Westside Equipment Installers, Inc., Respondent, vs. North of Sixty Flying, Inc., et al., Appellants.

Westside Equipment Installers, Inc., Respondent, vs. North of Sixty Flying, Inc., et al., Appellants. A06-1618, Court of Appeals Unpublished, July 24, 2007.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2006).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A06-1618

 

Westside Equipment Installers, Inc.,

Respondent,

 

vs.

 

North of Sixty Flying, Inc., et al.,

Appellants.

 

Filed July 24, 2007

Affirmed

Worke, Judge

 

Hennepin County District Court

File No. 04-17610

 

Phaedra J. Howard, Standke, Greene  & Greenstein, Ltd., 17717 Highway 7, Minnetonka, MN 55345 (for respondent)

 

Richard M. Carlson, Kelly Vince Griffitts, Brian Hoelscher, Morris Carlson & Hoelscher, P.A., 8300 Norman Center Drive, Suite 710, Bloomington, MN 55437 (for appellants)

 

            Considered and decided by Minge, Presiding Judge; Wright, Judge; and Worke, Judge.

U N P U B L I S H E D   O P I N I O N

WORKE, Judge

            Appellants North of Sixty Flying, Inc., et al. challenge the district court's grant of summary judgment in favor of respondent Westside Equipment Installers, Inc., on respondent's claims of breach of contract, account stated, unjust enrichment, and foreclosure of respondent's mechanic's lien as well as appellants' counterclaims for defamation of title and breach of contract.  We affirm.

FACTS

            In September 2003, respondent Westside Equipment Installers, Inc. entered into a written contract with appellants North of Sixty Flying, Inc., et al. for the sale and installation of petroleum-dispensing equipment.  The contract dictates that respondent is to supply and install two Gasboy high-speed suction pumps and two 75-foot aviation-fuel hoses and remove the existing suction pumps for a cost of $9,784.  Under the contract, appellants were responsible for connecting electrical and phone lines to the pump island.  Appellants also supplied a card reader, check valves, and other existing equipment to be used with the new pumps and hoses provided and installed by respondent.  Respondent installed the suction pumps and hoses as indicated in the contract.

            After the contract was signed, appellants requested that respondent handle the electrical wiring of the pumps, but the contract was not modified to reflect this change.  Respondent paid a subcontractor to wire the pumps and on January 20, 2004, sent appellants an invoice for the electrical work in the amount of $7,057.90.  Appellants dispute that they ever authorized respondent to wire the pumps.

            In February 2004, appellants paid respondent $8,584, which is the original contract price for the pumps and hoses, but does not include the labor costs of $1,200 as stated in the contract.

            After the pumps and hoses were installed, appellants notified respondent that they were having difficulties with the equipment because the pumps were dispensing different amounts of gas than they were registering.  Due to this deficiency, appellants could not get the pumps approved for retail use by the department of commerce.  Over the next several months, appellants called respondent on numerous occasions in an effort to resolve this and other issues. 

            In January 2004, appellants called respondent to the property because the low-lead fuel was not dispensing properly.  The record indicates that the problem was not related to the newly installed pumps, but rather was caused by a faulty nozzle valve on the fuel pump.  Respondent performed repairs on this date and invoiced appellants for three hours of labor and minimal material costs.

            Later, respondent was informed by appellants that they were having trouble with the pulsers on the low-lead pump and that the system was locking up when Smart Cards were used with the card-reader, supplied by appellants.  After running tests on the pumps, respondent concluded that the pumps were working properly but the card-reader was malfunctioning and there was debris in the fuel tank.  The manufacturer of the card-reader sent out a new main board, which respondent installed and tested. 

            In May 2004, appellants contacted respondent regarding a pump that was not properly dispensing.  Respondent discovered that the problems were the result of appellants "not properly filtering the fuel so that sediment and debris were accumulating in the pumps and damaging equipment and/or creating other problems."  After appellants wrote respondent questioning whether the installed pumps were compatible with aviation fuel and stating that if problems continued the pumps would need to be replaced, the manufacturer of the pumps wrote appellants and clarified that the installed pumps were compatible with aviation fuel and that the owner of the pump is responsible for properly filtering aviation fuel.  Respondent made numerous attempts to collect on the unpaid invoices from appellants, but payment was not forthcoming.

            In October 2004, appellants sent respondent a check in the amount of $1,200. The check was intended to constitute a full and final payment of all amounts owed by respondent to appellants.  The total amount of outstanding unpaid invoices at the time was $14,020.17, plus interest.  Respondent then filed a mechanic's lien and a notice of lis pendens against the property giving notice of the pending mechanic's lien action.

            Respondent then initiated an action to foreclose its mechanic's lien against the leasehold interest held by appellants.  Respondent also brought suit against appellants for breach of contract, account stated, and unjust enrichment.  Appellants counterclaimed for defamation of title and breach of contract.

            Respondent moved for summary judgment, which the district court granted in the amount of $14,020.17, plus costs, disbursements, and $23,241.50 in attorney fees.  As part of its order for summary judgment, the district court dismissed appellants' counterclaims on their merits.

            Appellants now challengethe district court's grant of summary judgment, arguing that genuine issues of material fact exist regarding (1) respondent's and appellants' breach of contract claims; (2) respondent's mechanic's lien claim; (3) respondent's accounts stated claim; (4) respondent's unjust enrichment claim; and (5) appellants' counterclaim for slander of title. Appellants also challenge the district court's award of attorney fees to respondent.

D E C I S I O N

On appeal from summary judgment, we determine whether there are any genuine issues of material fact and whether the district court erred in applying the law.  N. States Power Co. v. Minn. Metro. Council, 684 N.W.2d 485, 491 (Minn. 2004); State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).  We view the evidence in the light most favorable to the party against whom summary judgment was granted.  Hickman v. SAFECO Ins. Co. of Am., 695 N.W.2d 365, 369 (Minn. 2005).

A material fact is one that will affect the outcome of the case.  Zappa v. Fahey, 310 Minn. 555, 556, 245 N.W.2d 258, 259-60 (1976).  No genuine issue of material fact exists "[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party."  DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn. 1997) (alteration in original) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,475 U.S. 574, 587, 106 S. Ct. 1348, 1356 (1986)).  To survive summary judgment, the party opposing the motion must produce sufficient evidence to permit reasonable persons to draw different conclusions.  Schroeder v. St. Louis County, 708 N.W.2d 497, 507 (Minn. 2006).  It may not rely on "unverified and conclusory allegations, or postulated evidence that might be developed at trial, or metaphysical doubt about the facts" to establish a genuine issue of material fact.  Dyrdal v. Golden Nuggets, Inc., 689 N.W.2d 779, 783 (Minn. 2004). 

I.

            Appellants argue that their contract with respondent was not completed until the pumps were operational in July 2004, and all work provided by respondent until that time constituted warranty work based on the implied warranty of merchantability and fitness for a particular purpose.  But appellants have failed to provide any evidence, other than the assertions of their owner, that the problems with the pumps are attributable to any negligence or failure in the installation of the pumps and hoses.  In contrast, respondent has provided invoices, the affidavit of its vice president, and letters from the manufacturer of the pumps that show that the additional work was performed on check valves, the card-reader, and problems related to appellants' failure to maintain fuel purity and to the presence of debris in the fuel tanks and lines.

            Appellants assert that respondent breached the contract because installation of the pumps and hoses was not completed until the pumps were fully functional in July 2004, when respondent allegedly provided an installation time of late October or early November 2003.  The contract does not specify a deadline for performance.

            But the record contradicts appellants' argument.  The pumps and hoses were ordered from the manufacturer in October 2003 and installed in December 2003.  Further, appellants paid respondent for the cost of the equipment in February 2004.  Absent any evidence other than their own assertions that installation was not completed in a timely manner, and absent a deadline in the contract, appellants failed to raise a genuine issue of material fact regarding whether respondent breached the contract by not performing installation in a timely manner.

            Appellants argue that under the implied warranty of merchantability, the equipment provided by respondent was warranted to work properly.  Appellants also argue that a representation made by respondent that its equipment would interface with appellants' other equipment created a warranty of fitness for a particular purpose.  We disagree.  Two statutory warranties are relevant:  the implied warranty of merchantability, Minn. Stat. § 336.2-314 (2006) and the implied warranty of fitness for a particular purpose. Minn. Stat. § 336.2-315 (2006).

            The warranty of merchantability requires that when sold by a merchant, goods "pass without objection in the trade under the contract description," are of fair average quality and vary within the terms of the agreement, "are fit for the ordinary purposes for which such goods are used," are adequately packaged, and comply with any printed warranties on the package.  Minn. Stat. § 336.2-314.

            Appellants argue that the ordinary purpose of a gas pump is both to pump gas and to accurately measure the amount of fuel dispensed. The equipment supplied by respondent was part of a larger pumping system which included valves, filters, and card-readers provided by appellants.  Appellants' mere assertion that the problems were caused by respondent are not sufficient to withstand summary judgment in light of the fact that appellants stated in their answers to interrogatories that they were without the expertise to determine whether respondent did or did not perform its work.  Absent any evidence that the pumps and hoses supplied by respondent were deficient, appellants have not provided sufficient evidence to withstand summary judgment on the issue of merchantability.

            The Uniform Commercial Code, as adopted in Minnesota regarding a warranty of fitness for a particular purpose, provides:

Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is unless excluded or modified . . . an implied warranty that the goods shall be fit for such purpose.

 

Minn. Stat. § 336.2-315.

            Appellants allege that they contracted with respondent because respondent represented that it could install the pumps faster than the competition, respondent was aware that appellants ordered a particular credit card system to be used with the pumps and hoses, respondent assured appellants it would not have difficulties interfacing the equipment, and respondent reviewed appellants' existing equipment and did not advise appellants that they would need to replace other equipment for the system to work properly.

            But appellants' only evidence of these representations is their owner's assertions and appellants have failed to provide evidence that the pumps and hoses provided by respondent were unfit.  The record demonstrates that the card-reader supplied by appellants was faulty and was replaced by the manufacturer.  A letter from the manufacturer of the pumps also states that the installed pumps are compatible with aviation fuel and suggests that the problems were caused by improper fuel filtration.  Appellants failed to provide sufficient evidence that the installed pumps and hoses were not fit for their purpose in the larger context of the fuel pumping system.

Because conclusory allegations are not sufficient to create a genuine issue of material fact, see Dyrdal, 689 N.W.2d at 783 (stating that a genuine issue of material fact may not be established by "unverified and conclusory allegations, or postulated evidence that might be developed at trial"), and appellants failed to produce evidence showing that the additional work provided by respondent was made necessary because of any fault on behalf of respondent, the district court did not err by granting summary judgment in favor of respondent on both parties' breach of contract claims.

An action for unjust enrichment is a quasi-contractual agreement implied by law where there is no contract.  Hommerding v. Peterson, 376 N.W.2d 456, 459 (Minn. App. 1985); United States Fire Ins. Co. v. Minn. State Zoological Bd., 307 N.W.2d 490, 497 (Minn. 1981). Because we affirm the district court's finding of a contract between appellants and respondent, we do not reach the issue of unjust enrichment.

II.

            Appellants argue that the district court erred by granting summary judgment in favor of respondent on its mechanic's lien claim.  Minnesota law provides that "[w]hoever . . . contributes to the improvement of real estate by performing labor, or furnishing skill, material or machinery . . . shall have a lien upon the improvement, and upon the land on which it is situated or to which it may be removed."  Minn. Stat. § 514.01 (2006).  The lien attaches "from the time the first item of material or labor is furnished upon the premises for the beginning of the improvement."  Minn. Stat. § 514.05 (2006).

            Here, the record demonstrates that respondent improved the property by installing pumps and hoses, wiring the pumps, and providing maintenance and testing on numerous occasions.  Appellants failed to provide any evidence indicating that the additional work performed by respondent was unauthorized.  Because appellants did not produce evidence sufficient to create a genuine issue of material fact regarding respondent's mechanic's lien claim, the district court did not err by granting summary judgment in favor of respondent.  

III.

            Appellants argue that the district court erred by granting summary judgment in favor of respondent on its account-stated claim because respondent failed to show a prior debtor-creditor relationship and appellants did not retain a statement of account for more than a reasonable amount of time.  

            The doctrine of account stated is an alternative means of establishing liability for a debt other than a contract claim.  Am. Druggists Ins. v. Thompson Lumber Co., 349 N.W.2d 569, 573 (Minn. App. 1984).  The retention of a statement of account without objection for more than a reasonable period of time may demonstrate debtor acquiescence, imply a promise to pay the balance owed without further proof, and operate to create an account stated.  Meagher v. Kavli, 251 Minn. 477, 487, 88 N.W.2d 871, 879 (1958). An account stated constitutes prima facie evidence of the liability of the debtor.  Erickson v. Gen. United Life Ins. Co., 256 N.W.2d 255, 259 (Minn. 1977). 

            Appellants did not respond to six invoices sent between January 2004 and October 2004.  In light of the ongoing difficulties with the fuel islands, appellants' delay in response was unreasonable and demonstrates that appellants acquiesced to the cost of respondent's services and operates to create an account stated. Thus, the district court did not err in ordering summary judgment in favor of respondent on its account-stated claim. 

IV.

            Appellants argue that respondent committed slander of title by maliciously filing its notice of lis pendens because it included payment for warranty and unauthorized work. "A lis pendens serves warning that title to property is in litigation and impedes a property owner's right to free alienability of real estate."  Bly v. Gensmer, 386 N.W.2d 767, 769 (Minn. App. 1986).  "If the cause of action and notice of lis pendens involves a lien, the lien must exist at the time the action is commenced."  Id. at 768.  If the notice of lis pendens is filed with malice, the filing of a false statement on real property may constitute slander of title.  Id. at 769.  

            To prove slander of title, the plaintiff must show that:  (1) "there was a false statement concerning the real property owned by the plaintiff"; (2) "the false statement was published to others"; (3) "the false statement was published maliciously"; and (4) "the publication of the false statement concerning title to the property caused the plaintiff pecuniary loss in the form of special damages."  Paider v. Hughes, 615 N.W.2d 276, 279-80 (Minn. 2000).

            Appellants failed to provide any evidence that respondent acted with malice in filing its notice of lis pendens, and therefore the district court did not err in granting summary judgment in favor of respondent on appellants' slander of title claim.

V.

            Appellants argue that the district court abused its discretion by awarding respondent attorney fees disproportionate to the amount of respondent's mechanic's lien. The district court awarded respondent attorney fees in the amount of $23,241.50, and the mechanic's lien totaled $14,020.17.  Appellants do not raise specific objections to the number of hours expended or the hourly rate charged by respondent's counsel.

            "On review, this court will not reverse a trial court's award or denial of attorney fees absent an abuse of discretion."  Becker v. Alloy Hardfacing & Eng'g Co., 401 N.W.2d 655, 661 (Minn. 1987).  In addition, the district court shall allow reasonable costs to a prevailing party in a district court action.  Benigni v. County of St. Louis, 585 N.W.2d 51, 54 (Minn. 1998).

            In a mechanic's lien foreclosure action, a prevailing lienholder is entitled to "costs and disbursements to be fixed by the court."  Minn. Stat. § 514.14 (2006).  As part of the lienholder's costs and disbursements, the court may award a reasonable attorney fee.  See Obraske v. Woody, 294 Minn. 105, 108, 199 N.W.2d 429, 431 (1972) (stating that costs and disbursements include an award for attorney fees).  Although the award of attorney fees as part of a mechanic's lien foreclosure claim is discretionary, Asp v. O'Brien, 277 N.W.2d 382, 385 (Minn. 1979), the district court should review "time and effort required, novelty or difficulty of the issues, skills and standing of the attorney, value of the interest involved, results secured at trial, loss of opportunity for other employment, taxed party's ability to pay, customary charges for similar services, andcertainty of payment."  Jadwin v. Kasal, 318 N.W.2d 844, 848 (Minn. 1982).  Attorney fees awarded should be in proportion to the mechanic's lien judgment.  Asp, 277 N.W.2d at 385. But attorney fees are not "excessive merely because they may exceed the lien amounts." Kirkwold Constr. Co. v. M.G.A. Constr., Inc., 498 N.W.2d 465, 470 (Minn. App. 1993), aff'd, 513 N.W.2d 241 (Minn. 1994). "Limiting fees in such a manner would discourage small lienholders from pursuing valid claims through the legal system." Id.

            This case involves numerous and complex issues, and we conclude that the district court did not abuse its discretion by awarding attorney fees greater than the amount of the mechanic's lien. 

Appellants failed to produce sufficient evidence to create a genuine issue of material fact regarding respondent's claims or its own counterclaims. We therefore conclude that the district court did not err in granting summary judgment in favor of respondent on all issues. We also conclude that the district court did not abuse its discretion by awarding respondent attorney fees greater than the value of the underlying mechanic's lien.

            Affirmed.