Court Opinion

ID: 9695154
Source: CourtListenerOpinion
Date Created: 2023-08-25 18:09:46.153427+00
Date Added: 2024-06-11T18:20:09.316141
License: Public Domain

ROBERT H. SCHUMACHER, Judge
(concurring in part, dissenting in part).
While I concur with the majority’s analysis regarding the subcontractors’ equita*443ble claims, I respectfully dissent with regard to the analysis of the forfeiture clause. I believe that MAC is not entitled to the $44,000 because the forfeiture provision in its contract with JayLark does not apply to the surety and the subcontractors. Where a contract clearly and expressly provides for forfeiture, the provision will be strictly construed. Naftalin v. John Wood Co., 263 Minn. 135, 147-48, 116 N.W.2d 91, 100 (1962).
Here, the forfeiture provision clearly provides that “the Contractor” is the only party subject to its terms. Because it is undisputed that JayLark is “the Contractor,” I conclude that this court should not allow MAC to extend the reach of its forfeiture provision to include the subcontractors and the surety, which are nonparties to the contract between MAC and JayLark. As nonparties to the contract, the forfeiture provision is not a clear expression or manifestation of their intent and, thus, is unenforceable as applied to them. See id. (holding that forfeiture is enforceable if it is clear expression of parties’ intent).
Further, forfeitures are not favored and will not be enforced when great injustice would be done. Hideaway, Inc. v. Gambit Invs., Inc., 386 N.W.2d 822, 824 (Minn.App.1986). Here, I believe that it is unjust that MAC, which has the benefit of a fully completed project, retains a windfall profit of $44,000. While I agree that Mon-Ray and Erickson are not entitled to the $44,000 because both failed to timely pursue their statutory remedy, I conclude that Granite should be entitled to the money in mitigation of the great economic loss that it has suffered in discharge of its payment and performance bond obligations.