Murr Plumbing, Inc. v. Scherer Bros. Financial Services Co., 94-2363
| Court | United States Courts of Appeals. United States Court of Appeals (8th Circuit) |
| Writing for the Court | Before FAGG, MAGILL, and LOKEN; MAGILL |
| Citation | 48 F.3d 1066 |
| Parties | RICO Bus.Disp.Guide 8755 MURR PLUMBING, INC., Appellant, v. SCHERER BROTHERS FINANCIAL SERVICES CO., a Minnesota corporation; Scherer Brothers Lumber Co., a Minnesota corporation; Albertville Industrial Development Co., a partnership; Thomas P. Olson; Roger Scherer; Developers Construction, Inc.; Loren Spande; Ronald L. Chase; J. Roberts Construction, Inc.; J.H.R. Homes, Inc.; James H. Roberts; Mary J. Roberts; Metro-Build Tech, Inc.; also known as Copperfield Contractors Ltd.; Michael McCalvey, Appellees. |
| Docket Number | No. 94-2363,94-2363 |
| Decision Date | 19 April 1995 |
Page 1066
v.
SCHERER BROTHERS FINANCIAL SERVICES CO., a Minnesota
corporation; Scherer Brothers Lumber Co., a Minnesota
corporation; Albertville Industrial Development Co., a
partnership; Thomas P. Olson; Roger Scherer; Developers
Construction, Inc.; Loren Spande; Ronald L. Chase; J.
Roberts Construction, Inc.; J.H.R. Homes, Inc.; James H.
Roberts; Mary J. Roberts; Metro-Build Tech, Inc.; also
known as Copperfield Contractors Ltd.; Michael McCalvey, Appellees.
Eighth Circuit.
Decided Feb. 28, 1995.
Rehearing Denied April 19, 1995.
Page 1067
Dale C. Nathan, Eagan, MN, for appellant.
Thomas G. Jovanovich, St. Cloud, MN (Rajkowski Hansmeier, on the brief), for appellee.
Before FAGG, MAGILL, and LOKEN, Circuit Judges.
Page 1068
MAGILL, Circuit Judge.
Murr Plumbing, Inc. (Murr), appeals the dismissal of its second amended RICO complaint for failure to allege the predicate acts of mail and wire fraud with the specificity required by Rule 9(b) of the Federal Rules of Civil Procedure. We find no error in the district court's 1 finding that the conclusory allegations contained in Murr's second amended complaint do not satisfy the requirements of Rule 9(b). Accordingly, we affirm.
I. BACKGROUND
Defendant Scherer Brothers Lumber Co. (Scherer) is a family-owned lumber company and supplier of building materials. In 1988, Scherer formed a subsidiary, Scherer Brothers Financial Services Co. (SBFSC), to provide construction loan financing to developers. SBFSC provided financing to four developers named as defendants. The construction loans were secured by a first mortgage on the properties to be developed. Scherer also provided building materials (allegedly at inflated prices), and received mechanic's liens on seven of the twenty-four properties involved in the original complaint.
In 1988 and 1989, Murr, a plumbing subcontractor, provided materials and services for fourteen new home construction projects for three of the four developers. These developing companies were undercapitalized, and eventually SBFSC foreclosed the mortgages. These foreclosures defeated Murr's mechanic's lien for its subcontracting work and prevented Murr from receiving payment for its services.
Murr initiated this action by filing a one-count complaint alleging a RICO violation against twenty-two defendants 2 and involving twenty-four homes. On October 2, 1992, the district court held a hearing on motions to dismiss under Rule 12(b)(6). The court orally granted Murr's "unstated but clear" motion for leave to file an amended complaint, 3 and cautioned Murr to draft an amended complaint only "after a very careful and clear consideration of ... Rule 9, and of Rule 11." The court also granted Scherer leave to renew its motions to dismiss. Appellees' App. at 132-33. On March 26, 1993, an order denying Scherer's motion to dismiss was entered. The order was based on "the reasons set forth at the [October 2] hearing," but made no mention of the grant of leave to amend or to renew the motions to dismiss.
Over seven months passed without the filing of the amended complaint, and Scherer moved to dismiss the original complaint for failure to prosecute under Rule 41(b). Scherer also renewed its Rule 12(b)(6) motion. In an order dated May 20, 1993, the court denied these motions and again granted Murr leave to file an amended complaint. On June 30, 1993, Murr filed an amended complaint, and on July 16, 1993, Murr filed a second amended complaint which included RICO allegations involving fifteen 4 properties and added state law claims for breach of contract and constructive trust. In its answer, Scherer raised a Rule 9(b) defense to the RICO claim and renewed its Rule 12(b)(6) motion. Appellant's App. at 111.
Discovery began, and on October 13, 1993, Scherer moved for judgment on the pleadings or, in the alternative, for summary judgment. The district court treated Scherer's motion as one for summary judgment, and granted summary judgment in favor of Scherer on the RICO count, stating that Murr failed to plead mail and wire fraud with the specificity required by Rule 9(b). The court went on to note that the record did not support Murr's allegations of a fraudulent
Page 1069
scheme. 5 The district court declined to exercise supplemental jurisdiction over the two pendent state law claims, and Murr timely appealed.II. DISCUSSION
Summary judgment is appropriate when there is no disputed issue of material fact and the moving party is entitled to judgment as a matter of law. Egan v. Wells Fargo Alarm Servs., 23 F.3d 1444, 1446 (8th Cir.), cert. denied, --- U.S. ----, 115 S.Ct. 319, 130 L.Ed.2d 280 (1994); Fed.R.Civ.P. 56(c). We review a grant of summary judgment de novo, applying the same standard as the district court. Egan, 23 F.3d at 1446.
Murr identifies three claimed errors in its appeal. First, Murr argues that the district court improperly required it to plead "particulars of false representation or misrepresentation as part of [its] RICO claim." Second, Murr argues that the dismissal of its second amended complaint was improper because the district court had twice denied motions to dismiss Murr's original complaint. Finally, Murr argues that a Rule 9(b) challenge was not properly before the court, and therefore could not provide a basis for dismissal. We have carefully reviewed these arguments, and we find them to be without merit. We address each in turn.
A. Were mail and wire fraud pleaded with the specificity required by Rule 9(b)?
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