Steven Lee Mittelstaedt, et al.,

1
STATE OF MINNESOTA

IN SUPREME COURT

A20-0573

Court of Appeals Hudson, J.

Steven Lee Mittelstaedt, et al.,

Appellants,

vs. Filed: February 2, 2022
Office of Appellate Courts
William H. Henney, et al.,

Respondents.

________________________

Charles J. Lloyd, Adam C. Hagedorn, Livgard & Lloyd PLLP, Minneapolis, Minnesota,
for appellants.

William H. Henney, Minnetonka, Minnesota, for respondents.
________________________
SYLLABUS

1. The expert-affidavit requirement in Minnesota Statutes section 544.42
generally applies to breach-of-fiduciary-duty claims against attorneys, which are a type of
malpractice action and distinct from negligence.
2. Whether expert testimony is required to supp ort a breach-of- fiduciary-duty
claim against an attorney in a particular case is a threshold issue to be determined by the
district court on a case-by-case basis, in accordance with Minnesota Statutes section
544.42, subd. 2.
Reversed and remanded.
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OPINION
HUDSON, Justice.
The question presented in this case is whether Minnesota Statutes section 544.42,
which requires the service of certain expert -disclosure affidavits, applies to breach- of-
fiduciary-duty claims against attorneys. The district court dismissed appellant
Mittelstaedt’s breach-of-fiduciary-duty claim against respondent Henney, an attorney, on
summary judgment, finding Mittelstaedt failed to show that Henney took unfair advantage
of their professional relationship or that the terms of their dealings were unfair. The court
of appeals affirmed on different grounds, concluding that summary judgment was
appropriate because Mittelstaedt did not provide the expert-disclosure affidavits required
by section 544.42. We hold that section 544.42 does apply to breach-of-fiduciary-duty
claims. Because the court of appeals erred in its analysis for determining whether experts
were required in this case, however, we reverse and remand to the court of appeals to
consider the grounds originally raised on appeal.
FACTS
Appellant Steven Mittelstaedt, owner of Iron Range Repair & Storage LLC and
Wide Open Services LLC, developed a business relationship with defendant John Prosser,
owner of defendant Prosser Holdings, LLC. Prosser later introduced Mittelstaedt to his
attorney, respondent William Henney. Henney went on to provide legal advice in some
capacity to Mittelstaedt regarding an insurance claim and his divorce. Henney and Prosser
also co-own Maxim Management, LLC (“Maxim”).
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In February of 2012, Mittelstaedt relocated his trucking operation to a part-
residential and part-commercial property in Virginia, Minnesota. Beacon Bank owned the
property and leased it to Mittelstaedt with an option to purchase. When Mittelstaedt fell
behind on his lease payments, he asked Prosser to buy the property and lease it to him with
an option to purchase. Prosser agreed and, in March of 2015, signed a purchase agreement
with Beacon Bank. Prosser and Henney created Maxim to own and manage the Virginia
property as equal partners. As part of the arrangement, Mittelstaedt and his former wife
conveyed an adjacent property to Maxim.
The resulting lease agreement became effective between Maxim (Prosser and
Henney) and Wide Open Services (Mittelstaedt) in April of 2015. Henney drafted all the
related documents and signed on behalf of Maxim; Mittelstaedt signed on behalf of his
company. During the same period, Mittelstaedt began a joint venture with Prosser to buy,
repair, and sell used trucks and trailers.
By late 2015, Mittelstaedt struggled to make his rent payments to Maxim. He and
Prosser agreed to enter a second lease agreement beginning on January 1, 2016 reducing
his monthly rent. Unlike the prior lease, the second lease agreement did not contain an
option to purchase. Mittelstaedt believed his share of the profits from the joint venture
satisfied the lower monthly rent payment and, as a result, he stopped making payments.
Prosser, by contrast, believed Mittelstaedt was in default on the lease agreement.
Maxim brought an eviction action against Mittelstaedt and his company in May of
2017. In response, Mittelstaedt sued Prosser, Henney, and Maxim, alleging fraud, breach
of fiduciary duty, and breach of contract. In his claims against Henney, Mittelstaedt alleged
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that Henney had been acting as his attorney in other matters and failed to disclose that he
was Maxim’s part-owner. Against Prosser and Maxim, Mittelstaedt alleged they failed to
credit him for his fair share of the joint venture’s profits and breached their fiduciary duty
to disclose Henney’s involvement with Maxim.
The eviction action and Mittelstaedt’s lawsuit were consolidated. Henney moved
for summary judgment on the breach- of-fiduciary-duty claim, summary judgment or
dismissal on the fraud claim for failure to plead fraud with particularity, and for judgment
on the pleadings. As part of his summary-judgment motion, Henney argued briefly that
Mittelstaedt had not complied with the expert-affidavit requirement in Minnesota Statutes
section 544.42.
The district court did not address the expert-affidavit issue, but it granted Henney’s
motion for summary judgment. It found that Mittelstaedt was represented by separate
counsel and failed to show that Henney took “unfair advantage” of their relationship or that
their business dealings were unfair to him. It also found, however, that Mittelstaedt
presented evidence sufficient to create a question of fact regarding whether there was an
attorney-client relationship between himself and Henney. Mittelstaedt appealed, arguing
that the district court erred on the merits of its summary-judgment decision.
Although no party argued that Minnesota Statutes section 544.42 was an important
issue on appeal, the court of appeals nevertheless took up the issue . See Mittelstaedt v.
Henney, 954 N.W.2d 852, 859 (Minn. App. 2020). It concluded that because breach-of -
fiduciary-duty claims have the same elements as legal malpractice, the statute’s affidavit
requirement should apply. Id. at 859–62. It further reasoned that a “back door” to trial
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without expert disclosures would open if the statute did not apply to breach-of-fiduciary-
duty claims. Id. at 862. And it concluded that this was not the “rare” claim where expert
affidavits were unnecessary. Id. at 863. Because Mittelstaedt did not submit expert
affidavits, the court of appeals affirmed summary judgment. The court of appeals did not
otherwise address the merits of the district court’s decision on summary judgment.
We granted Mittelstaedt’s petition for review of the expert-affidavit issue.
ANALYSIS
We review a grant of summary judgment de novo. Hensen v. Uptown Drink, LLC,
922 N.W.2d 185, 190 (Minn. 2019). Whether the expert affidavit statute applies to breach-
of-fiduciary-duty claims is a question of statutory interpretation, which we also review de
novo. See Phone Recovery Services, LLC v. Qwest Corporation , 919 N.W. 2d 315, 319
(Minn. 2018).
The parties disagree over the applicability of Minnesota Statutes section 544.42,
which requires that plaintiffs provide two expert-disclosure affidavits “in an action against
a professional alleging negligence or malpractice in rendering a professional service where
expert testimony is to be used by a party to establish a prima facie case.” Minn. Stat.
§ 544.42, subd. 2 (2020). Noncompliance “results, upon motion, in mandatory dismissal
of each cause of action with prejudice.” Minn. Stat. § 544.42, subd. 6 (2020). Henney
argues the statute’s categories of “negligence or malpractice” encompass a wide range of
claims and, as a result, the statute applies to breach-of-fiduciary- duty claims against an
attorney. Minn. Stat. § 544.42, subd. 2. Mittelstaedt argues that the statute only applies to
a breach -of-fiduciary-duty claim when it derives from a negligence action, rather than
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intentional conduct. He also argues that the statute only covers claims in which the attorney
was the attorney “rendering a professional service,” id., as opposed to conduct regarding a
business transaction.
I.
For the following reasons, we conclude that Minnesota Statutes section 544.42 can
apply to breach-of -fiduciary-duty claims against attorneys if the statute’s other
requirements are met.
Whether the statute’s affidavit requirement applies to breach- of-fiduciary-duty
claims against attorneys is an issue of statutory interpretation. The purpose of statutory
interpretation is to determine the Legislature’s intent. Christenson v. Henke, 831 N.W.2d
532, 536 (Minn. 2013). We first look at the “plain and ordinary meaning” of the statute’s
language to determine whether it is ambiguous. Id. at 536–37. A statute is ambiguous if
it is “subject to more than one reasonable interpretation.” Id. at 537. If the statute is “plain
and unambiguous,” we will “not engage in any further construction.” State v. Townsend,
941 N.W.2d 108, 110 (Minn. 2020). But if the statute is ambiguous, we will consider other
factors to determine the Legislature’s intent. See Minn. Stat. § 645.16(1)–(8) (2020). We
interpret statutes “so as to give effect to each word and phrase,” and we may consult
dictionary definitions to determine a word’s plain meaning. Shire v. Rosemount, Inc.,
875 N.W.2d 289, 292 (Minn. 2016).
The statute requires expert affidavits in “negligence or malpractice” actions. Minn.
Stat. § 544.42, subd. 2. The court of appeals concluded the statute applied to breach- of-
fiduciary-duty claims against attorneys because they are essentially negligence claims. But
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we have long held that professional negligence and breach of fiduciary duty are distinct
claims. Perl v. St. Paul Fire and Marine Ins. Co., 345 N.W.2d 209, 213 (Minn. 1984).
Professional-negligence claims allege an attorney breached their standard of care, whereas
breach-of-fiduciary-duty claims concern a standard of conduct. Id. The standard of
conduct obligates the attorney to “represent the client with undivided loyalty, to preserve
the client’s confidences, and to disclose any material matters bearing upon the
representation of those matters.” Rice v. Perl, 320 N.W.2d 407, 410 (Minn. 1982) (citation
omitted). In contrast, “reasonableness” is the touchstone for the standard of care, under
which “[a]ttorneys have a duty ‘to exercise that degree of care and skill that is reasonable
under the circumstances, considering the nature of the undertaking.’ ” Jerry’s Enterprises,
Inc. v. Larkin, Hoffman, Daly & Lindgren, Ltd., 711 N.W.2d 811, 817 (quoting Prawer .v
Essling, 282 N.W.2d 493, 495 (Minn. 1979)). Therefore, the court of appeals erred in
concluding the two causes of action share identical elements. And unlike professional-
negligence claims, breach-of-fiduciary-duty claims can lead to equitable remedies, such as
fee forfeiture or disgorgement. See Davis v. Swedish American Bank , 81 N.W. 210, 212–
13 (Minn. 1899) (establishing fee forfeiture as a remedy for breach of fiduciary duty); see
also Gilchrist v. Perl, 387 N.W.2d 412 (Minn. 1986).
The statute’s language—that it applies to “negligence or malpractice ” allegations—
nevertheless encompasses breach-of-fiduciary-duty claims. Minn. Stat. § 544.42, subd. 2
(emphasis added). “Malpractice” is a category that includes multiple legal theories for
recovery against professionals, including professional negligence, breach of fiduciary duty,
and breach of contract. See Ronald E. Mallen, 1 Legal Malpractice § 1:2 (2021)
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(“[Malpractice] encompasses any professional misconduct whether attributable to a breach
of the standard of care or of the fiduciary obligations.”); see also Jerry’s Enters., Inc., 711
N.W.2d at 816 (including negligence and breach of contract within the category of
malpractice). Accordingly, the statute’s expert-affidavit requirement for cases involving
“negligence or malpractice” unambiguously applies to breach-of-fiduciary-duty claims
when the statute’s other requirements are met.1
II.
The expert-affidavit requirement in Minnesota Statutes section 544.42 applies only
“where expert testimony is to be used by a party to establish a prima facie case.” Minn.
Stat. § 544.42, subd. 2. Whether the statute applies to a case is a threshold issue for the
district court to decide by examining “each element of the prima facie case of malpractice.”
Guzick v. Kimball, 869 N.W.2d 42, 48–49 (Minn. 2015); Hill v. Okay Const. Co.,
252 N.W.2d 107, 116 (Minn. 1977). The elements of a legal malpractice br each-of-
fiduciary-duty claim are: (1) the existence of an attorney-client relationship, which
establishes a standard of conduct, i.e., the duty; (2) a breach by the attorney of one or more

1 We also disagree with Mittelstaedt’s argument that the statute’s affidavit
requirement does not apply to breach-of-fiduciary-duty claims stemming from intentional
conduct. Nothing in the statute suggests distinguishing between the intentional or
unintentional nature of alleged malpractice. The fact that the statute includes both
negligence (which is only unintentional) and malpractice (which might not be) further
suggests that at least some claims based on intentional acts are included. The extent to
which the allegedly breaching conduct was intentional may, however, factor into the case-
by-case analysis of whether a specific case requires expert testimony. Mittelstaedt further
tried to distinguish between professional services and business transactions. But we do not
find his argument persuasive because the nature of being a fiduciary will almost certainly
involve rendering professional services.
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of the fundamental obligations owed to the client under that stand ard of conduct; (3)
causation; and (4) damages. See Hansen v. U.S. Bank Nat’l Assoc., 934 N.W.2d 319, 327
(Minn. 2019) (“A breach of fiduciary duty claim consists of four elements: duty, breach,
causation, and damages”). The fundamental obligations attorneys owe their clients are the
duty of candor, the duty to disclose material facts, and the duty to put the client’s interests
ahead of the attorney’s interests. See Colstad v. Levine, 67 N.W.2d 648, 654 (Minn. 1954).
If any element demands expert testimony, the statute’s affidavit requirement applies. And
although the standard of conduct applicable in a breach-of-fiduciary- duty claim is distinct
from the standard of care at issue in a claim of professional negligence, the same general
principle as to expert testimony applies to each standard. Generally, the “duty and breach
elements of malpractice . . . must be established by expert testimony.”
2 Guzick, 869
N.W.2d at 49 (quoting Hill, 252 N.W.2d at 116). An exception applies, however, “where
the conduct can be evaluated adequately by a jury in the absence of expert testimony.”
Guzick, 869 N.W.2d at 49 (quotation omitted). Significantly, whether it is an attorney-
negligence claim or breach-of-fiduciary-duty claim, whether the exception applies is
“determined on a case-by-case basis.” Id. at 48–49.
The court of appeals erred by applying the medical-malpractice presumption we
articulated in Sorenson v. St. Paul Ramsey Medical Ctr., 457 N.W.2d 188 (Minn. 1990),

2 In contexts where the malpractice case involved negligence, we have referred to
these elements as “the acts constituting negligence,” Guzick, 869 N.W.2d at 49, but
different principles rooted in professional ethics and responsibilities are present in the
breach-of-fiduciary-duty context.

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rather than an ordinary case-by-case analysis to determine that experts were required here.
In Sorenson, we held that only the “rare” or “exceptional” case would not require expert
testimony, given the complex and scientific nature of facts in medical-malpractice cases.
Id. at 191; see also Tousignant v. St. Louis Cty., 615 N.W.2d 53, 58 (Minn. 2000). Because
the same considerations do not necessarily appear as frequently in malpractice claims
against lawyers, the more stringent Sorensen test “has limited applicability to a legal
malpractice case.” Guzick, 869 N.W.2d at 50. Instead, courts must decide on an ordinary
case-by-case basis whether expert affidavits are required.
3
In this case, the district court, which is to make the initial determination whether
expert affidavits are required in a particular case, did not address the issue. Even if it had,
it would not have had the benefit of our opinion on the subject. Instead, the district court
decided the summary-judgment motion on its merits. On remand, the court of appeals
should consider the other grounds raised on appeal, specifically whether the district court’s
ruling on the merits of the summary judgment motion was erroneous. If the court of
appeals concludes summary judgment was proper without reaching the expert affidavit
issue, the case will be concluded. But if the court of appeals holds that summary judgment

3 In Colstad, we held that the “strict rules of fiduciary conduct cast upon the attorney
the burden of proving that he has been absolutely frank and fair with his client and has
taken no advantage of the confidence arising from such professional relation.” 67 N.W.2d
at 654 (emphasis added). Colstad remains good law and is consistent with this opinion.
Requiring plaintiffs to produce affidavits at the outset of litigation to show a prima facie
case neither changes nor contradicts the attorney’s ultimate burden to prove that they
discharged their duties appropriately. See Minn. Stat. § 544.42, subd. 2(1)–(2).
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was not proper, the case will be remanded to the district court for further proceedings,
including a decision as to whether an expert affidavit is necessary in this case.
CONCLUSION
For the foregoing reasons, we reverse the decision of the court of appeals and
remand to the court of appeals for further consideration consistent with this opinion.
Reversed and remanded.