Land & Resource Consulting, Inc. v. Workhorse Land Development, LLC et al

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UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Land & Resource Consulting, Inc.,
Plaintiff,
v.
Work Horse Land Development, LLC, and
William Webber,
Defendants.
No. 25-cv-2890 (KMM/SGE)
ORDER
Plaintiff Land & Resource Consulting, Inc. (“LRC”) filed this action against
Defendant Work Horse Land Development, LLC (“Work Horse”).1 Work Horse answered
and filed several counterclaims. After LRC moved to dismiss the counterclaims, Work
Horse filed an Amended Counterclaim alleging that LRC breached several contracts,
tortiously interfered with Work Horse’s existing contractual relationships with third parties,
and fraudulently induced Work Horse to enter contracts with LRC. This matter is before
the Court on LRC’s motion to dismiss Work Horse’s Amended Counterclaims. For the
reasons discussed below, LRC’s motion is denied in part and granted in part.
BACKGROUND
Plaintiff’s Complaint
Although the legal sufficiency of LRC’s claims against Work Horse are not before
the Court, some context with respect to LRC’s Complaint is useful. LRC alleges that Work
1 Defendant William Webber, the principal of Work Horse, was also named in the
Complaint.
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Horse failed to pay for engineering services LRC provided pursuant to the parties’ contracts
for six different real estate development projects. These projects include:
1. 	A residential development on Ridge Road in Le Sueur County, Minnesota (“the
Le Sueur Project”);
2. 	A mixed-use development on Old Fon Du Lac Road in Kewaskum, Wisconsin
(“the Kewaskum Project”);
3. 	A mixed-use residential development in Hutchison, Minnesota (“the Hutchison
Project”);
4. 	A mixed-use residential development in Ellsworth, Wisconsin (“the Ellsworth
Project”);
5. 	A mixed-use residential development in Young America Township, Minnesota
(“the Young America Project”); and
6. 	A mixed-use development on Albers Avenue in Faribault, Minnesota (“the
Faribault Project”).
LRC agreed to provide conceptual sketch plans; topographic boundary surveys;
preliminary plat and preliminary construction plans; wetland delineations; geotechnical
surveys; tree surveys; storm water management design; entitlement application for
approval processes; construction documentation; final plats; project management; and
construction administration. According to LRC, the total contractual value of the work it
agreed to perform for these six projects was over $1.7 million. However, Work Horse
allegedly still owes LRC over $400,000 for work LRC performed on these projects. LRC
seeks compensatory damages and other relief in its complaint.2
2 LRC also claims that Defendants fraudulently induced LRC to enter into the six
contracts at issue in LRC’s complaint. According to LRC, Work Horse and its principal,
Defendant William Webber, never had any intention to honor its contractual responsibility
to pay if any project turned out not to be sufficiently profitable.
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Defendants’ Counterclaims
Breach of Contract. Work Horse asserts nine breach-of-contract claims against
LRC. (Dkt. 28.) These include the same six projects listed above and three others: (1) an
initial project in Princeton, Minnesota (“the Princeton I Project”); (2) a second project in
Princeton (“the Princeton II Project”); and (3) a project in Hot Springs, Arkansas (“the Hot
Springs Project”).
Work Horse alleges that LRC breached all nine agreements. For example, Work
Horse alleges that “LRC materially breached the Le Sueur Contract by[:] missing timelines
and deadlines; providing incomplete cost estimates that failed to include stormwater costs
in budgeting; and failing to communicate and preform the services under the Le Sueur
Contract.” (Id. ¶ 29.) LRC also allegedly breached the Le Sueur contract “by failing to
maintain accurate accounting records and other project related records.” (Id. ¶ 30.) LRC’s
breaches allegedly caused the builder for the Le Sueur Project to refuse to move forward
and Work Horse was forced to sell the Le Sueur Project at a substantial loss. (Id. ¶ 32.)
Work Horse claims to have lost an expected $3.5 million in profit on the Le Sueur Project.
(Id. ¶ 33.) Work Horse also says that it has been damaged because it had to pay LRC’s
subcontractors directly when LRC failed to pay them and was forced to incur the time and
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expense of completing “Mylar filings” that LRC was contractually obligated to complete.
(Id. ¶¶ 34–35.)3
Relevant to the pending motion to dismiss, each of the agreements contains the
following notice provision:
NOTICE OF CLAIMED ERRORS OR OMISSIONS. In
consideration of Consultant’s providing insurance to cover
claims made by Client, Client hereby waives offset as to fees
otherwise due to Consultant. Client shall provide written
notice, 	including 	all 	know 	[sic] 	associated 	details, 	to
Consultant of any claimed errors or omissions in Consultant’s
services no later than 60 calendar days after Client becomes
aware, or in the exercise of reasonable diligence should have
become aware, of the existence of such error or omission.
Consultant 	shall 	be 	given 	a 	reasonable 	opportunity 	to
investigate 	to 	investigate 	solutions 	to 	mitigating 	alleged
damages. 	Client’s 	failure 	to 	provide 	such 	notice, 	and/or
Client’s failure to provide Consultant a reasonable opportunity
to investigate and offer solutions, within the time stated shall
constitute 	an 	irrevocable 	waiver 	of 	any 	and 	all 	claims,
counterclaims, defenses, setoffs, or recoupments in connection
with any such alleged error or omission.
(Dkt. 39-3 at 11.)4 In its Amended Counterclaim, Work Horse alleges that it provided
written notice to LRC of violations of the contract that form the basis of Work Horse’s
breach-of-contract claims. It says it gave this notice within 60 calendar days of becoming
3 Work Horse’s breach-of-contract claims regarding the other projects are similar to
those concerning the Le Sueur Project. (Dkt. 28 ¶¶ 54–56 (Kewaskum Project), 76–77
(Hutchison Project), 100–01 (Ellsworth Project), 122–23 (Young America Project), 143–
44 (Faribault Project), 165–66 (Princeton I Project), 185–86 (Princeton II Project), 202–03
(Hot Springs Project).)
4 Unless otherwise noted, all page numbers refer to the CM/ECF pagination.
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aware of the LRC’s errors and omissions. (Dkt. 28 ¶¶ 31, 57, 78, 102, 124, 145, 167, 187,
204.)
Tortious Interference. Work Horse alleges that LRC tortiously interfered with
Work Horse’s existing contracts with several non-parties. Work Horse states that it had
contractual relationships with buyers, sellers, subcontractors and builders. These third
parties include: (1) Northwest Asphalt; (2) the City of Ellsworth; (3) Haugo Geotechnical;
(4) Heartland Eco Group; (5) Jacobson Environmental; (6) Kjolhaug Enviro Services;
(7) Parish Survey & Engineering; (8) SRF Consulting; (9) Bogart, Pederson & Associates;
(10) First Class Builders; (11) Diana Stephan and Kathleen Weinand; (12) Randy G
Anderson Crown Property of MN, LLC; and (13) Fieldstone. (Dkt. 28 ¶ 210.) LRC
allegedly knew of these agreements and provided services “for certain of the relationships.”
(Id. ¶ 211.) According to the Amended Counterclaim, LRC had access to Work Horse’s
information and systems and was involved in strategic decision-making regarding project
timing and completion. (Id. ¶ 210.) “When the relationship between Work Horse and LRC
soured, LRC took actions to procure the breach of the contractual relationships that Work
Horse had with” these third parties. (Id. ¶ 211.)
Fraudulent Inducement. Finally, Work Horse claims that LRC fraudulently
induced Work Horse to enter each of the nine contracts at issue the Amended Counterclaim.
For example, Work Horse alleges that before the contract for the Le Sueur Project was
executed, LRC “falsely represented to Work Horse that it would fully, timely and accurately
complete the terms and conditions of the Le Sueur Contract.” (Id. ¶ 215.) LRC allegedly
knew that this statement was false when it was made and intended that Work Horse would
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rely on the statement to enter the contract. (Id. ¶¶ 216–17.) Work Horse makes essentially
the same allegations with respect to the remaining eight projects. (Id. ¶¶ 219–51.) Work
Horse seeks damages, attorneys’ fees, and other financial remedies.
DISCUSSION
I. 	Legal Standard
To survive a Rule 12(b)(6) motion to dismiss, a complaint must contain “enough
facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007). This standard does not require the inclusion of “detailed factual
allegations” in a pleading, but the complaint must contain facts with enough specificity “to
raise a right to relief above the speculative level.” Id. at 555. “Threadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not suffice.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). In applying
this standard, the Court must assume the facts in the complaint to be true and take all
reasonable inferences from those facts in the light most favorable to the plaintiff. Morton
v. Becker, 793 F.2d 185, 187 (8th Cir. 1986); see Waters v. Madson, 921 F.3d 725, 734 (8th
Cir. 2019). But the Court need not accept as true any wholly conclusory allegations or legal
conclusions that the plaintiff draws from the facts pled. Glick v. W. Power Sports, Inc., 944
F.3d 714, 717 (8th Cir. 2019).
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II. 	Breach of Contract
Under Minnesota law,5 a party asserting a claim for breach of contract must establish
the following elements: (1) the existence of a contract; (2) the plaintiff performed the
conditions precedent to the right to demand performance by the defendant; and (3) the
defendant breached the agreement. E.g., Park Nicollet Clinic v. Hamann, 808 N.W.2d 828,
833 (Minn. 2011).
LRC argues that Work Horse’s breach-of-contract claims fail because Work Horse’s
allegations regarding pre-suit written notice are too conclusory. Thus, LRC challenges the
sufficiency of Work Horse’s claim that it performed a condition precedent to its breach-of-
contract claims.6 The Court disagrees and finds that Work Horse’s pleading satisfies this
element of its contract claims.
There is no dispute that all nine agreements contain the same written-notice
provision. Those provisions plainly require Work Horse to provide written notice within
60 days of becoming aware of any alleged breach by LRC, and they state that Work Horse’s
failure to provide such notice constitutes waiver of Work Horse’s claims. But with respect
to each agreement, Work Horse alleges that it provided written notice within 60 days of
5 Because this case is in federal court on diversity jurisdiction, the Court applies the
substantive law of the forum, and the Court notes that the agreements include a Minnesota
choice-of-law provision. (E.g., Dkt. 39-3 at 10 (“This Proposal shall be governed by
Minnesota law, without regard to conflicts of law principles.”).). The parties do not dispute
that Minnesota law applies.
6 See Valspar Refinish, Inc. v. Gaylord’s, Inc., 764 N.W.2d 359, 365 (Minn. 2009)
(“[P]arties to a contract may expressly agree that written notice of breach is a condition
precedent to bringing a breach of contract claim and that the failure to give written notice
bars a subsequent claim.”).
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becoming aware of LRC’s errors and omissions that constituted the breach of that contract
and that LRC failed to cure the deficiencies. LRC argues that Work Horse’s allegations that
it provided written notice within 60 days are “wholly conclusory” and that “Work Horse
fails to support the conclusion that it complied with the notice-and-cure provisions of the
contract with any facts.” (Dkt. 35 at 8.) But here, LRC conflates two concepts—an
allegation of fact and the legal conclusion to be derived from that fact. Whether Work Horse
provided written notice within 60 days after it became aware of any error or omission by
LRC is a question of fact. Whether any notice Work Horse says it provided constituted
compliance with the contracts’ notice-and-cure provisions is a legal conclusion that hinges
upon the facts. Here, Work Horse plainly alleged the necessary facts to support the
inference of compliance with the contractual condition.
LRC clearly disagrees that Work Horse provided the required notice. (Dkt. 35 at 8–
9 (arguing that Work Horse does not allege detailed facts “because they do not exist”).) But
a motion to dismiss for failure to state a claim is not an opportunity for the Court to assess
whether there is evidence to support an allegation in a pleading. LRC is correct that Work
Horse’s allegations concerning the notice are not overly detailed, but it cites no case
holding that a party bringing a breach-of-contract claim is required to do more than what
Work Horse did here. The Amended Counterclaim alerts LRC to the fact that Work Horse
alleges it provided notice in compliance with the contracts. LRC has all it needs from the
pleadings to have notice of the basis for Work Horse’s claims, to test those claims in
discovery, and to establish a defense on the merits.
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Accordingly, the motion to dismiss Work Horse’s breach-of-contract claims is
denied.
III. 	Tortious Interference
“To state a claim for tortious interference with a contract, a party must allege (1) the
existence of a contract, (2) the accused’s knowledge of the contract, (3) intentional
procurement of its breach, (4) the absence of justification, and (5) damages.” Paisley Park
Enters., Inc. v. Boxill, 361 F. Supp. 3d 869, 880 (D. Minn. 2019) (citing Kallok v.
Medtronic, Inc., 573 N.W.2d 356, 362 (Minn. 1998)).
LRC raises two concerns with Work Horse’s tortious-interference claim. First, LRC
argues that Work Horse has failed to allege the existence of any specific contract. The Court
finds this argument unpersuasive. The Amended Counterclaim asserts that Work Horse had
reached an agreement with thirteen third party buyers, sellers, subcontractors, and builders.
It identifies who those third parties are by name. While the pleading does not specify or
identify any specific contract by name, the nature of the allegations in the Amended
Counterclaim are sufficient to provide LRC with notice of the claims against it. The only
case LRC cites in support of its argument is Paisley Park (Dkt. 35 at 11), but it is
distinguishable. 	The 	Paisley 	Park 	court 	did 	not 	dismiss 	the 	defendants’ tortious-
interference claim because it failed to specify a contract. The court found that the
relationships the defendants identified with its business partners were nothing more than
“negotiations and preliminary agreements” that could not satisfy the first element of the
claim under Minnesota law. 361 F. Supp. 3d at 880 (citing Bouten v. Richard Miller Homes,
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Inc., 321 N.W.2d 895, 900 (Minn. 1982)). Here, by contrast, Work Horse alleges that there
were existing contractual relationships with the third parties it identifies.
LRC’s second argument is more persuasive. LRC contends that Work Horse’s
tortious-interference claim should be dismissed because Work Horse “does not state any
facts related to how LRC interfered with [any contract Work Horse] claims to have had
[with] the litany of entities mentioned in the Counterclaim.” (Dkt. 35 at 12.) The Court
agrees. Because a party asserting a tortious-interference claim often lacks access to
“alleged behind-the-scenes actions” taken by the defendant, courts do not require such
claims to be supported by “highly specific” allegations. Am. Achievement Corp. v. Jostens,
Inc., 622 F. Supp. 3d 749, 761 (D. Minn. 2022) (quoting Strategic Energy Concepts, LLC
v. Otoka Energy, LLC, No. 16-cv-463 (MJD/BRT), 2016 WL 7627040, at *11 (D. Minn.
Nov. 18, 2016)). But here, Work Horse does not identify any conduct that LRC allegedly
engaged in. Instead, it provides only a conclusory statement that LRC intentionally
procured breaches of at least thirteen separate contracts. As to each contract Work Horse
had with the identified third parties, all it alleges is “[w]hen the relationship between Work
Horse and LRC soured, LRC took actions to procure the breach of the contractual
relationships that Work Horse had” with those third parties. (Dkt. 28 ¶ 211.) The Amended
Counterclaim, therefore, fails to allege “facts with sufficient detail to give notice of the
conduct [Work Horse] complains about.” Am. Achievement Corp., 622 F. Supp. 3d at 761.
For this reason, LRC’s motion to dismiss the tortious-interference claim is granted and
Counterclaim X is dismissed without prejudice.
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IV. 	Fraudulent Inducement
When a party is fraudulently induced to enter a contract, the agreement can be
voided. Kruger v. Lely N. Am., Inc., 518 F. Supp. 3d 1281, 1291 (D. Minn. 2021) (citing
MCC Invs. v. Crystal Props., 415 N.W.2d 908, 911 (Minn. Ct. App. 1987)). Pleading a
fraudulent-inducement claim requires the plaintiff to allege the following elements:
(1) the defendant made a false representation of fact; (2) the
defendant either knew the representation was false or asserted
it as his own knowledge without knowing whether it was true
or false; (3) the defendant intended the plaintiff to rely on the
representation; (4) the plaintiff was induced to act based on the
representation; and (5) the false representation proximately
caused damage to the plaintiff.
Id. (citing Progressive Techs., Inc. v. Shupe, No. A04-1110, 2005 WL 832059, at *4 (Minn.
Ct. App. Apr. 12, 2005)). Moreover, “[i]n alleging fraud . . . , a party must state with
particularity the circumstances constituting fraud[.]” Fed. R. Civ. P. 9(b). “A claim for fraud
in the inducement ‘is only different from a common-law fraud claim in that it requires a
claim that the fraud contributed to the formation of a contract.’” OrthoAccel Techs., Inc. v.
Devicix, LLC, No. 15-cv-1503 (DWF/TNL), 2015 WL 4563134, at *3 n.1 (D. Minn. July
29, 2015) (quoting Target Corp. v. LCH Pavement Consultants, LLC, No. 12-cv-912, 2013
WL 4400390, at *6 (D. Minn. Aug. 9, 2013)). As such, a party asserting fraud in the
inducement of a contract must comply with Rule 9(b)’s particularity requirements. Id. at
*3. This rule requires greater specificity to provide the party accused of fraud “a higher
degree of notice than that required for other claims,” so that the accused party can “respond
specifically and quickly to the potentially damaging allegations.” U.S. ex rel. Joshi v. St.
Luke’s Hosp., Inc., 441 F.3d 552, 556 (8th Cir. 2006) (citation omitted). “To satisfy the
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particularity requirement of Rule 9(b), the complaint must plead such facts as the time,
place, and content of the [party’s] false representations, as well as the details of [its]
fraudulent acts, including when the acts occurred, who engaged in them, and what was
obtained as a result.” Id.
Work Horse’s fraudulent-inducement claims do not comply with Rule 9(b)’s
particularity requirement. Nothing in the Amended Counterclaim identifies the time, place,
and content of LRC’s alleged false representations. Nor does it allege who made any false
representation or when the representations were made. Instead, Work Horse provides only
conclusory allegations. It simply states, for each of the nine contracts at issue, that LRC
falsely represented to Work Horse that it would fully, timely, and accurately complete the
terms and conditions of the relevant contract, and thereby induced Work Horse to enter the
relationship. Greater specificity is required to adequately assert a claim based on fraud.
Accordingly, LRC’s motion to dismiss is granted and Work Horse’s fraudulent-inducement
claim is dismissed without prejudice.
ORDER
For the reasons stated above, IT IS HEREBY ORDERED THAT
1. 	Plaintiff’s Motion to Dismiss Defendant’s Amended Counterclaim (Dkt. 34) is
granted in part and denied in part.
2. 	Defendant’s Amended Counterclaims for tortious interference with contract
(Counterclaim X) and for fraudulent inducement (Counterclaim XI) are
DISMISSED WITHOUT PREJUDICE.
3. 	Plaintiff’s Motion is otherwise denied.
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Date: February 6, 2026
s/Katherine Menendez
Katherine Menendez
United States District Judge
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