Willow Run Partners, Appellant,

This opinion is nonprecedential except as provided by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
A21-0404

Willow Run Partners,
Appellant,

vs.

Scott D. Hillstrom, et al.,
Respondents,

Michael W. Haag, et al.,
Respondents,

Paul Chamberlain, et al.,
Respondents,

Paul Overson,
Respondent,

Daniel Schultz, deceased,
Respondent,

Lyle Olson,
Respondent,

G. T. Mork,
Respondent,

Marilyn Smith, et al.,
Respondents,

Florence Francis,
Respondent.

Filed January 31, 2022
Affirmed
Cochran, Judge

2
Hennepin County District Court
File No. 27-CV-20-7507

Matthew L. Thornton, Matthew L. Thornton, P.L.C., St. Paul, Minnesota (for appellant)

Robert W. Vaccaro, M. Greg ory Simpson, Meagher & Ge er, P.L.L.P., Minneapolis,
Minnesota (for respondents Scott D. Hillstr om, Andrew R. Lewis, and Guardian Law
Group, LLC)

Charles E. Jones, Megan J. Renslow, Moss & Barnett, P.A., Minneapolis, Minnesota (for
respondents Michael W. Haag, Wyatt S. Partridge, and Foley & Mansfield, PLLP)

Kay Nord Hunt, Michelle K. Kuhl, Keith J. Broady, Lommen Abdo, P.A., Minneapolis,
Minnesota (for respondent Paul Overson)

Peter C. Hennigan, Barry A. Gersick, Maslon LLP, Minneapolis, Minnesota (for
respondent Daniel Raymond Schultz)

Julia J. Douglass, Dean B. Thomson, Fa byanske, Westra, Hart & Thomson, P.A.,
Minneapolis, Minnesota (for respondent G.T. Mork)

Daniel M. Eaton, Christensen Law Office PLLC, Minneapolis, Minnesota (for respondents
Marilynn Smith and Janet Lahna)

Considered and decided by Connolly, Pr esiding Judge; Cochran, Judge; and
Klaphake, Judge.

NONPRECEDENTIAL OPINION
COCHRAN, Judge
Appellant, a limited partners hip, challenges the district court’s dismissal of its
claims against respondents, all of whom were involved in a prior action against appellant.
Because we conclude that the district court did not err in dismissing the claims, we affirm.

 Retired judge of the Minnesota Court of A ppeals, serving by appoi ntment pursuant to
Minn. Const. art. VI, § 10.
3
FACTS
Appellant Willow Run Partners (WRP) developed a subsidized apartment complex
in Willmar, Minnesota, under a now-discon tinued federal program. WRP sold the
apartment complex project in 2016. In a related, prior action brought just before the closing
of the sale, plaintiffs claiming to be WRP general partners sued WRP, its managing general
partner, and others involved in the operatio n of WRP, alleging mismanagement of WRP
and claiming an interest in the sale proceeds. Following the resolution of that case, WRP
filed the present action against several of the pa rties to the prior acti on, their attorneys, a
court-appointed receiver, and the receiver’s attorney. The follow ing summarizes the
procedural history relevant to this appeal.
Background
WRP, a limited partnership, was formed in 1973. The original general partners of
WRP were two brothers—Dempsey Mork and respondent G.T. Mork—and a corporation
named Mork & Associates Inc. Mork & Associates, in turn, was owned by Dempsey
Mork, G.T. Mork, and their un cle, Russ Mork. When Russ Mo rk later died, any interest
he had in Mork & Associates, and conseq uently WRP, passed to his two daughters,
respondents Marilynn Phyllis Smith and Janet Lahna. Also during the 1970s, G.T. Mork
sold or otherwise relinquished his individual partnership interest in WRP. While G.T.
Mork has claimed a continuing interest in WRP through Mork & Associates, WRP
contends that Mork & Associates was a “sham corporation that never existed.” Dempsey
Mork has served as the managing general partner of WRP since its formation.
4
In 2015, the United States Department of Housing and Urban Development (HUD)
filed a lawsuit against WRP, Dempsey Mork , and G.T. Mork. HUD alleged that two
property managers of the apartment-complex project, who were supervised by Dempsey
Mork, had embezzled $ 250,000 from WRP. HUD also alleged that WRP had withheld
“excess rents.” The HUD lawsuit resulted in a settlement agreement, under which WRP
agreed to pay HUD $260,000, and the property managers accused of embezzlement agreed
to pay HUD $250,000. The settlement agreement freed G.T. Mork of any liability.
The Prior Action
In 2016, following the reso lution of the HUD lawsuit, WRP agreed to sell the
apartment-complex project. Just two days before the closing of the sale, G.T. Mork, Russ
Mork’s daughters (Smith and Lahna), and Mo rk & Associates (together, the prior-action
plaintiffs) sued WRP, Dempsey Mork, and related individuals and business entities. The
plaintiffs as a group were represented by respondents Scott D. Hillstrom, Andrew R. Lewis,
and their law firm, Guardian Law Group LLC (collectively, the Hillstrom respondents), as
well as respondents Michael W. Haag, Wyatt S. Partridge, and their law firm, Foley &
Mansfield PLLP (collectively, the Foley re spondents), as co-counsel. Through their
purported interest in Mork & Associates, the plaintiffs claimed an interest in the sale
proceeds of the apartment-complex project and requested that the district court determine
the rightful claimants to the proceeds. The complaint also alleged that Dempsey Mork had
mismanaged WRP and violated his duties to the plaintiffs as WRP’s managing general
partner. In that same lawsuit, WRP and Dempsey Mork brought a counterclaim against
the prior-action plaintiffs for tortious interference with a prospective business relationship.
5
The sale of the apartment-complex project was completed in October 2016, netting
proceeds of approximately two million dollars. By stipulation, the parties agreed to escrow
the proceeds until resolution of the action.
In January 2017, the prior-action plaintiffs moved for appointment of a receiver to
distribute the sale proceeds and wind up the pa rtnership. The district court granted the
motion based upon “well founded” allegati ons that Dempsey Mo rk was mismanaging
WRP. The court appointed respondent Daniel Schultz, a certified public accountant, to act
as receiver for WRP. Schultz hired an attorn ey, respondent Paul Overson, to represent
Schultz in his capacity as receiver. Schultz thereafter filed a report with the district court,
in which he proposed an allocation and distribution schedule of the sale proceeds. Schultz
also requested that WRP pay him total co mpensation of approximately $350,000 for
serving as receiver, including $50,000 that he had already received. WRP and Dempsey
Mork challenged Schultz’s proposed distributions, argued that Schultz should not receive
any compensation, and moved to discharge Schultz as receiver for cause. WRP and
Dempsey Mork asserted that Sc hultz should be discharged an d not compensated, in part,
because Schultz was not qualified to be receiver and failed to disclose his prior relationship,
and that of his accounting firm, with G.T. Mork.
Prior to any hearing on the matter, the parties agreed to waive their pleaded claims
and counterclaim. They agr eed to limit the district court’s decision to the following
issues: whether to approve or modify Schu ltz’s proposed allocation and distribution
schedule, the amount Schultz should be compensated, whether Schultz should be
discharged as receiver, and whether Dempsey Mork should be ordered to disgorge certain
6
funds that he transferred to another company in which he had an interest. The district court
then held an eight-day evidentiary hearing on these issues. WRP and Dempsey Mork called
an expert witness to challenge Schultz’s distribution proposal.
The district court issued its findings of fact, conclusions of law, and order in
April 2019 and issued an amended order in May 2019. With resp ect to Dempsey Mork,
the district court concluded that “there were deficiencies in his management” of WRP but
that the evidence presented at th e hearing failed to bear out the plaintiffs’ contention that
he blatantly disregarded his duties as managing general partner or “milked WRP to unjustly
enrich himself.” Regarding the distribution of the sale proceeds, the district court rejected
many of Schultz’s recommenda tions based on its determina tion that Schultz’s economic
analysis was flawed and that Schultz had misinterpreted state law and WRP’s limited
partnership agreement.
The district court then addressed WRP and Dempsey Mork’s complaints about
Schultz’s conduct as receiver. The district c ourt agreed with many of WRP’s complaints
about Schultz. It found that, while Schultz was “a highly qualified accountant,” his flawed
economic analysis of the project “call[ed] into question his expertise in this area.” The
district court further found that Schultz failed to disclose a “prior financial relationship”
with G.T. Mork and improperly met with G.T. Mork and his attorney, Hillstrom. The court
determined that this con duct “damaged [Schultz’s] im partiality and biased him
against . . . Dempsey Mork.” The court also concluded that Schultz violated state law and
the district court’s order appointing him by making a payment to counsel for the plaintiffs
from WRP funds without court approval.
7
The district court determined that these fa ilings “led [Schultz] to what the [c]ourt
concludes is an erroneous recommendation and a failure to aggressively pursue the
protection and marshalling of th e partnership assets and caus ed the partnership and the
parties to incur heavy litigation expenses.” Nonetheless, the district court rejected the
argument that Schultz engaged in “collusion and deception” wi th the other plaintiffs and
determined that “the evidence falls short of intentional wrongdoing.” Based on its findings,
the district court reduced Schultz’s proposed fee by one-half—ordering that WRP pay him
only an additional $125,000 on top of the $50,000 he had already been paid. It also granted
WRP and Dempsey Mork’s request to discharge Schultz for cause.
Following the district court’s discharge of Schultz as receiver, Schultz transferred
$125,000—the amount of his receivership fee—from WRP’s bank account to his personal
bank account without the permission of WRP.
The Present Action
In May 2020, WRP commenced the presen t action. WRP named as defendants all
prior-action plaintiffs except for Mork & Associates—incl uding G.T. Mork, Smith, and
Lahna—as well as those parties’ attorneys in the prior ac tion—the Hillstrom respondents
and the Foley respondents. 1 WRP also named as defenda nts receiver Schultz and his

1 WRP also asserted claims in the present action against respondents Florence Francis and
attorneys Paul W. Chamberlain, Ryan Richard Kuhlmann, and their law firm, Chamberlain
Law Firm PLLC (collectively, the Chamberlain respondents). Francis intervened in the
prior action, claiming that she was also entitled to a share of the proceeds from the sale of
the apartment-complex project. The Chamberlain respondents represented Francis in that
action. Because WRP does not challenge the district court’s dismissal of the claims against
Francis or the Chamberlain respondents, we do not discuss those parties or the claims
against them in this appeal.
8
attorney in the prior action, Overson. In a 50-page complaint, WRP raised 16 counts,
alleging breaches of fiduciary duty, theft by fraudulent misrepresentation, abuse of process,
unjust enrichment, and related “aiding and abetting” claims against various defendants.
WRP asserted that, by bringing the prior action, each of the defendants “separately,
and all of them collectively, engaged in a w illful pattern of outrageous and intolerable
conduct involving the willful and systematic representation of a false narrative against
WRP’s general partner that included a ma licious design to force WRP to undergo
protracted, expensive, and fri volous litigation.” The essenc e of WRP’s claims in the
present action is that the prior action was improper and that the attorneys, their clients, and
the receiver conspired to cause WRP to incur significant expenses in that action.
The defendants moved to dismiss WRP’s co mplaint. The district court dismissed
15 of the 16 counts, each on the basis that WRP had failed to state a claim upon which
relief can be granted pursuant to Minn. R. Civ. P. 12.02(e). The district court declined to
dismiss only count 1, which a lleged breach of fiduciary dut y against attorney Hillstrom
and Guardian Law Group.
WRP appeals, challenging the district court’s dismissal of 11 counts raised in its
complaint.

In addition, WRP brou ght one claim against Lyle E. Olson, who is an accountant
and former business partner of Schultz. Olson is the only defendant who did not move to
dismiss WRP’s complaint. The single abuse- of-process claim against Olson (count 8)
therefore survives.
9
DECISION
A district court properly dismisses a claim under rule 12.02(e) “only if it appears to
a certainty that no facts, which could be intr oduced consistent with the pleading, exist
which would support granting the relief demanded.” State by Smart Growth
Minneapolis v. City of Minneapolis , 954 N.W.2d 584, 594 (Minn. 2021) (quotation
omitted). We review a district cour t’s rule 12.02(e) decision de novo. Id. In conducting
our review, we “accept the facts alleged in the complaint as true and construe all reasonable
inferences in favor of the plaintiff.” Id.
On appeal, WRP challenges the district court’s dismissal of 11 of the counts raised
in its complaint—counts 2-5, 8-13, and 16. We address each of those counts below.
I. The district court did not err by dismi ssing WRP’s claim of theft by fraudulent
misrepresentation against Schultz (count 2).

Count 2 in WRP’s complaint alleges theft by fraudulent misrepresentation against
Schultz. This claim is base d on WRP’s allegation that, follo wing Schultz’s discharge as
receiver in the prior action, Schultz transf erred the remainder of his receivership fee—
$125,000—from WRP’s bank account to hi s personal bank acco unt without WRP’s
permission. The district court dismisse d count 2 on the basis that WRP failed to
sufficiently allege damages. For the followi ng reasons, we affirm the district court’s
decision to dismiss count 2.
To state a claim for fraudulent misreprese ntation, a plaintiff must plead, among
other elements, that “the party suffered pecuniary damage as a result of the reliance.” Hoyt
Props., Inc. v. Prod. Res. Grp., LLC , 736 N.W.2d 313, 318 (Minn. 2007) (quotation
10
omitted). Under Minnesota law, “damages for misrepresentation are limited to the actual
out-of-pocket loss sustained by the plaintiff as a proximate result of the defendant’s fraud.”
TCI Bus. Cap., Inc. v. Five Star Am. Die Casting, LLC , 890 N.W.2d 423, 434 (Minn.
App. 2017) (quoting Strouth v. Wilkison, 224 N.W.2d 511, 514 (Minn. 1974)).
WRP argues that the district court erred by dismissing count 2 because it is entitled
to recover both actual and pun itive damages from Schultz. W ith respect to its claim for
actual damages, WRP contends that it is entitle d to recover: (1) the full $125,000 that it
alleges Schultz wrongfully transferred from its bank account, (2) in terest it would have
earned had the $125,000 remained in its ba nk account until it transferred the money to
Schultz itself, and (3) an additional $10 that it incurred as a transfer fee when Schultz
transferred the money to himself. WRP fu rther asserts that punitive damages are
appropriate in this case because Schultz’s conduct in taking the $125,000 without
permission demonstrated a deliberate disreg ard for the rights of WRP. We are not
persuaded.
First, WRP’s contention that it is entitled to actual damages is unavailing. Its claim
that Schultz must forfeit $125,000 fails under the out-of-pocket-loss rule. The district court
in the prior action ordered that Schultz wa s entitled to that mone y as compensation for
serving as receiver. Although WRP alleges that Schultz transferred the $125,000 to himself
at a point in time when he wa s not authorized to do so, Schultz was undisputedly entitled
to that money. Accordingly, WRP has not sustained an out-of-pocket loss in that amount.
WRP’s additional contentions that it is entitled to recover actual damages in the
amount of a $10 transfer fee plus interest fa re no better. Minnesota courts have declined
11
to reverse a district court’s decision where an alleged error resulted in de minimis harm to
the aggrieved party. See, e.g., Peterson v. Sorlien, 299 N.W.2d 123, 129 n.1 (Minn. 1980)
(declining to reverse judgment for defendant where plaintiff would be entitled to only
nominal damages); Risk ex rel. Miller v. Stark , 787 N.W.2d 690, 693, 694 n.1 (Minn.
App. 2010) (stating that district court’s failure to account for $400 in value of land worth
$99,900 and with $54,900 in equity was de minimis error and declining to remand),
rev. denied (Minn. Nov. 16, 2010). WRP’s claim that it has incurred damages of $10 plus
interest would amount to a very small sum. Accordingly, we conclude, under these
circumstances, that reversal is not warranted based on WRP’s argument that it is entitled
to actual damages.
Second, WRP’s contention that it is entitle d to punitive damages fails in light of
Schultz’s recent death. Schultz died in Sept ember 2021, while this appeal was pending.
Under Minnesota law, a party cannot recover punitive damages from a deceased tortfeasor.
Thompson v. Est. of Petroff , 319 N.W.2d 400, 408 (Minn. 1982). In Thompson, the
supreme court explained that th e purpose of punitive damages is to punish the tortfeasor
and deter that person from repea ting the wrongful act, but if the tortfeasor has died, “no
need exists for either punishment or deterrence.” Id.
WRP urges us to create an exception to the rule announced in Thompson, contending
that “[t]he theft of money by a court appoint ed fiduciary from a litig ant (the fiduciary’s
beneficiary) is the type of extraordinary conduct that should be deterred because it strikes
at the fundamental integrity of the civil justice system.” WRP further contends that, even
though punishment of Schultz is not available due to Schultz’s death, “[d]eterrence is still
12
achiev[able] because [other] fiduciaries would know that their estates would be diminished
by conduct subject to a claim for punitive damages.” We de cline WRP’s request that we
carve out an exception to the rule stated in Thompson. It is the role of the supreme court,
not of the court of appeals, to determine whether a new exception to existing law is
warranted. See Jensen v. 1985 Ferrari , 949 N.W.2d 729, 741 n.21 (Minn. App. 2020)
(stating that, as an error-correcting court, th e court of appeals applies existing precedent
and is without authority to change the law). WRP’s claim for punitive damages thus fails
as a matter of law.
We therefore affirm the district court’s decision to dismiss WRP’s claim of theft by
fraudulent misrepresentation against Schultz.
II. The district court did not err by di smissing WRP’s claims of breach of
fiduciary duty against Schultz and Overson (counts 3, 4, and 5) and abuse of
process against Schultz (count 8).

Counts 3 and 4 of WRP’s complaint alle ge breaches of fiduciary duty against
Schultz. Count 5 alleges that Overson, Schultz’s attorney, also breached his fiduciary duty
to WRP. And Count 8 asserts abuse of proc ess against Schultz. We conclude that the
district court properly dismissed these clai ms based on the doctr ine of quasi-judicial
immunity.
Judicial immunity is designed to protect the judicial process by shielding judges and
other persons who are “integral parts” of the judicial process from civil liability for actions
performed in the exercise of their judicial authority. Myers through Myers v. Price ,
463 N.W.2d 773, 775 (Minn. App. 1990), rev. denied (Minn. Feb. 4, 1991). This
common-law immunity doctri ne is available to court-appointed receivers. Minn.
13
Stat. § 576.28(a) (2020) (providing that a “receiver shall be entitled to all defenses and
immunities provided at common law for acts or omissions within the scope of the receiver’s
appointment”). When judicial immunity is applied to persons other than judges, it is called
“quasi-judicial immunity.” Myers, 463 N.W.2d at 775. Quasi-judicial immunity extends
to court-appointed receivers only for actions performed “within the scope of the receiver’s
appointment.” Minn. Stat. § 576 .28(a). The doctrine protec ts an actor from liability for
acts done in the exercise of judicial authority, however erroneous, or by whatever motives
prompted. Linder v. Foster, 295 N.W. 299, 300 (Minn. 1940) (quotation omitted).
The conduct of Schultz and Overson ab out which WRP complains in counts 3-5
and 8 falls squarely within the quasi-judicial immunity doctrine. With respect to Schultz,
count 3 is based on allegations that Schultz was not qualifie d to serve as receiver, had
conflicts of interest (in the form of a “significant financial relationship” with G.T. Mork),
and failed to disclose those facts to the district court in the prior action. Count 4 is based
on allegations that Schultz secretly communi cated with and accepted the aid of “adverse
counsel,” employed his business partner, Ols on—who had conflicts of interest—without
notifying the court, and dist ributed WRP funds to Olson and the Hillstrom and Foley
respondents without notifying the court. And count 8 alleges that Schultz was a
“perpetrator[] of . . . fraud and . . . abuse of process.” Specifically, count 8 appears to
allege that Schultz, as the other respondents’ “hand chosen” receiver, participated in a
“conspiracy” to gain control of the sale proc eeds of the apartment-complex project. The
essence of these claims is that Schultz improperly performed his duties as receiver. All of
14
these allegations therefore relate to actions performed within the scope of Schultz’s court
appointment.
We reach a similar conclu sion with respect to Over son. Count 5 of WRP’s
complaint alleges that Overson acquiesced in, authorized, or failed to subsequently disclose
Schultz’s actions to the district court. Th ese allegations entirely relate to Overson’s
performance of his duties in his capa city as the recei ver’s attorney. See Minn.
Stat. § 576.32, subd. 1(a) (20 20) (providing that the receiver may employ attorneys “[t]o
represent or assist the receiver in carrying out the receiver’s duties”). Because the alleged
misconduct of Schultz and Overson constitutes “acts done in the exercise of judicial
authority,” Linder, 295 N.W. at 300 (quotation omitted), the receiver and his attorney are
entitled to the protection of quasi-judicial immunity.
We are not persuaded by WRP’ s arguments to the contrary. First, WRP contends
that quasi-judicial immunity does not apply to Schultz because Schultz’s conduct violated
the law and the district court’s order appointing him. But Mi nnesota law is clear that the
correctness of Schultz’s conduct and the motivation behind it are irrelevant for the purpose
of applying quasi-judicial immunity. Myers, 463 N.W.2d at 775 (stating that judicial
immunity shields an actor fro m liability for conduct “however erroneous or by whatever
motives prompted” (quotation omitted)). Whatever the propriety of Schultz’s actions, he
engaged in those actions within the scope of his appointment as receiver and is therefore
protected by the immunity doctrine.2

2 WRP cites our nonprecedential decision in Dahl v. Quinn , No. A20-0468, 2020 WL
6852631 (Minn. App. Nov. 23, 2020), to suppor t its assertion that the district court erred
15
Second, WRP contends that ap plication of quasi-judicial immunity to Schultz and
Overson violates public policy and damages the judicial pro cess. But shielding Schultz
and Overson from civil liability based on quasi -judicial immunity did not preclude WRP
from challenging or obtaining relief from thei r actions. In the prior action, WRP had an
opportunity to challenge—and did in fact challenge—many aspects of Schultz’s conduct,
his distribution proposal, and his compensation. WRP also moved to discharge Schultz as
receiver. The district court agreed with many of WRP’s complaints about Schultz,
discharged him, and reduced his compensati on accordingly. Moreover, with respect to
Overson, WRP could have challenged the payment of his attorney fees, which the district
court in the prior action approved. We are therefore unconvinced by WRP’s public-policy
argument.
Accordingly, we conclude that the dist rict court did not err by dismissing WRP’s
claims against Schultz and Overson in count s 3-5 and 8 on the basis of quasi-judicial
immunity.3

by dismissing counts 3-5 and 8 with respect to Schultz and Overson. WRP’s reliance on
Dahl is misplaced because Dahl is both factually distinguishable and nonprecedential. In
Dahl, the defendant, who was a child-custody evaluator, moved to dismiss a defamation
claim on the basis that she was entitled to quasi-judicial immunity. Dahl, 2020 WL
6852631, at *1. We affirmed the district court’s deci sion to deny the motion to dismiss,
emphasizing “the very limited record” and concluding that we knew “too little” at that early
stage of the litigation about the custody evaluator’s “court appointment and the meeting at
which she allegedly made the challenged statements.” Id. at *4. In contrast to Dahl, the
record in this case contains much more detailed information regarding the district court’s
order appointing Schultz as receiver, Schultz’s conduct as receiver, and WRP’s allegations
against Schultz and Overson. Accordingly, the record before us provides a sufficient basis
for our conclusion that Schultz and Overson are protected by quasi-judicial immunity.
3 Overson also contends that we should affirm the district court’s dismissal of WRP’s claim
of breach of fiduciary duty against him (count 5) on the basis that he did not owe a fiduciary
16
III. The district court did not err by dism issing WRP’s claims of abuse of process
against the Hillstrom respondents, Foley respondents, G.T. Mork, Smith, and
Lahna (count 8).

In the remaining allegations in count 8, WRP contends that the Hillstrom and Foley
respondents and their clients G.T. Mork, Smith, and Lahna engaged in a “conspiracy”
against WRP. Specifically, WRP alleges that the Hillstrom and Fo ley respondents and
their clients made bad-faith claims that G.T. Mork, Smith, and Lahna were stockholders in
Mork & Associates in order to “[c]ontriv[e] standing to sue”; made unfounded claims
against Dempsey Mork in order to have Schultz appointed as receiver and gain control of
the sale proceeds; and failed to disclose that Schultz was not independent of the parties and
was unqualified. For the reasons that follow, we conclude that the district court properly
dismissed count 8 with respect to these parties on the basis of absolute privilege.
Absolute privilege “shields a speaker from liability for statements made in judicial
proceedings.” Expose v. Thad Wilderson & Assocs., P.A., 889 N.W.2d 279, 286
(Minn. 2016). The doctrine pr ovides that “a party who files a pleading or affidavit in a
judicial proceeding has absolu te immunity, though his stat ements are defamatory and
malicious, if they relate to the subject of inquiry.” Matthis v. Kennedy, 67 N.W.2d 413,
419 (Minn. 1954) (quotation omitted). “Specifically, the doctrine may apply where a
statement is (1) made by a j udge, attorney, or witness; (2) made at a judicial or
quasi-judicial proceeding; and (3) relevant to the subject matter of the litigation.” Expose,

duty to WRP. Because we affirm dismissal of that claim on the basis of quasi-judicial
immunity, we need not reach Overson’s alternative argument.
17
889 N.W.2d at 286. The doctrine extends its protection to parties and attorneys. Matthis,
67 N.W.2d at 417.
In addition to barring defamation claims, absolute privilege “also bars claims
sounding in defamation—that is[,] claims where the injury stemmed from and grew out of
the defamation.” Mahoney & Hagberg v. Newgard, 729 N.W.2d 302, 309 (Minn. 2007).
“[T]he immunity rule is not to be ‘scuttled’ by pleadings which alle ge that the wrongful
acts resulted from a conspiracy.” Jenson v. Olson, 141 N.W.2d 488, 490-91 (Minn. 1966).
The absolute-privilege doctrine applies to WRP’s abuse-of-process claim against
the Hillstrom and Foley respondents, G.T. Mork, Smith, and Lahna. The crux of the claim
is that the Hillstrom and Foley respondents and their clie nts made false statements in the
prior action for the purpose of gaining control of the sale proceeds of the
apartment-complex project. In particular, WRP’s complaint alleged that those respondents
falsely stated that G.T. Mork, Smith, and Lahna had an interest in WRP as shareholders in
Mork & Associates and made unfounded clai ms against Dempsey Mork in order to get
Schultz (who was biased and unqualified) appointed as receiver. Such an allegation sounds
in defamation. Regardless of the label, the basis of WRP’s abuse-of-process claim is that
the respondents made false statements when they knew those statements would harm WRP.
Moreover, because the alleged false statements were made by attorneys on behalf of the
parties in the prior action, and because those statements also related to the subject matter
of the litigation, the other requirements of absolute privilege are met.
Minnesota courts “will apply absolute pr ivilege only when th e administration of
justice requires complete immunity from bei ng called to account for language used.”
18
Expose, 889 N.W.2d at 286 (quotation omitted). Before applying the doctrine, a court must
“determine whether there are competing po licy interests that would counsel against
application of the privilege.” Id. (quotation omitted). One co mpeting policy interest is
“the need to adequately punish and discourage litigation misconduct.” Mahoney,
729 N.W.2d at 309 (quoting Matsuura v. E.I. du Pont de Nemours & Co., 73 P.3d 687, 697
(Haw. 2003)). WRP appears to argue that this policy interest bars application of absolute
privilege in this case. To support that pr oposition, WRP relies on the Supreme Court of
Hawaii’s decision in Matsuura. There, in response to a certified question posed by the
United States District Court for the District of Hawaii, the Supreme Court of Hawaii
concluded that, “[u]nder Hawa i’i law, a party is not immu ne from liability for civil
damages based upon that party’ s fraud engaged in during prio r litigation proceedings.”
Matsuura, 73 P.3d at 706. WRP’s reliance on Matsuura is misplaced. In addition to not
binding this court, Matsuura is factually distinct. Matsuura involved allegations of
extensive discovery fraud, including the wi thholding and destruction of evidence. Id. at
689, 692. The allegations in that case are very different from the false statements alleged
in this case, which sound in defamation. We discern no policy interests at issue in this case
that would bar application of absolute privilege.
WRP also relies on Estate of Mayer v. Lax, Inc., 998 N.E.2d 238, 251 (Ind. Ct. App.
2013), in which the Indiana Court of Appeals concluded that absolute privilege does not
apply to an abuse-of-process claim under Indi ana law. But Minnesota courts have not
reached any similar conclusion. WRP’s relia nce on case law from ot her jurisdictions is
unavailing.
19
We therefore conclude that the absolute-p rivilege doctrine bars WRP’s abuse-of-
process claim against the Hillstrom respondents, Foley respondents, G.T. Mork, Smith, and
Lahna, and the district court did not err by dismissing count 8 with respect to those parties.
IV. The district court did not err by di smissing counts 9- 13 and 16 against the
Hillstrom respondents, Foley respondents, and G.T. Mork.

Counts 9, 10, 12, 13, and 16 are based upon allegations that Schultz improperly paid
attorney fees from WRP funds to the Hillstrom and Foley respondents for legal services
the attorneys performed for G.T. Mork, Smith, and Lahna in the prior action. These counts
allege that the Hillstrom resp ondents, Foley respondents, a nd G.T. Mork engaged in the
following: theft by fraudulent misrepresentation (count 9), unjust enrichment (count 10),
aiding and abetting Schultz’s breach of fiduciary duty (count 12), aiding and abetting theft
by fraudulent misrepresentation (count 13), a nd aiding and abetting unjust enrichment
(count 16).4 Count 11 additionally asserts th at the Hillstrom re spondents, Foley
respondents, and G.T. Mork “aided and abe tted” Schultz’s breach of fiduciary duty by
supporting Schultz’s appointment as receiver in the prior action. The district court
dismissed all of these counts on the basis of res judicata. We agree with the district court.
The doctrine of res judicata bars a subse quent claim when “(1) the earlier claim
involved the same set of factual circumstan ces; (2) the earlier claim involved the same
parties or their privies; (3) there was a final judgment on the merits; [and] (4) the estopped
party had a full and fair opport unity to litigate the matter.” Hauschildt v. Beckingham ,

4 WRP also asserted claims against Smith and Lahna in counts 9, 11-13, and 16. On appeal,
WRP does not challenge the district court’s dismissal of those counts as against Smith and
Lahna.
20
686 N.W.2d 829, 840 (Minn. 2004). Res judi cata “is conclusive, not only as to every
matter actually litigated, but also as to every matter that might have been litigated.”
Brown-Wilbert, Inc. v. Copeland Buhl & Co., P.L.L.P. , 715 N.W.2d 484, 487 (Minn.
App. 2006), aff’d, 732 N.W.2d 209 (Minn. 2007). We address each res judicata factor in
turn.
A. Same Set of Factual Circumstances
“The common test for determining whet her a former judgment is a bar to a
subsequent action is to inquire whether the same evidence will sustain both actions.”
Hauschildt, 686 N.W.2d at 840-41 (quotation omitted). The first factor is met only if the
right to assert the second claim arose at the same time as the right to assert the first claim.
Id. at 841.
This factor is met with respect to counts 9, 10, 12, 13, and 16. These counts allege
that the Hillstrom and Foley respondents se cretly submitted bills to Schultz, without
seeking court approval, and represented that they were entitled to have their attorney fees
paid from WRP funds. WRP asserts that the Hillstrom respondents received approximately
$47,000 of WRP funds from Schultz and that the Foley respondents received
approximately $10, 300. These counts further clai m that the Hillstrom respondents
encouraged G.T. Mork to present their request for payment to Schultz and that G.T. Mork
did so. The “aiding and abetting” counts also allege that each of these respondents assisted
one another in inducing Schultz to make the allegedly improper payments.
The central focus of the clai ms set forth in counts 9, 10, 12, 13, and 16 is that
Schultz’s payments of WRP funds to the Hillstrom and Foley respondents were improper.
21
The facts giving rise to these claims arose at the same time as the fa cts giving rise to the
claims in the prior action. Regarding the payment to the Hillstrom respondents, WRP
challenged that payment, which totaled approxi mately $47,000, during the prior action.
The district court addressed the $47,000 payment, concluding that Schultz violated state
law and the court’s order appo inting him by making that pa yment without the district
court’s approval. Nonetheless, the district court “accept[ed] [Schultz’s] explanation that
he viewed [the payment as for] work done to support the receivership and protect the sale
proceeds,” and it did not orde r the Hillstrom respondents to reimburse WRP for that
payment. Regarding the payment to the Fole y respondents, which totaled approximately
$10,300, WRP did not challenge that payment in the prior action. But WRP acknowledges
in its complaint in the pres ent action that it knew about Sc hultz’s payments to both the
Hillstrom and Foley respondents during the prior action. Because WRP did challenge
Schultz’s payment of $4 7,000 to the Hillstrom respondents in the prior action and could
have challenged Schultz’s payment of $10, 300 to the Foley res pondents, the first
res judicata factor is met with respect to these counts.
We likewise conclude that the first res judicata factor is met with respect to count 11.
Count 11 alleges that the Hillstrom respondents, Foley respondents, and G.T. Mork aided
and abetted Schultz’s appointment as receive r when they presented an affidavit from
Schultz to the district court in the prior action “[d]espite knowing that Schultz was not
qualified” to be receiver and was not independent of the parties. WRP presented the same
issues concerning Schultz’s qualifications and independence to the district court in the prior
action, and the district court specifically addressed those issues. Regarding Schultz’s
22
qualifications, the district court determined th at Schultz “appears to be a highly qualified
accountant, but the [c]ourt has rejected his econ omic analysis of this Section 236 project,
as well as his interpretations of the [limited partnership agreement] and state law, which
calls into question his expertise in this area.” With respect to Schultz’s alleged conflicts
of interest, the district court agreed with WRP and Dempsey Mork that Schultz had an
“undisclosed prior financial relationship” with G.T. Mork. The court concluded that the
conflict of interest and Schultz’s meetings with G.T. Mork and H illstrom “damaged his
impartiality and biased him against . . . Dempsey Mork.” After considering those
allegations and others, the district court found that “the evidence falls short of intentional
wrongdoing,” but determined that Schultz’s conflict with G.T. Mo rk and other failings
warranted reducing his proposed compensation and discharging him. This discussion by
the district court in the prior action demons trates that it considered the allegations
underlying count 11. Count 11 therefore involves the same set of factual circumstances as
the prior action.
Because WRP could have raised or did ra ise in the prior action the allegations
underlying counts 9-13 and 16, the first res judicata factor is met.
B. Same Parties or Parties in Privity
The second res judicata factor is satisfied when the parties to the second action were
either parties to the first action or are in “pri vity” with parties to the first action. Privity
exists where a person is “so identified in interest with another that he represents the same
legal right.” Rucker v. Schmidt , 794 N.W.2d 114, 118 (Minn. 2011). “Privity does not
follow one specific definition, bu t rather expresses the idea th at a judgment should also
23
determine the interests of certain non-part ies closely connected with the litigation.”
Rucker v. Schmidt, 768 N.W.2d 408, 412-13 (Minn. App. 2009) (quotation omitted), aff’d,
794 N.W.2d 114 (Minn. 2011).
Here, G.T. Mork and WRP were parties to the prior action. Moreover, the Hillstrom
and Foley respondents were clos ely connected with the litigati on in the prior action. For
instance, the Hillstrom and Foley respondents had an active self-interest in the prior action
in ensuring validation of the attorney-fees payments made to them by Schultz from WRP
funds. The second res judicata factor is therefore met.
C. Final Judgment on the Merits
For the purpose of res judicata, a final judgme nt is “one that ends the litigation on
the merits and leaves nothing for the co urt to do but execute the judgment.” All Finish
Concrete, Inc. v. Erickson, 899 N.W.2d 557, 568 (Minn. App. 2017) (discussing the third
factor in the context of collateral estoppel). There is no question that there was a final
judgment on the merits in the prior action. The parties voluntarily waived their claims and
counterclaim in that action and the district court’s order resolved the issues litigated during
the evidentiary hearing.
D. Full and Fair Opportunity to Litigate
The fourth and final res judicata factor “focuses on whether there were significant
procedural limitations in the prior proceedin g, whether the party had the incentive to
litigate fully the issue, or whether effect ive litigation was limited by the nature or
relationship of the parties.” Breaker v. Bemidji State Univ., 899 N.W.2d 515, 519 (Minn.
App. 2017) (quoting State v. Joseph, 636 N.W.2d 322, 328 (Minn. 2001)).
24
WRP had a full and fair opportunity in the prior action to challenge the propriety of
the attorney-fees payments a nd to challenge Schultz’s qualif ications and impartiality.
WRP had every incentive to litig ate those matters and it did in fact raise the issues of
Schultz’s qualifications and co nflicts of interest, as well as Schultz’s payment to the
Hillstrom respondents. Moreover, there is no indication that effective litigation was limited
by the nature or relationship of the parties.
WRP contends that it did not have a full and fair opp ortunity to litigate its claims
because the district court “imp licit[ly]” limited discovery in the prior action to “issues
relevant to the distribution to the limited partners.” But we are not persuaded that any
limitation on discovery in the prior action constituted a significant procedural limitation on
WRP’s ability to challenge the attorney-fees payments or Schultz’s qualifications or
impartiality. Again, WRP knew about the atto rney-fees payments while the prior action
was ongoing, challenged the payment to th e Hillstrom respondent s, and could have
challenged the payment to the Foley respondents. WRP also raised to the district court in
the prior action its concerns about Schultz’s conflicts of interest and qualifications.
Moreover, WRP did not appeal the district court’s decision in the prior action to
“implicit[ly]” limit discovery.
WRP also argues that res judicata cannot apply to bar its claims in the present action
because the respondents had “unclean hands.” Under the unclean-hands doctrine, a court
will not impose an equitable remedy if the party seeking th e remedy engaged in
“unconscionable” conduct “by reason of a bad motive” or if “the result induced by his
conduct will be unconscionable either in the bene fit to himself or the injury to others.”
25
Hruska v. Chandler Assocs., Inc., 372 N.W.2d 709, 715 (Minn. 1985) (quotation omitted).
WRP does not cite any case law in which the unclean-hands doctrine has been applied to
bar application of res judicata, and we are aware of no such case law. Moreover, based
upon our independent review, the actions alleged in counts 9-13 and 16 do not rise to the
level of “unconscionable” conduct. We note that the district court found that Schultz and
the plaintiffs in the prior action engaged in no “intentional wrongdoing” or “deliberate
collusion.” And the district court accepted Schultz’s explanation for the $47,000 payment
and did not order reimbursement of that payment. We therefore conclude that WRP had a
full and fair opportunity to litigate the claims underlying counts 9-13 and 16.
Because each res judicata factor is satisfied, we conclude that the district court did
not err by dismissing these counts on that basis.
Conclusion
In sum, WRP has failed to demonstrate that the district court erred by dismissing
these 11 counts—counts 2-5, 8-13, and 16—of its complaint. We therefore affirm the
district court’s decision to dismiss those counts.
Affirmed.