Edna Ruth Albertson, et al., Appellants,

This opinion will be unpublished and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
A17-0293

Edna Ruth Albertson, et al.,
Appellants,

vs.

Timberjay, Inc., et al.,
Respondents.

Filed September 5, 2017
Affirmed
Schellhas, Judge

St. Louis County District Court
File No. 69VI-CV-16-555

John M. Colosimo, Colosimo, Patchin & Kearney, Ltd., Virginia, Minnesota (for
appellants)

R. Thomas Torgerson, Hanft Fride, Duluth, Minnesota (for respondents)

Considered and decided by Ross, Presidin g Judge; Schellhas, Judge; and Connolly,
Judge.
U N P U B L I S H E D O P I N I O N
SCHELLHAS, Judge
Minority-shareholder appellants challenge the summary-judgment dismissal of their
equitable claims against corporate and majo rity-shareholder respondents, arguing that
genuine issues of material fact exist about whether respondents treated appellants in an

2
unfairly prejudicial manner and violated their right to inspect corporate documents. We
affirm.
FACTS
In December 1989, H. Arthur Dale a nd Madonna Ohse fo rmed a Minnesota
corporation, respondent Timberjay Inc. (Timberjay), which operates a weekly newspaper
covering the communities of Cook, Tower, and Ely. 1 Dale and Ohse are named in
Timberjay’s articles of incorporation as firs t directors. As of Ju ne 1997, respondents
Marshall Helmberger and Jodi Summit-Helmberger 2 (Helmbergers) were directors and
officers of Timberjay and owned a combined 54% of Timberjay stock. Additionally,
Timberjay employed Helmberger as its publisher and Summit- Helmberger as its general
manager. As of June 1997, Ohse owned the remaining 46% of Timberjay stock; no record
evidence indicates whether Ohse was a director, officer, or employee of Timberjay at that
time.
In July 1997, appellants Edna and Gary Albertson (Albertsons) purchased Ohse’s
Timberjay stock for $33,000. 3 Albertsons had no contact with Helmbergers prior to
purchasing the stock, and they knew that by purchasing the stock, they would become
minority shareholders in Timberjay. Yet Albe rtsons claim that they purchased the stock
with an expectation that they would have some level of involvement in Timberjay’s

1 Timberjay originally was named “Orr Timberjay Inc.” but was renamed “Timberjay Inc.”
in September 1991.
2 Certain filings in the district court and on appeal indicate that Jodi’s surname is “Summit,”
not “Summit-Helmberger.” We use the parties’ names as they appear in the case caption.
3 The record suggests that Al bertsons then had an owners hip interest in a competitor
newspaper and later acquired an ownership interest in a second competitor newspaper.

3
management and that Timberjay would pay divi dends or make other distributions to its
shareholders from its net profits.
In the years following Albert sons’ purchase of their 46% interest in Timberjay,
Helmbergers served as Timberjay’s only dire ctors and officers and continued in their
positions of employment. Timberjay paid no dividends to sh areholders, instead using net
profits to build Timberjay’s reserve fund an d to reinvest in Timberjay’s newspaper
operations. Albertsons did not seek employment by Timberjay; made a single, unsuccessful
attempt to be elected as directors of Ti mberjay; and stopped attending shareholder
meetings. After Helmbergers stopped hold ing shareholder mee tings—as permitted by
Timberjay’s bylaws—Albertsons did not exercise their right under the bylaws to demand
regular or special shareholder meetings.
In December 2015, Albertsons sued Timberjay and Helm bergers, alleging, among
other things, that Helmbergers treated them in an unfairly prejudicial manner and failed to
provide them with “fin ancial information with regard to the operations of [Timberjay].”
They sought equitable relief in district cour t, asking that the court order Helmbergers to
purchase Albertsons’ Timberjay stock “at fair market value but in no event less than what
[Albertsons] initially paid for the stock, plus a reasonable return,” or, alternatively, order
that Timberjay and its assets be sold at fair market value.
On the same day that Timberjay and He lmbergers filed an answer, Albertsons
moved the district court to grant the equitable relief requested in their complaint. They filed
Gary Albertson’s affidavit in support of their motion. Timberjay and Helmbergers opposed
the motion and moved for summary judgment , attaching supporting documents that

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included Timberjay’s articles of incorpor ation and bylaws, Marshall Helmberger’s
affidavit, correspondence between Marsha ll Helmberger and Gary Albertson, and
Albertsons’ interrogatory answers. After a he aring, the district court granted summary
judgment in favor of Timberjay and Helmbergers.
This appeal follows.
D E C I S I O N
“A district court may grant summary judgme nt when ‘there is no genuine issue as
to any material fact’ and one party ‘is entitled to a judgment as a matter of law.’” Kelly v.
Kraemer Constr., Inc. , 896 N.W.2d 504, 508 (Minn. 2017) (quoting Minn. R. Civ. P.
56.03). Appellate courts review the grant of summary judgment de novo, considering two
questions: “whether a genuine issue of material fact exists, and whether an error in the
application of law occurred.” Id. (quotation omitted). “A genuine issue of material fact
arises when there is sufficient evidence regarding an essential element to permit reasonable
persons to draw different conclusions.” Id. (quotation omitted). “The evidence must be
viewed in the light most favorable to the nonmoving party . . . .” Id. But the nonmoving
party “may not rest upon the mere averments or denials of [its] pleading but must present
specific facts showing that there is a genuine issue for trial.” Minn. R. Civ. P. 56.05.
I.
If a shareholder in a corporation brings an action in whic h the shareholder
establishes that “the directors or those in control of the corporation have acted in a manner
unfairly prejudicial toward one or more shareholders in their capacities as shareholders or
directors of a corporation that is not a publicly held corporation, or as officers or employees

5
of a closely held corporation,” the district court “may grant any e quitable relief it deems
just and reasonable in the circumstances or may dissolve [the] corporation and liquidate its
assets and business.” Minn. Stat. § 302A.751, subd. 1(b)(3) (2016). If the corporation is
not publicly held, the court alternatively
may . . . order the sale by a plaintiff or a defendant of all shares
of the corporation held by the pl aintiff or defendant to either
the corporation or the moving sh areholders . . . if the court
determines in its discretion that an order would be fair and
equitable to all parties under a ll of the circumstances of the
case.

Minn. Stat. § 302A.751, subd. 2 (2016).
“The term ‘unfairly prejudicial’ is not explicitly defined” by statute, U.S. Bank N.A.
v. Cold Spring Granite Co., 802 N.W.2d 363, 377 (Minn. 2011), and “is to be interpreted
liberally,” Bolander v. Bolander , 703 N.W.2d 529, 552 (Minn. App. 2005), review
dismissed (Minn. Nov. 15, 2005). “[U]nfairly prejudicial conduct under Minn. Stat.
§ 302A.751 includes conduct that violates the reasonable expectations of the shareholder.”
U.S. Bank, 802 N.W.2d at 379 & n.10; see also Minn. Stat. § 302A.751, subd. 3a (2016)
(“In determining whether to order equitable relief, dissolution, or a buy-out, the court shall
take into consideration . . . the reasonable expectations of all shareholders as they exist at
the inception and develop during the course of the shareholders’ relationship with the
corporation and with each other.”); Bolander, 703 N.W.2d at 552 (“Unfair prejudice exists
when a shareholder’s reasonable expectations have been frustrated.”).
“[A]ny written agreements, including employment agre ements and buy-sell
agreements, between or among shareholde rs or between or among one or more

6
shareholders and the corporation are pres umed to reflect the parties’ reasonable
expectations concerning matters dealt with in the agreements.” Minn. Stat. § 302A.751,
subd. 3a. “But, in close corporations, the e xpectations of sharehol ders are not always
encompassed in written agreements and written agreements are not always dispositive of
shareholder expectations.” Haley v. Forcelle , 669 N.W.2d 48, 58 (Minn. App. 2003),
review denied (Minn. Nov. 25, 2003). “Often, sh areholder expectations arise from
understandings that are not expressly st ated in the corporation’s documents.” Gunderson
v. All. of Computer Professionals, Inc. , 628 N.W.2d 173, 186 (Minn. App. 2001), review
dismissed (Minn. Aug. 17, 2001).
Yet “a claim of oppression or unfairly prejudicial conduct may not be predicated on
the failure to fulfill a minority shareholder’s subjective hope s and desires in joining the
venture.” Id. at 191 (quotation omitted). “Instead, oppr ession should be deemed to arise
only when the majority conduct substantially defeats expectations that, objectively viewed,
were both reasonable under th e circumstances and central to the minority shareholder’s
decision to join the venture.” Id. (quotation omitted). “Because whether a shareholder’s
reasonable expectations have been frustrate d is essentially a fa ct issue,” a minority
shareholder’s unfair-prejudice claim may not be dismissed on summary judgment unless
no rational fact-finder could find that his frustrated expectations were reasonable. Id. at
186.
In this case, Albertsons argue that the district court erred in its summary-judgment
dismissal of their section 302A.751 unfair-pre judice claim because genuine issues of
material fact exist as to wh ether Helmbergers treated them in an unfairly prejudicial

7
manner. Specifically, Albertsons claim that Helmbergers’ conduct frustrated their
reasonable expectations of some level of involvement in Timb erjay’s management
(management expectation) and payment of dividends or receipt of other distributions from
Timberjay’s net profits (dividends expectation). Timberjay and Helmbergers respond that
Albertsons’ “expectations of management control and payment of dividends were, at best,
subjective, contrary to law and corporat e documentation, and not shared by all
shareholders,” such that no rational fact-finde r could find that Albe rtsons’ expectations
were reasonable. We agree.
Albertsons’ management expectation has no basis in Minnesota statute or in
Timberjay’s articles of incorporation or bylaws. The Minnesota Business Corporation Act
(MBCA), Minn. Stat. §§ 302A.001–.92 (2016), provides that “[t]he business and affairs of
a corporation shall be managed by or under the direction of a board” of directors, Minn.
Stat. § 302A.201, subd. 1, who “are elected by a plurality of the voting power of the shares
present and entitled to vote on the election of directors,” Minn. Stat. § 302A.215, subd. 1.
Timberjay’s bylaws echo the MBCA, “[t]he busin ess and affairs of this corporation shall
be managed by or under the direction of a Board of Directors.” Timberjay’s bylaws further
provide that “[a]t each regular meeting of shareholders th ere shall be an election of
qualified successors for directors who serve fo r an indefinite term,” and Timberjay’s
articles of incorporation specify that “shareholders shall take action by the affirmative vote
of the holders of fifty-one percent (51%) of the voting power of all voting shares.”
Albertsons’ dividends expectation also has no basis in Minnesota law or in
Timberjay’s articles of incorporation or bylaws. Under the MBCA, “[a] corporation may

8
effect a share dividend,” Minn. Stat. § 302A.402, subd. 1 (emphasis added), and dividends
may not be withheld in bad faith or for an improper purpose, Keough v. St. Paul Milk Co.,
205 Minn. 96, 118, 121, 285 N. W. 809, 821, 823 (1939). But “the determination whether
or not a dividend should be declared is essentially a matte r of internal management” and
“is primarily for the corporate directors in their sound discretion to decide.” Keough, 205
Minn. at 117, 285 N.W. at 821. Timberjay’s bylaws provide:
Dividends upon the shares of this corporation may be declared
by the Board of Directors to the extent permitted by law at any
time and from time to time as the Board of Directors in its sole
discretion may determine. Before payment of any dividend or
making any distribution of the pr ofits there may be set aside
out of the surplus or net profits of this corporation such sum or
sums as the directors from time to time in th eir absolute
discretion think proper as a reserve fund to meet contingencies
. . . or for such other purpose s as the directors shall think
conducive to the interests of this corporation.

Moreover, undisputed record evidence shows that Albertsons had no contact with
Helmbergers prior to purchasing Ohse’s Timberjay stock and that, when Albertsons bought
Ohse’s shares in 1997, “the corporation di d not have a history of paying dividends but
rather had a history and future objective of re investing profits to increase product quality
and to secure growth.” The record contains no evidence that Helmbergers chose not to pay
dividends for the purpose of harming Albertsons or for any other improper purpose.
In sum, Albertsons have not identified a legal or factual basis for their management
and dividends expectations. We therefore conclude that no rational fact-finder could find
that Albertsons’ subjective hopes and desires were reas onable under the circumstances.
Because no genuine issue of ma terial fact remains on this poi nt, the district court did not

9
err in its summary-judgment dismissal of Al bertsons’ section 302A.751 unfair-prejudice
claim.
II.
“If a corporation or an officer or director of the corporation violates a provision of
th[e MBCA], a court in this state may, in an action brought by a shareholder of the
corporation, grant any equitable relief it deem s just and reasonable in the circumstances
. . . .” Minn. Stat. § 302A.467. One provision of the MBCA requires corporations to keep
certain documents and codifies shareholde rs’ common-law right to inspect corporate
documents. Minn. Stat. § 302A.461, subd. 4; see State ex rel. Boldt v. St. Cloud Milk
Producers’ Ass’n, 200 Minn. 1, 6, 273 N.W. 603, 606 (1937) (“The common-law right of
inspection is part of the common law and has been enforced by all the courts in this
country.”).
As relevant here, a shareholder in a corp oration that is not publicly held has “an
absolute right, upon written demand, to examine and copy . . . at any reasonable time . . .
within ten days after receipt by an officer of the corporation of the written demand,” certain
documents. Minn. Stat. § 302A.461, subds. 2, 4(a). Those documents are: “a share register
not more than one year old, containing the names and addresses of the shareholders and
the number and classes of shares held by each shareholder,” id., subd. 1(a); “records of all
proceedings of shareholders for the last three years,” id., subd. 2(a); “records of all
proceedings of the board for the last three years,” id., subd. 2(b); the corporation’s “articles
and all amendments currently in effect,” id., subd. 2(c); the corporation’s “bylaws and all
amendments currently in effect,” id., subd. 2(d); the corporation’s “annual financial

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statements,” which must include “a balance shee t as of the end of [the] fiscal year and a
statement of income for the fiscal year, which shall be prepared on the basis of accounting
methods reasonable in the circumstances,” id., subd. 2(e); Minn. Stat. § 302A.463(a);4 any
“financial statement for the most recent inte rim period prepared in the course of the
operation of the corporation for distribution to the shareholders or to a governmental
agency as a matter of public record,” Minn. Stat. § 302A.461, subd. 2(e); “reports made to
shareholders generally within the last three years,” id., subd. 2(f); “a statement of the names
and usual business addresses of its directors and principal officers,” id., subd. 2(g); any
“voting trust agreements,” id., subd. 2(h); any “shareholder control agreements,” id., subd.
2(i); and “a copy of [any] agreements, contracts, or other arrangements or portions of them
incorporated by reference” in the corporation’s articles, id., subd. 2(j).
Additionally, a shareholder in a corporation that is not publicly held “has a right,
upon written demand, to examine and copy . . . other corporate records at any reasonable
time only if the shareholder . . . demonstrat es a proper purpose for the examination,”
defined as a purpose that is “r easonably related to [his or he r] interest as a shareholder.”
Id., subd. 4(b), (d); see also Fownes v. Hubbard Broad., Inc. , 302 Minn. 471, 473, 225
N.W.2d 534, 536 (1975) (ide ntifying as proper shareholders’ purposes “to place an
accurate value on their shares of stock, and to evaluate the conduct and affairs of the

4 As to annual financial statements, the corporation’s duty extends beyond allowing
shareholders to examine and copy the statem ents; the corporation al so must provide the
statements to shareholders at their request. See Minn. Stat. § 302A.463(b) (“Upon written
request by a shareholder, a corporation sha ll furnish its most recent annual financial
statements . . . no later than ten business da ys after receipt of a shareholder’s written
request.”).

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corporation’s officers and majo rity shareholders so as to determine the effects on the
financial condition of [the corp oration]”). “[A] prima facie case of good faith purpose is
achieved by the mere allegation . . . that the information soug ht is for a proper purpose.”
Fownes, 302 Minn. at 473, 225 N.W.2d at 536. But that prima facie case of good faith may
be “rebutted by evidence of improper motive or purpose.” Id. at 473–74, 225 N.W.2d at
536; see also Bergmann v. Lee Data Corp. , 467 N.W.2d 636, 640 (Minn. App. 1991)
(rejecting proposition that “the mere incan tation of a proper purpose by a requesting
shareholder” suffices), review denied (Minn. May 23, 1991).
On appeal, Albertsons argue that the dist rict court erred in its summary-judgment
dismissal of their section 302A.467 claim because genuine issues of material fact exist as
to whether Helmbergers violated Albertsons ’ right to inspect Timberjay’s documents.
Albertsons claim that “[Gary] Albertson requested access to the financial records of the
corporation on multiple occasions and was denied the absolute right that shareholders have
to inspect the documents he requested.” Undisputed reco rd evidence indicates that
Timberjay provided Albertsons with its annual financial statements in the form of
accountant-reviewed tax returns, as required by Minn. Stat. § 302A.463(b). Yet Albertsons
assert that the district court erroneously concluded that, because “the provided tax records
were the only accountant-reviewed financial records of the corporation,” the tax records
“were the only financial documents to which the Albertsons had a statutory right of
inspection.” Albertsons mischaracterize the district court’s summary-judgment order.
The district court stated in its order that

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[Minn. Stat. § 302A.463] clearl y requires the corporation to
furnish certain financial doc uments upon request of a
shareholder. [Albertsons] claim that [Helmbergers] have
provided little to no informatio n regarding the finances of
[Timberjay]. [Helmbergers] assert that [Albertsons] have been
furnished with [Timberjay]’s fina ncial statements in the form
of the corporate federal tax returns each year and that
Timberjay, Inc. relies on those returns as its only accountant-
reviewed financial statement.

[T]here is evidence on the record in the form of correspondence
between the parties acknowledging that [Albertsons] received
[Timberjay]’s federal tax returns. This contradicts
[Albertsons’] claim that they have received little or no financial
information. Additionally, [Timbe rjay’s] corporate tax return
provided to the court include s a balance sheet . . . . The
financial disclosure statute does not require disclosure of any
additional financial information outside of a balance sheet.
Minn. Stat. § 302A.463. Thus, ba sed on the reco rd before the
court, there exists no issue of fact as to whether [Helmbergers]
were in compliance with the fi nancial disclosure requirement
of Minn. Stat. § 302A.463.

The court reasonably focused on Minn. Stat . § 302A.463, because Albertsons neither
alleged in their complaint nor identified evidence that Helmbergers violated their right to
inspect under Minn. Stat. § 302A.461, subds. 2 or 4(a). Instead, Albertsons consistently
articulated their corporate-documents allegati on below as a failure to provide them with
Timberjay’s financial information. As a resu lt, we may decline to consider Albertsons’
section 302A.461 argument. See Engfer v. Gen. Dynamic s Advanced Info. Sys., Inc., 869
N.W.2d 295, 306 (Minn. 2015) (stating that “generally [appellate courts] will not consider
an issue raised for the first time on appeal”).
In any event, Albertsons’ argument lacks merit. They claim that their argument is
supported by Blohm v. Kelly, a case in which we concluded that a minority shareholder was

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entitled to trial on the question of “whether th e [corporate] records [he] seeks are records
to which he is entitled by statute.” 765 N.W.2d 147, 158 (Minn. App. 2009). But in Blohm,
the record contained evidence that the corporation’s sole di rector and officer “ha[d] not
given [the minority shareholder] the access to records that he requested.” 765 N.W.2d at
157–58. Here, by contrast, th e record contains evidence that Helmbergers generally
responded to Albertsons’ requests for inform ation by promptly providing the requested
information and that, as to Albertsons’ few rejected requests, Albertsons made the requests
either without an absolute right to inspect or a demonstration of proper purpose. On these
facts, we conclude that no genuine issu e of material fact remains about whether
Helmbergers violated Albertsons’ right to inspect Timberjay’s documents. We therefore
conclude that the district court did not err in its summary-judgment dismissal of
Albertsons’ section 302A.467 MBCA-violation claim.
Affirmed.