Waldner v. Snow
| Decision Date | 30 September 2013 |
| Docket Number | Civ. 10-4056-LLP |
| Parties | ROGER D. WALDNER, Plaintiff, v. KAREN SNOW; ACTION CARRIER, INC.; MICHAEL L. WALSH; WENDY L. WALSH; JANE DOES 1-14; JOHN DOES 1-14; and A. THOMAS POKELA, Defendants. |
| Court | U.S. District Court — District of South Dakota |
Plaintiff Roger D. Waldner is an inmate at the Federal Prison Camp in Yankton, South Dakota. Docket 367. On May 20, 2010, Waldner filed a pro se lawsuit against more than sixty named defendants, alleging that defendants engaged in a broad conspiracy to defraud him in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"). Docket 9. Over the last three years and in response to various dispositive motions, the Court has dismissed Waldner's claims against all but five named defendants. See Dockets 281, 344, 362, 364. Waldner's claims against Karen Snow, Michael L. Walsh, Wendy L. Walsh, Action Carrier, Inc., and A. Thomas Pokela remain. Each aforementioned defendant filed an answer in response to Waldner's complaint. See Dockets 76, 84, 91, 93, 287. Within their respective answers, Defendants M. Walsh, W. Walsh, Action Carrier, Inc., and Pokela each alleged that Waldner failed to state a claim upon which relief maybe granted. Docket 82 at ¶ 10; Docket 84 at ¶ 10; Docket 91 at ¶ 10; Docket 287 at ¶ 2. For the reasons set forth herein, the Court dismisses Waldner's action against the remaining named defendants.
In the light most favorable to Waldner, the relevant facts are as follows:
In 2002, Waldner initiated bankruptcy proceedings on behalf of H&W Motor Express Company, his solely owned corporation. See In re H & W Express Co., 343 B.4. 208 (Bankr. N.D, Iowa 2006). After the close of the bankruptcy proceedings, numerous creditors filed state-court lawsuits against Waldner in Iowa and South Dakota alleging that Waldner violated various contracts. In 2007, Waldner pleaded guilty to having made false statements during the federal bankruptcy proceedings. See United States v. Waldner, 564 F. Supp. 2d 911 (N.D. Iowa 2008). Consequently, Waldner was sentenced to ten years in prison.
The instant case arose out of a dispute between Waldner, William R. Rush, and their respective business entities. Docket 9. Rush is the majority shareholder and chief executive officer of North American Truck & Trailer, Inc. ("NATT"), and at the outset of this case, Waldner accused Rush of conspiring with a multitude of lawyers, accountants, financial institutions, corporations, and federal prisoners to defraud Waldner. Id. Karen Snow, Michael L. Walsh, Wendy L.Walsh, and A. Thomas Pokela are four such individuals accused of conspiring with Rush to defraud Waldner. Id. at ¶¶ 13, 48-9, 95, 33. Waldner has accused Action Carrier, Inc., a business owned by Michael and Wendy Walsh, of the same. Id. at ¶ 47.
With regard to Karen Snow, Waldner alleges that Snow was a corporate comptroller for NATT and the Rush Criminal Enterprise Companies. Docket 9 at ¶¶ 13, 219. As such, Snow allegedly "became aware of the criminal activities of the Rush Criminal Enterprise and agreed to join it by supporting its internal accounting operations and other activities while others committed the predicate acts." Id. at ¶ 219. Accordingly, Waldner asserts that Snow conspired toand did engage in a pattern of racketeering activities in violation of 18 U.S.C, §§ 1962(c) and (d). Id. at ¶¶ 1, 220.
Waldner's allegations against Michael L. Walsh, Wendy L. Walsh, and Action Carriers, Inc. (hereinafter "the Action Carrier Defendants"), are less than clear. Liberally construed, Waldner appears to allege that the Action Carrier Defendants entered into equipment contracts that "were tainted and procured by fraudulent inducement and fraud upon the court." Docket 9 at ¶ 160, Waldner further alleges that during their respective bankruptcy proceedings, each of the Action Carrier Defendants failed to reveal to the court and their other creditors "that NATT and its subsidiaries were insiders to Action Carrier, Inc., and the Walshes[,] and that [the Action Carrier Defendants] had made insider payments to the Rush Criminal Enterprise Companies during their proceedings." Id. at ¶¶ 161, 242. Had the Action Carrier Defendants made the appropriate disclosures, Waldner believes such information "would have revealed that NATT and its subsidiaries share a common bank account or accounts which is [sic] tainted by proceeds from the Rush Criminal Enterprise Companies Racketeering Activities." Id. at ¶ 162. Furthermore, Waldner claims that the Action Carrier Defendants, through their attorney, fraudulently concealed "the removal of 980 shares of . . . a subsidiary of NATT, owned by the Walshes and valued by them at $1.3 million, from their personal bankruptcy proceedings through the Action Carrier, Inc., bankruptcy proceedings, and from there, into the Rush Criminal Enterprise." Id. at ¶¶ 163, 241. Had this concealment not taken place, Waldner believes "it is very likely that all, or a great part of the judgement [sic] in [the] Complaint would have been discharged." Id. at ¶ 165.
Lastly, with regard to A, Thomas Pokela, Waldner alleges that during the time Pokelaserved as Waldner's counsel, Pokela conspired with Rush "to refrain from investigating the law in relation to the facts in the H&W bankruptcy proceedings" and with regard to various lease contracts. Docket 9 at ¶ 91. Furthermore, Waldner alleges that Pokela conspired with Rush Criminal Enterprises to "conceal [] from [Waldner] the 6,000± discovery documents until [it was] too late for Waldner or Pokela to investigate the true, correct, and complete facts behind the leases and H&W bankruptcy frauds." Id. at ¶ 93. With less specificity, Waldner alleges that Pokela conspired with Rush and the various attorneys associated with Rush Criminal Enterprises to conceal criminal activity from the court. Id. at ¶¶ 163, 196. Finally, Waldner alleges the following:
Pokela [was] aware of the Rush Criminal Enterprise companies conspiracy and agreed to join it by using [his] legal acuity to manipulate the H&W bankruptcy proceedings in Iowa and South Dakota State Circuit Court proceedings by presentation of and allusions to Carolina's false claims of ownership of the H&W leased equipment and thereby sought to obtain, and did obtain, orders, stipulations and judgements [sic] against Waldner by means of fraud inter partes and by fraud upon the courts.
"A Court may sua sponte dismiss an action if it fails from the face of the complaint." Wong v. Bann-Cor Mortg., 918 F. Supp. 2d 941, 950 (W.D. Mo. 2013) (citations omitted). "[T]he failure to give [prior] notice is not per se reversible error when it is patently obvious the plaintiff could not prevail based on the facts alleged in the complaint." Smith v. Boyd, 945 F.2d 1041, 1043 (8th Cir. 1991) (citations omitted). Pro se complaints, " 'however inartfully pleaded,' [are] held to less stringent standards than formal pleadings drafted by lawyers.' " Estelle v. Gamble, 429 U.S. 97, 106 (1976) (quoting Haines v. Kemer, 404 U.S. 519, 520 (1972)).Nonetheless, a pro se complaint must comply with the minimal requirements set forth in the Federal Rules of Civil Procedure, which specifically require pleadings to contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Although a pro se complaint need not contain detailed factual allegations, it must contain "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A pro se complaint must "allege facts sufficient to support the claims advanced." Stone v. Harry, 364 F.3d 912, 914 (8th Cir. 2004). The Court is not required to "supply additional facts, nor will [it] construct a legal theory that assumes facts that have not been pleaded." Id. (citing Dunn v. White, 880 F.2d 1188, 1197 (10th Cir. 1989)). If the complaint does not contain these bare essentials, dismissal is appropriate. Beavers v. Lockhart, 755 F.2d 657, 663 (8th Cir. 1985).
DISCUSSION
"To recover in a civil suit for a violation of RICO, a plaintiff must prove: (1) that the defendant violated 18 U.S.C. § 1962; (2) that the plaintiff suffered injury to business or property; and (3) that the plaintiff's injury was proximately caused by the defendant's RICO violation." Fogie v. THORN Americas, Inc., 190 F.3d 889, 894 (8th Cir. 1999) (citations omitted). In the instant case, Waldner has alleged that Smith, B. Hartke, and D. Hartke violated subsections (c) and (d) of 18 U.S.C. § 1962. Docket 9 at ¶¶ 1,230.
Under subsection (c), it is "unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt." To state a claim under § 1962(c), "aplaintiff must establish (1) the existence of an enterprise; (2) defendant's association with the enterprise; (3) defendant's participation in predicate acts of racketeering; and (4) defendant's actions constitute a pattern of racketeering activity." United Healthcare Corp. v. Am. Trade Ins. Co., 88 F.3d 563, 570 (8th Cir. 1996). Moreover, "the plaintiff must demonstrate that 'he has been injured in his business or property by the conduct constituting the violation.' " Id. (quoting Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985)).
Subsection (d) incorporates the conduct prohibited in subsection (c) by making it "unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of [§ 1962]." To establish that a defendant engaged in a conspiracy to violate RICO, a plaintiff must present "additional evidence1 that the defendant entered into an agreement...
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