This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2014).

STATE OF MINNESOTA

IN COURT OF APPEALS

A15-1724

Reichel Investments, L.P., 

Appellant, 

vs. 

Craig A. Reichel, 

Respondent.

Filed July 18, 2016

Affirmed

Jesson, Judge

Olmsted County District Court

File No. 55-CV-13-3406

Michael Mahoney, Mahoney Lefky LLC, Wayzata, Minnesota (for appellant)

James A. Godwin, Jon S. Swierzewski, Larkin Hoffman Daly & Lindgren, Ltd., 

Minneapolis, Minnesota (for respondent)

Considered and decided by Reilly, Presiding Judge; Halbrooks, Judge; and Jesson, 

Judge. 

U N P U B L I S H E D O P I N I O N

JESSON, Judge

Appellant Reichel Investments L.P. argues that the district court erred by granting 

summary judgment dismissing its claims against respondent Craig Reichel based on 

allegations surrounding its purported investment in Coyote Creek LLC, a company 

controlled by Craig. Because the district court did not err by concluding that principles 
2

of collateral estoppel barred appellant from relitigating its claims that are based on 

ownership of Coyote and because no genuine issue of material fact exists on appellant’s 

claim of unjust enrichment, we affirm. 

FACTS

Bryan Reichel and respondent Craig Reichel are brothers. Bryan is the principal 

of Reichel Investments LLC (Investments), an investment company formed in 2002. In 

2005, Craig formed Coyote Creek LLC (Coyote), a Rochester outdoor sporting-goods 

store of which he is president.1 

In 2007, the brothers agreed that Investments would place funds in Coyote. They 

dispute whether those funds were meant to purchase an ownership interest or to reflect 

repayment of a loan that Craig previously made to Bryan. It is not disputed, however, 

that Investments placed $186,000 in Coyote. The record contains copies of checks from 

Investments totaling $178,500, which were made out to Coyote in 2007 and 2008. Bryan 

later alleged that two of those checks, for $25,000 each, were not deposited in Coyote’s 

account and that Craig may have kept those funds for himself. 

In 2011, Bryan filed for personal bankruptcy under Chapter 7 of the United States 

Bankruptcy Code. In his bankruptcy, he listed a receivable due from Coyote, based on a 

$180,000 receivable held by Investments, of which Bryan was a partner through his 

living trust. 

 

1 For ease of reference, the brothers will be referred to by their first names. Craig was 

also president of Bullets & Broadheads LLC and Herdbull Holdings LLC, real estate 

holding companies that were originally defendants in this action but were dismissed with 

prejudice by stipulation. 
3

In March 2013, Investments filed a complaint in Olmsted County District Court, 

alleging that Craig had represented to Bryan that he could purchase 40% of Coyote; that 

Bryan or Investments had invested in Coyote; that Bryan had guaranteed a bank loan 

made to Coyote; and that Craig had promised, but failed to pay, a return of 6%. It also 

asserted that Craig, as sole owner and manager of Coyote, breached fiduciary duties of 

loyalty, good faith and fair dealing, and full disclosure, and made negligent 

misrepresentations surrounding an investment in Coyote. It sought equitable relief under 

the Minnesota Limited Liability Company Act, Minn. Stat. §§ 332B.01 to 322B.975 

(2014) and asserted usurpation of corporate opportunity. Finally, it alleged breach of 

contract or, in the alternative, a claim for unjust enrichment. 

In December 2013, Coyote filed for Chapter 11 bankruptcy, and the state-court 

action was stayed. Investments initially filed a claim in Coyote’s bankruptcy based on 

ownership rights to Coyote, with an addendum noting that it had filed the state-court 

action and referring to the complaint in that action.2 But it then moved to withdraw its 

claim. The bankruptcy judge ordered withdrawal of the claim with prejudice, stating 

“[t]he court is going to grant the motion to withdraw the claims and they are withdrawn 

with prejudice so that they can’t be re-filed.” That determination was not appealed.

In January 2015, the bankruptcy court confirmed Coyote’s reorganization plan. 

The confirmed plan provided that “Craig Reichel will continue to be the president of the 

Debtor, and its sole shareholder and the sole member of the Debtor’s Board of 

 

2 This claim contradicted Bryan’s assertion in his personal bankruptcy that the funds 

provided to Coyote constituted a loan. 
4

Governors.” It also provided that discharge under the plan “shall constitute a complete 

waiver, discharge, release and satisfaction of all claims of all creditors and interest 

holders against the Debtor, to the full extent allowed under bankruptcy law.” 

Investments objected to the plan, arguing that the bankruptcy court’s determination may 

have collateral effect on their proceeding in state court, but the district court overruled the 

objection. 

Craig then moved to dismiss this state-court action, arguing that all of 

Investments’ claims depended on its status as an owner of Coyote, and the bankruptcy 

court had issued a final decree as to ownership of that entity. Investments, however, 

argued that its claims related to Craig, not Coyote, and the confirmation plan in 

bankruptcy was not binding as to Craig personally because he was not a party to that 

proceeding. In February 2015, the parties stipulated to dismissal of all of the state-court 

claims against Coyote. The claims alleged against Craig personally, however, were not 

dismissed. 

In August 2015 the district court granted summary judgment in favor of Craig. 

The district court concluded that confirmation of the bankruptcy plan barred Investments’ 

further effort to collect from Coyote and that the elements of res judicata and collateral 

estoppel were met, so that Investments’ action against Craig was precluded. The district 

court noted that “[e]very claim [in the complaint] requires a finding that defendant had an 

ownership interest in Coyote Creek, LLC. Without this, Defendant owes no duty to 

Plaintiff.” This appeal follows. 
5

D E C I S I O N 

The doctrines of res judicata and collateral estoppel, which are related, are 

doctrines of finality, which require that there be an end to litigation. Hauschildt v. 

Beckingham, 686 N.W.2d 829, 840 (Minn. 2004); Hauser v. Mealey, 263 N.W.2d 803, 

806-07 (Minn. 1978). After adjudication of a dispute, res judicata, or claim preclusion, 

prevents either party from relitigating claims arising from the original circumstances, 

while collateral estoppel, or issue preclusion, prevents relitigation of “specific legal 

issues that have been adjudicated.” Hauschildt, 686 N.W.2d at 837.3 

This court reviews de novo whether principles of res judicata or collateral estoppel 

apply to preclude litigation. Care Inst., Inc.-Roseville v. Cty. of Ramsey, 612 N.W.2d 

443, 446 (Minn. 2000). Here the district court concluded that the bankruptcy court’s 

determination, through the plan-confirmation process, that Craig is the “sole shareholder 

and the sole member of [Coyote’s] Board of Governors” was dispositive of each of the 

claims in Investments’ complaint, so that further litigation of these claims was precluded. 

In our review, we first examine each cause of action asserted in Investments’ complaint 

to determine whether Craig’s sole ownership would be dispositive of the claim. We then 

examine the four prongs of collateral estoppel to determine whether that doctrine applies 

 

3 Although Craig originally sought dismissal of Investments’ complaint under Minn. R. 

Civ. P. 12.02(e), the parties submitted affidavits to the district court, and the district court 

properly treated the motion as one for summary judgment. Minn. R. Civ. P. 12.02; N. 

States Power Co. v. Minn. Metro. Council, 684 N.W.2d 485, 490 (Minn. 2004). We 

review a district court’s summary-judgment order de novo to determine whether there are 

genuine issues of fact that preclude summary judgment and whether the district court 

properly applied the law. Riverview Muir Doran, LLC v. JADT Dev. Grp., LLC, 790 

N.W.2d 167, 170 (Minn. 2010). 
6

to preclude relitigation of the specific issue of ownership. Finally, we address whether 

Investments’ unjust-enrichment claim, which is not premised on an ownership interest by 

Investments, is precluded by confirmation of Coyote’s bankruptcy reorganization.

I

With certain exceptions not applicable here, the discharge in a Chapter-11 

proceeding “operates as an injunction against the commencement or continuation of an 

action, the employment of process, or an act, to collect recover or offset any such debt as 

a personal liability of the debtor, whether or not discharge of such debt is waived.” 11 

U.S.C. § 524(a)(2) (2012). And the bankruptcy court’s confirmation of a plan binds any 

creditor, equity security holder, or general partner in the debtor, whether or not the 

creditor’s claim is impaired under the plan and whether or not the creditor has accepted 

the plan. 11 U.S.C. § 1141(a) (2012). The parties agreed to dismiss Investments’ statecourt claims against the debtor, Coyote; these claims were precluded by operation of 

Coyote’s bankruptcy. 

Investments maintains, however, that because Craig is not the named debtor in 

Coyote’s bankruptcy, discharge of Coyote’s debts is not dispositive of any personal 

liability Craig may have with respect to claims asserted by Investments. See 11 U.S.C. 

§ 524(e) (2012) (providing that generally, “discharge of a debt of the debtor does not 

affect the liability of any other entity on, or the property of any other entity for, such 

debt”). And Investments argues that at least some of its claims do not depend on 

ownership in Coyote, so that the district court erred in granting summary judgment on 
7

these claims. To address this argument, we examine the claims asserted in Investments’ 

complaint. 

Derivative claims 

Investments’ complaint asserted, among other allegations, that Craig breached 

duties of loyalty, good faith and fair dealing, and full disclosure, and participated in 

usurpation of corporate opportunities. Craig asserts that these are derivative claims, 

which are not available to Investments without a showing that Investments had an 

ownership interest in Coyote. A derivative claim is asserted in “an action brought by one 

or more shareholders or members” of a corporation to enforce a right of the corporation. 

Minn. R. Civ. P. 23.09. It must be brought on behalf of the corporation and cannot be 

brought unless the corporation has failed to bring an action to enforce its rights. Id. 

“Derivative suits allow shareholders to bring suit against wrongdoers on behalf of the 

corporation, and force liable parties to compensate the corporation for injuries so 

caused.” Janssen v. Best & Flanagan, 662 N.W.2d 876, 882 (Minn. 2003). Thus, an 

action for diversion of corporate funds lies with the corporation, not an individual. 

Westgor v. Grimm, 318 N.W.2d 56, 58 (Minn. 1982). Similarly, a cause of action for 

breach of fiduciary duty alleging that a director or controlling shareholder acted against 

the interests of the corporation is asserted by a shareholder on behalf of the corporation. 

Id. at 58-59. 

Investments’ claims of breach of duties of loyalty, good faith and fair dealing, full 

disclosure, and usurpation of corporate opportunity, are derivative claims. See id. 

Therefore, Investments lacks standing to assert those claims if it cannot show that it had 
8

an ownership interest in Coyote. See, e.g., PJ Acquisition Corp. v. Skoglund, 453 

N.W.2d 1, 7 (Minn. 1990) (holding that a plaintiff lacked standing to pursue claim for 

dissipation of corporate assets by directors and officers when claim occurred prior to 

when plaintiff became a shareholder). 

Section 322B violations and breach of contract 

Investments’ complaint alleged that Craig, in his capacity as manager or governor 

of Coyote, “ha[s] acted fraudulently or illegally toward one or more members in their 

capacities as members or managers or as officers or employees of the Company, 

including the Plaintiff.” The complaint also asserted that the “controlling documents, 

including the Articles of Formation and company agreements, constitute enforceable 

contracts between the parties,” which “required Craig . . . to act in good faith, to maintain 

[his] duty of loyalty to [Coyote] and its members” and “to obtain minority interests 

approval for any major decisions.” (Emphasis added.) Investments argues that these 

claims are not “tort duty theory” claims, so that the district court’s statement that Craig 

“owes no duty to” Investments does not properly dispose of them. We conclude, 

however, that in order to succeed on these claims, Investments must show that it had an 

ownership interest in Coyote. 

Managers of limited liability companies (LLCs) must perform their duties in good 

faith, in a manner they reasonably believe to be in the best interests of the company, and 

with reasonable care. Minn. Stat. § 322B.69; see also Hurwitz v. Padden, 581 N.W.2d 

359, 361-62 (Minn. App. 1998) (noting fiduciary duties of partners and stating that 

principles from partnership law may apply in addressing issues with respect to LLCs), 
9

review denied (Minn. Aug. 31, 1998). But these duties of care are owed by the manager 

of the LLC to its owners. See Minn. Stat. § 322B.03, subd. 35 (defining an owner of an 

LLC as a member of the LLC); id., subd. 30 (defining a “member” of an LLC as “a 

person reflected in the required records of a limited liability company as the owner of 

some governance rights of a membership interest of the limited liability company”). 

Therefore, without an ownership interest in Coyote, Investments may not establish a 

violation of chapter 322B based on Craig’s asserted actions. 

As to breach of contract, to establish contractual rights to enforce a duty owed to 

owners of the LLC, Investments would be required to show that it was an owner or a 

party to a contract establishing or governing the LLC. As the allegations in the complaint 

acknowledge, this would require a showing of membership or a minority interest in 

Coyote. A third party who is not an intended beneficiary under a contract is a mere 

incidental beneficiary and has no right to enforce the contract. Caldas v. Affordable 

Granite & Stone, Inc., 820 N.W.2d 826, 833 (Minn. 2012). Thus, this claim depends on 

ownership of Coyote as well. 

Negligent misrepresentation

In its complaint, Investments alleged that, to guide its business transactions, Craig 

negligently misrepresented Coyote’s net worth, financial stability, and a certain rate of 

return on investment, and that Craig failed to furnish financial information or record a 

membership interest in Coyote. To establish a claim for negligent misrepresentation, a 

plaintiff must show: (1) that the defendant owes the plaintiff a duty of care; (2) that 

defendant supplied false information to the plaintiff; (3) that the plaintiff justifiably relied 
10

on that information; and (4) that the defendant failed to exercise reasonable care in 

communicating the information. Williams v. Smith, 820 N.W.2d 807, 815 (Minn. 2012). 

The Minnesota Supreme Court has noted that, generally, the first required element, 

a duty of care, exists in certain professional and fiduciary relationships, or “certain 

special legal relationships in which one party has superior knowledge or expertise.” Id. at 

816. But here, without evidence that Investments was an owner of Coyote or that Craig 

was acting in a professional or fiduciary relationship with respect to advising Bryan or 

Investments, a duty of care would not arise regarding any advice Craig may have given in 

connection with Investments’ placing funds in Coyote. 

Unjust enrichment 

Investments also argues that the district court erred in dismissing its claim against 

Craig for unjust enrichment, “based on the allegation that . . . Investments did not become 

an owner and did not get what was promised from Craig.” Unjust enrichment is an 

equitable doctrine. Caldas, 820 N.W.2d at 838. “[T]o establish a claim for unjust 

enrichment, the claimant must show that another party knowingly received something of 

value to which he was not entitled, and that the circumstances are such that it would be 

unjust for that person to retain the benefit.” Schumacher v. Schumacher, 627 N.W.2d 

725, 729 (Minn. App. 2001). “[U]njust enrichment claims do not lie simply because one 

party benefits from the efforts or obligations of others, but instead it must be shown that a

party was unjustly enriched in the sense that the term ‘unjustly’ could mean illegally or 

unlawfully.” First Nat’l Bank of St. Paul v. Ramier, 311 N.W.2d 502, 504 (Minn. 1981). 

Investments’ claim of unjust enrichment assumes that Craig unjustly retained funds that 
11

should have gone to purchase an ownership interest in Coyote, but did not. Therefore, 

unlike its other claims against Craig, the unjust-enrichment claim does not require that 

Investments have an ownership interest in Coyote.

II

We next review the district court’s conclusion that all of Investments’ claims 

against Craig were barred under principles of collateral estoppel. Collateral estoppel bars 

a subsequent claim when all of the following prongs are met:

(1) the issue [is] identical to one in a prior adjudication; 

(2) there was a final judgment on the merits; (3) the estopped 

party was a party or was in privity with a party to the prior 

adjudication; and (4) the estopped party was given a full and 

fair opportunity to be heard on the adjudicated issue. 

Hauschildt, 686 N.W.2d at 837 (quotation omitted). For collateral estoppel to apply, the 

issue must also have been contested and directly determined in the prior adjudication. Id. 

at 837-38.4 When an issue of fact or law is actually litigated and determined by a valid 

and final judgment, and the determination is essential to the judgment, the determination 

is conclusive in a subsequent action between the parties, whether on the same or a 

different claim. Restatement (Second) of Judgments § 27 (1982). “The normal rules of 

 

4 The Eighth Circuit Court of Appeals employs the following factors to determine 

whether collateral estoppel applies in a particular case: (1) the party sought to be 

precluded was a party, or in privity with a party, to the prior action; (2) the issue sought 

to be precluded is the same as that involved in the prior action; (3) the issue has been 

actually litigated in the prior action; (4) the issue precluded was determined by a valid 

final judgment in the prior action; and (5) the determination was essential to the prior 

judgment. Sells v. Porter (In re Porter), 539 F.3d 889, 894 (8th Cir. 2008). The 

Minnesota federal bankruptcy court has noted that the standards articulated under 

Minnesota law do “not materially differ from” the standards articulated by the Eighth 

Circuit. PLM Lake & Land Mgmt. Corp. v. Duy (In re Duy), 484 B.R. 742, 747 (Bankr. 

D. Minn. 2012). 
12

res judicata and collateral estoppel apply to the decisions of bankruptcy courts.” Katchen 

v. Landy, 382 U.S. 323, 334, 86 S. Ct. 467, 475 (1966) (emphasis omitted). We therefore 

examine the requirements for the application of collateral estoppel in the context of this 

case. 

Identical issue in prior adjudication

For collateral-estoppel purposes, issues are identical when “the issues presented by 

[the current] litigation are in substance the same as those resolved” in the previous 

litigation. Montana v. United States, 440 U.S. 147, 155, 99 S. Ct. 970, 974 (1979). 

Investments argues that its claims against Craig personally and those in Coyote’s 

bankruptcy proceeding did not involve the same issues because its state-court claims 

involve different facts relating to Craig’s personal conduct that damaged Investments. 

But the facts of the two cases need not be identical, as long as any factual differences 

have no “legal significance” in “resolving the issue presented in both cases.” United 

States v. Stauffer Chem. Co., 464 U.S. 165, 172, 104 S. Ct. 575, 579 (1984). Here, 

although Investments asserts different theories of recovery in its state-law complaint, 

most of those theories require proof of Craig’s ownership of Coyote, which was resolved 

conclusively in Coyote’s bankruptcy. In fact, Investments originally submitted a proof of 

claim in the bankruptcy proceeding that referred to its state-court complaint. The district 

court did not err by concluding that this element of collateral estoppel was met. 

Final judgment on merits 

The district court concluded that this prong of collateral estoppel was satisfied 

because the bankruptcy court issued a final judgment on the merits. Investments argues 
13

that confirmation of Coyote’s bankruptcy plan did not act as a final judgment on the 

merits with respect to its state-court claims against Craig, who was a non-debtor and not 

subject to bankruptcy court jurisdiction. But for collateral estoppel to apply here, there 

need only be a final judgment on the merits in the bankruptcy matter. And when

Investments withdrew its claim in the bankruptcy proceeding, the bankruptcy court 

treated the withdrawal as a voluntary dismissal with prejudice of any unasserted claims 

against Coyote. “The phrase ‘final judgment on the merits’ is often used interchangeably 

with ‘dismissal with prejudice.’” Decker v. Washington Mut. Bank (In re Decker), 357 

B.R. 825, 832 (Bankr. D. Mont. 2007). 

Same parties or privies

Investments argues that this element of collateral estoppel was not satisfied because 

Craig and Coyote were not in privity with each other. Privity recognizes “that a judgment 

should also determine the interests of certain non-parties closely connected with the 

litigation.” Reil v. Benjamin, 584 N.W.2d 442, 445 (Minn. App. 1998), review denied 

(Minn. Nov. 17, 1998). Courts will find privity as to “those who control an action 

although not parties to it[,]” “those whose interests are represented by a party to the 

action[,]” and “successors in interest to those having derivative claims.” Margo-Kraft 

Distribs., Inc. v. Minneapolis Gas Co., 294 Minn. 274, 278, 200 N.W.2d 45, 47-48 (1972) 

(quotation omitted). It may also be found when a person is “so identified in interest with 

another that he represents the same legal right.” McMenomy v. Ryden, 276 Minn. 55, 58-

59, 148 N.W.2d 804, 807 (1967) (quotation omitted). A court determines whether parties 
14

are in privity by carefully examining the circumstances of each case. Rucker v. Schmidt, 

794 N.W.2d 114, 118 (Minn. 2011). 

It is undisputed that Craig had full control over Coyote, and, as Craig points out, 

the bankruptcy court extended the automatic stay in bankruptcy to claims against Craig 

personally. See Miller v. Nw. Nat’l Ins. Co., 354 N.W.2d 58, 62 (Minn. App. 1984) 

(stating that a person who has full control over a corporation is presumed to be in privity 

with the corporation). The more salient inquiry for collateral-estoppel purposes is whether 

Investments was a party or in privity in the bankruptcy proceeding. We conclude that it 

was, under the circumstances of this case. Investments had notice of the bankruptcy case, 

which determined ownership of Coyote, and originally filed a claim in that matter. The 

district court appropriately concluded that the element of privity was satisfied. 

Full and fair opportunity to litigate 

The district court concluded that Investments had a full and fair opportunity to 

litigate its claims in bankruptcy court. 

[W]hether a party had a full and fair opportunity to litigate a 

matter generally focuses on whether there were significant 

procedural limitations in the prior proceeding, whether the 

party had the incentive to litigate fully the issue, or whether 

effective litigation was limited by the nature or relationship of 

the parties. 

State v. Joseph, 636 N.W.2d 322, 328 (Minn. 2001) (quotation omitted). Here, 

Investments, which filed a claim in Coyote’s bankruptcy but later withdrew that claim, 

cannot now assert that it lacked a full and fair opportunity to litigate any issues that 

depended on ownership of Coyote. 
15

Investments argues that it was entitled to have its state-court claims heard before a 

jury, based on Stern v. Marshall, 564 U.S. 462, 131 S. Ct. 2594 (2011). In Stern, the 

United States Supreme Court held that a bankruptcy court “lack[s] the constitutional 

authority to enter a final judgment on a state law counterclaim that is not resolved in the 

process of ruling on a creditor’s proof of claim.” Id. at 503, 131 S. Ct. at 2620. But Stern 

involved the debtor’s counterclaim for tortious interference with a gift of inheritance, 

which was asserted in response to a creditor’s bankruptcy claim alleging defamation by 

the debtor. Id. at 470, 131 S. Ct. at 2601. Here, no counterclaims were made by the 

debtor in response to matters unrelated to Coyote’s bankruptcy. Rather, apart from its 

unjust-enrichment claim, Investments’ claims relate to the purported ownership of 

Coyote’s assets and were properly asserted as claims against Coyote’s bankruptcy estate. 

See, e.g., In re Woods, 517 B.R. 106, 113 (Bankr. N.D. Ill. 2014) (concluding that Stern 

did not deprive the bankruptcy court of jurisdiction to determine a state-law counterclaim 

when it was not asserted by the debtor, but involved a claim against the bankruptcy 

estate). Therefore, we reject Investments’ argument that, based on Stern, it lacked a full 

and fair opportunity to litigate those claims.

Contested and directly determined 

Investments does not contest this element of collateral estoppel. We note that 

when the bankruptcy court deemed Investments’ claim to be withdrawn with prejudice, 

this determination was considered a final judgment on the merits, similar to a default 

judgment. See Decker, 357 B.R. at 832. In general, “the principle of collateral estoppel 

does not apply to unlitigated issues underlying default or consent judgments, . . . unless it 
16

can be said that the parties could reasonably have foreseen the conclusive effect of their 

actions.” Klingman v. Levinson, 831 F.2d 1292, 1296 (7th Cir. 1987) (emphasis omitted) 

(quotation omitted). But the exception to the general rule has been applied when the 

party had a full and fair opportunity to defend against allegations, such as fraud, in the 

bankruptcy proceeding and chose not to do so, Jones v. Wilson (In re Wilson), 72 B.R. 

956, 959 (Bankr. M.D. Fla. 1987), or substantially participated in the litigation. Int’l 

Strategies Grp., Ltd. v. Pomeroy (In re Pomeroy), 353 B.R. 371, 377 (Bankr. D. Mass. 

2006). Here, Investments had ample opportunity to participate in the bankruptcy 

proceeding and did so, filing a claim and contesting confirmation of the bankruptcy plan, 

before it ultimately decided to withdraw its claim. Therefore, this element was met. 

We conclude that the district court did not err by concluding that collateral 

estoppel precluded litigation of all of Investments’ claims that depend on its ownership of 

Coyote.5

III

Investments also alleged in its complaint that Craig was unjustly enriched by 

retaining the funds. As discussed above, unlike Investments’ other claims, this claim 

does not depend on ownership of Coyote. We therefore address separately whether the 

district court erred by granting summary judgment in favor of Craig on the unjustenrichment claim. 

 

5 Because we conclude that all collateral-estoppel prongs were met with respect to 

Investments’ state-law claims that depend on ownership of Coyote, we do not address the 

district court’s alternative ruling that those claims were precluded by res judicata.
17

The first requirement of a claim for unjust enrichment is that the plaintiff must 

confer a benefit on the defendant. Caldas, 820 N.W.2d at 838. Here, Investments 

conferred a benefit on Coyote. Each of the checks provided by Investments and Bryan 

was made out to Coyote, not to Craig. And the parties agreed to dismiss all claims 

against Coyote in this action. 

If Investments believed that it was entitled to some of Coyote’s assets, it had the 

opportunity to make that claim in Coyote’s bankruptcy proceeding. But when it 

withdrew its claim in that proceeding, that claim was voluntarily dismissed with 

prejudice. If Investments believes, as it argues here, that Craig misappropriated funds 

that belonged to Coyote, it should have brought that claim in the bankruptcy proceeding. 

It did not. When a reorganization plan is confirmed, “the property dealt with by the plan 

is free and clear of all claims and interests of creditors, equity security holders, and of 

general partners in the debtor.” 11 U.S.C. § 1141 (c) (2012). The funds contributed by 

Investments were “property dealt with by the [bankruptcy] plan,” id., the bankruptcy 

court rejected Investments’ challenge to the plan, and the discharge in Coyote’s Chapter11 proceeding precludes a subsequent unjust enrichment claim based on those funds. We 

conclude that the district court did not err by granting summary judgment on the unjustenrichment claim.

Finally, Investments argues that the stipulation signed by the parties, agreeing that 

the claims against the other companies would be dismissed, but not the claims against 

Craig personally, operated as a binding agreement that Craig would not move to dismiss 
18

the claims against him. But because we affirm the district court’s summary judgment, 

this issue is now moot. 

Affirmed.