937 F. Supp. 2d 1048
D. Minnesota2013Background
- This action concerns a 2005 commercial real estate purchase in Commerce Park, Rochester, MN by the Damons against Realtor Defendants and Compark Defendants.
- The Damons allege multiple tort and contract claims including fraud, fiduciary duty breaches, and misrepresentation arising from the transaction.
- Diversity jurisdiction was challenged due to Jacqueline Damon being stateless; the court ultimately dismisses her from the suit for jurisdictional reasons.
- Agency relationships between Dan G./Merl G. and Compark are contested and central to liability theories.
- Several motions for summary judgment address consumer fraud, deceptive trade practices, civil theft, conspiracy, veil-piercing, and other theories; the court grants in part and denies in part.
- The matter is set for trial with potential joinder of Damon Center, LLC under separate briefing to determine damages attribution and party status.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does diversity jurisdiction exist given Ms. Damon’s domicile status? | Damon claims domicile in the U.S. (Maryland/Virginia) despite residence in Kenya. | Defendants contend Ms. Damon is stateless and diversity is destroyed. | Ms. Damon lacks a U.S. domicile, but is dispensable to preserve jurisdiction. |
| Are the Compark and Realtor Defendants potentially liable for misrepresentations as agents? | Damons allege agent misrepresentations induced the sale; agency exists. | Agency may be disputed; defense argues at most arm’s-length conduct. | Agency exists for some claims; Compark may be liable for representations by Dan G. and Merl G. |
| Should the Damons’ consumer fraud claim be dismissed under Minnesota law? | Fraud occurred in a single transaction; CFA applies. | Public-benefit requirement not satisfied; single transaction injury. | Consumer fraud claim dismissed with prejudice. |
| Is there entitlement to other equitable or statutory remedies (e.g., promissory estoppel, unjust enrichment, rescission)? | Damons seek various equitable remedies for alleged misrepresentations. | Remedies limited by contract and statutory scheme; some claims fail. | Promissory estoppel, unjust enrichment, and rescission claims denied or limited; others proceed. |
Key Cases Cited
- Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826 (U.S. 1989) (diversity requires domicile for U.S. citizens; statelessness destroys diversity)
- Maple Island Farm v. Bitterling, 196 F.2d 55 (8th Cir. 1952) (presumptions govern domicile changes; burden on movant to prove change)
- Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365 (U.S. 1978) (strict construction of diversity jurisdiction; burden on proponent)
- Clark v. Matthews Int’l Corp., 639 F.3d 391 (8th Cir. 2011) (who bears burden to prove diversity requires persuasion by preponderance)
- Am. Computer Trust Leasing v. Jack Farrell Implement Co., 763 F. Supp. 1473 (D. Minn. 1991) (anti-puffery fraud standards; particularized reliance and future promises)