Handeen v. Lemaire, 95-3678

Citation112 F.3d 1339
Decision Date07 May 1997
Docket NumberNo. 95-3678,95-3678
PartiesRICO Bus.Disp.Guide 9271 Paul HANDEEN, Plaintiff--Appellant, v. Gregory A. LEMAIRE; Henry Lemaire; Patricia Lemaire, Defendants, Orlins & Brainerd Law Firm; Richard K. Brainerd; Peter I. Orlins, Defendants--Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)

Morley Friedman, argued, St. Paul, MN, for plaintiff-appellant.

Scott W. Johnson, argued, Minneapolis, MN, for defendants-appellees.

Before RICHARD S. ARNOLD, Chief Judge, FLOYD R. GIBSON, and MORRIS SHEPPARD ARNOLD, Circuit Judges.

FLOYD R. GIBSON, Circuit Judge.

Paul Handeen appeals the district court's order granting summary judgment in favor of the Orlins & Brainerd Law Firm and its principals (collectively the "Firm") on his claims under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961-1968 (1994 & Supp. I 1995), and various other provisions of federal and Minnesota state law. 1 Given the procedural posture of this case, we find ourselves constrained to reverse the district court's dismissal of Handeen's RICO and state law causes of action, but we otherwise affirm.

I. BACKGROUND

The appeal before us traces its genesis to a series of unfortunate events that has already been the subject of extensive litigation in this Court, see Handeen v. LeMaire (In re LeMaire), 898 F.2d 1346, 1347-48 (8th Cir.1990)(en banc)("LeMaire II")(describing underlying factual foundation), rev'g 883 F.2d 1373, 1375-76 (8th Cir.1989)(containing further elaboration), and we see no present need to retell that sorry tale. Suffice it to say that Gregory Lemaire (individually referred to as "Gregory" or "Lemaire") set out to execute Handeen on July 9, 1978, and he very nearly succeeded. 2 As a result of this intentional deed, Lemaire pleaded guilty to a charge of aggravated assault and spent twenty-seven months in a Minnesota prison. Following his release, Lemaire resumed his graduate studies at the University of Minnesota and in January 1986 received a doctoral degree in, of all things, experimental behavioral pharmacology.

Handeen filed a civil suit against Lemaire and obtained a consent judgment in excess of $50,000. Lemaire used funds received from his father to pay an initial lump sum of $3,000 due under the judgment, but he failed to remit any agreed-upon monthly installments. This prompted Handeen to commence garnishment proceedings to collect the balance due him. Lemaire, who was represented by the Firm, filed a Chapter 13 bankruptcy petition shortly thereafter, and the bankruptcy court, over Handeen's objections, approved Lemaire's repayment plan. The district court and a divided panel of this Court affirmed the bankruptcy judge's decision, see Handeen v. LeMaire (In re LeMaire), 883 F.2d 1373 (8th Cir.1989)("LeMaire I"), rev'd en banc, 898 F.2d 1346 (8th Cir.1990), but upon rehearing en banc we determined that Lemaire had not proposed the Chapter 13 plan in good faith, see LeMaire II, 898 F.2d at 1352-53. Accordingly, we reversed the order confirming the plan and remanded the case for further proceedings. Id. at 1353. On July 19, 1990, the bankruptcy judge vacated the plan and dismissed the petition.

Handeen initiated this suit against the Firm and the Lemaires on October 16, 1992. The Complaint paints a sordid portrait of an intricate scheme through which Lemaire sought to fraudulently obtain a discharge of Handeen's judgment by manipulating the bankruptcy system. 3 As part of this plot, the Firm and the Lemaires contrived to minimize whatever reduced recovery Handeen might achieve via the bankruptcy process. To this end, the Firm instructed Gregory to inflate the amount of his debts by agreeing to pay his parents rent and by executing a false promissory note payable to the elder Lemaires. 4 Gregory listed his parents as creditors on schedules he filed with the bankruptcy court, 5 and the Firm relied on the parents' claims when preparing proposed repayment plans. Of course, to the extent the bankruptcy court recognized this "indebtedness," it would reduce Handeen's pro rata share of any Chapter 13 distributions. Indeed, the cabal enjoyed success in this venture, for the bankruptcy court in substantial measure approved the parents' petitions against the estate. 6 As such, Gregory's parents received a portion of the sums he paid under the approved plan, and they compounded the fraud by transferring much of this money back to Gregory.

The intrigue, however, does not end there. In 1989, while Handeen was appealing the bankruptcy court's confirmation of the Chapter 13 plan, Gregory found a new job which required him to relocate from Minneapolis to Houston, Texas. This employment significantly enhanced Lemaire's income. Nonetheless, presumably because a person who takes refuge in Chapter 13 must ordinarily devote to the repayment plan "all of the debtor's projected disposable income," 11 U.S.C. § 1325(b)(1)(B) (1994), 7 Lemaire did not wish to reveal his increased wages to the bankruptcy trustee. Consequently, Lemaire, his parents, and the Firm formulated an artifice to avoid rousing the trustee's attention. Specifically, the ruse called for Lemaire to mail his father a parcel every month. Within that package would be an envelope addressed to the bankruptcy trustee and containing a check representing Lemaire's monthly payment under the plan. Lemaire's father would, in turn, place the enclosed envelope in the mails, and the trustee would thus receive a letter postmarked from Minneapolis rather than Houston. The object, it is clear, was to fool the trustee into believing that the status quo ante existed, and this exploitation of the postal service remained a monthly ritual until the court dismissed Lemaire's plan in July of 1990.

In his Complaint, Handeen charges that the Firm and the Lemaires, through their duplicitous association with Gregory's bankruptcy estate, violated 18 U.S.C. § 1962(c) by conducting a RICO enterprise (the estate) through a pattern of racketeering activity. Handeen also alleges that the group conspired to violate RICO in violation of 18 U.S.C. § 1962(d). On summary judgment, the district court dismissed these claims against the Firm based on its determination that Handeen had failed to demonstrate "the existence of a pattern of racketeering separate and apart from the bankruptcy estate." At the same time, the district court rejected Handeen's attempt to obtain an augmented recovery under two provisions of Minnesota state law that subject unscrupulous attorneys to severe monetary penalties. See Minn.Stat. Ann. §§ 481.07-.071 (West 1990). The court decided that the statutes in question merely authorize treble damages in certain civil suits and do not create independent causes of action. Thus, because the district court believed that Handeen did not attempt to ground his state law action upon a separate tort, but instead merely invoked the two damages provisions, the court found summary judgment appropriate.

Handeen now appeals the district court's dismissal of his RICO and state law causes of action. 8 We reverse the court's grant of summary judgment on these claims.

II. DISCUSSION
A. Procedural Considerations

Before taking up the merits of Handeen's appeal, we must first focus on a procedural question of significant import in the context of this case. At oral argument, counsel for the Firm mentioned that Handeen's response to the motion for summary judgment, along with all accompanying submissions, failed to establish the existence of a "factual record warranting trial." Based upon our review of these materials, we wholeheartedly agree with this suggestion. The response makes no effort to demonstrate, through citation to affidavits, depositions, answers to interrogatories, or admissions on file, any "specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). It is true that Handeen supplemented his response with certain affidavits and other papers extraneous to the pleadings. Still, these documents are largely irrelevant to the essential elements Handeen will be required to prove in order to prevail, and he appears to have included most of them to provide support for tangential matters not currently in issue. Accordingly, were this a typical summary judgment case, we would have no difficulty with affirming the district court's judgment in toto. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986)("[T]he plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.").

This is not, however, a typical summary judgment case. We have also had occasion to inspect the Firm's summary judgment motion, and we are convinced that, for present purposes, it would be entirely unfair to hold Handeen accountable for a factual showing that would, under normal circumstances, be inadequate. This is because the Firm's motion shares, and probably engendered, the exact flaw contained in Handeen's response: It is almost entirely bereft of any citations to relevant portions of the record. 9 In fact, the Firm went so far as to introduce its argument section with an express affirmation that

[r]esolution of th[e] motion does not depend upon the outcome of any disputed question of fact. Instead, it requires only the application of established principles of law to the allegations contained in [Handeen's] Complaint. Such application demonstrates that [Handeen] has failed to state a claim against [the Firm] upon which relief can be granted....

The Firm's Summ. J. Mot. at 6. This evolved into the dominant theme underlying the Firm's motion, as it is readily apparent that, for whatever reason, the Firm chose to eschew reliance on...

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