Potter v. Newkirk

POTTER, et al., Plaintiffs, v. NEWKIRK, et al., Defendants.

Civil No. 17-08478 (RBK/KMW)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY CAMDEN VICINAGE

October 20, 2020

NOT FOR PUBLICATION

OPINION

KUGLER, United States District Judge:

Presently before this Court are Defendants Douglas J. Grant, Landis Title Corp., Donna and George Loose, Bruce J. Duke LLC, Cumberland County Prosecutor's Office, and Vitality Group, LLC., Motions to Dismiss under F.R.C.P. 12(b)(6); Defendants Cumberland County Prosecutor's Office and Bruce J. Duke, LLC., Motion to Retroactively Annul the automatic stay; and Plaintiffs Kevin Potter and Marguerite Potter's Motion to Strike Doc. No. 15 and to Impose Pre-Filing Injunctions. (Doc. No. 101, 121, 123-126, 128, 131). For the reasons detailed herein, Defendants' motions are GRANTED in part and DENIED in part, and Plaintiffs' motions are DENIED.

I. BACKGROUND

Plaintiff Kevin Potter and Marguerite Potter—a mother and son duo—are frequent fliers of both the state and federal courts. In fact, it was Plaintiffs proclivity toward litigation which ultimately led to the current dispute. To provide context for the case at bar, we will briefly recount the genesis of this dispute and the underlying litigation.¹

A. Genesis of the Underlying Dispute

Plaintiff Kevin Potter ("Kevin Potter") instituted various lawsuits against his former neighbors, Nathan Van Embden, and John and Ashley Sorantino. (Doc. No. 15, Brief at ¶ 5-7). Initially, the litigation persisted between Kevin Potter and Nathan Van Embden. (Id. at ¶ 8). However, on or around August of 2005, the Sorantino family was dragged into court after Kevin Potter filed three criminal complaints against John and Ashley Sorantino over a verbal altercation. (Id. at ¶ 9). Shortly thereafter, on September 6, 2005, Mr. Potter filed an additional 5 criminal complaints against them. (Id.). Only 10 days later, on September 16, Mr. Potter filed a civil lawsuit against the Sorantinos claiming ownership of their property by adverse possession. (Id. at ¶ 10).

On September 20, 2005, the Sorantinos attempted to erect a wooden fence between their property and Mr. Potters. (Id. at ¶11). This resulted in Mr. Potter filing another 20 complaints against John and Ashley Sorantino in addition to 25 related criminal complaints against anyone hired by Sorantinos to erect the fence. (Id.). Every state trooper and state trooper station commander who was called to the scene was also thrown into the complaint for good measure. (Id.).

On December 15, 2005, Mr. Potter amended his civil complaint against John and Ahsley Sorantino; it spanned 49 pages and included 19 causes of action. (Id. at ¶ 12). In response, the Sorantinos filed a counterclaim against Mr. Potter for both civil and criminal malicious prosecution based on the 30 criminal complaints he filed as well as the civil lawsuit. (Id. at ¶ 13).

On September 8, 2008, the lawsuit between Mr. Potter and the Sorantinos was tried by a jury. (Id. at ¶ 17). And 11 days later, on September 19, 2008, the jury awarded the Sorantinos $249,000 in damages, including verdicts in their favor for their malicious prosecution claims against Mr. Potter. (Id.). Just ten days following the verdict, Mr. Potter transferred ownership of his Buckshutem Road property to Delmarva Enterprises for $100. (Id. at ¶ 18). Delmarva Enterprises is a sole proprietorship owned by Marguerite Potter, Mr. Potter's mother. (Id.).

B. Bankruptcy Proceedings

On February 19, 2009, Kevin Potter filed a Chapter 7 Bankruptcy petition in the Bankruptcy Court for the Middle District of Florida. (Id. at ¶ 22). Kevin Potter submitted his petition under penalty of perjury and claimed that he had no assets and that his property 13104 West Buckshutem Road, Millville, New Jersey, had been deeded to Delmarva Enterprises. (Id.). On May 21, 2009, the Chapter Seven Trustee appointed in Kevin Potter's bankruptcy case filed an adversary proceeding to set aside as fraudulent the pre-petition transfer of his West Buckshutem property to his mother. (Case No. 3:09-bk-0245, Doc No. 1). This petition was granted and the Bankruptcy Court entered judgment avoiding that transfer. (Id. 108-109). The Bankruptcy Court found the property was part of the bankruptcy estate to be administered by the trustee and that Marguerite Potter and Delmarva Enterprises had no interest in or lien claim on the property. (Doc No. 124, Exhibit D).

On April 5, 2011, the Trustee filed a motion in the Bankruptcy Court to compel Plaintiffs to vacate 13104 West Buckshutem Road, Millville, N.J. (Case No. 3:09-bk-1080, Doc No. 48). On July 11, 2011, United States Bankruptcy Court Judge Jerry A. Funk granted the Trustee's motion and ordered the Plaintiffs to vacate the property within 30 days of the order. (Id.)

Following the order for the property to be sold and vacated, Mr. Potter filed a complaint on July 22, 2011 in the District of New Jersey, naming as defendants, the bankruptcy trustee, Robert Altman, the trustee's attorney, Allan Wulberm and his law firm, the Cumberland County Prosecutor, Jon M. Reilly as well as the clerks who work in the bankruptcy office in Jacksonville, Florida. See, e.g., Potter v. Altman, Civ. No. 11-04197 (D.N.J. 2011).

C. Current Case

Mr. Potter failed to comply with the Bankruptcy Court's order to vacate the property and consequently, on August 11, 2011, the bankruptcy trustee filed an ejectment action in the Superior Court of New Jersey. (Doc. No. 15, Brief at ¶ 30). On October 19, 2011—the day before the scheduled eviction—Marguerite Potter filed a Chapter 13 bankruptcy petition in the United States Bankruptcy Court for the District of New Jersey. (Id. at ¶ 34). The Potters were evicted from the property on October 20, 2011. (Am. Compl. at ¶ 47). Marguerite Potter's bankruptcy was terminated on November 23, 2011. (Case No. 11-40237, Doc No. 16).

Six years later, on October 17, 2017, the Potters brought the current action alleging that the New Jersey property was part of Marguerite Potter's Chapter 13 bankruptcy estate and that the defendant's violated the automatic stay issued pursuant to 11 U.S.C. § 362(a)(1). (Doc. No. 1, Compl. at ¶ 1-6). The Complaint named over 60 defendants and alleged that Plaintiffs served notice on every defendant the same day that Marguerite Potter filed for Chapter 13 bankruptcy. (Id. at ¶ 7). A slew of claims was levied against the defendants, all arising from the ejectment action. Specifically, Plaintiff brought claims for: (1) willful violation of Title 11 U.S.C. § 362; (2) conversion; (3) trespass; (4) tortious interference with contractual relations; (5) unlawful interference with prospective economic advantage; (6) malicious prosecution; (7) and breach of contract. (Id. at ¶ 29-127).

Given Plaintiffs' litigation history, this Court ordered Plaintiff to submit competent evidence to the Court regarding Plaintiff's claims. (Doc. No. 77). Plaintiffs submitted an affidavit and exhibits on June 20, 2018. (Doc. Nos. 81, 82). This Court sua sponte concluded that it lacked subject matter jurisdiction over the Potter's claim brought pursuant to 11 U.S.C. § 362(k) for a willful violation of the automatic bankruptcy stay. (Doc. No. 84, 85). We determined that such a claim was in the exclusive jurisdiction of the Bankruptcy Court and declined to exercise supplemental jurisdiction. (Id.). We also denied Plaintiff's motion to amend the pleadings and in ruling on the motion for a preliminary injunction, cited the Potter's abusive litigation history and directed the Potters to show cause why they should not be enjoined from filing any further lawsuits in New Jersey without the Court's prior approval. (Id.). The Potters filed a timely post-judgment motion for relief and a motion to compel this Court to transfer the matter to the Bankruptcy Court. (Doc No. 86, 88). We denied the Potter's post judgment motion and motion to compel. (Doc No. 91). Plaintiff's appealed. (Doc. No. 91).

D. Appeal

The Third Circuit vacated our judgment and concluded we erred in sua sponte dismissing the complaint for lack of subject matter jurisdiction and denying the motion for reconsideration. (Doc. No. 96, Opinion). It also vacated this Court's decision to deny the Potters' motion to compel transfer of the matter to the Bankruptcy Court. (Id.).

Of note, especially for purposes of the present motion, was the Third Circuit's conclusion that the part of the Potters' claim that was premised on defendants violating the automatic stay by seizing the New Jersey property presented an insubstantial federal question. (Id.). It reasoned that "[t]the mainstay of the Potters' claim-that the defendants violated the automatic stay by seizing the New Jersey property-is foreclosed by the orders of the Florida Bankruptcy Court . . . See HannisDistilling Co. v. Baltimore, 216 U.S. 285, 288 (1910) (noting that a claim is insubstantial if previous decisions 'foreclose the subject and leave no room for the inference that the questions sought to be raised can be the subject of controversy').". (Id.) Thus, the only claim that presented a substantial federal question under § 362 was the allegation "that defendants violated the automatic stay with respect to personal property belonging only to Marguerite Potter." (Id.)

On remand, Defendants' filed Motions to Dismiss the Complaint and Retroactively Annul the Bankruptcy Stay. (Doc No. 121, 123, 124, 125, 126, 128, and 131).

II. LEGAL STANDARD

A. Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(6)

Federal Rule of Civil Procedure 12(b)(6) allows a court to dismiss an action for failure to state a claim upon which relief can be granted. When evaluating a motion to dismiss, "courts accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d...