Mark Oldfield and Patricia Oldfield v. Drake Enterprises
Mark Oldfield and Patricia Oldfield, Individually and Derivatively on Behalf of Zeus Electric Chassis, Inc. v. Drake Enterprises, Ltd., and Jamie Stiles
- Eric Tostrud
- 0:25-cv-02774
- U.S. District Court · District of Minnesota
- 29
In Oldfield v. Drake Enterprises, Ltd., Judge Tostrud dismissed all claims brought by Mark and Patricia Oldfield against Jamie Stiles for lack of personal jurisdiction over him in Minnesota, and dismissed all remaining claims against Drake Enterprises with prejudice because the complaint did not plausibly allege that Drake, as a minority shareholder owning less than 10% of Zeus Electric Chassis, Inc., owed fiduciary duties to Zeus or the Oldfields under Delaware law.
Minority shareholders and creditors of closely held corporations who believe a fellow minority shareholder engaged in self-dealing; corporate officers of out-of-state companies sued in Minnesota federal court; litigants seeking to establish personal jurisdiction based on secondhand reports of a defendant's forum-state contacts.
What happened
In Oldfield v. Drake Enterprises, Ltd., Mark and Patricia Oldfield sued Drake Enterprises and its CEO Jamie Stiles, claiming they schemed to wipe out all other investors in Zeus Electric Chassis, Inc. — a Minnesota-based electric vehicle company — by engineering a court-supervised receivership in Ramsey County, selling Zeus's assets to Drake, and cutting out the Oldfields and other investors. The Oldfields brought claims both on their own behalf and on Zeus's behalf, alleging breach of fiduciary duty, aiding and abetting such a breach, and tortious interference with business relationships.
The two defendants moved to dismiss the entire case. Stiles argued the Minnesota federal court had no power over him personally, while Drake argued the claims against it failed on the merits. The Oldfields tried to show Stiles had sufficient connections to Minnesota by pointing to allegations in their complaint and a declaration from Mark Oldfield stating he had been told by a former Zeus employee that Stiles traveled to Minnesota to meet with a Chinese company called Tingyu. The court found those complaint allegations either conclusory, misattributed to Stiles, or not actually about him, and excluded the declaration statement as unreliable hearsay — secondhand information with no identified source and no explanation of how the source would have known.
Judge Tostrud granted the motion to dismiss in full. All claims against Stiles were dismissed without prejudice (meaning the Oldfields could potentially refile if they can establish jurisdiction) because the court lacked personal jurisdiction over him. All claims against Drake were dismissed with prejudice (meaning they cannot be refiled) because, under Delaware law — which governs fiduciary duties in companies incorporated there — a minority shareholder owning less than 10% of a company generally owes no fiduciary duties unless it actually controls the company's board, and the complaint contained no facts plausibly showing Drake had that kind of control over Zeus. Because the Oldfields' tortious interference claims depended entirely on the existence of a fiduciary breach, those claims also failed once the fiduciary duty theory was rejected.
The detailed version
Case Overview Case: Oldfield v. Drake Enterprises, Ltd. and Jamie Stiles, No. 25-cv-2774 (ECT/DLM) Court: U.S. District Court, District of Minnesota Judge: Eric C. Tostrud, United States District Judge Date: December 22, 2025
Parties - Plaintiffs: Mark Oldfield and Patricia Oldfield, suing individually and derivatively (on behalf of a company) on behalf of Zeus Electric Chassis, Inc., a Delaware-incorporated, Minnesota-based electric vehicle company in product development stage. - Defendants: Drake Enterprises, Ltd., a fellow Zeus shareholder and creditor; and Jamie Stiles, Drake's CEO and President.
Background Facts Zeus Electric Chassis, Inc. was incorporated under Delaware law with its principal place of business in White Bear Lake, Minnesota. The Oldfields invested approximately $2.24 million in Zeus between 2021 and 2022, owning 9.34% of the company, and made over $1.1 million in secured loans to Zeus. Drake owned 9.95% of Zeus and held first-priority liens on Zeus's assets through roughly $4.85 million in convertible promissory notes.
In July 2024, Zeus explored a potential investment from Tingyu Tech, a Chinese-controlled company. The complaint alleged that during a meeting attended by Stiles and a Zeus board member, Drake, Stiles, and Tingyu decided to eliminate all other investors' interests before Tingyu provided funding. After Zeus defaulted on the Drake promissory notes in January 2025, Drake filed a breach-of-contract suit against Zeus in Ramsey County District Court and sought appointment of a general receiver to sell Zeus's assets.
Following a receivership bidding process, Ramsey County District Judge Laura Nelson approved the sale of Zeus's assets to Drake on May 29, 2025. Drake's credit bid of $6,193,719 was the only qualifying bid at auction. The Oldfields objected to the sale in that proceeding but were overruled; the order was not appealed. The Oldfields filed this federal lawsuit approximately two weeks after Judge Nelson's order.
Claims Asserted The Oldfields asserted six claims: 1. (Count I) Derivative claim: Drake breached fiduciary duties owed to Zeus. 2. (Count II) Derivative claim: Stiles aided and abetted Drake's breach of duties to Zeus. 3. (Count III) Derivative claim: Drake and Stiles tortiously interfered with Zeus's prospective business relationships (a $20+ million order from One Stop Truck & Equipment and a $15 million investment from Wingmen Limited). 4. (Count IV) Direct claim: Drake breached fiduciary duties owed to the Oldfields. 5. (Count V) Direct claim: Stiles aided and abetted Drake's breach of duties to the Oldfields. 6. (Count VI) Direct claim: Drake and Stiles tortiously interfered with the Oldfields' prospective business relationships arising from their investment in Zeus.
Ruling on Personal Jurisdiction over Stiles (Rule 12(b)(2)) Stiles moved to dismiss for lack of personal jurisdiction — meaning the court's constitutional and statutory power to compel him to defend himself in Minnesota.
Fiduciary Shield Doctrine
Stiles first argued that all his Minnesota contacts occurred solely in his corporate capacity as Drake's CEO, and that the "fiduciary shield" doctrine exempts such corporate-capacity contacts from the personal jurisdiction analysis. The court rejected this argument, holding that the fiduciary shield doctrine is not part of federal constitutional due process analysis, and that Minnesota has not adopted the doctrine in its long-arm statute (Minn. Stat. § 543.19) or state court decisions. The Minnesota Supreme Court has explicitly declined to apply it.
Minimum Contacts Analysis
Under the Eighth Circuit's five-factor test, the court analyzes: (1) nature and quality of contacts; (2) quantity of contacts; (3) relationship between claims and contacts; (4) the state's interest in providing a forum; and (5) convenience to parties. The first three factors are primary.
The court found the Oldfields failed to plausibly allege Stiles had sufficient Minnesota contacts: - The complaint's jurisdictional allegation was a conclusory legal conclusion that did not identify specific Minnesota activities by Stiles. - Allegations lumped Stiles with Drake without individual attribution, which is legally insufficient. - Specific allegations the Oldfields cited in their brief (e.g., that Stiles initiated the receivership, directed the asset sale) were not actually supported by the complaint paragraphs cited — those paragraphs referred to Drake's actions, not Stiles's. - Mark Oldfield's declaration that he was told by a former Zeus employee that Stiles traveled to Minnesota to meet with Tingyu representatives was excluded as hearsay. The court surveyed the circuit split on this issue and followed the majority rule excluding hearsay in personal jurisdiction challenges, noting the declaration also lacked adequate indicia of reliability under the hearsay rules' residual exception.
Even considering the excluded hearsay, the court found one alleged Minnesota visit insufficient to establish personal jurisdiction. Minnesota's interest in providing a forum for its citizens cannot substitute for absent minimum contacts. The Calder effects test (for intentional torts — requiring that defendant's acts be aimed at the forum state) was also unsatisfied because the record only showed Stiles knew the Oldfields and Zeus were in Minnesota; mere foreseeability of harm in the forum state does not establish the requisite purposeful direction.
Disposition
Claims against Stiles (Counts II, V, and the portions of Counts III and VI asserted against him) were dismissed without prejudice for lack of personal jurisdiction.
Ruling on Failure to State a Claim against Drake (Rule 12(b)(6)) Drake moved to dismiss for failure to state a claim, arguing the complaint did not plausibly allege it owed fiduciary duties to Zeus or the Oldfields. The parties agreed Delaware law governs the fiduciary duty claims (because Zeus was incorporated in Delaware) and Minnesota law governs the tortious interference claims.
Controlling Shareholder Fiduciary Duty under Delaware Law
As a general rule under Delaware law, shareholders do not owe fiduciary duties to the corporation or fellow shareholders. Fiduciary duties arise only when a shareholder is a "controlling stockholder." The Delaware Supreme Court's 2025 decision in In re Oracle Corp. provided the governing framework: - A shareholder owning more than 50% is presumed to be a controlling stockholder. - A minority shareholder (below 50%) can be a controlling stockholder only by exercising actual control — either general managerial control through a combination of significant voting power and management authority over the board, or actual control over a specific transaction (meaning actual domination of the board's decision-making for that particular transaction).
Drake owned 9.95% of Zeus — well below any presumption of control. The complaint failed to plausibly allege controlling-shareholder status because: - It did not allege Drake held board seats at Zeus. - It did not identify any board-level transaction Drake controlled. - The complaint's own theory was that Drake acted independently of the Zeus board to harm Zeus — not that Drake controlled the board. A minority shareholder acting outside of board processes cannot trigger controlling-shareholder fiduciary liability under Delaware law. - The receivership was something that happened to Zeus (Drake sued Zeus), not a board decision Zeus made that Drake dominated. - The complaint's allegations were far less substantial than the evidence of control found in comparable Delaware cases like Tornetta v. Musk, where Elon Musk held 21.9% equity, served as CEO and Chair, and dominated the specific compensation transaction at issue.
Creditor Status
The court also noted in a footnote that Drake's status as a secured creditor of Zeus independently triggers no fiduciary duty under Delaware law, as creditor-debtor relationships in the ordinary course do not carry fiduciary obligations.
Tortious Interference Claims
The Oldfields' tortious interference claims under Minnesota law required showing that Drake's interference was "independently tortious" — that is, wrongful by some other legal standard. The Oldfields relied solely on the alleged fiduciary breach to satisfy that element. Because the fiduciary duty claims failed, the tortious interference claims failed as well. (The court noted the same result would obtain under Delaware law.)
Disposition
Claims against Drake (Count I, Count IV, and the portions of Counts III and VI asserted against Drake) were dismissed with prejudice because the Oldfields did not request leave to amend.
Final Order The motion to dismiss [ECF No. 7] was granted in full: - Counts II, V, and portions of Counts III and VI against Stiles: dismissed without prejudice (no personal jurisdiction). - Count I, Count IV, and portions of Counts III and VI against Drake: dismissed with prejudice (failure to state a claim; no leave to amend requested). - Judgment to be entered accordingly.
Reviewer note from the AI+
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