Lynn Peterson, 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This opinion is nonprecedential except as provided by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
A22-0398

Lynn Peterson,
Appellant,

vs.

Clark Lake Homes, Inc., et al.,
Respondents,

Shelley Peterson,
Respondent.

Filed November 14, 2022
Affirmed
Frisch, Judge

Crow Wing County District Court
File No. 18-CV-21-2771

Mark K. Thompson, MKT Law, PLC, Minneapolis, Minnesota (for appellant Lynn
Peterson)

Stephen E. Schemenauer, Aalok K. Sharma, Kathryn M. Bjorklund, Stinson LLP,
Minneapolis, Minnesota (for respondents Clark Lake Homes, Inc., et al.)

Erik T. Salveson, Brandie Morgenroth, Maria Brekke, Nilan Johnson Lewis PA,
Minneapolis, Minnesota (for respondent Shelley Peterson)

Considered and decided by Frisch, Presiding Judge; Segal , Chief Judge; and
Connolly, Judge.

2
NONPRECEDENTIAL OPINION
FRISCH, Judge
Appellant argues that the district court erred by dismissing his complaint for failure
to state a claim upon which relief can be granted because a mutual release clause in the
parties’ agreement does not bar his claims or, alternatively, is invalid because of duress or
fraud. Because appellant released his claims against respondents and the complaint does
not state a defense for duress or fraud, we affirm.
FACTS
In reviewing a motion to dismiss for failure to state a claim under Minn. R. Civ.
P. 12.02(e), we accept the facts as alleged in the complaint as true. Walsh v. U.S. Bank,
N.A., 851 N.W.2d 598, 606 (Minn. 2014). The complaint contains the following factual
allegations.
In 1995, appellant Lynn Peterson (Lynn)1 incorporated respondent Clark Lake
Homes Inc. (CLH), a business providing long -term care for disabled individuals. At that
time, Lynn owned approximately 51% of CLH’s shares, and his wife, respondent Shelley
Peterson (Shelley), owned 49% of CLH’s shares. Lynn was the chief executive officer
(CEO) of CLH. Lynn and Shelley were also the member-managers of various real-estate-
holding entities (the LLCs) that held CLH’s office, housing facilities, and cabin, as well as
vacant lots next to those properties. By 2020, Lynn had grown CLH into a multi-million-

1 The parties to this appeal share a last name. For clarity, we refer to the parties using their
first names.
3
dollar business that operated 11 different long-term care facilities and served 45 disabled
individuals.
In 2000, Shelley began handling CLH’s finances. In 2008, Lynn and Shelley’s sons,
respondents Adam Peterson (Adam) and Jared Peterson (Jared) began working full-time at
CLH. Adam and Jared assumed increasing responsibility for many aspects of CLH’s
business, including assisting Lynn as requested. In 2017, CLH began operating at its most
profitable rate. Lynn had planned to retire and pass CLH to Adam and Jared around this
time.
In February 2020, Shelley filed a petition to divorce Lynn.
In March 2020, respondent JJ&A Property Management, LLC (JJ&A) was formed.
Adam and Jared are members and managers of JJ&A. Over time, Lynn and Shelley gifted
to Adam and Jared ownership shares in CLH. As of March 2020, Lynn owned
approximately 33.5% of CLH’s shares, Shelley owned approximately 16.5%, and Adam
and Jared owned approximately 20% each.
Buyout
In late February or early March 2020, Adam and Jared told Lynn that they planned
either to buy or vote him out of CLH. On March 31, Lynn attended a meeting of all of the
CLH shareholders, with the CLH accountant attending by phone. During this meeting,
Lynn was informed of buyout terms. On April 16, Lynn was presented with documents
consummating the buyout, which he understood were to be promptly signed. Shelley,
Adam, and Jared required that the buyout close quickly and chose the closing date. The
valuation methodology for the buyout was not explained to Lynn, and the process lacked
4
corporate-governance formalities. Lynn did not have an opportunity to consult with an
attorney, fully read the documents, or negotiate the terms.
Lynn nevertheless executed the documents, entitled Business Interest Purchase
Agreement (BIPA) and Real Estate Purchase Agreement (REPA). The BIPA contained a
mutual release clause:
As of the Closing Date, each party mutually discharges and
releases the other party from any and all claims and demands
whatsoever which that party had or has up to and after the date
of this Agreement against the other party for or by reason of,
or in respect to, the conduct of the business of the Corporation
or LP’s or SP’s ownership of the shares, and each discharges
the other party from any and all obligations with respect thereto
except for the obligations created under this Agreement.

Shelley signed the BIPA and REPA at the same time as Lynn.
In addition to the compensation set forth in the BIPA and the REPA, Lynn assumed
a consulting and maintenance role in CLH after the buyout. Lynn received payment for
those services until June 2020 when the role was terminated.
Lynn’s Post-Buyout Investigation
While Lynn was CEO of CLH, he rarely reviewed bank statements for CLH or the
LLCs. He trusted and relied on Shelley, Adam, and Jared to handle this aspect of the
business.
After the buyout, Lynn and Shelley continued to engage in proceedings related to
their divorce. In April 2021, Lynn and Shelley attended a second divorce mediation. At
that mediation, Shelley declined to disclose bank-account statements, which Lynn believed
could reveal actionable conduct by Adam and Jared. Shelley later responded to Lynn’s
5
request for bank-account information by stating that “Adam Peterson and Jared Peterson
will not release their bank statements. I have not transferred any funds into either Adam’s
or Jared’s account; nor have I requested that either Adam or Jared transfer funds from joint
marital accounts into their individual accounts.”
After the mediation, Lynn began reviewing statements for business, marital, and
personal accounts. By the time Lynn initiated the underlying action, he had reviewed
statements from approximately 15 different bank accounts dating back to 2014, and he was
continuing his investigation. During this investigation, Lynn learned that accounts he
believed were closed remained open.
Lynn served a complaint against Adam, Jared, Shelley, JJ&A, and CLH alleging
nine counts: breach of fiduciary duty, conversion, fraud, violation of Minn. Stat.
§ 302A.251 (2020), violation of Minn. Stat. § 302A.361 (2020), civil theft under Minn.
Stat. § 604.14 (2020), unjust enrichment, civil conspiracy, and declaratory relief.
Respondents moved to dismiss the complaint for failure to state a claim on which relief
can be granted, primarily arguing that the mutual release clause in the BIPA barred all of
Lynn’s claims. The district court agreed and dismissed the complaint.
This appeal follows.
DECISION
Lynn argues that the district court erred by dismissing his complaint for failure to
state a claim because the BIPA (1) does not apply to his claims, (2) was invalidated by
duress, and (3) was either induced or invalidated by fraud. We address each argument in
turn.
6
“We review de novo whether a complaint sets forth a legally sufficient claim for
relief. We accept the facts alleged in the complaint as true and construe all reasonable
inferences in favor of the nonmoving party.” Walsh, 851 N.W.2d at 606 (citation omitted).
However, we are not bound by legal conclusions set forth in a complaint. Graphic
Commc’ns Local 1B Health & Welfare Fund “A” v. CVS Caremark Corp., 850 N.W.2d
682, 692 (Minn. 2014). We may also consider documents referenced in the complaint.
N. States Power Co. v. Minn. Metro. Council, 684 N.W.2d 485, 490-91 (Minn. 2004). “A
claim is sufficient against a motion to dismiss for failure to state a claim if it is possible on
any evidence which might be produced, consistent with the pleader ’s theory, to grant the
relief demanded.” Walsh, 851 N.W.2d at 603.
I. The district court did not err by concluding that the release clause in the BIPA
bars Lynn’s claims.

Lynn argues that the district court erred by concluding that the BIPA release clause
was unambiguous and operated to bar his claims. He argues that his claims fall outside of
the scope of the BIPA release clause because Shelley, Adam, and Jared were not parties to
the BIPA, and the release does not apply to unknown claims. We disagree.
We begin by determining the meaning of the release clause. “Whether a contract is
ambiguous is a question of law that we review de novo. The language of a contract is
ambiguous if it is susceptible to two or more reasonable interpretations.” Dykes v. Sukup
Mfg. Co., 781 N.W.2d 578, 582 (Minn. 2010) (citation omitted). “A contract’s terms are
not ambiguous simply because the parties’ interpretations differ.” Staffing Specifix, Inc. v.
7
TempWorks Mgmt Servs., Inc., 913 N.W.2d. 687, 692 (Minn. 2018) . Thus, the question
before us is whether the mutual release clause is ambiguous.
The BIPA release clause provides that “each party . . . releases the other party from
. . . claims . . . that party had or has . . . against the other party.” This language is
unambiguous as it is susceptible to only one reasonable interpretation: the parties released
each other from claims that any party had or has against any other party. Lynn’s arguments
to the contrary are not reasonable.
Lynn first contends that the BIPA release clause does not apply to claims against
Shelley, Adam, and Jared as individuals because they were not “other parties” to the BIPA.
Lynn specifically argues that he and Shelley were considered one party for purposes of the
BIPA. Lynn did not raise this argument before the district court and therefore forfeited
this argument. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988). Even so, the language
in the BIPA provides otherwise. The introductory clause of the BIPA identifies and defines
Shelley separately from Lynn. Shelley is referenced individually as “SP” throughout the
BIPA, and certain provisions refer only to her. And Shelley and Lynn each separately
executed the BIPA. Lynn also contends that Adam and Jared were not parties to the
agreement in their individual capacities. But as with Shelley, the BIPA introductory clause
identifies Adam and Jared separately as individuals. Because Shelley, Adam, and Jared
are each separately identified as parties to the agreement, Lynn’s argument that Shelley,
Adam, and Jared are not individual parties as defined in the BIPA is contrary to the express
language of the contract and is not reasonable.
8
Lynn next argues that the plain language of the BIPA does not release unknown
claims. We disagree.
Language that clearly expresses an intent to release known and unknown claims will
be enforced—no specific language is required. Curtis v. Altria Gr p., Inc., 813 N.W.2d
891, 901-02 (Minn. 2012). The BIPA release broadly includes “any and all claims . . .
whatsoever.” Lynn cites to no language in the agreement or any applicable authority to
support his reading of the agreement that the mutual release excepts unknown claims, and
the plain language of the BIPA is not limited by its terms only to known claims .
Accordingly, Lynn’s interpretation of the BIPA is not reasonable.
Lynn argues that public policy compels the conclusion that a release of unknown
claims is unenforceable. In support of this argument, Ly nn relies on authority in the
personal-injury context, where courts have invalidated a release of claims related to
unknown personal injuries because the parties did not contemplate an unknown injury at
the time of execution of the release. But these authorities are inapposite, as they are
grounded on specifically identified policy consideration s arising in the personal-injury
context, such as the injured party’s financial position in light of their physical condition.
These policy concerns are not present in a business transaction between sophisticated
parties. Lynn describes himself in his complaint as a sophisticated party, having founded
and operated a multi- million-dollar, multi-faceted business venture. When he signed the
BIPA, Lynn had been responsible for CLH’s continued expansion through the acquisition
of existing businesses as its CEO for over 20 years. Lynn cites to no authority identifying
a public-policy concern in enforcing a mutual release clause between sophisticated parties
9
to bar unknown claims. We are unwilling to disturb the unambiguous language of a
commercial contract in this context. See Metro. Sports Facilities Comm’n v. Gen. Mills,
Inc., 470 N.W.2d 118, 125 (Minn. 1991) (reasoning that “sophisticated parties . . . are
accountable for the product of their negotiations”).
Accordingly, the district court did not err in determining that the BIPA applied to
Lynn’s claims against Shelley, Adam, and Jared, and that the release clause covered
unknown claims. The BIPA therefore bars Lynn’s action as stated in the complaint.
II. The complaint does not state a defense that the BIPA was invalidated by
duress.

Lynn argues that the district court erred by concluding that facts alleged in the
complaint did not meet the legal definition of duress. We disagree.
Duress is a defense to enforcement of a contract. Bond v. Charlson, 374 N.W.2d
423, 428 (Minn. 1985). Under Minnesota law, duress occurs “ only when agreement is
coerced by physical force or unlawful threats.” Id. A threat to enforce a legal right is
unlawful if it is made without good faith that the right is viable, or for the purpose of using
the legal process to cause oppression or unnecessary hardship. Wise v. Midtown Motors ,
42 N.W.2d 404, 407-08 (Minn. 1950).
The complaint contains no allegation that Adam and Jared made unlawful threats to
induce Lynn to sign the BIPA. The complaint instead contains allegations that Adam and
Jared told Lynn that they would use their voting power to remove him from CLH if Lynn
did not agree to a buyout. But the complaint does not contain any allegation that this threat
was unlawful. For example, the complaint does not contain any allegation that Adam and
10
Jared did not have or believe in good faith that they had a lawful right to vote Lynn out of
CLH. Because the complaint does not state a defense of duress, we see no error by the
district court in its dismissal order.
III. The complaint does not state a defense that the BIPA was invalidated by fraud.

Lynn argues that the district court erred in concluding that the BIPA was not
invalidated by fraud. At oral argument, Lynn asserted that the complaint contains fraud
allegations that fall into two categories, either of which, he claims, would invalidate the
BIPA. Lynn first asserts that Shelley, Jared, and Adam represented that Shelley was selling
her CLH shares on equal terms to Lynn, but that they hatched and concealed a plan from
Lynn whereby Jared and Adam would allow Shelley to re-purchase her shares in CLH after
the conclusion of the divorce proceeding so as to hide their financial misdeeds and
Shelley’s true assets. Separately, Lynn asserts that Shelley, Adam, and Jared stole or
withheld money from CLH, concealed bank accounts from Lynn, and engaged in other
financial misdeeds that were not disclosed at the time he signed the BIPA. We address
each circumstance in turn.
A contract is voidable if a party’s assent to the agreement was induced by a
fraudulent or material misrepresentation upon which the party was justified in relying.
Carpenter v. Vreeman, 409 N.W.2d 258, 260 -61 (Minn. App. 1987). A party claiming
fraud must plead the circumstances constituting fraud with particularity. Minn. R. Civ.
P. 9.02. Particularity requires that the party must plead the “ultimate facts.” Hardin Cnty.
Sav. Bank v. Hous. & Redevelopment Auth. of Brainerd, 821 N.W.2d 184, 191 (Minn.
2012) (quotation omitted). The “ultimate facts” requires particularized factual allegations
11
underlying each element of fraud. Id.; Minn. R. Civ. P. 9.02; see, e.g., Baker v. Best Buy
Stores, LP, 812 N.W.2d 177, 183-84 (Minn. App. 2012) (reasoning that, like Fed. R. Civ.
P. 9(b), Minn. R. Civ. P. 9.02 requires identification of the “who, what, when, where, and
how” of the fraud), rev. denied (Minn. Apr. 25, 2012).
The elements of fraud are as follows: (1) a false representation of a past or existing
material fact susceptible of knowledge; (2) made with knowledge of the falsity of the
representation or made without knowing whether it was true or false; (3) with the intention
to induce a party to act in reliance on that representation; (4) that the representation caused
such party to act in reliance on that representation; and (5) that such party suffered
pecuniary damages as a result. Valspar Refinish, Inc. v. Gaylord’s Inc., 764 N.W.2d 359,
368 (Minn. 2009). An omission or concealment of a fact may amount to fraud where
(1) the fact is material and (2) there exists an obligation to communicate the fact to the
other party. See CVS Caremark Corp., 850 N.W.2d at 695 (discussing the common- law
definition of fraud in Minnesota) . A concealed fact is material to a transaction if a party
would have relied on the concealed fact had the information been available. See U.S. Bank
N.A. v. Cold Spring Granite Co., 802 N.W.2d 363, 3 73-74 (Minn. 2011) (stating that
allegedly concealed information was immaterial where testimony revealed that the
information would not have been relied on even if it were available). For the reasons set
forth below, regardless of how Lynn characterizes the alleged fraud, as by
misrepresentation, omission, or concealment, the complaint fails to state a fraud that would
invalidate the BIPA.
12
A. Shelley’s CLH Shares

Lynn first alleges that Shelley, Adam, Jared, CLH and JJ&A affirmatively
misrepresented that Shelley was selling her CLH shares on equal terms as Lynn, and that
this representation was false because she actually retained her CLH shares or had hatched
and concealed a plan to buy back into CLH after the divorce from Lynn was finalized.
These allegations do not set forth a particularized fraud defense.
First, to the extent that Lynn alleges that Shelley did not actually sell her CLH
shares, the executed BIPA belies those allegations. Lynn does not contest that the BIPA
was executed by Shelley.
Second, the complaint contains no allegation that in executing the BIPA, Lynn
relied, reasonably or otherwise, on any representation that Shelley was selling her shares
on same or equal terms as him. Likewise, the complaint contains no allegation that Lynn
would not have executed the BIPA had he known of a plan for Shelley to buy back CLH
shares at a later date.
We observe that the complaint contains affirmative allegations that Lynn was
motivated by the financial benefit to him in executing the BIPA as opposed to the
alternative option, that Jared and Adam would vote Lynn out of CLH. Lynn specifically
alleged in the complaint that the reason that he executed the BIPA was to put himself in a
better financial position than if he were voted out of CLH, not because he thought Shelley
was selling her shares on equal terms or would never be a shareholder of CLH again. We
must accept this allegation as true. Walsh, 851 N.W.2d at 606. In light of this allegation,
13
it would not be reasonable to infer that Lynn relied on any financial implications for Shelley
in executing the BIPA.
Third, Lynn does not allege that the plan for Shelley to repurchase her CLH shares
has materialized. He only alleges the existence of a secret plan. A fraudulent plan that has
not materialized cannot result in damage. See Strouth v. Wilkison, 224 N.W.2d 511, 514
(Minn. 1974) (applying the rule that damages are limited to “actual out-of-pocket loss”).
At oral argument, Lynn conceded that because the plan has not materialized, Lynn has
suffered no damage. Accordingly, the allegations in the complaint related to any claimed
fraud involving an unmaterialized plan with no resulting damages does not state the
existence of a fraud.
B. Financial Dealings
Lynn alleges that Shelley, Adam, and Jared both concealed and affirmatively
misrepresented financial information adversely affecting the accuracy of the valuation of
Lynn’s CLH shares. Specifically, Lynn alleges that Shelley, Adam, and Jared represented
that the CLH accounting was accurate, but that they stole or withheld money from CLH,
and that certain bank accounts had been closed, but Lynn later learned that certain bank
accounts remained open. Lynn also alleges that certain bank statements were redirected to
Jared’s home address. These allegations of fraudulent representation, omission, and/or
concealment are insufficient to state a fraud defense.
First, Lynn does not allege with particularity that he relied on any representation by
Shelley, Adam, or Jared regarding the valuation of his CLH shares in executing the BIPA.
The complaint contains allegations that the CLH accountant prepared a valuation of the
14
company and that the methodology was not explained to Lynn. But the mere existence of
a valuation does not equate to Lynn’s reliance on any representation as to that valuation.
Separately, we note that the complaint contains allegations that valuation was prepared by
the accountant, not by Shelley, Adam, or Jared. A misrepresentation by a non-party does
not, in the absence of particularized allegations, amount to fraud by a party . Lynn also
alleges generally that he relied on Shelley, Adam, and Jared with respect to reviewing the
LLCs and CLH bank-account statements and the reinvestment of profits. But Lynn makes
no allegation that his reliance on bank statements, accounts, or past financial dealings of
the company relates to the BIPA. For fraud to invalidate an agreement, the fraud must
relate to that agreement. Sorenson v. Coast-to-Coast Stores (Cent. Org.), Inc., 353 N.W.2d
666, 670 (Minn. App. 1984), rev. denied (Minn. Nov. 7, 1984). The complaint therefore
fails to state a fraud defense because it lacks particular allegations that Lynn relied on a
fraudulent misrepresentation by any party in executing the BIPA.
Second, the complaint does not contain any allegation that the fact that any account
may have remained open or that bank statements were rerouted to a new address induced
Lynn to sign the BIPA or otherwise amounted to fraud of some nature. To that end, the
complaint contains no allegation that, had Lynn been aware of this information at the time
he was presented with the BIPA, he would not have executed the agreement. And, as noted
above, the allegations in the complaint demonstrate that Lynn’s sole motivation in
executing the BIPA was that he would yield a better financial outcome than the alternative
whereby Adam and Jared would vote him out of the company. Accordingly, the fraud
allegations in the complaint with respect to the financial dealings of respondents fail to
15
state a defense of fraudulent inducement because there is no allegation that Lynn relied on
any representations, material omissions, or material concealed facts when he signed the
BIPA. Thus, the fraud allegations in the complaint are not sufficiently particular to
invalidate the BIPA.
Affirmed.