Management Registry, Inc. v. A.W. Companies, Inc.

                   UNITED STATES DISTRICT COURT                          
                      DISTRICT OF MINNESOTA                              
MANAGEMENT REGISTRY, INC.,                                               
                                     Civil No. 17-5009 (JRT/DTS)         
                       Plaintiff,                                        

v.                               MEMORANDUM OPINION AND ORDER            
                                 GRANTING IN PART AND DENYING IN         
A.W. COMPANIES, INC., ALLAN K.     PART THE PARTIES’ MOTIONS FOR         
BROWN, WENDY BROWN, and MILAN          SUMMARY JUDGMENT                  
BATINICH,                                                                

                      Defendants.                                        

    Anna Koch, Nicholas N. Sperling, and V. John Ella, TREPANIER MACGILLIS 
    BATTINA, PA, 8000 Flour Exchange Building, 310 South Fourth Avenue,  
    Minneapolis, MN 55415; James M. Morris, MORRIS & MORRIS P.S.C., 217  
    North Upper Street, Lexington, KY 40507, for Plaintiff.              

    Donald M. Lewis, Joel Andersen, and Katie M. Connolly, NILAN JOHNSON 
    LEWIS PA, 250 Marquette Avenue, Suite 800, Minneapolis, MN 55401, for 
    Defendants.                                                          


    Plaintiff Management Registry, Inc. (“MRI”) alleges a myriad of claims against A.W. 
Companies, Inc. (“A.W.”), Allan and Wendy Brown, and a former MRI employee, Milan 
Batinich  (collectively  “Defendants”).    The  core  allegation  asserts  that  Allan  Brown 
orchestrated the sale of several companies to MRI and then aided his wife, Wendy Brown, 
in stealing several of those companies from MRI.  MRI also alleges that Allan and Wendy 
Brown, with the assistance of Milan Batinich, pilfered customers, hardware, employees, 
and other materials from MRI while establishing A.W. as a rival company to MRI.  The 
parties now move for summary judgment on 19 separate claims—12 of the Plaintiff’s 
claims and 7 of the Defendants’ counterclaims.                            

    For the reasons set forth below, the Court will grant in part MRI’s motion for 
summary  judgment  on  Count  III  of  its  Second  Amended  Complaint  as  it  relates  to 
statements MRI made to its IT vendor and Count VII as it relates to Allan Brown’s Breach 
of Contract.  The Court will also grant MRI’s motion as to Counts II, VIII, and X of 

Defendants’ Counterclaims and will deny the motion on the remaining claims.  The Court 
will grant in part Defendants’ motion on Count II of MRI’s Second Amended Complaint as 
it relates to Allan Brown’s acceptance of the alleged broker’s fee, Count VIII as it relates 

to Batinich’s alleged breach of contract, and on Counts III, IV, V, VII.  The Court will deny 
Defendants’ motion as to all remaining claims.                            
                          BACKGROUND                                     
I.   FACTUAL BACKGROUND1                                                  
    MRI is a recruiting and staffing company that offers a “full suite of workforce 

solutions” to its clients.  (Decl. of Tim Malone ¶ 3, Nov. 15, 2017, Docket No. 37.)  MRI is 


    1 While the parties each insist that their version of events is undisputed, it is apparent 
that the parties’ approach to developing the facts in their briefs was heavily infused with ad 
hominem vitriol.  Frequently, the prospect of providing the facts in coherent narrative style is 
entirely abandoned in favor of inundating the Court with bullet points and tables highlighting bits 
and pieces of the record supporting their arguments.  Moreover, many of the parties’ factual 
assertions are either unsupported by record citations or the parties only generally cite to 
voluminous exhibits.  “Without some guidance, [the Court] will not mine a summary judgment 
record searching for nuggets of factual disputes to gild a party’s arguments.”  Rodgers v. City of 
Des Moines, 

 (8th Cir. 2006).  Although the Court has thoroughly reviewed the 
owned by Joe Malone, the founder, and two of Joe Malone’s sons, Tim and Terry Malone.  
(Id.)                                                                     

    Allan Brown was the president and part owner of a suite of companies collectively 
referred to as AllStaff including, as relevant here, the Minnesota based non-industrial 
divisions of AllStaff known as AllStaff Recruiting Inc. (referred to herein as the “Minnesota 
Businesses”).  (Decl. of Katie Connolly (“1st Connolly Decl.”), Ex. 1 (“Allan Brown Dep.”) at 

8, Jan. 14, 2022, Docket No. 608.)  Mary and Mel Zwirn were also part owners of AllStaff 
alongside Allan Brown.  (Id. at 12.)                                      
    In 2016, due to Mel Zwirn’s declining health, the Zwirns contemplated selling 

AllStaff to the Malones.  (Id. at 116.)  Allan Brown and the Malones negotiated the sale of 
AllStaff via a Stock Purchase Agreement (“SPA”), and the sale closed in September of 
2017.  (1st Connolly Decl., Ex. 5 (“SPA”).)                               
    Early in the sale process, Allan Brown and the Malones discussed selling the 

Minnesota Businesses to Allan’s wife, Wendy Brown (the “Minnesota Deal”).  (Allan 
Brown Dep. at 26–27; 1st Connolly Decl., Ex. 4, (“Tim Malone Dep.”) at 7.)  Under the terms 
of  the  sale,  Allan  Brown  would  continue  to  serve  as  the  president  of  the  AllStaff 
companies, “other than the non-industrial business of AllStaff Recruiting, Inc.”  (Corrected 

Decl. James M. Morris (“Morris Decl.”), Ex. 4, May 4, 2022, Docket No. 636.)  Defendants 


record in this case, the Court expects the parties and their attorneys to exhibit a higher degree 
of professionalism and etiquette than they have displayed to date.        
assert that Allan Brown and Tim Malone agreed that MRI would purchase the Minnesota 
Businesses, and then sell them to Wendy Brown within 30 days of the SPA’s closing date, 

but the deal never materialized.  (Allan Brown Dep. at 154, 158–59.)      
    In early September 2017, MRI took possession of AllStaff.  (1st Connelly Decl., Ex. 
17.)  The management of the Minnesota Businesses between September and November 
2017 and the facts relating to the dissolution of the Minnesota Deal are disputed by the 

parties.  However, between September and November 2017, Wendy Brown operated in 
a leadership role in the Minnesota Businesses.  (See 

 Ex. 18 at 54, Ex. 14 at 63, Ex. 19 
at 16) (Minnesota Businesses’ employees testifying either that they believed MRI was not 

their employer or that they worked under Wendy Brown).)                   
    MRI claims that the Browns began a subversive movement to seize control of the 
Minnesota  Businesses  prior  to  the  closing  of  the  SPA.    It  insists  that  Allan  Brown 
intentionally took advantage of the fact that MRI would not notice what was happening 

with the Minnesota Businesses because it had just gone through an acquisition that nearly 
doubled its size and covertly ushered his wife into an ownership position. 
    MRI asserts that Allan Brown was hesitant to initially inform customers, vendors, 
and  employees  of  the  acquisition  stating  that  there  should  be  “[n]o  published 

announcement or very little fanfare to start.  Let us get transition complete . . . to make 
sure clients don’t feel a thing.”  (Morris Decl., Ex. 10.).  MRI also claims the Browns 
“utilized MRI’s FAQ/Announcement [regarding the acquisition] to manufacture a fake 
FAQ/Announcement [to be issued to the Minnesota Businesses] . . . claiming ‘Eric Berg 
and a new partner, Wendy Brown ha[d] purchased’” the Minnesota Businesses.  (Pl.’s 

Mem. Supp. Mot. Summ. J., at 7–8, Jan. 14, 2022, Docket No. 601; Morris Decl., Ex. 15).  
MRI  insists  that  the  fake  announcement  was  intended  keep  MRI  uniformed  of  the 
Minnesota Businesses.  MRI cites several instances where the Browns along with  Berg—
who, according to MRI, the Browns misled into believing Wendy owned the Minnesota 

Businesses—blocked their employees from signing any MRI employment agreements or 
agreeing to any MRI restrictive covenants.  (Morris Decl. Exs. 25–29.)    
    In late October and early November of 2017, the Browns and Eric Berg dissolved 

many of the Minnesota Businesses’ contracts with its customers who, in turn, entered 
into contracts with A.W.  (Decl. of Laura McKnight, Ex. 12, Nov. 3, 2017, Docket No. 10; 
Am. Decl. of James Morris, Exs. 1–4, Nov. 20, 2017, Docket No. 55.)  Importantly, Berg 
played the lead role in the dissolution of the Minnesota Businesses’ contracts and the 

transfer of information and equipment from the Minnesota Businesses to A.W.  (See Am. 
Decl. James Morris, Exs. 1–4.)                                            
    The Defendants’ factual narrative starkly contrasts MRI’s depiction.  Defendants 
allege emails exchanged between Allan Brown and MRI’s ownership and executives 

directly reference Wendy Brown as a go to person in the Minnesota Businesses, (Morris 
Decl., Ex. 15), and argue that MRI executives did not oppose the mention of Wendy Brown 
playing  a  leading  role.    (See,  e.g.,  

  Ex.  10.)    Defendants  also  assert  that  the 
FAQ/Announcement issued to the Minnesota Businesses was neither fake nor issued by 
the  Browns.    Instead,  they  claim  it  was  issued  by  an  employee  of  the  Minnesota 

Businesses at the direction of Berg.  (1st Connolly Decl., Ex. 28 at 148–49, 155–56, 161–
62.)  Moreover, Defendants insist that the Malones and Allan Brown agreed to the 
decision to prevent the Minnesota Businesses employees from signing MRI paperwork.  
(2nd Decl. of Katie Connolly (“2nd Connolly Decl.”), Ex. 35, Jan. 27, 2022, Docket No. 612.)  

Finally, the Defendants argue Eric Berg was not misled by the Browns and was fully aware 
that Wendy Brown was not the owner of the Minnesota Businesses and that there was 
an agreement that she would become the owner in the future.  (1st Connolly Decl., Ex. 3 

at 57.)                                                                   
    While the Court cannot resolve fact disputes at the summary judgment stage, and 
does not attempt to do so here, the record establishes that by the end of October 2017, 
the Minnesota Deal fell apart.  (Decl. of Wendy Brown ¶¶ 27–29, Nov. 10, 2017, Docket 

No. 25.)  Shortly after learning that the deal had collapsed, the Browns set about creating 
their own institution, A.W., and Allan Brown resigned from his position at MRI.  (Morris 
Decl., Ex. 41.)  It is also uncontradicted that the Browns accessed and utilized a great deal 
of data and information from the Minnesota Businesses to form A.W.  (Id., Exs. 57–60.)   

    However, Wendy Brown’s role in the Minnesota Businesses prior to this point is 
unclear.  More specifically, it is unclear if MRI was aware of her role and therefore 
condoned it or whether Allan Brown inappropriately included her in the management of 
the Minnesota Businesses.                                                 

    It is also unclear whether Berg was acting at the direction of the Browns or of his 
own volition.  Notably, while MRI states that the Browns misled Berg into believing they 
were the rightful owners of the Minnesota Businesses, the record indicates that Allan 
Brown informed Berg that the Malones were the owners of the Minnesota Businesses, 

not the Browns, (Morris Decl., Ex. 78), and there is no evidence that the Defendants 
directed Berg to take any action—including cancelling MRI’s contracts with its customers. 
    2. Relevant Sale Terms                                               

    Several specific terms of the SPA are relevant to the parties’ summary judgment 
motions.  The SPA prohibited Allan Brown from engaging or assisting others who were 
involved in competition with MRI, from inducing or encouraging actual or prospective 
clients to terminate or modify their relationship with MRI, or to solicit or hire any person 

who is offered employment by MRI or allow any affiliates to do so.  (SPA § 6.5.)  Any such 
action was prohibited for two years following the Closing Date.  (SPA § 6.2(b).) 
    Section 4.15 of the SPA stated, “[n]o broker, finder or investment banker is entitled 
to any brokerage finder’s or other fee or commission in connection with the transactions 

contemplated  by  this  Agreement  or  any  other  Transaction  Document  based  upon 
arrangements made by or on behalf of Sellers.”  (SPA § 4.15.)  Section 4.16 of the SPA 
states,  in  brief,  that  Sellers  make  no  further  representations  “[e]xcept  for  the 
representations and warranties contained in this Article (including the related portions of 
the Disclosure Schedules).”  (SPA § 4.16.)                                

    Additionally, the SPA contained an indemnification clause which required the 
Zwirns and Allan Brown to indemnify MRI against “all Losses” incurred, sustained or 
imposed upon MRI “with respect to or by reason of: (a) any inaccuracy in or breach of any 
of the representations or warranties of Sellers contained in this Agreement; or (b) any 

breach or non-fulfillment of any covenant, agreement or obligation to be performed by 
Sellers pursuant to this Agreement.”  (SPA § 8.2.)  The indemnification clause further 
states,                                                                   

    Offset of Purchase Price.  Notwithstanding anything to the contrary  
    contained herein, Buyer’s [MRI] sole recourse for indemnification    
    from Sellers [Allan Brown and the Zwirns] shall be by way of an offset 
    of the remaining portion of the Purchase Price payable under the     
    Promissory Note.  Such offset shall be applied on advance written    
    notice to the Sellers of no less than 30 days.                       
(SPA § 8.7.)                                                              
II.  Procedural Background                                                
    MRI brought an initial complaint against A.W., the Browns, and Berg.2  (Compl. at 
1, Nov. 3, 2017, Docket No. 1.)  MRI immediately sought and was granted a preliminary 
injunction enjoining the Defendants from engaging in any advertising utilizing MRI’s 
images or likeness or employing or soliciting MRI employees or customers.  (Order 

    2 Berg is no longer a defendant in this action.  (Stip. Dismissal, Aug. 9, 2018, Docket No. 
163.)                                                                     
Granting Mot. Prelim. Inj., Nov. 3, 2017, Docket No. 16.)  Two weeks later, the Court found 
that there were factual disputes “prevent[ing] the Court from finding that MRI [was] likely 

to succeed on the merits of its claims.”  (Order Vacating TRO at 1, Nov. 17, 2017, Docket 
No. 53.)                                                                  
    MRI filed its First Amended Complaint shortly thereafter.  (First Am. Compl., Nov. 
21, 2017, Docket No. 59.)  On May 17, 2019, Defendants moved for judgment on the 

pleadings as to several of the counts in the First Amended Complaint.  (Mot. J. Pleadings, 
May 17, 2019, Docket No. 204.)   On July 12, 2019, MRI filed its Second Amended 
Complaint.  (Second Am. Compl., July 12, 2019, Docket No. 251.)  Defendants filed a 

motion to dismiss the Second Amended Complaint on July 24, 2019.  (Mot. Dismiss Second 
Am. Compl., July 24, 2019, Docket No. 255.)  Defendants also filed a motion to strike MRI’s 
additional claim of punitive damages.  (Mot. Strike, July 24, 2019, Docket No. 256.)  The 
Magistrate Judge issued a Report and Recommendation (“R&R”) on September 12, 2019, 

recommending that the Court deny Defendants’ motions.  (R&R at 34, Sept. 12, 2019, 
Docket No. 298.)  The Court adopted the R&R, and the parties proceeded to discovery.  
(Order Adopting R&R, Sept. 30, 2020, Docket No. 469.)  The parties then filed the pending 
motions for summary judgment.  (Pl.’s Mot. Summ. J., Docket No. 589; Defs.’ Mot. Summ. 

J., Docket No. 605.)                                                      
                            ANALYSIS                                     
I.  STANDARD OF REVIEW                                                    
    Summary judgment is appropriate when there are no genuine issues of material 

fact, and the moving party can demonstrate that it is entitled to judgment as a matter of 
law.  Fed. R. Civ. P. 56(a).  A fact is material if it might affect the outcome of the suit, and 
a dispute is genuine if the evidence is such that it could lead a reasonable jury to return a 
verdict for the nonmoving party.  Anderson v. Liberty Lobby, Inc., 

 (1986).  

A court considering a motion for summary judgment must view the facts in the light most 
favorable to the nonmoving party and give that party the benefit of all reasonable 
inferences to be drawn from those facts.  Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 

 (1986).  The nonmoving party may not rest on mere allegations or 
denials but must show, through the presentation of admissible evidence, that specific 
facts exist creating a genuine issue for trial.  Anderson, 

 (discussing Fed. R. 
Civ. P. 56(e)).  “The mere existence of a scintilla of evidence in support of the plaintiff’s 

position will be insufficient; there must be evidence on which the jury could reasonably 
find for the plaintiff.”  

.                                     
II.  DISCUSSION                                                           

    A. Count I: Conversion and Count XII: Civil Theft (All Defendants)   
    Both parties moved for summary judgment on Counts I and XIII for conversion and 
civil theft.  MRI argues that Defendants misappropriated MRI’s possessions including 
computers, monitors, telephones, and headsets.  Defendants argue that the property 
they took did not belong to MRI but rather belonged to one of MRI’s clients who left MRI 
and became an A.W. client.  Additionally, A.W. asserts that it returned all contested 

property.                                                                 
    Conversion  is  “an  act  of  willful  interference  with  [the  personal  property  of 
another], done, without lawful justification, by which any person entitled thereto is 
deprived of use and possession, and the exercise of dominion and control over goods 

inconsistent with, and in repudiation of, the owner’s rights in those goods.”  Christensen 
v. Milbank Ins. Co., 

 (Minn. 2003) (citations omitted).  The elements 
of common law conversion are: “(1) plaintiff holds a property interest; and (2) defendant 

deprives plaintiff of that interest.”  Williamson v. Prasciunas, 

 (Minn. 
Ct. App. 2003).                                                           
    Civil theft is governed by 

, which provides that “[a] person who 
steals personal property from another is civilly liable to the owner of the property for its 

value when stolen plus punitive damages of either $50 or up to 100 percent of its value 
when stolen, whichever is greater.”  

, subd. 1.  “‘Property’ means all 
forms of tangible property, whether real or personal[.]” 

, subd. 1(1). 
    MRI  asserts  that  that  once  A.W.  was  formed,  Batinich  directed  former  MRI 

employees to go to MRI’s office in Madison, Wisconsin and take several computers and 
monitors to be used by A.W.                                               
    A.W. claims that the computers were not owned by MRI, but rather by MRI client 
Meijer.  (1st Connolly Decl., Ex. 59 (“A.W. Dep.”) at 128–40.)  A.W. further argues that 

because MRI purchased the computers and related equipment, set them up, and then 
billed Meijer for the cost of doing so, Meijer therefore obtained title over the computers.  
(Id.)                                                                     
    MRI contends that although Meijer may have reimbursed MRI for purchasing and 

setting up the equipment, MRI retained title to the equipment.  (Id., Exs. 72–73.)   
    In sum, the ownership of the equipment here is contested by the parties and the 
record simply does not establish who owned the equipment.  Because both conversion 

and  civil  theft  require  that  MRI  owned  the  allegedly  stolen  property,  fact  disputes 
preclude summary judgment and the Court will deny both parties’ motions on Counts I 
and XII.                                                                  
    B. Count II: Common Law Fraud (Allan Brown and Wendy Brown)          
    Both parties move for summary judgment on MRI’s common law fraud claims 

against the Browns.  MRI argues that the Defendants attempted, from the start, to steal 
the Minnesota Businesses without ever compensating MRI.                   
    To establish a common law fraud claims under Minnesota law, a plaintiff must 

show  “(1)  a  false  representation  of  a  past  or  existing  material  fact  susceptible  of 
knowledge; (2) made with knowledge of the falsity of the representation or made without 
knowing whether it was true or false; (3) with the intention to induce action in reliance 
thereon; (4) that the representation caused action in reliance thereon; and (5) pecuniary 
damages.”  U.S. Bank N.A. v. Cold Spring Granite Co., 

 (Minn. 2011). 

    MRI bases its claim on two allegations that (1) Allan Brown misled MRI into 
believing that he would not receive a broker’s fee for negotiating the sale of the Zwirn’s 
entities to MRI and (2) Allan and Wendy Brown misrepresented that Wendy owned the 
Minnesota Businesses without ever purchasing them.                        

    Addressing MRI’s allegation that Allan Brown misled it regarding the payment of a 
broker’s fee, the SPA states that no broker would receive a broker fee for the sale of 
AllStaff to the Malones.  (SPA § 4.15.)  However, following closing of the deal, Allan Brown 

admitted to receiving a 1% “commission.”  (Morris Decl., Ex. 1 at 3.)     
    Notably, MRI fails to point to any record evidence indicating that Allan Brown made 
a false statement.  Instead, MRI merely points to the provision of the SPA stating that no 
broker would receive a fee.  While the parties raise various factual issues surrounding 

Allan Brown’s payment, allegations that the payment violated the SPA rest in contract 
law—not common law fraud.  Therefore, the Court will grant the Defendants’ Motion for 
Summary Judgment on MRI’s Common Law Fraud claim, to the extent that the claim 
relates to Allan Brown’s alleged misrepresentation regarding a broker’s fee. 

    Turning  to  the  alleged  misrepresentations  that  Wendy  Brown  owned  the 
Minnesota Businesses, both parties point to communications between Allan Brown and 
various MRI executives that either (1) refer to the Minnesota Businesses as Wendy’s 
Company or (2) are important company-related messages that include and refer to 
Wendy Brown.  (See, e.g.,1st Connolly Decl. Exs. 23, 26, 29, & 35.)       

    MRI argues that these are instances of Allan Brown wrongfully incorporating 
Wendy Brown into conversations that she did not have a right to be in.  Additionally, MRI 
cites several instances where the Minnesota Businesses’ employees thought or acted as 
though Wendy Brown was their employer.  (See, e.g., id., Ex. 36 (financial questionnaire 

prepared  by  an  MRI  employee  listing  Wendy  Brown  as  owner  of  the  Minnesota 
Businesses); Morris Decl., Ex. 15 (announcement stating that Wendy Brown was one of 
the owners of the Minnesota Businesses).)                                 

    Defendants insist that these communications indicate that MRI executives were 
aware of Wendy’s role and were not opposed to it.  The Defendants further argue that 
they did nothing to perpetuate any misconceptions and that they arose naturally from 
the expectation that Wendy Brown would become the owner in a matter of weeks.   

    Here, the Defendants’ intentions, as well as their knowledge, in allegedly making 
any  misleading  statements  are  factual  disputes  precluding  summary  judgment.  
Therefore, the Court will deny both parties’ Motions for Summary Judgment on that 
portion of MRI’s claim.                                                   

    In  sum,  MRI  may  pursue  a  common  law  fraud  claim  based  upon  alleged 
misrepresentations related to Wendy Brown’s ownership of the Minnesota Businesses 
but is precluded from pursuing the claim regarding any statements related to any alleged 
“broker fee” paid to Allan Brown.                                         

    C. Count VII: Unjust Enrichment (All Defendants)                     
    Both parties move for summary judgment on MRI’s claim for unjust enrichment.  
To state a claim for unjust enrichment, “the plaintiff must plead more than that ‘one party 
benefit[ted] from the efforts or obligations of others,’ but instead must allege ‘that a party 

was  unjustly  enriched  in  the  sense  that  the  term  ‘unjustly’  could  mean  illegally  or 
unlawfully.’”  Schaaf v. Residential Funding Corp., 

 (8th Cir. 2008) (citing 
First Nat’l Bank of St. Paul v. Ramer, 

 (Minn. 1981).  “So long as an 
adequate  legal  remedy  exists,  equitable  remedies  like  unjust  enrichment  are  not 

available.”  Loftness Specialized Farm Equip., Inc. v. Twiestmeyer, 

 (8th 
Cir. 2014) (citing ServiceMaster of St. Cloud v. GAB Bus. Servs., Inc., 

 
(Minn. 1996)).                                                            
    Here,  unjust  enrichment  is  not  appropriate  because  MRI  has—and  indeed  is 

pursuing—sufficient contract and tort remedies.  See Johnson v. Res. Bancshares Mortg. 
Grp., No. 972378, 

, at *2 (D. Minn. May 15, 2000) (concluding that the 
plaintiffs’ claim for unjust enrichment failed because they had an adequate remedy at 

law).  Accordingly, the Court will grant the Defendants’ Motion for Summary Judgment 
on MRI’s claim for unjust enrichment.                                     
    D. Count VIII: Breach of Contract (Allan Brown and Batinich)         
    The parties also move for summary judgment on MRI’s breach of contract claims.  

MRI claims that Allan Brown and Batinich breached their contracts with MRI.  The 
Defendants maintain that Allan Brown did not breach his contract, and even if he did, MRI 
is not entitled to damages in this action due to the terms of the contract.  Defendants 
further argue Batinich’s contract is void because its non-compete clause is overly broad. 

    To establish a breach of contract, MRI must show “(1) the existence of a valid and 
enforceable contract; (2) performance by the plaintiff; (3) breach of contract by the 
defendant; and (4) resultant injury to the plaintiff.” Van Der Molen v. Wash. Mut. Fin., 
Inc., 

 (Ill. 2005).3  The formation of a valid contract requires offer and 

acceptance, consideration, and definite and certain terms.  Village of South Elgin v. Waste 
Mgmt. of Ill., Inc., 

 (Ill. 2004).                     
    1. Allan Brown’s Contract                                            
    Under the terms of the SPA, Allan Brown is prohibited from engaging or assisting 

others who are involved in competition with MRI, from inducing or encouraging actual or 
prospective clients to terminate or modify their relationship with MRI, or to solicit or hire 
any person who is offered employment by MRI or allow any affiliates to do so for a period 
of two years following the closing date.  (SPA §§ 6.2(b), 6.5.)           


    3 The parties agree that the Allan Brown’s contract is governed by Illinois law, and—as 
discussed below—the Court has already determined that Batinich’s contract is also governed by 
Illinois law.                                                             
    MRI argues that when Allan Brown assisted Wendy Brown with forming A.W., he 
assisted a company competing against MRI.  MRI argues that Allan Brown did not simply 

provide advice to Wendy Brown, but also contacted third party vendors to work with 
A.W., reached out to MRI clients such as Meijer, and helped with onboarding new 
employees.  (Morris Decl., Exs. 166, 187, 225, 260.)                      
    Defendants argue that even if Allan Brown’s actions could constitute a breach, MRI 

waived its right to sue because his work forming A.W. was done in tandem with MRI, with 
MRI’s knowledge, and at the direction of MRI.                             
    Even assuming that the Defendants are correct that MRI directed Allan Brown to 

assist Wendy Brown in preparation of her eventual takeover of the Minnesota Businesses, 
nothing in the record says they permitted either of the Browns to set up a separate 
competitive company.  Similarly, the record does not establish that MRI permitted Allan 
Brown to invite MRI’s employees and customers to leave their employment or cancel 

their contracts with MRI in order to benefit a rival company.             
    Defendants alternatively argue that there are no damages available to MRI under 
the terms of the SPA and that MRI has not established the elements of a breach of 
contract claim.                                                           

    Section 8 of the SPA contains an indemnification clause providing:   
         Offset of Purchase Price.  Notwithstanding anything to the      
         contrary  contained  herein,  Buyer’s  sole  recourse  for      
         indemnification from Sellers shall be by way of an offset of the 
         remaining portion of the Purchase Price payable under the       
         Promissory Note.  Such an offset shall be applied on advance    
         written notice to the Sellers of no less than 30 days.          
(SPA § 8.7.)                                                              
    The Defendants assert that MRI exercised its right to an offset on May 2, 2018, 
after Allan Brown allegedly breached his contract, obtaining approximately $4.7 million 

still owed but which was released.  (Stip. re: Promissory Note, Jan. 14, 2022, Docket No. 
600.)  However, MRI asserts that at the time of the breach, October 30, 2017, the 
Promissory Note was worth more than $5.8 million.  (Id.)  As such, MRI claims that it is 
entitled to the difference between the amount released in May 2018 and the actual 

amount owed at the time of the alleged breach in October 2017.            
    Because the Defendants failed to make any argument justifying Allan Brown’s 
assistance in forming and acquiring clients for A.W. despite clear contractual language 
prohibiting him from aiding one of MRI’s competitors, and because Defendants present 

no reason why MRI should not be entitled to the difference between the value of the 
Promissory Note at the time of breach and May 2, 2018, the Court will grant MRI’s Motion 
for Summary Judgment and order Defendants to pay the difference between the value of 

the Promissory Note at the time of breach and May 2, 2018.                
    2. Batinich’s Contract4                                              
    Next, the Court must consider the restrictive covenants in Batinich’s contract to 

determine whether Batinich was in breach.                                 
    Section 4.3 of the Batinich’s contract states:                       
         Employee shall not, for a period of twelve (12) months after    
         the termination of Employee’s employment with Company,          
         directly or indirectly, work for, advise, manage, own or act as 
         an agent or consultant for or have any business connections     
         or employment relationship, with any entity or person that      
         provides the same or similar services of the kind provided by   
         Company  to  its  Customers,  located  within  a  twenty  mile  
         radius of any office in which Employee worked during his or     
         her employment with Company.                                    
(1st Connolly Decl., Ex. 13 (“Batinich Contract”) § 4.3 (emphasis added).) 
    Defendants  assert  that  the  covenants  are  unenforceable  because  they 
“unambiguously prohibit him from taking non-competitive roles.”  (Defs.’ Mem. Opp. Pl.’s 
Mot. Summ. J. at 34, Feb. 11, 2022, Docket No. 621.)                      
    Under Illinois law, agreements “which restrict the signor’s ability to work for a 
competitor without regard to capacity have repeatedly been declared contrary to law.”  
Telxon Corp. v. Hoffman, 

, 665 n.7 (N.D. Ill. 1989) (citing N. Am. Paper Co. 

    4 Defendants attempt to argue that Wisconsin law should apply to Batinich’s contract 
because Batinich lives and works in Wisconsin.  However, the Court has already considered the 
choice of law issues in this case and determined that Batinich’s contract is governed by Illinois 
law.  (Order Adopting R&R at 13 (“The Court is not free to ignore the terms of the contract, which 
specifies Illinois law, and instead rely on Minnesota law merely because there is no Illinois 
Supreme Court case on point.”).)                                          
    Additionally, to the extent Defendants argue that the assignment of Batinich’s contract 
to MRI renders the contract unenforceable, the Court has already addressed and rejected this 
issue.  (Id.)                                                             
v. Unterberger, 

, (Ill. Cir. Ct. 1988) (“Unterberger is prohibited from 
associating with any competitor in any capacity whatsoever, even if Unterberger’s job 

were merely menial and he had absolutely nothing to do with sales or purchasing.”).  
Batinich’s restrictive covenant is thus overbroad because it bars him from having any 
business connection or employment relationship with any competitor.       
    Regardless of the covenant’s overbreadth, MRI may still maintain its breach of 

contract claim if § 4.3 is severable from the overall contract.  “In general, ‘courts which 
will enforce a contract with a portion severed generally do so when the severed portion 
does not go to the contract’s essence.’”  Del Monte Fresh Produce, N.A., Inc. v. Chiquita 

Brands Int’l, Inc., 

, 818–19 (N.D. Ill. 2009) (quoting People ex rel. 
Foreman v. Vill. of Round Lake Park, 

 (Ill. App. Ct. 1988)).   
    In Del Monte, the Court refused to sever an overly broad non-competition clause 
because the contract contained language stating that it was essential to the contract.  Id. 

at 819.  Here, § 4.4 of Batinich’s contract similarly states “these restrictions are necessary 
because Employee’s position with Company would make it impossible for Employee to 
work  for  any  competitive  business  without  disclosing  Company’s  Confidential 
Information, interfering with Company’s Customer relationships, or otherwise violating 

Employee’s obligations under this Agreement.”  (Batinich Contract § 4.4.)  As such, the 
non-competition clause is an essential part of the contract and cannot be severed.  
Accordingly, the Court will grant the Defendants’ Motion for Summary Judgment as to 
Batinich’s contract.                                                      

    E. Count IX: Breach of Duty of Loyalty (Batinich)                    
    Both parties move for summary judgment on MRI’s breach of duty of loyalty claim 
against Batinich.  Under Illinois law, a plaintiff is required to establish “(1) that a fiduciary 
duty exists; (2) that the fiduciary duty was breached; and (3) that such breach proximately 

caused the injury of which the party complains.”  Lawlor v. N. Am. Coro of Ill., 

, 433 (Ill. 2012).                                                     
    Here, MRI has not argued Batinich’s alleged breach caused any injury.  Nor does 
the record establish any evidence of harm that resulted directly from Batinich’s alleged 

breach.  MRI’s failure to establish an element of their claim against Batinich undermines 
its claim.  As such, the Court will grant Defendants’ Motion for Summary Judgment on 
MRI’s Breach of Duty of Loyalty Claim.                                    

    F. Count XIII: Civil Conspiracy (All Defendants)                     
    To  demonstrate  a  civil  conspiracy,  a  plaintiff  must  demonstrate  that  the 
defendants agreed to accomplish an unlawful purpose and took concerted actions to 
achieve that purpose.  Marty H. Segelbaum, Inc. v. Mw Capital, LLC, 

, 
880–81 (D. Minn. 2009) (citing Harding v. Ohio Cas. Ins. Co., 

 (Minn. 

1950)).  Additionally, the defendants’ actions must be based on an underlying intentional 
tort.  

                                                                
    Because MRI’s civil conspiracy claims is dependent on underlying tort claims 
containing factual disputes, the Court will deny both parties’ motions on MRI’s claim. 

    G. Count III: Malicious Injury (All Defendants)                      
    Defendants also move for summary judgment on MRI’s Malicious Injury claim.  
Under Minnesota law, a claim for “malicious wrong” is recognized as a distinct claim from 
defamation based on statements made by a defendant about a plaintiff’s business.  

Marudas v. Odegard, 

 (Minn. 1943).  This claim requires allegations 
that  “the  defendant  maliciously  intended  to  injure  the  plaintiff  by  his  words  and 
succeeded in his malicious intent, and damage to the plaintiff was the direct result of the 

defendant’s words, . . . whatever the nature of the words, provided they are untrue.”  Id.; 
see also Keckhafer v. Prudential Ins. Co. of Am., No. 01-1017, 

, at *5 
(D. Minn. Oct. 1, 2002) (“Thus, where a plaintiff alleges that a defendant maliciously 
intended to injure him or her by communicating false words and has succeeded in that 

malicious intent, and damage to the plaintiff is the direct result of the defendant’s untrue 
words, a claim exists under Minnesota law upon which relief can be granted.”). 
    Defendants argue that MRI relies on conjecture in asserting that the Defendants 
made false statements intended to harm MRI.  MRI contends that its Second Amended 

Complaint contains pleadings in minute detail that establishes facts sufficient to support 
its claim.                                                                
    However, at the summary judgment stage, the nonmoving party may not rest on 
mere allegations or denials but must show, through the presentation of admissible 

evidence, that specific facts exist creating a genuine issue for trial.  Anderson, 

.  MRI’s reliance on its Second Amended Complaint does not constitute admissible 
evidence.  Therefore, the Court will grant the Defendants’ Motion for Summary Judgment 
on MRI’s claim.                                                           

    H. Count IV: Business Defamation (All Defendants)                    
    “Defamation under Minnesota law requires proof that the alleged defamatory 
statement (1) was communicated to someone other than the plaintiff, (2) was false, and 
(3) tended to harm the plaintiff’s reputation and lower [the plaintiff] in the estimation of 

the community.”  Thomas v. United Steelworkers Local 1938, 

 (8th Cir. 
2014) (quoting Chambers v. Travelers Cos., 

 (8th Cir. 2012)) (alteration in 
Thomas).  A false statement that “affects the plaintiff in his business, trade profession, 
office or calling . . . is defamation per se.”  

  (quoting Bahr v. Boise Cascade Corp., 

 (Minn. 2009)) (alteration omitted).  Statements of opinion are not 
actionable, but statements that “present or imply the existence of fact that can be proven 
true or false” are.  

  (quoting Gacek v. Owens & Minor Distrib., Inc., 

 

(8th Cir. 2012).  Whether a statement is true or false is generally a jury question.  

  (citing 
Keuchle v. Life’s Companion P.C.A., Inc., 653 n.W.2d 214, 218 (Minn. Ct. App. 2002)). 
    Defendants argue that there is no evidence that they published any statement to 
entities other than MRI that caused harm to MRI’s business.  MRI contends Defendants 
purportedly made statements to MRI clients and employees that MRI could no longer 
supply services that were outlined in the Second Amended Complaint.  However, MRI has 

not presented actual record evidence of these statements.  Instead, MRI highlights an 
incident with its client University of Minnesota Physicians (“UMP”) where A.W. invoiced 
UMP for work performed by the Minnesota Businesses.  The record, however, fails to 
show that Defendants made statements about MRI to UMP.                    

    Because MRI presents no evidence of statements the Defendants made about MRI, 
the Court will grant the Defendants’ Motion for Summary Judgment on MRI’s Business 
Defamation claim.                                                         

    I. Count V: Deceptive Trade Practices (All Defendants)               
    Defendants move for summary judgment on MRI’s Deceptive Trade Practices Act 
(“DTPA”).  They contend that because the sole remedy under the DTPA is injunctive relief 
and injunctive relief is not appropriate here because there is no longer any confusion in 
the market pertaining to MRI’s ownership of Minnesota Businesses or the ownership and 

distinct nature of A.W.                                                   
    The DTPA states that, “[a] person likely to be damaged by a deceptive trade 
practice of another may be granted an injunction against it under the principles of equity 

and on terms that the court considers reasonable.” Minn. Stat. § 325D.45, subd. 1. 
Because the DTPA provides relief for “a person likely to be damaged,” it only provides 
injunctive relief “from future damage, not past damage.” Jaskulske v. State Farm Mut. 
Auto. Ins. Co., No. 14-869, 

, at *6 (D. Minn. Nov. 3, 2014) (quotation 
omitted); see also Chairez v. AW Distrib., Inc., No. 20-1473, 

, at *9 (D. 
Minn. Apr. 23, 2021) (“An injunction is the only available remedy for the Deceptive Trade 

Practices Act claim.”).  As MRI has failed to produce evidence that it is likely to be harmed 
in the future, the DTPA’s injunctive relief is unavailable.  Moreover, MRI has failed to 
establish any reason why the DTPA would apply in this situation or any fact that tends to 
show that the Defendants’ actions are likely to cause the sorts of harm protected against 

by the DTPA.  See Minn. Stat. § 325D.44.  As such, the Court will grant the Defendants’ 
Motion for Summary Judgment on MRI’s DTPA claim.                          
    J. Count VI: Tortious Interference (All Defendants)                  
    To establish a claim for tortious interference with contract, a plaintiff must prove 

“(1) the existence of a contract; (2) the alleged wrongdoer’s knowledge of the contract; 
(3) intentional procurement of its breach; (4) without justification; and (5) damages.”  
Kallok v. Medtronic, Inc., 

 (Minn. 1998); accord E-Shops Corp. v. U.S. 
Bank Nat. Ass’n, 

 (8th Cir. 2012).                       

    While it is undisputed that MRI had several contracts with employees and with 
businesses that were breached, canceled, or otherwise dissolved around the time A.W. 
was incorporated, it is less clear who was responsible for the breach and whether any 

such breach was justified.5  Importantly, whether “interference is justified is ordinarily a 

    5 The breach of one’s own contract does not give rise to a claim of tortious interference 
with contract.  Bouten v. Richard Miller Homes, Inc., 

 (Minn. 1982).  Thus, 
insofar as Allan Brown’s and Batinich’s alleged breaches are concerned, MRI must prove that 
Wendy Brown or A.W. intentionally interfered with those contracts.        
factual determination of what is reasonable conduct under the circumstances.”  Kallok, 

.                                                        

    Here, Berg gave contradictory testimony pertaining to the role the Browns played 
in his decision to cancel several MRI contracts.  (Compare 1st Decl. Eric Berg ¶ 37, Nov. 10, 
2017, Docket No. 27, with 2nd Decl. Eric Burg ¶ 17, May 22, 2019, Docket No. 209.)  
Additionally, there is a factual dispute as to whether the Browns were aware of the details 

of the MRI contracts (other than Allan Brown’s own contract).  Because the justification 
of alleged interference with a contract is a factual issue and the pertinent facts here are 
unsettled, the Court will deny the Defendants’ Motion for Summary Judgment on MRI’s 

Tortious Interference claim.                                              
    K. Count XI: Misappropriation of Trade Secrets (All Defendants)      
    To prevail on a misappropriation of trade secrets claim under the federal Defense 
Trade Secrets Act (“DTSA”), 

 Stat. 376 (codified at 

, et seq.) and the Minnesota Uniform Trade Secrets Act (“MUTSA”), Minn. Stat. 

§§ 325C.01–.08, the plaintiff must prove (1) the existence of a trade secret possessed by 
the plaintiff and (2) misappropriation of the trade secret by the defendant.6  First, to 


    6 Because of their similarities, courts often analyze claims under the DTSA and MUTSA 
together.  See MPAY Inc. v. Erie Custom Computer Applications, Inc., 

, 1017 n.1 (8th 
Cir. 2020); Cambria Co. LLC v. Schumann, No. 19-3145, 

, at *3 (D. Minn. Jan. 23, 
2020) (“The Court analyzes the claims together because the statutes have the same purpose and 
functionally  the  same definitions  for  key  terms like  ‘trade  secret,’  ‘misappropriation,’  and 
‘improper means.’”).                                                      
prove  existence,  the  plaintiff  must  show  (1)  it  possessed  information  that  derived 
independent  economic  value  from  its  secrecy;  (2)  the  information  was  not  readily 

ascertainable by others; and (3) it took reasonable steps to keep the information secret.  

(3); Minn. Stat. § 325C.01, subd. 5; Protégé Biomedical, LLC v. Z-Medica, 
LLC, 

, 938–39 (D. Minn. 2019).  Second, to prove misappropriation, 
the plaintiff must show the defendant acquired, disclosed, or used a trade secret without 

the consent of its owner when the defendant either used improper means to acquire it 
or knew or should have known, at the time of disclosure or use, it had been acquired by 
improper means or from someone with a duty to maintain its secrecy.  

(5); 

Minn. Stat. § 325C.01, subd. 3; Protégé Biomedical, 394 F. Supp. 3d at 939   
    Here, factual disputes persist as to whether MRI took reasonable steps to protect 
its trade secrets.  Defendants assert that MRI failed to take reasonable steps to maintain 
the secrecy of its information by permitting Wendy Brown to operate the Minnesota 

Businesses without requiring her to provide any sort of contractual assurances that she 
would not access or use that information.  MRI argues that Allan Brown effectively placed 
his wife into a position of leadership in the Minnesota Businesses without the consent of 
MRI and in dereliction of his duty as the President of MRI’s newly acquired companies.  

Because there is a genuine issue of material fact regarding whether MRI took reasonable 
steps  to  protect  its  trade  secrets,  the  Court  will  deny  the  Defendants’  Motion  for 
Summary Judgment on MRI’s claim.                                          
    L. Counterclaim I: Breach of Contract                                
    MRI moves for summary judgment on Defendants’ counterclaim for breach of 

contract.  Defendants assert that MRI breached an oral contract with Wendy Brown 
wherein it agreed to sell the Minnesota Businesses to her.  MRI raises two relevant 
arguments: the contract violates the statute of frauds, and the terms of the contract were 
nullified by the integration clause of the SPA.                           

         1.   Statute of Frauds                                          
    Under  the  statute  of  frauds,  any  agreement  that,  by  its  terms,  is  not  to  be 
performed within one year from its making must be in writing or is void.  

.  The Browns claim an oral contract was formed wherein Wendy Brown would 

purchase the Minnesota Businesses contained a “material term[]” that “MRI would 
provide all “back-office functions [for the Minnesota Businesses] . . . for a five year term.”  
(Decl. of Wendy Brown ¶ 4(b); Decl. of Allan Brown, ¶ 17(b), Nov. 10, 2017, Docket No. 
26.)  However, separate documentation regarding the potential terms of the contract 

indicated that the back-office support agreement could terminate in less than one year if 
the Minnesota Businesses generated more than $50 million in profit within a year.  (Decl. 
Wendy Brown, Ex. 4 ¶ 3.).  Regardless of the probability of the Minnesota Businesses 
generating a $50 million profit in one year, the potential to satisfy the contract within one 

year renders the statute of frauds inapplicable.  See Eklund v. Vincent Brass & Aluminum 
Co., 

, 375–76 (Minn. Ct. App. 1984) (holding that the statute of frauds 
does not apply to a contract that can be performed within a year even if unlikely).  While 
it is not certain what terms of the purported oral contract would govern at this point, or 
indeed whether such a contract existed, the facts on the record here are insufficient to 

find that the statute of frauds is applicable.                            
    2. SPA Integration Clause                                            
    MRI also argues that any potential oral agreement is irrelevant because the SPA 
contained an integration clause stating that the Closing Documents “supersede all prior 

agreements and understandings, both written and oral, among the parties with respect 
to the subject matter hereof; and are not intended to confer upon any other person any 
rights or remedies hereunder.”  (SPA, § 9.4.)  However, as Defendants point out, Wendy 

Brown was not a party to the SPA.  Thus, the SPA’s integration clause has no bearing on 
the alleged contract between Wendy and MRI.                               
    Because neither the statute of frauds nor the SPA’s integration clause invalidate 
the potential contract between Wendy Brown and MRI, the Court will deny MRI’s Motion 

for Summary Judgment on Defendants’ Breach of Contract claim.             
    M. Counterclaim II: Tortious Interference with Prospective Economic Advantage 
    MRI moves for summary judgment on the Defendants’ tortious interference with 
prospective economic advantage claim.  To establish its claim, Defendants must show (1) 

a reasonable expectation of economic advantage, (2) that MRI knew of the expectation, 
(3)  that  MRI  intentionally  interfered  with  the  economic  advantage  either  in  an 
independently tortious manner or in violation of a state or federal statute or regulation, 
(4) in the absence of the interference it was reasonably probable that the Defendants 
would have realized the advantage, and (5) Defendants sustained damages.  Gieseke ex 
rel. Diversified Water diversion, Inc. v. IDCA, Inc., 

 (Minn. 2014). 

    Here, Defendants’ have not produced evidence that they were damaged by any 
alleged  interference.    Although  Defendants  allege  they  could  theoretically  produce 
evidence at trial, Defendants may not rest on mere allegations and, rather, must show 
based upon admissible evidence that specific facts creating a genuine issue for trial exist.  

Anderson, 

.  Because Defendants have failed to produce such evidence, 
the Court will grant MRI’s motion on the Defendants’ claim.               
    N. Counterclaim III: Defamation                                      
    The elements of defamation are: “(a) a false and defamatory statement about the 

plaintiff; (b) in unprivileged publication to a third party; (c) that harmed the plaintiff’s 
reputation in the community.”  Weinberger v. Maplewood Review, 

 
(Minn. 2003).  Statements are defamatory per se if they contain false accusations of 
criminal behavior, false statements regarding the plaintiff’s conduct of business, and 

imputations of a loathsome disease or unchastity.  Anderson v. Kammeier, 

  (Minn.  1977).    Defamation  per  se  is  “actionable  without  proof  of  actual 
damages . . . because statements that are defamatory per se are virtually certain to cause 

serious injury to reputation, and that this kind of injury is extremely difficult to prove.”  
Maethner v. Someplace Safe, Inc., 

 (Minn. 2019) (cleaned up). 
    Defendants allege that MRI defamed them first by telling A.W.’s client Meijer that 
Meijer must cease and desist from working with A.W.  (Decl. of Katie Connolly in Opp. 
(“Connolly Decl. in Opp.”), Ex. 29, Feb. 11, 2022, Docket No. 622-4.)  However, that is not 
a statement about the Defendants.  As such it is insufficient to sustain a defamation claim.   

    Defendants also claim that MRI defamed them by telling an MRI employee that 
Wendy Brown was stealing company files, and that MRI contacted one of A.W.’s IT 
vendors stating that Defendants stole MRI’s trade secrets.  (Decl. of Wendy Brown, Ex. 
13; Connolly Decl. in Opp., Ex. 23.)  Despite Defendants’ contentions, the statements to 

the IT vendor did not contain any accusations about Defendants.  Instead, MRI asked the 
IT vendor not to share any of MRI’s trade secrets with A.W.  (Connolly Decl. in Opp., Ex. 
23.)  That does not constitute defamation because it is not a statement about Defendants.  

However, MRI’s statements to its own employee are sufficient to establish the publication 
prong of Defendants’ claim.  Frankson v. Design Space Int., 

 (Minn. 
1986).  Accordingly, the Court will grant MRI’s Motion for Summary Judgment in part as 
it pertains to the statements MRI made to the IT vendor.                  

    O. Counterclaim IV: Tortious Interference with Contract              
    The elements of tortious interference with contract are (1) the existence of a valid 
contract, (2) the defendant’s knowledge of the contract, (3) intentional procurement of 
its  breach,  (4)  without  justification,  and  (5)  damages.    Kallok,  

.  

Defendants point to two contracts with which MRI allegedly interfered: (1) a contract 
executed by Wendy wherein the parties were one of the Minnesota Businesses and Altrua 
and (2) a contract with an IT vendor.  MRI states that it had no way of knowing that A.W. 
had contracts with either Altrua or the IT vendor.  However, the record evidence shows 
that MRI was aware that A.W. was working with those entities and actively attempted to 
disrupt those relationships.  (Connolly Decl. in Opp., Exs. 23–27, 38.)  Whether MRI’s 

interference was justified is a factual matter to be determined by a jury. 
    As to the final element, damages, the Court has sanctioned the Defendants by 
prohibiting them from entering any documentary evidence of damages, and they may 
only prove damages through witness testimony at trial.  (Order Adopting R&R at 12.)  

Because the Defendants can present evidence at trial through witnesses that may be able 
to satisfy the damages element of tortious interference and because MRI fails to show 
that the other elements have not been met, the Court will deny MRI’s Motion for 

Summary Judgment on the Defendants’ Tortious Interference with Contract Claim. 
    P. Counterclaim VII: Fraudulent Inducement                           
    MRI moves for summary judgment on the Defendants’ Fraudulent Inducement 
claim.  Defendants allege that MRI fraudulently induced Allan Brown to sign the SPA with 
the false promise of selling the Minnesota Businesses to Wendy.           

    To establish that MRI falsely induced Allan Brown to sign the SPA, Defendants must 
prove that MRI made a false representation of a past or existing material fact susceptible 
of knowledge, with knowledge of the falsity, with intent to induce action, causing reliance 

and  damages.    Davis  v.  Re-Trac  Mfg.  Corp.,  

,  38–39  (Minn.  1967).  
Defendants assert that Allan Brown would not have entered into the SPA but for MRI’s 
guarantee that it would sell the Minnesota Businesses to Wendy Brown.  MRI raises the 
same arguments it did in reference to the breach of contract claim: statute of frauds and 
the  SPA’s  Integration  Clause.    However,  Defendants  do  not  argue  that  MRI  was 
contractually bound to sell the Minnesota Businesses to Wendy Brown.  Rather they 

contend that MRI intentionally led Allan Brown to believe that if he entered into the SPA, 
MRI would sell Wendy the Minnesota Businesses.  Because the Court must interpret all 
ambiguity in favor of the non-moving party, these facts are sufficient to deny the motion.  
Moreover, there is sufficient evidence for a jury to find that Allan Brown entered into the 

SPA  because  of  MRI’s  assurances  that  it  would  sell  the  Minnesota  Businesses.  
Additionally, the defendants can prove they suffered damages because Allan Brown 
would not have lost his ownership stake in the Zwirns’ business were it not for the 

misrepresentation.  Therefore, the Court will deny MRI’s Motion for Summary Judgment 
on the Defendants’ claim for Fraudulent inducement.                       
    Q. Counterclaim VIII: Negligent Misrepresentation                    
    The elements of negligent misrepresentation are: (1) the defendant supplied false 
information to another person to guide that person’s own business transactions; (2) the 

defendant failed to use reasonable care in obtaining or communicating that information; 
(3) the plaintiff relied on the information; (4) the plaintiff was justified in relying on that 
information; and (5) the plaintiff was financially harmed as a result.  Hardin Cnty. Sav. 

Bank v. Hous. & Redevelopment Auth. of City of Brainerd, 

 (Minn. 
2012).                                                                    
    Defendants use the same argument to support its negligent misrepresentation 
claim as they did to support their fraudulent inducement claim.  Here, however, the issue 
is not simply making a false statement, but supplying false information.  Defendants fail 
to present evidence of any false information presented to the Defendants.  Therefore, the 

Court will grant MRI’s Motion for Summary Judgment on the Defendants’ Negligent 
Misrepresentation claim.                                                  
    R. Counter Claim X: Unjust Enrichment                                
    Lastly, MRI moves for Summary Judgment on the Defendants’ Unjust Enrichment 

claim.  “So long as an adequate legal remedy exists, equitable remedies like unjust 
enrichment are not available.”  Loftness Specialized Farm Equip., Inc., 

 
(citing ServiceMaster of St. Cloud, 

).  To state a claim for unjust 
enrichment, “the plaintiff must plead more than that one party benefit[ed] from the 

efforts or obligations of others, but instead must allege that a party was unjustly enriched 
in the sense that the term ‘unjustly’ could mean illegally or unlawfully.”  Schaaf, 

 (citing First Nat’l Bank of St. Paul, 

.           
    Defendants’ argument in support of this claim is that MRI, through fraudulent 

misrepresentations, improperly retained the Minnesota Businesses instead of turning 
them over to Wendy.  However, “unjust enrichment does not occur when a defendant is 
enriched by what he is entitled to under a contract or otherwise.”  

  The “enrichment” 

the Defendants allege came to MRI by contract, specifically the SPA.  Any obligation MRI 
had to turn the Minnesota Businesses over to Wendy Brown would have been governed 
by the separate oral contract with Wendy.7  Thus, MRI was only allegedly enriched 
through its contract.  Legal remedies are available.  Therefore, the Court will grant MRI’s 

Motion for Summary Judgment on the Defendants’ Unjust Enrichment Claim.   
                          CONCLUSION                                     

    In sum, the Court will grant in part MRI's Motion for Summary Judgment as to Allan 
Brown’s breach of contract, Defendants’ claims for tortious interference with prospective 
business, defamation as it pertains to statements MRI made to its IT vendor, negligent 
misrepresentation, and unjust enrichment.  The Court will also grant in part Defendants’ 

Motion for Summary Judgment on MRI’s claims for fraud as it pertains to Allan Brown’s 
acceptance of the alleged broker’s fee, malicious injury, business defamation, violation of 
the DTPA, unjust enrichment, breach of the duty of loyalty, and breach of contract as it 
pertains to Batinich’s alleged breach of contract.                        

    The Court will deny in part MRI’s Motion for Summary Judgment as to its claims 
for conversion, fraud, civil theft and conspiracy, and Defendants counterclaims for breach 
of contract, tortious interference with contract, and fraudulent inducement.   




    7 If the Defendants were to argue that MRI was bound to sell the Minnesota Businesses 
to Wendy Brown through promises made in the course of negotiating the SPA, the integration 
clause of the SPA would have nullified those promises and the claim would still fail.  Moreover, 
if, as the Defendants allege, MRI breached a separate contract with Wendy Brown the proper 
remedy there would be obtained through the Breach of Contract Claim.      
    The Court will also deny in part Defendants’ Motion for Summary Judgment as to 
MRI’s claims for conversion, fraud it pertains to Wendy Brown’s assertions of ownership 

of the Minnesota Businesses, tortious interference, misappropriation of trade secrets, 
and civil theft and conspiracy.                                           

    Based on the foregoing, and all the files, records, and proceedings herein, IT IS 

HEREBY ORDERED that;                                                      
    1.  Plaintiff’s Motion for Summary Judgment [Docket No. 589] is GRANTED in part 
      and DENIED in part, as follows:                                    

         a.  GRANTED as to Count VIII as it pertains to Allan Brown’s Breach of 
           Contract of Plaintiff’s Second Amended Complaint, and Counts II, III as it 
           pertains to statements Plaintiff made to its IT vendor, VIII and X of 
           Defendants’ Counterclaims; and                                

         b.  DENIED with respect to all other claims.                    
    2.  Defendants’ Motion for Summary Judgment [Docket No. 605] is GRANTED in 
      part and DENIED in part, as follows:                               
         a.  GRANTED as to Count II as it pertains to Allan Brown’s acceptance of the 

           alleged broker’s fee, Count VIII as it pertains to Batinich’s alleged breach 
           of  contract,  and  Counts  III,  IV,  V,  VII,  and  IX  of  Plaintiff’s  Second 
           Amended Complaint; and                                        
           b.  DENIED with respect to all other claims. 

DATED:  September 30, 2022                    dO h. (Ubhdin 
at Minneapolis, Minnesota.                         JOHN R. TUNHEIM 
                                            United States District Judge 

                                    -37- 

                   UNITED STATES DISTRICT COURT                          
                      DISTRICT OF MINNESOTA                              
MANAGEMENT REGISTRY, INC.,                                               
                                     Civil No. 17-5009 (JRT/DTS)         
                       Plaintiff,                                        

v.                               MEMORANDUM OPINION AND ORDER            
                                 GRANTING IN PART AND DENYING IN         
A.W. COMPANIES, INC., ALLAN K.     PART THE PARTIES’ MOTIONS FOR         
BROWN, WENDY BROWN, and MILAN          SUMMARY JUDGMENT                  
BATINICH,                                                                

                      Defendants.                                        

    Anna Koch, Nicholas N. Sperling, and V. John Ella, TREPANIER MACGILLIS 
    BATTINA, PA, 8000 Flour Exchange Building, 310 South Fourth Avenue,  
    Minneapolis, MN 55415; James M. Morris, MORRIS & MORRIS P.S.C., 217  
    North Upper Street, Lexington, KY 40507, for Plaintiff.              

    Donald M. Lewis, Joel Andersen, and Katie M. Connolly, NILAN JOHNSON 
    LEWIS PA, 250 Marquette Avenue, Suite 800, Minneapolis, MN 55401, for 
    Defendants.                                                          


    Plaintiff Management Registry, Inc. (“MRI”) alleges a myriad of claims against A.W. 
Companies, Inc. (“A.W.”), Allan and Wendy Brown, and a former MRI employee, Milan 
Batinich  (collectively  “Defendants”).    The  core  allegation  asserts  that  Allan  Brown 
orchestrated the sale of several companies to MRI and then aided his wife, Wendy Brown, 
in stealing several of those companies from MRI.  MRI also alleges that Allan and Wendy 
Brown, with the assistance of Milan Batinich, pilfered customers, hardware, employees, 
and other materials from MRI while establishing A.W. as a rival company to MRI.  The 
parties now move for summary judgment on 19 separate claims—12 of the Plaintiff’s 
claims and 7 of the Defendants’ counterclaims.                            

    For the reasons set forth below, the Court will grant in part MRI’s motion for 
summary  judgment  on  Count  III  of  its  Second  Amended  Complaint  as  it  relates  to 
statements MRI made to its IT vendor and Count VII as it relates to Allan Brown’s Breach 
of Contract.  The Court will also grant MRI’s motion as to Counts II, VIII, and X of 

Defendants’ Counterclaims and will deny the motion on the remaining claims.  The Court 
will grant in part Defendants’ motion on Count II of MRI’s Second Amended Complaint as 
it relates to Allan Brown’s acceptance of the alleged broker’s fee, Count VIII as it relates 

to Batinich’s alleged breach of contract, and on Counts III, IV, V, VII.  The Court will deny 
Defendants’ motion as to all remaining claims.                            
                          BACKGROUND                                     
I.   FACTUAL BACKGROUND1                                                  
    MRI is a recruiting and staffing company that offers a “full suite of workforce 

solutions” to its clients.  (Decl. of Tim Malone ¶ 3, Nov. 15, 2017, Docket No. 37.)  MRI is 


    1 While the parties each insist that their version of events is undisputed, it is apparent 
that the parties’ approach to developing the facts in their briefs was heavily infused with ad 
hominem vitriol.  Frequently, the prospect of providing the facts in coherent narrative style is 
entirely abandoned in favor of inundating the Court with bullet points and tables highlighting bits 
and pieces of the record supporting their arguments.  Moreover, many of the parties’ factual 
assertions are either unsupported by record citations or the parties only generally cite to 
voluminous exhibits.  “Without some guidance, [the Court] will not mine a summary judgment 
record searching for nuggets of factual disputes to gild a party’s arguments.”  Rodgers v. City of 
Des Moines, 

 (8th Cir. 2006).  Although the Court has thoroughly reviewed the 
owned by Joe Malone, the founder, and two of Joe Malone’s sons, Tim and Terry Malone.  
(Id.)                                                                     

    Allan Brown was the president and part owner of a suite of companies collectively 
referred to as AllStaff including, as relevant here, the Minnesota based non-industrial 
divisions of AllStaff known as AllStaff Recruiting Inc. (referred to herein as the “Minnesota 
Businesses”).  (Decl. of Katie Connolly (“1st Connolly Decl.”), Ex. 1 (“Allan Brown Dep.”) at 

8, Jan. 14, 2022, Docket No. 608.)  Mary and Mel Zwirn were also part owners of AllStaff 
alongside Allan Brown.  (Id. at 12.)                                      
    In 2016, due to Mel Zwirn’s declining health, the Zwirns contemplated selling 

AllStaff to the Malones.  (Id. at 116.)  Allan Brown and the Malones negotiated the sale of 
AllStaff via a Stock Purchase Agreement (“SPA”), and the sale closed in September of 
2017.  (1st Connolly Decl., Ex. 5 (“SPA”).)                               
    Early in the sale process, Allan Brown and the Malones discussed selling the 

Minnesota Businesses to Allan’s wife, Wendy Brown (the “Minnesota Deal”).  (Allan 
Brown Dep. at 26–27; 1st Connolly Decl., Ex. 4, (“Tim Malone Dep.”) at 7.)  Under the terms 
of  the  sale,  Allan  Brown  would  continue  to  serve  as  the  president  of  the  AllStaff 
companies, “other than the non-industrial business of AllStaff Recruiting, Inc.”  (Corrected 

Decl. James M. Morris (“Morris Decl.”), Ex. 4, May 4, 2022, Docket No. 636.)  Defendants 


record in this case, the Court expects the parties and their attorneys to exhibit a higher degree 
of professionalism and etiquette than they have displayed to date.        
assert that Allan Brown and Tim Malone agreed that MRI would purchase the Minnesota 
Businesses, and then sell them to Wendy Brown within 30 days of the SPA’s closing date, 

but the deal never materialized.  (Allan Brown Dep. at 154, 158–59.)      
    In early September 2017, MRI took possession of AllStaff.  (1st Connelly Decl., Ex. 
17.)  The management of the Minnesota Businesses between September and November 
2017 and the facts relating to the dissolution of the Minnesota Deal are disputed by the 

parties.  However, between September and November 2017, Wendy Brown operated in 
a leadership role in the Minnesota Businesses.  (See 

 Ex. 18 at 54, Ex. 14 at 63, Ex. 19 
at 16) (Minnesota Businesses’ employees testifying either that they believed MRI was not 

their employer or that they worked under Wendy Brown).)                   
    MRI claims that the Browns began a subversive movement to seize control of the 
Minnesota  Businesses  prior  to  the  closing  of  the  SPA.    It  insists  that  Allan  Brown 
intentionally took advantage of the fact that MRI would not notice what was happening 

with the Minnesota Businesses because it had just gone through an acquisition that nearly 
doubled its size and covertly ushered his wife into an ownership position. 
    MRI asserts that Allan Brown was hesitant to initially inform customers, vendors, 
and  employees  of  the  acquisition  stating  that  there  should  be  “[n]o  published 

announcement or very little fanfare to start.  Let us get transition complete . . . to make 
sure clients don’t feel a thing.”  (Morris Decl., Ex. 10.).  MRI also claims the Browns 
“utilized MRI’s FAQ/Announcement [regarding the acquisition] to manufacture a fake 
FAQ/Announcement [to be issued to the Minnesota Businesses] . . . claiming ‘Eric Berg 
and a new partner, Wendy Brown ha[d] purchased’” the Minnesota Businesses.  (Pl.’s 

Mem. Supp. Mot. Summ. J., at 7–8, Jan. 14, 2022, Docket No. 601; Morris Decl., Ex. 15).  
MRI  insists  that  the  fake  announcement  was  intended  keep  MRI  uniformed  of  the 
Minnesota Businesses.  MRI cites several instances where the Browns along with  Berg—
who, according to MRI, the Browns misled into believing Wendy owned the Minnesota 

Businesses—blocked their employees from signing any MRI employment agreements or 
agreeing to any MRI restrictive covenants.  (Morris Decl. Exs. 25–29.)    
    In late October and early November of 2017, the Browns and Eric Berg dissolved 

many of the Minnesota Businesses’ contracts with its customers who, in turn, entered 
into contracts with A.W.  (Decl. of Laura McKnight, Ex. 12, Nov. 3, 2017, Docket No. 10; 
Am. Decl. of James Morris, Exs. 1–4, Nov. 20, 2017, Docket No. 55.)  Importantly, Berg 
played the lead role in the dissolution of the Minnesota Businesses’ contracts and the 

transfer of information and equipment from the Minnesota Businesses to A.W.  (See Am. 
Decl. James Morris, Exs. 1–4.)                                            
    The Defendants’ factual narrative starkly contrasts MRI’s depiction.  Defendants 
allege emails exchanged between Allan Brown and MRI’s ownership and executives 

directly reference Wendy Brown as a go to person in the Minnesota Businesses, (Morris 
Decl., Ex. 15), and argue that MRI executives did not oppose the mention of Wendy Brown 
playing  a  leading  role.    (See,  e.g.,  

  Ex.  10.)    Defendants  also  assert  that  the 
FAQ/Announcement issued to the Minnesota Businesses was neither fake nor issued by 
the  Browns.    Instead,  they  claim  it  was  issued  by  an  employee  of  the  Minnesota 

Businesses at the direction of Berg.  (1st Connolly Decl., Ex. 28 at 148–49, 155–56, 161–
62.)  Moreover, Defendants insist that the Malones and Allan Brown agreed to the 
decision to prevent the Minnesota Businesses employees from signing MRI paperwork.  
(2nd Decl. of Katie Connolly (“2nd Connolly Decl.”), Ex. 35, Jan. 27, 2022, Docket No. 612.)  

Finally, the Defendants argue Eric Berg was not misled by the Browns and was fully aware 
that Wendy Brown was not the owner of the Minnesota Businesses and that there was 
an agreement that she would become the owner in the future.  (1st Connolly Decl., Ex. 3 

at 57.)                                                                   
    While the Court cannot resolve fact disputes at the summary judgment stage, and 
does not attempt to do so here, the record establishes that by the end of October 2017, 
the Minnesota Deal fell apart.  (Decl. of Wendy Brown ¶¶ 27–29, Nov. 10, 2017, Docket 

No. 25.)  Shortly after learning that the deal had collapsed, the Browns set about creating 
their own institution, A.W., and Allan Brown resigned from his position at MRI.  (Morris 
Decl., Ex. 41.)  It is also uncontradicted that the Browns accessed and utilized a great deal 
of data and information from the Minnesota Businesses to form A.W.  (Id., Exs. 57–60.)   

    However, Wendy Brown’s role in the Minnesota Businesses prior to this point is 
unclear.  More specifically, it is unclear if MRI was aware of her role and therefore 
condoned it or whether Allan Brown inappropriately included her in the management of 
the Minnesota Businesses.                                                 

    It is also unclear whether Berg was acting at the direction of the Browns or of his 
own volition.  Notably, while MRI states that the Browns misled Berg into believing they 
were the rightful owners of the Minnesota Businesses, the record indicates that Allan 
Brown informed Berg that the Malones were the owners of the Minnesota Businesses, 

not the Browns, (Morris Decl., Ex. 78), and there is no evidence that the Defendants 
directed Berg to take any action—including cancelling MRI’s contracts with its customers. 
    2. Relevant Sale Terms                                               

    Several specific terms of the SPA are relevant to the parties’ summary judgment 
motions.  The SPA prohibited Allan Brown from engaging or assisting others who were 
involved in competition with MRI, from inducing or encouraging actual or prospective 
clients to terminate or modify their relationship with MRI, or to solicit or hire any person 

who is offered employment by MRI or allow any affiliates to do so.  (SPA § 6.5.)  Any such 
action was prohibited for two years following the Closing Date.  (SPA § 6.2(b).) 
    Section 4.15 of the SPA stated, “[n]o broker, finder or investment banker is entitled 
to any brokerage finder’s or other fee or commission in connection with the transactions 

contemplated  by  this  Agreement  or  any  other  Transaction  Document  based  upon 
arrangements made by or on behalf of Sellers.”  (SPA § 4.15.)  Section 4.16 of the SPA 
states,  in  brief,  that  Sellers  make  no  further  representations  “[e]xcept  for  the 
representations and warranties contained in this Article (including the related portions of 
the Disclosure Schedules).”  (SPA § 4.16.)                                

    Additionally, the SPA contained an indemnification clause which required the 
Zwirns and Allan Brown to indemnify MRI against “all Losses” incurred, sustained or 
imposed upon MRI “with respect to or by reason of: (a) any inaccuracy in or breach of any 
of the representations or warranties of Sellers contained in this Agreement; or (b) any 

breach or non-fulfillment of any covenant, agreement or obligation to be performed by 
Sellers pursuant to this Agreement.”  (SPA § 8.2.)  The indemnification clause further 
states,                                                                   

    Offset of Purchase Price.  Notwithstanding anything to the contrary  
    contained herein, Buyer’s [MRI] sole recourse for indemnification    
    from Sellers [Allan Brown and the Zwirns] shall be by way of an offset 
    of the remaining portion of the Purchase Price payable under the     
    Promissory Note.  Such offset shall be applied on advance written    
    notice to the Sellers of no less than 30 days.                       
(SPA § 8.7.)                                                              
II.  Procedural Background                                                
    MRI brought an initial complaint against A.W., the Browns, and Berg.2  (Compl. at 
1, Nov. 3, 2017, Docket No. 1.)  MRI immediately sought and was granted a preliminary 
injunction enjoining the Defendants from engaging in any advertising utilizing MRI’s 
images or likeness or employing or soliciting MRI employees or customers.  (Order 

    2 Berg is no longer a defendant in this action.  (Stip. Dismissal, Aug. 9, 2018, Docket No. 
163.)                                                                     
Granting Mot. Prelim. Inj., Nov. 3, 2017, Docket No. 16.)  Two weeks later, the Court found 
that there were factual disputes “prevent[ing] the Court from finding that MRI [was] likely 

to succeed on the merits of its claims.”  (Order Vacating TRO at 1, Nov. 17, 2017, Docket 
No. 53.)                                                                  
    MRI filed its First Amended Complaint shortly thereafter.  (First Am. Compl., Nov. 
21, 2017, Docket No. 59.)  On May 17, 2019, Defendants moved for judgment on the 

pleadings as to several of the counts in the First Amended Complaint.  (Mot. J. Pleadings, 
May 17, 2019, Docket No. 204.)   On July 12, 2019, MRI filed its Second Amended 
Complaint.  (Second Am. Compl., July 12, 2019, Docket No. 251.)  Defendants filed a 

motion to dismiss the Second Amended Complaint on July 24, 2019.  (Mot. Dismiss Second 
Am. Compl., July 24, 2019, Docket No. 255.)  Defendants also filed a motion to strike MRI’s 
additional claim of punitive damages.  (Mot. Strike, July 24, 2019, Docket No. 256.)  The 
Magistrate Judge issued a Report and Recommendation (“R&R”) on September 12, 2019, 

recommending that the Court deny Defendants’ motions.  (R&R at 34, Sept. 12, 2019, 
Docket No. 298.)  The Court adopted the R&R, and the parties proceeded to discovery.  
(Order Adopting R&R, Sept. 30, 2020, Docket No. 469.)  The parties then filed the pending 
motions for summary judgment.  (Pl.’s Mot. Summ. J., Docket No. 589; Defs.’ Mot. Summ. 

J., Docket No. 605.)                                                      
                            ANALYSIS                                     
I.  STANDARD OF REVIEW                                                    
    Summary judgment is appropriate when there are no genuine issues of material 

fact, and the moving party can demonstrate that it is entitled to judgment as a matter of 
law.  Fed. R. Civ. P. 56(a).  A fact is material if it might affect the outcome of the suit, and 
a dispute is genuine if the evidence is such that it could lead a reasonable jury to return a 
verdict for the nonmoving party.  Anderson v. Liberty Lobby, Inc., 

 (1986).  

A court considering a motion for summary judgment must view the facts in the light most 
favorable to the nonmoving party and give that party the benefit of all reasonable 
inferences to be drawn from those facts.  Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 

 (1986).  The nonmoving party may not rest on mere allegations or 
denials but must show, through the presentation of admissible evidence, that specific 
facts exist creating a genuine issue for trial.  Anderson, 

 (discussing Fed. R. 
Civ. P. 56(e)).  “The mere existence of a scintilla of evidence in support of the plaintiff’s 

position will be insufficient; there must be evidence on which the jury could reasonably 
find for the plaintiff.”  

.                                     
II.  DISCUSSION                                                           

    A. Count I: Conversion and Count XII: Civil Theft (All Defendants)   
    Both parties moved for summary judgment on Counts I and XIII for conversion and 
civil theft.  MRI argues that Defendants misappropriated MRI’s possessions including 
computers, monitors, telephones, and headsets.  Defendants argue that the property 
they took did not belong to MRI but rather belonged to one of MRI’s clients who left MRI 
and became an A.W. client.  Additionally, A.W. asserts that it returned all contested 

property.                                                                 
    Conversion  is  “an  act  of  willful  interference  with  [the  personal  property  of 
another], done, without lawful justification, by which any person entitled thereto is 
deprived of use and possession, and the exercise of dominion and control over goods 

inconsistent with, and in repudiation of, the owner’s rights in those goods.”  Christensen 
v. Milbank Ins. Co., 

 (Minn. 2003) (citations omitted).  The elements 
of common law conversion are: “(1) plaintiff holds a property interest; and (2) defendant 

deprives plaintiff of that interest.”  Williamson v. Prasciunas, 

 (Minn. 
Ct. App. 2003).                                                           
    Civil theft is governed by 

, which provides that “[a] person who 
steals personal property from another is civilly liable to the owner of the property for its 

value when stolen plus punitive damages of either $50 or up to 100 percent of its value 
when stolen, whichever is greater.”  

, subd. 1.  “‘Property’ means all 
forms of tangible property, whether real or personal[.]” 

, subd. 1(1). 
    MRI  asserts  that  that  once  A.W.  was  formed,  Batinich  directed  former  MRI 

employees to go to MRI’s office in Madison, Wisconsin and take several computers and 
monitors to be used by A.W.                                               
    A.W. claims that the computers were not owned by MRI, but rather by MRI client 
Meijer.  (1st Connolly Decl., Ex. 59 (“A.W. Dep.”) at 128–40.)  A.W. further argues that 

because MRI purchased the computers and related equipment, set them up, and then 
billed Meijer for the cost of doing so, Meijer therefore obtained title over the computers.  
(Id.)                                                                     
    MRI contends that although Meijer may have reimbursed MRI for purchasing and 

setting up the equipment, MRI retained title to the equipment.  (Id., Exs. 72–73.)   
    In sum, the ownership of the equipment here is contested by the parties and the 
record simply does not establish who owned the equipment.  Because both conversion 

and  civil  theft  require  that  MRI  owned  the  allegedly  stolen  property,  fact  disputes 
preclude summary judgment and the Court will deny both parties’ motions on Counts I 
and XII.                                                                  
    B. Count II: Common Law Fraud (Allan Brown and Wendy Brown)          
    Both parties move for summary judgment on MRI’s common law fraud claims 

against the Browns.  MRI argues that the Defendants attempted, from the start, to steal 
the Minnesota Businesses without ever compensating MRI.                   
    To establish a common law fraud claims under Minnesota law, a plaintiff must 

show  “(1)  a  false  representation  of  a  past  or  existing  material  fact  susceptible  of 
knowledge; (2) made with knowledge of the falsity of the representation or made without 
knowing whether it was true or false; (3) with the intention to induce action in reliance 
thereon; (4) that the representation caused action in reliance thereon; and (5) pecuniary 
damages.”  U.S. Bank N.A. v. Cold Spring Granite Co., 

 (Minn. 2011). 

    MRI bases its claim on two allegations that (1) Allan Brown misled MRI into 
believing that he would not receive a broker’s fee for negotiating the sale of the Zwirn’s 
entities to MRI and (2) Allan and Wendy Brown misrepresented that Wendy owned the 
Minnesota Businesses without ever purchasing them.                        

    Addressing MRI’s allegation that Allan Brown misled it regarding the payment of a 
broker’s fee, the SPA states that no broker would receive a broker fee for the sale of 
AllStaff to the Malones.  (SPA § 4.15.)  However, following closing of the deal, Allan Brown 

admitted to receiving a 1% “commission.”  (Morris Decl., Ex. 1 at 3.)     
    Notably, MRI fails to point to any record evidence indicating that Allan Brown made 
a false statement.  Instead, MRI merely points to the provision of the SPA stating that no 
broker would receive a fee.  While the parties raise various factual issues surrounding 

Allan Brown’s payment, allegations that the payment violated the SPA rest in contract 
law—not common law fraud.  Therefore, the Court will grant the Defendants’ Motion for 
Summary Judgment on MRI’s Common Law Fraud claim, to the extent that the claim 
relates to Allan Brown’s alleged misrepresentation regarding a broker’s fee. 

    Turning  to  the  alleged  misrepresentations  that  Wendy  Brown  owned  the 
Minnesota Businesses, both parties point to communications between Allan Brown and 
various MRI executives that either (1) refer to the Minnesota Businesses as Wendy’s 
Company or (2) are important company-related messages that include and refer to 
Wendy Brown.  (See, e.g.,1st Connolly Decl. Exs. 23, 26, 29, & 35.)       

    MRI argues that these are instances of Allan Brown wrongfully incorporating 
Wendy Brown into conversations that she did not have a right to be in.  Additionally, MRI 
cites several instances where the Minnesota Businesses’ employees thought or acted as 
though Wendy Brown was their employer.  (See, e.g., id., Ex. 36 (financial questionnaire 

prepared  by  an  MRI  employee  listing  Wendy  Brown  as  owner  of  the  Minnesota 
Businesses); Morris Decl., Ex. 15 (announcement stating that Wendy Brown was one of 
the owners of the Minnesota Businesses).)                                 

    Defendants insist that these communications indicate that MRI executives were 
aware of Wendy’s role and were not opposed to it.  The Defendants further argue that 
they did nothing to perpetuate any misconceptions and that they arose naturally from 
the expectation that Wendy Brown would become the owner in a matter of weeks.   

    Here, the Defendants’ intentions, as well as their knowledge, in allegedly making 
any  misleading  statements  are  factual  disputes  precluding  summary  judgment.  
Therefore, the Court will deny both parties’ Motions for Summary Judgment on that 
portion of MRI’s claim.                                                   

    In  sum,  MRI  may  pursue  a  common  law  fraud  claim  based  upon  alleged 
misrepresentations related to Wendy Brown’s ownership of the Minnesota Businesses 
but is precluded from pursuing the claim regarding any statements related to any alleged 
“broker fee” paid to Allan Brown.                                         

    C. Count VII: Unjust Enrichment (All Defendants)                     
    Both parties move for summary judgment on MRI’s claim for unjust enrichment.  
To state a claim for unjust enrichment, “the plaintiff must plead more than that ‘one party 
benefit[ted] from the efforts or obligations of others,’ but instead must allege ‘that a party 

was  unjustly  enriched  in  the  sense  that  the  term  ‘unjustly’  could  mean  illegally  or 
unlawfully.’”  Schaaf v. Residential Funding Corp., 

 (8th Cir. 2008) (citing 
First Nat’l Bank of St. Paul v. Ramer, 

 (Minn. 1981).  “So long as an 
adequate  legal  remedy  exists,  equitable  remedies  like  unjust  enrichment  are  not 

available.”  Loftness Specialized Farm Equip., Inc. v. Twiestmeyer, 

 (8th 
Cir. 2014) (citing ServiceMaster of St. Cloud v. GAB Bus. Servs., Inc., 

 
(Minn. 1996)).                                                            
    Here,  unjust  enrichment  is  not  appropriate  because  MRI  has—and  indeed  is 

pursuing—sufficient contract and tort remedies.  See Johnson v. Res. Bancshares Mortg. 
Grp., No. 972378, 

, at *2 (D. Minn. May 15, 2000) (concluding that the 
plaintiffs’ claim for unjust enrichment failed because they had an adequate remedy at 

law).  Accordingly, the Court will grant the Defendants’ Motion for Summary Judgment 
on MRI’s claim for unjust enrichment.                                     
    D. Count VIII: Breach of Contract (Allan Brown and Batinich)         
    The parties also move for summary judgment on MRI’s breach of contract claims.  

MRI claims that Allan Brown and Batinich breached their contracts with MRI.  The 
Defendants maintain that Allan Brown did not breach his contract, and even if he did, MRI 
is not entitled to damages in this action due to the terms of the contract.  Defendants 
further argue Batinich’s contract is void because its non-compete clause is overly broad. 

    To establish a breach of contract, MRI must show “(1) the existence of a valid and 
enforceable contract; (2) performance by the plaintiff; (3) breach of contract by the 
defendant; and (4) resultant injury to the plaintiff.” Van Der Molen v. Wash. Mut. Fin., 
Inc., 

 (Ill. 2005).3  The formation of a valid contract requires offer and 

acceptance, consideration, and definite and certain terms.  Village of South Elgin v. Waste 
Mgmt. of Ill., Inc., 

 (Ill. 2004).                     
    1. Allan Brown’s Contract                                            
    Under the terms of the SPA, Allan Brown is prohibited from engaging or assisting 

others who are involved in competition with MRI, from inducing or encouraging actual or 
prospective clients to terminate or modify their relationship with MRI, or to solicit or hire 
any person who is offered employment by MRI or allow any affiliates to do so for a period 
of two years following the closing date.  (SPA §§ 6.2(b), 6.5.)           


    3 The parties agree that the Allan Brown’s contract is governed by Illinois law, and—as 
discussed below—the Court has already determined that Batinich’s contract is also governed by 
Illinois law.                                                             
    MRI argues that when Allan Brown assisted Wendy Brown with forming A.W., he 
assisted a company competing against MRI.  MRI argues that Allan Brown did not simply 

provide advice to Wendy Brown, but also contacted third party vendors to work with 
A.W., reached out to MRI clients such as Meijer, and helped with onboarding new 
employees.  (Morris Decl., Exs. 166, 187, 225, 260.)                      
    Defendants argue that even if Allan Brown’s actions could constitute a breach, MRI 

waived its right to sue because his work forming A.W. was done in tandem with MRI, with 
MRI’s knowledge, and at the direction of MRI.                             
    Even assuming that the Defendants are correct that MRI directed Allan Brown to 

assist Wendy Brown in preparation of her eventual takeover of the Minnesota Businesses, 
nothing in the record says they permitted either of the Browns to set up a separate 
competitive company.  Similarly, the record does not establish that MRI permitted Allan 
Brown to invite MRI’s employees and customers to leave their employment or cancel 

their contracts with MRI in order to benefit a rival company.             
    Defendants alternatively argue that there are no damages available to MRI under 
the terms of the SPA and that MRI has not established the elements of a breach of 
contract claim.                                                           

    Section 8 of the SPA contains an indemnification clause providing:   
         Offset of Purchase Price.  Notwithstanding anything to the      
         contrary  contained  herein,  Buyer’s  sole  recourse  for      
         indemnification from Sellers shall be by way of an offset of the 
         remaining portion of the Purchase Price payable under the       
         Promissory Note.  Such an offset shall be applied on advance    
         written notice to the Sellers of no less than 30 days.          
(SPA § 8.7.)                                                              
    The Defendants assert that MRI exercised its right to an offset on May 2, 2018, 
after Allan Brown allegedly breached his contract, obtaining approximately $4.7 million 

still owed but which was released.  (Stip. re: Promissory Note, Jan. 14, 2022, Docket No. 
600.)  However, MRI asserts that at the time of the breach, October 30, 2017, the 
Promissory Note was worth more than $5.8 million.  (Id.)  As such, MRI claims that it is 
entitled to the difference between the amount released in May 2018 and the actual 

amount owed at the time of the alleged breach in October 2017.            
    Because the Defendants failed to make any argument justifying Allan Brown’s 
assistance in forming and acquiring clients for A.W. despite clear contractual language 
prohibiting him from aiding one of MRI’s competitors, and because Defendants present 

no reason why MRI should not be entitled to the difference between the value of the 
Promissory Note at the time of breach and May 2, 2018, the Court will grant MRI’s Motion 
for Summary Judgment and order Defendants to pay the difference between the value of 

the Promissory Note at the time of breach and May 2, 2018.                
    2. Batinich’s Contract4                                              
    Next, the Court must consider the restrictive covenants in Batinich’s contract to 

determine whether Batinich was in breach.                                 
    Section 4.3 of the Batinich’s contract states:                       
         Employee shall not, for a period of twelve (12) months after    
         the termination of Employee’s employment with Company,          
         directly or indirectly, work for, advise, manage, own or act as 
         an agent or consultant for or have any business connections     
         or employment relationship, with any entity or person that      
         provides the same or similar services of the kind provided by   
         Company  to  its  Customers,  located  within  a  twenty  mile  
         radius of any office in which Employee worked during his or     
         her employment with Company.                                    
(1st Connolly Decl., Ex. 13 (“Batinich Contract”) § 4.3 (emphasis added).) 
    Defendants  assert  that  the  covenants  are  unenforceable  because  they 
“unambiguously prohibit him from taking non-competitive roles.”  (Defs.’ Mem. Opp. Pl.’s 
Mot. Summ. J. at 34, Feb. 11, 2022, Docket No. 621.)                      
    Under Illinois law, agreements “which restrict the signor’s ability to work for a 
competitor without regard to capacity have repeatedly been declared contrary to law.”  
Telxon Corp. v. Hoffman, 

, 665 n.7 (N.D. Ill. 1989) (citing N. Am. Paper Co. 

    4 Defendants attempt to argue that Wisconsin law should apply to Batinich’s contract 
because Batinich lives and works in Wisconsin.  However, the Court has already considered the 
choice of law issues in this case and determined that Batinich’s contract is governed by Illinois 
law.  (Order Adopting R&R at 13 (“The Court is not free to ignore the terms of the contract, which 
specifies Illinois law, and instead rely on Minnesota law merely because there is no Illinois 
Supreme Court case on point.”).)                                          
    Additionally, to the extent Defendants argue that the assignment of Batinich’s contract 
to MRI renders the contract unenforceable, the Court has already addressed and rejected this 
issue.  (Id.)                                                             
v. Unterberger, 

, (Ill. Cir. Ct. 1988) (“Unterberger is prohibited from 
associating with any competitor in any capacity whatsoever, even if Unterberger’s job 

were merely menial and he had absolutely nothing to do with sales or purchasing.”).  
Batinich’s restrictive covenant is thus overbroad because it bars him from having any 
business connection or employment relationship with any competitor.       
    Regardless of the covenant’s overbreadth, MRI may still maintain its breach of 

contract claim if § 4.3 is severable from the overall contract.  “In general, ‘courts which 
will enforce a contract with a portion severed generally do so when the severed portion 
does not go to the contract’s essence.’”  Del Monte Fresh Produce, N.A., Inc. v. Chiquita 

Brands Int’l, Inc., 

, 818–19 (N.D. Ill. 2009) (quoting People ex rel. 
Foreman v. Vill. of Round Lake Park, 

 (Ill. App. Ct. 1988)).   
    In Del Monte, the Court refused to sever an overly broad non-competition clause 
because the contract contained language stating that it was essential to the contract.  Id. 

at 819.  Here, § 4.4 of Batinich’s contract similarly states “these restrictions are necessary 
because Employee’s position with Company would make it impossible for Employee to 
work  for  any  competitive  business  without  disclosing  Company’s  Confidential 
Information, interfering with Company’s Customer relationships, or otherwise violating 

Employee’s obligations under this Agreement.”  (Batinich Contract § 4.4.)  As such, the 
non-competition clause is an essential part of the contract and cannot be severed.  
Accordingly, the Court will grant the Defendants’ Motion for Summary Judgment as to 
Batinich’s contract.                                                      

    E. Count IX: Breach of Duty of Loyalty (Batinich)                    
    Both parties move for summary judgment on MRI’s breach of duty of loyalty claim 
against Batinich.  Under Illinois law, a plaintiff is required to establish “(1) that a fiduciary 
duty exists; (2) that the fiduciary duty was breached; and (3) that such breach proximately 

caused the injury of which the party complains.”  Lawlor v. N. Am. Coro of Ill., 

, 433 (Ill. 2012).                                                     
    Here, MRI has not argued Batinich’s alleged breach caused any injury.  Nor does 
the record establish any evidence of harm that resulted directly from Batinich’s alleged 

breach.  MRI’s failure to establish an element of their claim against Batinich undermines 
its claim.  As such, the Court will grant Defendants’ Motion for Summary Judgment on 
MRI’s Breach of Duty of Loyalty Claim.                                    

    F. Count XIII: Civil Conspiracy (All Defendants)                     
    To  demonstrate  a  civil  conspiracy,  a  plaintiff  must  demonstrate  that  the 
defendants agreed to accomplish an unlawful purpose and took concerted actions to 
achieve that purpose.  Marty H. Segelbaum, Inc. v. Mw Capital, LLC, 

, 
880–81 (D. Minn. 2009) (citing Harding v. Ohio Cas. Ins. Co., 

 (Minn. 

1950)).  Additionally, the defendants’ actions must be based on an underlying intentional 
tort.  

                                                                
    Because MRI’s civil conspiracy claims is dependent on underlying tort claims 
containing factual disputes, the Court will deny both parties’ motions on MRI’s claim. 

    G. Count III: Malicious Injury (All Defendants)                      
    Defendants also move for summary judgment on MRI’s Malicious Injury claim.  
Under Minnesota law, a claim for “malicious wrong” is recognized as a distinct claim from 
defamation based on statements made by a defendant about a plaintiff’s business.  

Marudas v. Odegard, 

 (Minn. 1943).  This claim requires allegations 
that  “the  defendant  maliciously  intended  to  injure  the  plaintiff  by  his  words  and 
succeeded in his malicious intent, and damage to the plaintiff was the direct result of the 

defendant’s words, . . . whatever the nature of the words, provided they are untrue.”  Id.; 
see also Keckhafer v. Prudential Ins. Co. of Am., No. 01-1017, 

, at *5 
(D. Minn. Oct. 1, 2002) (“Thus, where a plaintiff alleges that a defendant maliciously 
intended to injure him or her by communicating false words and has succeeded in that 

malicious intent, and damage to the plaintiff is the direct result of the defendant’s untrue 
words, a claim exists under Minnesota law upon which relief can be granted.”). 
    Defendants argue that MRI relies on conjecture in asserting that the Defendants 
made false statements intended to harm MRI.  MRI contends that its Second Amended 

Complaint contains pleadings in minute detail that establishes facts sufficient to support 
its claim.                                                                
    However, at the summary judgment stage, the nonmoving party may not rest on 
mere allegations or denials but must show, through the presentation of admissible 

evidence, that specific facts exist creating a genuine issue for trial.  Anderson, 

.  MRI’s reliance on its Second Amended Complaint does not constitute admissible 
evidence.  Therefore, the Court will grant the Defendants’ Motion for Summary Judgment 
on MRI’s claim.                                                           

    H. Count IV: Business Defamation (All Defendants)                    
    “Defamation under Minnesota law requires proof that the alleged defamatory 
statement (1) was communicated to someone other than the plaintiff, (2) was false, and 
(3) tended to harm the plaintiff’s reputation and lower [the plaintiff] in the estimation of 

the community.”  Thomas v. United Steelworkers Local 1938, 

 (8th Cir. 
2014) (quoting Chambers v. Travelers Cos., 

 (8th Cir. 2012)) (alteration in 
Thomas).  A false statement that “affects the plaintiff in his business, trade profession, 
office or calling . . . is defamation per se.”  

  (quoting Bahr v. Boise Cascade Corp., 

 (Minn. 2009)) (alteration omitted).  Statements of opinion are not 
actionable, but statements that “present or imply the existence of fact that can be proven 
true or false” are.  

  (quoting Gacek v. Owens & Minor Distrib., Inc., 

 

(8th Cir. 2012).  Whether a statement is true or false is generally a jury question.  

  (citing 
Keuchle v. Life’s Companion P.C.A., Inc., 653 n.W.2d 214, 218 (Minn. Ct. App. 2002)). 
    Defendants argue that there is no evidence that they published any statement to 
entities other than MRI that caused harm to MRI’s business.  MRI contends Defendants 
purportedly made statements to MRI clients and employees that MRI could no longer 
supply services that were outlined in the Second Amended Complaint.  However, MRI has 

not presented actual record evidence of these statements.  Instead, MRI highlights an 
incident with its client University of Minnesota Physicians (“UMP”) where A.W. invoiced 
UMP for work performed by the Minnesota Businesses.  The record, however, fails to 
show that Defendants made statements about MRI to UMP.                    

    Because MRI presents no evidence of statements the Defendants made about MRI, 
the Court will grant the Defendants’ Motion for Summary Judgment on MRI’s Business 
Defamation claim.                                                         

    I. Count V: Deceptive Trade Practices (All Defendants)               
    Defendants move for summary judgment on MRI’s Deceptive Trade Practices Act 
(“DTPA”).  They contend that because the sole remedy under the DTPA is injunctive relief 
and injunctive relief is not appropriate here because there is no longer any confusion in 
the market pertaining to MRI’s ownership of Minnesota Businesses or the ownership and 

distinct nature of A.W.                                                   
    The DTPA states that, “[a] person likely to be damaged by a deceptive trade 
practice of another may be granted an injunction against it under the principles of equity 

and on terms that the court considers reasonable.” Minn. Stat. § 325D.45, subd. 1. 
Because the DTPA provides relief for “a person likely to be damaged,” it only provides 
injunctive relief “from future damage, not past damage.” Jaskulske v. State Farm Mut. 
Auto. Ins. Co., No. 14-869, 

, at *6 (D. Minn. Nov. 3, 2014) (quotation 
omitted); see also Chairez v. AW Distrib., Inc., No. 20-1473, 

, at *9 (D. 
Minn. Apr. 23, 2021) (“An injunction is the only available remedy for the Deceptive Trade 

Practices Act claim.”).  As MRI has failed to produce evidence that it is likely to be harmed 
in the future, the DTPA’s injunctive relief is unavailable.  Moreover, MRI has failed to 
establish any reason why the DTPA would apply in this situation or any fact that tends to 
show that the Defendants’ actions are likely to cause the sorts of harm protected against 

by the DTPA.  See Minn. Stat. § 325D.44.  As such, the Court will grant the Defendants’ 
Motion for Summary Judgment on MRI’s DTPA claim.                          
    J. Count VI: Tortious Interference (All Defendants)                  
    To establish a claim for tortious interference with contract, a plaintiff must prove 

“(1) the existence of a contract; (2) the alleged wrongdoer’s knowledge of the contract; 
(3) intentional procurement of its breach; (4) without justification; and (5) damages.”  
Kallok v. Medtronic, Inc., 

 (Minn. 1998); accord E-Shops Corp. v. U.S. 
Bank Nat. Ass’n, 

 (8th Cir. 2012).                       

    While it is undisputed that MRI had several contracts with employees and with 
businesses that were breached, canceled, or otherwise dissolved around the time A.W. 
was incorporated, it is less clear who was responsible for the breach and whether any 

such breach was justified.5  Importantly, whether “interference is justified is ordinarily a 

    5 The breach of one’s own contract does not give rise to a claim of tortious interference 
with contract.  Bouten v. Richard Miller Homes, Inc., 

 (Minn. 1982).  Thus, 
insofar as Allan Brown’s and Batinich’s alleged breaches are concerned, MRI must prove that 
Wendy Brown or A.W. intentionally interfered with those contracts.        
factual determination of what is reasonable conduct under the circumstances.”  Kallok, 

.                                                        

    Here, Berg gave contradictory testimony pertaining to the role the Browns played 
in his decision to cancel several MRI contracts.  (Compare 1st Decl. Eric Berg ¶ 37, Nov. 10, 
2017, Docket No. 27, with 2nd Decl. Eric Burg ¶ 17, May 22, 2019, Docket No. 209.)  
Additionally, there is a factual dispute as to whether the Browns were aware of the details 

of the MRI contracts (other than Allan Brown’s own contract).  Because the justification 
of alleged interference with a contract is a factual issue and the pertinent facts here are 
unsettled, the Court will deny the Defendants’ Motion for Summary Judgment on MRI’s 

Tortious Interference claim.                                              
    K. Count XI: Misappropriation of Trade Secrets (All Defendants)      
    To prevail on a misappropriation of trade secrets claim under the federal Defense 
Trade Secrets Act (“DTSA”), 

 Stat. 376 (codified at 

, et seq.) and the Minnesota Uniform Trade Secrets Act (“MUTSA”), Minn. Stat. 

§§ 325C.01–.08, the plaintiff must prove (1) the existence of a trade secret possessed by 
the plaintiff and (2) misappropriation of the trade secret by the defendant.6  First, to 


    6 Because of their similarities, courts often analyze claims under the DTSA and MUTSA 
together.  See MPAY Inc. v. Erie Custom Computer Applications, Inc., 

, 1017 n.1 (8th 
Cir. 2020); Cambria Co. LLC v. Schumann, No. 19-3145, 

, at *3 (D. Minn. Jan. 23, 
2020) (“The Court analyzes the claims together because the statutes have the same purpose and 
functionally  the  same definitions  for  key  terms like  ‘trade  secret,’  ‘misappropriation,’  and 
‘improper means.’”).                                                      
prove  existence,  the  plaintiff  must  show  (1)  it  possessed  information  that  derived 
independent  economic  value  from  its  secrecy;  (2)  the  information  was  not  readily 

ascertainable by others; and (3) it took reasonable steps to keep the information secret.  

(3); Minn. Stat. § 325C.01, subd. 5; Protégé Biomedical, LLC v. Z-Medica, 
LLC, 

, 938–39 (D. Minn. 2019).  Second, to prove misappropriation, 
the plaintiff must show the defendant acquired, disclosed, or used a trade secret without 

the consent of its owner when the defendant either used improper means to acquire it 
or knew or should have known, at the time of disclosure or use, it had been acquired by 
improper means or from someone with a duty to maintain its secrecy.  

(5); 

Minn. Stat. § 325C.01, subd. 3; Protégé Biomedical, 394 F. Supp. 3d at 939   
    Here, factual disputes persist as to whether MRI took reasonable steps to protect 
its trade secrets.  Defendants assert that MRI failed to take reasonable steps to maintain 
the secrecy of its information by permitting Wendy Brown to operate the Minnesota 

Businesses without requiring her to provide any sort of contractual assurances that she 
would not access or use that information.  MRI argues that Allan Brown effectively placed 
his wife into a position of leadership in the Minnesota Businesses without the consent of 
MRI and in dereliction of his duty as the President of MRI’s newly acquired companies.  

Because there is a genuine issue of material fact regarding whether MRI took reasonable 
steps  to  protect  its  trade  secrets,  the  Court  will  deny  the  Defendants’  Motion  for 
Summary Judgment on MRI’s claim.                                          
    L. Counterclaim I: Breach of Contract                                
    MRI moves for summary judgment on Defendants’ counterclaim for breach of 

contract.  Defendants assert that MRI breached an oral contract with Wendy Brown 
wherein it agreed to sell the Minnesota Businesses to her.  MRI raises two relevant 
arguments: the contract violates the statute of frauds, and the terms of the contract were 
nullified by the integration clause of the SPA.                           

         1.   Statute of Frauds                                          
    Under  the  statute  of  frauds,  any  agreement  that,  by  its  terms,  is  not  to  be 
performed within one year from its making must be in writing or is void.  

.  The Browns claim an oral contract was formed wherein Wendy Brown would 

purchase the Minnesota Businesses contained a “material term[]” that “MRI would 
provide all “back-office functions [for the Minnesota Businesses] . . . for a five year term.”  
(Decl. of Wendy Brown ¶ 4(b); Decl. of Allan Brown, ¶ 17(b), Nov. 10, 2017, Docket No. 
26.)  However, separate documentation regarding the potential terms of the contract 

indicated that the back-office support agreement could terminate in less than one year if 
the Minnesota Businesses generated more than $50 million in profit within a year.  (Decl. 
Wendy Brown, Ex. 4 ¶ 3.).  Regardless of the probability of the Minnesota Businesses 
generating a $50 million profit in one year, the potential to satisfy the contract within one 

year renders the statute of frauds inapplicable.  See Eklund v. Vincent Brass & Aluminum 
Co., 

, 375–76 (Minn. Ct. App. 1984) (holding that the statute of frauds 
does not apply to a contract that can be performed within a year even if unlikely).  While 
it is not certain what terms of the purported oral contract would govern at this point, or 
indeed whether such a contract existed, the facts on the record here are insufficient to 

find that the statute of frauds is applicable.                            
    2. SPA Integration Clause                                            
    MRI also argues that any potential oral agreement is irrelevant because the SPA 
contained an integration clause stating that the Closing Documents “supersede all prior 

agreements and understandings, both written and oral, among the parties with respect 
to the subject matter hereof; and are not intended to confer upon any other person any 
rights or remedies hereunder.”  (SPA, § 9.4.)  However, as Defendants point out, Wendy 

Brown was not a party to the SPA.  Thus, the SPA’s integration clause has no bearing on 
the alleged contract between Wendy and MRI.                               
    Because neither the statute of frauds nor the SPA’s integration clause invalidate 
the potential contract between Wendy Brown and MRI, the Court will deny MRI’s Motion 

for Summary Judgment on Defendants’ Breach of Contract claim.             
    M. Counterclaim II: Tortious Interference with Prospective Economic Advantage 
    MRI moves for summary judgment on the Defendants’ tortious interference with 
prospective economic advantage claim.  To establish its claim, Defendants must show (1) 

a reasonable expectation of economic advantage, (2) that MRI knew of the expectation, 
(3)  that  MRI  intentionally  interfered  with  the  economic  advantage  either  in  an 
independently tortious manner or in violation of a state or federal statute or regulation, 
(4) in the absence of the interference it was reasonably probable that the Defendants 
would have realized the advantage, and (5) Defendants sustained damages.  Gieseke ex 
rel. Diversified Water diversion, Inc. v. IDCA, Inc., 

 (Minn. 2014). 

    Here, Defendants’ have not produced evidence that they were damaged by any 
alleged  interference.    Although  Defendants  allege  they  could  theoretically  produce 
evidence at trial, Defendants may not rest on mere allegations and, rather, must show 
based upon admissible evidence that specific facts creating a genuine issue for trial exist.  

Anderson, 

.  Because Defendants have failed to produce such evidence, 
the Court will grant MRI’s motion on the Defendants’ claim.               
    N. Counterclaim III: Defamation                                      
    The elements of defamation are: “(a) a false and defamatory statement about the 

plaintiff; (b) in unprivileged publication to a third party; (c) that harmed the plaintiff’s 
reputation in the community.”  Weinberger v. Maplewood Review, 

 
(Minn. 2003).  Statements are defamatory per se if they contain false accusations of 
criminal behavior, false statements regarding the plaintiff’s conduct of business, and 

imputations of a loathsome disease or unchastity.  Anderson v. Kammeier, 

  (Minn.  1977).    Defamation  per  se  is  “actionable  without  proof  of  actual 
damages . . . because statements that are defamatory per se are virtually certain to cause 

serious injury to reputation, and that this kind of injury is extremely difficult to prove.”  
Maethner v. Someplace Safe, Inc., 

 (Minn. 2019) (cleaned up). 
    Defendants allege that MRI defamed them first by telling A.W.’s client Meijer that 
Meijer must cease and desist from working with A.W.  (Decl. of Katie Connolly in Opp. 
(“Connolly Decl. in Opp.”), Ex. 29, Feb. 11, 2022, Docket No. 622-4.)  However, that is not 
a statement about the Defendants.  As such it is insufficient to sustain a defamation claim.   

    Defendants also claim that MRI defamed them by telling an MRI employee that 
Wendy Brown was stealing company files, and that MRI contacted one of A.W.’s IT 
vendors stating that Defendants stole MRI’s trade secrets.  (Decl. of Wendy Brown, Ex. 
13; Connolly Decl. in Opp., Ex. 23.)  Despite Defendants’ contentions, the statements to 

the IT vendor did not contain any accusations about Defendants.  Instead, MRI asked the 
IT vendor not to share any of MRI’s trade secrets with A.W.  (Connolly Decl. in Opp., Ex. 
23.)  That does not constitute defamation because it is not a statement about Defendants.  

However, MRI’s statements to its own employee are sufficient to establish the publication 
prong of Defendants’ claim.  Frankson v. Design Space Int., 

 (Minn. 
1986).  Accordingly, the Court will grant MRI’s Motion for Summary Judgment in part as 
it pertains to the statements MRI made to the IT vendor.                  

    O. Counterclaim IV: Tortious Interference with Contract              
    The elements of tortious interference with contract are (1) the existence of a valid 
contract, (2) the defendant’s knowledge of the contract, (3) intentional procurement of 
its  breach,  (4)  without  justification,  and  (5)  damages.    Kallok,  

.  

Defendants point to two contracts with which MRI allegedly interfered: (1) a contract 
executed by Wendy wherein the parties were one of the Minnesota Businesses and Altrua 
and (2) a contract with an IT vendor.  MRI states that it had no way of knowing that A.W. 
had contracts with either Altrua or the IT vendor.  However, the record evidence shows 
that MRI was aware that A.W. was working with those entities and actively attempted to 
disrupt those relationships.  (Connolly Decl. in Opp., Exs. 23–27, 38.)  Whether MRI’s 

interference was justified is a factual matter to be determined by a jury. 
    As to the final element, damages, the Court has sanctioned the Defendants by 
prohibiting them from entering any documentary evidence of damages, and they may 
only prove damages through witness testimony at trial.  (Order Adopting R&R at 12.)  

Because the Defendants can present evidence at trial through witnesses that may be able 
to satisfy the damages element of tortious interference and because MRI fails to show 
that the other elements have not been met, the Court will deny MRI’s Motion for 

Summary Judgment on the Defendants’ Tortious Interference with Contract Claim. 
    P. Counterclaim VII: Fraudulent Inducement                           
    MRI moves for summary judgment on the Defendants’ Fraudulent Inducement 
claim.  Defendants allege that MRI fraudulently induced Allan Brown to sign the SPA with 
the false promise of selling the Minnesota Businesses to Wendy.           

    To establish that MRI falsely induced Allan Brown to sign the SPA, Defendants must 
prove that MRI made a false representation of a past or existing material fact susceptible 
of knowledge, with knowledge of the falsity, with intent to induce action, causing reliance 

and  damages.    Davis  v.  Re-Trac  Mfg.  Corp.,  

,  38–39  (Minn.  1967).  
Defendants assert that Allan Brown would not have entered into the SPA but for MRI’s 
guarantee that it would sell the Minnesota Businesses to Wendy Brown.  MRI raises the 
same arguments it did in reference to the breach of contract claim: statute of frauds and 
the  SPA’s  Integration  Clause.    However,  Defendants  do  not  argue  that  MRI  was 
contractually bound to sell the Minnesota Businesses to Wendy Brown.  Rather they 

contend that MRI intentionally led Allan Brown to believe that if he entered into the SPA, 
MRI would sell Wendy the Minnesota Businesses.  Because the Court must interpret all 
ambiguity in favor of the non-moving party, these facts are sufficient to deny the motion.  
Moreover, there is sufficient evidence for a jury to find that Allan Brown entered into the 

SPA  because  of  MRI’s  assurances  that  it  would  sell  the  Minnesota  Businesses.  
Additionally, the defendants can prove they suffered damages because Allan Brown 
would not have lost his ownership stake in the Zwirns’ business were it not for the 

misrepresentation.  Therefore, the Court will deny MRI’s Motion for Summary Judgment 
on the Defendants’ claim for Fraudulent inducement.                       
    Q. Counterclaim VIII: Negligent Misrepresentation                    
    The elements of negligent misrepresentation are: (1) the defendant supplied false 
information to another person to guide that person’s own business transactions; (2) the 

defendant failed to use reasonable care in obtaining or communicating that information; 
(3) the plaintiff relied on the information; (4) the plaintiff was justified in relying on that 
information; and (5) the plaintiff was financially harmed as a result.  Hardin Cnty. Sav. 

Bank v. Hous. & Redevelopment Auth. of City of Brainerd, 

 (Minn. 
2012).                                                                    
    Defendants use the same argument to support its negligent misrepresentation 
claim as they did to support their fraudulent inducement claim.  Here, however, the issue 
is not simply making a false statement, but supplying false information.  Defendants fail 
to present evidence of any false information presented to the Defendants.  Therefore, the 

Court will grant MRI’s Motion for Summary Judgment on the Defendants’ Negligent 
Misrepresentation claim.                                                  
    R. Counter Claim X: Unjust Enrichment                                
    Lastly, MRI moves for Summary Judgment on the Defendants’ Unjust Enrichment 

claim.  “So long as an adequate legal remedy exists, equitable remedies like unjust 
enrichment are not available.”  Loftness Specialized Farm Equip., Inc., 

 
(citing ServiceMaster of St. Cloud, 

).  To state a claim for unjust 
enrichment, “the plaintiff must plead more than that one party benefit[ed] from the 

efforts or obligations of others, but instead must allege that a party was unjustly enriched 
in the sense that the term ‘unjustly’ could mean illegally or unlawfully.”  Schaaf, 

 (citing First Nat’l Bank of St. Paul, 

.           
    Defendants’ argument in support of this claim is that MRI, through fraudulent 

misrepresentations, improperly retained the Minnesota Businesses instead of turning 
them over to Wendy.  However, “unjust enrichment does not occur when a defendant is 
enriched by what he is entitled to under a contract or otherwise.”  

  The “enrichment” 

the Defendants allege came to MRI by contract, specifically the SPA.  Any obligation MRI 
had to turn the Minnesota Businesses over to Wendy Brown would have been governed 
by the separate oral contract with Wendy.7  Thus, MRI was only allegedly enriched 
through its contract.  Legal remedies are available.  Therefore, the Court will grant MRI’s 

Motion for Summary Judgment on the Defendants’ Unjust Enrichment Claim.   
                          CONCLUSION                                     

    In sum, the Court will grant in part MRI's Motion for Summary Judgment as to Allan 
Brown’s breach of contract, Defendants’ claims for tortious interference with prospective 
business, defamation as it pertains to statements MRI made to its IT vendor, negligent 
misrepresentation, and unjust enrichment.  The Court will also grant in part Defendants’ 

Motion for Summary Judgment on MRI’s claims for fraud as it pertains to Allan Brown’s 
acceptance of the alleged broker’s fee, malicious injury, business defamation, violation of 
the DTPA, unjust enrichment, breach of the duty of loyalty, and breach of contract as it 
pertains to Batinich’s alleged breach of contract.                        

    The Court will deny in part MRI’s Motion for Summary Judgment as to its claims 
for conversion, fraud, civil theft and conspiracy, and Defendants counterclaims for breach 
of contract, tortious interference with contract, and fraudulent inducement.   




    7 If the Defendants were to argue that MRI was bound to sell the Minnesota Businesses 
to Wendy Brown through promises made in the course of negotiating the SPA, the integration 
clause of the SPA would have nullified those promises and the claim would still fail.  Moreover, 
if, as the Defendants allege, MRI breached a separate contract with Wendy Brown the proper 
remedy there would be obtained through the Breach of Contract Claim.      
    The Court will also deny in part Defendants’ Motion for Summary Judgment as to 
MRI’s claims for conversion, fraud it pertains to Wendy Brown’s assertions of ownership 

of the Minnesota Businesses, tortious interference, misappropriation of trade secrets, 
and civil theft and conspiracy.                                           

    Based on the foregoing, and all the files, records, and proceedings herein, IT IS 

HEREBY ORDERED that;                                                      
    1.  Plaintiff’s Motion for Summary Judgment [Docket No. 589] is GRANTED in part 
      and DENIED in part, as follows:                                    

         a.  GRANTED as to Count VIII as it pertains to Allan Brown’s Breach of 
           Contract of Plaintiff’s Second Amended Complaint, and Counts II, III as it 
           pertains to statements Plaintiff made to its IT vendor, VIII and X of 
           Defendants’ Counterclaims; and                                

         b.  DENIED with respect to all other claims.                    
    2.  Defendants’ Motion for Summary Judgment [Docket No. 605] is GRANTED in 
      part and DENIED in part, as follows:                               
         a.  GRANTED as to Count II as it pertains to Allan Brown’s acceptance of the 

           alleged broker’s fee, Count VIII as it pertains to Batinich’s alleged breach 
           of  contract,  and  Counts  III,  IV,  V,  VII,  and  IX  of  Plaintiff’s  Second 
           Amended Complaint; and                                        
           b.  DENIED with respect to all other claims. 

DATED:  September 30, 2022                    dO h. (Ubhdin 
at Minneapolis, Minnesota.                         JOHN R. TUNHEIM 
                                            United States District Judge 

                                    -37-