No Duty to Plead Around Affirmative Defenses: Minnesota Adopts “Unrebuttable Defense” Standard for Rule 12 Dismissals and Vacates Early Fee Awards

Introduction

In Doug Hoskin v. Josh Krsnak, the Minnesota Supreme Court issued a significant procedural ruling that recalibrates how Rule 12 motions to dismiss based on affirmative defenses are handled in Minnesota courts. The case arises from a business dispute between longtime partners, appellant Doug Hoskin and respondent Josh Krsnak (and his entity, JT Manager, LLC), who jointly owned interests in various enterprises, including Interstate Parking Company, LLC (IPC).

Against the backdrop of the COVID-19 economic downturn, Hoskin alleged he was coerced into signing five transfer agreements selling certain business interests to Krsnak/JT Manager, under threats that Krsnak would otherwise scuttle IPC’s application for a time-sensitive Main Street federal loan critical to IPC’s survival. Those transfer agreements contained broad release provisions. Hoskin sued, alleging duress and fraud, among other claims, and sought a declaration that the transfer agreements were unenforceable.

The district court granted respondents’ Rule 12.02(e) motion to dismiss, principally on the basis of the releases, and awarded respondents contractual attorneys’ fees as the “prevailing party.” The court of appeals affirmed dismissal on the releases (though disagreeing with the district court on “tender back”) and affirmed the fee award. The Supreme Court reversed, holding that a plaintiff’s complaint need not anticipate and rebut an affirmative defense to survive a motion to dismiss. Instead, a Rule 12 dismissal based on an affirmative defense is proper only if the complaint’s allegations (and any documents it incorporates) establish an unrebuttable defense on their face. The Court remanded for further proceedings and vacated the fee award because respondents are no longer the prevailing party.

Summary of the Opinion

Justice Procaccini, writing for the Court (Justice Gaïtas took no part), announced two principal holdings:

• Pleading standard: Under Minnesota’s notice-pleading regime, a plaintiff has no obligation to anticipate and negate affirmative defenses in the complaint. A motion to dismiss based on an affirmative defense can be granted only when the allegations and incorporated documents, construed in the plaintiff’s favor, establish an unrebuttable defense—i.e., the complaint “pleads itself out of court.” To the extent older decisions (Zimmermann v. Benz and Wallner v. Schmitz) suggested otherwise, they are overruled.
• Attorneys’ fees: Because dismissal was reversed, respondents are not currently the “prevailing party.” The fee award under the transfer agreements’ fee-shifting clauses is reversed.

The Court did not decide the merits of duress, fraud, or the validity of the releases. It remanded to the court of appeals to address the district court’s alternative, claim-specific rulings that had dismissed five counts on independent grounds.

Factual and Procedural Background

Hoskin and Krsnak co-owned IPC (Hoskin 34%, Krsnak 10%) and other parking-related investments. During COVID-19, with revenues depressed, IPC sought a Federal Main Street loan. According to the complaint, while the loan was pending and under a tight application deadline, the parties negotiated the sale of some of Hoskin’s interests to Krsnak/JT Manager. Krsnak allegedly reduced his offer and told Hoskin he would block IPC’s loan unless Hoskin accepted the revised terms, including releases embedded in the transfer agreements. Hoskin signed, later alleging he did so under duress and in reliance on fraudulent misrepresentations and nondisclosures.

Hoskin sued on ten counts: fraudulent nondisclosure (I), fraudulent misrepresentation (II), breach of the implied covenant of good faith and fair dealing (III), promissory estoppel (IV), breach of oral agreement (V), negligence (VI), breach of fiduciary duty (VII), quantum meruit (VIII), unjust enrichment (IX), and declaratory judgment that the transfer agreements are unenforceable because of duress (X).

Respondents moved to dismiss under Minn. R. Civ. P. 12.02(e), primarily asserting the release defense; in the alternative they advanced claim-specific attacks. The district court:

• Dismissed the entire complaint based on the releases, concluding Hoskin had not tendered back consideration (a prerequisite it viewed as necessary to void the releases).
• Alternatively, held that absent the releases, Counts I, IV, V, VII, and X stated claims; but dismissed Counts II, III, VI, VIII, and IX on independent grounds.
• Awarded respondents contractual attorneys’ fees and costs as the prevailing party.

The court of appeals agreed that the complaint was barred by the releases (but rejected the district court’s “tender back” rationale), did not reach the district court’s alternative rulings on five counts, and affirmed fees. The Supreme Court granted review, requested supplemental briefing on a threshold procedural question (not raised by the parties): whether a complaint must plead facts negating an affirmative defense at the Rule 12 stage, and then reversed.

Analysis

Precedents Cited and Their Role

The Court synthesized Minnesota’s pleading doctrine from the code-pleading era to the modern notice-pleading era, reconciling conflicting authorities and aligning Minnesota with the prevailing approach in other jurisdictions.

• Code-pleading era cases now limited/overruled:
  • Zimmermann v. Benz (1925) and Wallner v. Schmitz (1953) had suggested plaintiffs must plead facts rebutting a release (duress) to survive dismissal. The Court explained those decisions were rendered under code pleading, which demanded detailed “ultimate facts,” and are incompatible with modern notice pleading. They are overruled to the extent inconsistent with the new standard.
• Notice-pleading era anchors:
  • Minn. R. Civ. P. 8.01 (short and plain statement) and 12.02(e) (failure to state a claim) undergird Minnesota’s “non-technical, broad-brush pleadings.”
  • Franklin (1963) and Walsh v. U.S. Bank (2014) reaffirm that a complaint survives if any evidence consistent with its theory could entitle the plaintiff to relief.
  • MacRae v. Group Health Plan (2008): affirmative defenses place the burden of proof on the defendant.
  • Hansen v. U.S. Bank (2019): dismissal on affirmative defense grounds is proper only when it is clear from the complaint that the defense bars the claim.
  • Kelly v. Ellefson (2006): explains Minnesota’s transition from code to notice pleading.
  • Martens v. 3M (2000) and Halva (2021): standard of review and deference to complaint’s allegations and reasonable inferences at the Rule 12 stage.
  • N. States Power Co. v. Met Council (2004): courts may consider documents referenced in the complaint without converting to summary judgment.
• Substantive authorities on duress and releases:
  • Minn. R. Civ. P. 8.03: “release” is an affirmative defense.
  • Karnes v. Quality Pork Processors (1995): a release is an affirmative defense.
  • Perry v. Merit Systems Protection Board (U.S. 2017): a release is a defense the defendant must raise; the plaintiff need not plead around it.
  • Bond v. Charlson (1985), Wise v. Midtown Motors (1950), Snyder v. Samuelson (1918): duress doctrine focuses on whether threats (including economic threats) overbore the plaintiff’s free will; the test is subjective and fact-specific.
• Federal and sister-state alignment:
  • L.N.P. v. Kijakazi (4th Cir. 2023), Joyce v. Armstrong Teasdale (8th Cir. 2011), Jensen v. Brown (9th Cir. 2025), and Wright & Miller treatise: dismissal on an affirmative defense is proper only when the defense appears on the complaint’s face—rare cases where the complaint is “self-defeating.”
  • G.G. v. Salesforce.com (7th Cir. 2023), Gable v. Gable (W. Va. 2021), Shepherd v. Costco (Ariz. 2021), and others: plaintiffs need not anticipate and plead around defenses.
  • Demskie v. U.S. Bank (Minn. 2024), Walsh (2014): Minnesota does not follow Twombly/Iqbal’s federal “plausibility” standard; its pleading threshold is lower.
• Appellate practice:
  • Greenlaw v. United States (2008) and State v. Hannuksela (Minn. 1990): courts generally rely on the parties to frame issues, but may address necessary legal questions—particularly after ordering supplemental briefing—to decide the case according to law.
  • Minn. R. Civ. App. P. 103.04: appellate courts may address issues not raised in the petition in the interests of justice (relevant to vacating the fee award).

Legal Reasoning

The central question—whether a plaintiff must negate an affirmative defense in the complaint—turned on Minnesota’s modern notice-pleading regime. The Court drew a sharp distinction between code pleading (requiring detailed factual averments) and notice pleading (requiring only a short and plain statement). Because an affirmative defense is the defendant’s burden under Rule 8.03, requiring plaintiffs to preemptively negate such defenses would impermissibly ratchet Minnesota back toward code pleading.

The Court crystallized the standard as follows: A Rule 12 motion predicated on an affirmative defense may be granted only when the complaint’s allegations and any incorporated materials, taken as true and viewed favorably to the plaintiff, establish an unrebuttable defense. Put another way, dismissal is appropriate only if the plaintiff has “pled itself out of court”—admitting all elements of an “impenetrable” defense.

Applying that standard, the Court held that the mere existence of releases incorporated by reference does not defeat the complaint at the pleading stage, particularly where the complaint alleges the releases (and their parent contracts) were executed under duress and fraud. Whether threats amount to “unlawful threats” and whether they overbore Hoskin’s free will are fact-laden inquiries, not resolved by pleading-stage admissions here. The Court expressly noted it has never categorically excluded “economic duress” from duress analysis; rather, the inquiry is case-specific and subjective.

Because the court of appeals required Hoskin to plead sufficient facts to invalidate the releases at the Rule 12 stage, it applied the wrong standard. The Supreme Court reversed and remanded for the court of appeals to evaluate the district court’s alternative dismissals of five counts on other grounds.

Finally, the Court reversed the contractual fee award. With dismissal vacated, respondents are not presently the “prevailing party,” rendering a fee award premature.

Impact

This decision sets a clear, statewide procedural rule with substantial practical consequences:

• Pleading practice recalibrated:
  • Plaintiffs are no longer expected to anticipate and negate affirmative defenses in complaints. This lowers the front-end drafting burden and reduces the risk of early dismissal based on defensive theories not yet joined.
  • Defendants seeking Rule 12 dismissal on affirmative defenses must now show that the complaint itself (and incorporated documents) admit all elements of an unrebuttable defense—an exacting showing.
• Survival past Rule 12:
  • Many cases involving releases, statutes of limitations, waiver, estoppel, laches, res judicata, statute of frauds, and other Rule 8.03 defenses will more often proceed beyond Rule 12 to discovery, summary judgment, or trial unless the complaint is facially self-defeating.
• Contract drafting and release enforcement:
  • Parties relying on releases should expect that validity challenges (duress, fraud in the inducement) will rarely be resolved on the pleadings. Robust recitals and acknowledgments may assist later stages but will seldom guarantee Rule 12 dismissal if the complaint alleges involuntariness or deception.
• Attorneys’ fees provisions:
  • Fee-shifting clauses keyed to “prevailing party” outcomes cannot reliably support early fee awards where dismissal is contested and reversible. Prevailing party status typically attaches upon final, durable success on the merits or jurisdictional grounds.
• Appellate practice and procedure:
  • The Court reaffirmed its authority to identify and decide dispositive legal issues not raised by the parties—after soliciting supplemental briefing—when necessary to apply the correct law.
• Unanswered merits questions:
  • The Supreme Court did not define the contours of “economic duress,” did not adjudicate fraud-related issues, and did not resolve whether a “tender back” requirement applies generally to void releases under Minnesota law. Those issues remain for future cases or later phases.
  • The court of appeals, on remand, must examine the district court’s alternative dismissal of five counts (Counts II, III, VI, VIII, and IX), potentially clarifying substantive elements of those claims.

Complex Concepts Simplified

• Affirmative defense:
  • A legal argument that, even if the plaintiff’s allegations are true, there is a separate reason the plaintiff cannot win (e.g., release, statute of limitations, res judicata). The defendant bears the burden of proof on such defenses.
• Rule 12.02(e) motion to dismiss:
  • A request to end the case at the outset because the complaint fails to state a claim recognized by law. Courts assume the complaint’s factual allegations are true and draw reasonable inferences in the plaintiff’s favor.
• Notice pleading vs. code pleading:
  • Notice pleading (Minnesota’s system) requires only a “short and plain statement” of the claim to put the defendant on notice; plaintiffs need not plead detailed facts or negate defenses. Code pleading (older system) required detailed “ultimate facts,” often forcing plaintiffs to anticipate and counter defenses.
• Release:
  • A contractual provision where a party gives up the right to bring claims. In litigation, a release is a defense the defendant must prove; the plaintiff does not have to preemptively allege facts invalidating it.
• Duress:
  • An agreement is voidable if a party’s free will was overborne by physical force or unlawful threats. The test is subjective: did the threats overcome this plaintiff’s free will under the circumstances? Economic pressure can constitute duress where it effectively destroys free choice; there is no categorical exclusion.
• “Unrebuttable” or “impenetrable” defense at the pleading stage:
  • Dismissal is appropriate only if the complaint itself admits all elements of the defense and leaves no room for factual development. If reasonable inferences in plaintiff’s favor could defeat the defense, dismissal is improper.
• Tender back:
  • The notion that a party seeking to rescind a contract or release must return (or offer to return) consideration received. The Supreme Court did not decide whether tender back is required to challenge a release; it held only that a plaintiff need not plead tender back to survive Rule 12 when the defense is release.
• Prevailing party and early fee awards:
  • Many contracts award fees to the “prevailing party.” A party is not “prevailing” when a dismissal is reversed on appeal. Courts are cautious about awarding fees before final, enduring success is established.
• Incorporation by reference at Rule 12:
  • Courts may consider documents referenced in the complaint without converting the motion to summary judgment. But those documents must conclusively establish the defense to justify Rule 12 dismissal on affirmative defense grounds.

Practical Takeaways

• For plaintiffs:
  • Do not feel compelled to plead around every imaginable affirmative defense. Avoid unnecessary admissions; if relevant agreements contain releases, you may allege involuntariness (duress) or fraud without exhaustively proving them at the pleading stage.
  • Be mindful that fraud claims remain subject to particularity pleading (Rule 9.02), even as you need not negate defensive doctrines in your complaint.
• For defendants:
  • Rule 12 dismissal on affirmative defenses will be rare. Consider targeted motions (e.g., Rule 12 for pure legal defects) or develop a record for summary judgment. If you seek Rule 12 dismissal based on an affirmative defense, show that the complaint’s own allegations and incorporated materials leave no factual wiggle room.
• For contract drafters:
  • Strong releases, separate consideration, clear acknowledgments of voluntariness, and disclaimers may aid later stages (summary judgment/trial), but will seldom short-circuit litigation at the pleading stage if the complaint alleges coercion or deception.
• For fee-shifting strategies:
  • Exercise caution seeking early fee awards. “Prevailing party” status typically awaits final adjudication; interim victories on pleadings may not suffice if subject to reversal.

Conclusion

The Minnesota Supreme Court’s decision in Hoskin v. Krsnak clarifies and modernizes state pleading practice: plaintiffs need not anticipate and rebut affirmative defenses to survive a Rule 12 motion. Dismissal on an affirmative defense is proper only when the complaint itself, construed in the plaintiff’s favor, establishes an unrebuttable defense. By expressly overruling contrary code-pleading-era precedents and aligning with the mainstream approach in other jurisdictions, the Court reaffirms Minnesota’s long-standing commitment to notice pleading and adjudication on the merits.

The ruling also resets expectations around enforcing releases at the pleading stage and limits early fee awards under prevailing party clauses. While the Court left open substantive questions about economic duress, fraud, and tender back, it returned the case to the court of appeals to address the district court’s alternative grounds for dismissing five counts. The immediate legacy is procedural but powerful: Minnesota litigants will see fewer Rule 12 dismissals based on affirmative defenses, and more cases will proceed to discovery and fuller adjudication, consistent with the state’s “broad-brush” pleading philosophy.