Caldas v. Affordable Granite & Stone, Inc.
820 N.W.2d 826
| Minn. | 2012Background
- City of Minneapolis contracted with Affordable Granite & Stone (AGS) to repair the Minneapolis Convention Center.
- AGS paid appellants the prevailing wage for their classification ($16.28) rather than terrazzo mechanics ($44.31).
- AGS’s prevailing wage obligation was incorporated via a prevailing wage certificate and the Public Works Ordinance incorporated into the contract.
- City investigated and found no prevailing wage violation; later letters were prepared but not delivered to appellants.
- Appellants sued AGS for breach of contract, wage-statute claims, and unjust enrichment, arguing third-party beneficiary rights.
- Lower courts granted summary judgment for AGS; the supreme court affirmed, holding no third-party beneficiary status and meritless wage claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are appellants intended third-party beneficiaries? | Caldas argues contract intended beneficiaries rights. | AGS contends only the City has enforcement rights; appellants are incidental. | No; appellants are not intended beneficiaries. |
| Does the Payment of Wages Act allow recovery here? | Appellants seek independent wage rights under the Act via contract/ordinance. | Act is timing, not substantive recovery; no independent right exists absent beneficiary status. | No independent right; Act does not support recovery absent third-party status. |
| Can appellants pursue unjust enrichment against AGS? | Unjust enrichment should require payment at the terrazzo rate. | No enrichment if not contract beneficiaries; no basis to pierce contract. | Unjust enrichment claim fails as a matter of law. |
Key Cases Cited
- Cretex Cos. v. Constr. Leaders, Inc., 342 N.W.2d 135 (Minn. 1984) (Restatement § 302 framework for intended vs incidental beneficiaries)
- Hickman v. SAFECO Ins. Co. of Am., 695 N.W.2d 365 (Minn. 2005) (intent-to-benefit analysis for third-party beneficiaries in government contracts)
- N. Nat'l Bank of Bemidji v. N. Minn. Nat'l Bank of Duluth, 244 N.W.2d 202 (Minn. 1955) ( Restatement-style treatment of third-party beneficiaries)
- Duluth Lumber & Plywood Co. v. Delta Dev., Inc., 281 N.W.2d 377 (Minn. 1979) (incidental vs intended beneficiary analysis in contract)
- Astra USA, Inc. v. Santa Clara Cnty., 131 S. Ct. 1342 (2011) (Supreme Court on limitations of third-party beneficiary status when contract merely incorporates statutory obligations)