Preview
58-CV-24-260
Filed in District Court
State of Minnesota
5/31/2024 3:01 PM
STATE OF MINNESOTA DISTRICT COURT
COUNTY OF PINE TENTH JUDICIAL DISTRICT
CASE TYPE: Contract/Replevin/Other - Civil
JAZME, LLC d/b/a Alliance Recycling Court File No.: ____________
Group, a Minnesota limited liability The Honorable ____________
company,
Plaintiff, SUMMONS
v.
Brook Park Auto Recycling, LLC, a
Minnesota limited liability company,
Defendant.
This Summons is directed to Brook Park Auto Recycling, LLC.
1. You are being sued. The Plaintiff has started a lawsuit against you. The Complaint is
attached to this Summons. Do not throw these papers away. They are official papers that
start a lawsuit and affect your legal rights, even if nothing has been filed with the court and
even if there is no court file number on this Summons.
2. You must EACH reply, in writing, AND get a copy of your reply to the
person/business who is suing you within 21 days to protect your rights. Your reply is
called an Answer. Getting your reply to the Plaintiff is called service. You must serve a
copy of your Answer or Answer and Counterclaim (Answer) within 21 days from the date
you received the Summons and Complaint.
ANSWER: You can find the Answer form and instructions on the MN Judicial Branch
website at www.mncourts.gov/forms under the “Civil” category. The instructions will
explain in detail how to fill out the Answer form.
3. You must respond to each claim. The Answer is your written response to the
Plaintiff’s Complaint. In your Answer you must state whether you agree or disagree
with each paragraph of the Complaint. If you think the Plaintiff should not be given
everything they asked for in the Complaint, you must say that in your Answer.
4. SERVICE: You may lose your case if you do not send a written response to the
Plaintiff. If you do not serve a written Answer within 21 days, you may lose this case by
default. You will not get to tell your side of the story. If you choose not to respond, the
Plaintiff may be awarded everything they asked for in their Complaint. If you agree with
the claims stated in the Complaint, you don’t need to respond. A default judgment can
than be entered against you for what the Plaintiff asked for in the Complaint.
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To protect your rights, you must serve a copy of your Answer on the person who signed
this Summons in person or by mail at this address:
Matthew P. Kostolnik
Justin S. Boschwitz
Moss & Barnett, a Professional Association
150 South Fifth Street, Suite 1200
Minneapolis, MN 55402
5. Carefully read the Instructions (CIV301) for the Answer for your next steps.
6. Legal Assistance. You may wish to get legal help from an attorney. If you do not have
an attorney and would like legal help:
• Visit www.mncourts.gov/selfhelp and click on the “Legal Advice Clinics” tab to
get more information about legal clinics in each Minnesota county.
• Court Administration may have information about places where you can get legal
assistance.
NOTE: Even if you cannot get legal help, you must still serve a written Answer to
protect your rights or you may lose the case.
7. Alternative Dispute Resolution (ADR). The parties may agree to or be ordered to
participate in an ADR process under Rule 114 of the Minnesota Rules of Practice. You
must still serve your written Answer, even if you expect to use ADR.
MOSS & BARNETT,
A Professional Association
Dated: May 1, 2024 By: /s/ Justin S. Boschwitz
Matthew P. Kostolnik (#0310669)
Justin S. Boschwitz (#0401472)
150 South Fifth Street, Suite 1200
Minneapolis, MN 55402
T: (612) 877-5000
F: (612) 877-5999
Email: matt.kostolnik@lawmoss.com
justin.boschwitz@lawmoss.com
ATTORNEYS FOR PLAINTIFF
9255842v1
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STATE OF MINNESOTA DISTRICT COURT
COUNTY OF PINE TENTH JUDICIAL DISTRICT
Case Type: Contract/Replevin/Other - Civil
JAZME, LLC d/b/a Alliance Recycling Group,
a Minnesota limited liability company,
COURT FILE NO. __________
Plaintiff,
v.
COMPLAINT
Brook Park Auto Recycling, LLC, a Minnesota
limited liability company,
Defendant.
COMES NOW Plaintiff JAZME, LLC d/b/a Alliance Recycling Group, a Minnesota
limited liability company, by and through its undersigned counsel, and for its Complaint (the
“Complaint”) against Defendant Brook Park Auto Recycling, LLC, a Minnesota limited liability
company, states and alleges as follows:
PARTIES
1. Plaintiff JAZME, LLC d/b/a Alliance Recycling Group (“Plaintiff” or “Lessor”) is
a Minnesota limited liability company with a registered office located at 115 31st Avenue N,
Minneapolis, Minnesota 55411.
2. Defendant Brook Park Auto Recycling, LLC (“Defendant” or “Lessee”) is a
Minnesota limited liability company with its principal executive office located at 28178 State Hwy
107, Brook Park, Minnesota 55007.
JURISDICTION AND VENUE
3. Jurisdiction and venue are proper as Defendant’s registered office is located in Pine
County, Minnesota, and all relevant acts, including the non-payment of lease obligations, location
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of equipment and breach of contract, which form the basis of this action, took place in Pine County.
See Minn. Stat. §§ 542.06, 542.09.
FACTUAL ALLEGATIONS
A. Background
4. Plaintiff is an industrial metal recycling company headquartered in Minneapolis,
Minnesota.
5. Upon information and belief, Defendant owns and operates a used car salvage yard
in Brook Park, Minnesota.
6. Upon information and belief, Defendant sells salvaged vehicle parts to customers
throughout the United States and sells scrap metal to businesses such as Plaintiff.
B. Plaintiff Leases Equipment to Defendant
7. On or about February 1, 2018, Plaintiff, as Lessor, and Defendant, as Lessee,
entered into an Equipment Lease and Material Supply Agreement, as amended by Amendment
No. 1 to Equipment Lease and Material Supply Agreement dated February 1, 2023 (collectively
the “Lease”). A copy of the Lease is attached as Exhibit A and is incorporated herein by reference.
8. Pursuant to the Lease, Defendant leased from Plaintiff the following equipment:
One (1) E-Z Crusher A+ Portable; Serial Number RMJ632-100; 2013 Model. Basic
E-Z Specifications; John Deere 6 Cylinder Turbo Power with remote Start-Stop;
Remote Automation; Hydraulic Outriggers; 30 Gallon Air System; Tandem Axles
with 11-22.5 Dual Tires.
(the “Equipment”).
9. On or about February 6, 2018, Plaintiff filed and perfected its security interest in
the Equipment by filing a UCC-1 Financing Statement with the Office of the Minnesota Secretary
of State, identified by Filing Number: 998893300023 (the “Financing Statement”). A copy of the
Financing Statement is attached as Exhibit B and is incorporated herein by reference.
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10. The initial term of the Lease commenced upon Defendant, as Lessee, accepting the
Equipment, and it continued through January 31, 2023 (the “Initial Term”). (See Lease, at ¶ 2).
11. Pursuant to Amendment No. 1 to Equipment Lease and Material Supply
Agreement, the term of the Lease was extended for an additional five (5) years, from February 1,
2023, through January 31, 2028 (the “Extended Term,” together with the Initial Term, the “Term”).
(See Lease, Amend. No. 1, at ¶ 1.)
12. During the Initial Term of the Lease, Defendant was required to pay Plaintiff
monthly rent in the amount of $1,750.00, plus any sales and use tax thereon; monthly rent for the
Extended Term was reduced to $1,200.00, plus any sales and use tax thereon (“Rent”). (See Lease,
at ¶ 3; Lease, Amend. No. 1, at ¶ 2.)
13. The Lease requires that Defendant make all payments of Rent by the 10th day of
each month (e.g., March 10, April 10, etc.). (See Lease, at ¶ 3; Lease, Amend. No. 1, at ¶ 2.)
14. If any installment of Rent is not paid when due, Plaintiff may, in its discretion,
charge a late fee of five percent (5%) of the amount of the installment, but in any event not more
than permitted by applicable law. (Lease ¶ 21.)
15. At all relevant times hereto, Plaintiff, as Lessor, remained the sole owner of the
Equipment and provided Defendant, as Lessee, the right to possess and use the Equipment in
accordance with the terms of the Lease. (See Lease, at ¶ 7; Lease, Amend. No. 1, at ¶ 4.)
16. In addition to Rent, the Lease specified certain quarterly Processed Material
Requirements that Defendant was required to satisfy. (See generally Lease, at ¶ 15; Lease, Amend.
No. 1, at ¶ 5.)
17. During the Initial Term of the Lease, Defendant was required to meet either of the
following “Processed Material Requirements:”
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(a) Commencing on the date of this Lease and continuing through January 31, 2023
(the “Processed Material Period”), Lessee shall either (i) offer to sell to Lessor
(or, in Lessor’s discretion, Lessor’s designee) all of Lessee’s Processed Material
(as defined below) (with sales to be consistent with prevailing market prices and
past business practices between the parties), or (ii) pay Lessor $10.00 per ton for
Processed Material that Lessee elects to sell to any other party. For purposes hereof,
“Processed Material” means crushed automobiles and other recyclable/scrap
materials that are processed using the Equipment, as well as all motor blocks that
are removed from automobiles prior to processing.
(b) Throughout the Processed Material Period, Lessee shall sell a minimum of
1,500 tons of Processed Material per quarter to Lessor or pay Lessor $10.00 per ton
in lieu thereof as contemplated by Section 15(a). If Lessee fails to do so, Lessee
will either make up the shortfall by selling other scrap/recyclable material (e.g.,
non-ferrous, motor blocks (removed), ferrous, etc.) to Lessor or paying Lessor for
the shortfall at a rate of $10.00 per ton. Lessor may apply amounts owed for
payments of monthly Rent and any shortfall payments under this Section 15(b)
against its payments for scrap purchases.
(Lease ¶ 15) (emphasis in original).
18. During the Extended Term of the Lease, the Processed Material Requirement was
modified as follows:
(a) Commencing on the date of this Lease and continuing through January 31, 2028
(the "Processed Material Period"), Lessee shall either (i) offer to sell to Lessor
(or, in Lessor's discretion, Lessor's designee) all of Lessee's Processed Material (as
defined below) (with sales to be consistent with prevailing market prices and past
business practices between the parties), or (ii) pay Lessor $10.00 per ton for
Processed Material that Lessee elects to sell to any other party. For purposes hereof,
"Processed Material" means crushed automobiles and other recyclable/scrap
materials that are processed using the Equipment, as well as all motor blocks that
are removed from automobiles prior to processing.
(b) Throughout the Processed Material Period, Lessee shall sell a minimum of 960
tons of Processed Material per year to Lessor or pay Lessor $5.00 per ton in lieu
thereof as contemplated by Section 0(a). If Lessee fails to do so, Lessee will either
make up the shortfall by selling other scrap/recyclable material (e.g., non-ferrous,
motor blocks (removed), ferrous, etc.) to Lessor or paying Lessor for the shortfall
at a rate of $5.00 per ton. Lessor may apply amounts owed for payments of monthly
Rent and any shortfall payments under this Section 0(b) against its payments for
scrap purchases."
(Lease, Amend. No. 1, at ¶ 5) (emphasis added by source).
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19. The Lease states, in part, that a default occurs if:
(a) Lessee fails to pay when installment of Rent within five calendar days after it
becomes due; (b) Lessee shall fail to perform or observe any covenant condition or
agreement to be performed or observed by it hereunder within 10 days following
Lessee’s receipt of notice of such failure from Lessor; […] or (f) Lessee fails to
comply with Lessee’s covenants regarding Processed Material under Section 15 [of
the Lease].
(Lease ¶ 16.)
20. Regarding remedies, the Lease states as follows:
(A) “Loss Amount” as of any date shall be the sum of the following: (i) the amount
of all Rent and other amounts payable by Lessee hereunder due but unpaid as of
such date, plus (ii) the amount of all unpaid Rent for the balance of the Term of this
lease not yet due as of such date, and (B) “Remaining Processed Material
Amount” as of any date shall be the amount of all payments that Lessee is required
to make from and after such date until the expiration of the Processed Material
Period on account of minimum tons of Processed Material under Section 15(b)
(assuming the entire minimum amount qualifies as a shortfall which Lessee shall
pay for in cash, but at a rate of $5.00 per ton (rather than $10.00) per ton).
(Lease ¶ 17) (emphasis in original).
21. Upon the occurrence of a default by Defendant, Plaintiff may exercise the remedies
set forth in further detail in Paragraph 17 of the Lease, as summarized herein, including any one
or more of the following: (a) terminate the Lease; (b) proceed by court action to enforce
Defendant’s performance under the Lease; (c) repossess the Equipment and either retain the
Equipment in full satisfaction of Defendant’s obligations, or sell or lease each item of Equipment
in such manner, and upon such terms as Plaintiff may determine its sole discretion; (d) recover
interest on the unpaid balance of the Loss Amount; and (e) or exercise any other right or remedy
available to Plaintiff by law or by agreement, and may in any event, recover legal fees and other
expenses by reason of an event of default or exercise of any remedy described in the Lease. (See
Lease ¶ 17(a)-(e).)
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22. Regardless of the remedy chosen by Plaintiff, Defendant’s obligations to comply
with the Lease’s Processed Material Requirement continues in full force and effect until the
expiration of the Processed Material Period. (See Lease ¶ 17.)
C. Defendant Defaults Under the Terms of the Lease
23. Defendant is in default of the Lease for failing to pay all amounts of Rent due and
owing in the amount of $32,520.
24. During and throughout both the Initial Term and the Extended Term, Defendant
repeatedly failed to meet the Processed Material Requirements set forth in the Lease.
25. Plaintiff estimates that, based upon the minimum Processed Material Requirement
set for the in the Lease, Defendant has failed to pay Processed Material shortfalls in an amount not
less than $139,832.18. (See Lease, at ¶ 15; Lease, Amend. No. 1, at ¶ 5) (discussing minimum
Processed Material Requirement, and the necessary payments from Defendant to Plaintiff in the
event of any Processed Material shortfalls).
26. As a result of this action, Plaintiff is incurring recoverable costs and attorneys’ fees
that continue to accrue.
D. Defendant Refuses to Return the Equipment to Plaintiff
27. On or about April 11, 2024, one of Plaintiff’s principals attempted to meet with
Defendant’s principals to discuss Defendants defaults under the Lease and the surrender of the
Equipment from Defendant to Plaintiff.
28. At said meeting, Defendant’s principals would not discuss their defaults under the
Lease, nor would Defendant’s principals discuss a voluntary surrender of the Equipment or provide
Plaintiff with access to the Equipment.
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29. Instead, at said meeting, Defendant’s principals told Plaintiff’s principal to “F--k
off” and to “sue them.”
30. Upon information and belief, Defendant is unlawfully retaining possession of the
Equipment in its locked yard.
COUNT I
REPLEVIN
31. Plaintiff realleges and reincorporates all preceding paragraphs of this Complaint as
if fully restated herein.
32. Plaintiff is the sole owner and lessor of the Equipment, has the right to possession
of the Equipment, or the right to receive from Defendant payment of the Equipment’s fair market
value.
33. At all times relevant hereto, Plaintiff has maintained a perfected security interest in
the Equipment as evidenced by the Financing Statement.
34. Defendant has defaulted under the terms of the Lease.
35. Defendant is wrongfully in possession of the Equipment which is solely owned by
Plaintiff.
36. Defendant has refused to surrender the Equipment to Plaintiff.
37. Plaintiff is entitled to replevin by taking possession of the Equipment from
Defendant, or the fair market value of the Equipment, and damages for Defendant’s wrongful
detention of the Equipment.
COUNT II
CONVERSION
38. Plaintiff realleges and reincorporates all preceding paragraphs of this Complaint as
if fully restated herein.
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39. Defendant is currently exercising control over Plaintiff’s Equipment in a way that
is contrary to Plaintiff’s rights.
40. Defendant has intentionally deprived Plaintiff of possession of the Equipment
permanently, or for an indefinite period of time.
41. Defendant has, without legal justification, willfully interfered with Plaintiff’s
possession and control of the Equipment.
42. Defendant’s exercise of dominion and control over the Equipment is inconsistent
with, and in repudiation of Plaintiff’s rights to the Equipment as stated in the Lease.
43. Defendant’s conversion has caused Plaintiff to incur damages in excess of $50,000,
plus costs, disbursements, attorneys’ fees and interest thereon in an amount to be determined at
trial.
COUNT III
BREACH OF CONTRACT
44. Plaintiff realleges and reincorporates all preceding paragraphs of this Complaint as
if fully restated herein.
45. The Lease is an enforceable contract between Plaintiff and Defendant.
46. Plaintiff satisfied all conditions precedent under the Lease.
47. Defendant breached the Lease, without justification, and is in default by, among
other things, failing to pay all amounts due and owing under the terms of the Lease as described
in the preceding paragraphs above.
48. Defendant’s breach of contract has caused Plaintiff to incur damages in excess of
$50,000, plus costs, disbursements, attorneys’ fees and interest thereon in an amount to be
determined at trial.
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PRAYER FOR RELIEF
WHEREFORE, Plaintiff prays for judgment against Defendant as follows:
1. As to Count I, an order pursuant to Minn. Stat. § 548.04, directing Defendant to
return and surrender the Equipment to Plaintiff, or for judgment of the fair market value of the
Equipment if delivery cannot be made, and damages for detention of the Equipment.
2. As to Count II, an order directing Defendant to pay Plaintiff the fair market value
of the Equipment, in an amount in excess of $50,000 to be proven at trial.
3. As to Count III, an order against Defendant in an amount in excess of $50,000 to
be proven at trial.
4. An award of all costs, disbursements, and attorneys’ fees incurred by Plaintiff, plus
interest as allowed by the Lease.
5. For any and all such other relief that the Court deems equitable and just.
MOSS & BARNETT
A Professional Association
Dated: May 1, 2024 By: /s/ Justin S. Boschwitz
Matthew P. Kostolnik (#0310669)
Justin S. Boschwitz (#0401472)
150 South Fifth Street, Suite 1200
Minneapolis, MN 55402
T: (612) 877-5000
F: (612) 877-5999
Email: matt.kostolnik@lawmoss.com
justin.boschwitz@lawmoss.com
ATTORNEYS FOR PLAINTIFF
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ACKNOWLEDGMENT
The undersigned hereby acknowledges that costs, disbursements and reasonable attorney
and witness fees may be awarded pursuant to Minn. Stat. § 549.211, subd. 3, if the court determines
that this document violates Minn. Stat. § 549.211, subd. 2.
/s/ Justin S. Boschwitz
Justin S. Boschwitz (#0401472)
9238130v4
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EQUIPMENT LEASE AND MATERIAL SUPPLY AGREEMENT
THIS EQUIPMENT LEASE AND MATERIAL SUPPLY AGREEMENT (THE “LEASE”) IS ENTERED INTO
AS OF FEBRUARY 1, 2018 BY AND BETWEEN JAZME, LLC DBA ALLIANCE RECYCLING GROUP, A
MINNESOTA LIMITED LIABILITY COMPANY (“LESSOR”), AND BROOK PARK AUTO RECYCLING,
LLC, A MINNESOTA LIMITED LIABILITY COMPANY (“LESSEE”).
1. Lease of Equipment. Lessor hereby leases to Lessee and Lessee hereby leases from Lessor the personal
property described on Schedule A (hereinafter, with all replacement parts, additions, repairs and accessories
incorporated therein and/or affixed thereto, referred to as “Equipment”). Lessor will arrange to have the Equipment
shipped and installed at Lessee’s business location at 28178 State Hwy. 107, Brook Park, MN 55007, at Lessee’s
expense and direction. Unless otherwise consented to by Lessor in its discretion, the Equipment will reside at such
premises throughout the Term (as defined below).
2. Term. The initial term of this Lease shall commence on the date of acceptance of the Equipment and
(unless terminated earlier in accordance with the terms of this Lease) shall continue for the approximately five year
period ending January 31, 2023 (the “Term”).
3. Rent. For each month during the Term, the Lessee shall pay to Lessor, without demand, the sum of
$1,750.00, as rent, plus any sales and use tax thereon (the “Rent”). Rent for February 2018 will be payable in
arrears on February 28, 2018. Thereafter, Rent will be due and payable on the 10th day of each month (March 10,
April 10, etc.).
4. Purchase of the Equipment at the End of the Term. Provided that no Event of Default, and no event
which with lapse of time or giving of notice or both would become an Event of Default, has occurred, Lessee may
elect, by giving Lessor not less than ninety (90) days prior written notice (which notice shall be irrevocable without
Lessor’s written consent), to purchase the Equipment as of the last day of the Term for Forty Thousand Dollars
($40,000.00), plus applicable taxes and other amounts due or payable with respect to such sale (the “Residual
Purchase Price”), with the Residual Purchase Price will be due and payable on the last day of the Term. The
Equipment to be sold to Lessee shall be sold, “AS IS, WHERE IS” with no express or implied warranties
whatsoever including, but not limited to, WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
5. Return of Equipment. If Lessee does not elect to purchase the Equipment, if allowed in accordance with
the terms hereof, (i) Lessee shall be obligated to return the Equipment to Lessor at the end of the Term or as required
by Lessor upon the occurrence of an Event of Default under Section 16; and (ii) Lessee shall at its sole expense
demobilize, load, and transport the Equipment to any location designated by Lessor such that possession is delivered
to Lessor on the last day of the Term or immediately upon the occurrence of an Event of Default, or at such other
time as Lessor shall consent in writing. Any and all components of the Equipment returned to Lessor shall be in the
same physical and mechanical condition as originally delivered, excepting only Reasonable Wear and Tear. For
purposes of this Lease “Reasonable Wear and Tear” shall mean: (i) the results of normal use of the Equipment as
originally intended assuming use and maintenance in accordance with the manufacturer’s recommendations and the
absence of any casualty, misuse, abuse, abandonment, improper care, accident, negligence or similar occurrence
with respect to the Equipment, whether or not the Equipment is in use at the time of said occurrence; and (ii) use that
does not, in any way, impair the function of the Equipment or prevent the Equipment from promptly being placed
into use. If Lessee is required to return the Equipment in accordance with the terms hereof, Lessee shall provide
Lessor, at Lessee’s sole cost and expense at least ninety (90) days prior to the end of the Term (or immediately if the
Equipment is returned due to an Event of Default), with a true, accurate and complete set of all material
documentation for the Equipment setting forth a detailed description of its components and its operating and
maintenance history, all in form reasonably satisfactory to Lessor. If the Equipment is not in the condition required
upon return, Lessee shall pay to Lessor, on demand, all costs, and expenses incurred by Lessor to bring the
Equipment into the required condition. Lessee expressly agrees that, in the event Lessee does not elect to purchase
the Equipment in accordance with the terms hereof, Lessor has the right to arrange for the sale or other disposition
prior to the Equipment’s return (provided that such sale shall not close until the end of the applicable Term) and
Lessee agrees to facilitate any such sale or disposition of the Equipment and that Lessor, its agents or employees,
EXHIBIT A
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shall have the right to enter Lessee’s property for the purpose of showcasing the Equipment for sale or other
disposition.
6. Warranty Disclaimer. Lessee acknowledges that Lessor is not the manufacturer of the equipment, nor
manufacturer’s agent and Lessee represents Lessee has selected the Equipment rented hereunder based upon
Lessee's judgement prior to having requested Lessor to purchase the same for renting to Lessee and Lessee agrees
that the Equipment rented hereunder is of design, size, fitness and capacity selected by Lessee and that Lessee is
satisfied that the same is suitable and fit for its intended purposes. Lessee further agrees that Lessor has made and
makes no representations or warranties of whatsoever nature, directly or indirectly, expressed or implied, including
but not limited to any representations or warranties with respect to suitability, durability, fitness for use and
merchantability of the Equipment, the purposes and uses of Lessee or otherwise. Lessee waives all rights to make
claim against Lessor for breach of any warranty of any kind whatsoever. Lessor shall not be liable to Lessee for any
loss, damage or expense of any kind or nature caused directly or indirectly by the Equipment, for the use or
maintenance thereof, or for the failure of operations thereof, or for the repairs, service, or adjustment thereto, or by
any delay or failure to provide any thereof, or by any interruption of service or loss of use thereof or for any loss of
business or any other damage whatsoever and howsoever caused. No defect or unfitness of the Equipment shall
relieve Lessee of the obligation to pay rent, or any other obligation under this Lease to Lessor or its assignee.
7. Ownership of Equipment. Lessee and Lessor intend that: (i) the Lease constitutes a true “lease” that is a
“finance lease” as such terms are defined in Article 2A of the Uniform Commercial Code as in effect from time to
time in the applicable jurisdiction (the “UCC”) and does not create a “security interest” as defined in the UCC; (ii)
Lessor is and shall remain the owner of the Equipment (unless sold by Lessor pursuant to this Lease); (iii) Lessee
shall not acquire any right, title, equity or interest in or to such Equipment other than the right to possess and use the
Equipment in accordance with Lessee’s leasehold interest under the Lease. If, notwithstanding the intention of the
parties and the economic realities of this Lease, this Lease is deemed to create a security interest, Lessee shall be
deemed to have granted to Lessor as security for Lessee’s obligations hereunder, a first priority security interest in
the Equipment and all proceeds thereof. Lessee, at its expense, shall protect and defend the title of Lessor and keep
it free of all claims and liens other than the rights of Lessee hereunder and claims and liens created by or arising
through Lessor. Lessee shall in the use of the Equipment comply with all laws, ordinances, rules and regulations of
any lawfully constituted authority or governmental unit having jurisdiction. Lessee shall execute and deliver such
other and further documents as Lessor may request to confirm the interest of Lessor hereunder. If Lessor supplies
Lessee with labels indicating that the Equipment is owned by Lessor, Lessee shall affix such labels to and keep them
in a prominent place on the Equipment. Lessor is hereby appointed by Lessee as its true and lawful attorney in
respect to being hereby authorized by Lessee, at Lessee's expense, to cause this Lease, or any statement or other
instrument in respect of this Lease showing the interest of Lessor in the Equipment including Uniform Commercial
Code Financing Statements, to be filed or recorded and re-filed and re-recorded. Lessee agrees to execute and
deliver any statement or instrument requested by Lessor for such purpose, and agrees to pay or reimburse Lessor for
any searches, filings, recordings or stamp fees or taxes arising from the filing or recording any such instrument or
statement. Lessee agrees to make the Rent and other payments required hereunder without regard to the condition of
the Equipment and to look only to persons other than Lessor such as the manufacturer, vendor or carrier thereof
should any item of Equipment for any reason be defective. So long as no Event of Default has occurred and is
continuing, Lessor agrees, to the extent they are assignable, to assign to Lessee, without any recourse to Lessor, any
warranty received by Lessor.
8. Maintenance of Equipment. Lessee, at Lessee’s sole cost and expense, shall keep the Equipment in good
repair, condition and working order and shall furnish all parts, mechanism, devices and servicing required therefor
and shall not materially alter the Equipment, without the consent of Lessor. Lessee shall provide facilities for, and
operate the Equipment only in accordance with the manufacturer specifications. Lessee shall grant access to the
Equipment to Lessor, its designee or the manufacturer at reasonable times for inspection, repair maintenance,
installation of engineering changes and for any other reasonable purpose. Lessee shall serve Lessor with prompt
written notice of any alleged or apparent improper manufacture, functioning or operation of the Equipment. If
Lessee fails to maintain the Equipment as required hereunder, Lessor may do so as Lessee’s expense, and Lessor
may invoice Lessee for such amounts, including a 15% administrative charge. Such invoice shall be considered
additional Rent hereunder, and shall be due within ten (10) days of the date of such invoice. Lessor may inspect the
Equipment at any time and from time to time during regular business hours.
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9. Risk of Loss. Lessee hereby assumes and shall bear the entire risk of loss for the theft, loss, damage, or
destruction of the Equipment from any and every cause whatsoever. No such loss or damage shall impair obligation
of Lessee under this Agreement which shall continue in full force and effect. In the event the Equipment shall
become lost, stolen, destroyed, damaged beyond repair or rendered permanently unfit for use for any reason, or in
the event of condemnation or seizure of any item of Equipment, Lessee shall promptly pay Lessor the sum of (a) the
amount of all Rent and other amounts payable by Lessee hereunder with respect to the Equipment due but unpaid at
the date of such payment, plus (b) the amount of all unpaid Rent with respect to the Equipment for the balance of the
Term not yet due at the time of such payment, plus (c) the Residual Payment Amount. Upon payment of such
amount to Lessor, the Equipment shall become the property of Lessee, Lessor will transfer to Lessee, without
recourse or warranty, all of Lessor’s right, title and interest therein, and all of Lessee’s obligations under this Lease
shall terminate, with the exception of (y) Lessee’s covenants regarding Processed Material under Section 15, which
shall survive until the expiration of the Processed Material Period (as defined in Section 15 below), and (z) Lessee’s
other obligations that survive termination or expiration of the Term as set forth in Section 25, which shall survive
indefinitely. Lessee shall pay any sales and use taxes due on such transfer. Any insurance or condemnation
proceeds received by Lessor shall be credited to Lessee’s obligation under this Section 9 and Lessor shall be entitled
to any surplus.
10. Liability. Lessee hereby indemnifies Lessor against and agrees to save Lessor harmless from any and all
liability and expense arising out of the ordering, ownership, use, condition, or operation of each item of Equipment
during the term of this lease, including liability for death or injury to persons, damage to property, strict liability
under the laws or judicial decisions of any state or the United States, and legal expenses in defending any claim
brought to enforce any such liability or expense, including court cost and legal expenses incurred by or asserted
against Lessor in any way relating to the manufacture, purchase, ownership, delivery, lease, possession, use,
operation, condition, return or other disposition of the Equipment by Lessor or Lessee or otherwise related to this
Lease, including any claim alleging latent or other defects under the doctrine of strict liability or otherwise; any
other claim under the doctrine of strict liability; and any claim for patent, trademark, service mark or copyright
infringement. Each party shall give the other notice of any event covered hereby promptly following learning
thereof.
11. Insurance. Lessee shall keep the Equipment insured against all risks of loss or damage from every cause
whatsoever. Lessee shall maintain (a) actual cash value all risk insurance of the Equipment, naming Lessor as LOSS
PAYEE and (b) single limit public liability and property damage insurance of not less than $1,000,000 per
occurrence, or such greater or lesser amount as Lessor may from time to time request on notice to Lessee, naming
Lessee as named insured and Lessor as additional insured and loss payee thereunder. Lessee shall be liable for all
deductible portions of all required insurance. All said insurance shall be in form and amount and with companies
satisfactory to Lessor, and in all events, shall be in amounts covering replacement cost for the Equipment, less
commercially reasonable deductibles. All insurance for loss or damage shall provide that losses, if any, shall be
payable to Lessor, and all such liability insurance shall be in the joint names of Lessor and Lessee. Lessee shall pay
the premiums therefor and deliver to Lessor the policies of insurance or duplicates thereof, or other evidence
satisfactory to Lessor, of such insurance coverage. Each insurer shall agree by endorsement upon the policy or
policies issued by independent instrument furnished Lessor, that it will give Lessor 30 days written notice prior to
the effective date of any alteration or cancellation of such policy. The proceeds of such insurance payable as a result
of loss of or damage to the Equipment shall be applied, at the option of Lessor, as set out in Section 9. Lessee hereby
irrevocably appoints Lessor as Lessee’s attorney-in-fact to make claim for, receive payment of, and execute and
endorse all documents, checks or drafts received in payment for loss of damage under any said insurance policies.
In case of the failure of Lessee to procure or maintain said insurance or to comply with any other provision of this
Agreement, Lessor shall have the right but shall not be obligated, to effect such insurance or compliance on behalf
of Lessee. In the event all money spent by and expenses of Lessor in effecting such insurance or compliance shall
be deemed to be additional rent, and shall be paid by Lessee to Lessor with the next monthly payment of Rent.
12. Fees. Lessee shall pay directly, or to Lessor, all license fees, registration fees, assessments and taxes which
may now or hereafter be imposed upon the ownership, sale (if authorized), possession or use of the Equipment
excepting only those based on Lessor's income, and shall keep the equipment free and clear of all levies, liens or
encumbrances arising therefrom. Lessee shall make all filings as to and pay when due all property taxes on the
Equipment in behalf of Lessor, with all appropriate governmental agencies, except where Lessor is notified by the
taxing jurisdiction that Lessor must pay the tax direct and within not more than 60 days after the due date of such
3
58-CV-24-260
Filed in District Court
State of Minnesota
5/31/2024 3:01 PM
filing to send Lessor a confirmation of such filing. If Lessee fails to pay any said fees, assessments or taxes, Lessor
shall have the right but not the obligation, to pay the same and such amount including penalties and costs, which
shall be repayable to Lessor with the next installment of rent and if not so paid shall be the same as failure to pay
any installment of rent due hereunder. Lessor shall not be responsible for contesting any valuation of or any tax
imposed on the Equipment but may do so strictly as an accommodation to Lessee and shall not be liable or
accountable to Lessee therefor.
13. Tax Rights. Lessee hereby further indemnifies and saves Lessor harmless from any and all losses
including, without limitation, all taxes, interest and penalties, incurred as a result of a loss of tax benefit or any and
all inclusions in gross income by Lessor of amounts with respect to this Lease arising from a determination by the
Internal Revenue Service or any other federal, state or local taxing authority that (i) this Lease is not treated as a
“true lease” for federal income tax purposes, or (ii) Lessor is not the owner of the Equipment entitled to a deduction
for its depreciation or any other tax benefits associated with ownership thereof.
14. Time of the Essence. Time is of the essence in this Lease and no waiver by Lessor of any breach or Event
of Default shall constitute a waiver of any additional or subsequent breach or Event of Default by Lessor nor shall it
be a waiver of any of Lessor’s rights.
15. Processed Material Requirements.
(a) Commencing on the date of this Lease and continuing through January 31, 2023 (the “Processed
Material Period”), Lessee shall either (i) offer to sell to Lessor (or, in Lessor’s discretion, Lessor’s designee) all of
Lessee’s Processed Material (as defined below) (with sales to be consistent with prevailing market prices and past
business practices between the parties), or (ii) pay Lessor $10.00 per ton for Processed Material that Lessee elects to
sell to any other party. For purposes hereof, “Processed Material” means crushed automobiles and other
recyclable/scrap materials that are processed using the Equipment, as well as all motor blocks that are removed from
automobiles prior to processing.
(b) Throughout the Processed Material Period, Lessee shall sell a minimum of 1,500 tons of
Processed Material per quarter to Lessor or pay Lessor $10.00 per ton in lieu ther
Preview
58-CV-24-260 Filed in District Court State of Minnesota 5/31/2024 3:01 PM STATE OF MINNESOTA DISTRICT COURT COUNTY OF PINE TENTH JUDICIAL DISTRICT CASE TYPE: Contract/Replevin/Other - Civil JAZME, LLC d/b/a Alliance Recycling Court File No.: ____________ Group, a Minnesota limited liability The Honorable ____________ company, Plaintiff, SUMMONS v. Brook Park Auto Recycling, LLC, a Minnesota limited liability company, Defendant. This Summons is directed to Brook Park Auto Recycling, LLC. 1. You are being sued. The Plaintiff has started a lawsuit against you. The Complaint is attached to this Summons. Do not throw these papers away. They are official papers that start a lawsuit and affect your legal rights, even if nothing has been filed with the court and even if there is no court file number on this Summons. 2. You must EACH reply, in writing, AND get a copy of your reply to the person/business who is suing you within 21 days to protect your rights. Your reply is called an Answer. Getting your reply to the Plaintiff is called service. You must serve a copy of your Answer or Answer and Counterclaim (Answer) within 21 days from the date you received the Summons and Complaint. ANSWER: You can find the Answer form and instructions on the MN Judicial Branch website at www.mncourts.gov/forms under the “Civil” category. The instructions will explain in detail how to fill out the Answer form. 3. You must respond to each claim. The Answer is your written response to the Plaintiff’s Complaint. In your Answer you must state whether you agree or disagree with each paragraph of the Complaint. If you think the Plaintiff should not be given everything they asked for in the Complaint, you must say that in your Answer. 4. SERVICE: You may lose your case if you do not send a written response to the Plaintiff. If you do not serve a written Answer within 21 days, you may lose this case by default. You will not get to tell your side of the story. If you choose not to respond, the Plaintiff may be awarded everything they asked for in their Complaint. If you agree with the claims stated in the Complaint, you don’t need to respond. A default judgment can than be entered against you for what the Plaintiff asked for in the Complaint. 1 58-CV-24-260 Filed in District Court State of Minnesota 5/31/2024 3:01 PM To protect your rights, you must serve a copy of your Answer on the person who signed this Summons in person or by mail at this address: Matthew P. Kostolnik Justin S. Boschwitz Moss & Barnett, a Professional Association 150 South Fifth Street, Suite 1200 Minneapolis, MN 55402 5. Carefully read the Instructions (CIV301) for the Answer for your next steps. 6. Legal Assistance. You may wish to get legal help from an attorney. If you do not have an attorney and would like legal help: • Visit www.mncourts.gov/selfhelp and click on the “Legal Advice Clinics” tab to get more information about legal clinics in each Minnesota county. • Court Administration may have information about places where you can get legal assistance. NOTE: Even if you cannot get legal help, you must still serve a written Answer to protect your rights or you may lose the case. 7. Alternative Dispute Resolution (ADR). The parties may agree to or be ordered to participate in an ADR process under Rule 114 of the Minnesota Rules of Practice. You must still serve your written Answer, even if you expect to use ADR. MOSS & BARNETT, A Professional Association Dated: May 1, 2024 By: /s/ Justin S. Boschwitz Matthew P. Kostolnik (#0310669) Justin S. Boschwitz (#0401472) 150 South Fifth Street, Suite 1200 Minneapolis, MN 55402 T: (612) 877-5000 F: (612) 877-5999 Email: matt.kostolnik@lawmoss.com justin.boschwitz@lawmoss.com ATTORNEYS FOR PLAINTIFF 9255842v1 2 58-CV-24-260 Filed in District Court State of Minnesota 5/31/2024 3:01 PM STATE OF MINNESOTA DISTRICT COURT COUNTY OF PINE TENTH JUDICIAL DISTRICT Case Type: Contract/Replevin/Other - Civil JAZME, LLC d/b/a Alliance Recycling Group, a Minnesota limited liability company, COURT FILE NO. __________ Plaintiff, v. COMPLAINT Brook Park Auto Recycling, LLC, a Minnesota limited liability company, Defendant. COMES NOW Plaintiff JAZME, LLC d/b/a Alliance Recycling Group, a Minnesota limited liability company, by and through its undersigned counsel, and for its Complaint (the “Complaint”) against Defendant Brook Park Auto Recycling, LLC, a Minnesota limited liability company, states and alleges as follows: PARTIES 1. Plaintiff JAZME, LLC d/b/a Alliance Recycling Group (“Plaintiff” or “Lessor”) is a Minnesota limited liability company with a registered office located at 115 31st Avenue N, Minneapolis, Minnesota 55411. 2. Defendant Brook Park Auto Recycling, LLC (“Defendant” or “Lessee”) is a Minnesota limited liability company with its principal executive office located at 28178 State Hwy 107, Brook Park, Minnesota 55007. JURISDICTION AND VENUE 3. Jurisdiction and venue are proper as Defendant’s registered office is located in Pine County, Minnesota, and all relevant acts, including the non-payment of lease obligations, location 1 58-CV-24-260 Filed in District Court State of Minnesota 5/31/2024 3:01 PM of equipment and breach of contract, which form the basis of this action, took place in Pine County. See Minn. Stat. §§ 542.06, 542.09. FACTUAL ALLEGATIONS A. Background 4. Plaintiff is an industrial metal recycling company headquartered in Minneapolis, Minnesota. 5. Upon information and belief, Defendant owns and operates a used car salvage yard in Brook Park, Minnesota. 6. Upon information and belief, Defendant sells salvaged vehicle parts to customers throughout the United States and sells scrap metal to businesses such as Plaintiff. B. Plaintiff Leases Equipment to Defendant 7. On or about February 1, 2018, Plaintiff, as Lessor, and Defendant, as Lessee, entered into an Equipment Lease and Material Supply Agreement, as amended by Amendment No. 1 to Equipment Lease and Material Supply Agreement dated February 1, 2023 (collectively the “Lease”). A copy of the Lease is attached as Exhibit A and is incorporated herein by reference. 8. Pursuant to the Lease, Defendant leased from Plaintiff the following equipment: One (1) E-Z Crusher A+ Portable; Serial Number RMJ632-100; 2013 Model. Basic E-Z Specifications; John Deere 6 Cylinder Turbo Power with remote Start-Stop; Remote Automation; Hydraulic Outriggers; 30 Gallon Air System; Tandem Axles with 11-22.5 Dual Tires. (the “Equipment”). 9. On or about February 6, 2018, Plaintiff filed and perfected its security interest in the Equipment by filing a UCC-1 Financing Statement with the Office of the Minnesota Secretary of State, identified by Filing Number: 998893300023 (the “Financing Statement”). A copy of the Financing Statement is attached as Exhibit B and is incorporated herein by reference. 2 58-CV-24-260 Filed in District Court State of Minnesota 5/31/2024 3:01 PM 10. The initial term of the Lease commenced upon Defendant, as Lessee, accepting the Equipment, and it continued through January 31, 2023 (the “Initial Term”). (See Lease, at ¶ 2). 11. Pursuant to Amendment No. 1 to Equipment Lease and Material Supply Agreement, the term of the Lease was extended for an additional five (5) years, from February 1, 2023, through January 31, 2028 (the “Extended Term,” together with the Initial Term, the “Term”). (See Lease, Amend. No. 1, at ¶ 1.) 12. During the Initial Term of the Lease, Defendant was required to pay Plaintiff monthly rent in the amount of $1,750.00, plus any sales and use tax thereon; monthly rent for the Extended Term was reduced to $1,200.00, plus any sales and use tax thereon (“Rent”). (See Lease, at ¶ 3; Lease, Amend. No. 1, at ¶ 2.) 13. The Lease requires that Defendant make all payments of Rent by the 10th day of each month (e.g., March 10, April 10, etc.). (See Lease, at ¶ 3; Lease, Amend. No. 1, at ¶ 2.) 14. If any installment of Rent is not paid when due, Plaintiff may, in its discretion, charge a late fee of five percent (5%) of the amount of the installment, but in any event not more than permitted by applicable law. (Lease ¶ 21.) 15. At all relevant times hereto, Plaintiff, as Lessor, remained the sole owner of the Equipment and provided Defendant, as Lessee, the right to possess and use the Equipment in accordance with the terms of the Lease. (See Lease, at ¶ 7; Lease, Amend. No. 1, at ¶ 4.) 16. In addition to Rent, the Lease specified certain quarterly Processed Material Requirements that Defendant was required to satisfy. (See generally Lease, at ¶ 15; Lease, Amend. No. 1, at ¶ 5.) 17. During the Initial Term of the Lease, Defendant was required to meet either of the following “Processed Material Requirements:” 3 58-CV-24-260 Filed in District Court State of Minnesota 5/31/2024 3:01 PM (a) Commencing on the date of this Lease and continuing through January 31, 2023 (the “Processed Material Period”), Lessee shall either (i) offer to sell to Lessor (or, in Lessor’s discretion, Lessor’s designee) all of Lessee’s Processed Material (as defined below) (with sales to be consistent with prevailing market prices and past business practices between the parties), or (ii) pay Lessor $10.00 per ton for Processed Material that Lessee elects to sell to any other party. For purposes hereof, “Processed Material” means crushed automobiles and other recyclable/scrap materials that are processed using the Equipment, as well as all motor blocks that are removed from automobiles prior to processing. (b) Throughout the Processed Material Period, Lessee shall sell a minimum of 1,500 tons of Processed Material per quarter to Lessor or pay Lessor $10.00 per ton in lieu thereof as contemplated by Section 15(a). If Lessee fails to do so, Lessee will either make up the shortfall by selling other scrap/recyclable material (e.g., non-ferrous, motor blocks (removed), ferrous, etc.) to Lessor or paying Lessor for the shortfall at a rate of $10.00 per ton. Lessor may apply amounts owed for payments of monthly Rent and any shortfall payments under this Section 15(b) against its payments for scrap purchases. (Lease ¶ 15) (emphasis in original). 18. During the Extended Term of the Lease, the Processed Material Requirement was modified as follows: (a) Commencing on the date of this Lease and continuing through January 31, 2028 (the "Processed Material Period"), Lessee shall either (i) offer to sell to Lessor (or, in Lessor's discretion, Lessor's designee) all of Lessee's Processed Material (as defined below) (with sales to be consistent with prevailing market prices and past business practices between the parties), or (ii) pay Lessor $10.00 per ton for Processed Material that Lessee elects to sell to any other party. For purposes hereof, "Processed Material" means crushed automobiles and other recyclable/scrap materials that are processed using the Equipment, as well as all motor blocks that are removed from automobiles prior to processing. (b) Throughout the Processed Material Period, Lessee shall sell a minimum of 960 tons of Processed Material per year to Lessor or pay Lessor $5.00 per ton in lieu thereof as contemplated by Section 0(a). If Lessee fails to do so, Lessee will either make up the shortfall by selling other scrap/recyclable material (e.g., non-ferrous, motor blocks (removed), ferrous, etc.) to Lessor or paying Lessor for the shortfall at a rate of $5.00 per ton. Lessor may apply amounts owed for payments of monthly Rent and any shortfall payments under this Section 0(b) against its payments for scrap purchases." (Lease, Amend. No. 1, at ¶ 5) (emphasis added by source). 4 58-CV-24-260 Filed in District Court State of Minnesota 5/31/2024 3:01 PM 19. The Lease states, in part, that a default occurs if: (a) Lessee fails to pay when installment of Rent within five calendar days after it becomes due; (b) Lessee shall fail to perform or observe any covenant condition or agreement to be performed or observed by it hereunder within 10 days following Lessee’s receipt of notice of such failure from Lessor; […] or (f) Lessee fails to comply with Lessee’s covenants regarding Processed Material under Section 15 [of the Lease]. (Lease ¶ 16.) 20. Regarding remedies, the Lease states as follows: (A) “Loss Amount” as of any date shall be the sum of the following: (i) the amount of all Rent and other amounts payable by Lessee hereunder due but unpaid as of such date, plus (ii) the amount of all unpaid Rent for the balance of the Term of this lease not yet due as of such date, and (B) “Remaining Processed Material Amount” as of any date shall be the amount of all payments that Lessee is required to make from and after such date until the expiration of the Processed Material Period on account of minimum tons of Processed Material under Section 15(b) (assuming the entire minimum amount qualifies as a shortfall which Lessee shall pay for in cash, but at a rate of $5.00 per ton (rather than $10.00) per ton). (Lease ¶ 17) (emphasis in original). 21. Upon the occurrence of a default by Defendant, Plaintiff may exercise the remedies set forth in further detail in Paragraph 17 of the Lease, as summarized herein, including any one or more of the following: (a) terminate the Lease; (b) proceed by court action to enforce Defendant’s performance under the Lease; (c) repossess the Equipment and either retain the Equipment in full satisfaction of Defendant’s obligations, or sell or lease each item of Equipment in such manner, and upon such terms as Plaintiff may determine its sole discretion; (d) recover interest on the unpaid balance of the Loss Amount; and (e) or exercise any other right or remedy available to Plaintiff by law or by agreement, and may in any event, recover legal fees and other expenses by reason of an event of default or exercise of any remedy described in the Lease. (See Lease ¶ 17(a)-(e).) 5 58-CV-24-260 Filed in District Court State of Minnesota 5/31/2024 3:01 PM 22. Regardless of the remedy chosen by Plaintiff, Defendant’s obligations to comply with the Lease’s Processed Material Requirement continues in full force and effect until the expiration of the Processed Material Period. (See Lease ¶ 17.) C. Defendant Defaults Under the Terms of the Lease 23. Defendant is in default of the Lease for failing to pay all amounts of Rent due and owing in the amount of $32,520. 24. During and throughout both the Initial Term and the Extended Term, Defendant repeatedly failed to meet the Processed Material Requirements set forth in the Lease. 25. Plaintiff estimates that, based upon the minimum Processed Material Requirement set for the in the Lease, Defendant has failed to pay Processed Material shortfalls in an amount not less than $139,832.18. (See Lease, at ¶ 15; Lease, Amend. No. 1, at ¶ 5) (discussing minimum Processed Material Requirement, and the necessary payments from Defendant to Plaintiff in the event of any Processed Material shortfalls). 26. As a result of this action, Plaintiff is incurring recoverable costs and attorneys’ fees that continue to accrue. D. Defendant Refuses to Return the Equipment to Plaintiff 27. On or about April 11, 2024, one of Plaintiff’s principals attempted to meet with Defendant’s principals to discuss Defendants defaults under the Lease and the surrender of the Equipment from Defendant to Plaintiff. 28. At said meeting, Defendant’s principals would not discuss their defaults under the Lease, nor would Defendant’s principals discuss a voluntary surrender of the Equipment or provide Plaintiff with access to the Equipment. 6 58-CV-24-260 Filed in District Court State of Minnesota 5/31/2024 3:01 PM 29. Instead, at said meeting, Defendant’s principals told Plaintiff’s principal to “F--k off” and to “sue them.” 30. Upon information and belief, Defendant is unlawfully retaining possession of the Equipment in its locked yard. COUNT I REPLEVIN 31. Plaintiff realleges and reincorporates all preceding paragraphs of this Complaint as if fully restated herein. 32. Plaintiff is the sole owner and lessor of the Equipment, has the right to possession of the Equipment, or the right to receive from Defendant payment of the Equipment’s fair market value. 33. At all times relevant hereto, Plaintiff has maintained a perfected security interest in the Equipment as evidenced by the Financing Statement. 34. Defendant has defaulted under the terms of the Lease. 35. Defendant is wrongfully in possession of the Equipment which is solely owned by Plaintiff. 36. Defendant has refused to surrender the Equipment to Plaintiff. 37. Plaintiff is entitled to replevin by taking possession of the Equipment from Defendant, or the fair market value of the Equipment, and damages for Defendant’s wrongful detention of the Equipment. COUNT II CONVERSION 38. Plaintiff realleges and reincorporates all preceding paragraphs of this Complaint as if fully restated herein. 7 58-CV-24-260 Filed in District Court State of Minnesota 5/31/2024 3:01 PM 39. Defendant is currently exercising control over Plaintiff’s Equipment in a way that is contrary to Plaintiff’s rights. 40. Defendant has intentionally deprived Plaintiff of possession of the Equipment permanently, or for an indefinite period of time. 41. Defendant has, without legal justification, willfully interfered with Plaintiff’s possession and control of the Equipment. 42. Defendant’s exercise of dominion and control over the Equipment is inconsistent with, and in repudiation of Plaintiff’s rights to the Equipment as stated in the Lease. 43. Defendant’s conversion has caused Plaintiff to incur damages in excess of $50,000, plus costs, disbursements, attorneys’ fees and interest thereon in an amount to be determined at trial. COUNT III BREACH OF CONTRACT 44. Plaintiff realleges and reincorporates all preceding paragraphs of this Complaint as if fully restated herein. 45. The Lease is an enforceable contract between Plaintiff and Defendant. 46. Plaintiff satisfied all conditions precedent under the Lease. 47. Defendant breached the Lease, without justification, and is in default by, among other things, failing to pay all amounts due and owing under the terms of the Lease as described in the preceding paragraphs above. 48. Defendant’s breach of contract has caused Plaintiff to incur damages in excess of $50,000, plus costs, disbursements, attorneys’ fees and interest thereon in an amount to be determined at trial. 8 58-CV-24-260 Filed in District Court State of Minnesota 5/31/2024 3:01 PM PRAYER FOR RELIEF WHEREFORE, Plaintiff prays for judgment against Defendant as follows: 1. As to Count I, an order pursuant to Minn. Stat. § 548.04, directing Defendant to return and surrender the Equipment to Plaintiff, or for judgment of the fair market value of the Equipment if delivery cannot be made, and damages for detention of the Equipment. 2. As to Count II, an order directing Defendant to pay Plaintiff the fair market value of the Equipment, in an amount in excess of $50,000 to be proven at trial. 3. As to Count III, an order against Defendant in an amount in excess of $50,000 to be proven at trial. 4. An award of all costs, disbursements, and attorneys’ fees incurred by Plaintiff, plus interest as allowed by the Lease. 5. For any and all such other relief that the Court deems equitable and just. MOSS & BARNETT A Professional Association Dated: May 1, 2024 By: /s/ Justin S. Boschwitz Matthew P. Kostolnik (#0310669) Justin S. Boschwitz (#0401472) 150 South Fifth Street, Suite 1200 Minneapolis, MN 55402 T: (612) 877-5000 F: (612) 877-5999 Email: matt.kostolnik@lawmoss.com justin.boschwitz@lawmoss.com ATTORNEYS FOR PLAINTIFF 9 58-CV-24-260 Filed in District Court State of Minnesota 5/31/2024 3:01 PM ACKNOWLEDGMENT The undersigned hereby acknowledges that costs, disbursements and reasonable attorney and witness fees may be awarded pursuant to Minn. Stat. § 549.211, subd. 3, if the court determines that this document violates Minn. Stat. § 549.211, subd. 2. /s/ Justin S. Boschwitz Justin S. Boschwitz (#0401472) 9238130v4 10 58-CV-24-260 Filed in District Court State of Minnesota 5/31/2024 3:01 PM EQUIPMENT LEASE AND MATERIAL SUPPLY AGREEMENT THIS EQUIPMENT LEASE AND MATERIAL SUPPLY AGREEMENT (THE “LEASE”) IS ENTERED INTO AS OF FEBRUARY 1, 2018 BY AND BETWEEN JAZME, LLC DBA ALLIANCE RECYCLING GROUP, A MINNESOTA LIMITED LIABILITY COMPANY (“LESSOR”), AND BROOK PARK AUTO RECYCLING, LLC, A MINNESOTA LIMITED LIABILITY COMPANY (“LESSEE”). 1. Lease of Equipment. Lessor hereby leases to Lessee and Lessee hereby leases from Lessor the personal property described on Schedule A (hereinafter, with all replacement parts, additions, repairs and accessories incorporated therein and/or affixed thereto, referred to as “Equipment”). Lessor will arrange to have the Equipment shipped and installed at Lessee’s business location at 28178 State Hwy. 107, Brook Park, MN 55007, at Lessee’s expense and direction. Unless otherwise consented to by Lessor in its discretion, the Equipment will reside at such premises throughout the Term (as defined below). 2. Term. The initial term of this Lease shall commence on the date of acceptance of the Equipment and (unless terminated earlier in accordance with the terms of this Lease) shall continue for the approximately five year period ending January 31, 2023 (the “Term”). 3. Rent. For each month during the Term, the Lessee shall pay to Lessor, without demand, the sum of $1,750.00, as rent, plus any sales and use tax thereon (the “Rent”). Rent for February 2018 will be payable in arrears on February 28, 2018. Thereafter, Rent will be due and payable on the 10th day of each month (March 10, April 10, etc.). 4. Purchase of the Equipment at the End of the Term. Provided that no Event of Default, and no event which with lapse of time or giving of notice or both would become an Event of Default, has occurred, Lessee may elect, by giving Lessor not less than ninety (90) days prior written notice (which notice shall be irrevocable without Lessor’s written consent), to purchase the Equipment as of the last day of the Term for Forty Thousand Dollars ($40,000.00), plus applicable taxes and other amounts due or payable with respect to such sale (the “Residual Purchase Price”), with the Residual Purchase Price will be due and payable on the last day of the Term. The Equipment to be sold to Lessee shall be sold, “AS IS, WHERE IS” with no express or implied warranties whatsoever including, but not limited to, WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 5. Return of Equipment. If Lessee does not elect to purchase the Equipment, if allowed in accordance with the terms hereof, (i) Lessee shall be obligated to return the Equipment to Lessor at the end of the Term or as required by Lessor upon the occurrence of an Event of Default under Section 16; and (ii) Lessee shall at its sole expense demobilize, load, and transport the Equipment to any location designated by Lessor such that possession is delivered to Lessor on the last day of the Term or immediately upon the occurrence of an Event of Default, or at such other time as Lessor shall consent in writing. Any and all components of the Equipment returned to Lessor shall be in the same physical and mechanical condition as originally delivered, excepting only Reasonable Wear and Tear. For purposes of this Lease “Reasonable Wear and Tear” shall mean: (i) the results of normal use of the Equipment as originally intended assuming use and maintenance in accordance with the manufacturer’s recommendations and the absence of any casualty, misuse, abuse, abandonment, improper care, accident, negligence or similar occurrence with respect to the Equipment, whether or not the Equipment is in use at the time of said occurrence; and (ii) use that does not, in any way, impair the function of the Equipment or prevent the Equipment from promptly being placed into use. If Lessee is required to return the Equipment in accordance with the terms hereof, Lessee shall provide Lessor, at Lessee’s sole cost and expense at least ninety (90) days prior to the end of the Term (or immediately if the Equipment is returned due to an Event of Default), with a true, accurate and complete set of all material documentation for the Equipment setting forth a detailed description of its components and its operating and maintenance history, all in form reasonably satisfactory to Lessor. If the Equipment is not in the condition required upon return, Lessee shall pay to Lessor, on demand, all costs, and expenses incurred by Lessor to bring the Equipment into the required condition. Lessee expressly agrees that, in the event Lessee does not elect to purchase the Equipment in accordance with the terms hereof, Lessor has the right to arrange for the sale or other disposition prior to the Equipment’s return (provided that such sale shall not close until the end of the applicable Term) and Lessee agrees to facilitate any such sale or disposition of the Equipment and that Lessor, its agents or employees, EXHIBIT A 58-CV-24-260 Filed in District Court State of Minnesota 5/31/2024 3:01 PM shall have the right to enter Lessee’s property for the purpose of showcasing the Equipment for sale or other disposition. 6. Warranty Disclaimer. Lessee acknowledges that Lessor is not the manufacturer of the equipment, nor manufacturer’s agent and Lessee represents Lessee has selected the Equipment rented hereunder based upon Lessee's judgement prior to having requested Lessor to purchase the same for renting to Lessee and Lessee agrees that the Equipment rented hereunder is of design, size, fitness and capacity selected by Lessee and that Lessee is satisfied that the same is suitable and fit for its intended purposes. Lessee further agrees that Lessor has made and makes no representations or warranties of whatsoever nature, directly or indirectly, expressed or implied, including but not limited to any representations or warranties with respect to suitability, durability, fitness for use and merchantability of the Equipment, the purposes and uses of Lessee or otherwise. Lessee waives all rights to make claim against Lessor for breach of any warranty of any kind whatsoever. Lessor shall not be liable to Lessee for any loss, damage or expense of any kind or nature caused directly or indirectly by the Equipment, for the use or maintenance thereof, or for the failure of operations thereof, or for the repairs, service, or adjustment thereto, or by any delay or failure to provide any thereof, or by any interruption of service or loss of use thereof or for any loss of business or any other damage whatsoever and howsoever caused. No defect or unfitness of the Equipment shall relieve Lessee of the obligation to pay rent, or any other obligation under this Lease to Lessor or its assignee. 7. Ownership of Equipment. Lessee and Lessor intend that: (i) the Lease constitutes a true “lease” that is a “finance lease” as such terms are defined in Article 2A of the Uniform Commercial Code as in effect from time to time in the applicable jurisdiction (the “UCC”) and does not create a “security interest” as defined in the UCC; (ii) Lessor is and shall remain the owner of the Equipment (unless sold by Lessor pursuant to this Lease); (iii) Lessee shall not acquire any right, title, equity or interest in or to such Equipment other than the right to possess and use the Equipment in accordance with Lessee’s leasehold interest under the Lease. If, notwithstanding the intention of the parties and the economic realities of this Lease, this Lease is deemed to create a security interest, Lessee shall be deemed to have granted to Lessor as security for Lessee’s obligations hereunder, a first priority security interest in the Equipment and all proceeds thereof. Lessee, at its expense, shall protect and defend the title of Lessor and keep it free of all claims and liens other than the rights of Lessee hereunder and claims and liens created by or arising through Lessor. Lessee shall in the use of the Equipment comply with all laws, ordinances, rules and regulations of any lawfully constituted authority or governmental unit having jurisdiction. Lessee shall execute and deliver such other and further documents as Lessor may request to confirm the interest of Lessor hereunder. If Lessor supplies Lessee with labels indicating that the Equipment is owned by Lessor, Lessee shall affix such labels to and keep them in a prominent place on the Equipment. Lessor is hereby appointed by Lessee as its true and lawful attorney in respect to being hereby authorized by Lessee, at Lessee's expense, to cause this Lease, or any statement or other instrument in respect of this Lease showing the interest of Lessor in the Equipment including Uniform Commercial Code Financing Statements, to be filed or recorded and re-filed and re-recorded. Lessee agrees to execute and deliver any statement or instrument requested by Lessor for such purpose, and agrees to pay or reimburse Lessor for any searches, filings, recordings or stamp fees or taxes arising from the filing or recording any such instrument or statement. Lessee agrees to make the Rent and other payments required hereunder without regard to the condition of the Equipment and to look only to persons other than Lessor such as the manufacturer, vendor or carrier thereof should any item of Equipment for any reason be defective. So long as no Event of Default has occurred and is continuing, Lessor agrees, to the extent they are assignable, to assign to Lessee, without any recourse to Lessor, any warranty received by Lessor. 8. Maintenance of Equipment. Lessee, at Lessee’s sole cost and expense, shall keep the Equipment in good repair, condition and working order and shall furnish all parts, mechanism, devices and servicing required therefor and shall not materially alter the Equipment, without the consent of Lessor. Lessee shall provide facilities for, and operate the Equipment only in accordance with the manufacturer specifications. Lessee shall grant access to the Equipment to Lessor, its designee or the manufacturer at reasonable times for inspection, repair maintenance, installation of engineering changes and for any other reasonable purpose. Lessee shall serve Lessor with prompt written notice of any alleged or apparent improper manufacture, functioning or operation of the Equipment. If Lessee fails to maintain the Equipment as required hereunder, Lessor may do so as Lessee’s expense, and Lessor may invoice Lessee for such amounts, including a 15% administrative charge. Such invoice shall be considered additional Rent hereunder, and shall be due within ten (10) days of the date of such invoice. Lessor may inspect the Equipment at any time and from time to time during regular business hours. 2 58-CV-24-260 Filed in District Court State of Minnesota 5/31/2024 3:01 PM 9. Risk of Loss. Lessee hereby assumes and shall bear the entire risk of loss for the theft, loss, damage, or destruction of the Equipment from any and every cause whatsoever. No such loss or damage shall impair obligation of Lessee under this Agreement which shall continue in full force and effect. In the event the Equipment shall become lost, stolen, destroyed, damaged beyond repair or rendered permanently unfit for use for any reason, or in the event of condemnation or seizure of any item of Equipment, Lessee shall promptly pay Lessor the sum of (a) the amount of all Rent and other amounts payable by Lessee hereunder with respect to the Equipment due but unpaid at the date of such payment, plus (b) the amount of all unpaid Rent with respect to the Equipment for the balance of the Term not yet due at the time of such payment, plus (c) the Residual Payment Amount. Upon payment of such amount to Lessor, the Equipment shall become the property of Lessee, Lessor will transfer to Lessee, without recourse or warranty, all of Lessor’s right, title and interest therein, and all of Lessee’s obligations under this Lease shall terminate, with the exception of (y) Lessee’s covenants regarding Processed Material under Section 15, which shall survive until the expiration of the Processed Material Period (as defined in Section 15 below), and (z) Lessee’s other obligations that survive termination or expiration of the Term as set forth in Section 25, which shall survive indefinitely. Lessee shall pay any sales and use taxes due on such transfer. Any insurance or condemnation proceeds received by Lessor shall be credited to Lessee’s obligation under this Section 9 and Lessor shall be entitled to any surplus. 10. Liability. Lessee hereby indemnifies Lessor against and agrees to save Lessor harmless from any and all liability and expense arising out of the ordering, ownership, use, condition, or operation of each item of Equipment during the term of this lease, including liability for death or injury to persons, damage to property, strict liability under the laws or judicial decisions of any state or the United States, and legal expenses in defending any claim brought to enforce any such liability or expense, including court cost and legal expenses incurred by or asserted against Lessor in any way relating to the manufacture, purchase, ownership, delivery, lease, possession, use, operation, condition, return or other disposition of the Equipment by Lessor or Lessee or otherwise related to this Lease, including any claim alleging latent or other defects under the doctrine of strict liability or otherwise; any other claim under the doctrine of strict liability; and any claim for patent, trademark, service mark or copyright infringement. Each party shall give the other notice of any event covered hereby promptly following learning thereof. 11. Insurance. Lessee shall keep the Equipment insured against all risks of loss or damage from every cause whatsoever. Lessee shall maintain (a) actual cash value all risk insurance of the Equipment, naming Lessor as LOSS PAYEE and (b) single limit public liability and property damage insurance of not less than $1,000,000 per occurrence, or such greater or lesser amount as Lessor may from time to time request on notice to Lessee, naming Lessee as named insured and Lessor as additional insured and loss payee thereunder. Lessee shall be liable for all deductible portions of all required insurance. All said insurance shall be in form and amount and with companies satisfactory to Lessor, and in all events, shall be in amounts covering replacement cost for the Equipment, less commercially reasonable deductibles. All insurance for loss or damage shall provide that losses, if any, shall be payable to Lessor, and all such liability insurance shall be in the joint names of Lessor and Lessee. Lessee shall pay the premiums therefor and deliver to Lessor the policies of insurance or duplicates thereof, or other evidence satisfactory to Lessor, of such insurance coverage. Each insurer shall agree by endorsement upon the policy or policies issued by independent instrument furnished Lessor, that it will give Lessor 30 days written notice prior to the effective date of any alteration or cancellation of such policy. The proceeds of such insurance payable as a result of loss of or damage to the Equipment shall be applied, at the option of Lessor, as set out in Section 9. Lessee hereby irrevocably appoints Lessor as Lessee’s attorney-in-fact to make claim for, receive payment of, and execute and endorse all documents, checks or drafts received in payment for loss of damage under any said insurance policies. In case of the failure of Lessee to procure or maintain said insurance or to comply with any other provision of this Agreement, Lessor shall have the right but shall not be obligated, to effect such insurance or compliance on behalf of Lessee. In the event all money spent by and expenses of Lessor in effecting such insurance or compliance shall be deemed to be additional rent, and shall be paid by Lessee to Lessor with the next monthly payment of Rent. 12. Fees. Lessee shall pay directly, or to Lessor, all license fees, registration fees, assessments and taxes which may now or hereafter be imposed upon the ownership, sale (if authorized), possession or use of the Equipment excepting only those based on Lessor's income, and shall keep the equipment free and clear of all levies, liens or encumbrances arising therefrom. Lessee shall make all filings as to and pay when due all property taxes on the Equipment in behalf of Lessor, with all appropriate governmental agencies, except where Lessor is notified by the taxing jurisdiction that Lessor must pay the tax direct and within not more than 60 days after the due date of such 3 58-CV-24-260 Filed in District Court State of Minnesota 5/31/2024 3:01 PM filing to send Lessor a confirmation of such filing. If Lessee fails to pay any said fees, assessments or taxes, Lessor shall have the right but not the obligation, to pay the same and such amount including penalties and costs, which shall be repayable to Lessor with the next installment of rent and if not so paid shall be the same as failure to pay any installment of rent due hereunder. Lessor shall not be responsible for contesting any valuation of or any tax imposed on the Equipment but may do so strictly as an accommodation to Lessee and shall not be liable or accountable to Lessee therefor. 13. Tax Rights. Lessee hereby further indemnifies and saves Lessor harmless from any and all losses including, without limitation, all taxes, interest and penalties, incurred as a result of a loss of tax benefit or any and all inclusions in gross income by Lessor of amounts with respect to this Lease arising from a determination by the Internal Revenue Service or any other federal, state or local taxing authority that (i) this Lease is not treated as a “true lease” for federal income tax purposes, or (ii) Lessor is not the owner of the Equipment entitled to a deduction for its depreciation or any other tax benefits associated with ownership thereof. 14. Time of the Essence. Time is of the essence in this Lease and no waiver by Lessor of any breach or Event of Default shall constitute a waiver of any additional or subsequent breach or Event of Default by Lessor nor shall it be a waiver of any of Lessor’s rights. 15. Processed Material Requirements. (a) Commencing on the date of this Lease and continuing through January 31, 2023 (the “Processed Material Period”), Lessee shall either (i) offer to sell to Lessor (or, in Lessor’s discretion, Lessor’s designee) all of Lessee’s Processed Material (as defined below) (with sales to be consistent with prevailing market prices and past business practices between the parties), or (ii) pay Lessor $10.00 per ton for Processed Material that Lessee elects to sell to any other party. For purposes hereof, “Processed Material” means crushed automobiles and other recyclable/scrap materials that are processed using the Equipment, as well as all motor blocks that are removed from automobiles prior to processing. (b) Throughout the Processed Material Period, Lessee shall sell a minimum of 1,500 tons of Processed Material per quarter to Lessor or pay Lessor $10.00 per ton in lieu ther