Alerus Financial, N.A., Respondent,

STATE OF MINNESOTA
IN COURT OF APPEALS
A20-1135

Alerus Financial, N.A.,
Respondent,

vs.

Aaron Carlson Corporation,
Appellant,

Jason Horner,
Defendant.

Filed August 9, 2021
Affirmed
Jesson, Judge

Hennepin County District Court
File No. 27-CV-19-18847

David A. Orenstein, Dewitt LLP, Minneapolis, Minnesota (for respondent)

Brandon M. Schwartz, Michael D. Schwartz, Schwartz Law Firm, Oakdale, Minnesota (for
appellant)

Considered and decided by Florey, Presiding Judge; Jesson, Judge; and
Smith, Tracy M., Judge.
SYLLABUS
A party is not required to file an a ffidavit of attempted service on a foreign
corporation with the district court before effectuating substitute service on the Minnesota
Secretary of State under Minnesota Statutes section 5.25, subdivision 4(a)(2) (2020).

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OPINION
JESSON, Judge
Appellant Aaron Carls on Corporation (ACC) owes respondent Alerus
Financial N.A. (Alerus) $997,197.78 under the terms of a loan agreement between the
parties. ACC defaulted on th e loan in 2019 and refused to pay the remaining balance,
causing Alerus to sue for breach of contract. But when Alerus sued, it was unable to serve
ACC’s registered agent with the summons and complaint and instead effectuated substitute
service on the Minnesota Secretary of State.
In response, ACC raised an affirmative de fense of improper service, arguing that
Alerus was required to file an affidavit of at tempted service with the district court before
serving the secretary of state. But the co urt, in granting Alerus’s motion for summary
judgment, concluded that the process server’s affidavit of nonservice—filed seven months
after the server attempted service—showed that Alerus properly served ACC via substitute
service on the secretary of state. ACC appeals. Because parties are not required to file an
affidavit of attempted service on a foreign co rporation with the court before effectuating
substitute service on the Minnesota Secretary of State, we affirm.
FACTS
ACC was an architectural woodworking company incorporated in Delaware and
conducting business in Minnesot a. In 2009, ACC entered in to a loan agreement for a
revolving line of credit with Alerus. Over the next ten years, amendments to the agreement
increased the maximum loan amount from one million to f our million dollars and added
ACC’s sole owner and chief ex ecutive officer (CEO) as a personal guarantor. But when

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the loan matured in 2019, A CC failed to pay the remaining balance. After demands for
repayment went unanswered—and after ACC dissolved—Alerus sued for breach of
contract.
Before filing the summons and complaint w ith the district court, Alerus attempted
to serve ACC at its registered Minnesota office via a process server. But when the process
server arrived at ACC’s office, the doors were locked. There was no way for the server to
communicate with anyone who may have been inside. Because the process server could
not serve ACC, Alerus effected substitute service on the Minnesota Secretary of State. 1
In its answer to Alerus ’s complaint, ACC raised an affirmative defense of
insufficient service of process. Several m onths later, when Alerus moved for summary
judgment on its breach-of-contract claim, ACC opposed summary judgment on the ground
of insufficient service of proce ss. Alerus replied to this a sserted affirmative defense and
filed an affidavit of nonservice detailing the process server’s attempt to serve ACC at its
registered offices—seven months earlier. Concluding that the affidavit of nonservice was
“uncontroverted evidence” that Alerus had properly served ACC via substitute service and
that “the filing of an affidavit of no service with the court is not mandatory to effectuate
service of [Alerus’s] summons and compla int,” the district court rejected ACC’s

1 When a foreign corporation—one incorporat ed under the laws of a different state—
conducts business in Minnesota, the secretary of state acts as its appointed representative,
upon whom process in proceed ings against the corporation may be served. Minn. Stat.
§§ 5.25, subd. 4(b) (explaining the relations hip between a foreign corporation and the
secretary of state), 302A.011, subd. 12 (defining “foreign corporation”) (2020). As a result,
when process cannot be served on a forei gn corporation’s registered agent, officer,
manager, or general partner, a plaintiff may serve the secretary of state instead as a
“substitute” for those agents. Minn. Stat. § 5.25, subd. 1 (2020).

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affirmative defense and granted Alerus’s motion for summary judgment on the breach-of-
contract claim.
ACC appeals. 2
ISSUE
Was Alerus required to file an affidavit of attempted service with the court before
effectuating service on the Minnesota Secretary of State?
ANALYSIS
ACC challenges the district court’s gran t of summary judgment, arguing that the
court erred by determining that Alerus prop erly served the summ ons and complaint.
Specifically, ACC asserts that Al erus could not serve the secretary of state without first
showing—by filing an affidavit of attempted service—that ACC’s registered agent could
not be found. We review a district court’s grant of summary judgment de novo to
determine whether there are any genuine issues of material fact and whether the court erred
in its application of the law. Montemayor v. Sebright Prods., Inc. , 898 N.W.2d 623, 628
(Minn. 2017).
Here, the facts are not in dispute. Th e parties agree that ACC owes Alerus the
remaining balance on the loan under the terms of the loan agreement. And although ACC
takes issue with the timing of the filing of the affidavit of nonservice, it does not dispute
that the attempt at service of the summons and complaint at ACC’s registered address

2 ACC’s sole owner and CEO also appealed, but because he was discharged in a separate
bankruptcy proceeding, we removed him as an appellant from these proceedings. ACC
remains the sole appellant.

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occurred before Alerus served the documents on the secretary of state. Because the facts
are undisputed, there are no genu ine issues of material fact with regard to the issue of
service.
As a result, we turn to whet her the district court erred in its application of the law.
Id. Whether service of process was effective and personal jurisdiction exists is a question
of law we review de novo. Shamrock Dev., Inc. v. Smith , 754 N.W.2d 377, 382
(Minn. 2008). Because there is no caselaw on the precise issue of whether a party must
file an affidavit of attempted service before serving the secretary of state as substitute
service, we engage in statutory interpretati on to ascertain the meaning of the relevant
statute.3 To do so, we first determine whether the language at issue is ambiguous, or
“subject to more than one reasonable interpretation.” Roberts v. State, 945 N.W.2d 850,
853 (Minn. 2020). We read the statute as a whole, interpreting each section in light of
surrounding sections. Id. If the language is ambiguous, we look to the legislative intent in
enacting the statute. Id. But if the language is unambiguous, “we apply its plain meaning.”
State v. Henderson, 907 N.W.2d 623, 625 (Minn. 2018).
At issue is Minnesota Statutes section 5. 25, subdivision 4(a)(2), which provides that
a summons may be served on a voluntarily dissolved foreign corporation, such as ACC,
by:
delivering to and leaving wi th the secretary of state . . . one
copy of it and a fee of $50 in the following
circumstances: . . . (2) whenever a registered agent cannot be

3 The parties have not identified—and we have not found—any Minnesota appellate
caselaw that addresses the question of whether a party must file an affidavit of attempted
service before effectuating substitute service on the secretary of state.

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found at its registered office in this state , as shown by the
return of the sheriff of the county in which the registered office
is situated, or by an affidavit of attempted service by a person
not a party[.]

(Emphasis added.) ACC argues that this subdivision requires parties to file an affidavit of
attempted service before effectuating substitute service on th e secretary of state. Alerus
contends that an affidavit need not be filed at all.
Despite the parties’ opposing interpretations , the language of the statute is plain.
The statute does not create a requirement that an affidavit of attempted service be filed to
effectuate substitute service. Nor does the statute establish when such an affidavit must be
produced to show that the regi stered agent could not be found . Rather, the sole focus of
the statute is service of process. And it provides that substitute service of process on the
secretary of state may be effective for a voluntarily dissolved foreign corporation when an
affidavit of attempted service confirms that the registered agent could not be served.4 Id.
Applying subdivision 4(a)(2) to the undisputed facts in this case, we conclude that
Alerus met the requirements of the statute. A process server was unable to serve ACC’s
registered agent with the summons and complaint, as shown by the affidavit of nonservice.

4 Additionally, we note that the filing requirements for servi ce-related documents are
outlined not in the statute, bu t in Minnesota Rule of Civil Procedure 5.04. That rule
establishes that “all documents after the comp laint required to be served upon a party,
together with a certificate of service specify ing the details of how and when service was
accomplished . . . shall be filed with the court within a reasonable time after service .”
Minn. R. Civ. P. 5.04(b) (emphasis added). Like subdivision 4(a)(2), rule 5.04 does not
require an affidavit of attempted service be filed before effectuating substitute service on
the secretary of state. But the parties here do not address the general applicability of this
rule. Nor does ACC claim that Alerus failed to file the affidavit within the timeframe
established in rule 5.04.

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Alerus then effectuated substitute service on the secretary of state, completing the statutory
requirements for serving ACC. Because the di strict court correctly applied subdivision
4(a)(2) to the uncontroverted facts, the cour t did not err by granting Alerus’s motion for
summary judgment.
DECISION
The plain language of Minnesota Statutes section 5.25, subdivision 4(a)(2), does not
require a party to file an affidavit of atte mpted service on a foreig n corporation with the
court before effectuating substitute service on the Minnesota Secretary of State. Because
there are no genuine issues of material fact, and the district court correctly applied section
5.25, subdivision 4(a)(2), to the undisputed facts, the court did not err by granting Alerus’s
motion for summary judgment.
Affirmed.