Acoustics Associates, Inc. v. Rongitsch Construction, Inc., et al

This opinion is nonprecedential except as provided by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
A26-0137

Acoustics Associates, Inc.,
Respondent,

vs.

Rongitsch Construction, Inc., et al.,
Appellants.

Filed August 24, 2026
Affirmed in part, reversed in part, and remanded
Connolly, Judge

Dakota County District Court
File No. 19HA-CV-24-295

Aaron A. Dean, Madeline E. Davis, Matthew E. Cavanaugh, Spencer Fane LLP,
Minneapolis, Minnesota (for respondent)

Tyson Smith, Richard T. Furlong III, Smith Law, PLLC, Grand Marais, Minnesota; and

Malcolm P. Terry, Bernick Lifson, PA, Minneapolis, Minnesota (for appellants)

Considered and decided by Connolly, Presiding Judge; Reyes, Judge; and
Rasmusson, Judge.
NONPRECEDENTIAL OPINION
CONNOLLY, Judge
Following the district court granting summary judgment and awarding interest and
attorney fees in favor of respondent, appellant argues that the district court erred by
(1) resolving fact disputes; (2) awarding interest; (3) impliedly making appellant -

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individuals jointly and severally liable; (4) failing to dismiss respondent’s unjust -
enrichment claims; (5) not considering respondent’s failure to mitigate damages; and
(6) awarding attorney fees. We affirm in part, reverse in part, and remand.
FACTS
Appellant Rongitsch Construction Inc. (RCI) is a custom home builder and general
construction contractor owned and operated by appellant Michael Rongitsch. Appellant
Desiree Rongitsch “is an owner of RCI” and appellant Nate Rongitsch “is an employee of
RCI.”1 Respondent Acoustic Associates, Inc. is an interior finish contractor and has been
working as a subcontractor with RCI pursuant to a n agreement signed in 2018 (the
subcontractor agreement). The subcontractor agreement was restated in January 2022 (the
independent-contractor agreement), and provides that RCI “shall from time to time request
a written bid from [respondent] to perform . . . services.”
In 2022 and 2023, RCI hired respondent to perform work on the following three
projects: (1) the Beauty HQ Project; (2) the Erken Project; and (3) the Kelly Project. With
respect to the Beauty HQ Project, respondent submitted a bid to perform the work for
$8,450. Under the bid, the payment was due 30 days after completion of respondent’s
work, any unpaid balance outstanding for more than 60 days was subject to a 12% annual
interest rate, and RCI was liable for respondent’s collection costs and attorney fees.
Although respondent’s bid was n ot signed by an RCI representative, RCI instructed
respondent to perform the work pursuant to the proposal.

1 Because the Rongitsch parties share the same last name, they will be referred to
individually by their first names.

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Respondent also submitted a bid to perform the work for the Erken Project for
$15,075. This bid contained terms for interest and fees that were identical to the bid for
the Beauty HQ Project, but this bid was signed by RCI. And although there was no written
bid related to the Kelly Project, respondent agreed to perform the services for $1,005.
It is not disputed that respondent finished the work for the three projects and issued
final invoices for the projects. It is also not disputed that RCI has not paid respondent for
the projects. As a result, respondent commenced this action against RCI, Michael, Nate,
and Desiree (collectively “appellants”) seeking payment for the three projects as well as
interest and attorney fees. Specifically, respondent asserted claims for ( 1) breach of
contract against RCI; (2) violation of Minn. Stat. § 337.10 (2024), against RCI; (3) theft of
proceeds under Minn. Stat. § 514.02 (2024), against all appellants; ( 4) accounts stated
against RCI; and (5) unjust enrichment against all appellants.
Respondent moved for summary judgment. Following a hearing, the district court
granted respondent’s motion for summary judgment, concluding that respondent “is
entitled to the principal balance for all three contracts.” The district court also determined
that respondent “is entitled to attorney [] fees, interests, costs, and disbursements for all
three contracts at issue.” With respect to the Erken Project and the Beauty HQ Project, the
district court determined that, pursuant to the written bids, respondent is entitled to interest
calculated at a rate of 12% from 60 days after the date the first invoice for the two projects
was sent to RCI. And because there was “no written bid” for the Kelly Project, and the
independent-contractor agreement “is silent on [the interest] issue,” the district court
determined that, under Minn. Stat. § 337.10, subd. 3, respondent “is entitled to interest at

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[a] 1.5% per month rate 10 days after the invoice was sent to RCI.” The district court then
directed respondent “to file an itemization and description of attorney [] fees and interest
for the principal balances on the contracts,” and later issued an order awarding respondent
$24,530 for the principal amounts owed, $31,559.43 for attorney fees and costs, and
$5,133.68 for interest.
After appellants filed an appeal in this matter , the appeal was dismissed as
premature because the judgment had not been entered by the court administrator. The
district court subsequently filed an order for judgment nunc pro tunc, directing the court
administrator to enter judgment, and judgment was entered. This appeal follows.
DECISION
Appellate courts review summary-judgment determinations de novo “to determine
whether there are genuine issues of material fact and whether the district court erred in its
application of the law.” Montemayor v. Sebright Prods., Inc., 898 N.W.2d 623, 628 (Minn.
2017) (quotation omitted). We view the evidence in the light most favorable to the party
against whom summary judgment was granted. Henson v. Uptown Drink, LLC , 922
N.W.2d 185, 190 (Minn. 2019). And we resolve all doubts and factual inferences in favor
of the party against whom summary judgment was granted. Id. If “reasonable persons
might draw different legal conclusions from the evidence presented, summary judgment
must be denied.” Kenneh v. Homeward Bound, Inc., 944 N.W.2d 222, 228 (Minn. 2020).
I.
Appellants assert that, since 2018, the relationship between RCI and respondent has
been controlled by the subcontractor agreement, which “contains no fees or interest

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provision,” and “requires written consent to be modified.” Although appellants admit that
the terms of the subcontractor agreement were modified as they related to the Erken
Project, appellants contend that the district court impermissibly resolved factua l disputes
related to the Beauty HQ Project “by concluding that terms of th[at] agreement were
represented by the unsigned bid.”2 We are not persuaded.
A contract, although unsigned, may still be enforceable if the parties have agreed to
and acted in conformity with its terms. Poser v. Abel, 510 N.W.2d 224, 228 (Minn. App.
1994), rev. denied (Minn. Feb. 24, 1994). Here, the undisputed record demonstrates that
respondent sent a bid for the Beauty HQ Project; RCI did not sign the bid but did not object
to the bid; and respondent performed the work described in the bid. In fact, appellants do
not dispute that they o we respondent for the work performed on the Beauty HQ Project.
Although appellants contend that the subcontractor agreement controls the Beauty HQ
Project, the undisputed record demonstrates that the parties acted in conformity with the
bid submitted by r espondent for the Beauty HQ Project. Under these circumstances, the
undisputed records shows that the Beauty HQ Project agreement controls with respect to
interest. As such, the district court did not resolve any factual dispute related to the Beauty
HQ Project.

2 Appellants also insinuate that there are factual disputes related to the Kelly Project
agreement. But appellants do not specify the factual disputes that exist related to that
agreement. As such, any argument that factual disputes exist related to the K elly Project
agreement are not properly before us. See Melina v. Chaplin, 327 N.W.2d 19, 20 (Minn.
1982); see McKenzie v. State , 583 N.W.2d 744, 746 n.1 (Minn. 1998) (determining that
arguments not briefed are waived in an appeal in which the appellant “allude[d] to” an
issue but “fail[ed] to address them in the argument portion of his brief”).

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II.
Appellants challenge the district court’s “blanket award of interest under section
337.10 and the contracts.” First, appellants argue that interest cannot be awarded for the
Beauty HQ Project because that contract does not allow for interest. We construe th is
argument as premised on the theory that the subcontractor agreement controls the parties’
obligations regarding the Beauty HQ Project and th at agreement does not provide for
interest. But as addressed above, the parties had an agreement related to the Beauty HQ
Project and that agreement controls. The agreement related to the Beauty HQ Project
specifically provides that “[u]npaid balances after 60 days will be subject to interest at the
annual rate of 12%.” It is not disputed that respondent was not paid for its performance on
the Beauty HQ Project, and the district court awarded 12% interest pursuant to the
agreement related to that project. The district court did not err in awarding interest to
respondent for the Beauty HQ Project.
Second, appellants argue that the contract related to the Kelly Project does not allow
for interest and that, even though the district court awarded interest under section 337.10,
“a fact question exists as to whether the payment offered pursuant to the p arties’ ordinary
course of performance would render the statutory elements unmet.” We disagree.
Section 337.10 provides in relevant part:
A building and construction contract shall be deemed to
require the prime contractor and all subcontractors to promptly
pay any subcontractor or material supplier contract within ten
days of receipt by the party responsible for payment of
payment for undis puted services provided by the party
requesting payment, including payments under subdivision 4.
The contract shall be deemed to require the party responsible

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for payment to pay interest of 1 -1/2 percent per month to the
party requesting payment on any undisputed amount not paid
on time.

Minn. Stat. § 337.10, subd. 3.
Here, as the district court determined, “there is no written bid for [the Kelly Project]
outlining the terms of late fees or interest .” And both the subcontractor agreement and
independent-contractor agreement are silent as to interest. Moreover, it is not disputed that
respondent performed the work for the Kelly Project. The plain language of section 337.10,
subdivision 3, clearly states that, under these circumstances, respondent was entitled to
payment on the Kelly Project “within ten days of receipt by [RCI] of payment for
undisputed services provided by [respondent].” Id. Although appellants claim that a “fact
question exists as to whether the payment offered pursuant to the parties’ ordinary course
of performance” satisfies the elements of section 337.10, subdivision 3, appellants fail to
point to anything in the record indicating that they offered payment within the statutory
ten-day time frame. As such, the district court did not err in awarding respondent interest
at the statutory interest rate for the Kelly Project.
Third, appellants argue that, with respect to the Erken Project, the district court erred
by approving “compounding interest” because section 337.10, subd ivision. 3 “allows
interest on the ‘undisputed amount not paid ’; not the undisputed amount plus contract
interest.” To support their position, appellants note that, with respect to the Erken Project,
“18 percent interest was calculated on contract principal plus accrued 12% interest.” But
appellants’ position indica tes that the district court awarded respondent 18% statutory

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interest on the Erken Project in addition to 12% contractual interest, which is a
misconstruction of the record.
The record reflects that, pursuant to the bid related to the Erken Project, “Unpaid
balances after 60 days will be subject to interest at the annual rate of 12%.” In granting
respondent’s motion for summary judgment, the district court determined that, with respect
to the “written bid” for the Erken Project, respondent is “entitled to the principal balance
plus the 12% annual interest rate from 60 days after the first invoice on this project was
sent to RCI.” Respondent later submitted an affidavit calculating interest to be awarded
on the Erken Project as follows:
Erken Contract:
a. Principal Amount: $15,075
b. Invoice issued 5/8/23 (60 days after = 7/8/23)
c. GC paid in full on 8/23/23 + 10 days = 9/2/23
d. Sept. 3 2023 through 11/24/24 (day SJ was granted) = 448
days
e. Interest at 12% (contract):
i. 7/8/23 through 9/2/23 = 56 days
ii. 15075 (56/365) (.12) = $277.54
f. Interest at 18%:
i. (15075 + 277.54) (448/365) (.18) = 3,391.86
g. Total interest: $3,391.86

Based on the above -referenced calculation, the district court awarded respondent
interest, pursuant to the written bid for the Erken Project, at a rate of 12% per annum, from
60 days after respondent issued its invoice until ten days after RCI was paid in full. The
district court then applied the statutory interest rate of 18% per annum from ten days after
RCI was paid in full until the date the summary judgment motion was granted. The interest
from the two time frames was then added together to form the amount of interest awarded

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for the Erken Project. But because the two time frames did not overlap, appellants are
mistaken that the district court compounded the interest for the Erken Project. We therefore
conclude that appellants have not shown that the district court’s award of interest was
erroneous.
III.
Appellants argue that respondent’s claims under Minn. Stat. § 514.02, “were
dismissed,” but if they were not, the district court erred by holding all of the individual
appellants jointly and severally liable. Based on our review of the order for summary
judgment, respondent’s claims under section 514.02 were dismissed and the individual
appellants were not held jointly and severally liable.
The order for summary judgment recognized the claims asserted by respondent,
including: “Breach of Contract against RCI”; “Violation of Minn. Stat. § 337.10 against
RCI”; and “Theft of Proceeds, Minn. Stat. § 514.02, against all [appellants].” The district
court then addressed respondent’s breach-of-contract claim and determined that respondent
“is entitled to the principal balance for all three contracts.” The district court also addressed
respondent’s entitlement to interest and attorney fees and determined that respondent “is
entitled to attorney[] fees, interest, costs, and disbursements for all three contracts at issue.”
And without addressing the other claims raised by respondent, the district court concluded
that “[u]pon receipt of the necessary fee affidavits, this Court will enter judgment in favor
of [respondent], and all other claims will be dismissed with prejudice.” (Emphasis added.)
Because the district court granted summary judgment in favor of respondent on its claims
for breach of contract and interest and attorney fees, which were only asserted against RCI,

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and the district court dismissed “all other claims,” including the claim against all appellants
pursuant to section 514.02, the order for summary judgment did not provide a basis to hold
appellants jointly and severally liable.
Nonetheless, the order for summary judgment states that “[j]udgment shall be
entered . . . against Defendants,” the plural of which indicates all individual appellants .
Similarly, the order for judgment nunc pro tunc recognized that the district court “ordered
summary judgment in favor of Plaintiff and monetary judgment in favor of Plaintiff and
against Defendants.” (Emphasis added .) The entry of judgment against all individual
appellants conflicts with the district court’s analysis on summary judgment, which granted
relief against RCI, but dismissed all other claims against the individual appellants.
Therefore, to the extent that the district court erroneously entered the judgment against all
appellants, we reverse in part to correct that error.
IV.
Appellant argues that, because respondent “has a contract remedy at law, to the
extent the[y] have not already been, [respondent’s] unjust enrichment claims must be
dismissed.” Because the district court granted summary judgment in favor of respondent
on its claims for breach of contract and interest and attorney fees, and dismissed “all other
claims” without addressing the unjust -enrichment claim, we conclude that respondent’s
unjust-enrichment claim was dismissed.
V.
Appellants argue that they are entitled to relief because respondent failed to mitigate
its damages. But it is well settled that appellate courts consider only issues presented to

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and decided by the district court. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988).
Here, although appellants raised this issue below, the district court did not consider it.
Therefore, appellants’ failure-to-mitigate-damages argument is not properly before us. See
id.
VI.
Appellants challenge the district court’s award of attorney fees to respondent.
Generally, such an award is reviewed for an abuse of discretion. State by Comm’r of
Transp. v. Schneider , 934 N.W.2d 140, 142 (Minn. App. 2019). But when an award of
attorney fees “turns on the interpretation of a statute,” our review is de novo. Id.
Under Minnesota law, “[a] party may not recover attorney fees from an opponent
unless a statutory or contractual provision expressly allows for such recovery.” Correll v.
Distinctive Dental Servs., P.A., 636 N.W.2d 578, 582 (Minn. App. 2001). Here, appellants
argue first that the district court erred in awarding attorney fees for the Beauty HQ Project
because the subcontractor agreement was the controlling agreement with respect to that
project and the subcontractor agreement did not contain a provision for recovery of attorney
fees. But as discussed above, respondent’s written bid constituted the written agreement
with respect to the Beauty HQ Project; respondent signed the bid, RCI did not object to the
bid, and respondent performed the work described in the bid. The Beauty HQ Project bid
clearly states: “If collection efforts are required to achieve payment, purchaser shall be
responsible for all costs incurred including attorney [] fees.” Because the Beauty HQ
Project agreement clearly allows for attorney fees, the district court did not abuse its
discretion by awarding attorney fees for the Beauty HQ Project.

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Next, appellants argue that the district court erred by awarding attorney fees for the
Kelly Project under section 337.10. But that statute provides that “ [a] party requesting
payment who prevails in a civil action to collect interest penalties from a party responsible
for payment must be awarded its costs and disbursements, including attorney fees incurred
in bringing the action. Minn. Stat. § 337.10, subd. 3 (emphasis added). As described
above, respondent sought to collect interest from appellants for work performed for the
Kelly Project and respondent prevailed in its action. Thus, the district court was required
to award respondent its attorney fees related to the Kelly Project. See id.; see also Minn.
Stat. § 645.44, subd. 15a (2024) (“‘Must’ is mandatory.”).
Appellants further argue that the district court erred by holding all of the appellants
personally liable for attorney fees. We agree. As addressed above, to the extent judgment
was erroneously entered against all individual appellants, we reverse that judgment.
Lastly, appellants challenge the reasonableness of the attorney fees awarded to
respondent. Minnesota courts generally use the lodestar method to determine the
reasonableness of statutory attorney fees. Green v. BMW of N. Am., LLC, 826 N.W.2d 530,
535 (Minn. 2013). That method requires a district court to “determine the number of hours
reasonably expended on the litigation and then multiply those hours by a reasonable hourly
rate.” Id. at 536. “In determining the reasonable value of the legal services, the district
court should consider all relevant circumstances,” including: “the time and labor required;
the nature and difficulty of the responsibility assumed; the amount involved and the results
obtained; the fees customarily charged for similar legal services; the experience, reputation,
and ability of counsel; and the fee a rrangement existing between counsel and the

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client.” Id. (quotations omitted). “When the reasonableness of the requested attorney fees
is challenged, the district court must provide a concise but clear explanation of its reasons
for the fee award.” State by Comm’r of Transp. v. Krause , 925 N.W.2d 30, 35 (Minn.
2019).
Here, the district court awarded respondent:
$31,559.43 for attorney fees and costs – this was
calculated by tallying all total fees, total disbursements ,
courtesy discounts, and trust retainer overpayments.
Specifically, the $3,840 from May 9, 2024, was removed since
that amount was discounted and covered by the retainer . . . .

Appellants argue that “the district court’s order is devoid of any findings or other
rational[e] as to the reasonableness [of attorney fees] besides its statement that it tallied the
invoices and credited the retainer amount ,” which “deprives [appellants] of the ability to
obtain meaningful review by this Court.” We agree.
The district court’s order awarding respondent $31,559.43 for attorney fees contains
no analysis of the award. Rather, the district court simply awarded respondent the amount
it sought for attorney fees, less the amount of the retainer. In other words, there is nothing
to indicate that the district court considered the reasonableness of the attorney fees sought.
And because the district court never considered the reasonableness of the amount of
attorney fees sought, there are no findings for us to review with respect to reasonableness.
We therefore reverse and remand the award of attorney fees for the district court to consider
the reasonableness of the attorney fees sought without expressing any opinion as to the
merits of the reasonableness of the attorney -fee award . See Gams v. Houghton , 869
N.W.2d 60, 65 (Minn. App. 2015) (“[R]emand is the appropriate remedy when the district

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court has made insufficient findings to enable appellate review.”), aff’d as modified, 884
N.W.2d 611 (Minn. 2016).
Affirmed in part, reversed in part, and remanded.