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UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA LOFTNESS SPECIALIZED FARM EQUIPMENT, INC., Plaintiff/Counterclaim Defendant, v. TERRY TWIESTMEYER, STEVEN HOOD AND TWIESTMEYER & ASSOCIATES, INC.,

Court File No. 11-cv-01506 (DWF/TNL) DEFENDANTS/COUNTERCLAIMANTS’ MEMORANDUM IN OPPOSITION TO MOTION TO STRIKE DEFENDANTS/COUNTERCLAIMANTS’ DAMAGES EXPERT

Defendants/Counterclaimants.

I. INTRODUCTION Loftness Specialized Farm Equipment, Inc. (“Loftness”) has filed a motion to strike the damages expert retained by Defendants/Counterclaimants, Terry Twiestmeyer (“Twiestmeyer”), and Steven Hood (“Hood”) and Twiestmeyer & Associates, Inc. (“TAI”), to calculate damages based on a reasonable royalty measure of damages. Loftness argues that the reasonable royalty measure of damages “while possibly appropriate in a patent case” is not the appropriate measure of damages for breach of the Nondisclosure Agreement (“NDA”) at issue in this case. (Loftness Motion to Strike Memorandum at 1). Loftness’s position is contrary to Tate v. Scanlan Int’l, Inc., 403 N.W. 2d 666, 672-74 (Minn. App.) review denied (Minn. 1987) (affirming jury verdict applying reasonable royalty measure of damages in a breach of a nondisclosure agreement case).

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Defendants/Counterclaimants respectfully submit this Memorandum in Opposition to the Motion to Strike the Damages Report prepared by Zach Eubank and to prohibit Mr. Eubank from testifying at trial. II. RESPONSE TO “BACKGROUND FACTS” A.

The Terms of The NDA Loftness correctly sets out some of the duties and obligations imposed on Loftness

under the NDA at page 4 of its brief. Loftness goes astray, however, when it states: “The NDA did not impose a duty on Loftness to make royalty payments to TAI.” (Loftness Motion to Strike Memorandum at 4). In Loftness Specialized Farm Equip., Inc. v. Twiestmeyer, 818 F.3d 356, 363-64 (8th Cir. 2016) (“Loftness II”), the Eighth Circuit stated: The district court found dispositive the NDA’s lack of any provision relating to payment, observing that the parties instead chose to address TAI’s compensation through the Override Agreement, an agreement we already held Loftness had not breached. Loftness I, 742 F.3d at 853. We disagree. The NDA bans Loftness’s use of TAI’s confidential information “for [Loftness’s] own benefit” or in a way that “could be construed as being competitive of [TAI]’s business.” As mentioned above, however, so long as Loftness continued to pay TAI, TAI reasonably may have considered Loftness’s use of TAI’s confidential information as part of the Brandt Industries relationship to be a non-competitive use. Under this view, had Loftness wished to continue to use TAI’s confidential information in a potentially competitive manner, Loftness could have continued to enter into ancillary payment agreements with TAI. Because the extrinsic evidence is not conclusive, the fact question of the parties’ intent should have gone to a jury, and summary judgment was inappropriate. Thus, Loftness’s attempt to focus on the lack of an express provision relating to payment in the NDA to TAI invites the same error recognized by the Eighth Circuit in Loftness II. Loftness’s use of confidential information “for its own benefit, or use for any 2 4842-1060-5382.1

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purpose other than Project”, without compensation to the Disclosing Party, creates a fact question that must be determined by the jury. Loftness also contends that “[t]he only other written agreement between TAI and Loftness is the SRA.” (Loftness Motion to Strike Memorandum at 5). The SRA is the manufacturer’s representative agreement entered into between Loftness and TAI as a sales representative, and TAI entered into its SRA on January 1, 2008. (Doc. 1-1, Ex. B). The SRA did not cover the Project envisioned in the NDA until an Addendum to the SRA was executed on the same day as the Override Agreement. (Doc. 1-1, Ex. C). TAI’s territory for the sale of grain bagging equipment was amended to include Colorado and Kansas as well as Nebraska, and commissions for the sale of grain baggers, loaders and unloaders were initially 9%, but reduced to 7% by a handwritten notation on the Addendum. (Id.) Presumably, this 2% reduction relates to the 2% paid under the Override Agreement. B.

TAI’s Benefits Relating to the Sale of Grain Bagging Equipment Included the Obligations Owed by Loftness Under the NDA Loftness attempts to limit the benefits TAI would receive in connection with the

development and sale of the new grain bagging equipment product line by Loftness to specific sales made by TAI under the Addendum to the SRA. This contention ignores the fact that TAI had the right to enforce Loftness’s promise not to use the Confidential Information covered by the NDA for Loftness’s own benefit or to use such information for any purpose other than the Project. This non-use provision is not covered by the SRA or its Addendum, and enforcement of the non-use provision is at issue in this litigation. Accordingly, Loftness’s attempt to limit any benefit TAI receives to the SRA must be

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rejected. Moreover, TAI was the 50% owner of the recipient of the compensation paid under the Override Agreement. (Declaration of Thomas H. Dahlk (“Dahlk Decl.”), Ex. A, Deposition of Steven Hood taken on April 17, 2012 (“Hood Dep.”) 11:2-13:4; 198:10-17). C.

TAI is Still in the Business of Selling Grain Bags Loftness takes the position that TAI’s resignation as a Loftness Sales Representative

effective December 31, 2012, while this case was on appeal in Loftness Specialized Farm Equip., Inc. v. Twiestmeyer, 742 F.3d, 845 (8th Cir. 2014) (Loftness I), somehow terminates TAI’s right to enforce the non-use provision of the NDA. (Loftness Motion to Strike Memorandum at 6 and 13). In fact, after TAI resigned from its position as a Loftness Sales Representative, TAI remained in business and continues to sell grain bags, which is one of the components of the grain bag system disclosed under the terms of the NDA. (Dahlk Dec. Ex. E, Declaration of Terry Twiestmeyer dated April 6, 2017 (“Twiestmeyer Decl.”) ¶ 2). Thus, TAI is an active corporation engaged in the sale of grain bagging equipment. D.

Twiestmeyer and Hood are Entitled to Enforce the NDA Loftness has filed a motion for partial summary judgment seeking dismissal of

Twiestmeyer and Hood as individual parties in this case. Twiestmeyer, Hood and TAI will not repeat the arguments that have been made in the Memorandum filed in opposition to the motion for partial summary judgment, but state that both Twiestmeyer and Hood are entitled to have a jury determine whether it was the intent of the parties that Twiestmeyer and Hood be entitled to enforce the terms of the NDA. To the extent Loftness relies on an argument claiming Twiestmeyer and Hood cannot enforce the terms of the NDA, 4 4842-1060-5382.1

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Defendants/Counterclaimants submit this argument should be rejected for the reasons set forth in their opposition brief to the motion for partial summary judgment. Loftness also takes the position that “[m]any of the facts here have been established in two Eighth Circuit Court of Appeal decisions.” Memorandum at 6).

(Loftness Motion to Strike

While there have been two appeals to the Eighth Circuit,

Defendants/Counterclaimants respectfully submit that there are many statements contained in the two opinions that are mere recitals of facts set forth in briefs of the parties on appeal. The applicable rule has been stated as follows: The reach of the mandate is generally limited to matters actually decided. A mere recital of matters assumed for purposes of decision and dicta are not part of the mandate. Matters simply not considered also are likely to be outside the mandate. 18B Wright, Miller & Cooper, FEDERAL PRACTICE AND PROCEDURE: JURISDICTION 2d § 4478.3 (2d ed. 2002). Loftness stresses that in Loftness I and Loftness II, the Eighth Circuit has determined that the parties discussed and agreed how Twiestmeyer and Hood would be compensated for their role in the development of the new product line, and then attempts to limit this compensation to Override Agreement. (Loftness Motion to Strike Memorandum at 6-7). In fact, the Eighth Circuit never specifically addressed the damages resulting from a breach of the NDA, but did reject the argument that the lack of a provision providing for payment in the NDA was fatal to a claim for breach of the NDA. Loftness II, 818 F.3d at 363-64 (“Under this view, had Loftness wished to continue to use TAI’s confidential information in a potentially competitive manner, Loftness could have continued to enter into ancillary

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payment agreements with TAI.”). The Eighth Circuit expressly determined that because the extrinsic evidence was not conclusive, “the fact question of the parties’ intent should have gone to jury, and summary judgment was inappropriate.” Id. at 364. E.

Defendants/Counterclaimants Did Attempt To Negotiate a New Override Agreement in January 2011 When Loftness decided to cut off all compensation for Twiestmeyer, Hood and

TAI’s involvement in the development of the new product line, a new Override Agreement was presented to Loftness for discussion. Defendants/Counterclaimants object to the admission of this attempt to compromise the dispute under Fed. R. Evid. 408 to the extent it is offered to prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction. If the compromise offer is offered to show

the

identity

of

the

parties

entitled

to

compensation,

however,

Defendants/Counterclaimants submit that the Court may admit the evidence for this limited purpose. F.

Allegations of Breach Under the NDA Loftness attempts to limit the scope of the breach of NDA claim asserted in this case

by ignoring the claim based on Loftness’s breach of the non-use provision of the NDA. Breach of the non-use provision is the essence of the claim left to be tried in this case. The Eighth Circuit expressly held that the claim that Loftness has breached the NDA by using TAI’s confidential information for Loftness’s own benefit is properly before the Court. Loftness II, 818 F.3d at 360. Any attempt to limit the scope of this claim must be rejected.

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G.

Damages Report Prepared by Hood Before the two appeals, Defendants/Counterclaimants submitted a Damages Report

prepared by Mr. Hood. (Doc. 50-2, Hood Damages Report). A portion of the damages contained in this report was based on the premise that the Override Agreement was orally extended by the parties. This claim was rejected by the Court in the first summary judgment motion and affirmed in Loftness I by the Eighth Circuit. Thus, a claim for breach of the Override Agreement is no longer in the case. Hood’s Damages Report continues to have relevance, however, because Mr. Hood did summarize the expenses incurred by Twiestmeyer and Hood for the development of the grain bagging system disclosed to Loftness under the NDA. It is anticipated that Mr. Hood will testify as to these damages at the trial. H.

Defendants/Counterclaimants Identified a Supplemental Damages Expert After The Second Appeal Because the breach of the Override Agreement claim is no longer viable,

Defendants/Counterclaimants requested leave to designate a damages expert to opine on a reasonable royalty measure of damages and calculate the damages under this measure for the breach of the NDA claim.

(Doc. 97 p.1).

Judge Leung permitted the

Defendants/Counterclaimants to identify a supplemental expert and prepare an expert report. Judge Leung did not specifically rule on whether a reasonable royalty measure of damage was the appropriate measure for breach of the NDA.

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I.

A Supplemental Damages Report was Prepared by Zach Eubank Defendants/Counterclaimants retained Zach Eubank of the accounting firm RSM to

calculate damages based on a reasonable royalty measure of damages. III. ARGUMENT A.

Standard of Review Fed. R. Evid. 702 and 703, and the teachings of Daubert v. Merrell Dow Pharm.,

Inc., 509 U.S. 579, 591-93 (1993) and its progeny, govern the admissibility of expert opinions. In the present case, however, Loftness’s challenge to the admissibility of Mr. Eubank’s expert opinion is primarily directed at his use of the reasonable royalty measure of damages. Loftness does not appear to be making any challenge to his qualifications to give a damages opinion. Nor has Loftness challenged the methodology used by Mr. Eubank in arriving at his reasonable royalty rate conclusion. Thus, these issues will not be directly addressed in this Memorandum. B.

The Reasonable Royalty Measure of Damage is Appropriate in the Present Case Loftness makes the argument that the law of the case doctrine prohibits any claim

for damages based on a reasonable royalty measure of damages. (Loftness Motion to Strike Memorandum at 11-16). Distilled to its essence, Loftness argues that because the only contract that obligated Loftness to pay a royalty was contained in the Override Agreement, Mr. Eubank should be disqualified because he took the Override Agreement into account when reaching his conclusion. Mr. Eubank did not base his conclusion solely on the fact that Twiestmeyer, Hood and Loftness entered into the Override Agreement. Mr. Eubank expressly stated that the 8 4842-1060-5382.1

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fact the parties entered into a 2% override agreement on May 21, 2008, “provides support for a reasonable royalty for purposes of my analysis and will consider this as one data point in determining a reasonable royalty rate applicable to the confidential information used to manufacture the grain bagging equipment.” (Doc. 127, 130, Ex. 3, Eubank Report p.10). In reaching his final conclusion that a reasonable royalty rate would range between 2% and 5% of sales, he performed a financial analysis and applied the factors set forth in his description of the reasonable royalty methodology set forth at pages 10-11 of his report. He then described in detail his methodology used in his selection of a reasonable royalty. (Doc. 130, Eubank Report at pp.12-21). At pages 19-21 of his report, Mr. Eubank specifically described the “hypothetical negotiation for a reasonable royalty rate.” In this analysis, the Override Agreement is mentioned on page 19 as follows: This is a starting point to analyze a reasonable royalty rate attributable to the confidential information conveyed. This rate was secured prior to the suit and/or infringement: it was paid and accepted by the parties; was in a uniform amount; was not paid under threat of suit or in settlement of litigation and directly relates to the payment for use of the confidential information. Finally, this is evidence of terms negotiated by a willing seller and willing buyer and involves the actual participants in the present litigation. (Doc. 130, Eubank Report at p.19) Thus, Mr. Eubank’s Report refutes Loftness’s contention that Mr. Eubank somehow considered the NDA and the Override Agreement as one contract. (Loftness Motion to Strike Memorandum at 11). This is not what Mr. Eubank did, and Loftness’s challenge should be rejected for this reason alone.

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Loftness also makes the argument that “[t]here was no obligation in the NDA for Loftness to pay a royalty to TAI.” (Loftness Motion to Strike Memorandum at 13). Loftness then attempts to limit the breach of the NDA claim to the alleged confidential information breach related to the sales to Brandt and any damage suffered by TAI for sales in TAI’s territory as a result of the sales to Brandt. (Id.) As support for this argument, Loftness contends that Twiestmeyer limited the damage theory when he gave his 30(b)(6) deposition on behalf of TAI before the Override Agreement breached was dismissed from this case.

Defendants/Counterclaimants

respectfully submit that Twiestmeyer’s testimony was not a limitation on the damages claimed in this litigation. In fact, Mr. Hood provided his damages testimony when he later prepared his Damage Report, and Twiestmeyer’s testimony was not exclusive. While Mr. Hood’s Damages Report primarily relied upon the Override Agreement, the theory of damages did not restrict damages to those suffered by TAI as a sales representative under the SRA. Moreover, Mr. Eubank relied upon a Minnesota case allowing reasonable royalty measure of damages in a breach of a nondisclosure agreement case. In Tate v. Scanlan Int’l, Inc., 403 N.W. 2d 666, 672-74 (Minn. Ct. App.) review denied (Minn. 1987), the Minnesota Court of Appeals affirmed a jury verdict applying the reasonable royalty measure of damage in a case involving a breach of a nondisclosure agreement. Thus, under Minnesota law, damages for breach of a non-disclosure agreement can be based upon a reasonable royalty measure of damages tied to the sales of the product manufactured and sold by the breaching party. 10 4842-1060-5382.1

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The contract enforced in Tate was described as follows: “[Tate] set up a meeting with Scanlan to present her idea, with the understanding that he would keep her idea confidential and that if he used her idea, she would be compensated.” 403 N.W. 2d at 669. After their initial meeting and the disclosure of the idea, Tate and Scanlan met on many occasions but no definite payment terms were discussed. Id. After the product in Tate was marketed, Scanlan sent Tate two contract proposals but revoked the offers before they were accepted. Id. In Tate, the jury found that Tate “communicated her idea to [Scanlan] with the understanding that the idea would be kept confidential were it not used; that [Scanlan] expressly or impliedly agreed to compensate [Tate] if it profitably marketed a product using her idea; and that [Scanlan] breached its agreement with [Tate].” Id. at 670. Loftness attempts to distinguish Tate, stating that: “Loftness never agreed verbally or in writing, to pay TAI a royalty.” (Loftness Motion to Strike Memorandum at 22). Thus, Loftness’s argument is based solely on its contention that there is no evidence that TAI (as opposed to Twiestmeyer and Hood individually) was promised compensation by Loftness. This argument ignores the fact that TAI was the 50% owner of the entity formed to receive the compensation from Loftness. In the Memorandum submitted in opposition to Loftness’s motion for partial summary judgment, Defendants/Counterclaimants have fully briefed Twiestmeyer and Hood’s right to enforce the NDA, and the arguments will not be repeated here. But even if TAI is the only party seeking damages under the NDA, TAI signed the NDA for the benefit of Twiestmeyer and Hood. (Ex. E, Twiestmeyer Decl. ¶ 4). TAI can assert an 11 4842-1060-5382.1

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action for damages under the NDA for the benefit of Twiestmeyer and Hood. 17A Am. Jur. 2d Contracts § 406 (2016) (citing Ingelson v. Olson, 272 N.W. 270 (Minn. 1937)). Because TAI can pursue damages on behalf of Twiestmeyer and Hood, Loftness’s agreement to compensate only Twiestmeyer and Hood should not make Tate distinguishable. In addition, under Minnesota law, the Minnesota courts have generally cited to the Restatement (Second) of Contracts § 344 (Am. Law Inst. 1979) when analyzing the damages remedies available in a breach of contract action. See, e.g., Logan v. Norwest Bank Minn., N.A., 603 N.W.2d 659, 663 (Minn. Ct. App. 1999). Section 344 recognizes three interests deserving of protection in a breach of contract action: (1) the “expectation interest”, (2) the “reliance interest”, and (3) the “restitution interest”. In the present case, TAI, Twiestmeyer and Hood are seeking to protect the “restitution interest”. Recognition of the “restitution interest” in a breach of contract action serves “to prevent unjust enrichment.” Restatement (Second) of Contracts § 344, Cmt a. The reasonable royalty measure of damages recognized in Tate, supra, represents an award of damages that is based upon the amount Loftness would have likely paid for the use of the Confidential Information disclosed under the NDA. See Hallmark Cards, Inc. v. Monitor Clipper Partners, LLC, 758 F.3d 1051, 1059 (8th Cir. 2014). The Eighth Circuit has recognized that the reasonable royalty measure of damages “is most appropriate when the other theories would result in no recovery or when the parties actually had or contemplated a royalty arrangement.”

Pioneer Hi-Bred International v. Holden

Foundation Seeds, Inc., 35 F.3d 1226, 1244 (8th Cir. 1993). 12 4842-1060-5382.1

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C.

Mr. Eubank’s Expert Report Demonstrates a Reasonable Understanding of the Facts of the Case Loftness states that Mr. Eubank suffered from a failure to understand “the

fundamental facts of this case and [his assumptions] are contrary to anything the evidence here could possibility support.” (Loftness Motion to Strike Memorandum at 16). For example, Loftness argues that Mr. Eubank’s use of January 1, 2011 as his starting date for the damages because it was the date of the last payment received from Loftness must be discounted because the only payments that ended in January in 2011 were made under the Override Agreement, not under the NDA. (Id. at 17). Loftness concludes that “since TAI was not a party to the Override Agreement, it never received any of them.” (Id.). Loftness ignores the interrelationship of TAI with the payments paid under the Override Agreement. TAI is a 50% owner of GBSS, the recipient of the payments. Thus, TAI clearly received the benefit of such payments in accordance with its agreement with Mr. Hood and Mr. Twiestmeyer. This argument by Loftness fails to withstand analysis. Loftness then attacks Eubank’s continuation of his damages calculation until May 15, 2027, the date the NDA expires. Loftness’s argument is that Mr. Eubank failed to explain how a royalty measure of damages was appropriate, and that the only royalty payments made were under the Override Agreement that expired on May 21, 2010. (Loftness Motion to Strike Memorandum at 17). Loftness then makes the argument that TAI and Loftness never entered into a license agreement, and that the only business relationship with TAI and Loftness was the manufacturer’s representative relationship under the SRA and its addendum. (Id. at 18).

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Loftness primarily bases its attack on the fact TAI signed the NDA and Twiestmeyer and Hood signed the Override Agreement. Defendants/Counterclaimants submit that this technicality is not fatal to their right to assert a claim for damages for Loftness’s breach of the non-use provision of the NDA. If it were, the Eighth Circuit would not have remanded the case for a jury trial in Loftness II. All of Loftness’s arguments ignore the sufficiency of the methodology employed by Mr. Eubank in preparing his Expert Report and the recognized use of the reasonable royalty measure of damages in Tate, supra. None of the challenges even attempts to critique the manner in which Mr. Eubank arrived at his conclusion that a reasonable royalty rate in this case ranges between 2% and 5% of net sales. Defendants/Counterclaimamts respectfully submit that Loftness has not established that Mr. Eubank failed to address the true facts of this case, and that Mr. Eubank’s testimony should be allowed. D.

Eubank’s Opinion is Reliable In Ventura v Titan Sports, Inc., 65 F.3d 725, 734 (8th Cir. 1995), the Eighth Circuit

found that the damages expert’s methodology in arriving at a reasonable royalty rate was reliable. Id. at 734. The Eighth Circuit recognized that it is common practice to introduce evidence of transactions involving other “substantially similar” articles, and that the expert in Ventura surveyed licensing agreements involving other sports and entertainment figures. Id. This examination or survey of other similar transactions was also performed by Mr. Eubank. Thus, Defendants/Counterclaimants respectfully submit that Mr. Eubank’s expert opinion is reliable and admissible.

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Loftness contends that Eubank relied “only” on the Override Agreement and referred to TAI as a party to the Override Agreement. Eubank did not rely solely on the Override Agreement, but instead used it as one data point and as a starting point. (Doc. 130, Eubank Rep. pp. 10, 19). Moreover, the Eighth Circuit in Loftness II referred to “TAI’s compensation through the Override Agreement.” 818 F.3d at 363. Eubank can rely on statements made by the Eighth Circuit in formulating his opinion. E.

Loftness Incorrectly Argues that Eubank’s Damages Report Should Be Excluded as Irrelevant In Ventura, supra, defendant challenged the admissibility of expert testimony

concerning a reasonable royalty rate on the grounds of relevancy. The Eighth Circuit affirmed a verdict applying the reasonable royalty measure of damages in a claim based on quantum meruit, stating that Minnesota cases generally recognize that the amount of recovery in quantum meruit actions is the reasonable value of the benefit (or services) to the defendant. 65 F.3d at 733-34. The Eighth Circuit in Ventura affirmed the trial court’s determination that the expert’s testimony was relevant because it tended to fix the value of the benefit received by the defendant and provided competing evidence of a reasonable royalty rate. Id. In the present case, Zach Eubank’s expert testimony is relevant to provide the jury a basis for calculating damages. Loftness’s contention to the contrary should be rejected. F.

Eubank’s Testimony Will Assist the Trier of Fact In Its Determination of Damages Loftness also challenges the admission of Eubank’s testimony on the basis that the

subject matter is not beyond the ordinary capability of the jurors. (Loftness Motion to 15 4842-1060-5382.1

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Strike Memorandum at 23-24). This argument is premised on Loftness’s argument that TAI’s damages caused by a breach of the NDA must be confined to a loss of commissions on sales Brandt made in TAI’s sales territory under the SRA. Loftness argues that only simple math would be required to calculate these damages, and thus an expert such as Mr. Eubank is not necessary. Defendants/Counterclaimants respectfully submit that the proposed Loftness measure of damages ignores the measure of damages allowed in Tate, supra. Under a reasonable royalty measure of damages, Mr. Eubank’s testimony will assist the jury in its determination of the damages caused by Loftness’s breach of the non-use provision contained in the NDA. G.

Mr. Eubank’s Testimony Should Not be Excluded Under Fed. R. Evid. 403 As its last ditch attempt to exclude Mr. Eubank’s testimony, Loftness argues that

his testimony should be excluded because it is “highly prejudicial” to Loftness. (Loftness Motion to Strike Memorandum at 24). Defendants/Counterclaimants respectfully submit that Mr. Eubank’s expert testimony is based upon the reasonable royalty measure of damages express recognized by the Minnesota Court of Appeals in Tate, supra, and that his testimony should not be excluded simply because he will testify that the damages will be as much as $6,315,000. Loftness also contends that the Eighth Circuit has become confused on this very issue,

and

therefore

“it

is

likely

that

a

jury

would

as

well.”

(Id.)

Defendants/Counterclaimants respectfully submit that the Eighth Circuit is not “confused”

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simply because it disagrees with Loftness’s view of the case, and that a damages expert should be allowed to opine on a reasonable royalty measure of damages. IV. CONCLUSION Loftness is seeking to exclude Mr. Eubank’s Expert Report and his testimony at trial primarily because Loftness does not believe a reasonable royalty measure of damages is appropriate in this case. Defendants/Counterclaimants respectfully submit that Tate v. Scanlan Int’l, Inc., 403 N.W. 2d 666, 672-74 (Minn. Ct. App.) review denied (Minn. 1987) is

directly

on

point,

and

Loftness’s

argument

is

contrary

to

the

law.

Defendants/Counterclaims respectfully request that Loftness’s motion to strike be denied in its entirety. Respectfully submitted, this 7th day of April, 2017. TERRY TWIESTMEYER, STEVEN HOOD and TWIESTMEYER & ASSOCIATES, INC., Defendants/Counterclaimants By: /s/ Thomas H. Dahlk Thomas H. Dahlk, NE #15371 (admitted pro hac vice) Victoria H. Buter, NE #23841 (admitted pro hac vice) KUTAK ROCK LLP 1650 Farnam Street Omaha, Nebraska 68102-2186 Phone: (402) 346-6000 Facsimile: (402) 346-1148 [email protected] [email protected] and

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Aaron A. Myers, #311959 KUTAK ROCK LLP 60 S. Sixth Street, Suite 3400 Minneapolis, Minnesota 55402-4400 Phone: (612) 334-5000 [email protected]

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