This opinion will be unpublished and

may not be cited except as provided by

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

 

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A05-2000

 

 

Mary Jo K. Gerring,

Appellant,

 

vs.

 

Quality Car Wash Operations, Ltd., et al.,

Respondents,

 

Steven M. Gerring,

Respondent,

 

Virginia Gerring,

Respondent.

 

 

Filed July 11, 2006

Affirmed

Toussaint, Chief Judge

 

Hennepin County District Court

File No. MC 05-000467

 

 

John F. Bonner, III, Robyn K. Johnson, Bonner & Borhart, LLP, 1950 U.S. Bank Plaza, 220 South Sixth Street, Minneapolis, MN 55402 (for appellant)

 

Alan Miles Albrecht, Gavin, Olson & Winters, Ltd., 1017 Hennepin Avenue, Glencoe, MN 55336 (for respondents Quality Car Wash Operations, Ltd., Gerring Properties, Inc., and Martin T. Gerring)

 

Thomas W. Pahl, Jennifer R. Olson, Foley & Mansfield, P.L.L.P., Suite 1200, 250 Marquette Avenue, Minneapolis, MN 55401 (for respondent Steven M. Gerring)

 

John Wade Tackett, Suite 502, 800 Washington Avenue North, Minneapolis, MN 55401 (for respondent Virginia Gerring)

 

 

            Considered and decided by Wright, Presiding Judge; Toussaint, Chief Judge; and Ross, Judge.

U N P U B L I S H E D   O P I N I O N

TOUSSAINT, Chief Judge

            Appellant Mary Jo K. Gerring challenges the district court’s grant of summary judgment, claiming she has standing to bring an action under the Minnesota Business Corporations Acts because she has not been divested of her 19 shares of stock in Gerring Properties.  We affirm.

D E C I S I O N

In January 2005, appellant filed a complaint seeking relief under the Minnesota Business Corporation Act against respondents Quality Car Wash Operations, Ltd., Gerring Properties, Inc., and shareholders Martin T. Gerring, Steven M. Gerring, and Virginia Gerring.  Appellant alleged her interest in Gerring Properties had been devalued because of respondents’ “unfairly prejudicial” actions.  The district court granted respondents’ motion for summary judgment, finding that appellant was not a shareholder in Gerring Properties and therefore lacked standing to bring a claim under the Minnesota Business Corporation Act. 

A review of an order for summary judgment must determine whether there are any genuine issues of material fact and whether the district court erred in its application of the law.  State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).  The evidence must be viewed in the light most favorable to the nonmoving party.  Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).  The district court’s legal conclusions are reviewed de novo.  Lefto v. Hoggsbreath Enters., Inc., 581 N.W.2d 855, 856 (Minn. 1998).

Only legally recognized shareholders can maintain an action under the Minnesota Business Corporation Act.  Minn. Stat. § 302A.751, subd 1 (2004).  Ownership of shares of stock in a corporation is evidenced by possession of share certificates.  Mertz v. H.D. Hudson Mfg. Co., 194 Minn. 636, 641, 261 N.W. 472, 474 (1935).  Generally, transfer restrictions that appear on the share certificates must be enforced.  Minn. Stat. §§ 302A.429, subd 2; 302A.011, subd. 29; 336.8-204 (2004).  But such restrictions do not apply to involuntary transfers of stock.  Castonguay v. Castonguay, 306 N.W.2d 143, 145 (Minn. 1981). 

Before their marriage dissolution in July 2003, appellant held 19 shares of Gerring Properties stock and Steven M. Gerring held one share.  Her share certificate indicated the stocks were “transferable only on the books of the Corporation by the holder hereof in person or by duly authorized Attorney upon surrender of this Certificate properly endorsed.”  The marriage dissolution decree divided the parties’ 20 shares of Gerring Properties stock equally between them.  The decree required the parties to execute and exchange documents to effectuate the order, and, if they failed to do so, the decree “shall operate as said conveyance”. 

In compliance with the divorce decree, the Gerring Properties board of directors issued ten new shares of stock to appellant and ten new shares to Steven M. Gerring.  Three unheeded notices were sent to appellant.  Appellant contends that she is still a Gerring Properties stockholder because her certificate for 19 shares of stock indicates on its face that it ccould be transferred only by the holder “in person” or by an authorized attorney, and she did not surrender the certificate.  We agree with the district court’s conclusion that, because appellant failed to surrender her certificate for 19 shares of stock, the dissolution decree operated as an involuntary transfer of her stock.  Restrictions on stock transfers do not apply to involuntary transfers.  Id.

Subsequently, a third-party levy was issued against appellant’s ten new shares of stock in order to satisfy a judgment obtained against her by her children, Matthew S. and Steven R. Gerring.  The levy was executed in March 2004 by the Hennepin County sheriff and resulted in an involuntary transfer of appellant’s remaining ten shares of Gerring Properties stock.  Appellant argues for the first time on appeal that the levy was not valid because it was made out to “Gerring Car Wash.”  Because this issue was not raised or considered by the district court, we will not consider it on appeal.  Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988).  

Thus, we affirm the district court’s conclusion that, because appellant does not own any shares of stock in Gerring Properties, she lacks the legal interest necessary to establish standing to bring an action under the Minnesota Business Corporations Acts. See Envall v. Indep. Sch. Dist. No. 704, 399 N.W.2d 593, 596 (Minn. App. 1987) (personal interest not enough to establish standing to bring action), review denied (Minn. Mar. 25, 1987); Minn. Stat. § 302A.751, subd 1 (only legally recognized shareholders can maintain action under Minnesota Business Corporation Act). 

Affirmed.