IN THE DISTRICT COURT OF THE SIXTH JUDICIAL DISTRICT ... · memorandum decision and order granting...

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MEMORANDUM DECISION AND ORDER GRANTING DEFENDANT/COUNTERCLAIMANT’S MOTION FOR SUMMARY JUDGMENT ON COUNTERCLAIM - 1

IN THE DISTRICT COURT OF THE SIXTH JUDICIAL DISTRICT

OF THE STATE OF IDAHO, IN AND FOR THE COUNTY OF POWER

CHRISTOPHER M. NEMELKA, Plaintiff / Counterdefendant, vs. HARRY DSCHAAK Defendant / Counterclaimant

Case No. CV-2016-0000389 MEMORANDUM DECISION AND ORDER GRANTING DEFENDANT / COUNTERCLAIMANT’S MOTION FOR SUMMARY JUDGMENT ON COUNTERCLAIM

Defendant/Counterclaimant’s Motion for Summary Judgment on Counterclaim, filed

March 1, 2019, (“Dschaak’s Motion for Summary Judgment on Counterclaim”) was heard by the

Court on March 29, 2019. Plaintiff/Counterdefendant, Christopher M. Nemelka (“Nemelka”) did

not appear at the hearing, nor did Nemelka file any sort of opposition to Dschaak’s Motion for

Summary Judgment on Counterclaim. On December 31, 2018, Nemelka filed a “Notice of Refusal

to Plead or Otherwise Defend Further; Notice Allowing the Court to Enter Default Judgment

Pursuant to Rule 55(a)(2)(B); Notice of Intent to Refile Case and Appeal in Federal Court.”

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Dschaak’s counsel attempted to serve Nemelka with Dschaak’s Motion for Summary

Judgment on Counterclaim, the supporting brief, and other documents in support of Dschaak’s

motion via the email addresses which Nemelka has provided to the Court; however, the emails

were returned with failure notices. Affidavit of Norman G. Reece, Jr., filed March 15, 2019

(“3/15/19 Reece Affidavit”) at 1-3 ¶¶ 3-7. Dschaak’s counsel made several such attempts February

28 – March 1 of 2019. 3/15/19 Reece Affidavit at 2-3 ¶¶ 5-7.

In addition, Dschaak’s counsel sent physical copies of his motion, the supporting brief, and

other supporting documents via UPS to the physical address shown on Nemelka’s filings with the

Court. 3/15/19 Reece Affidavit at 3 ¶¶ 8-9. The UPS package arrived at Nemelka’s address on

March 4, 2019. 3/15/19 Reece Affidavit at 3¶ 8.

The UPS package was returned to Dschaak’s counsel with a letter from Diane Heath, who

claimed she is the owner of the residence which Nemelka used as his physical address on court

filings. 3/15/19 Reece Affidavit at 3 ¶ 9. Ms. Heath claimed she did not know the whereabouts

of Nemelka. 3/15/19 Reece Affidavit at 3 ¶ 9. However, according to a Quit Claim Deed recorded

August 22, 2016, as Utah County, Utah, Instrument No. 79988:2016, Nemelka conveyed all of his

interest in the residence to Ms. Heath and himself on July 27, 2016, as joint tenants with rights of

survivorship. 3/15/19 Reece Affidavit at 3 ¶ 10. Thus, Nemelka still has an interest in the property

he represented to the Court as his physical address. The Court takes judicial notice of Utah County,

Utah, Instrument No. 79988:2016.

Under the Idaho Rules of Civil Procedure (I.R.C.P.), Dschaak was required to serve

Nemelka with Dschaak’s motion, the supporting brief and all supporting documents at least 28

days before the hearing of March 29, 2019. I.R.C.P. 56(b)(2). The record shows Dschaak

attempted service via the iCourt electronic filing on February 28, 2019 and March 1, 2019. Upon

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receiving failure notices Dschaak’s counsel physically mailed the documents on March 1, 2019,

to the physical address Nemelka provided to the Court. Thus, Nemelka was properly served within

the time limits of I.R.C.P. 56(b)(2).

SUMMARY OF RELEVANT PROCEEDINGS

On January 4, 2019, the Court granted Dschaak summary judgment on all causes of

action Nemelka brought against Dschaak. See Minute Entry & Order, filed January 17, 2019

(“MEO”) at 2. The Court also granted summary judgment to Dschaak as to Nemelka’s liability

to Dschaak for intentional infliction of emotional distress. MEO at 2. See also Memorandum

Decision and Order Granting Defendant/Counterclaimant’s Motion for Summary Judgment, filed

February 27, 2019 (“MDO re Summary Judgment”) at 5-18.

At the hearing of July 12, 2018, the court granted Dschaak’s motion to amend Dschaak’s

pleadings. See Minute Entry and Order Regarding Motions, filed July 17, 2018 (“MEO re

Motions”) at 2. Also on July 12th, the Court granted Dschaak leave to amend to assert a claim

for punitive damages. MEO re Motions at 2.

Accordingly, Dschaak filed Defendant/Counterclaimant’s Verified Second Amended

Answer and Counterclaim on August 6, 2018. Under this pleading, Dschaak procured his

summary judgment on Nemelka’s claims against Dschaak and on Dschaak’s emotional distress

claim (liability only) against Nemelka. Following the Court’s entry of its MDO re Summary

Judgment on February 27, 2019, Dschaak filed Dschaak’s Verified Third Amended

Counterclaim on February 28, 2019 (“Verified Amended Counterclaim”), which included a

claim for punitive damages against Nemelka. On March 1, 2019, Dschaak filed the instant

summary judgment motion.

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Dschaak now seeks summary judgment on all claims asserted in his Verified Amended

Counterclaim, including Dschaak’s claim for punitive damages against Nemelka. The Court

concludes there is no genuine issue of material fact precluding summary judgment for Dschaak

on the Verified Amended Counterclaim. As for the evidentiary record, some of the evidence

supporting Dschaak’s motion stems from sanctions imposed by the Court against Nemelka. See

generally Memorandum Decision and Order Granting Defendant’s Motion for Sanctions, filed

March 1, 2019 (“MDO re Sanctions”). The Verified Amended Counterclaim was never opposed

by Nemelka. On summary judgment, it “has the force and effect” of a supporting affidavit.

Drennon v. Idaho State Correctional Institution, 145 Idaho 598, 603, 181 P.3d 524, 529 n.3 (Ct.

App. 2007).

FACTS

The Verified Amended Counterclaim alleges the facts set forth below:

5. In about October of 2004, Nemelka caused to be published a book entitled, “The Sealed Portion – The Final Testament of Jesus Christ.” In the preface of this book, Nemelka claims: (a) that he was visited by Joseph Smith, Jr. (1805-1844), founder of the LDS Church, in the LDS Temple in Salt Lake City, Utah, on or about June 16, 1987; (b) that during this encounter, Joseph Smith, Jr., reached out and touched Nemelka, thereby altering Nemelka’s DNA, which in turn gave Nemelka the ability to use the Urim and Thummim, a device which allows Nemelka to contact highly advanced human beings who reside on another planet; (c) that during this meeting, Joseph Smith, Jr., caused Nemelka to understand that Nemelka was the reincarnated or reborn Hyrum Smith (1800-1844), brother of Joseph Smith, Jr., and commissioned Nemelka to translate the “sealed portion” of the original gold plates from which Joseph Smith, Jr., translated the Book of Mormon; and (d) that Nemelka had indeed translated the “sealed portion” of the Book of Mormon.

6. On January 3, 2005, Dschaak located a website about Nemelka. From that time through March of 2005, Dschaak and Nemelka exchanged various communications, and Dschaak joined an Internet discussion group ([email protected]) in which Nemelka repeatedly made his claims as set forth in Paragraph 5 . . . .

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7. On February 10, 2005, Nemelka represented to Dschaak and other members of The [email protected] that none of Nemelka’s teachings were his own, but that Nemelka received such knowledge through the Urim and Thummim, given to Nemelka due to the nature of Nemelka’s calling as the only mouthpiece for the highly advanced human beings who reside on another planet, and with whom Nemelka was in contact.

8. On February 28, 2005, Nemelka again represented his possession of the gold plates when he told Dschaak and other members of TheSealedPortion@ yahoogroups.com that the gold plates weigh between 70 and 80 pounds.

9. On March 12, 2005, to gain their confidence, Nemelka represented to Dschaak and other members of [email protected] that Nemelka had been visited by at least three extraterrestrials, resurrected beings who once resided on this planet; namely, Joseph Smith, Jr., and two Book of Mormon icons, Moroni and Mahonri. Nemelka claimed this visit took place on a boat just beyond the San Diego harbor in southern California. 10. On March 26-27, 2005, Nemelka began a concerted effort to recruit Dschaak and Dschaak’s family to Nemelka’s movement or organization. As part of that concerted effort, Nemelka reiterated the representations set forth in Paragraphs 5-9 . . . .

11. In early April of 2005, Dschaak and Dschaak’s family traveled to southern California to meet Nemelka.

12. On April 6, 2005, Dschaak and Dschaak’s family attended a press conference in Chula Vista, California, where Nemelka repeated the claims set forth in Paragraph 5 . . . .

13. On April 7, 2005, in San Diego, California, Nemelka showed Dschaak and Dschaak’s family two rocks which Nemelka claimed were the Urim and Thummim – the instrument by which Nemelka communicated with highly advanced human beings who reside on another planet. At this time and place, Nemelka gave Dschaak and Dschaak’s family a detailed demonstration of how the Urim and Thummim allegedly worked, without actually making them work.

14. On April 7, 2005, in San Diego, California, Nemelka represented to Dschaak and Dschaak’s family: (a) that the two rocks were the exact same two rocks that Joseph Smith, Jr., used to translate the Book of Mormon from the gold plates; (b) that the two rocks were thousands of years old, having been preserved by the efforts of honest men dating back to the time of the Tower of Babel; (c) that the two rocks were the very same stones mentioned in the Book of Mormon as having been touched by the finger of God; and (d) that the phrase “touched by the hand of God” was just “religious speak” for what happens when the molecules

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inside the rocks are manipulated by highly advanced beings, enabling them to emit light as related in the Book of Mormon account of the Jaredite barges, and also causing the rocks to be transformed into highly advanced cell phones, video phones, and texting devices for anyone prepared from before the foundation of the world to operate them.

15. On April 7, 2005, in San Diego, California, Nemelka gave Dschaak and Dschaak’s family a detailed demonstration and description of how Nemelka translated the “sealed portion” of the gold plates as well as a portion of the gold plates known as the “Book of Lehi,” or “the lost 116-page manuscript.” At this time and place, Nemelka represented to Dschaak and Dschaak’s family that some of the gold plates were slightly larger than others and had a slightly different hue, and that at least one of the gold plates which Nemelka translated had a slight aberration.

16. By the time Dschaak and Dschaak’s family left California on April 8, 2005, Nemelka had convinced them to join Nemelka’s new online discussion group, [email protected]. Nemelka used Nemelka’s own laptop to enter the Dschaaks’ contact information and set up their individual accounts.

17. As Dschaak continued his affiliation with Nemelka’s movement or organization, Dschaak gave cash to Nemelka and made cash deposits into financial accounts as requested by Nemelka. These cash donations and payments commenced in September of 2005 and continued through October of 2008.

18. During the time when Dschaak made the cash contributions described in Paragraph 17, . . . Dschaak also contributed considerable hours and resources to Nemelka’s cause, in particular, by translating Nemelka’s “sealed portion” into Spanish. During this time, Nemelka repeated his claims to Dschaak, as set forth in Paragraphs 5-9 . . . , in several such communications.

19. On August 31, 2008, Dschaak met Nemelka at the home of Kurt and Monica Smith in Melba, Idaho, where Nemelka again repeated and reaffirmed his claims as set forth in Paragraphs 5-9 . . . , and encouraged Dschaak to continue assisting Nemelka with Dschaak’s time, money and other resources.

20. On or about December 20, 2016, Nemelka posted a video on YouTube declaring that he had made up all the claims as set forth in Paragraphs 5-9 and 12-15 . . . .

21. On or about January 18, 2017, Nemelka published a daily personal journal in which he disclaimed his prior representations as set forth in Paragraphs 5-9 and 12-15 . . . .

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22. In separate podcasts from Orem, Utah, on March 4, 2017, and April 16, 2017, Nemelka admitted his prior claims as set forth in Paragraphs 5-9 and 12-15 . . . were in fact false.

* * * * 39. During the time in which Nemelka set out to deceive and defraud victims such as Dschaak, Nemelka set up several on-line discussion groups which he used to communicate his misrepresentations to Dschaak and others whom he had invited to join in the discussion groups. Nemelka knew that his representations in these on-line discussion groups would be critical, material and highly relevant evidence in civil litigation instituted by Nemelka.

40. Nemelka concealed, destroyed, or otherwise disposed of evidence in these on-line discussion groups, or shut them down entirely. Nemelka’s conduct in this regard violates the criminal law of Utah which prohibits evidence tampering. See Utah Code § 76-8-510.5. Nemelka intentionally and with premeditation undertook this action maliciously, willfully, wrongfully, in conscious disregard of the probable serious harm to Dschaak, and with reckless indifference for the injurious consequences of his actions. Nemelka thus destroyed the evidence knowing it was highly relevant, critical, and material to pending or reasonably foreseeable litigation.

See Verified Amended Counterclaim at 2-5, 8. Additional facts relevant to particular

causes of action are set forth in the Legal Discussion below.

LEGAL DISCUSSION

A party is entitled to summary judgment if “there is no genuine dispute as to any material

fact and the [moving party] is entitled to judgment as a matter of law.” I. R. C. P. 56(a).

“The moving party has the burden of establishing there is no genuine issue of material

fact.” Johnson v. Wal-Mart Stores, Inc., 164 Idaho 53, 56, 423 P.3d 1005, 1008 (2018); Wright v.

Ada County, 160 Idaho 491, 495, 376 P.3d 58, 62 (2016). When the moving party meets that

burden, the non-moving party must submit evidence showing a genuine issue of material fact.

Johnson, 164 Idaho at 56, 423 P.3d at 1008. PHH Mortgage v. Nickerson, 160 Idaho 388, 394,

374 P.3d 551, 557 (2016).

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To meet that burden, the non-moving party must oppose the summary judgment motion

with specific facts that show a genuine issue of material fact. Wright, 160 Idaho at 495, 376 P.3d

at 62. Thus, the non-moving party may not rely on the allegations of its pleadings. Wolford v.

Montee, 161 Idaho 432, 437, 387 P.3d 100, 105 (2016); Eagle Equity Fund, LLC v. Titleone

Corp., 161 Idaho 355, 360, 386 P.3d 496, 501 (2016); PHH Mortgage, 160 Idaho at 393, 374

P.3d at 557. The non-moving party must show a genuine issue of material fact by affidavit

setting forth specific facts. Wolford, 161 Idaho at 437, 387 P.3d at 105. “[A] mere pleading

allegation” is insufficient “against affidavits and other evidentiary materials” to show a genuine

issue of material fact. Eagle Equity Fund, 161 Idaho at 360, 386 P.3d at 501. The non-moving

party “must come forward with evidence by way of affidavit or otherwise which . . . establishes

the existence of a material issue of disputed fact.” PHH Mortgage, 160 Idaho at 394, 374 P.3d at

557.

“A mere scintilla of evidence or only slight doubt as to the facts is not sufficient to create

a genuine issue of material fact for the purposes of summary judgment.” Wright, 160 Idaho at

495, 376 P.3d at 62; Johnson, 164 Idaho at 56, 423 P.3d at 1008; PHH Mortgage, 160 Idaho at

394, 374 P.3d at 557. See also Eagle Equity Fund, 161 Idaho at 360, 386 P.3d at 501; H-D

Transport v. Pogue, 160 Idaho 428, 431, 374 P.3d 591, 594 (2016).

A conclusory assertion “that an issue of material fact exists” is insufficient to withstand

summary judgment. Wright, 160 Idaho at 495, 376 P.3d at 62. Similarly, “[f]limsy or

transparent contentions, theoretical questions of fact which are not genuine, or disputes as to

matters of form do not create genuine issues which will preclude summary judgment. Eagle

Equity Fund, LLC, 161 Idaho at 360, 386 P.3d at 501.

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“When an action will be tried without a jury, the trial court ‘is entitled to arrive at the

most probable inferences based upon the undisputed evidence properly before it and grant the

summary judgment despite the possibility of conflicting inferences.’” Wolford, 161 Idaho at

437, 387 P.3d at 105.

In this case, Dschaak met his initial burden of establishing the absence of a genuine issue

of material fact that would preclude summary judgment. Thus, the burden shifted to Nemelka to

show a genuine issue of material fact. Nemelka offered nothing in opposition, not even a “mere

scintilla” which, of course, would be insufficient. In short, Nemelka rested on his pleadings.

Under Idaho law, that does not meet Nemelka’s burden in opposing summary judgment.

The Court will now analyze the specific allegations of Dschaak’s counterclaim. The

record shows no genuine issue of material fact that would preclude summary judgment for

Dschaak on his counterclaim against Nemelka.

1. Count 1 – Fraud/Intentional Misrepresentation

“To establish fraud or misrepresentation, a party must prove each of the following

elements: (1) a statement or representation of fact; (2) its falsity; (3) its materiality; (4) the

speaker’s knowledge about its falsity or ignorance of its truth; (5) the speaker’s intent that there

be reliance; (6) the hearer’s ignorance of the falsity of the statement; (7) reliance by the hearer;

(8) justifiable reliance; and (9) resultant injury.” Budget Truck Sales, LLC v. Tilley, 163 Idaho

841, 847, 419 P.3d 1139, 1145 (2018). The party asserting a fraud claim must prove its elements

by clear and convincing evidence. Budget Truck Sales, 163 Idaho at 847, 419 P.3d at 1145.

STATEMENT OR REPRESENTATION OF FACT

The statements of fact made by Nemelka to Dschaak are set forth in Paragraphs 5-10, 12-

15, and 18-19 of the Verified Amended Counterclaim. They are statements of fact. Moreover,

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as required by I. R. C. P. 9, the circumstances including time and place are specified in the

Verified Amended Counterclaim. See I.R.C.P. 9(b) and 9(f).

FALSITY

By his own admissions, Nemelka has established that his statements forming the basis of

Dschaak’s fraud claim were indeed false. On April 16, 2017, Nemelka admitted in a pod cast

interview that the statements were false. See Affidavit of Harry Dschaak, filed April 16, 2018

(“04/16/18 Dschaak Affidavit”) at 2 ¶ 3. Nemelka has made similar admissions in other media;

e.g., “All the revelations are bullsh*t, of course, I made em up.” See Sworn Statement of Rick

Alan Ross, filed October 30, 2018 (“Ross Statement”), Exhibit B, p. 5; Exhibit C, p. 7. Nemelka

made such admissions in this litigation as well:

Plaintiff [Nemelka] has published and proclaimed that the “story” about Joseph Smith visiting him in the Salt Lake Mormon temple was a fabricated story invented by those who recruited him in an effort to present the “story” of the Sealed Portion of the Book of Mormon in a way that Mormons would open their minds to read it. The Plaintiff avers that he never met with the resurrected Joseph Smith, Jr. at any time, and has published a detailed explanation as to why the story was told in one of his books, and why he told the story up until the time that he revealed that it was just a “story.”

Plaintiff’s Answers to Defendant’s First Set of Requests for Admissions, dated July 11, 2017,

Response to Request No. 4 (emphasis added) [attached as Exhibit A to Affidavit of Harry

Dschaak re I.R.C.P. 56(d), filed December 7, 2017 (“12/07/17 Dschaak Affidavit”)].

MATERIALITY

A misrepresentation is material if it induces the plaintiff to act in a certain way. Budget

Truck Sales, 163 Idaho at 849, 419 P.3d at 1147. In this case, Nemelka’s false representations to

Dschaak were material, because they induced Dschaak to become affiliated with Nemelka and

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contribute considerable financial and other resources in support of Nemelka. See Paragraphs 6,

11, 12, 16, 17, 18, 19 and 26 of Verified Amended Counterclaim.

KNOWLEDGE OF FALSITY

As noted, Nemelka published and proclaimed a fabricated story and told that story until

he finally revealed it was false. Plaintiff’s Answers to Defendant’s First Set of Requests for

Admissions, dated July 11, 2017, Response to Request No. 4 (emphasis added) [attached as

Exhibit A to 12/07/17 Dschaak Affidavit]. Nemelka has admitted in other media that he knew

his statements were false when he made them. 04/16/18 Dschaak Affidavit at 2 ¶ 3. See also

MDO re Sanctions at 7, 11.

SPEAKER’S INTENT RE RELIANCE

Moreover, the record provides ample evidence that Nemelka made the fraudulent

statements with the intent that his listeners rely on the statements. Nemelka has admitted as

much:

What I did do was I deceived her [Ida Smith] religiously. I played with her religious beliefs and mind, which I do not think a person should do.

* * * * When I deal with people, I am amazed at the ignorance and stupidity of most. People are so easily manipulated and deceived. Knowing this has made me a near master of manipulation. I try only to use this art, to however, to help [sic], Sometimes I do seem terrible at the time, but usually the manipulation works to accomplish that which I intended.

Ross Statement, Exhibit B, p. 5.

HEARER’S IGNORANCE OF STATEMENT’S FALSITY

The Third Amended Counterclaim is verified by Dschaak. Verified Amended

Counterclaim at 11. It “has the force and effect” of a supporting affidavit. Drennan, 145 Idaho

at 603, 181 P.3d at 529 n.3. Dschaak has thus offered sworn testimony to the Court that at the

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time Nemelka’s misrepresentations were made, Dschaak did not know they were false. Verified

Amended Counterclaim at 6 ¶ 29.

RELIANCE BY THE HEARER

Similarly, Dschaak relied on Nemelka’s misrepresentations. Verified Amended

Counterclaim at 6 ¶ 30. He did so “by affiliating with Nemelka’s movement or organization, and

by contributing time, money and other resources in support of Nemelka . . . .” Verified

Amended Counterclaim at 6 ¶ 30.

JUSTIFIABLE RELIANCE

Dschaak contends his reliance upon Nemelka’s statements was justified and reasonable,

“because Nemelka was very convincing in describing his story . . . .” Verified Amended

Counterclaim at 6 ¶ 31. As Nemelka said, “[p]eople are so easily manipulated and deceived” by

Nemelka’s techniques. Ross Statement, Exhibit B, p. 5.

Moreover, Nemelka has submitted no less than 19 affidavits from people who are

supportive of him and who deeply believe in Nemelka’s teachings:

• Affidavit of Monica R. Smith, filed November 5, 2018

• Affidavit of L. Kurt Smith, filed November 5, 2018

• Affidavit of Rodney Jay Vessels, filed November 8, 2018

• Affidavit of Tony Saiki, filed November 8, 2018

• Affidavit of Clifford Bret Powelson, filed November 8, 2018

• Affidavit of Lynnette Cook, filed November 8, 2018

• Affidavit of Jesse Glen Iverson, filed November 8, 2018

• Affidavit of Natalee S. Lance, filed November 9, 2018

• Affidavit of Jay Montgomery Benson, filed November 9, 2018

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• Affidavit of Kendall James Panza, filed November 9, 2018

• Affidavit of Helen Cheryl Patton, filed November 9, 2018

• Affidavit of Julie L. Taggart, filed November 14, 2018

• Affidavit of Monica Ruth Smith, filed November 14, 2018

• Affidavit of Kendra M. Nordes, filed November 20, 2018

• Affidavit of Denton E. Theide, filed November 20, 2018

• Affidavit of Jerry Adam Pittman, filed November 20, 2018

• Affidavit of Jessica Bradford, filed November 20, 2018

• Affidavit of Lesley Bruce DeYoung, filed November 20, 2018

• Affidavit of Sydney R. Theide, filed November 20, 2018

Given this evidence of record, the Court finds that Dschaak’s reliance on Nemelka’s

misrepresentations was not, as a matter of law, unreasonable.

RESULTANT INJURY

Dschaak contributed “time, money and other resources in support of Nemelka . . . .”

Verified Amended Counterclaim at 6 ¶ 30. During his affiliation with Nemelka, Dschaak

donated at least $4,000.00 to financial accounts as requested by Nemelka. See Affidavit of Harry

Dschaak, filed February 28, 2019 (“02/28/19 Dschaak Affidavit”) at 2 ¶¶ 3, 5. Nemelka would

request L. Kurt Smith to have Dschaak come up with the money, which either L. Kurt Smith or

Monica Smith would deposit into their account. See 02/28/19 Dschaak Affidavit at 2 ¶ 6. Thus,

the evidence of record clearly shows fraud on the part of Nemelka which resulted in financial

damages to Dschaak.

The record establishes each of the nine elements of fraud by clear and convincing

evidence. Nemelka made no opposition to Dschaak’s motion for summary judgment on

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Dschaak’s fraud claim. Therefore, Dschaak is entitled to summary judgment on his fraud claim

against Nemelka.

2. Count 2 – Intentional Infliction of Emotional Distress

The Court granted Dschaak summary judgment as to Nemelka’s liability to Dschaak for

intentional infliction of emotional distress. See MDO re Summary Judgment at 18. Dschaak

submitted a comprehensive billing from his counselor, LeeAnn A. Turpin. See Affidavit of

LeeAnn A. Turpin, filed February 28, 2019 (“02/28/19 Turpin Affidavit”) at 2 ¶ 4, Exhibit C.

This shows payments from Dschaak to Center Counseling which total $1,105.00. 02/28/19

Turpin Affidavit, Exhibit C. Thus, the Court grants summary judgment to Dschaak as to his

emotional distress claim and awards $1,105.00 to Dschaak as damages for this count.

3. Count 3 – Spoliation of Evidence

Dschaak’s Verified Amended Counterclaim sets forth the factual basis for this count:

39. During the time in which Nemelka set out to deceive and defraud victims such as Dschaak, Nemelka set up several on-line discussion groups which he used to communicate his misrepresentations to Dschaak and others whom he had invited to join in the discussion groups. Nemelka knew that his representations in these on-line discussion groups would be critical, material and highly relevant evidence in civil litigation instituted by Nemelka. 40. Nemelka concealed, destroyed, or otherwise disposed of evidence in these on-line discussion groups, or shut them down entirely. Nemelka’s conduct in this regard violates the criminal law of Utah which prohibits evidence tampering. See Utah Code § 76-8-510.5. Nemelka intentionally and with premeditation undertook this action maliciously, willfully, wrongfully, in conscious disregard of the probable serious harm to Dschaak, and with reckless indifference for the injurious consequences of his actions. Nemelka thus destroyed the evidence knowing it was highly relevant, critical, and material to pending or reasonably foreseeable litigation.

Verified Amended Counterclaim at 8 ¶¶ 39, 40. Nemelka has admitted “that he has maintained

an online Daily Journal (off and on) since August of 2010, and that it is blocked from

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comments.” See Plaintiff’s Answers to Defendant’s Second Set of Requests for Admission,

dated November 6, 2017, Response to Request for Admission No. 33 [attached as Exhibit B to

Affidavit of Norman G. Reece, Jr., filed June 8, 2018 (“06/08/18 Reece Affidavit”).] Finally, this

Court has sanctioned Nemelka by ruling that, for purposes of this litigation, Nemelka has

committed spoliation of evidence. MDO re Sanctions at 8, 9. Therefore, there is no genuine

issue of material fact as to Nemelka’s spoliation of evidence. Dschaak is entitled to summary

judgment on his count for spoliation of evidence.

4. Count 4 – Civil Racketeering

Under Idaho law:

A person who sustains injury to his person, business or property by a pattern of racketeering activity may file an action in the district court for the recovery of three (3) times the actual damages proved and the cost of the suit, including reasonable attorney’s fees.

I.C. § 18-7805(a). Section 18-7803 of the Idaho Code defines “racketeering” to include fraud.

I.C. § 18-7803(a)(10).

The same statute defines “pattern of racketeering activity” as:

engaging in at least two (2) incidents of racketeering conduct that have the same or similar intents, results, accomplices, victims or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated incidents, provided . . . that the last of such incidents occurred within five (5) years after a prior incident of racketeering conduct.

I.C. § 18-7803(d). One who commits predicate acts and uses proceeds from those acts to

establish or operate a business engages in a pattern of racketeering activity. State v. Hoyle, 140

Idaho 679, 687, 99 P.3d 1069, 1077 (2004).

To succeed in establishing a racketeering claim, a plaintiff must show a pattern of

racketeering activity connected to an “enterprise” which means:

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any sole proprietorship, partnership, corporation, business, labor union, association or other legal entity or any group of individuals associated in fact although not a legal entity, and includes illicit as well as licit entities . . . .

I.C. § 18-7803(c); see also Mannos v. Moss, 143 Idaho 927, 935-36, 155 P.3d 1166, 1174-75

(2007). Three elements are necessary to show a racketeering enterprise. “Those elements are (1)

a common or shared purpose; (2) continuity of structure and personnel; and (3) an ascertainable

structure distinct from the inherent conduct of the pattern of racketeering activity itself.” State v.

Hansen, 125 Idaho 927, 930, 877 P.2d 898, 901 (1994).

The record establishes Nemelka’s liability for racketeering. Therefore, Dschaak is

entitled to summary judgment on Dschaak’s racketeering claim.

PATTERN OF RACKETEERING ACTIVITY

Two or more incidents within five (5) years. The Verified Amended Counterclaim sets

forth at least two (2) incidents of racketeering conduct within a span of five years. The recital of

facts indicates Dschaak’s contacts with Nemelka commenced in January of 2005, and outlines

several fraudulent representations Nemelka knowingly made to Dschaak in 2005 alone. Verified

Amended Counterclaim at 2-4 ¶¶ 5-16. Dschaak made cash donations and payments from

September 2005 through October 2008. Verified Amended Counterclaim at 4 ¶ 17; 02/28/19

Dschaak Affidavit at 1 ¶ 2. From September 2005 through October 2008, Nemelka continued to

make his fraudulent representations to Dschaak. Verified Amended Counterclaim at 5 ¶ 18.

Later, to conceal his misdeeds, Nemelka committed spoliation of evidence. Verified Amended

Counterclaim at 8 ¶¶ 39-40.

Similar intents, results, accomplices, victims, methods of commission. Dschaak has

testified under oath that the contributions he made to Nemelka involved a similar pattern.

“Nemelka would request financial assistance and would designate a method by which the funds

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should be provided to himself indirectly.” 02/28/19 Dschaak Affidavit at 2 ¶ 6. In response,

Dschaak would make whatever financial contributions his circumstances allowed at the time.

02/28/19 Dschaak Affidavit at 2 ¶ 6. Pursuant to the Court’s sanctions order, “the record

establishes that, from December 2005 through December 2009, L. Kurt Smith and/or Monica

Smith, or their agents acting on their behalf, transferred money to Nemelka or to the MWAW

[Marvelous Work and Wonder] through certain financial institutions in which Nemelka or the

Smiths had an interest.” MDO re Sanctions at 5.

Thus, Dschaak has established a pattern of racketeering activity via several predicate acts

within five years. The racketeering activity had similar intents and results (i.e., financial

contributions from Dschaak) and utilized the same accomplices (Nemelka, the Smiths) and

similar methods of commission (request for deposit, followed by indirect payment to Nemelka).

ENTERPRISE

A common or shared purpose. The record in this case “establishes that certain

individuals, in a common purpose to further Nemelka’s fraudulent activities, instructed Nemelka

to sue Dschaak and others, alleging that Nemelka’s claims were true. MDO re Sanctions at 6.

Prior to that time, during the events in question, Nemelka would request financial assistance

from Dschaak and others and outline how the payments were to be made indirectly to Nemelka.

02/28/19 Dschaak Affidavit at 2 ¶ 6. As noted, “the record establishes that, from December

2005 through December 2009, L. Kurt Smith and/or Monica Smith, or their agents acting on

their behalf, transferred money to Nemelka or to the MWAW [Marvelous Work and Wonder]

through certain financial institutions in which Nemelka or the Smiths had an interest.” MDO re

Sanctions at 5.

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Continuity of structure and personnel. The pattern of racketeering activity involved the

same actors – Nemelka and the Smiths, or other agents acting on their behalf. The unidentified

individuals directed Nemelka’s activities in a common purpose to defraud Dschaak. MDO re

Sanctions at 6.

Continuity of structure distinct from inherent conduct of racketeering activity. “[T]he

record establishes that the MWAW Trust was used by Nemelka as a depository for monies

received from Nemelka’s fraudulent activities, that such monies were used to further the business

of MWAW, and that MWAW was used as a cover for Nemelka’s fraudulent activities.” MDO re

Sanctions at 11.

Thus, Dschaak has shown a racketeering enterprise. The record establishes several

individuals working in concert with Nemelka to further Nemelka’s fraudulent schemes. Monies

derived from the racketeering were deposited into the MWAW Trust, used as a front for the

racketeering enterprise.

Dschaak having established the elements of racketeering, he is entitled to an award of

three times his damages, plus attorney fees and court costs. I.C. § 18-7805(a). Dschaak has

shown no less than $4,000.00 in damages. 02/28/19 Dschaak Affidavit at 2 ¶¶ 3, 5. In addition,

the Court has awarded Dschaak $1,105.00 to Dschaak for damages on Dschaak’s claim for

intentional infliction of emotional distress. Therefore, the Court grants Dschaak summary

judgment on Dschaak’s RICO claim and awards Dschaak $15,315.00 in damages against

Nemelka. Attorney fees and court costs will be awarded after counsel for Dschaak submits a

memorandum of costs and fees, pursuant to I.R.C.P. 54.

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5. Count 5 – Punitive Damages

A litigant is entitled to punitive damages upon clear and convincing proof of “oppressive,

fraudulent, malicious or outrageous conduct by the party against whom the claim for punitive

damages is asserted.” I.C. § 6-1604(1). The Verified Amended Counterclaim asserts that

Nemelka’s conduct “was oppressive, fraudulent, malicious and/or outrageous,” warranting the

imposition of punitive damages. Verified Amended Counterclaim at 9 ¶ 50. The Court finds

clear and convincing evidence of such conduct on the part of Nemelka.

As noted, the record establishes fraudulent conduct by Nemelka. See generally pages 9-

14, supra. Nemelka himself admits he fabricated the story of his being “called” to translate the

Sealed Portion of the Book of Mormon in an effort to deceive an LDS audience. Plaintiff’s

Answers to Defendant’s First Set of Requests for Admissions, dated July 11, 2017, Response to

Request No. 4 [attached as Exhibit A to 12/07/17 Dschaak Affidavit]. Moreover, Nemelka has

commented on how “amazed” he is at the “ignorance and stupidity” of his victims who “are so

easily manipulated and deceived.” Ross Statement, Exhibit B, p. 5. Given Nemelka’s motives

and mindset, his conduct was not only fraudulent; it was outrageous as well.

In spite of Nemelka’s knowing his claims were false, Nemelka has admitted that he

institutes defamation lawsuits against individuals, asserting that his claims are actually true. See

Plaintiff’s Answers to Defendant’s Second Set of Requests for Admission, Response to Request

for Admission No. 74 [attached as Exhibit B to 06/08/18 Reece Affidavit]. This is another

example of outrageous conduct. Putting his victims such as Dschaak to the considerable expense

of litigation brought in bad faith is also oppressive and malicious.

Once Nemelka commences frivolous litigation, he and his attorney then resort to witness

tampering and spoliation of evidence, as was the case here. See Verified Amended Counterclaim

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at 8 ¶¶ 39-40. This hampers his victims’ ability to defend against liability. See Verified

Amended Counterclaim at 8 ¶ 41. A prime example in this case involves Dschaak’s witness,

Robert G. Pace. Mr. Pace was disclosed as a witness for Dschaak in Defendant’s Disclosure of

Witnesses, including “Expert Witnesses,” filed October 3, 2017. Nemelka and his attorney then

procured an injunction against Mr. Pace, precluding Mr. Pace from offering testimony in any

litigation. See Order and Permanent Injunction entered in Christopher M. Nemelka v. Robert G.

Pace, case no. 170901210 LB, Third Judicial District in and for Salt Lake County, State of Utah

[attached as Exhibit B to “Appellant’s Response Brief to Order Conditionally Dismissing

Plaintiff’s Appeal,” filed herein on December 2, 2018]. See also MDO re Sanctions at 8.

Nemelka has also admitted to blocking access to online materials which could contain evidence

helpful to those he sues. See Plaintiff’s Answers to Defendant’s Second Set of Requests for

Admission, Response to Request for Admission No. 33 [attached as Exhibit B to 06/08/18 Reece

Affidavit]. See also MDO re Sanctions at 9. Clearly, committing fraud, frivolously suing his

fraud victims for defamation, then tampering with witnesses and evidence helpful to his victims’

defense is oppressive and outrageous. Nemelka’s characterization of his victims as ignorant,

stupid and easy to manipulate is clear evidence of Nemelka’s malice.

Finally, the Court has already found Nemelka liable for intentional infliction of emotional

distress. MDO re Summary Judgment at 18. Given the nature of this cause of action, its

elements support liability for punitive damages.

Thus, the record is replete with clear and convincing evidence of conduct warranting

punitive damages. Nemelka’s conduct far exceeds the bounds of common decency and honor.

Hence, Dschaak is entitled to summary judgment on Nemelka’s liability for punitive damages.

Upon Dschaak’s submission of evidence probative of the amount the Court should award as

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punitive damages, the Court will determine an appropriate amount of punitive damages to be

assessed against Nemelka.

CONCLUSION

Dschaak is entitled to summary judgment on all counts of the Verified Amended

Counterclaim. There is no genuine issue as to any material fact, and Dschaak is entitled to

judgment as a matter of law on the counts for fraud, intentional infliction of emotional distress,

spoliation of evidence, racketeering, and punitive damages.

DATED this _____ day of May, 2019.

_________________________________________ HON. ROBERT C. NAFTZ District Judge

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CLERK’S CERTIFICATE OF SERVICE

I hereby certify that I am a duly authorized clerk of the court and that on this _____day of May, 2019, I served a true and correct copy of the foregoing MEMORANDUM DECISION AND ORDER GRANTING DEFENDANT/COUNTERCLAIMANT’S MOTION FOR SUMMARY JUDGMENT ON COUNTERCLAIM by iCourt email to: Christopher M. Nemelka 224 W. Garden Park Orem, UT 84057 Email: [email protected] Norman G. Reece, Jr. NORMAN G. REECE, P.C. 445 W. Chubbuck Road, Suite D Chubbuck, ID 83202 Email: [email protected]

IN THE DISTRICT COURT OF THE SIXTH JUDICIAL DISTRICT ... · memorandum decision and order granting...

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