A25-1555

This opinion is nonprecedential except as provided by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
A25-0804
A25-1555

Maple Grove NBC, LLC,
Appellant,

vs.

Cake Gals Inc.,
Respondent.

Filed March 9, 2026
Affirmed
Schmidt, Judge

Hennepin County District Court
File No. 27-CV-24-11367

Michael L. Gust, ABST Law, P.C., Fargo, North Dakota (for appellant)

Steven J. Weintraut, Siegel Brill, P.A., Minneapolis, Minnesota (for respondent)

Considered and decided by Larson, Presiding Judge; Schmidt, Judge; and Florey,
Judge.∗

∗ Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
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NONPRECEDENTIAL OPINION
SCHMIDT, Judge
Appellant Maple Grove NBC, LLC challenges the district court’s orders granting
respondent Cake Gals Inc. summary judgment and attorney fees. We affirm.
FACTS
Maple Grove and Cake Gals executed an Asset Purchase Agreement (the purchase
agreement). The purchase agreement includes the following terms:
Seller desires to sell certain tangible assets that are used in
operating the Bakery as set forth in Exhibit “A” hereto (the
“Assets”) to Buyer[.]

. . . .
2. Sale of Assets. Seller shall sell, assign and transfer to
Buyer, and Buyer shall purchase all of Seller’s right, title and
interest, legal and beneficial, in and to all of the Assets,
including, but not limited to, all of the goodwill, equipment,
furniture, and fixtures at the Bakery, including those Assets
listed in Exhibit A. Seller shall convey good and marketable
title to the Assets to Buyer. Notwithstanding the foregoing, the
following items shall be excluded and not considered Assets:
(a) cash on hand and on account as of the close of business on
the day preceding the Closing Date (defined below); and
(b) any and all personal computers and any of the Sellers
personal items located at the Bakery.

. . . .

3. Assumption of Liabilities and Delegation of Duties
Under Leases/Utilities.

. . . .

c. No Assumption of Liabilities[.] . . . Buyer shall
not be liable for: 1) any federal, state, or local taxes due
and owing from Seller to any governmental agency[.]
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. . . .

6. Representations, Warranties and Covenants of
Seller.

. . . .

f. Conduct of Business. Since June 10, 2022, and
until [July 25, 2022], Seller has not and will not have:

i) Incurred liabilities or obligations
(absolute and contingent), except for liabilities
and obligations disclosed herein, except for such
liabilities and obligations as have arisen in the
ordinary course of business of Seller[.]
. . . .

7. Representations, Warranties and Covenants of
Buyer.

. . . .

e. Access to Books and Records. Buyer has been
provided access to the books and records of the Seller
for the business, has been furnished such information as
has been required concerning the Seller and the
business, and is satisfied with regard to the foregoing
information.

Exhibit A sets forth a Schedule of Assets:
The sellers will transfer the bakery and all its assets in its
current functioning state to include:
a. All fixtures, furniture & equipment
b. All baked items (i.e. cakes in chiller and refrigerator)
c. All cake decorations, paper products and labels
d. All dry & fresh ingredients at typical operating levels (par
levels of all ingredients and 2 weeks’ worth of materials,
boxes, cake boards etc.) All kitchen & store supplies
e. All retail items for resale
f. All employment records and personnel files maintained by
Seller for the last three (3) years in the ordinary course of
business.
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g. All business records and files customarily kept in the
operation of Seller’s business, including, but not limited to,
any and all client lists.
h. To the extent that Seller maintains Facebook, Instagram, or
other social media sites, those websites/pages/accounts
shall be transferred to Buyer. At the date of Closing, Seller
shall provide all logins and passwords for any and all social
media accounts.

After closing, Maple Grove requested that Cake Gals provide past financial records,
inquired about Employee Retention Credit (ERC)
1 funds, and requested Cake Gals’ federal
tax-identification number. Cake Gals provided the requested information.
Maple Grove then applied for ERC funds by filing adjusted 2020 and 2021 federal
tax returns using Cake Gals’ name and tax-identification number. Based upon the amended
tax returns, the IRS sent Cake Gals ERC checks totaling $276,000. Maple Grove
demanded that Cake Gals transfer the funds to Maple Grove. Cake Gals refused.
Maple Grove also learned that Cake Gals had $7,597.98 of outstanding customer
store credit.2 None of the store credits arose during the time that Cake Gals had committed
to Maple Grove that it would not incur any non-ordinary business debt.
Maple Grove sued Cake Gals, alleging: (1) breach of contract for failing to turn over
the ERC funds and failing to disclose the store credits; and (2) conversion for failing to
give Maple Grove the ERC funds. Both parties moved for summary judgment. The district
court granted Cake Gals’ motion and denied Maple Grove’s motion.

1 ERCs are pandemic-era tax credits for employers that continued to pay their employees
during the COVID-19 shutdowns in 2020 and 2021.

2 Store credits arise for various reasons, including “missing items, hair found in food items,
receiving the wrong order, incorrect orders, and customer unhappiness with an order.”
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Cake Gals moved for attorney fees under a term in the purchase agreement that
provided that in the event of litigation, the prevailing party is entitled to fees and costs from
the non-prevailing party. The district court granted the motion and awarded fees.
Maple Grove appealed.
DECISION
I. The district court properly granted summary judgment to Cake Gals.

We review Maple Grove’s challenges to the summary judgment rulings de novo.
Riverview Muir Doran, LLC v. JADT Dev. Grp., LLC, 790 N.W.2d 167, 170 (Minn. 2010).
In reviewing an order granting summary judgment, we determine whether the court
properly applied the law and whether genuine issues of material fact exist that preclude
summary judgment. Id. We must view the evidence in the light most favorable to the
nonmoving party. Denelsbeck v. Wells Fargo & Co., 666 N.W.2d 339, 345 (Minn. 2003).
Maple Grove argues that the district court erred by granting summary judgment on
its breach of contract claims and its conversion claims. We address each argument in turn.
A. The district court properly granted summary judgment on Maple
Grove’s breach-of-contract claims.

Maple Grove first challenges the district court’s breach -of-contract ruling. We
review challenges to the construction of a contract de novo. Id. Our “primary goal of
contract interpretation is to determine and enforce the intent of the parties.” Motorsports
Racing Plus, Inc. v. Arctic Cat Sales, Inc., 666 N.W.2d 320, 323 (Minn. 2003).
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1. ERC Funds
Maple Grove argues that the district court erred in granting summary judgment
because Cake Gals breached the purchase agreement by failing to give the ERC funds to
Maple Grove. But the plain language of the purchase agreement states that Cake Gals
sought “to sell certain tangible assets.” The right to apply for ERC funds is not a tangible
asset that the parties contemplated in the purchase agreement.
In addition, the purchase agreement contemplated an intent that Cake Gals be
responsible for tax-related obligations before the closing date and that Maple Grove would
assume responsibility for tax obligations after closing. The right to seek ERC funds
undisputedly occurred before closing, which demonstrates that the ERC rights belonged to
Cake Gals. The district court properly ruled that Cake Gals was entitled to the ERC funds.
2. Store Credits
Maple Grove also argues that Cake Gals breached the purchase agreement by failing
to disclose the cash equivalent of the outstanding store credits. But the undisputed facts
showed that the store credits reflected “regular business practice[s]” and were incurred and
recorded before closing. Maple Grove does not contest that it had the opportunity to review
Cake Gals’ financial ledgers—which included store-credit information—before it executed
the contract. Store credits were reviewable and knowable before the date of purchase. The
district court properly granted Cake Gals’ motion for summary judgment as to Maple
Grove’s breach-of-contract claim related to the store credits.
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B. The district court properly granted summary judgment on Maple
Grove’s ERC conversion claim.

Maple Grove challenges the district court’s summary judgment ruling on its ERC
conversion claim. A common-law-conversion claim has two elements: “(1) plaintiff holds
a property interest; and (2) defendant deprives plaintiff of that interest.” Staffing Specifix,
Inc. v. TempWorks Mgmt. Servs., Inc., 896 N.W.2d 115, 125 (Minn. App. 2017) (quotation
omitted), aff’d, 913 N.W.2d 687 (Minn. 2018). “Wrongfully refusing to deliver property
on demand by the owner constitutes conversion.” Id. (quotation omitted).
Maple Grove failed to demonstrate that it has a property interest in the ERC funds,
because, as analyzed above, the right to apply for ERC funds was not a tangible asset that
was sold through the purchase agreement. Because Maple Grove cannot establish the first
element of conversion, Maple Grove’s claim fails. The district court properly granted Cake
Gals’ motion for summary judgment on Maple Grove’s conversion claim.
II. The court did not abuse its discretion in awarding attorney fees to Cake Gals.

Maple Grove argues that the district court abused its discretion in awarding attorney
fees to Cake Gals. We review a district court’s decision granting fees for an abuse of
discretion, Carlson v. SALA Architects, Inc., 732 N.W.2d 324, 331 (Minn. App. 2007), rev.
denied (Minn. Aug. 21, 2007), and its finding on the amount awarded for clear error.
Amerman v. Lakeland Dev. Corp., 203 N.W.2d 400, 400-01 (Minn. 1973).
On appeal, Maple Grove challenges the district court’s decision to discount the fees
by only 11.6% instead of the 30% reduction that Maple Grove requested due to Cake Gals
use of block billing. We are not persuaded.
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Maple Grove cites no authority in support of its argument that a district court abuses
its discretion by awarding fees calculated on block-billing time entries. 3 Our persuasive
authority provides that a district court may, within its discretion, base an award of attorney
fees on work documented in block-billing totals with descriptions for the work performed.
See, e.g., McGrath v. MICO, Inc., No. A11-1087, 2012 WL 6097116, at *15 (Minn. App.
Dec. 10, 2012) (holding that the district court did not abuse its discretion by awarding fees
based on block-billing time entries and descriptions), rev. denied (Feb. 19, 2013); see also
Lashinski v. Lashinski, No. C8-94 -1536, 1994 WL 664940, at *3 (Minn. App. Nov. 29,
1994) (“In its calculation, the court expressly addressed appellant’s concerns about
excessive rates and block-billing by reducing the fees by fifteen percent. On this record,
we find no abuse of discretion.” (citation omitted)).4 We discern no abuse of discretion in
the district court’s award of fees or any clear error in the amount awarded.
Affirmed.

3 Instead, Maple Grove cites general caselaw about awarding attorney fees and references
nonbinding cases from Ohio and Maryland.

4 We cite these nonprecedential opinions for their persuasive value. See Minn. R. Civ.
App. P. 136.01, subd. 1(c).