This opinion is nonprecedential except as provided by Minn. R. Civ. App. P. 136.01, subd. 1(c).
STATE OF MINNESOTA IN COURT OF APPEALS A25-0411
Alex Sajady, et al., Appellants,
vs.
Tracy Sajady, Respondent.
Filed October 6, 2025 Affirmed in part, reversed in part, and remanded Johnson, Judge
Carver County District Court File No. 10-CV-23-627
Matt Kezhaya, Kezhaya Law PLC, Minneapolis, Minnesota (for appellants)
Samuel M. Johnson, Skolnick, Bardwell & Johnson, P.A., Minneapolis, Minnesota (for respondent)
Considered and decided by Worke, Presiding Judge; Johnson, Judge; and Reyes,
Judge.
NONPRECEDENTIAL OPINION
JOHNSON, Judge
Four siblings sued their mother, alleging that she stole cryptocurrency and certain
items of personal property from them. The district court granted the defendant’s motion to
dismiss the complaint for failure to state a claim upon which relief can be granted. We
conclude that the district court did not err by ruling that plaintiffs failed to state a viable conversion claim with respect to the cryptocurrency. But we conclude that the district court
erred by ruling that plaintiffs failed to state viable conversion and civil-theft claims with
respect to the personal property. Therefore, we affirm in part, reverse in part, and remand
for further proceedings.
FACTS
On a motion filed pursuant to rule of civil procedure 12.02(e), the relevant facts
generally are limited to the facts alleged in the complaint. See Hansen v. U.S. Bank N.A.,
934 N.W.2d 319, 325 (Minn. 2019); Bodah v. Lakeville Motor Express, Inc., 663 N.W.2d
550, 552-53 (Minn. 2003). In this case, however, both parties filed affidavits and exhibits
with their motion papers. But the district court specifically stated that the only facts
considered were the facts alleged in the complaint. See Minn. R. Civ. P. 12.02.
Accordingly, our statement of the relevant facts is based solely on plaintiffs’ complaint.
See Martens v. Minnesota Mining & Mfg. Co., 616 N.W.2d 732, 739 n.7 (Minn. 2000).
Tracy Sajady and Masood Sajady (also known as Mas) previously were married.
Their marriage was dissolved in 2017. They had six children together. Four of their
children now are adults.
In February 2023, Tracy’s and Masood’s adult children—Alex Sajady, Zak Sajady,
Emme Sajady, and Zeus Sajady—commenced this action against Tracy. The complaint
alleges, in pertinent part, as follows:
10. Over the years, Mas gave his children various gifts of cash, precious metals (coins, gold, silver, and platinum), and other valuables (“Valuables”) worth well over $385,000, in an amount to be proven at trial.
2 11. The Valuables were owned exclusively by Plaintiffs and the Minor Children, which is evidenced by the fact the Valuables were not listed as marital assets in Tracy and Mas’s divorce decree.
12. Tracy knew of the existence of the Valuables and knew that they belonged to her children.
13. Sometime after Tracy divorced Mas in 2017, Tracy entered Mas’s house with the intention of taking the Valuables from her children.
14. Tracy went throughout Mas’s home collecting the Valuables, some of which were hidden in a tube in the wall and a nondescript computer box.
15. Tracy secretly removed these Valuables from Mas’s home and took them with her.
16. In the past year, Plaintiffs discovered that the Valuables were missing.
17. There was no sign that anyone broke into the home, so Plaintiffs wondered if their mother may have stolen the Valuables.
18. Alex confronted Tracy about whether she took the Valuables.
19. Tracy admitted she took the Valuables.
20. Tracy acknowledged that she used the Valuables to fund litigation against Mas.
....
25. Over the years, Plaintiffs and the Minor Children received cryptocurrency as gifts and as payment for labor.
26. The fact that the children were minors required that the cryptocurrency be held in an account under an adult’s name, so their cryptocurrency was held in a Coinbase account under Mas’s name.
3 27. Although the Coinbase account was held in Mas’s name, the asset was the property of Plaintiffs and the Minor Children.
28. Tracy knew this cryptocurrency was owned by her children.
29. In 2021, in legal documents mailed from Hennepin County, Tracy garnished this Coinbase account to take the cryptocurrency owned by Plaintiffs and her Minor Children.
30. Tracy took this action through her attorney, . . . who operates a law firm in Hennepin County.
The complaint asserts three causes of action: (1) conversion of both the
cryptocurrency and the valuables, (2) civil theft of the valuables, and (3) replevin with
respect to both the cryptocurrency and the valuables.
In lieu of answering the complaint, Tracy moved to dismiss on the ground that the
complaint fails to state a claim upon which relief can be granted. See Minn. R. Civ. P.
12.02(e). In January 2025, the district court filed an order in which it granted Tracy’s
motion and dismissed the complaint, with prejudice. The district court dismissed all claims
on the ground that plaintiffs did not sufficiently allege that they have cognizable property
interests in both the cryptocurrency and the valuables. In addition, the district court
dismissed the conversion and replevin claims with respect to the cryptocurrency on the
ground that cryptocurrency is intangible and, thus, not personal property that can be the
subject of a conversion claim. Furthermore, the district court dismissed the conversion and
replevin claims with respect to the cryptocurrency on the ground that plaintiffs alleged that
4 Tracy obtained the cryptocurrency in a garnishment proceeding, which shows that she did
not obtain the cryptocurrency without lawful justification. Plaintiffs appeal.
DECISION
Appellants argue that the district court erred by granting Tracy’s motion and
dismissing the complaint.
A district court may grant a motion to dismiss if a complaint “fail[s] to state a claim
upon which relief can be granted.” Minn. R. Civ. P. 12.02(e). To state a claim for relief,
a complaint need only “contain a short and plain statement of the claim showing that the
pleader is entitled to relief.” Minn. R. Civ. P. 8.01. “A claim is sufficient against a motion
to dismiss for failure to state a claim if it is possible on any evidence which might be
produced, consistent with the pleader’s theory, to grant the relief demanded.” Walsh v.
U.S. Bank, N.A., 851 N.W.2d 598, 603 (Minn. 2014). In considering a motion to dismiss
pursuant to rule 12.02(e), a district court must “consider only the facts alleged in the
complaint, accepting those facts as true and must construe all reasonable inferences in favor
of the nonmoving party.” Finn v. Alliance Bank, 860 N.W.2d 638, 653 (Minn. 2015)
(quotation omitted). In reviewing a district court’s grant of a motion to dismiss under rule
12.02(e), an appellate court should “construe the complaint to allow the claim to go forward
unless there is no way to construe the alleged facts—and the inferences drawn from those
facts—in support of the claim.” Demskie v. U.S. Bank N.A., 7 N.W.3d 382, 386 (Minn.
2024) (quotation omitted). We apply a de novo standard of review to a district court’s grant
of a motion to dismiss pursuant to rule 12.02(e). DeRosa v. McKenzie, 936 N.W.2d 342,
346 (Minn. 2019).
5 Appellants make three arguments for reversal. First, they argue that the district
court erred by ruling that they did not plead viable conversion and civil-theft claims on the
ground that they did not allege cognizable property interests in both the cryptocurrency and
the valuables. Second, appellants argue that the district court erred by ruling that they did
not plead a viable claim of conversion of the cryptocurrency on the ground that
cryptocurrency is intangible and, thus, not personal property that can be the subject of a
conversion claim. Third, appellants argue that the district court erred by ruling that they
did not plead a viable claim of conversion of the cryptocurrency on the ground that their
allegations show that Tracy did not obtain the cryptocurrency without lawful justification.
Appellants do not challenge the district court’s dismissal of their replevin claim.
I. Cryptocurrency
We begin by considering appellants’ third argument. Conversion is defined as “an
act of willful interference with the personal property of another, done, without lawful
justification, by which any person entitled thereto is deprived of use and possession, and
the exercise of dominion and control over goods inconsistent with, and in repudiation of,
the owner’s rights in those goods.” Christensen v. Milbank Ins. Co., 658 N.W.2d 580, 585
(Minn. 2003) (emphasis added) (quotations, brackets, and citations omitted); see also DLH,
Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997); Larson v. Archer-Daniels-Midland Co., 32
N.W.2d 649, 650 (Minn. 1948). The parties agree that the absence of lawful justification
is an element of a conversion claim that must be proved by the plaintiff. We agree with
the parties and adopt their shared premise. See Christensen, 658 N.W.2d at 585; DLH, 566
N.W.2d at 71; Larson, 32 N.W.2d at 650; cf. Hoskin v. Krsnak, ____ N.W.3d ____, ____,
6 2025 WL 2609549, *7 (Minn. Sept. 10, 2025) (holding that “motion to dismiss based on
an affirmative defense may be granted only if the allegations in the complaint, construed
in the plaintiff’s favor, establish an unrebuttable defense”).
The district court reasoned, in part, that appellants did not plead a viable conversion
claim with respect to the cryptocurrency because they alleged that Tracy garnished the
cryptocurrency, which “shows [Tracy] was not without lawful justification.” The district
court added that, if appellants wished to attack Tracy’s garnishment of the cryptocurrency,
“that issue should be challenged in Hennepin County,” where Tracy and Masood’s
dissolution action and post-dissolution proceedings were venued.
On appeal, appellants challenge the district court’s reasoning in two ways.
A.
Appellants first contend that they are not foreclosed from proving that Tracy acted
without lawful justification because they have alleged that Tracy and her family-court
attorney acted wrongfully by garnishing Masood’s Coinbase account when Tracy knew
that the cryptocurrency in the account was owned by appellants.
Appellants have cited no binding authority for the proposition that a creditor may
commit the tort of conversion by initiating a garnishment proceeding to reach assets in an
account titled in a debtor’s name. Our own research indicates that the Minnesota appellate
courts have not considered the viability of such a claim, let alone endorsed it.
In addition, appellants’ argument is inconsistent with the decisions in Savig v. First
National Bank, in which the plaintiffs brought a conversion claim (and three other claims)
in federal district court based on a judgment creditor’s garnishment of a bank account
7 jointly owned by a judgment debtor and her husband. See 781 N.W.2d 335, 337 (Minn.
2010). The federal district court certified three questions to the supreme court, including
the question whether a judgment creditor may serve a garnishment summons on a joint
bank account if fewer than all joint owners are judgment debtors. See id. In answering
that question, the supreme court reasoned that “Minnesota Statutes § 571.71 gives broad
authority to a creditor to begin the garnishment process by issuing a garnishment
summons” 1 and that “[t]here are no restrictions in Minn. Stat. § 571.71 concerning the type
of property that a creditor may seek to garnish when serving a summons.” Id. at 339. The
supreme court also reasoned that, because “joint account holders may contest the retention
of funds from a joint account,” 2 and because the Minnesota Multiparty Accounts Act,
1 A judgment creditor may initiate a garnishment proceeding by issuing a garnishment summons “at any time after entry of a money judgment in the civil action.” Minn. Stat. § 571.71(3) (2024). The service of a garnishment summons may attach a debtor’s “nonexempt disposable earnings”; “other nonexempt indebtedness, money, or other property due or belonging to the debtor”; and “other nonexempt intangible or tangible personal property of the debtor.” Minn. Stat. § 571.73, subd. 3(1), (2), (3) (2024); see also Minn. Stat. § 571.72, subds. 2, 5 (2024). 2 If the debtor is “a natural person,” he or she is entitled to a “garnishment exemption notice,” which must inform him or her that “[s]ome of your property may be exempt and cannot be garnished,” must list some common exemptions, and must encourage the judgment debtor to “obtain legal advice” if the debtor has questions. Minn. Stat. § 571.72, subd. 8; see also Minn. Stat. § 571.912, subd. 1 (2024) (governing funds in financial institution). If the asset sought to be attached is exempt, the debtor may claim an exemption and request a hearing on the claimed exemption. See Minn. Stat. § 571.72, subd. 9(b); Estate of Jones by Blume v. Kvamme, 529 N.W.2d 335, 336-40 (Minn. 1995); Anderson v. Kaliszewski, No. 20-0175, 2020 WL 4932843, *2-3 (Minn. App. Aug. 24, 2020). One exemption allowed by law is “[t]he earnings of the minor child of any debtor.” Minn. Stat. § 550.37, subd. 15 (2024); see also Minn. Stat. § 571.912, subd. 1. Also, the debtor may object and request a hearing on the ground that the asset sought to be attached does not belong to him or her. See Minn. Stat. § 571.72, subd. 9(b); Village at Izatys Ass’n v. Jaskowick, No. 09-1030, 2010 WL 10423, *1-2 (Minn. App. Jan. 5, 2010). In addition, a third party claiming ownership of the asset may intervene, assert an objection, and request
8 Minn. Stat. §§ 524.6-201 to -214 (2008), does not limit a judgment creditor’s broad
authority to serve a garnishment summons, it is not improper for a judgment creditor to
serve a garnishment summons on a joint bank account. Id. at 340-41. The supreme court
did not decide that the judgment creditor necessarily was entitled to all funds in the joint
account; the court merely held that the judgment creditor was not required “to prove by
clear and convincing evidence prior to serving a summons that the funds belong to the
debtor.” Id. at 341 (emphasis added). After the supreme court issued its opinion, the
federal district court concluded that the plaintiffs’ conversion claim failed as a matter of
law on the ground that “there is no actionable state-law tort based on the garnishment”
because the creditor “effected the garnishment in the manner prescribed by the state’s
highest court.” Savig v. First Nat’l Bank, No. 09-132 JNE/LIB, 2011 WL 883642, *2 (D.
Minn. Mar. 11, 2011). The Savig case indicates that a creditor is not obligated to refrain
from serving a garnishment summons on a debtor’s account if some or all of the assets in
the account are or might be owned by someone other than the debtor.
We also find guidance in two supreme court opinions involving challenges to
garnishments under different theories. In Pow-Bel Construction Corporation v. Gondek,
192 N.W.2d 812 (Minn. 1971), a debtor asserted a claim of abuse of process based on a
creditor’s initiation of a pre-judgment garnishment proceeding. Id. at 813. The jury found
a hearing. See Minn. Stat. §§ 571.72, subd. 9(b), 571.83 (2024); August Ventures, LLC v. Gedney Foods Co., No. A23-1577, 2024 WL 3320880, *3-5 (Minn. App. July 8, 2024), rev. denied (Minn. Oct. 15, 2024); see also Mannheimer v. Phinney, 219 N.W. 765, 765- 66 (Minn. 1928); Conroy v. Ferree, 71 N.W. 383, 384 (Minn. 1897); Smith v. Barclay, 55 N.W. 827, 828 (Minn. 1893); North Star Boot & Shoe Co. v. Ladd, 20 N.W. 334, 335 (Minn. 1884).
9 in favor of the debtor, but the district court granted the creditor’s motion for judgment
notwithstanding the verdict. Id. at 813-14. On appeal, the supreme court affirmed and
reasoned, in part, that “if a dispute arose . . . as to who owned the funds, garnishment was
not an improper ancillary proceeding to the main action.” Id. at 814.
Similarly, in Martin v. Cedar Lake Ice Company, 177 N.W. 631 (Minn. 1920), a
judgment debtor asserted a claim of malicious prosecution based on the defendants’ pursuit
of a default judgment and initiation of a garnishment proceeding to collect on the judgment.
Id. at 631. The district court granted the judgment creditor’s motion for judgment on the
pleadings. Id. On appeal, the supreme court affirmed, reasoning in part that, to prevail,
“the [debtor] must allege and prove a termination of the original proceeding in his favor.”
Id. The supreme court concluded by stating, “The attempt to collect a valid and unpaid
judgment by garnishment may not be held wrongful or unlawful.” Id. at 632.
Given these authorities, we conclude that a creditor does not act without lawful
justification by serving a garnishment summons on a garnishee to reach assets in an account
that is titled in a debtor’s name.
B.
Appellants also contend that the district court erred by stating that they should have
challenged Tracy’s garnishment of the cryptocurrency in Hennepin County. Appellants
challenge this part of the district court’s order by asserting that Tracy and her family-law
attorney were obligated to serve a garnishment summons on them but did not do so.
Appellants do not cite any authority for that proposition. Our review of the garnishment
statutes reveals that a creditor must serve a garnishment summons on a garnishee and must
10 serve a copy of the summons on the debtor. Minn. Stat. § 571.72, subds. 2, 4; see also
Minn. Stat. §§ 571.911, 571.912, subd. 1. We are unaware of any requirement that a
creditor serve a garnishment summons on a third party who may have an interest in a
financial account titled in a debtor’s name.
Thus, appellants have not identified any possibility that evidence might be
produced, consistent with their theory, that would allow them to prove that Tracy acted
without lawful justification when her family-law attorney garnished the cryptocurrency in
Masood’s Coinbase account. See Walsh, 851 N.W.2d at 602. Therefore, appellants have
not stated a viable conversion claim with respect to the cryptocurrency. In light of that
resolution of appellants’ third argument, we need not consider appellants’ first argument
as it relates to the cryptocurrency or appellants’ second argument.
II. Valuables
We continue by considering appellants’ first argument with respect to the valuables,
that the district court erred by ruling that they did not plead viable conversion and civil-
theft claims on the ground that they did not allege cognizable property interests in the
valuables.
As stated above, a conversion claim may provide a remedy for the “willful
interference with the personal property of another” or the deprivation of “use and
possession” of property to which any other person is entitled. Christensen, 658 N.W.2d at
585 (emphasis added) (quotations, brackets, and citations omitted). Similarly, a person
commits civil theft if the person “steals personal property from another.” Minn. Stat.
§ 604.14, subd. 1 (2024) (emphasis added). Accordingly, to prevail on their claims of
11 conversion and civil theft, appellants must prove that they have cognizable property
interests in the valuables. See Minnesota Citizens Concerned for Life, Inc. v. Joint
Revocable Trust Agreement of John Charais & Sveindis Charais, No. A23-0960, 2024 WL
1714225, at *10-11 (Minn. App. Apr. 22, 2024) (affirming dismissal of civil-theft claim
for failure to allege property interest in funds in bank account); Minn. R. Civ. App. P.
136.01, subd. 1(c) (providing that nonprecedential opinions are “not binding authority” but
“may be cited as persuasive authority”).
The district court reasoned in part that courts are not bound by legal conclusions in
a complaint when ruling on a motion to dismiss. The supreme court has so stated. See
Bahr v. Capella Univ., 788 N.W.2d 76, 80 (Minn. 2010); Hebert v. City of Fifty Lakes, 744
N.W.2d 226, 235 (Minn. 2008). But the supreme court has explained that legal conclusions
are to be distinguished from factual conclusions. Halva v. Minnesota State Colls. & Univs.,
953 N.W.2d 496, 501 & n.2 (Minn. 2021). In addition, the supreme court has clarified that
a conclusion in a complaint should not be characterized in a manner that is “inconsistent
with our notice pleading standard, which permits short and general statements of fact and
does not ask for detailed factual allegations.” Demskie, 7 N.W.3d at 387 (quotation
omitted). In this case, appellants’ allegation that they are the exclusive owners of the
valuables is more of a factual conclusion than a legal conclusion. See id.; Halva, 953
N.W.2d at 501 & n.2.
The district court also reasoned that appellants did not allege that Masood had made
completed gifts by delivering and absolutely disposing of the valuables. See Oehler v.
Falstrom, 142 N.W.2d 581, 585 (Minn. 1966). But appellants allege that “Mas gave his
12 children various gifts of cash, precious metals (coins, gold, silver, and platinum), and other
valuables.” In addition, appellants allege that the valuables were not listed as marital assets
in Tracy and Masood’s dissolution case, which, if true, would tend to show that the
valuables are owned by appellants. The absence of more detailed allegations is not fatal to
appellants’ claims, and the allegation that the valuables were removed from Masood’s
home is not inconsistent with appellants’ theory. Given the familial relationships,
appellants conceivably could prove, for example, that the valuables were given to them but
were stored at Masood’s home pursuant to an agreement. Accordingly, we cannot say that
there is “no way to construe the alleged facts—and the inferences drawn from those facts—
in support of the claim.” See Demskie, 7 N.W.3d at 386 (quotation omitted).
Thus, the district court erred by reasoning that appellants did not adequately plead
conversion and civil-theft claims concerning the valuables. Therefore, we reverse and
remand for further proceedings on appellants’ conversion and civil-theft claims with
respect to the valuables.
Affirmed in part, reversed in part, and remanded.