Curtis Trude, (A15-0378), (A15-1863, A15-1864), Glenwood State Bank, counterclaimant, and third party v. Peterson Earth Movers, Inc., Third Party (A15-0378, A15-1863), (A15-1864), Golden West, LLC, third party (A15-1863), (A15-0378, A15-1864), Charles D. Peterson, Third Party (A15-1864), and Curtis Trude v. Excel Recovery, Inc.
A15-1864
Minn. Ct. App.Aug 15, 2016Background
- Glenwood State Bank sued PEM, Bud, JBI, Trude, Golden West, LaDon Peterson, and others after a defaulted PEM loan secured by PEM assets; Glenwood obtained a judgment and sought to repossess collateral.
- Glenwood alleged PEM transferred assets to JBI and Trude to continue PEM’s earthmoving business and to evade liability; MUFTA and conspiracy claims were raised against several parties.
- A series of discovery disputes culminated in a court order for Trude to disclose the location of Ziegler equipment and later for JBI/Trude to produce a laptop for forensic analysis; data-wiping and noncompliance led to contempt findings.
- The district court found JBI and Trude's discovery violations serious, leading to dismissal of their claims, striking their answer, and a default judgment against them for over $1.27 million, with several parties held liable jointly and severally.
- Bench trial against Golden West and LaDon determined they held job proceeds/equipment obtained to defraud Glenwood; the court pierced the corporate veil and held LaDon personally liable, with Golden West liable under MUFTA and for conspiratorial acts.
- PEM and Bud sought relief from judgment under Rule 60.02; the district court denied relief, and those decisions were appealed along with the sanctions and the posttrial rulings against Golden West and LaDon.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PEM is entitled to relief from judgment under Rule 60.02 | PEM argues factors weigh in its favor (merit, excuse, diligence, no prejudice). | Glenwood contends PEM failed to show lack of prejudice or substantial prejudice and didn't meet factors. | District court not abused; PEM failed to show no substantial prejudice. |
| Whether the discovery sanctions against JBI and Trude were proper | Glenwood contends repeated willful violations warrant extreme sanctions. | JBI/Trude argue sanctions were too harsh for discovery violations. | District court did not abuse discretion; sanctions (striking claims, striking answer, default judgment) affirmed. |
| Whether Golden West & LaDon can be held liable via veil-piercing, successor liability, MUFTA, and conspiracy | Glenwood asserts veil-piercing and conspiratorial/transfer theories prove liability. | Golden West/LaDon challenge theories and forfeit earlier opportunities to contest them. | Court upheld theories as to veil-piercing and conspiratorial MUFTA liability; forfeit arguments rejected as to merits, but some forfeited issues noted. |
Key Cases Cited
- Finden v. Klaas, 128 N.W.2d 748 (Minn. 1964) (four-factor test for relief from judgment under 60.02)
- Hinz v. Northland Milk & Ice Cream Co., 53 N.W.2d 454 (Minn. 1952) (historical backdrop for 60.02 discretion)
- Northland Temps., Inc. v. Turpin, 744 N.W.2d 398 (Minn. App. 2008) (broad discretion in 60.02-like analysis)
- Frontier Ins. Co. v. Frontline Processing Corp., 788 N.W.2d 917 (Minn. App. 2010) (abuse-of-discretion standard for discovery sanctions)
- Miller v. Lankow, 801 N.W.2d 120 (Minn. 2011) (evidence-spoliation and sanctions considerations)