Dummar v. Lummis

• Decision Date: 12 September 2008
• Docket Number: No. 07-4062.,07-4062.
• Citation: 543 F.3d 614
• Parties: Melvin DUMMAR, Plaintiff-Appellant, v. William Rice LUMMIS; Frank W. Gay, II and Robert C. Gay, as personal representatives of Frank William Gay, deceased, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

543 F.3d 614

Melvin DUMMAR, Plaintiff-Appellant, v. William Rice LUMMIS; Frank W. Gay, II and Robert C. Gay, as personal representatives of Frank William Gay, deceased, Defendants-Appellees.

No. 07-4062.

United States Court of Appeals, Tenth Circuit.

September 12, 2008.

Stuart L. Stein, The Stein Law Firm, Albuquerque, NM, for Plaintiff-Appellant.

Randy L. Dryer (Gordon L. Roberts and James T. Blanch, with him on the briefs), of Parsons, Behle & Latimer, Salt Lake City, UT, for Defendant-Appellee Lummis.

Peggy A. Tomsic (Eric K. Schnibbe, with her on the briefs), of Tomsic & Peck, Salt Lake City, UT, for Defendants-Appellees Gay.

Before MURPHY, HARTZ, and GORSUCH, Circuit Judges.

HARTZ, Circuit Judge.

This case, like several before it (as well as a few books and an Academy Award winning film),¹ concerns the estate of the late billionaire Howard Hughes. Plaintiff Melvin Dummar has long maintained that he is entitled to a portion of the Hughes fortune, having been named an heir in a handwritten document (the Holographic Will) purporting to be Hughes's will. A Nevada jury found the Holographic Will invalid in 1978. But Mr. Dummar filed a new suit in the United States District Court for the District of Utah in 2006, alleging that Defendants William Rice Lummis and Frank William Gay deprived him of his inheritance by conspiring to cause the jury to reject the Holographic Will. His amended complaint (the Complaint) asserts four claims against Defendants: (1) fraud, (2) violation of the federal Racketeer Influenced and Corrupt Organization (RICO) statute, 18 U.S.C. §§ 1961-68, (3) violation of Nevada's RICO statute, Nev.Rev.Stat. §§ 207.350-.510, and (4) unjust enrichment. He contends that absent Defendants' wrongdoing, the jury would have found the will valid, and he would have inherited $156 million. For relief he requests $156 million, with interest dating back to 1978, treble damages, punitive damages, costs, and attorney fees. The district court, ruling that Mr. Dummar's claims were barred by issue preclusion based on the 1978 judgment, dismissed the Complaint. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm the dismissal. As we will explain, the fraud and federal RICO claims are each time-barred, the Nevada RICO claim fails to state a claim, and the unjust-enrichment claim is barred by issue preclusion.

I. BACKGROUND

A. The Complaint

The Complaint alleges the following facts:

Late in the evening, sometime during the last week of December 1967, Mr. Dummar was driving through rural Nevada. When he pulled off the road for a rest stop, he saw a bloodied and disheveled man lying in the road. Mr. Dummar woke the semiconscious man and offered to take him to a hospital. The man instead requested to be driven to the Sands Hotel in Las Vegas, Nevada. Mr. Dummar complied, and during the ride to Las Vegas the man identified himself as Howard Hughes. After leaving the man at the Sands Hotel, Mr. Dummar had no contact with him.

Hughes died in 1976. Shortly after Hughes's death, a stranger² delivered an envelope to Mr. Dummar at the gas station in Utah where he worked. The envelope was addressed to the President of the Church of Jesus Christ of Latter Day Saints (the LDS Church). Steaming open the envelope, Mr. Dummar found inside a three-page, handwritten document purporting to be Hughes's last will and testament. The document listed him as a 1/16 beneficiary of Hughes's estate. Mr. Dummar delivered the envelope to the LDS Church, leaving it on a secretary's desk.

In April 1976 the LDS Church delivered the Holographic Will to the Clark County District Court in Las Vegas, Nevada, for probate. A trial ensued to determine the will's validity. Mr. Dummar was an in-court proponent of the will; several relatives of Hughes, including Defendant Lummis, opposed it. Although the Holographic Will named Mr. Lummis a 1/16th beneficiary, he stood to gain more from intestate succession. Defendant Gay, who was the Chief Operating Officer of the Hughes entities for the period surrounding Hughes's death, "worked together" with the opponents of the Holographic Will. J.App. at 15 (Compl. at ¶ 5). At trial Mr. Dummar testified about giving Hughes a ride; the opponents of the will, however, introduced testimony that for a period of years, including December 1967, Hughes never left his hotel. Each side presented testimony from a handwriting expert. On June 8, 1978, the jury rejected the Holographic Will.

Nearly 30 years later Mr. Dummar obtained information regarding misconduct related to the trial. He learned from a pilot that on various occasions before December 1967, Hughes had flown to locations in southern Nevada to investigate sites for a terminal for supersonic jets and to visit brothels. The flights were arranged by Howard Eckersley, a close aide of Hughes and employee of Mr. Gay. During late December 1967 Eckersley had the pilot take Hughes to visit a prostitute at the Cottontail Ranch at Lida Junction in rural Nevada. While waiting for Hughes at the brothel, the pilot fell asleep; when he awoke, he was told that Hughes had left alone. The pilot then returned to Las Vegas without Hughes. Some months after this incident, he accepted an executive position with a company owned by a friend of Hughes. Before the pilot left, Eckersley ordered him to turn over his flight logs and company records so that all references to Hughes as his passenger could be removed. The pilot then signed a nondisclosure agreement, which he honored until recently.

In addition to the information from the former pilot, Mr. Dummar has learned (or perhaps only inferred — the Complaint often omits when the information was received and who the source was) the following:³ (1) after the Holographic Will was delivered for probate, there was a meeting of aides close to Hughes in which it was decided that all would testify that Hughes never left the Desert Inn Hotel, where he lived, for years at a time; (2) Mr. Gay and Mr. Lummis bribed and threatened the aides to testify falsely; (3) top aides, including Eckersley, did testify falsely that Hughes never left his hotel during the period in question; (4) Mr. Gay himself testified that there was a "possibility" that Hughes left the Desert Inn, but he denied any actual knowledge of such a departure; (5) high doses of codeine contributed to Hughes's death, and Defendants were "involved in" the destruction of boxes of empty codeine vials; (6) a member of the jury successfully campaigned to be elected foreperson by using typewritten notes that he claimed to have prepared at home from his handwritten trial notes, thus "irrevocably taint[ing]" the verdict, id. at 27 (Compl. at ¶ 33); (7) after the trial a reporter was threatened and warned not to interview this juror or investigate the reasons for the probate verdict; (8) there was a pattern of threats, including of bodily harm, against witnesses who were to testify for Dummar; (9) the opponents of the Holographic Will paid more than $100,000 for expert testimony on handwriting; and (10) it is "understood" that the jury foreperson had his debts at Hughes's casinos forgiven, id. at 31 (Compl. at ¶ 41).

B. District Court Proceedings

Mr. Gay and Mr. Lummis each filed a motion under Fed.R.Civ.P. 12(b)(6) to dismiss Mr. Dummar's Complaint. They raised several grounds for dismissal, including issue preclusion arising from the probate judgment, time bar, and failure to state claims entitling Mr. Dummar to relief. Mr. Dummar responded to both motions. After a hearing the district court granted the motions on the ground of issue preclusion. Mr. Dummar's motion for reconsideration was denied. He now appeals. Defendants argue that the district court was correct to dismiss the claims on issue-preclusion grounds but argue alternatively that the dismissal can be affirmed on the other grounds that they raised in district court.

II. DISCUSSION

"We review the district court's grant of a Rule 12(b)(6) motion de novo, accepting all well-pleaded allegations as true and viewing them in the light most favorable to the plaintiff." Lane v. Simon, 495 F.3d 1182, 1186 (10th Cir.2007). We may "affirm a district court decision on any grounds for which there is a record sufficient to permit conclusions of law, even grounds not relied upon by the district court." Weitzel v. Div. of Occupational & Prof'l Licensing of Dep't of Commerce of Utah, 240 F.3d 871, 876 (10th Cir.2001) (internal quotation marks omitted). We address each of Dummar's claims in turn: fraud, federal civil RICO, Nevada civil RICO, and unjust enrichment. Our choice of the ground on which to affirm says nothing about the merits of other possible grounds.

A. Fraud

Defendants argue that Mr. Dummar's claim for fraud is time-barred. Neither party has suggested whether Utah or Nevada law should apply to the fraud claim, but we need not decide between them. The laws of the two States are similar in all relevant respects, so the choice of law would not influence the outcome.

In Nevada,

[F]raud must be proven by clear and convincing evidence as to each of the following elements: (1) a false representation made by the defendant; (2) defendant's knowledge or belief that the representation is false (or insufficient basis for making the representation); (3) defendant's intention to induce the plaintiff to act or to refrain from acting in reliance upon the misrepresentation; (4) plaintiff's justifiable reliance upon the misrepresentation; and (5) damage to the plaintiff resulting from such reliance.

Albert H. Wohlers & Co. v. Bartgis, 114 Nev. 1249, 969 P.2d 949, 957-58 (1998).⁴ Utah's elements, though phrased differently, are in substance the same. See Gold Standard, Inc. v. Getty Oil Co., 915 P.2d 1060, 1066-67 (Utah 1996). In particular, each State requires a false representation, which, under Federal Rule of Civil Procedure 9(b), must be "state[ed] with particularity." The only false representations alleged by the...