Kuehl v. F.D.I.C.

• Decision Date: 09 September 1993
• Docket Number: No. 93-1419,93-1419
• Parties: David E. and Jean E. KUEHL, Plaintiffs, Appellants, v. FEDERAL DEPOSIT INSURANCE CORPORATION, et al., Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 905

8 F.3d 905

27 Fed.R.Serv.3d 845

David E. and Jean E. KUEHL, Plaintiffs, Appellants, v. FEDERAL DEPOSIT INSURANCE CORPORATION, et al., Defendants, Appellees.

No. 93-1419.

United States Court of Appeals, First Circuit.

Heard Sept. 9, 1993.

Decided Nov. 17, 1993.

Rehearing Denied Dec. 7, 1993.

Alex Komaridis, Auburn, NH, for appellants.

Richard E. Mills, Manchester, for appellees.

Before BOUDIN, Circuit Judge, COFFIN and CAMPBELL, Senior Circuit Judges.

COFFIN, Senior Circuit Judge.

The district court dismissed plaintiffs' 43-page, 358-paragraph complaint because of its failure to conform to the concise pleading requirements of Rule 8(a) of the Federal Rules of Civil Procedure. Plaintiffs contend that the court erred in doing so, and in failing to give them an opportunity to file an amended complaint. We cannot say that the district court abused its discretion and, accordingly, affirm the dismissal.

I. Procedural Background

Plaintiffs David and Jean Kuehl originally filed this lender liability lawsuit in state court, seeking damages from two banks and numerous bank officers and directors based on foreclosures against their properties and their resulting inability to obtain credit. The state court complaint consisted of 19 single-spaced typed pages containing 36 counts against 28 defendants.

In October 1991, the two banks were taken over by federal agencies, and the action was removed to federal court. Following a status conference in early February 1992, a magistrate judge ordered plaintiffs to submit "an amended complaint" to conform the pleadings to the concise pleading requirements of Fed.R.Civ.P. 8(a). ¹ The order noted the magistrate's expectation that "a review of the proposed amended complaint and the results of Rule 12(b)(6) motions [to dismiss for failure to state a claim] will reduce considerably the number of parties in the action."

Several days later, plaintiffs filed a 43-page, now double-spaced, complaint with the same number of counts, and including all of the original defendants, plus the two federal agencies. The complaint set forth, inter alia, eight separate counts of respondeat superior, eight counts of negligent supervision, six counts of breach of good faith, three counts of breach of fiduciary duty, three counts of negligence, and two counts of conspiracy. ²

Defendants promptly filed motions to dismiss. They urged that the entire complaint be dismissed for failure to provide a short and plain statement of the claims as required by Rule 8(a)(2), and as ordered by the magistrate judge. The motions alternatively sought dismissal against the individual defendants who had been sued only in their official capacities, and also challenged certain counts as failing to state claims upon which relief could be granted.

Plaintiffs objected to the motions, asserting that the complaint did conform to the requirements of Rule 8(a), and that every count stated a viable cause of action. They did not seek leave to further amend the complaint.

On July 23, 1992, the magistrate judge issued his Report and Recommendation calling for dismissal of the complaint because it violated Rule 8(a). He found that, despite the explicit directions in his February order, plaintiffs had "proceeded to file a verbose and redundant complaint containing the same number of counts as the original." He noted that several counts were nearly identical to each other, several other counts were ambiguous as to which defendant was named, and "[t]he possible substance of the claim is hidden in prolixity."

The Kuehls filed an objection to the recommended dismissal, complaining that no consideration had been given to the merits of their claims or to their "right" to further amend. This complaint was their first in the federal format, they pointed out, and Fed.R.Civ.P. 15(a) allows a party one amendment "as a matter of course" before a responsive pleading is served. ³ Plaintiffs did not, as part of their objection, seek leave to amend or submit a proposed amended complaint.

Plaintiffs did attempt to file a motion to amend in early September, attaching a proposed amended complaint. They also filed a dismissal without prejudice of all claims against the 21 defendants who were directors of the two banks. The court refused the motion to amend, however, because plaintiffs had not sought concurrence from the defendants, as required by Local Rule 11. No subsequent attempt was made to obtain concurrence or refile the pleading.

On September 25, 1992, the district court issued an order adopting the magistrate judge's recommendation that the complaint be dismissed in its entirety. The court noted that plaintiffs had failed to file an amended complaint meeting the requirements of Rule 8(a), as ordered, "even after the Magistrate Judge gratuitiously gave plaintiffs rather specific guidance as to how the complaint should be amended."

Plaintiffs filed a Motion for Reconsideration, stating that, in attempting to balance the various federal pleading rules, "[p]laintiffs' attorney unintentionally violated Rule 8(a)" and that dismissal with prejudice was too harsh a penalty under the circumstances. For the first time, plaintiffs submitted a proper request for permission to amend their complaint, although they did not submit a proposed new complaint. The district court denied the motion for reconsideration on March 12, 1993. This appeal followed.

The Kuehls now attack the dismissal on two fronts. First, they claim that they are absolutely entitled to another round of repleading under Rule 15(a) because they have filed only one federal complaint and defendants have not filed responsive pleadings. ⁴ Second, they argue that the deficiencies of their complaint were not so severe as to warrant a dismissal without the opportunity to amend.

II. The Right to Amend

Under Rule 81(c) of the Federal Rules of Civil Procedure, an action that is removed from state to federal court need not be repled "unless the court so orders." The Kuehls maintain that their original federal complaint was a repleading ordered pursuant to Rule 81(c), but that--contrary to the district court's conclusion--that redrafting did not use up their Rule 15(a) right to amend their complaint once as a matter of course.

We can agree, generally, with the principle that a repleading ordered under Rule 81(c) does not automatically deprive the plaintiff of the one-time option to amend granted by Rule 15(a). This seems particularly so when the repleading involves simply a change of format to fit the federal court model.

In this case, however, the magistrate judge explicitly ordered an amended complaint that was intended to contain substantive changes to meet Rule 8(a)'s requirements. The plaintiffs, therefore, had a chance to make meaningful modifications to their complaint and, indeed, were given some advice about how to do so. They point to no authority supporting the proposition that they are entitled, as a matter of right, to a second chance to improve the substance of their complaint. The fact that plaintiffs squandered their one guaranteed opportunity by making only stylistic changes does not yield them another.

III. Too Tough a Sanction?

A district court has the power to dismiss a complaint when a plaintiff fails to comply with the Federal Rules of Civil Procedure, including Rule 8(a)(2)'s "short and plain statement" requirement. Vakalis v. Shawmut Corp., 925 F.2d 34, 36 (1st Cir.1991); Mangan v. Weinberger, 848 F.2d 909, 911 (8th Cir.1988). See Fed.R.Civ.P. 41(b). Its decision to do so is reviewable only for abuse of discretion. Mangan, 848 F.2d at 911; HMG Property Investors v. Parque Indus. Rio Canas, 847 F.2d 908, 916-17 (1st Cir.1988).

Plaintiffs now acknowledge a technical violation of Rule 8(a), conceding that their complaint is excessively long and unnecessarily redundant. They claim, however, that dismissal with prejudice is too drastic a sanction because this was "unintentional error" on the part of plaintiffs' attorney, who believed that it was essential to plead in detail in light of the magistrate's stated expectation that many defendants and some claims would be dismissed. By drafting counts in numerous, short, separate paragraphs, plaintiffs explain, they sought to permit any dismissed counts to be excised without affecting the...