789 N.W.2d 688 (Minn.App. 2010), A10-402, Asian Women United of Minnesota v. Leiendecker

Docket Nº:A10-402.
Citation:789 N.W.2d 688
Opinion Judge:PETERSON, Judge.
Party Name:ASIAN WOMEN UNITED OF MINNESOTA, Respondent, v. Sinuon LEIENDECKER, Appellant.
Attorney:Frank T. Mabley, Greenstein Mabley & Wall, LLC, Roseville, MN, for respondent. Thomas Gunther, Virnig & Gunther Law Office, PLLC, Minneapolis, MN, for appellant.
Judge Panel:Considered and decided by PETERSON, Presiding Judge; HUDSON, Judge; and LARKIN, Judge.
Case Date:October 19, 2010
Court:Court of Appeals of Minnesota
 
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Page 688

789 N.W.2d 688 (Minn.App. 2010)

ASIAN WOMEN UNITED OF MINNESOTA, Respondent,

v.

Sinuon LEIENDECKER, Appellant.

No. A10-402.

Court of Appeals of Minnesota.

October 19, 2010

Page 689

Syllabus by the Court

I. Unless otherwise provided in a corporation's articles of incorporation or bylaws, an indemnification advance by a corporation under Minn.Stat. § 317A.521, subd. 3 (2008), is mandatory when the statutory requirements for an advance have been met, even when the advance is sought in a proceeding that the corporation brought against the person seeking the advance.

II. When a person who requests an indemnification advance under Minn.Stat. § 317A.521, subd. 3, is determined to be ineligible for an advance under the methods set forth in Minn.Stat. § 317A.521, subd. 6(a)(1)-(4), (b) (2008), the person may apply to the district court for a determination of eligibility under Minn.Stat. § 317A.521, subd. 6(a)(5) (2008), and the district court must make an independent determination whether the person is entitled to an indemnification advance.

Frank T. Mabley, Greenstein Mabley & Wall, LLC, Roseville, MN, for respondent.

Thomas Gunther, Virnig & Gunther Law Office, PLLC, Minneapolis, MN, for appellant.

Considered and decided by PETERSON, Presiding Judge; HUDSON, Judge; and LARKIN, Judge.

OPINION

PETERSON, Judge.

This appeal is from a district court order denying appellant's request for an advance from respondent corporation, her former employer, to fund her defense of claims that respondent asserted against her. Because the district court did not make an independent determination of whether appellant is entitled to an advance, we reverse and remand.

FACTS

Appellant Sinuon Leiendecker is a former executive director for respondent Asian Women United of Minnesota (AWUM), a Minnesota nonprofit corporation. The facts underlying her employment and the termination of her employment are discussed in Leiendecker v. Asian Women United of Minn., 731 N.W.2d 836 (Minn.App.2007), review denied (Minn. Aug. 7, 2007). The parties have been involved in litigation with each other since 2004. In this, the third action between the parties, AWUM seeks to recover allegedly unauthorized salary paid to Leiendecker, under theories of conversion, fraud, breach of fiduciary duty, and breach of contract. Leiendecker asserts a counterclaim for indemnification under AWUM's corporate bylaws.

Leiendecker moved to dismiss AWUM's claims, asserting that, under the doctrine of res judicata, they are barred by a judgment in one of the previous actions. The district court denied that motion, and Leiendecker petitioned this court for a writ of mandamus or prohibition. This court denied the petition, explaining that Leiendecker will have an adequate legal remedy in an appeal from final judgment.

Leiendecker then moved in the district court for advanced indemnification and default judgment on the indemnification

Page 690

counterclaim, which AWUM had not answered. In response to Leiendecker's motions, AWUM answered the counterclaim and moved for partial summary judgment, asserting that, by virtue of her alleged conduct, Leiendecker could not meet the requirements for indemnification as a matter of law. The district court denied both parties' motions, and Leiendecker appeals, challenging the denial of her motions for advanced indemnification and default judgment and the district court's previous order denying dismissal on res judicata grounds.

ISSUE

Did the district court err by denying Leiendecker's request for an indemnification advance?

ANALYSIS

I.

As a threshold matter, we conclude that, despite its interlocutory nature, the district court's order denying an indemnification advance is appealable under the collateral-order doctrine. See Kastner v. Star Trails Ass'n, 646 N.W.2d 235, 240 (Minn.2002) (holding appeal available under collateral-order doctrine when the order being appealed (1) conclusively decides the question in dispute, (2) resolves an important issue that is completely separate from the merits of the action, and (3) is in...

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