A former Hayfield mayor who has been determined to be vulnerable because of his health has lost a suit against his former long-time Austin lawyer and a bank over business dealings.

Wednesday, April 19, 2000

A former Hayfield mayor who has been determined to be vulnerable because of his health has lost a suit against his former long-time Austin lawyer and a bank over business dealings.

Freeborn County District Judge John Chesterman ruled this month against Dennis Stenberg, who lost his bid to have a jury hear his allegations against Paul V. Sween, an Austin attorney, and Citizens State Bank of Hayfield.

Chesterman ruled April 4 in favor of the attorney and bank, granting their motions for a summary judgment to dismiss Stenberg’s case against them. Stenberg was not available for comment; he now has 60 days to appeal the judge’s decision.

How a vulnerable adult came to sue a man who had represented him in legal matters for more than two decades, and the bank that helped finance a once-fledging Hayfield business makes for interesting reading of court documents.

The episode reached the public arena March 24, when Stenberg sought to represent himself in Chesterman’s court. Sween did not represent Stenberg in court this time.

Unlike so many times before, Sween, a partner in the Austin law firm of Alderson, Ondov, Leonard, Sween & Rizzi, was a defendant in a civil suit that also named Citizens State Bank of Hayfield.

Sween maintained he represented the plaintiff in good faith and looked out after his best interests.

Stenberg, the plaintiff, described himself as a vulnerable adult who was manipulated. The former mayor, who now lives in London, accused the defendants of seven counts of negligence, professional malpractice, conspiracy, breach of contract and fiduciary obligation and violations of Minnesota statutes.

Stenberg’s suit unsuccessfully sought $50,000 in compensatory damages against both defendants, undetermined compensatory damages against Sween and costs, disbursements and attorneys’ fees against both defendants.

Sween told the Austin Daily Herald: "There was no basis for any of it," referring to both the Stenberg complaint in court and the complaint before the state Lawyers Professional Responsibility Board.

He also said Stenberg’s ex-wife, ex-employees and others also could refute the allegations made by the plaintiff.

"The motion for summary judgment was necessary in this case," Sween said. "There was absolutely no basis to the charges."

Christopher R. Morris, an attorney with the Minneapolis law firm of Bassford, Lockhart, Truesdell & Briggs, represented Sween in the civil suit. Morris’ only comment on behalf of his client, after the hearing, was "Mr. Stenberg’s comments were false" and Chesterman’s ruling supports the lawyer’s assertion.

Mark Meidtke, president of Citizens State Bank, had no comment.

Stenberg, who claims to be a vulnerable adult, represented himself, pro se, in court.

"I have no problem with the bank," Stenberg said. "It’s the attorney I have problems with."

Stenberg’s complaint was filed Aug. 30. The filing fee for the complaint was waived by the Freeborn County District Court administrator because he meets income guidelines in such matters. However, after filing the complaint, Stenberg did not respond to requests from the plaintiffs’ attorneys for information in the matter. He also did not properly file any motions, as requested, in response to the plaintiffs’ attorneys’ call for a summary judgment to have the suit dismissed.

In court March 24, the "David vs. Goliath" court case shed light on the strange legal affair.

Stenberg’s predicament also was documented in a complaint he filed March 18 with the Lawyers Professional Responsibility Board in St. Paul.

Whether or not Stenberg’s complaints against the defendants or their own defenses of their actions ever will be allowed to be heard in court remains in Chesterman’s hands.

Stenberg’s vulnerable adult status was verified by Tom Schleck, a social worker with the Freeborn County Department of Human Services. Two years ago, Schleck referred Stenberg to Southern Minnesota Regional Legal Services, the Semcac utilities program and Project Green Thumb for possible employment as a senior citizen.

"Dennis Stenberg had serious legal and business dealings that occurred when he had the stroke and still are important in his life. These areas need to be addressed by a competent attorney in a professional way," Schieck observed in describing Stenberg’s vulnerable adult concerns and conservator needs.

According to Stenberg, he suffered a severe brain aneurysm in December 1990. He spent four months in a hospital before being released and still suffers cognitive difficulties and short-term memory loss.

At the time of the brain aneurysm, Stenberg was the owner of Road Warrior Inc., a road construction business.

"Given our long-standing relationship, I considered Paul Sween to be the one person that I could trust to give me sound advice and to be my advocate, during the time I was most vulnerable following my aneurysm," Stenberg said.

Sween was Stenberg’s personal and business attorney.

Stenberg alleged, both in his civil suit and in the complaint to the Lawyers Professional Responsibility Board, Sween conspired with the bank to sell his Road Warrior Inc. business to Todd Severson "at a price far below its fair market value" in order to satisfy obligations owed by Stenberg and his business to Sween and the Hayfield bank.

That was in September 1993, when Sween also represented both the Hayfield bank in legal matters and Severson.

Stenberg also alleged conspiracy in Sween’s action to acquire shares of stock in a residential development in Missouri called Orchard Creek Properties and in which Sween already had a financial interest.

According to the terms of the agreement, the purchase of the stock was to "keep his operation in Dodge County, Minn., known as Road Warrior Inc. going."

Also according to the agreement, Stenberg agreed to allow Sween to pledge the shares to the Hayfield bank to repay a loan Sween obtained from the bank to purchase the stock.

As time passed, Stenberg lost his share of the Missouri residential development and his Road Warrior Inc. business.

As Stenberg’s financial woes continued and his health problems, too, Randall J. Mickelson was approved by the Social Security Administration as the representative payee for Stenberg’s disability checks. Mickelson is the registered executive officer of RPMS Leasing Co. in Austin.

In a letter dated Nov. 29, 1994, Sween wrote RPMS’ Mickelson asking for $50 Stenberg apparently had verbally agreed to pay the Alderson, Ondov, Leonard, Sween & Rizzi law firm for legal fees. The money was to come from the Social Security disability pension check received by Stenberg.

Sween’s co-mingling relationships, both financial and as legal counsel with the Hayfield bank, RPMS Leasing and Severson, were at the crux of Stenberg’s complaints to the court and the Lawyers Professional Responsibility Board.

Beginning in 1998, Stenberg, with the help of others, wrote Sween complaining of the attorney’s involvement. By then, Stenberg was being hauled into Dodge Count District Court by creditors.

Sween replied in a letter dated April 8, 1999, that notes: "Dennis, I have always considered you a friend and still do."

The attorney offered to make his files available to Stenberg, including those 20 years or older and dating back to when he first represented Stenberg in legal matters.

Wearing dark pants and a sweatshirt over a white T-shirt that hung from his pants, Stenberg appeared in Chesterman’s courtroom March 24.

He sat alone at the plaintiff’s table, while attorneys Morris and Eric Larson of Rochester (representing the bank), plus Mark Meidtke, president of the Hayfield, bank sat at the defense table.

The judge explained the rules of court to Stenberg repeatedly, repeating himself for the benefit of the plaintiff.

Then, Larson addressed the court, denying Stenberg’s allegations and asking for a summary judgment throwing out the civil suit.

Referring to the difficult legal process from the time last summer, when Stenberg filed his complaint – without paying the filing fee – until the March 24 hearing and alluding to the difficulty in exchanging information and Stenberg’s repeated ignoring of notices to file motions, Larson told the judge, "I went far beyond what I normally do in cases such as this."

Stenberg addressed Larson and Meidtke in the courtroom and said, "I have no argument with you."

Larson refuted every one of Stenberg’s allegations and pointedly argued his charge that the Hayfield bank did not exercise fiduciary responsibility, saying the bank knew Stenberg was vulnerable, "but, your honor, the burden of proof was Dennis Stenberg’s to prove he lacked cognitive abilities."

"The special circumstances, required under the law, were not there to require Citizen State Bank’s fiduciary responsibility role in this matter," Larson concluded.

On the subject of the bank’s possible conflict of interest in the sale of Stenberg’s business, Larson told the court, "Citizens State Bank got the best offer out of its own employee, Todd Severson" and, the attorney said for a conspiracy to exist, there was be an underlying element of an unlawful act.

"There was none," Larson said.

Sween’s attorney, Morris, spoke briefly for his client, echoing Larson’s denial of the charges in Stenberg’s complaint one by one.

He also chided the plaintiff for his failure to "adhere to court rules" and Morris noted Stenberg, the vulnerable adult, must have had some legal help.

"That is one of the most sophisticated pro se complaints or there is a lawyer around," Morris said.

Morris concluded: "There is no grounds for a civil cause of action" and asked the court to dismiss the case.

When Stenberg was asked to address the court at the hearing for a summary judgment, he read a statement, but not before telling the judge, "I had to rely on people, because of the six clips and shunt I got inside my head."

In a statement, Stenberg recounted his allegations and sprinkled his comments with observations about the people he had business dealings with. He concluded by requesting a jury trial.

When the judge declared the hearing over, Stenberg walked out of the courtroom and down a hallway asking the plaintiffs’ attorneys where to find the court administrator’s office.

Stenberg has no telephone and attempts to reach him last week were unsuccessful.