This opinion will be unpublished and

may not be cited except as provided by

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







In re PEMSTAR, Inc.

Derivative Litigation.


Filed September 5, 2006


Hudson, Judge


Olmsted County District Court

File No. C3-03-3693


Gerald T. Laurie, Ian S. Laurie, Jonathan D. Sigelman, Laurie & Laurie, PA, 1660 South Highway 100, Suite 508E, St. Louis Park, Minnesota 55416; and


W. Todd Ver Weire (pro hac vice), Federman & Sherwood, 120 North Robinson, Suite 2720, Oklahoma City, Oklahoma 73102 (for appellant Michael Tittle)


Peter W. Carter, Mitchell W. Granberg, Bryan C. Keane, Gretchen A. Agee, Dorsey & Whitney LLP, Suite 1500, 50 South Sixth Street, Minneapolis, Minnesota 55402-1498 (for respondents PEMSTAR, Inc., et al.)


            Considered and decided by Halbrooks, Presiding Judge; Hudson, Judge; and Wright, Judge.

U N P U B L I S H E D   O P I N I O N


On appeal from a judgment approving a settlement in a shareholder derivative action, appellant, who objected to the proposed settlement, argues that the district court (a) erred in holding that appellant lacked standing to object to the proposed settlement; (b) erred in ruling that the notice of settlement complied with the requirements of due process; (c) abused its discretion in ruling that the settlement agreement was fair, reasonable, and adequate because the court failed to perform the required analysis or create an adequate record for judicial review; and (d) failed to ensure that the named plaintiffs had standing to settle the lawsuit.  Because we conclude that appellant lacked standing to object to the settlement agreement, we affirm and decline to address the remaining issues.


In August 2005, appellant Michael Tittle filed an objection to a proposed settlement agreement in a shareholder derivative action against respondents PEMSTAR, Inc., et al.  The district court found that appellant did not provide adequate proof of purchase and ownership of PEMSTAR stock and therefore did not have standing to object to the settlement agreement.  However, the district court permitted appellant to present his arguments at the hearing.  At the conclusion of the hearing, the district court determined that appellant had failed to show that the proposed settlement was unfair, unreasonable, or inadequate.  Accordingly, the district court approved the settlement agreement and general release.  This appeal follows.


            A party must be a shareholder at the time he brings suit to have standing to challenge a settlement agreement in a derivative action.  Vista Fund v. Garis, 277 N.W.2d 19, 23 (Minn. 1979).  Challenges to standing are questions of law which this court reviews de novo.  Rukavina v. Pawlenty, 684 N.W.2d 525, 531 (Minn. App. 2004), review denied (Minn. Oct. 19, 2004).   

            The district court, pursuant to the requirements of Minn. R. Civ. P. 23.09, provided notice to the shareholders of the proposed settlement agreement by issuing a notice of proposed settlement of derivative action (hereafter “the notice order”).  Minn. R. Civ. P. 23.09 (previously numbered 23.06).  The text of the notice order included language directing shareholders who wished to object to the proposed settlement agreement to supply the district court with proof of ownership of PEMSTAR shares.  Specifically, the notice order provided that “no one shall be heard or entitled to contest any of the [settlement agreement] unless that person . . . has served . . . proof of such ownership in the form of a broker’s confirmation slip, statement of account, or other satisfactory proof of purchase and continued ownership of the common stock.”

The only proof appellant provided to the district court of his shareholder status was an unsworn statement by his attorney.  Appellant contends that this statement, declaring that appellant owned 1,800 shares during the relevant time period set forth in the complaint, satisfied the proof requirement contained in the notice order.  The district court concluded that the declaration did not meet the requirements set out in the notice order and did not constitute adequate proof of purchase and ownership of PEMSTAR shares.  We agree.

The unsworn statement by appellant’s attorney is not adequate proof of appellant’s shareholder status.  The statement does not contain any language indicating that the declaration was made under penalty of perjury or that it was sworn.  See Meany v. Newell, 352 N.W.2d 779, 783 (Minn. App. 1984) (holding unsworn statements insufficient to defeat summary judgment motion), rev’d on other grounds, 367 N.W.2d 472 (Minn. 1985); State v. Mlynczak, 268 Minn. 417, 419, 130 N.W.2d 53, 54–55 (1964) (holding unsworn statements incompetent as substantive evidence in criminal context).

Additionally, the statement does not comply with the requirements listed in the notice order issued by the district court.  The canon of construction known as ejusdem generis states that “when a general word or phrase follows a list of specific persons or things, the general word or phrase will be interpreted to include only persons or things of the same type as those listed.”  Black’s Law Dictionary 535 (7th ed. 1999).  In this case, we analyze the general phrase “other satisfactory proof” in the context of the preceding, more specific terms.  These specific terms, “broker’s confirmation slip” and “statement of account,” suggest official proof or documentation of share ownership.  The unsworn statement by appellant’s attorney does not fall into this category, nor does it share the characteristics common to such documents.  Therefore, the unsworn statement by appellant’s attorney is unsatisfactory proof of appellant’s shareholder status.