This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).






Jacquelin Powell,





Richard Anderson, et al.,



Walter G. Anderson, Inc.,



A & P Partnership, et al.,



Filed January 10, 2006

Crippen, Judge


Hennepin County District Court

File No. CT 97-22393


John F. Bonner, III, Robert J. Borhart, Bonner & Borhart LLP, 1950 U.S. Bank Plaza, 220 South Sixth Street, Minneapolis, MN 55402-4511 (for appellant)


Richard T. Ostlund, Randy G. Gullickson, Anthony Ostlund & Baer, P.A., 3600 Wells Fargo Center, 90 South Seventh Street, Minneapolis, MN 55402 (for respondents Richard Anderson, et al.)


Eric J. Magnuson, Patrick J. Rooney II, John J. Wackman, Rider Bennett, LLP, 33 South Sixth Street, Suite 4900, Minneapolis, MN 55402 (for respondent Walter G. Anderson, Inc.)

            Considered and decided by Toussaint, Chief Judge, Hudson, Judge, and Crippen, Judge.

U N P U B L I S H E D   O P I N I O N


            After a remand from this court, appellant Jacquelin Powell challenges the district court’s summary judgment dismissing her claims under Minn. Stat. § 302A.751 as a minority shareholder in a closely-held family corporation.  Appellant alleges that there are material fact issues on the valuation method for her stock under a shareholder-buyout agreement and the percentage of her stock ownership following a delay in redemption of the corporate shares of her late father, and she challenges the district court’s denial of additional discovery and attorney fees.  Finding no merit in these claims, we affirm.


            The facts of this case are set forth in detail in Powell v. Anderson, No. C5-99-1975, 2003 WL 22705878 (Minn. App. 2003) (Powell II), where we remanded certain issues to the district court after the Minnesota Supreme Court vacated this court’s previous decision for reasons unrelated to the current appeal.  See Powell v. Anderson, 660 N.W.2d 107 (Minn. 2003) (Powell I), (vacating Powell v. Anderson, No. C5-99-1755, 2000 WL 943842 (Minn. App. 2000)).  

            The late Walter G. Anderson founded Anderson, Incorporated, a closely-held paper box manufacturing company (the company) in the 1950’s.   In the 1970’s, he gave a significant number of shares in the corporation to appellant and her brother, respondent Richard Anderson. 

            In 1988, appellant signed an amended share retirement agreement that provided that following her father’s death the company would have an option to redeem her shares at a price equal to the aggregate book value of those shares at the end of the fiscal year immediately preceding the redemption date.  The option was exercisable on the day after the last distribution from Walter Anderson’s estate. In 1991, Richard Anderson and respondent Walter Gervais became partners in respondent Anderson Corporation (an entity other than Anderson, Inc.), which is also engaged in the paper box packaging industry.

            After Walter Anderson’s death in 1997, appellant unsuccessfully attempted to cancel the buyout agreement.  She then sued for a fair-market-value buyout of her shares, alleging that Richard Anderson, Walter Gervais, and respondent Estate of Walter G. Anderson had violated Minn. Stat. § 302A.751, subd. 1 (1996) by acting fraudulently and in a manner unfairly prejudicial to her as a shareholder of the company.  Appellant also alleged that Richard Anderson and Gervais, through Anderson Corp., had usurped a corporate opportunity of Anderson, Inc., and she brought other claims that are no longer at issue.  The company and Anderson Corp. counterclaimed for a judgment declaring the buyout agreement to be valid, binding, and enforceable. 

            The district court determined, by summary judgment, that appellant had a right to a fair-market-value buyout of her shares of the company, but that the 1988 share retirement agreement signed by appellant was valid and enforceable.  The district court summarily determined the percentage of appellant’s interest in the company to be 24.73%, the percentage stated in the agreement, which was less than the 33% claimed by appellant.  The district court, also on summary judgment, determined the fair market value for appellant’s shares to be $3,464,499.    

            In its initial summary judgment, the district court determined that the only issue remaining for trial was the usurpation claim and resulting damages and ordered that discovery be limited to claims not resolved on summary judgment.  Later, the court granted appellant’s motion for partial summary judgment on the usurpation claim, based on respondents’ stipulation to liability for usurpation.  The court determined the valuation date for appellant’s claims against both corporations (Anderson, Inc. and Anderson Corp.) to be November 12, 1997, the date of filing of her lawsuit. 

            The court held a bench trial on the usurpation claim, limiting testimony on damages to the separate value of Anderson Corp. and excluding proffered evidence on the combined value of the two corporations.  The court found that appellant was entitled to $605,390.40 in damages.[1] The court denied appellant’s request for attorney fees.

            After the supreme court vacated this court’s decision on appellant’s first appeal, we considered the matter on remand in Powell v. Anderson, No. C5-99-1975, 2003 WL 22705878 (Minn. App. 2003) (Powell II).  In Powell II, this court reversed and remanded portions of the district court’s earlier actions.  Pertinent to the issues now on appeal, we concluded that the district court abused its discretion when it summarily determined, without a court decision, that the contracted-for price in the buyout agreement was unreasonable, that appellant was entitled to equitable relief in the form of damages for the difference between the share price specified in the agreement and the fair market value of the shares.  Id. at *7.  We also determined that there should be a trial to determine whether appellant’s percentage of ownership in the company should be greater than 24.73%, to reflect that appellant would have owned a greater percentage of the company after shares were redeemed from Walter Anderson’s estate to pay estate taxes, which occurred before the corporation exercised its option to redeem appellant’s shares.  Id. at *5.  Finally, we remanded for reexamination of the district court’s orders limiting discovery and denying attorney fees.  Id. at *8, *12.  We also remanded for determination of whether the usurpation of corporate opportunity triggers equitable relief under Minn. Stat. § 302A.751, subd. 1, and for a reexamination of the district court’s handling of minority and marketability discounts on the usurpation claim.  Id. at *7, *10-*11.

            On remand, the district court summarily redetermined that a court-ordered buyout of appellant’s interest in the company was an appropriate remedy.  The court determined as a matter of law that appellant failed to show that the book-value terms of the 1988 buyout agreement were unreasonable and that appellant’s shares had a book value price of $2,846,820.  The court concluded that appellant’s ownership was 24.73%, not the greater percentage that she claimed as a result of delay in redeeming certain shares.  Finally, the district court denied further discovery and refused to allow costs and attorney fees.


            An appellate court reviews summary judgments to determine whether there are any genuine issues of material fact and whether the district court erred in applying the law.  Reads Landing Campers Ass’n v. Twp. of Pepin, 546 N.W.2d 10, 13 (Minn. 1996); see Minn. R. Civ. P. 56.03 (stating that summary judgment is appropriate if the record shows “there is no genuine issue as to any material fact and that either party is entitled to a judgment as a matter of law”).  When a motion for summary judgment is properly made and supported, the nonmoving party may not rest upon “mere averments or denials . . . but must present specific facts showing that there is a genuine issue for trial.”  Minn. R. Civ. P. 56.05; see DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997).  The reviewing court views the evidence in the light most favorable to the nonmoving party and resolves any doubt on the existence of a material fact against the moving party.  Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).[2]



            Appellant contends that the usurpation-of-corporate-opportunity claim for which she received a separate recovery requires that her shares in the company be valued at greater than the book value specified in the 1988 buyout agreement—that there are genuine fact questions as to whether application of the book value agreement is unreasonable. 

            Under Minn. Stat. § 302A.751, subd. 1(b)(3) (2004), a court may order a buyout of a shareholder’s interest if corporate directors or controlling shareholders have acted in a manner unfairly prejudicial to that shareholder.  The district court determined that the usurpation by Anderson Corp. of corporate opportunity of the company fell within the ambit of this section, thus triggering appellant’s right to a buyout.  But this decision leads to the separate issue on the valuation method. 

            Although the statute provides for a fair-market-value approach, it also indicates that if the shares are subject to a shareholder control agreement, the court “shall order the sale for the price and on the terms set forth [in the agreement] . . . , unless the court determines that the price or terms are unreasonable under all circumstances of the case.”  Minn. Stat. § 302A.751, subd. 2 (2004).  “‘Shall’ is mandatory.”  Minn. Stat. § 645.44, subd. 16 (2004).  Additionally, Minn. Stat. § 302A.751, subd. 3a (2004), recognizes a presumption that written agreements “are presumed to reflect the parties’ reasonable expectations concerning matters dealt with in the agreements.”  See Gunderson v. Alliance of Computer Prof’ls, 628 N.W.2d 173, 185 (Minn. App. 2001) (stating that courts may rely on shareholder agreements in determining reasonableness of shareholder expectations), review granted (Minn. July 24, 2001), and appeal dismissed (Minn. Aug. 17, 2001).  The terms of the shareholder agreement signed by appellant are presumed to reflect the parties’ reasonable expectations, and the court was bound to follow it unless appellant established that the price or terms were unreasonable under all the circumstances of this case.

            The district court concluded that no material factual issue existed on the reasonableness of the agreement and ordered a buyout at the contracted-for book value of appellant’s shares, a value well below the market value of the shares.  Appellant argues that the court improperly found facts on summary judgment because a genuine issue of material fact exists on the reasonableness of the agreement “under all the circumstances of the case.”

            The issue is narrowed by a preliminary legal consideration:  Disparity in price does not by itself establish that a valuation method specified in the parties’ contract is unreasonable, absent separate conduct that would make enforcement of that term unreasonable.  See Gunderson, 628 N.W.2d at 187 (stating that mere fact that valuation method agreed on in buyout agreement resulted in purchase price lower than appraised value of stock does not establish breach of fiduciary duty).

            Appellant argues that the usurpation conduct in 1991 demonstrates the unreasonableness of the book-value agreement.  But appellant failed to specify any conduct that establishes a link between the usurpation of corporate opportunity when Anderson Corp. was founded and the 1988 buyout agreement.  As the district court observed, the record lacks any evidence that the controlling shareholders used the agreement to manipulate or force a sale; it is undisputed that the buyout provision was triggered by the death of Walter Anderson and not by acts within the control of the parties.  See id. (concluding that evidence failed to support claim that buy-sell agreement frustrated reasonable shareholder expectations in absence of evidence that controlling shareholders used agreement manipulatively to force sale of shares).  Additionally, we recognize that appellant has recovered separate damages for the usurpation claim.  The district court did not err in determining as a matter of law that the buyout agreement was not shown to be unreasonable, and the terms of the agreement govern appellant’s buyout rights.

            We further reject appellant’s argument that the district court failed to follow this court’s remand instructions when it declined to adopt appellant’s proposal for valuing both corporations (Anderson, Inc. and Anderson Corp.) together.  The court was not required to consider appellant’s valuation proposal, and its refusal to do so would bear further examination only if we had concluded that the buyout value established in the agreement was unreasonable, a proposition that we are rejecting.   


            Appellant argues that the district court erred in determining on summary judgment that appellant owned 24.73% of the shares of Anderson, Inc. for purposes of the court-ordered buyout.  Appellant asserts that a material factual issue remains regarding whether Richard Anderson’s delay in redeeming Walter Anderson’s shares to pay estate taxes improperly reduced appellant’s percentage of ownership in the company.  She claims that if Walter Anderson’s stock had been redeemed immediately after his death, her ownership percentage would have increased from 24.73% to 33.60%.

            It is evident, as respondents have observed, that if the cost of redemption lowered the total book value of all, 33.60% of a lower book value might not exceed 24.73% of a higher total value.  At any rate, appellant had the burden to show facts warranting cause for greater relief and has failed to show that an increase in her ownership percentage share interest would have correspondingly enlarged her recovery beyond that awarded by the district court.  

            Respondents also refer, in a separate proceeding, to this court’s affirmance of a district court determination that Richard Anderson violated no fiduciary duty as trustee of a trust associated with the Walter Anderson estate by delaying redemption for estate tax purposes.  See In re Estate & Trust of Anderson, 654 N.W.2d 682, 688 (Minn. App. 2002) (holding that Anderson did not breach his fiduciary duty as trustee by transferring decedent’s shares to the trust before the company redeemed sufficient shares to pay estate taxes and costs, or by failing to pay the estate taxes immediately), review denied (Minn. Feb. 26, 2003).  As appellant points out, we recognized in Powell II that “[the trust] litigation did not involve the issue of whether the delay in redeeming the shares constituted a breach of Anderson’s fiduciary duty to Powell under Minn. Stat. § 302A.751, subd. 1(b)(3).  This issue has never been litigated.”  Powell II, 2003 WL 22705878, at *6.  Thus, this court’s prior determination that Richard Anderson did not breach his fiduciary duty as trustee has no preclusive effect on this appeal.   See Clapper v. Budget Oil Co., 437 N.W.2d 722, 725 (Minn. App. 1989) (stating that “[c]ollateral estoppel bars the relitigation of issues which are both identical to those issues already litigated by the parties in a prior action and necessary and essential to the resulting judgment”), review denied (Minn. June 9, 1989). 

            Nonetheless, we conclude that the district court on remand had other good cause to disregard the date-of-redemption issue.  It is undisputed that on November 12, 1997, the valuation date previously established by the district court (eight months after Walter Anderson’s death), appellant owned 24.73% of the stock in the company.  The selection of this valuation date was not challenged in the first appeal and became the law of the case.[3]  See Lange v. Nelson-Ryan Flight Serv., Inc., 263 Minn. 152, 155-56, 116 N.W.2d 266, 269 (1962) (stating that law-of-the-case doctrine applies regarding issues previously determined within an action); Pedro v. Pedro, 489 N.W.2d 798, 803 (Minn. App. 1992) (holding that when appellants failed to raise issue in first appeal, district court’s determination of that issue became law of case in second appeal), review denied (Minn. Oct. 20, 1992).  Any increase in value attributable to a change in ownership percentage after November 12, 1997, the valuation date adopted by the district court before the first appeal, is no longer recoverable.


            Appellant claims that the district court abused its discretion by declining to allow further discovery.  The court’s determination on discovery will not be disturbed absent a clear abuse of its wide discretion.  Shetka v. Kueppers, Kueppers, Von Feldt, & Salmen, 454 N.W.2d 916, 921 (Minn. 1990). 

            This court in Powell II directed the district court to permit such further discovery, in its discretion, as the requesting party showed to be relevant and necessary to a determination of the remanded issues.  Powell II, 2003 WL 22705878 at *8.  Appellant argues that further discovery could have produced evidence demonstrating ties between the usurpation claim relating to the formation of Anderson Corp. in 1991 and the fairness of the 1988 buyout agreement.  But appellant failed to identify particular documents or facts that might now be discovered and might have been relevant or necessary to the court’s determination of the remanded issues.  The district court did not abuse its discretion in declining to order further discovery.

            Finally, appellant challenges the district court’s denial of attorney fees.  We consider the court’s determination on whether to grant attorney fees under an abuse-of-discretion standard.  Becker v. Alloy Hardfacing & Eng’g Co., 401 N.W.2d 655, 661 (Minn. 1987).  In Powell II, this court indicated that the district court could, when reconsidering appellant’s claim for equitable relief, “choose to exercise its discretion differently” on appellant’s requests for fees and costs.  Powell II, 2003 WL 22705878, at *11. 

            Appellant asserts that the district court’s determination that she was entitled to relief under chapter 302A entitles her to attorney fees.  See Minn. Stat. §§ 302A.467 (2004) (stating that if an officer or corporate director violates a section of chapter 302A, the court, in an action brought by a corporate shareholder, “may . . . award expenses, including attorney fees”); .751, subd. 4 (2004) (stating that district court may “in its discretion” award attorneys’ fees and expenses if a party has acted arbitrarily, vexatiously, or in bad faith).  But neither statutory provision mandates the award of fees and costs.  See Minn. Stat. § 645.44, subd. 15 (2004) (providing that “‘[m]ay’ is permissive”).   Although appellant was awarded damages, the district court found that no evidence was presented to indicate that Richard Anderson or Gervais, by forming Anderson Corp., acted in a malicious or fraudulent manner towards appellant.  And the district court found no bad faith, arbitrary or vexatious conduct on the part of respondents.  On the record as presented, the court did not abuse its discretion in declining to award attorney fees. 

            Appellant also contends that the district court erred by imposing a heightened burden for obtaining attorney fees, arguing that an award of fees would be “extraordinary.”  Although the statute does not establish any presumption against awarding fees, we view the reference as a stylistic choice and not the court’s evidentiary determination.  The record establishes that there was a reasonable basis for the court to exercise discretion and to deny fees. 


* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

[1] In a determination no longer at issue, this amount was redetermined after correction of the district court’s initial application of minority and marketability discounts.

[2] Respondents claim that the appeal is defective because it was taken from the wrong judgment.  The notice of appeal referred to the district court’s February 2005 judgment, which determined an issue not currently on appeal.  The district court’s October 2004 order for partial summary judgment on the claims raised in this appeal was not appealable when it was executed and neither was the judgment entered on that order in November 2004.  See Minn. R. Civ. App. P. 103.03(a) (stating that appeal may be taken “from a final judgment, or from a partial judgment entered pursuant to Minn. R. Civ. P. 54.02”); 104.01, subd. 1 (providing that time to appeal partial judgment does not begin to run until entry of a final judgment adjudicating remainder of claims).  Because the November 2004 judgment finally determined the issues challenged on appeal, appellant should have included a reference to that judgment in the current notice of appeal.  But “notices of appeal are to be liberally construed in favor of their sufficiency,” and we will not dismiss an appeal on the basis of defects that could not have been misleading.  Kelly v. Kelly, 371 N.W.2d 193, 195-96 (Minn. 1985).  Appellant’s notice of appeal stated as its basis “the entry and docketing of judgments constituting the final determination of the rights of the parties in the underlying action” and properly outlined the issues raised on appeal.  Respondents had sufficient notice of these issues, and any technical defect in omitting a specific reference to the November 2004 partial judgment is not jurisdictional.

[3] The record shows that appellant originally contested the valuation date in district court in a different context, i.e., measuring damages for usurpation of corporate opportunity.  In that context, appellant argued that damages for the lost opportunity belonging to the company should be valued as of the trial date.  The valuation date for usurpation damages was not challenged in the first appeal, although appellant challenged other valuation factors that are not at issue in this appeal.  The district court’s February 1999 determination that any buyout under the parties’ agreement should be valued as of November 1997 was not raised in the first appeal, it was not remanded for additional consideration, and it is not properly before us at this time.