s tort duties were not “an obligation connected with” the contract as was the
lender’s compliance with TILA in Pugh. 288 N.W.2d at 705. W e therefore conclude that
Coleman’s negligence claim does not support a recoupment defense and cannot reduce the
amount of Sustainable 9’s mechanic’s lien award.
B. The district court did not err by determining that Sustainable 9 did not
materially breach the contract.

Coleman argues that, as a matter of law, Sustainable 9 materially breached the
contract first, excusing her performance under the contract. From this premise, Coleman
contends that the district court misapplied the law in enforcing Sustainable 9’s mechanic’s
lien and denying her motion for JMOL. We therefore review the issue de novo. See Butler,
25
803 N.W.2d at 399 (stating that appellate courts review the district court’s denial of a
motion for JMOL de novo).
A breach of the express terms in a contract is not necessarily a material breach. See
Boatwright Constr., Inc. v. Kemrich Knolls, 238 N.W.2d 606, 607 (Minn. 1976) (stating
that failing to oil streets as provided in a land-sale contract constituted a nonmaterial
breach). “A material breach is a breach that goes to the essence of the parties’ agreement,
affecting the purpose of the contract in a vital way.” Kuhn v. Dunn, 8 N.W.3d 633, 640-41
(Minn. 2024) (quotations omitted). As noted above, a plaintiff’s prior material breach of a
contract can excuse a defendant’s nonperformance. MTS Co., 365 N.W.2d at 327.
In its order enforcing the mechanic’s lien, the district court stated:
Here, the jury found that Sustainable 9’s breach caused no
damage and therefore this court finds that it was not a material
breach. Ms. Coleman asks the court to overlook the jury’s
finding and assume that because they found damages for
negligence, there must have been a material breach. The court
will not override the jury findings.

In its order denying Coleman’s motion for JMOL, the district court expanded on its
reasoning:
Again, there are facts in the record to support that Coleman
breached first by not making the required payment and by not
allowing Sustainable 9 to return. The fact that the work needed
to be fixed is not necessarily a first breach that would nullify
the right to be paid. The court finds that the verdict is consistent
with the facts in the case.

Coleman argues that the “magnitude” of the cost to repair the construction defects—
almost 20% of the payments made under the contract—“demonstrates the materiality of
Sustainable 9’s breach.” Sustainable 9 counters that “Coleman was the first party to
26
commit a material breach” by not paying the draw request and refusing to allow
Sustainable 9 to repair the punch-list items. Sustainable 9 acknowledges that the jury found
it had breached the contract, as shown by the defects in the punch list, but Sustainable 9
insists these defects were reparable and therefore not a material breach.
Coleman cites no legal authority to support her contention that the cost to repair the
home, as a matter of law, demonstrates that Sustainable 9’s breach of contract was material.
To determine whether there is a material breach based on a contractor’s defective work,
“the design intent of the contract plans and specifications must be evaluated against the
quality of the work actually furnished, its suitability under applicable building codes, and
its adequacy for the owner’s intended use.” 7 Philip L. Bruner & Patrick J. O’Connor, Jr.,
Bruner and O’Connor on Construction Law § 18:2 (2024-2025 ed.). Each of these
factors—design intent, quality of the work, and adequacy for intended use—raise questions
of fact for the jury. H.P. Droher & Sons v. Toushin, 85 N.W.2d 273, 277 (Minn. 1957)
(stating that whether a contractor properly performed on its contract is a question of fact).
Coleman does not contend that the evidence on each factor is so one-sided that she is
entitled to JMOL.
To the extent that Coleman’s argument relies on the contract, her argument is
unavailing. The parties’ contract anticipates defects and provides that Sustainable 9 will
make repairs. For example, under the performance guidelines, Sustainable 9 must “repair
or replace defective concrete surfaces,” “repair defective joints,” “correct or replace and
refinish defective doors,” and “repair or replace defective switches, fixtures and outlets.”
The contract states that “any warranty work or other work required to correct any
27
deficiencies in the Work will be performed by” Sustainable 9. And the contract gives
Sustainable 9 the opportunity to correct defects before Coleman can terminate the contract
or seek legal action. Th ese contract terms show that the parties expected defects in the
construction and agreed to abide by certain terms so Sustainable 9 could repair them. Thus,
the existence of defects in the home, without something more, did not go “to the essence
of the parties’ agreement, affecting the purpose of the contract in a vital way.” Kuhn,
8 N.W.3d at 640-41 (quotation omitted). We therefore conclude that the district court did
not err when it determined that Sustainable 9’s breach was not material.
Because Sustainable 9’s breach was not material, Coleman was not excused from
performance under the contract. As discussed, the record sustains the jury’s finding that
Coleman breached the contract by refusing to pay the draw request for work completed by
Sustainable 9 and preventing Sustainable 9 from repairing agreed- upon defects. Thus, the
district court did not err by determining that Coleman materially breached the contract,
which supports its conclusion that Sustainable 9 was entitled to enforce its mechanic’s lien.
Coleman therefore was not entitled to JMOL on Sustainable 9’s mechanic’s lien claim.
C. The district court did not abuse its discretion by awarding attorney fees
to Sustainable 9 in the mechanic’s lien proceeding.

Coleman challenges the attorney -fee award to Sustainable 9 related to its
mechanic’s lien award. The prevailing party in a mechanic’s lien proceeding is entitled to
seek attorney fees. See Minn. Stat. § 514.14 (stating that judgment in a mechanic’s lien
proceeding “shall be given in favor of each lienholder for the amount demanded and proved
by him, with costs and disbursements to be fixed by the court at the trial”); Hilltop Constr.,
28
Inc. v. Lou Park Apartments, 324 N.W.2d 236, 240 (Minn. 1982) (explaining that Minn.
Stat. § 514.14 “has been interpreted to permit the award of reasonable attorney fees”).
Appellate courts review a district court’s decision to grant attorney fees for abuse of
discretion. Carlson, 732 N.W.2d at 331.
In the mechanic’s lien context, an attorney-fee award must “bear a reasonable
relation to the amount of the judgment secured.” Lyman Lumber Co. v. Cornerstone
Constr., Inc., 487 N.W.2d 251, 255 (Minn. App. 1992) (quotation omitted), rev. denied
(Minn. Aug. 4, 1992).
7 For example, in Asp, the supreme court reduced an attorney-fee
award to a mechanic’s lienholder from $2,400 to $1,000 where the lienholder recovered
$4,359.46 on the lien. 277 N.W.2d at 383, 385. In reducing the award, the supreme court
stated that attorney-fee awards in mechanic’s lien proceedings “should be made with
caution so that property owners are not discouraged from challenging defective
workmanship on the part of lien holders by excessive awards of attorney’s fees.” Id. at 385.
The supreme court explained that it was “not inclined to allow the award of the full amount,
particularly where the amount of the lien recovered is small in comparison to the attorney’s
fees assessed” and “the property owner was successful in partially limiting the amount of
recovery.” Id.

7 To determine the amount of an attorney-fee award in a mechanic’s lien proceeding,
district courts consider the (1) “time and effort required,” (2) “novelty or difficulty of the
issues,” (3) attorney’s “skill and standing,” (4) “value of the interest involved,” (5) “results
secured at trial,” (6) “loss of opportunity for other employment,” (7) losing party’s “ability
to pay,” (8) “customary charges for similar services,” and (9) “certainty of payment.” Id.
(citing Jadwin v. Kasal, 318 N.W.2d 844, 848 (Minn. 1982)).
29
The jury found that Coleman’s breach of contract damaged Sustainable 9 in the
amount of $94,951.89. The district court determined this was the amount of the mechanic’s
lien. In directing Sustainable 9 to submit an attorney-fee request, the district court stated
that Sustainable 9 should “request less than its total fees expended” and explain “how the
fees requested reasonably account for the fact that Ms. Coleman prevailed on her
negligence claim and was awarded an amount of compensation far in excess of the amount
awarded on the lien claim.” The district court also stated that it would not award attorney
fees for Sustainable 9’s defense of Coleman’s negligence claim. The district court
ultimately awarded Sustainable 9 $62,500 in attorney fees, costs, and disbursements for
prevailing on its mechanic’s lien claim.
Coleman does not argue that the fees awarded were excessive based on the hours
billed or amount charged. We therefore do not consider whether the district court awarded
a reasonable amount of attorney fees associated with the mechanic’s lien claim. Coleman
instead argues that the district court abused its discretion in awarding any attorney fees to
Sustainable 9 because “Sustainable 9 did not prevail on its lien claim.” Coleman maintains
that the attorney-fee award is not reasonably related to the mechanic’s lien award because
the jury verdict on her negligence damages “was almost three times the amount” of the
mechanic’s lien award. Coleman argues that the attorney-fee award “encourages more
litigation by contractors while also discouraging property owners from challenging
defective workmanship.”
Sustainable 9 counters that “Coleman fails to cite any case law supporting [her]
argument that [Sustainable 9] is barred from recovering attorney’s fees simply because
30
Coleman recovered a greater amount.” Sustainable 9 argues that “Minnesota courts have
consistently emphasized the nuanced analysis required to determine both the
appropriateness and reasonableness of a fee award” and that the attorney-fee award was
within the district court’s discretion.8
Sustainable 9’s argument is persuasive. Coleman’s negligence judgment is separate
from Sustainable 9’s mechanic’s lien award because a negligence claim arises from the
breach of a duty of care that is independent of the contract. See Pemtom, Inc., 475 N.W.2d
at 500. And Coleman cites no legal authority that suggests a negligence judgment against
a contractor bars attorney fees related to a mechanic’s lien proceeding. We therefore
conclude that the district court did not abuse its discretion in awarding $62,500 in attorney
fees, costs, and disbursements to Sustainable 9 in the mechanic’s lien proceeding.
Affirmed.

8 Sustainable 9 also argues that the attorney-fee award was reasonable because (1) “the
award is less than the amount of the [mechanic’s lien] judgment secured,” (2) “fees
incurred in enforcing a mechanic’s lien remain recoverable because the trial court found
that [Sustainable 9] had a valid lien in the amount that the jury awarded for Coleman’s
breach,” and (3) the award was not excessive. Because we affirm the attorney-fee award
on other grounds, we need not address these other arguments.