Giannetta v. Boucher
| Decision Date | 22 December 1992 |
| Docket Number | No. 92-1488,92-1488 |
| Citation | 981 F.2d 1245 |
| Parties | NOTICE: First Circuit Local Rule 36.2(b)6 states unpublished opinions may be cited only in related cases. James W. GIANNETTA, Plaintiff, Appellant, v. Peter A. BOUCHER, Defendant, Appellee. |
| Court | U.S. Court of Appeals — First Circuit |
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE
James W. Giannetta on brief pro se.
Before Breyer, Chief Judge, Torruella and Selya, Circuit Judges.
Plaintiff-appellant, James W. Giannetta, appeals from the district court's dismissal of his complaint for lack of subject matter jurisdiction. Appellant contests the district court's finding that "the allegation of jurisdictional amount is frivolously made with no good faith foundation in fact." Appellant also contends that the district judge erred in not recusing himself from the case pursuant to 28 U.S.C. § 455(a), despite appellant's failure to move for recusal. Finally, appellant argues that the district court abused its discretion in its intermediate orders and rulings. We affirm.
Appellant filed the complaint in this case on July 30, 1991 with the United States District Court for the District of Maine, claiming subject matter jurisdiction based upon diversity of citizenship of the parties. Appellant's original complaint sought damages for breach of contract and fraud "associated with the defendant's improper and unlawful use of the plaintiff's credit card, which has resulted in a financial loss to the plaintiff, and has permanently damaged the plaintiff's credit rating."
Specifically, appellant alleged that in September, 1988, appellant agreed to add appellee as an additional card holder on appellant's pre-approved application for a CitiBank Mastercard. Between September, 1988 and July, 1989, appellee received a credit card for appellant's account, but did not inform appellant that he had received it. Appellant further alleged that appellee made charges on the credit card in the amount of $4,151. The complaint stated that appellee "fraudulently converted funds from the checking accounts of Leisure Leasing Associates, owned by Plaintiff James W. Giannetta, for which he was an authorized signature for legitimate Leisure Leasing Associates expenses only" and used the funds, in the amount of $1,586, to pay personal debts incurred by the use of the CitiBank Mastercard. Finally, appellant claimed that, as a result of appellee's breach of contract and fraud, the appellant's credit rating had been damaged, causing him financial loss in the amount of $250,000.
At the time that he filed his complaint, appellant was serving a 15-year sentence resulting from guilty pleas entered in December, 1986 and March, 1987 to charges of conspiracy to possess with intent to distribute cocaine and to import hashish. On February 26, 1988, Chief Judge Gene Carter of the United States District Court for the District of Maine suspended the imposition of sentence and placed defendant on probation for a period of five years. On July 7, 1989, however, Chief Judge Carter ordered appellant's probation revoked for numerous violations of conditions of probation. See United States v. Giannetta, 717 F. Supp. 926 (D. Me. 1989).
In January, 1992, after appellant had filed his complaint in this case, Chief Judge Carter presided over a hearing on appellant's motion for reduction of his sentence. On March 4, 1992, Chief Judge Carter denied the motion, finding, in part, as follows:
The court is not persuaded that Defendant's latest round of cooperative activities with the government represents any rehabilitation of his previously determined criminal bent. This activity is simply another round of the same self-serving, opportunistic conduct by which he has continuously baited the most gullible members of the law enforcement community and by which he gulled this Court into placing him, with illuminating if disastrous consequences, on probation at the first sentencing. The Court is morally certain that the cooperative conduct reflected in the presentation most recently made to the Court is not motivated by any sense of genuine remorse for Defendant's past behavior or any desire to atone for past wrongful acts. He remains, in the view of the Court, as unreconstructed as when the Court last appraised his capacity for responsible, law-abiding conduct.
In response to appellant's complaint, appellee filed an answer and a motion to dismiss for failure to state a claim, lack of subject matter jurisdiction due to a deficient jurisdictional amount in controversy, and failure to allege fraud with the requisite specificity demanded by Fed. R. Civ. P. 9(b). Appellee asserted as an affirmative defense that the alleged expenditures were authorized by appellant and were made solely for appellant's benefit. Appellant filed a rejoinder to the affirmative defense, denying that the charges were authorized by him or were made for his benefit. The answer, motion to dismiss and memorandum in support of the motion were the only documents filed by appellee in this case.
On December 6, 1991, appellant filed an amended complaint (with leave of the court) alleging breach of contract, breach of fiduciary relationship and fraud. He sought actual damages in the amount of $75,737.00, $70,000 of which was for harm to his credit rating "for a minimum period of 7 years." Appellant also sought $50,000 in punitive damages and $50,000 in unspecified "consequential" damages. The essential factual basis for the claims remained the same as in the original complaint: that appellee had agreed to pay for his charges on appellant's CitiBank Mastercard account from his personal accounts or funds, but had actually only made such payments from appellant's accounts.
On October 28, 1991, appellant filed a motion to compel discovery and request for sanctions, seeking an order compelling appellee to respond to Plaintiff's First Set of Interrogatories, served upon him on September 17, 1991. After appellee failed to object, Magistrate Judge Cohen entered an order granting the motion to compel pursuant to Local Rule 19(c). The court ordered appellee to serve his answers to interrogatories upon appellant by November 29, 1991.
On December 6, 1991, appellant filed a motion for contempt order, default judgment, and sanctions, on the ground that appellee had failed to comply with the court order compelling discovery. On January 3, 1992, Magistrate Cohen granted the order, again pursuant to Local Rule 19(c), and directed the Clerk to enter the defendant's default pursuant to Fed. R. Civ. P. 37(b)(2). The Clerk entered the default on that date.
On December 27, 1991, appellant moved for a default judgment to be entered in the amount of $175,737 plus interest and costs. Chief Judge Carter denied the motion on January 23, 1992, on the ground that "the amount of recoverable damages is not 'a sum certain' and a trial of damages issues is required to determine damages." Following the entry of default against appellee, on February 24, 1991, the district court denied (without explanation) appellant's previously filed motions to amend the scheduling order to extend its deadlines by 30 days and to add as an additional defendant, Jamie Plourd, who allegedly conspired with appellee to commit the unlawful acts alleged in the amended complaint. On April 3, 1992, Chief Judge Carter granted appellee's motion to dismiss, finding that "the allegation of jurisdictional amount is frivolously made with no good faith foundation in fact." Appellant appeals from the judgment dismissing his complaint.
1. Dismissal for lack of subject matter jurisdiction. Title 28 U.S.C. § 1332 provides, in relevant part, as follows:
The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $50,000. As exclusive of interest and costs, and is between--
(1) citizens of different states;
In his Amended Complaint, appellant asserted that the amount in controversy exceeded $50,000. As the Supreme Court has stated,
[t]he general federal rule has long been to decide what the amount in controversy is from the complaint itself, unless it appears or is in some way shown that the amount stated in the complaint is not claimed "in good faith." In deciding this question of good faith we have said that "it must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal."
Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 353 (1961) (quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938)). In dismissing appellant's complaint, the district court found that "the allegation of jurisdictional amount is frivolously made with no good faith foundation in fact." Before dismissing the complaint on this ground, the district court was required to find that it appeared "to a legal certainty" that appellant's claims were really for less than $50,000. Once the jurisdictional amount is challenged, as it was in this case by appellee's motion to dismiss, appellant had the burden of "alleging with sufficient particularity facts indicating that it is not a legal certainty that the claim involves less than the jurisdictional amount." Department of Recreation & Sports v. World Boxing Ass'n, 942 F.2d 84, 88 (1st Cir. 1991).
We conclude that appellant has not met that burden. In his brief, appellant admits that his "out-of-pocket monetary loss" amounted to only $5,737.00. To bring the amount in controversy up to the jurisdictional minimum, appellant relies upon claims of damages resulting from harm to his credit rating and punitive damages. 1 We address each of these claims in turn to determine whether they are alleged "with sufficient particularity" to meet appellant's burden.
a) Damages for Harm to Credit Rating. It is unclear whether Maine law recognizes injury to credit rating as an element of...
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