Sinuon Leiendecker (plaintiff) was executive director of Asian Women United of Minnesota (AWUM) (defendant), a nonprofit corporation, from 1999 until February 2004. After Leiendecker asserted that AWUM had violated its bylaws, Sushila Shah (Shah), Quoc-Bao Do (Bao Do), and the remaining five members of AWUM’s board of directors (old board) passed a resolution to fire Leiendecker in November 2003. The board continued to allow Leiendecker to act as director. During that time, Leiendecker sought to install a new board of directors (new board). The old board reported Leiendecker to various Minnesota officials for “serious mismanagement of agency funds and questionable conduct.” The new board then sued the old board, seeking declarations that the new board was AWUM’s rightful board of directors and Leiendecker its executive director. Along with its answer, the old board filed a third-party complaint seeking a declaration that the new board was illegitimate and naming Leiendecker as a defendant. The court concluded that the old board was the rightful board, ousted Shah and Bao Do, and nullified the resolution to fire Leiendecker. The old board promptly terminated Leiendecker. The court granted Leiendecker’s motion to dismiss the claims against her. Leiendecker then sued AWUM for defamation, tortious interference with a contract, breach of contract, wrongful termination under the Minnesota Whistleblower Act, and violations of the Nonprofit Corporation Act. AWUM moved to dismiss on the ground that Leiendecker’s claims were compulsory counterclaims under Rule 13.01 of the Minnesota Rules of Civil Procedure (MRCP) and had been waived by Leiendecker’s failure to assert them in the prior lawsuit. Leiendecker moved for summary judgment as to her defamation claim. The court held a hearing and then dismissed the claims. Leiendecker appealed to the Minnesota Court of Appeals.