Steve Dupuis, 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This opinion will be unpublished and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
A17-1782

Steve Dupuis,
Appellant,

vs.

GATR of Sauk Rapids, Inc.,
d/b/a GATR Truck Center,
d/b/a GATR Volvo & GMC Center; et al.,
Respondents.

Filed July 30, 2018
Affirmed
Schellhas, Judge

Benton County District Court
File No. 05-CV-17-970

Sarah R. Jewell, Christopher A. Jensen, Fr anz Hultgren Evenson, P.A., St. Cloud,
Minnesota (for appellant)

Jacqueline A. Mrachek, Terran C. Chambers, Faegre Bake r Daniels LLP, Minneapolis,
Minnesota (for respondents)

Considered and decided by Schellhas, Pr esiding Judge; Reilly, Judge; and Bratvold,
Judge.
U N P U B L I S H E D O P I N I O N
SCHELLHAS, Judge
Appellant challenges the dismissal of hi s claims under Minn. R. Civ. P. 12.02(e).
We affirm.

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FACTS
Respondent Robert Neitzke is the chief executive officer of respondent GATR of
Sauk Rapids, Inc., a Minnesota Corporation. In March 2015, Neitzke and appellant Steve
Dupuis began discussing Dupuis’s possible employment as president of GATR. Dupuis
claims that during their discussions, “Neitzke held himself out . . . as a successful business
person, as having a good reputation in the community, and doing well financially with his
various business entities.” At the time, Dupu is was employed as pr esident of a Memphis
company, where he earned approximately $600,000 annually.
In early August 2015, Dupuis became president of GATR under a written
employment agreement that provided for an approximate annual income of $350,000, plus
deferred and equity compensation that would vest after employment of a set number of
years. Dupuis claims that when he signed the employment agreement, he was unaware that
Neitzke had been convicted of soliciting a pros titute in April 2013. According to Dupuis,
he became aware of Neitzke’s conviction in July 2016, when the St. Cloud Times
newspaper published Neitzke’s photograph, among others, in an article, captioned “Men
Convicted Following Sex Trafficking Task Force Stings.”
Dupuis also claims that, during his em ployment at GATR, he became aware of
“Neitzke’s unlawful day-to-day employment practices at GATR, in volving the sexual
harassment of GATR’s female employees,” and discussion of female employees’ body
parts. Dupuis also claims that during hi s employment, he became aware of fraudulent
company practices such as “over-financing of used truc k inventory” and cheating
salespersons out of earned commissions by maintaining a second set of accounting books

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or logs. Dupuis claims that respondents expected him, as president, to “be complicit in such
illegal and fraudulent employment and accounting practices.”
Dupuis claims that through his employment, he learne d of “Neitzke’s severely
damaged reputation in the truck sales industry throughout the region,” and that his mention
to others in the industry of his employment with GATR “was met with outright refusals to
do business, . . . unfavorable remarks, commen ts, or other types of behavior because he
was associated with . . . Ne itzke.” Dupuis claims that Neitzke’s prostitution-solicitation
conviction “tainted the potentia l markets where [Dupuis] may have otherwise seen sales
growth.” He claims that all of the above s ubstantially diminished the benefits of his
employment agreement, and that he therefore resigned from hi s position as president of
GATR in October 2016.
In May 2017, Dupuis sued Neitzke and GATR, alleging fraudulent inducement to
contract and breach of contract related to th e above claims. Dupuis alleged that if he had
remained employed by GATR, he “would have been required to remain complicit with,
and potentially be held liable as an officer of the company, for any civil liability or criminal
charges which could arise from such illegal conduct.” Respondents moved to dismiss under
Minn. R. Civ. P. 12.02(e). The district court granted the motion, concluding that because
Dupuis’s complaint on ly includes allegations of stat ements by Neitzke “that were
subjective statements or opinions that constitute non-actionable puffery, [he] has failed to
establish the first element of his claim for fraudulent inducement to contract.” The district
court also determined that because the contract was betw een Dupuis and GATR, Dupuis
failed to state a claim for breach of contract against Neitzke. Finally, the district court

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concluded that Dupuis failed to state a claim against GATR for breach of contract because
the complaint fails to identify which provisions of the contract were breached by GATR or
that entitle him to compensation under the facts as alleged in his complaint.
This appeal follows.
D E C I S I O N
Dupuis challenges the district court’s rule 12. 02(e) dismissal of his claims for
fraudulent inducement to contr act and breach of contract. “When a case is dismissed
pursuant to Minn. R. Civ. P. 12.02(e) for fa ilure to state a claim for which relief can be
granted, [appellate courts] review the legal su fficiency of the claim de novo to determine
whether the complaint sets forth a legally suff icient claim for relief.” Graphic Commc’ns
Local 1B Health & Welfare Fu nd “A” v. CVS Caremark Corp. , 850 N.W.2d 682, 692
(Minn. 2014). In so doing, this court “accept[s] the facts alleged in the complaint as true
and construe[s] all reasonable inferenc es in favor of the nonmoving party.” Frederick v.
Wallerich, 907 N.W.2d 167, 172 (Minn. 2018) (quotation omitted). A reviewing court also
considers statements or documents incorporated as exhibits into the pleadings. Minn. R.
Civ. P. 10.03 (“A copy of any written instrument which is an exhibit to a pleading is part
of the statement of claim or defense set forth in the pleading.”).
Fraudulent Inducement to Contract
To succeed on his claim that Neitzke frau dulently induced him to enter into the
employment agreement, Dupuis must prove: (1) a false representation by Neitzke of a past
or existing material fact susceptible of knowledge; (2) made with knowledge of the falsity
of the representation or made without knowing if it was true or false; (3) with the intention

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to induce Dupuis to act in reliance thereon; (4) that the representation caused Dupuis to act
in reliance thereon; and (5) that Dupuis su ffered pecuniary damages as a result of the
reliance. See Valspar Refinish, Inc. v. Gaylord’s, Inc., 764 N.W.2d 359, 368 (Minn. 2009)
(listing elements of claim for fraudulent inducement).
Dupuis argues that the district court erre d in determining that Neitzke’s “false
statements about himself, his reputation, and that his solely owned business were mere
puffery.” We disagree. “Misrepresentations, in order to constitute actionable fraud, must
be as to material facts of a nature to affect the conduct of others, and, generally, a mere
statement of an opinion is not enough.” Griffin v. Farrier , 32 Minn. 474, 474, 21 N.W.
553, 553–54 (1884). “Employers frequently boast of good benefits, competitive salaries,
excellent working conditions and the like. To anoint such puffing language with contractual
import would open the door to a plethora of specious litigation and constitute a severe and
unwanted intrusion on the ability of business enterprises to manage internal affairs.”
Martens v. Minnesota Min. & Mfg. Co. , 616 N.W.2d 732, 744– 75 n.25 (Minn. 2000)
(quotation omitted); see United Indus. Corp. v. Clorox Co., 140 F.3d 1175, 1180 (8th Cir.
1998) (“Puffery is exaggerated advertisi ng, blustering, and boasting upon which no
reasonable buyer would rely and is not actionable.” (quotation omitted)). “False
descriptions of specific or absolute characte ristics of a product and specific, measurable
claims of product superiority based on product testing are not puffery and are actionable.”
United Indus., 140 F.3d at 1180.
Dupuis contends that Neitzke’s represen tations are capable of being proved false
with evidence that (1) he wa s arrested and convicted for soliciting a prostitute and his

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picture was printed in the local newspaper acknowledging the offense, (2) he made sexually
inappropriate comments about company employees, and (3) he was defrauding employees.
But, even if true, these facts fail to disprove that Neitzke was a successful business person,
had a good reputation in the community, and did well financially within his business
enterprise, because the repres entations are subjective and ma tters of opinion. And to the
extent that the publication of Neitzke’s picture in the local newspaper, alerting the public
of his solicitation of a prostitute, negatively affected his public image, the picture was not
published until 2016, after Dupuis signed the employment contract. As the district court
therefore found, the newspaper ar ticle referenced by Dupuis “is not releva nt to what . . .
Neitzke’s reputation was within the community at the time of their negotiations.”
In Stowman v. Carlson Cos. , 430 N.W.2d 490, 49 2 (Minn. App. 1988), review
denied (Minn. Jan. 13, 1989), an employee, Stowman, left his former employer of
approximately 25 years to become employed by Carlson Companies. Id. at 492. A few
months later, Carlson Companies informed its employees that it had been sold to another
company. Id. The company was again sold a month later, and Stowman’s employment was
terminated. Id. Stowman brought suit against Carlson Companies for fraudulently inducing
his employment, alleging that he “justifia bly relied on” Carlson Companies’ owner’s
reputation in assuming that his employment was guaranteed. Id. On appeal from summary
judgment in favor of Carlson Companies, this court affirmed , concluding that the facts,
standing alone, did not give Stowman a basis to claim frau dulent inducement. Id. at 493
(stating that “Stowman cites no authority that raises the reliance he placed on [the Carlson
Companies’ owner’s] reputation to the level of a fraudulent inducement”).

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Here, as in Stowman, Dupuis cites no authority that raises the reliance he placed on
Neitzke’s reputation to the level of a fraudul ent inducement. To the contrary, the alleged
misrepresentations that Neitzke was a su ccessful business pers on, who had a good
reputation in the community, and did well financially, are subjective opinions and
constitute puffery because they merely exaggerate and boast about Neitzke’s opinion about
himself. The alleged misrepresentations therefore are not actionable.
In his reply brief, Dupuis claims that Ne itzke had a duty to disclose information
regarding (1) his arrest for soliciting a prostitute; (2) GATR’s unlawful business practices;
and (3) his habit of making sexually inap propriate comments about company employees.
Dupuis contends that these fa cts were material and may ha ve influenced his decision
whether to accept the positon at GATR. Dupuis argues that because he sufficiently pleaded
his claim for fraudulent inducement based upon Neitzke’s omissions of material fact, the
district court erred by granting respondents’ rule 12 motion to dismiss. We disagree.
For nondisclosure to constitute fraud, a le gal or equitable duty to communicate the
information must exist. Richfield Bank & Trust Co. v. Sjogren , 309 Minn. 362, 365, 244
N.W.2d 648, 650 (1976). “The general rule is that one party to a transaction has no duty to
disclose material facts to the other.” L & H. Airco, Inc. v. Rapistan Corp., 446 N.W.2d 372,
380 (Minn. 1989) (quotation omitted). Look ing specifically at commercial entities,
“[c]ourts applying Minnesota law have been reluctant to impose a duty to disclose material
facts in arm’s-length transactions.” Driscoll v. Standard Hardware Inc., 785 N.W.2d 805,
813 (Minn. App. 2010), review denied (Minn. Sept. 29, 2010).

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In Williams v. Smith , a candidate for an assistant basketball-coach position at the
University of Minnesota brought an action against the board of regents and head basketball
coach for negligent misrepresentation and other claims arising out of the head coach’s offer
of employment. 820 N.W.2d 807, 810–11 (Minn. 2012). The supreme court concluded that
the legal relationship between the assistant-coach candidate and head coach is not the type
of relationship entitled to legal protection, and therefore no duty of care against negligent
misrepresentation is owed. Id. at 818. The court referenced three reasons as supportive of
its decision. Id. First, the parties’ “relationship in negotiating potential employment was
not a professional, fiduciary, or special legal relationship in which one party had superior
knowledge or expertise.” Id. Second, the nature of the pa rties’ relationship, as “two
sophisticated business people, both watching out for their individual interests while
negotiating at arm’s length,” did not support recognizing a duty of care. Id. at 819. Third,
“no reason or public policy warranted impos ing a duty of care in the context of a
prospective government employment relationship involving negotiations by sophisticated
parties who do not stand in a special relationship.” Id. The court therefore held that “in the
absence of a duty of care,” the employment candidate’s “claim for negligent
misrepresentation failed as a matter of law.” Id. at 822.
Here, although no governmental entities ar e involved, the relationship between the
parties is the same as the relationship between the parties in Williams—an employer and a
prospective employee. Under Williams, Neitzke owed no duty of care to disclose the
alleged material facts to Dupu is. Accordingly, the district court did not err by granting

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respondents’ rule 12 motion to dismiss D upuis’s claim for fraudulent inducement to
contract.
Breach of contract1
Dupuis contends that the district court erred by granting GATR’s rule 12 motion to
dismiss his breach-of-contract claim. “A breach of contract is a failure, without legal
excuse, to perform any promise that form s the whole or part of the contract.” Lyon Fin.
Servs., Inc. v. Ill. Paper and Copier Co., 848 N.W.2d 539, 543 (Minn. 2014). A claim for
breach of contract requires the plaintiff to show “(1) formation of a contract,
(2) performance by plaintiff of any cond itions precedent to his right to demand
performance by the defendant, and (3) breach of the contract by defendant.” Id. (quotation
omitted). In pleading his breach-of-contract claim, Dupuis’s complaint had to “contain a
short and plain statement of the claim show ing that the pleader is entitled to relief.” See
Minn. R. Civ. P. 8.01 (stating requirements for pleading claim).
“Compensation and Benefits,” “Fixed Deferred Compensation,” and “Equity
Compensation” are addressed in paragraphs four through six of Dupuis’s employment
agreement. Dupuis’s compla int alleged that GATR breac hed these provisions of the
agreement because GATR’s conduct of fraudulently misrepresenting company accounting
books, and making sexually inappropriate statements regarding female employees,
frustrated the purpose and substantially di minished the benefits of the employment

1 As noted above, the district court dismissed the breach-of-contract claim against Neitzke
because he was not a party to the employment agreement. Dupuis does not challenge that
conclusion on appeal.

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agreement. The district court concluded that Dupuis failed to state a claim for breach of
contract against GATR because “frustration of purpose is a defense to a breach of contract
claim” and therefore Dupuis’s claim that GATR’s actions constituted a “frustration of the
purpose” of the employment ag reement was not a proper basis for a breach-of-contract
claim. The district court was correct. See J.J. Brooksbank Co., Inc. v. Budget Rent-A-Car
Corp., 337 N.W.2d 372, 377 (Minn. 1983) (stati ng that the doctrine of frustration of
purpose has at its “core a requirement that some event must occur, the nonoccurrence of
which was a basic assumption of the contract at the time it was made”) (citing Restatement
(Second) of Contracts, §§ 261, 265 (1981)). Dupuis does not appear to challenge the district
court’s conclusion that frustration of purpose is not a proper basis for a breach-of-contract
claim. We conclude that the district c ourt did not err by determining that Dupuis’s
frustration-of-purpose argument failed to state a claim upon which relief could be granted.
The district court noted th at Dupuis’s employment agr eement “clearly states that
[Dupuis] is an employee-at-will, that he is entitled to a base salary during his employment
and that if he voluntarily resigns, [GATR’s] total liability ‘shall be limited to the payment
of Compensation and Benefits through and including the date of termination.’” The district
court concluded that although Dupuis alleged that GATR breached paragraphs four through
six of the employment agreement, which addre ss elements of his compensation, he failed
“to identify any provision in the Employment Agreement that addresses a remedy in
circumstances where [responde nts] engage[] in alleged illegal business and accounting
practices or that entitles him to any compensation where he voluntarily resigns because of

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such allegations.” Dupuis argues that the district court erred because he “sufficiently pled
that respondents prevented him from obtaining the benefit of the bargain with regard to his
employment agreement because it would requir e him to remain complicit in [the alleged
illegal and inappropriate] activities.”
Although Dupuis claims that GATR breache d paragraphs four through six of the
employment agreement, he does not claim that he is entitled to any compensation under
those provisions of the employment agreement. Indeed, the employment agreement plainly
states that Dupuis’s “employm ent with [GATR] is AT WILL and may be terminated, by
either party at any time.” When Dupui s resigned, GATR’s obligations under the
employment agreement therefore expired. Moreover, the employment agreement
specifically provides that if Dupuis “voluntarily terminates his employment with [GATR]
prior to the fifteenth (15th) anniversary of this Agreement, [Dupuis] will not be entitled to
any Fixed Deferred Compensation hereunder.” And because Dupuis’s equity compensation
is also “controlled by the terms of the Deferred Compensation Plan,” any equity
compensation would not vest until Dupuis had been with the company for 15 years.
Because Dupuis voluntarily resigned from his employment at GATR approximately 14
months after he started, GATR was under no obligation under the employment agreement
to pay Dupuis any deferred or equity compensation. And Dupuis points to no provision of
the employment agreement that GATR breached as a result of Neitzke’s alleged behavior.
As a result, Dupuis’s complaint failed to state a claim for brea ch of contract. The district
court’s dismissal of Dupuis’s claims is thoroughly analyzed and well reasoned. We

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therefore conclude that the district court pr operly granted respondents’ rule 12 motion to
dismiss.
Affirmed.