G Urban Companies, Inc. v. Roseville Area Schools ISD 623 ( 2023 )

This opinion is nonprecedential except as provided by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
A23-0573
G Urban Companies, Inc.,
Appellant,
vs.
Roseville Area Schools ISD #623,
Respondent.
Filed December 4, 2023
Affirmed
Schmidt, Judge
Ramsey County District Court
File No. 62-CV-21-4872
Beau D. McGraw, McGraw Law Firm, P.A., Lake Elmo, Minnesota (for appellant)
Zachary J. Cronen, Squires, Waldspurger & Mace, P.A., Minneapolis, Minnesota (for
respondent)
Considered and decided by Ross, Presiding Judge; Schmidt, Judge; and
Halbrooks, Judge. ∗
∗
Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
NONPRECEDENTIAL OPINION
SCHMIDT, Judge
Appellant G Urban Companies Inc. (G Urban) challenges the summary-judgment
dismissal of its claims of breach of contract, unjust enrichment, and promissory estoppel
against respondent Roseville Area Schools ISD #623 (the district), arguing that issues of
material fact regarding the bidding process that led to the parties’ contract preclude
summary judgment on all three claims. Because the plain language of the parties’ contract
defeats the breach-of-contract claim and the existence of an enforceable contract precludes
equitable relief, we affirm.
FACTS 1
In mid-2019, the district began a construction project at a middle school that
included work on its track and field. The district’s construction manager solicited bids for
the project, posting plans and specifications for bidding on the platform iSqFt. The bidding
documents were also available in several other locations, including the Minnesota Builders
Exchange (MBEX). The work scope for the project called for “removal of existing track
aggregate as required to install engineered soil.” An addendum to the bidding documents
(Addendum No. 2) also referenced “engineered soil” and included a drawing (C200) that
used shading to show installation of engineered soil as part of the project.
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Consistent with our review of an order granting summary judgment, our recitation of the
facts includes only undisputed facts that we view in the light most favorable to G Urban as
the nonmoving party. Trebelhorn v. Agrawal, 905 N.W.2d 237, 241 (Minn. App. 2017).
2
G Urban submitted a bid, offering to complete the work for $1,650,000. In its bid,
G Urban acknowledged that it received and examined the bidding documents and addenda.
After all bids were publicly opened and read at the Roseville Area Schools District Center,
G Urban was revealed to be the lowest bidder. The parties thereafter reviewed the scope
of the project, confirming that it included installation of a new engineered soil track.
G Urban told the district that its bid did not account for installing engineered soil because
it obtained a drawing from MBEX that did “not indicate that engineered soil is required for
the surface of the track.” G Urban asserted that the apparent inconsistency in bidding
documents made the bidding process unfair and requested that the district either award it
the project and later provide for additional compensation for installing engineered soil or
reject all bids and allow for rebidding. The district denied the requests.
Instead, the construction manager explained that the district intended to accept
G Urban’s bid amount as is “with no intention of accepting a change order.” The
construction manager further offered that if G Urban was “not in agreement they may
withdraw their bid.” G Urban responded that it “will not agree to withdraw its bid” and
reiterated its requests for the district to award the contract to G Urban with the additional
cost for the engineered soil or for the district to re-bid the entire project. The district replied
that G Urban will be “expected and required to utilize engineered fill in the track areas.”
The district also noted that it “will strongly oppose any effort by G. Urban, post-award, to
assert a claim of entitlement to additional compensation for such fill.” G Urban did not
withdraw its bid.
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The district’s school board held a public meeting to award the project. G Urban’s
owner attended the meeting and spoke during the public-comment period, restating the
request for additional compensation for installing engineered soils. The district awarded
the project to G Urban. G Urban and the district thereafter executed a written contract. In
defining the work that G Urban agreed to perform, the construction contract incorporated
numerous bid documents, including Addendum No. 2 and drawing C200, which identify
installation of engineered soil as part of the project. The district agreed to pay G Urban
$1,650,000 for the work. The construction contract states that it “represents the entire and
integrated agreement between the parties hereto and supersedes prior negotiations,
representations or agreements, either written or oral.” The construction contract also
permits modification of the scope of the work and the compensation if the parties agree to
a “change order.”
In early 2020, G Urban wrote to the construction manager requesting an additional
$77,750 as “extra costs” for installing engineered soil, reiterating its position that some
bidding documents did not clearly show that work as part of the project. The construction
manager rejected the request, stating: “The expectation is that because [G Urban] accepted
the project award that engineered fill will be provided throughout the track as shown in the
project documents at no additional cost to the project.” G Urban completed the project,
including installation of engineered soil.
G Urban sued the district, alleging that the construction contract is an “enforceable
agreement,” it requested a change order regarding installation of engineered soil, and the
district breached the contract by “fail[ing] to approve [G Urban’s] change order and
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refus[ing] to compensate [G Urban] for the use of engineered soils in the track and field
area.” G Urban also asserted claims of unjust enrichment and promissory estoppel based
on the district’s refusal to compensate it for installing engineered soil.
The district moved for summary judgment, arguing that it did not breach the
construction contract by declining to grant a change order because the contract required
installation of engineered soil. The district also argued G Urban cannot receive equitable
relief because a valid contract governs the parties’ actions. The district court agreed,
granted summary judgment, and dismissed the case with prejudice. G Urban appeals.
DECISION
Summary judgment is proper if the moving party shows that “there is no genuine
issue as to any material fact and the movant is entitled to judgment as a matter of
law.” Minn. R. Civ. P. 56.01. On appeal, we review “the record to determine whether
there is any genuine issue of material fact and whether the district court erred in its
application of the law.” Dahlin v. Kroening, 796 N.W.2d 503, 504–05 (Minn. 2011). “We
review a district court’s summary judgment decision de novo.” Riverview Muir Doran,
LLC v. JADT Dev. Grp., LLC, 790 N.W.2d 167, 170 (Minn. 2010). We view the evidence
“in the light most favorable to the party against whom judgment was granted.” Trebelhorn,
905 N.W.2d at 241.
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I. The plain language of the construction contract defeats G Urban’s breach-of-
contract claim.
To prevail on a breach-of-contract claim, a plaintiff must prove three
elements: “(1) formation of a contract, (2) performance by plaintiff of any conditions
precedent to [its] right to demand performance by the defendant, and (3) breach of
the contract by defendant.” Park Nicollet Clinic v. Hamann, 808 N.W.2d 828, 833
(Minn. 2011).
G Urban and the district undisputedly formed a valid contract. Whether the district
breached the construction contract depends on interpretation of the contract, which presents
a question of law that we review de novo. Trebelhorn, 905 N.W.2d at 242. “If a contract
is unambiguous, a court gives effect to the parties’ intentions as expressed in the four
corners of the instrument, and clear, plain, and unambiguous terms are conclusive of that
intent.” Christensen L. Off., PLLC v. Olean, 916 N.W.2d 876, 886 (Minn. App. 2018).
G Urban argues that material fact issues preclude summary judgment on its claim
that the district breached the construction contract because (1) inaccurate bidding
documents were posted on MBEX, misleading G Urban regarding the project’s
requirements; (2) the parties discussed a change order regarding engineered soil before
executing the construction contract, and the construction contract permits G Urban to
submit a change order; (3) the phrase “engineered soils” is ambiguous; and (4) the record
contains conflicting evidence as to whether G Urban accessed the correct bid documents
on iSqFt. Because none of these facts are material as to whether the district breached the
construction contract, we are not persuaded.
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In analyzing a breach-of-contract-claim, we look to the language of the contract
itself. Christensen, 916 N.W.2d at 886. Unless that language is ambiguous, we will not
consider extrinsic evidence of “previous understandings and negotiations.” Triple B & G,
Inc. v. City of Fairmont, 494 N.W.2d 49, 53 (Minn. App. 1992). Here, the construction
contract is not ambiguous. The contract plainly permits change orders, but it just as plainly
provides that a change order “shall be based upon agreement among” the district, the
construction manager, the architect, and G Urban. The construction contract does not
require the district to agree to any change order that G Urban submits. Similarly, the
contract plainly requires G Urban to install engineered soil—as part of the agreed-to work,
for the agreed-to compensation—by incorporating Addendum No. 2 and drawing C200.
G Urban does not dispute that the construction contract calls for installing
engineered soil, only that G Urban did not have access to Addendum No. 2 and drawing
C200 before bidding. But before signing the contract, G Urban undisputedly understood
that the contract included engineered soil and declined to withdraw its bid. At oral
argument, counsel argued withdrawing the bid was “impracticable . . . from an economic
standpoint.” This argument inherently recognizes that G Urban made a business decision
to sign the contract that included engineered soil, perform under the contract and install
engineered soil, and take a calculated business risk that the district may not accept the
change order for additional compensation for the engineered soil. G Urban’s business
decision to sign the contract knowing the risks does not make the agreement unenforceable
or prove that the district breached the contract. Accordingly, the district court did not err
by granting summary judgment to the district on G Urban’s breach-of-contract claim.
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II. The construction contract precludes G Urban’s equitable claims.
Unjust enrichment and promissory estoppel are equitable doctrines that allow a
plaintiff to recover under circumstances when the parties’ rights are not governed by a
contract. Herlache v. Rucks, 990 N.W.2d 443, 450 (Minn. 2023) (defining unjust
enrichment); Javinsky v. Comm’r of Admin., 725 N.W.2d 393, 398 (Minn. App. 2007)
(defining promissory estoppel). These equitable claims afford relief in the absence of an
adequate legal remedy, but they are not available when “the rights of the parties are
governed by a valid contract.” Colangelo v. Norwest Morg., Inc., 598 N.W.2d 14, 19
(Minn. App. 1999), rev. denied (Minn. Oct. 21, 1999).
To avoid application of this rule, G Urban argues that the construction contract does
not “completely” govern the parties’ rights because it is ambiguous “on what is meant by
‘engineered soils.’” We are not persuaded. Even if the phrase “engineered soils” is
ambiguous, it does not make the construction contract incomplete; it simply permits
consideration of extrinsic evidence to interpret it. See Trebelhorn, 905 N.W.2d at 242. But
more importantly, as noted above, any ambiguity in the phrase “engineered soils” is
immaterial as to whether the construction contract required G Urban to install engineered
soil as part of the agreed-to work for the agreed-to compensation. Because a valid contract
governs the parties’ rights and obligations with respect to installation of engineered soil
and compensation for that work, the district court properly granted summary judgment to
the district on G Urban’s equitable claims.
Affirmed.
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