Lunnon v. United States

MICHAEL LUNNON, Plaintiff, v. UNITED STATES OF AMERICA, et al., Defendants.

Civ. No. 16-1152 MV/JFR

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO

March 23, 2020

ORDER OVERRULING PLAINTIFF'S OBJECTIONS AND ADOPTING MAGISTRATE JUDGE'S PROPOSED FINDINGS AND RECOMMENDED DISPOSITION

THIS MATTER is before the Court on United States and T. W. Lyons' ("Defendants") Amended Joint Motion and Brief in Support to Dismiss the RICO Cause of Action in the Amended Complaint ("Motion to Dismiss Count IV"), filed July 10, 2019. Doc. 123. This matter is also before the Court on the Court's Order to Show Cause, filed November 8, 2019. Doc. 136. In his Proposed Findings and Recommended Disposition ("PFRD"), filed February 21, 2020, United States Magistrate Judge John F. Robbenhaar recommended that the Court grant the Motion to Dismiss Count IV and quash the Order to Show Cause. Doc. 149. On March 3, 2020, Plaintiff timely filed Plaintiff's Objections to Findings & Dismissal Recommendation (Doc. 152) ("Objections") which are now before the Court.

District courts may refer dispositive motions to a magistrate judge for a recommended disposition pursuant to 28 U.S.C. § 636 and Federal Rule of Civil Procedure 72. 28 U.S.C. § 636(b)(1)(B); Fed. R. Civ. P. 72(b)(1). "Within 14 days after being served with a copy of the [magistrate judge's] recommended disposition, a party may serve and file specific written objections to the proposed findings and recommendations." Fed. R. Civ. P. 72(b)(2); 28 U.S.C. § 636(b)(1). When resolving objections to a magistrate judge's proposal, "[t]he district judge must determine de novo any part of the magistrate judge's disposition that has been properly objected to. The district judge may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions." Fed. R. Civ. P. 72(b)(3); 28 U.S.C. § 636(b)(1).

"[A] party's objections to the magistrate judge's report and recommendation must be both timely and specific to preserve an issue for de novo review by the district court or for appellate review." United States v. One Parcel of Real Prop., 73 F.3d 1057, 1060 (10th Cir. 1996). Further, "[i]ssues raised for the first time in objections to the magistrate judge's recommendation are deemed waived." Marshall v. Chater, 75 F.3d 1421, 1426 (10^th Cir. 1996); see also United States v. Garfinkle, 261 F.3d 1030, 1031 (10th Cir. 2001) ("In this circuit, theories raised for the first time in objections to the magistrate judge's report are deemed waived.").

The Court has considered the Motion to Dismiss Count IV, Plaintiff's Response, and Defendants' Reply; the Court's Order to Show Cause, Defendant United States' Response, and Plaintiff's Objections; and the Magistrate Judge's PFRD and Plaintiff's Objections in light of the foregoing standards, and has conducted a de novo review. Based on this review, the Court finds that Plaintiff's Objections to the Magistrate Judge's PFRD are unfounded and they are overruled.

I. Relevant Procedural Background

On September 18, 2018, Plaintiff filed an Amended Complaint removing LG Kendrick, LLC ("Kendrick LLC") as a Plaintiff¹ and adding T. W. Lyons and The UPS Store, Inc. ("TUPSS") as Defendants. Doc. 104. The Amended Complaint also removed a cause of action for quiet title,and added two causes of action, i.e., Count IV against Defendant Lyons and TUPSS for RICO Violations, and Count VI against TUPSS for Bad Faith Breach of Contract.² Id. On October 2, 2018, Defendant United States filed a Motion to Dismiss Counts I-III of Plaintiff's Amended Complaint.³ Doc. 105. On October 25, 2018, a summons was issued as to TUPSS, and TUPSS filed an Answer on November 20, 2018. Doc. 112. The case was temporarily stayed from December 27, 2018 through February 28, 2019, due to a federal lapse in appropriations. Docs. 117, 119. On May 20, 2019, three summonses were issued as to Defendant Lyons and indicated that copies of the summons and Amended Complaint were mailed to (1) Defendant Lyons' last known address; (2) the U.S. Attorney General William Barr; and (3) the U.S. Attorney John C. Anderson for the District of New Mexico. Docs. 124, 125, 126. On July 11, 2019, and July 12, 2019, the summonses were returned and indicated that delivery was complete as to U.S. Attorney General William Barr and U.S. Attorney John C. Anderson for the District of New Mexico. Docs. 125, 126. The delivery of the summons and Amended Complaint mailed to Defendant Lyons at his last known address was not completed. Doc. 124. Following service of the summonses and Amended Complaint as to Defendant Lyons, Defendants filed their Motion to Dismiss Count IV on July 8, 2019. Doc. 122. On July 10, 2019, Defendants filed the Amended Motion to Dismiss Count IV. Doc. 123.

On November 8, 2019, the Court entered an Order to Show Cause ordering Defendant United States to demonstrate the authority by which it brought the Motion to Dismiss Count IV on its behalf and that of Defendant Lyons, where Plaintiff's allegations in Count IV were not allegedagainst the United States, and where the United States had neither waived service nor entered its appearance on behalf of Defendant Lyons. Doc. 136. On November 18, 2019, Defendant United States responded to the Order to Show Cause. Doc. 136. On December 2, 2019, Plaintiff filed Objections to the United States' Response. Doc. 141.

On February 21, 2020, the magistrate judge entered Proposed Findings and Recommended Disposition. Doc. 149. The magistrate judge recommended that Defendants' Motion to Dismiss Count IV not be stricken. Id. at 6-14. The magistrate judge further recommended that Defendants' Motion to Dismiss Count IV be granted because the claims as alleged in Count IV are on behalf of Kendrick LLC, which is not a party in this action and is not properly represented by counsel. Id. at 14-16. In the alternative, the magistrate judge recommended that even if the claims as alleged in Count IV were construed as being brought on Plaintiff's behalf, that Defendants' Motion to Dismiss Count IV be granted for (1) lack of subject matter jurisdiction; (2) insufficient service of process; and (3) failure to state a claim upon which relief can be granted. Id. at 16-25.

A. The Motion to Dismiss Count IV Should Not Be Stricken

In the PFRD, the magistrate judge, having liberally construed Plaintiff's filings,⁴ initially addressed Plaintiff's request in both his Response to Defendants' Motion to Dismiss Count IV and in his Objections to the United States' Response to the Court's Order to Show Cause that Defendants' Motion to Dismiss Count IV be stricken. Doc. 149 at 6-14. The magistrate judge found that the grounds Plaintiff argued for striking Defendants' Motion to Dismiss Count IV, i.e., (1) the United States lacked standing to move for dismissal on Defendant Lyons' behalf; (2) that counsel for Defendant Lyons failed to file an entry of appearance; (3) that Defendants failed toconfer with Plaintiff prior to filing the Motion to Dismiss Count IV; and (4) that Defendant United States was precluded from filing a successive motion under Rule 12 [Doc. 127 at 2-4; Doc. 141 at 2-4], were without merit. Id.

Plaintiff objects to the magistrate judge's recommendation that Defendants' Motion to Dismiss Count IV should not be stricken. Doc. 152 at 5-8. As grounds, Plaintiff reasserts his argument that Defendants' Motion to Dismiss Count IV was a successive Rule 12(b) motion and is not allowed pursuant to Rule 12(g)(2).⁵ Id. at 5. Plaintiff further argues that the magistrate judge arbitrarily changed the legal standard for striking the Motion to Dismiss Count IV in the PFRD from the legal standard set forth in the Order to Show Cause. Id. at 5-6.

As to Plaintiff's former argument, Plaintiff reasserts the same argument that he presented in his response in opposition to the Motion to Dismiss Count IV and in his objections to Defendant United States' response to the Order to Show Cause. The Court is not persuaded. Moreover, even if the Court were to assume that the United States, as the real party in interest, should have responded to Count IV in its original motion to dismiss as Plaintiff argues [Doc. 127 at 2, Doc. 141 at 2-3], Plaintiff ignored and failed to address in his objections that subject matter jurisdiction can be raised at any time. See Fed. R. Civ. P. 12(h)(1) and (3) (a party waives any defense listed in Rule 12(b)(2)-(5) by omitting if from a motion in the circumstances described in Rule 12(g)(2), but "[i]f a court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.").⁶ Here, having found that the United States was the real party for claimsalleged against Defendant Lyons acting in his official capacity, the magistrate judge went on to find that even if the Court were to construe Count IV of Plaintiff's Amended Complaint as claimed alleged by Plaintiff and not Kendrick LLC,⁷ that because Plaintiff failed to establish a waiver of sovereign immunity, the Court lacked subject matter jurisdiction for the RICO claims asserted against Defendant Lyons acting in his official capacity pursuant to Fed. R. Civ. P. 12(b)(1). Doc. 149 at 16-18. The Court finds no error in the magistrate judge's analysis.

As to his latter argument, Plaintiff contends that the magistrate judge arbitrarily changed the legal standard for striking Defendants' Motion to Dismiss Count IV in its PFRD from the legal standard set forth in the Court's Order to Show Cause. Doc. 152 at 5-6. Plaintiff explains that the Court cited case law in its Order to Show Cause that allowed the Court to strike in its entirety Defendants' Motion to Dismiss Count IV if found to be improperly filed, but that in the PFRD the magistrate judge cited Rule 12(f) that allowed the Court to strike only portions of a filed document. Id. at 5-6. Plaintiff's argument is misplaced. In the Order to Show Cause, the magistrate judge...