Buan v. Aatru Medical, LLC
- John Tunheim
- 0:23-cv-03357
- U.S. District Court · District of Minnesota
- 8
In Buan v. Aatru Medical, Judge Tunheim granted in part and denied in part Aatru’s motion to dismiss, dismissing four counts with prejudice.
John Buan may continue litigating his breach-of-contract and alternative unjust-enrichment claims. Aatru Medical prevailed on dismissal of Buan’s conversion, civil-theft, and federal and state minimum-wage claims, which were dismissed with prejudice.
What happened
In Buan v. Aatru Medical, LLC, John Buan alleged that Aatru Medical failed to pay his salary and reimburse business expenses for nearly a year. He claimed about $228,000 in unpaid wages and $17,000 in unreimbursed expenses.
The court allowed Buan’s breach-of-contract and alternative unjust-enrichment claims to continue. It dismissed his conversion, civil-theft, and federal and state minimum-wage claims because unpaid wages were not covered by those claims under the allegations and legal rules discussed.
Judge John R. Tunheim granted in part and denied in part Aatru’s motion to dismiss. The order dismissed Counts III, IV, V, and VII with prejudice; the opinion does not state that Counts I and II were dismissed.
The detailed version
- Buan v. Aatru Medical, LLC · No. 0:23-cv-03357
- John Tunheim
- May 23, 2024
Background
John Buan alleged that Aatru Medical failed to pay his salary beginning in October 2022 and did not reimburse about $17,000 in business expenses. Buan had served as Aatru’s Chief Technology Officer and alleged that his salary had been set at $240,000 per year, payable monthly. He claimed approximately $228,000 in unpaid wages.
Aatru moved to dismiss Counts I–V and VII under Federal Rule of Civil Procedure 12(b)(6), which asks whether a complaint plausibly states a legal claim. Aatru did not challenge Counts VI, VIII, or IX.
Court’s analysis
The court denied dismissal of Count I, the breach-of-contract claim. Buan plausibly alleged that Aatru failed to pay wages required by the employment contract. The court also held that Buan plausibly alleged a contractual claim for unreimbursed business expenses. Although the contract did not set a deadline for reimbursement, the court explained that payment is generally due within a reasonable time when a contract sets no deadline.
The court denied dismissal of Count II, the unjust-enrichment claim. Buan pleaded that claim in the alternative to his contract claim, and Aatru did not dispute that he alleged the elements of unjust enrichment. The court therefore allowed the alternative claim to proceed at this stage.
The court dismissed Count III, the conversion claim, because unpaid wages are intangible. Under the Minnesota law discussed in the opinion, conversion generally applies to tangible personal property, and money must be in a tangible and separately identifiable form for a conversion claim.
The court dismissed Count IV, the civil-theft claim. It concluded that Aatru allegedly withheld Buan’s wages rather than taking money from him. Because civil theft requires an initial wrongful act of taking possession of another person’s property, the allegations did not state a civil-theft claim.
The court dismissed Counts V and VII, which alleged violations of the federal Fair Labor Standards Act and the Minnesota Fair Labor Standards Act’s minimum-wage requirements. The court reasoned that the agreed-upon salary, rather than the amount actually paid, controlled the minimum-wage calculation for these allegations. It concluded that Buan’s alleged injury arose from a breach of contract, not from a minimum-wage violation.
Disposition
The order states that Aatru’s motion to dismiss was GRANTED in part and DENIED in part. The court denied dismissal of Counts I and II and dismissed Counts III, IV, V, and VII with prejudice. The opinion states that Aatru did not challenge Counts VI, VIII, and IX.
Read the full 8-page opinion on CourtListener, the free public archive maintained by the Free Law Project.