Aaron Jude Schnagl, Appellant,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2018).

STATE OF MINNESOTA
IN COURT OF APPEALS
A18-1542

Aaron Jude Schnagl,
Appellant,

vs.

Elliot Tuccitto Bonngard,
Respondent.

Filed June 10, 2019
Affirmed
Smith, John, Judge*

Washington County District Court
File No. 82-CV-17-668

Aaron Jude Schnagl, Lino Lakes, Minnesota (pro se appellant)

Paul W. Rogosheske, Ryan J. Grove, Rogosheske, Rogosheske & Atkins, PLLC, South St.
Paul, Minnesota (for respondent)

Considered and decided by Smith, Tracy M. , Presiding Judge; Larkin, Judge; and
Smith, John, Judge.

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.

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U N P U B L I S H E D O P I N I O N
SMITH, JOHN, Judge
We affirm the dismissal of appellant’s complaint for failure to state a claim for
which relief can be granted, because there are no facts alleged in the complaint which
would support granting appellant’s requested relief.
FACTS
In 201 2, appellant Aaron Jude Schnagl filed paperwork to create Good Guys
Companies (Good Guys) . Schnagl was listed on business filings as the CEO, but
respondent Elliot Tuccitto Bonngard (Tuccitto) was listed as a 50% shareholder on 2012
tax documents, and was also listed as a registered agent of the corporation. Schnagl
operated Good Guys until December 2012, when he was arrested for charges unrelated to
this appeal. In 2 013, Schnagl was convicted and incarcerated. At some point in 2013,
“Tuccitto assumed Schnagl’s position as an officer of Good Guys, but fired all employees
and began to run the business.” Schnagl alleged that the business relationship between
himself and Tuccitto began deteriorating, and that they were unable to reach any resolution
regarding the dissolution of the business. Schnagl appointed his mother, Patti Jo Nord, as
an authorized representative of Good Guys, and also gave her power of attorney.
In January 2013, Tuccitto started ET Detailing L.L.C. In February 2017, Schnagl
sued Tuccitto. Schnagl alleged in his complaint that Tuccitto agreed to help with Good
Guys until Schnagl’s criminal issues were resolved. In 2018, after some discovery
attempts, Tuccitto filed a motion to dismiss the suit pursuant to Minn. R. Civ. P. 12.02(e) ,
for failure to state a claim for which relief can be granted, and in the alternative for

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summary judgment. After a motion hearing, Schnagl filed a motion to amend h is
complaint. The district court granted Schnagl’s motion to amend the complaint and denied
Tuccitto’s motion to dismiss and motion for summary judgment as premature.
Schnagl amended the complaint in June 2018, alleging civil liability for theft,
conversion of an instrument , and misrepresentation and fraud. Specifically, Schnagl
alleged that Tuccitto “took control of all of Good Guys[’s] assets” without the authorization
of Schnagl, converted property from Good Guys, and “knowingly misrepresented the status
of Good Guys and the valuation of the business assets and liabilities and debts ,” and that
Schnagl relied upon the misrepresentation. Schnagl alleged that “as a result of this fraud
Tuccitto was able to steal all the assets of Good Guys, depriving [S chnagl] of his right to
the company and its assets.” Schnagl demanded judgment against Tuccitto “for a
reasonable amount greater than $50,000.”
Tuccitto denied all of the counts and again moved to dismiss the case for failure to
state a claim for which relief can be granted. The district court dismissed Schnagl’s
complaint with prejudice. Schnagl requested leave to file a motion to reconsider , but the
district court denied his request.
D E C I S I O N
“We review de novo whether a complaint sets forth a legally sufficient claim for
relief. We accept the facts alleged in the complaint as true and construe all reasonable
inferences in favor of the nonmoving party.” Walsh v. U.S. Bank, N.A ., 851 N.W.2d 598,
606 (Minn. 2014) (citation omitted). “[A] pleading will be dismissed only if it appears to
a certainty that no facts, which could be introduced consistent with the pleading, exist

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which would support granting the relief demanded.” Bahr v. Capella Univ. , 788 N.W.2d
76, 80 (Minn. 2010) (quotation omitted).
Schnagl contends that his complaint sets forth a legally sufficient claim for civil
liability for theft. The district court found that Tuccitto “had the power to dispose of the
property of the Business” and that accordingly, “his actions cannot constitute theft because
he had a claim of right.” The district court concluded that dismissal was proper because
“there is no possible way [Schnagl]’s first claim could be proven.”
Minn. Stat. § 604.14, subd. 1 (2018) states that a person who steals personal property
from another is civilly liable to the property owner. Theft is defined as intentionally and
without claim of right taking, using, transferring, concealing, or retaining possession of
property without the owner’s consent and with the intent to permanently deprive the owner
of possession. Minn. Stat. § 609.52, subd. 2(a)(1) (2018). But officers of a corporation
have the obligation to pay the contractual debts, obligations, and liabilities that are incurred
during the wind -up process. Minn. Stat. § 302A.781, subd. 3 (2018). Minn. Stat.
§ 302A.301 (2018) states that a corporation “shall have one or more natural persons
exercising the functions of the offices, however designated, of chief executive officer
[CEO] and chief financial officer [CFO].” Corporations must have the required officers to
manage the daily operations of the company, and handle the finances and company
property. Id. Minn. Stat. § 302A.305 (2018) designates the duties of the CEO and CFO.
Because Good Guys does not have a ny bylaws, the duties of the CEO and CFO are as
specified by statute. See id., subd. 1.

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Minn. Stat. § 302A.341, subd. 3 (2018) states that “in the case of a vacancy in the
office of chief executive officer or chief financial officer” shall be filled “in t he manner
provided in the articles or bylaws . . . or pursuant to section 302A.321.” Schnagl, the CEO
and CFO, left a vacancy in both offices due to his incarceration. Because Good Guys did
not have bylaws, Minn. Stat. § 302A.321 (2018) controls. Section 302A.321 provides that
“[i]n the absence of an election or appointment of officers by the board, the person or
persons exercising the principal functions of the chief executive officer or the chief
financial officer are deemed to have been elected to those offices . . . .”
Here, Tuccitto owned 50% of Good Guys’ shares, had signing authority on the
business bank account and, according to the complaint, Tuccitto took “control of the daily
operations at Good Guys” after Schnagl’s incarceration. Based on the allegations in the
complaint, it appears that Tuccitto was exercising the principal functions of the CEO and
CFO. Accordingly, the district court properly concluded that Tuccitto had the power to
dispose of business property and pay creditors as an offi cer of the business and that civil
liability for theft could not be proven as Tuccitto’s disposal of business property occurred
under a claim of right.
Next, Schnagl argues that his complaint sets forth a legally sufficient claim for
conversion. His comp laint alleges that Tuccitto “is liable for the conversion of [an]
instrument of [Schnagl]’s above listed personal property pursuant to [Minn. Stat.] § 336.3-
420.”
Conversion of an instrument occurs when it is taken by a person who is not entitled
to enforce the instrument or receive payment. Minn. Stat. § 336.3 -420 (2018). Schnagl

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argues that Tuccitto converted the property listed on the “Shop Inventory List” included
with the complaint. The district court found that “there is no possibility that this claim, as
it stands, could be proven.” We agree. As discussed above, Tuccitto had the right to
dispose of business property in his capacity as an officer. The “Shop Inventory List” is
comprised of business property, and Schnagl does not identify which, if any, property is
personal. Thus, even drawing all inferences in Schnagl’s favor, there are no facts consistent
with the complaint “which would support granting the relief requested.” See Walsh, 851
N.W.2d at 60 2 (quotation omitted) ; Bahr, 788 N.W.2d at 80 (quotation omitted) . The
district court properly dismissed Schnagl’s claim for conversion of an instrument.
Finally, Schnagl contends that his complaint sets forth a legally sufficient claim for
misrepresentation and fraud “ under Minn. Stat. § 325F.69 (2018).” Fraud,
misrepresentation, and deceptive practices are defined as the use of a “false promise , . . .
misleading statement or deceptive practice, with the intent that others rely thereon in
connection with the sale of any merchandise.” Minn. S tat. § 325F.69, subd. 1. Minn. R.
Civ. P. 9.02 provides that “[i]n all averments of fraud or mistake, the circumstances
constituting fraud or mistake shall be stated with particularity.”
Schnagl claimed that Tuccitto represented that “Good Guys would remain open, and
he would watch over the business and [Schnagl] would continue to profit from his
business.” Based on this representation, Schnagl claims that “Tuccitto stole in excess of
$50,000.00 worth of equipment fr om Good Guys, among files, accounts and invaluable
business records.” Schnagl also claims that Tuccitto misrepresented the valuation of Good
Guys and its assets and liabilities.

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The district court noted that the bank statements incorporated with the compl aint
provided by Schnagl show that Good Guys brought in “substantial amounts of money
which were also paid out almost immediately to cover debts, showing that the Business
was just above breaking even,” and that Schnagl did not list the business debts when listing
the valuation of the business equipment. Schnagl included letters between Tuccitto and
Nord with his amended complaint. The letters show that Tuccitto told Schnagl and Nord
that Good Guys “has no value” and that unless Schnagl wanted to “partici pate in these
expenses I suggest we all part ways.” Based on Schnagl’s complaint, the district court
correctly concluded that Schnagl did not show, with any particularity, that Tuccitto falsely
represented that Good Guys would remain open or falsely repre sented the value of the
business.
Schnagl’s complaint does not demonstrate a “legally sufficient claim for relief.” See
Walsh, 851 N.W.2d at 606. Even with all inferences drawn in Schnagl’s favor, there are
no facts consistent with the complaint “which would support granting the relief requested.”
Id.; Bahr, 788 N.W.2d at 80. Accordingly, we affirm the district court’s dismissal of
Schnagl’s complaint.
Affirmed.