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STATE OF MINNESOTA IN COURT OF APPEALS A10-263 JL Schwieters Construction, Inc., Respondent, vs. Goldridge Construction, Inc., et al., Appellants, Minnwest Bank, M.V., Respondent, Inver Grove Heights WP, LLC, a Delaware limited liability company, Respondent, Auer Steel & Heating Supply Co., Respondent, Crew2, Inc., Respondent, J. F. Ahern Co., a Wisconsin corporation, Respondent, Ramsey Excavating, Inc., Respondent, MCI Paint & Drywall, Inc., Respondent, Pine Bend Paving, Inc., Respondent, Benedict Refrigeration Service, Inc., intervenor, Respondent, Ferguson Enterprises, Inc., intervenor/defendant, Respondent,

Plummer Concrete, Inc., intervenor/defendant, Respondent, Floor Technologies, Inc., intervenor/defendant, Respondent, South Side Electric, Inc., intervenor/defendant, Respondent, +Tub Medic, Inc., Intervenor/Defendant, Schindler Elevator Corporation, intervenor/defendant, Respondent, Acquisition of I-94 Glass & Mirror, Inc., Respondent, Ace Supply Co., Inc., as Assignee of Swanson Plumbing & Heating, Inc., Respondent, BRODE-90, LLC, Respondent, Wakota Federal Credit Union, Respondent, 21st Century Bank, Respondent, John J. Morgan Company, Respondent, Midwest Fence & Manufacturing Company, Respondent, Egan Company, Respondent, AVR, Inc., Respondent,

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ELM of Wisconsin, Inc., Respondent, Schwieters Companies, Inc., Respondent, JDS & WMK, Inc., d/b/a Overhead Door Co. of the Northland, et al., Defendants. Filed September 21, 2010 Affirmed Ross, Judge Dakota County District Court File No. 19HA-CV-08-5257 Ernest F. Peake, Patrick J. Lindmark, Leonard, O'Brien, Spencer, Gale & Sayre, Ltd, Minneapolis, Minnesota (for respondents JL Schwieters Construction, Inc. and Schwieters Companies, Inc.) Richard M. Carlson, Morris Law Group, P.A., Edina, Minnesota; and Albert Solochek, Howard, Solochek & Weber, S.C., Milwaukee, Wisconsin (pro hac vice for appellants Goldridge Construction, Inc., et al.) Frederick A. Dudderar, Jr., Hanft, Fride, et al., Duluth, Minnesota; and Brian M. Sund, Eric G. Nasstrom, Morrison Fenske & Sund, P.A., Minnetonka, Minnesota (for respondent Minnwest Bank, M.V.) Matthew A. Anderson, Mackall, Crounse & Moore, PLC, Minneapolis, Minnesota (for respondent Inver Grove Heights WP, LLC) Amy M. Kaldor, Murnane Brandt, St. Paul, Minnesota (for respondent Crew2, Inc.) Patrick V. Johnson, Speeter and Johnson, Minneapolis, Minnesota (for respondent Ramsey Excavating, Inc.) Michael J. Auger, Schleck & Associates, P.A., Minneapolis, Minnesota; and Justin L. Seurer, Seurer Law Firm, Minnetonka, Minnesota (for respondent MCI Paint & Drywall, Inc.) 3

Christopher J. Lehmann, Grannis & Grannis, P.A., South St. Paul, Minnesota (for respondent Pine Bend Paving, Inc.) Marnie E. Fearon, Felhaber, Larson, Fenlon & Vogt, P.A., Minneapolis, Minnesota (for respondent Benedict Refrigeration Services, Inc.) Anthony U. Wacker, St. Paul, Minnesota (for respondent Ferguson Enterprises, Inc.) Jennifer L. Lappegaard, Red Wing, Minnesota (for respondent Plummer Concrete, Inc.) Malcolm D. MacGregor, Nolan, MacGregor, Thompson, et al., St. Paul, Minnesota (for respondent Floor Technologies, Inc.) Dean G. Gavin, Gavin Law Office, PLC, Chaska, Minnesota (for respondent South Side Electric, Inc.) James K. Sander, James K. Sander, P.A., Golden Valley, Minnesota (for respondent Schindler Elevator Corporation) Eric W. Forsberg, Forsberg Law Office, P.A., Minneapolis, Minnesota (for respondent Acquisition of I-94 Glass & Mirror, Inc.) John M. Harvey, Harvey & Sheehan, Ltd., Minneapolis, Minnesota (for respondents Ace Supply Co. as Assignee of Swanson Plumbing and Heating, Inc.) BRODE-90, LLC, Minneapolis, Minnesota (respondent) Wakota Federal Credit Union, South St. Paul, Minnesota (respondent) Thomas P. Dolphin, Blaine, Minnesota (for respondent 21st Century Bank) John J. Morgan Company, St. Paul, Minnesota (respondent) David E. Albright, Eagan, Minnesota (for respondent Midwest Fence & Manufacturing Company) Gregory T. Spalj, Fabyanske, Westra, Hart & Thomson, Minneapolis, Minnesota (for respondent Egan Company) Reese E. Chezick, Hastings, Minnesota (for respondent AVR, Inc.)

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Charles B. Harris, Arthur Chapman Kettering Smetak & Pikala, P.A., Hudson, Wisconsin (for respondent ELM of Wisconsin, Inc.)

Considered and decided by Minge, Presiding Judge; Halbrooks, Judge; and Ross, Judge. SYLLABUS On a motion to dismiss for lack of personal jurisdiction, preliminary evidence that a nonresident parent company operated its subsidiary to develop and hold real estate in Minnesota is sufficient to establish a prima facie showing of vicarious personal jurisdiction over the parent. OPINION ROSS, Judge Wisconsin company Goldridge Group LLP appeals from the district court's denial of its motion to dismiss for lack of personal jurisdiction. Goldridge Group was sued for accepting fraudulent transfers of funds from a Minnesota subsidiary that owned the property developed during a construction project in Inver Grove Heights. When the project was completed, the subsidiary was insolvent and could not pay the subcontractors. Goldridge Group argues that the district court's assertion of personal jurisdiction violates its due process rights because Goldridge Group does not itself have the requisite minimum contacts with Minnesota and because its subsidiary's Minnesota contacts should not be imputed to it. But because pretrial evidence implies that Goldridge Group treated its subsidiary as an alter ego or instrumentality to transact its business in Minnesota, we affirm. 5

FACTS This case concerns a dispute over a developer's failure to pay on contracts arising from the construction of the White Pines Senior Living Center in Inver Grove Heights. Preliminary pretrial evidence supports the following facts. The center and the land on which it sits are owned by Goldridge Group WP IGH LLC ("White Pines LLC"), a Wisconsin limited liability company. White Pines LLC is owned by Goldridge Group, a Wisconsin real estate holding company. Goldridge Group develops properties, including senior living centers in Minnesota and Wisconsin. Each senior center is organized as an LLC wholly owned by Goldridge Group. During the period relevant to this action, White Pines LLC had no employees, officers, corporate records, or bank account. It shares a business address with Goldridge Group. Its only asset is the senior center, its only income is rent from the center, and its only expenses are mortgage payments on the property. All arrangements for the construction of the senior center appear to have been made by Goldridge Group. Goldridge Group's president obtained a $9.6 million

mortgage from Minnwest Bank to secure a loan to finance construction of the senior center. Goldridge Group signed as guarantor of the loan. A Goldridge Group partner negotiated the lease of the completed senior center, and the group's accounting department kept track of rent receipts and mortgage payments. Because White Pines LLC had no bank account, all funds received by White Pines LLC flowed directly to Goldridge Group; on at least seven occasions, Goldridge Group received wire transfers directly from Minnwest Bank. White Pines LLC conveyed hundreds of thousands of 6

dollars to Goldridge Group during the course of the project without receiving anything of value in exchange. The sole bidder on the White Pines project was Goldridge Construction, Inc., a Wisconsin general contractor. Goldridge Construction was a Goldridge Group spinoff created to separate the group's real estate holding function from its construction function. Like White Pines LLC, Goldridge Construction shares an address with Goldridge Group. Its two shareholders are also the two sole partners of Goldridge Group. Goldridge Construction hired several subcontractors, including respondent JL Schwieters Construction, Inc. Work on the project began in fall 2007, and Schwieters completed its part of the job in September 2008. By that time, White Pines LLC was insolvent and, within a year, Goldridge Construction would close its doors. Schwieters and the other subcontractors were advised that they would not be fully paid for their work. Schwieters commenced a mechanic's lien foreclosure action, naming Goldridge Construction and White Pines LLC as defendants. Schwieters later added Goldridge Group as a defendant and sought to recover funds that it claimed White Pines LLC had fraudulently transferred to Goldridge Group while purportedly insolvent. Schwieters deposed Gerard Koehn, a co-partner in Goldridge Group and a coshareholder in Goldridge Construction. Despite having a substantial ownership interest in White Pines LLC as a Goldridge Group partner, Koehn seemed to lack knowledge of White Pines LLC's structure and operations. He did not know whether White Pines LLC had any officers, whether it had its own checking account, whether it kept its own 7

financial records, or even its business address. He was able to describe how he and Goldridge Group employees negotiated the mortgage and lease for White Pines LLC and provided it with accounting services, but he did not know whether White Pines LLC paid Goldridge Group for these services. Goldridge Group moved to dismiss, arguing that it did not have sufficient contacts with Minnesota to support the district court's exercise of personal jurisdiction. The district court denied the motion, apparently reasoning that Goldridge Group had sufficient contacts because it had transacted substantial business in Minnesota through its subsidiary White Pines LLC. Goldridge Group appeals. ISSUE Does the district court have personal jurisdiction over Goldridge Group? ANALYSIS Goldridge Group challenges the district court's order denying its motion to dismiss for lack of personal jurisdiction. An order denying a motion to dismiss for lack of personal jurisdiction is immediately appealable. Domtar, Inc. v. Niagara Fire Ins. Co., 518 N.W.2d 58, 60 (Minn. App. 1994), aff'd, 533 N.W.2d 25 (Minn. 1995). Whether personal jurisdiction exists is a question of law reviewed de novo. Juelich v. Yamazaki Mazak Optonics Corp., 682 N.W.2d 565, 569 (Minn. 2004). The burden of proof rests with the plaintiff. Dent-Air, Inc. v. Beech Mountain Air Serv., Inc., 332 N.W.2d 904, 907 n.1 (Minn. 1983). But a plaintiff need only make a prima facie showing of personal jurisdiction before trial, and the complaint and any supporting evidence must be taken as 8

true. Hardrives, Inc. v. City of La Crosse, 307 Minn. 290, 293, 240 N.W.2d 814, 816 (1976). Minnesota courts' power over out-of-state defendants extends to the full extent of constitutional due process, and any doubts should be resolved in favor of retaining jurisdiction. Id. at 296, 240 N.W.2d at 818. Minnesota has a "long-arm" statute that defines personal jurisdiction over foreign defendants. See Minn. Stat.

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