This opinion will be unpublished and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

A14-0384

Farmers Insurance Exchange, et al.,

Respondents,

vs.

Erik Hjelle,

Appellant,

The Insurance Shop Services, LLC,

Defendant.

Filed January 26, 2015

Affirmed

Schellhas, Judge

Ramsey County District Court

File No. 62-CV-11-6258

Kelly A. Putney, Bassford Remele, P.A., Minneapolis, Minnesota; and

Melvin D. Weinstein (pro hac vice), Kegler, Brown, Hill & Ritter Co., L.P.A., Columbus, 

Ohio (for respondents)

Diana Longrie, Maplewood, Minnesota (for appellant)

Considered and decided by Schellhas, Presiding Judge; Ross, Judge; and Smith, 

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

SCHELLHAS, Judge

Appellant challenges the district court’s partial summary judgment to respondent 

on the issue of appellant’s liability for breach of contract. We affirm.

FACTS

Appellant Erik Hjelle entered into an agent appointment agreement with 

respondents Farmers Insurance Exchange, Truck Insurance Exchange, Fire Insurance 

Exchange, Mid-Century Insurance Company, Farmers New World Life Insurance 

Company, and Illinois Farmers Insurance Company (respondents) in April 1997. Hjelle 

formed The Insurance Shop Services LLC in 2007 or 2008 and thereafter switched

multiple policyholders of respondents to other insurance carriers. In September 2010, 

Hjelle gave respondents notice of termination of his agent agreement, effective December

2010. Following termination, the agent agreement obligated respondents to pay Hjelle a 

“Contract Value,” calculated to be a total of $85,545.45, payable in at least three 

installments.

In November 2010, through an office assistant, Hjelle used confidential 

policyholder information from respondents’ password-protected computer database—

respondents’ “Agency Dashboard”—to create mailing labels for letters that Hjelle sent to
3

policyholders. One version of the letter was printed on respondents’ letterhead, and a

second, virtually identical version, was printed on The Insurance Shop letterhead.1

Following termination of his agent agreement in December 2010, Hjelle accepted 

business from respondents’ policyholders whom he had serviced as respondents’ agent. 

Respondents warned Hjelle by letter that he had violated the agent agreement and that 

installment payments of his contract value were in jeopardy, pending an investigation of 

his conduct. Although respondents paid Hjelle two contract-value installments in March 

and June 2011, Hjelle continued to accept business from respondents’ policyholders 

whom he had previously serviced as respondents’ agent. Respondents consequently 

withheld Hjelle’s final contract-value installment and commenced suit against Hjelle and 

The Insurance Shop, alleging, among other things, breach of contract and tortious 

interference with prospective and existing business and contractual relations. Hjelle and 

The Insurance Shop answered and counterclaimed for, among other things, bad faith 

litigation, abuse of process, and tortious interference with existing business and 

contractual relations.

The district court granted respondents a temporary injunction to prevent Hjelle and 

The Insurance Shop from continuing to solicit, accept, or service respondents’ 

policyholders of record as of March 2011 and from using respondents’ confidential 

 

1 Hjelle disputes that he sent any letters on respondents’ letterhead, but he admitted 

during his deposition that he did not see the letters before they were mailed and he 

answered questions about a letter that was printed on respondents’ letterhead.
4

information until March 2012.

2

The court subsequently granted respondents’ motion for 

partial summary judgment on the issue of Hjelle’s liability for breaching the agent 

agreement prior to its termination by switching respondents’ policyholders to other 

insurance carriers, by using respondents’ confidential policyholder information to solicit 

business of respondents’ policyholders for other insurance companies, and by “soliciting, 

accepting and/or servicing” respondents’ policyholders following termination of the 

agent agreement. The court also granted respondents summary judgment on Hjelle and 

The Insurance Shop’s counterclaims for “bad faith litigation, abuse of process, and 

tortious interference with contractual relations.” 

Following a trial on the issues of damages for Hjelle’s breach of contract and of 

liability and damages for The Insurance Shop’s tortious interference with contractual 

relations, a jury returned a special verdict, awarding breach-of-contract damages in the 

amount of $324,489 and tortious-interference damages in the amount of $171,872. The 

district court entered judgment on both awards, reducing the breach-of-contract award by 

the amount of the unpaid final contract-value installment of $28,486.81.

Hjelle appeals from the partial summary judgment on liability for breach of

contract.3

 

2 Hjelle and The Insurance Shop appealed the temporary injunction in March 2012. This 

court dismissed the appeal as moot in October 2012, because the injunction already had 

expired.

3

This court dismissed The Insurance Shop from the appeal after respondents challenged 

The Insurance Shop’s status as a party to this appeal because the issues on appeal involve 

only respondents and Hjelle.
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D E C I S I O N

Hjelle argues that the district court erred by granting partial summary judgment to 

respondents because (1) genuine issues of material fact exist regarding whether (a) Hjelle 

switched eligible policyholders of respondents to other carriers and (b) Hjelle’s 

November 2010 letter was a solicitation, and (2) the court erred in its interpretation and 

application of Minn. Stat. § 72A.20.

“Summary judgment is appropriate when the evidence, viewed in the light most 

favorable to the nonmoving party, establishes that no genuine issue of material fact exists 

and that the moving party is entitled to judgment as a matter of law.” Citizens State Bank 

Norwood Young Am. v. Brown, 849 N.W.2d 55, 61 (Minn. 2014); see also Minn. R. Civ. 

P. 56.03. “The moving party has the burden of showing an absence of factual issues 

before summary judgment can be granted.” Anderson v. State, Dep’t of Natural Res., 693 

N.W.2d 181, 191 (Minn. 2005). “[W]hen the moving party makes out a prima facie case, 

the burden of establishing that the facts raise a genuine issue falls to the opposing party.” 

Citizens State Bank, 849 N.W.2d at 62. “To defeat a summary judgment motion, the 

nonmoving party must do more than rest on averments or denials of the adverse party’s 

pleadings.” Id. at 61–62 (citing Minn. R. Civ. P. 56.05). “[T]he nonmoving party must 

present more than evidence which merely creates a metaphysical doubt as to a factual 

issue and which is not sufficiently probative with respect to an essential element of the 

nonmoving party’s case to permit reasonable persons to draw different conclusions.” 

Valspar Refinish, Inc. v. Gaylord’s, Inc., 764 N.W.2d 359, 364 (Minn. 2009) (quotation 

omitted). “No genuine issue of material fact exists when the record taken as a whole 
6

could not lead a rational trier of fact to find for the nonmoving party.” Frieler v. Carlson 

Mktg. Grp., Inc., 751 N.W.2d 558, 564 (Minn. 2008) (quotations omitted). 

Appellate courts “review de novo a district court’s grant of summary judgment.” 

Dukowitz v. Hannon Sec. Servs., 841 N.W.2d 147, 150 (Minn. 2014). Appellate courts 

“view the evidence in the light most favorable to the party against whom summary 

judgment was granted to determine whether there are any genuine issues of material fact 

and whether the district court correctly applied the law.” Id.

Hjelle’s switching of eligible policyholders of respondents to other insurance carriers

The agent agreement between Hjelle and respondents provides that the agent will 

sell insurance to eligible applicants:

B. The Agent agrees in consideration of the 

Companies’ agreements:

1. To sell insurance for the Companies and to 

submit to the Companies every request or application 

for insurance for the classes and lines underwritten by 

the Companies and eligible in accordance with their 

published Rules and Manuals. All business acceptable 

to the Companies and written by the Agent will be 

placed with the Companies.

The agent agreement also provides that if an agent switches insurance from respondents 

to other carriers, the agreement is subject to immediate termination:

C. This Agreement terminates upon the death of the 

Agent and may be terminated by either the Agent or the 

Companies on three (3) months written notice.

If the provisions of this Agreement are breached by 

either the Agent or the Companies, the Agreement may be 

terminated by the other party on thirty (30) days written 

notice. This Agreement may be terminated immediately by 
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mutual consent or by the Companies for the following 

reasons:

. . . .

2. Switching insurance from the Companies to 

another carrier.

(Emphasis added.)

The district court concluded that Hjelle breached the agent agreement by 

switching eligible policyholders of respondents to other insurance carriers. Paragraph C 

of the agent agreement clearly prohibited Hjelle from switching respondents’ 

policyholders to other insurance carriers. The district court noted that, as to the eligibility 

of existing policyholders, “Hjelle submitted no evidence to contradict the evidence 

submitted by Farmers.” Respondents argue that, because this case focuses on existing 

policyholders of respondents whom Hjelle switched to other insurance carriers, the 

district court correctly determined that Hjelle “failed to meet his Rule 56.05 burden” to 

produce evidence of ineligibility. We agree. See Citizens State Bank, 849 N.W.2d at 62

(“[W]hen the moving party makes out a prima facie case, the burden of establishing that 

the facts raise a genuine issue falls to the opposing party.”).

Hjelle argues that he presented sufficient evidence to raise a genuine issue of 

material fact regarding the eligibility of respondents’ policyholders whom he switched to 

other insurance carriers. Hjelle points to his deposition testimony, in which he provided

some explanations about why certain of respondents’ policyholders became ineligible for 

respondents’ policies. He also argues that his deposition testimony is supplemented with 

evidence regarding the existence and implementation of underwriting advisories that 
8

helped agents determine which policies would qualify with respondents and discouraged 

agents from writing ineligible policies and with evidence of bonuses that he received for 

good risk selection. But Hjelle admits in his brief that he testified at his deposition that he 

has no memory of the reason for various policyholder switches to other carriers. Hjelle 

therefore did not raise a genuine issue of material fact regarding whether those switches

of policyholders to other insurance carriers violated his agent agreement.

We conclude that, based on the record as a whole, no reasonable person could 

conclude that Hjelle did not switch eligible policyholders of respondents to other 

insurance carriers. The district court therefore did not err by granting summary judgment

to respondents on their breach-of-contract claim.

Hjelle’s solicitation letter to respondents’ existing policyholders

The letter that Hjelle sent to existing policyholders of respondents in November 

2010 reads:

Change is the only thing that we can be certain of 

sometimes and change is coming to your Home Insurance and 

my Agency. Farmers Insurance has changed its’ Home 

Insurance effective your next renewal to exclude the 

“Matching of Undamaged Property”. This change in your 

Home policy affects roofing, siding, flooring, etc. when 

replacement materials do not match existing materials. I have 

included a copy of the actual endorsement change. This 

change in your policy will not be effective until your current 

Next Generation Home policy renews.

For 15 years, my primary obligation to you has been 

honesty and advocacy. As a result of this change and other

factors, I have decided to leave Farmers effective 

December 3, 2010 and continue my Insurance career as an 

Independent agent. Having choice with 20+ Insurance 
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Companies and being able to offer better rates along with 

comprehensive coverage is very important.

Last June I purchased a new office and want to grow 

my business by serving clients with a diverse choice of 

Insurance Companies. For the last 4 years, I have been an 

Independent agent licensed in Wisconsin and have enjoyed 

being an Insurance Broker. After December 3, I will be 

changing my selling agreements with those Independent 

companies to include Minnesota and will cancel my selling 

agreement with Farmers. As a consumer, you have a right to 

purchase insurance from any Company and any agent you 

choose.

I want to THANK YOU for your business over these 

many years. I can never adequately express my appreciation 

and gratitude for such loyalty, especially when insurance is 

available from so many sources. Thank you for that privilege!

The letter concluded with Hjelle’s contact information, including his phone number, email address, the website for The Insurance Shop, and Hjelle’s invitation to contact him 

with “questions at any time.”

The district court determined on summary judgment that “Hjelle’s letter is a 

business solicitation as a matter of law,” that Hjelle used the letter to the detriment of 

respondents, and that Hjelle breached the agent agreement by sending the letter to 

respondents’ policyholders using information found on the Agency Dashboard. Hjelle 

argues that the court erred by concluding that his letter is a business solicitation as a 

matter of law. Citing Rehabilitation Specialists, Inc. v. Koering, 404 N.W.2d 301 (Minn. 

App. 1987), Hjelle argues that “the District Court had sufficient evidence to either 

determine that the November 2010 letter was not a solicitation letter or that a genuine 

issue of material fact existed as to if it was permissible preparation.” In Koering, this 
10

court stated that “[a]n employee has the right, . . . while still employed, to prepare to enter 

into competition with her employer” and that “[t]here is no precise line between acts by 

an employee which constitute prohibited solicitation and acts which constitute 

permissible preparation.” Id. at 304−05 (quotations omitted).

Respondents argue that Hjelle waived his permissible-preparation argument

because he did not present it in district court. See Thiele v. Stich, 425 N.W.2d 580, 582

(Minn. 1988) (“A reviewing court must generally consider only those issues that the 

record shows were presented and considered by the trial court in deciding the matter 

before it.” (quotation omitted)). Although we reject respondents’ waiver argument 

because Hjelle argued to the district court that his letter was not a solicitation, we 

conclude that Hjelle’s permissible-preparation argument is unpersuasive. 

A “solicitation” includes “[a]n attempt or effort to gain business.” Black’s Law 

Dictionary 1520 (9th ed. 2009). Hjelle’s reliance on Koering and Sanitary Farm Dairies 

v. Wolf, 261 Minn. 166, 112 N.W.2d 42 (1961), as support for his argument that his letter 

was permissible preparation rather than prohibited solicitation is misplaced. Neither case 

involves a breach-of-contract claim; both cases involve claims of breach of the duty of 

loyalty only. See Koering, 404 N.W.2d at 304; Wolf, 261 Minn. at 168, 112 N.W.2d at 

44.

Hjelle does not dispute that his office assistant used policyholder information, 

including names, addresses, renewal dates, and other policy information, from 

respondents’ Agency Dashboard to create mailing labels for his letter. This constituted a 

violation of the agent agreement, which provides:
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I. The Agent acknowledges that all manuals, lists and 

records of any kind (including information pertaining to 

policyholders and expirations) are the confidential property of 

the Companies and agrees they shall not be used or divulged 

in any way detrimental to the Companies . . . .

We agree with the district court that the letter is a “classic example of a business 

solicitation.” No reasonable trier of fact could find that Hjelle’s letter was not an attempt 

or effort to gain business. We therefore conclude that the district court did not err by 

determining that Hjelle’s letter to policyholders of respondents constituted a solicitation 

and that Hjelle violated his agent agreement. Hjelle breached the agent agreement by 

using confidential information from the Agency Dashboard to mail a solicitation to

respondents’ existing policyholders to respondents’ detriment.

Interpretation and application of Minn. Stat. § 72A.20

The agent agreement includes the following noncompete clause:

H. The Agent agrees to . . . accept tender of Contract 

Value and further agrees that for a period of one year 

following the date of payment or tender of payment the Agent 

will neither directly or indirectly solicit, accept, or service the 

insurance business of any policyholder of record in the 

agencies of this district as of the date of payment or tender of 

payment.

The district court concluded that Hjelle breached the noncompete clause by accepting and 

servicing business from respondents’ policyholders after he received the first contractvalue installment. Hjelle argues that the noncompete clause is unenforceable because 

Minnesota Statutes section 72A.20, subdivision 14, “as a matter of law supersedes the 

operation of a non-compete clause in an agent appointment agreement.” That statute 

provides:
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An insurance agent refusing to supply a requested application 

form for homeowner’s insurance with any insurer whom the 

agent represents or refusing to transmit forthwith any 

completed application from the insurer, shall constitute an 

unfair method of competition and an unfair and deceptive act 

or practice.

Minn. Stat. § 72A.20, subd. 14 (2014).4

“[A] contract violating law or public policy is void.” Scheeler v. Sartell Water 

Controls, Inc., 730 N.W.2d 285, 288 (Minn. App. 2007). Hjelle cites Grand Union Tea 

Co. v. Dodds, 128 N.W. 1090 (Mich. 1910), Grand Union Tea Co. v. Lewitsky, 116 N.W. 

1090 (Mich. 1908), and Wolf, 261 Minn. 166, 112 N.W.2d 42, to support his argument 

that section 72A.20 supersedes the noncompete clause. As out-of-state cases, neither 

Dodds nor Lewitsky is binding on this court. See Eng’g & Const. Innovations, Inc. v. L.H. 

Bolduc Co., 825 N.W.2d 695, 707 n.8 (Minn. 2013) (citing foreign caselaw and stating 

that “[t]hese decisions are not binding on us”). Moreover, those refer to a statute that 

expressly prohibited agreements not to engage in business or trade, such as noncompete 

agreements. See Dodds, 128 N.W. at 1091 (referencing Michigan statute discussed in 

Lewitsky); Lewitsky, 116 N.W. at 1093 (quoting Michigan statute that provided that

“‘[a]ll agreements and contracts by which any person . . . promises or agrees not to 

engage in any . . . trade, profession or business, whether reasonable or unreasonable, . . .

are hereby declared to be against public policy and illegal and void’”). And Wolf does not 

involve a noncompete clause or a statute prohibiting noncompete agreements. See 261 

 

4 We apply the most recent version of section 72A.20 because the statute has not been 

amended in relevant part. See Interstate Power Co. v. Nobles Cnty. Bd. Of Comm’rs, 671 

N.W.2d 566, 575 (Minn. 2000) (stating that, generally, “appellate courts apply the law as 

it exists at the time they rule on a case”).
13

Minn. at 174, 112 N.W.2d at 48. None of the cases is instructive, and Hjelle’s reliance 

upon the cases is misplaced.

Respondents argue that section 72A.20 is an anti-redlining statute and does not 

prohibit Hjelle from complying with the noncompete clause.5“The goal of statutory 

interpretation is to effectuate the intent of the Legislature.” Staab v. Diocese of St. Cloud, 

853 N.W.2d 713, 716 (Minn. 2014). “If the Legislature’s intent is clear from the 

unambiguous language of the statute, we apply the statute according to its plain 

meaning.” Id. at 716–17. “But if a statute is susceptible to more than one reasonable 

interpretation, the statute is ambiguous, and we will consider other factors to ascertain the 

Legislature’s intent.” Id. at 717. We agree with respondents that section 72A.20 is not 

ambiguous and that the plain meaning of the statute does not prohibit enforcement of 

valid noncompete clauses in agent agreements.

Section 72A.20 contains numerous provisions identifying conduct that constitutes 

unfair and deceptive trade practices. Our supreme court has referred to it as “the antiredlining statute.” See Schermer v. State Farm Fire & Cas. Co., 721 N.W.2d 307, 309 

(Minn. 2006) (“More specific prohibitions against discrimination are contained in Minn. 

Stat. § 72A.20 (2004), the anti-redlining statute.”).

Read in this context, subdivision 14 clearly is meant to prohibit insurance agents 

from refusing to supply or transmit insurance applications as a method of redlining. See 

Am. Family Ins. Group v. Schroedl, 616 N.W.2d 273, 278 (Minn. 2000) (“While statutory 

 

5

“[R]edlining” means “[c]redit discrimination . . . by an institution that refuses to provide 

loans or insurance on properties in areas that are considered to be poor financial risks or 

to the people who live in those areas.” Black’s Law Dictionary 1391 (9th ed. 2009).
14

construction focuses on the language of the provision at issue, it is sometimes necessary 

to analyze that provision in the context of the surrounding sections.”). Section 72A.20, 

subdivision 14, does not prohibit an insurance agent from complying with a valid and 

enforceable noncompete clause.

Affirmed.