August 4, 1999 REPORT AND RECOMMENDATION by U.S. Magistrate Judge John M. Mason, in LAMBROS vs. FAULKNER, that offers an excellent overview of the facts and procedural history in this case. Judge Mason states, "For the reasons set forth above, it is recommended that Defendant's Motion to Dismiss or for summary judgment [Docket No. 47] be DENIED as presented.


CIVIL NO. 98-1621 (DSD/JMM)


Filed August 4, 1999

JOHN GREGORY LAMBROS, Plaintiff v. CHARLES W. FAULKNER, sued as Estate/Will Business Insurance of Deceased Attorney Charles W. Faulkner, SHEILA REGAN FAULKNER, FAULKNER & FAULKNER and JOHN & JANE DOE, Defendants.

The above matter is before the Court on Defendants' Motion to Dismiss or for Summary Judgment [Docket No. 47]. The matter is before the undersigned for a Report and Recommendation to District Judge David S. Doty, pursuant to the provisions of 28 U.S.C. § 636 (b)(1 )(B).

Upon the following Findings of Fact Report, it is recommended that Defendants' Motion to Dismiss or for Summary Judgment [Docket No. 47] be denied.


Procedural History

This case has a somewhat confused procedural history. The initial Complaint was filed on July 2, 1998. Defendants were granted in extension of time until September 11, 1998 to respond to the Complaint. [Docket No. 8]. On September 9, 1998, Defendant filed an Answer which is dated September 8, 1998. [Docket No. 13]. On September 23, 1999, Defendants filed a Motion to Extend Time to Answer [Docket No. 18] and an Answer which is dated August 8, 1998. [Docket No. 19]. By various pleadings, Plaintiff sought leave to Amend his Complaint. (E.g. Docket Nos. 9, 16, 25 and 28.) Defendant Sheila Regan Faulkner then made a Motion to Dismiss the Complaint. [See Docket Nos. 31-34].

In an attempt to clarify that procedural situation, this Court issued Orders which denied without prejudice the Motions to Amend, and the Motions to Dismiss. [Docket Nos. 37, 38, and 39]. The goal was to cause the Complaint to take final form prior to the submission of a Motion to Dismiss.

On February 23, 1999, Plaintiff filed a new Motion to Amend. [Docket No. 40]. Defendants did not respond to the Motion to Amend. Rather, they somehow concluded that the Complaint had already been amended, so they filed an Answer [Docket No. 41]. On March 26, 1999, this Court then issued another Order attempting to clarify this procedural status. [Docket No. 43].

The Order required Plaintiff to file the Amended Complaint by April 7, 1999.

The Order directed that Defendants' previously filed Answer to the Amended Complaint [Docket No. 41] be deemed timely.

The Order directed that Defendants' new Motion to Dismiss or for Summary Judgment be served by April 26, 1999, and required that the Motion comply with the requirements of Local Rule 7.1(b)(1)(A).

Defendants timely filed their Motion to Dismiss or for Summary Judgment on April 26, 1999, accompanied by a three page Memorandum in Support. [Docket Nos. 47 and 48]. However, no Affidavits or Exhibits were provided in support of the Motion. See Local Rule 7.1(b)(1)(A)4. Plaintiff filed a Motion to extend the time for his Response [Docket No.49]. Plaintiff filed an initial Response on May 17,1999 [Docket Nos. 50, 51]. On May 21, 1999, Defendants filed a Memorandum opposing Plaintiff's Request for additional time [Docket No. 52] and simultaneously filed their Reply [Docket No. 533. Plaintiff filed a supplemental Response on May 24,1999 [Docket No. 54].


Defendant Charles W. Faulkner ("C.W. Faulkner") was appointed to be Plaintiff's attorney in a federal criminal case, U.S. v. Lambros, 4-CR-89-82(05). At the time, Faulkner was a partner at the law firm of Faulkner & Faulkner. Defendant Sheila Faulkner was also a partner at Faulkner & Faulkner. Plaintiff identifies Defendants John and Jane Doe as persons employed by C.W. Faulkner to assist in his defense. C.W. Faulkner died before this action was commenced.

Plaintiff was offered a plea bargain of seven years in prison for all of the charges pending against him. Plaintiff rejected this plea bargain. After a trial, he was convicted of the federal criminal charges and sentenced to a term of at least 360 months in jail. Plaintiff is suing Defendants for legal malpractice and violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO") in connection with his criminal defense.



Standard of Review

The Court of Appeals for the Eighth Circuit has provided this standard for the consideration of a Motion to Dismiss pursuant to Rule 12(b)(6):

"[A] motion to dismiss a complaint should not be granted unless it appears beyond doubt that the plaintiff can prove no set of facts which would entitle him to relief. Thomas W. Garland, Inc. v. City of St. Louis, 596 F.2d 784, 787 (8th Cir.), cert. denied, 444 U.S. 899, 100 S. Ct. 208, 62 L.Ed.2d 135 (1979). We must take the well-pleaded allegations of the complaint as true, and construe the complaint, and all reasonable inferences arising therefrom, most favorably to the pleader. United States v. Mississippi, 380 U.S. 128, 143, 85 S. Ct. 808, 816, 13 L.Ed.2d 717 (1965); see also Bennett v. Berg, 685 F.2d 1053, 1058-59 (8th Cir. 1983); Bramlet v. Wilson, 495 F.2d 714, 717 (8th Cir.1974)."

Morton v. Becker, 793 F.2d 185,187 (8th Cir.1986); accord Conley v. Gibson, 355 U.S. 41, 45-46 (1957). In considering a motion to dismiss, courts accept a plaintiff s factual allegations as true, but reject conclusory allegations of law and unwarranted inferences. Silver v. H&R Block. Inc.,105 F.3d 394,397 (8th Cir.1997). The Court may not consider materials outside the pleadings on a motion to dismiss. Gibb v. Scott, 958 F.2d 814, 816 (8th Cir. 1992).

A. Defendants have not shown that Plaintiff's claims against C.W. Faulkner's estate are time barred.

Defendants' first argument is that the Court lacks jurisdiction over Plaintiff's claims against C.W. Faulkner's estate because these claims are time barred as a matter of law.- Defendants base this argument on their assertion that a legal notice was filed in the St. Paul Legal Ledger stating that all claims against the estate were to be filed no late than March 31, 1998. A copy of this notice was filed with the Court as Exhibit B to Defendants' Answer [Docket No.41]. Defendants cite Minn. Stat. §524.3-801 (a) in support of this argument.

While Minn. Stat. §524.3-801(a) does provide that some creditors' claims may be time barred based upon a published notice, Minn. Stat. §524.3-801(b) provides that known creditors must be served personally with a copy of such notice. A known creditor is one who the estate's personal representative knows has asserted a claim that arose during the decedent's life against either the decedent or the decedent's estate. Minn. Stat. §524.3-801 (b)(3). Plaintiff had served a lien on C.W. Faulkner on October 20, 1997 seeking compensation for C.W. Faulkner's alleged malpractice in handling Plaintiff's case. Arguably, this put the estate on notice of Plaintiffs claim and made Plaintiff a known creditor of the estate, entitled to personal notice of the time limit for filing additional claims. Defendants have not addressed this argument, nor did they respond to Plaintiffs argument that because he was in prison when the notice was published it was a practical impossibility for him to receive notice of the time limit for filing claims.

In addition, Defendants themselves point out that a caveat to Minn. Stat. §524.3-801 is contained in Minn. Stat. §541.16, which provides: "If a cause of action survives against a decedent, which is not required by law to be presented as a claim against the decedent's estate, an action may be brought thereon against the personal representative of the decedent at any time within one year after death or within the limitation period otherwise prescribed, whichever is longer." Defendants assert that Plaintiffs claim should have been filed against the estate, but present no support for this assertion. Under Minnesota law, all causes of action against a decedent survive against the personal representative except causes of action arising out of an injury to the person. Minn. Stat. §573.01. A legal malpractice claim is not an injury to the person. Lipka v. Minnesota School Employees Assoc. Local 1980, 537 N.W.2d 624, 629 (Minn. Ct. App. 1995).

We conclude that defendants nave not established that Plaintiff could prove no set of facts which would avoid the conclusion that his claims were untimely filed.

B. Plaintiff has not failed to state a claim against the defendants other than C.W. Faulkner.

Defendants state that C.W. Faulkner was appointed personally to represent Plaintiff in the criminal action, and therefore Plaintiff cannot maintain claims against the other Defendants in this action. Their argument is that Minn. Stat. §323.12 provides that a partnership is liable for the wrongful acts or omissions of an individual partner only if that partner was acting in the ordinary course of the business of the partnership or with the authority of copartners. Defendants suggest that because Sheila Faulkner was not directly involved in Plaintiff's criminal defense, Plaintiff's case against all of the defendants other than C.W. Faulkner should be dismissed.

We first note that the pleadings and affidavits do not establish the fact that Faulkner & Faulkner is a partnership, and that the partnership is engaged in the practice of law. While this certainly appears to be the case based upon the letterhead of certain documents, and the Court's own understanding, we are unable to recommend that the District Court find this to be the fact in the absence of evidentiary documentation, or some suggestion of a basis upon which judicial notice may be taken of this fact.

We also conclude that the Motion must be denied even if one assumes that Faulkner & Faulkner is a general partnership engaged in the practice of law. Defendants acknowledge that Faulkner & Faulkner did occasionally handle criminal cases. If the ordinary course of the partnership's business included criminal defense, C.W. Faulkner's representation of Plaintiff would not fall outside that umbrella. Defendants have not submitted authority to support their assertion that C.W. Faulkner's actions in defending Plaintiff were not in the ordinary course of Defendants' business. Defendants have not shown that Plaintiff's allegations against Defendants other than C.W. Faulkner fail to state a claim, under the standards by which we must evaluate a Motion to Dismiss.


Standard of Review

The standards for considering a Motion for Summary Judgment have their foundation in the provisions of Rule 56 of the Federal Rules of Civil Procedure, as interpreted in a trilogy of cases decided by the Supreme Court in 1986. Summary judgment is appropriate if the materials submitted in support of the motion "show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). In Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986), the Supreme Court described the importance of the summary judgment procedure:

"Summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed 'to secure the just, speedy and inexpensive determination of every action.' ... Rule 56 must be construed with due regard not only for the rights of persons asserting claims and defenses that are adequately based in fact to have those claims and defenses tried to a jury, but also for the rights of persons opposing such claims and defenses to demonstrate in the manner provided by the Rule, prior to trial, that the claims and defenses have no factual basis."

On a Motion for Summary Judgment, the moving party has the initial burden of establishing the "material facts" and demonstrating that there is not a "genuine" dispute as to whether those material facts are true. It is possible to satisfy that burden without filing Affidavits. Celotex Corp., 477 U.S. at 322-23. To defeat the motion, the opposing party must then establish that there is a "genuine" issue as to material facts. When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); Fed. R. Civ. P. 56(e).

The Court is guided in determining issues of materiality of the facts and the genuineness of the dispute by additional standards. "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no 'genuine issue for trial."' Matsushita Elec. Indus. Co., 475 U.S. at 586. The Court considers the Motion for Summary Judgment based upon the materials presented in connection with the Motion. "The inquiry performed is the threshold inquiry of determining whether there is the need for a trial--whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 249 (1986). The Court's inquiry should be "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." Id . at 251.

These principles have been explained and applied by the Court of Appeals for the Eighth Circuit in numerous cases. E.g., Hartnagel v. Norman,953 F.2d 394,395-96 (8th Cir. 1992); Fischer v. NWA. Inc., 883 F.2d 594, 598 (8th Cir. 1989); cert. denied, 495 U.S. 947 (1990); Health Care Equal. Comm. of the lowa Chiropractic Soc' v. Iowa Medical Soc'y., 851 F.2d 1020,1031-1032 (8th Cir.1988).

In this case, as noted in the first section below, the standard for summary judgment is narrower, because Defendants did not make and support their motion with Affidavits or Exhibits. Where a motion for summary judgment is based solely on the pleadings and makes no [meaningful] reference to affidavits, depositions, or interrogatories, it makes no difference whether the motion is evaluated under Rule 56 or Rule 12(b)(6) because both standards reduce to the same question." Ashe v. Corley, 992 F.2d 540, 544 (5th Cir.1993)(quoted with approval in Handeen v. Lemaire,112 F.3d 1339, 1347 (8th Cir.1997).

A. Materials Submitted in Support of Motion

As noted earlier, Defendants Motion to Dismiss or for Summary Judgment and the accompanying Memorandum are filed as Docket Nos.47 and 48. Defendants did not submit Affidavits or Exhibits in support of their Motion. A party moving for summary judgment does not sustain his burden merely by offering conclusory denials of the allegations in his opponent's pleadings. Handeen,112 F.3d at 1354. Neither is a party entitled to summary judgment merely because it appears that his adversary is unlikely to prevail at trial. Id. At the very least, a party moving for summary judgment must identify those portions of the record which bear out his assertion that no genuine issues of material fact exist. Id. at 1346. We cannot conclude on the record before us that there are no genuine issues of material fact and that Defendants are entitled to judgment as a matter of law as to the allegations in Plaintiff's Complaint.

We note that in the conclusion to their Memorandum, Defendants state: "Based upon the foregoing and the entire record, file and proceedings, Defendants seek dismiss or summary judgment." [Docket No. 48, p. 3.] Perhaps this phrase was intended to cause the Court to rely upon earlier fillings by Defendants. We note, however, that Plaintiff points out at page one of his initial Memorandum [Docket No. 50 that statements of counsel may not be treated as evidence, and Defendants' Reply [Docket No. 53] does not respond to this argument, nor argue that the earlier filings supplied evidentiary support.

Out of an excess of caution, in addition to Defendants' Motion and Memorandum [Docket Nos. 47 and 48], we also consider the materials submitted by Defendants with respect to their initial Motion to Dismiss or for Summary Judgment, directed at a different Complaint, [Docket Nos. 31 - 34] as well as the Exhibits to Defendants' unverified Answer. [Docket No. 41].2 Consideration of these materials does not alter our conclusion that Defendants have not established that Summary Judgment should be granted at this time.

B. Application to Plaintiff s Amended Complaint

1. Plaintiff's legal malpractice claims are not barred by collateral estoppel.

Defendants argue that the doctrine of collateral estoppel precludes the Court's consideration of Plaintiff's legal malpractice claims. The doctrine of collateral estoppel, also known as issue preclusion, may bar relitigation of an issue that has already been addressed by the courts. In order for collateral estoppel to bar litigation of an issue, "(1 ) the issue sought to be precluded must be the same as that involved in the prior action; (2) the issue must have been litigated in the prior action; (3) the issue must have been determined by a valid and final judgment; and (4) the determination must have been essential to the prior judgment." Mille Lacs Band of Chippewa Indians v. State of Minnesota, 124 F.3d 904, 922 (8th Cir. 1997)(citations omitted). "In addition, the estopped party must be a party or in privity with a party to the prior litigation." Id. Defendants would have to establish that no genuine issue of material fact exists as to any of the Mille Lacs elements in order for Plaintiff to be estopped from bringing his legal malpractice claim. Defendants have not met this burden with respect to any of the elements.

Defendants' argument is that Plaintiff is estopped from bringing a legal malpractice claim because, in Plaintiff s criminal case, the court determined that C.W. Faulkner provided effective assistance to Plaintiff. Defendants cited three documents from U.S. v. Lambros, 4-CR-89-82(05), in support of this assertion: an Order dated June 8, 1993, a Resentencing Memorandum dated February 19, 1997, and an Order dated April 6, 1999. Defendants did not file these documents with their Motion or Memorandum. At the request of the Court, Defendants submitted copies of these documents to the Court by telefax. The copies submitted by Defendants were not attested to or authenticated, so they do not provide evidence upon which the Court may rely. None of these documents establishes that there is no genuine issue of material fact as to whether Plaintiff has had a full and fair opportunity to litigate a claim of negligence against Defendants such as Plaintiff is alleging in the present case.

In the April 6, 1999 Order, the court specifically did not address P!Plaintiffs allegations of ineffective assistance of counsel because it determined that it did not have subject matter jurisdiction over the issue. The February 19, 1997 Resentencing Memorandum does make reference to motions by Plaintiff regarding the conduct of his attorney during his criminal trial. The court denied three motions in which Plaintiff requested that the court order some action by his attorney, such as questioning certain witnesses. The court also denied Plaintiff's motion for an evidentiary hearing as to his attorney's failure to conduct pretrial investigation in Brazil and elsewhere. However, nowhere did the court indicate that it was addressing or ruling on the issues of whether Plaintiff received effective assistance of counsel or whether Plaintiff's attorney had been negligent. In the June 8, 1993 Order, the court refers to C.W. Faulkner as "able," but makes no reference to the standard by which it measured his actions. Moreover, the June 8, 1993 Order was issued before Plaintiff was sentenced, and therefore does not address any actions taken by Defendants during the sentencing phase.

Defendants have not established that the issue sought to be precluded in this case was the same as that litigated in Plaintiff's criminal trial, the first Mille Lacs element. It is not clear that the issue of ineffective assistance of counsel was ever addressed in Plaintiffs criminal trial. In addition, Defendants have not addressed the question of whether the standard for determining if an attorney provided effective assistance is the same as the standard for determining whether an attorney has committed malpractice. Unless the court in the prior proceeding applied the same standard to measure Defendants' behavior as we would apply in this action, it cannot be said that the issues are the same in both cases.

Defendants also have not established the second Mille Lacs element, i.e., that the issue sought to be precluded was in fact litigated in the prior action. None of the Orders from Plaintiff's criminal trial state that C.W. Faulkner provided effective assistance to Plaintiff. Although the court may have stated that C.W. Faulkner was "able," a genuine issue of fact exists as to whether the parties argued the issue and the court determined that he provided effective assistance. Also, as stated above, the court made this statement while C.W. Faulkner was still in the process of representing Plaintiff, so even if the issue had been litigated as to counsel's conduct before June 8, 1993, genuine issues of fact would still exists as to counsel's conduct after that date.

By failing to establish that the issue was litigated in the criminal action, Defendants have likewise failed to establish the third and fourth elements of Mille Lacs, that the issue was determined by a valid and final judgment and that the determination of the issue was essential to the prior judgment. We cannot conclude on the basis of the material submitted by Defendants that there is no genuine issue of material fact as to whether Plaintiff's legal malpractice claim is barred by collateral estoppel.

2. Defendants have not established that no genuine issue of material fact exists as to Plaintiff's legal malpractice claims.

"To prevail in a legal malpractice action, the plaintiff must prove: (a) the existence of an attorney-client relationship; (b) acts amounting to negligence or breach of contract; (c) that such acts were the proximate cause of the plaintiff's damages; and (d) that but for defendant's conduct, the plaintiff would have been successful in the action." Rouse v. Dunkley & Bennett. P.A., 520 N.W.2d 406, 408 (Minn. ,994). Defendants concede that Plaintiff has met the first element, i.e., that an attorney-client relationship existed. Defendants have not established that no genuine issue of material fact exists as to the remaining three elements.

Defendants make no argument as to the second and third elements, but argue that Plaintiff cannot establish the fourth element because he chose not to accept the seven-year sentence offered in the plea bargain that was negotiated for him by C.W. Faulkner. They suggest that Plaintiff cannot show that he was damaged by their actions because he could have been serving a lesser sentence if he had accepted the plea bargain rather than going through with a trial. However, Plaintiff has alleged in his Amended Complaint that he could have received a sentence of much less than seven years, or even been acquitted of all charges against him, were it not for the negligence of Defendants. The mere fact that Plaintiff was offered a plea bargain which would have resulted in a shorter sentence than the one he ultimately received does not preclude a finding of negligence on the part of his attorney, when Plaintiff is claiming that Defendants should have been able to keep him out of jail altogether.

In fact, even if Plaintiff had accepted the plea bargain, he still could have been able to bring a malpractice action against Defendants. See Rampy v. Messerli 224 B.R. 701 (D. Minn. 1997)(Client accepted settlement in underlying action negotiated by attorney. Client's malpractice action would survive summary judgment if there was a genuine issue of material fact as to whether, absent attorney's negligence, client could have recovered more than she received under settlement agreement.).

Defendants have not established that no genuine issue of material facts exists as to the fourth element of Plaintiff's legal malpractice claim.

3. Defendants have not established that Plaintiff's Amended Complaint fails to state a claim under RICO.

In Defendants' Motion they request that we grant summary judgment on Plaintiffs RICO claim pursuant to Fed. R. Civ. P. 56; in their supporting Memorandum, Defendants ask that we dismiss Plaintiff's RICO claim pursuant to Fed. R. Civ. P. 12. We are not prepared to recommend a ruling in Defendants' favor under either standard based upon Defendants' submissions to the Court at this time.

Defendants argue that Plaintiff has not stated any factual basis to support a RICO claim and therefore Plaintiff's RICO claim should be dismissed. This is the entirety of Defendants' argument on this point. Defendants' assertion is not sufficient to warrant a grant of summary judgment or dismissal as to Plaintiff's RICO claim. To state a claim under RICO, a private party must show conduct of an enterprise through a pattern of racketeering activity. Handeen, 112 F.3d at 1347; Wisdom v. First Midwest Bank, 167 F.3d 402, 406 (8th Cir. 1999). Plaintiff has alleged conduct by Defendants, working together, during which they made illegal use of the United States Postal Service and court system. He has alleged that Defendants thereby created an enterprise which engaged in a pattern of racketeering activity throughout his criminal proceedings, including bribery, mail fraud, wire fraud, obstruction of justice and witness tampering. Plaintiff has further alleged that this conduct by Defendants was done for the purpose of depriving him of his constitutional rights. Defendants have presented no facts or legal argument to contradict these allegations. Although we may be skeptical as to Plaintiff's ability to prevail at trial on this claim, or indeed any of the claims alleged in Plaintiff's Amended Complaint, we simply have not been presented with a basis to recommend dismissal or summary judgment of this claim at this time.

It is apparent that counsel for Defendants have strong feelings that the Amended Complaint against them is totally without merit. Counsel for Defendants urge the Court to refrain from excusing any failures on Plaintiff's part on the basis of his status as pro se party, noting that the Court of Appeals for the Eighth Circuit has stated that Plaintiff takes great pleasure in antagonizing the legal system." U.S. v. Lambros, 65 F.3d 698, 701 (8th Cir. 1995). The issue before the Court, however, is not the standards with which Plaintiff must comply, but the requirements which must be met by Defendants in seeking an Order of the District Court granting their Motion to dismiss Plaintiff's Amended Complaint based upon Rule 1 2(b)(6) or Rule 56 of the Federal Rules of Civil Procedure. It may well be that such a Motion could be made and sufficiently supported to warrant dismissal of Plaintiff's Amended Complaint prior to trial. The materials submitted to the Court at this time do not provide to the District Court a sufficient basis upon which to grant Defendants' Motion.


For the reasons set forth above, it is recommended that Defendants' Motion to Dismiss or for Summary Judgment [Docket No. 47] be denied as presented. Dated: August 4, 1999



United States Magistrate Judge

Pursuant to Local Rule 72.1 (c)(2), any party may object to this Report and Recommendation by filing with the Clerk of Court, and by serving upon all parties on or before August 19, 1999 a copy of this Report, written objections which specifically identify the portions of the Report to which objections are made and the bases for each objection.

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U. S. Penitentiary Leavenworth
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Leavenworth, KS 66048-1000