Davis v. Bayless

• Decision Date: 22 November 1995
• Docket Number: No. 94-20552,94-20552
• Citation: 1995 WL 692991,70 F.3d 367
• Parties: Lana Ryan DAVIS and Lori Davis, Plaintiffs-Appellants, v. Bobbie G. BAYLESS, Bayless & Stokes and Burta Rhodes Raborn, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 367

70 F.3d 367

Lana Ryan DAVIS and Lori Davis, Plaintiffs-Appellants, v. Bobbie G. BAYLESS, Bayless & Stokes and Burta Rhodes Raborn,

Defendants-Appellees.

No. 94-20552.

United States Court of Appeals,

Fifth Circuit.

Nov. 22, 1995.

George M. Bishop, Houston, TX, for Appellants.

Bobbie G. Bayless, Bayless & Stokes, Houston, TX, for Appellees.

Appeal from the United States District Court for the Southern District of Texas.

Before LAY, ¹ DUHE and DeMOSS, Circuit Judges.

DeMOSS, Circuit Judge:

Plaintiffs Lana and Lori Davis appeal from rule 12(b)(6) dismissal of their complaint alleging claims for damages under federal and state law and seeking preliminary injunctive relief. Review of rule 12(b)(6) dismissal is de novo and dismissal should not be affirmed unless it appears that plaintiffs can prove no set of facts in support of their claims that would entitle them to relief. Blackburn v. City of Marshall, 42 F.3d 925, 931 (5th Cir.1995). For purposes of review, plaintiffs' factual allegations must be accepted as true. Id.

RELEVANT FACTS

Defendant Burta Rhodes Raborn is a court appointed receiver over the non-exempt assets of Dr. Gerald Johnson and his estranged wife June. Dr. Johnson is the judgment-debtor on an $11,360,000 malpractice judgment entered by the 133rd Judicial District Court of Harris County, Texas in 1982. Defendant Bobbie G. Bayless is counsel for Mr. and Mrs. Earl Newsome, the judgment-creditors in the malpractice action. Bayless & Stokes is the law firm in which Ms. Bayless is a partner. Plaintiff Lana Ryan Davis is employed by and romantically involved with Dr. Johnson. At all times relevant to this suit, Dr. Johnson, who is separated from his wife, was staying with Lana Davis in her Houston home. Plaintiff Lori Davis is Lana Davis' daughter. She shared the residence with Lana Davis and Johnson.

Attempts to satisfy the Newsome judgment have been repeatedly frustrated. For example, Raborn's receivership was abated in 1986 when a settlement was reached, but had to be reinstated in May 1993 after Johnson breached the settlement agreement. Satisfaction was also interrupted by Johnson's bankruptcy. In denying Johnson a discharge, the bankruptcy judge pointedly commented on Johnson's "nefarious machinations" to avoid payment of the Newsome judgment, characterizing Johnson's "fanciful account" of failed investments with "imaginary friends" as being indicative of fraud, perjury and forgery.

On July 14, 1993, Bayless met Johnson at the Davis home to search for assets that could be applied to the Newsome judgment. Johnson consented to a limited search for his assets. The facts alleged by Davis, which must be accepted as true, suggest that Johnson's consent was invalid. ² During the search both Lana Davis and her daughter Lori Davis returned home and were distressed to find Bayless in the home. Davis In November 1993, pursuant to a turnover petition, the state court authorized the receiver to take possession of the contents of storage facilities held in the name of Dr. Johnson or other named persons associated with him, including Lana Davis and her children. The November order also instructed named storage facilities to turn over documentation that would allow the receiver to determine whether Johnson had an interest in the contents of the storage rooms at those facilities. In December 1993, the court issued a supplemental order specifically identifying a particular storage unit leased to Davis' adult daughter, Carrie Goff. Pursuant to those orders Raborn and Bayless thereafter searched the Goff storage unit and seized several items of value, including $5,600 cash, several items of jewelry which Davis claims belonged to her mother and grandmother, and an oil painting. The Davises are not party to the state court receivership action and received no notice that an order allowing search of their property had been issued. Defendants acknowledge that the property is being held by the receiver, but allege that it is clearly identifiable as Johnson's from documents in the Johnson divorce proceeding. In an order dated December 7, 1993, the state court also authorized Raborn or her agent to take possession of the contents of safe deposit boxes held by Johnson or other named individuals, including Davis and her children. No search or seizure has been conducted pursuant to this last order.

alleges that Bayless rifled her underwear drawer, read her personal mail and refused to leave. Davis also claims that Bayless eventually left with several pair of Lana Davis' underwear. Defendants Raborn, Bayless and Bayless & Stokes respond that Bayless' search of Johnson's residence was an attempt to satisfy the Newsome judgment and was authorized by the state court's order appointing Raborn receiver, which allowed the receiver to take possession of Johnson's non-exempt property and required Johnson to cooperate by providing access to places where such property might be located.

PROCEDURAL HISTORY

The Davises filed this action in February 1994. Their amended complaint alleges that Raborn, Bayless and Bayless & Stokes conspired under color of state law to deprive them of protected liberty and property interests without due process of law. The complaint alleges violations of Article 1 Sec. 10 and the First, Fourth and Fourteenth Amendments to the United States Constitution, and statutory violations under 42 U.S.C. Secs. 1983 and 1985. The Davises also sought preliminary injunctive relief to enjoin the defendants from seizing or disposing of property belonging to the Davises during the pendency of the suit. Finally, the complaint states a number of pendant state law claims, including invasion of privacy, conversion, civil conspiracy, intentional infliction of emotional distress, abuse of process, trespass and violation of Article 1 Sec. 19 of the Texas Constitution, which guarantees due process of law.

Defendants filed a 12(b)(6) motion, arguing that they were entitled to absolute judicial immunity from the Davises' claims. With that motion, defendants filed a request that the court take judicial notice of the state court orders authorizing the receiver's actions. The Davises responded and submitted the affidavits of Dr. Johnson and Lana Davis. Taking judicial notice of the state court orders, the district court granted defendants' motion. ³

THE DISTRICT COURT'S DISPOSITION

The district court's brief order purports to dismiss the entire complaint, but expressly decides only two issues: (1) that a court appointed receiver is entitled to share in the appointing judge's absolute judicial immunity and (2) that alleged misappropriation of

property or funds by a receiver does not state a constitutional claim for deprivation of due process when state law affords adequate post-deprivation remedies. On its face, the order appears to address only Raborn's liability for federal law claims. We have assumed for purposes of review that the district court intended to extend these principles to the other defendants and to the Davises' state law claims.

JUDICIAL IMMUNITY

Court appointed receivers act as arms of the court and are entitled to share the appointing judge's absolute immunity provided that the challenged actions are taken in good faith and within the scope of the authority granted to the receiver. New Alaska Dev. Corp. v. Guetschow, 869 F.2d 1298, 1303 (9th Cir.1989); Property Management & Investments, Inc. v. Lewis, 752 F.2d 599, 602-03 (11th Cir.1985); T & W Investment Co. v. Kurtz, 588 F.2d 801, 802 (10th Cir.1978); Kermit Contr. v. Banco Credito Y Ahorro Ponceno, 547 F.2d 1, 3 (1st Cir.1976); Bradford Audio Corp. v. Pious, 392 F.2d 67, 72 (2d Cir.1968); see also Boullion v. McClanahan, 639 F.2d 213 (5th Cir.1981) (recognizing derived judicial immunity for bankruptcy trustees who act under the supervision of and subject to the orders of the bankruptcy court). Because a receiver's immunity is derivative of the appointing judge's judicial immunity, it must depend, in part, upon whether the state court was acting within its judicial discretion.

Jurisdiction of the State Court to Enter the Receivership Orders

Judges are afforded absolute immunity when they (1) perform a normal judicial function; unless they are (2) acting in the clear absence of all jurisdiction. Stump v. Sparkman, 435 U.S. 349, 357-60, 98 S.Ct. 1099, 1105-06, 55 L.Ed.2d 331 (1978). For purposes of immunity, the judge's jurisdiction is construed broadly and a judge is not deprived of immunity "because the action he took was in error, was done maliciously, or was in excess of his authority; rather, he will be subject to liability only when he has acted in the 'clear absence of all jurisdiction.' " Id. at 357, 98 S.Ct. at 1105. Because " 'some of the most difficult and embarrassing questions which a judicial officer is called upon to consider and determine relate to his jurisdiction,' " the proper inquiry is not whether the judge actually had jurisdiction, or even whether the court exceeded its jurisdictional authority, but whether the challenged actions were obviously taken outside the scope of the judge's power. Id. at 357, 98 S.Ct. at 1105 (quoting Bradley v. Fisher, 13 Wall. 335, 352, 20 L.Ed. 646 (1872)).

The Davises argue that defendants Raborn and Bayless are not entitled to immunity because the state court exceeded its authority by ordering the search and seizure of the Davises' property when the Davises were not party to the Newsome litigation. The Davises cite several Texas cases which collectively stand for the proposition that receivers cannot take custody of property in the possession of strangers to the suit. Ex parte Harvill, 415 S.W.2d 174 (Tex.1967); Ex parte Britton, 127 Tex. 85, 92 S.W.2d 224 (1936); Ex parte Renfro, 115 Tex. 82, 273 S.W. 813 (1925). Harvill, Britton and Renfro all involve contempt proceedings brought by the receiver against third parties and are expressly inapplicable to situations in which the third party...