Van Stelton et al v. Van Stelton et al

Filing 105

MEMORANDUM OPINION AND ORDER granting 59 Motion to Dismiss; granting in part and denying in part 60 Motion to Dismiss for Failure to State a Claim; granting 74 Motion to Dismiss for Failure to State a Claim. See order text for details. Signed by Judge Mark W Bennett on 07/17/2013. (src)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
WESTERN DIVISION
VIRGIL VAN STELTON, CAROL VAN
STELTON,
AND
ALVIN
VAN
STELTON,
No. C11-4045-MWB
Plaintiffs,
vs.
MEMORANDUM OPINION AND
JERRY VAN STELTON, DONNA VAN ORDER REGARDING DEFENDANTS’
STELTON, EUGENE VAN STELTON,
MOTIONS TO DISMISS
GARY CHRISTIANS, DOUG WEBER,
SCOTT GRIES, NATE KRIKKE,
ROBERT E. HANSEN, DANIEL
DEKOTER,
OSCEOLA
COUNTY,
IOWA, THE CITY OF SIBLEY, IOWA,
AND
DEKOTER,
THOLE
AND
DAWSON, P.C.
Defendants.
___________________________
TABLE OF CONTENTS
I. 

INTRODUCTION AND BACKGROUND .............................................. 4 
A. 
Factual Background ............................................................... 4 
1. 
The parties and principal actors ......................................... 4 
2. 
Osceola County’s tax law ................................................. 5 
3. 
The Enterprise .............................................................. 6 
4. 
Tax protest and reaction .................................................. 6 
5. 
The Van Stelton Trust kerfuffle ......................................... 9 
B. 
Procedural Background ......................................................... 12 

II. 

LEGAL ANALYSIS ...................................................................... 14 
A. 
Standards For A Motion To Dismiss .......................................... 14 
B. 
Sufficiency Of the § 1983 Allegations ........................................ 16 
1. 
Requirements for § 1983 action ....................................... 16 
2. 
Allegations against the Law Firm defendants....................... 19 

C. 

D. 

E. 

F. 
III. 

DeKoter’s actions ................................................ 21 
a. 
b. 
The Law Firm’s liability ........................................ 22 
Sufficiency Of RICO Allegations .............................................. 25 
1. 
Purpose and scope of RICO ............................................ 25 
2. 
Requirements for RICO claim ......................................... 27 
3. 
Analysis .................................................................... 29 
First Amendment Right To Petition Claim Against The County
Defendants ......................................................................... 32 
1. 
Overview of the right to access and requirements for claim ..... 34 
2. 
Analysis .................................................................... 35 
State Law Claims ................................................................. 37 
1. 
Carol Van Stelton’s slander and libel claim......................... 37 
2. 
False arrest claim against the Law Firm defendants .............. 37 
3. 
Malicious prosecution claim against the Law Firm
defendants ................................................................. 39 
4. 
Defamation claim against the Law Firm defendants .............. 42 
5. 
Tortious interference with prospective business relations
claims ....................................................................... 44 
a. 
Requirements for a claim ....................................... 45 
b. 
Claim against the Law Firm defendants ..................... 45 
c. 
Claim against the County defendants ........................ 47 
6. 
Fraud/breach of fiduciary duty ........................................ 47 
a. 
Fraud ............................................................... 47 
b. 
Breach of fiduciary duty ........................................ 49 
7. 
Ongoing criminal conduct .............................................. 52 
a. 
Overview of the OCC ............................................ 52 
b. 
Analysis ............................................................ 54 
The City Of Sibley’s Motion .................................................... 54 

CONCLUSION ............................................................................ 55 

2

In music, a “mashup” is a song “created by blending two or more pre-recorded
songs, usually by overlaying the vocal track of one song seamlessly over the
instrumental track of another.” Mashup, http://en.wikipedia.org/wiki/Mashup_(music)
(last visited July 15, 2013). Plaintiffs’ Third Amended Complaint reads like a literary
mashup of John Grisham’s novel, “the Firm,” and John Steinbeck’s “East of Eden.”1
Plaintiffs allege that the defendant law firm controls and manipulates a wide array of
legal matters in Osceola County, Iowa. The law firm allegedly maintains such control
through symbiotic relationships it enjoys with the county attorney and sheriff, as well
its attorneys’ self-serving advice to county officials. Plaintiffs also allege a conflict
between two sets of brothers over their interests in a family trust.

In this sibling

conflict, the defendant law firm has allegedly aligned itself with one set of brothers
who, not by coincidence, are clients. Plaintiffs bring a panoply of claims against the
law firm, one set of the brothers, and other defendants, including claims for civil rights
violations under 42 U.S.C. § 1983; violations of the Racketeer Influenced and Corrupt
Organizations Act (“RICO”), 18 U.S.C. § 1961, et seq.; and pendent state law claims
for false arrest, malicious prosecution, slander and libel, and tortious interference with
prospective economic advantage.

Defendants’ motions to dismiss require me to

consider whether plaintiffs’ allegations adequately state viable claims under Federal or
Iowa law.

In his novel, The Firm, author John Grisham describes a powerful and corrupt
law firm, with ties to organized crime, that will do just about anything for a fee
regardless of legality or ethics. JOHN GRISHAM, THE FIRM (1991). East of Eden is
Steinbeck’s gothic retelling of the Cain and Abel story of sibling rivalry set in
Monterey and Salinas, California, during the early part of the last century. JOHN
STEINBECK, EAST OF EDEN (1952).
1

3

I.

INTRODUCTION AND BACKGROUND
A.

Factual Background

“When ruling on a defendant's motion to dismiss, a judge must accept as true all
of the factual allegations contained in the complaint.” Erickson v. Pardus, 551 U.S. 89,
94 (2007) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555–56 (2007)). Thus,
the factual background presented here is based on the plaintiffs' allegations in their
Third Amended Complaint.
1.

The parties and principal actors

Plaintiffs Virgil Van Stelton and his wife, plaintiff Carol Van Stelton, are
residents of Iowa. They both live in Sibley, Iowa, which is located in Osceola County.
Both own real estate in Osceola County and pay real estate taxes there. Plaintiff Alvin
Van Stelton is also a resident of Iowa. He lives in Ashton, Iowa, which is also located
in Osceola County. He too owns real estate in Osceola County and pays real estate
taxes there.

Defendants Jerry Van Stelton, Donna Van Stelton, and Eugene Van

Stelton are residents of Iowa, all living in Sibley. Virgil, Alvin, Jerry, and Eugene are
brothers. Jacob Van Stelton and Margaret Van Stelton were their father and stepmother.
Defendants Gary Christians, Doug Weber, Scott Gries, Nate Krikke, Robert E.
Hansen, and Daniel E. DeKoter are also residents of Iowa. Weber is the Osceola
County Sheriff. Hansen is the Osceola County Attorney. Defendant DeKoter, Thole,
and Dawson, P.L.C. (“the Law Firm”) is a law firm with its principal offices in Sibley.
DeKoter and Harold D. Dawson are attorneys and partners in the Law Firm. Sibley is
one of the Law Firm’s clients.
Dawson also serves as compensation counsel to the Osceola County Board of
Supervisors. DeKoter is legal counsel for the Osceola County Economic Development
Commission.

The Osceola County Economic Development Commission provides
4

economic development funds to business interests in Osceola County through banks in
Sibley. The banks are clients of the Law Firm.

The business interests which receive

economic development project funds are referred to the Law Firm for legal services in
connection with the development projects.
2.

Osceola County’s tax law

Osceola County allocates its real estate tax proceeds under what is termed “the
Unified Law”.

The Law Firm’s predecessor entities were instrumental in Osceola

County implementing the Unified Law as part of its home rule powers.2

Osceola

County’s rural taxpayers pay the majority of the county’s property taxes. The Unified
Law has been administered in such a way as to “provide disproportionate benefits” to
the county seat, Sibley, and disproportionate funding of Osceola County’s central
administration. The Unified Law continues to be followed in Osceola County even
though it has been repealed or its term has expired. Sibley’s taxpayers benefit from the
Unified Law by receiving a disproportionate allocation of tax funding under it. As a
result, Sibley taxpayers support the Unified Law in order to maintain a reduced tax
burden.

2

The Supreme Court of Iowa has observed:
Under our form of government in Iowa, counties are
empowered to perform any function to “protect and preserve
the rights, privileges, and property of the county or of its
residents, and to preserve and improve the peace, safety,
health, welfare, comfort, and convenience of its residents”
except as limited by the constitution or a statute.

Warren Cnty. Bd. of Health v. Warren Cnty. Bd. of Supervisors, 654 N.W.2d 910, 913
(Iowa 2002).
5

3.

The Enterprise

DeKoter, the Law Firm, County Attorney Hansen, and Sheriff Weber have
formed an association (“the Enterprise”). The Enterprise’s members benefit from the
Unified Law’s maladministration because it funds a corrupt political base of support
which furthers the Enterprise’s actions. Hansen was elected and has been reelected
with the support of DeKoter, the Law Firm, and the Law Firm’s clients.

Hansen

serves the Enterprises’ and Sibley’s interests by failing to properly advise Osceola
County government officials on the Unified Law’s requirements and administration. In
turn, the Law Firm assures that Hansen is overcompensated through Dawson’s advice
to the Osceola County Board of Supervisors in his role as its compensation counsel.
Weber is also overcompensated as a reward for his “doing the bidding” of DeKoter and
the Law Firm.
Hansen and Weber selectively enforced criminal laws and ordinances to benefit
the Law Firm’s clients and used their official positions to suppress local political
activities in order to maintain the balance of power within the county. The Enterprise
controls elections to the Osceola County Board of Supervisors in order to benefit Sibley
voters and uses intimidation to control the board members. If the board was perceived
to be taking any action detrimental to Sibley’s interests or threatening Hansen or
Weber’s compensation, DeKoter or his partner Dawson would threaten a lawsuit
against the board.
4.

Tax protest and reaction

Some rural citizens of Osceola County formed the Osceola County Taxpayers
Association (“OCTA”) to investigate what they perceived to be the disproportionate
allocation of real estate tax proceeds in Osceola County. The OTCA concluded that
Sibley receives 60 percent of the funding provided by the Unified Law but only
contributes 40 percent of the taxes. The OTCA was concerned that Hansen was being
6

paid the equivalent of a full-time salary for part-time work. The OCTA was also
concerned about the budget of the Osceola County Sheriff’s Department, which the
OCTA viewed as “bloated.” Plaintiffs were known to associate with the OCTA and
Virgil is active in the OCTA.
In 2006, acting as the Osceola County Economic Development Commission’s
counsel, DeKoter sent a letter, entitled “A Peace Plan For Osceola County”, to
members of the Osceola County Board of Supervisors. In this letter, DeKoter wrote:
Last week the Osceola County Taxpayers Association
sponsored a smear campaign—a campaign of lies—directed
at Osceola County attorney Robert Hansen and my law firm.
The campaign was orchestrated by someone hired by the
OCTA. I trust that the OTCA did not really understand how
far this person would go when they hired him.
We need to send the message that smear campaigns
have no place in public life in this country. The real issue
that motivates the OTCA is unified law, so let’s try to
resolve it. For the good of Osceola County, we need to
bring the unified law issue to closure, then move forward by
working together.
Starting over a year ago, I began privately telling the
OTCA how the unified law issue could be put on the ballot
for a vote. The unified law statute provides one of the few
areas of the law where voters speak directly. Unified law
came into existence by vote of the people. The law provides
that voters may put it to a vote at any general election in
order to end it. The rural voters would vote separately on
whether they want stay in unified law, majority vote, up or
down. Each town would do the same. Any jurisdiction that
voted to get out would then legally withdraw,
The best way to decide this issue is not through smear
campaigns. The best way to decide it is by the democratic
process which was wisely included in the unified law statute.
Therefore, I now publically call on the OTCA to agree to
7

the following eight point peace plan on the issue of the
unified law:
1.

Put unified law on the ballot at the next election.
Each jurisdiction will vote on whether it stays in or
gets out, majority rules in that jurisdiction. By law,
there is still a unified law district for the jurisdictions
that vote to stay in, as long as there is at least two.

2.

Mutual apologies will be made all around for offenses
given.

3.

No more personal attacks on each other. All parties
will withdraw pamphlets, stop character assassination
via telephone, and take down parts of web sites that
attack peoples’ integrity.

4.

No more letters to the editor or statements at public
board meetings on this subject by either side until two
months before the referendum.

5.

When the time comes for the campaign on unified
law, all ads and campaign literature and editorials
would be screened for personal attacks by a neutral,
level-headed committee of citizens before they are
issued to the public. I would personally suggest that
we ask the Osceola County Ministerial Association to
referee the ads. All campaign ads would be required
to be out and issued to the public no later than two
weeks before the election, to avoid any last-minute
shenanigans.

6.

No lawsuits from either side.

7.

After the referendum, abide by the will of the voters
without complaint or personal attacks.

8.

Repeat the same process in the future if people want
to submit the issue to a referendum again.

I hope that we can bring this problem to an end for
the good of everyone.
8

DeKoter Letter at 1-2; Third Am. Complaint, Ext A. DeKoter was not authorized to
propose any solution to the dispute over the Unified Law.
In 2011, the Osceola Board of Supervisors began examining Weber’s
compensation. In response, Dawson acted contrary to his duty to the board as its
compensation counsel. Instead, he acted to benefit Weber by counseling the board that
comparing Weber’s compensation with sheriffs in counties of equivalent size constituted
a breach of contract making them liable for damages to Weber.
On November 7, 2012, DeKoter sent an email to Sibley and Sibley businesses in
which he admitted that he had undertaken “political” activities to protect Sibley from
the harm that “a fair tax allocation scheme might cause to it and its businesses.” Third
Am. Complaint at ¶ 132. DeKoter sent the email to impress upon its recipients that he
was protecting Sibley and its businesses from possible economic harm that would occur
if the OCTA obtained relief from the Unified Law.
5.

The Van Stelton Trust kerfuffle

Virgil, Alvin, Jerry, and Eugene inherited, from their mother, a 40 acre parcel
of land in Osceola County. All of their mother’s remaining property was inherited by
their father, Jacob Van Stelton. Jacob created a trust in Arizona, the Van Stelton Trust.
The Van Stelton brothers were beneficiaries of a substantial portion of the Van Stelton
Trust. Jacob became incompetent prior to his death, and, under the terms of the Van
Stelton Trust, Alvin, Jerry, and Eugene were made trustees of it. DeKoter was Jerry
and Eugene’s attorney. DeKoter was then retained as attorney for the Van Stelton
Trust.
In his capacity as the attorney for the Van Stelton Trust, DeKoter interfered with
communications between Alvin and Virgil, and Margaret Van Stelton, their stepmother.

DeKoter did so by contacting, in person and telephonically, the nursing

facility staff caring for Margaret “to create suspicions in the mind of staff concerning
9

Margaret’s safety and security in the presence of Alvin and Virgil Van Stelton and her
ongoing contacts with them and Carol Van Stelton.” Third Am. Complaint at ¶ 68.
DeKoter took these actions to protect Jerry and Eugene from possible liability for
underpaying for rent on trust lands in Osceola County. DeKoter also made changes to
the allocation of trust assets. He also made a fraudulent conveyance of 40 acres of land
into the Van Stelton Trust. The land had been inherited by the Van Stelton brothers
from their mother. The 40 acres is used to grow crops which are sold in interstate
commerce.
Prior to Margaret’s death in 2007, Alvin was visiting her at her assisted living
quarters when DeKoter arrived.

DeKoter sought to influence Margaret to remove

Alvin as one of the trustees of the Van Stelton Trust. DeKoter ordered Alvin to leave
or he would have Alvin forcibly removed by Weber. Alvin believed that DeKoter
would use Weber to have him forcibly removed. To avoid upsetting Margaret, Alvin
left. With him gone, DeKoter exercised undue influence over Margaret, causing her to
remove Alvin as one of the trustees. Following Alvin’s removal as a trustee, changes
were made to the administration of the trust which benefited Jerry and Eugene, but
were detrimental to Alvin and Virgil.
Jerry and Eugene substantially underpaid the market value rent on the trust
farmland from 2003, when they were appointed trustees, until 2009, when the final
distribution of trust assets occurred. Jerry and Eugene refused to disclose the rental
amounts for trust lands to the trust.

Virgil and Alvin filed a lawsuit against Jerry and

Eugene in Iowa District Court for Osceola County.
Alvin and Virgil requested that Weber conduct a criminal investigation into
DeKoter, Jerry and Eugene’s actions.

Weber, however, did not investigate their

allegations. DeKoter encouraged criminal complaints be made against Alvin and Virgil
by Jerry and Eugene. Jerry, Eugene, and Donna Van Stelton then met with Weber
10

seeking additional charges be filed against Virgil. They falsely claimed that Virgil
threatened DeKoter.
On May 11, 2009, Virgil was attacked by Jerry in order to obtain a digital tape
recorder that Virgil had on him. Virgil’s recorder contained “a conversation which
would exonerate him from any claim that he made a threat against the Defendant
DeKoter.” Third Am. Complaint at ¶ 96. Jerry took the recorder from Virgil and
tossed it in a ditch.

Gary Christians made a false police report that Virgil was

trespassing. Virgil was arrested for domestic assault and trespass by Scott Gries and
Nate Krikke. Virgil was later charged with assault causing bodily injury. Weber,
Gries, Krikke, and Hansen knew that the charges against Virgil were false and without
a legal basis.
Virgil’s arrest was initiated by Jerry at DeKoter and Hansen’s direction as a
pretext to seize Virgil’s tape recorder. Gries seized Virgil’s tape recorder from the
ditch without a search warrant. The tape recorder was played while it was in the
Osceola County Sheriff’s Department’s custody. Virgil’s tape recorder was returned
after he was released from jail. Virgil found that a recording had been deleted.
Weber and Hansen caused or allowed the search of Virgil’s tape recorder in an
attempt to obtain evidence on which to bring “false charges” against Virgil, and
intimidate him. The Enterprise was the intended beneficiary of these actions. On May
12, 2009, the Osceola County Sheriff’s Department caused a report of Virgil’s arrest to
be broadcast on local radio. This was done to intimidate Virgil, Alvin, Carol, and
other opponents of the Unified Law. The radio transmission was also made to further
Jerry, Eugene, DeKoter, and the Law Firm’s scheme to interfere with Virgil and
Alvin’s inheritance of land.
Nine days after Virgil’s arrest, Weber telephoned Carol at work, the SibleyOcheydan Schools, and informed her of the charges facing Virgil. Weber made the call
11

solely to intimidate her and further the scheme to defraud Virgil and Alvin through the
fraudulent administration of the Van Stelton Trust. DeKoter directed Weber to make
the call.

B.

Procedural Background

On May 11, 2011, plaintiffs filed their initial pro se Complaint. The Complaint
contained the following claims:

(1) civil rights violation claims under 42 U.S.C.

§ 1983 by all plaintiffs; (2) claims by Virgil Van Stelton for false arrest, malicious
prosecution, and loss of consortium; (3) claims by Virgil Van Stelton and Alvin Van
Stelton for intentional infliction of emotional distress, slander, and “interference with
Right to Petition for Redress of Grievances.”
On January 6, 2012, plaintiffs filed their Amended Complaint. The Amended
Complaint added Carol Van Stelton’s claims for intentional infliction of emotional
distress, loss of consortium, and slander. After plaintiffs retained counsel, plaintiffs
sought and were granted leave to file a Second Amended Complaint on November 9,
2012. The Second Amended Complaint contained additional factual allegations and
added the City of Sibley as a defendant. Generally, the Second Amended Complaint
alleges that Hansen and Weber abused the power of their official positions by acting in
concert with the other defendants, their friends and clients. The Second Amended
Complaint contained the following claims: (1) civil rights violations under 42 U.S.C.
§ 1983; (2) violations of the Racketeer Influenced and Corrupt Organizations Act
(“RICO”), 18 U.S.C. § 1961, et seq.; (3) pendent state law claims for false arrest,
malicious prosecution, slander and libel, tortious interference with prospective
economic advantage, and declaratory judgment and injunctive relief.
Defendant DeKoter, and defendants Weber, Scott Gries, Nate Krikke, Hansen,
Osceola County (collectively, “the County defendants”) each filed motions to dismiss
12

portions of the Second Amended Complaint. In response, plaintiffs sought and were
granted leave to file their Third Amended Complaint. The Third Amended Complaint
contained more factual detail and added the City of Sibley and the Law Firm as named
defendants (DeKoter and the Law Firm will collectively be referred to as “the Law
Firm defendants” unless otherwise indicated). In general terms, the Third Amended
Complaint again alleges that Hansen and Weber abused the power of their official
positions by acting in concert with the other defendants to benefit them, their friends
and clients.

Plaintiffs have added claims under Iowa’s Ongoing Criminal Conduct

statute (“OCC”), see IOWA CODE ch. 706A, to their RICO claims in Count 2.
Defendants were permitted to submit supplemental briefs addressing the
allegations contained in the Third Amended Complaint and how, if at all, those
allegations impacted defendants’ original arguments. Both the Law Firm defendants
and the County defendants filed supplemental briefs seeking to dismiss portions of the
Third Amended Complaint.

Specifically, the County defendants seek dismissal of

Count II (RICO) as to all plaintiffs; Count V (slander and libel) as to Carol Van
Stelton; and Count VI (tortious interference with propective business relations) as to all
plaintiffs. The Law Firm defendants seek dismissal of all claims against them in the
Third Amended Complaint. Plaintiffs filed briefs in response. Both the Law Firm
defendants and the County defendants then filed timely supplemental reply briefs.
Sibley also filed a motion to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(6). In its motion, Sibley asserts that it is named as a defendant in only Count 8 in
which plaintiffs seek declaratory judgment and/or injunctive relief against it. Sibley
argues that both declaratory judgment and injunctive relief require a viable underlying
cause of action but plaintiffs have alleged none. Thus, Sibley contends that the Third
Amended Complaint fails to state a claim against it for which relief can be granted.
Plaintiffs filed a timely resistance to Sibley’s motion.
13

II.

LEGAL ANALYSIS

The County defendants, the Law Firm defendants, and Sibley each seek
dismissal of certain claims asserted against them for failure to state a claim, pursuant to
Federal Rule of Civil Procedure 12(b)(6). After reviewing the standards for a 12(b)(6)
motion to dismiss, I will address the specific issues raised by defendants' motions.
Because of an overlap in the issues raised by the parties' motions, I will address the
issues seriatim.

A.

Standards For A Motion To Dismiss

Defendants seek dismissal of portions of plaintiffs’ Third Amended Complaint,
pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, which authorizes a
pre-answer motion to dismiss for “failure to state a claim upon which relief can be
granted.” FED. R. CIV. P. 12(b)(6). As the Eighth Circuit Court of Appeals recently
explained,
We review de novo the district court’s grant of a
motion to dismiss, accepting as true all factual allegations in
the complaint and drawing all reasonable inferences in favor
of the nonmoving party. See Palmer v. Ill. Farmers Ins.
Co., 666 F.3d 1081, 1083 (8th Cir. 2012); see also
Fed.R.Civ.P. 12(b)(6). “To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173
L.Ed.2d 868 (2009) (internal quotation omitted). “A claim
has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Id.

14

Richter v. Advance Auto Parts, Inc., 686 F.3d 847, 850 (8th Cir. 2012); accord Freitas
v. Wells Fargo Home Mortg., Inc., 703 F.3d 436, 438 (8th Cir. 2013) (quoting Richter,
686 F.3d at 850); Whitney v. Guys, Inc., 700 F.3d 1118, 1128 (8th Cir. 2012) (stating
the same standards).

Courts consider “plausibility” by “‘draw[ing] on [our own]

judicial experience and common sense,’” Whitney, 700 F.3d at 1128 (quoting Iqbal,
556 U.S. at 679), and “‘review[ing] the plausibility of the plaintiff’s claim as a whole,
not the plausibility of each individual allegation.’”

Id. (quoting Zoltek Corp. v.

Structural Polymer Grp., 592 F.3d 893, 896 n.4 (8th Cir. 2010)). The Eighth Circuit
Court of Appeals has refused, at the pleading stage, “to incorporate some general and
formal level of evidentiary proof into the ‘plausibility’ requirement of Iqbal and
Twombly.” Id. Nevertheless, the question “is not whether [the pleader] might at some
later stage be able to prove [facts alleged]; the question is whether [it] has adequately
asserted facts (as contrasted with naked legal conclusions) to support [its] claims.” Id.
at 1129. Thus,
[w]hile this court must “accept as true all facts pleaded by
the non-moving party and grant all reasonable inferences
from the pleadings in favor of the non-moving party,”
United States v. Any & All Radio Station Transmission
Equip., 207 F.3d 458, 462 (8th Cir. 2000), “[a] pleading
that offers ‘labels and conclusions’ or ‘a formulaic recitation
of the elements of a cause of action will not do.’” Iqbal,
556 U.S. at 678, 129 S.Ct. 1937 (quoting [Bell Atl. Corp.
v.] Twombly, 550 U.S. [544,] 555, 127 S.Ct. 1955
[(2007)]).
Gallagher v. City of Clayton, 699 F.3d 1013, 1016 (8th Cir. 2012); Whitney, 700 F.3d
at 1128 (stating the same standards).
In assessing “plausibility,” as required by the Supreme Court in Iqbal, the
Eighth Circuit Court of Appeals has explained that courts “consider[ ] only the
materials that are ‘necessarily embraced by the pleadings and exhibits attached to the
15

complaint,’” Whitney, 700 F.3d at 1128 (quoting Mattes v. ABC Plastics, Inc., 323
F.3d 695, 697 n.4 (8th Cir. 2003)), and “‘materials that are part of the public record or
do not contradict the complaint.’” Miller v. Redwood Toxicology Lab., Inc., 688 F.3d
928, 931 (8th Cir. 2012) (quoting Porous Media Corp. v. Pall Corp., 186 F.3d 1077,
1079 (8th Cir. 1999), and citing Illig v. Union Elec. Co., 652 F.3d 971, 976 (8th Cir.
2011)). A more complete list of the matters outside of the pleadings that a court may
consider, without converting a Rule 12(b)(6) motion to dismiss into a Rule 56 motion
for summary judgment, pursuant to Rule 12(d), includes “‘matters incorporated by
reference or integral to the claim, items subject to judicial notice, matters of public
record, orders, items appearing in the record of the case, and exhibits attached to the
complaint whose authenticity is unquestioned.’” Miller, 688 F.3d at 931 n.3 (quoting
5B CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND
PROCEDURE § 1357 (3d ed. 2004)). With these standards in mind, I turn to consider
defendants’ motions to dismiss.

B.

Sufficiency Of the § 1983 Allegations

The Law Firm defendants challenge the sufficiency of plaintiffs’ § 1983 claims
against them. Specifically, the Law Firm defendants contend plaintiffs have failed to
plead state action by them. Plaintiffs respond that their pleadings satisfy § 1983’s state
action requirement. Consequently, the issue raised by this portion of the Law Firm
defendants’ motion is whether the Law Firm defendants may fairly be considered acting
under color of state law for the purposes of § 1983.
1.

Requirements for § 1983 action

“Section 1983 provides a cause of action against any person who deprives an
individual of federally guaranteed rights ‘under color’ of state law.” Filarsky v. Delia,
132 S. Ct. 1657, 1661 (2012) (quoting 42 U.S.C. § 1983). In order to state a claim for
16

relief under 42 U.S.C. § 1983, plaintiffs must establish that they were “deprived of a
right secured by the Constitution or laws of the United States, and that the alleged
deprivation was committed under color of state law.” American Mfrs. Mut. Ins. Co. v.
Sullivan, 526 U.S. 40, 49-50 (1999); accord Alexander v. Hedback, ---F.3d---, 2013
WL 3242189, at *2 (8th Cir. June 27, 2013) (“To state a claim under 42 U.S.C. §
1983, a plaintiff must show that he was deprived of a right secured by the Constitution
and the laws of the United States and that the deprivation was committed by a person
acting under color of state law.”). Thus, “[t]he essential elements of a constitutional
claim under § 1983 are (1) that the defendant acted under color of state law, and (2)
that the alleged wrongful conduct deprived the plaintiff of a constitutionally protected
federal right.” L.L. Nelson Enters., Inc. v. County of St. Louis, Mo., 673 F.3d 799,
805 (8th Cir. 2012); see Van Zee v. Hanson, 630 F.3d 1126, 1128 (8th Cir. 2011);
Zutu v. Nelson, 601 F.3d 842, 848 (8th Cir. 2010 (quoting Schmidt v. City of Bella
Villa, 557 F.3d 564, 571 (8th Cir. 2009)); Dennen v. City of Duluth, 350 F.3d 786,
790 (8th Cir. 2003); Murray v. City of Onawa, 323 F.3d 616, 618 (8th Cir. 2003);
DuBose v. Kelly, 187 F.3d 999, 1002 (8th Cir. 1999).
Courts have consistently treated the “under color of state law” element of § 1983
“as the same thing as the ‘state action’ required under the Fourteenth Amendment.”
Rendell-Baker v. Kohn, 457 U.S. 830, 838 (1982) (quoting United States v. Price, 383
U.S. 787, 794 (1966)); accord Brentwood Acad. v. Tennessee Secondary Sch. Athletic
Ass'n, 531 U.S. 288, 295 n.2 (2001); Sullivan, 526 U.S. at 50 (1999); Lugar v.
Edmondson Oil Co., 457 U.S. 922, 935 (1982); Dossett v. First State Bank, 399 F.3d
940, 947 (8th Cir. 2005); Tancredi v. Metropolitan Life Ins. Co., 378 F.3d 220, 229
(2nd Cir. 2004); Lee v. Katz, 276 F.3d 550, 554 (9th Cir. 2002); Mentavlos v.
Anderson, 249 F.3d 301, 310 (4th Cir. 2001); Tarpley v. Keistler, 188 F.3d 788, 791
(7th Cir. 1999); Abraham v. Raso, 183 F.3d 279, 287 (3rd Cir. 1999); Yeo v. Town of
17

Lexington, 131 F.3d 241, 248 n.3 (1st Cir. 1997); Doe v. Rains County Indep. Sch.
Dist., 66 F.3d 1402, 1406 (5th Cir. 1995). “[S]tate action requires both an alleged
constitutional deprivation ‘caused by the exercise of some right or privilege created by
the State or by a rule of conduct imposed by the State or by a person for whom the
State is responsible,’ and that ‘the party charged with the deprivation must be a person
who may fairly said to be a state actor.”’ Sullivan, 526 U.S. at 50 (quoting Lugar, 457
U.S. at 937). Careful attention to the state action requirement serves two purposes: it
“preserves an area of individual freedom by limiting the reach of federal law and
federal judicial power,” Lugar, 457 U.S. at 936; and it avoids imposing on a state
responsibility for conduct which was not under its control. Brentwood Acad., 531 U.S.
at 295.
The Eighth Circuit Court of Appeals has observed that:
The Supreme Court has recognized a number of
circumstances in which a private party may be characterized
as a state actor, such as where the state has delegated to a
private party a power “traditionally exclusively reserved to
the State,” see Jackson v. Metro. Edison Co., 419 U.S. 345,
352, 95 S. Ct. 449, 42 L. Ed. 2d 477 (1974), where a
private actor is a “willful participant in joint activity with
the State or its agents,” see Adickes v. S.H. Kress & Co.,
398 U.S. 144, 151, 90 S. Ct. 1598, 26 L. Ed. 2d 142
(1970), and where there is “pervasive entwinement”
between the private entity and the state, see Brentwood, 531
U.S. at 291, 121 S. Ct. 924. These particular circumstances
are merely examples and not intended to be exclusive. See
id. at 295, 121 S. Ct. 924.
Wickersham v. City of Columbia, 481 F.3d 591, 597 (8th Cir. 2007). The court went
on to point out that:
The one unyielding requirement is that there be a “close
nexus” not merely between the state and the private party,
but between the state and the alleged deprivation itself. See
18

Brentwood, 531 U.S. at 295, 121 S. Ct. 924. No such nexus
exists where a private party acts with the mere approval or
acquiescence of the state, see Blum v. Yaretsky, 457 U.S.
991, 1004-05, 102 S. Ct. 2777, 73 L.Ed.2d 534 (1982), but
a private entity may be considered a state actor if it “has
acted together with or has obtained significant aid from state
officials” in furtherance of the challenged action. Lugar, 457
U.S. at 937, 102 S. Ct. 2744.
Wickersham, 481 F.3d at 597.
2.

Allegations against the Law Firm defendants

I begin my inquiry into whether the Law Firm defendants’ conduct may be
“fairly attributable to the State . . . . by identifying ‘the specific conduct of which the
plaintiff complains.’” Sullivan, 526 U.S. at 50–51 (quoting Blum v. Yaretsky, 457 U.S.
991, 1004 (1982)); see Cornish v. Correctional Servs. Corp., 402 F.3d 545, 550 (5th
Cir. 2005); Tancredi v. Metropolitian Life Ins. Co., 316 F.3d 308, 312 (2nd Cir.
2003). In making this inquiry, I recognize that “[a] complaint need not be articulately
drafted in order to adequately allege that private persons are acting under color of state
law.” Murray v. Wal-Mart, Inc., 874 F.2d 555, 558 (8th Cir. 1989).
I note that many of plaintiffs’ allegations are made “upon information and
belief.” The Eighth Circuit Court of Appeals not yet addressed whether a pleading
based on “information and belief” is sufficient to state a claim under Iqbal and
Twombly. A number of federal courts, however, have held that pleadings based “on
information and belief” are sufficient to state a claim after Iqbal and Twombly. See
Arista Records, LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir. 2010) (“The Twombly
plausibility standard, which applies to all civil actions, does not prevent a plaintiff from
pleading facts alleged ‘upon information and belief’ where the facts are peculiarly
within the possession and control of the defendant.”) (citations omitted); Gilmore v.
Mississippi Coast Coliseum Comm’n, No. 1:12-cv-183-HSO-RHW, 2013 WL 1194706,
19

at * 5 (S.D. Miss. Mar. 22, 2013) (following and quoting Arista Records, 604 F.3d at
120); JBCHoldings NY, L.L.C. v. Pakter, --- F. Supp. ---, 2013 WL 1149061, at *
(S.D.NY. Mar. 20, 2013) (“T]he Court is mindful that Twombly does not prevent a
plaintiff

from

pleading

facts

“on

information

and

belief”

in

appropriate

circumstances.”); Circle Click Media L.L.C. v. Regus Mgmt. Group L.L.C., 2013 WL
57861, at *6 (N.D. Cal. Jan. 3, 2013) (following and quoting Arista Records, 604 F.3d
at 120); Jefferson v. Collins, --- F. Supp.2d ---, 2012 WL 5941953, at *16 (D.D.C.
Nov. 28, 2012) (same); Basler Elec. Co. v. Fortis Plastics, L.L.C., no. 12-cv-713JPG, 2012 WL 5298935, at *3 (S.D. Ill. Oct. 25, 2012) (same); Wright v. Lehigh
Valley Hosp. & Health Network, No. 10–431, 2011 WL 2550361, at *3 (E.D. Pa. June
23, 2011) (“Although defendants take strong issue with Wright's use of ‘upon
information and belief’ pleading, the allowance of pleading upon information and belief
has been held to be appropriate under the Twombly/Iqbal regime where the facts
required to be pled are uniquely in the control of the defendant.”); Brinkmeier v. Graco
Children's Products Inc., 767 F. Supp.2d 488, 496 (D. Del. 2011) (permitting pleading
upon information and belief even under Rule 9); Simonian v. Blistex, Inc., No.
10CV01201, 2010 WL 4539450, at *3 (N.D.Ill. Nov. 3, 2010) (observing “nothing in
either Twombly or Iqbal suggests that pleading based upon “information and belief” is
necessarily deficient. The Court therefore concludes that pleading in this manner is not
categorically improper, especially when information lies uniquely within the control of
the defendant.”); Sunshine Media Group, Inc. v. Goldberg, No. CV-10-0761-PHXDGC, 2010 WL 2899081, at *4 (D. Ariz. July 22, 2010) (denying motion to dismiss,
noting, “Parties are permitted to plead upon information and belief”). But see Harmon
v. Unisys Corp., 356 F. App'x 638, 641 (4th Cir. 2009) (“conclusory allegations”
made upon “information and belief” are “insufficient to defeat a motion to dismiss”);
Solis v. City of Fresno, No. 1:11–CV00053, 2012 WL 868681, at *8 (E.D. Cal. Mar.
20

13, 2012) (“In the post-Twombly and Iqbal era, pleading on information and belief,
without more, is insufficient to survive a motion to dismiss for failure to state a
claim.”). Here, the specific facts of what took place at the alleged meetings between
DeKoter, Hansen, and Weber are peculiarly within defendants’ possession and control,
and thus may be based on information and belief. See Arista Records, L.L.C., 604 F.3d
at 120.
a.

DeKoter’s actions

I recognize that the Eighth Circuit Court of Appeals has clearly held that “[t]he
conduct of counsel, either retained or appointed, in representing clients, does not
constitute action under color of state law for purposes of a section 1983 violation.”
Bilal v. Kaplan, 904 F.2d 14, 15 (8th Cir. 1990); see Harkins v. Eldredge, 505 F.2d
802, 803 (8th Cir. 1974); see also Eling v. Jones, 797 F.2d 697, 699 (8th Cir. 1986).
Plaintiffs, however, do not rely on DeKoter’s representation of Sibley, the Osceola
County Economic Development Commission, or any other Law Firm client to meet the
“under color of state law” element of § 1983. Instead, plaintiffs allege that DeKoter
controls and directs a symbiotic relationship with Hansen and Weber.

In this

relationship, DeKoter directs Hansen and Weber to selectively enforce criminal laws
and ordinances to benefit the Law Firm’s clients and used their official positions to
suppress local political activities in order to maintain the balance of power within the
county. In return for their actions, Hansen and Weber are rewarded with excessive
compensation. Their overcompensation is allegedly assured through DeKoter’s law
partner’s advice to the Osceola County Board of Supervisors in his role as its
compensation counsel. Plaintiffs specifically allege that DeKoter orchestrated Virgil’s
false arrest with County Attorney Hansen as a pretext to seize Virgil’s tape recorder.
Thus, plaintiffs allege a concerted plan between DeKoter and the County defendants to
violate due process rights. Taking these allegations of joint activity as true, they are
21

sufficient to make DeKoter a state actor liable under § 1983. See Dennis v. Sparks,
449 U.S. 24, 27–28 (1980) (holding that defendants who conspired with and
participated in bribery with federal judge acted under color of state law); Adickes, 398
U.S. at 152 (finding plaintiff entitled to relief under § 1983 against private party if she
can prove that private party and police officer “reached an understanding” to cause her
arrest on impermissible grounds); Murray v. Wal–Mart, Inc., 874 F.2d 555, 558–59
(8th Cir. 1989) (holding store acted in concert with the police because store had a
practice of working with the police department in prosecuting shoplifters; the store
security officer was also an employee of the police department; and the security officer
had “a close relationship with the prosecuting attorney who recommended prosecution
based on the security officer’s “word, not upon an independent investigation of the
facts.”). This portion of the Law Firm defendants’ motion to dismiss is denied as to
DeKoter.
b.

The Law Firm’s liability

The question of whether the Law Firm may be considered a state actor is,
however, a different question. The Law Firm defendants contend that the Law Firm
cannot be liable under § 1983 for the actions of its lawyers based on a theory of
respondeat superior. Plaintiffs have not addressed this argument in their brief.
It is well established that “[s]ection 1983 will not support a claim based on a
respondeat superior theory of liability.” Polk Cnty. v. Dodson, 454 U.S. 312, 326
(1981) (citing Monell v. New York City Dept. of Social Servs., 436 U.S. 658, 694
(1978)); see City of Canton, Ohio v. Harris, 489 U.S. 378, 385 (1989) (“Respondeat
superior or vicarious liability will not attach under § 1983.”); Luckert v. Dodge Cnty.,
684 F.3d 808, 817 (8th Cir. 2012) (holding prison supervisors were not liable under §
1983 on respondeat superior theory), cert. denied, 133 S. Ct. 865 (2013); Brown v.
Fortner, 518 F.3d 552, 559 n.1 (8th Cir. 2008) (noting that § 1983 claims cannot be
22

based on respondeat superior or vicarious liability). The Court recognized in Monell
that the text of § 1983 “cannot be easily read to impose liability vicariously on
governing bodies solely on the basis of the existence of an employer-employee
relationship with a tortfeasor.” Monell, 436 U.S. at 692. To the contrary, the Court
noted that Congress explicitly provided “that A's tort became B's liability if B ‘caused’
A to subject another to a tort.” Id. Thus, the Court observed that § 1983 authorizes
suit “for constitutional deprivations visited pursuant to governmental ‘custom’ even
though such a custom has not received formal approval through the body's official
decisionmaking channels.” Id. at 690–691. “At the same time, the Court rejected the
use of the doctrine of respondeat superior and concluded that municipalities could be
held liable only when an injury was inflicted by a government's “’lawmakers or by
those whose edicts or acts may fairly be said to represent official policy.’” City of St.
Louis v. Praprotnik, 458 U.S. 112, 121 (1988) (quoting Monell, 436 U.S. at 694).
Although Monell involved a municipal corporation, the Eighth Circuit Court of
Appeals and every other circuit to consider the issue has extended Monell’s holding to
private corporations and employers. See Royster v. Nichols, 698 F.3d 681, 692 (8th
Cir. 2012) (holding that claims against private security firm failed as a matter of law
because “‘respondeat superior is inapplicable to claims under 42 U.S.C. § 1983.’”)
(quoting Bell v. Kansas City Police Dep't, 635 F.3d 346, 347 (8th Cir. 2011)); see also
Maniscalco v. Simon, 712 F.3d 1139, 1144 (7th Cir. 2013) (holding that “vicarious
liability under the doctrine of respondeat superior is unavailable against private
employers sued under § 1983 based on the rationale of Monell.”); Tsao v. Desert
Palace, Inc., 698 F.3d 1128, 1139 (9th Cir. 2012) (noting that “we see no basis in the
reasoning underlying Monell to distinguish between municipalities and private entities
acting under color of state law.”); Savoie v. Martin, 673 F.3d 488, 494 (6th Cir. 2012)
(noting that “‘every circuit to consider the issue’ has extended ‘to private corporations
23

as well’ the rule that a defendant cannot be held liable under section 1983 on a
respondeat superior or vicarious liability basis.”) (quoting Street v. Corrections Corp.
of Am., 102 F.3d 810, 818 (6th Cir. 1996)); Craig v. Floyd Cnty., Ga., 643 F.3d
1306, 1310 (11th Cir. 2011) (holding that § 1983 claims against limited liability
company could not be based on respondeat superior); Dubbs v. Head Start, Inc., 336
F.3d 1194, 1216 (10th Cir. 2003) (holding that “a private actor ‘cannot be held liable
solely because it employs a tortfeasor—or, in other words . . . cannot be held liable
under § 1983 on a respondeat superior theory.’”) (quoting Monell, 436 U.S. at 691);
Austin v. Paramount Parks, Inc., 195 F.3d 715, 728 (4th Cir. 1999) (holding that “a
private corporation is not liable under § 1983 for torts committed by special police
officers when such liability is predicated solely upon a theory of respondeat superior.”);
Iskander v. Village of Forest Park, 690 F.2d 126, 128 (7th Cir. 1982); (“[J]ust as a
municipal corporation is not vicariously liable upon a theory of respondeat superior for
the constitutional torts of its employees, a private corporation is not vicariously liable
under § 1983 for its employees' deprivations of others' civil rights.”) (citation
omitted)).
Therefore, in order to hold the Law Firm liable for the alleged acts of its
attorneys, plaintiffs must allege that the Law firm directly caused the constitutional
violations by instituting an official policy that was “‘the moving force behind the
deprivation of the plaintiff's rights.’”

Savoie, 673 F.3d at 494 (quoting Miller v.

Sanilac Cnty., 606 F.3d 240, 255 (6th Cir. 2010)); see Auvaa v. City of Taylorsville,
506 F. Supp.2d 903, 909 (D. Utah 2007) (holding that for law firm to be liable for the
acts of its agents, “the plaintiffs must show that the firm directly caused the
constitutional violation by instituting an official policy of some nature that was the
‘direct cause’ or ‘moving force’ behind the constitutional violations.”).

The Third

Amended Complaint, however, is completely bereft of any allegations that the Law
24

Firm was involved in establishing a policy or custom that was the cause of the alleged
constitutional violations, and therefore cannot be a state actor. See Auvaa, 506 F.
Supp.2d at 910; see also Frompovicz v. Township of South Manheim, No. 3:06cv2120;
2007 WL 2908292, at *8 (M.D. Pa. Oct. 4, 2007) (holding that “law firm cannot be
fairly said to be a state actor” where there were no allegations that the law firm was
involved in establishing a policy or custom leading to the constitutional violation).
Accordingly, while DeKoter may be considered a state actor and liable under § 1983,
the same cannot be said for the Law Firm. See Frompovicz, No. 3:06cv2120; 2007
WL 2908292, at *8 (holding that § 1983 claim against attorney could proceed because
he could be deemed a “state actor” but dismissing § 1983 claim against law firm
because respondeat superior liability was unavailable and law firm could not be
considered to be a “state actor.”). Thus, this portion of the Law Firm defendants’
motion to dismiss is granted as to the Law Firm.

C.

Sufficiency Of RICO Allegations

The County defendants and the Law Firm defendants both seek dismissal of
plaintiffs’ RICO claims against them.

Before addressing the parties’ specific

arguments, I briefly review RICO’s purpose and scope, and then the requirements for
such a claim.
1.

Purpose and scope of RICO

The Eighth Circuit has explained:
Section 1962 of the RICO Act makes it “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.” Nitro Distrib., Inc. v. Alticor, Inc., 565 F.3d 417,
25

428 (8th Cir. 2009) (quoting 18 U.S.C. § 1962(c)). “RICO
provides a private right of action for any person ‘injured in
his business or property by reason of a violation of’ its
substantive prohibitions.” Dahlgren v. First Nat'l Bank of
Holdrege, 533 F.3d 681, 689 (8th Cir. 2008) (quoting 18
U.S.C. § 1964(c)).
Crest Constr. II, Inc. v. Doe, 660 F.3d 346, 353 (8th Cir. 2011). The Eighth Circuit
Court of Appeals has also observed that “‘[t]he major purpose behind RICO is to curb
the infiltration of legitimate business organizations by racketeers.’” Sinclair v. Hawke,
314 F.3d 934, 944 (8th Cir. 2003) (quoting Atlas Pile Driving Co. v. DiCon Fin. Co.,
886 F.2d 986, 990 (8th Cir. 1989)). The Supreme Court explained that:
The occasion for Congress' action was the perceived need to
combat organized crime. But Congress for cogent reasons
chose to enact a more general statute, one which, although it
had organized crime as its focus, was not limited in
application to organized crime. In Title IX, Congress
picked out as key to RICO's application broad concepts that
might fairly indicate an organized crime connection, but that
it fully realized do not either individually or together provide
anything approaching a perfect fit with “organized crime.”
See, e.g., [116 Cong.Rec.] at 18940 (Sen. McClellan) (“it is
impossible to draw an effective statute which reaches most
of the commercial activities of organized crime, yet does not
include offenses commonly committed by persons outside
organized crime as well”).
H.J. Inc., 492 U.S. at 248; see Atlas Pile Driving Co., 886 F.2d 986, 990 (8th Cir.
1989) (citing United States v. Turkette, 452 U.S. 576, 591 (1981)). Thus, RICO also
imposes civil liability on other types of organizations that have no alleged ties to
organized crime. Atlas Pile Driving Co., 886 F.2d at 990. A court's focus, however,
must be “to ensure that RICO's severe penalties are limited to ‘enterprises consisting of
more than simple conspiracies to perpetrate the acts of racketeering.’” United States v.

26

Davidson, 122 F.3d 531, 534 (8th Cir. 1997) (quoting United States v. Bledsoe, 674
F.2d 647 (8th Cir. 1982)).
2.

Requirements for RICO claim

“A violation of § 1962(c) requires appellants to show ‘(1) conduct (2) of an
enterprise (3) through a pattern (4) of racketeering activity.’”

Id. (quoting Nitro

Distrib., Inc. v. Alticor, Inc., 565 F.3d 417, 428 (8th Cir. 2009) (quoting in turn
Sedima S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985) (footnote and internal
quotation marks omitted)); Gallagher v. Magner, 619 F.3d 823, 842 (8th Cir. 2010);
Craig Outdoor Advertising, Inc. v. Viacom Outdoor, Inc., 528 F.3d 1001, 1027 (8th
Cir. 2008).3 “The requirements of § 1962(c) must be established as to each individual
defendant.” Craig Outdoor Advertising, Inc., 528 F.3d at 1027. In addition,
A RICO claim must be pleaded with particularity
under Rule 9(b). Id. “Under Rule 9(b)'s heightened pleading
standard, allegations of fraud . . . [must] be pleaded with
particularity. In other words, Rule 9(b) requires plaintiffs to
plead the who, what, when, where, and how: the first
paragraph of any newspaper story.” Summerhill [ v.
Although plaintiffs do not refer to any specific RICO section in their Third
Amended Complaint, their RICO claims appear to be based solely on § 1962(c).
Section 1962(a) provides that “[i]t shall be unlawful for any person who has received
any income derived, directly or indirectly, from a pattern of racketeering activity . . .
to use or invest, directly or indirectly, any part of such income, or the proceeds of such
income, in acquisition of any interest in, or the establishment or operation of, any
enterprise which is engaged in, or the activities of which affect, interstate or foreign
commerce.” 18 U.S.C. § 1962(a). Section 1962(b) provides that “[i]t shall be unlawful
for any person through a pattern of racketeering activity . . . to acquire or maintain,
directly or indirectly, any interest in or control of any enterprise which is engaged in,
or the activities of which affect, interstate or foreign commerce.” 18 U.S.C. § 1962(b).
Section 1962(d) prohibits any person from conspiring to violate any of the provisions of
§ 1962(a)-(c). 18 U.S.C. § 1962(d). The Third Amended Complaint contains no
allegations concerning plaintiffs’ acquisition of an interest in a RICO enterprise or a
conspiracy to violate any of the provisions of § 1962(a)-(c).
3

27

Terminix, Inc.], 637 F.3d [877,] 880 [(8th Cir.2011)]
(alteration in original) (citations and internal quotation marks
omitted).
Crest Constr. II, Inc., 660 F.3d at 353.
A RICO enterprise “includes any individual, partnership, corporation,
association, or other legal entity, and any union or group of individuals associated in
fact although not a legal entity.” 18 U.S.C. § 1961(4). Plaintiffs allege an associationin-fact enterprise consisting of DeKoter, Hansen, Weber, and the Law Firm.

To

properly plead a RICO enterprise, plaintiffs must allege the existence of an association
that has “(1) a common purpose that animates the individuals associated with it; (2) an
ongoing organization with members who function as a continuing unit; and (3) an
ascertainable structure distinct from the conduct of a pattern of racketeering.” United
States v. Lee, 374 F.3d 637, 647 (8th Cir. 2004); see Boyle v. United States, 556 U.S.
938, 946 (2009) (“[A]n association-in-fact enterprise must have at least three structural
features: a purpose, relationships among those associated with the enterprise, and
longevity sufficient to permit these associates to pursue the enterprise's purpose.”). To
properly plead a pattern of racketeering activity, plaintiffs must allege “two or more
related acts of racketeering activity that ‘amount to or pose a threat of continued
criminal activity.’” Crest Constr. II, Inc., 660 F.3d. at 356 (quoting Nitro Distrib.,
Inc., 565 F.3d at 428 (quoting in turn Wisdom v. First Midwest Bank, of Poplar Bluff,
167 F.3d 402, 406 (8th Cir.1999) (internal quotation marks omitted). “Racketeering
activity” is defined in 18 U.S.C. § 1961(1) “as a list of predicate acts, including certain
state law crimes, conduct that is indictable under various federal provisions, and
numerous other offenses.”4 Gallagher, 619 F.3d at 841.
4

Racketeering activities defined in § 1961(1) include murder, kidnaping,
gambling, arson, robbery, bribery, extortion, dealing in obscene matter, or dealing in
narcotic or other dangerous drugs, specified federal offenses indictable under title 18,
28

3.

Analysis

The County defendants and the Law Firm defendants both argue that plaintiffs
have failed to plead two elements of a valid RICO claim:

the existence of an

enterprise, and a pattern of racketeering activity. Plaintiffs counter that their Third
Amended Complaint contains sufficient allegations to satisfy both of these elements.
Because I find it dispositive, I turn first to the question of whether plaintiffs have
sufficiently alleged a pattern of racketeering activity.
As mentioned above, to satisfy the pattern requirement, plaintiffs must allege
“two or more related acts of racketeering activity that ‘amount to or pose a threat of
continued criminal activity.’”

Crest Constr. II, Inc., 660 F.3d. at 356 (quoting Nitro

Distrib., Inc., 565 F.3d at 428 (quoting in turn Wisdom, 167 F.3d at 406 (internal
quotation marks omitted). This requires not two aggregate predicate acts, but that each
defendant committed two predicate acts of racketeering activity. See Craig Outdoor
Adver., 528 F.3d at 1027; Aetna Sur. Co. v. P & B Autobody, 43 F.3d 1546, 1560 (1st
Cir. 1994); United States v. Persico, 832 F.2d 705, 714 (2d Cir. 1987); In re
WellPoint, Inc. Out-of-Network UCR Rates Litig., 865 F. Supp. 2d 1002, 1036 (C.D.
Cal. 2011); Shahin v. Darling, 606 F. Supp. 2d 525, 537 (D. Del. 2009); World
Wrestling Entm’t, Inc. v. Jakks Pac., Inc., 530 F. Supp. 2d 486, 496 (S.D.N.Y. 2007);
including such offenses as bribery, counterfeiting, embezzlement, wire and mail fraud,
witness tampering, interstate gambling offenses, other interstate offenses, and dealings
in contraband, specified federal offenses indictable under title 29, including violations
of restrictions on payments and loans to labor organizations and embezzlement from
union funds, and further offenses including “any offense involving fraud connected
with a case under title 11, fraud in the sale of securities, or the felonious manufacture,
importation, receiving, concealment, buying, selling, or otherwise dealing in narcotic
or other dangerous drugs, punishable under any law of the United States, or . . . any
act which is indictable under the Currency and Foreign Transactions Reporting Act. . .
.” 18 U.S.C. § 1961(1).
29

Universal Tube & Rollform Equip. Corp. v. YouTube, Inc., 504 F. Supp. 2d 260, 271
(N.D. Ohio 2007); cf. United States v. Local 560, 780 F.2d 267 (3d Cir. 1985) (noting
that under RICO an individual need not himself commit two predicate acts as long as
that individual aids or abets the commission of the predicate offenses). As the Second
Circuit Court of Appeals explained: “The focus of section 1962(c) is on the individual
patterns of racketeering engaged in by a defendant, rather than the collective activities
of the members of the enterprise.” Persico, 832 F.2d at 714.
The pattern of racketeering activity requirement is referred to as “continuity plus
relationship.” Handeen v. Lemaire, 112 F.3d 1339, 1353 (8th Cir. 1997) (quoting H.J.
Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 239 (1989)); see Lange v. Hocker,
940 F.2d 359, 361 (8th Cir. 1991).

The “continuity” element requires either

“‘multiple predicate acts occurring over a substantial period of time (closed-end
continuity) or evidence that the alleged predicate acts threaten to extend into the future
(open-ended continuity).’”

Crest Const. II, Inc., 660 F.3d at 356 (quoting Craig

Outdoor Advertising, Inc., 528 F.3d at 1028); see Craig Outdoor Adver., 528 F.3d at
1028 (“A plaintiff may establish open-ended continuity by showing that the predicate
acts themselves involve a distinct threat of long-term racketeering activity. . . .”).
“Prohibited activities are related if they ‘have the same or similar purposes, results,
participants, victims, or methods of commission, or otherwise are interrelated by
distinguishing characteristics and are not isolated events.’” Handeen, 112 F.3d at 1353
(quoting H.J. Inc., 492 U.S. at 240). Where a complaint’s allegations, taken as true,
do not support the existence of either long-term criminal conduct or the threat thereof,
dismissal is appropriate. H.J. Inc., 492 U.S. at 242.
Plaintiffs fail to allege either open-ended or closed-ended continuity because they
have failed to allege that each of the defendants committed two specific predicate acts.
The first predicate act plaintiffs allege is that DeKoter committed mail fraud in 2006
30

when, acting as the Osceola County Economic Development Commission’s counsel, he
sent a letter, entitled “A Peace Plan For Osceola County”, to members of the Osceola
County Board of Supervisors. “’Though mail fraud can be a predicate act, mailings are
insufficient to establish the continuity factor unless they contain misrepresentations
themselves.’” Crest Const. II, Inc., 660 F.3d at 356 (quoting Dahlgren v. First Nat'l
Bank of Holdrege, 533 F.3d 681, 689 (8th Cir. 2008) (quoting in turn Wisdom, 167
F.3d at 407) (internal quotation marks omitted). DeKoter’s letter, in which he urges
that a voter referendum on the Unified Law be undertaken, does not contain any alleged
misrepresentations. Accordingly, I do not consider DeKoter’s 2006 letter on the issue
of continuity. See Primary Care Investors, Seven, Inc. v, PHP Healthcare Corp., 986
F.2d 1208, 1215 (8th Cir.1993) (refusing to consider a letter containing no indications
of fraud as the beginning mail fraud predicate act); Kehr Packages, Inc. v. Fidelcor,
Inc., 926 F.2d 1406, 1414 (3d Cir. 1991) (“[T]he continuity question should not be
affected by the fact that a particular fraudulent scheme involved numerous otherwise
‘innocent’ mailings . . . .”). All but one of the other predicate acts alleged in the Third
Amended Complaint relate to Virgil’s arrest in May 2009.5

Plaintiffs allege that

someone at the Osceola County Sheriff’s Department caused a report of Virgil’s false
arrest to be broadcast on the local radio. The Third Amended Complaint, however,
does not identify any defendant as causing the issuance of the report.
The next predicate act alleged by plaintiffs is wire fraud by Weber for his
telephone call to Carol Van Stelton regarding Virgil’s arrest. The Third Amended
Complaint, however, does not disclose the contents of the conversation between Weber
The Third Amended Complaint is unclear about the date of Virgil’s arrest. In
¶ 87, it is alleged that Virgil was arrested on May 11, 2009. However, in ¶ 106,
plaintiffs allege that the radio transmission concerning Virgil’s arrest occurred on May
12, 2009, while in ¶ 107, plaintiffs allege that the radio transmission occurred on May
9, 2009.
5

31

and Carol.

The fourth predicate act alleged in the Third Amended Complaint is an

allegation of mail fraud that allegedly occurred in 2012 when Osceola County sent out
real estate tax statements.

The Third Amended Complaint does not identify any

defendant as directly causing the issuance of the real estate tax statements. Even if this
allegation can be construed as attempting to allege the predicate act of mail fraud, it
fails to allege the fraud with the particularity required by Rule 9(b). See Crest Const.
II, 660 F.3d at 353 (“Rule 9(b) requires plaintiffs to plead the who, what, when,
where, and how. . . .”). Conspicuously absent is any allegation that the real estate
statements contain misstatements. Accordingly, whatever the merits of plaintiffs’ RICO
claims in other respects, they are fatally deficient in their allegation of a pattern of
racketeering activity. See Craig Outdoor Adver., 528 F.3d at 1028 (“Failure to present
sufficient evidence on any one element of a RICO claim means the entire claim fails.”).
Therefore, this portion of the Law Firm defendants’ and the County defendants’
motions to dismiss are granted. Plaintiffs’ RICO claims are dismissed in their entirety.

D.

First Amendment Right To Petition Claim Against
The County Defendants

The County defendants also seek dismissal of plaintiffs’ claim against them for
violating their right to petition the government for grievances under the First
Amendment.6 The County defendants argue that plaintiffs have failed to allege a viable
claim because they were ably represented by counsel in the Van Stelton Trust litigation
and make no allegation about how they were denied the opportunity to attain a full and

Plaintiffs have combined their First Amendment right to petition and tortious
interference with prospective business relations claims in a single count, I will consider
them separately. I will address plaintiffs’ tortious interference with prospective
business relations claim below with plaintiffs’ other state law claims.
6

32

fair hearing in the matter.

Plaintiffs counter that the County defendants are

impermissibly attempting to interject facts outside of the pleadings to attack the
sufficiency of their First Amendment claim and that their allegations are sufficient to
state a viable First Amendment claim against the County defendants.

I begin my

analysis with a brief review of the governing law and the requirements for such a
claim.7

7

Plaintiffs do not mention 42 U.S.C. § 1983 in Count VI of the Third Amended
Complaint. Section 1983 provides in relevant part:
“Every person who, under color of any statute, ordinance,
regulation, custom, or usage, of any State . . . subjects, or
causes to be subjected, any citizen of the United States or
other person within the jurisdiction thereof to the deprivation
of any rights, privileges, or immunities secured by the
Constitution and laws, shall be liable to the party injured in
an action at law, suit in equity, or other proper proceeding
for redress . . . .”
42 U.S.C. § 1983. The law is clear that a claim against state actors for violation of
constitutional rights is not enforceable directly under the Constitution, but rather
through § 1983 or other civil rights statutes. See Arpin v. Santa Clara Valley Transp.
Agency, 261 F.3d 912, 925 (9th Cir. 2001) (noting that “a litigant complaining of a
violation of a constitutional right does not have a direct cause of action under the
United States Constitution but must utilize 42 U.S.C. § 1983.”); Martin v. City of Los
Angeles, 141 F.3d 1373, 1383 (9th Cir. 1998) (observing that “a plaintiff may not sue a
state defendant directly under the Constitution where § 1983 provides a remedy.”);
Azul–Pacifico, Inc. v. City of Los Angeles, 973 F.2d 704, 705 (9th Cir. 1992)
(“Plaintiff has no cause of action directly under the United States Constitution. We
have previously held that a litigant complaining of a violation of a constitutional right
must utilize 42 U.S.C. § 1983.”); Hunt v. Robeson Cnty. Dep't of Soc. Servs., 816
F.2d 150, 152 n.2 (4th Cir. 1987) (“Because defendants here are all local officials, any
cause of action against them for unconstitutional conduct under color of state law could
only proceed under § 1983.”); see also Quality Refrigerated Servs., Inc. v. City of
Spencer, 908 F. Supp. 1471, 1492 (N.D. Iowa 1995) (“There simply is no direct cause
of action arising under the Constitution itself against municipal officials for alleged
33

1.

Overview of the right to access and requirements for claim

The First Amendment protects “the right of the people . . . to petition the
Government for a redress of grievances.” U.S. CONST. amend. I. “[T]he Petition
Clause protects the right of individuals to appeal to courts and other forums established
by the government for resolution of legal disputes. ‘[T]he right of access to courts for
redress of wrongs is an aspect of the First Amendment right to petition the
government.’”

Borough of Duryea v. Guarnieri, 131 S. Ct. 2488, 2494 (2011)

(quoting Sure–Tan, Inc. v. NLRB, 467 U.S. 883, 896–897 (1984)). This right “extends
to all departments of the Government.” California Motor Transp. Co. v. Trucking
Unlimited, 404 U.S. 508, 510 (1972).

The United States Supreme Court has

recognized the right to access as “one of ‘the most precious of the liberties safeguarded
by the Bill of Rights.’” BE & K Constr. Co. v. NLRB, 536 U.S. 516, 524, (2003)
(quoting United Mine Workers v. Illinois State Bar Ass'n, 389 U.S. 217, 222 (1967)).
“In order to prevail on such a claim, a plaintiff must show that the defendants
acted with some intentional motivation to restrict his access to the courts. The plaintiff
must show government action was designed to prevent access to the courts.” Morris v.
City of Chillicothe, 512 F.3d 1013, 1020 (8th Cir. 2008) (citation omitted); see Earl v.
Fabian, 956 F.3d 717, 727 (8th Cir. 2009) (“To prevail under the First Amendment a
claimant typically bears the burden of proving that the defendants intentionally
restricted his access to the courts.”); Scheeler v. City of St. Cloud, 402 F.3d 826, 830
(8th Cir. 2005) (holding that in order to prevail on such a claim, plaintiffs “must show
that the defendants acted with some intentional motivation to restrict their access to the
constitutional violations. Rather courts have held that a litigant complaining of a
violation of a constitutional right must utilize 42 U.S.C. § 1983.”) (citation omitted).
Construing plaintiffs’ pleadings liberally, and as no other civil rights statute appears to
present a viable vehicle for asserting plaintiffs’ First Amendment right to access claim,
I construe this claim as arising under § 1983.
34

courts.”); Whisman v. Rinehart, 119 F.3d 1303, 1313 (8th Cir. 1997) (“Government
action designed to prevent an individual from utilizing legal remedies may infringe
upon the First Amendment right to petition the courts.”). The right of access cannot be
impaired, either directly or indirectly. See In re Workers' Compensation Refund, 46
F.3d 813, 822 (8th Cir. 1995); Harrison v. Springdale Water & Sewer Comm'n, 780
F.2d 1422, 1428 (8th Cir. 1986). “Indirect impairment may include ‘retaliatory action
[taken] against an individual designed either to punish him for having exercised his
constitutional right to seek judicial relief or to intimidate or chill his exercise of that
right in the future.’” In re Workers' Compensation Refund, 46 F.3d at 822 (quoting
Harrison, 780 F.2d at 1428). “The right applies not only to the actual denial of access
to the courts, but also to situations in which the plaintiff has been denied meaningful
access by some impediment put up by the defendant.” Scheeler, 402 F.3d at 830 (citing
Alexander v. Macoubrie, 982 F.2d 307, 308 (8th Cir. 1992)).
2.

Analysis

As I noted above, “[t]o state a claim under 42 U.S.C. § 1983, a plaintiff must
show that he was deprived of a right secured by the Constitution and the laws of the
United States and that the deprivation was committed by a person acting under color of
state law.”

Alexander, ---F.3d---, 2013 WL 3242189, at *2; see Lind v. Midland

Funding, L.L.C., 688 F.3d 402, 405 (8th Cir. 2012); L.L. Nelson Enters., Inc., 673
F.3d at 805; Van Zee, 630 F.3d at 1128. As the Supreme Court has explained, to
establish an access to courts claim
the named plaintiff must identify a nonfrivolous, arguable,
underlying claim. . . . It follows that the underlying cause of
action, whether anticipated or lost, is an element that must
be described in the complaint, just as much as allegations
much describe the official acts frustrating the litigation. It
follows, too, that when the access claim (like this one) looks
backward, the complaint must identify a remedy that may be
35

awarded as recompense but not otherwise available in some
suit that may yet be brought. There is, after all, no point in
spending time and money to establish the facts constituting
denial of access when a plaintiff would end up just as well
off after litigating a simpler case without the denial-of-access
element.
Christopher v. Harbury, 536 U.S. 403, 415 (2002).
Concerning their right to access claim, plaintiffs allege the following:
168. The disruption of and distraction in the state
court litigation caused by the threats and intimidation of the
Plaintiffs [sic] lawful claims in the Trust litigation and is a
further continuation of the fraud complained herein.
169. The Defendants acted in concert to interfere
with the Plaintiffs’ state court action for fraud on the Van
Stelton Trust of which the Plaintiffs were beneficiaries by
maliciously interfering with their litigation rights in violation
of their right to petition the government for redress of
grievances which caused them a loss of prospective
economic advantage, which loss was not only foreseeable,
but was deliberately intended.
170. As a result of the combined actions of the
Defendants, Plaintiffs were denied full and fair hearing in
the Trust litigation, which forced them to accept less than
their fair share of the estate distribution due to the fraud and
breach of fiduciary duty by Jerry and Eugene Van Stelton as
Defendants in concert with the Defendant DeKoter
(hereinafter the Fraud Parties) prior to and during the Trust
litigation.
Third Am. Complaint at ¶¶ 168-170.
I find that plaintiffs do not allege any facts showing that they suffered a specific,
litigation related harm caused by the County defendants' actions. Plaintiffs have utterly
failed to allege with particularity any act or acts of the County defendants which
interfered with plaintiffs’ trust litigation.

Plaintiffs have also failed to allege with
36

particularity any specific claims they lost, or claims that they had which were harmed,
as a result of the County defendants' conduct. Thus, plaintiffs have failed to state a
viable access to courts claim against the County defendants and this portion of the
County defendants’ motion to dismiss is granted.

E.
1.

State Law Claims

Carol Van Stelton’s slander and libel claim

The County defendants seek dismissal of plaintiff Carol Van Stelton’s slander
and libel claim against them for failure to state a claim upon which relief may be
granted. Specifically, the County defendants assert that the Third Amended Complaint
does not contain any alleged statements that were made by them, when they were
published, or how they were libelous or defamatory to Carol. In response, plaintiffs do
not resist this portion of the County defendants’ motion.

Plaintiffs state that they

intended to remove any reference to Carol in Count V of the Third Amended Complaint
but inadvertently did not. Therefore, this portion of the County defendants’ motion to
dismiss is granted, and plaintiff Carol Van Stelton’s slander and libel claim is dismissed
in its entirety.
2.

False arrest claim against the Law Firm defendants

The Law Firm defendants also seek dismissal of Virgil’s false arrest claim
against them. They argue that this claim depends on the existence of a conspiracy
between them and others, but plaintiffs have not properly pled such a conspiracy.
Plaintiffs respond that their false arrest claim is not based on the Law Firm’s
involvement in a conspiracy but is grounded on their directly engaging in the tortious
conduct.
Under Iowa law, false arrest is indistinguishable from false imprisonment. See
Rife v. D.T. Corner, Inc., 641 N.W.2d 761, 767 (Iowa 2002); Kraft v. Bettendorf, 359
37

N.W.2d 466, 469 (Iowa 1984).

A claim of false arrest has two elements:

“‘(1)

detention or restraint against one’s will, and (2) unlawfulness of the detention or
restraint.’” Thomas v. Marion Cnty., 652 N.W.2d 183, 186 (Iowa 2002) (quoting
Kraft, 359 N.W.2d at 469); see Children v. Burton, 331 N.W.2d 673, 678-79 (Iowa
1983). “‘[A] private citizen at whose request, direction, or command a police officer
makes an arrest without a warrant is liable if the arrest turns out to be unlawful.’”
Busch v. City of Anthon, Iowa, 173 F. Supp.2d 876, 894 (N.D. Iowa 2001) (quoting
(quoting Dixon v. Hy–Vee, Inc., No. 00–1234, 2001 WL 912738, at *2 (Iowa Ct. App.
Aug. 15, 2001)) (quoting in turn 32 AM.JUR.2d False Imprisonment § 40 (1995)). A
person who instigates or participates in the unlawful arrest of another person is subject
to liability to that person for false imprisonment. Id. Iowa courts distinguish between
“merely reporting an incident or suspect, and instigating detention by authorities.” Turk
v. Iowa West Racing Ass’n, Inc., 690 N.W.2d 695, 2004 WL 1836119, *4 (Iowa Ct.
App. Aug. 11, 2004) (unpublished table decision). Instigation goes beyond a person
giving information to the police about a crime’s commission or accusing another of
committing a crime so long as the person “leaves to the police the decision as to what
shall be done about any arrest, without persuading or influencing them.” Busch, 173 F.
Supp. 2d at 895 (citing RESTATEMENT (SECOND) OF TORTS § 45A cmt. c (1965)). A
person may be liable for false arrest or false imprisonment if the person supplied
information to the police that he or she knew to be false. Id.
Plaintiffs do not allege that DeKoter directly detained or confined Virgil in any
way. Instead, plaintiffs allege that Gries and Krikke alone detained and arrested Virgil.
Therefore, the relevant question is whether plaintiffs have sufficiently alleged that the
Law Firm defendants instigated, requested, or directed Virgil’s arrest or detention by
Gries and Krikke.

Plaintiffs allege that DeKoter “encouraged criminal complaints”

against Virgil by Jerry and Eugene in order to further their litigation position regarding
38

the Van Stelton Trust. Third Am. Complaint ¶ 86. Plaintiffs further allege that Virgil
was arrested after he was attacked by Jerry and that “the incident was planned and
executed as a pretext to seize the digital tape recorder and was arranged by Defendants
[sic] Jerry Van Stelton under the advice and counsel of Defendants DeKoter and
Hansen for enforcement by the Defendant Weber through Defendants Gries and Krikke,
with false evidence to be supplied by Defendants. . . .” Third Am. Complaint ¶ 96(c).
I find these allegations sufficient to support a claim for false arrest against
DeKoter because he is alleged to have orchestrated Virgil’s warrantless arrest without
probable cause. Moreover, because DeKoter is alleged to be a partner in the Law Firm
at the time he advised and counseled Jerry, the allegations sufficiently allege that
DeKoter’s actions were committed in the course or scope of his employment. Under
such circumstances, the Law Firm would be liable for DeKoter’s wrongful actions. See
Walderbach v. Archdiocese of Dubuque, Inc., 730 N.W.2d 198, 201 (Iowa 2007)
(noting that “[a] claim of vicarious liability under the doctrine of respondeat superior
rests on two elements: proof of an employer/employee relationship (or employment as
an independent contractor), and proof that the injury occurred within the scope of that
relationship.”); Biddle v. Sartori Mem. Hosp., 518 N.W.2d 795, 797 (Iowa 1994)
(same).

Therefore, this portion of the Law Firm defendants’ motion to dismiss is

denied.
3.

Malicious prosecution claim against the Law Firm defendants

The Law Firm defendants next seek dismissal of plaintiffs’ malicious prosecution
claim against them. The parties repeat the same arguments regarding the vitality of this
claim that they made concerning the false arrest claim.
In order to establish a claim of malicious prosecution, a plaintiff must prove the
following six elements:

39

(1) a previous prosecution; (2) instigation of that
prosecution by the defendant; (3) termination of the
prosecution by acquittal or discharge of the plaintiff; (4)
want of probable cause; (5) malice on the part of the
defendant for bringing the prosecution; and (6) damage to
the plaintiff.
Wilson v. Hayes, 464 N.W.2d 250, 259 (Iowa 1990); see Winkel v. Von Maur, Inc.,
652 N.W.2d 453, 460 (Iowa 2002), abrogated in part on other grounds by Barreca v.
Nickolas, 652 N.W.2d 453 (Iowa 2004); Royce v. Henning, 423 N.W.2d 198, 200
(Iowa 1998); Sarvold v. Dodson, 237 N.W.2d 447, 448 (Iowa 1976); see also Craig v.
City of Cedar Rapids, 826 N.W.2d 516, 2012 WL 6193862, at *4 (Iowa Ct. App. Dec.
12, 2012) (unpublished table decision); Jackson v. Wesselink, 758 N.W.2d 349, 2011
WL 649471, at *4 (Iowa Ct. App. Feb. 23, 2011) (unpublished table decision);
McLaughlin v. Ranschau, 791 N.W.2d 427, 2010 WL 3503543, at * 2 (Iowa Ct. App.
Set. 9, 2010) (unpublished table decision); Schneider v. Rodgers, 752 N.W.2d 33, 2008
WL 508481, at *3 n.2 (Iowa Ct. App. Feb. 27, 2008) (unpublished table decision).8

In two stray cases, the Iowa Supreme Court identified the second element of a
malicious prosecution claim as “investigation” of the prosecution by the present
defendant. See Whalen v. Connelly, 621 N.W.2d 681, 687-88 (Iowa 2000); Employers
Mut. Cas. Co. v. Cedar Rapids Television Co., 552 N.W.2d 639, 643 (Iowa 1996).
This metamorphosis of the second element, from “instigation” in Wilson to
“investigation” in Employers Mutual, appears to have been no more than a scrivener's
error since Employers Mutual cites Wilson as the sole authority for the elements of a
malicious prosecution claim. See Employers Mut. Cas. Co., 552 N.W.2d at 643.
Moreover, the Restatement (Second) of Torts, which the Iowa Supreme Court relied in
Wilson, defines the pertinent element as “initiation, continuation or procurement of civil
proceedings against another. . . .” RESTATEMENT (SECOND) OF TORTS § 674 (1965);
see RESTATEMENT (SECOND) OF TORTS § 681A (stating the element as “the defendant
has initiated, continued or procured the civil proceedings against [the plaintiff]”).
Finally, since Whalen, the Iowa appellate courts have referred to the second element
only as “instigation” of the prosecution by the defendant. See Winkel, 652 N.W.2d at
460; see also Craig, 826 N.W.2d 516, 2012 WL 6193862, at *4; Jackson, 758 N.W.2d
8

40

“Malice means any wrongful act which has been wilfully and purposely done to the
injury of another. There must be an improper purpose or motive. Malice may be
actual, or it may be inferred from a want of probable cause.” Wilson, 464 N.W.2d at
260 (quoting in Brown v. Monticello State Bank, 360 N.W.2d 81, 87 (Iowa 1984)).
Probable cause is defined as:
“One who takes an active part in the initiation, continuation
or procurement of civil proceedings against another has
probable cause for doing so if he reasonably believes in the
existence of the facts upon which the claim is based, and
either
(a) correctly or reasonably believes that under those facts the
claim may be valid under the applicable law, or
(b) believes to this effect in reliance upon the advice of
counsel, sought in good faith and given after full disclosure
of all relevant facts within his knowledge and information.”
Wilson, 464 N.W.2d at 261-62 (quoting RESTATEMENT (SECOND) OF TORTS § 675).
The Iowa Supreme Court has instructed that in determining the existence of probable
cause
“[t]he important question [is not the defendant's] belief but
whether all the facts, as [the defendant] knew them or
should have known, were such as to justify the ordinary,
reasonably prudent, careful and conscientious person in
reaching such a conclusion.”
Wilson, 464 N.W.2d at 261 (quoting Schnathorst v. Williams, 36 N.W.2d 739, 748
(1949)).
In their Third Amended Complaint, plaintiffs allege that Virgil was attacked by
Jerry. DeKoter had actual knowledge of these facts but nonetheless directed Hansen to

349, 2011 WL 649471, at *4; McLaughlin, 791 N.W.2d 427, 2010 WL 3503543, at *
2; Schneider, 752 N.W.2d 33, 2008 WL 508481, at *3 n.2.
41

file a criminal charge against Virgil. Virgil was charged with assault causing bodily
injury but that charge, which was not supported by probable cause, was later dismissed.
Drawing all reasonable inferences in Virgil’s favor, I conclude that he has adequately
pled each element of malicious prosecution. See Hamilton v. Palm, 621 F .3d 816, 819
(8th Cir. 2010) (“A plaintiff need only allege facts that permit the reasonable inference
that the defendant is liable, even if the complaint ‘strikes a savvy judge that actual proof
of the facts alleged is improbable’ and recovery ‘very remote and unlikely.’”).
Therefore, this portion of the Law Firm defendants’ motion to dismiss is also denied.
4.

Defamation claim against the Law Firm defendants

The Law Firm defendants further seek dismissal of plaintiffs’ defamation claim
against them. As they did with Virgil’s false arrest claim, the Law Firm defendants
argue that this claim depends on the existence of a conspiracy between them and others,
but plaintiffs have not properly pled such a conspiracy. Plaintiffs respond that their
defamation claim is not based on the Law Firm’s involvement in a conspiracy but are
grounded on their directly engaging in the tortious conduct. The Law Firm defendants
counter that plaintiffs have not alleged or identified any derogatory statements made by
them which could form the basis for such a claim.
Under Iowa law, defamation is
“is an impairment of a relational interest; it denigrates the
opinion which others in the community have of the plaintiff
and invades the plaintiff's interest in his reputation and good
name. A cause of action for defamation is based on the
transmission of derogatory statements, not any physical or
emotional distress to plaintiff which may result. Defamation
law protects interests of personality, not of property.”
Kiesau v. Bantz, 686 N.W.2d 164, 175 (Iowa 2004) (quoting Schlegel v. Ottumwa
Courier, 585 N.W.2d 217, 221 (Iowa 1998)).

As I have previously explained,

defamation under Iowa law consists of the “twin torts” of “libel” and “slander,” where
42

“libel” is defined as malicious publication, expressed either in printing or in writing, or
by signs and pictures, tending to injure the reputation of another person or to expose
the person to public hatred, contempt, or ridicule, or to injure the person in the
maintenance of the person's business, and “slander” is defined as oral publication of
defamatory material. McFarland v. McFarland, 684 F. Supp.2d 1073, 1086 (N.D.
Iowa 2010); Park v. Hill, 380 F.Supp.2d 1002, 1015 (N.D. Iowa 2005); Lyons v.
Midwest Glazing, L.L.C., 235 F.Supp.2d 1030, 1043-44 (N.D. Iowa 2002); accord
Kiesau v. Bantz, 686 N.W.2d 164, 174 (Iowa 2004); Barreca v. Nickolas, 683 N.W.2d
111, 116 (Iowa 2004); Delaney v. International Union UAW Local No. 94, 675
N.W.2d 832, 839 (Iowa 2004); Theisen v. Covenant Med. Ctr., Inc., 636 N.W.2d 74,
83 (Iowa 2001); Johnson v. Nickerson, 542 N.W.2d 506, 510 (Iowa 1996); Lara v.
Thomas, 512 N.W.2d 777, 785 (Iowa 1994). In order to establish a prima facie case of
defamation, the plaintiff must prove that the defendant “‘(1) published a statement that
(2) was defamatory (3) of and concerning the plaintiff, and (4) resulted in injury to the
plaintiff.’” Kiesau, 686 N.W.2d at 175 (quoting Johnson v. Nickerson, 542 N.W.2d
506, 510 (Iowa 1996)). The Iowa Supreme Court has recognized that:
There are two kinds of libel: libel per se and libel per quod.
In statements that are libelous per se, falsity, malice, and
injury are presumed and proof of these elements is not
necessary. Vinson v. Linn-Mar Cmty. Sch. Dist., 360
N.W.2d 108, 115-16 (Iowa 1985). “An attack on the
integrity and moral character of a party is libelous per se.”
Wilson v. IBP, Inc., 558 N.W.2d 132, 139 (Iowa 1996).
Kiesau, 686 N.W.2d at 175. Similarly, the Iowa Supreme Court has recognized that
statements may constitute “slander per se.” Barreca, 683 N.W.2d at 116 (cataloguing
Iowa slander per se cases).
Here, accepting all allegations in the Third Amended Complaint as true and
drawing all reasonable inferences in the light most favorable to plaintiffs, I conclude
43

that plaintiffs have not alleged sufficient facts to make out prima facie claims of libel
and slander against the Law Firm defendants. Specifically, plaintiffs only allege that:
164. Defendants Weber, Gries and Krikke published
and caused to be published stories or articles in various
media that Plaintiff Virgil Van Stelton had allegedly engaged
in Domestic Assault knowing that those allegations were
wholly false, defamatory and without basis.
165. Further, the aforesaid Defendants made false
and defamatory statements to each other and to third parties
concerning Plaintiffs Virgil Van Stelton and Alvin Van
Stelton with the intent to slander the Plaintiffs Van Stelton
and cause them harm.
Third Am. Complaint at ¶¶ 164-65.

The Law Firm defendants’ conduct is not

mentioned whatsoever. Thus, these allegations totally fail to state a cause of action for
either slander or libel against the Law Firm defendants. Accordingly, this portion of
the Law Firm defendants’ motion to dismiss is granted.
5.

Tortious interference with prospective business relations claims

Both the Law Firm defendants and the County defendants seek dismissal of
plaintiffs' claim of tortious interference with prospective business relations, contending
that plaintiffs have made only conclusory allegations and have not plead specific acts
committed by the defendants which satisfy the elements of this claim.

Plaintiffs

respond that they have sufficiently identified the defendants’ conduct to make out a
prima facie claim of tortious interference with prospective business relations. I will
first discuss the requirements for such a claim and then analyze whether the allegations
sufficiently state plausible claims of tortious interference with prospective business
relations against the Law Firm defendants and the County defendants.

44

a.

Requirements for a claim

Under Iowa law, the elements of a claim for tortious interference with
prospective business advantage are as follows:
“(1) A prospective contractual or business relationship;
(2) the defendant knew of the prospective relationship;
(3) the defendant intentionally and improperly interfered
with the relationship;
(4) the defendant's interference caused the relationship to
fail to materialize; and
(5) the amount of resulting damages.”
Blumenthal Inv. Trusts v. City of W. Des Moines, 636 N.W.2d 255, 269 (Iowa 2001)
(quoting Iowa Coal Mining Co. v. Monroe Cnty., 555 N.W.2d 418, 438 (Iowa 1996)).
“Interference with a prospective business contract is an intentional tort which requires a
showing that the sole or predominant purpose of the actor's conduct was to financially
injure or destroy the plaintiff.” Lorenzen Steffen Ins. Agency, Inc. v. United Fire &
CAs. Co., 666 N.W.2d 619 (Iowa Ct. App. 2003) (citing Economy Roofing &
Insulating Co. v. Zumaris, 538 N.W.2d 641, 651–52 (Iowa 1995)); see Hoefer v.
Wisconsin Educ. Ass'n Ins. Trust, 470 N.W.2d 336, 341 (Iowa 1991) (“[P]laintiffs who
allege tortious interference with prospective business relations are held to a strict
standard of substantial proof ‘that the defendant acted with a predominantly improper
purpose.’” (quoting Harsha v. State Sav. Bank, 346 N.W.2d 791, 800 (Iowa 1984))).
b.

Claim against the Law Firm defendants

Plaintiffs allege that:
173. During the 2009 crop year, Defendant DeKoter
maliciously interfered with the Plaintiffs Van Stelton in their
effort to bid against the Defendants Van Stelton for the right
to plant the Trust lands costing them the opportunity to
compete for the income to be gained from that crop season.
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Third Am. Complaint at ¶ 173. Plaintiffs specifically allege that Alvin, Jerry, and
Eugene were trustees of the Van Stelton Trust.

DeKoter was Jerry and Eugene’s

attorney. He was then retained as attorney for the Van Stelton Trust. In his capacity as
the attorney for the Van Stelton Trust, DeKoter interfered with communications
between Alvin, Virgil, and Margaret. DeKoter did so by contacting, in person and
telephonically, the nursing facility staff caring for Margaret “to create suspicions in the
mind of staff concerning Margaret’s safety and security in the presence of Alvin and
Virgil Van Stelton and her ongoing contacts with them and Carol Van Stelton.” Third
Am. Complaint at ¶ 68.

Having interfered with communications between Alvin,

Virgil, and Margaret, DeKoter exercised “undue influence” over Margaret and caused
her to remove Alvin as a trustee. Third Am. Complaint at ¶ 69. After Alvin was
removed as a trustee, Jerry and Eugene were able to rent farm land from the Van
Stelton Trust for below market rates.
I conclude that these allegations sufficiently state a plausible claim of tortious
interference with prospective business relations. It must be remembered that Federal
Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim
showing that the pleader is entitled to relief,” in order to “give the defendant fair notice
of what the . . . claim is and the grounds upon which it rests. . . .'” Twombly, 550
U.S. at 555 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Although plaintiffs’
Third Amended Complaint is not as rich with detail as one might prefer, it need only
set forth sufficient facts to support plausible claims. Id. This it does. These allegations
sufficiently put the Law Firm defendants on notice of plaintiffs’ tortious interference
with prospective business relations claim, and the grounds upon which it rests, thereby
complying with Rule 8. Accordingly, that part of the Law Firm defendants’ motion to
dismiss plaintiffs’ tortious interference with prospective business relations claim is
denied.
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c.

Claim against the County defendants

Concerning their claim against the County defendants, plaintiffs only allege that
all of these defendants acted “in concert” with the other defendants to interfere with
their litigation over the Van Stelton Trust.

Plaintiffs do not allege how, if at all, this

interference affected the rental of the trust farmland.

Thus, I conclude that these

allegations do not sufficiently state a plausible claim of tortious interference with
prospective business relations against the County defendants. Thus, the portion of the
County defendants’ motion to dismiss plaintiffs’ tortious interference with prospective
business relations claim is granted.
6.

Fraud/breach of fiduciary duty

The Law Firm defendants further seek dismissal of plaintiffs’ fraud and breach
of fiduciary duty claims against them. The Law Firm defendants contend that these
claims fail as a matter of law because DeKoter was never a trustee of the Van Stelton
trust. They alternatively argue that these claims are time-barred. Plaintiffs respond
that they have made out a viable claim for breach of fiduciary duty based on DeKoter’s
actions as counsel to the Van Stelton Trust. Plaintiffs, however, do not address the
Law Firm defendants’ argument that these claims are barred by Iowa’s statute of
limitations.
Although plaintiffs have combined their fraud and breach of fiduciary duty
claims in a single count, I will consider them separately because they are distinct torts
with elements unique to each.
a.

Fraud

The Iowa Supreme Court has instructed that:
In order to prevail on a common law fraud claim the
plaintiff must prove the following:

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(1) [the] defendant made a representation to the
plaintiff, (2) the representation was false, (3) the
representation was material, (4) the defendant knew
the representation was false, (5) the defendant
intended to deceive the plaintiff, (6) the plaintiff acted
in [justifiable] reliance on the truth of the
representation . . ., (7) the representation was a
proximate cause of [the] plaintiff’s damages, and (8)
the amount of damages.
Spreitzer v. Hawkeye State Bank, 779 N.W.2d 726, 735
(Iowa 2009) (quoting Gibson v. ITT Hartford Ins. Co., 621
N.W.2d 388, 400 (Iowa 2001)).
Diers v. Peters, 815 N.W.2d 1, 7 (Iowa 2012) (footnote omitted).9 The first three
elements of the tort are “frequently treated as a single element and referred to as
fraudulent misrepresentation.” Sinnard v. Roach, 414 N.W.2d 100, 105 (Iowa 1987).
“In alleging fraud . . . a party must state with particularity the circumstances
constituting fraud or mistake.” FED. R. CIV. P. 9(b).
The allegations in the Third Amended Complaint are wholly insufficient to state
a viable claim for fraud under Rule 9(b) against the Law Firm defendants.

The

problem with plaintiffs' fraud claim is that they have pleaded no facts whatsoever
9

The Iowa Supreme Court also recognized that:
At times we have spoken in terms of seven required
elements. Van Sickle Const. Co. v. Wachovia Commercial
Mortg., Inc., 783 N.W.2d 684, 687 (Iowa 2010). In those
instances, we have treated the seventh and eighth elements
above as a single element—“resulting injury and damage.”
Id.; see also Lloyd v. Drake Univ., 686 N.W.2d 225, 233
(Iowa 2004). On other occasions, we have referred to six
elements of fraud. See In re Marriage of Cutler, 588
N.W.2d 425, 430 (Iowa 1999).

Diers, 815 N.W.2d at 7 n.3.
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regarding any false representations made by DeKoter, or other members of the Law
Firm, which plaintiffs relied on to their detriment. The only statements allegedly made
by DeKoter were: (1) his ordering Alvin to leave Margaret’s assisted living quarters,
Third Am. Complaint at ¶ 71; (2) his soliciting criminal complaints from Jerry,
Eugene, and third-parties against Alvin and Virgil, id. at ¶¶ 79, 86; (3) his 2006 “A
Peace Plan For Osceola County” letter to members of the Osceola County Board of
Supervisors, id. at ¶ 118 & Ext A.; (4) his threatening the Osceola County Board of
Supervisors with lawsuits, id. at ¶ 119; (5) his sending “a political mailer” to Osceola
County voters which falsely alleged an association between candidate Edward Jones and
OCTA consultant Paul Dorr, id. at ¶ 125(a); (6) his admission that he sent the mailing,
id. at ¶ 125(c); (7) his sending an email to the City of Sibley and Sibley businesses on
November 7, 2012, in which “he admits his ‘political’ activities. . . .”, id. at ¶ 125(d);
and, (8) his sending an email to Edward Jones’s wife in which “she was told that if she
was helping her husband, ‘Heaven help you.’”, id. at ¶ 131. I find that the Third
Amended Complaint fails entirely to allege that plaintiffs relied, in any way, on any of
these statements to their detriment.

Therefore, plaintiffs have failed to sufficiently

plead a common law fraud claim against the Law Firm defendants, and this portion of
the Law Firm defendants’ motion to dismiss is also granted.
b.

Breach of fiduciary duty

Under Iowa law, to establish a breach of fiduciary duty, the plaintiffs must
demonstrate the following elements: (1) the defendant owed the plaintiff a fiduciary
duty; (2) the defendant breached this fiduciary duty; (3) the breach of the fiduciary duty
was a proximate cause of the plaintiff's damages; and (4) the amount of damages. See
Asa–Brandt, Inc. v. ADM Investor Servs., 344 F.3d 738, 744 (8th Cir. 2003) (applying
Iowa law); NCMIC Fin. Corp. v. Artino, 638 F. Supp. 2d 1042, 1082 (S.D. Iowa
2009) (same); Top of Iowa Co-op. v. Schewe, 149 F.Supp.2d 709, 717 (N.D. Iowa
49

2001) (same); see also Greene v. Heithoff, 808 N.W.2d 754, 2011 WL 5515167, at *10
(Iowa Ct. App. Nov. 9, 2011) (unpublished table discision); Unterberger v. Bresnahan,
789 N.W.2d 164, 2010 WL 2925843, at *3 (Iowa Ct. App. July 28, 2010)
(unpublished table decision). It is well established that “[a] trustee owes a duty of
loyalty to the trust and to its beneficiaries and must act in good faith in all actions
affecting the trust.” Schildberg v. Schildberg, 461 N.W.2d 186, 191-92 (Iowa 1990);
accord Harvey v. Leonard, 268 N.W.2d 504, 512 (Iowa 1978); In re Thompson Trust,
801 N.W.2d 23, 26 (Iowa Ct. App. 2011). “‘[A]s a general rule trustees are prohibited
from engaging in self-dealing transactions with the trust and from obtaining personal
advantage from their dealings with trust property.’” Orud v. Groth, 708 N.W.2d 72,
79 (Iowa 2006) (quoting Harvey, 268 N.W.2d at 512); accord Coster v. Crookham,
468 N.W.2d 802, 806 (Iowa 1991) (stating a “‘trustee violates his duty to the
beneficiary . . . where he uses the trust property for his own purposes’” (quoting
RESTATEMENT (SECOND) OF TRUSTS § 170 cmt. l )). DeKoter is not alleged to have
ever been a trustee of the Van Stelton Trust. Instead, plaintiffs allege that he “was
retained as attorney for the Trust.”10 Third Am. Complaint at ¶ 66. However, the
Iowa Supreme Court has “recognized that a third party may be liable for a trustee’s
breach of fiduciary duty.” Orud, 708 N.W.2d at 80; see Coster v. Crookham, 468
N.W.2d 802, 809 (Iowa 1991). The Iowa Supreme Court has quoted approvingly the
following rule from the Restatement (Second) of Trusts:
“‘A third person who, although not a transferee of trust
property, has notice that the trustee is committing a breach
of trust and participates therein is liable to the beneficiary
for any loss caused by the breach of trust.’”

While DeKoter is alleged to have represented both Jerry and Eugene before he
was retained to work on trust matters, the Third Amended Complaint does not disclose
who actually retained DeKoter for this work.
10

50

Orud, 708 N.W.2d at 80 (quoting Coster, 468 N.W.2d at 809 (quoting in turn
RESTATEMENT (SECOND) OF TRUSTS § 326, at 124). Here, plaintiffs allege Jerry and
Eugene, as trustees of the Van Stelton Trust, engaged in self-dealing by renting trust
farm land to themselves at below market rates. Plaintiffs further allege that DeKoter
actively participated with Jerry and Eugene by interfering and blocking communications
between Margaret, Alvin, and Virgil which may have revealed the self-dealing.
Accordingly, plaintiffs have stated a claim for aiding and abetting the breach of a
fiduciary duty against the Law Firm defendants. This conclusion requires me to next
address the Law Firm defendants’ alternative argument that plaintiffs’ breach of
fiduciary duty claim is barred by Iowa’s statute of limitations.
Iowa law bars a claim for a breach of trust by a beneficiary
who has received a final account or other report adequately
disclosing the existence of the claim, unless a proceeding to
assert the claim is commenced within one year after the
earlier of the receipt of the accounting or report of the
termination of the trust relationship between the trustee and
beneficiary.
IOWA CODE § 633A.4504(1). For the Law Firm defendants to prevail on their statute
of limitations argument, they must establish the following: (1) plaintiffs were
beneficiaries of the Van Stelton Trust; (2) the claim against Jerry and Eugene is for a
breach of trust; (3) plaintiffs received an accounting or other report adequately
disclosing the existence of the claim; and (4) plaintiffs failed to commence this action
within one year after the receipt of this accounting or report. See Turner v. Iowa State
Bank & Trust Co., 743 N.W.2d 1, 5 (Iowa 2007). The Third Amended Complaint
contains insufficient details for me to determine, as a matter of law, that plaintiffs’
breach of fiduciary duty claim against the Law Firm defendants is barred by Iowa’s
statute of limitations. Specifically, the Third Amended Complaint does not disclose
when, if ever, plaintiffs received an accounting or other report adequately disclosing
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the existence of their claim against Jerry and Eugene for self-dealing. Accordingly,
this issue cannot be resolved on a motion to dismiss but rather must await summary
judgment or trial, and this portion of the Law Firm defendants’ motion to dismiss is
denied.
7.

Ongoing criminal conduct

Both the County defendants and the Law Firm defendants challenge plaintiffs’
Ongoing Criminal Conduct claim against them.

The County defendants argue that

plaintiffs’ OCC claim fails because plaintiffs have not alleged criminal activity that
occurred or will occur on a continuing basis, a necessary element for such a claim. See
IOWA CODE § 706A.1(1). The Law Firm defendants similarly argue that plaintiffs’
OCC claim is insufficient because plaintiffs have failed to plead underlying criminal
conduct sufficient to support such a claim. Plaintiffs respond that they have sufficiently
plead wire and mail fraud violations to support their OCC claims against these
defendants. I begin my analysis with a review of Iowa’s OCC statute.
a.

Overview of the OCC

In 1996, the Iowa legislature enacted the OCC.11 State v. Olsen, 618 N.W.2d
346, 348 (Iowa 2000). “The basic goal of the model act was to defend legitimate
commerce from organized criminal activity and remedy the economic effects of crime.”
Id. at 348. The OCC allows an “aggrieved person” to file a civil action against any
person violating the statute. See IOWA CODE § 706A.3(1). Plaintiffs allege that both

Iowa’s OCC was patterned after the Model Ongoing Criminal Conduct Act, § 2
(1993). See State v. Olsen, 618 N.W.2d 346, 348 (Iowa 2000); 4 IOWA PRACTICE
SERIES, CRIMINAL LAW § 12.1 (2012-13 ed.). “Iowa is the only state in the nation to
enact an ongoing criminal conduct statute.” Olsen, 618 N.W.2d at 348 n.1; see 4
IOWA PRACTICE SERIES, CRIMINAL LAW § 12.1 (“Iowa is the only state to adopt the
act.”).
11

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the County defendants and the Law Firm defendants violated Iowa Code
§ 706A.2(2)(a). That section provides:
2. Facilitation of a criminal network. It is unlawful for a
person acting with knowledge of the financial goals and
criminal objectives of a criminal network to knowingly
facilitate criminal objectives of the network by doing any of
the following:
a. Engaging in violence or intimidation or inciting or
inducing another to engage in violence or intimidation.
IOWA CODE § 706A.2(2)(a). The OCC defines “criminal network” as:
any combination of persons engaging, for financial gain on a
continuing basis, in conduct which is an indictable offense
under the laws of this state regardless of whether such
conduct is charged or indicted. As used in this subsection,
persons combine if they collaborate or act in concert in
carrying on or furthering the activities or purposes of a
network even though such persons may not know each
other's identity, membership in the network changes from
time to time, or one or more members of the network stand
in a wholesaler-retailer, service provider, or other arm's
length relationship with others as to conduct in the
furtherance of the financial goals of the network.
Iowa Code 706A.1(1). “Although ‘financial gain’ is not defined by the [sic] chapter
706A, we read the statute to require only proof that a defendant's purpose was for
financial gain, not that he or she actually received financial gain.” Day v. State, No.
12-1790, 2013 WL 2373264, at *2 (Iowa Ct. App. May 30, 2013). The Iowa Supreme
Court has further instructed that
Given the similarity between the underlying purposes of
RICO and Iowa Code chapter 706A, we think the
interpretation given to “pattern of racketeering activity” by
the United States Supreme Court in H.J. is a reasonable one
for “continuing basis” in [the OCC].
53

State v. Reed, 618 N.W.2d 327, 335 (Iowa 2000).

Thus, to satisfy the OCC’s

“continuing basis” requirement, plaintiffs must allege two or more related acts of
criminal activity that “have the same or similar purpose.” See Id.: see also State v.
Russell, 781 N.W.2d 303, 2010 WL 786207, at *1 (Iowa Ct. App. March 10, 2010)
(unpublished table decision).
b.

Analysis

For the reasons I discussed above in finding that plaintiffs failed to sufficiently
allege a pattern of racketeering activity under RICO, due to their failure to allege that
each of the defendants committed two specific predicate acts, I also find that plaintiffs
have failed to sufficiently allege that either the County defendants or the Law Firm
defendants engaged in criminal activity on a continuing basis under the OCC.
Therefore, this portion of the Law Firm defendants’ and the County defendants’
motions to dismiss are granted, and plaintiffs’ OCC claims are dismissed in their
entirety.

F.

The City Of Sibley’s Motion

Plaintiffs seek only declaratory judgment and/or injunctive relief against the City
of Sibley. Sibley argues that both declaratory judgment and injunctive relief require a
viable underlying cause of action, but plaintiffs have failed to allege any such viable
underlying cause of action against it.

As a result, Sibley contends that the Third

Amended Complaint fails to state a claim against it for which relief can be granted.
Plaintiffs respond that Sibley is a necessary party for plaintiffs to obtain complete relief
and in order for Sibley to protect its interests regarding the allocation of taxes.
Plaintiffs further argue that although facts exist to support an unjust enrichment claim
against Sibley, they have not plead it out of courtesy to Sibley.

Notwithstanding

plaintiffs’ arguments that Sibley is a necessary party, plaintiffs alternatively state that
54

they do not object to Sibley’s dismissal in accordance with Sibley’s request. Because
plaintiffs do not object to the dismissal of Sibley, Sibley’s motion to dismiss is granted.
III.

CONCLUSION

For the reasons stated above, it is ordered that:
1. The County defendants’ motion to dismiss is granted, and the following
claims against the County defendants are dismissed:
a. the RICO claim;
b. the First Amendment right to petition claim;
c. Carol Van Stelton’s slander and libel claim;
d. the tortious interference with prospective business relations claim;
e. the OCC claim.
2. The Law Firm defendants’ motion to dismiss is granted in part and denied in
part, as follows:
a. That part of the motion seeking dismissal of the § 1983 claims against
DeKoter is denied;
b. That part of the motion seeking dismissal of the § 1983 claims against the
Law Firm is granted;
c. That part of the motion seeking dismissal of the RICO claims is granted;
d. That part of the motion seeking dismissal of Virgil Van Stelton’s false arrest
claim is denied;
e. That part of the motion seeking dismissal of the malicious prosecution claim is
denied;
f. That part of the motion seeking dismissal of the defamation claim against them
is granted;

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g. That part of the motion seeking dismissal of the tortious interference with
prospective business relations is denied;
h. That part of the motion seeking dismissal of the fraud claims is granted;
i. That part of the motion seeking dismissal of the breach of fiduciary duty claim
is denied;
j. That part of the motion seeking dismissal of the OCC claim is granted.
3. The City of Sibley’s motion to dismiss is granted.
IT IS SO ORDERED.
DATED this 17th day of July, 2013.

______________________________________
MARK W. BENNETT
U.S. DISTRICT COURT JUDGE
NORTHERN DISTRICT OF IOWA

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