The Trial Lawyers College v. Gerry Spences Trial Lawyers College at Thunderhead Ranch et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF WYOMING
THE TRIAL LAWYERS COLLEGE,
a nonprofit corporation,
Plaintiff, Counterclaim Defendant,
v. 	Case No. 1:20-cv-80-JMC
GERRY SPENCES TRIAL LAWYERS
COLLEGE AT THUNDERHEAD RANCH,
a nonprofit corporation,
THE GERRY SPENCE METHOD AT
THUNDERHEAD RANCH INC,
a nonprofit corporation, and
JOHN ZELBST,
JOSEPH H. LOW,
KENT SPENCE, and
DANIEL AMBROSE, individuals,
Defendants,
JOHN JOYCE,
Defendant, Counterclaim Plaintiff,
GERALD L. SPENCE, and
REX PARRIS, individuals,
Defendants, Counterclaim Plaintiffs, Third-Party Plaintiffs,
v.
JOHN SLOAN,
ANNE VALENTINE,
JAMES R. CLARY, JR,
MILTON GRIMES,
MAREN CHALOUPKA,
DANA COLE, individuals,
Third-Party Defendants,
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JOHN JOYCE,
Third-Party Plaintiff,
v.
F WARRIORS,
Third-Party Defendant.
MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF AND THIRD-
PARTY DEFENDANT F WARRIORS’ MOTION TO DISMISS COUNTERCLAIMS
On October 26, 2021, Plaintiff The Trial Lawyers College filed a Third Amended Verified
Complaint (Doc. 238). Defendant John Joyce filed an Answer and Third-Party Complaint with
counterclaims (Doc. 341). Plaintiff then moved to dismiss the counterclaims with prejudice under
Federal Rule of Civil Procedure 12(b)(6) (Doc. 363). 	And Third-Party Defendant F Warriors
moved to join in and adopt Plaintiff’s motion to dismiss (Doc. 367). Defendant Joyce responded
to Plaintiff’s motion and Plaintiff has since replied (Docs. 369, 370). For the reasons stated below,
the Court grants Plaintiff’s Motion to Dismiss Counterclaims and Third-Party Defendant F
Warriors’ Motion to Join.
I. 	Background
Plaintiff alleges the following facts in its Complaint. Plaintiff is a nonprofit corporation
that provides training programs to lawyers. Defendant Gerald L. Spence founded Plaintiff in 1993
and remained affiliated with it. 	Defendants John Zelbst, Rex Parris, Joseph H. Low, and Kent
Spence have also affiliated with Plaintiff since the 1990s. Plaintiff began operating in 1994 at the
Thunderhead Ranch in Dubois, Wyoming. In 2012, Plaintiff applied for and received two federally
registered trademarks. The first, Registration Number 4,197,908 (the ‘908 Mark) is a trademark
for “TRIAL LAWYERS COLLEGE” in standard characters, without claim to any particular font,
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style, size, or color. The second, Registration Number 4,198,054 (the ‘054 Mark) is a trademark
for a stylized design of a cloud with a lightning bolt.
Plaintiff sued in federal district court alleging Defendants, including Defendant Joyce,
violated the Lanham Act, 15 U.S.C. §§ 1114, et seq., and 15 U.S.C. § 1125(a). Plaintiff alleges
Defendants infringed its federally registered trademarks and engaged in unfair competition, false
designation of origin, passing off, and false advertising related to Plaintiff’s federally registered
trademarks. 	Plaintiff also alleges Defendants violated the Defend Trade Secrets Act, 18 U.S.C.
§ 1836, and Wyo. Stat. Ann. § 40-24-101, et seq., by accessing and misusing Plaintiff’s
confidential and proprietary computer files. Plaintiff further alleges Defendant the Gerry Spence
Method’s agents infringed on Plaintiff’s copyrighted materials, including a trial skills outline.
And, finally, Plaintiff alleges Defendants conspired to engage in this tortious behavior.
Defendant Joyce filed counterclaims against Plaintiff and third-party claims against
Plaintiff’s organization, Third-Party Defendant F Warriors. 	In his combined Complaint,
Defendant Joyce, one of Plaintiff’s graduates, alleges that Plaintiff and Third-Party Defendant F
Warriors defrauded Plaintiff’s graduates by asking them to donate to maintain Thunderhead
Ranch, Defendant Gerald Spence’s property that he donated to serve Plaintiff. 	But rather than
using graduates’ donations to maintain the Ranch, Plaintiff and Third-Party Defendant F Warriors
used the donations to “fund the lavish lifestyles of several [of Plaintiff’s] insiders and engage in
other frivolous spending, including the funding of this lawsuit.” Defendant Joyce brings six claims
against Plaintiff and Third-Party Defendant F Warriors based on this alleged misuse of funds.
In Count I of Defendant Joyce’s Complaint, he alleges that Plaintiff and Third-Party
Defendant F Warriors committed common law fraud by taking $12,000 from him for the advertised
purpose of maintaining the Ranch while knowing they were deceiving Defendant Joyce and other
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graduates about how they would spend the money. In Counts II and III, Defendant Joyce alleges
that Plaintiff and Third-Party Defendant F Warriors perpetrated this plot through mail fraud and
wire fraud respectively, using mail and e-mail to solicit donations in violation of 18 U.S.C.
§§ 1341, 1343. The remaining three claims accuse Plaintiff and Third-Party Defendant F Warriors
of colluding to commit this alleged fraud. 	In Count IV, Defendant Joyce alleges Plaintiff and
Third-Party Defendant F Warriors engaged in a pattern of racketeering activity that affected
interstate commerce in violation of 18 U.S.C. § 1962. And in Count V, he alleges Plaintiff and
Third-Party Defendant F Warriors conspired to unlawfully defraud Plaintiff’s graduates. Finally,
in Count VI, Defendant Joyce combines these last two counts to accuse Plaintiff and Third-Party
Defendant F Warriors of conspiring to engage in a pattern of racketeering activity together again
in violation of 18 U.S.C. § 1962.
Plaintiff seeks to dismiss the counterclaims on several grounds. First, it claims Defendant
Joyce missed the scheduling order’s deadline to file counterclaims and so the Court should dismiss
them on that procedural ground without considering the merits. 	But if the Court does consider
each claim on its merits, Plaintiff also argues that Defendant Joyce failed to state any claims upon
which the Court can grant relief based on his pleadings. 	Finally, Plaintiff argues, the statute of
limitations for fraud actions in Wyoming bars any conduct Defendant Joyce seeks relief from that
occurred before April 12, 2018. Third-Party Defendant F Warriors asks the Court to allow it to
join in Plaintiff’s motion to dismiss because Defendant Joyce’s arguments against Plaintiff apply
equally to Third-Party Defendant. Defendant Joyce responded to Plaintiff’s motion by claiming
he had sufficiently alleged each claim.
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II. 	Applicable Law
In considering a motion to dismiss for failure to state a claim under Rule 12(b)(6), the Court
must accept as true all facts in the pleadings. Kan. Penn Gaming, LLC v. Collins, 656 F.3d 1210,
1214 (10th Cir. 2011). Although Rule 8’s pleading standard “does not require ‘detailed factual
allegations,’ 	it 	demands 	more 	than 	an 	unadorned, 	the-defendant-unlawfully-harmed-me
accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007)). Thus, a complaint does not suffice “if it tenders ‘naked assertions’ devoid
of ‘further factual enhancement.’” Id. (quoting Twombly, 550 U.S. at 557). It follows, then, that
“[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555). “While legal conclusions can
provide the framework of a complaint, they must be supported by factual allegations.” Id. at 679.
So the Court will “disregard all conclusory statements of law and consider whether the remaining
specific factual allegations, if assumed to be true, plausibly suggest the defendant is liable.”
Collins, 656 F.3d at 1214.
III. 	Analysis
Before the Court dives into Plaintiff’s motion to dismiss, it will address Third-Party
Defendant F Warriors’ Motion to Join. The Federal Rules of Civil Procedure allow a party to join
its motion with another Rule 12 motion. Fed. R. Civ. P. 12(g)(1). The Court agrees that Defendant
Joyce equally accuses Plaintiff and Third-Party Defendant 	F Warriors in each claim, making it
appropriate to join Third-Party Defendant F Warriors to Plaintiff’s motion to dismiss for
efficiency’s sake. Thus, the Court will address Plaintiff’s motion to dismiss as if both it and Third-
Party Defendant F Warriors made such arguments.
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A. 	Modification of Scheduling Order
Plaintiff and Third-Party Defendant F Warriors first challenge Defendant Joyce’s ability to
bring counterclaims this late in the discovery process. 	They claim that the original scheduling
order render his counterclaims untimely. The scheduling order only allowed parties to bring new
claims until October 16, 2020 (Doc. 75). But as Defendant Joyce points out, no one served him
the complaint until December 2020 (Doc. 132). In fact, on that very deadline, Plaintiff moved to
file a second amended complaint to add Defendant Joyce to the complaint (Doc. 96). It does not
make sense for the Court to hold Defendant Joyce to a scheduling order deadline he could not
possibly meet.
Besides, Defendant Joyce’s answer and counterclaims followed Plaintiff’s Third Amended
Verified Complaint, which it filed on October 26, 2021. 	Again, it makes no sense to expect
Defendant Joyce to meet a deadline to bring counterclaims over a year before Plaintiff filed its
most recent complaint. 	And Plaintiff and Third-Party Defendant did not object to Defendant
Joyce’s Answer and counterclaims as untimely under the Federal Rules. 	So the Court rejects
Plaintiff and Third-Party Defendant F Warriors’ timing argument and proceeds to the merits of
Defendant Joyce’s counterclaims.
B. 	Motion to Dismiss
Plaintiff and Third-Party Defendant F Warriors make five arguments for why Defendant
Joyce has failed to state any counterclaim sufficient to survive Rule 12(b)(6). 	First, they assert
that Defendant Joyce failed to plead his common law fraud or RICO counterclaims with sufficient
particularity as required under Federal Rule of Civil Procedure 9(b). Second, they point out that
Defendant Joyce cannot bring counterclaims for mail and wire fraud as civil causes of action under
criminal statutes. Next, Plaintiff and Third-Party Defendant F Warriors argue that his pleadings
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do not sufficiently allege RICO’s elements. Fourth, they assert that the statute of limitations bars
Defendant Joyce’s fraud counterclaims that involve conduct more than four years ago. 	Lastly,
Plaintiff and Third-Party Defendants contend that Defendant Joyce’s conspiracy counterclaims
must fail because he has failed to prove any underlying claim. For the reasons stated below, the
Court finds that Defendant Joyce failed to adequately state a counterclaim upon which the Court
could grant relief.
1. 	Federal Rule of Civil Procedure 9(b) and Common Law Fraud
The Federal Rules require Defendant Joyce to “state with particularity the circumstances
constituting fraud” in his allegations. Fed. R. Civ. P. 9(b). The Tenth Circuit has interpreted this
rule to mean a plaintiff who alleges fraud in his complaint must “set forth the time, place[,] and
contents of the false representation, the identity of the party making the false statements[,] and the
consequences thereof.” Tal v. Hogan, 453 F.3d 1244, 1263 (10th Cir. 2006) (citation and internal
quotation marks omitted). 	Plaintiff and Third-Party Defendant F Warriors seek to dismiss
Defendant Joyce’s common law fraud and RICO counterclaims for failing to satisfy this
heightened pleading requirement.
Start with Defendant Joyce’s common law fraud counterclaim. 	He alleges that Plaintiff
and Third-Party Defendant F Warriors “took $12,000.00 of John Joyce’s money by fraud” because
they “falsely claimed that money solicited . . . would be maintained in a specific fund and used
exclusively to maintain Gerry Spence’s ranch.” 	He also alleges they “knew those claims to be
false when they were made” and intended to “induc[e] Joyce and others to donate.” 	These
allegations, at best, establish the contents, identities, and consequences that Rule 9(b) requires:
Plaintiff and Third-Party Defendant F Warriors allegedly asked for money to maintain the Ranch
and thereby succeeded in swindling $12,000 out of Defendant Joyce. 	But these allegations are
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devoid of any particularity that would prove them. Not to mention, Defendant Joyce included no
details of the time or place of such fraud, let alone any facts to support the alleged deceptive
solicitation.
Defendant Joyce’s common law fraud pleadings amount to legal conclusions unsupported
by factual allegations. See Iqbal, 556 U.S. at 679. For example, he claims Plaintiff and Third-
Party Defendant F Warriors knew they lied to Plaintiff’s graduates about how they planned to
spend the donations, but Defendant Joyce includes no facts that show their alleged knowledge of
such deception. 	At bottom, Defendant Joyce’s pleadings include very little factual allegations,
leaving the Court to try to piece together how a common law fraud claim could derive from such
pleadings. But the Court need not do so because the allegations do not state a claim upon which
the Court could grant relief.
2. 	Mail and Wire Fraud
Defendant Joyce cites criminal statutes to allege civil causes of action that Plaintiff and
Third-Party Defendant F Warriors committed mail and wire fraud. But criminal statutes cannot
serve the basis for civil liability unless the statute specifically provides for a civil cause of action.
See Goode v. Gaia, Inc., No. 20-cv-00742, 2022 WL 596292, at *9 (D. Colo. Feb. 28, 2022) (citing
cases with the same holding). And they do not here. So Defendant Joyce “cannot obtain relief for
alleged violations of criminal statutes.” Id. (same). The Court will thus dismiss Counterclaims II
and III for failure to state a claim upon which the Court could grant relief.
3. 	RICO
Defendant Joyce also alleged the fraudulent acts from his mail and wire fraud claims as
predicate acts for the racketeering counterclaim. Underneath Counterclaim IV, Defendant Joyce
alleged that Plaintiff and Third-Party Defendant “committed multiple related acts of common law
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fraud, mail fraud, and wire fraud as described above which constitute a pattern of racketeering
activity . . . .”
The Racketeer Influenced and Corrupt Organization (RICO) Act contains four different
subsections. See 18 U.S.C. § 1962(a)–(d). Each subsection requires a plaintiff to “prove different
things.” 	Reynolds v. E. Dyer Dev. Co., 882 F.2d 1249, 1251 (7th Cir. 1989). 	A plaintiff must
therefore specify which RICO subsection defendants allegedly violated so that a court can
determine whether the plaintiff has adequately stated a claim for relief. United Transp. Union v.
Springfield Terminal Co., 869 F. Supp. 42, 49 (D. Me. 1994). 	Identifying the pertinent RICO
subsection also gives defendants the ability to prepare a defense. Anvan Realty & Mgmt. Co. v.
Marks, 680 F. Supp. 1245, 1247 (N.D. Ill. 1988) (citation omitted). Thus, failure to specify the
RICO subsection at issue can warrant dismissal. See Estate of Scott v. Scott, 907 F. Supp. 1495,
1499 (M.D. Ala. 1995) (“The court also recognizes that failure to plead the specific subsection of
§ 1962 may alone constitute grounds to dismiss a RICO complaint.” (citing Atl. Gypsum Co. v.
Lloyds Int’l Corp., 753 F. Supp. 505 (S.D.N.Y. 1990))). But see Kuczynski v. Ragen Corp., 732
F. Supp. 378, 384 (S.D.N.Y. 1989) (analyzing RICO claim even though the plaintiffs did not
identify which subsection the plaintiffs alleged because the court could infer from plaintiffs’
pleading fraud with particularity which subsection they meant).
Defendant Joyce failed to specify which RICO subsection Plaintiff and Third-Party
Defendant allegedly violated. 	He cites only to 18 U.S.C. § 1962 in his fourth counterclaim.
Plaintiff and Third-Party Defendant pointed out this deficiency in the motion to dismiss, but
Defendant Joyce elected not to clarify or supplement his pleadings for that counterclaim in his
reply. As discussed above, the Court could dismiss his RICO claim solely for these failures. See
Cowan v. Gen. Motors Corp., No. IP 91 233 C., 1992 WL 176996, at *6 (S.D. Ind. Mar. 10, 1992)
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(finding plaintiffs’ RICO pleadings deficient for failing to identify a specific subsection of §1962
and “not attempt[ing] to narrow the focus” of their RICO claim after defendants pointed out
plaintiffs’ failure, thereby dismissing the RICO count because “defendants are not required to
speculate as to which section of RICO . . . they allegedly violated.” (citing Jennings v. Emry, 910
F.2d 1434, 1435–36 (7th Cir. 1990))).
But even if the Court did assume which RICO subsection Defendant Joyce meant in his
pleadings, the Court would still conclude he failed to plausibly allege the requisite elements. See
Hopkins v. Am. Home Mortg. Servicing, Inc., No. 13-4447, 2014 WL 580769, at *3–6 (N.D. Cal.
Feb. 13, 2014) (“Although [the plaintiff’s] complaint does not specify which RICO subsection(s)
defendants allegedly violated, his allegations most closely fit § 1962(c) and are analyzed [and
found insufficient] accordingly.” (citing Reynolds, 882 F.2d at 1251 (same))). 	Section 1962(c)
prohibits “any person employed by or associated with any enterprise engaged in, or the activities
of which affect, interstate or foreign commerce, [from] conduct[ing] or participat[ing], directly or
indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity.”
“RICO provides a private right of action in federal court for individuals injured in their business
or property through fraudulent conduct.” George v. Urb. Settlement Servs., 833 F.3d 1242, 1248
(10th Cir. 2016) (quoting Robert L. Kroenlein Trust ex rel. Alden v. Kirchhefer, 764 F.3d 1268,
1274 (10th Cir. 2014)). 	To plead a valid RICO claim, a plaintiff must plausibly allege that a
defendant “(1) conducted the affairs (2) of an enterprise (3) through a pattern (4) of racketeering
activity.” 	Id. (citing 18 U.S.C. § 1962(c)). 	An “enterprise” is “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). 	“Racketeering activity” consists of the
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criminal offenses listed in 18 U.S.C. § 1961(1), and a “pattern” requires at least two racketeering
acts committed within ten years of each other. 18 U.S.C. § 1961(5).
Because Rule 9(b) requires a counterclaimant to plead mail and wire fraud with
particularity, Defendant Joyce must “set forth the time, place and contents of the false
representation, the identity of the party making the false statements and the consequences thereof.”
George, 833 F.3d at 1254 (quoting Koch v. Koch Indus., 203 F.3d 1202, 1236 (10th Cir. 2000)).
In his counterclaim, Defendant generally alleges that Plaintiff and F Warriors made statements
claiming that Plaintiff would use solicited money donated to the Ranch Club to maintain Gerry
Spence’s ranch. 	Defendant claims that Plaintiff used emails to conceal the fraud. 	But only
generally alleging that a person, even sometimes on specific dates, received false representations
via phone, and received letters through the mail containing false and misleading statements does
not suffice under Rule 9(b). 	Id. 	And that’s exactly the type of general allegations Defendant
makes in his counterclaim. 	Defendant does not disclose any facts to support his conclusory
statements that Plaintiff and F Warriors knew those claims to be false when made. 	Although
Defendant says he donated $10,800 on April 16, 2019, he does not provide a time or place of the
false representation that sparked that donation. Defendant does not say which materials or which
emails Plaintiff designed to fool alumni and what those specific materials said in order to induce
donations by fraudulent means. 	Defendant identifies only two emails—sent by Plaintiff on
November 10, 2017 and September 15, 2018. But Defendant does not set forth any contents of
those emails.
Rule 9(b)’s purpose in this context is to afford a plaintiff fair notice of a counterclaimant-
defendant’s claims and the factual grounds supporting those claims. 	George, 833 F.3d at 1255
(quoting Schwartz v. Celestial Seasonings, Inc., 124 F.3d 1246, 1252 (10th Cir. 1997)). Defendant
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failed to do that here. 	Defendant’s counterclaim lacks the factual allegations required to afford
Plaintiff notice of his claims. 	And when alerted to that deficiency in a motion to dismiss,
Defendant responded in two sentences of substance regarding his counterclaim:
Joyce 	provides 	the 	specific 	content 	of 	TLC’s 	fraudulent
communication: namely that statements were made by TLC and its
representatives claiming all money donated to the Ranch Club
would be used exclusively to maintain Gerry Spence’s ranch. Joyce
also gave the specific dates of emails that were used to conceal the
fraud, and properly pled that the purpose of the emails was to
conceal the fraud.
Defendant Joyce simply did not identify the contents of mailings or emails other than to generally
allege that “TLC and F WARRIORS falsely claimed that money solicited . . . would be maintained
in a specific fund and used exclusively to maintain Gerry Spence’s ranch.” That bare conclusory
allegation is not enough to survive the heightened pleading standard.
Because Defendant failure to specify the RICO subsection at issue in his counterclaim and
because Defendant did not plead the underlying wire fraud and mail fraud with particularity, the
Court agrees with Plaintiff that Plaintiff has failed to state a claim for violations of RICO.
4. 	Statute of Limitations
Plaintiff argues that, to the extent that any RICO or fraud claims occurred prior to April
12, 2018, the applicable statutes of limitations bar Defendant Joyce’s claims. Plaintiff admits that
it cannot discern when the allegedly improper conduct occurred from the face of the complaint.
Neither can the Court. As mentioned above, Defendant Joyce fails to state a claim for both RICO
and common law fraud. Thus, the Court need not rely on Plaintiff’s statute of limitations defense
in ruling on the motion to dismiss.
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5. 	Conspiracy Counterclaims
Defendant Joyce’s conspiracy counterclaims must fail as well. 	As mentioned above,
Defendant failed to allege any substantive violation of RICO. That failure disposes of his claim
for any RICO conspiracy. Schroder v. Volcker, 864 F.2d 97, 98 (10th Cir. 1988) (citing United
States v. Hampton, 786 F.2d 977, 978 (10th Cir. 1986)). The “object of a RICO conspiracy must
be to violate a substantive RICO provision.” Id. Thus, Defendant has failed to state a claim for a
RICO conspiracy.
Likewise, Defendant has failed to allege a claim for civil conspiracy under Wyoming state
law. Under Wyoming law, a party cannot claim civil conspiracy without an underlying cause of
action in tort. White v. Shane Edeburn Constr., LLC, 285 P.3d 949, 958 (Wyo. 2012) (citing Cent.
Wyo. Med. Lab., LLC v. Med. Testing Lab, Inc., 43 P.3d 121, 126 (Wyo. 2002)). Because none of
Defendant’s underlying counterclaims survive a motion to dismiss, Defendant Joyce has no
underlying cause of action in tort and his claim for civil conspiracy must fail for failure to state a
claim.
IV. 	Conclusion
For the reasons set forth above, the Court GRANTS Third-Party Defendant’s Motion to
Join Plaintiff’s Motion to Dismiss (Doc. 367) and Plaintiff’s Motion to Dismiss Defendant Joyce’s
Counterclaims (Doc. 363).
IT IS SO ORDERED.
Entered for the Court
this the 22nd day of September, 2022
/s/ Joel M. Carson III 	.
Joel M. Carson III
United States Circuit Judge
Sitting by Designation
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