Doe v. Hoagland
| Decision Date | 20 August 2018 |
| Docket Number | A18-0015,A17-2081,A17-2080,A17-2078 |
| Parties | John Doe 125, Appellant (A17-2078), John Doe 126, et al., Appellants (A17-2081), John Doe 123, et al., Appellants (A18-0015), v. Peter Hoagland, Defendant (A17-2078, A17-2081, A18-0015), Pete's Communication, Inc., Respondent (A17-2078, A17-2081, A18-0015), and Allstate Insurance Company, Respondent (A17-2080), v. John Doe 123, et al., Co-Appellants (A17-2080), John Doe 125, et al., Appellants (A17-2080) |
| Court | Minnesota Court of Appeals |
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2016).
Affirmed
Kandiyohi County District Court
Melanie E. Baillie, James, Vernon & Weeks, P.A., Coeur d'Alene, Idaho; and
Patrick W. Noaker, Noaker Law Firm, LLC, Minneapolis, Minnesota (for appellants John Doe 123 and John Doe 124)
Scott Wilson, Attorney at Law, Minneapolis, Minnesota; and
Michael Hall III, Carrie A. Loch, Hall Law, P.A., St. Cloud, Minnesota (for appellants John Doe 126 and John Doe 127)
Stacey L. Sever, Stich, Angell, Kreidler & Unke, P.A., Minneapolis, Minnesota (for respondent Pete's Communication, Inc.)
Kay Nord Hunt, Kathleen M. Loucks, Michael R. Moline, Lommen Abdo, P.A., Minneapolis, Minnesota (for respondent Pete's Communication, Inc. and Defendant Peter Hoagland)
M. Ryan Madison, Madison Law Firm, LLC, Anoka, Minnesota (for appellant John Doe 125)
Paul Rajkowski, Rajkowski Hansmeier Ltd., St. Cloud, Minnesota (for respondent Allstate Ins. Co.)
Considered and decided by Reilly, Presiding Judge; Larkin, Judge; and Bjorkman, Judge.
UNPUBLISHED OPINION
In these consolidated appeals, appellants challenge the district court's summary dismissal of their negligence-based claims against respondent corporation, as well as the district court's award of costs and disbursements to respondent corporation. Appellants also challenge the district court's award of costs and disbursements to respondent-insurer in its declaratory-judgment action to determine its coverage obligations to respondent corporation. We affirm.
Peter Hoagland is the sole shareholder, officer, and director of respondent Pete's Communication, Inc. (PCI). PCI previously owned and operated a telecommunications store in Willmar that sold radio equipment, pagers, and cellphones. It also repaired radios and maintained emergency vehicles and radio towers. The store's customers were generally farmers or businesspeople. PCI had five store employees during the store's peak operations. The Willmar store closed in 2016.
At different times between 1980 and 2015, Paul Anderson, Bill Linder, and Steven Linder held shares in PCI. Anderson and Bill Linder also served terms as secretary of PCI. However, Hoagland has always held a controlling interest in PCI. Hoagland was also PCI's president and manager, and he had final say in all business decisions, including the hiring and firing of employees.
The lawsuits underlying these appeals stem from Hoagland's undisputed sexual abuse of five boys, appellants John Does 123, 124, 125, 126, and 127, from approximately1990 to 2001. Appellants ranged in age from 10 to 17 years old when the abuse occurred. These appeals follow the district court's awards of partial summary judgment and attendant costs and disbursements. The following undisputed facts are taken from the summary-judgment record in district court.
John Doe 123 met Hoagland at a hockey game through a teammate. Hoagland gave John Doe 123 rides to hockey games and practices, and John Doe 123 frequently spent time with Hoagland at his home and cabin, and at the Willmar store. John Doe 123 did some "odds-and-ends job[s]" for PCI like mowing the lawn. PCI paid him for that work. Hoagland kept a snowmobile helmet for John Doe 123 at the Willmar store.
Hoagland sexually abused John Doe 123 at Hoagland's home and cabin, and at the Willmar store. Hoagland abused John Doe 123 approximately 200 times at the Willmar store, including in Hoagland's cubicle, the lunchroom, the restroom, and the store's back room. The abuse at the Willmar store occurred during and after business hours.
Hoagland sometimes abused John Doe 123 when he sat on Hoagland's lap at the Willmar store. Hoagland would push John Doe 123 off of his lap to conceal the abuse if he heard someone coming to his cubicle. John Doe 123 believes that one of PCI's employees saw him sitting on Hoagland's lap, but none of PCI's employees reported observing the abuse.
John Doe 124 is John Doe 123's younger brother. John Doe 124 met Hoagland through John Doe 123. John Doe 124 spent time with Hoagland at the state fair, at Hoagland's cabin, and at the Willmar store. John Doe 124 also did some "odds-and-endsjob[s]" for PCI, and the company paid him for that work. Hoagland kept a snowmobile helmet for John Doe 124 at the Willmar store.
Hoagland sexually abused John Doe 124 at Hoagland's home and cabin, at the Willmar store, and in Hoagland's car. Hoagland abused John Doe 124 approximately 50 to 100 times at Hoagland's desk at the Willmar store. Hoagland abused John Doe 124 at the store during and after business hours. PCI employees saw John Doe 124 enter the store, but did not observe the abuse.
Sometimes, John Does 123 and 124's mother brought them to the Willmar store. On other occasions, Hoagland brought them. One of the PCI employees who observed John Does 123 and 124 at the Willmar store believed that Hoagland was dating their mother because Hoagland would go to their home for dinner and would go on outings with them and their mother. The employee believed that Hoagland's interactions with John Does 123 and 124 were a "natural extension" of that relationship. When it became clear that Hoagland was not involved in a romantic relationship with their mother, the employee thought that Hoagland acted as a "big brother" to John Does 123 and 124 because their father was largely absent from their lives.
John Doe 125 lived across the street from Hoagland. John Doe 125 met Hoagland in his neighborhood. John Doe 125 spent time with Hoagland at his home and cabin, and at the Willmar store. While spending time with Hoagland at the Willmar store, John Doe 125 played in police cars that were serviced there and with the electronics that Hoagland repaired. Hoagland gave John Doe 125 a pager with service.
At least two PCI employees observed John Doe 125 at the store. Both employees understood that Hoagland had been giving John Doe 125 money and that there was a conflict between Hoagland and John Doe 125 regarding the financial gifts. Hoagland told one of the employees that he had looked into getting a restraining order against John Doe 125 to prevent him from coming to the store to ask for more money.
Hoagland sexually abused John Doe 125 at Hoagland's home and cabin, and at the Willmar store. Hoagland usually abused John Doe 125 at the store after hours. Appellants John Doe 126 and John Doe 127 were sometimes present when Hoagland abused John Doe 125. On several occasions, Hoagland brought John Doe 125 home late at night after abusing him and told his mother that John Doe 125 had been helping Hoagland with work at the Willmar store.
John Doe 126 was a friend of John Doe 125 and met Hoagland through him. John Doe 126 spent time with Hoagland at the Willmar store, playing with electronics and walkie-talkies and in police cars that were being serviced there. Hoagland sexually abused John Doe 126 at Hoagland's cabin, in Hoagland's car and boat, at radio towers maintained by PCI, and at the Willmar store. The abuse at the store occurred after hours when no employees were present.
John Doe 127 is John Doe 126's younger brother, and he met Hoagland through John Doe 126. Hoagland took John Doe 127 snowmobiling and waterskiing, and to ham-radio festivals. Hoagland sexually abused John Doe 127 at Hoagland's home and cabin, at a hotel, at a restaurant, at the Willmar store, and in Hoagland's car and boat. The sexualabuse in the Willmar store occurred in the lunchroom, garage, and storage rooms. PCI employees were present when Hoagland abused John Doe 127, but they did not observe the abuse.
John Does 126 and 127's mother did not suspect that Hoagland was abusing them. She believed that Hoagland wanted to show them his business, give them the opportunity to waterski, and otherwise help her with the children when she was dealing with difficult family circumstances.
In October 2015, Hoagland pleaded guilty to four counts of second-degree criminal sexual conduct and four counts of fourth-degree criminal sexual conduct stemming from his abuse of appellants and was sent to prison.
Between December 2015 and May 2016, appellants initiated three separate civil actions, asserting sexual-abuse claims against Hoagland and negligence, negligent-retention, and negligent-supervision claims against PCI. In June 2016, PCI's insurer, respondent Allstate Insurance Company, brought a declaratory-judgment action, seeking a declaration that it had "no obligation to defend, indemnify, or otherwise provide coverage . . . to or on behalf of [PCI] and/or Hoagland" in appellants' lawsuits. In 2017, Allstate moved for summary judgment in its declaratory-judgment action, and PCI moved for summary judgment in appellants' actions. PCI argued that appellants' claims failed because they could not show that PCI "could have foreseen the abuse or that Hoagland was acting within the scope of his employment when the abuse happened."
The district court granted PCI's motion for summary judgment, reasoning that, because "the acts of sexual abuse did not relate to Hoagland's position with [PCI], i.e. the business of providing communication services," the "alleged assaults were not within the scope of employment" and Hoagland's knowledge of the acts could not be imputed to PCI. The district court further reasoned that, because Hoagland's knowledge could not...
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