                   United States Court of Appeals
                         FOR THE EIGHTH CIRCUIT
                                  ___________

                                  No. 07-1813
                                  ___________

Noble Systems Corporation,               *
a Georgia Corporation,                   *
                                         *
              Appellant,                 *
                                         *
        v.                               * Appeal from the United States
                                         * District Court for the
Alorica Central, LLC, a Nevada           * District of Minnesota.
limited liability company; Whitebox      *
Advisors, LLC, a Minnesota limited       *
liability company doing business as      *
Pandora Select Partners, LP; Pandora     *
Select Partners, LP, a British Virgin    *
Islands limited partnership,             *
                                         *
              Appellees.                 *
                                    ___________

                             Submitted: January 18, 2008
                                Filed: October 8, 2008
                                 ___________

Before WOLLMAN, BRIGHT, and SMITH, Circuit Judges.
                          ___________

WOLLMAN, Circuit Judge.

      Noble Systems Corporation sued Alorica Central, LLC, Pandora Select
Partners, LP, and Whitebox Advisors, LLC (doing business as Pandora Select
Partners, LP)1 for tortious interference with a business relationship, fraud and
intentional and negligent misrepresentation, conversion, unjust enrichment, and
conspiracy to defraud Noble and convert its property. Noble also sued Alorica for
replevin. Based on the magistrate judge’s2 report and recommendation, the district
court3 granted Alorica’s motion to dismiss and its motion for judicial notice in support
of its motion to dismiss. The district court also granted Pandora’s motion for
judgment on the pleadings. Noble appeals from these decisions. We affirm.

      We review de novo a district court’s dismissal of a claim under Rule 12(b)(6)
or Rule 12(c). MM&S Fin., Inc. v. Nat’l Ass’n of Sec. Dealers, Inc., 364 F.3d 908,
909 (8th Cir. 2004); Faibisch v. Univ. of Minn., 304 F.3d 797, 799-800, 803 (8th Cir.
2002). We accept as true the non-moving party’s factual allegations and grant the
non-moving party all reasonable inferences from the pleadings. MM&S Fin., 364
F.3d at 909; Faibisch, 304 F.3d at 803.

                                          I.

       In August 2004, Noble sold a customer-support call-center system, which
included hardware and software, to ACI Telecentrics, Inc., a Minnesota corporation.
The title to the hardware passed to ACI, and the software was subject to an ongoing
licensing agreement. ACI granted Noble a security interest in the hardware, which


      1
        Although the brief for Pandora and Whitebox asserts in a footnote that
Whitebox is a separate legal entity that was not a party to the events underlying this
lawsuit, Whitebox does not appear to have argued for dismissal on that ground. We
refer to them collectively as “Pandora” for purposes of this opinion.
      2
        The Honorable Arthur J. Boylan, United States Magistrate Judge for the
District of Minnesota.
      3
       The Honorable Michael J. Davis, now Chief Judge, United States District
Court for the District of Minnesota.

                                          -2-
Noble failed to perfect. In December 2004, ACI resolved to replace its former line of
credit with a line of credit from Pandora, which was accomplished in March 2005.
Pandora obtained a security interest in all of ACI’s assets, including the hardware
purchased from Noble. Pandora perfected its interest by filing with the Minnesota
Secretary of State. Gary Kohler was a member of the board of directors for both ACI
and Pandora until they entered the credit agreement, at which time he resigned from
ACI. Kohler knew of Noble’s unperfected security interest.

        In early June 2005, Pandora informed ACI that it was “fatigued,” but it did not
indicate that it was withdrawing its line of credit. On June 15, 2005, however,
Pandora informed ACI that it was pulling its line of credit, notwithstanding the fact
that ACI was not then in default. ACI was unable to meet its obligations, including
its debt to Pandora, without Pandora’s line of credit. ACI contacted two parties, one
of which was Alorica, about assuming ACI’s financing. Upon learning of Alorica’s
interest, Pandora contacted it directly about purchasing ACI at a closed foreclosure
sale. In July, ACI signed a consent and waiver that had been prepared by Pandora and
Alorica in which ACI acknowledged that it was in default. The consent and waiver
falsely represented that there were no other security interests in the collateral.
Pandora thereupon initiated foreclosure proceedings. Alorica purchased the hardware
and software from Pandora in a closed sale at a lower price than ACI had asked.
Noble was not notified of the foreclosure proceedings, and Pandora did not disburse
any proceeds of the sale to Noble. In August 2005, ACI notified its creditors,
including Noble, of these events, whereupon Noble contacted Alorica to demand that
it pay the software licensing fees it owed. Alorica paid licensing fees for ninety days,
beginning from the date of foreclosure, and agreed to reassess the situation after that.
After the ninety days, Alorica agreed to enter into a permanent licensing agreement
with Noble by December 1, 2005. Alorica did not do so, however, and Noble
eventually cut off Alorica’s access to the software.




                                          -3-
                           II. Motion for Judicial Notice

       Noble appeals the district court’s decision to grant Alorica’s motion to take
judicial notice of the financing statement that Pandora filed with the Minnesota
Secretary of State. When ruling on a motion to dismiss under Rules 12(b)(6) or 12(c),
a district court generally may not consider materials outside the pleadings. Porous
Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999). It may, however,
consider some public records, materials that do not contradict the complaint, or
materials that are “necessarily embraced by the pleadings.” Id. (internal quotation
omitted); see Tellabs, Inc. v. Makor Issues & Rights, Ltd., 127 S. Ct. 2499, 2509
(2007). Although Noble’s complaint artfully avoids noting that Pandora, unlike
Noble, perfected its security interest in ACI’s hardware, this lawsuit and the events
underlying it hinge on that fact. Moreover, Pandora’s financing statement is on file
with the state of Minnesota and thus is a public record that can be considered even if
not mentioned expressly in the pleadings. Accordingly, the district court did not err
in considering the financing statement.

                                 III. Noble’s Claims

              A. Tortious Interference with a Contractual Relationship

       Minnesota law requires that five elements be established in a claim of tortious
interference with a contractual relationship: “(1) the existence of a contract; (2) the
alleged wrongdoer’s knowledge of the contract; (3) intentional procurement of its
breach; (4) without justification; and (5) damages.” Kallok v. Medtronic, Inc., 573
N.W.2d 356, 362 (Minn. 1998) (internal quotation omitted).




                                         -4-
                                       1. Pandora

       Noble contends that Pandora tortiously interfered with the ongoing Noble-ACI
agreement by foreclosing on its loan to ACI despite its knowledge that Noble would
not be fully repaid for the hardware it had sold to ACI and would not continue to be
paid maintenance fees as provided for under the contract. Even assuming that Noble’s
allegations could satisfy the other elements of a claim of tortious interference, they
cannot show that Pandora acted without justification.

       Ordinarily, the existence of a justification is a question of fact that the defendant
must prove. Kallok, 573 N.W.2d at 362. If an affirmative defense such as a privilege
is apparent on the face of the complaint, however, that privilege can provide the basis
for dismissal under Rule 12(b)(6). Bradford v. Huckabee, 394 F.3d 1012, 1015 (8th
Cir. 2005); Hafley v. Lohman, 90 F.3d 264, 266 (8th Cir. 1996). Although our cases
require the defense to be apparent on the face of the complaint, this means simply that
the district court is limited to the materials properly before it on a motion to dismiss,
which may include public records and materials embraced by the complaint. See
Porous Media Corp., 186 F.3d at 1079; Owen v. Kronheim, 304 F.2d 957, 958 (D.C.
Cir. 1962) (per curiam) (considering a defense despite the plaintiff’s artful avoidance
of mentioning the facts giving rise to the defense because the court was aware of the
facts via judicial notice and it justifiably inferred that the defense applied); see also
Bradford, 394 F.3d at 1015(considering exhibits attached to the complaint as part of
the complaint). Pandora’s higher-priority security interest is a matter of public record
and is embraced by the complaint, and it raises the affirmative defense that Pandora’s
conduct was justified.

       Generally, a defendant’s actions are justified if it pursues its legal rights via
legal means. Langeland v. Farmers State Bank of Trimont, 319 N.W.2d 26, 32-33
(Minn. 1982). “The general rule with which we are concerned is that one has a right
to be secure in his contracts and to pursue his business or employment free from the

                                            -5-
interference of others except where such others act in pursuance of a superior or equal
right.” Bennett v. Storz Broad. Co., 134 N.W.2d 892, 897 (Minn. 1965); see Furlev
Sales and Assocs., Inc. v. N. Am. Auto. Warehouse, Inc., 325 N.W.2d 20, 25-26
(Minn. 1982) (reversing a jury verdict and holding that a corporate officer and
principal shareholder was justified in interfering with a contract when he acted in the
best interests of his corporation); Harman v. Heartland Food Co., 614 N.W.2d 236,
241 (Minn. Ct. App. 2000) (holding that a tortious interference claim “does not lie
where the alleged interferer has a legitimate interest, economic or otherwise, in the
contract or expectancy sought to be protected and employs no improper means”
(internal quotation omitted)); Ludowese v. Redmann, 479 N.W.2d 59, 63 (Minn. Ct.
App. 1991) (affirming dismissal because the defendant’s interference was justified as
a matter of law because he lawfully exercised his statutory right of first refusal); see
also Prosser and Keeton on Torts 983-86 (W. Page Keeton et al. eds., 5th ed. 1984).
Noble cannot dispute that Pandora was the highest-priority creditor. Because a senior
secured creditor may foreclose and take the collateral, it seems clear that Pandora was
pursuing its legal right by legal means, thus justifying its actions.

       Noble argues that Pandora foreclosed on its loan in bad faith, thus negating
Pandora’s justification. Bad faith can constitute evidence that the defendant’s conduct
was not justified. Nordling v. N. States Power Co., 478 N.W.2d 498, 506 (Minn.
1991). Generally, however, bad faith means nothing more than “wrongful conduct
done without legal justification or excuse,” id., which is essentially the same test used
to determine whether a defendant’s actions are justified, as discussed above. See
Langeland, 319 N.W.2d at 32-33.

      We applied this understanding of bad faith in Thompson v. United States, 408
F.2d 1075 (8th Cir. 1969). In Thompson, we altered the priority of secured interests
because of the senior creditor’s bad faith towards the junior creditor. We held that the
Thompson corporation (owned by Thompson, his sons, and a few other family
members) was not operating in good faith because it acquired priority over the

                                          -6-
government only by wrongfully participating with the Thompson partnership
(consisting of Thompson and his sons) in breaching the partnership’s security
agreement with the government. “The relationship between the Thompson partnership
and the Thompson corporation is so close that the corporation must be charged with
participation in the partnership’s breach of the regulatory agreement.” Id. at 1084.
We concluded that the Thompson corporation had more than actual knowledge of the
partnership’s agreement and that “[u]nder the circumstances of this case, good faith
would require the members of the Thompson family and any of its business entities
to observe and abide by these contractual agreements.” Id. at 1083, 1085.

       The facts in Thompson are readily distinguishable from the facts alleged here.
In this case, Pandora’s alleged bad faith consisted primarily of its knowledge of the
unperfected security interest and its foreclosure in the face of its knowledge that junior
creditors like Noble would not have their claims satisfied at the foreclosure sale.
Neither of these allegations calls into question the legitimacy of Pandora’s ends or
means. Unlike the Thompson partnership, ACI derived no benefit from the
foreclosure, and unlike the Thompson corporation, Pandora cannot be charged with
a duty to observe and abide by ACI’s contract with Noble. A junior creditor cannot
sue a senior creditor for tortious interference solely because the senior creditor forces
a foreclosure sale against the junior creditor’s wishes or because the sale does not
generate enough income to satisfy the junior creditor. Noble has not pleaded facts to
support its argument that Pandora was not justified in its foreclosure and sale of ACI’s
assets, and we thus affirm the district court’s dismissal of Noble’s tortious interference
claim.

      Noble’s tortious interference claim also rests heavily on its allegations of fraud,
which are meritless for the reasons discussed below.




                                           -7-
                                     2. Alorica

       Almost all of the acts that rendered ACI incapable of fulfilling its contractual
obligations to Noble were completed prior to Alorica’s involvement. According to
Noble’s complaint, Gary Kohler facilitated Pandora in its move to become the primary
creditor of ACI. Pandora notified ACI that it was pulling ACI’s line of credit on June
15, 2005. Because Pandora had no contact with Alorica until June 17, 2005, the only
allegedly wrongful act Alorica could have committed was its declining to purchase
ACI’s assets directly from ACI and instead agreeing to buy them at a foreclosure sale.
There appears to be no basis for holding that Alorica had a legal or equitable duty to
accept ACI’s offer rather than Pandora’s offer, and Alorica’s decision to buy from
Pandora could not have been the cause of the events that were set in motion prior to
Alorica’s involvement. To borrow a concept from another area of tort law, Alorica
had no duty to rescue ACI, much less Noble. Accordingly, the district court did not
err by dismissing the tortious interference claim against Alorica.

              B. Fraud; Intentional and Negligent Misrepresentation

       Noble claims that Pandora and Alorica are liable for either their fraudulent and
intentional misrepresentations or their negligent misrepresentations. To succeed in
a fraudulent misrepresentation claim under Minnesota law, a plaintiff must prove that:

      (1) there was a false representation by a party of a past or existing
      material fact susceptible of knowledge; (2) made with knowledge of the
      falsity of the representation or made as of the party's own knowledge
      without knowing whether it was true or false; (3) with the intention to
      induce another to act in reliance thereon; (4) that the representation
      caused the other party to act in reliance thereon; and (5) that the party
      suffer[ed] pecuniary damage as a result of the reliance.




                                         -8-
Hoyt Props., Inc. v. Prod. Res. Group, L.L.C., 736 N.W.2d 313, 318 (Minn. 2007)
(internal quotation omitted); see M.H. v. Caritas Family Servs., 488 N.W.2d 282, 289
(Minn. 1992). The facts necessary to prove each element must be specifically
pleaded. Fed. R. Civ. P. 9(b).

       To succeed in a negligent misrepresentation claim under Minnesota law, a
plaintiff must prove that: the defendant, by its failure to use reasonable care, made a
false representation or failed to communicate information that it knew or should have
discovered; the misrepresentation occurred in the course of the defendant’s business
or in a transaction in which the defendant had a pecuniary interest; the defendant
intended that the plaintiff rely on the misrepresentation in the plaintiff’s business
transactions; and the plaintiff reasonably relied on the misrepresentation and suffered
harm as a result. Florenzano v. Olson, 387 N.W.2d 168, 174 & n.3 (Minn. 1986).

       In both intentional and negligent misrepresentation claims, the plaintiff must
prove some relationship that is sufficient to create a duty owed by the defendant to the
plaintiff, that the plaintiff relied on the defendant’s misrepresentation, and that it
thereby suffered harm. See L & H Airco, Inc. v. Rapistan Corp., 446 N.W.2d 372,
380 (Minn. 1989); Flynn v. Am. Home Prods. Corp., 627 N.W.2d 342, 349-50 (Minn.
Ct. App. 2001). These requirements are all fatal to Noble’s misrepresentation claims.

                               1. Pandora and Alorica

       Noble claims that the consent and waiver agreement that Pandora and Alorica
prepared for ACI to sign was fraudulent because it falsely represented that Noble did
not have a security interest in some of ACI’s assets. Assuming, arguendo, that the
consent and waiver was a statement made by Pandora and Alorica to Noble and not
by ACI to Pandora and Alorica, neither Pandora nor Alorica had a duty to not make
false representations to Noble, who was not a party to the agreement. See Flynn, 627
N.W.2d at 350. Additionally, there is no proffered or apparent reason why Pandora

                                          -9-
or Alorica would intend or expect that Noble would in any way rely on the statement
in the consent and waiver that Noble had no security interest in ACI’s assets.
Moreover, these claims require that the plaintiff actually rely on the misrepresentation
to its detriment. Hoyt, 736 N.W.2d at 318. None of Noble’s acts or omissions can be
construed as having been made in reliance on the statement that Noble did not have
a security interest in any of ACI’s property. Nor can any fact alleged explain how
such reliance, if it existed, could have caused the loss described in the complaint.

       Noble also claims that Pandora and Alorica fraudulently failed to timely inform
Noble that Pandora was foreclosing on its security interest and that Alorica would be
purchasing ACI’s assets. Nondisclosure is fraudulent only if the defendant had a legal
or equitable obligation to disclose to a plaintiff who was entitled to receive the
information. The default rule is that one party to a transaction has no duty to disclose
facts to another party. L & H Airco, 446 N.W.2d at 380. Minnesota law does not
appear to recognize any duty to disclose information to third parties with whom no
relationship exists. Flynn, 627 N.W.2d at 350. Noble argues that Minnesota has
upheld fraudulent concealment claims as to third parties, but the cases it cites do not
support this contention. See Vikse v. Flaby, 316 N.W.2d 276, 278-79, 284 (Minn.
1982) (a corporation defrauded its investors when its agents lied to and withheld
information from an investment advisor with intention that the advisor would induce
investors to invest in the corporation based on the agents’ lies and omissions);
Richfield Bank & Trust Co. v. Sjogren, 244 N.W.2d 648, 652 (Minn. 1976) (bank
liable for nondisclosure to persons borrowing money from the bank). The facts that
support Noble’s assertion that there was a relationship between Noble and Pandora
before the foreclosure boil down to Pandora’s knowledge of Noble’s unperfected
security interest, which was not sufficient to create a duty to disclose. See L & H
Airco, 446 N.W.2d at 380. Even if such a duty existed, Noble does not allege that it
took or failed to take any action that could be construed as relying on Pandora’s
failure to communicate that foreclosure proceedings were pending. Further, there is
no causative link between Noble’s ignorance of the foreclosure and its junior security

                                         -10-
interest, which is the most direct cause of its loss. Noble has not sufficiently pleaded
its fraud claims, and the district court correctly dismissed them.

                                         2. Alorica

       Noble’s complaint alleges that Alorica falsely represented itself as being ACI
until ACI publicized the foreclosure and that it falsely promised to purchase a
permanent software license at some time in the future. On appeal, Noble concedes
that these deceptions by themselves did not constitute fraudulent misrepresentation.
Instead, Noble argues only that they are evidence that Alorica conspired with Pandora
to defraud Noble. Thus, the fraud claim against Alorica was correctly dismissed.

                              C. Conversion and Replevin

       Noble asserts that Pandora and Alorica converted the hardware and software it
sold to ACI. “The elements of common law conversion are (1) the plaintiff has a
property interest and (2) the defendant deprives the plaintiff of that interest.” Olson
v. Moorhead Country Club, 568 N.W.2d 871, 872 (Minn. Ct. App. 1997) (internal
quotation omitted). “A plaintiff’s lack of an enforceable interest in the subject
property is a complete defense against conversion.” Lassen v. First Bank Eden
Prairie, 514 N.W.2d 831, 838 (Minn. Ct. App. 1994). The sale agreement between
Noble and ACI, which Noble attached as Exhibit A to its complaint, states that title
passed to ACI upon delivery. Therefore, the only interest in the property that Noble
possessed was a security interest. Noble cannot dispute that Pandora possessed a
higher priority security interest that allowed it to take title to the collateral and sell it.
Because Noble possessed no property interest that it could enforce against Pandora or
Alorica, its conversion claim fails.

       Replevin, like conversion, is a way to test the superiority of property rights, but
with the ability to recover the property itself instead of damages. Widgren v. Massie,

                                            -11-
352 N.W.2d 420, 424-25 (Minn. Ct. App. 1984). Noble’s replevin claim against
Alorica fails for the same reasons as its conversion claim.

                   D. Civil Conspiracy and Unjust Enrichment

       Noble alleges that Pandora and Alorica conspired to convert the equipment that
Noble sold to ACI and to defraud Noble. A civil conspiracy claim requires an
underlying tort. D.A.B. v. Brown, 570 N.W.2d 168, 172 (Minn. Ct. App. 1997)
(citing Harding v. Ohio Cas. Ins. Co., 41 N.W.2d 818, 824 (Minn. 1950)). Similarly,
a claim for “[u]njust enrichment may be founded on failure of consideration, fraud,
or mistake, or “situations where it would be morally wrong for one party to enrich
himself at the expense of another.” Mon-Ray, Inc. v. Granite Re, Inc., 677 N.W.2d
434, 440 (Minn. Ct. App. 2004) (internal quotation omitted). Noble bases its unjust
enrichment claim on its allegations of fraud and other tortious conduct, including
tortious interference. Because there is no underlying fraud, conversion, or other tort
to support either the conspiracy or unjust enrichment claims, these claims must also
fail.

                                  IV. Conclusion

      The judgment is affirmed.
                      _____________________________




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