Howard v. Office of Special Deputy Receiver

• Decision Date: 14 February 2022
• Docket Number: Civil Action 3:21-CV-0921-K (BH)
• Parties: SAMUEL M. HOWARD, Plaintiff, v. OFFICE OF THE SPECIAL DEPUTY RECEIVER, Defendant.
• Court: U.S. District Court — Northern District of Texas

SAMUEL M. HOWARD, Plaintiff,
v.
OFFICE OF THE SPECIAL DEPUTY RECEIVER, Defendant.

Civil Action No. 3:21-CV-0921-K (BH)

United States District Court, N.D. Texas, Dallas Division

February 14, 2022

Referred to U.S. Magistrate Judge^[1]

FINDINGS, CONCLUSIONS, AND RECOMMENDATION

IRMA CARRILLO RAMIREZ, UNITED STALES MAGISTRATE JUDGE.

Before the Court are Defendant Lumbermens Mutual Casualty Company's … Motions to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(1)-(2) and Motion to Abate and Dismiss, filed on June 24, 2021 (doc. 18), and Defendant Office of the Special Deputy Receiver's … Motions to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(1)-(2) and Motion to Abate and Dismiss, filed on June 24, 2021 (doc. 19). Based on the relevant filings and applicable law, the plaintiff's responses to the motions are liberally construed as motions for leave to amend his complaint and GRANTED; the motions to dismiss should be GRANTED, and the motions to abate should be DENIED as moot.

I. BACKGROUND

This pro se action arises from the denial of Samuel M. Howard's (Plaintiff) insurance claim for an unpaid 1995 settlement with his former employer by liquidated insolvent Illinois insurer, Lumbermens Mutual Casualty Company (Insurer), the liquidation of which is being overseen by the Illinois Office of the Special Deputy Receiver (Receiver) (Defendants). (See doc. 3 at 1, 17; doc. 10 at 1; doc. 17 at 1; doc. 21 at 6, 9; doc. 24 at 3.)^[2]

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On December 6, 1992, a month after he started working as a diesel mechanic at Grayline Tours of Dallas/Ft. Worth (Employer 1), Plaintiff injured his back in a work accident. (See doc. 3 at 13, 21.) Three weeks later, on December 27, 1992, he started working as a limo mechanic at Executive Transportation Services (Employer 2). (See Id. at 55, 58-59; doc. 7 at 5; doc. 21 at 6-7.) Insurer was allegedly the insurance carrier for both employers. (See doc. 3 at 1, 17; doc. 8 at 2;^[3] doc. 10 at 1; doc. 21 at 6, 9.) Plaintiff was fired from both companies on January 11, 1993, but did not receive worker's compensation, unemployment benefits, or reimbursement for his medical bills. (See doc. 3 at 21, 27; doc. 8 at 2, 5, 9; doc. 21 at 2-3, 6-7.) He also claims that the owner of Employer 2 failed to pay him $548.00 for “repair and labor.” (See doc. 3 at 55, 58-59; doc. 8 at 2, 5; doc. 21 at 6-7.)

Plaintiff sued Employer 2 on June 7, 1993, in Dallas County Court at Law No. 1 for damages. (See doc. 3 at 4-5.) On August 8, 1995, the parties agreed to settle all claims arising out of Plaintiff's December 6, 1992 injury, including “bad faith, DTPA, 21.21 Insurance Code violations or any other claim in common law or statute, ” for $21, 000.00, to be paid no later than November 15, 1996. (See id.) Employer 2 “went into bankruptcy and did not satisfy” the settlement, however. (See Id. at 46.)

On May 8, 2013, the Circuit Court of Cook County, Illinois, placed Insurer into liquidation, enjoining any actions outside the liquidation proceedings against it or Receiver. (See doc. 17 at 6-16.) Between August 13, 2013, and Spring 2020, Plaintiff submitted claims for the unpaid settlement and allegedly sent Receiver proof of his employment with Employer 1, but his claim

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was denied several times for lack of proof of employment. (See doc. 3 at 17-18, 27-29, 34-52; doc. 21 at 3, 10.)

On April 22, 2021, Plaintiff filed this lawsuit against Receiver. (See doc. 3.) The one-page complaint, accompanied by 59 pages of attachments consisting of statements, correspondence, and emails, states:

I was working at Executive Transportation but the debt is still unpaid. I won a settlement. Now Grayline Tours of Dallas/Ft Worth say there is no records that I were ever an employee of this Insured I have proof of claim I have a W2 Form that show I worked there. Why would a company deliberately to conspiracy to destroy an employee record, and I like to file a suit and file a lien additional Information of Affidavits may be attached

(See Id. at 1-60.)^[4] Also attached is a standard civil cover sheet, in which Plaintiff checked the box for “U.S. Government” as the plaintiff, and the following boxes for “Nature of Suit”: 110 Insurance, 365 Personal Injury - Product Liability, 440 Other Civil Rights, and 790 Other Labor Litigation. (See Id. at 61.) He separately listed the federal statutes under which he is suing as “Code 110, 442 [Employment], 422 [No such code], 718 [No such code], 895 [Freedom of Information Act] and 790 (Rev 10-20). (See id.) While the specific causes of action he seeks to assert are unclear, he does expressly seek to impose a lien on an undisclosed property to secure either $20, 260.00 or $26, 000 for the unpaid settlement and $548.00 for “repair and labor.” (See doc. 3 at 1, 27-28, 58-59; doc. 8 at 2, 5-6; doc. 10; doc. 14 at 2-3; doc. 17; doc. 21 at 7.) In his MJQ answers and subsequent amendments to his complaint, Plaintiff also named Insurer as a

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defendant and made the same type of allegations against it that he made against Receiver. (See doc. 8; doc. 10; doc. 14; doc. 17.)^[5]

On June 24, 2021, Defendants filed identical answers and motions to dismiss under Fed.R.Civ.P. 12(b)(1)-(2), or in the alternative, motions to abate and dismiss. (See docs. 18-19.) In his response, filed on July 7, 2021, Plaintiff specifically sought a judgment lien under 28 U.S.C. § 3201 and alleged that his damages “will come over of $87, 000.00” due to 10% annual interest on the unpaid 1995 settlement. (See doc. 21 at 6-7.)^[6] Defendants replied on July 27, 2021, and Plaintiff filed a sur-reply without leave on December 9, 2021, in which he lists additional statutes as bases for his lawsuit. (See docs. 22-24).^[7]

II. SUBJECT MATTER JURISDICTION

Defendants move to dismiss under Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction. (See docs. 18 at 3; 19 at 3.)

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A motion under Rule 12(b)(1) “may be raised by a party, or by a court on its own initiative, at any stage in the litigation, even after trial and the entry of judgment.” Arbaugh v. Y & H Corp., 546 U.S. 500, 506 (2006). A court must dismiss the action if it determines that it lacks jurisdiction over the subject matter. Fed.R.Civ.P. 12(h)(3); Stockman v. Fed. Election Comm'n, 138 F.3d 144, 151 (5th Cir. 1998). “When a Rule 12(b)(1) motion is filed in conjunction with other Rule 12 motions, the court should consider the Rule 12(b)(1) jurisdictional attack before addressing any attack on the merits.” Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001) (per curiam). A dismissal under Rule 12(b)(1) “is not a determination of the merits, ” and it “does not prevent the plaintiff from pursuing a claim in a court that does have proper jurisdiction.” Id. Accordingly, considering Rule 12(b)(1) motions first “prevents a court without jurisdiction from prematurely dismissing a case with prejudice.” Id.

The district court may dismiss for lack of subject matter jurisdiction based on (1) the complaint alone; (2) the complaint supplemented by undisputed facts in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts. Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir. 1981). A motion to dismiss based on the complaint alone presents a “facial attack” that requires the court to merely decide whether the allegations in the complaint, which are presumed to be true, sufficiently state a basis for subject matter jurisdiction. See Paterson v. Weinberger, 644 F.2d 521, 523 (5th Cir. 1998). “If sufficient, those allegations alone provide jurisdiction.” Id. Facial attacks are usually made early in the proceedings. Id. “A facial attack requires the court merely to decide if the plaintiff has correctly alleged a basis for subject matter jurisdiction” by examining the allegations in the complaint, which are presumed to be true. Rodriguez v. Tex. Comm'n on the Arts, 992 F.Supp. 876, 878 (N.D. Tex. 1998) (citations omitted).

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If the defendant supports the motion with evidence, however, then the attack is “factual” and “no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.” Williamson, 645 F.2d at 413. A factual attack may occur at any stage of the proceedings. Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir. 1980). Regardless of the nature of attack, the party asserting federal jurisdiction continually carries the burden of proof to show it exists. Ramming, 281 F.3d at 161.

Here, Defendants' motions to dismiss for lack of subject matter jurisdiction rely solely on Plaintiff's pleadings, which consist of his original complaint with attachments, ^[8] his amendments to the original complaint, his MJQ answers, ^[9] his response to the motion, ^[10] and his sur-reply.^[11] (See

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docs. 3 at 1-60; doc. 8 at 1-3, 5-10; 10 at 1; 14 at 2-4; 17 at 1-16; 21 at 1-14; 24 at 1-3.) The motions therefore present a facial attack that do not require the resolution of factual matters outside the pleadings. See Williamson, 645 F.2d at 412-13.

A. Diversity Jurisdiction

Defendants contend that diversity jurisdiction is lacking because Plaintiff has not met the amount in controversy element. (See doc. 18 at 3; 19 at 3.)

Diversity jurisdiction is proper only when complete diversity exists between the parties and “the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs.” See 28 U.S.C. § 1332(a). The amount in controversy includes all damages available under the law governing the suit. St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F.3d 1250, 1254-55 (5th Cir. 1998) (citation omitted). “The sum claimed by a plaintiff...