Doug Hoskin v. Josh Krsnak

This opinion is nonprecedential except as provided by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
A23-1275

Doug Hoskin,
Appellant,

vs.

Josh Krsnak, et al.,
Respondents.

Filed May 13, 2024
Affirmed
Bratvold, Judge

Hennepin County District Court
File No. 27-CV-22-11259

Larina A. Alton, Jevon C. Bindman, Jeremy D. F. Krahn, Maslon LLP, Minneapolis,
Minnesota (for appellant)

Arthur G. Boylan, Philip J. Kaplan, Ryan M. Lawrence, Kathryn E. Campbell, Anthony
Ostlund Louwagie Dressen & Boylan P.A., Minneapolis, Minnesota (for respondents)

Considered and decided by Connolly, Presiding Judge; Bratvold, Judge; and Florey,

Judge. *

NONPRECEDENTIAL OPINION

BRATVOLD, Judge

Appellant and one of the respondents each owned an interest in the same

limited-liability company. In December 2020, appellant negotiated with that respondent

*
Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
and transferred his interest in the limited-liability company by signing five written

agreements. Each agreement included a clause releasing all of appellant’s claims related to

the limited-liability company. In July 2022, appellant sued that respondent along with a

second respondent, the first’s solely owned limited-liability company, alleging two counts

of fraud and eight other counts. The district court granted respondents’ motion to dismiss

the complaint for failure to state a claim for relief. The district court also granted

respondents’ motion for attorney fees and costs as provided in the transfer agreements.

Appellant contends that the district court erred by dismissing the complaint and

awarding attorney fees and costs. Appellant argues, first, that the complaint alleges facts

sufficient to show that duress and fraud invalidate the releases in the transfer agreements,

so he is entitled to pursue all claims. Second, appellant contends in the alternative that the

complaint alleges facts sufficient to state a claim for relief in five counts, contrary to the

district court’s analysis. Third, appellant argues that the attorney-fee provision does not

apply and that, even if it did, the district court disregarded his right to a jury trial on

respondents’ claim for attorney fees and costs. We affirm.

FACTS

The following summarizes the allegations in the complaint, stating the facts in a

light favorable to the nonmoving party and taking the allegations as true.

Appellant Doug Hoskin and respondent Josh Krsnak were “longtime business

partner[s]” who were “co-investors and co-members” in businesses “in the real estate

and/or parking facility space.” Among other investments, they each had “an ownership

interest”—Hoskin had 34%; Krsnak had 10%—in Interstate Parking Company LLC (IPC).

2
Hoskin and Krsnak “held numerous [other] businesses and properties through IPC.”

Krsnak also solely owns respondent JT Manager LLC; we refer collectively to Krsnak and

JT Manager LLC as respondents.

IPC was “principally involved in leasing parking facilities and operational

management of parking services at those facilities.” During the COVID-19 pandemic, the

demand for parking declined and IPC “realiz[ed] very little parking income” while still

being required to cover lease payments, general overhead, and operational expenses.

Facing a revenue shortfall, IPC applied for and received a Paycheck Protection Program

(PPP) loan. 1 Because “it became clear that in order to survive, IPC needed additional

capital,” the IPC members “decided to apply for a Federal Main Street loan” (Main Street

loan). Krsnak “promised to manage and attain” the Main Street loan and told Hoskin that

he would “get it taken care of.” Krsnak planned to secure the Main Street loan from

American Equity Bank, stating that he served on the bank’s board.

In “a separate business discussion unrelated to the Main Street loan,” Krsnak and

Hoskin met to discuss the sale and transfer of some “business interests” from Hoskin to

Krsnak. On December 17, 2020, Krsnak and Hoskin discussed terms and Krsnak offered

to pay Hoskin $350,000.

The next day, Krsnak and Hoskin met again, this time with their attorneys. Krsnak

offered $220,000 for Hoskin’s “membership units,” “represented that he would allocate

1
A PPP loan is from a federal loan program administered by the Small Business
Administration during the COVID-19 pandemic.

3
$470,000 in federal historic tax credits to . . . Hoskin,” and “agreed to approval of a salary

to . . . Hoskin from IPC at the amount of $150,000 per year.”

During the meeting, Krsnak told Hoskin that he would not apply for, or “would

otherwise undermine” IPC’s efforts to obtain, the Main Street loan, for which the

application deadline expired that day. Both Hoskin and Krsnak “acknowledged that, due

to the looming deadline to apply” for the Main Street loan, “time was of the essence in

applying for and securing financing” through the bank. Krsnak told Hoskin, “I’m not going

to get the Main Street [loan] unless we get this done, Doug. If you don’t sell to me along

the lines and prices that we are discussing now, [IPC] would be in a world of hurt if they

don’t get that loan.”

Hoskin objected to Krsnak’s proposal, “which undervalued his membership assets

and interest in the projects and real estate assets included in the deal, and which transferred

[Hoskin’s] interests in them during a depressed market.” Krsnak, however, “reiterated that

unless . . . Hoskin signed the transfer agreements . . . he would ensure that the Main Street

loan program required to ensure the survival of IPC would not occur.” Given that “Hoskin’s

financial and other interests would be irreparably harmed” if IPC failed, Hoskin “had no

choice but to sign over his membership units”; he “was forced to sign the membership

transfer without change or negotiation, and his execution of the alleged agreements was

forced upon him.”

4
 “Under duress,” Hoskin signed five transfer agreements with Krsnak. Each transfer

agreement included a paragraph titled, “Release by Hoskin” (the releases):

Hoskin, on behalf of himself and all of his respective
representatives, agents, predecessors, successors and assigns,
as well as anyone else claiming rights through them,
notwithstanding any claims stated in this Agreement which
survive closing, hereby releases Manager and Company, and
all of their members, officers, directors, agents, employees,
representatives, agents, predecessors, successors and assigns
from all claims, demands, damages, actions, and causes of
actions, cost and expense, debts, accounts, contracts,
agreements, and any other form of liability whatsoever,
whether known or unknown, liquidated or unliquidated, fixed
or contingent, in law or in equity, arising out of or related to
the Company, Hoskin’s investment in the Company or the
Company’s members, officers, directors, agents, employees,
including but not limited to any claims that could have been
asserted in a lawsuit against any party. However, this release
by Hoskin does not include a release of the indemnification
provisions and obligations from Joshua D. Krsnak and
Anthony Janowiec for the benefit of Hoskin that are contained
in any contribution and indemnification agreement related to
investments of Hoskin in the Company.

(Emphasis added.) Hoskin was damaged because his former interest “in these [transferred]

entities and their underlying assets are now valued in the millions of dollars.”

About 18 months later, in July 2022, Hoskin sued respondents, asserting claims in

ten counts related to IPC: fraud (counts I and II), breach of the implied covenant of good

faith and fair dealing (count III), promissory estoppel (count IV), breach of oral agreement

(count V), negligence (count VI), breach of fiduciary duty (count VII), quantum meruit

(count VIII), unjust enrichment (count IX), and declaratory judgment determining that the

transfer agreements were unenforceable because Hoskin “had no choice” and executed

them under duress (count X).

5
 Respondents moved to dismiss under Minn. R. Civ. P. 12.02(e), arguing that

Hoskin’s complaint failed to allege facts sufficient to state a claim for relief because Hoskin

released all claims related to IPC and the complaint did not allege facts sufficient to state

a claim for duress or fraud. Hoskin opposed the motion.

After briefing and argument, the district court granted the motion and dismissed the

complaint. The district court first concluded that the complaint alleged sufficient facts to

show economic duress, which “is a factor to consider in determining whether the allegedly

aggrieved party intended to release their legal claims.” But because the complaint “does

not allege [Hoskin] has or has attempted to return any amount of the consideration received

for signing the transfer agreements,” the district court concluded that Hoskin has “not taken

the actions necessary to void the release agreements” and that the releases are thus valid

and “bar[] all of Hoskin’s claims.” In the alternative, the district court determined that the

complaint failed to allege sufficient facts to state claims for relief in counts II, III, VI, VIII,

and IX.

Respondents moved for costs and for attorney fees and costs as provided in the

transfer agreements. Hoskin opposed the motion, and after a hearing, the district court

granted the motion and awarded attorney fees, costs, and disbursements of $38,156.36.

Hoskin appeals.

DECISION

In lieu of answering a complaint, a party may move to dismiss for failure to state a

claim upon which relief can be granted. Minn. R. Civ. P. 12.02(e). “A claim is sufficient

against a motion to dismiss for failure to state a claim if it is possible on any evidence

6
which might be produced, consistent with the pleader’s theory, to grant the relief

demanded.” Walsh v. U.S. Bank, N.A., 851 N.W.2d 598, 603 (Minn. 2014). In other words,

“a pleading will be dismissed only if it appears to a certainty that no facts, which could be

introduced consistent with the pleading, exist which would support granting the relief

demanded.” Halva v. Minn. State Colls. & Univs., 953 N.W.2d 496, 501 (Minn. 2021)

(quotation omitted). “And all pleadings shall be so construed as to do substantial justice.”

Id. (quotation omitted). Appellate courts “review a district court’s dismissal for failure to

state a claim de novo.” Walmart Inc. v. Winona County, 963 N.W.2d 192, 196 (Minn.

2021).

On review, an appellate court must “accept the facts alleged in the complaint as true

and construe all reasonable inferences in favor of the nonmoving party.” Engstrom v.

Whitebirch, Inc., 931 N.W.2d 786, 790 (Minn. 2019). An appellate court, however, “is not

bound by the legal conclusions pleaded” in the complaint. Walsh, 851 N.W.2d at 607 n.3;

accord Graphic Commc’ns Local 1B Health & Welfare Fund “A” v. CVS Caremark Corp.,

850 N.W.2d 682, 692 (Minn. 2014) (“[A] legal conclusion in the complaint does not bind

us, and a plaintiff must provide more than mere labels and conclusions.”). In reviewing a

motion to dismiss, the court may consider documents, including the transfer agreements

referenced in Hoskin’s complaint, without converting the motion into one for summary

judgment. See In re Hennepin Cnty. 1986 Recycling Bond Litig., 540 N.W.2d 494, 497

(Minn. 1995) (stating that, “[i]n deciding a motion to dismiss, . . . the court may consider

the entire written contract when the complaint refers to the contract and the contract is

central to the claims alleged”).

7
 Hoskin raises three main issues on appeal. First, Hoskin contends that the district

court erred by dismissing all counts in the complaint based on the releases in the transfer

agreements because the complaint alleged facts sufficient to invalidate the releases based

on duress and fraud. Second, Hoskin argues that the district court erred in dismissing five

counts on alternative grounds. Third, Hoskin contends that the district court erred by

awarding attorney fees and costs to respondents based on the language of the transfer

agreements and applicable caselaw.

We first consider whether the district court erred by enforcing the releases in the

transfer agreements and dismissing the entire complaint. Because we conclude that the

complaint fails to allege facts sufficient to support a claim for relief based on duress and

fraud and that the releases are therefore valid, we need not consider whether the district

court erred in dismissing five counts on alternative grounds. Second, we examine the

district court’s award of attorney fees and costs.

I. The district court did not err by dismissing all of Hoskin’s claims based on the
releases in the transfer agreements.

Hoskin argues that “the release in the transfer agreements was not enforceable

because it [was] obtained through fraudulent inducement and duress.” Respondents argue

that the releases in the transfer agreements are valid and bar all of Hoskin’s claims.

“A valid release is a defense to any action on the claims released.” Sorensen v.

Coast-to-Coast Stores (Cent. Org.), Inc., 353 N.W.2d 666, 669 (Minn. App. 1984), rev.

denied (Minn. Nov. 7, 1984). “A general release of all claims, known and unknown, will

be enforced by the court if the intent is clearly expressed.” Curtis v. Altria Grp., Inc.,

8
813 N.W.2d 891, 902, 904 (Minn. 2012) (affirming district court decision to enforce a

release in a settlement agreement). Minnesota “presumes that parties to a release agreement

intend what is expressed in a signed writing.” Riverview Muir Doran, LLC v. JADT Dev.

Grp., LLC, 776 N.W.2d 172, 176, 181 (Minn. App. 2009) (quotation omitted) (affirming a

district court’s decision to enforce a forbearance agreement).

While a release “may be set aside if obtained by duress or fraud . . . it is not enough

to merely allege that a payment was obtained by duress.” Wallner v. Schmitz, 57 N.W.2d

821, 824 (Minn. 1953) (citation omitted). A complaint must state facts “which, under the

law, constitute duress.” Id. And appellate courts will affirm a district court’s decision to

dismiss a complaint for failing to allege facts sufficient to state a claim for duress when the

release is unambiguous. See, e.g., id. (affirming judgment for defendant on pleadings and

enforcing release despite plaintiff’s claim of duress); Zimmerman v. Benz, 202 N.W. 272,

272-73 (Minn. 1925) (affirming dismissal of complaint on pleadings for failing to allege

facts sufficient to set aside release for duress).

A. The duress allegations in the complaint are insufficient to invalidate the
releases in the transfer agreements.

Hoskin argues the releases were not valid because he was under “economic duress”

when he signed the transfer agreements, including the release clauses. Respondents

contend that the complaint does not allege facts sufficient to state a claim for duress that

voids the releases in the transfer agreements.

9
 1. Traditional Duress

“[D]uress is available as a defense to a contract only when [the] agreement is

coerced by physical force or unlawful threats.” St. Louis Park Inv. Co. v. R.L. Johnson Inv.

Co., 411 N.W.2d 288, 291 (Minn. App. 1987) (quotation omitted), rev. denied (Minn.

Oct. 30, 1987). Although other jurisdictions have recognized “economic duress” or

“business compulsion,” Minnesota has not. Id. The supreme court held that Minnesota

courts only recognize duress as a defense to a contract when there is “coercion by means

of physical force or unlawful threats, which destroys [one]’s free will and compels him to

comply with some demand of the party exerting the coercion.” Wise v. Midtown Motors,

Inc., 42 N.W.2d 404, 407 (Minn. 1950). Our court has described this as “traditional duress

theory.” St. Louis Park Inv. Co., 411 N.W.2d at 291.

Hoskin’s complaint does not allege any physical force or unlawful threat by Krsnak

or related to the release. On appeal, Hoskin does not appear to claim otherwise because he

argues that he was under “duress caused by economic coercion.” 2 But our caselaw is clear

that Minnesota does not recognize economic duress as a defense to a contract. See Bond v.

Charlson, 374 N.W.2d 423, 428 (Minn. 1985) (rejecting “economic stress” as proof of

coercion and holding that “[d]uress is available as a defense to a contract only when [the]

agreement is coerced by physical force or unlawful threats”).

2
In Hoskin’s reply brief, he argues that Krsnak threatened him unlawfully. But appellate
courts do not consider arguments raised for the first time in a reply brief. King’s Cove
Marina, LLC v. Lambert Com. Constr. LLC, 958 N.W.2d 310, 317-18 n.5 (Minn. 2021).

10
 The complaint’s allegations that Krsnak did not fulfill his promise to secure the

Main Street loan and reduced his offer to Hoskin when IPC was struggling financially are

not facts sufficient to state a claim for duress. Caselaw recognizes that “it is well settled

that the mere refusal of a party to pay a debt or to perform a contract is not duress, so as to

avoid a contract procured by means of such refusal, although the other party was influenced

in entering into it by his financial necessities.” Joannin v. Ogilvie, 52 N.W. 217, 218 (Minn.

1892). Similarly, “[m]erely driving a hard bargain or wresting advantage of another’s

financial difficulty is not duress.” St. Louis Park Inv. Co., 411 N.W.2d at 291; see also

Zimmermann, 202 N.W. at 273 (“[I]t is plain that there is nothing unlawful in the endeavor

to purchase property at as small a price as possible . . . .”). We conclude that Hoskin’s

complaint does not allege facts showing that traditional duress invalidates the releases in

the transfer agreements.

2. Economic Duress as a Factor in Determining Intent to Release
Claims

Setting aside traditional duress theory, our caselaw has also recognized that a

“release is invalid if the party executed the release under circumstances showing the release

was not intended.” Sorensen, 353 N.W.2d at 669. 3 This caselaw appears to reason that a

release of claims by settlement agreement “must manifest an intent to release, discharge,

or relinquish a right, claim, or privilege by a person in whom it exists to a person against

3
In the same sentence, Sorensen also observed that a release may be set aside for
insufficient consideration. Id. Because Hoskin’s complaint does not allege insufficient
consideration and his brief to this court does not make this argument on appeal, we do not
discuss this aspect of Sorensen.

11
whom it might have been enforced to be a release.” Dykes v. Sukup Mfg. Co., 781 N.W.2d

578, 582 (Minn. 2010). Generally, “we review the language of the contract to determine

the intent of the parties.” Id.

Even though the complaint does not allege and Hoskin does not argue any ambiguity

in the language of the transfer agreements or the releases, the district court did not consider

the release language. Instead, the district court discussed Sorensen and observed that

“economic duress is a factor to consider in determining whether the allegedly aggrieved

party intended to release their legal claims.” (Emphasis added.) The district court

determined that three of six factors “suggest Hoskin did not intend to release his claims

against defendants by way of the signed releases.” The three factors were the “lack of

sufficient time to consider the release with counsel, lack of ability to negotiate amendments

to the releases, and inequitable conduct in obtaining the releases.” The district court

concluded that “the release agreements [were] voidable.”

Hoskin urges us to agree with the district court that economic duress may be

considered and supports his claim to invalidate the releases. Respondents contend in a

footnote that the district court’s analysis is dicta because the caselaw cited refers “to

separate legal theories that Hoskin has not raised.”

We are not convinced that the six-factor analysis used by the district court is

relevant. First, the district court drew its six-factor analysis from federal caselaw.

Schmitt-Norton Ford, Inc. v. Ford Motor Co., 524 F. Supp. 1099, 1102-03 (D. Minn. 1981).

This is at best persuasive because a “federal court’s interpretation of Minnesota law is not

12
binding on this court.” TCI Bus. Cap., Inc. v. Five Star Am. Die Casting, LLC, 890 N.W.2d

423, 431 (Minn. App. 2017).

Second, when we consider Sorensen, which the district court also cited and on which

Hoskin relies in his brief to this court, we see a five-factor analysis. In Sorensen, this court

affirmed summary judgment by upholding a release signed by a franchisee and rejecting

all claims against the franchisor, including fraud and misrepresentation, after considering

the franchisee’s claim that “he did not intend to release [franchisor] from the claims

brought.” 353 N.W.2d at 668-69, 671. After reviewing relevant caselaw, 4 we identified “a

variety of factors to decide a claimant’s intent to release [their] claims.” Id. We considered

(1) the language of the release, (2) the presence of legal counsel before or at the time of

execution of the release, (3) “the existence of fraud or misrepresentation,” (4) “wrongful

concealment of fact or other inequitable conduct” contributing to a party’s mistake of fact,

and (5) duress, including “duress caused by economic coercion.” Id. at 669-70; see also

Noble v. C.E.D.O., Inc., 374 N.W.2d 734, 744 (Minn. App. 1985), rev. denied (Minn.

Nov. 18, 1985).

We assume without deciding that Sorensen applies to our analysis of Hoskin’s

economic-duress claim and therefore consider each of the five factors. 5 We note that

4
Sorensen cited both Schmitt-Norton Ford, Inc., 524 F. Supp. 1099 (release of contract
claims), and Schmidt v. Smith, 216 N.W.2d 669 (Minn. 1974) (release of personal-injury
claims). Id. at 669.
5
We question whether Sorensen’s five-factor analysis is appropriate here for at least two
reasons. First, Sorensen analyzed the franchisee’s claim that he did not intend to release
any claims. The franchisee in Sorensen offered evidence that, when he signed the release,
he was executing a form document to terminate the franchise and “did not believe he was

13
Hoskin’s brief to this court emphasizes the fifth factor, economic coercion, along with the

“immediacy of time pressure” to “force Hoskin” to sign the transfer agreements on “the

very last day” to apply for the Main Street loan.

First, we consider the language of the release. In Sorensen, we concluded that

because the release contained “only language common in the business community,” was

“short and straightforward,” and did not hide “operative words” in “legal jargon” or “fine

print,” it suggested that the franchisee intended to release his claims. 353 N.W.2d at 669.

The language in the releases Hoskin signed is similarly straightforward. While we accept

the complaint’s allegation that Hoskin signed the transfer agreements “without change or

negotiation,” the complaint does not plead any facts about the language of the releases to

suggest that it was incomprehensible or hid important information. Hoskin’s brief to this

court does not discuss the language of the release. This factor indicates that Hoskin

intended to release his claims.

Second, we consider the presence of legal counsel at the time the transfer

agreements were executed. In Sorensen, we stated that “the absence of counsel [is]

significant when examining the intent to release a claim,” while “[t]he presence of counsel

giving up any rights.” 353 N.W.2d at 668. Unlike the franchisee in Sorensen, Hoskin does
not allege that he did not intend to sign the releases.
Second, each of the five factors from Sorensen involves parol evidence. Id. at
669-70. But only when contract language is ambiguous may parol evidence “be considered
to determine intent.” Dykes, 781 N.W.2d at 582. The supreme court has held that, when
the language of a release in a settlement agreement “is clear and unambiguous, we enforce
the agreement of the parties as expressed in the language of the contract.” Id. Here, Hoskin
does not contend that the release language is ambiguous, so parol evidence is not
considered.

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is a strong factor indicating intent.” Id. The franchisee in Sorensen did not have legal

counsel “before or at the time of execution.” Id. Still, because “the release language [was]

simple” and Sorensen was “an experienced businessman,” we concluded that the absence

of legal counsel did not indicate a lack of intent. Id.

Unlike the franchisee in Sorenson, Hoskin had his chosen legal counsel present

when he discussed the transfer agreements with Krsnak and signed it, including the release

clauses. Like the franchisee in Sorensen, Hoskin was an experienced businessperson, and

the release language was simple. While the complaint alleges that Hoskin was not allowed

to negotiate the terms of the sale, the complaint says nothing about any obstacles to

obtaining legal advice on the significance of the release language. In his brief to this court,

Hoskin claims that “a party can be subject to duress even if they have counsel.” Hoskin’s

claim effectively asks us to look at the other four factors and thus concedes that this factor

indicates he intended to release his claims.

Third, we consider the existence of fraud or misrepresentation. In Sorensen, we

explained that, “[w]hile it is well recognized that releases may be avoided when fraud or

misrepresentation exists, the fraud or misrepresentation must touch execution of the

release.” Id. at 670 (emphasis added). Hoskin’s complaint alleges facts touching on fraud

in executing the transfer of membership units but alleges no fact touching on fraud in

executing the release. Unlike the franchisee in Sorensen, Hoskin does not claim that he was

“misled about the nature of what [he] was signing.” Id. (quotation omitted). While we will

consider Hoskin’s allegations of fraud more thoroughly below, under Sorensen, we

conclude that this factor indicates that Hoskin intended to release his claims.

15
 Fourth, we consider wrongful concealment of fact or other inequitable conduct. In

Sorensen, we stated that when inequitable conduct “contributes” to a plaintiff’s decision to

sign a release, the factor suggests that the plaintiff did not intend to sign a release. Id.

Hoskin’s complaint alleges that Krsnak “did not disclose his plan to attain business

leverage, and ultimately Mr. Hoskin’s assets,” and that this concealment led Hoskin to sign

the transfer agreements. But Hoskin’s complaint does not allege facts showing that

Krsnak’s concealment of facts or inequitable conduct contributed to his decision to sign

the releases, as described in Sorensen. See id. Thus, this factor indicates that Hoskin

intended to release his claims.

Fifth, we consider economic duress. In Sorensen, we explained that economic

coercion undermines a party’s intent to enter into a release if three elements are satisfied:

(A) “[a] party must allege that he involuntarily accepted the terms of the release,” (B) “the

circumstances allowed only that alternative,” and (C) “the other party created the

compelling circumstances through coercive acts.” Id. In Sorensen, we concluded that the

franchisee’s claim for economic duress failed because “the loss of his business and his

escalating debts may have caused great stress . . . but, absent coercive acts by [the

franchisor], it will not rebut [the franchisee’s] intent to execute the release.” Id.

If we apply Sorensen’s analysis to Hoskin’s complaint—as Hoskin urges us to do—

we conclude that the economic-duress allegations in the complaint do not state a claim for

relief. While the complaint alleges that the timing of the Main Street loan and IPC’s

escalating debts “caused great stress,” the complaint does not allege coercive acts by

Krsnak related to signing the release. See id. Simply put, the complaint does not plead that

16
other alternatives, including simply to walk away from the transfer agreements and obtain

other financing, were not available to Hoskin. Even though the district court reached a

similar conclusion, Hoskin’s brief to this court does not argue that he would produce

evidence, consistent with pleading duress, that he had no alternative to signing the transfer

agreements and the releases. Thus, none of the five factors in Sorenson suggest that Hoskin

did not intend to enter into the transfer agreements and releases.

To sum up, we conclude that the complaint fails to allege facts sufficient to claim

that Hoskin signed the transfer agreements and released his claims under duress. First, the

complaint does not allege traditional duress because it does not allege physical force or

unlawful threats. Second, if we rely on the analysis in Sorensen, the complaint does not

allege facts sufficient to support Hoskin’s claim that economic duress undermined his

intent to enter into the transfer agreements and releases, which are unambiguous. The

release language is straightforward, Hoskin is an experienced businessperson and had legal

counsel present, Hoskin alleges no fraud or concealment “touching” on the release, and the

timing of the Main Street loan and IPC’s mounting debts support a claim of “economic

stress” but do not rise to duress because the complaint does not allege that Hoskin had no

alternative other than to sign the transfer agreements.

Taking all of the allegations in the complaint together and viewing them in a light

favorable to Hoskin, the complaint alleges that Krsnak drove a “hard bargain” and took

advantage of Hoskin’s “financial difficulty.” But we have previously held that this is “not

duress.” St. Louis Park Inv. Co., 411 N.W.2d at 291. Hoskin’s brief to this court also fails

to articulate what evidence could be produced, consistent with his theory of duress, that

17
would prove that Hoskin had no alternative. See Walsh, 851 N.W.2d at 603. Because none

of the five factors in Sorensen suggests that Hoskin did not intend to release his claims, we

return, as we did in Sorensen, to the legal presumption “that parties to a release agreement

intend what is expressed in a signed writing.” 353 N.W.2d at 670. Thus, we conclude that

the releases are valid.

B. Hoskin’s failure to return the consideration he received from Krsnak
does not support the district court’s decision to dismiss the complaint.

The district court dismissed Hoskin’s complaint after considering that a party “may

repudiate a release entered under duress by returning the consideration paid for in the

release agreement.” In doing so, the district court discussed Wise, 42 N.W.2d at 408-09.

The district court first stated that Wise “stands for [the] proposition” that Hoskin

“is . . . required to return the consideration.” The district court next determined that,

because the complaint “does not allege [Hoskin] has or has attempted to return any amount

of the consideration received for signing the transfer agreements,” the releases “remain in

full force and effect, barring all of [his] claims.”

In his brief to this court, Hoskin argues that he “was not required to return the

consideration he received in exchange for his ownership interests prior to filing suit.” He

contends that a “party who has been “induced to enter a contract by fraudulent

misrepresentations may elect to rescind the contract or sue for damages” and, at this stage,

“may claim either or both alternatively,” quoting Great Plains Educational Foundation,

Inc. v. Student Loan Finance Corp., 954 N.W.2d 844, 849 (Minn. App. 2020), rev denied

(Minn. Mar. 30, 2021), and Vesta State Bank v. Independent State Bank of Minnesota,

18
518 N.W.2d 850, 855 (Minn. 1994). (Emphasis added.) Krsnak responds that, “because

Hoskin kept the consideration he received for the releases, he cannot avoid them by

claiming duress.” Krsnak contends that no Minnesota case has held that a “plaintiff has a

choice between rescinding the release or suing for fraud damages despite the release.”

Krsnak points out that Hoskin cites caselaw involving fraud, not duress.

First, we examine Wise to determine whether Hoskin was required to return the

consideration he received before attempting to void the releases. In Wise, an employee sued

his employer, disputing the amount the employer owed the employee after his employment

ended. 42 N.W.2d at 405. In response, the employer threatened to sue the employee for

$40,000-$50,000. Id. at 406. The employee agreed to accept $200 “in full payment,

satisfaction, release and discharge of any claims, demands, or actions he might have against

[the employer] arising out of the employment.” Id. The employee executed the release, and

the employer paid the employee $200 plus $100 “cash for his attorneys.” Id. “Almost

immediately thereafter,” the employee notified the employer that he was rescinding the

release. Id. The employee returned the $200 given to him in exchange for the release but

kept $100 for his attorneys. Id. The employee argued that the release was obtained by

duress and was invalid. Id. The district court directed a verdict for the employer based on

the release, and the supreme court reversed and remanded for a new trial. Id. at 405, 409.

The supreme court concluded that there was sufficient evidence to generate a question of

fact about whether the release was signed under duress based on the employer’s threat to

sue because the suit was not in good faith. Id. at 408. And the supreme court rejected the

19
employer’s argument that the employee’s failure to return $100 prevented voiding the

release. Id. at 409. The court reasoned:

[The employee’s] tender to [the employer] of the $200
received by him for the release was all that was required to void
it. A party repudiating a release for duress is not required to
return more than the consideration given for it. The $100 given
by [the employer] after the release was executed was no part of
the consideration for the release. . . . [The employer’s]
contention that [the employee] failed to restore the Status quo
by return of the consideration received for the release is plainly
without merit.

Id. (emphasis added).

The district court emphasized Wise’s conclusion that a party repudiating a release

for duress “is not required to return more than the consideration given for it.” Id. From this

language, the district court determined that a party repudiating a release must return the

consideration received. But Wise does not go this far. Nowhere in Wise does the supreme

court hold that a party must return the consideration before repudiating a release. Rather,

Wise states that when a party repudiates a release, claims duress, and returns the

consideration, there is no requirement to return additional fees. Id.

Other caselaw underscores our view that consideration need not be returned before

voiding a release. In Marple v. Minneapolis & St. Louis Railway, the supreme court

considered the same issue in the context of rescission of a settlement based on fraud and

first stated, “The general rule undoubtedly is that where a party to a contract that is not

void, but voidable, seeks to rescind by his own act, he must return or offer to return what

he received under the contract.” 132 N.W. 333, 334-35 (Minn. 1911) (affirming the district

20
court’s denial of railroad’s posttrial motions after jury verdict for plaintiff who sought to

rescind a settlement).

But Marple adds that “there is no reason for the strict application of the rule when

substantial justice can be meted out in the final disposition of the case,” such as by

deducting the consideration received from the amount of damages recovered. Id. at 334.

The supreme court ultimately concluded “that it was not necessary” for Marple to return

the consideration received in the settlement he sought to rescind because “substantial

justice” could be done “when the amount received on the settlement is credited on the

verdict.” Id.

Subsequent caselaw also discusses whether return of consideration is needed to

rescind a release. “[A] party repudiating a release cannot be required, as a condition

precedent, to return the amount paid upon a specific liquidated demand justly owing,

simply because it was paid as part of the transaction of settlement.” Helvetia Copper Co.

v. Hart-Parr Co., 171 N.W. 272, 274 (Minn. 1919). And a “release procured by fraud may

be canceled in an equitable action brought for that purpose. . . . A party is not bound to

return or tender money received under a fraudulent release where the adverse party pleads

the release as a defense.” Serr v. Biwabik Concrete Aggregate Co., 278 N.W. 355, 365-66

(Minn. 1938) (emphasis omitted) (quotation omitted).

Hoskin relies on Marple to support his position that even if “some portion of the

consideration was specifically payment for the releases, . . . there is no obligation to repay

that amount prior to bringing suit” because the consideration can be returned by reducing

the verdict or judgment. We agree. Thus, we conclude that the district court erred when it

21
concluded that Hoskin was required to return the consideration before repudiating the

releases.

C. The fraud allegations in the complaint are insufficient to invalidate the
releases in the transfer agreements.

Hoskin also claims that the releases are invalid because they were procured by fraud.

A heightened pleading standard applies to fraud. Minn. R. Civ. P. 9.02 (stating fraud must

be pleaded with particularity). Pleading “with particularity is to plead the ‘ultimate facts’

or the ‘facts constituting fraud.’” Hardin Cnty. Sav. Bank v. Hous. & Redev. Auth.,

821 N.W.2d 184, 191 (Minn. 2012). “[U]ltimate facts” of a fraud claim are the “facts

underlying each element of the fraud claim.” Id.

The elements of a claim for fraudulent misrepresentation are

(1) there was a false representation by a party of a past or
existing material fact susceptible of knowledge; (2) made with
knowledge of the falsity of the representation or made as of the
party’s own knowledge without knowing whether it was true
or false; (3) with the intention to induce another to act in
reliance thereon; (4) that the representation caused the other
party to act in reliance thereon; and (5) that the party suffered
pecuniary damage as a result of the reliance.

Hoyt Props., Inc. v. Prod. Res. Grp., L.L.C., 736 N.W.2d 313, 318 (Minn. 2007) (quotation

omitted). Fraud also may be proved by concealment of material facts that causes another

party to act in reliance. “[N]ondisclosure may constitute fraud [if there is] a suppression of

facts which one party is under a legal or equitable obligation to communicate to the other,

and which the other party is entitled to have communicated to him.” Richfield Bank & Tr.

Co. v. Sjogren, 244 N.W.2d 648, 650 (Minn. 1976).

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 Hoskin’s complaint alleges two fraud theories in separate counts, which we take in

turn.

1. Fraudulent Nondisclosure: Count I

The complaint in count I alleges fraudulent nondisclosure by Krsnak of his “plan to

attain business leverage, and ultimately Mr. Hoskin’s assets.” For the reliance element, the

complaint pivots to alleging that Hoskin relied on Krsnak’s affirmative representation that

he would “get it done” and secure the Main Street loan so that Hoskin “did not seek” other

“financing options.” The complaint also alleges that, on the day the transfer agreements

were signed, Krsnak “sprung his plan into action” and threatened not to seek or to

undermine the Main Street loan unless Hoskin agreed to the proposed sale terms.

The district court upheld count I as stating a claim for fraudulent concealment based

on allegations that Krsnak was a “de facto fiduciary” and concealed material facts because

he did not intend to secure the Main Street loan unless Hoskin agreed to the transfer

agreements. 6 In his brief to this court, Hoskin claims that we may not consider the legal

sufficiency of count I under rule 12.02 because Krsnak did not appeal the district court’s

decision. But a respondent need not cross-appeal to argue alternative grounds for

affirmance. Stand Up Multipositional Advantage MRI, P.A. v. Am. Fam. Ins. Co.,

889 N.W.2d 543, 547 n.4 (Minn. 2017) (citing Day Masonry v. Indep. Sch. Dist. 347,

781 N.W.2d 321, 331 (Minn. 2010)) (“We have held that respondents need not file a notice

6
For the purposes of appeal, we will assume without deciding that Krsnak had a “legal or
equitable obligation to communicate” the omitted facts to Hoskin. Id.

23
of appeal to preserve an argument if that argument was presented below and was an

alternative ground on which to affirm a judgment in respondent’s favor.”).

Thus, we consider Krsnak’s arguments that count I fails under rule 12.02 because

the complaint alleges that Hoskin “knew the facts underlying his claim before he signed

the releases.” Krsnak cites this court’s opinion in Great Plains Educational Foundation,

which determined that a complaint sufficiently alleged fraudulent inducement of a

settlement agreement under rule 12.02 based on claims that plaintiff “did not have

knowledge of the fraud until after the parties had entered into” the contract. 954 N.W.2d at

851.

Krsnak’s argument is persuasive. The complaint fails to allege facts supporting

Hoskin’s claim that he relied on the fraudulent nondisclosure in signing the transfer

agreements. Instead, the complaint alleges that Hoskin knew of Krsnak’s scheme, the

reduced price, the deadline for the Main Street loan, and Krsnak’s “threat” not to secure

the loan at the time Hoskin signed the transfer agreements. Thus, the complaint fails to

allege that Hoskin did not know about Krsnak’s fraud until after the transfer agreements

were signed, and we conclude that the complaint fails to allege facts sufficient to offer

evidence of reliance.

At best, count I alleges that, before the day Hoskin signed the transfer agreements,

he relied on Krsnak’s affirmative representation that he would secure the Main Steet loan

and did not explore other financing. But Krsnak’s promise to obtain the Main Street loan

does not satisfy the first element of a fraud claim because it is not “a past or existing

material fact susceptible of knowledge.” Hoyt Props., Inc., 736 N.W.2d at 318. Even if we

24
assume that Krsnak’s promise to secure the Main Street loan is a “past or existing fact,”

the complaint does not allege that this representation was false. Indeed, the complaint

alleges that Krsnak successfully restored IPC’s fortunes after the transfer agreements were

signed. Because the complaint alleges that Hoskin knew of Krsnak’s alleged fraudulent

nondisclosure before Hoskin signed the transfer agreements, and because the only reliance

alleged relates to a representation that is not claimed to be false, count I does not allege

facts sufficient to support Hoskin’s claim that the releases were induced by a fraudulent

nondisclosure and therefore were invalid.

2. Fraudulent Misrepresentation: Count II

The complaint in count II alleges fraudulent misrepresentation based on Krsnak’s

statement to Hoskin that Krsnak had a special relationship with American Equity Bank and

could “attain financing because of this relationship.” Alternatively, count II alleges that

Krsnak “represented that he could and would ensure the IPC would not attain the needed

financing through a Main Street loan.” Count II also alleges that Krsnak knew at the time

he made these representations that “they were false.”

The district court concluded that count II failed to state a claim for relief because it

alleged tortious interference with the loan application and not fraudulent misrepresentation.

Hoskin’s brief to this court contends that the district court misunderstood the complaint’s

theory, which is that Krsnak “made the threat that he could and would interfere with IPC’s

financing, when in fact this was a lie.” Krsnak argues that the complaint does not allege a

false representation because “it is undisputed that Krsnak’s ‘representation’ came true.

Krsnak got the [Main Street] loan he allegedly promised,” and the complaint does not

25
contend otherwise. While Krsnak’s point is valid, it does not grapple with Hoskin’s theory

about Krsnak’s ability to interfere with the Main Street loan.

If we assume, as we must, that the fraudulent misrepresentation was Krsnak’s ability

to interfere with IPC’s financing, then we consider whether count II’s allegations allege

facts sufficient to support the first element of fraudulent misrepresentation. We conclude

that the complaint asserts facts showing the truth of Krsnak’s representations about his

ability to interfere with the Main Steet loan, not their falsity. The complaint does not allege,

nor does Hoskin assert that he will prove, that Krsnak lacked a special relationship with

American Equity Bank. Rather, the complaint alleges that Krsnak was on the bank board.

Nor does the complaint allege that Krsnak could not prevent or undermine the Main Street

loan at the time the transfer agreements were signed.

The complaint also alleges that Krsnak had not yet secured the Main Street loan on

the last day for applications. And the complaint asserts that Hoskin “had no choice but to

sign” the transfer agreements because IPC needed the Main Street loan to survive. Thus,

the only facts that count II asserts is that Krsnak truthfully claimed he could prevent or

undermine the Main Street loan. The complaint therefore does not allege an actionable

false representation. Rather, it alleges that Krsnak “forced” Hoskin to sign the transfer

agreements by threatening not to secure financing as promised. While this may be breach

of contract or some other claim, it is not fraudulent misrepresentation.

After carefully reviewing the complaint’s factual allegations in support of counts I

and II and taking them in the light most favorable to Hoskin, we conclude that the

26
complaint fails to allege facts sufficient to state a claim for fraudulent nondisclosure or

fraudulent misrepresentation as a basis to invalidate the releases.

In sum, when Hoskin signed the transfer agreements, he released “Manager and

Company . . . from all claims, demands, damages, actions, and causes of

actions . . . whether known or unknown . . . in law or in equity, arising out of or related to

the Company, Hoskin’s investment in the Company or the Company’s members, officers,

directors, agents, employees.” A valid release is a defense to any action on the claims

released. See Moffat v. White, 279 N.W. 732, 736 (Minn. 1938) (“A release is not only

evidence of the relinquishment but, of itself, extinguishes the pre-existing obligation.”

(quotation omitted)). Because we conclude that the releases are enforceable and that the

complaint does not state a claim for relief from the releases based on traditional duress,

economic duress, fraudulent nondisclosure, or fraudulent misrepresentation, we need not

discuss whether the complaint otherwise states a claim for relief related to IPC. And

although we conclude that the district court erred when it concluded that Hoskin was

required to return the consideration before repudiating the release, Hoskin’s complaint does

not plead facts that would support setting aside the release. Nor does Hoskin’s brief to this

court articulate what evidence could be proved, consistent with his theories of duress or

fraud, to support his claim that the transfer agreements and releases should be invalidated.

Thus, the district court did not err in dismissing Hoskin’s complaint based on the releases

in the transfer agreements.

27
II. The district court did not err by awarding attorney fees based on the
fee-shifting provision in the transfer agreements.

Each of the five transfer agreements provides that “in any action to enforce this

agreement, the prevailing party shall be entitled to recover from the other party its costs

and attorney fees.” The district court determined that this was “a proceeding to enforce this

agreement” and awarded attorney fees to Krsnak. We review a district court’s decision to

award attorney fees for abuse of discretion. City of Savage v. Formanek, 459 N.W.2d 173,

177 (Minn. App. 1990), rev. denied (Minn. Oct. 25, 1990). We review the district court’s

factual findings for clear error. Minn. R. Civ. P. 52.01. We review a district court’s legal

conclusions, such as the interpretation of contract language, de novo. Harlow v. State,

Dep’t of Hum. Servs., 883 N.W.2d 561, 568 (Minn. 2016); Roemhildt v. Kristall Dev., Inc.,

798 N.W.2d 371, 373 (Minn. App. 2011), rev. denied (Minn. July 19, 2011).

A. This lawsuit and respondents’ motion to dismiss are an “action to
enforce” the transfer agreements.

On appeal, Hoskin argues that the district court erred by awarding attorney fees to

respondents because “the fee-shifting provision does not apply in this case based on the

plain meaning of its terms.” Hoskin urges that “[n]either respondents’ motion for attorneys’

fees nor their motion to dismiss can reasonably be considered an ‘action’ within the plain

meaning of the word” and that “the fee-shifting provision applies only to a civil complaint

that states a legal cause of action seeking to keep in force or compel compliance with the

transfer agreements.” (Emphasis added.) Krsnak contends that, within “the plain language

of the transfer agreements, the words ‘action’ and ‘enforce’ encompass respondents’

motion to dismiss.”

28
 Neither party claims the language in the attorney-fee provision is ambiguous. “If a

contract is unambiguous, the contract language must be given its plain and ordinary

meaning, and shall be enforced by courts even if the result is harsh.” Denelsbeck v. Wells

Fargo & Co., 666 N.W.2d 339, 346-47 (Minn. 2003) (quotation omitted). Paragraph five

in each of the transfer agreements states: “Attorney Fees and Costs. In any action to enforce

this agreement, the prevailing party shall be entitled to recover from the other party its costs

and attorney fees.”

We turn to a legal dictionary to consider whether the attorney-fee provision is

ambiguous. The common legal meaning of an “action” is “[a] civil or criminal judicial

proceeding.” Black’s Law Dictionary (11th ed. 2019) (defining action). The ordinary legal

meaning of “enforce” is “[t]o give force or effect to (a law, etc.); to compel obedience to.”

Black’s Law Dictionary (11th ed. 2019) (defining enforce). Reading these definitions

together with the rest of the attorney-fee provision, we determined that it is not ambiguous,

and we may enforce its plain language. We therefore conclude that Krsnak’s motion to

dismiss Hoskin’s complaint based on the releases in the transfer agreements is “a civil

judicial proceeding” to “compel obedience to” the transfer agreements.

We also find persuasive Krsnak’s argument that, to the extent “any action to enforce

this agreement” is ambiguous, then Hoskin’s interpretation “would lead to an absurd

result.” See Emps. Mut. Liab. Ins. Co. of Wis. v. Eagles Lodge, 165 N.W.2d 554, 556

(Minn. 1969) (stating that ambiguous contract terms “will not be so strictly construed as to

lead to a harsh and absurd result”). If we accept Hoskin’s argument that the fee-shifting

provision applies only to a civil complaint that seeks to enforce the contract, that would

29
mean that the party who makes it to the courthouse first would recover attorney fees. This

interpretation of the fee provision would not only encourage lawsuits and discourage

presuit settlement but would also fail to focus on whether a party is enforcing the contract,

even though that is the explicit requirement of the attorney-fee provision.

Thus, Krsnak, as the prevailing party, was entitled to attorney fees under the

unambiguous language of the attorney-fee provision in the transfer agreements.

B. Hoskin’s claim that he was entitled to a jury trial on attorney fees lacks
merit.

“[A] jury determines both the liability for a breach of contract and the amount of

damages to award of the breach, if any, assuming genuine issues of material fact exist with

respect to both questions that warrant submission to a jury.” United Prairie Bank˗Mountain

Lake v. Haugen Nutrition & Equip., LLC, 813 N.W.2d 49, 63 n.9 (Minn. 2012). In response

to Krsnak’s motion for attorney fees and the affidavits submitted in its support, Hoskin

submitted a memorandum of law, did not submit evidence, and asserted the claim should

be tried to a jury. The district court did not expressly describe its ruling as a summary

judgment, but it concluded that a jury trial was not necessary here

because there is no genuine issue of material fact that the
attorney fees requested by [respondents] . . . are reasonable, as
their legal team seeking compensation in this matter was
reasonably composed, they billed at the prevailing market
rates, they did not bill for pre-litigation work, their hours billed
for responding to Hoskin’s discovery requests were reasonably
spent, and [respondents’] computerized legal research was
both compensable and reasonable in the amount requested.

On appeal, Hoskin argues that the district court erred because “the reasonableness

and amount of fees remained a question of fact” that is “uniquely suited for the jury.”

30
Respondents argue that the record shows there was no genuine issue of fact on either the

reasonableness or the amount of attorney fees and observed that Hoskin offered no

evidence in response to respondents’ attorney-fee submission. We consider each of

Hoskin’s arguments in light of the district court’s analysis.

First, in response to Hoskin’s challenge to the composition of Krsnak’s legal team,

the district court reasoned that, although several shareholders were involved in the claim

for fees, one shareholder billed at an associate rate, while the other shareholder effectively

lowered the overall cost because he had a lower billing rate and billed more hours than the

highest-rate shareholder. The district court concluded that a jury therefore could “not draw

a reasonable conclusion different” because there was no genuine issue of fact.

Next, regarding Krsnak’s attorneys’ billing rates, Hoskin argued in his

memorandum in opposition that Krsnak “provided no data or information regarding

prevailing market rates, which was their burden to meet at the outset.” But the district court

noted that Hoskin “ignores the cases cited by [respondents] showing their [hourly] rates

fall within the range approved by various courts.” Given that Hoskin failed to present

evidence on different prevailing rates, the district court concluded that no genuine issue of

fact remained for trial.

Hoskin also contended that “the requested award includes prelitigation time with

respect to reviewing books and records requests, to which [respondents’] counsel failed to

substantively respond.” The district court found that Hoskin commenced suit when service

was completed and therefore that the litigation commenced on July 19, 2022, and

31
respondents did not request attorney fees for any work before that date. The district court

concluded, as a result, that there was no genuine dispute of fact on that issue.

Hoskin also argued that respondents’ counsel “billed an unreasonable amount of

time for reviewing discovery requests to which they also refused to substantively respond”

and “failed to engage in good faith with Mr. Hoskin’s legitimate discovery requests,

essentially copying and pasting the same objection.” The district court noted that Hoskin

“[did] not argue that the work done by [respondents’] counsel did not take as long as they

have billed or that the work done could have been reasonably accomplished in a shorter

time”; rather, Hoskin “argue[d] the work performed was inconsistent with the discovery

rules.” The district court concluded that, although it was “unimpressed” with respondents’

discovery responses, their objections to Hoskin’s discovery requests “are appropriate

objections one could reasonably expect an attorney to make in good faith” and that “[n]o

reasonable jury could decide otherwise on this record.”

Hoskin finally argued that although “computerized legal research may be

considered a component of attorneys’ fees, . . . such fees are not necessarily reasonable or

recoverable.” Hoskin argued that respondents did not “meet their burden of demonstrating

that separately billing for Westlaw, Lexis, or any other computerized legal research costs

is the prevailing practice in the Twin Cities legal market.” He also argued that $5,744.36

is “surely unreasonable.” The district court concluded that, because the legal-research costs

were billed on a case-specific, line-item basis, and because Krsnak’s motion-to-dismiss

and reply memoranda were long and demanded significant legal research, there could be

no genuine dispute that these costs were reasonable.

32
 We discern no error in the district court’s reasoned conclusion, based on this record,

that there was no genuine issue of material fact sufficient to warrant a jury trial on the

reasonableness and amount of attorney fees.

Affirmed.

33