Patsy Monno, Respondent, vs. Gale Rachuy, Appellant (A04-2434), and Inter Savings Bank, Respondent, vs. Patsy Monno, Respondent, Gale Rachuy, Appellant (A05-343), Respondent (A05-563), Terry Duggins, Respondent (A05-343), Appellant (A05-563).
Annotate this CaseThis opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480 A. 08, subd. 3 (2004).
STATE OF MINNESOTA
IN COURT OF APPEALS
A04-2434
A05-343
A05-563
Patsy Monno,
Respondent,
vs.
Gale Rachuy,
Appellant (A04-2434),
and
Inter Savings Bank,
Respondent,
vs.
Patsy Monno,
Respondent,
Gale Rachuy,
Appellant (A05-343),
Respondent (A05-563),
Terry Duggins,
Respondent (A05-343),
Appellant (A05-563).
Filed February 14, 2006
Affirmed in part, reversed in part, and remanded; motion denied
Lansing, Judge
Ramsey County District Court
File No. C6-04-005017
Hennepin County District Court
File No. 04-4864
Warren E. Peterson, Peterson, Fram & Bergman, P.A., 50 East Fifth Street, Suite 300, St. Paul, MN 55101-1197 (for respondent Monno)
Gale Rachuy, 7600 - 525th Street, Rush City, MN 55069 (pro se appellant)
Genevieve Anne Beck, Larkin, Hoffman, Daly & Lindgren, Ltd., 1500 Wells Fargo Plaza, 7900 Xerxes Avenue South, Bloomington, MN 55431-1194 (for respondent Inter Savings Bank)
John G. Westrick, Kirk M. Anderson, Westrick & McDowall-Nix, P.L.L.P., 325 Cedar Street, Suite 450, St. Paul, MN 55101 (for appellant Terry Duggins)
Considered and decided by Lansing, Presiding Judge; Willis, Judge; and Halbrooks, Judge.
U N P U B L I S H E D O P I N I O N
LANSING, Judge
In this consolidated appeal, Gale Rachuy challenges both a summary judgment in a fraud action and a related judgment directing the delivery of funds deposited into court. Terry Duggins, who represented Rachuy, appeals that part of the second judgment requiring him to pay attorneys' fees to Patsy Monno, the claimant in the fraud action. We affirm the summary judgment and the judgment directing the delivery of funds, but, because the grant of attorneys' fees is unsupported by findings, we reverse and remand that provision for further consideration.
F A C T S
St. Paul police arrested Gale Rachuy in February 2004 in connection with a fraud investigation. At the time of his arrest, Rachuy was carrying a check issued by Inter Savings Bank. A St. Paul police officer contacted Inter Savings, and, as a result of this contact, Inter Savings stopped payment on three checks totaling $17,024 issued to Rachuy from funds withdrawn from Patsy Monno's account.
In March 2004 Inter Savings received a copy of a letter from attorney Terry Duggins claiming an interest in part of the funds that were subject to the stop-payment order. Duggins stated that he represented Rachuy and that one of the checks, in the amount of $13,566, had been endorsed over to Duggins's trust account. Inter Savings petitioned the Hennepin County district court under Minn. R. Civ. P. 67.02 to deposit into court the total amount of $17,024. In an order filed on April 8, 2004, the district court accepted custody of the money, ordered Inter Savings to provide notice to all persons adversely claiming an interest in the money, and relieved Inter Savings of liability for distribution.
In a complaint dated April 26, 2004, Patsy Monno sued Gale Rachuy in Ramsey County for fraud. Monno requested $85,268 in damages and, as partial satisfaction of that amount, an order directing the Hennepin County District Court Administrator to distribute to him the $17,024 deposited by Inter Savings. Monno served the complaint on Rachuy in the Ramsey County Law Enforcement Center on April 28, 2004. In May 2004 Rachuy moved for a change of venue.
In June 2004 Monno served Rachuy with interrogatories and requests for admission. Monno denied Rachuy's request for an extension to respond. Monno moved for summary judgment in July 2004. Rachuy and Monno were both present at the hearing on the summary judgment and change-of-venue motions. In August 2004 the Ramsey County district court found that Rachuy had been properly served with process, denied Rachuy's motion for change of venue, granted Monno's motion for summary judgment, and ordered the Hennepin County District Court Administrator to deliver the $17,024 deposit together with interest to Monno's attorney in partial satisfaction of the $85,268 judgment.
In the memorandum accompanying the summary judgment, the district court concluded that Rachuy had not denied the essential allegations of fraud set forth in Monno's complaint. These allegations were that Rachuy falsely represented himself to Monno as an attorney, that Rachuy was not an attorney, that Rachuy purported to negotiate a settlement on behalf of Monno's former business partners for a disputed claim over capital contributions, that Rachuy falsely represented that he had initiated a collateral action against the city of St. Paul to recoup joint business losses, and that Rachuy fraudulently obtained $85,268 from Monno under these pretexts.
In September 2004 Duggins, on behalf of himself and Rachuy, filed a motion in Hennepin County district court requesting a default judgment ordering release of the Inter Savings deposit to Duggins's law-firm trust account. Following a hearing, the court denied the motion, granted Monno's motion to release the funds to his attorney, and granted Monno's motion to recover attorneys' fees from Rachuy and Duggins. The court entered judgment releasing the funds with interest to Monno's attorney and assessing attorneys' fees against Duggins in the amount of $1,415.50.
While Duggins's motion was pending in Hennepin County, Rachuy brought a motion in Ramsey County to vacate the summary judgment. Rachuy asserted that he had denied all of the essential facts of Monno's fraud complaint and that he had never told Monno that he was an attorney. In response, Monno filed a copy of a February 5, 2004 letter on Midwest Legal Services letterhead, signed by Rachuy, stating that "[w]e represent [Monno's former business partners] in this action," directing Monno to communicate with him rather than Monno's former business partner, rejecting a settlement offer, and making a counteroffer. The Ramsey County district court denied Rachuy's motion to vacate the summary judgment.
On appeal Rachuy challenges (1) Ramsey County's jurisdiction over the fraud action; (2) the service of process in the fraud action; (3) the denial of a change of venue; (4) the service of requests for admission; (5) the timeliness of the motion for summary judgment; (6) the summary judgment adjudicating the fraud action; and (7) Hennepin County district court's denial of his motion to grant a default judgment releasing the funds on deposit to him or to Duggins. Duggins appeals the Hennepin County judgment ordering him to pay Monno $1,415.50 in attorneys' fees. Rachuy has also moved to strike the appendix of Monno's appellate brief for noncompliance with the Minnesota Rules of Civil Appellate Procedure.
D E C I S I O N
I
Rachuy first claims that Ramsey County did not have jurisdiction over Monno's fraud claim because the deposit of the Inter Savings funds with the Hennepin County District Court Administrator created an interpleader action that gave the Hennepin County district court priority under the "first-filed" rule. The first-filed rule is not a formal rule, but rather a principle based on courtesy and expediency that governs a forum determination when two state courts have concurrent jurisdiction. Gavle v. Little Six, Inc.,555 N.W.2d 284, 291 (Minn. 1996). The principle provides that, when two actions between the same parties involve the same subject and test the same rights, the court that first acquired jurisdiction may resolve the entire controversy. State ex. rel. Minn. Nat'l Bank of Duluth v. Dist. Court, 195 Minn. 169, 173, 262 N.W. 155, 157 (1935).
Rachuy's argument is based on the incorrect assumption that Inter Savings' deposit of funds in Hennepin County created a legal action. The bank petitioned the court to deposit the funds under Minn. R. Civ. P. 67.02, which permits deposits when no action is brought. A companion rule provides for deposits in an ongoing action. See Minn. R. Civ. P. 67.01 (addressing court-ordered deposits when holder of disputed property is party to action). Because there was no competing action filed in Hennepin County, the first-filed rule does not apply.
II
Rachuy argues that the court did not have personal jurisdiction over him because the summons and complaint were not served on the warden or commissioner of corrections. A determination of personal jurisdiction is a question of law reviewed de novo. Patterson v. Wu Family Corp.,608 N.W.2d 863, 866 (Minn. 2000). Process may be served on an individual by delivering a copy of the summons "to the individual personally or by leaving a copy at the individual's usual place of abode." Minn. R. Civ. P. 4.03(a). If an individual is confined to a state institution, the rules of civil procedure also direct service on the institution's chief executive officer. Id.
The Ramsey County district court determined that service of the summons on Rachuy in the Ramsey County Law Enforcement Center was effective. We agree. When an individual is confined to jail, the facility is his "usual place of abode." Berryhill v. Sepp, 106 Minn. 458, 460, 119 N.W. 404, 405 (1909). Although we recognize that Minn. R. Civ. P. 4.03(a) refers to state institutions and that Rachuy was confined in county jail, the underlying principles apply generally to government institutions. The purpose for serving the chief executive officer of a jail is to ensure notice to the defendant. 1 David F. Herr & Roger S. Haydock, Minnesota Practice § 4.10 (2002). Failure to serve the chief executive officer will render the service voidable, but not void. See Schultz v. Oldenburg, 202 Minn. 237, 246-47, 277 N.W. 918, 923 (1938) (concluding that statute providing for service of summons on guardian is directory and not mandatory).
Rachuy was personally served in the Ramsey County Law Enforcement Center. When he was later confined in the Washington County jail, Ramsey County transported Rachuy to the hearings pursuant to a court order. Rachuy was present in court during all proceedings, and the record indicates no lack of notice that would void the initial personal service of the summons and complaint.
III
A party must commence litigation in either the county in which one or more of the defendants reside when the action begins or the county in which the cause of action arose. Minn. Stat. § 542.09 (2004). Although the statute allows a party to sue where the cause of action arose, a plaintiff seeking to retain venue in a county in which no defendant resides must make a strong showing that some part of the cause of action arose there. Johnson v. Minn. Farm Bureau Mktg. Corp., 304 Minn. 292, 296-97, 232 N.W.2d 200, 203-04 (Minn. 1975). The district court held that Ramsey County was an appropriate venue. We review this determination for an abuse of discretion. Berg v. Knutson, 257 Minn. 595, 596, 100 N.W.2d 99, 100 (1959).
The record provides conclusive evidence that significant parts of the fraud action arose in Ramsey County. The property that Monno and his business partners were managing and developing is located in Ramsey County. Monno forwarded money to Rachuy by transmitting checks written against his account at the Inter Savings Bank in Ramsey County. Rachuy attempted to cash these checks at the Ramsey County bank, and St. Paul police also arrested Rachuy in Ramsey County. Furthermore, Rachuy had communications forwarded to the Ramsey County jail where he was a resident during the first segment of the proceedings. The district court did not abuse its discretion by determining that Ramsey County was the proper venue.
IV
Rachuy next challenges the district court's determination that Rachuy failed to respond to Monno's requests for admission. If a party fails to respond to a request for admission within the time allowed, each of the requests is deemed admitted by operation of law. Minn. R. Civ. P. 36.01. At the summary judgment hearing, Rachuy argued that the discovery documents, including requests for admissions, were taken from him at the Ramsey County Law Enforcement Center and that he was unable to retrieve the papers or respond to them. The district court rejected this explanation and the record supports the rejection. The evidence establishes that Rachuy had the documents because he contacted Monno's attorney in June 2004, shortly after he was served, to request an extension. The attorney declined to extend the time and informed Rachuy by letter.
Rachuy appeared at the August summary judgment hearing and argued pro se. The district court's rejection of the explanation Rachuy offered at the hearing is subject to a credibility determination that is anchored in the district court's opportunity to personally observe the witness and to gauge the witness's candor and demeanor. Appellate courts, for this reason, defer to the district court's determination on the credibility of witnesses and the weight to be given to their testimony. Minn. R. Civ. P. 52.01 ("[D]ue regard shall be given to the opportunity of the trial court to judge the credibility of witnesses.").
V
Rachuy contends that he had inadequate time to respond to Monno's summary judgment motion. When serving and filing a motion, a party must comply with the requirements of Rule 115.03 of the General Rules of Practice for the District Courts. Minn. R. Civ. P. 56.03. Rule 115.03 requires notice and filing twenty-eight days before a hearing on a dispositive motion. Minn. R. Gen. Pract. 115.03. The time limit is subject to modification so long as the court has an adequate opportunity to prepare for and promptly rule on the motion, the opposing party receives at least ten days' notice, and the parties are not unfairly prejudiced. See Minn. R. Civ. P. 56.03 (stating that "in no event shall the motion be served less than 10 days before the time fixed for the hearing"); Minn. R. Gen. Pract. 115.01(b) (allowing court to modify motion time limits); Brault v. Acceptance Indem. Ins. Co., 538 N.W.2d 144, 149 (Minn. App. 1995) (stating no jurisdictional defect exists when court relaxes timeliness rules if modification does not prejudice parties), review denied (Minn. Nov. 21, 1995). The district court held the summary judgment hearing twenty-seven days after Rachuy received notice of Monno's motion. Rachuy has demonstrated no prejudice; the one-day variance does not warrant a reversal of the judgment.
VI
Summary judgment is appropriate when the evidence shows that there is no genuine issue of material fact and that either party is entitled to a judgment as a matter of law. Minn. R. Civ. P. 56.03; Fabio v. Bellomo,504 N.W.2d 758, 761 (Minn. 1993). In reviewing summary judgment, we look at the evidence in the light most favorable to the nonmoving party. Fabio, 504 N.W.2d at 761. Nevertheless, in establishing the existence of a genuine issue of material fact, the nonmoving party must do more than rely on the allegations in the pleadings or postulate evidence that might be produced at trial. DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997). The party must establish a genuine issue of material fact by substantial evidence. Id. at 69-71.
The district court relied on affirmative evidence of fraud set forth in affidavits and also relied on the admissions deemed to be established by Rachuy's failure to answer. Although Rachuy submitted, with his motion to vacate the judgment, a personal affidavit and an affidavit from his investigator denying that Rachuy told Monno he was an attorney, the affirmative evidence is to the contrary. At the hearing on the motion, Monno submitted as an exhibit a letter signed by Rachuy and written on Midwest Legal Services' stationery. The letter unequivocally stated that Rachuy represented Monno's former business partners and that Monno must communicate with Rachuy about the litigation, and it proposed a settlement agreement. Monno also submitted a copy of an email in which Rachuy outlined the terms of the settlement and requested that Monno disburse a check directly to him.
Rachuy's mere assertions of disagreement do not create a fact issue in the context of this evidence. Furthermore, Rachuy has offered no alternative explanation of his possession of the checks or his involvement in the entire transaction. The district court did not err by granting summary judgment to Monno on the fraud claim.
VII
Rachuy argues that the Hennepin County district court erred by failing to grant a default judgment releasing Inter Savings' deposit to him or to Duggins. Rachuy provides no legal or factual basis for his argument that he was entitled to a default judgment. Courts may extend some latitude to pro se litigants. Liptak v. State ex rel. City of New Hope, 340 N.W.2d 366, 367 (Minn. App. 1983). But we are unable to review issues raised on appeal by a party without legal authority or a logical argument connected to a possible remedy. See State ex rel. Morrow v. LaFleur, 590 N.W.2d 787, 796 n.15 (Minn. 2003) (declining to address issue not properly briefed); In re Olson, 648 N.W.2d 226, 228 (Minn. 2002) (finding no error when appellate court refused to address issue not properly briefed and only raised tangentially). The money was disbursed to Monno's attorney based on the Ramsey County judgment directing delivery; Rachuy has established no error or abuse of discretion in this procedure.
VIII
When the district court makes specific findings of fact on an order for attorneys' fees, those findings will not be set aside on review unless they are clearly erroneous. Anderson v. Hunter, Keith, Marshall & Co., 417 N.W.2d 619, 630 (Minn. 1988). But the district court must provide a basis for its determination. Becker v. Alloy Hardfacing & Eng'g Co.,401 N.W.2d 655, 661 (Minn. 1987) (remanding to district court for failure to state basis for determination on attorneys' fees).
In response to Duggins and Rachuy's motion for default judgment in Hennepin County, Monno requested attorneys' fees as a sanction for Duggins's "failure to appear at the proceedings held on October 18, 2004, and for his persistence in proceeding[] on a frivolous claim." The Hennepin County district court granted attorneys' fees against Duggins, but it did not state whether it granted the fees as a compensatory sanction for Duggins's previous failure to appear or as a sanction for violating Minn. R. Civ. P. 11.02 by bringing a frivolous claim. We therefore reverse and remand for further consideration. If the district court maintains the attorneys' fees on remand, it must state findings that support its determination.
IX
Finally, we address Rachuy's motion to strike Monno's appendix because the appendix is not consecutively numbered in accordance with Minn. R. Civ. App. P. 130.01, subd. 1. Although Rachuy correctly observes that Monno's appendix is not consecutively numbered, we decline to strike the entire appendix for three reasons. First, the appendix contains an index and the pagination is consecutive within the document groupings, which makes it comprehensible. Second, the contents of the appendix replicate documents that are elsewhere in the record. And, third, Rachuy's brief and appendix has also failed to comply strictly with Minn. R. Civ. App. P. 130.01, subd. 1. Rachuy alternatively moves to strike appendix exhibit 2, which is Inter Savings' petition to the Hennepin County district court requesting that the court allow the bank to deposit the disputed funds with the court. Rachuy contends the petition is not part of the record on appeal under Minn. R. Civ. App. P. 110.01. This argument is incorrect. Exhibit 2 is a document filed with the court in one of the proceedings consolidated for appeal and is a relevant document required to be included under Minn. R. Civ. App. P. 130.01, subd. 1(a). Rachuy's motion is denied.
Affirmed in part, reversed in part, and remanded; motion denied.
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