This opinion will
be unpublished and
may not be cited
except as provided by
Minn. Stat. §
480A.08, subd. 3 (2004).
STATE OF MINNESOTA
IN COURT OF
Inter Savings Bank,
Filed February 14,
Affirmed in part,
reversed in part, and remanded; motion denied
File No. C6-04-005017
File No. 04-4864
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)
Beck, Larkin, Hoffman, Daly & Lindgren, Ltd., 1500 Wells Fargo Plaza, 7900
Xerxes Avenue South, Bloomington, MN 55431-1194 (for respondent Inter Savings
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
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
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on three checks totaling $17,024 issued to Rachuy from funds withdrawn from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.
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.
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
on April 28, 2004. In May 2004 Rachuy
moved for a change of venue.
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
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.
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.
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.
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.
E C I S I O N
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
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.
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.
district court determined that service of the summons on Rachuy in the Ramsey County
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
was personally served in the Ramsey
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
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
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
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.
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
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.
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.
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.
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).
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
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.