The U.S. District Court in Minnesota dismissed Tim and Nikki Clancy's civil lawsuit against their neighbors.
The Clancys, who own Vacationaire Resort on Island Lake, filed the federal lawsuit on Aug. 1, 2018, under the Racketeer Influenced and Corrupt Organizations (RICO) Act.
The Clancys alleged that Vacationaire Estates, the Flamm Community Property Trust, Donald Flamm, Eric and Dena Flamm, Dan Elsey, Craig Bingen, Todd Jungwirth and Richard Jungwirth "engaged in a nearly two-year pattern of terroristic actions, terroristic threats, acts of violence and threats of violence" for the purpose of forcing the Clancys to give up their interest in disputed property.
The defendants filed a motion to dismiss the case on Sept. 20, 2018, and U.S. Chief Judge John Tunheim granted the dismissal last week, saying the Clancys "have not satisfied the pleading standards."
According to the Feb. 27 court order, "The complaint fails to lay out the elements of any claim, fails to indicate which factual allegations support which claims and fails to identify which claims are asserted against which defendants."
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The court ruled that all claims against Donald Flamm, who died of bone cancer on July 24, 2018, were dismissed because he predeceased the complaint.
The Clancys claimed the Flamm Trust purchased property across the street from their restaurant from Todd Jungwirth in March 2017 "for the purpose of harassing and terrorizing the plaintiffs, their employees and customers."
The court dismissed all claims against the Flamm Trust because "the complaint was devoid of any conduct undertaken by the trust, and it would be impossible for a trust, which is not a thing or person under the law, to commit an intentional tort," wrote the judge.
The Clancys alleged they suffered a drop in sales, a loss of goodwill, and estimated lost profits of $243,000 to $307,000 from August 2016 through June 2018.
The defendants argued that the Clancys have owned the restaurant for such a short amount of time that their claims of damage are "not grounded in objective measurement." The Clancys bought the resort in April 2016 and claim they lost profits by August 2016.
"The court is skeptical that the plaintiffs could measure this loss after being operation only a few months, especially given how much their sales likely vary with the seasons," the court agreed.
The Clancys claimed former and current members of Vacationaire Estates used "threats of violence, acts of violence and malicious defamation for the purpose of harming the plaintiff's business, frightening the plaintiffs and thereby forcing the plaintiffs to surrender their property interest in old County Road 89 and the easement to Vacationaire Estates."
On Sept. 13, 2018, the Ninth District state court determined that the Clancys do not own, have any easement or right to use any portion of Icon Drive. The court determined that Icon Drive is owned by Vacationaire Estates and another portion by the Flamm Trust.
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The state court also ruled that Vacationaire Estates is owner of the northwest part of the paved parking lot within its property boundary and the Flamm Trust owns part of the lot within its property line.
The federal court, therefore, dismissed the Clancys trespass claim since they don't possess the disputed property.
The Clancys submitted negative reviews of their restaurant on Google and Yelp, allegedly written by the defendants, as examples of defamation. The court determined the reviews were mostly opinion.
The federal court dismissed the racketeering claim against Vacationaire Estates, saying an enterprise generally does not face liability, rather "it is the vehicle through which the racketeering activity is carried out."
Vacationaire Estates (VE) is a Minnesota nonprofit corporation organized in 1971 to provide an operating agreement for 10 cabin owners.
According to the court order, "racketeering is defined as 'any act or threat involving murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in obscene manner or dealing in a controlled substance. . .'"
The judge determined the Clancys "failed to plead facts showing participating in the operation or management of the enterprise as to all defendants except Elsey, who was alleged to be president of VE."
The judge wrote, "While skeptical that plaintiffs will ultimately be able to sustain a RICO claim, the court would consider a motion for leave to amend the complaint" if the Clancys can address deficiencies in their claim.
