370 F. Supp. 3d 1020
D. Me.2019Background
- Homestar Property Solutions (plaintiff) contracted with Safeguard Properties (defendant) as an independent contractor to preserve foreclosed properties between 2012–2014; disputes center on 578 work orders in an Accounts Receivable (AR) spreadsheet listing ~$1.75M in alleged underpayments.
- Safeguard produced a detailed audit (Safeguard AR Analysis) concluding it owed only $129,123.86 for 89 work orders and identified categories (paid, chargebacks, pricing adjustments, duplicates, etc.) for disputing the remainder.
- Homestar concedes liability for some items but disputes ~273 work orders and advances roughly $1.26M in direct contract damages; it also asserts consequential/reputational losses and a separate $1.7M promissory-estoppel theory based on an alleged oral promise.
- Procedural posture: Safeguard moved for summary judgment on breach of contract, unjust enrichment, promissory estoppel, and account stated; Bank of America moved on an unjust enrichment claim; court previously granted in part Safeguard’s counterclaim SJ and granted BofA’s SJ; this opinion resolves Safeguard’s primary SJ motion.
- The court found genuine disputes of material fact on many individual work orders (crediting Homestar’s affidavits vs. Safeguard’s accounting) and denied summary judgment on breach of contract except as to damages theories not supported by evidence.
- The court granted summary judgment to Safeguard on Homestar’s promissory estoppel, unjust enrichment, and account stated claims (dismissed with prejudice), limiting Homestar to contract-based recovery for specific work orders and requiring proof of causation and reasonable certainty for consequential or lost-profit damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract — unpaid/underpaid work orders | Homestar: Safeguard failed to pay/underpaid on numerous work orders per AR spreadsheet (~$1.26M) | Safeguard: Its audit shows most charges are invalid (paid, chargebacks, duplicates, pricing adjustments), owing only ~$129k | Denied in part: material factual disputes on many individual work orders preclude SJ; issues go to jury for each disputed order |
| Consequential/reputational damages and lost profits | Homestar: slow paying caused defaults, loss of reputation, subcontractor relations, and ultimate insolvency; seeks consequential damages | Safeguard: no contract breach shown re: payment timing; damages speculative and unsupported | Granted in part: Homestar produced no evidence of a payment-timing breach; consequential/lost-profit damages barred absent proof of specific contract breaches causally linking losses |
| Promissory estoppel — alleged $1.7M oral promise | Homestar: Safeguard (via Dinehart) orally promised to pay the AR amount, creating enforceable reliance | Safeguard: Written contracts govern; no clear enforceable oral promise; Breese affidavit contradicted by other testimony | Granted: promissory estoppel barred where written contract governs same subject matter; claim dismissed with prejudice |
| Unjust enrichment & Account stated | Homestar: alternative equitable claims to recover payments | Safeguard: valid written contract covers subject matter; equitable claims not available | Granted: both equitable claims dismissed with prejudice because enforceable contract governs dispute |
Key Cases Cited
- Ingrassia v. Schafer, 825 F.3d 891 (8th Cir.) (summary judgment requires nonmoving party to present specific facts creating a genuine dispute)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. Supreme Court) (standard for summary judgment; credibility and weight are jury functions)
- Grinnell Mut. Reinsurance Co. v. Schwieger, 685 F.3d 697 (8th Cir.) (evidence viewed in light most favorable to nonmoving party)
- Lyon Fin. Servs., Inc. v. Ill. Paper & Copier Co., 848 N.W.2d 539 (Minn.) (elements of breach of contract under Minnesota law)
- Hinz v. Neuroscience, Inc., 538 F.3d 979 (8th Cir.) (requirements for recovering lost profits: causal link and reasonable certainty)
- Caldas v. Affordable Granite & Stone, Inc., 820 N.W.2d 826 (Minn.) (unjust enrichment unavailable where enforceable contract governs)
- Martens v. Minn. Mining & Mfg. Co., 616 N.W.2d 732 (Minn.) (elements of promissory estoppel)
- Reisdorf v. i3, LLC, 129 F.Supp.3d 751 (D. Minn.) (promissory estoppel rejected where written contract governs)
- St. Jude Med., S.C., Inc. v. Biosense Webster, Inc., 994 F.Supp.2d 1033 (D. Minn.) (contract claims limit recovery; unjust enrichment dismissed where contract applies)
- Upsher-Smith Lab., Inc. v. Mylan Lab., Inc., 944 F.Supp. 1411 (D. Minn.) (business reputation injury may be compensable in contract actions)