Michelle Alton Bonomo, Appellant,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).

STATE OF MINNESOTA
IN COURT OF APPEALS
A16-2071

Michelle Alton Bonomo,
Appellant,

vs.

Midtown Partners, LLC,
Respondent

Filed August 28, 2017
Affirmed
Worke, Judge

Hennepin County District Court
File No. 27-CV-15-17538

George G. Eck, Andrew B. Branti ngham, Nicholas J. Bullard, Dor sey & Whitney LLP,
Minneapolis, Minnesota (for appellant)

Kevin R. Coan, Kyle A. Eidsness, Hinshaw & Culbertson LLP, Minneapolis, Minnesota
(for respondent)

Considered and decided by Worke, Presiding Judge; Johnson, Judge; and Larkin,
Judge.
U N P U B L I S H E D O P I N I O N
WORKE, Judge
Appellant challenges the district court’s summary -judgment denial of her req uest
for a declaratory judgment that she holds a financial interest in respondent-LLC under the
terms of a settlement agreement. We affirm.

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FACTS
In 1999, appellant Michelle Alton Bonomo’s then-husband, Dean Vlahos, founded
Redstone American Grill Inc. to operate Redstone American Grill res taurants. In 2000,
Vlahos, Craig Oberlander, and Tom Petters formed Idlewild Properties, LLC 1 with the
purpose of acquiring real estate to lease to Redstone for a restaurant. Each member held a
one-third interes t in the company. Vlahos’s contribution to Idlewild was made largely
through demand promissory notes.
In 2006, Vlahos, Oberlander, and Petters formed respondent Midtown Partners LLC
solely to purchase shar es of Redstone preferred stock. In order to p urchase the stock,
Midtown secured a $5 mi llion loan from Home Federal. The loan accrues interest at a
variable rate, payable in monthly installments. Midtown’s members agreed to be
responsible for paying their proportionate share of Midtown’s interest expense on the loan
because Midtown does not generate income.
The members agreed that Idlewild would make the interest payments on beha lf of
the members of Midtown. Effectively, this meant that as long as a memb er of Midtown
was a member of Idlewild, Idlewild would pay that member’s share of the interest expense.
It also meant that if one of the Midtown members ceased being a member of Idlewild, that
Midtown member’s portion of the interest expense would be payable directly by that
Midtown member.

1 Idlewild’s members were 78th Street Properties LLC (owned by Oberlander), DSV
Ventures LLC (owned by Vlahos), and Tom Petters LLC (owned by Petters).

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In 200 9, Bonomo and Vlahos divorced. Bonomo and Vlahos’s divorce decree
states: “The parties’ 1/3 interest in Midtown . . . shall be divided equally between the
parties. To the extent [Bonomo’s] interest may be transferred individually into her own
name, it shall be so transferred.” The parties also agreed to divide equally the one -third
interest in Idlewild.
On March 8, 2011, Idlewild’s board of governors voted to demand payment of
promissory notes due in connection with Vlahos’s interest. Idlewild sent a demand letter
indicating that Vlahos was required to make payment on his notes. Vlahos failed to make
a payment; thus, pursuant to the member control agreement (MCA), Vlahos’s membership
interest in Idlewild was reduce d, resulting in a 0% interest. After losing his interest in
Idlewild, Vlahos acknowledged that he was personally responsible for his proportional
payment of interest expense to Midtown.
Midtown then gave Vlahos notice that it was making a capital call , pursuant to its
MCA, and that all outstanding interest would be due by July 7, 2012. If Vlahos failed to
make the payment, his interest in Midtown would be diluted. Before his interest could be
diluted, Vlahos filed for Chapter 7 bankruptcy, listing his one-third interest in Midtown as
an asset. On August 22, 2013, the Midtown Irrevocable Trust 2 purchased Vlahos’s
membership interest in Midtow n from the bankruptcy trustee. This purchase, in addition
to the trust’s purchase of Vlahos’s interest in Idlewild, was approved by a court in Vlahos’s

2 Oberlander assigned his interest in Midtown to the irrevocable trust created for es tate
planning. The trust also acquired Petters’s interest in Midtown. Midtown Irrevocable Trust
is the sole member of Midtown.

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bankruptcy proceeding despite Bonomo’s objection and claim that she had a one -half
interest in Vlahos’s interests in Midtown and Idlewild.
In November 2013, Midtown and Idlewild commenced a lawsuit against Bono mo,
seeking a declaration that Bonomo held no interest in either company. Bonomo sought a
declaratory judgment, seeking recognition of her interests as awarded in the dissolution .
The parties moved for summar y judgment. Prior to a ruling on the motions, the parties
reached an agreement regarding Bonomo’s interest in Idlewild . But Bonomo eventually
abandoned any interest in Idlewild.
A district court denied th e motions for summary jud gment. After which, on
October 9, 2014, the parties entered into an agreement regarding Midtow n. The parties
agreed that, if Bonomo fulfilled certain conditions, Midtown would acknowledge that she
obtained a one-sixth interest as of the date of the dissolution decree. Bonomo (1) “agree[d]
to be bound by Chapter 322B of Minnesota Statutes,” (2) “agree[d] to be bound by
Midtown’s current Member Control and Operating Agreements,” (3) “acknowledge[d] that
Home Federal has a security interest in the one -sixth financial interest,” and (4) “agree[d]
to execute all documents necessary to effectuate her personal guarantee of Midtown’s loan
obligations to Home Federal.”
In May 2015, Midtown prepared documents assigning and transferring the one-sixth
interest to Bonomo. The document included “Assignee ’s Share of Interest Exp ense,”
which stated: “Because [Bonomo] is not, and will not become, a member of Idlewild,
[Bonomo] owes her one -sixth share of the monthly Interest Expense to [Midtown] as of

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October 9, 2014. [Midtown’s] monthly Interest Expense is currently $28,850.19, a nd
[Bonomo’s] share of the monthly Interest Expense is $4,808.37.”
Instead of signing the transfer documents, Bonomo initiated a lawsuit against
Midtown, claiming that Midtown breached the October 2014 agreement because the
agreement did not require her to pay an interest expense. The parties moved for summary
judgment. Midtown claimed that Bonomo was not entitled to an interest in Midtown
because she failed to satisfy conditions prece dent to Midtown’s performance.
Alternatively, Midtown argued t hat if Bonomo is entitled to an interest in Midtown, she
should be obligated to pay her portion of the interest expense.
Following a hearing on the parties’ motions, the district court granted Midtown’s
motion for summary judgment. The district court concluded that Bonomo’s refusal to sign
the transfer documents requiring her to pay interest on the loan indicated that she is not
willing to be bound by the agreements applicable to members, one of the four requirements
of the October 2014 agreement. This appeal followed.
D E C I S I O N
Bonomo argues that the district court erred in granting Midtown’ s motion for
summary judgment. This court “review[s] a district court’ s summary judgment decision
de novo. In doing so, [this court] determine[s] whether the district court properly applied
the law and whether there are genuine issues of material fact that preclude summary
judgment.” Riverview Muir Doran, LLC v. JADT Dev. Grp., LLC, 790 N.W.2d 167, 170
(Minn. 2010) (citation omitted). Summary judgment must be granted “if the pleadings,
depositions, answers to interrogatories, and admissions on file, tog ether with [any]

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affidavits . . . show that there is no genuine issue as to an y material fact and that either
party is entitled to a judgment as a matter of law.” Minn. R. Civ. P. 56.03. The moving
party has the burden of showing the absence of a genuine issue of material fact. Anderson
v. State, Dep’t of Nat. Res. , 693 N.W.2d 181, 191 (Minn. 2005). A genuine issue of fact
exists when reasonable minds can draw different conclusions from the evidence presented.
DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn. 1997).
The parties agree that their October 9, 2014 agreement is central to resolving the
issue in this matter. The parties also agree that t heir agreement is unambiguous. “A
settlement agreement is a contract.” Dykes v. Sukup Mfg. Co. , 781 N.W.2d 578, 581 -82
(Minn. 2010). When the language of a contract is clear and unambiguous, this court
enforces the agreement of the parties as expressed in the contract. Id. at 582.
Bonomo asserts that the district court erred by requiring “an unwritten fifth
condition” that she make interest payments on Midtown’s debt. Midtown counters that the
district court did not impose a fifth condition; rather, implicit in the four conditions is the
requirement that Bonomo make interest payments. We agree with Midtown.
Bonomo agreed “to be bound by Midtown’s current Member Control and Operating
Agreements, which agreements are id entical to those of Idlewild.” Bonomo asserts that
she “satisfied this requirement by signing the Midtown Agreement and thereby agreeing to
be bound by the current Member Control and Operating Ag reements.” However, signing
the agreement does not satisfy a condition that Bonomo be bound by Midtown’s control
agreement. Bonomo has to abide by the terms of the agreement in order to satisfy this
condition.

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The MCA addresses involuntary transfers. An involuntary transfer occurs in a
marriage-dissolution proceeding. Thus, Bonomo’s potential interest in Midtown exists
because of an involuntary transfer. The MCA requires an involuntary transferee (Bonomo)
to be bound by the MCA and “all other agreements applicable to the [m]embers.” One
such agreement between the members relates to interest payments on the loan.
Midtown’s only purpose was to secure a $5 million loan from Home Federal in
order to purchase 2.5 million shares of stock in Redstone. While Midtown does not
generate income, it still owes th e lender interest on the loan. Thus, when Midtown was
formed, its members agreed to be responsible for paying their proportionate share of
Midtown’s interest expense on the loan. The members agreed that their distributions from
Idlewild would be paid to Midtown to pay the interest. The members understood that as
long as a member of Midtown was also a member of Idlewild, Idlewild would pay that
member’s share of the interest expense. But if one of the Midtown members ceased being
a member of Idlewild, then that Midtown member’s portion of the interest expense would
be payable directly by the Midtown member. Midtown has admitted that, if Bonomo had
agreed to become a member of Idlewild under certain conditions, Idlewild would be paying
Bonomo’s porti on of the debt on her behalf. But Bonomo abandoned any interest in
Idlewild. Because Bonomo claims a membership interest in Midtown and is not a member
of Idlewild, based on the members’ agreement, she is responsible for the proportionate
interest expense.
Bonomo claims that “Footnote 1 [of the October 2014 agreement] waives any
obligation on [her] part to pay accrued interest—nothing more. It does not require [her] to

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make future interest payments.” Footnote 1 states: “Midtown . . . agrees to waive payment
by Bonomo of the approximate . . . $207,125.50[] due and owing as to the one-sixth (1/6)
interest held by . . . Vlahos that is being transferred to Bonomo consistent with t he terms
of this [a]greement.” Bonomo is correct that this is a waiver and nothing more regarding
Bonomo’s obligation to pay accrued interest. But Midtown did not need to include an
obligation to pay future interest in the footnote because the obligation is included as an
“other agreement[] applicable to the [m]embers” referenced in the MCA that Bonomo
agreed to be bound to.
Bonomo claims that she is not required to make interest payments because the
agreement does not “affirmatively impose” any obligation for her to make interest
payments. But the agreement states: “The [p]arties have agreed that Bonomo may obtain
a one -sixth financial interest in Midtown, subject to the terms and conditions of this
[a]greement.” The agreement established what Bonomo must do in order to obtain a one-
sixth interest. After she met the conditions and obtained a membership interest, she would
have obtained a financial benefit and a financial obligation. As Midtown has argued,
Bonomo’s position is that she should receive the benefit of being a member without any of
the associated financial obligations—“all the upside, none of the downside.” Based on this
record, the district court did not err in granting Midtown’s motion for summary judgment.
Affirmed.