Preview
27-CV-18-19659
Filed in District Court
State of Minnesota
12/22/2020 1:59 PM
STATE OF MINNESOTA DISTRICT COURT
COUNTY OF HENNEPIN FOURTH JUDICIAL DISTRICT
Ryan Lazenby, and Temaca Irrigation LLC, Court File No. 27-CV-18-19659
Case Type: Employment
Plaintiffs,
Judge Joseph R. Klein
v.
FINDINGS OF FACT,
Guadalupe Gomez, James Gomez, and CONCLUSIONS OF LAW, AND
Temaca Lawn Sprinkler’s, Inc. d/b/a/ Temaca ORDER FOR JUDGMENT
Lawn Sprinklers,
Defendants.
This matter came before the Honorable Joseph R. Klein, Judge of District Court, on August
31, 2020 for a court trial. Plaintiff Ryan Lazenby appeared with counsel. Defendants Guadalupe
Gomez and James Gomez appeared pro se. Specific appearances are as noted on the record.
Based on the evidence adduced at trial and all the files, records, and proceedings herein,
the court makes the following:
ORDER
1. Plaintiffs have failed to sustain their burden of establishing any of their claims.
2. Judgment is entered in favor of Defendants.
3. The $996.27 of payments held in trust shall be immediately released to Ryan Lazenby.
4. The attached memorandum is incorporated herein.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: December 22, 2020 BY THE COURT:
____________________________
Joseph R. Klein
Judge of District Court
JUDGMENT
Filed in District Court I Hereby Certify that the above Order
State of Minnesota Constitutes the Entry of Judgment of the Court
Jan 21, 2021 8:37 am Sarah Lindahl-Pfieffer, Court Administrator
By_____________________________________
Jan 21, 2021
_______________________________________
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INTRODUCTION
This matter came on for a court trial before Judge Klein on August 31, 2020. Plaintiff Ryan
Lazenby appeared with counsel. Defendants Guadalupe Gomez and James Gomez appeared pro
se.
Plaintiff Lazenby called the following witnesses: Ryan Lazenby, James Gomez, Diane
McCarthy, and Guadalupe Gomez.
Defendant Guadalupe Gomez called the following witnesses: Gene J. Shavlik and Karen
Gomez-Maestoso-Koukal.
The following exhibits were offered and received into evidence:
Exhibit 1: Business Purchase Agreement, dated April 24, 2017.
Exhibit 2: Photos of checks received by Defendant Guadalupe Gomez.
Exhibit 3: List of checks not received or cashed by Plaintiff Lazenby.
Exhibit 4: Temaca Law Sprinklers Bank Account Statement.
Exhibit 5: Disputed checks received by Defendant Guadalupe Gomez held in a trust
account.
Exhibit 6: Copy of a Facebook message sent by Defendant James Gomez.
Exhibits 11, 12 and 13: Temaca Inc. Business Summaries.
Exhibits 1-6 were submitted by Plaintiffs. Exhibits 11-13 were submitted by Defendants.
Following the court trial, Plaintiffs submitted a Memorandums of Law in support of
Judgment, and Defendant filed a Memorandum in response.
FINDINGS OF FACTS
Defendant Guadalupe Gomez (a.k.a. “Lupe Gomez”) is the former owner of Defendant
Temaca Lawn Sprinklers (“Temaca Inc.”) who owned and operated Temaca Inc. for approximately
15 years. Around April 2017, Plaintiff Ryan Lazenby entered into a Business Purchase Agreement
(“Agreement”) whereby Plaintiff purchased Temaca Inc. from Defendant Guadalupe Gomez.
Defendant James Gomez is Defendant Guadalupe Gomez’s son, who at no time had any interest
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or employment with Temaca Inc. or its successor company, Plaintiff Temaca Irrigation LLC
(“Temaca LLC”).
Pursuant to the Agreement, the business, Temaca Inc., to be purchased is described to
include the following properties:
The Inventory, which includes the stock in trade and merchandise, raw materials,
work in progress and finished goods to be sold and purchased under this Agreement
All customers past and present. (Customer list is attached and is approximately 654
customers see Exhibit B)
All the furniture, fixtures, equipment, and other tangible assets
All the trade, goodwill, and other intangible assets
The Agreement also provides:
Consideration
As total consideration for the purchase and sale of the Business (including its
tangible and intangible assets as described above), and Buyer's assumption of the
assumed obligations and all other liabilities provided for in this Agreement, the
Buyer shall pay to the Seller the sum of $73,967.00, and such total consideration to
be referred to in this Agreement as the ‘Purchase Price.’
Payment
The sum of $63,000.00 shall be delivered to Seller upon Buyer's execution of this
Agreement. Buyer agrees to pay the entire amount at closing. Concurrent with the
execution of this Agreement, Temaca Lawn Sprinklers will operate under Ryan
Lazenby for the 2017 season. At the end of the season, the customers who have
done business with the company will be added up and a payment of $150 per
customer will be paid to Lupe Gomez. This total amount will be paid in 3 equal
payments. The 1st payment will be due the fall of 2017 on or around November
th
15 . The second payment will be due on around July 15th of 2018. The 3rd and final
payment will be due on or around June 1st 2019.”
Non-Compete
Upon finalizing this transaction, for a period of 3 Years, the Seller will not directly
or indirectly engage in any business competitive with Temaca Lawn Sprinklers.
This covenant shall apply to the geographical area that includes all of the State of
Minnesota. Directly or indirectly engaging in any competitive business includes,
but is not limited to: (i) engaging in a business as owner, partner, or agent, (ii)
becoming an employee of any third party that is engaged in such business, (iii)
becoming interested directly or indirectly in any such business, or (iv) soliciting
any customer or current Executive or Employee of Temaca Lawn Sprinklers for the
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benefit of a third party that is engaged in such business. The parties agree that this
non-compete provision will not adversely affect Lupe Gomez’s livelihood.
Additionally, pursuant to the Agreement, the seller, Defendant Guadalupe Gomez,
represents and warrants that he “has timely prepared and filed all federal, state, and local tax returns
and reports as are and have been required to be filed, and all taxes shown thereon to be due have
been paid in full, including but not limited to sales tax, withholding tax, and all other taxes of every
nature.”
The Agreement was signed by both Plaintiff and Defendant Guadalupe Gomez. The
Agreement was drafted by counsel for Plaintiff.
After the purchase, Plaintiff Lazenby created Plaintiff Temaca LLC as a successor entity
to Temaca Inc. and operated the business solely under Plaintiff Temaca LLC. Defendant
Guadalupe Gomez became an at-will employee of Temaca LLC.
After the creation of Temaca LLC, customers continued to send checks to Defendant
Guadalupe Gomez and made payable to Temaca Inc. (this was the standard billing practice of
Temaca Inc. prior to the sale of the business). Disputes arose between Plaintiff and Defendant
Guadalupe Gomez regarding these checks. The parties acknowledge, though, that a cause of
Defendant Guadalupe Gomez continuing to receive checks from customers was that the new
business, Temaca LLC, and the old business, Temaca Inc., had similar names. The parties also
acknowledge that the change of business name and change of ownership with Defendant
Guadalupe Gomez still working for the business caused confusion among the customers.
According to Plaintiff, customers were lost due to disputes and confusion over checks. Plaintiff
also alleges that Defendant Guadalupe Gomez deposited checks into Temaca Inc. bank account,
which was still under the sole control of Defendant Guadalupe Gomez.
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Defendant Guadalupe Gomez was terminated by Temaca LLC around June 2018. Plaintiff
alleges that after termination, Defendant Guadalupe Gomez was still receiving checks from
customers and that issues with the checks persisted, including Defendant Guadalupe Gomez
depositing checks in the Temaca Inc. bank account. Plaintiff also alleges that after his termination,
Defendant Guadalupe Gomez maintained and operated Temaca Inc. and began approaching
Temaca LLC customers and soliciting their business. Plaintiff alleges that Temaca Inc. lost an
estimated 203 customers due to Defendant Guadalupe Gomez soliciting them. Plaintiff also alleges
that Defendant James Gomez began contacting Temaca LLC customers and making false, negative
statements about Plaintiff. Plaintiff alleges that he lost customers due to Defendant James Gomez’s
statements.
Plaintiff filed the Complaint on December 5, 2018, alleging five causes of action against
Defendants Guadalupe Gomez, James Gomez, and Temaca Inc., specifically: 1) Breach of contract
against Defendants Guadalupe Gomez and Temaca Inc.; 2) Conversion against Defendants
Guadalupe Gomez and Temaca Inc.; 3) Tortious interference with a contract against all three
Defendants; 4) Tortious interference with a prospective business advantage against all three
Defendants; and 5) Defamation against Defendants Guadalupe Gomez and James Gomez.
Simultaneous to filing the Complaint, Plaintiff brought a Motion for Temporary
Restraining Order, seeking an order: an order: (1) enjoining Defendants from servicing law
irrigation systems, soliciting law irrigation customers, or otherwise competing in the Minnesota
lawn irrigation business; (2) freezing all accounts held by Temaca Sprinklers; and (3) enjoining
Defendant Guadalupe Gomez from operating Temaca Sprinklers, and identifying and escrowing
any monetary compensation or receivables received as a result of servicing lawn irrigation
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systems. A hearing on this motion was held on December 14, 2018. On February 1, 2019, this
court issued the Order Denying Motion for Temporary Injunction.
At trial, the court first heard testimony from Plaintiff Lazenby. Plaintiff testified that at the
time the Agreement was negotiated and entered into, Temaca Inc. had approximately $50,000.00
in taxes owed and that the parties were in agreement that Defendant would pay this. Plaintiff also
testified that there was no clear understanding of how many customers Temaca Inc. actually had
at the time the Agreement was consummated. The Agreement states that there are approximately
654 customers, but Plaintiff testified that there was actually approximately 462 customers.
Curiously, the court notes that Plaintiff’s own verified Complaint provides that Temaca LLC has
approximately 750 customers.1
Plaintiff Lazenby also testified as to his belief that Defendant Guadalupe Gomez was
receiving checks from customers and depositing them into the Temaca Inc. bank account. Plaintiff
also testified as to Defendant James Gomez’s negative statements regarding Plaintiff to potential
customers. Plaintiff provided a Facebook message sent by Defendant James Gomez to Shawn
Halbert2 and testified that because of Defendant James Gomez’s statements, Halbert chose not to
become a customer of Temaca LLC. Plaintiff did not provide any evidence as to why Halbert did
not become a customer of Temaca LLC. This court does not find credible the testimony of plaintiff
Lazenby. He signed a verified Complaint in which he claimed various acts of misconduct by
Defendants that caused him to lose customers. In the very same Complaint that he verified, he
acknowledged having nearly one hundred more customers than he did at the time he signed the
1
Plaintiff’s verified Complaint was signed on November 28, 2018, by Ryan Lazenby. Plaintiff Lazenby attested, under
penalty of perjury, that the contents of the Complaint were true. By this verification, Plaintiff Lazenby attested to this
court, under penalty of perjury, that Temaca LLC “has approximately 750 customers” as of November 28, 2018.
2
Plaintiffs’verified Complaint statesthat Defendant James Gomez sent the message to “one current Temaca”
customer. Plaintiffs’ post-trial Memorandum of Law in Support of Judgment states that the message was sent to a
“potential Temaca” customer.
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Purchase Agreement. At trial, he testified that the actual number of customers was really only
approximately 462 customers at the time he took over the business. Neither his testimony, nor any
other evidence offered by Plaintiffs, attempted to reconcile this discrepancy. This sworn testimony
at trial stands in stark contradiction to both the Agreement that he signed, and the verified
Complaint that he signed. Given the drastic inconsistency presented by Plaintiff with respect to
these numbers, itwould appear that his sworn testimony with regard to lost customers is not
trustworthy on its face. On the contrary, since the number of customers goes to the very heart of
the issues in the present case, this court must consider the whole of Plaintiff Lazenby’s credibility
compromised. Apart from his self-serving testimony, Plaintiff Lazenby provided no competent
evidence showing that he had lost even a single customer as a result of any conduct by any of the
Defendants. His testimony that Halbert chose not to become a customer, is unverified hearsay and
was not corroborated by any evidence other evidence offered at trial. His belief that checks were
being deposited by Gomez into the Temaca Inc. account is than little more than that—a belief. He
articulated this allegation in his Complaint, and at trial did nothing more than reiterate his belief.
Given the court’s concern with his credibility, and the lack of any definite corroborating evidence
in the record, there is not enough to persuade the court that the belief was based in fact or justified.
It fails to provide the court with evidence sufficient to sustain plaintiff’s burden of proof.
Plaintiff then called Defendant James Gomez as a witness. Defendant James Gomez
testified as to the Facebook message he sent to Shawn Halbert. In that message, Defendant James
Gomez states, among other things, that Plaintiff is “bi-polar3” and a “crook.” Defendant James
3
At trial, the court had an opportunity to listen to James Gomez’s testimony, and assess his demeanor and candor.
This court judged Defendant James Gomez to be an unsophisticated, non-medically trained person, who had a
tendency to use rough language. Considering this, and the context of this statements, this court finds that James
Gomez was not claiming that Plaintiff Lazenby had been diagnosed with Bi-Polar Disorder. This court draws the
reasonable inference that Gomez was simply expressing an opinion that Plaintiff Lazenby had certain perceived
negative traits that many in society frequently express in terms of someone acting “bi-polar.”. It appears to this court
that Defendant James Gomez was using the term as an equivalence to his belief that Plaintiff Lazenby was “moody”
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Gomez testified that he is not aware if Plaintiff has ever been diagnosed with Bi-Polar Disorder.
Defendant James Gomez testified that he believes Plaintiff is “bi-polar” based on his observations
of Plaintiff and experiences with him. Defendant James Gomez further testified that his other
statements regarding Plaintiff—that he “screams at workers” and “threatens workers”—was based
on his observations and experiences, and on conversations he has had with Plaintiff’s former
employees. Defendant James Gomez also testified that Plaintiff was previously married to James
Gomez’s cousin and had knowledge of Plaintiff through that connection. Plaintiff did not elicit
testimony from Defendant James Gomez as to the formation of his beliefs that Plaintiff is a “crook”
and “broke.”4 As a witness, James Gomez presented as a simple and unsophisticated blue-collar
worker. This court was able to discern from Defendant James Gomez’s testimony that he felt a
considerable degree of acrimony towards Plaintiff Lazenby. This court finds Defendant James
Gomez’s testimony to be generally credible, as he admitted to a number of statements, and his
testimony was not impeached in any meaningful way.
Plaintiff then called Diane McCarthy as a witness. McCarthy stated that she was a customer
of Temaca Inc. for many years prior to the sale in 2017. McCarthy stated that in 20195 she had an
encounter with Defendant and that this was the first time she had spoken to him since he left
Temaca LLC. McCarthy stated that she had no recollection of Defendant telling her that he was
back in the irrigation business or that he would be getting his business, Temaca, back. McCarthy
or “unstable.” Plaintiff introduced no evidence to indicate that any third party heard or read the expressions “bi-polar”
and reasonably believed that Plaintiff Lazenby had been diagnosed with Bi-Polar Disorder, much less that any such
belief caused any such a third party to cease doing business with Plaintiffs, or refrained from doing business with
Plaintiffs.
4
Counsel for Plaintiffs initially posed a question to Defendant James Gomez regarding these statements, at which
time Defendant James Gomez raised a document he had brought up to the witness stand with him. At that point,
counsel for Plaintiffs decided not to elicit any testimony regarding these statements and “moved-on” from the issue.
Given the paucity of the record with respect to these terms used by James Gomez, there is not enough evidence to
consider them any more than the expression of a belief or opinion.
5
The court notes that this conversation, if it took place in 2019, would have transpired after Plaintiffs had already
drafted, served, and filed their Complaint against Defendant.
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stated that Defendant may have said to her, “I might have to get back into it.” McCarthy stated that
she currently uses Kelly Irrigation for her irrigation needs. The court finds McCarthy, a
disinterested third-party, to be a credible witness.
Plaintiff then called Defendant Guadalupe Gomez as a witness. Defendant Guadalupe
Gomez testified that it was not his understanding that the Temaca Inc. bank account was to be a
part of the sale in the Agreement. Defendant Guadalupe Gomez testified that he retained control
of the Temaca Inc. bank account in order to process a loan he had taken out from Bridgewater
Bank to pay the taxes owed by Temaca Inc. and to pay other outstanding debts of Temaca Inc.
Defendant Guadalupe Gomez testified that the balance in the Temaca Inc. bank account was from
loan proceeds and payments from before the Agreement was signed. Defendant Guadalupe Gomez
testified that deposits into the Temaca Inc. bank account after the Agreement was entered into were
from cash loans he was receiving from family and friends to help pay Temaca Inc. debts, and that
Defendant Guadalupe Gomez at times deposited funds from some of his other business ventures
into the Temaca Inc. account. Defendant Guadalupe Gomez testified that all checks received from
customers after the Agreement have been provided to Plaintiff or Plaintiff’s counsel, or to
Defendant Guadalupe Gomez’s former counsel that represented him at the beginning of this
litigation. Defendant Guadalupe Gomez further testified that he at no time commenced a
competing business, nor did he perform any irrigation work for any of Temaca Inc.’s former
customers, once he was terminated. The court finds Defendant Guadalupe Gomez to be a credible
witness and believable in his testimony concerning his conduct with checks received after the sale
of the business. The Court further finds credible and believable Defendant Guadalupe Gomez’s
testimony that he has not competed with Plaintiffs’ business.
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Defendant Guadalupe Gomez called Gene J. Shavlik as a witness. Shavlik is a Certified
Personal Accountant and Certified Financial Planner that has been working with Defendant
Guadalupe Gomez, including preparing tax returns, for “a long time.” Shavlik testified as to certain
aspects of the Agreement, specifically, the consideration to be paid by Plaintiff Lazenby.
Defendant Guadalupe Gomez then called Karen Gomez-Maestoso-Koukal as a witness.
Gomez-Maestoso-Koukal testified as to the summaries that were prepared and submitted as
Exhibits 12 and 13. Defendant recalled Shavlik to add testimony regarding Exhibits 12 and 13.
The court finds the testimony of both Shavlik and Gomez-Maestoso-Koukal to be credible
witnesses.
CONCLUSIONS OF LAW
I. Plaintiffs failed to meet their burden of proof on their breach of contract claim.
Plaintiffs claim that Defendant Guadalupe Gomez breached the Agreement by retaining
control over Temaca Inc.’s corporate affairs and bank account, and continuing to operate Temaca
Inc. independent of Plaintiff. Plaintiff also claims that Defendant Guadalupe Gomez breached the
non-compete clause of the Agreement.
A breach of contract claim requires: (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). There is no dispute that the Agreement is an
enforceable contract between the parties.
Other than the Temaca Inc. bank account, Plaintiffs have provided no evidence that
Defendant Guadalupe Gomez maintained control of Temaca Inc.’s corporate affairs or that he
continued to operate Temaca Inc. independent of Plaintiffs. In regards to the Temaca Inc. bank
account, Plaintiffs allege that the Agreement provided for Defendant Guadalupe Gomez to transfer
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all tangible and intangible assets, which included the Temaca Inc. bank account. However,
Plaintiffs provide no evidence in support of this conclusion, and Defendant Guadalupe Gomez
maintains that the parties were never in agreement that the Temaca Inc. bank account would be
included in the assets. “Where there are ambiguous terms or the intent is doubtful, it is axiomatic
that the contract will be construed against the drafter.” Turner v. Alpha Phi Sorority House, 276
N.W.2d 63, 66 (Minn. 1979); see also Lowry v. Kneeland, 263 Minn. 537, 541, 117 N.W.2d 207,
210 (Minn. 1962) (“[I]f there is doubt as to [a contract's] meaning itmust be construed most
strongly against the one who chose the language in drafting the instrument.”). Furthermore,
Plaintiff changed the name of Temaca Inc. to Temaca LLC, leading this court to find that a
Plaintiffs would have had no use for the Temaca Inc. bank account.
Regarding the non-compete clause of the Agreement, it provides that Defendant Guadalupe
Gomez shall not “[d]irectly or indirectly engaging in any competitive business includes, but is not
limited to: (i) engaging in a business as owner, partner, or agent, (ii) becoming an employee of any
third party that is engaged in such business, (iii) becoming interested directly or indirectly in any
such business, or (iv) soliciting any customer or current Executive or Employee of Temaca Lawn
Sprinklers for the benefit of a third party that is engaged in such business.” Plaintiffs presented no
evidence, other than the testimony of Plaintiff Lazenby, that Defendant Guadalupe Gomez violated
any of these prohibitions.
Indeed, Plaintiffs’ own witness, Diane McCarthy, a disinterested third-party, testified that
when she spoke to Defendant Guadalupe Gomez in 2019, after he had left Temaca LLC, he did
not state to McCarthy that he was currently engaged in the lawn irrigation business or attempt to
solicit McCarthy’s business, but merely stated that “I might have to get back into it.” Furthermore,
Plaintiff testified that the actual number of customers Temaca Inc. had when the Agreement was
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entered into in April 2017 was approximately 462, then in the verified Complaint attested that at
the time of verifying the Complaint, November 28, 2018, Temaca LLC had 750 customers,
indicating—if anything—that the amount of customers had not diminished, but grown, and leading
to the powerful inference that that Defendant Guadalupe Gomez had not actually solicited any
customers. At the very least Plaintiffs have failed identify customers that were lost, or explain
how they has lost business, when their very own court filings indicate that their customer numbers
had increased substantially. The fact that Plaintiffs could not present testimony from even one
witness establishing that he or she had ceased doing business with Temaca Inc. or Temaca, LLC,
let alone that he or she had gone to a competitor who was in some way connected with Defendants,
is quite telling. The absence of any such competent evidence leaves Plaintiffs’ breach of contract
claims wanting and deficient.
Based on the forgoing reasons, the court finds that Plaintiffs have not met their burden of
establishing a claim for breach of contract.
II. Plaintiffs failed to meet their burden of proof on their conversion claim.
Plaintiffs claim that Defendant Guadalupe Gomez is exercising control over checks that
Plaintiffs have a right to, and that Defendant Guadalupe Gomez has deposited checks that Plaintiffs
have a right to into the Temaca Inc. bank account.
Conversion has two elements: 1) the plaintiff holds a property interest, and 2) the defendant
deprives plaintiff of that interest. Williamson v. Prasciunas, 661 N.W.2d 645, 649 (Minn. Ct. App.
2003). The requisite intent for conversion is that the “act [is] one which [respondent] knows to be
destructive of any outstanding possessory right, if such there be.” Christensen v. Milbank Ins. Co.,
658 N.W.2d 580, 585–86 (Minn. 2003); DLH, Inc., v. Russ, 566 N.W.2d 60, 71 (Minn. 1997).
At the hearing on Plaintiffs’ Motion for a Temporary Injunction on December 14, 2018,
Defendant Guadalupe Gomez provided Plaintiff customer checks that were sent to Defendant by
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mistake. Those checks are set forth in Exhibit 2. In addition, after commencement of this litigation,
it was agreed between the parties that any additional customer checks mistakenly received by
Defendant Guadalupe Gomez would be held in trust and there is no evidence to suggest that
Defendant Guadalupe Gomez has not complied with this. These checks currently held in trust are
set forth in Exhibit 5.
Plaintiffs offer no evidence of other checks received or held by Defendant Guadalupe
Gomez that Plaintiffs have a right to. Plaintiffs have identified certain deposits made in the Temaca
Inc. bank account by Defendant Guadalupe Gomez, but provide no evidence establishing that these
deposits are customer checks or funds to which Plaintiffs have any right. Other than pointing to
deposits and funds in the Temaca Inc. bank account and stating a “belief” that they are from checks
owed to Plaintiffs, no evidence was provided that Defendant Guadalupe Gomez deposited checks
from customers that Plaintiffs had a right to, nor is there any evidence that Defendant Guadalupe
Gomez cashed any checks from customers to which Plaintiffs was entitled.
Based on the forgoing, the court finds that Plaintiffs have failed to meet their burden of
establishing a claim for conversion.
III. Plaintiffs failed to meet their burden of proof on their defamation claim.
Plaintiffs claim that Defendants Guadalupe Gomez and James Gomez made numerous false
statements regarding Plaintiff’s finances, debt, tax liabilities, and character. Specifically, Plaintiffs
claim that Defendants Guadalupe Gomez and James Gomez falsely stated that Plaintiff’s liabilities
exceeded his assets, that Plaintiff was “bi-polar” and an abusive employer, and that Plaintiff owed
Defendant Guadalupe Gomez money for Temaca Inc.
For a defamation claim, a plaintiff must prove that the defendant made: (a) a false and
defamatory statement about the plaintiff; (b) in unprivileged publication to a third party; (c) that
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harmed the plaintiff's reputation in the community. Weinberger v. Maplewood Review, 668
N.W.2d 667, 673 (Minn. 2003) (citing Britton v. Koep, 470 N.W.2d 518, 520 (Minn. 1991)).
Plaintiffs have failed to establish that statements made by Defendants harmed Plaintiffs’
reputation. The only evidence presented by Plaintiffs that could support this claim is the Facebook
message sent by Defendant James Gomez to Shawn Halbert. Plaintiffs claim that the fact that
Halbert chose not to enter into a service relationship with Plaintiffs after receiving Defendant
James Gomez message is evidence that the statements harmed Plaintiffs’ reputation. However,
Plaintiffs failed to establish that Halbert was considering entering into a service relationship with
Plaintiffs, or that Halbert chose not to enter in a service relationship with Plaintiffs due to
Defendant James Gomez’s statement.
Plaintiffs also failed to establish that Defendant James Gomez’s statements were false and
defamatory. Plaintiffs failed to establish that any party took Defendant James Gomez’s statements
to be evidence that Plaintiff had been diagnosed with Bi-Polar Disorder, or that such a diagnosis
would be harmful one’s reputation.6 Furthermore, the court finds that, considering the context of
the statements, Defendant James Gomez was not intending to imply that Plaintiff had been
diagnosed with Bi-Polar Disorder and no reasonable person could construe it as such.
Plaintiffs also failed to establish that Defendant James Gomez’s statements that Plaintiff is
a “crook” or regarding Plaintiff’s finances, debt, or tax liabilities are false or defamatory. At trial,
Plaintiffs had the opportunity to elicit testimony from Defendant James Gomez regarding his
statements that Plaintiff is a “crook” or regarding his finances, debts, or tax liability, and appeared
to begin eliciting such testimony, but explicitly chose not to. Furthermore, Defendants’ post-trial
6
The court is not inclined to sua sponte analyze whether, and to what extent, mental health issues and diagnosis impact
a person’s reputation.
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27-CV-18-19659 Filed in District Court State of Minnesota 12/22/2020 1:59 PM STATE OF MINNESOTA DISTRICT COURT COUNTY OF HENNEPIN FOURTH JUDICIAL DISTRICT Ryan Lazenby, and Temaca Irrigation LLC, Court File No. 27-CV-18-19659 Case Type: Employment Plaintiffs, Judge Joseph R. Klein v. FINDINGS OF FACT, Guadalupe Gomez, James Gomez, and CONCLUSIONS OF LAW, AND Temaca Lawn Sprinkler’s, Inc. d/b/a/ Temaca ORDER FOR JUDGMENT Lawn Sprinklers, Defendants. This matter came before the Honorable Joseph R. Klein, Judge of District Court, on August 31, 2020 for a court trial. Plaintiff Ryan Lazenby appeared with counsel. Defendants Guadalupe Gomez and James Gomez appeared pro se. Specific appearances are as noted on the record. Based on the evidence adduced at trial and all the files, records, and proceedings herein, the court makes the following: ORDER 1. Plaintiffs have failed to sustain their burden of establishing any of their claims. 2. Judgment is entered in favor of Defendants. 3. The $996.27 of payments held in trust shall be immediately released to Ryan Lazenby. 4. The attached memorandum is incorporated herein. LET JUDGMENT BE ENTERED ACCORDINGLY. Dated: December 22, 2020 BY THE COURT: ____________________________ Joseph R. Klein Judge of District Court JUDGMENT Filed in District Court I Hereby Certify that the above Order State of Minnesota Constitutes the Entry of Judgment of the Court Jan 21, 2021 8:37 am Sarah Lindahl-Pfieffer, Court Administrator By_____________________________________ Jan 21, 2021 _______________________________________ Page 1 of 16 27-CV-18-19659 Filed in District Court State of Minnesota 12/22/2020 1:59 PM INTRODUCTION This matter came on for a court trial before Judge Klein on August 31, 2020. Plaintiff Ryan Lazenby appeared with counsel. Defendants Guadalupe Gomez and James Gomez appeared pro se. Plaintiff Lazenby called the following witnesses: Ryan Lazenby, James Gomez, Diane McCarthy, and Guadalupe Gomez. Defendant Guadalupe Gomez called the following witnesses: Gene J. Shavlik and Karen Gomez-Maestoso-Koukal. The following exhibits were offered and received into evidence: Exhibit 1: Business Purchase Agreement, dated April 24, 2017. Exhibit 2: Photos of checks received by Defendant Guadalupe Gomez. Exhibit 3: List of checks not received or cashed by Plaintiff Lazenby. Exhibit 4: Temaca Law Sprinklers Bank Account Statement. Exhibit 5: Disputed checks received by Defendant Guadalupe Gomez held in a trust account. Exhibit 6: Copy of a Facebook message sent by Defendant James Gomez. Exhibits 11, 12 and 13: Temaca Inc. Business Summaries. Exhibits 1-6 were submitted by Plaintiffs. Exhibits 11-13 were submitted by Defendants. Following the court trial, Plaintiffs submitted a Memorandums of Law in support of Judgment, and Defendant filed a Memorandum in response. FINDINGS OF FACTS Defendant Guadalupe Gomez (a.k.a. “Lupe Gomez”) is the former owner of Defendant Temaca Lawn Sprinklers (“Temaca Inc.”) who owned and operated Temaca Inc. for approximately 15 years. Around April 2017, Plaintiff Ryan Lazenby entered into a Business Purchase Agreement (“Agreement”) whereby Plaintiff purchased Temaca Inc. from Defendant Guadalupe Gomez. Defendant James Gomez is Defendant Guadalupe Gomez’s son, who at no time had any interest Page 2 of 16 27-CV-18-19659 Filed in District Court State of Minnesota 12/22/2020 1:59 PM or employment with Temaca Inc. or its successor company, Plaintiff Temaca Irrigation LLC (“Temaca LLC”). Pursuant to the Agreement, the business, Temaca Inc., to be purchased is described to include the following properties: The Inventory, which includes the stock in trade and merchandise, raw materials, work in progress and finished goods to be sold and purchased under this Agreement All customers past and present. (Customer list is attached and is approximately 654 customers see Exhibit B) All the furniture, fixtures, equipment, and other tangible assets All the trade, goodwill, and other intangible assets The Agreement also provides: Consideration As total consideration for the purchase and sale of the Business (including its tangible and intangible assets as described above), and Buyer's assumption of the assumed obligations and all other liabilities provided for in this Agreement, the Buyer shall pay to the Seller the sum of $73,967.00, and such total consideration to be referred to in this Agreement as the ‘Purchase Price.’ Payment The sum of $63,000.00 shall be delivered to Seller upon Buyer's execution of this Agreement. Buyer agrees to pay the entire amount at closing. Concurrent with the execution of this Agreement, Temaca Lawn Sprinklers will operate under Ryan Lazenby for the 2017 season. At the end of the season, the customers who have done business with the company will be added up and a payment of $150 per customer will be paid to Lupe Gomez. This total amount will be paid in 3 equal payments. The 1st payment will be due the fall of 2017 on or around November th 15 . The second payment will be due on around July 15th of 2018. The 3rd and final payment will be due on or around June 1st 2019.” Non-Compete Upon finalizing this transaction, for a period of 3 Years, the Seller will not directly or indirectly engage in any business competitive with Temaca Lawn Sprinklers. This covenant shall apply to the geographical area that includes all of the State of Minnesota. Directly or indirectly engaging in any competitive business includes, but is not limited to: (i) engaging in a business as owner, partner, or agent, (ii) becoming an employee of any third party that is engaged in such business, (iii) becoming interested directly or indirectly in any such business, or (iv) soliciting any customer or current Executive or Employee of Temaca Lawn Sprinklers for the Page 3 of 16 27-CV-18-19659 Filed in District Court State of Minnesota 12/22/2020 1:59 PM benefit of a third party that is engaged in such business. The parties agree that this non-compete provision will not adversely affect Lupe Gomez’s livelihood. Additionally, pursuant to the Agreement, the seller, Defendant Guadalupe Gomez, represents and warrants that he “has timely prepared and filed all federal, state, and local tax returns and reports as are and have been required to be filed, and all taxes shown thereon to be due have been paid in full, including but not limited to sales tax, withholding tax, and all other taxes of every nature.” The Agreement was signed by both Plaintiff and Defendant Guadalupe Gomez. The Agreement was drafted by counsel for Plaintiff. After the purchase, Plaintiff Lazenby created Plaintiff Temaca LLC as a successor entity to Temaca Inc. and operated the business solely under Plaintiff Temaca LLC. Defendant Guadalupe Gomez became an at-will employee of Temaca LLC. After the creation of Temaca LLC, customers continued to send checks to Defendant Guadalupe Gomez and made payable to Temaca Inc. (this was the standard billing practice of Temaca Inc. prior to the sale of the business). Disputes arose between Plaintiff and Defendant Guadalupe Gomez regarding these checks. The parties acknowledge, though, that a cause of Defendant Guadalupe Gomez continuing to receive checks from customers was that the new business, Temaca LLC, and the old business, Temaca Inc., had similar names. The parties also acknowledge that the change of business name and change of ownership with Defendant Guadalupe Gomez still working for the business caused confusion among the customers. According to Plaintiff, customers were lost due to disputes and confusion over checks. Plaintiff also alleges that Defendant Guadalupe Gomez deposited checks into Temaca Inc. bank account, which was still under the sole control of Defendant Guadalupe Gomez. Page 4 of 16 27-CV-18-19659 Filed in District Court State of Minnesota 12/22/2020 1:59 PM Defendant Guadalupe Gomez was terminated by Temaca LLC around June 2018. Plaintiff alleges that after termination, Defendant Guadalupe Gomez was still receiving checks from customers and that issues with the checks persisted, including Defendant Guadalupe Gomez depositing checks in the Temaca Inc. bank account. Plaintiff also alleges that after his termination, Defendant Guadalupe Gomez maintained and operated Temaca Inc. and began approaching Temaca LLC customers and soliciting their business. Plaintiff alleges that Temaca Inc. lost an estimated 203 customers due to Defendant Guadalupe Gomez soliciting them. Plaintiff also alleges that Defendant James Gomez began contacting Temaca LLC customers and making false, negative statements about Plaintiff. Plaintiff alleges that he lost customers due to Defendant James Gomez’s statements. Plaintiff filed the Complaint on December 5, 2018, alleging five causes of action against Defendants Guadalupe Gomez, James Gomez, and Temaca Inc., specifically: 1) Breach of contract against Defendants Guadalupe Gomez and Temaca Inc.; 2) Conversion against Defendants Guadalupe Gomez and Temaca Inc.; 3) Tortious interference with a contract against all three Defendants; 4) Tortious interference with a prospective business advantage against all three Defendants; and 5) Defamation against Defendants Guadalupe Gomez and James Gomez. Simultaneous to filing the Complaint, Plaintiff brought a Motion for Temporary Restraining Order, seeking an order: an order: (1) enjoining Defendants from servicing law irrigation systems, soliciting law irrigation customers, or otherwise competing in the Minnesota lawn irrigation business; (2) freezing all accounts held by Temaca Sprinklers; and (3) enjoining Defendant Guadalupe Gomez from operating Temaca Sprinklers, and identifying and escrowing any monetary compensation or receivables received as a result of servicing lawn irrigation Page 5 of 16 27-CV-18-19659 Filed in District Court State of Minnesota 12/22/2020 1:59 PM systems. A hearing on this motion was held on December 14, 2018. On February 1, 2019, this court issued the Order Denying Motion for Temporary Injunction. At trial, the court first heard testimony from Plaintiff Lazenby. Plaintiff testified that at the time the Agreement was negotiated and entered into, Temaca Inc. had approximately $50,000.00 in taxes owed and that the parties were in agreement that Defendant would pay this. Plaintiff also testified that there was no clear understanding of how many customers Temaca Inc. actually had at the time the Agreement was consummated. The Agreement states that there are approximately 654 customers, but Plaintiff testified that there was actually approximately 462 customers. Curiously, the court notes that Plaintiff’s own verified Complaint provides that Temaca LLC has approximately 750 customers.1 Plaintiff Lazenby also testified as to his belief that Defendant Guadalupe Gomez was receiving checks from customers and depositing them into the Temaca Inc. bank account. Plaintiff also testified as to Defendant James Gomez’s negative statements regarding Plaintiff to potential customers. Plaintiff provided a Facebook message sent by Defendant James Gomez to Shawn Halbert2 and testified that because of Defendant James Gomez’s statements, Halbert chose not to become a customer of Temaca LLC. Plaintiff did not provide any evidence as to why Halbert did not become a customer of Temaca LLC. This court does not find credible the testimony of plaintiff Lazenby. He signed a verified Complaint in which he claimed various acts of misconduct by Defendants that caused him to lose customers. In the very same Complaint that he verified, he acknowledged having nearly one hundred more customers than he did at the time he signed the 1 Plaintiff’s verified Complaint was signed on November 28, 2018, by Ryan Lazenby. Plaintiff Lazenby attested, under penalty of perjury, that the contents of the Complaint were true. By this verification, Plaintiff Lazenby attested to this court, under penalty of perjury, that Temaca LLC “has approximately 750 customers” as of November 28, 2018. 2 Plaintiffs’verified Complaint statesthat Defendant James Gomez sent the message to “one current Temaca” customer. Plaintiffs’ post-trial Memorandum of Law in Support of Judgment states that the message was sent to a “potential Temaca” customer. Page 6 of 16 27-CV-18-19659 Filed in District Court State of Minnesota 12/22/2020 1:59 PM Purchase Agreement. At trial, he testified that the actual number of customers was really only approximately 462 customers at the time he took over the business. Neither his testimony, nor any other evidence offered by Plaintiffs, attempted to reconcile this discrepancy. This sworn testimony at trial stands in stark contradiction to both the Agreement that he signed, and the verified Complaint that he signed. Given the drastic inconsistency presented by Plaintiff with respect to these numbers, itwould appear that his sworn testimony with regard to lost customers is not trustworthy on its face. On the contrary, since the number of customers goes to the very heart of the issues in the present case, this court must consider the whole of Plaintiff Lazenby’s credibility compromised. Apart from his self-serving testimony, Plaintiff Lazenby provided no competent evidence showing that he had lost even a single customer as a result of any conduct by any of the Defendants. His testimony that Halbert chose not to become a customer, is unverified hearsay and was not corroborated by any evidence other evidence offered at trial. His belief that checks were being deposited by Gomez into the Temaca Inc. account is than little more than that—a belief. He articulated this allegation in his Complaint, and at trial did nothing more than reiterate his belief. Given the court’s concern with his credibility, and the lack of any definite corroborating evidence in the record, there is not enough to persuade the court that the belief was based in fact or justified. It fails to provide the court with evidence sufficient to sustain plaintiff’s burden of proof. Plaintiff then called Defendant James Gomez as a witness. Defendant James Gomez testified as to the Facebook message he sent to Shawn Halbert. In that message, Defendant James Gomez states, among other things, that Plaintiff is “bi-polar3” and a “crook.” Defendant James 3 At trial, the court had an opportunity to listen to James Gomez’s testimony, and assess his demeanor and candor. This court judged Defendant James Gomez to be an unsophisticated, non-medically trained person, who had a tendency to use rough language. Considering this, and the context of this statements, this court finds that James Gomez was not claiming that Plaintiff Lazenby had been diagnosed with Bi-Polar Disorder. This court draws the reasonable inference that Gomez was simply expressing an opinion that Plaintiff Lazenby had certain perceived negative traits that many in society frequently express in terms of someone acting “bi-polar.”. It appears to this court that Defendant James Gomez was using the term as an equivalence to his belief that Plaintiff Lazenby was “moody” Page 7 of 16 27-CV-18-19659 Filed in District Court State of Minnesota 12/22/2020 1:59 PM Gomez testified that he is not aware if Plaintiff has ever been diagnosed with Bi-Polar Disorder. Defendant James Gomez testified that he believes Plaintiff is “bi-polar” based on his observations of Plaintiff and experiences with him. Defendant James Gomez further testified that his other statements regarding Plaintiff—that he “screams at workers” and “threatens workers”—was based on his observations and experiences, and on conversations he has had with Plaintiff’s former employees. Defendant James Gomez also testified that Plaintiff was previously married to James Gomez’s cousin and had knowledge of Plaintiff through that connection. Plaintiff did not elicit testimony from Defendant James Gomez as to the formation of his beliefs that Plaintiff is a “crook” and “broke.”4 As a witness, James Gomez presented as a simple and unsophisticated blue-collar worker. This court was able to discern from Defendant James Gomez’s testimony that he felt a considerable degree of acrimony towards Plaintiff Lazenby. This court finds Defendant James Gomez’s testimony to be generally credible, as he admitted to a number of statements, and his testimony was not impeached in any meaningful way. Plaintiff then called Diane McCarthy as a witness. McCarthy stated that she was a customer of Temaca Inc. for many years prior to the sale in 2017. McCarthy stated that in 20195 she had an encounter with Defendant and that this was the first time she had spoken to him since he left Temaca LLC. McCarthy stated that she had no recollection of Defendant telling her that he was back in the irrigation business or that he would be getting his business, Temaca, back. McCarthy or “unstable.” Plaintiff introduced no evidence to indicate that any third party heard or read the expressions “bi-polar” and reasonably believed that Plaintiff Lazenby had been diagnosed with Bi-Polar Disorder, much less that any such belief caused any such a third party to cease doing business with Plaintiffs, or refrained from doing business with Plaintiffs. 4 Counsel for Plaintiffs initially posed a question to Defendant James Gomez regarding these statements, at which time Defendant James Gomez raised a document he had brought up to the witness stand with him. At that point, counsel for Plaintiffs decided not to elicit any testimony regarding these statements and “moved-on” from the issue. Given the paucity of the record with respect to these terms used by James Gomez, there is not enough evidence to consider them any more than the expression of a belief or opinion. 5 The court notes that this conversation, if it took place in 2019, would have transpired after Plaintiffs had already drafted, served, and filed their Complaint against Defendant. Page 8 of 16 27-CV-18-19659 Filed in District Court State of Minnesota 12/22/2020 1:59 PM stated that Defendant may have said to her, “I might have to get back into it.” McCarthy stated that she currently uses Kelly Irrigation for her irrigation needs. The court finds McCarthy, a disinterested third-party, to be a credible witness. Plaintiff then called Defendant Guadalupe Gomez as a witness. Defendant Guadalupe Gomez testified that it was not his understanding that the Temaca Inc. bank account was to be a part of the sale in the Agreement. Defendant Guadalupe Gomez testified that he retained control of the Temaca Inc. bank account in order to process a loan he had taken out from Bridgewater Bank to pay the taxes owed by Temaca Inc. and to pay other outstanding debts of Temaca Inc. Defendant Guadalupe Gomez testified that the balance in the Temaca Inc. bank account was from loan proceeds and payments from before the Agreement was signed. Defendant Guadalupe Gomez testified that deposits into the Temaca Inc. bank account after the Agreement was entered into were from cash loans he was receiving from family and friends to help pay Temaca Inc. debts, and that Defendant Guadalupe Gomez at times deposited funds from some of his other business ventures into the Temaca Inc. account. Defendant Guadalupe Gomez testified that all checks received from customers after the Agreement have been provided to Plaintiff or Plaintiff’s counsel, or to Defendant Guadalupe Gomez’s former counsel that represented him at the beginning of this litigation. Defendant Guadalupe Gomez further testified that he at no time commenced a competing business, nor did he perform any irrigation work for any of Temaca Inc.’s former customers, once he was terminated. The court finds Defendant Guadalupe Gomez to be a credible witness and believable in his testimony concerning his conduct with checks received after the sale of the business. The Court further finds credible and believable Defendant Guadalupe Gomez’s testimony that he has not competed with Plaintiffs’ business. Page 9 of 16 27-CV-18-19659 Filed in District Court State of Minnesota 12/22/2020 1:59 PM Defendant Guadalupe Gomez called Gene J. Shavlik as a witness. Shavlik is a Certified Personal Accountant and Certified Financial Planner that has been working with Defendant Guadalupe Gomez, including preparing tax returns, for “a long time.” Shavlik testified as to certain aspects of the Agreement, specifically, the consideration to be paid by Plaintiff Lazenby. Defendant Guadalupe Gomez then called Karen Gomez-Maestoso-Koukal as a witness. Gomez-Maestoso-Koukal testified as to the summaries that were prepared and submitted as Exhibits 12 and 13. Defendant recalled Shavlik to add testimony regarding Exhibits 12 and 13. The court finds the testimony of both Shavlik and Gomez-Maestoso-Koukal to be credible witnesses. CONCLUSIONS OF LAW I. Plaintiffs failed to meet their burden of proof on their breach of contract claim. Plaintiffs claim that Defendant Guadalupe Gomez breached the Agreement by retaining control over Temaca Inc.’s corporate affairs and bank account, and continuing to operate Temaca Inc. independent of Plaintiff. Plaintiff also claims that Defendant Guadalupe Gomez breached the non-compete clause of the Agreement. A breach of contract claim requires: (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). There is no dispute that the Agreement is an enforceable contract between the parties. Other than the Temaca Inc. bank account, Plaintiffs have provided no evidence that Defendant Guadalupe Gomez maintained control of Temaca Inc.’s corporate affairs or that he continued to operate Temaca Inc. independent of Plaintiffs. In regards to the Temaca Inc. bank account, Plaintiffs allege that the Agreement provided for Defendant Guadalupe Gomez to transfer Page 10 of 16 27-CV-18-19659 Filed in District Court State of Minnesota 12/22/2020 1:59 PM all tangible and intangible assets, which included the Temaca Inc. bank account. However, Plaintiffs provide no evidence in support of this conclusion, and Defendant Guadalupe Gomez maintains that the parties were never in agreement that the Temaca Inc. bank account would be included in the assets. “Where there are ambiguous terms or the intent is doubtful, it is axiomatic that the contract will be construed against the drafter.” Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn. 1979); see also Lowry v. Kneeland, 263 Minn. 537, 541, 117 N.W.2d 207, 210 (Minn. 1962) (“[I]f there is doubt as to [a contract's] meaning itmust be construed most strongly against the one who chose the language in drafting the instrument.”). Furthermore, Plaintiff changed the name of Temaca Inc. to Temaca LLC, leading this court to find that a Plaintiffs would have had no use for the Temaca Inc. bank account. Regarding the non-compete clause of the Agreement, it provides that Defendant Guadalupe Gomez shall not “[d]irectly or indirectly engaging in any competitive business includes, but is not limited to: (i) engaging in a business as owner, partner, or agent, (ii) becoming an employee of any third party that is engaged in such business, (iii) becoming interested directly or indirectly in any such business, or (iv) soliciting any customer or current Executive or Employee of Temaca Lawn Sprinklers for the benefit of a third party that is engaged in such business.” Plaintiffs presented no evidence, other than the testimony of Plaintiff Lazenby, that Defendant Guadalupe Gomez violated any of these prohibitions. Indeed, Plaintiffs’ own witness, Diane McCarthy, a disinterested third-party, testified that when she spoke to Defendant Guadalupe Gomez in 2019, after he had left Temaca LLC, he did not state to McCarthy that he was currently engaged in the lawn irrigation business or attempt to solicit McCarthy’s business, but merely stated that “I might have to get back into it.” Furthermore, Plaintiff testified that the actual number of customers Temaca Inc. had when the Agreement was Page 11 of 16 27-CV-18-19659 Filed in District Court State of Minnesota 12/22/2020 1:59 PM entered into in April 2017 was approximately 462, then in the verified Complaint attested that at the time of verifying the Complaint, November 28, 2018, Temaca LLC had 750 customers, indicating—if anything—that the amount of customers had not diminished, but grown, and leading to the powerful inference that that Defendant Guadalupe Gomez had not actually solicited any customers. At the very least Plaintiffs have failed identify customers that were lost, or explain how they has lost business, when their very own court filings indicate that their customer numbers had increased substantially. The fact that Plaintiffs could not present testimony from even one witness establishing that he or she had ceased doing business with Temaca Inc. or Temaca, LLC, let alone that he or she had gone to a competitor who was in some way connected with Defendants, is quite telling. The absence of any such competent evidence leaves Plaintiffs’ breach of contract claims wanting and deficient. Based on the forgoing reasons, the court finds that Plaintiffs have not met their burden of establishing a claim for breach of contract. II. Plaintiffs failed to meet their burden of proof on their conversion claim. Plaintiffs claim that Defendant Guadalupe Gomez is exercising control over checks that Plaintiffs have a right to, and that Defendant Guadalupe Gomez has deposited checks that Plaintiffs have a right to into the Temaca Inc. bank account. Conversion has two elements: 1) the plaintiff holds a property interest, and 2) the defendant deprives plaintiff of that interest. Williamson v. Prasciunas, 661 N.W.2d 645, 649 (Minn. Ct. App. 2003). The requisite intent for conversion is that the “act [is] one which [respondent] knows to be destructive of any outstanding possessory right, if such there be.” Christensen v. Milbank Ins. Co., 658 N.W.2d 580, 585–86 (Minn. 2003); DLH, Inc., v. Russ, 566 N.W.2d 60, 71 (Minn. 1997). At the hearing on Plaintiffs’ Motion for a Temporary Injunction on December 14, 2018, Defendant Guadalupe Gomez provided Plaintiff customer checks that were sent to Defendant by Page 12 of 16 27-CV-18-19659 Filed in District Court State of Minnesota 12/22/2020 1:59 PM mistake. Those checks are set forth in Exhibit 2. In addition, after commencement of this litigation, it was agreed between the parties that any additional customer checks mistakenly received by Defendant Guadalupe Gomez would be held in trust and there is no evidence to suggest that Defendant Guadalupe Gomez has not complied with this. These checks currently held in trust are set forth in Exhibit 5. Plaintiffs offer no evidence of other checks received or held by Defendant Guadalupe Gomez that Plaintiffs have a right to. Plaintiffs have identified certain deposits made in the Temaca Inc. bank account by Defendant Guadalupe Gomez, but provide no evidence establishing that these deposits are customer checks or funds to which Plaintiffs have any right. Other than pointing to deposits and funds in the Temaca Inc. bank account and stating a “belief” that they are from checks owed to Plaintiffs, no evidence was provided that Defendant Guadalupe Gomez deposited checks from customers that Plaintiffs had a right to, nor is there any evidence that Defendant Guadalupe Gomez cashed any checks from customers to which Plaintiffs was entitled. Based on the forgoing, the court finds that Plaintiffs have failed to meet their burden of establishing a claim for conversion. III. Plaintiffs failed to meet their burden of proof on their defamation claim. Plaintiffs claim that Defendants Guadalupe Gomez and James Gomez made numerous false statements regarding Plaintiff’s finances, debt, tax liabilities, and character. Specifically, Plaintiffs claim that Defendants Guadalupe Gomez and James Gomez falsely stated that Plaintiff’s liabilities exceeded his assets, that Plaintiff was “bi-polar” and an abusive employer, and that Plaintiff owed Defendant Guadalupe Gomez money for Temaca Inc. For a defamation claim, a plaintiff must prove that the defendant made: (a) a false and defamatory statement about the plaintiff; (b) in unprivileged publication to a third party; (c) that Page 13 of 16 27-CV-18-19659 Filed in District Court State of Minnesota 12/22/2020 1:59 PM harmed the plaintiff's reputation in the community. Weinberger v. Maplewood Review, 668 N.W.2d 667, 673 (Minn. 2003) (citing Britton v. Koep, 470 N.W.2d 518, 520 (Minn. 1991)). Plaintiffs have failed to establish that statements made by Defendants harmed Plaintiffs’ reputation. The only evidence presented by Plaintiffs that could support this claim is the Facebook message sent by Defendant James Gomez to Shawn Halbert. Plaintiffs claim that the fact that Halbert chose not to enter into a service relationship with Plaintiffs after receiving Defendant James Gomez message is evidence that the statements harmed Plaintiffs’ reputation. However, Plaintiffs failed to establish that Halbert was considering entering into a service relationship with Plaintiffs, or that Halbert chose not to enter in a service relationship with Plaintiffs due to Defendant James Gomez’s statement. Plaintiffs also failed to establish that Defendant James Gomez’s statements were false and defamatory. Plaintiffs failed to establish that any party took Defendant James Gomez’s statements to be evidence that Plaintiff had been diagnosed with Bi-Polar Disorder, or that such a diagnosis would be harmful one’s reputation.6 Furthermore, the court finds that, considering the context of the statements, Defendant James Gomez was not intending to imply that Plaintiff had been diagnosed with Bi-Polar Disorder and no reasonable person could construe it as such. Plaintiffs also failed to establish that Defendant James Gomez’s statements that Plaintiff is a “crook” or regarding Plaintiff’s finances, debt, or tax liabilities are false or defamatory. At trial, Plaintiffs had the opportunity to elicit testimony from Defendant James Gomez regarding his statements that Plaintiff is a “crook” or regarding his finances, debts, or tax liability, and appeared to begin eliciting such testimony, but explicitly chose not to. Furthermore, Defendants’ post-trial 6 The court is not inclined to sua sponte analyze whether, and to what extent, mental health issues and diagnosis impact a person’s reputation. Page 14 of 16 27-CV-18-19659 Filed in District Court