RSS Fridley, LLC, a Minnesota limited liability company, et al., Appellants,

This opinion is nonprecedential except as provided by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
A21-0664

RSS Fridley, LLC,
a Minnesota limited liability company, et al.,
Appellants,

vs.

Northwestern Orthopaedic Surgeons Partnership, LLP,
a Minnesota limited liability partnership, et al.,
Respondents,

Gaughan Enterprises, Inc. d/b/a Gaughan Companies,
a Minnesota corporation, et al.,
Respondents,

Doe(s) 1-20 and ABC Corporation(s) 1-20,
Respondents.

Filed January 24, 2022
Affirmed in part, reversed in part, and remanded
Worke, Judge
Concurring in part, dissenting in part, Connolly, Judge

Anoka County District Court
File No. 02-CV-20-3985

Ellen Ahrens Wickham, Christopher W. Madel, Madel PA, Minneapolis, Minnesota; and

Scott J. Seiler, Seiler Law, PLLC, St. Paul, Minnesota (for appellants)

Mark W. Vyvyan, Rachel L. Dougherty, Fredrikson & Byron, P.A., Minneapolis,
Minnesota (for respondents Northwestern Or thopaedic Surgeons Pa rtnership, L.L.P.,
Northwestern Orthopaedic Surgeons Partne rship, LLP, Peter Holmberg, Joseph Flake,
Robin C. Crandall, Twin Citie s Orthopedics, P.A., Infinite Health Collaborative, P.A.,
Orthopaedic Partners, P.A., TCO Real Estate-Fund 1, LLC, Troy Simonson, and Rebecca
Anderson)

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Melissa Dosick Riethof, Bradley J. Lindeman, Meagher and Geer, P.L.L.P., Minneapolis,
Minnesota (for respondents Gaughan Enterprises, Inc. d/b/a Gaughan Companies and Dan
Hebert)

Considered and decided by Connolly, Pr esiding Judge; Worke, Judge; and
Klaphake, Judge.
*
NONPRECEDENTIAL OPINION
WORKE, Judge
Appellants-plaintiffs bought a medical o ffice building, and commercial tenants on
the property later relocated to a new medical office building that had been built to compete
with the existing building. Appellants brought a civil action against respondents-
defendants, who consist of the parties who sold the property, the real estate company that
brokered the sale, commercial tenants who moved out of the pr operty, and various
individuals associated with the entities. The complaint brought multiple fraud, breach-of-
contract, and related tort claims. The primary allegations were that, at the time of the sale,
respondents made misrepresentations about the leases and the tenants’ plans to remain on
the property, which fraudulently induced appellants to buy the property. The district court
granted respondents’ motions for failure to state a claim upon which relief could be granted
and for judgment on the pleadings. We affirm in part and reverse in part, and we remand
for further proceedings.

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

3

FACTS
This case arises out of the sale of a me dical office building in Fridley, Minnesota
(the property), and events transpiring after the sale involving the commercial tenants for
the property. Appellants filed their complaint against respondents in October 2020.1
The Parties
Appellants are three entities who bought the property—RSS Fridley LLC, BT
Group LLC, and 7900 Group LLP (collectively, “appellants”). Respondents are broken
into two groups: the TCO respondents and th e Gaughan respondents. Each group of
respondents is represented by its own counsel and responded separately to the complaint.
The Gaughan respondents consist of a corp oration, Gaughan Enterprises Inc. (d/b/a
Gaughan Companies), and an individual, Dan Hebert. Gaughan Companies is the real
estate broker that listed and so ld the property to appellants, and Hebert is the salesperson
employed by Gaughan Companies who worked on the sale.
The TCO respondent s consist of three entities, as well as their employees and
representatives. The first en tity is Northwestern Orthopaed ic Surgeons Partnership LLP
(NOSP), which is the previous owner of the pr operty and sold it to appellants. Three
individuals—Dr. Peter Holmberg, Dr. Jose ph Flake, and Dr. Robin Crandall—are the
general partners of NOSP. In conjunction with the sale, NOSP assigned the commercial

1 Because we are reviewing a dismissal under Minnesota Rule of Civil Procedure 12.02(e)
and judgment on the pleadings under rule 12.03, we describe the fa cts as alleged in
appellants’ amended complaint, and we accept those facts as true for purposes of our
opinion. See Walsh v. U.S. Bank, N.A. , 851 N.W.2d 598, 606 (Minn. 2014); Burt v.
Rackner, Inc., 902 N.W.2d 448, 451 (Minn. 2017).

4

leases on the property to appellants. The se cond entity is one of the commercial tenants
for the property. That entity is made up of three professi onal associations—Twin Cities
Orthopedics P.A., Infinite H ealth Collaborative P.A., and Orthopaedic Partners P.A.
(OPPA)—and is referred to collectively as “T CO.” Troy Simonson is the CEO for TCO
and holds other leadership po sitions with the companies. Rebecca Anderson is an
employee and representative for TCO. The th ird entity is TCO Real Estate-Fund 1 LLC,
which is the owner of the new building in Blaine that was constructed to compete with the
property.
In addition to TCO, two non -parties leased premises on the property: Minnesota
Orthopaedic Surgery Center LLC (MOSC) and North Metro Orthotics and Prosthetics Inc.
Neither is a party to this case, but many alle gations in the complain t relate to MOSC’s
actions in abandoning the prope rty before the expiration of th e lease. Appellants filed a
separate lawsuit against MOSC alleging breaches of the lease and damages relating to the
removal of an MRI system. Litigation is still proceeding in that case.
The Complaint
In 2014, the Gaughan respondents listed th e property for sale on behalf of NOSP.
NOSP and the Gaughan respondents created an offering memorandum to market the
property. The offering memorandum advertised the property as a medical office including
“a surgery center, MRI unit, operatory rooms, and general office space.” The property held
three commercial tenants, whose leases were to be assigned along with the purchase of the
property. NOSP had renewed the MOSC lease through October 2024 and the OPPA lease
through December 2025. The offering memorandum advertised that the recent renewal of

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most of the property’s leased space for anot her ten years provided for “strong future cash
flow and minimize[d] roll over exposure.” The offering memorandum also stated that the
area in which the property was located was “i n demand when it comes to medical office
buildings” and had strong business flow due to its proximity to several regional hospitals
and nearby highways. The offering memorand um contained a written disclaimer, which
stated that, although the in formation provided was “belie ved to be correct,” Gaughan
Companies made “no representation or warra nty of any nature, concerning, without
limitation, the correctness or completeness of the information.” The disclaimer advised
that prospective buyers were “cautioned to independently verify all facts . . . and to make
their own judgments in regard to any future projections concerning [the] property.”
Relying on the offering memorandum, two of appellants’ representatives, Ralph
Shapiro and Todd Striker, submitted a proposal to purchase the property. In a January
2015 letter, NOSP and the Gaughan respondent s submitted a counterproposal to sell the
property for $6,739,380. In February 2015, a ppellants entered into a real estate purchase
agreement with NOSP. The purchase agreement provided that the property to be purchased
included the real property, improvements loca ted on the real property, all fixtures and
personal property owned by NOSP and located on the property, and NOSP’s interest in the
leases. The purchase agreement also represented that the leases were in full effect and no
tenant was in breach or had threatened to breach the lease.
On April 24, 2015, appellants’ represen tatives, Shapiro and Striker, met in a
conference room at the property with several of respondents’ representatives, including Dr.
Holmberg, Dr. Crandall, Anderson, and Hebert. Dr. Holmberg and Dr. Crandall “did most

6

of the talking,” and the others “assent[ed] to the comments (either verbally or through
physical manifestations (i.e., nodding)) and, at no time did any of the [respondents] refute,
modify or condition any of Holmberg’s or Crandall’s assertions.”
Over the course of the meeting, respondents made many representations which form
the basis for several of appellants’ claims. Shapiro and Striker asked whether there was
any intention to replace the bu ilding with a new one, and D r. Holmberg and Dr. Crandall
said that they “were very sa tisfied at the location and had no intent to move.” All
representatives who were present made pos itive comments, such as “of course we’re
staying” and “we are not planning to go.” The representatives complimented the strategic
location of the property, its pr oximity to two hospitals and significant highways, and the
strength of the north metropo litan market. When Shapiro a nd Striker asked whether the
tenants intended to fulfill their lease, Dr. Ho lmberg and Dr. Crandall responded that they
did. Shapiro and Striker suggested longer terms on the leases, to which Dr. Holmberg and
Dr. Crandall responded that they were interest ed and agreed to disc uss lease renewal at a
later date. Further, Dr. Holm berg and Dr. Crandall told Shapiro and Striker that NOSP
owned the MRI system in the building and that this improvement evidenced NOSP’s intent
that the tenants continue staying at the prop erty. According to the complaint, all these
verbal representations were false.
On June 3, 2015, appellants and NOSP closed on the sale of the property. The leases
were assigned to appellants. The bill of sa le provided that “a ll personal pr operty and
equipment” were being transferred.

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Unbeknownst to appellants, while responde nts were listing and trying to sell the
property, at the same time the TCO respondents were planning to construct a new medical
office building nearby in Blaine (the Blai ne building). The TC O respondents built the
Blaine building for the purpose of competing with the property. Prior to the sale, the TCO
respondents had determined that the commercial tenants would not renew their leases with
the property and would instead move to the Blaine building. All respondents knew about
this plan before the property was sold, and they did not di sclose this information to
appellants. At the time of the sale, appellants believed the property to be profitable because
respondents represented to appellants that they would have substantial and stable long-term
tenants. Appellants would not have purchased the property if they had known that the TCO
respondents were planning to build a new building to compete with the property.
The TCO respondents’ plan to relocate came to fruition in 2018. That July,
Simonson asked Striker whether appellants would consider buying out MOSC’s lease. The
parties did not reach a decision at that poin t. Later that summer, MOSC aban doned the
premises, leaving it in “terrible condition and disrepair.” MOSC then relocated to the new
Blaine building. The abandonment of the lease caused the value of the property to
decrease.
Around the same time that MOSC aband oned the lease, appellants encountered
additional difficulties with the tenants. Part of the building leased to OPPA contained a
fully functional MRI system. Anderson contacted appellants around July 2018 and asked
i f t h e y w a n t e d t o p u r c h a s e the MRI system. Appellants declined, believing that they
already owned it. Appellants later discovere d that the MRI system had been dismantled

8

and removed from the property by cutting a larg e hole in the wall. The MRI system was
removed without appellants’ knowledge and consent, and the damage to the building was
not repaired. Anderson and the TCO respondents allegedly authorized the removal of the
MRI system. Additionally, in early fall 2018, appellants discovered that a third-party sub-
tenant had entered into a written sublease a nd was operating out of the MRI area. The
sublease was made without appellants’ prior written consent. These breaches of the leases
were allegedly caused by vari ous TCO representatives and entities working together to
direct the tenants’ behavior.2
The TCO respondents also allegedly interfered with appellants’ contracts with third
parties. The TCO respondents secretly c ontacted appellants’ vendors and engaged in
various actions: “providing unauthorized direction” to the vendors, “placing unauthorized
orders for products and services with such vendors,” “directing vendors to send invoices
directly to the TCO [respondents],” and “disparaging [appellants].” These actions harmed
appellants’ relationships with their vendors and resulted in some ve ndors breaching their
contracts.
District Court Proceedings
The complaint listed 12 counts: fraud, failure to disclose material facts, fraudulent
inducement to contract, breach of contract, brea ch of the covenant of good faith and fair
dealing, declaratory judgment, conversion, unjust enrichment , tortious interference with

2 The complaint noted that appellants had recently commenced litigation against MOSC
and OPPA for their breaches of the leases , and litigation was ongoing at the time the
complaint was filed.

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contract, tortious interference with prospective business advantage, conspiracy, and aiding
and abetting. The complaint sought damages of at least $50,000 or alternatively to rescind
the purchase agreement.
The TCO respondents did not file an answ er to the complaint, but instead filed a
motion to dismiss for failure to state a claim upon which re lief could be granted. The
Gaughan respondents filed a separate answer, which denied many of the allegations in the
complaint. The Gaughan respon dents then filed a motion for ju dgment on the pleadings.
The district court granted the motions, dete rmining that appellants were not entitled to
relief on any of their 12 claims . Accordingly, the district court dismissed appellants’
complaint. This appeal followed.
DECISION
Appellants challenge the district court’ s decision dismissing their complaint under
Minnesota Rule of Civil Procedure 12.02(e) fo r failure to state a cl aim upon which relief
can be granted and granting j udgment on the pleadings under Minnesota Rule of Civil
Procedure 12.03. We review de novo the dist rict court’s grant of a motion to dismiss for
failure to state a claim and grant of a motion for judgment on the pleadings. Abel v. Abbott
Nw. Hosp., 947 N.W.2d 58, 68 (Minn. 2020). We review “whether the pleadings set forth
a legally sufficient claim for relief.” Id. “A claim is legally suffi cient if it is possible on
any evidence which might be produced, consiste nt with the pleader’s theory, to grant the
relief demanded.” Id. (quotation omitted). “We accept th e facts alleged in the complaint
as true and construe all reasonable infere nces in favor of the nonmoving party.” Walsh,
851 N.W.2d at 606 (applying in context of motion to dismiss); see also Burt, 902 N.W.2d

10

at 451 (applying in context of judgment on th e pleadings). We first address the claims
brought against the Gaughan respondents, and we then review each claim brought against
the TCO respondents.
I. The district court correctly dismi ssed all claims against the Gaughan
respondents.
Seven of the twelve counts in the co mplaint were brought against the Gaughan
respondents, who brokered the sale of the property: fraud, failure to disclose material facts,
fraudulent inducement, declaratory judgment , conversion, unjust enrichment, and aiding
and abetting. We agree with the district court that the Gaughan respondents were entitled
to judgment on the pleadings.
The claims against the Gaughan resp ondents are based mostly on allegedly
fraudulent statements. To prevail on a fraud claim, a party must show five elements: (1) the
defendant made a false representation “of a past or existing material fact susceptible of
knowledge”; (2) the represen tation was “made with knowle dge of the falsity of the
representation or made without knowing whether it was true or false”; (3) the defendant
made the representation with the intent to induce the plaintiff to act in reliance on it; (4) the
representation caused the plaintiff to act in reliance on it; and (5) the plaintiff “suffered
pecuniary damages as a result of the reliance.” Valspar Refinish, Inc. v. Gaylord’s, Inc. ,
764 N.W.2d 359, 368 (Minn. 2009). There is a “high threshold of proof” for fraud claims.
Martens v. Minn. Mining & Mfg. Co. , 616 N.W.2d 732, 747 (Minn. 2000). “[T]he
circumstances constituting fraud . . . shall be st ated with particularity.” Minn. R. Civ.
P. 9.02. A person’s intent, knowledge, or other condition of mind may be alleged

11

generally. Id. To plead with particularity, the party must plead the “ultimate facts,” which
are the “facts underlying each element of the fraud claim.” Hardin Cnty. Sav. Bank v.
Hous. & Redev. Auth., 821 N.W.2d 184, 191 (Minn. 2012).
The complaint alleges these facts in support of the fraud claims. Respondents’
allegedly fraudulent statements were made at the April 2015 meeting between appellants’
and respondents’ representatives. The alleged misrepresentations were that the tenants
were satisfied with the proper ty, did not intend to move ou t, and were interested in
extending the leases. These statements were made by Dr. Holmberg and Dr. Crandall, who
are representatives of NOSP. Hebert, w ho was representing Gau ghan Companies, was
present at the meeting but did not make any statements himself. In stead, the complaint
alleges, Hebert “assent[ed] to the comment s” made by Dr. Holmberg and Dr. Crandall,
either verbally or by nodding, and he did not refu te or modify the statements. Hebert
“supported these comments throughout the course of the [m]eeting and made similar or the
same representations.”
We conclude that the complaint’s allegatio ns fail to plead the fraud claims with
particularity against the Gaughan respondents. Specifically, the complaint does not plead
the first element of fraud with particularity, that Hebert (the only Gaughan representative
at the meeting) made false representations. The complaint does not allege that Hebert made
any misrepresentations himself; rather, it alleges generally that he “assent[ed]” to
representations made by other people. There is no indication of which particular statements
Hebert assented to, and the allegation that he made “similar or the same representations”
is vague and nonspecific. At most, the comp laint generally attributes various statements

12

to Hebert based on his presence at the me eting and general show of agreement. The
allegations fail to plead the underlying f acts necessary to attribute to Hebert any
responsibility for the allegedly false statements made by others at the meeting. Thus, the
fraud claims against the Gaughan respondents are not pleaded with particularity based on
the statements made at the April 2015 meeting.
The complaint also alleges that the Gaughan respondents made false representations
in the offering memorandum. The complaint alleges that the offering memorandum was
fraudulent because it failed to disclose the TCO respondents’ then-present intention to
construct a new building and move the tenant s to the new building. But the offering
memorandum—which appellants attached as part of the complaint—contained a written
disclaimer.
3 The disclaimer stated that the information in cluded in the offering
memorandum was believed to be correct, bu t that Gaughan Companies did not make any
representation about the correctness of the information. The disclaimer advised
prospective buyers to independently verify all facts set forth in the memorandum. In light
of the disclaimer, the complaint’s allegations do not satisfy the fraud elements that any
representations in the offering memorandum were made with knowledge of their falsity or
with the intent to induce a party to act in re liance on them. The co mplaint therefore fails
to plead the fraud claims with particularity based on the offering memorandum.

3 Appellate courts “may consider matters outside the pleadings if the pleadings refer to or
rely on the outside matters.” In re Individual 35W Bridge Litig. , 787 N.W.2d 643, 647
(Minn. App. 2010), aff’d, 806 N.W.2d 820 (Minn. 2011). Because the complaint referred
to the offering memorandum and it was attached to the complaint, we may consider that
document.

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Because the complaint did no t plead the fraud-based claims with particularity with
respect to the Gaughan respondents, the district court correctly dismissed the claims against
them. And because appellants’ remaining cl aims against the Gaughan respondents are
based on the fraud allegations, those claims also fail. The district court properly dismissed
all claims against the Gaughan respondents. We now turn to the claims against the TCO
respondents, discussing each claim in turn.
II. The pleaded facts are sufficient to surviv e a rule 12.02(e) motion on two of
appellants’ fraud-related claims against the TCO respondents.
Appellants’ complaint centers on three fraud-related claims: fraud, failure to
disclose material facts, and fraudulent induce ment to contract. The claims are based on
two sets of circumstances: the TCO respondent s’ affirmative misrepresentations made at
the April 2015 meeting, and the TCO respondent s’ failure to disclose the construction of
the Blaine building. We conclude that the complaint’s allegations about the TCO
respondents’ affirmative misrepresentations are sufficient to state claims for fraud and
fraudulent inducement. But we conclude that the complaint fails to state a claim for failure
to disclose material facts base d on the failure to disclose the construction of the Blaine
building.
A. Fraud and fraudulent inducement
As explained above, fraud claims must be pleaded with particularity, meaning that
the complaint must plead “fact s underlying each element of the fraud claim.” Minn. R.
Civ. P. 9.02; Hardin Cnty. Sav. Bank , 821 N.W.2d at 191. Ther e are five elements to a
fraud claim: (1) the defendant ma de a false representation of a past or existing material

14

fact; (2) the representation was made knowing that it was false or without knowing whether
it was true or false; (3) the defendant intended to induce the plaintiff to act in reliance on
the representation; (4) the representation in duced plaintiff to act in reliance on it; and
(5) the plaintiff suffered damages as a result. Valspar Refinish, 764 N.W.2d at 368.
Appellants’ claims of fraud and fraudulen t inducement against the TCO respondents
are based primarily on statements made by Dr. Holmberg and Dr. Crandall at the April
2015 meeting between appellants’ and resp ondents’ representative s. The complaint
alleged that Dr. Holmberg and Dr. Crandall told appellants that they were satisfied with
the property and did not intend to move, that the tena nts intended to fu lfill the terms of
their leases, and that they would discuss renewal of the leases at a later time.
The district court determined that these allegations failed as a matter of law. The
district court focused on the first element of a fraud claim, whether the TCO respondents
made false representations of past or existing material facts. The district court reasoned
that the alleged statements were not material misrepresentations because they “amount[ed]
to nothing more than puffery and/or opinion s.” The district court commented that the
statements related to future events, rather than past or existing facts. The district court also
determined that the allegations did not satis fy the element requiring that the alleged
misrepresentations caused appellants to act in reliance on them. For the following reasons,
we conclude that the district court’s reasoning was erroneous.
First, the district court erred by determining that the alleged misrepresentations were
not actionable because they related to future events. The district court correctly noted that
the alleged misrepresentations referred to future events—that the tenants would fulfill the

15

lease terms and would not move out of the property. And a misrepresentation as to future
events does not support a fraud action simply because the future act did not happen. Id. at
368-69. But “a misrepresentation of a presen t intention could amount to fraud” if it is
“made affirmatively to appear that the promisor had no intention to perform at the time the
promise was made.” Id. at 369 (quoting Vandeputte v. Soderholm, 216 N.W.2d 144, 147
(Minn. 1974)).
Here, the complaint alleged misrepresenta tions by referring not merely to future
acts, but to present intentions. The complaint alleged that, at the time the TCO respondents
made the statements, they were taking actions to construct the Blaine building, knew that
the new building would compete with the old one, and intended for the tenants to move to
the Blaine building. If we accept appellants’ allegations as true—which we must on appeal
at the motion-to-dismiss stage, Walsh, 851 N.W.2d at 606—then the TCO respondents
made representations to appellants about thei r present intention to continue leasing the
property, when in fact they had no intenti on to carry out their promises. Because the
complaint alleges misrepresentations as to present intentions, it sufficiently pleads
misrepresentations of existing material facts.
The district court also erred by determin ing that the TCO respondents’ alleged
statements were not misrepresentations beca use they were merely puffery or opinions.
“[N]either opinions nor statemen ts that are general and indefi nite are representations of
fact.” Martens, 616 N.W.2d at 747. There is little precedential caselaw in Minnesota
addressing “puffery” in the context of pleading fraud claims. One federal district court for
the District of Minnesota, in applying Minnesota law, defined “puffery” as encompassing

16

“exaggerated blustering or boast ing and vague, subjective statements of superiority,” as
well as “[g]eneral assertions of quality.” Bernstein v. Extendicare Health Servs., Inc., 607
F. Supp. 2d 1027, 1031 (D. Minn. 2009). In Moua v. Jani-King of Minnesota, Inc., another
federal district court for the District of Minn esota held that statements that a restaurant
franchise was a “good business ” and would continue for “a long time” were puffery
because they were “vague statements of superiority.” 810 F. Supp. 2d 882, 890 (D. Minn.
2011). Similarly, in an unpublished opinion, this court determined that statements that the
defendant was a successful businessperson, ha d a good reputation, and had a financially
successful enterprise were puffe ry “because they me rely exaggerate and boast about [the
defendant’s] opinion about himself.” Dupuis v. GATR of Sauk Rapids, Inc., No. A17-1782,
2018 WL 3614320, at *3 (Minn. App. July 30, 2018).
Here, some of the alleged representations amount to puffery. For example, the
statements that the tenants were satisfied with their location, as well as the expressions of
“various complimentary factor s” about the property, are va gue, subjective opinions and
general assertions about the quality of the property. These statements therefore do not form
the basis for a fraud claim. Other statements made by the TCO respondents, however, are
not puffery. The alleged representations that the tenants intended to fulfill the lease terms
and did not intend to leave the property are not subjective statements about the property.
Nor are they general, indefinite assertions. Rather, they are statemen ts of fact about the
TCO respondents’ intentions towards the prope rty. The district court therefore erred by
rejecting appellants’ fraud claims as based on puffery. Because the alleged statements

17

amounted to false representations of material facts, the complaint pleads the first element
of fraud claims with particularity.
We likewise conclude that the complaint sufficiently pleads the remaining elements
of fraud claims. The complaint made these alle gations. Before the sale of the property,
the TCO respondents began planning the construction of the Blaine building, intended for
the Blaine building to compete with the property, and planned to move the tenants to the
new building without renewing the leases w ith the property. Appellants believed the
property would be profitable because the TC O respondents represented that appellants
could anticipate having successful and stable long-term tenants. The TCO respondents’
representations at the April 20 15 meeting reaffirmed the tena nts’ intentions to remain on
the property through the duration of the l eases. If appellants had known that the TCO
respondents intended to construct a new building to compete with the property, they would
not have bought the property. When MOSC later discontinued the lease and abandoned
the premises, the value of the property di minished significantly and caused long-term
damages. These allegations, if proved, show that the TCO respondents knew the
representations were false, th e TCO respondents intended to induce appellants to rely on
the representations, appellants in fact relied on the representations by buying the property,
and appellants suffered damages as a result.
The dissent states that appellants’ reliance on the TCO respondents’ oral
representations at the meeting was unjustifiabl e as a matter of law. The dissent reasons
that the purchase agreement st ated that it “alone fully a nd completely expresses [the
parties’] agreement,” and it did not guarantee that the tenants would remain in the property.

18

But reliance on an oral representation is unjustifiable as a matter of law “only if the written
contract provision explicitly stated a fact completely contradictory to the claimed
misrepresentation.” Johnson Bldg. Co. v. River Bluff Dev. Co. , 374 N.W.2d 187, 194
(Minn. App. 1985), rev. denied (Minn. Nov. 18, 1985). “Whe n a promise is not in plain
contradiction of a contract or, if contradictory, when it is accompanied by
misrepresentations of other material facts in addition to the contradictory intent, the
question of reasonable reliance is for the trier of fact.” Id. We recently applied this
principle in the context of a rule 12.02(e) motion to dismiss, holding that the district court
erred by dismissing the plaintiff’s fraud claims based on language in the parties’ settlement
agreement. Great Plains Educ. Found., Inc. v. Student Loan Fin. Corp., 954 N.W.2d 844,
850-51 (Minn. App. 2020), rev. denied (Minn. Mar. 30, 2021). We reach the same
conclusion here. The a lleged misrepresentations—that the tenants planned to fulfill their
leases and remain on the property—are not “completely contradictory” to the terms of the
purchase agreement. Whether appellants reasonably relied on the TCO respondents’
alleged misrepresentations is therefore a fact ual question inappropriate to resolve at this
stage.
Because the complaint pleaded the facts underlying each el ement of fraud, the
claims of fraud and fraudulent inducement were pleaded with particularity, and the district
court erred by dismissing those claims.
B. Failure to disclose material facts
In addition to the claims of fraud and fraudulent inducement, appellants brought a
fraud-based claim for failure to disclose materi al facts. The compla int alleged that the

19

TCO respondents did not disclo se to appellants material facts, including that the TCO
respondents were constructin g the Blaine building to re place and compete with the
property, and that the tenants intended not to renew their leas es with the property and to
move to the Blaine building instead. The failure-to-disclose claim was based on the theory
that the TCO respondents had special knowledge of these facts and deliberately failed to
disclose them to appellants, with the intent that appellants would rely on the nondisclosure
when buying the property. The district court determined that the failure-to-disclose claim
failed because the TCO respondent s did not have a duty to di sclose their plans about the
Blaine building. We agree.
One party to a transaction generally does no t have a duty to disclose material facts
to the other party. Graphic Commc’ns Local 1B Hea lth & Welfare Fund A v. CVS
Caremark Corp., 850 N.W.2d 682, 695 (Minn. 2014). But the Minnesota Supreme Court
has recognized that “special circumstances” ma y create a duty to disclose material facts.
Id. The supreme court has recognized three non-exclusive types of special circumstances:
(1) the parties have a confidential or fiduci ary relationship, (2) one party “has special
knowledge of material facts to which the other party does not have access,” and (3) when
one party speaks, it must say enough to avoid misleading the other party. Id. Here,
appellants argue that the second type of circ umstance applies—that the TCO respondents
had a duty to disclose materi al facts because their knowledge of the construction of the
Blaine building constituted “special knowledge of material facts.”
The supreme court in Graphic Communications recognized that the special-
knowledge theory has been “rarely addressed” by Minnesota courts. Id. at 697. Only one

20

case has applied the theory, Richfield Bank & Tr. Co. v. Sjogren , 244 N.W.2d 648, 652
(Minn. 1976). In that case, the supreme court determined that, “under the unique and
narrow” circumstances, a bank had the affirmative duty to disclose to the plaintiff the fact
that one of its depositors was engaging in fraudulent activities before the bank made a loan
to the plaintiff, when the ba nk had actual knowledge of that informa tion and making the
loan allowed the depositor to continue the fraud. Richfield Bank, 244 N.W.2d at 652. This
case is easily distinguishable from Richfield Bank. There are no concerns about imbalance
of power; appellants and respondents were bo th sophisticated parties engaging in a
business transaction. Appellants were repres ented by counsel and ha d the opportunity to
conduct due diligence before en tering into the transaction. And Minnesota courts “have
been reluctant to impose a duty to disclose material facts in arm’s-length business
transactions between commercial entities.” Driscoll v. Standard Hardware, Inc. , 785
N.W.2d 805, 813 (M inn. App. 2010), rev. denied (Minn. Sept. 29, 2010). Given our
caselaw, we decline to apply the special-knowledge theory here.
Because the TCO respondents did not have a duty to disclose the facts about the
construction of the Blaine building, appellants’ complaint fails to state a claim for failure
to disclose material facts. The district court properly dismissed this claim.
III. The complaint fails to state a claim for breach of contract against NOSP.
The complaint brought a clai m for breach of contract against NOSP only. The
complaint specifically alleged three ways that NOSP breached its contractual duties: (1) it
failed to provide accurate information about th e property, including th e plan to build the
Blaine building; (2) it failed to deliver fixtures and personal property that was to remain on

21

the property, including the MR I system, and removed the fixtures; and (3) it sold the
property without disclosing material facts that would adversely affect the purchase price.
Because none of these allegations state a clai m for breach of contra ct, the district court
properly dismissed the claim.
“A breach of contract is a failure, without legal excuse, to perform any promise that
forms the whole or part of the contract.” Lyon Fin. Servs., Inc. v. Ill. Paper & Copier Co.,
848 N.W.2d 539, 542 (Minn. 20 14). A breach-of-contract claim has three elements:
“(1) formation of a contract, (2) performance by plaintiff of any co nditions precedent to
his right to demand performance by the defe ndant, and (3) breach of the contract by
defendant.” Id. (quotation omitted).
The first and third alleged breaches—that NOSP failed to disclose the plan to build
the Blaine building and that it sold the property without disclosing material facts that would
affect the price—appear to be based on the sa me theory as appellants’ failure-to-disclose
claim. For the reasons explained above, NOSP did not have a duty to disclose the fact that
the Blaine building was being constructed. And there is no provision in the parties’
contracts creating such a duty. The complaint therefore fails to state a claim for breach of
contract on those theories.
We also conclude that the complaint do es not state a claim based on the second
alleged breach—that NOSP failed to deliver and removed the MRI system. Accepting the
allegations in the complaint as true, NOSP delivered the property, including the MRI
system, at the time the parties closed on the sale of the property in 2015. The MRI system
was removed in 2018. At oral argument, ap pellants acknowledged that the MRI system

22

was removed by a subtenant and that they filed a separate action against the tenants for the
taking of the MRI system. The district court declined to consider the alleged breach of
contract based on the removal of the MRI system, noting that the issue was being addressed
in separate litigation with “the proper defendants.” We agre e with the district court’s
reasoning. Accepting the allega tions in the compla int as true, we do not see how they
support appellants’ breach-of-contract theory against the seller based on the taking of the
MRI system by a different party at a later time. Because the allegations do not show that
NOSP breached one of its contracts with appella nts, the district court properly dismissed
this claim.
IV. The complaint fails to state a claim for breach of the covenant of good faith and
fair dealing against the TCO respondents.
The complaint also brought a claim for breach of the covenant of good faith and fair
dealing, alleging generally that the TCO respondents “knowingly and continually failed to
act honestly in performing duties owed to [appellants] under their contracts” and “hindered
and prohibited [appellants’] abilit y to perform under their vari ous contracts and/or enjoy
the benefits of such contracts.” These allega tions do not state a claim for breach of the
covenant of good faith and fair dealing.
Every contract contains an implied covenant of good faith and fair dealing, which
requires that “one party not unjustifiably hinder the other party’s performance of the
contract.” In re Hennepin Cnty. 1986 Recycling Bond Litig., 540 N.W.2d 494, 502 (Minn.
1995) (quotation omitted). But the covenant “does not extend to actions beyond the scope
of the underlying contract.” Id. at 503.

23

Appellants’ complaint did not specify which contractual duties the TCO
respondents hindered. On a ppeal, appellants argue that the complaint supports a good-
faith-and-fair-dealing claim based on the allega tions that the TCO respondents interfered
with appellants’ relationships with their vendors. These allegations, if true, show that the
TCO respondents interfered with contracts between appellants and third parties . The
covenant of good faith and fair dealing extends only to the parties to a contract, not to
separate contracts to which the defendant is not a party. See id. at 502-03 (recognizing that
covenant does not extend beyo nd scope of underlying contract). Appellants therefore
cannot obtain relief on this claim.4
V. The complaint fails to state a claim for declaratory judgment.
The complaint brought a claim for declarat ory judgment against all respondents.
The district court determined that declar atory judgment was unnecessary because the
parties did not dispute the underlying fact s on which appellants sought declaratory
judgment. We agree and conclude that the district court properly dismissed this claim.
Minnesota’s Declaratory Judgments Act gives district courts the power “to declare
rights, status, and other legal relations whether or not further relief is or could be claimed.”
Minn. Stat. § 555.01 (2020). The statute “is remedial, intended to settle and to afford relief
from uncertainty with respect to rights, status, and other legal relations.” McCaughtry v.
City of Red Wing, 808 N.W.2d 331, 337 (Minn. 2011) (quotation omitted). District courts

4 The TCO respondents’ alleged interference with appellants’ contracts with their vendors
may, however, support a claim of tortious interference with contract. We discuss this claim
in greater detail below.

24

have jurisdiction over a declaratory judgment proceeding only if there is a justiciable
controversy. Onvoy, Inc. v. ALLETE, Inc. , 736 N.W.2d 611, 617 (Minn. 2007). For a
claim to be justiciable, the claim must “(1) involve[] definite and concrete assertions of
right that emanate from a legal source, (2) involve[] a genuine conflict in tangible interests
between parties with adverse interests, and (3) [be] capable of specific resolution by
judgment rather than presenting hypothetical facts that would form an advisory opinion.”
Id. at 617-18.
The complaint sought declaratory judgment to clarify the prop er parties to the
various contracts between appellants and resp ondents. Specifically, the complaint noted
that, when the property was transferred, the l eases were assigned to appellants, including
the OPPA lease. But appellants later discov ered “that OPPA merged with TCO in 2001
and that TCO is the actual [t]enant and operates under the assumed name of OPPA.” The
complaint alleged that there was a “real and justiciable controversy” regarding “the proper
identification of OPPA’s successor in interest and the proper party obligated to [appellants]
under the OPPA [l]ease,” as well as regard ing the actual relations hip between appellants
and NOSP under their contracts. The comp laint requested “a judicial declaration of
OPPA’s proper name, status as an entity, relation to other entities and/or successor in
interest” and “identifying the proper parties to the various agreements at issue,” because of
the TCO respondents’ alleged failure to accurately identify the parties to the contracts.
These allegations do not give rise to a cl aim for declaratory judgment. Appellants
merely ask the district court to clarify the iden tity of the parties to th e contracts. Despite
this opinion dismissing many of appellants’ claims, these matters are best resolved through

25

discovery and deposition. Identifying the parties to the contracts does not present a definite
and concrete assertion of right giving rise to a declaratory-judgment claim. Because there
is no justiciable controversy, the district court appropriately dismissed the declaratory-
judgment claim.
VI. The complaint fails to state a clai m for conversion against the TCO
respondents.
The complaint brought a cl aim for conversion, based on appellants’ alleged
overpayment for the property under the purchas e agreement. The complaint alleged that,
because of respondents’ misr epresentations and failure to disclose material facts,
appellants “overpaid for the [p]roperty and lost the benefit of the bargain as presented.”
As a result, the complaint alleged, the TCO respondents “converted [appellants’] personal
property, including money.” The district court rejected appellants’ claim, reasoning that a
conversion claim could not rest on an allege d overpayment and money in an intangible
form. Because the district court correctly determined that appellants’ theory of conversion
is not supported by Minnesota law, their conversion claim fails.
5
Conversion is “an act of willful interfere nce with personal property, done without
lawful justification by which any person entitled thereto is deprived of use and possession.”
DLH, Inc. v. Russ , 566 N.W.2d 60, 71 (M inn. 1997) (quotation omitted). Common-law

5 The complaint also alleged that a conversion claim was supported based on the taking of
the MRI system from the propert y. As explained above, the complaint alleged that the
subtenants—who are not defendants in this case—were the ones who removed the MRI
system. And appellants have pursued separate litigation against the tenants regarding the
taking of the MRI system. Thus, the complaint fails to state a claim for conversion based
on the MRI system against any of the TCO respondents.

26

conversion has two elements: (1) the plain tiff holds a property interest, and (2) the
defendant deprives the plaintiff of that property interest. Williamson v. Prasciunas, 661
N.W.2d 645, 649 (Minn. App. 2003). We agre e with the district court that appellants’
conversion claim based on an alleged overpayme nt fails, because it is inconsistent with
both Minnesota caselaw and black-letter tort law.
We recognize that Minnesota courts have never conclusively held that conversion
of money is not a recognizable claim. But at least two published cases from this court have
favored that position, without deciding the issue. In Halla v. Norwest Bank Minnesota,
N.A., this court noted that courts from other juri sdictions have recognized that “[b]ecause
cash is liquid and designe d to be transferred, it is a subj ect of conversion only when it is
capable of being identified, and described as a specific chattel.” 601 N.W.2d 449, 453
(Minn. App. 1999) (quotation omitted), rev. denied (Minn. Dec. 14, 1999). For this reason,
this court commented that cash deposited at a bank generally would not support an action
for conversion. Id. Similarly, in TCI Business Capital, Inc. v. Five Star American Die
Casting, LLC, this court addressed a claim for conve rsion of money via a wire transfer.
890 N.W.2d 423, 428 (Minn. App. 2017). This court commented that the appellant’s claim
“rest[ed] on the premise that money in an intangible form is property”—a premise that was
“without precedent in Minnesota law.” Id. This court interpreted Halla as standing for the
proposition that “a conversion claim is viable w ith respect to money only if the money is
in a tangible form (such as a particular roll of coins or a particular stack of bills) and is kept
separate from other money.” Id. at 429. While this court in both cases ultimately affirmed
on other grounds, see TCI Business Capital, 890 N.W.2d at 435; Halla, 601 N.W.2d at 453,

27

the cases reflect Minnesota courts’ recognition that loss of money in an intangible form
generally does not support a conversion claim.
Appellants, nonetheless, cite two unp ublished cases from this court for the
proposition that conversion of money is a recognizable claim in Minnesota. In Tuaolo v.
Want Some Weather, Inc. , this court determined that a viable conversion claim could be
based on fraudulent inducement of an invest ment. No. A07-2139, 2008 WL 5136614, at
*4 (Minn. App. Dec. 9, 2008). And in Neff v. Americana Community Bank , this court
reversed a grant of summary judgment on a claim of conversion based on money deposited
by wire transfer. No. 07-0878, 2008 WL 933505, at *1 (Minn. App. Apr. 8, 2008). Those
cases are unpublished and therefore not binding on this court. See Skyline Vill. Park Ass’n
v. Skyline Vill. L.P. , 786 N.W.2d 304, 309-10 (Minn. App. 2010) (recognizing that
unpublished opinions from this court “are of persuasive value at best and not precedential”
(quotation omitted)). Moreover, neither case involves facts similar to those here, in which
the conversion claim is based on an unde fined overpayment pursuant to a purchase
agreement. We decline to rely on these authorities to support a conversion claim based on
the facts here.
We also note that general tort law supp orts the position that a conversion claim
cannot be based on money. A conversion action typically lies for personal chattels that are
“of a tangible nature.” 90 C.J.S. Trover and Conversion § 9 (2021). “[T]he general rule
is that money is an intangible and therefore not subject to a claim for conversion.” 90
C.J.S. Trover and Conversion § 16 (2021). An exception applies when the money “is
specific and capable of identification” or “whe re a party shows ownership or the right to

28

possess specific, identifiable money.” Id. Here, the alleged converted property was money
that appellants paid respondents pursuant to the purchase agreement. The money paid is
intangible. While the payment itself coul d arguably be specific and identifiable,
appellants’ conversion claim is based on an alleged overpayment. In other words,
appellants seek to recover an undefined amount of money from their original payment.
This is not the type of prope rty that courts have recogni zed may form the basis for a
conversion claim.
In sum, neither Minnesota caselaw nor basic principles of tort law support
appellants’ theory of conver sion based on the alleged ove rpayment under the purchase
agreement. Thus, the district court properly dismissed appellants’ conversion claim.
VII. The complaint fails to state a claim for unjust enrichment against the TCO
respondents.
The complaint brought a claim for unjust en richment, based on appellants’ alleged
overpayment for the property due to respon dents’ misrepresentations. The complaint
alleged that, as a result of the transacti on for the property, respondents “wrongfully
received and retained” benefits through their dealings with appellan ts, and retention of
those benefits was “wrongful, illegal, and unjust.” We agree with the district court that the
allegations do not support a claim for unjust enrichment.
An unjust-enrichment claim requires a pa rty to “show that the defendant has
knowingly received or obtained something of value for which the defendant in equity and
good conscience should pay.” City of Maple Grove v. Mark etline Constr. Capital, LLC ,
802 N.W.2d 809, 817 (Minn. App. 2011) (quotation omitted). “Unjust enrichment claims

29

do not lie simply because one pa rty benefits from the efforts or obligations of others, but
instead it must be shown that a party was unj ustly enriched in the sense that the term
‘unjustly’ could mean illegally or unlawfully.” Id. at 817-18 (quotation omitted). And an
unjust-enrichment claim fails when there is a valid contract between the parties. Colangelo
v. Norwest Mortg., Inc., 598 N.W.2d 14, 19 (Minn. App. 1999), rev. denied (Minn. Oct. 21,
1999).
Here, the parties’ rights are governed by contract, including the purchase agreement.
Appellants argue that the purchase agreement and related contracts are subject to rescission
because of respondents’ alleged fraud, and th at the unjust enrich ment claim therefore
“should be reinstated in the event the contract s are rescinded.” But “[w]hen a contract is
rescinded, the parties must be placed in a position as if the cont ract never existed,”
including refund of all amount s paid under the contract. Park-Lake Car Wash, Inc. v.
Springer, 394 N.W.2d 505, 519 (Minn. App. 1986). If appellants prevail on their fraud
claims, the proper remedy would be to rescind the contracts and order respondents to refund
the amounts paid under the contracts. Ap pellants cannot obtain re lief under a claim of
unjust enrichment.
VIII. The complaint pleads sufficient facts to support a claim of tortious interference
with contract against the TCO respondents, based on their alleged interference
with appellants’ contracts with their vendors.
The complaint brought a claim for tortio us interference with contract. The
complaint alleged that the TCO respondents intentionally procured breaches of appellants’
contracts with NOSP, the three commercial tenants on the property, and appellants’ third-

30

party vendors. We agree with appellants that the allegations are sufficient to state a claim
for tortious interference with contract with respect to appellants’ vendors.6
A party must show five elements to prevail on a claim of tortious interference with
contract: “(1) the existence of a contract; (2) the alleged wrongdoer ’s knowledge of the
contract; (3) intentional procurement of it s breach; (4) without justification; and
(5) damages.” Sysdyne Corp. v. Rousslang , 860 N.W.2d 347, 351 (Minn. 2015). The
complaint alleges these facts about the TCO respondents’ actions towards appellants’
vendors. Appellants had valid and existing c ontracts with various vendors. The TCO
respondents “provid[ed] unauthorized direc tion” to the vendors, “plac[ed] unauthorized
orders for products and services,” “direct[ed] vendors to send invoices directly to the TCO
[respondents],” and disparaged appellants to some of the vendors. The TCO respondents’
actions adversely affected appellants’ rela tionships with those vendors and caused the
vendors to breach the contracts. Accepting these allegations as true, it is possible, on any
evidence which might be produced, to grant th e relief demanded on the claim of tortious
interference with contract. See Abel, 947 N.W.2d at 68.

6 We conclude that the complaint does not su pport a claim for tortious interference with
appellants’ contracts with NOSP and the tenants. Appellants’ claim in this regard is based
on the theory that the TCO respondents interfered with the leases by constructing the Blaine
building and influencing the tenants to leav e the property before the expiration of the
leases. But the parties agree, and appella nts acknowledged at oral argument, that no
provision in the leases prohibited the te nants from leaving the property before the
expiration of the lease term. As such, the TCO respondents could not have interfered with
the leases even if they did cause the tenants to abandon th e property, as the complaint
alleges.

31

The TCO respondents contend that the allegations are insufficient because they do
not provide enough specificity about the vendor s or the contracts. But “Minnesota is a
notice-pleading state and does not require abso lute specificity in pleading, but rather
requires only information sufficient to fairly notify the opposing party of the claim against
it.” DeRosa v. McKenzie, 936 N.W.2d 342, 346 (Minn. 2019) (quotation omitted). We are
satisfied that the complaint provides sufficient allegations about the TCO respondents’
actions to put them on notice of the claim agai nst them. At this stage of the proceedings,
the allegations of tortious interference with contract are sufficient to survive a rule 12.02(e)
motion to dismiss.
IX. The complaint pleads sufficient facts to support a claim of tortious interference
with prospective business advantage against the TCO respondents.
The complaint alleged that the TCO re spondents interfered with appellants’
reasonable expectation of economic or busin ess advantage by causing the tenants not to
continue their prospective relations with appellants. We conclude that the allegations are
sufficient to support a claim based on this theory.
A claim for tortious interference with pr ospective business advantage “protects an
interest in the reasonable expectation of economic advantage.” Gieseke ex rel. Diversified
Water Diversion, Inc. v. IDCA, Inc. , 844 N.W.2d 210, 218 (Min n. 2014). A party must
show five elements to prevail on this claim: (1) the plaintiff had a reasonable expectation
of economic advantage; (2) the defendant knew about that expectation of economic
advantage; (3) the defendant intentionally interfered with the plaintiff’s reasonable
expectation of economic advant age, and that interference is independently tortious or

32

violates the law; (4) but for the defendant’s wrongful act, “it is reasonably probable that
[the] plaintiff would have realized his economic advantage or benefit”; and (5) the plaintiff
suffered damages. Id. at 219.
The complaint alleged these facts about the TCO respondents’ actions with respect
to the tenants abandoning the property. The TCO responden ts built the Blaine building
and directed the tenants, including MOSC, to discontinue their occupancy of the property
and relocate to the Blaine bu ilding. MOSC abandoned the pr emises and left it in poor
condition. Appellants had expected the property to be profitable because of the prospect
of having long-term tenants that would genera te significant revenue. As a result of the
tenants moving, the value of the property diminished, and appellants suffered substantial
damages. These allegations, if true, show that the TCO respo ndents interfered with
appellants’ expected business advantage in the property by influencing the tenants to
abandon the property. Even if MOSC’s abandonment of the lease did not constitute a
breach of the lease, there need not be a breach of contract to show to rtious interference
with prospective business advantage. Th e allegations are suffi cient to survive a
rule 12.02(e) motion on this claim.
X. The complaint states a claim for conspi racy and aiding and abetting against
the TCO respondents to th e extent they are consistent with the other
sufficiently pleaded claims.
Finally, the complaint brought two claims based on the TCO respondents’ combined
efforts: conspiracy and aiding and abetting. The district court dismissed these claims
because it determined that ther e were no underlying torts to support the claims. Because

33

we reverse the district court’s dismissal of several of the underlying torts, we likewise
reverse the district court’s dismissal of the claims of conspiracy and aiding and abetting.
A claim for civil conspiracy must be based on an underlying tort. D.A.B. v. Brown,
570 N.W.2d 168, 172 (Minn. App. 1997) (citing Harding v. Ohio Cas. Ins. Co., 41 N.W.2d
818, 824 (Minn. 1950)). “A conspiracy is a combination of persons to accomplish an
unlawful purpose or a lawful purpose by unlawful means.” Harding, 41 N.W.2d at 824.
Similarly, parties who aid and abet the commi ssion of a tort may be liable for the injury
caused. Witzman v. Lehrman, Lehrman & Flom , 601 N.W.2d 179, 185-86 (Minn. 1999).
A claim for aiding and abetting the tortious conduct of another has three elements: (1) the
primary tortfeasor committed a tort that results in injury to the plaintiff; (2) the defendant
knew that the primary tortfeasor’s conduct wa s a breach of duty; and (3) the defendant
substantially assisted or encouraged the primary tortfeasor to commit a breach. Id. at 187.
The complaint alleges numerous ways in which the various respondents worked
together to make fraudulent representations to appellants, induce appellants to buy the
property based on the fraud, and interfere w ith appellants’ contracts and prospective
business advantage. According to the co mplaint, these unlawful actions were not
committed by one respondent al one, but rather by many acting in cooperation. We
conclude that the conspiracy and aiding and abetting claims are sufficiently pleaded, to the
extent they are supported by the underlying claims that we have deemed sufficiently
pleaded.

34

Conclusion
In sum, we affirm the dismissal of all claims against the Gaughan respondents. We
reverse and remand on the claims of fraud and fraudulent inducement against the TCO
respondents. We likewise reverse and remand on the claims of tortious interference with
contract, tortious interference with prospective business advantage, conspiracy, and aiding
and abetting. We affirm on all remaining claims. We remand to the district court for
further proceedings consistent with this opinion.
Affirmed in part, reversed in part, and remanded.

C/D-1

CONNOLLY, Judge (concurring in part, dissenting in part)
I fully concur with the majo rity’s affirmance of the dism issal of all claims against
the Gaughan respondents and of six of the twelve claims against the TCO respondents:
failure to disclose, declaratory judgment, breach of contract, breach of the covenant of good
faith and fair dealing, conversion, and unjust enrichment. But I respectfully dissent from
the majority’s decision to reverse and remand the dismissal of the other six claims against
those respondents: fraud, fraudulent inducement to contract, tortious interference with
contract, tortious interference with prospective business advantage, conspiracy, and aiding
and abetting. In my view, the pleadings of these claims also fail to set forth a legally
sufficient claim for relief and therefore were properly dismissed under Minnesota Rules of
Civil Procedure 12.02(e) and 12.03, and the district court’s opinion should be affirmed in
its entirety.
“A claim is legally sufficient if it is possible on any evidence which might be
produced, consistent with the pleader’s th eory, to grant the relief demanded.” Abel v.
Abbott Nw. Hosp., 947 N.W.2d 58, 68 (Minn. 2020) (quotation omitted).
A pleading is sufficiently detailed when it gives fair
notice to the adverse party of the incident giving rise to the suit
with sufficient clarity to disc lose the pleader’s theory upon
which his claim for relief is based. Under our law, the pleading
of broad general statements that may be conclusory is
permitted. No longer is a pleade r required to allege facts and
every element of a cause of action.

Halva v. Minn. State Colls. and Univs. , 953 N.W.2d 496, 503 (M inn. 2021) (quotations
and citations omitted). In our de novo review of the grant of a motion to dismiss, “we

C/D-2

consider only the facts alleged in the complaint, accepting those facts as true.” Sipe v. STS
Mfg., Inc., 834 N.W.2d 683, 686 (Minn. 2013) (quotation omitted).
1. Fraud and Fraudulent Inducement
Our case law establishes a high threshold of proof for . . . a
[fraud] claim. It must be pled with specificity that there was a
false representation regarding a pa st or present fact, the fact
was material and susceptible of knowledge, the representer
knew it was false or asserted it as his or her own knowledge
without knowing whether it was true or false, the representer
intended to induce the claimant to act or justify the claimant in
acting, the claimant was induced to act or justified in acting in
reliance on the representation, the claimant suffered damages,
and the representation was the proximate cause of the damages.

Where a representation regarding a future event is
alleged, as here, an additional element of proof is that the party
making the representation had no intention of performing when
the promise was made . . . .

Martens v. Minn. Mining & Mfg. Co. , 616 N.W.2d 732, 747 (Minn. 2000) (citations
omitted); see also Valspar Refinish, Inc. v. Gaylord’s, Inc. , 764 N.W.2d 359, 368 (Minn.
2009) (setting out the same criteria for fraudulent inducement).
The district court noted that appellants alleged various respondents said at a presale
meeting that “their . . . pr actices had no intention of movi ng and intended to fulfill their
lease terms”; they “made positive statements regarding the . . . [b]uilding stating they were
not planning to leave and were staying”; one of them was “i nterested in” the prospect of
Care Suites on adjacent property; and “the TCO tenants [paid] all [the] operating costs.”
The district court commented that “[t]hese statements amount to nothing more than puffery
and/or opinions” and they “consist of general statements regarding prospective future plans
and do not rise to the level of fraud.” The majority agrees that respondents’ statements that

C/D-3

they were satisfied with thei r location and their expressions of positive factors about the
building were “vague, subjective opinions” that “do not form the basis for a fraud claim,”
but also states that the “representations that [respondents/tenants] intended to fulfill the
lease terms and did not intend to leave the property” were “statements of fact about [their]
intentions toward the property” and “amounted to false representations of material facts.”
I disagree.
Moreover, respondents’ intentions toward the property were expressed in the
purchase agreement, which said it “alone fully and completely expressed [the parties’]
agreement,” so appellant’s reliance on oral comments made at a meeting is not justifiable.
And as the district court noted, under the leases “[t]there were no guarantees that the tenants
would remain in the property. In fact the lease terms were set . . . . Both parties have the
right to not renew the tenancy at the end of the lease term.” Thus, appellants’ alleged
reliance on a party’s representation that it w ould remain contradicted the leases and was
unjustifiable as a matter of law. “[R]eliance on an oral representation [is] unjustifiable as
a matter of law . . . if the written contract . . . explicitly state[s] a fact completely
contradictory to the claimed misrepresentation.” Johnson Bldg. Co. v. River Bluff Dev.
Co., 374 N.W.2d 187, 194 (Minn. App. 1985), rev. denied (Minn. Nov. 18, 1985). Here,
the leases explicitly stated that the parties had the right to not renew their leases, a complete
contradiction of their alleged oral representation that they would renew the leases. On that
basis, I would distinguish Great Plains Educ. Found., Inc. v. Student Loan Fin. Corp., 954
N.W.2d 844, 850 (Minn. App. 2020) (concluding that fraud claims were not precluded by
a settlement agreement because one party’s “alleged misrepresentations and omissions”

C/D-4

did not completely contradict the terms of that agreement), rev. denied (Minn. Mar. 30,
2021).
Also, because justifiable reliance is one el ement of a fraud clai m, appellants were
obligated to allege facts supporting their justifiable reliance. See Minn. R. Civ. P. 9.02;
Ambassador Press, Inc. v. Durst Image Tech. U.S., LLC, 949 F.3d 417, 424 (8th Cir. 2020)
(holding that a plaintiff in a claim of fraud “cannot assert, with only conclusory allegations,
that it reasonably relied on the alleged misrepresentations”).
Minnesota courts . . . explain that reliance in fraud cases is
generally evaluated in the cont ext of the aggrieved party’s
intelligence, experience, and op portunity to investigate the
facts at issue. Valspar[, 764 N.W.2d at 369]. When a party
conducts an independent factual investigation before it enters
into a commercial transaction, that party cannot later claim that
it reasonably relied on the alleged misrepresentation. Id.

Id. at 423-24 (quotations and citations omitted). Because the alleged oral
misrepresentations contradicted the terms of the parties’ leases, appellants’ alleged reliance
on those misrepresentations was not justifiable, and they could not allege facts supporting
that element of the fraud and fraudulent-inducement claims.
I agree with the district court that neith er appellants’ fraud claim nor its claim of
fraudulent inducement sets forth a legally sufficient basis for relief.
2. Tortious Interference with Contracts
A claim of tortious interference with contra ct requires that: (1) there is a contract;
that the party whose interference is alleged (2) knows of the contract, (3) intentionally
procures its breach, (4) has no justification fo r procuring its breach; and (5) that there are
damages. Sysdyne Corp. v. Rousslang, 860 N.W.2d 347, 351 (Minn. 2015). Appellants’

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complaint alleges that respondents intentionally procured breaches of appellants’ contracts
with NOSP, the commercial tenants, and third-party vendors. The district court addressed
only the contracts with the tenants, found that appellants “do not address [Sysdyne] factors
#3 through #5,” and dismissed the claim.
The majority states that appellants’ allega tions in the complain t “are sufficient to
state a claim for tortious interference with respect to appellants’ vendors” but in a footnote
concludes that “the complaint does not sup port a claim for tortious interference with
appellants’ contracts with NOSP and the tenants.” I dissent from the reversal of the district
court’s decision to dismiss this claim as it relates to the vendors.
Appellants allege in their complaint that “[v]alid and existing contracts exist [sic]
between [appellants] and various third parties that provide services to [appellants] for the
benefit of the Property.” The complaint also asserts that:
Since the Sale, [respondents] have covertly (without
[appellants’] prior knowledge or consent) engaged in discourse
with certain of [appellants’] ve ndors, which included without
limitation:
a. providing unauthorized direction to such vendors;
b. placing unauthorized orders for products and services
with such vendors (and, upon information and belief, directing
payment thereof [to] be billed to [appellants];
c. upon information and belief, directing vendors to send
invoices directly to the TCO [respondents]; and
d. disparaging [appellants] to certain of [appellants’]
vendors.
Such actions have impede d and adversely affected
[appellants’] relationships with such vendors, up to and
including breaches of such vendor contracts.

Appellants provide no specifics as to which vendors had contracts, how many
contracts were interfered with, what interfere nce occurred with each contract, and what

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damage resulted from the interference. “Courts are always able to dismiss pleadings
consisting solely of vague or conclusory allegations, who lly unsupported by fact.” In re
Milk Indirect Purchase Antitrust Litig. , 558 N.W.2d 772, 775 (M inn. App. 1999). The
dismissal of the tortious inte rference with contracts claim as it relates to the vendors was
such a dismissal.
3. Tortious Interference with Prospective Business Advantage
The complaint states that the TCO respondents “int entionally interfered with
[appellants’] reasonable expectation of econo mic or business adva ntage by inducing or
otherwise causing NSOP, the TCO Fridley Building tenants, and/or vendors and/or service
providers to [appellants], to e ither not enter into or contin ue prospective relations with
[appellants] and/or by preventing continuance of the prospective relation(s).”
A claim for tortious interference with prospective business advantage requires:
(1) the existence of a reasonable expectatio n of economic advantage; (2) a defendant’s
knowledge of that expectation of economic advantage; (3) that the defendant intentionally
interfered with the plaintiff’s reasonable expectation, and th e intentional interference is
“either independently tortious or in violation of a state or federal statute or regulation”;
(4) that, absent the wrongful act of the defendant, it is reasonably probable that the plaintiff
would have realized his economic advantage or benefit, and (5) that the plaintiff sustained
damages. Gieseke ex rel. Diversified Water Diversion, Inc. v. IDCA, Inc ., 844 N.W.2d
210, 219 (Minn. 2014).

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The district court dismissed the claim, stating that
[appellants] allege that [respondents] TCO have
intentionally interfered with [appellants’] reasonable
expectation of economic or business advantage by inducing or
otherwise causing the TCO Fridle y building tenants to either
not enter into or continue wi th prospective relations with
[appellants]. [Appellants] fail to allege any further facts and
instead seem to rely on speculation that the tenants will either
breach their lease contracts or not renew their lease. . . . [T]he
facts as alleged do not demons trate that [respondents] TCO
have committed a wrongful act [or] interfered with contractual
relationships or that [appellants] suffered pecuniary harm.”

The reasoning in support of my view that the fraud and fraud in inducement claims were
properly dismissed also supports the view th at appellants’ allegations do not meet the
“wrongful act” requirement of tortious interference with prospective business advantage.
The majority states that the allegations that “the TCO respondents interfered with
appellants’ reasonable expectation of econom ic or business advantage by causing the
tenants not to continue their prospective rela tions with appellants” were “sufficient to
support” the tortious-interference-with-prosp ective-business-advantage claim. But, as
respondents point out, the claim against th e TCO respondents fails because “TCO cannot
interfere with its own business relationships nor can its agents be liable for alleged
interference undertaken in the scope of their duties.”
Moreover, the relationship between th e TCO respondents and appellants was
governed by the purchase agreement and the leases, as set out above. Once the fraud and
fraudulent-inducement claims relative to those documents were dismissed, this claim also
would necessarily be dismissed.

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4. Aiding and Abetting and Conspiracy
Claims of civil conspiracy and aiding an d abetting are not independently actionable;
they require an underlying tort because they are assertions of vicarious liability for the
underlying tort. Leiendecker v. Asian Women United , 848 N.W.2d 224, 228 n.2 (Minn.
2014). The majority states th at, “[b]ecause we reverse the district court’s dismissal of
several of the underlying torts, we likewise re verse the district court’s dismissal of the
claims of conspiracy and aidi ng and abetting.” Analogously , because I would affirm the
dismissal of the underlying torts, I would al so affirm the dismissal of the aiding and
abetting and the conspiracy claims.
In conclusion, I would affirm the decision by the district court to dismiss all of these
claims. At the end of the day, appellants were sophisticated business entities who were
represented by counsel. They entered into a purchase agreement with the TCO respondents
in an arm’s length commercial tr ansaction. To address the co ncerns they now face, they
could have negotiated an exclus ive geographical restriction in the purchase agreement to
prevent the TCO respondents from erecting an office building that now competes with their
office building. They did not. It is not the role of the courts to rescue parties from business
decisions they now regret making. See Janssen v. Best & Flanagan, 662 N.W.2d 876, 882
(Minn. 2003) (“[C]ourts are ill-equipped to judge the wisdom of business ventures.”).