Opinion
No. A2-01-117
August 26, 2002
MEMORANDUM AND ORDER
I. Introduction
Before the Court are Defendants' motion to dismiss or, alternatively, motion for summary judgment as well as Plaintiff's motion for summary judgment. The parties to this action are involved in a dispute arising out of Defendants' representation of Plaintiff's creditor in a bankruptcy action. Plaintiff's motion (doc. #32) is DENIED. Defendants' motion to dismiss for lack of subject matter jurisdiction is DENIED (doc. #34-1). Defendants' motion for summary judgment (doc. #34-2) is GRANTED.
II. Background
In March 1990, Roy Lindholm ("Plaintiff") and Arlene Lindholm executed a promissory note secured by a mortgage and, in return, accepted the sum of $50,000 from John and Dawn Botsford. The Lindholms later defaulted on their obligation to repay the note.
In September 1995, Arlene Lindholm commenced a divorce action against Roy Lindholm in Grand Forks County District Court. The Honorable Bruce Bohlman presided over the divorce proceeding and awarded Arlene Lindholm the homestead. The remainder of the couple's property was to be sold to the highest bidder. The Amended Judgment provided that the proceeds of the sale be used to pay the balance of the mortgage on the real estate in favor of the Botsfords, and to any outstanding real estate taxes. Any remaining sale proceeds were to be distributed to Arlene Lindholm and Plaintiff in equal shares.
In the meantime, the Botsfords retained defendant Grant H. Shaft ("Shaft") of Shaft, Reis Shaft to foreclose on the Lindholms' property. In September 2000, Grant Shaft drafted two Notice Before Foreclosure documents. Arlene Lindholm was served with notice, but the process server was unable to locate Plaintiff as he had moved to an undisclosed location in Minnesota. Plaintiff was eventually served, at least arguably, in January 2001 when he stopped by Defendants' law office in Grand Forks, North Dakota and asked for a copy of the notice.
In a letter from Arlene Lindholm' s divorce attorney to Shaft, dated October 9, 2000, it was requested that Shaft defer taking any action on the foreclosure. The letter indicated that Arlene Lindholm was willing to assign the proceeds of judicial sale to Shaft's clients to satisfy the mortgage. Shaft and his client discussed the proposal and decided it would be best to suspend foreclosure proceedings until Judge Bohlman had issued an order allowing for judicial sale of property pursuant to the divorce decree.
In February 2001, Judge Bohlman granted Arlene Lindholm's motion to proceed with the sale of the farmland; however., before an order for judicial sale could be drafted, Plaintiff filed for bankruptcy. The automatic stay provisions of the Bankruptcy Act prevented Arlene Lindholm's divorce attorney from taking further action with respect to the land sale. Arlene Lindholm's divorce attorney and Shaft filed a motion for relief from stay on March 29, 2001, and a hearing was held in United States Bankruptcy Court in Fargo, North Dakota on May 22, 2001. The court granted Shaft's requested relief from the stay so that Shaft's client could proceed with the foreclosure action. In October 2001, Arlene Lindholm passed away. The sale of the farmland had not yet occurred, and it is presumably being handled by her estate.
By the fall of 2001, the foreclosure action had not commenced. Plaintiff, appearing pro se, brought the present action contending that the failure to institute the foreclosure action constitutes abuse of process because the threatened action was made with the ulterior purpose of trying to move the land sale matter back to the divorce court proceeding. Plaintiff also contends that the failure to commence with the foreclosure was fraudulent and constituted third-party malpractice-negligence. Plaintiff seeks $50,000 in actual damages and $1,000,000 in punitive damages.
III. Analysis
A. Subject Matter Jurisdiction
Defendant argues that the Rooker-Feldman doctrine precludes this Court from asserting subject matter jurisdiction over the present action. See Rooker v. Fidelity, 263 U.S. 413 (1923); District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983) (stating a federal district court is precluded from hearing challenges to state court determinations in judicial proceedings). The Rooker-Feldman doctrine prevents a federal court from entertaining not only straightforward appeals, but also more indirect attempts by a federal plaintiff to undermine a state court decision. Lemonds v. St. Louis County, 222 F.3d 488, 492-93 (8th Cir. 2000).
Generally, a federal district court is foreclosed from exercising jurisdiction over claims that are "inextricably intertwined" with specific claims already adjudicated in state court. Id. A claim is inextricably intertwined with a state court judgment "if the federal claim succeeds only to the extent that the state court wrongly decided the issue before it." Id. (quoting Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 25 (1987) (Marshall, J., concurring)).
The Court finds it has jurisdiction over this matter. Plaintiffs action involves various tort claims arising out of Shaft's representation of Plaintiff's mortgagee in a foreclosure action and bankruptcy proceeding. This tort action is unrelated to the divorce proceeding in state court. In other words, this Court's ruling will not impact the state divorce proceeding. Consequently, Defendants' motion to dismiss for lack of subject matter jurisdiction is DENIED (doc. #34-1). However, the Court finds Plaintiff's claims frivolous and unable to survive Defendants' motion for summary judgment.
B. Summary Judgment
Summary judgment is appropriate when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). A fact is "material" if it might affect the outcome of a case, and a dispute is "genuine" if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Churchill Bus. Credit, Inc. v. Pacific Mut. Door Co., 49 F.3d 1334, 1336 (8th Cir. 1995).
The inquiry for summary judgment is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one sided that one party must prevail as a matter of law." However, the nonmovant must do more than merely restate earlier pleadings. See McLaughlin v. Esselte Pendaflex Corp., 50 F.3d 507, 510 (8th Cir. 1995). Mere arguments or allegations are insufficient to defeat summary judgment; the nonmovant must advance specific facts to create a genuine issue of material fact for trial. See, e.g., F.D.I.C. v. Bell, 106 F.3d 258, 263 (8th Cir. 1997). This requirement is not satisfied by "speculation, conjecture, or fantasy"; it requires sufficient probative evidence to allow a finding in its favor, assuming the evidence is established at trial. See Wilson v. International Business Machines Corp., 62 F.3d 237, 241 (8th Cir. 1995).
Plaintiff fails to meet the summary judgment standard set forth above. Plaintiff brings forward several speculative and fantastic claims against Defendants, and for the reasons set out below the Court finds that there is no genuine issue of material fact in the present case and Defendants are entitled to judgment as a matter of law.
1. Abuse of Process
First, Plaintiff brings a claim for abuse of process. In North Dakota, the tort, abuse of process, consists of two elements: first, an ulterior purpose; second, a willful act in the use of the process not proper in the regular conduct of the proceedings. Stoner v. Nash Finch, Inc., 446 N.W.2d 747, 751 (N.D. 1989).
Some definite act or threat not authorized by the process, or aimed at an objective not legitimate in the use of the process, is required; and there is no liability where the defendant has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions. The improper purpose usually takes the form of coercion to obtain a collateral advantage, not properly involved in the proceeding itself, such as the surrender of property or the payment of money, by the use of the process as a threat or a club. There is, in other words, a form of extortion, and it is what is done in the course of negotiation, rather than the issuance or any formal use of the process itself, which constitutes the tort.Volk v. Wisconsin Mortgage Assur. Co., 474 N.W.2d 40, 44 (N.D. 1991).
Plaintiff alleges that Defendants had an ulterior motive of trying to take Plaintiff's land and accomplish a land foreclosure in the divorce court. All Plaintiff has shown this Court is that Defendants have dutifully represented the interests of their client within the bounds of the law. The actions that Plaintiff complains of were brought in good faith and were necessary to preserve the Botsfords' right to proceed with foreclosure, should they choose to do so. Therefore, Plaintiff's claim has no merit.
2. Section 1983 Claim
Plaintiff also asserts a claim for violation of his due process rights under Title 42, Section 1983 of the United States Code. Section 1983 provides a federal cause of action against any person who, acting under color of state law, deprives another of his federal rights. See 42 U.S.C. § 1983 (2001). Section 1983 protects against acts of the government or its agents. Here, however, Plaintiff seeks to recover from a private party. To prevail against a private party, Plaintiff must prove that the private party was a "willful participant in joint activity with the State or its agents" in the activity which deprived him of his constitutional right. Murray v. Wal-Mart, Inc., 874 F.2d 555, 558-59 (8th Cir. 1989) (quoting Adickes v. S.H. Kress Co., 398 U.S. 144, 150 (1970)). A private party's mere invocation of state legal procedures does not constitute state action. Miller v. Compton, 122 F.3d 1094, 1098 (8th Cir. 1997). Plaintiff offers no proof of Defendants' entanglement with the government other than Defendants' use of the legal system, thus, his Section 1983 claim is without merit.
3. Fraud
Plaintiff asserts that Shaft's statement to the bankruptcy court that his client wished to proceed with the foreclosure was fraudulent because Shaft never instituted the foreclosure proceeding. As a matter of law, Shaft's statement to the bankruptcy court was not fraudulent. The alleged fraudulent statement was a mere prediction of a future act or an unfilled promise to seek a foreclosure; in either case the statement was not fraudulent. See Serle v. Weigel, 130 N.W.2d 315, 320 (N.D. 1964) (stating fraudulent statements cannot consist of unfulfilled promises or predictions with respect to future events, especially where intent to deceive is absent).
Furthermore, a key element in proving fraud or deceit is reliance by the complaining party upon the false or misleading representations. Dvorak v. American Family Mut. Ins. Co., 508 N.W.2d 329, 332 (N.D. 1993). There is no evidence of reliance by Plaintiff on the statement. The bankruptcy court is the only party that seemingly relied on Shaft's statement. Thus, Plaintiffs claim for fraud fails as a matter of law.
4. Third Party Malpractice and Negligence
Plaintiff contends that Shaft's actions constitute third-party malpractice and negligence. The Court is uncertain from Plaintiff's complaint which facts or allegations constitute Plaintiff's negligence claim, but because malpractice is a form of negligence the Court will assume this is the same cause of action.
In North Dakota, the existence of an attorney-client relationship is an essential element of legal
malpractice. Moen v. Thomas, 628 N.W.2d 325, 329 (N.D. 2001). Although it is not necessary that there be an express contract or payment of fees, there must be at least some conduct which demonstrates the existence of an attorney-client relationship. Id. Here, Plaintiff fails to establish any conduct on the part of Shaft that would indicate the existence of an attorney-client relationship between Plaintiff and Defendant. Hence, his claim is without merit.
C. Defendants' Request for Injunction
Defendants' have requested an injunction to prevent Plaintiff from instituting further legal proceedings. The Court finds an that injunction would be improper in the present case.
IV. Conclusion
For the aforementioned reasons, Defendants' motion to dismiss is DENIED (doc. #34-1), but Defendants' motion for summary judgment is GRANTED (doc. #34-2). For the same reasons, Plaintiff's motion for summary judgment is DENIED (doc. #32).