Condict v. Condict

• Decision Date: 25 March 1987
• Docket Number: No. 85-2001,85-2001
• Citation: 815 F.2d 579
• Parties: RICO Bus.Disp.Guide 6579 Withrop C. CONDICT and Elsie E. Condict, Plaintiffs-Appellants, v. Alden Revelle CONDICT, Karen K. Condict, Leland Thomas Grieve, Kermit Brown, John MacPherson, James W. Hearne, Keith Schafer, Sharen Schafer, Ted Jenkins, Walter Junior Leavelle, Garland Bartlett, Sr., and Garland Bartlett, Jr., Defendants-Appellees
• Court: U.S. Court of Appeals — Tenth Circuit

Page 579

815 F.2d 579

RICO Bus.Disp.Guide 6579

Withrop C. CONDICT and Elsie E. Condict, Plaintiffs-Appellants, v. Alden Revelle CONDICT, Karen K. Condict, Leland Thomas Grieve, Kermit Brown, John MacPherson, James W. Hearne Keith Schafer, Sharen Schafer, Ted Jenkins, Walter Junior Leavelle, Garland Bartlett, Sr., and Garland Bartlett, Jr. Defendants-Appellees.

No. 85-2001

United States Court of Appeals, Tenth Circuit

March 25, 1987

Herbert K. Doby of Elletson, Doby & Felde, Cheyenne, Wyo., for plaintiffs-appellants.

Randall R. Steichen (Raymond J. Turner, with him on the brief) of Sherman & Howard, Denver, Colo., for Alden Revelle Condict, Karen K. Condict, Keith Schafer, Sharen Schafer, Ted Jenkins, Garland Bartlett, Sr., Garland Bartlett, Jr., and James W. Hearne, defendants-appellees.

Blair J. Trautwein of Hathaway, Speight & Kunz, Cheyenne, Wyo. (Kermit C. Brown

of Brown & Davidson, Rollins, Wyo., with him on the brief), for Leland Thomas Grieve and Kermit C. Brown, defendants-appellees.

James A. Applegate of Hirst & Applegate, Cheyenne, Wyo., for John MacPherson, defendant-appellee.

Robert A. Van Vooren (of counsel) of Lane & Waterman, Davenport, Iowa, for James W. Hearne, defendant-appellee.

Before HOLLOWAY, Chief Judge, and BALDOCK and McWILLIAMS, Circuit Judges.

McWILLIAMS, Circuit Judge.

This case represents an effort to fit a family dispute over a family ranching operation into the RICO mold. The district court held that it didn't fit and entered summary judgment on June 5, 1985, for the defendants on the RICO claim and also dismissed a pendant claim based on common law fraud, deceit, and misrepresentation. We see no fit either, and on that basis we affirm.

The Condict ranch properties at one time occupied approximately 26,000 acres in Carbon County, Wyoming, and ranching operations were begun in about 1885 by Winthrop C. Condict. His son, Winthrop C. Condict II, ran the ranch until his death in 1955. The will of Winthrop C. Condict II distributed the ranch property as follows: one-half interest to his wife, Aurilla, and one-sixth interests to each of his three children, Alden Condict, Winthrop C. Condict III, and Maysel Condict Beales. Thereafter the Condict Ranch was operated under a general partnership agreement by Aurilla Condict, the surviving widow; Alden Condict, a surviving son; Winthrop C. Condict III, another surviving son; and the latter's wife, Elsie Condict.

During the 1970's and the early 1980's a bitter family quarrel developed over the ranching operations, with Winthrop C. Condict III and his wife, Elsie, on one side, and Winthrop's mother, Aurilla, and his brother, Alden, on the other side. In a setting of constant disagreement and continual family dispute over the ranch and its operation, Alden Condict and his mother, now deceased, brought an action in 1982 in the state district court in Carbon County, Wyoming, seeking partition of the ranch realty, dissolution of the partnership, an accounting, appointment of a receiver and damages, including $500,000 in punitive damages. Winthrop C. Condict III and his wife, Elsie, defendants in the state partition proceeding, filed a counterclaim alleging that Winthrop's brother, Alden, and his mother, Aurilla, were guilty of fraud, concealment of assets, misappropriation of assets, waste, and sought damages, both compensatory and punitive.

On November 23, 1982, a Wyoming state judge dissolved the partnership and, subsequently, a receiver was appointed to operate the ranch. The ranch properties later were divided temporarily by the state court, pursuant to stipulation, on a "north-south" split, using Wyoming Highway 130 as the dividing line. Although the state court proceedings have been tortuous, we are now advised that they are drawing to a close. As indicated, the general partnership was dissolved, a receiver has been operating the ranch and his reports have been approved. The realty has been divided. And, beginning on October 8, 1985, the state court had a 10-week trial on the accounting phase of the dispute. However, we have not been advised as to whether the state court has ruled on the accounting matter.

In any event, on October 30, 1984, Winthrop C. Condict III and his wife, Elsie, filed the instant action in the United States District Court for the District of Nebraska. The first claim for relief was a RICO claim based on the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Secs. 1961-68 (1982 and Supp. III 1985). The second claim for relief was based on common law fraud, deceit, and misrepresentation. There are twelve named defendants. They are: Alden Condict and his wife, Karen; Sharen Schafer, Karen's twin sister, and Sharen's husband, Keith Schafer, both Colorado ranchers; Leland Grieve, the receiver for Condict Ranches; Kermit Brown, court appointed counsel for the receiver John MacPherson, a Wyoming attorney who represented Alden and Aurilla Condict in the state partition proceeding; James Hearne, a certified public accountant in Cheyenne, Wyoming, who from 1979 to 1983 prepared tax returns for the partnership; Ted Jenkins and Walter Junior Leavelle, referred to in the complaint as "thugs," in the employ of Alden Condict; and Garland Bartlett, Sr. and Garland Bartlett, Jr., also employees of Alden Condict, but not described as "thugs," although they, according to the complaint, "beat up and intimidated Win and Elsie Condict."

The several defendants filed motions in the RICO proceeding in the United States District Court for the District of Nebraska, including a motion for change of venue pursuant to 28 U.S.C. Sec. 1404(a). This latter motion was granted, and the case was transferred to the United States District Court for the District of Wyoming. Thereafter, the Honorable Ewing T. Kerr, a senior judge for the United States District Court for the District of Wyoming, heard defendants' motions to dismiss or for summary judgment. Judge Kerr granted these motions and dismissed both of plaintiffs' claims. Plaintiffs appeal such dismissal. We affirm.

As stated, the several defendants variously filed motions to dismiss under Fed.R.Civ.P. 12(b), and, in the alternative, motions for summary judgment under Rule 56. The district court apparently did consider matters outside the four corners of the complaint, and accordingly, in a technical sense, granted summary judgment for the defendants. We agree that under the circumstances there is no genuine issue of fact and that judgment for the defendants, whether it be on the basis of Rule 12(b) or 56, was appropriate.

According to the complaint, the gist of plaintiffs' claim is that the defendants conspired to "seize control of the Condict Ranches, a ten million dollar plus ranching operation which had previously been run as a partnership by Aurilla Condict [the mother], her sons Win and Alden, and Win's wife, Elsie Condict." The complaint was filed specifically under 18 U.S.C. Sec. 1964(c). In support of their RICO claim, the plaintiffs alleged that the defendants were guilty of fraud, consisting "of the previously mentioned conduct, including but not limited to Alden and Karen Condict's attempts to wrongfully deprive Win and Elsie Condict of their rightful share of partnership income and to wrongfully impose upon them an inappropriate share of the partnership burdens. Further, the remaining principal defendants--Hearne, Grieve, Brown, MacPherson--were pulled into the original conspiracy to cover-up the original wrongs, for their own profit, and to drive Win and Elsie from the ranching business."

It was further alleged that "[e]ach defendant herein has engaged in 'racketeering activity' as that phrase is defined by 18 U.S.C. Section 1961(1)(B) in that he or she has engaged in wrongful conduct, as set forth herein, in violation of Title 18 of United States Code, Section 1341 (relating to mail fraud), and Section 1343 (relating to wire fraud)." And, in the same vein, it was alleged in the complaint that "[s]aid racketeering activity under section 1961 (1) constituted a pattern under section 1961 (5) in that, since October 15, 1970, defendants and their conspiracy utilized both the mails and wires on more than two occasions each during the past ten years in furtherance of the scheme described herein." ¹ Finally, in support of their RICO claim, the plaintiffs alleged that:

By virtue of the operation of their fraudulent and conspiratorial schemes, and acting with knowledge of functionally identical and consciously parallel fraud by defendants corrupted the Condict Ranches which is an "enterprise", as that term is defined by 18 U.S.C. Section 1964(4). ²

The connection between the defendants' pattern of racketeering activity and the enterprise is that the defendants' scheme to defraud was designed to wrongfully acquire plaintiffs' interest in the ranch, to make plaintiffs pay too much support for the ranch and to cover up previous fraud by Alden and Karen Condict.

The second claim for relief was a pendant claim for common law fraud, deceit and misrepresentation.

By way of relief, the plaintiffs sought, both preliminarily and permanently, to enjoin the defendants from their unlawful acts, treble damages, restitution, together with costs and attorneys' fees.

The district court in dismissing the action and entering judgment for the defendants held that the complaint failed to state a claim upon which relief could be granted. Specifically, the district court held that the complaint failed to allege the following: (1) that activities of the defendants were in furtherance of a tie to organized crime or with criminal activities of an organized nature; (2) that the defendants, or any of them, have been convicted of the predicate acts of mail or wire fraud upon which the RICO claim is founded; (3) that the plaintiffs suffered a "distinct RICO injury"; and (4) that the predicate acts of mail and wire fraud were not pleaded with sufficient particularity. Further, the...