Patrick Dean, Joan Hunziker-Dean, individually and as derivative representatives of the Center Plaza Association of Rochester, Inc., 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This opinion will be unpublished and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
A17-1839

Patrick Dean, Joan Hunziker-Dean,
individually and as derivative representatives
of the Center Plaza Association of Rochester, Inc.,
Appellants,

vs.

CMPJ Enterprises, LLC, et al.,
Respondents,

Oxford Property Management, LLC,
Respondent,

and

Center Plaza Association of Rochester, Inc., nominal defendant,
Respondent.

Filed July 30, 2018
Affirmed
Peterson, Judge

Olmsted County District Court
File No. 55-CV-15-8650

Brian M. Childs, Nic S. Puechner, Larkin Hoffman Daly & Lindgren Ltd., Minneapolis,
Minnesota (for appellants)

Edward W. Gale, Thomas C. Atmore, Paul M. Shapiro, Leonard, O’Brien, Spencer, Gale
& Sayre, Ltd., Minneapolis, Minnesota (for respondents CMPJ Enterprises, LLC, et al.)

William M. Topka, Robert B. Bauer, Dougherty, Molenda, Solfest, Hills & Bauer P.A.,
Apple Valley, Minnesota (for respondent Oxford Property Management, LLC)

2
Daniel J. Heuel, O’Brien & Wolf, L.L. P., Rochester, Minnesota (for respondent Center
Plaza Association of Rochester, Inc.)

Considered and decided by Larkin, Presiding Judge; Peterson, Judge; and Reilly,
Judge.
U N P U B L I S H E D O P I N I O N
PETERSON, Judge
In this appeal from summary judgment in a condominium-association dispute,
appellant condominium-unit owners argu e that the district court erred in (1) ruling that
respondent condominium-association directors did not breach their fiduciary duties to the
association and its members, (2) denying appellants’ motion to amend the scheduling order
without sufficient findings, (3) considering evidence that respondents did not produce
during discovery, (4) determining that there are no genuine issues of material fact regarding
appellants’ civil theft claim against respondent management company, and (5) dismissing
appellants’ equitable accounting claim because ther e was no valid underlying claim . We
affirm.
FACTS
Appellants Patrick Dean and Joan Hunziker-Dean own six residential condominium
units on the 16th floor of the Center Plaza Building, which contains 67 residential units
and four commercial units. Respondents C.D. Bhakta and Michael Bhakta own respondent
CMPJ Enterprises, LLC (CMPJ), and CMPJ owns t he largest commercial unit in the
building (Unit 2), which takes up 52.47% of the building’s total square footage and is used
to operate a Holiday Inn hotel.

3
Respondent Center Plaza Association of Rochester, Inc. (the Association) governs
and manages the building, and CMPJ manages the Association. In February 2014, CMPJ
entered into a management agreement with respondent Oxford Property Management, LLC
(Oxford) to perform accounting and administrative services for CMPJ for $2,000 per
month.
The Association’s board consists of seven di rectors, who each get one equal vote.
Under the Association’s bylaws, votes are allocated to each condominium unit based on
the ratio of “the area of each u nit to the area of all Units,” and directors are elected by a
majority of the member votes cast in the election at the annual meeting.
CMPJ bought Unit 2 in 2006, and, s ince 2007, C.D. Bhakta , Michael Bhakta, and
two other directors have been appointed to the board by CMPJ based on its majority interest
in the building. Two of the three remaining direc tors were elected at annual meeting s to
represent the building’s residential-unit owners.
In 2007 or 2008, Patrick Dean was elected to the board as one of the directors
representing residential-unit owners, and he served on the board through 2014. At the 2015
annual meeting, three members ran for the two director positions representing residential -
unit owners, and Patrick Dean was not re-elected.
On December 15, 2015, the Deans began this action against respondents, alleging
13 counts for violations of the Minnesota Common Interest Ownership Act (MCIOA) and
the Minnesota Nonprofit Corporation Act , conversion, civil theft, civil conspiracy,
equitable accounting, and breach of fiduciary duty, and seeking attorney fees, costs, and

4
disbursements. Respondents moved for summary judgment, and the district court granted
summary judgment dismissing all 13 counts.1 This appeal followed.
D E C I S I O N
Summary judgment is appropriate when the record shows “that there is no genuine
issue as to any material fact an d that either party is entitled to a judgment as a matter of
law.” Minn. R. Civ. P. 56.03. We review the district court ’s grant of summary judgment
de novo, to determine whether there are genuine issues of material fact and whether the
district court erred in applying the law. Mattson Ridge, LLC v. Clear Rock Title, LLP, 824
N.W.2d 622, 627 (Minn. 2012). “We view the evidence in the light most favorable to the
party against whom summary judgment was granted.” STAR Ctrs., Inc. v. Faegre &
Benson, L.L.P., 644 N.W.2d 72, 76-77 (Minn. 2002).
I.
Unit 2 electricity costs
The Association’s board treated electricity costs for Unit 2 as common expenses and
assessed all unit owners for those costs. Residential units are metered separately, and unit
owners pay for their own electricity. Unit 2 is metered on the building’s main meter, which
measures electricity consumption throughout the building. The parties presented

1 In its order, the district court stated that “Counts I through XII of the First Amended
Complaint are hereby DISMISSED.” But in the memorandum that accompanied the order,
the district court addressed 13 counts and stated that “summa ry judgment is appropriate
with respect to Counts XI-XIII.” Thus, we conclude that the order contains a typographical
error and that the district court dismissed counts I through XIII.

5
conflicting expert testimony about the practicality of separately metering electricity used
in Unit 2.
The Deans argue that
[i]n the absence of any provision compelling the Bhaktas to
charge the Association for their hotel’s electricity usage, the
Bhaktas improperly used CMPJ’s control of the Association’s
Board to compel the Association to fund their hotel’s
electricity usage, subsidizing the for-profit hotel’s operation at
the expense of other unit owners. To rule that this election was
justified by the Bylaws ignores the Bhaktas’ fidu ciary duty to
the Association.

The MCIOA requires that a director “discharge the duties of the position . . . in good
faith, in a manner the director reasonably believes to be in the best interests of the
corporation, and with the care an ordinarily prudent person in a like position would exercise
under similar circumstances.” Minn. Stat. § 317A.251, subd. 1 (2016); see also Minn. Stat.
§ 515B.3-103(a) (2016) (defining duty of care under MCOIA with reference to section
317A.251). This court has stated that, under the MCIOA, good faith “means observance
of two standards: ‘honesty in fact’, and observance of reasonable standards of fair dealing.”
Horodenski v. Lyndale Green Townhome Ass’n, Inc., 804 N.W.2d 366, 373 (Minn. App.
2011) ( quoting Uniform Common In terest Ownership Act (1982) (U.L.A.) § 1 –113 &
cmt.).
The Deans argue that this “duty must also be viewed in the context of the
Association’s status as a nonprofit corporation. ” Under the Minnesota Nonprofit
Corporation Act, a corporation is prohibited f rom “pay[ing] dividends or other pecuniary
remuneration, directly or indirectly, to its members, other than to members that are

6
nonprofit organizations or subdivisions, units, or agencies of the United States or a state or
local government.” Minn. Stat. § 317A.011, subd. 6(2) (2016). The Deans contend that
“[t]his prohibition is frustrated, if not outright violated, by the Association paying expenses
for the sole benefit of CMPJ, in essence subsidizing the operations of a for -profit hotel.”
The district c ourt concluded that because the Bhaktas acted in accordance with the
Association’s governing documents when treating the Unit 2 electricity expenses as
common expenses, their conduct could not constitute a breach of the MCIOA.
The Association’s governing documents include its declaration and its bylaws. The
declaration defines “common elements” as “[a]ll portions of the Condominium except the
Units” and “common expenses” as “[e]xpenditures made or liabilities incurred by or on
behalf of the Association, t ogether with any allocations to reserves.” The bylaws further
define “common expenses” to specifically include “utility charges not charged directly to
Unit Owners.” The board is authorized to levy assessment s against unit owners for
common expenses according to “the unit’s percentage of undivided interest in the Common
Elements.” The district court concluded that because Unit 2’s electricity costs were not
metered separately and were not charged directly to CMPJ, they were common expenses
under the bylaws, and the Bhaktas did not breach their fiduciary by acting in accordance
with the bylaws.
The Deans argue first that the district court erred when it made the factual
determination that CMPJ was not charged directly for energy consumed on the main
electric meter. They contend that, in opposing summary judgment, they presented a utility
bill addressed to “Holiday Inn City Centre,” which is CMPJ’s for-profit hotel, and that this

7
bill proves that CMPJ was charged directly for electricity measured on the ma in meter.
But, although this bill was addressed to Holiday Inn City Centre, it does not identify CMPJ
or any other entity as the customer responsible for paying the bill, and, therefore, does not
create a fact issue as to whether CMPJ was charged directly for electricity.
The Deans also argue that the district court erred when it impli citly ruled that the
definition of “common expenses” in the bylaws is unambiguous. They contend that the
definition of common expenses in the bylaws should be interpreted to mean “utility charges
of a type not charged directly to any unit owners ” (emphasis added), and, because
electricity charges are a type of utility charge that is charged directly to reside ntial-unit
owners, electricity charges are not common expenses. But nothing in the bylaws’
definition of “common expenses,” suggests that the term refers to a type of utility charge,
rather than to a specific charge that was actually incurred but was not charged to a specific
unit owner. The definition is unambiguous. See Polk v. Mut. Serv. Life Ins. Co. , 344
N.W.2d 427, 430 (Minn. App. 1984) (a court will not read ambiguity into an unambiguous
document in order to alter or vary its terms).
The Deans also argue that the district court erred when it construed the bylaws’
definition of “common expenses” in a manner that conflicts with the declaration’s
definition of “common expenses.” The Deans are correct that, under paragraph 11.3 of the
bylaws, in the case of any conflict between the provisions of the bylaws and the provisions
of the declaration, the declaration controls . But we agree with the district court that the
definitions of “common expenses” in the two documents are not inconsistent. As the
district court concluded, the bylaws ’ definition further defines the phrase, “liabilities

8
incurred by or on behalf of the Association ,” which is in the declaration’s definition, to
specifically include “utility charges not charged directly to Unit Owne rs.” When read
together, the declaration and bylaws unambiguously identify the costs of electricity used
in the building that are not charged directly to a unit owner a s liabilities incurred by the
Association.
Finally, the Deans argue that the declaratio n’s definition of “common expenses” is
ambiguous because the phrase “by or on behalf of the Association” could mean “benefitting
the Association.” But nothing in the definition suggests that determining whether a liability
incurred by or on behalf of the Association is a common expense requires a determination
whether the liability provided a benefit to the Association. The plain language of the
definition requires only that the liability was incurred by the Association. As we have
already stated, we will not read ambiguity into an unambiguous document in order to be
able to alter or vary its terms. The Deans may be dissatisfied with the way that the
declaration and bylaws treat electricity used in Unit 2 , but the Bhaktas’ conduct was
consistent with the unambiguous terms of the Association’s governing documents, which
demonstrates a reasonable standard of fair dealing.
Elevator repair and maintenance costs
There are four elevators in the building : one freight elevator, two elevators
programmed to serve Unit 2, and one elevator programmed to serve the residential units.
The board treated elevator maintenance and repair costs as common expenses and assessed
the costs to all unit owners.

9
The MCIOA provides that “[u] nless otherwise required by the declaration . . . any
common expense associated with the maintenance, repair, or replacement of a limited
common element shall be assessed against the units to which that limited common element
is assigned, equally, or in any other proportion the declaration provides .” Minn. Stat.
§ 515B.3-115(e)(1) (2016). Paragraph 6.1.(a) of the declaration provides that the costs of
maintenance and repair of common elements are a common expense , but the declaration
does not specifically address common expenses associated with maintenance or repair of
limited common element s. Paragraph 1.13 of the declaration, however, does define
“limited common elements” to include only “[ t]hose portions of the Common Elements
allocated . . . for the exclusive use of one or more but fewer than all of the units.” Thus,
under the MCIOA and the declaration, common expenses associated with the maintenance
or repair of a common element exclusively used by fewer than all of the units sha ll be
assessed against the units to which that limited common element is assigned.
The Deans argue that the district court erred in concluding that the freight elevator
and the two elevators programmed to serve Unit 2 are common elements, rather than
limited common elements. They contend that, because those elevators are limited common
elements, the district court erred by ruling that the Bhaktas were authorized to force the
Association to pay for expenses related to their repair and maintenance.
The district court determined that the freight elevator is not a limited common
element because it serves all units. The record supports this determination. Patrick Dean
testified in a deposition that all unit owners use the freight elevator with permission and by
obtaining a code, and board-meeting minutes from 2008 state that residents were asked to

10
use the freight elevator when their elevator was down. Thus, the costs of maintaining and
repairing the freight elevator are common expenses.
Although the district court determined that the elevators that served Unit 2 are
common elements, it also determined that, even if th ose elevators are limited common
elements, the Deans claim that elevator repair and maintenance costs were improperly
treated as common expenses failed because “the record would not permit reasonable jurors
to reach a non-speculative conclusion about damages.” We need not address whether the
district court erred in determining that the e levators that served Unit 2 are common
elements because we agree with the district court’s additional determination that, even if
those elevators are limited common elements, the Deans failed to produce evidence
sufficient to prove what damages the Associa tion suffered as a result of treating the
elevators as common elements.
“Speculative, remote, or conjectural damages are not recoverable at law.” Lassen
v. First Bank Eden Prairie, 514 N.W.2d 831, 839 (Minn. App. 1994), review denied (Minn.
June 29, 1994 ). The Deans argue that they provided an invoice for servicing the freight
elevator and evidence that all four elevators were overhauled at a cost of several hundred
thousand dollars. But, because the freight elevator is not a limited common element,
evidence of the cost of servicing it does not support the Deans’ claim, and, as the district
court concluded, the remaining evidence does not identify which elevators were serviced.
Even if it would be reasonable for a jury to infer that the elevators that served the hotel
were serviced at some time, the evidence would not permit them to do anything more than
speculate about the cost of servicing those elevators.

11
II.
The district court’s third amended scheduling order set a February 10, 2017 deadline
for the plaintiffs to designate experts and make the disclosures required by Minn. R. Civ.
P. 26.01(b), and an April 7, 2017 deadline for non -dispositive motions to be heard. “A
schedule shall not be modified except by leave of court upon a showing of good cause. ”
Minn. R. Civ. P. 16.02. “Except in unusual circumstances, a motion to extend deadlines
under a scheduling order shall be made before the expiration of the deadline.” Minn. R.
Gen. Pract. 111.04.
On April 26, 2017, almost three weeks after the deadline for non -dispositive
motions passed, the Deans filed a motion to extend the non-dispositive-motion deadline so
that the district court could hear their motion to permit their expert to conduct testing to
determine electricity usage in Unit 2. The district court denied the motion, and the Deans
argue on appeal that the district court failed to make findings suf ficient to support the
denial.
The Deans argued in the district court that testing to determine electricity usage in
Unit 2 was needed to determine d amages caused by improperly treating the cost of the
electricity as a common expense. The district court denied the Deans’ motion before the
court determined on summary judgment that treating the cost of the electricity as a common
expense was not imprope r. Because we agree with the district court that it was not
improper to treat the cost of the electricity as a common expense, damages for doing so are
no longer an issue, and we will not address whether the district court’s findings were

12
sufficient to support the denial of the Deans’ motion to extend the non-dispositive-motion
deadline.
III.
Although the management agreement between CMPJ and Oxford did not call for
Oxford to provide services to the Association, CMPJ authorized Oxford to write checks on
behalf of the Association. In 2014 and 2015, six Association checks were written to
Oxford, four for $2,000, one for $4,000, and one for $14,000. The Deans’ civil theft claim
alleged that Oxford “impermissibly and on multiple occasions caused funds to be
transferred from the Condo Association’s operating account to itself .” During her
deposition, Melissa Greene, an Oxford employee, was questioned about Association
checks that were written to Oxford, and she testified that two checks for $2,000 from the
Association’s account had been written in error, and when the error was discovered, Oxford
refunded the money to the Association.
In their memorandum in response to CMPJ’s and the Bhaktas’ motion for summary
judgment, the Deans argued that “[t]here is no documentary evidence in the record of this
case that Oxford has repaid those monies.” Oxford then provided with its reply
memorandum in support of its motion for summary judgment a sw orn declaration of
Melissa Greene, and attached to the declaration as exhibits copies of checks, deposit slips,
and check registers that showed payments made by Oxford to the Association. The Deans
moved to strike these documents, and the district court denied their motion.
Minn. R. Civ. P. 26.01( B) requires a party to provide to the other parties all
documents “that the disclosing party has in its possession, custody, or control and may use

13
to support its claims or defenses,” within 60 days after filing an answer, unless a different
time is set by stipulation or court order.
A party is under a duty seasonably to amend a prior response
to an interrogatory, request for production, or request for
admission if the party learns that the response is in some
material respect incomplete or incorrect and if the additional or
corrective information has not otherwise been made known to
the other parties during the discovery process or in writing.
With respect to testimony of an expert, the duty extends . . . to
information provided through a deposition of the expert.

Minn. R. Civ. P. 26.05. If a party fails to provide information under rule 26.01 or 26.05,
“the party is not allowed to use that information or witness to supply evidence on a motion,
at a hearing, or at a trial, unless the failure was substantially justified or harmless.” Minn.
R. Civ. P. 37.03(a).
The Deans argue that the district court erred by denying their motion to strike
Melissa Greene’s declaration because it contained documents that were disclosed for the
first time in Oxford’s reply memorandum supporting its summary -judgment motion. The
Deans argue that they were denied the opportunity to conduct discovery related to the
documents or question Greene about them in a deposition and that they w ere denied the
opportunity to respond to the evidence.
The admission of evidence rests within the broad
discretion of the trial court and its ruling will not be disturbed
unless it is based on an erroneous view of the law or constitutes
an abuse of discre tion. . . . In the absence of some indication
that the trial court exercised its discretion arbitrarily,
capriciously, or contrary to legal usage, the appellate court is
bound by the result.

14
Kroning v. State Farm Auto Ins. Co. , 567 N.W.2d 42, 45 -46 (Minn. 1997) (quotation
omitted).
The district court explained its denial of the motion as follows:
In this case, the allegations within the First Amended
Complaint focus on improper transfers from the Association to
Oxford. In their depositions, Mr. Dickson and Ms. Greene
were only questioned about checks written to Oxford in error
for services provided to CMPJ. It wasn’t until the Deans filed
their memorandum and specifically asked for these documents
that Oxford sought them out and became aware of their
significance. Additionally, [Oxford’s attorney] was unaware
the documents even existed until he r eceived the Deans’
memorandum and inquired about them. It is unclear whether
these documents were reasonably available to Oxford at the
time of its initial disclosures. However, even if they were, it
appears that Oxford failed to disclose this information because
it was unaware of its significance to the claims at issue. Based
on the unique circumstances in this case, the Court finds that
Oxford’s failure to disclose these documents was substantially
justified.

(Footnotes omitted.)
During Greene’s deposition, the Deans’ attorney asked Greene about checks from
the Association to Oxford, and Greene testified that she oversaw the process of paying back
to the Association amounts that had been wrongfully paid to Oxford. The Deans’ attorney
then said, “I’m going to ask for the records of those transfers. I may have them, and if I do
I’ll let you know.” The records were not formally requested, and Oxford produced them
only after the Deans argued in their memorandum in opposition to summary judgment that
there was no documentary evidence that Oxford repaid the money. Under these
circumstances, where the Deans’ attorney stated that he was going to ask for the records if
he did not have them and then never formally asked for the records, the district court did

15
not abuse its discretion when it concluded that Oxford’s failure to produce the records was
substantially justified because Oxford was not aware of the significance of the records.
IV.
The Deans argue that, regardless of whether the Greene declaration was considered,
the district court erred when it ruled that no issues of fact precluded summary judgment on
their claim for civil theft. The district court concluded:
[T]here is no evidence to support that Oxford intended to keep
or use the Association’s mon ey. Of the six checks issued to
Oxford, one was never cashed; three were issued to
compensate Oxford for its own funds, which were accidentally
placed in the Association’s account; and two were issued to
Oxford in error but subsequently returned. There i s nothing
within the record to rebut or contradict this evidence and
otherwise show that Oxford took these funds with the intent of
keeping or using them.

(Italics and footnote omitted.)
The Deans contend that Oxford’s representation that it repaid the mo ney that it
received through checks from the Association is thrust into doubt by a summary of the
Association’s bank-account register that CMPJ produced as part of exhibit A to the Greene
declaration. The summary lists three checks for $2,000 each that we re written to Oxford
Property Management. The date and check number for each check is listed, and the entry
for each check is followed by the phrase “Management fee” and the name of a month in
2014. The Deans state that “[t]here is no mention of these payments having been error, nor
is there any reference to the payments having been reimbursed by Oxford,” and they appear
to suggest that the brief phrase used to describe each check creates a fact issue.

16
It is not apparent what fact issue is created by the brevity of the phrase used to
describe the checks. The document in which the phrase is used is plainly a summary, and
there is no apparent reason why a more comprehensive description is needed to explain
that the three checks were written to Oxford.
The Deans also argue that there is a fact issue regarding their civil theft claim
because the district court concluded that , of the six disputed checks issued from the
Association to Oxford, “two were issued to Oxford in error but subsequently returned,” but
Oxford never produced a copy of the voided or cashed check to substantiate this claim.
Greene stated in her declaration: “Check Nos. 6156 and 6180 were paid back to the
Association through Oxford’s Check No. 8123. A true and accurate copy of the check and
deposit slip is attached hereto as Exhibit B. The Court can see this deposit show up on
Exhibit A-1 on page 6.”
Exhibit B shows the check and a December 11, 2014 deposit slip for $4,000, and
exhibit A-1 shows a $4,000 deposit into the Association’s checking account on December
11, 2014. When read in the context of Greene’s declaration, it is apparent that the district
court’s statement that two checks were “subsequently returned” means that two checks for
$2,000 each were cashed by Oxford, but Oxford l ater returned $4,000 to the Association.
Although the district court’s statement that the checks, rather than $4,000, were returned is
incorrect, this misstatement does not create a fact issue as to whether Oxford returned the
$4,000 to the Association.
Finally, the Deans argue that there is a fact issue whether Oxford returned the $4,000
to the Association because the check register labeled as exhibit A to the Greene declaration

17
does not include the $4,000 deposit that is shown on exhibit A -1. Greene sta ted in her
declaration that she attached exhibit A -1 because exhibit A, which had been produced
during discovery, did not appear to be complete. Our review of exhibit A reveals that the
final entry on one page of the check register is for check number 631 9 on December 4,
2014. The first entry on the following page is for a deposit on December 12, 2014, which
is followed by entries for four more deposits and then an entry for check number 6325 on
December 17, 2014. There are no entries for checks numbered 6320 through 6324. Every
page in exhibit A shows a similar gap between the entry at the bottom of the page and the
entry at the top of the next page, which suggests that entries at the bottom of each page
were omitted.
Exhibit A -1 includes entries for checks numbered 6320 through 6324, all on
December 4, 2014, and entries for seven deposits between December 8, 2014, and
December 12, 2014, which appear to have been entries that were omitted at the bottom of
the page on exhibit A . One of these seven depo sits is a $4,000 deposit on December 11,
2014. The Deans contend that the differences between exhibits A and A -1 create a fact
issue about this deposit , which might be persuasive if exhibits A and A -1 were the only
exhibits. But exhibit B includes a Dece mber 11, 2014 bank receipt for a $4,000 deposit,
which independently shows that the deposit was made. Neither exhibit A nor any other
evidence shows that the $4,000 deposit was not made, and we are not persuaded that there
is a genuine fact issue whether Oxford returned the $4,000 to the Association.

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V.
An equitable accounting is primarily available only “when a fiduciary owes an
equitable duty to account and when the accounts at issue are exceedingly complicated.”
United Prairie Bank–Mountain Lake v. Haugen Nutrition & Equip., LLC, 813 N.W.2d 49,
57 n.3 (Minn. 2012). The district court dismissed the Deans’ accounting claim because it
ruled that they did not have a valid underlying claim. See Cox v. Mortg. Elec. Registration
Sys., Inc., 794 F. Supp. 2d 1060, 1065 (D. Minn. 2011) (stating that dismissal of accounting
claim was warranted when it was premised on defendants’ liability on other claims and
those claims were dismissed), aff’d, 685 F.3d 663 (8th Cir. 2012). Because we conclude
that the distri ct court did not err in dismissing the Deans’ underlying claims, we also
conclude that the district court did not err in dismissing the Deans’ accounting claim.
Affirmed.