Knight v. Mooring Capital Fund, LLC

• Decision Date: 22 April 2014
• Docket Number: No. 13–6112.,13–6112.
• Citation: 749 F.3d 1180
• Parties: Judy KNIGHT, Plaintiff–Appellant, and PHOENIX CENTRAL, INC.; Mini Malls of America; John Doe, unknown investors in Mooring # 1 thru xx; Jane Doe, unknown investors in Mooring # 1 thru xx, Plaintiffs, v. MOORING CAPITAL FUND, LLC; Mooring Financial Corporation; John Jacquemin, Defendants–Appellees, and David Nalls; John Doe; Jane Doe; Counsels and Agents of Defendants, Defendants.
• Court: U.S. Court of Appeals — Tenth Circuit

749 F.3d 1180

Judy KNIGHT, Plaintiff–Appellant,andPHOENIX CENTRAL, INC.; Mini Malls of America; John Doe, unknown investors in Mooring # 1 thru xx; Jane Doe, unknown investors in Mooring # 1 thru xx, Plaintiffs,

v. MOORING CAPITAL FUND, LLC; Mooring Financial Corporation; John Jacquemin, Defendants–Appellees,andDavid Nalls; John Doe; Jane Doe; Counsels and Agents of Defendants, Defendants.

No. 13–6112.

United States Court of Appeals,Tenth Circuit.

April 22, 2014.

Submitted on the briefs: ^*

Judy Knight, filed a brief pro se.

Leif E. Swedlow, Andrews Davis, P.C., Oklahoma City, OK, for Defendants–Appellees.

Before HARTZ, McKAY, and BALDOCK, Circuit Judges.

HARTZ, Circuit Judge.

Judy Knight appeals from the dismissal of her lawsuit on the grounds of untimeliness, failure to state a claim, and claim preclusion (res judicata). We affirm the judgment below. Most of our reasons for affirmance are routine. But this appeal does raise interesting questions regarding claims under the federal Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961–68, based on alleged misconduct in prior litigation.

I. Background

In 2010 this court decided two appeals involving claims and cross-claims between, on one side, Ms. Knight and her company Phoenix Central Inc. (Phoenix), an Oklahoma corporation, and, on the other side, Mooring Capital Fund, LLC (Capital) and Mooring Financial Corporation (Financial). See Mooring Capital Fund, LLC v. Knight, 388 Fed.Appx. 814 (10th Cir.2010)( Mooring I ). Two years later, Ms. Knight filed a new suit in Oklahoma state court on behalf of herself, Phoenix, and another of her companies, Mini Malls of America, also an Oklahoma corporation. The defendants were Capital and Financial and individuals associated with them, including Financial's Chief Executive Officer, John Jacquemin, and unnamed “Counsels and Agents of Defendants.” R. at 15. Capital, Financial, and Mr. Jacquemin removed the litigation to federal district court.

The removing defendants moved to dismiss with prejudice. In addition to filing a response, Ms. Knight filed a first amended complaint that named as additional defendants the law firm and individual lawyers who represented Capital and Financial in Mooring I (the Counsel Defendants). Capital, Financial, and Mr. Jacquemin then moved to dismiss the first amended complaint with prejudice. Citing claim preclusion, the statute of limitations, and Fed.R.Civ.P. 12(b)(6), the court granted the motion the next day. In the same order, the court sua sponte dismissed the claims against the other defendants.

The day after the district court filed its judgment dismissing the action with prejudice, Ms. Knight filed a motion to remand the case to state court, which the district court denied as moot. Ms. Knight then filed a Fed.R.Civ.P. 59 motion to vacate, alter, or amend the dismissal order, which the district court also denied. Shortly thereafter, Ms. Knight sent an e-mail message seeking the district judge's recusal. The court ordered the e-mail to be filed and denied the request for recusal. Ms. Knight has appealed.¹ We affirm. The removal of the case to federal court was proper. Some of Ms. Knight's claims were untimely and the others fail to state a claim or are barred by issue preclusion (collateral estoppel). And her request for recusal was untimely.

II. Analysis

A. Issues Concerning Removal

1. District Court's Jurisdiction

We first consider Ms. Knight's challenge to the district court's jurisdiction, reviewing the issue de novo, see Australian Gold, Inc. v. Hatfield, 436 F.3d 1228, 1234 (10th Cir.2006). The district court may exercise removal jurisdiction over “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). In removing the action, defendants primarily relied upon diversity jurisdiction, but they also cited federal-question jurisdiction. We need not consider the arguments regarding diversity jurisdiction because Ms. Knight's assertion of federal-law claims under RICO supports federal-question jurisdiction. See Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). On appeal Ms. Knight appears to argue that she did not assert any federal-law claims. That argument is undermined, however, by the plain text of both her original and first amended complaints.

2. Counsel Defendants' Consent to Removal

The case was removed to federal court by Capital, Financial, and Mr. Jacquemin. Ms. Knight argues that removal was improper because the Counsel Defendants did not join in or consent to the removal, as required by 28 U.S.C. § 1446(b)(2)(A). But consent is required only of “defendants who have been properly joined and served,” id., and Ms. Knight, although asserting that she mailed a summons and complaint to the Counsel Defendants, has failed to demonstrate that they had been properly served at the time of removal.

Because the action was in Oklahoma state court before removal, we examine Oklahoma's service requirements. Oklahoma allows service by mail on individuals and entities. SeeOkla. Stat. Ann. tit. 12, § 2004(C)(2)(a). It is not clear, however, that Oklahoma would allow a pro se party to mail service. Section 2004(C)(2)(a) implies the contrary by specifying that service by mail can be accomplished “by the plaintiff's attorney, any person authorized to serve process pursuant to subparagraph a of paragraph 1 of this section [listing sheriff or deputy sheriff, licensed process server, or person specially appointed to serve process], or by the court clerk.”

But even assuming that pro se plaintiffs can accomplish service by mail under Oklahoma law, the record in this case contains no evidence that service was so accomplished, much less that it was accomplished before the filing of the notice of removal. For service by mail in Oklahoma, one must “mail[ ] a copy of the summons and petition by certified mail, return receipt requested and delivery restricted to the addressee.” Id. § 2004(C)(2)(b). “Service by mail shall be effective on the date of receipt or if refused, on the date of refusal of the summons and petition by the defendant.” Id. § 2004(C)(2)(a). Although Ms. Knight states that she mailed a summons and complaint via registered mail, return receipt requested, to one lawyer and the law firm, her unsupported assertions are insufficient to show that she complied with the relevant service requirements. The record does not contain any return receipts showing the date of delivery or any other evidence that the documents actually were properly addressed, were deposited in the mail, and were delivered or refused. See Chester v. Green, 120 F.3d 1091, 1091 (10th Cir.1997) (plaintiff failed to show service because there was “no authenticating post office stamp on any receipt showing they actually passed through the mails, nor [was] there a receipt or acknowledgment showing actual delivery of the complaint to the purported defendants”); Colclazier & Assocs. v. Stephens, 277 P.3d 1285, 1290 (Okla.Civ.App.2012) (“[A]bsent any documentary evidence supporting the Law Firm's claim of attempted mailings, the district court could not have determined that service by mail had been made.”). Since Ms. Knight has failed to establish that the Counsel Defendants were served before the date of removal, their consent to removal was not required.

B. Dismissal of Claims

Ms. Knight challenges the district court's application of statutes of limitations, Rule 12(b)(6), and claim preclusion. For ease of analysis, we divide her claims into two categories—first, claims concerning events that occurred before the Mooring I litigation (Phase 1 claims), and, second, claims concerning events that occurred during the Mooring I proceedings (Phase 2 claims). We address each category separately. Our review is de novo. See Wallace v. Microsoft Corp., 596 F.3d 703, 705 (10th Cir.2010) (statute of limitations); Gee v. Pacheco, 627 F.3d 1178, 1183 (10th Cir.2010) (Rule 12(b)(6)); Valley View Angus Ranch, Inc. v. Duke Energy Field Servs., Inc., 497 F.3d 1096, 1100 (10th Cir.2007) (preclusion).

1. Phase 1 Claims

The Phase 1 claims are claims based on events before Mooring I. They include claims that were asserted but failed in Mooring I and claims that could have been asserted but were not. It was proper for the district court to dismiss these claims on the ground that any applicable limitations period had expired.

The Phase 1 claims predate Mooring I, which began in state court in September 2005 and was removed to federal court in January 2006. The present action was not filed until July 2012. By then, any Phase 1 claims clearly were untimely. SeeOkla. Stat. Ann. tit. 12, § 95(A)(1) (five-year limitations period for actions upon written contracts, agreements, and promises); id. § 95(A)(2) (three-year limitations period for oral contracts and liabilities created by statute); id. § 95(A)(3) (two-year limitations period for torts and fraud); Dummar v. Lummis, 543 F.3d 614, 621 (10th Cir.2008) (four-year limitations period for federal RICO claims); Okla. Stat. tit. 22, § 1409(E) (five-year limitations period for Oklahoma RICO claims).

2. Phase 2 Claims

The Phase 2 claims are those claims concerning events that occurred during Mooring I. They include claims that the defendants committed fraud and deceit in their filings and testimony and that their litigation conduct was tortious. It was proper for the district court to dismiss the Phase 2 claims under Rule 12(b)(6) and on the ground of preclusion (although the appropriate preclusion doctrine is issue preclusion, not claim preclusion).

a. Claims Under Oklahoma Law

The majority of the Phase 2 claims are claims under Oklahoma law. Oklahoma, however, has afforded participants in judicial proceedings an absolute immunity against later civil suits grounded in litigation conduct. See Patel v. OMH Med. Ctr., Inc., 987 P.2d 1185, 1202 (Okla.1999)...