Mark Lukens, et al., Respondents,

This opinion is nonprecedential except as provided by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
A24-1621

Mark Lukens, et al.,
Respondents,

vs.

Snowman Construction, LLC,
Appellant.

Filed August 4, 2025
Affirmed
Cochran, Judge

Blue Earth County District Court
File No. 07-CV-22-713

Natalie R. Walz, David J. McGee, McGee Walz PA, Minneapolis, Minnesota (for
respondents)

Ryan R. Dreyer, Fafinski Mark & Johnson, P.A., Eden Prairie, Minnesota (for appellant)

Considered and decided by Cochran, Presiding Judge; Reyes, Judge; and Schmidt,
Judge.
NONPRECEDENTIAL OPINION
COCHRAN, Judge
Following a court trial in this construction dispute, the district court entered
judgment in favor of respondent-homeowners on their claims and awarded damages. On
appeal, appellant-contractor seeks reversal of the judgment, raising several arguments.
First, appellant argues that the district court erred in granting relief to respondents because
2
respondents’ claims were barred by their failure to comply with the contractual requirement
that the parties participate in mediation prior to bringing a lawsuit. Alternatively, appellant
argues that respondents’ claims were released by the terms of the contract when
respondents took occupancy of the home. Additionally, appellant argues that respondents
failed to mitigate their damages, that the district court erred by rescinding a valid change
order, and the district court erred by dismissing appellant’s fraud claim against
respondents. We affirm.
FACTS
This appeal involves a dispute regarding a contract between appellant Snowman
Construction, LLC and respondents Mark and Pamela Lukens for the construction of a
home. The Lukenses brought suit against Snowman, asserting claims for breach of contract
and negligence. The matter proceeded to a court trial. The following summarizes the
district court’s factual findings and is supplemented by record evidence when helpful to
understand the issues on appeal.
In August 2020, the Lukenses contracted with Snowman for the construction of a
new home in Lindstrom. The parties agreed that the home would be built according to
plans and specifications provided for in the contract, subject to any modifications or change
orders. Section 1.2 of the contract addresses change orders and provide s that “the
[Lukenses] may request changes in the work and at [Snowman’s] discretion [Snowman]
may perform the work” (the change-order provision). Section 1.2 also specifies that change
orders “should be in writing and agreed upon by [the parties] prior to completion of [the]
work.”
3
The parties executed four change orders related to the home, but only one change
order is at issue on appeal. In October 2020, Snowman presented the Lukenses with a
change order that included costs for connecting the home’s sewer and water systems to the
city system. The Lukenses did not request the change order. They thought the contract
included this work and did not believe they were responsible for these additional expenses
included in the change order. Nevertheless, Pamela Lukens signed the change order
because she believed that Snowman would stop working on the project and place a lien on
the property if she did not sign. Bradley Snow, the owner of Snowman, stated that the
parties discussed the change order, and he acknowledged that he threatened to stop working
on the project and put a lien on the property if the Lukenses did not sign the change order.
Section 4.4. of the contract sets forth the parties’ agreement related to punch- list
items. Section 4.4 provides that the Lukenses would give Snowman a punch list within
five working days of substantial completion of the home, or upon notification by Snowman.
The contract defines “substantial completion” as “occur[ing] when a certificate of
occupancy is issued by the local building official.” Upon receiving the initial punch list,
Snowman would then have 14 working days to complete the items identified on this list.
Section 4.4 provide s that the parties would then “agree on a final punch list within
ten working days of [the Lukenses’] Occupancy” and that “[a]ny and all items not listed
on the final punch list [would] be deemed accepted, and thereafter [] only subject to the
New Home Warranty Act.”
Section 4.5 of the contract provides that: “Occupancy of the Home by [the
Lukenses] shall be deemed to be unconditional acceptance of the Home by [the Lukenses]
4
and shall release [Snowman] from any further obligations” under the contract, except for
“completion of Punch List items which could not be completed within the time allowed”
and “warranty obligations.”
On March 3, 2021, the county issued a certificate of occupancy for the home. The
Lukenses closed on the home the following day and moved into the home. On March 7,
they submitted a 12-item punch list to Snowman. Snowman returned a copy of the punch
list to the Lukenses on March 12 that included a response to each of the 12 items. The 14-
working-day deadline to complete the punch list was March 25. However, Snow
acknowledged at trial that Snowman did not complete the items on the list by the March 25
deadline.
The contract also addresses the parties’ understanding regarding the resolution of
disputes. Section 6.6 provides that the parties “shall endeavor to resolve their claims by
mediation . . . in accordance with the Construction Industry Mediation Rules of the
American Arbitration Association [(the AAA)]” (the dispute- resolution clause). It is
uncontested that the parties did not engage in mediation prior to litigation.
Instead, the Lukenses commenced this lawsuit against Snowman in February 2022,
asserting claims for breach of contract and negligence. Under the breach-of-contract claim,
the Lukenses alleged that Snowman breached the contract by failing to complete
substantial construction of the home in a timely manner and by initiating change orders
that they did not request. They further claimed that Snowman did not complete the
punch-list items on the initial punch list within 14 days and did not work with them to
compile a final punch list. As to the negligence claim, the Lukenses contended that
5
Snowman failed to complete the work in a workmanlike manner. Snowman filed an answer
denying the claims and asserting numerous affirmative defenses including failure to
mitigate damages. Snowman also brought counterclaims for breach of contract and fraud.
The district court held a two-day bench trial in March 2024. It determined that
Snowman breached the contract by charging the Lukenses for change orders that the
Lukenses “did not request and had no responsibility for, resulting in large upcharges.” As
to the punch-list items, the district court found that Snowman did not complete the items
on the punch list by the 14-day deadline, and that “[n]o other punch list was provided.” It
also found that Snowman was negligent in its duty to construct the driveway and install the
patio doors in a workmanlike manner. The district court did not make any findings related
to Snowman’s argument that the Lukenses failed to mitigate their damages related to the
patio doors. In reaching these decisions, the district court rejected Snowman’s argument,
raised in its written closing argument, that the Lukenses’ claims were barred because they
did not participate in mediation prior to filing the lawsuit. And it further rejected
Snowman’s argument that the Lukenses were liable for fraudulent misrepresentation and
breach of contract. The district court awarded damages to the Lukenses.
Snowman appeals.
6
DECISION
“On appeal from judgment following a court trial, this court reviews whether the
district court’s findings were clearly erroneous and whether the district court erred as a
matter of law.” In re Distrib. of Att ’y’s Fees, 855 N.W.2d 760, 761 (Minn. App. 2014),
aff’d, 870 N.W.2d 755 (Minn. 2015). To conclude that findings of fact are clearly
erroneous, a reviewing court must be “left with a definite and firm conviction that a mistake
has been committed.” In re Civ. Commitment of Kenney, 963 N.W.2d 214, 221 (Minn.
2021) (quotation omitted). In determining whether a finding of fact is clearly erroneous,
an appellate court views the evidence in the light most favorable to the district court’s
findings and examines the record to see if there is reasonable evidence to support the
district court’s findings. Id. This standard is deferential to the district court’s findings
because the district court is in the best position to observe the witnesses and assess their
credibility. Minn. R. Civ. P. 52.01; Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988).
Under this standard, an appellate court will not reweigh the evidence or substitute its
judgment for that of the district court. Sefkow, 427 N.W.2d at 210.
However, c ontract interpretation presents a question of law, which an appellate
court reviews de novo. Glacier Park Iron Ore Props., LLC v. U.S. Steel Corp. ,
961 N.W.2d 766, 769 (Minn. 2021). The purpose of contract interpretation is to
determine and enforce the parties’ intent. Travertine Corp. v. Lexington-Silverwood,
683 N.W.2d 267, 271 (Minn. 2004). To discern that intent, we look to the language of the
contract as a whole. Trebelhorn v. Agrawal, 905 N.W.2d 237, 242 (Minn. App. 2017). If
the language of the contract is unambiguous, “the plain and ordinary meaning of the
7
contract language controls.” Linn v. BCBSM, Inc., 905 N.W.2d 497, 504 (Minn. 2018)
(quotation omitted).
On appeal, Snowman asserts that we should reverse the judgment in favor of the
Lukenses because: (1) the Lukenses did not pursue mediation prior to commencing this
lawsuit; (2) the district court erred in determining that the Lukenses’ claims were not barred
under sections 4.4 and 4.5 of the contract; (3) the Lukenses are not entitled to damages for
the patio doors because they failed to mitigate their damages; (4) the district court erred in
determining that Snowman breached the contract by presenting the Lukenses with a change
order the Lukenses did not initiate; and (5) Snowman is entitled to relief on its fraud claim.
Each argument is addressed in turn.
I. Snowman’s mediation argument is forfeited.
Snowman argues that the Lukenses’ claims are barred because the contract
contemplates that the parties will engage in mediation prior to bringing a lawsuit, which
did not occur. The district court concluded that the mediation provision did not bar the
claims. Based on our review of the undisputed facts, we conclude that Snowman forfeited
this argument by failing to raise the issue of mediation until the end of trial, more than two
years after the Lukenses commenced this litigation.
1

1 The district court did not address the question of forfeiture. However, an appellate court
may affirm on any ground that supports the district court’s decision. See, e.g., Day
Masonry v. Indep. Sch. Dist. 347, 781 N.W.2d 321, 331 (Minn. 2010) (stating that a party
may on appeal “stress any sound reason for affirmance” (quotation omitted)). Because we
conclude that Snowman forfeited its claim, we do not address the merits of this argument.
8
“[F]orfeiture is the failure to make the timely assertion of a right . . . .”
State v. Beaulieu, 859 N.W.2d 275, 278 n.3 (Minn. 2015) (quotation omitted); see also
Leiendecker v. Asian Women United of Minn., 895 N.W.2d 623, 631 n.3 (Minn. 2017)
(applying Beaulieu in the context of civil litigation). Caselaw involving arbitration helps
inform our analysis. See Prod. Credit Ass’n of Worthington v. Spring Water Dairy Farm,
Inc., 392 N.W.2d 15, 17 (Minn. App. 1986), aff’d, 407 N.W.2d 88 (Minn. 1987)
(analogizing mediation to arbitration proceedings). The supreme court has held that “a
party to a contract containing an arbitration provision will be deemed to have waived any
right to arbitration if judicial proceedings based on that contract have been initiated and
have not been expeditiously challenged on the grounds that disputes under the contract are
to be arbitrated.” Bros. Jurewicz, Inc., 296 N.W.2d 422, 428 (Minn. 1980). In that case,
the supreme court determined that the complaining party forfeited its right to arbitration
because it answered on the merits and participated in litigation for nearly a year without
moving the court to stay the proceedings and compel arbitration. Id.; see also Bautch v.
Red Owl Stores, Inc., 278 N.W.2d 328, 330 (Minn. 1979) (concluding that it was
“incumbent” on the responding party to raise the issue of arbitration “immediately in the
interests of effective judicial administration”). A party forfeits its right to arbitrate a
dispute by ans wering on the merits and litigating. Anderson v. Twin City Rapid Transit
Co., 84 N.W.2d 593, 602-03 (Minn. 1957).
2

2 Brothers Jurewicz and Anderson use the term “waiver” rather than the term “forfeiture”
to refer to a party’s failure to make a timely assertion of its right to enforce an arbitration
clause in a contract. Bros. Jurewicz, 296 N.W.2d at 428; Anderson, 84 N.W.2d at 602-03;

9
Because mediation and arbitration are both dispute-resolution alternatives to trial,
we apply the supreme court’s precedent addressing forfeiture of a right to arbitration to
resolve the question of forfeiture before us. See Peterson v. City of Minneapolis,
892 N.W.2d 824, 829 (Minn. 2017) (discussing the similarities between mediation and
arbitration in that “a ‘dispute resolution process’ [including arbitration and mediation]
includes formal processes capable of providing relief to the complainant”); see also Black’s
Law Dictionary 98 (12th ed. 2024) (defining alternative dispute resolution as a “procedure
for settling a dispute by means other than litigation, as by arbitration or mediation”). Here,
section 6.6 of the contract provides in relevant part:
The parties shall endeavor to resolve their claims by mediation
which . . . shall be in accordance with the Construction
Industry Mediation Rules of the American Arbitration
Association currently in effect. Request for mediation shall be
filed in writing with the other party to this Contract and the
American Arbitration Association.

Assuming without deciding that this provision imposes an obligation on the parties to
engage in mediation prior to commencing a lawsuit, we conclude that Snowman forfeited
its right to demand mediation by failing to promptly raise the issue after the Lukenses
commenced this lawsuit and instead litigating the Lukenses’ claims on the merits at trial.
It is undisputed that, in its March 2022 answer to the complaint, Snowman did not raise the

Beaulieu, 859 N.W.2d at 278 n.3 (“ We have sometimes used the phrase
‘waived . . . appellate review’ when discussing a defendant’s failure to object to an error in
the district court.”). Beaulieu clarifies that “forfeiture is the failure to make the timely
assertion of a right,” whereas “waiver is the intentional relinquishment or abandonment of
a known right.” Id. (quotations omitted). Despite the different terms used in Brothers
Jurewicz and Anderson, these cases provide guidance on the issue of forfeiture.
10
issue of mediation. Nearly two years later, in March 2024, a bench trial was held. In the
interim, Snowman did not demand mediation, seek a stay to engage in mediation, or
otherwise seek dismissal of the lawsuit on the basis that the dispute must first be mediated.
Indeed, Snowman did not raise this issue until its written closing arguments following trial.
Because the undisputed facts show that Snowman did not “expeditiously challenge[]” the
Lukenses’ initiation of the lawsuit and chose to fully litigate the matter instead, Bros.
Jurewicz, 296 N.W.2d at 428, we conclude that Snowman forfeited any right to enforce the
mediation provision.
To persuade us otherwise, Snowman contends that it raised an affirmative defense
in its answer that the Lukenses’ complaint was “barred by . . . [the Lukenses’] own breach
of contract.” However, Snowman’s answer did not specify that its breach- of-contract
defense was based on the mediation clause of the parties’ contract. An affirmative defense
“must be pleaded specifically.” Rhee v. Golden Home Builders, Inc., 617 N.W.2d 618, 621
(Minn. App. 2000). Snowman’s pleading did not provide the Lukenses with sufficient
notice that the mediation clause was at issue. We therefore reject this argument.
II. Sections 4.4. and 4.5 do not bar the Lukenses’ claims.
Snowman next argues that the district court erred when it concluded that the
Lukenses’ claims were not released by the language of sections 4.4 and 4.5. We disagree.
A. The Lukenses’ claims are not barred by section 4.4.
Snowman argues that most of the Lukenses’ claims were released under section 4.4,
which sets forth the parties’ understanding about the completion of unfinished work
identified on a punch list. Specifically, this section provides that:
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[The Lukenses] are to give a punch list to [Snowman] within 5
working days after substantial completion, or upon notification
by [Snowman]. [Snowman] will have 14 working days to
complete this punch list. Thereafter, [the parties] shall agree
on a final punch list within 10 working days of [the Lukenses’]
Occupancy. Any and all items not listed on the final punch list
will be deemed accepted and thereafter are only subject to the
New Home Warranty Act.

“A punch list is an enumeration of work items that need to be done in order for the project
to be considered fully complete.” 3 Philip L. Bruner & Patrick J. O’Connor, Jr., Bruner &
O’Connor on Construction Law § 8:24, at 65 (2024).
Snowman contends that most of the Lukenses’ claims are barred by operation of
this clause because they waived any alleged defects that they did not include on the punch
list provided to Snowman. The Lukenses respond that their claims are not barred because
Snowman failed to complete the items on the initial punch list within 14 working days and
did not reach an agreement with them on a final punch list.
We first consider whether completion of the initial punch list within 14 days and the
creation of a final punch list was a condition precedent to Snowman’s work being accepted
under section 4.4. We then address whether the district court erred by determining that the
condition precedent was unfulfilled because Snowman did not complete the items on the
initial punch list and the parties did not mutually agree to a final punch list. Finally, we
consider whether the district court erred by concluding that the Lukenses’ claims were not
barred under section 4.4.
12
i. Completion of the items on the initial punch list and the creation
of a final punch list was a condition precedent to a waiver of
claims.

We begin by analyzing whether the timely completion of the items on the initial
punch list and the creation of a final punch list operated as a condition precedent . “A
condition precedent is a contract term that calls for the performance of some act or the
happening of some event after the contract is entered into, and upon the performance or
happening of which the promisor’s obligation is made to depend.” Capistrant v. Lifetouch
Nat’l Sch. Studios, Inc., 916 N.W.2d 23, 27 (Minn. 2018) (quotation omitted); see also
Carl Bolander & Sons, Inc. v. United Stockyards Corp., 215 N.W.2d 473, 476 (Minn.
1974) (explaining that a condition precedent is a fact that must occur before the promisor
is obligated to perform).
Resolution of this issue requires us to examine the language of section 4.4. “When
the intent of the parties can be determined from the writing of the contract, the construction
of the instrument is a question of law for the court to resolve, and this court need not defer
to the district court’s findings.” Alpha Real Est. Co. of Rochester v. Delta Dental Plan of
Minn., 671 N.W.2d 213, 221 (Minn. App. 2003) (quotation omitted), rev. denied (Minn.
Jan. 20, 2004). “If a contract is unambiguous, the contract language must be given its plain
and ordinary meaning, and shall be enforced by courts even if the result is harsh.”
Denelsbeck v. Wells Fargo & Co., 666 N.W.2d 339, 346 -47 (Minn. 2003) (quotation
omitted).
At issue is whether Snowman’s completion of the items on the initial punch list and
the creation of a final punch list under section 4.4 is a condition precedent under the parties’
13
contract. We conclude that it is. As the district court noted, section 4.4 provides that the
Lukenses were to give an initial punch list to Snowman within five working days of
substantial completion, and that Snowman would then have 14 working days to complete
the items on that list. Section 4.4 further provides that the parties “shall agree on a final
punch list within [ten] working days of” the Lukenses occupying the home and that “[a]ny
and all items not listed on the final punch list will be deemed accepted.” The plain language
of section 4.4 unambiguously directs that completion of the items on the initial punch list
and the parties’ creation and agreement on “a final punch list” is a condition precedent to
the Lukenses’s “deemed accept[ance]” of all work by Snowman other than items on that
list, subject only to the New Home Warranty Act.
ii. The condition precedent was not fulfilled.
We next consider whether the condition precedent was met. The district court
determined that Snowman did not complete the items on the initial punch list and that the
parties then did not agree to a final punch list. As noted above, w e review the district
court’s factual findings for clear error. In re Distrib. of Att’y’s Fees, 855 N.W.2d at 761.
In conducting clear-error review, “we examine the record to see if there is reasonable
evidence in the record to support the [district] court’s findings.” Rasmussen v. Two
Harbors Fish Co., 832 N.W.2d 790, 797 (Minn. 2013) (quotation omitted). We determine
that the district court’s factual findings are not clearly erroneous.
First, the record supports the finding that the items identified on the initial punch
list were not completed. Snowman received the initial punch list on March 7, which was
within five working days of substantial completion. The contract required Snowman to
14
complete the items on the list within 14 working days, or March 25. Bradley Snow
admitted at trial that Snowman failed to complete the items on the initial punch list by the
agreed-upon 14- day deadline. The record supports the district court’s findings that
Snowman did not complete the items on the initial punch list within the timeframe specified
in section 4.4 of the contract.
The record likewise supports the district court’s finding that the parties did not
mutually agree upon a final punch list within ten days of the Lukenses occupying the home,
as required by section 4.4. The final punch list was due on March 19, ten working days
from the date the Lukenses occupied the home. But as the district court noted, “[n]o other
punch list was produced or agreed upon,” other than the initial March 7 list. Snow agreed
at trial that he could not produce a final punch list signed by both parties.
Instead, Snowman points to a version of the initial punch list that has an additional
column added by Snowman that responds to each of the 12 items identified in the initial
list. This document is dated March 12. Snowman suggests that its March 12 responses
constituted the final punch list. The district court rejected this argument, finding that there
was an “absence of evidence” of a final punch list agreed upon by both parties. And on
appeal, Snowman bears the burden of showing that the district court erred. See
Leininger v. Anderson, 255 N.W.2d 22, 26 (Minn. 1977) (noting that the appellant has a
“heavy” burden to show that the district court’s factual findings are clearly erroneous or
that its legal conclusions are unsupported). Because there is no evidence in the record that
the parties mutually agreed on the responses included by Snowman on the initial punch list
or that they intended the initial punch list with those responses to constitute a final punch
15
list, Snowman has not met its burden of showing that the district court clearly erred in its
factual findings.
In sum, the plain language of section 4.4 requires Snowman to complete the items
on the initial punch list within 14 days and contemplates that the parties would agree to a
final punch list within ten days of occupancy. The district court found that this condition
precedent was not met because Snowman did not complete the items on the initial punch
list within 14 days and the parties did not mutually agree to a final punch list. Because the
record supports these determinations, they are not clearly erroneous.
iii. The L ukenses are not barred from bringing claims for alleged
defects not included on a final punch list.

Having concluded that the district court did not err in its determination that the
condition precedent in section 4.4 was not met, we turn to whether the Lukenses are barred
by section 4.4 from bringing claims for alleged defects that were not included on a final
punch list.
“Under general contract law, unfulfilled conditions prevent enforcement of a
contract.” Crossroads Church of Prior Lake MN v. County of Dakota, 800 N.W.2d 608,
615 (Minn. 2011); see also Nat’l City Bank of Minneapolis v. St. Paul Fire & Marine Ins.
Co., 447 N.W.2d 171, 178 (Minn. 1989) (“[N]o legal principle permits violation of a
contract condition to be completely ignored.”). Thus, “if the event required by the
condition does not occur, there is no breach of contract.” Capistrant, 916 N.W.2d at 27
(quotation omitted).
16
Here, Snowman argues that section 4.4 bars most of the Lukenses’ claims because
the Lukenses did not include alleged defects on a final punch list. The district court
concluded that because Snowman did not fulfill the condition precedent to complete the
items on the initial punch list within 14 days or agree to a final punch list, none of
Lukenses’ claims were barred by section 4.4. We agree.
The final-punch-list requirement in section 4.4 create s a condition precedent, as
discussed above. Section 4.4 contemplates a two-step process: first, that the Lukenses
would submit an initial punch list within five working days of occupying the home and that
Snowman would complete the items on the list within 14 working days; and second, that
the parties would agree on a final punch list within ten working days of the Lukenses
moving into the home. The record supports the district court’s finding that only one punch
list existed—the initial punch list submitted on March 7 and returned with responses on
March 12. Snowman did not timely complete the items on this list. Nor is there evidence
that the Lukenses and Snowman mutually agreed upon a final punch list. The district court
did not err in its determination that, because the condition precedent was unfulfilled,
Snowman could not rely on section 4.4 as a bar to the Lukenses’ claims.

B. The Lukenses’ claims are not barred by section 4.5.
Snowman next argues that the Lukenses waived their claims under section 4.5 by
taking occupancy of the home. This section provides that:
Occupancy of the Home by [the Lukenses] shall be deemed to
be unconditional acceptance of the Home by [the Lukenses]
and shall release [Snowman] from any further obligations
pursuant to this agreement EXCEPT 1) completion of Punch
17
List items which could not be completed within the time
allowed, and, 2) warranty obligations.

The district court determined that section 4.5 did not bar the Lukenses’ claims for breach
of contract or negligence because it is an invalid exculpatory clause. We agree.
“An ‘exculpatory clause’ is ‘[a] contractual provision relieving a party from liability
resulting from a negligent or wrongful act.’” Dewitt v. London Rd. Rental Ctr., Inc.,
910 N.W.2d 412, 420 n.7 (Minn. 2018) (quoting Black’s Law Dictionary 687-88 (10th ed.
2014)); see also Black’s Law Dictionary 710 (12th ed. 2024) (same definition). These
clauses are generally disfavored in the law because they exonerate a party from liability.
Justice v. Marvel, LLC, 979 N.W.2d 894, 898 (Minn. 2022). Exculpatory clauses are
strictly construed. Id. “Under strict construction, contractual provisions that purport to
release the benefited party from liability for intentional, willful or wanton acts are void and
unenforceable.” Lund v. Calhoun Orange, Inc., 20 N.W.3d 871, 876 (Minn. 2025)
(quotation omitted).
3 “But parties to a contract may, without violation of public policy,
protect themselves against liability resulting from their own negligence.” Id. (quotation
omitted). To do so, the contractual provision “must use specific, express language that
clearly and unequivocally states the contracting parties’ intent , regardless of whether the
provision is so broad that it necessarily includes the released party’ s own negligence.”
Justice, 979 N.W.2d at 901-02 (emphasis added) (quotation omitted). In cases of doubt,
exculpatory clauses are strictly construed against the benefited party. Id. at 898.

3 Nonprecedential opinions are not binding authority but may be cited for their persuasive
value. Minn. R. Civ. App. P. 136.01, subd. 1(c).
18
The supreme court’s decision in Justice is instructive. In Justice, the complaining
party signed a waiver containing a liability release in which the party agreed to “release
and hold harmless” the defendant “from and against any and all claims, injuries, liabilities
or damages” arising from the activity. Id. at 896. The supreme court determined that the
waiver’s exculpatory clause seeking to release the defendant from “any and all claims” did
not “fairly apprise the parties in clear and unequivocal language” that the party signing the
waiver was releasing the defendant from its own acts and omissions. Id. at 902 (quotations
omitted). The supreme court emphasized that the waiver did not state that the signing party
“was releasing [the defendant] for [the defendant’s] own conduct, whether negligent or
intentional.” Id. Consequently, the supreme court held that the waiver, strictly construed,
did not release the defendant from its own negligence. Id. at 902-03.
In the present case, section 4.5 is akin to the waiver at issue in Justice. Snowman’s
waiver includes a statement that the Lukenses “shall release [Snowman] from any further
obligations” except “completion of [p]unch [l]ist items” and “warranty obligations.” This
waiver did not “fairly apprise” the Lukenses “in clear and unequivocal language” that they
were releasing Snowman from its own negligent or intentional conduct. See id. at 902
(quotations omitted). Therefore, we agree with the district court that section 4.5 constitutes
an invalid exculpatory clause because it “makes no exception s for willful or wonton
recklessness, intentional torts, or [Snowman’s] own negligence.”
We further conclude, like the district court, that section 4.5 is an invalid exculpatory
clause because it is ambiguous. An exculpatory clause is unenforceable if it is ambiguous
as to scope. Justice, 979 N.W.2d at 899. “An exculpatory clause is ambiguous when it is
19
susceptible to more than one reasonable construction.” Beehner v. Cragun Corp., 636
N.W.2d 821, 827 (Minn. App. 2001), rev. denied (Minn. Feb. 28, 2002).
As noted above, section 4.5 contains an exception from its release of liability for
“[p]unch [l]ist items which could not be completed within the time allowed.” The district
court found that this clause was ambiguous because it did not “identify which punch list”
was referenced in the provision. Again, we agree. The contract identifies two punch
lists: an initial punch list and a final punch list. The initial punch list provided a deadline
for the completion of work, which was within 14 working days of receiving the list from
the Lukenses. But the contract did not articulate a deadline for the completion of any items
identified in the final punch list. And section 4.5 does not clarify which punch list is being
referenced—the initial list or the final list. Moreover, if we were to assume that “time
allowed” referred only to the first punch list, then the requirement for a final punch list
would become meaningless. In other words, if section 4.5 absolved Snowman of liability
for defects not stated in the initial list, then there would be no reason for the parties to create
a final list. But it is not clear that section 4.5 refers to the final punch list because the
contract does not expressly specify a time for completion of items on the final punch list.
When an exculpatory clause is ambiguous in scope—as here — then it “will not be
enforced.” Justice, 979 N.W.2d at 899. Given the ambiguity as to the scope of the
purported release in section 4.5, we agree with the district court that the ambiguity provides
an additional basis for concluding that section 4.5 does not bar the Lukenses’ claims.
Snowman asks us to conclude that section 4.5 is not an invalid exculpatory clause
because the release language includes an exception for punch-list items and an exception
20
for warranty obligations. But Snowman provides no support for its contention that the
exceptions to the exculpatory clause somehow cure the ambiguity or “fairly apprises ” the
Lukenses “in clear and unequivocal language” that Snowman was being released from its
own negligent or intentional conduct. Instead, Snowman argues that the supreme court’s
decision in Justice is not binding on the issue before us because Justice was not decided
until 2022—two years after the contract between Snowman and the Lukenses was signed.
This argument is unpersuasive. Minnesota has long recognized that exculpatory clauses
must be “strictly construed against the benefited party.” Schlobohm v. Spa Petite, Inc., 326
N.W.2d 920, 923 (Minn. 1982). Applying that principle here, we construe section 4.5 in
favor of the Lukenses and conclude that section 4.5 is an invalid exculpatory clause.
III. Snowman’s mitigation-of-damages argument does not warrant reversal.
Snowman argues that the district court’s decision to award damages to the Lukenses
related to Snowman’s installation of patio doors should be reversed because the Lukenses
failed to mitigate their damages. “It is a well-settled principle of contract law that a
nonbreaching party is duty-bound to use reasonable diligence to mitigate damages.”
Deutz-Allis Credit Corp. v. Jensen, 458 N.W.2d 163, 166 (Minn. App. 1990). If the
nonbreaching party fails to mitigate its damages, it is not entitled to any damages that could
have been avoided through reasonable mitigation. Lanesboro Produce & Hatchery
Co. v. Forthun, 16 N.W.2d 326, 328 (Minn. 1944). Reasonableness is a question of fact
left to the fact-finder, Larson v. Urb. Unit Corp., 360 N.W.2d 451, 452 (Minn. App. 1985),
while duty is a question of law reviewed de novo, DeRosier v. Utility Systems of America,
Inc., 780 N.W.2d 1, 6 (Minn. App. 2010).
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At trial, the Lukenses testified that the patio doors were faulty and not installed
properly, and that Snowman failed to remedy the defect adequately. The Lukenses paid
for the installation of new patio doors and blinds. An expert retained by the Lukenses
testified that the door frame was “bowed downward in the center,” which was inconsistent
with Minnesota construction standards. The expert opined that this was not the result of a
manufacturing defect. The expert further stated that the patio doors could not be fixed due
to their distortion. The district court found that Snowman “had a duty to install working
doors into the property,” but “failed to correct the issue” until after the lawsuit was
commenced about ten months later. The district court expressly found that the testimony
offered by the Lukenses’ expert was credible. Based on the evidence and the credibility
determination, the district court found that Snowman breached its duty to install the patio
doors “in a reasonably good and workmanlike manner” and awarded damages.
On appeal, Snowman argues that the district court erred in awarding damages to the
Lukenses related to the patio doors because the Lukenses “had a duty to mitigate their
alleged damages and have the patio doors reinstalled correctly.” Snowman claims that the
property did not need new patio doors or blinds. This argument is not persuasive.
Although the nonbreaching party has an affirmative duty to mitigate damages, the
breaching party—here, Snowman —bears the burden of showing that damages could have
been reasonably mitigated. Lanesboro Produce & Hatchery Co., 16 N.W.2d at 328 (“[I]t
is also well established that in the case of a breach of contract the burden of proof is upon
the defendant to show that damages were or could have been mitigated by reasonable
diligence.”). Snowman has not satisfied that burden. Snowman did not present any
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evidence to support its contention that the Lukenses could have reasonably reinstalled the
doors rather than replace them. Rather, the record reflects the Lukenses’ expert testified
that the doors were warped and could not be reinstalled. The district court credited this
unrebutted testimony. Snowman has not sustained its burden of showing that the Lukenses
failed to mitigate their damages with reasonable diligence. We therefore discern no error
in the district court’s determination.
IV. The district court did not err in its determination that the change order for the
sewer and water connection was not a valid modification of the contract.

Snowman argues that the district court improperly rescinded the change order for
sewer and water connection and erred by requiring Snowman to refund the amount paid by
the Lukenses for that work.4 In response, the Lukenses argue that the district court did not
rescind the change order, but rather found that the change order was not a proper
modification of the parties’ contract. We agree with the Lukenses.
“Rescission is the unmaking or abrogation of a contract.” Graves v. Wayman,
859 N.W.2d 791, 799 (Minn. 2015) (quotations omitted). Here, however, the district court
did not “unmake” the change order related to sewer and water connections. Rather, it found
that the change order was not valid. The district court explained that the contract did not
permit Snowman to use a change order to “require [the Lukenses] to pay for a cost that
[Snowman] failed to include in the [c]ontract.” We discern no error in this decision.

4 The change order at issue covered (1) sewer and water connection to the City of Lindstrom
and (2) excavation. Only the sewer and water connection is at issue on appeal.
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The contract includes a provision governing change orders. It specifies that,
“[w]ithout invalidating this contract, [the Lukenses] may request changes in the work and
at [Snowman’s] discretion [Snowman] may perform the work. Changes or overages to the
home should be in writing and agreed upon by [the parties] prior to comple tion of said
work.” The provision unambiguously authorized the Lukenses to initiate change orders,
but did not grant this same allowance to Snowman. Nevertheless, Bradley Snow testified
that he presented the Lukenses with the change order. The Lukenses did not initiate this
change order because they believed this work was included in the original contract. The
district court agreed, determining that “[t]he [c]ontract does not require [the Lukenses]
warrant this additional work of bringing the utilities into the property.” The plain language
of the contract, coupled with the testimony showing that Snowman—and not the
Lukenses—requested the change order, supports the district court’s determination that the
change order was not a valid modification of the contract.
We further note that Snowman did not present the Lukenses with the change order
until after the work was completed. The contract anticipated that change orders “should
be . . . agreed upon by [the parties] prior to completion of said work.” The district court
found that Snowman did not give the Lukenses the change order until “months after the
two items on the [change order] were already completed.” The record supports this finding.
Pamela Lukens testified that she received the change order only after the work had been
completed, and became aware of the cost of the items only at that time. We recognize that
the expectation that the change order “should be . . . agreed upon . . . prior to completion
of [the] work” was not mandatory. See State v. Jacobs (In re Jacobs ), 802 N.W.2d 748,
24
754 (Minn. 2011) (explaining that “should” is a permissive term (quotation omitted)).
However, it lends further support to the district court’s determination that Snowman’s
attempt to modify the contract through the change order was improper.
In sum, the district court did not err when it determined that the change order was
invalid or when it ordered Snowman to refund to the Lukenses the amount that they paid
for sewer and water connection under the change order.5
V. Snowman is not entitled to relief on its fraud claim.
Snowman argues that the district court erred by rejecting its fraud claim. “[P]arties
pleading fraud must meet a heightened pleading standard” under Minnesota Rule of Civil
Procedure 9.02. Hardin Cnty. Sav. Bank v. Hous. & Redevelopment Auth., 821 N.W.2d
184, 191 (Minn. 2012). Rule 9.02 provides that, “[i]n all averments of fraud or mistake,
the circumstances constituting fraud or mistake shall be stated with particularity.” Minn.
R. Civ. P. 9.02. The party claiming fraud must identify “the time, place, and contents of
the false representations, as well as the identity of the person making the misrepresentation
and what [they] obtained thereby.” Angeles v. Medtronic, Inc., 863 N.W.2d 404, 422
(Minn. 2015) (quotation omitted).
Snowman raised a counterclaim in its answer asserting that the Lukenses committed
fraud. The district court rejected this argument, determining that Snowman failed to

5 The parties raise additional arguments, including: (1) whether the change order was
invalid for lack of consideration; and (2) whether the district court erred by finding that the
change order was unenforceable because Snowman threatened to leave the project and file
a lien on the property unless the Lukenses signed the change order. We need not reach
these issues.
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support its claim. On appeal, Snowman argues that the district court erred by dismissing
its fraud claim because the Lukenses admitted at trial that they did not intend to pay
Snowman for the items in the change order. This argument lacks merit.
In its answer, Snowman asserted a counterclaim for fraud on the ground that the
Lukenses promised to release escrow funds to Snowman if Snowman completed certain
work items. On appeal, however, Snowman now asserts that the Lukenses committed fraud
because they did not intend to pay Snowman for the expenses identified in the change
order. Snowman did not put the Lukenses on notice that it had altered its fraud claim to
focus on the change order, rather than the escrowed funds. And “[i]t is an elementary
principle of appellate procedure that a party may not raise an issue or argument for the first
time on appeal and thereby seek appellate relief on an issue that was not litigated in the
district court.” Doe 175 by Doe 175 v. Columbia Heights Sch. Dist., ISD No. 13,
842 N.W.2d 38, 42 (Minn. App. 2014). For these reasons, we reject Snowman’s argument
that the district court erred when it dismissed Snowman’s fraud claim.
Affirmed.