Metro Sales, Inc. v. Core Consulting Group, LLC (275 F. Supp. 3d 1023, 2017)

United States District Court for the District of Minnesota 2017-07-26

Citations

Full opinion text

MEMORANDUM OPINION AND ORDER

DONOVAN W. FRANK, United States District Judge

INTRODUCTION

This matter is before the Court on a Motion for Summary Judgment brought by Plaintiff Metro Sales, Inc. (“MSI”). (Doc. No. 59.) Also before the Court is MSI’s Motion to Exclude Expert Testimony. (Doc. No. 62.) Defendants Core Consulting Group, LLC (“Core”) and Rodger Mohagen (“Mohagen”) (collectively, “Defendants”), oppose the motions. (Doc. Nos. 72, 73.) For the reasons set forth below, the Court grants the motions, in part, consistent with this opinion. As outlined below, the following claims will proceed to trial: (1) Plaintiffs breach-of-fiduciary-duty and declaratory judgment claims; and (2) Core’s breach-of-contract and deceit counterclaims.

BACKGROUND

Jerry Mathwig (“Mathwig”) is the founder and president of Metro Sales, Inc., a Minnesota corporation that provides and services office equipment. (Doc. No. 75 (“McNary Decl.”) ¶ 3.bb, Ex. 28 (“Mathwig Dep”) at 21:20-22, 23:16-18, 28:15-23, 35:14-19.) This case relates to MSI’s efforts to pursue an employee stock ownership plan (“ESOP”) for the company in late 2014' through the spring of 2015 in consultation with Core Consulting Group, LLC.

I. The First Consulting Agreement

In an October 2, 2014 e-mail, Mathwig reached out to Core, a North Dakota company that provides professional ESOP services. (McNary Decl. ¶ 3,c, Ex. 3.) Mathwig sent the e-mail to Core’s president, Rodger Mohagen, asking if he and his company would be interested in discussing a possible ESOP for a Minneapolis company. (Id.) Mohagen’s response was positive, and the parties signed an initial Consulting Agreement (the “First Consulting Agreement”) effective October 30, 2014 for Core to provide MSI with an ESOP “feasibility analysis.” (Id.-, Doc. No. 67 (“Vehrs Decl.”) ¶2, Ex. 3 (“1st CA”).) The First Consulting Agreement, had the following purposes:

[T]o gather information related to the governance and operations of [MSI] necessary to allow [Core] to determine primary issues to be addressed in [MSI’s] formation and ongoing sponsorship of an [ESOP] ... and to present these issues to [MSI] in a form ... which enables [MSI] to make informed decisions' in forming and addressing ongoing administration of a[n]--... ESOP.

(Id., Ex. 1.) In performing the feasibility analysis, Core anticipated that it would “[r]equest and review ... [MSI] documents,” and “review and comment on” implementing the ESOP as well as pre- and post-ESOP-formation transaction issues. (Id.) These services were to run from October 30, 2014 through January 15, 2015. (Id.) The First Consulting Agreement had “a fixed fee of ... $35,000.” (Id. ¶ 2.)

II. The Second Consulting Agreement

MSI and Core entered into another Consulting Agreement (the “Second Consulting Agreement”) effective December 16, 2014 with a fixed fee of $25,000. (Doc. No. 1 (“Compl.”) ¶ 9, Ex. B (“2nd CA”).) The Second Consulting Agreement contained the same provisions as the first, but provided for additional services to run from December 8, 2014 through January 30, 2015. (Id.-, see also 1st CA.) The services in the Second Consulting Agreement focused on designing arid drafting documents’for the'ESOP, such as 'an ESOP plan document, minutes, and other corporate documents. (2nd CA, Ex. 1.) Core also agreed to counsel MSI on several issues', including the timing of employee notices, provisions to include in the ESOP Document, the accrual and payment of ESOP contributions, and “anticipated income tax benefits.” (Id.)

Communication and work on services contained in each of the two signed Consulting Agreements continued after the terms of the contracts ended. The feasibility analysis continued into February 2015, when Mohagen e-mailed Mathwig and noted that Core was “winding up the ‘feasibility’ portion.” (Vehrs Decl. ¶ 2, Ex. 22.) MSI adopted the ESOP plan document on December 30, 2014. (McNary Deck ¶ 3.i, Ex. 9.) This was before the Second Consulting Agreement’s term ended, but some matters relating to this agreement were still in progress in March 2015. (Vehrs Deck ¶2, Ex. 23.) MSI has paid the $60,000 in fixed fees under the First and Second Consulting Agreements. (See Compl. ¶ 12; Doc. No. 47 (“Am. Answer”) ¶ 12.) The consulting agreements are governed by North Dakota law. (See 1st CA ¶ 12; 2nd CA ¶ 12.)

III. Additional Fees

As Core’s consulting work continued, the parties discussed additional fees and services on numerous occasions. On November 2, 2014, Mohagen sent Steve Zenz (“Zenz”), a member of MSI’s board of advisors, a fee estimate. (McNary Deck ¶ 3.a, Ex. 1; Vehrs Deck ¶ 2, Ex. 6.) Including the First Consulting Agreement’s $35,000 fixed fee, this anticipated fee estimate ranged from $105,000 to $127,500. (Vehrs Deck ¶2, Ex. 6; McNary Deck ¶ 3.r, Ex. 18.) Mohagen noted that “it is extremely difficult if not impossible to provide an ‘estimated fee’ ” partly because of “the high number of potential issues to be addressed.” (Vehrs Deck ¶2, Ex. 6.) He also noted that “if any issues arise in the feasibility analysis, those issues will be resolved outside of a ‘simplified’ ESOP formation.” (Id.) On November 3, 2014, Zenz e-mailed Mathwig and told him he “let [Mohagen] know we are okay with the feasibility fee and that we want to know in advance if he is going to do anything with an additional fee.” (Vehrs Deck ¶2, Ex. 25.)

On March 13, 2015, Mohagen e-mailed Zenz another fee estimate indicating fees of $395,000 plus at least an additional $122,500. (Vehrs Deck ¶2, Ex. 5.) On March 14, 2015, Zenz responded to Moha-gen’s e-mail, noting that he “was expecting the all-in fee would be around $300k, maybe $350k” and stating that he was “very concerned” about the high fee estimate. (Id.) On March 25, 2015, Mohagen sent Mathwig an e-mail and attached an anticipated fixed fee schedule for additional services in response to a request from MSI. (Vehrs Deck ¶ 2, Ex. 6.) The estimated fees totaled $532,500, including the $60,000 already paid. (Id.)

IV. Additional Services

As the engagement continued, Core proposed additional consulting agreements beyond those signed by the parties. On March 25, 2015, Mathwig sent a proposed Consulting Agreement for services totaling $7,500 to be executed from March 2, 2015 through April 30, 2015. (Vehrs Deck ¶2, Ex. 7.) On April 20, 2015, Mohagen emailed three new proposed consulting agreements, which were to account for work from March 2, 2015 until June 30, 2015. (Vehrs Deck ¶2, Ex. 11.) The additional fees proposed in these agreements totaled $180,000. (Id.) Then, Mathwig emailed five more proposed consulting agreements on April 23, 2015, totaling $285,000. (Vehrs Deck ¶2, Exs. 12, 13.) The term of these proposed agreements also began on March 2, 2015. (Id.) Moha-gen noted on both April 20, 2015 and April 23, 2015 that Core had already “engaged in significant services related to each of the attached [consulting agreements].” (Vehrs Deck ¶ 2, Ex. 11; Vehrs Deck ¶2, Ex. 13.)

MSI did not sign any of the additional proposed consulting agreements. (McNary Decl. ¶ 3.w, Ex. 23.) However, the parties dispute whether Mathwig promised to.do so. In his deposition, Mohagen asserted that he had a conversation with Mathwig on April 7, 2015, and Mathwig “agreed to all the engagement letters that were ’the product of the [fixed fee] schedule that he had been provided.” (Vehrs Decl. ¶ 2, Ex. 38 (“Second Mohagen Dep.”) at 17:24— 18:6.) On April 8, 2015, Mohagen -wrote to Zenz that “Jerry [Mathwig] did agree to sign engagement agreements and pay fees as we go.” (Vehrs Decl. ¶ 2, Ex. 10.) Ma-thwig does not deny that a phone call occurred on April 7, 2015, but he asserts that he “made no such promise,” and noted that he “had not even seen the other proposed agreements as of the date of that phone call.” (Doc. No. 66 (“Mathwig Decl”) ¶¶ 5, 6.)

It is also disputed whether MSI knew Core was undertaking additional services beyond the scope of the First and Second Consulting Agreements. Mohagen testified that he informed Mathwig about such services and fees in “personal meetings” or “telephone conferences”.(Vehrs Decl. ¶2, Ex. 37 (“Mohagen Dep.”) at 48:3-24.) Additionally, at least some agenda items and communications appear to include items not explicitly listed in either of the two signed Consulting Agreements. For example, a February 2, 2015 agenda included “NA Trading” and “Treatment of AAA”— both of which were not specifically listed in either of the signed Consulting Agreements. (McNary Decl. ¶ 3.j, Ex. 10; see 1st CA; 2nd CA.) On February 17, 20Í5, Mo-hagen also e-mailed Mathwig a summary of anticipated services for moving forward and indicated that some services would be completed immediately. (Vehrs Decl. ¶ 2, Ex. 22.)

However, on March 13, 2015, Mohagen wrote to Zenz that “Core anticipates entering into Consulting Agreements prior to material services being initiated on a particular project within the confines of the overall engagement.” (Vehrs Decl. ¶ 2, Ex. 5.) And on March 25, 2015, Mohagen wrote to Mathwig that the First and Second Consulting Agreements for fees of $35,000 and $25,000 “have been engaged, initiated and completed, therefore the services [sic] fees have been set and paid. The remaining services have not as of yet been engaged.” (Vehrs Decl. ¶ 2, Ex. 6.)

V. “Halt All Work” Instruction and Termination of the Relationship

On May 6, 2015, the relationship between MSI and Core quickly deteriorated when Mathwig sent Mohagen an instruction “to halt all work until I approve a restart” and “to bill all work that has been done so far.”- (Vehrs Decl. ¶2, Ex. 15.) In response, Mohagen sent an e-mail to Ma-thwig and Zenz regarding Mathwig’s instruction to “halt all work.” (McNary Decl. ¶ 3.w, Ex. 23.) His e-mail included a statement reminding Mathwig that “Core sent you, personally and MSI a schedule ... of the Projects to be undertaken with regard to this Engagement: and the anticipated cost/benefit of individual Projects.” (Id.)

On May 12, 2015, Mathwig wrote another e-mail stating that he expected “the Valuation Process to be completed fully and not excluded.” (Vehrs Decl. ¶2, Ex. 15.) However, on June 16, 2015, Mathwig sent another e-mail ending the relationship between Core and MSI. (Vehrs Decl. ¶2, Ex. 20.) On June 25, 2015, Mohagen emailed Mathwig the signed Consulting Agreements along with eight “[i]nvoices for Core services provided outside Exhibit 1 of the attached CA’s billed at Core’s standard hourly rates.” (Vehrs Decl. ¶ 2, Ex. 21.) The invoices totaled $207,032.50. (Id.)

VI. Procedural Background

On August 7, 2015, MSI commenced this action. (Compl.)' In the Complaint, MSI asserts the following claims: (1) breach of fiduciary duty (Count I); and (2) declaratory judgment pursuant to 28 U.S.C. § 2201(a) (Count II). (Id. ¶¶ 30-38.) ■ MSI seeks the following relief: (1) $60,000 as damages for its breach-of-fiduciary-duty claim; (2) an award of costs and attorney fees; (3) a declaration that MSI is not obligated to Core Consulting to pay $207,032.50 in additional fees; (4) a declaration that the First and Second Consulting Agreements' are unconscionable and void; and (5) other relief the court deems appropriate, (Id, at Prayer for Relief.)

On March, 1, 2016, Defendants filed an Amended Answer and Counterclaim. (Am. Answer.) Core asserts the following counterclaims against MSI: (1) breach of contract' under the 'First and' Second Consulting Agreements (Count I); (2) unjust enrichment (Count II); (3) promissory es-toppel (Count III); and (4) deceit/misrepresentation (Count IV). (Id, ¶¶ 90-117.) Core seeks the following relief: (1) dismissal of MSI’s Complaint with prejudice; (2) $207,032.50 plus interest; (3) an award of costs and attorney fees; and (4) other relief the court deems equitable. (Id. at Prayer for Relief.) The Court provides additional facts as they are relevant to the claims and issues analyzed below.

DISCUSSION

1. MSI’s Motion for Summary Judgment

MSI asserts it is entitled to summary judgment on all claims before the Court, including its own claims for declaratory judgment and breach of fiduciary duty as well as Core’s breach of contract, promissory estoppel, unjust enrichment, and'deceit counterclaims. Defendants, on the other hand, contend that genuine issues of material fact preclude summary judgment in MSI’s favor.

A. Legal Standard

Summary judgment is appropriate if the ‘‘movant shows that there is no genuine dispute as to any material- fact - and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Courts must view the evidence and all reasonable inferences in the light most favorable to the nonmoving party. Weitz Co., LLC v. Lloyd’s of London, 574 F.3d 885, 892 (8th Cir. 2009). However, “[sjummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed ‘to secure the just, speedy, and inexpensive determination of every action.’ ” Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting Fed. R. Civ.P. 1).

The moving party bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Enter. Bank v. Magna Bank of Mo., 92 F.3d 743, 747 (8th Cir. 1996). The nonmoving party must demonstrate the existence of specific facts in the record that create a genuine issue for trial. Krenik v. Cty. of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995). A party opposing a properly supported motion for summary judgment “may not rest upon mere allegation or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

B. Declaratory Judgment and Breach of Contract

MSI contends that it is entitled to a declaratory judgment to resolve the parties’ actual dispute over MSI’s obligation to pay invoices totaling $207,082,50. Accordingly, MSI also argues that it is 'entitled to summary judgment on Defendants’ counterclaim for breach of contract. First, MSI argues that the- parties’ contracts— the First and Second Consulting Agreements—plainly required Core to provide notice to MSI if any requested sendees went beyond the existing agreements. Second, MSI contends that there is no evidence that such notice was provided, absent Mohagen’s self-serving testimony. MSI further asserts that it had no réason to believe services were being performed outside of the First and Second Consulting Agreements. In particular, MSI argues that Mohagen’s February 17, 2015 e-mail could not have provided notice because it stated that Core was'“winding up the ‘feasibility’ portion of our engagement,” and working on an outline of issues not yet addressed. (Doc. No. 76' at 6 (quoting Vehrs Decl. ¶2, Ex. 22).) MSI points out that it is not relevant if MSI should have known that additional services were being provided beyond the scope of the existing agreements ‘ because Core had an obligation to provide actual notice.

Defendants assert that summary judgment on MSI’s declaratory judgment claim is improper. First, Defendants suggest that the Consulting Agreements contain no requirement that Core provide advance notice of services falling outside the scope of the agreements. Second; Defendants identify “several instances of Core notifying MSI of services.not described in the two executed Consulting Agreements,” (Doc. No. 73 at 19.) For example, Defendants point out that Mathwig participated in weekly conference calls relating to the ESOP transaction even after .the ESOP document was adopted. In addition, Defendants point to Mohagen’s testimony that Mathwig was informed of outside services “[o]n a number of occasions.” (Id. at 19-20.) Defendants also identify conference call agendas that cover topics outside the scope of the First and Second Consulting Agreements and point out that conference calls nearly always included discussions of fees ahd projects. Defendants also note that Mohagen explained via e-mail on February 17, 2015 that he would “continue to address ’matters requiring immediate attention” after describing maiiy services that were not yet engaged. (Id. at 20 (quoting Vehrs Decl. ¶ 2, Ex. 22).) In short, Defendants argue that genuine issues of material fact remain', precluding summary judgment.

The Court first notes the apparent dispute between the parties over the proper framing of the issues under these claims. With respect to its own declaratory judgment claim ánd Core’s breach-of-contract counterclaim, MSI focuses on the invoices totaling $207,032.50. However, MSI points out that Mohagen testified Defendants sent- the invoices totaling $207,032.50 to MSI to attempt to settle Core’s claimed entitlement to the additional fixed fees under the unsigned Consulting Agreements. In responding to MSI’s declaratory judgment claim, Defendants assert that “MSI asks the Court to declare- that MSI owes no additional fees to Core for consulting services,” not specifically referencing the $207,032.50 invoice figure. (Doc. No. 73 at 18 (emphasis added).) Notwithstanding the parties’ inconsistent framing of the issues under these claims, the Court interprets MSI’s declaratory judgment claim as seeking to resolve the parties’ dispute over MSI’s liability to Core for $207,032.50 under the First and Second Consulting Agreements—the only signed contracts between the parties. The Court will thus analyze these claims by focusing on this disputed issue.

Under North Dakota law, “[a] breach of contract is the nonperformance of a contractual duty when it is due.” Welch Const. & Excavating, LLC v. Duong, 2016 ND 70, ¶ 5, 877 N.W.2d 292, 294 (quoting WFND, LLC v. Fargo Marc, LLC, 2007 ND 67, ¶ 13, 730 N.W.2d 841, 848). The following three elements must be established: “the existence of a contract, a breach of the contract, and damages flowing from the breach.” Id. The burden rests on the party who has asserted a breach-of-contract claim. Serv. Oil, Inc. v. Gjestvang, 2015 ND 77, ¶ 15, 861 N.W.2d 490, 496.

Construing a written contract is generally a question of law. Welch Const., 2016 ND 70, ¶ 6, 877 N.W.2d at 294. Contract terms should “be understood in their ordinary and popular sense rather than according to their strict legal meaning, unless used by the parties in a technical sense, or unless a special meaning is given to them by usage, in which case the latter must be followed.” N.D. Cent. Code § 9-07-09 (2017). Dictionaries provide a useful aid because “[t]he ordinary meaning is the definition- a non law-trained person would attach to the term.” Martin v. Allianz Life Ins. Co. of N. Am., 1998 ND 8, ¶ 12, 573 N.W.2d 823, 826. A contract should be •interpreted as a whole, with every clause being used “to help interpret the others.” N.D. Cent. Code § 9-07-06 (2017).

Whether a contract has been breached is a question of fact. Welch Const., 2016 ND 70, ¶ 5, 877 N.W.2d at 294. If a party.seeks to establish the existence of an oral agreement by testimony, a court should not “resolve disputed issues of material fact as to the terms of the contract” at the summary judgment stage. Martin Const., Inc. v. Concrete Strategies, LLC, 2016 WL 4218591, at *2 (D.N.D. Mar. 23, 2016). Further, “[n]otice is a question of fact, which is generally inappropriate for summary judgment.” Van Sickle v. Hallmark & Assocs., Inc., 2008 ND 12, ¶ 17, 744 N.W.2d 532, 538 (quotation marks and citation omitted).

To be recoverable, damages, must be “clearly ascertainable in both their nature and origin.” Serv. Oil, Inc., 2015 ND 77, ¶ 16, 861 N.W.2d at 496 (quoting N.D. Cent. Code § 32-03-09). Although “mere uncertainty in the exact amount of damages will not preclude recovery when obvious damages were suffered or reasonably certain substantial damages have resulted,” recovery is, precluded where there is “uncertainty as to the fact of damages, rather than the amount.” Id. A court may conclude that the “fact of damages” is uncertain, for example, based on a lack of inventories relevant to the claimed damages. See id. at ¶¶ 20-21, 497-98.

Both the First and Second Consulting Agreements include an attached “Exhibit 1” which outlines the “specific consulting and advisory services to be provided by [Core]” pursuant to the agreement. (1st CA ¶ 1 & Ex. 1;' 2nd CA ¶ 1 & Ex. 1.) The agreements provide:

During the term of this Agreement, [MSI] may engage [Core] to complete consulting and advisory services which are outside the scope of services outlined in Exhibit 1.... When [MSI] engages [Core] to provide additional services under the terms of ... this Agreement, whether or not [Core] provides [MSI] with a written outline of the services to be completed and the fees to be charged by [Core] for these additional services, additional services shall be provided under the terms of this Agreement at standard hourly rates. If these additional services take longer than the term of this Agreement to be completed, this Agreement shall continue to be in effect until thé completion of these additional services by [Core].

(1st CA ¶ 1; 2nd CA ¶ 1.) With respect to fees, the agreements state:

[MSI] agrees that the fees quoted for this Agreement are for the services outlined in Exhibit 1 of this Agreement only and do not include services that may be required or engaged for with [Core] outside of the services summarized in Exhibit 1.... [Core] will notify [MSI] verbally or in writing when requested- consulting services fall outside of the services rendered pursuant to Exhibit 1....

(1st CA ¶ 2; 2nd CA ¶ 2.) Under a provision addressing termination, the First Consulting Agreement states:

The term of this Agreement shall "commence October 30, 2014, and terminate January 15, 2015, unless extended by ongoing services as outlined’ under Section 1 of this Agreement. The Agreement may be terminated by either party upon written notice if the other party breaches any of its obligations hereunder and the breaching party fails to cure such breach within thirty (30) days after receipt of notice of such breach..... ■ - If [MSI] elects to terminate this Agreement at any time after thirty (30) days from the execution of this Agreement, [MSI] shall be obligated to pay the fees enumerated in Section 2 of this Agreement and any fees agreed to on engagements falling outside of the services summarized in Exhibit 1.... •

(1st CA ¶ 5.) The Second Consulting Agreement contains an identical provision except for the term which “shall commence December 8, 2014, and terminate January 30, 2015.” (2nd CA ¶ 5.)

The Court first concludes that, the First and Second Consulting Agreements unambiguously require Core to provide ád-vance notice of services being provided outside the scope of the existing agreements. Both agreements plainly state that “[Core] will notify [MSI] verbally or in writing when requested consulting services fall outside of the services rendered pursuant to Exhibit 1.” (1st CA ¶ 2; 2nd CA ¶ 2.) There is no indication that the use of the term “notify” in this- provision should be construed according to its “strict legal meaning,” “in á technical sense,” or in accordance with a “special meaning.” See N.D. Cent. Code § 9-07-09. Understood in its “ordinary and popular sense,” see id., “notify” means, in relevant part, “to give notice of or report the occurrence of.” Notify, Merriam-Webster, http://www. merriam-webster.com/dictiOnary/notify (last visited July 20, 2017). In turn, the first-listed definition of “notice” is “warning or intimation of something.” Notice, Merriam-Webster, http://www.merriam-webster.com/dictionary/notice (last visited July 20,’ 2017). Consistent with these definitions, the Court concludes that the requirement to “notify” MSI most sensibly requires prior notice which would warn MSI and permit it to evaluate whether or not to engage such additional services. The Court acknowledges that the word “notify” may refer to prior notice or notice provided after the fact. When read in context, however, the Court concludes that the commonsense reading of this provision requires advance notice. See N.D. Cent. Code Ann. § 9-07-06 (providing that contracts should be read as a whole).

Second, the Court concludes that a genuine issue of material fact exists regarding whether Core notified MSI in advance that the additional services being provided, were beyond the scope of the First and Second Consulting Agreements. In particular, Mohagen testified in his deposition as follows:

THE COURT REPORTER: “Did you tell him in each conversation that you had with him starting in December that you were undertaking work outside of the agreements that he had already signed?”

[Mohagen]: No.

[Counsel for MSI]: Did you ever tell him that?

[Mohagen]: I believe we told him at a number of occasions.

[Counsel for MSI]: When?

[Mohagen]: I think if you look at every agenda: for every phone conference there’s always a, discussion about fees and billings. Every Steve Zenz prepared .agenda.

[Counsel for MSI]: So you’re saying it was in personal meetings.when you told him that you were undertaking work already outside the scope of the two signed consulting agreements?

[Mohagen]: Yes. And/or in telephone conferences,

[Counsel for MSI]: Was it in every ope?

[Mohagen]: I don’t know that it was in every on.e. I don’t recall.

(Mohagen Dep. at 48:3-24.)

While the evidence to support Defendants’ position is slim, the Court cannot hold on this record that Core undisputedly failed to notify MSI of services being engaged beyond the scope of the First and Second Consulting Agreements. MSI agreed to a contract provision whereby Core could give verbal notice of requested services falling outside the scope of the written agreements., The 'record establishes that the parties engaged in frequent verbal communications throughout the course of their business relationship. By not contracting for written notification only, Mathwig .and MSI took the risk that disputes relating to this provision may be resolved via conflicting testimony. To hold that Mohagen’s sworn testimony is insufficient to establish that Core in fact notified MSI would be inconsistent with the terms . agreed upon by the parties. A jury could reasonably conclude that MSI was notified in advance that Core was providing services beyond the scope of the First and Second Consulting Agreements. Therefore, MSI’s Motion for Summary Judgment is denied with respect to its declaratory judgment claim and MSI’s, breach-of-contract counterclaim.

The Court notes, however, that Core may have difficulty establishing its damages with respect-to its breach-of-contract claim in light of the limited evidence in the record regarding the nature and timing of the notice given and the particular “additional services” agreed upon by the parties. To support their claimed entitlement to additional fees, Defendants must clearly establish that particular work identified in the invoices totaling $207,032.50 was both (1) beyond the scope of the existing agreements and (2) agreed upon by the parties following Core’s timely notification.

C. Promissory Estoppel

MSI argues that Defendants’ promissory- estoppel counterclaim should be dismissed because Mathwig’s purported promise was not sufficiently definite as to essential terms, and Defendants could not have justifiably relied on this promise with respect to work performed before the alleged promise. According to MSI, Moha-gen’s February 17, 2015 e-mail did not include many of the services eventually identified in the proposed consulting agreements. In addition, the March 25, 2015 Services Summary e-mail was only a draft proposal which did not include contract terms, a clear description of services to be provided, or fixed fees. Even assuming Mathwig agreed to sign the consulting agreements he had not yet seen, MSI argues, Defendants’ promissory estoppel claim must fail because the essential terms were unknown at the time of the alleged April - 7, 2015 promise. MSI also argues that Defendants have failed to establish that they substantially changed their position as a result of Mathwig’s alleged promise. MSI contends that there is no injustice to Core in dismissing this claim.

According to Defendants, Mathwig agreed to sign the consulting agreements described in the March 25, 2015 Services Summary e-mail and pay the related fees. Mohagen asserts that Mathwig knew the provisions included in the unsigned consulting agreements would be the same as those included in the First and Second Consulting Agreements. Defendants also assert that Mathwig was aware of the services being proposed because they had been previously communicated via e-mail on February 17, 2015. Thus, Defendants argue, MSI knew, all of the essential.terms of the agreements Mathwig agreed to sign prior to his April 7, 2015, oral promise. Defendants argue that their continued performance in reliance on Mathwig’s promise and expectation of compensation was .justifiable. Defendants assert that they had a reasonable belief that MSI would execute the consulting agreements and pay the related fees if Core continued to perform services for MSI. Defendants argue that Mathwig’s promise must be enforced to avoid the injustice of Core going without compensation for months of work performed for MSI.

A claim of promissory estoppel requires a party to establish the following four elements: “1) a promise which the promisor should reasonably expect will cause the promisee to change his position; 2) a substantial change of the promisee’s position through action, or forbearance; 3) justifiable reliance on the promise; and 4) injustice which can only be avoided by enforcing the promise.” Valentina Williston, LLC v. Gadeco, LLC, 2016 ND 84, ¶ 25, 878 N.W.2d 397, 404 (quoting Univ. Hotel Dev., L.L.C. v. Dusterhoft Oil, Inc., 2006 ND 121, ¶ 11, 715 N.W.2d 153, 157). Failure on one element precludes a promissory estoppel claim and renders it unnecessary to evaluate the remaining elements. Erickson v. Brown, 2012 ND 43, ¶¶ 19-20, 813 N.W.2d 531, 536-37.

Under North Dakota law, in order for a promise to support a promissory estoppel claim it “must be clear, definite, and unambiguous as to essential terms.” Valentina Williston, 2016 ND 84, ¶ 25, 878 N.W.2d at 404 (quotation marks and citation omitted). “A promise is too indefinite for reasonable enforcement when a party retains the right to determine the extent of his performance.” Id. A court should consider whether “[t]he'terms of the agreement ...' were ..! preliminary,” or if “the parties simply agree[d] to negotiate the remaining terms in the future.” Knorr v. Norberg, 2015 ND 284, ¶ 14, 872 N.W.2d 323, 327; see also Erickson, 2012 ND 43, ¶ 16, 813 N.W.2d at 536 (noting that the requirement of a clear and definite promise “arises from a reluctance to enforce incomplete agreements based upon preliminary negotiations and discussions or upon an agreement to negotiate the remaining terms of a contract in the future” (quotation marks and citation omitted)).

Promissory estoppel “involve[s] questions of fact.” Knorr, 2015 ND 284, ¶ 7, 872 N.W.2d at 326. However, summary judgment is proper where a party fails to establish that “a specific promise” was made with respect to “an essential term” such as the amount of payment. Dusterhoft Oil, Inc., 2006 ND 121, ¶¶ 18, 20, 715 N.W.2d at 158; see also Lohse v. Atlantic Richfield Co., 389 N.W.2d 352, 357-58 (N.D. 1986) (affirming summary judgment in favor of the defendant where “the parties failed to agree to or even discuss many essential terms of the oil and gas lease”).

On February 17, 2015, Mohagen sent Mathwig an e-mail stating that Core was “working on an outline (generally a game plan)” of engagements and issues yet to be agreed upon. (Vehrs Deck ¶2, Ex. 22.) The e-mail noted that such issues were “to include but not limited to” multiple enumerated services. (Id.) On March 13, 2015, Mohagen sent Zenz an “ ‘anticipated’ fixed fee schedule.” (Vehrs Decl. ¶ 2, Ex. 5.) Mohagen explained that “[o]nly upon Core and MSI entering into a Consulting Agreement for a particular project will the Core fees for that project become ‘fixed’ as to amount.” (Id.) Further, Mohagen noted that “Core anticipates entering into Consulting Agreements prior to material services being initiated on a particular project within the confines of the overall engagement.” (Id.) In response, Zenz e-mailed Mohagen to suggest Core “take a hard look” to determine if it was possible “to substantially reduce the estimate.” (Id.) Mohagen responded on March 15, 2015, suggesting that they “discuss the fee issues and Jerry’s lates [sic] voice mail.” (Id.)

On March 25, 2015, Mohagen e-mailed Mathwig and Zenz a Services Summary spreadsheet, including a general description of services and fees relating to MSI’s ESOP Implementation. (Vehrs Deck ¶ 2, Ex. 6.) The spreadsheet included both completed services under the First and Second Consulting Agreements as well as other services and fees indicated “to be Engaged, Initiated and Completed.” (Id.) Projects in the latter category were designated as either “Required” or “Elective.” (Id.) Mohagen’s e-mail noted that the “Estimated Actual Core Fixed Fee” noted on the spreadsheet “is a fee ‘estimate’ subject to revision until Core issues a Consulting Agreement indicating specific services and a fixed fee for these specific services.” (Id.) Mohagen asked Mathwig to respond after reviewing the Services Summary to arrange an opportunity to discuss it over the phone. (Id.) Also on March 25, 2015, Moha-gen sent Mathwig a proposed consulting agreement relating to the appointment of transactional trustees. (Vehrs Deck ¶ 2, Ex. 7.)

According to Mohagen’s deposition testimony, in an April 7, 2015 phone call, Ma-thwig “agreed to sign all the engagement agreements” and agreed to all related fees. (Mohagen Dep. at 7:25-8:22.) Specifically, Mohagen testified that Mathwig “agreed to sign the engagement agreements that were to be drafted following the schedule that he had received on ... March 25.” (Id. at 43:3-18.) Mohagen acknowledged that he had not sent all of the consulting agreements to MSI at the time of the telephone call. (Id. at 43:19-24; see also id. at 50:3-6 (“He agreed to sign all the consulting agreements which were going to be prepared, and he agreed to all the fees that were on the schedule that was sent to him on March 25.”).) Mohagen also testified that Mathwig agreed to the specific payment terms that were eventually included in the consulting agreements. (Id. at 51:11-14.) Mohagen acknowledged that some terms were not discussed such as termination or confidentiality. (Id. at 51:15-52:13.) Mohagen agreed that those terms were “material.” (Id. at 52:14-16.) In his declaration, Mohagen asserted that “Mr. Mathwig understood that the material terms of the proposed consulting agreements would be the same as the two Consulting Agreements previously signed by Mr. Mathwig on behalf of MSI.” (Doc. No. 74 (“Mohagen Decl.”) ¶ 5.) In particular, Mohagen explained that “Mr. Mathwig understood from our conversation that only the flat fee amounts and the ‘Exhibit V description of services would differ from the Consulting-Agreements previously consummated.” {Id.) -

Mathwig testified that he did not recall the April 7, 2015 telephone conversation. (Mathwig Dep. at 222:9-16.) In his declaration, Mathwig asserted that he did not make the promise Mohagen described in the April 7, 2015 phone' call. (Mathwig Decl. ¶¶ 5-6.) Mathwig explained that “I had not even seen the other proposed agreements as of the date of that phone call. I had no clear understanding of what Mr. Mohagen was all proposing for MSI.” (Id. ¶ 6.)

On April 8, 2015, in response to an email from Zenz inquiring whether Moha-gen and Mathwig had discussed fees, Mo-hagen wrote:

We did resolve the fee issue. Jerry wants to wait until the end and see if there is any “room” for a “discount” (Jerry’s idea). Not sure that this isn’t “kicking the can down the road” however Jerry did agree to sign engagement agreements and pay fees as we go.... Jerry did ask me to copy both you and David on the engagement agreements primarily for the purpose of reminding him to sign the agreements and also to make sure we are following the services summary.

(Vehrs Decl. ¶ 2, Ex. 10.)

On April 20, 2015, Mohagen re-sent Ma-thwig the transactional trustee consulting agreement along with three additional consulting agreements, noting that the fees in the agreements “follow the Services Summary—Metro Sales, Inc. ESOP Implementation (‘Schedule’) schedule previously provided for your review' and comment.” (Vehrs Decl. ¶2, Ex. 11.) On April 23, 2015, Mohagen sent Mathwig five- more consulting agreements. (Vehrs Decl. ¶2, Exs. 12,13.) Mohagen again noted that the fees in these consulting agreements were consistent with the Services Summary, “with the exception of the NA Trading Stock Purchase Transaction which was not contemplated at the time the Schedule was prepared and sent to you for review.” (Vehrs Decl. ¶ 2, Ex. 13.) Later that same day, an MSI representative e-mailed Mo-hagen asking for an Excel file version of the Services Summary so that he coüld “enter all of the amounts associated with the consulting agreements you’ve sent, how much needs to be paid and when, etc.” (McNary Decl. ¶ 3.t, Ex. 20.) On' May 12, 2015, Mohagen wrote Mathwig via e-mail: “Although there has been verbal agreement as to MSI signing the Core provided CA’s [sic] for each of the Projects and further a follow up e-mail request to sign the CA’s [sic], at this point Core has not received signed CA’s [sic].” (McNary Decl. ¶ 3.w, Ex, 23.)

The Court concludes that Defendants have failed to establish the existence of a promise that is sufficiently “clear, definite, and unambiguous as to essential terms.” Valentina Williston, 2016 ND 84, ¶ 25, 878 N.W.2d at 404 (citation omitted). The Court acknowledges that there are disputed facts in the record, but these disputes are not material for resolving MSI’s motion. Even if Mathwig made the oral promise Defendants identify, this promise is “too indefinite for reasonable enforcement” because the actual services Core was agreeing to provide had not been identified in detail. See id. The Services Summary and prior e-mail communications between the parties were preliminary in nature and subject to revision. Importantly, the Services Summary provides only very general descriptions of the categories of services Mohagen intended to perform for MSI. Following the April 7, 2015 telephone call, Mohagen retained full discretion to outline the. specific scope of services to be provided in the remaining consulting agreements. This is precisely the type of indefinite and preliminary agreement North Dakota, courts decline to enforce. See id. (“A promise is too indefinite for reasonable enforcement when a party retains the right to determine the extent of his performance.”); Erickson, 2012 ND 43, ¶¶ 17-19, 813 N.W.2d at 536-37 (declining to enforce a. promise that, even if made, was “an incomplete promise based upon preliminary negotiations and discussions”); see also Lohse, 389 N.W.2d at 357. Even if Mathwig understood the general services to be provided and the associated fees, his alleged oral promise to sign multiple consulting agreements he undisputedly had’not seen is insufficient to support Defendants’ promissory estoppel counterclaim. The Court therefore grants MSI’s motion with respect to this claim.

D. Breach of Fiduciary Duty

MSI also asserts a claim for breach of fiduciary duty, arguing that Mohagen breached fiduciary duties owed to MSI based on Mohagen’s role as an attorney, accountant, and expert in ESOP transactions. MSI argues that it is- entitled to summary judgment on • this claim and seeks an award of reimbursement for the $60,000 it has paid to Core under the First and Second Consulting Agreements. Defendants assert that summary judgment should not be granted in MSI’s favor and propose instead that the Court, should consider summary judgment dismissal of this claim for failure to establish evidence on each essential element.

MSI argues that it sought Core and Mohagen’s services because Mathwig and his employees had no experience in ESO.P formation. Because Mohagen held himself out as an expert in this, area and knew that MSI was relying on his expertise, MSI argues that a fiduciary relationship existed based on Mohagen’s consulting role. MSI also argues that Mohagen, had. a fiduciary relationship to MSI based on his roles as an attorney and an accountant and his use of iegal and accounting knowledge in advising MSI. According to MSI, even though Mohagen claimed he was not acting in his capacity as an attorney in providing services to MSI, the parties un-disputedly had an attorney-client relationship. In particular, MSI asserts that Defendants’ expert witness designated to testify regarding the existence of an attorney-client relationship should not be permitted to testify, so Defendants will not be able to raise any genuine issues of material fact regarding this issue. MSI also suggests that a disclaimer that an attorney-client relationship does not exist cannot be relied upon when legal services are actually provided. MSI argues that it is entitled to summary judgment because Defendants breached their fiduciary duties as a matter of law by providing services pursuant to a conflict of interest. Specifically, MSI contends that Core im-permissibly represented both the buyers and the sellers in the contemplated ESOP transaction as demonstrated by Moha-gen’s e-mails and invoices. Citing Minnesota law governing breach of fiduciary duties in the context of an attorney-cliént relationship, MSI alleges it is entitled to the full $60,000 it has paid to Core for its services.

Defendants argue that disputed facts exist relating to numerous aspects of MSI’s fiduciary duty claim, including whether there was a fiduciary relationship, the scope of duties owed, whether any such duties were breached, and what damages MSI has suffered. Defendants emphasize that whether an attorney-client relationship exists is ordinarily a question of fact and that the burden is on the party seeking to establish such a relationship. Defendants also suggest that a fiduciary relationship must be established by clear and convincing evidence. Defendants argue that MSI never engaged Mohagen himself to provide services and that Core only provided consulting services not legal services, In particular, Defendants point to the disclaimer language in the First and Second Consulting Agreements which provided that Core was not a law firm .and that Core and MSI were not entering into an attorney-client relationship. Defendants also point out that Mohagen’s expert witness contradicts MSI’s expert witness on this issue. With respect to whether any fiduciary duties were breached, Defendants again point out that this presents a fact question. Defendants also argue that MSI oversimplifies the nature of an ESOP transaction by describing the ESOP trustees as the buyer and the company as the seller. Because the negotiated sale of stock had not yet occurred, Defendants argue, no conflict could have arisen. In addition. Defendants assert that MSI has failed to establish how Core actually represented conflicted parties. Finally, Defendants suggest that MSI is not entitled to the damages it seeks because MSI has not established that the alleged conflict of interest arose under the scope of services provided under the First and Second Consulting Agreements for which MSI paid $60,000.

“In order to establish a breach of fiduciary duty, the plaintiff must prove: ‘1. A fiduciary relationship between the plaintiff and defendant. 2. A duty by the defendant to the plaintiffs arising from that relationship. 3. The defendants] breach of that duty. 4. Damage to the plaintiffs proximately caused by that breach of duty.’ ” In re Estate of Vendsel, 2017 ND 71, ¶ 14, 891 N.W.2d 750, 755 (quoting Meyer v. Maus, 2001 ND 87, ¶ 14, 626 N.W.2d 281, 286). The Court concludes that summary judgment in MSI’s favor would be premature at this stage as numerous issues of material fact are genuinely disputed.

1. Existence of a Fiduciary Relationship and Duties Owed

First, whether Mohagen owed fiduciary duties to MSI is genuinely disputed by the parties, and this issue presents questions of fact properly resolved at trial. This dispute involves the first two elements of a fiduciary-duty claim—the existence of a fiduciary relationship and any corresponding duties created by that relationship.

The North Dakota Supreme Court has explained that “[a] fiduciary relationship is something approximating business agency, professional relationship, or family tie impelling or inducing the trusting party to relax the care and vigilance ... ordinarily exercise[d].” Nesvig v. Nesvig, 2004 ND 37, ¶ 20, 676 N.W.2d 73, 80 (quotation marks and citation omitted). “A fiduciary relationship exists when one is under a duty to act for, or to give advice for the benefit of another upon matters within the scope of the relationship.” Id. The trusting party “repostes] confidence” in the fiduciary and “must be in a position of inequality, dependence, weakness, or lack of knowledge.” Snortland v. State, 2000 ND 162, ¶ 16, 615 N.W.2d 574, 579 (citation omitted).

A fiduciary relationship may arise out of a principal-agent relationship. Border Res. LLC v. Irish Oil & Gas, Inc., 2015 ND 238, ¶ 18, 869 N.W.2d 758, 764; see also Burlington N. & Sante Fe Ry. Co. v. Burlington Res. Oil & Gas Co., 1999 ND 39, ¶ 17, 590 N.W.2d 433, 437 (“A business agency represents a fiduciary relationship.”). “In a fiduciary relationship, an agent is generally under a duty to act for, or to give advice to, a principal upon matters within the scope of the relationship. ...” Border Res., 2015 ND 238, ¶ 18, 869 N.W.2d at 764 (citation omitted). Whether an agency relationship exists is a fact question. Lagerquist v. Stergo, 2008 ND 138, ¶ 9, 752 N.W.2d 168, 171. “Agency is never presumed, and if an agency relationship is denied, the party alleging agency must establish it by clear and convincing evidence.” Id. at ¶ 10, 752 N.W.2d at 172 (citation omitted).

Where a fiduciary relationship arises from an agency relationship, “the agent’s duties to the principal are determined by the parties’ agreement and the nature of the fiduciary relationship.” Bor der Res., 2015 ND 238, ¶ 18, 869 N.W.2d at 764 (citation omitted); see also Burlington, 1999 ND 39, ¶ 15, 590 N.W.2d at 437. As a general matter, the superior, party in a fiduciary relationship “has a duty to act in the dependent party’s best interest.” Nesvig, 2004 ND 37, ¶ 20, 676 N.W.2d at 80.

In addition, “[a]n .attorney-client relationship is a fiduciary relationship.” Id. It is typically a fact question whether an attorney-client relationship exists. Moen v. Thomas, 2001 ND 110, ¶ 13, 628 N.W.2d 325, 329. In evaluating whether certain conduct constitutes the practice of law, the North Dakota Supreme Court has noted that activities such as “the work of an accountant dissociated from legal advice,” “[t]he giving of advice as to investments,” and “in making .tax returns” are activities that “lie close to the border line ' and may easily become or be accompanied by practice of -the law.” Cain v. Merchs. Nat. Bank & Trust Co. of Fargo, 66 N.D. 746, 268 N.W. 719, 723 (1936).

“An attorney must employ the degree of skill, care, diligence, and knowledge commonly possessed and exercised 'by a reasonable, careful, and prudent lawyer....” Nesvig, 2004 ND 37, ¶20, 676 N.W.2d at 80. The North Dakota Rules of Professional Conduct provide that “[a] lawyer shall not represent a client if the lawyer’s ability to consider, recommend, or carry out a course of action on behalf of the client will be adversely affected by the lawyer’s responsibilities to another client or to a third person, or by the lawyer’s own interests.” N.D.R. Prof. Conduct 1.7 (2016). These rules also apply to the provision of “law-related services” under specified circumstances. See N.D.R. Prof. Conduct 5.7 (2006). A disclaimer that a lawyer is not providing legal services is not effective where the attorney actually performs legal services. (See Doc. No. 78 (“Second Vehrs Deck”) ¶ 2, Ex. 43 (State Bar Ass’n of North Dakota Ethics Comm., Op. No. 01-03, May 24, 2001).) The North Dakota Supreme Court has clarified the relevance of the North Dakota Rules of Professional Conduct in connection with a claim for breach of fiduciary duty against an attorney, stating that they “are designed to provide guidance to lawyers and a structure for regulating conduct through disciplinary agencies, and they are not intended to be a basis for civil liability.” Nesvig, 2004 ND 37, ¶¶ 1, 23, 676 N.W.2d at 74, 81.

In- the context of an attorney-client relationship, “[e]xpert testimony is required generally to establish the standard of care and a breach of the standard of care.” Moen, 2001 ND 110, ¶ 20 n.4, 628 N.W.2d at 330 n.4 (Maring, J., concurring in part and dissenting in part); see also Richmond v. Nodland, 501 N.W.2d 759, 761 (N.D. 1993) (“Generally, expert testimony is necessary to establish the professional’s standard of • care- (duty) and whether the professional’s conduct in a particular case deviated from that standard of care (breach of duty).”). This is true unless “the-professional’s misconduct is so egregious and obvious that a layperson can comprehend the - professional’s breach of duty without the assistance of expert testimony.” Wastvedt v. Vaaler, 430 N.W.2d 561, 565 (N.D. 1988). The North Dakota Supreme Court has noted, that in matters involving tax planning or other complex circumstances involving specialized knowledge, expert testimony is essential to establish a professional’s duty and corresponding breach. See id. at 566 (“[E]xcept in rare cases, the.nuances and variations of the practice of law make indispensable expert testimony to acquaint the trier-of-fact with the applicable standard of care' and any deviation therefrom.”).

In his declaration, Mathwig asserts that he had no “direct experience” with ESOPs “and relied on Core and Mo-hagen’s expertise to guide us through the process.” (Mathwig Decl. ¶ 3.) The First and Second Consulting Agreements der scribe Core’s areas of expertise and outline the nature of the consulting services to be provided. (lst.CA at 1, ¶ 1; 2nd CA at 1, ¶ 1.) Specifically, the Agreements provide that “[Core] shall furnish [MSI] with its best advice, information, judgment and knowledge with respect to matters for which the Consultant has been engaged.” (1st CA ¶ 1; 2nd CA ¶ 1.) The Agreements also state, however, that “[MSI] shall be. solely responsible for taking action on issues raised and documentation completed by [Core]” and that “[MSI] shall be solely responsible for determining what action and documentation, if any, -is necessary and appropriate in' addressing issues, raised by [Core] during the term of this engagement.” (Id.)

Regarding the nature of the parties’ relationship, the Agreements provide that “[MSI] and [Core] are independent contractors,” and that “neither shall have' the right or authority to contract in the name of the other-nor shall it assume or create any obligations, debts, accounts or liabilities for- the other,” (1st CA ¶ 8; 2nd CA ¶8.) Importantly, the Agreements state that “[MSI] acknowledges that [Core] is not a law firm and that [Core] and [MSI] will not have an attorney-client relationship. If, required -by the engagement or requested by. [MSI], [Core] shall prepare sample documents to be reviewed by [MSI] with its legal counsel.” (Id. (emphasis in original).). The Agreements also provide that “[MSI] acknowledges that all legal services related to this Agreement shall be rendered by the Serkland Law Firm ... or such other law firm licensed to practice law in applicable states agreed to by both [MSI] and [Core].” (Id.) As Defendants note, Mohagen himself had no contractual relationship with MSI separate from the Consulting Agreements between Core and MSI.

, MSI’s expert on legal ethics, Eric Coo-perstein (“Cooperstein”), opines “that Mo-hagen’s work for MSI was subject to the Rules of Professional Conduct” because Mohagen performed legal services and law-related services for. MSI, (See Veln-s Deck ¶ 2, Ex. 28 (“Cooperstein Rep.”) at 5-8, 12.) Cooperstein opines that the disclaimer regarding an attorney-client relationship in the Consulting Agreements was ineffective based on, the work actually performed. (Id. at 7.) Second, Cooperstein suggests that even if Mohagen’s services are only characterized as law-related services, the Rules of Professional Conduct would apply. (Id. at 7-8.) Cooperstein provides the opinion that “[t]he non-legal services provided by Mohagen were undoubtedly law-related services.” (Id. at 8.) MSI’s expert on ESOP transactions, W. James Vogl, Jr. (“Vogl”), also opines “that Defendants, and particularly Mr. Moha-gen, were performing the role of an attorney on behalf of Metro Sales.” (Vehrs Decl. ¶ 2, Ex. 29 (“Vogl Rep.”) at 7.) '

Defendants’ expert, Duane - Lillehaug (“Lillehaug”), offers an opinion on the applicability of the North Dakota Rules of Professional Conduct to Core’s services in this matter. (Vehrs Decl. ¶ 2, Ex. 31 (“Lil-lehaug Rep.”).) Lillehaug provides the following opinion:

Pursuant to Rule 5.7, N.D. Rules of Professional Conduct, the Rules of Professional Conduct did not apply to the services provided by Core Consulting Group to Metro Sales, Inc. because any “law-related services,” as defined in Rule 5.7(b), N.D.R.Prof.Cond., were provided in circumstances that were distinct from the lawyers provision of legal services to clients and the lawyer took reasonable measures to assure that the person obtaining the legal [sic] services knew, that the services provided were not legal services and that the protections of the client/lawyer relationship did not exist.

(Id. at ,1.) Lillehaug notes that Mohagen’s former firm, the Tax' Law Office, did not exist when Core provided services to MSI, and that any legal services performed by Mohagen during the relevant time period would have been accomplished through the Serkland Law .Firm in which Mohagen had an “of counsel” relationship. (Id. at 2.) Lillehaug also points out that “Mathwig ... was an experienced, and sophisticated businessman” relying on “independent ad-visors” throughout the ESOP process. (Id. at 2, 4.) Lillehaug emphasizes the disclaimer language in the Consulting Agreement relating to Core’s limited role, and he suggests that “Mr. Mohagen took reasonable measures to assure that Metro Sales and its representatives knew that the Core Consulting services were not legal services and that the protections of the client lawyer relationship did not exist.” (Id. at 3-5.)

The Court concludes that the existence of a, fiduciary relationship between MSI and Defendants and the scope of any fiduciary duties owed is genuinely disputed on this, record. Notably, the parties’ competing experts reach divergent conclusions on whether Defendants- were subject to the professional responsibility rules goyeming an attorney-client relationship. Even if the fiduciary relationship arises only out of a general business agency relationship or Mohagen’s position as an accountant, the Court concludes that genuine issues of material fact remain regarding the nature of that relationship and the scope of any duties arising from the signed Consulting Agreements or the parties’ business relationship. Because it is typically a fact question whether an attorney-client relationship or other fiduciary relationship exists, and in light of the competing evidence on these issues in the record, the Court concludes that MSI has failed to establish that summary judgment in its favor is warranted on this issue.

2. Breach of Fiduciary Duty

Second, even if a fiduciary relationship were established, MSI has failed to demonstrate that Mohagen undisputedly breached a fiduciary duty by engaging in representation pursuant to a conflict of interest in the contemplated ESOP transaction. The Court reaches this conclusion whether Defendants’ duty is evaluated on the basis of a general principal-agent fiduciary relationship or an attorney-client relationship.

In cases alleging legal malpractice, a violation of the North Dakota Code of Professional Responsibility “merely constitute^] evidence to be considered by the trier of fact.” Martinson Bros. v. Hjellum, 359 N.W.2d 865, 875 (N.D. 1985). With respect to a claim for breach of fiduciary duty against an attorney, “representing both the buyer and a seller” in a transaction may constitute a conflict of interest and support a finding of liability. Meyer, 2001 ND 87, ¶ 15, 626 N.W.2d at 287. “While the existence and scope of a fiduciary duty depends on the parties’ agreement, whether a person has breached a fiduciary duty presents a question of fact....” Border Res., 2015 ND 238, ¶ 18, 869 N.W.2d at 764. Similarly, the North Dakota Supreme Court has noted that “summary judgment is generally inappropriate in legal malpractice actions.” Moen, 2001 ND 110, ¶ 10, 628 N.W.2d at 328; see also Martinson Bros., 359 N.W.2d at 872 (“[I]n the context of a legal malpractice action, whether or not an attorney has breached his professional duty is ordinarily a question of fact.”).

MSI’s expert on ESOP transactions, Vogl, opines that “Defendants’ simultaneous representation of Metro Sales and the ESOP trustees constituted an inherent and impermissible conflict of interest.” (Vogl Rep. at 13-14.) As a general matter, Vogl explains that:

Because an ESOP transaction involves both a seller and a buyer—the company’s shareholders selling their securities and the trust established to purchase the securities for the company’s employee’s—each party must be represented by separate legal counsel due to the inherent conflicts of interest. Specifically, the company’s existing shareholders have an interest in receiving a higher per share price for the sale of their stock while the ESOP Trustee has an interest in obtaining the stock at the lowest price possible.

(Id. at 5.)

Vogl suggests that “performing valuation-support services on behalf of the ESOP trustees would have constituted an obvious conflict of interest given Defendants’ representation of Metro Sales” because the ESOP trustees are responsible for selecting and working with an appraisal' company to identify an appropriate share price. (Id. at 11.) Based on the information he considered in forming his opinion, Vogl concludes that “Defendants were representing not only Metro Sales, through its existing shareholders, but also the ESOP trustees.” (Id. at 13.) Ultimately, Vogl provides the opinion that “Defendants improperly represented Metro Sales, Inc., its shareholders and the ESOP trustees, which presents an impermissible conflict of interest.” (Id. at 17.)

When asked whether he had “ever represented both the company and the ESOP trust at the same time in the same transaction,” Defendants’ ESOP expert, Steven Greenapple (“Greenapple”), stated that he had not because “[tjhat would be a conflict of interest.” (See Second Vehrs Decl. ¶ 2, Ex. 40 (“Greenapple Dep.”) at 31:10-15.) In his expert report, Greenapple outlines numerous services involved in establishing an ESOP. (Vehrs Decl. ¶ 2, Ex. 30 (“Gree-napple Rep.”) at 5-6.) His report states that “[a] business that considers whether to establish an ESOP and engage in an ESOP transaction, and decides to do so, requires a great deal of services.” (Id. at 5.) Such services include, for example, “analyzing the appropriateness of an ESOP for that business,” “recommending a structure for an ESOP transaction,” “selecting an ESOP trustee,” “assisting the ESOP trustee in engaging legal and financial ad-visors,” and “closing the ESOP transaction and th