Metropolitan Transportation Network, Inc. v. Collaborative Student Transportation of Minnesota, ...

6 N.W.3d 771

• Court: Court of Appeals of Minnesota
• Decided: April 15, 2024
• Docket: a230644
• Status: Published

Opinion

STATE OF MINNESOTA IN COURT OF APPEALS A23-0644

Metropolitan Transportation Network, Inc., et al., Appellants,

vs.

Collaborative Student Transportation of Minnesota, LLC, et al., Respondents.

Filed April 15, 2024 Affirmed Frisch, Judge

Hennepin County District Court File No. 27-CV-21-6224

Damon L. Ward, Ward Law Group, St. Louis Park, Minnesota; and

Lateesa T. Ward, Ward & Wilson, Minneapolis, Minnesota (for appellants)

Ashley R. Thronson, Erin Edgerton Hall, Fredrikson & Byron, P.A., Minneapolis, Minnesota (for respondents)

Considered and decided by Frisch, Presiding Judge; Worke, Judge; and Gaïtas,

Judge.

SYLLABUS

1. A party may use allegations in a verified complaint to support or oppose a

motion for summary judgment if (1) the allegations are made on personal knowledge,

(2) the allegations are based on facts that would be admissible in evidence, and (3) the face

of the complaint shows the competence of the verifying party to testify on the matters

stated, consistent with Minn. R. Civ. P. 56.03(d). 2. Minnesota does not recognize a cause of action for breach of an illusory

contract.

OPINION

FRISCH, Judge

In this dispute involving the provision of transportation services to school districts,

appellants, transportation-service providers, challenge the summary-judgment dismissal of

multiple claims against respondents, transportation-service coordinators and consultants,

arising out of allegations that respondents engaged in misdeeds causing appellants to lose

or forego actual and prospective business opportunities. Because breach of illusory

contract is not a cognizable cause of action under Minnesota law and the summary-

judgment record does not contain evidence presenting a genuine issue for trial on

appellants’ other claims, we affirm the district court’s entry of summary judgment.

FACTS

Appellants Metropolitan Transportation Network, Inc. (MTN), Tashitaa Tufaa, Safe

Tree Transportation, LLC (STT), and Mustafa Wake challenge the summary-judgment

dismissal of certain counts of their 13-count complaint against respondents Collaborative

Student Transportation of Minnesota (CSTMN) and CESO Transportation, LLC (CESO).

The facts, taken in the light most favorable to appellants as the nonmoving party, are as

follows.

Appellants STT and MTN offer transportation services to school districts. Wake

and Tufaa are the respective owners of those entities. Respondent CSTMN is an entity that

contracts with schools to provide a specific type of transportation. Dillon LaHaye is the

2 owner and chief of staff of CSTMN. CSTMN subcontracts with vendors, such as STT and

MTN, that provide the equipment and drivers needed to service the routes. Respondent

CESO is an entity that offers schools transportation consulting services, including through

“full service” contracts whereby CESO works with a school “as their transportation

department,” including working with transportation vendors. During the time relevant to

this action, CESO provided “full service” consulting for the Stillwater Area Public Schools

(Stillwater) and St. Anthony-New Brighton School Districts (St. Anthony). Lance

Libengood is the majority owner of CESO. Libengood and LaHaye are cousins. CESO

and CSTMN share space at the same address. CESO provides transportation staffing to

CSTMN.

CSTMN and STT executed service agreements for the 2019-2020 school year (2019

STT-CSTMN service agreement) and the 2020-2021 school year (2020 STT-CSTMN

service agreement). These agreements contained the following nonsolicitation provision:

CONTRACTOR will not directly or indirectly solicit or accept direct service contracts with any of CSTMN’s current or former Minnesota clients, customers or users during the life of the contract or for 18 months after the final date of the AGREEMENT between the CONTRACTOR and CSTMN has terminated, unless given written approval from CSTMN’s Chief of Staff.

Notwithstanding this nonsolicitation provision, STT submitted a bid to or executed a direct

contract with at least one entity that CSTMN identified as its customer.

MTN also executed a service agreement with CSTMN for the 2019-2020 school

year (2019 MTN-CSTMN service agreement). The 2019 MTN-CSTMN service

agreement did not contain a nonsolicitation provision. In June 2020, MTN executed a

3 direct transportation services contract with Stillwater with a term of August 1, 2020, to

June 30, 2024. And in March 2021, MTN executed a direct transportation services contract

with St. Anthony for the 2020-2025 school years.

In January and February 2021, Libengood, acting on behalf of Stillwater, and MTN

communicated repeatedly about whether MTN would be able to cover transportation routes

or whether Stillwater would need to seek support from other transportation providers in

light of a driver shortage. In April 2021, Stillwater notified MTN that MTN breached their

direct-services contract, citing numerous violations including “[f]ailing to hire sufficient

staff to provide the services identified in the Agreement.” MTN promised future

compliance, but problems continued. Stillwater filed an action against MTN and sought a

temporary restraining order, which a district court granted in September 2021. Separately,

CSTMN sued STT in spring 2021 for breach of contract.

Appellants commenced this action generally claiming that respondents acted

unlawfully to prevent them from providing transportation services to school districts.

Following motion practice, appellants filed a verified second-amended complaint. The

verified complaint includes 13 counts: declaratory judgment; breach of illusory contract;

breach of the implied covenant of good faith and fair dealing; two counts of tortious

interference with contracts; two counts of tortious interference with a prospective business

advantage; unjust enrichment; restraint of trade in violation of Minn. Stat. § 325D.51

(2022); restraint of trade in violation of Minn. Stat. § 325D.53, subd. 2(1) (2022); racial

discrimination in violation of 42 U.S.C. § 1981 (2018); business discrimination based on

4 race and national origin in violation of Minn. Stat. § 363A.17(3) (2022); and restraint of

trade in violation of Minn. Stat. § 325D.53, subd. 1(2) (2022).

In March 2022, Stillwater terminated its direct-services contract with MTN. And

in June, St. Anthony notified MTN that it would be removing routes and imposing fines

for ongoing contract violations.

In September 2022, after discovery, respondents moved for summary judgment on

all of appellants’ claims, which appellants opposed. The district court granted the motion,

concluding that appellants failed to present a genuine issue for trial on any of their claims.

In so doing, the district court determined that portions of documents upon which appellants

relied in opposition to summary judgment would not be admissible evidence at trial.

This appeal follows.

ISSUES

I. Did the district court err by determining that certain documents did not contain evidence admissible at trial or were not part of the record at summary judgment?

II. Did the district court err by granting summary judgment to respondents?

ANALYSIS

Summary judgment is appropriate if “there is no genuine issue as to any material

fact and the movant is entitled to judgment as a matter of law.” Minn. R. Civ. P. 56.01.

When reviewing a summary-judgment ruling, “we review [de novo] whether there are any

genuine issues of material fact and whether the district court erred in its application of the

law.” STAR Ctrs., Inc. v. Faegre & Benson, L.L.P., 644 N.W.2d 72, 76-77 (Minn. 2002).

“We view the evidence in the light most favorable to the party against whom summary

5 judgment was granted.” Id. The moving party bears the burden of showing that there is

no genuine issue of material fact. Minn. R. Civ. P. 56.01. But if the moving party supports

its motion, then “the nonmoving party must present specific facts showing that there is a

genuine issue for trial.” DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn. 1997) (quotation

omitted). The nonmoving party “must do more than rest on mere averments.” Id. at 71.

Rather, it must produce evidence that is “sufficiently probative with respect to an essential

element of the nonmoving party’s case to permit reasonable persons to draw different

conclusions.” Id. No genuine issue of material facts exists “when the nonmoving party

presents evidence which merely creates a metaphysical doubt as to a factual issue.” Id. “A

defendant is entitled to summary judgment as a matter of law [if] the record reflects a

complete lack of proof on an essential element of the plaintiff’s claim.” Lubbers v.

Anderson, 539 N.W.2d 398, 401 (Minn. 1995).

Appellants argue that the district court erred in granting summary judgment because

(1) the district court improperly disregarded evidence set forth in certain documents

identified by appellants as presenting genuine issues for trial and (2) genuine issues of

material fact preclude the entry of summary judgment on certain claims set forth in the

verified complaint. We address each issue in turn.

I. The district court properly disregarded evidence at summary judgment that would not be admissible at trial and documents outside of the record.

Appellants argue that the district court was required to consider statements set forth

in the verified complaint, Tufaa’s declaration, and Wake’s declaration in evaluating the

existence of genuine issues of material fact for trial. They assert that certain statements set

6 forth in those documents raised genuine and material fact issues for trial and that, had the

district court properly credited this evidence, it could not have granted the summary-

judgment motion. The district court declined to consider statements set forth in these

documents at summary judgment because Wake’s declaration was not properly made a part

of the summary-judgment record, and the statements set forth in the verified complaint and

Tufaa’s declaration would not be admissible evidence at trial because they are not based

on personal knowledge and/or merely set forth assertions without a factual basis.

First, Wake’s declaration was not filed in district court in this matter and is not

contained in the record on appeal. “The documents filed in the trial court, the exhibits, and

the transcript of the proceedings, if any, shall constitute the record on appeal in all cases.”

Minn. R. Civ. App. P. 110.01. Because the declaration was not part of the summary-

judgment record, the district court properly declined to consider it. Minn. R. Civ.

P. 56.03(a) (stating that a party may support a factual position by “citing to particular parts

of material in the record”). And because it was not before the district court, we decline to

consider it on appeal. Thiele v. Stich, 425 N.W.2d 580, 582-83 (Minn. 1988) (stating that

generally we will not consider matters outside the record on appeal or evidence not

produced and received in the district court).

We are not persuaded by appellants’ argument that, notwithstanding the fact that

Wake’s declaration was not part of the summary-judgment record in this matter, the district

court should still have considered it because the document was filed in a separate matter.

Minnesota law does not require a district court to consider as part of its summary-judgment

record documents filed in another matter. See Minn. R. Civ. P. 56.03(c) (stating that a

7 district court “may” consider materials “in the record”). And it appears from the district

court’s order that it did not access Wake’s declaration such that it considered the document

in making its summary-judgment decision. We therefore decline to consider the Wake

declaration in our review on appeal. See MacDonald v. Brodkorb, 939 N.W.2d 468, 474

(Minn. App. 2020) (declining to consider certain evidence when the appellant cited “no

authority for the proposition that an appellate court reviewing a summary-judgment

decision should consider evidence not considered or even properly offered during the

summary-judgment proceeding simply because it was mentioned in a different pleading”).

Second, as to the verified complaint and the Tufaa declaration, we discern no abuse

of discretion by the district court in declining to consider the cited generalized or

conclusory assertions set forth in those documents. Although the district court did not

make an express evidentiary ruling regarding any of the cited allegations, we understand

its decision not to consider certain information cited by appellants as an evidentiary ruling

authorized by the procedures set forth in Minn. R. Civ. P. 56.03. We review these

determinations by the district court for an abuse of discretion. State ex rel. Swanson v.

Integrity Advance, LLC, 846 N.W.2d 435, 440 (Minn. App. 2014) (applying an abuse-of-

discretion standard of review to a district court’s consideration of affidavits for purposes

of summary judgment), aff’d on other grounds, 870 N.W.2d 90 (Minn. 2015).

“Evidence offered to support or defeat a motion for summary judgment must be

such evidence as would be admissible at trial.” Hopkins by LaFontaine v. Empire Fire &

Marine Ins. Co., 474 N.W.2d 209, 212 (Minn. App. 1991); see generally Minn. R. Civ.

P. 56.03. Before the district court, respondents properly objected to appellants’ reliance

8 on generalized averments in both the verified complaint and Tufaa’s declaration, arguing

that they were not properly supported by evidence that would be admissible at trial,

following the procedure set forth in Minn. R. Civ. P. 56.03(b). The district court thereafter

noted throughout its order that certain allegations from the verified complaint and Tufaa’s

declaration would not be admissible evidence at trial. In so doing, the district court parsed

through the cited allegations in both documents and concluded that certain allegations

purporting to state a “fact” were made “upon information and belief” only, with no

supporting factual basis, or were otherwise conclusory. Stated differently, the district court

determined that relevant allegations set forth in these documents were lacking in proper

foundation and therefore would be inadmissible at trial. See Minn. R. Evid. 602 (“A

witness may not testify to a matter unless evidence is introduced sufficient to support a

finding that the witness has personal knowledge of the matter.”). Because the district court

determined that appellants failed to properly support the assertions of fact set forth in these

documents and the record otherwise did not present a genuine issue for trial, the district

court did not abuse its discretion in declining to consider these facts in its summary-

judgment ruling pursuant to Minn. R. Civ. P. 56.05(c).

Appellants argue that the district court was obligated to consider the cited

allegations set forth in these documents at summary judgment. But they do not challenge

the basis of the district court’s evidentiary determinations—that the allegations in these

documents upon which appellants rely to present genuine issues for trial lack proper

foundation. Instead, appellants broadly argue that a verified complaint is equivalent to an

affidavit, which can appropriately be considered as evidence for purposes of summary

9 judgment, and that the district court made impermissible credibility assessments about the

allegations. 1 See DLH, Inc., 566 N.W.2d at 70 (stating that the district court “must not

weigh the evidence on a motion for summary judgment”).

Facts set forth in a verified complaint that meet the requirements of an affidavit are

appropriately considered by the district court as evidence for purposes of summary

judgment. In determining the admissibility of allegations in a verified complaint, a district

court is guided by the requirements set forth in Minn. R. Civ. P. 56.03(d)—such allegations

are admissible if they (1) are “made on personal knowledge,” (2) “set out facts that would

be admissible in evidence,” and (3) “show that the affiant is competent to testify on matters

stated.”

The district court did in fact evaluate the allegations in the verified complaint upon

which appellants relied to oppose summary judgment and determined that those allegations

1 Although we address appellants’ argument that a verified complaint is equivalent to an affidavit for purposes of summary judgment, we independently note that the verified complaint here lacks an essential hallmark of an affidavit. “An affidavit used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant is competent to testify on matters stated.” Minn. R. Civ. P. 56.03(d). An affidavit is “a document that has been signed, sworn, and notarized.” MacDonald, 939 N.W.2d at 476 (quoting Minn. R. Gen. Prac. 15). Alternatively, an affidavit is “‘a document that has been signed under penalty of perjury pursuant to Minnesota Statutes, section 358.116, provided that the signature is affixed immediately below a declaration’ that says something like, ‘I declare under penalty of perjury that everything I have stated in this document is true and correct.’” Id. (quoting Minn. R. Gen. Prac. 15). Therefore, in addition to the requirements set forth in Minn. R. Civ. P. 56.03(d), an affidavit must be “notarized [or] signed under penalty of perjury.” Id. Here, the complaint was “verified,” but it was neither notarized nor signed under penalty of perjury. We therefore cannot consider appellants’ verified complaint as an affidavit for summary-judgment purposes.

10 were averred on “information and belief,” not facts or personal knowledge, and therefore

did not satisfy the admissibility threshold required by Minn. R. Civ. P. 56.03(d). That

determination was not based on a credibility determination of the veracity of the averments

but instead based on the absence of personal knowledge or factual basis to support the

allegations. And such unsupported allegations are not admissible at trial. See Minn. R.

Evid. 602. Accordingly, we hold that a party may rely on allegations in a verified

complaint to support or oppose a motion for summary judgment if (1) the allegations are

made on personal knowledge, (2) the allegations are based on facts that would be

admissible in evidence, and (3) the face of the complaint shows the competence of the

verifying party to testify on the matters stated, consistent with Minn. R. Civ. P. 56.03(d).

Stated differently, for purposes of a motion for summary judgment, a verified complaint is

the functional equivalent of an affidavit, and the allegations of a verified complaint must

therefore satisfy Minn. R. Civ. P. 56.03(d) to be considered in support of or in opposition

to the motion. We discern no abuse of discretion by the district court in evaluating the

proffered evidence and determining that cited allegations in the verified complaint lacked

proper foundation.

The district court likewise evaluated the cited allegations from Tufaa’s declaration,

noted that those cited allegations set forth in the declaration were based on “information

and belief” and not facts, observed that those averments were not based on personal

knowledge, and concluded that the allegations were not admissible evidence. This ruling,

too, is consistent with the requirements of Minn. R. Civ. P. 56.03(d), and we see no abuse

of discretion by the district court in its evidentiary determination. Minn. R. Evid. 602, 701.

11 Accordingly, we discern no abuse of discretion by the district court in its

determination to only consider evidence admissible at trial for purposes of summary

judgment. In evaluating the assignment of error for each of appellants’ claims on appeal,

we also consider only evidence admissible at trial to assess whether the district court erred

in granting summary judgment of dismissal.

II. The district court properly dismissed the action at summary judgment.

Appellants argue that the district court erred by dismissing the following claims at

summary judgment: STT’s claim against CSTMN for breach of illusory contract; STT’s

claim against CSTMN for breach of the implied covenant of good faith and fair dealing;

MTN’s claim against respondents for tortious interference with contracts; MTN’s claim

against respondents for tortious interference with a prospective business advantage; MTN’s

claim against respondents for unjust enrichment; STT and MTN’s claim against

respondents for engaging in a contract, combination, or conspiracy to restrain trade in

violation of Minn. Stat. § 325D.51; and STT and MTN’s claims against respondents for

engaging in a prohibited contract, combination, or conspiracy to restrain trade in violation

of Minn. Stat. § 325D.53, subd. 1(2). 2 We address the summary-judgment dismissal of

each claim in turn.

2 While identified as appellants, we note that Wake and Tufaa do not challenge the dismissal of claims arising in their personal capacities.

12 A. The district court properly dismissed STT’s claims for breach of illusory contract and breach of the implied covenant of good faith and fair dealing.

STT argues that the district court erred by granting summary judgment to

respondents on its breach-of-illusory-contract and breach-of-the-implied-covenant-of-

good-faith-and-fair-dealing claims. With respect to its claim for breach of illusory

contract, STT alleged that CSTMN “breached its obligations under the [2020 STT-CSTMN

service agreement] by failing to establish contractual requisites including, but not limited

to, consideration in exchange for [STT’s] services and obligations” and “by failing to

provide customers, routes, and opportunities for transportation services with Minnesota

school districts.” With respect to its claim for breach of the implied covenant of good faith

and fair dealing, STT alleged that CSTMN breached the implied covenant by failing to

secure routes for STT. 3

First, Minnesota does not recognize a claim for breach of contract when the alleged

breach is a failure to form the contract due to lack of consideration, or what MTN labels as

3 The verified complaint also included allegations that CSTMN attempted to remove routes and restrain STT from meeting its obligations under direct contracts with school districts and that CSTMN failed to refrain from making misrepresentations to CSTMN customers with whom STT has direct contracts. On appeal, appellants did not assert that the district court erred by determining that there was no genuine issue of material fact as to STT’s allegation that CSTMN made misrepresentations. And STT did not argue to the district court that CSTMN breached the implied covenant by failing to exercise its discretion under the contract in good faith. Accordingly, we do not address whether summary-judgment dismissal of this claim based on those specific allegations was proper. See Waters v. Fiebelkorn, 13 N.W.2d 461, 464-65 (Minn. 1944) (“[O]n appeal error is never presumed. It must be made to appear affirmatively before there can be reversal. . . . [And] the burden of showing error rests upon the one who relies upon it.”); Thiele, 425 N.W.2d at 582 (stating that a party cannot raise a new issue on appeal, “[n]or may a party obtain review by raising the same general issue litigated below but under a different theory”).

13 “breach of an illusory contract.” “The elements of a breach of contract claim are

(1) formation of a contract, (2) performance by plaintiff of any conditions precedent to his

right to demand performance by the defendant, and (3) breach of the contract by

defendant.” Lyon Fin. Servs., Inc. v. Ill. Paper & Copier Co., 848 N.W.2d 539, 543 (Minn.

2014) (quotation omitted). But “[w]hen there is a lack of consideration, no valid contract

is ever formed.” Franklin v. Carpenter, 244 N.W.2d 492, 495 (Minn. 1976); see also 3

Richard A. Lord, Williston on Contracts § 7:11 (4th ed. 2023) (“[A] lack of consideration

results in no contract being formed.”). Although these authorities support the proposition

that the absence of consideration may negate the formation of a contract, we are unaware

of any Minnesota authority standing for the proposition that the absence of consideration

is independently actionable as a breach of contract. That is because the absence of

consideration is fatal to the formation of a contract, without which no breach can exist.

The district court reached the same conclusion. Accordingly, we hold that Minnesota does

not recognize a cause of action for breach of an illusory contract.

Second, Minnesota does not recognize a cause of action for breach of the implied

covenant of good faith and fair dealing based on terms not included in the contract. “A

breach of contract is a failure, without legal excuse, to perform any promise that forms the

whole or part of the contract.” Lyon Fin. Servs., Inc., 848 N.W.2d at 543 (citing 23 Richard

A. Lord, Williston on Contracts § 63:1 (4th ed. 2002)). Likewise, the implied covenant of

good faith and fair dealing—which requires in every contract that “one party not

unjustifiably hinder the other party’s performance of the contract”—“does not extend to

actions beyond the scope of the underlying contract.” In re Hennepin Cnty. 1986 Recycling

14 Bond Litig., 540 N.W.2d 494, 502-03 (Minn. 1995) (quotation omitted); see also Minnwest

Bank Cent. v. Flagship Props., LLC, 689 N.W.2d 295, 303 (Minn. App. 2004) (concluding

that a claim for breach of the implied covenant of good faith and fair dealing was properly

dismissed when the claim was based on the performance of a duty not in the contract). STT

argues that CSTMN breached the implied covenant of good faith and fair dealing in the

2020 STT-CSTMN service agreement because CSTMN did not provide customers, routes,

and opportunities for transportation services to STT. But the plain language of the contract

does not obligate CSTMN to provide such benefits to STT. STT’s claim for breach of the

implied covenant of good faith and fair dealing therefore fails.

B. The district court properly dismissed MTN’s claims of tortious interference with contract and tortious interference with prospective business advantage.

MTN argues that the district court erred by dismissing its tortious-interference-with-

contract and tortious-interference-with-prospective-business-advantage claims. MTN

argues that the record contains evidence that respondents intentionally procured breaches

of its direct-services contracts with Stillwater and St. Anthony by “causing the

removal/termination of routes and services” and interfered with its ability to secure future

business with those school districts. The district court dismissed these claims, determining

that the record did not contain evidence that respondents intentionally procured a breach

of contract or knew of MTN’s reasonable expectation of economic advantage. We agree.

Tortious Interference with Contract

A claim of tortious interference with contract requires proof of “(1) the existence of

a contract; (2) the alleged wrongdoer’s knowledge of the contract; (3) intentional

15 procurement of its breach; (4) without justification; and (5) damages.” Sysdyne Corp. v.

Rousslang, 860 N.W.2d 347, 351 (Minn. 2015) (quotation omitted). Our review of the

entire record reveals an absence of admissible evidence on at least one essential element of

MTN’s claim.

With respect to its direct-services contract with Stillwater, MTN seems to argue that

respondents intentionally procured Stillwater’s breach of the contract. But MTN has not

identified how Stillwater breached its contract with MTN, and the record contains no

evidence that CESO or CSTMN interfered to intentionally procure any breach of the

contract. It is also unclear which party MTN alleges breached its direct-services contract

with St. Anthony, or what that breach was, or what the respondents did to intentionally

procure that breach. The record contains evidence that St. Anthony notified MTN that it

was going to remove routes from MTN permanently and assess fines based on its assertion

that MTN continuously violated the contract by failing to provide the required number of

personnel to fulfill St. Anthony’s needs, failing to adequately communicate with parents

and the district, and failing to have drivers exercise proper care to avoid injury and exposure

to liability. But the record evidence does not establish that respondents acted intentionally

to procure the breaches St. Anthony asserted, or, to the extent that St. Anthony’s removal

of routes and assessment of fines would be a breach of contract, procured that breach.

We acknowledge that MTN makes additional arguments with respect to its tortious-

interference claims, but we do not address them here because respondents are entitled to

summary judgment if “the record reflects a complete lack of proof” on even one of the

essential elements of MTN’s claim. Lubbers, 539 N.W.2d at 401.

16 Tortious Interference with Prospective Business Advantage

A claim of tortious interference with a prospective business advantage requires

proof of (1) “[t]he existence of a reasonable expectation of economic advantage,” (2) the

defendant’s “knowledge of that expectation of economic advantage,” (3) the defendant’s

intentional interference “with plaintiff’s reasonable expectation of economic advantage,

and [that] the intentional interference is either independently tortious or in violation of a

state or federal statute or regulation,” (4) a reasonable probability “that plaintiff would have

realized his economic advantage or benefit” in the “absence of the wrongful act of

defendant,” and (5) damages. Gieske ex rel. Diversified Water Div., Inc. v. IDCA, Inc.,

844 N.W.2d 210, 219 (Minn. 2014). “To ensure that fair competition is not chilled, a claim

for tortious interference with prospective economic advantage must be limited to those

circumstances in which the interference is intentional and independently tortious or

unlawful, rather than merely unfair.” Id. at 218. Our review of the entire record reveals

an absence of admissible evidence on at least one essential element of MTN’s claim.

The record does not contain admissible evidence showing that respondents were

aware of MTN’s claimed reasonable expectation of economic advantage in Stillwater and

St. Anthony, or of MTN’s efforts to obtain business from school districts other than

Stillwater and St. Anthony. And there is no admissible evidence in the record showing

that, in the absence of any alleged interference by any respondent, it was reasonably

probable that MTN would have realized a claimed benefit.

MTN’s claim with respect to other school districts fails as a matter of law because

it is not tied to a specific third party. Id. at 221-22 (“[A] plaintiff must specifically identify

17 a third party with whom the plaintiff had a reasonable probability of a future economic

relationship. . . . [A] plaintiff’s projection of future business with unidentified customers,

without more, is insufficient as a matter of law.”).

With respect to MTN’s claims regarding Stillwater and St. Anthony, we note that

the terms of MTN’s direct-services contracts were several years long and continued past

the point at which MTN commenced this action. But on appeal, MTN has not pointed to

evidence showing that it was reasonable for it to expect that those contracts would continue,

without modification, through the end of the term despite contract violations or that its

relationships with those districts would continue past the contract term. And, even if those

expectations were reasonable, the record does not contain evidence establishing that

respondents had knowledge of MTN’s expectation. The record shows that CESO provided

“full service” to Stillwater and St. Anthony, and that in that role it was aware of MTN’s

contracts with the districts and communicated with MTN on the districts’ behalf. And the

record contains evidence that owners of CESO and CSTMN are related, that the entities

share space at the same address, and that CESO provides transportation staffing to

CSTMN. But this evidence does not establish that respondents were specifically aware of

MTN’s reasonable expectation of an economic advantage with Stillwater or St. Anthony.

Because the record does not contain evidence to support these essential elements of

MTN’s claim, we conclude that summary judgment was appropriate and do not address

MTN’s arguments with respect to other elements of its claim. Lubbers, 539 N.W.2d at

401.

18 C. The district court properly dismissed STT and MTN’s antitrust claims.

STT and MTN assert that the district court erred by dismissing their antitrust claims

arising out of alleged violations of Minn. Stat. §§ 325D.51, .53, subd. 1(2)(b)-(c). STT and

MTN generally allege that respondents “planned and acted in concert” and “engaged in

making prohibited contracts in violation of statutory mandates and engaged in combination

or conspiracy between themselves” to restrain trade or that resulted in refrains from bidding

or restrained competition on public contracts. Because the record does not contain

admissible evidence that respondents engaged in the alleged anticompetitive behavior, we

disagree.

“A contract, combination, or conspiracy between two or more persons in

unreasonable restraint of trade or commerce is unlawful.” Minn. Stat. § 325D.51.

Additionally, “[a] contract, combination, or conspiracy between two or more persons

whereby, in the letting of any public contract . . . (b) one or more persons refrains from the

submission of a bid, or (c) competition is in any other manner restrained” is deemed an

unreasonable and unlawful restraint of trade or commerce. Minn. Stat. § 325D.53,

subd. 1(2)(b)-(c). A “[c]ontract, combination, or conspiracy means any agreement,

arrangement, collusion, or understanding.” Minn. Stat. § 325D.50, subd. 4 (2022)

(quotation omitted).

The record does not contain admissible evidence of a contract or combination

between CSTMN and CESO to restrain trade. See id. (defining specifically a contract as

including “a purchase, contract to purchase, a sale, a contract to sell, a lease, a contract to

lease, a license, or a contract to license” and defining a combination as including “a trust,

19 common selling or purchasing agent, pool, or holding company”). To establish a

conspiracy “[n]o formal agreement is necessary.” Prestressed Concrete, Inc. v. Bladholm

Bros. Culvert Co., 498 N.W.2d 274, 277 (Minn. App. 1993) (quoting Am. Tobacco Co. v.

United States, 328 U.S. 781, 809-10 (1946)), rev. denied (Minn. May 28, 1993); see also

Lorix v. Crompton Corp., 736 N.W.2d 619, 626 (Minn. 2007) (“Minnesota antitrust law is

generally interpreted consistently with federal antitrust law.”). Rather, it “may be found in

a course of dealings or other circumstance as well as in an exchange of words.” Prestressed

Concrete, Inc., 498 N.W.2d at 277 (quoting Am. Tobacco Co., 328 U.S. at 809-10). But

the record evidence does not show that CESO and CSTMN had “an agreement,

arrangement, collusion, or understanding” between them to restrain trade, or that resulted

in a person refraining from submitting a bid to a public contract or restrained competition

on a public contract. Minn. Stat. §§ 325D.51, .53 subd. 1(2)(b)-(c). While the record

evidence, taken in the light most favorable to STT and MTN as nonmoving parties, may

show connections between the entities, the record does not show that the connected entities

were working together to restrain trade or that any of the alleged anticompetitive conduct

of respondents actually restrained trade.

In addition, the undisputed evidence establishes that STT and MTN were not

discouraged from soliciting business or bidding on public contracts because of any alleged

anticompetitive behavior by respondents. Although STT complains that the nonsolicitation

provision in its agreement with CSTMN was an unreasonable restraint of trade, STT

nevertheless entered into direct contracts with schools. And although Wake, the owner of

STT, testified that STT did not pursue contracts in “most of the districts” and cited to the

20 nonsolicitation provision, he also testified that the reasons he did not pursue those contracts

had nothing to do with the nonsolicitation provision or that he was otherwise unaware or

was unable to recall if STT participated in or the school districts held a public quotation

process. 4 The 2019 MTN-CSTMN service agreement did not contain a nonsolicitation

provision.

Because the record lacks evidence that respondents, working together, restrained

trade, bids, or competition, summary-judgment dismissal of STT and MTN’s antitrust

claims was proper. 5

D. The district court properly dismissed MTN’s claim for unjust enrichment.

MTN asserts that the district court erred by dismissing its unjust-enrichment claim.

Because the record contains no evidence that respondents knowingly received something

of value to which they were not entitled, we disagree.

4 At oral argument, appellants’ counsel asked that, in reviewing this testimony, we consider that English is not Wake’s first language. We appreciate that Wake may have experienced language barriers at his deposition, but we also note that the record does not contain a completed errata sheet from his deposition or other supplemental filing correcting or clarifying Wake’s answers to questions posed at his deposition. Minn. R. Civ. P. 30.05 (“If requested by the deponent or a party before completion of the deposition, the deponent shall have 30 days after being notified by the officer that the transcript or recording is available in which to review the transcript or recording and, if there are changes in form or substance, to sign a statement reciting such changes and the reasons given by the deponent for making them.”). Nonetheless, it is not readily apparent from our review of the deposition transcript which, if any, of Wake’s answers may have been impacted by a language barrier. 5 The parties debate whether any public quotation process the school districts held include the making of a “bid” under Minn. Stat. § 325D.53, subd. 1(2)(b). We do not address this question because, even assuming that a quotation process is within the scope of the statute, STT and MTN’s claim was still properly dismissed at summary judgment.

21 To succeed on a claim of unjust enrichment, the evidence must show that

respondents “knowingly received something of value to which [they were] not entitled, and

that the circumstances are such that it would be unjust for that [entity] to retain the benefit.”

Schumacher v. Schumacher, 627 N.W.2d 725, 728 (Minn. App. 2001). “An action for

unjust enrichment does not lie simply because one party benefits from the efforts of others;

instead, it must be shown that a party was unjustly enriched in the sense that the term

unjustly could mean illegally or unlawfully.” Id. at 729 (quotation omitted). This can

include circumstances in which retaining the benefit is morally wrong. Id. at 729-30

(reversing the summary-judgment dismissal of the appellant’s unjust-enrichment claim

when he “provided evidence that he made substantial improvements on respondents’ land,

that respondents knew of those improvements and either encouraged them or did nothing

to discourage them and that respondents have benefited from them,” creating a genuine

issue of material fact).

MTN alleged that respondents “siphon[ed] off amounts designated by the Stillwater

and [St. Anthony] school districts for MTN, redirect[ed] routes secured by contract as well

as anticipated through marketing and business efforts, and refus[ed] to pay MTN for the

value of business improperly redirected.” But the record does not contain evidence that

respondents received any benefit to which MTN was entitled. And although MTN asserts

that CSTMN received route assignments from CESO on behalf of the school districts that

were once serviced by MTN, those assertions are not based on admissible evidence.

Because the record evidence does not contain facts showing that respondents received

22 anything of value to which they were not entitled, the district court properly dismissed

MTN’s unjust-enrichment claim.

DECISION

The district court properly considered only evidence that would be admissible at

trial in determining whether a genuine issue of material fact existed. We hold that a party

may use allegations in a verified complaint to support or oppose a motion for summary

judgment if (1) the allegations are made on personal knowledge, (2) the allegations are

based on facts that would be admissible in evidence, and (3) the face of the complaint

shows the competence of the verifying party to testify on the matters stated, consistent with

Minn. R. Civ. P. 56.03(d). The district court did not abuse its discretion in declining to

consider allegations in documents that lacked proper foundation in reaching its summary-

judgment decision. We also hold that Minnesota does not recognize a cause of action for

breach of an illusory contract. And the record is devoid of admissible evidence establishing

the essential elements of the remaining claims. We therefore affirm the district court’s

summary-judgment dismissal of the action.

Affirmed.