IN THE SUPREME COURT

STATE OF NORTH DAKOTA

2021 ND 88

Thomas M. Kruger and North Dakota

Safety Professionals, LLC, Plaintiffs and Appellees

v.

Sally V. Goossen, Defendant and Appellant

No. 20200287

Appeal from the District Court of Mountrail County, North Central Judicial 

District, the Honorable Douglas L. Mattson, Judge.

AFFIRMED.

Opinion of the Court by Tufte, Justice.

Jonathan P. Sanstead, Bismarck, N.D., for plaintiffs and appellees.

Kent A. Reierson (argued) and Lisa M. Six (on brief), Williston, N.D., for 

defendant and appellant.

FILED 

IN THE OFFICE OF THE 

CLERK OF SUPREME COURT 

MAY 20, 2021 

STATE OF NORTH DAKOTA
1

Kruger v. Goossen

No. 20200287

Tufte, Justice.

[¶1] Sally Goossen appeals from a judgment determining Thomas Kruger’s 

and Goossen’s ownership interests in North Dakota Safety Professionals, LLC 

(“NDSP”). Goossen argues the district court erred in finding that she owns 45 

percent of NDSP and that certain expenses were business expenses for NDSP

and were not draws Kruger made from NDSP’s account for his personal benefit. 

We affirm, concluding the district court’s findings are not clearly erroneous.

I

[¶2] Kruger and Goossen own NDSP. In 2017, Kruger and NDSP sued 

Goossen, requesting that the district court order dissolution of NDSP and

seeking damages for conversion. Kruger alleged he owns a 55 percent interest 

in NDSP and is the President of the company, Goossen owns 45 percent of 

NDSP and is the Vice-President of the company, Goossen improperly converted 

over $200,000 from NDSP’s checking account, and it was no longer practical to 

carry on the activities of NDSP because of Goossen’s actions. Goossen 

counterclaimed and requested the court dissolve NDSP and order distribution 

of NDSP’s assets based upon the parties’ contributions to NDSP and the 

amount of the parties’ prior draws on NDSP’s checking account. Goossen 

alleged she has a 50 percent interest in NDSP, she is entitled to draw from 

NDSP’s account, and the checks written for her personal benefit were properly 

allocated to her draw account.

[¶3] The parties stipulated to certain facts and issues for the district court to 

decide at trial. The parties agreed there were three main issues for the court 

to decide:

ISSUE ONE: Determine the ownership percentage by each of the 

two parties as partners in North Dakota Safety Professionals, 

LLC.

ISSUE TWO: Determine the equality of the draws from the entity 

by the parties and, if unequal, determine if there is any sum owed 

by one of the two partners to the other.
2

ISSUE THREE: Determine the date of valuation and the value of 

[listed] assets . . . .

[¶4] After a bench trial, the district court found NDSP was dissolved on 

December 31, 2016, Kruger has a 55 percent ownership interest in NDSP, and 

Goossen has a 45 percent ownership interest. The court made findings about 

whether certain draws from NDSP’s account were for personal expenses and

the benefit of the individual parties, determined the total amount of each 

party’s draws from NDSP’s account, and ordered Goossen to pay Kruger 

$128,754.14 to equalize the parties’ draws. Judgment was entered.

II

[¶5] In an appeal from a bench trial, the district court’s findings of fact are 

reviewed under the clearly erroneous standard of review and its conclusions of 

law are fully reviewable. Titan Machinery, Inc. v. Renewable Res., LLC, 2020 

ND 225, ¶ 7, 950 N.W.2d 149. A finding of fact is clearly erroneous if it is 

induced by an erroneous view of the law, if there is no evidence to support it, 

or if, after reviewing all of the evidence, this Court is left with a definite and 

firm conviction a mistake has been made. Id.

[¶6] “In a bench trial, the district court is the determiner of credibility issues 

and we will not second-guess the district court on its credibility 

determinations.” Titan Machinery, 2020 ND 225, ¶ 7 (quoting Gimbel v. 

Magrum, 2020 ND 181, ¶ 5, 947 N.W.2d 891). The district court’s findings are 

presumptively correct. Titan Machinery, at ¶ 7. “We do not reweigh evidence 

or reassess credibility, nor do we reexamine findings of fact made upon 

conflicting testimony. We give due regard to the trial court’s opportunity to 

assess the credibility of the witnesses, and the court’s choice between two 

permissible views of the evidence is not clearly erroneous.” B.J. Kadrmas, Inc. 

v. Oxbow Energy, LLC, 2007 ND 12, ¶ 7, 727 N.W.2d 270 (quoting Buri v. 

Ramsey, 2005 ND 65, ¶ 10, 693 N.W.2d 619).

III

[¶7] Goossen argues the district court erred by finding she owns 45 percent 

of NDSP and by requiring distribution from NDSP to be made on a 55-45 basis. 
3

She claims the court erred by requiring a specific document conveying or 

transferring an additional five percent interest to her to establish she owns 50 

percent of NDSP. She contends the evidence, including tax documents and 

testimony from both parties, established the parties agreed and intended that 

she would have 50 percent ownership of NDSP. She also argues Kruger is 

estopped from claiming the income allocation was anything but 50-50.

[¶8] “A contract is either express or implied. An express contract is one the 

terms of which are stated in words. An implied contract is one the existence 

and terms of which are manifested by conduct.” N.D.C.C. § 9-06-01. But for 

either type of contract to be enforceable, there must be a mutual intent to 

create a legal obligation. Kadrmas, 2007 ND 12, ¶ 11. The parties’ mutual 

assent is determined by their objective manifestations and not their secret 

intentions. Id. The parties’ conduct and the surrounding circumstances are 

relevant in deciding whether the parties intended to form a binding legal 

agreement. Kadrmas, at ¶ 14.

[¶9] Whether a contract exists is a question of fact. Kadrmas, 2007 ND 12,

¶ 7. “The trier of fact determines whether a contract is intended to be a 

complete, final, and binding agreement.” Id. (quoting Lonesome Dove 

Petroleum, Inc. v. Nelson, 2000 ND 104, ¶ 15, 611 N.W.2d 154).

[¶10] The district court considered the parties’ arguments, testimony 

presented at trial, and documentary evidence and found Goossen owns 45 

percent of NDSP. The court found documentary evidence established Goossen 

was initially given a 45 percent interest in NDSP on August 13, 2013, and there 

were no documents transferring an additional five percent interest from 

Kruger to Goossen. The court found the 2013 tax statement was the first time 

there was a purported 50-50 ownership, and NDSP’s tax accountant, Richard 

Diehl, testified the 2013 tax documents were prepared by another accounting 

agency and he relied on the 2013 tax forms for the ownership percentage in 

subsequent years. The court considered the Virginia Supreme Court’s decision 

in Knop v. Knop, 830 S.E.2d 723 (Va. 2019), in the context of using tax returns 

to determine whether an ownership interest was transferred, and rejected 
4

Goossen’s argument that the tax returns supported her claim that she owns 50 

percent of NDSP, stating:

[W]hile the government taxing certain property may cause the 

government to eventually acquire the property for unpaid taxes, 

this Court is unaware of how a private individual claiming to own 

a certain property interest on their tax returns can cause one—at 

some time—to legally acquire the property—in this case a 5% 

membership interest of NDSP, LLC after August 13, 2013.

The court found Goossen owns 45 percent of NDSP and Kruger owns 55 

percent, explaining:

Based on the testimony and exhibits received during trial, 

this Court finds Kruger’s testimony credible that he never 

transferred or relinquished control of any membership interest to 

Goossen after August 13, 2013. So this Court finds there is 

sufficient credible evidence showing Kruger has a 55% ownership 

interest of NDSP, LLC, while Goossen has a 45% ownership 

interest. This conclusion relies upon the above discussion, 

including—but not limited to—Diehl’s testimony of his reliance on 

the 2013 tax return prepared by Whitewater Tax & Consulting 

which erroneously set forth the 50 – 50 ownership format and that 

both parties acknowledged there were no NDSP, LLC minutes or 

documents which show a post August 13, 2013 transfer of 5% 

membership interest to Goossen.

[¶11] A document was admitted into evidence entitled “Written Action in Lieu 

of Initial Meeting of Members and Governors of North Dakota Safety 

Professionals, L.L.C.,” signed by Kruger and Goossen and dated August 13, 

2013, showing Goossen had a 45 percent interest in NDSP and Kruger had a

55 percent interest. The language of that document is not ambiguous. But 

there was conflicting evidence about whether the parties agreed to transfer an

additional five percent to Goossen.

[¶12] Kruger testified that he was the sole owner of NDSP when it was created 

in 2012 and that Goossen was an employee until she was added as an owner 

on August 13, 2013. He testified he owns 55 percent of the company because 

he was the person primarily responsible for establishing the company, Goossen 
5

did not contribute any capital or purchase any interest in the company, he 

never sold Goossen any of his interest in the company, there was no other 

written action of NDSP that created a different ownership interest, and the 

parties’ ownership percentages never changed after August 13, 2013.

[¶13] Goossen testified the August 2013 document showed she owned 45 

percent of NDSP, but she did not read the document showing her interest and

she assumed she was receiving 50 percent. She testified, “[I]f I would have 

realized it said 45/55 I probably would have disputed it at that time. I didn’t 

read through it. I assumed it was 50/50 because that’s what we were looking 

at as far as taxes and everything else.” She testified it was her understanding

that she was getting 50 percent and the K-1s showed a 50 percent interest. She 

testified she had a discussion with Kruger about her interest sometime after 

she signed the August 13, 2013 document, they discussed equal ownership, and 

they did not think they needed to redo the document showing a 45 percent 

interest because that document was only good for one year. She testified their 

discussion occurred after August 2013 and before the end of 2013.

[¶14] Documents related to NDSP’s tax returns, including the schedule K-1,

state each party owns 50 percent of NDSP, starting with the 2013 tax year. 

Diehl testified he did NDSP’s tax returns for 2014-2016 and he sent both 

parties a K-1 each year. Diehl testified that when he first started doing NDSP’s 

tax returns, he thought the parties each owned 50 percent of the company 

owing to information from the prior accountant, he just followed that each year 

after, and he sent the parties the K-1s. In a March 23, 2015 email, from Kruger 

to Diehl, Kruger said he was overdrawn from NDSP, asked what would be the 

best way to even things up for fiscal year 2014, and stated, “I believe the K-1 

shows equal shares are to be distributed.” Kruger testified about the email and 

whether he recognized that Goossen was to get equal shares, and he said he 

had been informed at that time that was what had been done and he did not 

object to her receiving 50 percent of the income, but he did not realize that the 

K-1 showed the parties’ ownership interest.

[¶15] Goossen argues the district court erred by relying on Knop, 830 S.E.2d 

723, as the sole support for its decision that ownership of NDSP was not 50-50. 
6

She contends this case is different from Knop and the court erred in concluding 

she claimed the tax documents acted to convey or transfer an interest to her.

[¶16] In Knop, 830 S.E.2d at 724, minority shareholders of a corporation 

brought an action against a majority shareholder to determine what 

percentage of shares each minority shareholder owned, arguing the majority 

shareholder had gifted additional shares to each minority shareholder. The 

court explained there must be a donative intent at the time of the gift and 

actual or constructive delivery divesting the donor of all control over the 

property to complete an inter vivos gift under Virginia law. Id. at 726. The 

minority shareholders argued that statements on various tax documents 

reflecting the minority shareholders’ larger share of ownership constituted 

constructive delivery of certificated shares of stock. Id. at 728. The court held

there was a donative intent to gift shares, but statements on a tax return 

reflecting the gift of shares did not constitute a relinquishment of control of the 

shares by the donor and therefore did not satisfy the element of delivery, which 

was required under statutory law for gifts of certificated shares of stock. Id. at 

726, 728.

[¶17] The court’s holding in Knop is not particularly relevant to the issues 

before the court in this case, including whether there was an intent and 

agreement to transfer to Goossen an additional five percent interest in NDSP. 

This Court has indicated tax documents may be used as evidence of a change 

in a party’s ownership interest. See Larson v. Midland Hosp. Supply, Inc., 2016 

ND 214, ¶¶ 16, 18, 891 N.W.2d 364. Although there was documentary evidence 

that supported Goossen’s claim that Kruger agreed she would own 50 percent

of NDSP, including the K-1s, there was also testimony explaining that there 

were errors in the documentary evidence and that the tax documents did not 

reflect an intent to transfer an additional five percent interest to Goossen. The 

parties gave conflicting testimony about the existence of an agreement to 

transfer an additional five percent interest in NDSP to Goossen. Furthermore, 

the district court considered all of the evidence presented, including the 

parties’ testimony, and did not rely solely on Knop to determine Goossen’s 

ownership interest.
7

[¶18] The district court was given a choice between two permissible views of 

the evidence. The court determined Kruger’s testimony was credible that he 

never transferred an additional five percent to Goossen. The district court’s 

credibility determinations will not be second-guessed on appeal. In re Estate of 

Finstrom, 2020 ND 227, ¶ 13, 950 N.W.2d 401. Although there is evidence in 

the record on which we could affirm a decision in favor of Goossen, there is also 

evidence in the record capable of supporting the court’s decision. In such a 

situation, our standard of review dictates that we do not substitute our 

judgment for that of the district court or reexamine findings of fact made upon 

conflicting testimony. Evidence supports the court’s finding Goossen failed to 

establish that there was an agreement and that Kruger intended to transfer

an additional five percent ownership to Goossen after the initial transfer in 

August 2013.

[¶19] Goossen also argues the doctrine of equitable estoppel applies and 

prevents Kruger from claiming that Goossen owned only 45 percent of NDSP 

and that distributions should be paid on a basis other than 50-50. After 

examining the record, we were unable to find where Goossen raised this issue 

before the district court. The district court did not make any findings about 

whether Kruger was estopped from claiming Goossen owned less than 50 

percent of NDSP. Issues raised for the first time on appeal will not be 

considered. Fahey v. Fife, 2017 ND 200, ¶ 10, 900 N.W.2d 250.

[¶20] We conclude the district court’s findings about the parties’ ownership 

interests in NDSP are not clearly erroneous.

IV

[¶21] Goossen argues the district court erred in determining $72,450 of the 

expenses labeled “Tom Training Materials,” “Office Supplies WY,” and “WY 

Office Set Up” are chargeable business expenses, which reduced the amount of 

Kruger’s draws. She contends there was no evidence that any specific expenses 

within these categories were legitimate business expenses of NDSP and there 

was only evidence that expenses for Kruger’s Wyoming office were not 

expenses for NDSP.
8

[¶22] The district court considered the parties’ arguments about whether 

certain expenses should be allocated to a specific party’s draw account and 

calculated each party’s total draws from NDSP’s accounts for August 13, 2013,

through December 31, 2016. The court found that $72,450 of the 2014, 2015, 

and 2016 expenses labeled “Tom Training Materials,” “Office Supplies WY,” 

and “WY Office Set Up” are chargeable business expenses and that Kruger’s 

draw account should be reduced by $72,450. After determining the total 

amount of each party’s draws from NDSP’s accounts, the court calculated the 

amount the parties were entitled to draw based on their percentage of 

ownership to determine whether either party should be required to pay the 

other party to equalize the draws. The court found Kruger had $417,343.76 in 

draws and Goossen had $575,561.51 in draws. The court ordered Goossen to 

pay Kruger $128,754.14 to equalize their draws.

[¶23] A list of Kruger’s expenses was admitted into evidence. Kruger testified 

that he moved to Wyoming approximately four years ago, while he was still 

providing services to NDSP. Kruger testified he worked and provided services 

to NDSP from his home office in Wyoming and the expenses categorized as 

“Office Supplies WY” appeared to be mainly expenses for his Wyoming home 

office. He testified the expenses categorized as “Tom Training Materials”

appeared to be expenses for setting up his home and office in Wyoming, and

NDSP was responsible for paying for the training materials he used to conduct 

his classes. He testified “Wyoming Office Set Up” expenses were also for his 

Wyoming home office. He testified that if the expenses were for training 

materials they should be allocated to the business and that if they were 

expensed to the business on the taxes they should have been directed strictly 

to the business.

[¶24] Both Doug Tracy, Kruger’s accountant, and Diehl, NDSP’s accountant, 

testified the expenses listed in these categories were all deducted on NDSP’s 

tax return as NDSP’s business expenses and if they were business expenses 

they should not be included in the total of Kruger’s draws. Evidence 

established Goossen handled NDSP’s bookkeeping, including maintaining 

financial records and inputting data into the accounting software. Diehl

testified that he had NDSP’s profit and loss statement from its accounting 
9

software when he was preparing the company’s taxes and that he would 

discuss the expenses with Goossen. He testified that he is sure he would have 

questioned Goossen about these amounts related to the Wyoming expenses

when he was preparing NDSP’s tax returns and that he would not have 

included these amounts as business expenses unless he talked to her and was 

comfortable they were business expenses. Goossen testified these expenses 

were not for NDSP, there was no training done for NDSP in Wyoming, and she 

did not realize they were included as business expenses on NDSP’s taxes.

[¶25] Evidence in the record supports the district court’s findings that the

expenses in these categories were business expenses included on NDSP’s tax 

returns and should not have been included in Kruger’s draws. The court’s 

finding that $72,450 of the 2014 through 2016 expenses labeled “Tom Training 

Materials,” “Office Supplies WY,” and “WY Office Set Up” are chargeable 

business expenses is not clearly erroneous, and the court did not err by failing 

to include these expenses in the total amount of Kruger’s draws.

V

[¶26] We affirm the judgment.

[¶27] Jon J. Jensen, C.J.

Gerald W. VandeWalle

Daniel J. Crothers

Lisa Fair McEvers

Jerod E. Tufte