William M. Ross, Appellant,

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This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A20-1543

William M. Ross,
Appellant,

vs.

Dianne’s Custom Candles, LLC, et al.,
Respondents.

Filed August 30, 2021
Affirmed
Florey, Judge

Hennepin County District Court
File No. 27-CV-20-1

Darron C. Knutson, New Brighton, Minnesota (for appellant)

Steven M. Cerny, Santi Cerny, PLLC, Minneapolis, Minnesota (for respondents)

Considered and decided by Connolly, Presiding Judge; Reyes, Judge; and Florey,
Judge.
NONPRECEDENTIAL OPINION
FLOREY, Judge
In this appeal from a summary judgment, appellant, a member of a limited-liability
corporation (LLC), argues that the district court erred by (1) dismissing as derivative his
claims challenging payments to other members; (2) dismissing other claims as barred by a
six-year statute of limitations and declining to apply the continuing -violation doctrine;
(3) dismissing his claims that respondents frustrated his reasonable expectations for his
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ownership interest in the company or otherwise engaged in oppressive conduct toward him;
and (4) declining to amend the scheduling order to allow for additional discovery. We
affirm.
FACTS
Respondent Dianne’s Custom Candles, LLC, (Candles) is a Minnesota-based
company that manufactures, distributes, and sells custom -made candles. Respondent
Dianne’s Fundraising, LLC , (Fundraising) is a Minnesota -based company that helped
nonprofit organizati ons raise money by supplying them with candles and other
merchandise for sale in fundraising campaigns . Fundraising became inactive in 2007 .
Respondent Alan Lenzen held the majority interest and was a governing member of both
businesses. Appellant William M. Ross owned a 35 percent share of Fundraising and was
also a governing member . From 2004 to approximately early 2007, Ross’s involvement
with Fundraising was sales-focused. He was not involved in management activities during
that time.
In late 2 006 or early 2007, Lenzen approached Ross about the prospect of
subsuming Fundraising’s business into Candles. Ross alleges that Lenzen assured him he
would receive increased earnings, to replace those lost when Fundraising became inactive,
and would shar e in Candles ’s profitability and growth. Ross agreed, and in early 2007
exchanged his 35 -percent ownership in Fundraising for a ten-percent ownership in
Candles, where he began working as an employee in sales. According to the Candles
Member Control Agreement, Lenzen owned 66 percent, Ross owned ten percent, and two
other members had 19- and five-percent interests. In 2008, Candles redeemed the five-
3
percent ownership interest , which increased Ross’s ownership interest to ten and a half
percent.
In January 2007, Ross learned that Fundraising would be reporting 2006 taxable
income attributed to him. He asked Lenzen to distribute enough cash from Fundraising to
compensate him for his tax liability , but Lenzen declined . Ross signed a $52,662
promissory note, drafted by his accountant and payable to Fundraising, to offset his taxable
income from Fundraising. Ross alleges that he and Lenzen orally agreed that Ross would
never have to pay the note, but he has no documents, communications, or notes to support
this allegation, and Lenzen does not recall any agreement to that effect. Ross has never
paid Fundraising any principal or interest on the note.
Ross worked at Candles from 2007 to June 2010 as vice president of sales. After
ending his emp loyment, Ross returned his company computer, which he used to send
company emails and store company price lists and product information, with a new hard
drive. The record is unclear as to whether Ross ever returned the original hard drive. Ross
also had paper copies of product lists, pricing lists, customer lists, and potential client lists
that he stated he either returned or threw away. Ross explained that any retained client
information after his resignation was “not on purpose to undermine [Candles], ” but rather
because there is “a lot of crossover” when working in the business for a long period of
time.
Following Ross’s separation from Candles in 2010, Lenzen demanded that Ross pay
the promissory note in full. Ross refused to pay, referring to the prior agreement he made
with Lenzen that he would not be required to pay. Ross began working in Galveston,
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Indiana, as an independent contractor for a similar company, and also dealt directly with a
professional-athletic-organization-licensed-merchandise supplier to make sales to Boy
Scout organizations, an opportunity Candles had been actively pursuing for three years
prior. Subsequently, from 2011 -2018, Ross ran a division of a company that sold food
products and candles for charitable fundraising.
Ross did not participate in the management or affairs of either Fundraising or
Candles after his employment ended. Candles’s governing documents state that profits and
losses would be allocated to the members based on each member’s ownership percentage
each year. From 2008-2018, Ross paid for his tax liability based on his ownership interest
in Candles, but received no disbursements or cash to cover the tax liabilities. Ross alleges
that Lenzen provided other members of Candles sufficient funds to cover their tax liabilities
through “salary or wage s, interest payments on alleged loans to Candles, expense
reimbursements, or pro fit distributions ,” and that respondents did this intentionally, in
order “to inflict financial injury upon Ross and thereby force him to surrender his
ownership interests in Candles and Fundraising.” Neither Candles’ s nor Fundraising’s
corporate records and governing documents require them to make distributions to members
or state that members are entitled to annual distributions.
Ross requested that respondents provide him information concerning the business
affairs of Candles and Fundraising beyond th e K-1 tax forms he received annually, but
respondents failed to do so . In February 2018, Ross sent respondents two letters
demanding “documentation and information concerning the organization documents,
financial results, insider transactions, distributions and payments of profits and other items
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bearing on the value of Ross’s ownership interests in Candles and Fundraising and the
rights and claims Ross may have arising from those ownership interests.” Respondents
state that they did not receive those letters.
In April 2018, Ross commenced an action (the first lawsuit) to compel respondents
to provide documents and information on Fundraising and Candles going back 16 years.
After filing a joint answer and counterclaim refusing to provide the requested information,
respondents eventually produced some of the requested records, but denied having others.
Respondents also declined to produce some documents based on their belief that Ross
would use the information to compete with Candles and Fundraising and d ivert business
away from them. The parties settled the first lawsuit in February 2019, although Ross
contends that respondents did not provide complete information and documentation as
required by the settlement agreement.
In December 2019, Ross commenced the present action, asking that the companies
be dissolved or ordered to buy out his interest based on oppressive conduct under Minn.
Stat. § 322C.0701, subds. 1, 2 (2020), or that he be awarded damages for breach of the
fiduciary duty of good faith and fair dealing. Respondents moved for dismissal pursuant
to Minn. R. Civ. P. 12 .02(e). The district court dismissed all claims arising prior to
November 18, 2013 , as barred by the statute of limitations, as well as claims relating
specifically to inappropriate or excessive amounts of company funds distributed to Lenzen
and other members as improperly pleaded derivative claims.
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Respondents moved for summary judgment on all remaining claims, which the
district court granted. The district court denied Ross’s motion to amend the scheduling
order to extend the discovery completion date. This appeal follows.
DECISION
I. The district court did not err in dismissing as derivative Ross’s claims
challenging payments to other members.

This case requires us to review an order dismissing a complaint pursuant to Minn.
R. Civ. P. 12.02(e) (stating that a compl aint must be dismissed if it fails to state a cl aim
upon which relief can be granted). We review de novo the district court’s decision on a
motion to dismiss, considering “only the facts alleged in the complaint, [and] accepting
those facts as true.” Sipe v. STS Mfg., Inc. , 834 N.W.2d 683, 686 (Minn. 2013) (citation
and internal quotation marks omitted). The determination of whether shareholder claims
are direct or derivative also presents a question of law subject to de novo review. See, e.g.,
Nw. Racquet Swim & Health Clubs, Inc. v. Deloitte & Touc he, 535 N.W.2d 612, 617
(Minn. 1995) (explaining that the question was “whether the trial court erred in concluding
as a matter of law” that the investor’s claims “are nonderivative”).
As an entity distinct from its shareholders, a corporation holds a sep arate right to
sue in its own name. Singer v. Allied Factors, Inc. , 13 N.W.2d 378, 380 (Minn. 1944).
Thus, “Minnesota has long adhered to the general principle that an individual shareholder
may not assert a cause of action that belongs to the corporation.” Nw. Racquet, 535 N.W.2d
at 617.
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If a shareholder asserts a cause of action belonging to the corporation, the
shareholder must seek redress in a “derivative” action on behalf of the corporation. Wessin
v. Archives Corp., 592 N.W.2d 460, 464 (Minn. 1999). By doing so, the shareholder, in
effect, steps into the corporation’s shoes and seeks restitution that the shareholder could
not demand as an individual. In re UnitedHealth Grp. Inc. S’holder Derivative Litig., 754
N.W.2d 544, 550 (Minn. 2008) (quotation omitted). In bringing a derivative action, the
shareholder must, among other things, comply with the procedural requirements of Minn.
R. Civ. P. 23.09. In re Medtronic, Inc. S’holder Litig., 900 N.W.2d 401, 406 (Minn. 2017).
A direct claim, on the other hand, alleges an injury to a shareholder that is not shared by
the corporation, and the procedural requirements of rule 23.09 are inapplicable. Id.
The Minnesota Supreme Court has distilled the direct -versus-derivative inquiry to
two questions: (1) who suffered the alleged injury and (2) who would receive the benefit
of any recovery. Medtronic, 900 N.W.2d at 408. When shareholders are injured only
indirectly, the action is derivative; but when shareholders show an injury that is not shared
with the corporation, the action is direct. Id. It is the injury itself that matters when making
this determination, not the theory on which the claim is based. Id. at 407 (citing Wessin,
592 N.W.2d at 464.)
Respondents contend that the district court properly dismissed Ross’s claim alleging
that Candles paid excessive compensation and interest payments to Lenzen and the other
members as an improperly pled derivative claim. Ross’s argument is essentially th at he
alone has been singled out from the other members by not receiving any payments in the
form of salary, interest, or distributions to cover his tax liabilities for his ownership interest.
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Ross argues that because this loss is not shared by other memb ers, his claim is direct and
does not have to comply with Rule 23.09. He also argues that the relief he seeks, a
mandatory purchase of his ownership interest at fair value under Minn. Stat. § 322C.0701
and damages for respondents’ breach of fiduciary duties, is for his benefit alone. Ross does
not cite any Minnesota case law in support of these arguments.
The district court determined that “to the extent that [Ross’s] allegations relating to
Lenzen’s family members being paid excessive salaries and Lenz en taking inappropriate
distributions are not already barred by the statute of limitations, these asse rtions are
derivative claims.” 1 The district court did not err by dismissing the improperly pleaded
derivative claims under Rule 12.02(e). A stockholder may sue because the corporation is
under the control of an alleged wrongdoer but, in doing so, must sue in a representative
capacity for the benefit of the corporation, not for personal damages. Wessin, 592 N.W.2d
at 464 (citing Seitz v. Michel, 181 N.W. 102, 105 (Minn. 1921)). The Minnesota Supreme
Court has held that shareholder claims based on an alleged diversion of corporate funds are
derivative claims. Medtronic, 900 N.W.2d at 408 (citing Seitz, 181 N.W. at 105). The
supreme court reasoned that, although “the additional allegation of a conspiracy to ‘freeze
out’ the plaintiff -shareholder ‘may have been directed against the plaintiff [,] [the
defendants’] acts resulted ultimately in the dissipat ion of corporate funds. ’” Id. (quoting

1 At the rule 12 motion hearing, t he district court did not dismiss Ross’s claims that he
alone did not receive distributions to cover his tax liabilities from the corporation,
explaining that Minnesota courts have allowed such claims as direct actions. See e.g.
Wessin, 592 N.W.2d at 465 (contemplating a direct action “where a corporation paid all
shareholders except one”). However, the district court later granted summary judgment on
these claims for failure of proof.
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Seitz, 181 N.W. at 106). Here, even if there was a conspiracy to freeze out Ross or he alone
suffered a financial injury, the alleged injury as pleaded is to the corporation, whose funds
were diverted.
For example, in Blohm v. Kelly , a minority shareholder alleged that a majority
shareholder and sole officer and director “abused his position in the corporation by paying
himself excessive compensation and by using corporate assets to discharge personal debts
and debts of another business.” 765 N.W.2d 147, 153 (Minn. App. 2009). This court held
that “[i]f true, the alleged conduct reduced the assets of the corporation in the first instance.
Corporate assets do not belong to the stockholders, but to the corporation.” Id. (quotation
omitted). The court found that the alleged distributions only indirectly injured the plaintiff,
such that the plaintiff’s injury was not “separate, distinct, and independent from the
corporation’s injury.” Id. (citing Wessin, 592 N.W.2d at 464.) Thus, the court concluded
that the alleged injury was primarily an inj ury to the corporation, and therefore, the
plaintiff’s claim was properly characterized as derivative, not direct. Blohm, 765 N.W.2d
at 154.
Here, Ross has alleged that funds were inappropriately taken and distributed to other
shareholders. These funds are corporate assets that do not belong to Ross, but rather to the
corporation; therefore, the injury alleged by Ross is an injury to the corporation, not a
“separate, distinct, and independent” injury suffered by him individually. Id. at 153. Under
these circumstances, a minority shareholder may bring suit against the majority shareholder
only “in a representative capacity for the benefit of the corporation, and not for damages
to him individually.” Wessin, 592 N.W.2d at 464 (quotation omitted). Therefore, the
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district court properly characterized Ross’s claims as derivative claims belonging to the
corporation.
II. The district court did not err in dismissing some claims as barred by a six-year
statute of limitations.

Ross asserted two claims against Candles: oppressive conduct pursuant to Minn.
Stat. § 322C.0701 and breach of the duty of go od faith and fair dealing. Both are subject
to a six-year statute of limitations. Minn. Stat. § 541.05, subd. 1 (2020). The statutory-
limitation period begins to run w hen the cause of action accrues . Minn. Stat. § 541.01
(2020).
The parties do not dispute that the complaint in this matter was served on November
18, 2019, and that claims brought under Minn. Stat. § 322C.0701 and fo r breach of
fiduciary duty must have been brought within six years after those claims accrued. Given
that date of service, respondents argue that any allegations attempting to support Ross’s
claims that occurred prior to November 18, 2013, are barred by the statute of limitations.
Ross contends that Candles’ argument is fundamentally flawed because the conduct
alleged in the compl aint constitutes a “pattern and practice of abuse and oppression to
advance [respondents’] ultimate goal of forcing Ross to surr ender his ownership interests
in Fundraising and Candles for little or no consideration.” Ross argues that all the acts he
complains of were in the aid of respondents’ sole purpose of driving him out of Candles
and Fundraising. Therefore, he contends that the “continuing violation rule” should be
applied to this case so that claims and events prior to November 18, 2013, are considered.
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“The continuing violation doctrine is most commonly applied in discrimination
cases involving wrongful acts that manifest over a period of time, rather than in a series of
discrete acts.” Davies v. West Publ’g Co., 622 N.W.2d 836, 841 (Minn. App. 2001), review
denied (Minn. May 29, 2001). But the doctrine has been applied outside the discrimination
context. N. States Power Co. v. Franklin, 122 N.W.2d 26, 30-31 (Minn. 1963) (trespass);
State Dep’t of Labor & Indus. v. Wintz Parcel Drivers, Inc. , 555 N.W.2d 908, 912 (Minn.
App. 1996) (workers’ compensation coverage), review granted in part, decision modified,
558 N.W.2d 480 (Minn. 1997). The doctrine allows a plaintiff’s claims to be considered
despite the expiration of the applicable statute of limitations when the alleged acts were
continuing in nature and manifested over time rather than as a series of discrete acts.
Giuliani v. Stuart Corp. , 512 N.W.2d 589, 595 (Minn. App. 1994); see also Sigurdson v.
Isanti County, 448 N.W.2d 62, 66 -67 (Minn. 1989). “When the doctrine is applied, the
final act is used to determine when the statute -of-limitations period begins for the entire
course of conduct.” Davies, 622 N.W. 2d at 841 (citation omitted).
In Davies, members of a stock association alleged breach of fiduciary duties based
on improper distributions and argued the continuing-violation doctrine should toll the six-
year statute of limitations. Id. This court noted that “[n]o case has applied the continuing
violation doctrine to a fact situation at all similar to this case,” and declined to extend
application of the doctrine to a claimed breach of fiduciary duty. Id. at 842. We concluded
that “even if the continuing violation doctrine could apply here, because eac h distribution
was a separate and distinct act that could have been challenged by respondents,” not a
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course of continuing conduct, “the doctrine does not toll application of the six-year statute
of limitations.” Id.
Ross cites to a slip opinion from the Iowa Court of Appeals that determined
summary judgment was precluded on a claim for oppressive conduct when the alleged
wrongs may have been a part of a scheme to freeze appellant out over an extended period,
contending that the facts are similar . Baur v. Baur Farms, Inc. , 780 N.W.2d 249 (Iowa
App. 2010). Bauer is not binding on this court, which has declined to extend the
continuing-violation doctrine in similar cases. See Davies, 622 N.W.2d at 841. We
likewise decline to do so here.
Furthermore, even if the continuing -violation doctrine did apply to Ross’s claims,
the events and allegations alleged prior to November 18, 2013 , are separate, discrete acts
to which the continuing-violation doctrine is inapplicable. In a thorough order, the district
court explained:
The lack of distributions in this matter were clearly
similar to the Davies payments, as each decision to not
distribute income to [Ross] was a separate action which [Ross]
could have contested. Likewise, [Ross] could have brought suit
to invalidate the [promissory note] after any demand from
Lenzen or Fundraising. Similarly, the fact that [Ross]
identifies several distinct examples in which [respondents]
allegedly did not consult him in decision-making or managing
the business . . . [as] evidence that these actions too were
concrete, distinct actions in which [Ross] could have legally
contested the actions. The same applies to the failure to
provide demanded financial docu ments, for which [Ross]
could have sued after each demand and failure to produce.
Each of these singular instances offered their own opportunity
for [Ross] to seek legal recourse, absent the presence of any of
the other allegations [Ross] asserts. They are thus not a ‘course
of continuing conduct.’
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We agree with the district court’s analysis. Because the continuing-violation
doctrine does not apply to the facts in this case, the district court did not err in concluding
that any claim involving conduct or events that occurred prior to November 18, 2013, was
barred by the statute of limitations.
III. The district court did not err in granting summary judgment to respondents.

Ross argues that the district court erred in finding that he failed to demonstrate that
a genuine issue of material fact exists to support his claims that respondents frustrated his
reasonable expectations for his ownership interest in Candles or otherwise engaged in
oppressive conduct toward him.
On appeal from summary judgm ent, we review de novo whether there are any
genuine issues of material fact and whether the district court erred in applying the law.
Ruiz v. 1st Fid. Loan Servicing, LLC , 829 N.W.2d 53, 56 (Minn. 2013). “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). A genuine issue of material fact exists when the evidence could lead a rational fact-
finder to find for the nonmovin g party. DLH, Inc. v. Russ , 566 N.W.2d 60, 69 (Minn.
1997).
Under Minnesota Statute section 322C.0110, subdivision 1 (2020):
[T]he operating agreement governs: (1) relations among the
members as members and between the members of the limited
liability company; (2) the rights and duties under this chapter
of a person in the capacity of manager or governor; (3) the
activities of t he company and the conduct of those activities;
and (4) the means and conditions for amending the operating
agreement.
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For a company that was formed before August 1, 2015, as was Candles, the language
in the articles of organization, operating agreement, and member control agreement shall
be considered the company’s “operating agreement” for purposes of Minn. Stat.
§ 322C.1204, subd. 3(1)-(2) (2020).
In order for conduct to be considered “oppressive,” conduct must be:
unfairly prejudicial . . . because th e conduct frustrated an
expectation of the applicant member that:

(i) is reasonable in light of the reasonable expectations of
the other members;
(ii) was material to the applicant’s decision to become a
member of the limited liability company or for a
substantial time has been material during the member’s
continuing membership;
(iii) was known to other members or that the other members
had reason to know; and
(iv) is not contrary to the operating agreement as applied
consistently with the contractual obligation of good
faith and fair dealing under section 322C.0409,
subdivision 4.
Minn. Stat. § 322C.0102, subd. 18(a)(3)(i-iv) (2020).

“Conduct (1) includes words, action, inaction, and any combination of words,
action, or inaction; and (2) is not oppressive solely by reason of a good faith disagreement
as to the content, interpretation, or application of the company’s operating agreement.”
Id.,(b)(1-2).
Both members and governors in a governor -managed company have an obligation
of good faith and fair dealing:
15
A member in a limited liability company shall discharge the
member’s duties and exercise any rights under this chapter or
under the operating agreement consis tently with the
contractual obligation of good faith and fair dealing, including
acting in a manner, in light of the operating agreement, that is
honest, fair, and reasonable.

Minn. Stat. § 322C.0409, subds. 4, 8 (2020).

Courts often analyze the concept of reasonable expectations in relation to
corporations under Minn. Stat. § 302A.751 (2020). Reasonable expectations can arise from
agreements not expressly stated in a corporation’s documents, including implicit
agreements based on history and course of d ealing. Blum v. Thompson, 901 N.W.2d 203,
220 (Minn. App. 2017) (citing Gunderson v. Alliance of Computer Prof’ls , 628 N.W.2d
173, 186 (Minn. App. 2001) , review granted, appeal dismissed (Minn. Aug. 17, 2001)) ,
review denied (Minn. Oct. 25, 2017); Pedro v. Pedro, 489 N.W.2d 798, 803 (Minn. App.
1992), review denied (Minn. Oct. 20, 1992).
“Oppressive conduct” as it pertains to members of a limited -liability company,
includes an additional element that any member’s reasonable expectation must be “material
to the applicant’s decision to become a member of the limited -liability company or for a
substantial time has been material during the member’s continuing membership” and “not
contrary to the operating agreement as applied consistently with the contractual obligation
of good faith and fair dealing under section 322C.0409, subdivision 4.” Minn. Stat.
§ 322C.0102, subd. 18 (a)(3). Accordingly, any reasonable expectations arising from
outside Candles’ s governing documents must have been material to Ross ’s decision to
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become a member or for a substantial time during his membership, and not be contrary to
the operating agreement.
Ross raised only two allegations on appeal: his reasonable expectation for income,
profit, and other economic benefit, and his reasonable expectation for attempting to secure
information concerning Candles and Fundraising were frustrated by respondents’ actions.
A. Reasonable expectations for income, profit, and other economic benefits
Ross argues that “Lenzen and the other members of Candles all receive cash income
from the company in the form of interest, salaries, and bonuses, but Ross receives no cash,
only a tax liability. ” He contends that “[n]o ‘objectively reasonable’ owner of a closely
held business would have agreed to such an arrangement,” and that “[t]he discretion given
Candles’ Board of Governors must be exercised in a fair and equitable manner, not as a
weapon to inflict financial loss on Ross.”
Here, the district court found that Ross had failed to show that there was a genuine
issue of material fact, because (1) there was no right under the operating agreement to
regular distributions or reimbursement for tax liability; (2) there was no evidence of
agreements outside of the operating agreement for distributions or reimbursements;
(3) there was no evidence that other members were receiving distributions to his sole
exclusion; and (4) to the extent that distributions were made, Ross was not similarly
situated because he was no longer employed by the companies: certain employees received
employee compensation or interest paymen ts on loans made to the company. Our
independent review of the record compels us to agree with the district court’s analysis.
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Ross’s argument that the district court erred by confining its analysis to the
governing documents is also meritless. While Ross is correct in stating that written
agreements are not dispositive because they do not reflect shareholder expectations based
on understandings not reflected in the documents, see Gunderson, 628 N.w.2d at 186, in
this case, the district court considered not only the governing documents but also whether
any conversations or communications occurred that would have led Ross to reasonably
expect cash payments or distributions from Candles.
We further decline to consider the foreign decisions cited by Ross that do not reflect
Minnesota law. Because review of the record does not show that a genuine issue of
material fact exists as to whether respondents frustrated Ross’s reasonable expectations ,
we determine that the district court did not err in granting summary judgment on this claim.
B. Reasonable expectations for receiving information

Ross next argues that the facts “clearly create a question of fact over whether
respondents punished and retaliated against Ross for exercising his rights under Minn. Stat.
§ 322C.0410 to obtain information in the Previous Litigation.” Specifically, Ross points
to the following facts and events: respondents (1) asserted meritless counterclaims against
Ross and numerous defenses with no relation to Ross’s claims; (2) refused to give Ross all
of the information he requested for fear h e might use it to compet e; (3) failed to produce
documents explaining Lenzen’s alleged loans to Candles; and (4) retaliated with
burdensome and frivolous claims and defenses. Ross does not cite to any caselaw in
support of his argument; rather, he states that respondents breached their duty of good faith
and fair dealing and failed to perform in a manner that is honest, fair, and reasonable.
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The doctrine of judicial immunity protect s litigants from torts that arise from a
person’s participation in the judicial process for stateme nts made in relation to or in
connection with the case at issue as a matter of public policy . See, i.e., Mahoney v.
Hagberg, 712 N.W.2d 215, 2 19-20 (Minn. App. 2006), aff’d, 729 N.W.2d 302 (Minn.
2007). Therefore, Ross’s allegations that point to the respondents’ conduct in the first
lawsuit that led to the settlement agreement is improper. Ross has not established a genuine
issue of material fact as to whether respondents’ conduct was oppressive or a breach of the
duty of good faith and fair dealing. Respondents had a right to bring counterclaims and
affirmative defenses as part of the legal process and were not required at the pleading stage
to have all the necessary facts to support their assertions. As the district court noted, “there
is nothing in the record to suggest these actions were anything but parties utilizing various
legal avenues available to them in a lawsuit.”
In regard to respondents’ refusal to provide Ross with certain documents, pu rsuant
to Minnesota Statutes section 322C.0410, subdivision 2(3),2 an entity is allowed to decline
to provide information requested by a member. Here, respondents asserted a belief that
Ross could unlawfully compet e with Candles and Fundraising by using the requested
information and intended to use the information to divert business. Ross stated that his
purpose for requesting the records was to “assess fully the value of his ownership interest

2 Minn. Stat. § 322C.0410, subd. 2(3), states: “Within ten days after receiving a demand
pursuant to clause (2), item (ii), the company shall in a record inform the member that made
the demand: (i) of the information that the company will provide in response to the demand
and when and where the company will provide the information; and (ii) if the company
declines to provide any demanded information, the company’s reasons for declining.”
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in [Fundraising and Candles] and to judge the extent of the injuries [Lenzen has] inflicted
upon him.” But Ross did not request a ruling on whether he was wrongfully refused the
documents and cites to nothing in either the governing documents or conversation s with
other members that establish es an expectation that respondents would not exercise this
right of refusal. As the district court noted, Ross “cannot logically argue that he reasonably
expected [respondents] to merely accept his assertions of purpose and provide all
information requested without utilizing a legal avenue that allows for such a withholding.”
Based on this record, Ross has not established a genuine issue of material fact as to
whether respondents’ conduct was oppressive or a breach of the duty of good faith and fair
dealing. Therefore, the district court did not err in granting summary judgment to
respondents on this claim.
IV. The district court did not abuse its discretion by declin ing to amend the
scheduling order.

Ross argues the district court abused its discretion by declining to amend the
scheduling order to give Ross more time to ob tain discovery. A district court may amend
a scheduling order on 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. Prac. 111.04. A district court has broad
discretion in scheduling matters, and we will not reverse its decision absent an abuse of
that discretion. Mercer v. Andersen, 715 N.W.2d 114, 123 (Minn. App. 2006).
Ross contends that “ [t]he passage of the deadline f or completion of fact discovery
before entry of the Court’s Order on the Rule 12 Motions and before [r espondents] were
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required to serve an Answer to the Complaint was good cause for amending the Scheduling
Order to extend the date for the close of fact discovery.” But, the district court found that
Ross had not been diligent in meeting the Scheduling Order deadline or in requesting an
extension before the discovery deadline expired. Further, the district court noted that Ross
knew of the extent of respondents’ challenges and had time before the schedule d hearing
date on respondents’ r ule 12 motion to request an amendment to the scheduling order.
Thus, the district court concluded that “[Ross] was not diligent in attempting to mee t the
Scheduling Order’s requirements and no other good cause has been established to grant a
motion to extend its deadlines.” Because this conclusion is supported by the record, it was
not an abuse of the district court’s discretion.
Affirmed.