A23-0268

This opinion is nonprecedential except as provided by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
A23-0248
A23-0268

Bren Road LLC,
Respondent,

vs.

Talon OP, LP, et al.,
Defendants (A23-0248),
Appellants (A23-0268),

Talon First Trust LLC,
Defendant,

and

Bren Road LLC,
Respondent,

vs.

Kris Wyrobek,
Appellant (A23-0248),

Eun Stowell, et al.,
Third-Party Defendants.

Filed February 12, 2024
Affirmed
Bjorkman, Judge

Hennepin County District Court
File No. 27-CV-19-12830

Skip Durocher, Eric A.O. Ruzicka, Mike Stinson, Ian Blodger, Dorsey & Whitney LLP,
Minneapolis, Minnesota (for respondent)

2
Daniel M. Gallatin, Gallatin Law, PLLC, Hugo, Minnesota (for appellants Talon OP, LP,
et al.)

John N. Bisanz, Jr., Benjamin J. Hamborg, Henson & Efron, P.A., Minneapolis, Minnesota
(for appellant Kristian Wyrobek)

Considered and decided by Bjorkman, Presiding Judge; Worke, Judge; and Ede,
Judge.
NONPRECEDENTIAL OPINION
BJORKMAN, Judge
These consolidated appeals are taken from judgment in favor of respondent
following a bench trial. Appellants challenge a number of the district court’s rulings and
argue that the evidence cannot sustain the judgment against them. We affirm.
FACTS
This matter stems from a business transaction in which respondent Bren Road LLC
(Bren Road) contributed real estate to appellant Talon Bren Road LLC (Talon BR) in
exchange for, in part, a limited-partnership interest in appellant Talon OP LP (Talon OP).
Years later, after Talon OP failed to respond to Bren Road’s multiple requests for books
and records, Bren Road commenced this action, ultimately asserting breach of fiduciary
duty and other claims against Talon OP, Talon BR, and numerous related entities and
individuals. During discovery, a special master ordered an adverse evidentiary inference
based on the spoliation of the Talon entities’ books and records. Based on the adverse
inference and the evidence presented during a bench trial, the district court ordered
judgment in favor of Bren Road and against Talon OP, Talon BR, and other appellants.
The following recitation of facts is stated in the light most favorable to that judgment.
3
The Talon Entities, First Tracks LLC, and Wyrobek
In 2013, appellant Matthew Kaminski (Kaminski) created Talon Real Estate
Holding Company (TREHC) through a reverse merger with a publicly traded company.
TREHC was the corporate general partner of Talon OP, which purchased real estate
through numerous subsidiaries, each of which was designed to hold a single property and
pass profits up to Talon OP. Talon BR was created as one of those subsidiaries to hold
property received from the Bren Road transaction described further below. Other Talon
entities that are appellants are: 5130 Industrial Street LLC, Talon Management Services
LLC, Talon Hotels LLC, Talon Antigua, and 350 Bud LLC.
Kaminski was the CEO of TREHC. Although they were separate legal entities,
Kaminski acknowledged that he operated the Talon entities as an “enterprise.” He saw no
distinction between the entities in day-to-day operations, characterizing them as “all one in
the same company.”
Kaminski and his family directly and indirectly owned about 90 percent of
TREHC’s stock. Kaminski’s wife, Brenda Kaminski, owned appellant First Tracks, which
held a substantial interest in TREHC. Shares were also held by trusts, including appellant
The Kaminski Trust, which was created for the benefit of the Kaminskis and their children.
We refer collectively to the Talon entities, First Tracks, Matthew Kaminski, Brenda
Kaminski, and The Kaminski Trust as the Talon appellants. We refer separately to
appellant Kris Wyrobek, a close friend of Kaminski’s who served on TREHC’s board of
directors.

4
The Bren Road Transaction
In May 2014, Bren Road, Talon OP, and Talon BR consummated the transaction
underlying this litigation (the Bren Road transaction), which involved numerous
agreements. Through a Contribution Agreement, Bren Road agreed to convey certain real
property (the Bren Road property) to Talon BR in exchange for Talon’s assumption of an
$11.5 million mortgage and grant to Bren Road of 5.2 million Talon OP limited partnership
units valued at $6.5 million. Through an NOI [Net Operating Income] Payment Agreement
between Bren Road and Talon BR, Bren Road agreed to pay deficiencies between expected
and actual operating incomes from the property for a period of three years. And through a
Pledge Agreement, Bren Road granted Talon BR a security interest in its Talon OP
partnership units to secure Bren Road’s performance of its obligations.
Talon’s Post-Transaction Operations
In the years following the Bren Road transaction, insiders became concerned that
the Talon entities were not properly tracking expenses and that Kaminski was diverting
Talon funds for personal use. In late 2016, TREHC’s chief financial officer (CFO) and
two of its directors resigned, leaving Kaminski as the sole director and interim CFO.
Wyrobek and Marc Agar were then elected to join the board. Agar learned of the financial
concerns from TREHC accounting employee Ryan Voorhies, who told Agar that Kaminski
used the company debit card for what Voorhies believed to be “very questionable business
expenses” and for personal expenses. According to Voorhies, the debit card use “sky
5
rocketed” after the former CFO left and there were “no checks and balances.” 1 Voorhies
resigned in October 2016 because he “didn’t think the longevity of the business was there
any longer” and “overall didn’t feel comfortable with some of the transactions and things
that were happening there.”
Agar developed his own concerns about Kaminski’s actions and attempted to
impose some internal controls, including limiting Kaminski’s ability to spend Talon funds
without board approval. But Agar’s efforts were thwarted by Wyrobek, who voiced
general support for internal controls while refusing to approve the specific measures Agar
proposed. During the time that Agar was on the board, the Talon entities completed
multiple financial transactions through which First Tracks was paid guarantor fees. The
first, a sale of receivables, was completed without board approval and resulted in a $75,000
guarantor fee to First Tracks. Agar and Wyrobek approved the second transaction —an
approximately $50 million refinancing transaction that included a $750,000 guarantor fee.
Agar consented based on representations that the transaction would allow the Talon entities
to pay all outstanding debts and that First Tracks was guaranteeing the entire loan. Those
representations turned out to be false : the Talon entities did not pay all outstanding
payables, and Agar learned after the loan closed that First Tracks guaranteed only
$5 million of the loan. When Kaminski proposed another refinancing transaction with a
$150,000 guarantor fee in mid-2017, Agar refused to approve it but believes that Kaminski

1 Voorhies also reported that Talon was “living receipt to receipt”; that Kaminski failed to
obtain board approval before taking on more debt; and that he was “hearing rumbling that
[Kaminski was] searching for another sale of future receipts,” a loan that Voorhies
characterized as a “very damaging kick of the can.”
6
and Wyrobek went ahead with the transaction. 2 Agar resigned from the TREHC board in
March 2019, communicating in his resignation letter that management had “a history of
refusing to provide [him] with the information necessary for performance of [his] oversight
role.”
During the same period that Agar was questioning the Talon entities’ financial
activities, TREHC stopped making required filings with the Securities and Exchange
Commission (SEC). And Agar’s concerns were echoed by TREHC’s independent public
registered accounting firm, Baker, Tilly, Virchow, Krauss LLP (Baker Tilly). In a
September 2017 letter, Baker Tilly summarized efforts to complete an audit of TREHC’s
consolidated financial statements for the year ending December 31, 2016. The letter
identified multiple deficiencies in internal controls that, in Baker Tilly’s judgment, were
material weaknesses, including TREHC’s inability to “execute a timely and accurate close
of its books and records”; failure to disclose information to its audit committee; and failure
to segregate financial reporting duties, “creat[ing] a condition which is conducive to
management override.”
3 Two months later, Baker Tilly resigned from representing

2 Because the guarantor fee involved a party related to Kaminski, the transaction required
both Agar and Wyrobek’s approval. Agar told Wyrobek he was a “firm NO” and was
“[n]ot compensating [Kaminski] and or Brenda any further.” Wyrobek responded that the
transaction could be a “win-win way forward” because it would “give the BOARD solid
ground to immediately implement the strong policies, procedures, and controls that need
to be fully put into place” and “[Kaminski] needs to feed his family.” Agar responded,
referring to the previous guarantor fee: “[H]e has already taken $750k and he can’t feed
his family? How about stop living the lifestyle of the rich and famous and pay people
back[?]”

3 Baker Tilly cited specific examples of the deficiencies, including: $25,518 in
unreimbursed, non -business-related expenses charged by Kaminski to TREHC’s credit
7
TREHC. In September 2018, the SEC took action to revoke TREHC’s public securities
registration based on its failure to make required filings. The revocation of TREHC’s
securities registration became final in November 2019.
Bren Road’s Requests for Books and Records
TREHC’s disclosure failures extended to Bren Road’s repeated requests for
TREHC’s books and records. Bren Road submitted its first such request in October 2016;
TREHC did not respond. In May 2019, Bren Road submitted another request, this time
through correspondence from its counsel to TREHC’s counsel. TREHC again failed to
respond.
This Litigation
4
In July 2019, Bren Road initiated this action, in its capacity as a limited partner of
Talon OP, alleging breach-of-fiduciary-duty and related claims against TREHC, Talon OP,
Talon BR, and Kaminski. Through subsequent pleadings, Bren Road added claims against
other entities and individuals, including Wyrobek. The Talon defendants asserted

card during 2016; judgments and notices of default against TREHC that constitute events
of default under its loan agreements and “were not identified by management through
timely monitoring”; and a $75,000 guarantor fee paid to First Tracks during 2016, for
which “there was no documentation . . . as to how the amount was determined or evaluated
for reasonableness.”

4 This is not the first lawsuit stemming from the Bren Road transaction. See Trooien v.
Talon OP, L.P., No. A19-1541, 2020 WL 2840230, at *1 (Minn. App. June 1, 2020)
(affirming judgment in favor of Bren Road owner for amounts due under consulting-
services agreement), rev. denied (Minn. Aug. 25, 2020); Talon Bren Road, LLC v. Bren
Road, LLC, No. A18- 0278, 2018 WL 3826277, at *1 (Minn. App. Aug. 13, 2018)
(affirming judgment in favor of Talon BR for unpaid deficiency payments under NOI
agreement).
8
counterclaims against Bren Road. The gist of Bren Road’s claims is that the value of its
interest in Talon OP had been eviscerated through diversion of assets by Kaminski. Bren
Road sought to pierce the corporate veil to hold all of the Talon appellants jointly and
severally liable. And Bren Road sought to hold Wyrobek liable on claims for breaches of
fiduciary duty, fraud by omission, and aiding and abetting breaches by TREHC and
Kaminski.
5 The Talon defendants sought a judicial declaration that Bren Road had no
standing to sue following Talon’s purported foreclosure of Bren Road’s partnership interest
in Talon OP under the Pledge Agreement.
The district court addressed some of the parties’ claims in a pretrial order on cross-
motions to dismiss. As relevant to this appeal, the district court denied Wyrobek’s motion
to dismiss the claims against him on the ground that they were derivative claims belonging
to Talon OP and granted Bren Road’s motion to dismiss the Talon defendants’ declaratory-
judgment claim that Bren Road was no longer a partner in Talon OP.
During discovery, a special master appointed by the district court determined that
Bren Road is entitled to an adverse inference as a sanction for spoliation of evidence. The
special master found that (1) the Talon entities’ books and financial records were
maintained by a third- party vendor; (2) the Talon entities took no steps to preserve them
when it decided not to renew its contract with the vendor in December 2019; and (3) despite
Bren Road serving discovery requests for books and records at that time, the Talon entities
made no attempt to obtain the data from the vendor until November 2020, by which time

5 Bren Road also sued other former TREHC officers and directors, but the claims against
those individuals are not at issue on appeal.
9
the data had been destroyed pursuant to the vendor’s data destruction policies. After
finding that destruction of the data prejudic ed Bren Road’s ability to prove that the
Kaminskis had diverted funds from the Talon entities, the special master granted Bren
Road’s request that the fact-finder be required to “presume that the spoliated information
was unfavorable to Talon OP, L.P.; TREHC; Talon Bren Road, LLC; and Matthew
Kaminski.”
Following the close of discovery, the parties’ remaining claims were tried to the
court over six days. Before trial, the district court issued an order stating that it would
“presume that the spoliated evidence was unfavorable to Talon OP, TREHC, Talon Bren
Road and Mr. Kaminski” and that it would not allow the Talon appellants or Wyrobek “to
introduce evidence that would have been reflected in the spoliated financial books and
records.” At trial, the district court heard testimony from Kaminski, Bren Road owner
Gerald Trooien, Voorhies, Agar, and Jeffrey Gendreau, a certified public accountant who
handled TREHC’s account with Baker Tilly.6 And the court considered numerous exhibits,
including documents related to Baker Tilly’s resignation and the SEC’s revocation of
TREHC’s securities registration, as well as emails exchanged between Voorhies, Agar,
Kaminski, Wyrobek, and others.
The district court found in favor of Bren Road on all of its remaining claims against
the Talon appellants and Wyrobek, ordering a monetary judgment as follows:
• for failure to provide partnership records (in violation of
statute and the partnership agreement), against Talon OP

6 Neither Wyrobek nor Brenda Kaminski testified at trial.
10
and TREHC, in the amount of Bren Road’s attorney fees
incurred in bringing that claim ($39,405.10);

• for breach of fiduciary duty, against TREHC and Kaminski,
in the amount of $14.5 million;

• for fraud by omission, against Talon OP, TREHC,
Kaminski, and Wyrobek, in the amount of $14.5 million;
and

• for aiding and abetting breaches of fiduciary duty, against
Wyrobek, in the amount of $14.5 million.

The district court also pierced corporate veils to hold all of the Talon appellants jointly and
severally liable.
Wyrobek (A23-0248) and the Talon appellants (A23 -0268) commenced separate
appeals, which this court consolidated.
DECISION
Although the factual and procedural history of this matter is complex, the issues
raised on appeal are discrete. TREHC and Talon OP do not deny their liability for failing
to provide partnership records to Bren Road. And no party challenges the district court’s
findings that TREHC and Kaminski breached fiduciary duties owed to Bren Road or that
TREHC, Talon OP, and Kaminski committed fraud by omission. In section I, we address
issues that Wyrobek raises regarding his liability. And in section II, we turn to issues raised
by the Talon appellants regarding the damages awarded and liability against First Tracks
and Brenda Kaminski.
I. The district court did not err by finding Wyrobek jointly and severally liable
for the damages award because he aided and abetted Kaminski’s fiduciary
breaches.

11
Wyrobek argues that the district court erred in (1) denying his motion to dismiss
Bren Road’s aiding-and-abetting claim against him as derivative, (2) finding against him
on that claim; and (3) calculating damages and imposing joint-and-several liability against
him for the entire damages award. We address each argument in turn.7
A. Any error by the district court in characterizing the aiding-and-abetting
claim as a direct claim is harmless.

Wyrobek first asserts that judgment on the aiding-and-abetting claim must be
reversed because the district court erred by denying his motion to dismiss the claim as
derivative. Like corporations, limited partnerships are entities that exist separate from their
owners and can sue in their own capacity. Minn. Stat. § 321.0105 (2022). A limited partner
seeking to assert a “direct action” against the partnership or another partner must “plead
and prove an actual or threatened injury that is not solely the result of an injury suffered or
threatened to be suffered by the limited partnership.” Minn. Stat. § 321.1001(b) (2022).
And a limited partner may only maintain a derivative action—one that is the result of an
injury suffered first by the partnership—if they (1) make a demand to the general partners
that the limited partnership pursue the action and the partnership fails to do so within a
reasonable time, or (2) such a demand would be futile. Minn. Stat. § 321.1002 (2022). “In
a derivative action, a complaint must state with particularity: (1) the date and content of
plaintiff’s demand and the general partners’ response to the demand; or (2) why demand

7 Wyrobek also argues that the district court erred by finding against him on Bren Road’s
fraud-by-omission claim. Because that claim supported the same $14.5 million damages
award, and because we reject Wyrobek’s assertions of error regarding the aiding-and-
abetting claim, we do not reach Wyrobek’s arguments regarding the fraud-by -omission
claim.
12
should be excused as futile.” Minn. Stat. § 321.1004 (2022); see also In re Medtronic, Inc.
S’holder Litig., 900 N.W.2d 401, 406 (Minn. 2017) (defining direct and derivative actions
and summarizing comparable requirements for bringing derivative claim against
corporation).
The issues of whether the allegations of a complaint state claims on which relief
may be granted and whether claims against a partnership are direct or derivative present
legal questions that we review de novo. Medtronic, 900 N.W.2d at 405. But any error by
the district court in answering these questions does not warrant reversal if it is harmless.
See Minn. R. Civ. P. 61 (requiring this court to disregard harmless error); Kallio v. Ford
Motor Co., 407 N.W.2d 92, 98 (Minn. 1987) (stating that “[a]lthough error may exist,
unless the error is prejudicial, no grounds exist for reversal”). That is the case here.
As noted above, a limited partner may maintain a derivative action if a demand to
the partnership to assert the action would have been futile. See Minn. Stat. § 321.1002. In
opposing the motion to dismiss, Bren Road argued that it pleaded facts sufficient to show
futility because (1) the wrongdoers constituted a majority of the board, (2) the Talon
appellants took the position that Bren Road was no longer a limited partner, and (3) the
Talon entities had failed to observe corporate formalities. This argument is persuasive.
We agree that Bren Road satisfied the pleading requirements for a derivative claim. And
Bren Road presented supporting evidence through motion practice and at trial, including
evidence that Kaminski and Wyrobek constituted a majority of TREHC’s board, that the
Talon entities purported to foreclose on Bren Road’s interest in Talon OP, and that Talon
OP did not respond to Bren Road’s requests for access to books and records.
13
On this record, we have no trouble concluding that the futility requirement was met.
See, e.g., Barry v. Curtin, 993 F. Supp. 2d 347, 352-53 (E.D.N.Y. 2014) (explaining that
demand by member of limited liability company would be futile because defendant—the
sole other member and the managing member—could not be expected to take action to sue
himself). Accordingly, any error by the district court in mischaracterizing the aiding-and-
abetting claim as direct is harmless and does not provide a basis for reversal. Cf. Winter v.
Farmers Educational & Coop. Union of Am., 107 N.W.2d 226, 232-34 (Minn. 1961)
(rejecting argument for reversal based on direct nature of claims where allegations of
complaint were sufficient to support futility and defendant failed to move to dismiss the
complaint).
B. The district court did not err in finding Wyrobek liable for aiding and
abetting breaches of fiduciary duty.

Wyrobek next challenges the district court’s determinations that Bren Road proved
its claim against him for aiding and abetting breaches of fiduciary duty. We review t his
argument de novo to the extent that it asserts legal error and for clear error to the extent
that it assails the evidentiary support for the district court’s findings. See Porch v. Gen.
Motors Acceptance Corp., 642 N.W.2d 473, 477 (Minn. App. 2002) (discussing standard
of review in appeal following court trial), rev. denied (Minn. June 26, 2002); see also Minn.
R. Civ. P. 52.01 (governing review of factual findings).
To prevail on its aiding-and-abetting claim, Bren Road was required to prove three
elements:
(1) the primary tort-feasor must commit a tort that causes an
injury to the plaintiff;
14
(2) the defendant must know that the primary tort-feasor’s
conduct constitutes a breach of duty; and
(3) the defendant must substantially assist or encourage the
primary tort-feasor in the achievement of the breach.

Witzman v. Lehrman, Lehrman & Flom, 601 N.W.2d 179, 187 (Minn. 1999). The
knowledge and substantial-assistance elements of an aiding-and -abetting claim are
evaluated “in tandem.” Id. at 188 (quotation omitted). “[W]here there is a minimal
showing of substantial assistance, a greater showing of scienter is required.” Id. (quotation
omitted).
Whether the requisite degree of knowledge or assistance exists
depends in part on the particular facts and circumstances in
each case. Factors such as the relationship between the
defendant and the primary tortfeasor, the nature of the primary
tortfeasor’s activity, the nature of assistance provided by the
defendant, and the defendant’s state of mind all come into play.

Id.
Wyrobek does not challenge the district court’s findings that TREHC and Kaminski
breached fiduciary duties to Bren Road. But he argues that Bren Road failed to prove that
he had actual knowledge that TREHC’s and Kaminski’s conduct breached fiduciary duties
or that he substantially assisted those breaches.
1. Knowledge Element

Wyrobek argues that Bren Road failed to prove the knowledge element because “the
trial record . . . contains no direct evidence that Wyrobek actually knew that any of
Kaminski’s conduct amounted to a breach of fiduciary duty.” But Bren Road faced no
requirement in this civil case to prove Wyrobek’s knowledge through direct, as opposed to
circumstantial, evidence. See Friend v. Gopher Co., 771 N.W.2d 33, 40 (Minn. App.
15
2009), rev. denied (Minn. Nov. 23, 2010); Ill. Farmers Ins. Co. v. Brekke Fireplace
Shoppe, Inc., 495 N.W.2d 216, 220 (Minn. App. 1993). And the district court’s factual
finding on the knowledge element is supported by Agar’s testimony that he discussed his
concerns with Wyrobek, as well as multiple emails in which Agar communicated to
Wyrobek and others his concerns about Kaminski’s conduct and the transactions he was
proposing. At one point, Agar even warned Wyrobek that he “need[ed] to get on board
with the proper oversight and [he was] complicit with the illegal behavior and [would] be
held accountable.” All of this evidence supports the inference that Wyrobek was aware of
Kaminski’s breaches of fiduciary duty.
2. Substantial-Assistance Element

Wyrobek contends that Bren Road failed to prove the substantial-assistance
element, because his conduct did not constitute “substantial assistance.” We agree with
Wyrobek that substantial assistance means more than “the mere presence of the particular
defendant at the commission of the wrong, or his failure to object to it.” Witzman , 601
N.W.2d at 189 (quotation omitted). Indeed, our supreme court has endorsed the view that
“‘substantial assistance’ means something more than the provision of routine professional
services.” Id. But we reject Wyrobek’s argument—that his inaction in relation to TREHC
and Kaminski’s conduct cannot amount to substantial assistance—for two reasons. First,
the argument fails to take into account relevant factors such as Wyrobek’s relationships
with TREHC and Kaminski and the fact-specific manner in which his failure to exercise
oversight enabled the breaches of fiduciary duty. See id. at 188 (identifying relationships
and nature of assistance as factors to consider in evaluating knowledge and substantial-
16
assistance elements). Second, the district court found that the substantial- assistance
element was met by evidence including Agar’s testimony that Kaminski and Wyrobek were
best friends of 30 -plus years and that Wyrobek voted to approve Kaminski’s misconduct
and thwarted Agar’s attempts to impose greater internal controls. And the district court
found that “these actions were deliberate on Wyrobek’s part and that Wyrobek
substantially assisted Kaminski in committing breach of fiduciary duty.” Because the
record evidence supports this factual finding, we will not disturb it.
In sum, we discern no legal error in relation to Bren Road’s aiding-and-ab etting
claim, and the evidence supports the district court’s findings in favor of Bren Road and
judgment against Wyrobek on this claim.
C. The district court did not err in awarding damages.

In the alternative to his arguments regarding liability, Wyrobek challenges the
damages award. He asserts that the district court erred because the damages award exceeds
the amount sought by Bren Road and that he should not be jointly and severally liable for
the entire award because certain fiduciary breaches pre-date his service as a director.
Wyrobek provides no legal authority to support either of these arguments. Thus, to the
extent that Wyrobek argues that the award lacks a legal basis, those arguments are forfeited.
See In re Civ. Commitment of Kropp, 895 N.W.2d 647, 653 (Minn. App. 2017) (“Minnesota
appellate courts decline to reach an issue in the absence of adequate briefing.” (citing State,
Dep’t of Labor & Indus. v. Wintz Parcel Drivers, Inc., 558 N.W.2d 480, 480 (Minn. 1997)),
rev. denied (Minn. June 20, 2017).
17
To the extent that Wyrobek asserts that the award lacks a factual basis, we disagree.
The district court determined that Bren Road’s damages were the lost value of its interest
in Talon OP, but that there was insufficient evidence—because of the spoliation of the
Talon entities’ financial records—to determine that value. The district court thus relied on
the value of the Bren Road property, reduced by the mortgage held by Bren Road at the
time it transferred the property, as a proxy for determining what the value of Bren Road’s
interest in Talon OP would have been absent the fiduciary breaches. The district court’s
calculation was consistent with general principles regarding proof of damages. See, e.g.,
Leoni v. Bemis Co., 255 N.W.2d 824, 826 (Minn. 1977) (“Once the fact of loss has been
shown, the difficulty of proving its amount will not preclude recovery so long as there is
proof of a reasonable basis upon which to approximate the amount.”). In sum, we discern
no error in the district court’s damages award.
II. The district court did not err by allowing Bren Road to pursue its claims
against the Talon appellants or abuse its discretion in holding Brenda
Kaminski personally liable.

The Talon appellants argue that the district court erred in (1) dismissing a claim
seeking a declaration that Bren Road was no longer a limited partner of Talon OP ,
(2) extending the spoliation sanction to First Tracks, and (3) piercing First Tracks’s
corporate veil to hold Brenda Kaminski personally liable.
8 We consider each of these
arguments in turn.

8 The Talon appellants echo Wyrobek’s argument that the district court erred by awarding
damages in excess of the amount sought by Bren Road. But like Wyrobek, they cite no
legal authority to support this argument, and it is therefore not properly before us. Kropp,
895 N.W.2d at 653.
18
A. The district court did not err in dismissing the Talon appellants’
counterclaim for a declaratory judgment that Bren Road was no longer
a limited partner in Talon OP.

We review the dismissal of the Talon appellants ’ declaratory-judgment
counterclaim de novo. Walsh v. U.S. Bank, N.A., 851 N.W.2d 598, 606 (Minn. 2014).
The counterclaim was based on the Talon appellants’ contention that Talon BR had
disposed of the Talon OP stock that Bren Road had pledged as collateral for its obligation
to satisfy deficiencies in net operating income from the Bren Road property. Talon BR
purported to dispose of the collateral by purchasing it and notified Bren Road of the
purchase after the fact. The Talon appellants assert that, following Talon BR’s purchase
of Bren Road’s pledged partnership interest, Bren Road was no longer a limited partner in
Talon OP and thus lacked standing to bring this action.
Under Minnesota’s Uniform Commercial Code, “a secured party that disposes of
collateral” must give notice before such disposition with three exceptions. Minn. Stat.
§ 336.9-611(b) (requiring reasonable notice of disposition), (d) (providing exceptions to
notice requirement) (2022); see also Minn. Stat. § 336.9-612 (2022) (providing that notice
in nonconsumer transactions is given within reasonable time if given ten days before
disposition). One of the exceptions excuses pre-sale notice if the collateral “is of a type
customarily sold on a recognized market.” Minn. Stat. § 336.9.611(d). It is undisputed
that the Talon appellants did not provide pre-sale notice under Minn. Stat.
§ 336.9-611(b), (d), before disposing of Bren Road’s shares. And the Talon appellants do
not deny that a lack of pre-sale notice, if required, defeats their assertion that Bren Road is
no longer a limited partner.
19
The Talon appellants argue that the exception for collateral “of a type customarily
sold on a recognized market” applies because Bren Road had the right to exchange its
Talon OP membership units for common stock in TREHC, which was publicly traded.
Minn. Stat. § 336.9-611(d). But it is undisputed that Bre n Road never made such an
exchange. And, as the district court explained: “The Talon defendants have not shown that
Talon OP, L.P. units are sold on any market whatsoever.” The Talon appellants urge us to
conclude that the district court was required to accept as true its allegation that a recognized
market existed for Bren Road’s interest. But courts are not required to accept legal
conclusions as true. Halva v. Minn. State Colleges & Univs., 953 N.W.2d 496, 501 (Minn.
2021). And the district court correctly concluded that the Talon appellants had not pleaded
facts that would support the legal conclusion that there was a market for Talon OP
membership interests. Accordingly, we reject the Talon appellants’ argument that the
district court erred by dismissing their declaratory-judgment claim.
B. Any error in the district court’s findings in relation to the scope of the
spoliation sanction is harmless.

The Talon appellants argue that the district court impermissibly extended the
spoliation sanction to First Tracks, pointing to a single reference in the district court’s order
to sanctions being awarded against “the Talon defendants,” which the district court had
defined to include First Tracks. Bren Road concedes that the district court mistakenly
referenced the sanction as being against all Talon defendants but argues that the error is
clerical and not prejudicial. We agree with Bren Road. Critically, the Talon appellants do
not explain how the district court’s mistaken reference to the scope of the spoliation
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sanction was tantamount to imposing that sanction against First Tracks. Nor do they assert
what relief should follow from the error. Accordingly, we reject the Talon appellants’
arguments on this issu e. See Minn. R. Civ. P. 61; Kallio, 407 N.W.2d at 98 (requiring
prejudicial error to justify reversal).
C. The district court did not abuse its discretion by piercing the corporate
veil of First Tracks to hold Brenda Kaminski jointly and severally liable.

Finally, the Talon appellants argue that the district court abused its discretion
because its findings on piercing First Tracks’s corporate veil are inadequate and the
evidence at trial is insufficient to support that remedy. We review the decision whether to
pierce the corporate veil for abuse of discretion. Equity Tr. Co. Custodian ex rel.
Eisenmenger IRA v. Cole, 766 N.W.2d 334, 339 (Minn. App. 2009).
“Piercing the corporate veil is an equitable remedy that may be applied in order to
avoid an injustice.” Id. In determining whether to pierce the corporate veil, Minnesota
courts consider factors including:
insufficient capitalization for purposes of corporate
undertaking, failure to observe corporate formalities,
nonpayment of dividends, insolvency of debtor corporation at
time of transaction in question, siphoning of funds by dominant
shareholder, nonfunctioning of other officers and directors,
absence of corporate records, and existence of corporation as
merely façade for individual dealings.

Victoria Elevator Co. of Minneapolis v. Meriden Grain Co., 283 N.W.2d 509, 512 (Minn.
1979). “Disregard of the corporate entity requires not only that a number of these factors
be present, but also that there be an element of injustice or fundamental unfairness.” Id.
The supreme court in Victoria Elevator explained the basis for these requirements:
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Where the above factors are present, to allow an individual to
escape liability because he does his business under a corporate
form is to allow him an advantage he does not deserve. Doing
business in a corporate form in order to limit individual
liability is not wrong; it is, in fact, one purpose for
incorporating. But where the formalities of corporate existence
are disregarded by one seeking to use it, corporate existence
cannot be allowed to shield the individual from liability for
damages incurred by those dealing with the corporation.

Id.
The district court pierced the veils of the Talon entities and First Tracks. Although
the district court made few findings specific to piercing the corporate veil of First Tracks,
it did find that “[Matthew] Kaminski, and Brenda Kaminski, as dominant shareholders,
siphoned funds from TREHC individually and through First Tracks.” The record supports
this finding. Agar testified that First Tracks had no business operations and no assets other
than its interest in TREHC. Moreover, there was evidence from which it could be inferred
that loan-guarantee payments to First Tracks were, in reality, being used by the Kaminski
family. In an email proposing the 2017 refinancing tra nsaction, Kaminski requested that,
“to sign this loan guaranty . . . and be personally liable for the entire balance of the loan, I
would request to be compensated $150,000 and 500,000 shares of stock for this
transaction.” (Emphasis added.) But Agar testified to his expectation that the 2017
guarantor fee would, like the previous fees, be paid to First Tracks, rather than Kaminski.
Voorhies and Agar explained that Kaminski faced a wage levy that caused him to avoid
receiving funds directly. Wyrobek perhaps most directly indicated the true purpose for the
guarantor fees when he stated, in an email supporting the 2017 transaction: “[Kaminski]
needs to feed his family.” Taking this evidence together, and given the equitable nature of
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the veil-piercing remedy, we conclude that the district court did not abuse its discretion by
piercing First Tracks’s corporate veil.
In sum, we discern no prejudicial error in the district court’s denial of Wyrobek’s
motion to dismiss the aiding-and-abetting claim, and the evidence is sufficient to support
the district court’s judgment in favor of Bren Road on that claim; the district court did not
err by dismissing the Talon appellants’ declaratory-judgment claim; any error by the
district court in referring to First Tracks when discussing the spoliation sanction is
harmless; and the district court did not err or abuse its discretion by piercing the corporate
veil of First Tracks to hold Brenda Kaminski jointly and severally liable. Accordingly, we
affirm the judgment in favor of Bren Road.
Affirmed.