Dream House owner sues police, WCCO

Paul Stepnes seeks damages for disrupted contest

EAST ISLES — A new chapter was written Tuesday in the ongoing saga of 2857 Irving Ave. S., also known as the Dream House.

Local builder Paul Stepnes filed a complaint in federal court seeking at least $75,000 in damages stemming from his May 28 arrest and the disruption of a contest that aimed to award the $1.8 million home to whoever could guess the number of nuts, bolts and other fasteners in a box.

The two Minneapolis police officers that arrested Stepnes are listed as defendants, along with a WCCO television reporter who did a story on the contest.  

The complaint alleges Sgts. Peter Ritschel and Janet Moore violated Stepnes’ rights during the arrest, and that a story by reporter Esme Murphy hurt his reputation. It also alleges that their actions preventedStepnes from going forward with the contest, even a revived version of The Big Dream House Giveaway begun in July.

At the time of Stepnes’ arrest, police spokesman Sgt. William Palmer said the contest amounted to an unlicensed raffle, a type of illegal gambling. Stepnes was never charged.
Participants in the original contest paid $20 to guess the contents of the box. The winner was to claim either the house or a cash prize of up to $1 million.
There were also weekly drawings for prizes. No entry fee was required to participate in the drawings, Stepnes has said.

Stepnes also said he spoke with the state’s top gambling official prior to the launch of the contest. He was told the contest was not gambling because guessing the contents of the box involved skill, not chance.
In the complaint, attorney Jill Clark acknowledged Stepnes came up with the Dream House Giveaway only after the house he had built went into foreclosure. Stepnes passed on a $1.8 million offer before the housing market took a turn for the worse.

The complaint states Stepnes hoped to sell enough tickets in the contest to pay off the mortgage and liens on the house. He also took some steps toward setting up a foundation that would distribute some contest profits to charity.

According to the complaint, the original contest was ended after police seized evidence from the Dream House, disturbing the contents of the original box of fasteners.
Stepnes had a new box and a new contest going in July when WCCO aired its report on the Dream House Giveaway. The complaint alleges the report unfairly cast Stepnes in a negative light, making it impossible to carry on the second contest.

The report appeared to have been removed from the WCCO website.

Five contestants joined Stepnes in the lawsuit, including Pete and Jan Girard of Kingfield, Ray Neset and David Holland of Lyndale and Terry Yzaguirre, a local blogger who has written about the case online.
Pete Girard said he and his wife toured the house on the Fourth of July. They entered the contest that day with dreams of converting the house to a bed and breakfast if they won.
Police actions to end the contest seemed like “an abuse of power,” he said.

That phrase was echoed by Neset, who gathered at 2857 Irving Ave. S. with the Girards, Yzaguirre, Stepnes and Clark on the morning the complaint was filed.
Clark said $75,000 was a “starting point” for calculating damages, and noted a similar house-giveaway contest in California brought in $5 million.
Both Palmer and WCCO spokeswoman Kiki Rosatti declined to comment on the lawsuit.

The website for the contest (www.2857irving.com) was still up on Wednesday, but much of the site appeared to be deactivated. A message explained the contest had ended and assured contestants: “Your money will be refunded, for most of you, in the manner in which you paid.”