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Lindmark v. Saint John's University

United States District Court, D. Minnesota

March 8, 2019

Roger M. Lindmark, Plaintiff,
Saint John's University, Defendant.



         This case involves parallel proceedings in this Court and in Stearns County District Court, Seventh Judicial District of Minnesota. Before this Court is the motion of Defendant Saint John's University (SJU) to dismiss Plaintiff Roger M. Lindmark's complaint. (Dkt. 8.) For the reasons addressed below, the Court grants SJU's motion and dismisses Lindmark's complaint with prejudice.


         The background of each proceeding is addressed, beginning with the proceedings before this Court.

         I. Federal Court Proceedings[1]

         Lindmark, an alumnus of SJU, was involved in two class-action lawsuits that predate this matter. Lindmark was the plaintiff in the first lawsuit, filed in the United States District Court for the Central District of California, Lindmark v. Am. Express Co., No. 2:00-CV-08658. The settlement agreement in that case included a “cy pres donation to ‘compensate society,' ” payable to SJU by American Express Company, a defendant in the California federal lawsuit. This $50, 000 donation established the “Lindmark Endowment for Corporate-Business Ethics” (the Endowment). In the second lawsuit, filed in California state court, Lindmark was an attorney. The California state court lawsuit also concluded in a settlement, pursuant to which Lindmark directed a grant of $250, 000 to SJU for the Endowment.

         SJU and Lindmark executed a written agreement on June 18, 2010 (the Gift Instrument) that amended the terms of the Endowment. The Gift Instrument recites the purpose of the Endowment, which among other things is to establish a summer undergraduate research fellowship for the study of corporate business ethics. The Gift Instrument states that it “constitutes a ‘gift instrument' within the meaning of and governed by Minnesota's Uniform Prudent Management of Institutional Funds Act” (UPMIFA), and that “[t]he laws of the State of Minnesota relating to endowment funds shall govern this gift instrument and the [Endowment].”

         Between 2010 and 2018, the relationship between Lindmark and SJU deteriorated. Lindmark alleges that SJU “mishandled” the Endowment “by failing to monitor and supervise the two summer student Fellows and by failing to use the funds in accordance with the [Gift Instrument], which called for use of the funds in the field of Corporate-Business Ethics.” In particular, Lindmark complains that the topics of the Fellows' research papers are unrelated to corporate business ethics. Lindmark also alleges that at least one Fellow received a stipend from the Endowment without completing his research project.

         Lindmark sued SJU in this Court on June 6, 2018, alleging breach of contract, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, and conversion. Each claim is based on Lindmark's allegations that SJU's management of the Endowment is inconsistent with the donor's intent. Lindmark seeks to “disband” the Endowment and the “return of any undisbursed funds” of the Endowment.

         SJU moves to dismiss Lindmark's complaint on two grounds-first, Lindmark lacks standing to challenge the administration of the Endowment or to enforce the terms of the Gift Instrument and, second, Lindmark fails to state a claim on which relief can be granted.

         II. State Court Proceedings[2]

         On May 24, 2018, SJU petitioned the Stearns County District Court for an order “(1) confirming that the actions taken by [S]U] in its administration of the [Endowment] to date have been proper; (2) instructing [S]U] regarding the future administration of the [Endowment]; and (3) instructing [S]U] that it may not pay or transfer assets of the [Endowment] to Lindmark.” SJU's petition cites Minnesota trust law and the Minnesota UPMIFA, which provide that a court may modify the terms of an institutional fund upon the application of an institution. Minn. Stat. §§ 309.755(b); 501B.31 et seq.; 501C.0101 et seq. SJU served the petition on the Office of the Minnesota Attorney General, which declined to take a position in the proceedings, but reserved the right to do so in the future. See Minn. Stat. § 501B.31, subd. 5 (“In cases arising under this section, the attorney general must be given notice of any court proceedings . . . .”).

         Lindmark opposed SJU's petition and sought dismissal, arguing that the Endowment is not a trust or an “institutional fund.” Rather, Lindmark argued, the Endowment is a contract between Lindmark and SJU. In response, SJU challenged Lindmark's standing to participate in the proceedings because, under the Minnesota UPMIFA, only the state attorney general has standing to participate in matters involving the administration and enforcement of irrevocable charitable gifts.

         While SJU's motion to dismiss Lindmark's complaint was pending before this Court, the Stearns County District Court rejected Lindmark's arguments and granted summary judgment in favor of SJU on December 17, 2018. Based on undisputed facts, the Stearns County District Court held that the Endowment is not a contract. Rather, the Endowment is an “institutional fund” governed by the Minnesota UPMIFA. This Court subsequently ordered the parties to file supplemental memoranda ...

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