Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-12-02102/USCOURTS-ca8-12-02102-0/pdf.json

Parties Involved:
Christopher M. Anderson
Not Party
Black Hawk Village Development, LLC
Not Party
Black Hawk Village, LP
Not Party
Blue Springs Village Development, LLC
Not Party
Blue Springs Village, LP
Not Party
Brandon Heights Village Development, LLC
Not Party
Brandon Heights Village II Development, LLC
Not Party
Brandon Heights Village II, LP
Not Party
Brandon Heights Village, LP
Not Party
Gandolf Group, LLC
Not Party
Gandolf Holdings, LLC
Not Party
Gilcrease Hills Estates Development, LLC
Not Party
Gilcrease Hills Estates, LP
Not Party
Green Street Estates Development, LLC
Not Party
Lakewood Village Development, LLC
Not Party
Lakewood Village, LP
Not Party
Meecorp Capital Markets, LLC
Appellee
Mercury Henderson Cottages, LP
Not Party
Timothy J. Oliver
Appellant
Orleans Terrace Development, LLC
Not Party
Orleans Terrace, LP
Not Party
PSC Funding, LLC
Not Party
PSC of Two Harbors, LLC
Not Party
Pine Crest Village Development, LLC
Not Party
Pine Crest Village, LP
Not Party
River Falls Ventures, LLC
Not Party
South Creek Village Development, LLC
Not Party
South Creek Village, LP
Not Party
South Glen Village Development, LLC
Not Party
South Glen Village, LP
Not Party
SunAmerica Housing Fund 1270
Not Party
SunAmerica Housing Fund 1306
Not Party
SunAmerica Housing Fund 1307
Not Party
SunAmerica Housing Fund 1346
Not Party
Woodglen Village Development, LLC
Not Party
Woodglen Village, LP
Not Party

Document Text:

United States Court of Appeals

For the Eighth Circuit

___________________________

No. 12-2102

___________________________

Meecorp Capital Markets, LLC

lllllllllllllllllllll Plaintiff - Appellee

v.

Timothy J. Oliver

lllllllllllllllllllll Defendant - Appellant

PSC of Two Harbors, LLC; Gandolf Group, LLC, 

formerly known as Gandolf Development, LLC, 

formerly known as Red Cedar Estates; Christopher 

M. Anderson; PSC Funding, LLC; Gandolf Holdings, 

LLC, formerly known as Gandolf Group, LLC; Black

Hawk Village Development, LLC; Blue Springs Village

Development, LLC; Brandon Heights Village Development, 

LLC; Brandon Heights Village II Development, LLC;

Lakewood Village Development, LLC, formerly known

as Evergreen Heights Development, LLC; Gilcrease

Hills Estates Development, LLC; Green Street Estates

Development, LLC; Orleans Terrace Development, LLC;

Pine Crest Village Development, LLC; River Falls 

Ventures, LLC; South Creek Village Development, LLC;

South Glen Village Development, LLC; Woodglen Village 

Development, LLC, formerly known as Alta Vista Village

Development, LLC; Black Hawk Village, LP; Blue Springs

Village, LP; Brandon Heights Village, LP; Brandon Heights

Village II, LP; Gilcrease Hills Estates, LP; Lakewood

Village, LP, formerly known as Evergreen Heights, LP;

Mercury Henderson Cottages, LP; Orleans Terrace, LP; 

Appellate Case: 12-2102 Page: 1 Date Filed: 01/13/2015 Entry ID: 4233836 
Pine Crest Village, LP; South Creek Village, LP; South 

Glen Village, LP; and Woodglen Village, LP

lllllllllllllllllllll Defendants

SunAmerica Housing Fund 1270;

SunAmerica Housing Fund 1306;

SunAmerica Housing Fund 1307;

and SunAmerica Housing Fund 1346

lllllllllllllllllllllIntervenors

___________________________

No. 12-2169

___________________________

Meecorp Capital Markets, LLC

lllllllllllllllllllll Plaintiff - Appellee

v.

PSC Funding, LLC

lllllllllllllllllllll Defendant - Appellant

Timothy J. Oliver; PSC of Two Harbors, LLC;

Gandolf Group, LLC, formerly known as Gandolf 

Development, LLC, formerly known as Red Cedar 

Estates; Christopher M. Anderson; Gandolf Holdings, 

LLC, formerly known as Gandolf Group, LLC; Black

Hawk Village Development, LLC; Blue Springs Village

Development, LLC; Brandon Heights Village

Development, LLC; Brandon Heights Village II 

Development, LLC; Lakewood Village Development, 

LLC, formerly known as Evergreen Heights Development, 

LLC; Gilcrease Hills Estates Development, LLC; Green

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Appellate Case: 12-2102 Page: 2 Date Filed: 01/13/2015 Entry ID: 4233836 
Street Estates Development, LLC; Orleans Terrace

Development, LLC; Pine Crest Village Development, LLC;

River Falls Ventures, LLC; South Creek Village Development, 

LLC; South Glen Village Development, LLC; Woodglen Village 

Development, LLC, formerly known as Alta Vista Village

Development, LLC; Black Hawk Village, LP; Blue Springs

Village, LP; Brandon Heights Village, LP; Brandon Heights

Village II, LP; Gilcrease Hills Estates, LP; Lakewood Village, 

LP, formerly known as Evergreen Heights, LP; Mercury

Henderson Cottages, LP; Orleans Terrace, LP; Pine

Crest Village, LP; South Creek Village, LP; South Glen

Village, LP; and Woodglen Village, LP

lllllllllllllllllllll Defendants

SunAmerica Housing Fund 1270;

SunAmerica Housing Fund 1306;

SunAmerica Housing Fund 1307;

and SunAmerica Housing Fund 1346

lllllllllllllllllllllIntervenors

____________

 Appeal from United States District Court 

for the District of Minnesota - Minneapolis

____________

 Submitted: October 6, 2014

 Filed: January 13, 2015

____________

Before MURPHY, SMITH, and GRUENDER, Circuit Judges.

____________

GRUENDER, Circuit Judge.

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After a bench trial, the district court found Timothy Oliver and PSC Funding, 1

LLC, liable to Meecorp Capital Markets, LLC, for fraud. Oliver and PSC Funding

now appeal. We affirm.

I.

Oliver wasthe chief manager and part-owner of PSC Funding. In 2004, Oliver

and PSC Funding applied to Meecorp Capital Markets (“Meecorp”) for a $1 million

loan to refinance property located on the north shore of Lake Superior in Minnesota. 

Meecorp made a preliminary commitment to provide the loan in December 2004. 

After conducting an appraisal of the property, Meecorp informed Oliver and PSC

Funding that Meecorp would not make the loan unless the borrowers pledged

collateral in addition to the north-shore property. In response, Oliver provided

Meecorp with a list of fourteen other income-producing properties and associated

“Oliver values,” valuations of Oliver’s interest in each. The list represented an offer 2

of Oliver’s interests as additional collateral. The sum of the “Oliver values” on the

list was more than $1 million. Gandolf Group (“Gandolf”), a real-estate development

company owned by Oliver and PSC Funding, also supplied information to Meecorp

regarding the fourteen properties, including cash-flow projections and the value of

Oliver’s interests. Meecorp used thisinformation to independently analyze the value

of the pledged collateral—Oliver’s interests in the fourteen properties—and to

determine the amount of loan principal the collateral would support. Ultimately,

Meecorp made a new loan offer for $1.32 million.

The Honorable Donovan W. Frank, United States District Court for the

1

District of Minnesota.

These valuations reflected the calculated present value of Oliver’s alleged

2

interestsin the companies associated with the fourteen properties, including his share

of the profits.

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Before closing, Meecorp requested additional information from Oliver about

the fourteen properties. In response, Gandolf supplied member-control agreements,

certificates of good standing, and Schedule K-1s for several limited-liability

companies owned by Gandolf and associated with each property (“Gandolf’s LLCs”). 

Gandolf, however, did not supply the deeds of ownership for the properties. After

reviewing the provided materials, Meecorp concluded that Oliver, as an individual,

could not pledge collateral of sufficient value to secure the $1.32 million loan

because he held no direct interest in the properties. Instead, Meecorp believed that

Gandolf’s LLCs actually owned nearly all the properties on Oliver’s list and that

Oliver held only governance rights—not financial rights—in Gandolf’s LLCs.3

Meecorp therefore requested that Gandolf, asthe owner of the remaining governance

rights and the 100% owner of the financial rights in Gandolf’s LLCs, pledge as

additional collateral its interests in the LLCs. Meecorp’s attorney and managing

director testified that they believed Gandolf’s pledge, along with Oliver’s initial

pledge, would make the loan “safe” because it would provide Meecorp with an

enforceable pledge of 100% of the membership interests in a sufficient number of

property-owning LLCs to secure the loan. The parties agreed which interests Gandolf

would pledge, and Oliver, acting as Gandolf’s representative, signed the pledge

agreement. Meecorp subsequently delivered the promised funds to PSC of Two

Harbors, a single-asset entity created for the project by Oliver and PSC Funding.

Oliver and PSC Funding defaulted on repayment of the loan, and Meecorp was

unable to recover any of the loan principal. During the subsequent legal proceedings,

Meecorp learned that neither Oliver nor Gandolf’s LLCs owned the properties

pledged as collateral. Instead, Gandolf’s LLCs were merely general partners in

undisclosed limited partnerships that owned and managed each property. Outside

Here, as in Gandolf’s LLC’s organizational documents, the term “financial 3

rights” refersto a member’s right to share in net income, net losses, and distributions. 

“Governance rights” refersto a member’s rights other than financialrights. Together,

these rights and interests constitute “membership interests.”

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limited partners, not revealed to Meecorp during loan negotiations, owned up to

99.99% of the equity interests in the properties pledged. Gandolf’s LLCs were able 4

to claim only approximately 0.01%. Thus, Gandolf owned only a very limited equity

interest in the partnerships. Moreover, the limited-partnership organizational

documents prohibited the general partners—Gandolf’s LLCs—from pledging their

economic interests without the limited partners’ prior consent. Because the limited

partners for each property did not consent to the pledges, Meecorp could not acquire

even the small share of equity interest owned by Gandolf’s LLCs.

In August 2009, Meecorp sued Oliver, PSC Funding, Gandolf, and several

other entities involved in the transaction. The district court granted summary

judgment to Meecorp on its breach-of-the-note claim against PSC of Two Harbors

and its breach-of-the-guaranty claim against Oliver, awarding Meecorp

$2,366,191.88—the amount of principal, fees, and interest due. The remaining claims

proceeded to a bench trial. The court entered judgment against Gandolf on a breachof-the-guaranty claim and against Gandolf, Oliver, and PSC Funding on a fraud

claim. Oliver and PSC Funding now appeal the fraud judgment.

II.

The substantive law of Minnesota applies in this diversity case. Gen. Elec.

Capital Corp. v. Union Planters Bank, N.A., 409 F.3d 1049, 1053 (8th Cir. 2005). 

Under Minnesota law, a plaintiff must prove five elements to succeed in a fraud

action: (1) a false representation of a past or existing material fact susceptible of

knowledge; (2) made with knowledge of the falsity of the representation or made

without knowing whether it was true or false; (3) with the intention to induce action

We use the term “equity interest” here to refer to a partner’s percentage 4

interest in the partnership assets and capital and its share of the profits, losses, and

credits generated by each property. The term “economic interest” refers to the same

rights.

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in reliance thereon; (4) the representation proximately caused action in reliance

thereon; and (5) pecuniary damages as a result of the reliance. U.S. Bank N.A. v. Cold

Spring Granite Co., 802 N.W.2d 363, 373 (Minn. 2011); Vandeputte v. Soderholm,

216 N.W.2d 144, 146 (Minn. 1974). “Fraud may also be established by concealment

of the truth.” Cold Spring Granite Co., 802 N.W.2d at 373.

Oliver and PSC Funding raise five challenges to the district court’s judgment

on the fraud claim. Specifically, they contend: (1) the list of “Oliver values” did not

contain actionable misrepresentations;(2) the evidence was not sufficient to establish

that Meecorp relied on anymisrepresentations about Oliver’s and Gandolf’s interests

in the properties; (3) the evidence was not sufficient to establish scienter; (4) the

evidence was not sufficient to establish proximate causation; and (5) the evidence

was not sufficient to establish fraud damages. “In an ‘appeal from a civil bench trial,

we review the trial court’s findings of fact for clear error. Its conclusions of law are

subject to de novo review. Mixed questions of law and fact that require the

consideration of legal concepts . . . are also reviewed de novo.’” Darst-Webbe 5

Tenant Ass’n Bd. v. St. Louis Hous. Auth., 339 F.3d 702, 710-11 (8th Cir. 2003)

(quoting Cooper Tire & Rubber Co. v. St. Paul Fire & Marine Ins. Co., 48 F.3d 365,

369 (8th Cir. 1995)).

Though this court has looked to state law on some occasions and federal law

5

on other occasions to supply the standard of review in an appeal from a bench trial

in a diversity action, see, e.g., BLB Aviation S.C., LLC v. Jet Linx Aviation, LLC, 748

F.3d 829, 835-36 & n.2 (8th Cir. 2014) (collecting cases), we apply the federal

standard of review here because both parties agree it governs. See Access Telecomm.

v. Sw. Bell Tel. Co., 137 F.3d 605, 608 (8th Cir.1998) (applying standard of review

that both parties argued “[w]ithout deciding the standard-of-review question, which

is best left to be resolved in a case in which it is contested”). 

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A.

Oliver and PSC Funding first argue that the district court erred by finding that

the list of “Oliver values” contained actionable misrepresentations because the

Minnesota Supreme Court has held that “a statement of opinion as to future value

does not generally give rise to an action for fraud.” Midland Nat’l Bank of

Minneapolis v. Perranoski, 299 N.W.2d 404, 412 (Minn. 1980). Whether the list of

“Oliver values” may serve as the basis for a fraud claim is a question of law. See

Berg v. Xerxes-Southdale Office Bldg. Co., 290 N.W.2d 612, 615 (Minn. 1980). We

review the district court’s finding de novo. Darst-Webbe Tenant Ass’n Bd., 339 F.3d

at 710-11.

By raising this challenge to the district court’s judgment, Oliver and PSC

Funding miss the point. The district court found that the list of values provided by

Oliver was actionable in fraud not because the underlying projections contained

inaccurate financial predictions but rather because the list represented that Oliver

owned interests of significant value that he could pledge as collateral to secure the

loan. The predictive nature of the values and the accuracy of those predictions thus

played no role in the district court’s judgment. Moreover, the defendants misconstrue

Minnesota law when they assert that any statements of value based on projections

cannot give rise to a fraud claim. The Minnesota courts have not extended blanket

immunity to all economic projections. See Berg, 290 N.W.2d at 615 (holding that a

pro forma statement—in that case, a projection of cash flow—could be actionable

“depending upon whether [it] accurately reflect[s] surrounding past and present

circumstances”). If the relevant projection “fail[s] to reflect past or present facts,” it

may serve as a valid basis for a fraud claim. Id. (citing Spiess v. Brandt, 41 N.W.2d

561, 565 (Minn. 1950)). Significant to the inquiry is whether a party “ma[kes] a

prediction without revealing a present fact which could have assisted [the recipient]

in determining the accuracy of the prediction.” Berg, 290 N.W.2d at 615.

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Here, Oliver provided valuations of his interests in the properties in response

to Meecorp’s request for additional collateral. By providing these figures, Oliver

represented that he held sizable financial interests in the properties that he could

pledge to secure the loan. Though Meecorp eventually realized that Oliver, as an

individual, only held governance rights in Gandolf’s LLCs, Meecorp made the loan

only after Oliver and Gandolf led it to believe that together they owned and could

pledge 100% of the membership interests in the LLCs that allegedly owned the

properties. At no point prior to closing did Oliver or PSC Funding inform Meecorp

about the existence of the limited partnerships that actually owned the properties

incorporated as collateral or the limited partners that held up to 99.99% of the equity

rights. Oliver and PSC Funding thus failed to reveal critical present facts that would

have enabled Meecorp to evaluate fully the list of values Oliver, and later Gandolf,

provided. These circumstances rendered the list of values “more than merely . . .

estimate[s] of a future event.” Id.; see also Richfield Bank & Trust Co. v. Sjogren,

244 N.W.2d 648, 650 (Minn. 1976) (stating that a party to a transaction has a duty to

disclose information to prevent his words from misleading the other party). Instead,

the list of values contained misrepresentations as to ownership and the ability to

pledge equity interests in the property-owning entities. Accordingly, we agree with

the district court’s finding that Oliver’s list of values was actionable in fraud.

B.

Oliver and PSC Funding next argue that the evidence was insufficient to

support the district court’s conclusion that Meecorp relied on Oliver’s

misrepresentations when making the loan. See U.S. Bank N.A., 802 N.W.2d at 373

(listing reliance as an element of common-law fraud). This is a factual finding, see

Lowrie v. Christenson, 206 N.W. 390, 390 (Minn. 1925), which we review for clear

error, Darst-Webbe Tenant Ass’n Bd., 339 F.3d at 710-11.

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Oliver and PSC Funding contend that the evidence wasinsufficient to establish

that Meecorp relied on Oliver’s misrepresentations because Meecorp knew prior to

closing that Oliver did not own directly any of the properties. The defendants once

again mischaracterize the district court’s holding. The district court’s reliance finding

did not turn on Oliver’s initial assertions of ownership alone. Instead, the court found

Oliver and PSC Funding liable for fraud because the defendants misrepresented that

together they owned and could pledge all governance and financial interests in a

sufficient number of property-owning entities to make the loan “safe.” Because of

this misrepresentation, Meecorp believed that Oliver’s and Gandolf’s respective

pledges together constituted a valid and enforceable pledge ofsignificant value. Only

after receiving these pledges did Meecorp fund the loan. We agree that these facts

sufficiently established reliance, and we reject the appellants’ argument that the court

clearly erred on this basis.

Oliver and PSC Funding’s second reliance argument is similarly unavailing. 

Oliver and PSC Funding contend that Meecorp could not have acted in reliance on

the misrepresentations because Meecorp independently evaluated the value of

Oliver’s and Gandolf’s interests before making the loan. See Spiess, 41 N.W.2d at

566 (stating as a general rule that the recipient of a fraudulent misrepresentation is not

justified in relying upon its truth if its falsity is “obvious” to the recipient). We

disagree. Though Meecorp’s managing director, Michael Edrei, testified that

Meecorp performed an independent evaluation, this evaluation relied on

misrepresentations provided by Oliver and Gandolf about which entities owned the

properties and could pledge economic interest as collateral. Oliver and PSC Funding

did not provide Meecorp with information about each property-owning limited

partnership, deeds of property ownership, or the partnership pledging restrictions

from which Meecorp might have been able to determine that Oliver and Gandolf

could not pledge anything ofsignificant value related to the properties. See Richfield

Bank, 244 N.W.2d at 650 (stating that a party to a transaction has a duty to disclose

information to prevent his words from misleading the other party). Thus, the

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independent evaluation could not and did not incorporate these facts. See Spiess, 41

N.W.2d at 567 (“We have repeatedly held that one who deceives another to his

prejudice ought not to be heard to say in defense that the other party was negligent

in taking him at his word.”). In light of these circumstances, the falsity of the

representation was not obvious to Meecorp. Cf. id. at 566 (finding defendants liable

for fraud where they withheld the only practical source of pertinent information and

thwarted plaintiffs’ efforts to investigate). We thus find no clear error in the district

court’s determination that Meecorp acted in reliance on the defendants’

misrepresentations when making the loan.

C.

Third, Oliver and PSC Funding argue that the evidence was insufficient to

establish scienter because Oliver testified that he never provided Meecorp

information that he knew to be false or that was intended to mislead. The existence

of scienter is a question of fact. See Hodge v. Franklin Ins. Co. of Phila., 126 N.W.

1098, 1099 (Minn. 1910). We review the district court’s finding for clear error. 

Darst-Webbe Tenant Ass’n Bd., 339 F.3d at 710-11.

Oliver’s professed innocent intent does not preclude a fraud finding. After all,

“a claim to an honest belief . . . is not automatic protection from liability in fraud, if

that claimis, under the circumstances, completely improbable.” Florenzano v. Olson,

387 N.W.2d 168, 174 (Minn. 1986). Oliver maintains that he did not intend to

defraud; instead, he asserts that Meecorp should have known that he intended to

pledge only his governance interests in Gandolf’s LLCs and that Gandolf’s pledge

would not provide Meecorp with any additional rights in the properties. However,

Oliver’s claim of honest belief conflicts with evidence demonstrating its

improbability. The evidence at trial showed: (1) Oliver, in response to Meecorp’s

request for additional collateral, represented that he owned interests worth more than

$1 million in fourteen properties; (2) after Meecorp learned that Oliver held only

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governance rights in the LLCs that allegedly owned the properties, Meecorp

expressed concern about making the loan; (3) Oliver, to satisfy Meecorp’s concerns

and induce Meecorp to make the loan, signed a document listing Gandolf as a

pledgor; (4) Oliver had signed many of the relevant limited-partnership agreements,

which explicitly limited Gandolf LLCs’ (and therefore Gandolf’s) financial rights in

the properties incorporated as collateral to approximately 0.01% and also contained

prohibitions against pledging even thislimited interest; and (5) before closing, Oliver

never provided information to Meecorp about the limited partnershipsthat owned the

properties incorporated into the loan agreement as collateral and that held up to

99.99% of the equity rights therein. Based on this evidence, the district court

reasonably could have found Oliver’s claim of honest belief to be improbable. We

find that evidence was sufficient to establish scienter.

D.

Fourth, Oliver and PSC Funding argue that Meecorp failed to produce

sufficient evidence to show that the misrepresentations were the proximate cause of

any damage to Meecorp. See Vandeputte, 216 N.W.2d at 146 (noting that, in fraud

claims, the false representation must be the proximate cause ofthe injury). Oliver and

PSC Funding allege that Meecorp’s losses instead resulted from Meecorp’s flawed

independent evaluation. Whether the evidence establishes proximate cause is a

question of fact, Barr/Nelson, Inc. v. Tonto’s, Inc., 336 N.W.2d 46, 51 (Minn. 1983),

and we review the district court’s finding for clear error, Darst-Webbe Tenant Ass’n

Bd., 339 F.3d at 710-11.

In Specialized Tours, Inc. v. Hagen, 392 N.W.2d 520 (Minn. 1986), the

Minnesota Supreme Court explained the proximate-cause relationship required

between fraudulent conduct and damages in fraud cases: “In general . . . courts have

restricted recovery to those losses which might be expected to follow from the fraud

and from events that are reasonably foreseeable.” Id. at 537-38 (quoting W. Keeton,

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et al., Prosser and Keeton on the Law of Torts § 110, at 767 (5th ed. 1984)). Here,

the district court did not clearly err in finding that Oliver’s and PSC Funding’s

misrepresentations proximately caused Meecorp’s damages. First, the evidence

showed that Meecorp suffered a loss—the inability to realize on the pledged

collateral following the loan default. Second, the evidence revealed that thisloss was

the type of injury that would be expected to follow from Oliver’s and PSC Funding’s

misrepresentations regarding their ability to pledge an equity interest in the propertyowning entities. There is no dispute that Meecorp initially refused to make the loan

due to insufficient collateral. Only after Meecorp received the pledges from Oliver

and Gandolf—pledges the defendants led it to believe constituted an enforceable

pledge of 100% ofthe membership interestsin entitiesthat owned the properties—did

it feel “safe” and agree to provide funds for the north-shore project. Oliver and PSC

Funding never revealed that limited partnerships actually owned the properties

incorporated as collateral and up to 99.99% of the financial rights therein, nor did

they disclose the restrictions that prevented Gandolf from pledging even its limited

equity interests. As a result, Meecorp made the loan, and, following the defendants’

default, Meecorp could not realize on the collateral. In light of these facts, the injury

was foreseeable, and Meecorp’s independent evaluation, which relied upon Oliver

and PSC Funding’s misrepresentations, did not sever the causal chain. The district

court thus did not commit clear error in finding the facts sufficient to establish

proximate cause.

E.

Finally, Oliver and PSC Funding argue that Meecorp did not produce any

evidence of fraud damages and that the district court erred when it found that

Meecorp proved this element of its fraud claim. We review for clear error. Vilett v.

Moler, 84 N.W. 452, 453-54 (Minn. 1900) (noting that the amount of damages

sustained by a plaintiff as a result of the fraud is a question of fact). See also DarstWebbe Tenant Ass’n Bd., 339 F.3d at 710-11 (stating that issues of fact are reviewed

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for clear error). Contrary to Oliver and PSC Funding’s assertion, the evidence

established that: (1) Meecorp gave Oliver and PSC Funding’s single-asset entity a

loan for $1.32 million, (2) the defendants defaulted, and (3) Meecorp was unable to

realize on the pledged collateral due to the defendants’ misrepresentations as to

ownership and ability to pledge equity interest in the property-owning entities. Under

Minnesota law, this evidence is sufficient to establish fraud damages. See

Commercial Prop. Invs., Inc. v. Quality Inns Int’l, Inc., 61 F.3d 639, 647 (8th Cir.

1995) (collecting casesshowing that Minnesota usesthe “out-of-pocket” lossrule for

damage compensation in cases of fraud). The district court thus did not commit clear

error in finding that Meecorp proved the damages element of its fraud claim.

III.

For the foregoing reasons, we affirm the judgment of the district court.

______________________________

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