![]() ![]() Afterwards, a judgment creditor again moved to add Hansmeier as a judgment debtor. On August 4, 2014, the Minnesota Court of Appeals issued a decision substantially affirming the district court’s judgment. The district court, however, ordered an examination of debtors on June 16 and July 2, 2014, at the request of one of the judgment creditors. The district court declined to add Hansmeier as a judgment debtor at that time, noting that to do so would alter the factual findings in the order, which were matters intertwined with a pending appeal. On January 8, 2014, one of the John Does moved to add Hansmeier as a judgment debtor, alleging Hansmeier dissolved Alpha to avoid paying the ordered sanctions. As part of the dissolution, Hansmeier certified that Alpha did not have any known debts, liabilities, or pending proceedings against it. Two weeks after the order granting sanctions against Alpha, Hansmeier dissolved Alpha. One week after an order to show cause why the court should not award attorney fees and costs to the non-party John Does, Hansmeier transferred $80,000 from Alpha to his personal account. ![]() Less than two weeks after the hearing on motions to quash, Hansmeier transferred $65,970 from Alpha to Class Action Justice Institute, LLC, another LLC of which Hansmeier was the sole member. The sanction award was reduced to judgment on September 20, 2013.ĭuring the above proceedings, Hansmeier took steps to defund and dissolve Alpha. The court sanctioned Guava, Dugas, and Alpha, jointly and severally, by awarding attorney fees to the John Does and internet service providers. On August 7, 2013, the district court issued an order concluding that Guava and Dugas acted in bad faith and without a basis in law and fact to initiate the action. The district court concluded that the lawsuit was merely an attempt to harass and burden non-parties through obtaining IP addresses to pursue settlement rather than proceed with potentially embarrassing litigation regarding downloading pornographic movies. Before the district court had an opportunity to rule on the motions, Guava and Merkel filed a stipulation in which Guava agreed to dismiss all claims with prejudice. Several of the internet service providers and their customers ( “John Does”) moved: (1) to quash Guava’s subpoenas, (2) for a protective order, and (3) for dismissal of Guava’s action. Guava filed a renewed subpoena motion on 17 internet service providers, which the court granted on the condition that the recipients could move to quash the subpoenas. The district court denied the motion, finding that there was no indication that the information sought was relevant and material to the action and that the request was broad and excessive. Shortly after filing its complaint, Guava moved for an order permitting it to subpoena more than 300 internet service providers for disclosure of customer names and addresses. In an earlier decision, the court noted that it was unclear whether Guava even existed. No representative of Guava ever appeared before the district court, despite a court order to do so. Michael Dugas ( “Dugas”) signed for Alpha Law Firm, LLC ( “Alpha”) on behalf of Guava, and Attorney Paul Hansmeier ( “Hansmeier”), the sole member of Alpha, noticed his appearance as “of counsel” for Guava. ![]() In October 2012, Guava, LLC ( “Guava”) filed a complaint against Spencer Merkel ( “Merkel”), alleging violations of Minn. 17, 2015) ( “ Guava II“), the Minnesota Court of Appeals affirmed a Hennepin County District Court decision, holding that the district court did not abuse its discretion by piercing the LLC’s corporate veil and holding its sole member personally liable as a judgment debtor, as both prongs of the Victoria Elevator Co. Minnesota courts will “pierce the corporate veil” of an LLC where the LLC is an alter ego of the individual member and there is an element of injustice or fundamental unfairness.
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