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Duluth Superior Erections, Inc. v. Concrete Restorers

July 15, 2003

DULUTH SUPERIOR ERECTION, INC., RESPONDENT,
v.
CONCRETE RESTORERS, INC., ET AL., APPELLANTS.



Affirmed in part, reversed in part, and remanded Huspeni, Judge*fn1 St. Louis County District Court File No. C1-02-601094

Considered and decided by Kalitowski, Presiding Judge, Anderson, Judge, and Huspeni, Judge.

SYLLABUS BY THE COURT

1. Minn. Stat. § 514.02 (2002), which provides penalties and remedies for nonpayment for improvement to real property, expressly prohibits a finding of fiduciary liability.

2. Minn. Stat. § 514.02 expressly prohibits a finding of tort liability, thus rendering joint-and-several liability inappropriate under the statute when the contract is solely between the contractor and the subcontractor.

The opinion of the court was delivered by: Huspeni, Judge

OPINION

In challenging the district court's grant of summary judgment, appellants argue that (1) summary judgment was inappropriate because there are genuine issues of material fact; (2) as to certain appellants, the district court erred by finding a presumption of liability and shifting the burden of proof under Minn. Stat. § 514.02 (2002); (3) the district court erred by finding that appellants breached a fiduciary duty pursuant to Minn. Stat. § 514.02; (4) the district court erred by entering judgment against appellants jointly and severally pursuant to Minn. Stat. § 514.02; and (5) the award of attorney fees was an abuse of discretion. Because there are no genuine issues of material fact, we affirm the district court's grant of summary judgment, but because Minn. Stat. § 514.02 expressly prohibits a finding of fiduciary liability, and joint-and-several liability is, therefore, inappropriate under the statute, we vacate the joint-and-several judgment award and remand to enable the district court to determine the extent to which each agent is liable based on the amount of proceeds each knowingly received.

FACTS

Appellant Concrete Restorers, Inc. (Concrete Restorers) subcontracted with respondent Duluth Superior Erection, Inc. (Duluth Superior) for excavation and concrete services for two residential projects known as the "Side Lake Project" and the "Grindy Project." The Side Lake Project consisted of a contract between Concrete Restorers and Duluth Superior for an estimated 6,100 square feet of 5á1/2-inch Fibermesh reinforced concrete. The contract required that Duluth Superior receive an advance payment of $10,000 from Concrete Restorers, leaving a balance due under the contract of $24,500. The terms of the Grindy Project specified that Duluth Superior was to receive $9,450 upon completion of the project.

Duluth Superior completed the work, and the owners of both the Side Lake and Grindy Project paid Concrete Restorers for the services. But Duluth Superior claims it was never compensated and is owed $24,500 for the Side Lake contract and $9,450 for the Grindy Project contract. Duluth Superior brought an action against Concrete Restorers and its shareholders, officers, directors, and agents for nonpayment for improvements to real property pursuant to Minn. Stat. § 514.02 (2002). Appellant Anthony Coda is a shareholder and the president of Concrete Restorers. Appellant Douglas Coda was a sales representative for Concrete Restorers. Appellant Lake Superior Polymers (Lake Superior), along with Concrete Restorers, is a family owned business headquartered in the home of Anthony Coda. The district court found that Anthony Coda, Douglas Coda, and Lake Superior were agents of Concrete Restorers, and that all had failed to pay Duluth Superior for its services. Duluth Superior's motion for summary judgment was granted, and judgment was entered jointly and severally against Concrete Restorers, Anthony Coda, Douglas Coda, and Lake Superior.*fn2 This appeal resulted.

ISSUES

I. Are there are genuine issues of material fact rendering summary judgment against appellants inappropriate?

II. Did the district court err by finding a presumption of liability and shifting the burden of proof to appellants under Minn. Stat. § 514.02 (2002)?

III. Did the district court err in determining that appellants breached a fiduciary duty pursuant to Minn. Stat. § 514.02?

IV. Did the district court err in entering judgment against appellants jointly and severally pursuant to Minn. Stat. § 514.02?

V. Did the district court abuse its discretion by awarding attorney fees to respondent pursuant to Minn. Stat. § 514.02?

ANALYSIS

I.

Appellants argue that the district court erred by granting summary judgment because there are genuine issues of material fact.

On an appeal from summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact and (2) whether the lower courts erred in their application of the law.

State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990) (citation omitted).

A motion for summary judgment shall be granted when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that either party is entitled to a judgment as a matter of law. On appeal, the reviewing court must view the evidence in the light most favorable to the party against who judgment was granted.

Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993) (citation omitted). When the district court grants summary judgment based on the application of a statute to undisputed facts, the result is a legal conclusion, reviewed de novo by the appellate court. ...


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