United States District Court, D. Minnesota
ERIK A. AHLGREN, in his capacity as assignee in the assignment for the benefit of creditors of Ashby Farmers CoOperative Elevator Company, Plaintiff,
JAY LINK and LINK'S WILD SAFARIS, Defendants.
A. AHLGREN, AHLGREN LAW OFFICE, PLLC, FOR PLAINTIFF.
G. SCHROEDER, ADAM G. CHANDLER, AND JASON R. ASMUS, BRIGGS
& MORGAN, PA, FOR DEFENDANTS.
MEMORANDUM OPINION AND ORDER
R. TUNHEIM CHIEF JUDGE
2003 and 2018, the manager of the Ashby Farmers Co-Operative
Elevator Company (the “Co-Op”), Jerry Hennessey,
appropriated millions of dollars of the Co-Op's funds for
his personal use. He accomplished this in part by writing
unauthorized checks to third parties, including Defendants
Jay Link and Link's Wild Safaris. Upon discovery of the
fraud in 2018, the Co-Op ceased operations and appointed an
Assignee, Plaintiff Erik Ahlgren, to pursue claims and
remedies on its behalf and on behalf of its creditors.
Ahlgren brought this action in January 2019, seeking to void
the unauthorized payments to Defendants. Ahlgren alleges
three Counts: (I) Actual Fraud pursuant to Minn. Stat.
§§ 513.44(a)(1), 513.47; (II) Constructive Fraud
pursuant to Minn. Stat. §§ 513.45(a), 513.47; and
(III) Unjust Enrichment.
the Court now is Defendants' Motion to Dismiss for lack
of personal jurisdiction and failure to state a claim.
Because Link and LWS solicited business in Minnesota and this
dispute arises out of that solicitation, the Court will deny
the Motion to Dismiss to the extent it is based on lack of
personal jurisdiction. Because Ahlgren pled facts sufficient
to show fraud and constructive fraud, the Court will deny the
Motion to Dismiss to the extent it is based on failure to
state a claim on Counts I and II. Finally, because adequate
legal remedies exist, the Court will grant Defendants'
Motion as to Count III and dismiss Count III with prejudice.
Co-Op is a grain farmers' cooperative based in Ashby,
Minnesota. (Notice of Removal ¶ 1, Ex. A
(“Compl.”) ¶¶ 1, 12-13, Feb. 8, 2019,
Docket No. 1-1.) The Co-Op purchases grain from local
farmers, who are also owners of the Co-Op, and sells it to
grain markets. (Id. ¶ 13.)
1989, the Co-Op hired Jerry Hennessey, a resident of
Minnesota, as its general manager. (Compl. ¶ 14.)
Between June 2003 and September 2018, Hennessey received over
$5.4 million in unauthorized funds from the Co-Op by writing
checks from the CoOp to himself and third parties, including
Jay Link. (Id. ¶¶ 15-17, 25.) Hennessey
used the checks for personal bills, home improvement
projects, property purchases, and domestic and international
hunting trips. (Id. ¶ 16.) Hennessey disguised
the checks by coding them as feed purchases or other ordinary
expenses. (Id. ¶ 16.)
Link is a resident of Wisconsin. (Id. ¶ 2.) He
owns and operates Link Wild Safaris (“LWS”) out
of Minong, Wisconsin. (Id. ¶ 3; Decl. of Jay
Link (“Link Decl.”) ¶ 3, Feb. 28, 2019,
Docket No. 12.) LWS connects hunters and fishers with
international outfitters, who provide guide services and
accommodations to LWS's clients. (Link Decl. ¶ 3.)
LWS is not licensed to do business in Minnesota and does not
have property or agents in Minnesota. (Id. ¶
5.) However, LWS does attend exhibitions in Minnesota hosted
by the Safari Club International (“SCI”). (Aff.
of Erik A. Ahlgren (“Ahlgren Aff.”) ¶ 7
& Ex. G, Mar. 19, 2019, Docket No. 17.) LWS attended
Minnesota SCI expos as an exhibitor in 2017, 2018, and 2019,
and links to LWS's website appear on SCI Minnesota's
webpages where it lists its exhibitors for those years.
(Id.) LWS also donated hunting trips at Minnesota
SCI events in 2017 and 2019. (Id. ¶¶ 8-9
& Ex. H-I.) Link is also involved with SCI in a personal
capacity, including as the founder of the SCI Lake Superior
Chapter, which holds events in Minnesota. (Id.
¶ 10 & Ex. J.)
states that he and Hennessey first met in February 2015 at
the SCI Convention in Nevada, which Link attended as a
representative for LWS. (Link Decl. ¶ 6.) In October of
that year, Hennessey wrote an unauthorized check to Link
using the Co-Op's funds. (Compl. ¶ 17.) Between
October 2015 and February 18, 2018, Hennessey wrote ten
unauthorized checks to Link, totaling $312, 150.00. The
checks, which identified the CoOp as the payor, paid for
Hennessey to go on exotic hunting trips organized by LWS.
(Id. ¶ 17.) Hennessey also paid LWS to organize
a hunting trip with an outfitter based in Centerville,
Minnesota. (Ahlgren Aff. ¶ 22 & Ex. V.) While
providing services to Hennessey and his wife, Link and LWS
corresponded with the couple to obtain permits for and
receive travel information from them. (Compl. ¶ 21.) LWS
addressed invoices during this time to Hennessey's P.O.
Box in Ashby, Minnesota. (Ahlgren Aff. ¶ 21, Exs. U-V at
fraud was discovered in September 2018. (Compl. ¶ 25.)
Hennessey pleaded guilty to mail fraud and income tax evasion
on February 14, 2019. (Ahlgren Aff. ¶ 14, Ex. O at
83-95.) By the time the fraud was discovered, Hennessey had
obtained over $7 million in a credit line for the Co-Op in
his ongoing efforts to conceal his fraud and cover up the
Co-Op's expenses. (Id. at 84-85.) As a result of
Hennessey's fraud, the Co-Op was forced to close and has
been unable to pay its debts. (Compl. ¶ 13; Ahlgren Aff.
¶ 18, Ex. R at 112.) The Co-Op has forty-three
creditors, most of which are based in Minnesota. (Ahlgren
Aff. ¶ 18, Ex. R at 119.)
December 2018, the Co-Op executed an assignment (the
“Assignment”) with Erik Ahlgren for the benefit
of the Co-Op's creditors. (Compl. ¶ 4; Ahlgren Aff.
¶ 18, Ex. R at 112-114.) Pursuant to Minn. Stat.
§§ 576-77, Ahlgren has committed to liquidating and
administering the Co-Op's assets and may pursue any claim
or remedy that could be asserted by the Co-Op or by a
creditor of the Co-Op. (Compl. ¶¶ 5, 7.)
brought this action in Grant County District Court on January
8, 2019, alleging three Counts: (I) Actual Fraud pursuant to
Minn. Stat. §§ 513.44(a)(1), 513.47; (II)
Constructive Fraud pursuant to Minn. Stat. §§
513.45(a), 513.47; and (III) Unjust Enrichment. (Compl.
¶¶ 27-49.) Ahlgren seeks recovery of the
unauthorized funds paid by Hennessey to Defendants. (Compl.
¶¶ 33, 40, 49.) Defendants removed the case to this
Court on February 7, 2019. (Notice of Filing of Notice of
Removal, Feb. 8, 2019, Docket No. 1-2.) On February 28, 2019,
Defendants moved to dismiss the Complaint for lack of
personal jurisdiction pursuant to Rule 12(b)(2) and for
failure to state a claim pursuant to Rule 12(b)(6). (Mot. to
Dismiss, Feb. 28, 2019, Docket No. 9.)
Standard of Review
Rule of Civil Procedure 12(b)(2) provides that a party may
move to dismiss claims for lack of personal jurisdiction.
“To defeat a motion to dismiss for lack of personal
jurisdiction, the nonmoving party need only make a prima
facie showing of jurisdiction.” Epps v. Stewart
Info. Servs. Corp.,327 F.3d 642, 647 (8th
Cir. 2003). “As long as there is ‘some evidence
upon which a prima facie showing of jurisdiction may be found
to exist,' the Rule 12(b)(2) motion will be
denied.” Pope v. Elabo GmbH, 588 F.Supp.2d
1008, 1014 (D. Minn. 2008) (quoting Aaron Ferer &
Sons Co. v. Diversified Metals Corp., 564 F.2d 1211,
1215 (8th Cir. 1977)). The party seeking to
establish personal jurisdiction bears the burden of proof,
and “the burden does not shift to the party challenging