Sergey Porada, Yelena Kurdyumova v. Terry I. Monroe, Marc L. Kruger ( 2014 )

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2012).
STATE OF MINNESOTA
IN COURT OF APPEALS
A13-1615
Sergey Porada,
Appellant,
Yelena Kurdyumova,
Appellant,
vs.
Terry I. Monroe,
Defendant,
Marc L. Kruger,
Respondent.
Filed July 28, 2014
Affirmed
Smith, Judge
Hennepin County District Court
File No. 27-CV-12-19004
Sergey Porada, Minneapolis, Minnesota (pro se appellant)
Yelena Kurdyumova, Minneapolis, Minnesota (pro se appellant)
Bradley R. Armstrong, Gurstel Chargo P.A., Golden Valley, Minnesota (for respondent)
Considered and decided by Hudson, Presiding Judge; Bjorkman, Judge; and
Smith, Judge.
UNPUBLISHED OPINION
SMITH, Judge
We affirm the district court’s dismissal of appellants’ claims because they fail to
state any legally sufficient bases for the requested relief.
FACTS
In their complaints, appellants Sergey Porada and Yelena Kurdyumova asserted
the following facts:1 In 2009, Porada and Kurdyumova purchased a condominium in
Brooklyn Park. The condominium was part of the Strawberry Commons Condominium
association, and Porada and Kurdyumova immediately began paying dues to the
association at a rate of $270 per month. Respondent Terry Monroe, acting as president of
the board of directors for the association, informed Porada and Kurdyumova that they
were required to pay an additional $24 per month beginning in 2009, $69 per month
beginning in 2011, and $79 per month beginning in 2012. From 2009 to 2012, Porada
and Kurdyumova usually submitted monthly payments of only $270, resulting in an
accumulated balance of $1221.43 on their association account.
Acting on the advice of respondent-attorney Marc Kruger, the association
authorized Monroe to file a lien against Porada and Kurdyumova’s condominium.
1
Despite repeated requests from the district court that Porada and Kurdyumova provide
substantiation of many of their claims, the record remains devoid of documentation
supporting most of the facts alleged in their complaints. We nonetheless assume that the
facts alleged in the complaints are true for purposes of this appeal. See Sipe v. STS Mfg.,
Inc., 834 N.W.2d 683, 686 (Minn. 2013) (stating that an appellate court assumes that the
facts alleged in the complaint are true when it reviews a district court’s grant of a motion
to dismiss for failure to state a claim upon which relief could be granted).
2
Monroe notified Porada and Kurdyumova that a lien of $1,221.43 would be filed. The
lien was recorded on May 2, 2012.
Monroe empowered Kruger to pursue foreclosure on April 26, 2012. Porada and
Kurdyumova’s condominium was sold at a sheriff’s sale in July 2012.
In September 2012, Porada and Kurdyumova sued Monroe and Kruger in the
district court, alleging violations of Minn. Stat. §§ 515B.3-102(a)(2), (11) (2010) (powers
of unit owners’ associations); 515B.3-115(a), (c) (2010) (association assessments for
common expenses); 515B.3-116(g), (h)(3) (2010) (lien for assessments); 515A.3-115(a),
(g) (2010) (lien for assessments); 581.03 (2010) (court judgment required in foreclosure
by action); 609.645 (2010) (fraudulent statements relating to securities); 609.64 (2010)
(recording of forged instrument); 609.749, subds. 2, 3.1 (2010) (stalking); 609.903, subd.
1 (2010) (racketeering); 609.902, subds. 3, 4 (2010) (definitions relating to racketeering);
609.52, subd. 2(3)(i), (4), (5)(iii) (2010) (theft); and 609.765 (2010) (criminal
defamation). They also alleged violations of the federal Fair Debt Collection Practices
Act, the 14th Amendment to the United States Constitution, and the Minnesota Rules of
Professional Conduct.
In October 2012, Kruger moved to dismiss the complaints for failure to state a
claim upon which relief could be granted. The district court granted the motions in
February 2013. Porada and Kurdyumova appealed, and this court dismissed the appeal
without prejudice because their claims against Monroe were still outstanding. Porada v.
Monroe, No. A13-0409 (Minn. App. Mar. 27, 2013) (order op.).
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Monroe moved to consolidate and dismiss the complaints in April 2013. The
district court granted his motions on June 26, 2013.
DECISION
We review a district court’s dismissal of a complaint for failure to state a claim
de novo, considering and accepting as true all facts alleged in the complaint. Sipe, 834
N.W.2d at 686. “[T]he question before this court is whether the complaint sets forth a
legally sufficient claim for relief.” Hebert v. City of Fifty Lakes, 744 N.W.2d 226, 229
(Minn. 2008).
Porada and Kurdyumova’s claims fall into five categories: (1) violations of civil
statutes; (2) violations of criminal statutes; (3) violations of “lawyers ethics” and the
Minnesota Rules of Professional Conduct; (4) violations of the federal Fair Debt
Collection Practices Act; and (5) a violation of the 14th Amendment to the United States
Constitution. On appeal, they add allegations that the district court violated the Code of
Judicial Conduct by acting out of bias based on their national origin. We address each of
these categories in turn.
A. Civil Statutes
“A statute does not give rise to a civil cause of action unless the language of the
statute is explicit or it can be determined by clear implication.” Becker v. Mayo
Foundation, 737 N.W.2d 200, 207 (Minn. 2007). A cause of action based on the
violation of a statute exists when an “underlying common law cause of action” also
exists. Bruegger v. Faribault Cnty. Sheriff’s Dep’t, 497 N.W.2d 260, 262 (Minn. 1993).
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We review the interpretation of statutes de novo. Swenson v. Nickaboine, 793 N.W.2d
738, 741 (Minn. 2011).
None of the civil statutes cited by Porada and Kurdyumova explicitly or implicitly
provides for civil causes of action. Article 3 of chapter 515B, which encompasses all but
two of the statutory provisions that Porada and Kurdyumova cite, governs the operation
of unit owners’ associations established to administer condominium communities. See
Minn. Stat. § 515B.3-101 (2010) (describing the scope of chapter 515B). Nothing in the
article states that parties aggrieved by purported defects in the operation of unit owners’
associations can sue for damages or, in particular, that they may sue individuals rather
than the association. Similarly, no private cause of action is authorized by article 3 of
chapter 515A, governing management of condominiums, on which Porada and
Kurdyumova base a claim.
Porada and Kurdyumova’s claims based on Minn. Stat. § 581.03 suffers from the
same defect. Chapter 581, which governs the foreclosure-by-action process, contains no
provision explicitly or implicitly authorizing a private right of action. It also does not
apply to the association’s foreclosure on Porada and Kurdyumova’s condominium
because it was a foreclosure by advertisement. Compare Minn. Stat. § 581.03 (requiring
entry of judgment before sheriff’s sale in foreclosure by action), with Minn. Stat.
§ 580.02 (2010) (specifying prerequisites for a foreclosure by advertisement that do not
include entry of court judgment). Rather than authorizing suit for damages as a remedy
for improper foreclosure by advertisement, chapter 580 authorizes a suit to invalidate the
sheriff’s sale. See Minn. Stat. § 580.20 (2010). Porada and Kurdyumova’s complaints
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did not seek to invalidate the sheriff’s sale, so their suit is not authorized by either chapter
581 or chapter 580.
Porada and Kurdyumova assert that no Minnesota law exists specifically barring a
private cause of action and that the purported “English Law” principle that “everything
which is not forbidden is allowed” authorizes their causes of action. Porada and
Kurdyumova did not present this argument to the district court, and it is therefore waived.
See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988). Porada and Kurdyumova’s
implicit argument that their causes of action exist in common law is also waived because
they cite no authority supporting either the existence or scope of the common-law
principle they claim or its applicability to Minnesota law. See Schoepke v. Alexander
Smith & Sons Carpet Co., 290 Minn. 518, 519-20, 187 N.W.2d 133, 135 (1971) (“An
assignment of error based on mere assertion and not supported by any argument or
authorities in appellant's brief is waived and will not be considered on appeal unless
prejudicial error is obvious on mere inspection.”). Therefore, the district court did not err
by concluding that none of the civil statutes cited by Porada and Kurdyumova authorizes
a private right of action for damages.
B. Criminal Statutes
“A criminal statute does not give rise to a civil cause of action unless the statute
expressly or by clear implication so provides.” Summers v. R&D Agency, Inc., 593
N.W.2d 241, 245 (Minn. App. 1999). None of the statutes cited by Porada and
Kurdyumova explicitly authorizes private rights of action. The district court did not err
by dismissing the claims grounded in criminal statutes.
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C. Rules of Professional Conduct and “Lawyer’s Ethics”
Commentary accompanying the Minnesota Rules of Professional Conduct notes
that “[t]hey are not designed to be a basis for civil liability.” Minn. R. Prof. Conduct
preamble cmt. 20. “The import of [this] comment . . . is that an attorney’s violation of
the Rules of Professional Conduct does not give rise to a private cause of action against
an attorney.” In re Disciplinary Action Against Montez, 812 N.W.2d 58, 66-67 (Minn.
2012). To the degree that Porada and Kurdyumova base their causes of action on
purported violations of the Rules of Professional Conduct, the district court did not err by
determining that those rules do not authorize a private causes of action.
To the degree that Porada and Kurdyumova base their cause of action on
allegations of attorney malpractice, they also do not allege a legally sufficient claim for
relief. The existence of an attorney-client relationship is essential to any malpractice
claim against an attorney. TJD Dissolution Corp. v. Savoie Supply Co., 460 N.W.2d 59,
62 (Minn. App. 1990). A party alleging malpractice may claim that an attorney-client
relationship existed based on either a contract for representation or on the party’s reliance
on the attorney’s legal advice “in circumstances in which a reasonable person would rely
on such advice.” Id. (quotation omitted). Porada and Kurdyumova allege neither type of
attorney-client relationship. To the contrary, their complaints indicate they understood
that attorney Kruger represented the association; that their relationship with Kruger was
hostile; and that they never sought, received, or relied upon legal advice from him.
Accordingly, Porada and Kurdyumova did not state a legally sufficient claim for relief
based on attorney malpractice.
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D. Fair Debt Collections Practices Act Violations
The district court cited Gray v. Four Oak Court Ass’n, Inc., 580 F. Supp. 2d 883,
886 (D. Minn. 2008), to support the conclusion that “a lien foreclosure[] does not
constitute the ‘collection of any debt’” as defined by the Fair Debt Collections Practices
Act (FDCPA). Gray does support that conclusion, but it was a federal district court
opinion lacking precedential value. See Camreta v. Greene, ___ U.S. ___, ___ n.7, 131
S. Ct. 2020, 2033 n.7 (2011) (stating that decisions of federal district courts are not
binding precedent). To the extent that the district court’s reliance upon Gray constitutes
its independent interpretation of a federal statute, we review its determination de novo.
See, e.g., Citizens for a Balanced City v. Plymouth Congregational Church, 672 N.W.2d
13, 19 (Minn. App. 2003).
Although Gray cites two other federal district court opinions holding that lien
foreclosures are not debt collections activities under the FDCPA, at least three federal
circuit courts have concluded the opposite, reasoning that lien foreclosure is debt
collection because its purpose is to recover an amount owed on an underlying debt. See,
e.g., Glazer v. Chase Home Fin. LLC, 704 F.3d 453, 461 (6th Cir. 2013); Wilson v.
Draper & Goldberg, P.L.L.C., 443 F.3d 373, 376 (4th Cir. 2006); Piper v. Portnoff Law
Assocs., 396 F.3d 227, 234 (3d Cir. 2005). Thus, because the weight of persuasive
authority lies heavily in favor of the conclusion that a lien foreclosure constitutes a debt
collection under the FDCPA, the district court’s determination that lien foreclosures are
not debt collections under the FDCPA was erroneous.
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We nevertheless affirm the district court’s dismissal of Porada and Kurdyumova’s
FDCPA claims because they do not seek relief in any form authorized by the statute. The
FDCPA allows parties aggrieved by unfair debt collection tactics to sue in district court
for damages. 15 U.S.C. § 1692k(a) (2006); see also 15 U.S.C. § 1692k(d) (2006)
(allowing exercise of jurisdiction by state courts). Although Porada and Kurdyumova
demanded damages for their other claims, they demanded only Kruger’s disbarment as
redress for their FDCPA claims. Such relief is not authorized by the FDCPA and is not
within the powers of the district court. See In re Proposed Petition to Recall Hatch, 628
N.W.2d 125, 128 (Minn. 2001) (holding that the supreme court has the “exclusive
authority to discipline attorneys”). Accordingly, we hold that, because they requested
disbarment instead of damages for their FDCPA claims, Porada and Kurdyumova failed
to state a claim upon which the relief they requested could be granted, and dismissal was
proper notwithstanding the district court’s erroneous interpretation of the FDCPA. See,
e.g., Alexander v. Minn. Vikings Football Club LLC, 649 N.W.2d 464, 467-68 (Minn.
App. 2002) (affirming dismissal for failure to state a claim upon which relief could be
granted where relief requested was beyond the authority of the district court), review
denied (Minn. Oct. 29, 2002).
E. 14th Amendment
Porada and Kurdyumova do not address their 14th Amendment claims on appeal.
The claims are therefore waived, and we decline to address them further. See Melina v.
Chaplin, 327 N.W.2d 19, 20 (Minn. 1982) (holding that issues not briefed on appeal are
waived).
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F. Code of Judicial Conduct
Porada and Kurdyumova assert that the district court committed numerous
violations of the Code of Judicial Conduct, specifically alleging bias based on their
national origin and denial of their constitutional right to a jury trial. As evidence of bias,
they point to the district court’s instructions that Porada speak through an interpreter, its
rejection of his request that a different interpreter be appointed, and its adverse
substantive rulings.
Claims of judicial bias are outside the scope of appellate review unless first raised
in the district court. Braith v. Fischer, 632 N.W.2d 716, 725 (Minn. App. 2001), review
denied (Minn. Oct. 24, 2001). Minn. R. Civ. P. 63.03 provides for motions to remove
allegedly biased judges. Porada and Kurdyumova did not file a motion to remove the
district court judge. We therefore decline to address the issue.
Affirmed.
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