Mark Oldfield and Patricia Oldfield v. Drake Enterprises

Background

Zeus Electric Chassis, Inc. is a Delaware-incorporated, Minnesota-based company in the business of developing medium-duty electric vehicle platforms. It has never been profitable and has relied entirely on outside investment and debt financing. Mark and Patricia Oldfield, Florida citizens, invested over $2.2 million in Zeus equity and made more than $1.1 million in secured loans to Zeus, holding approximately 9.34% of the company. Drake Enterprises, Ltd., a separate Zeus shareholder owning approximately 9.95%, had loaned Zeus $4.85 million secured by first-priority liens on Zeus's assets. Jamie Stiles is the CEO and President of Drake.

According to the Complaint, in July 2024, Zeus was in discussions with a Chinese-controlled company called Tingyu Tech as a potential investor. At a meeting attended by Stiles and a Zeus board member, the parties allegedly agreed to attempt to wipe out the interests of all other Zeus investors and lenders — including the Oldfields — before Tingyu would invest. In January 2025, after Zeus defaulted on its loans to Drake, Drake sued Zeus in Ramsey County District Court in Minnesota and sought appointment of a receiver to liquidate Zeus's assets. The Complaint alleges this receivership was brought to execute the plan to eliminate other investors, and that during the process Drake and Stiles fired key Zeus officers, causing Zeus to miss a $20 million purchase order from One Stop Truck & Equipment and a $15 million investment from Wingmen Limited.

In May 2025, Ramsey County District Judge Laura Nelson approved the sale of Zeus's assets to Drake following a court-supervised bidding process. The Oldfields objected but Judge Nelson rejected their objections. Her order was not appealed. Shortly after, the Oldfields filed this federal lawsuit bringing six claims: (Count I) derivative breach of fiduciary duty by Drake toward Zeus; (Count II) derivative aiding and abetting by Stiles; (Count III) derivative tortious interference by Drake and Stiles with Zeus's prospective business relationships; (Count IV) direct breach of fiduciary duty by Drake toward the Oldfields; (Count V) direct aiding and abetting by Stiles; and (Count VI) direct tortious interference by Drake and Stiles with the Oldfields' prospective business relationships.

Personal Jurisdiction Over Stiles (Rule 12(b)(2))

Stiles moved to dismiss for lack of personal jurisdiction — meaning the court's legal power to bind him to any judgment — under Federal Rule of Civil Procedure 12(b)(2). He first argued that his contacts with Minnesota occurred only in his official capacity as Drake's CEO, and that such corporate-capacity contacts cannot create personal jurisdiction over him individually (the so-called "fiduciary shield" doctrine).

Judge Tostrud rejected this argument. The fiduciary shield doctrine is not part of constitutional due process analysis; it exists only if a state has written it into its long-arm statute or judicial doctrine. Minnesota's long-arm statute, Minn. Stat. § 543.19, contains no such exception, and the Minnesota Supreme Court has not adopted the doctrine — indeed, in Real Properties, Inc. v. Mission Insurance Co., the Minnesota Supreme Court refused to apply it, holding that an agent's own conduct does not disappear just because it acts on a principal's behalf.

Stiles alternatively argued that even under the standard five-factor minimum-contacts analysis used in the Eighth Circuit, the Complaint fails to show sufficient contacts with Minnesota. The five factors are: (1) nature and quality of contacts with the forum state; (2) quantity of contacts; (3) relationship between the cause of action and the contacts; (4) the state's interest in providing a forum; and (5) convenience to the parties. The first three are primary.

Judge Tostrud agreed with Stiles on this alternative argument, finding the Complaint's jurisdictional allegations fatally deficient:

- The allegation that "a substantial part of the events giving rise to the claims occurred in Minnesota" is a legal conclusion tracking the federal venue statute, not a factual allegation about Stiles's contacts. - Allegations lumping Stiles and Drake together do not satisfy the requirement of an individualized showing of each defendant's contacts. - The Oldfields' brief cited Complaint paragraphs as attributing Minnesota contacts to Stiles, but the court found those paragraphs actually attributed the relevant conduct to Drake — not Stiles personally. - Mark Oldfield's declaration stated he "was informed by a former employee of Zeus" that Stiles traveled to Minnesota to meet Tingyu representatives. Judge Tostrud excluded this testimony as hearsay (an out-of-court statement offered for its truth), noting that a majority of circuit courts of appeals forbid or disfavor hearsay in this context, and that even if hearsay could sometimes be considered, this statement lacked sufficient guarantees of trustworthiness — Mark did not identify the source, the source's basis of knowledge, or when or how he received the information.

With the hearsay declaration excluded, no evidence showed Stiles was present in Minnesota for any reason connected to the case. Even the Minnesota forum's interest in protecting its citizens could not substitute for the absence of minimum contacts. The Calder "effects test" — which in intentional-tort cases allows jurisdiction if a defendant's conduct was aimed at the forum state and the defendant knew harm would be felt there — also failed because more than knowledge of the plaintiff's location is required; there must be a showing of conduct "uniquely or expressly aimed" at the forum state.

As a result, Counts II, V, and the portions of Counts III and VI asserted against Stiles were dismissed without prejudice (allowing potential refiling if the defect could be cured).

Failure to State a Claim Against Drake (Rule 12(b)(6))

Drake moved to dismiss the remaining claims under Federal Rule of Civil Procedure 12(b)(6), arguing the Complaint failed to plausibly allege Drake owed any fiduciary duty. The parties agreed Delaware law governs the fiduciary duty claims (because Zeus is incorporated in Delaware) and Minnesota law governs the tortious-interference claims. They also agreed that the tortious-interference claims depend entirely on the breach of fiduciary duty as the necessary "independently tortious" conduct — meaning if there is no viable fiduciary duty claim, the tortious-interference claims also fail.

Delaware Fiduciary Duty Law for Minority Shareholders

Under Delaware law, shareholders generally do not owe fiduciary duties to the corporation or fellow shareholders — they are free to act in their own interest. A shareholder who owns more than 50% of voting stock is presumed to be a controlling shareholder and may owe fiduciary duties. A minority shareholder (below 50%) can also owe such duties, but only by exercising actual control — either general control over the corporation's business affairs or control over a specific transaction — and the test "is not an easy one to satisfy." Control requires a combination of significant voting power and management control sufficient to effectively dominate the board without owning a majority of stock, or proof that the minority shareholder "exercised actual control over the board of directors during the course of a particular transaction." The court cited the Delaware Supreme Court's 2025 decision in In re Oracle Corp. Derivative Litigation as the governing statement of this standard.

Application to Drake

Drake owned approximately 9.95% of Zeus — well below the minority threshold where the presumption of non-control applies. The Complaint did not allege Drake held any board seat, did not identify any specific board-level transaction Drake controlled, and did not allege Drake had significant equity power, the right to name directors, or any high-status role within Zeus that might have given it board influence.

The Oldfields argued Drake exercised control over the receivership and the sale of Zeus's assets, and that Drake (through Stiles) exercised general managerial control by firing key Zeus officers. Judge Tostrud rejected both arguments. As to the receivership: Zeus did not choose to be sued, placed in receivership, or to sell its assets — these were not board-level decisions Zeus made. Without Zeus's board exercising control, there was nothing for Drake to have dominated. The Ramsey County court's approval of the sale also indicated the process was properly conducted. As to general managerial control: unlike the situation in Tornetta v. Musk — where Elon Musk held a 21.9% stake, was CEO, Chair, and founder, had close ties to the directors, and dominated a specific compensation decision — the Complaint alleged no comparable combination of equity power, management roles, and board influence for Drake.

The court also noted that Delaware law does not impose fiduciary duties based solely on a creditor-debtor relationship, so Drake's status as a secured lender to Zeus did not independently trigger duties.

Because the Oldfields did not request leave to amend, the court dismissed Counts I and IV (breach of fiduciary duty claims against Drake) and the portions of Counts III and VI asserted against Drake (tortious interference) with prejudice.

Disposition

The motion to dismiss was granted in full: - Counts II, V, and the Stiles-related portions of Counts III and VI: dismissed without prejudice for lack of personal jurisdiction. - Counts I, IV, and the Drake-related portions of Counts III and VI: dismissed with prejudice for failure to state a claim.

The court ordered that judgment be entered accordingly.