Lattanzio v. Ackerman

• Decision Date: 01 February 2010
• Docket Number: Civil Action No. 09-CV-13-JMH.
• Citation: 682 F.Supp.2d 781
• Parties: James LATTANZIO and Sandra Lattanzio, Plaintiffs, v. Thomas ACKERMAN, et al., Defendants.
• Court: U.S. District Court — Eastern District of Kentucky

682 F.Supp.2d 781

James LATTANZIO and Sandra Lattanzio, Plaintiffs,

v.Thomas ACKERMAN, et al., Defendants.

Civil Action No. 09-CV-13-JMH.

United States District Court,

E.D. Kentucky,

Central Division,

at Lexington.

Decided: Feb. 1, 2010.

COPYRIGHT MATERIAL OMITTED

James Lattanzio, Georgetown, KY, pro se.

Sandra Lattanzio, Georgetown, KY, pro se.

Matthew Robb Walter, Ephraim Woods Helton, Helton, Erwin & Associates, Danville, KY, Adrian M. Mendiondo, D. Barry Stilz, Kinkead & Stilz, PLLC, Lexington, KY, for Defendants.

MEMORANDUM OPINIONAND ORDER

JOSEPH M. HOOD, Senior District Judge.

Defendants Ephraim W. Helton, Thomas Ackerman, and Mahogany Hill Farm, LLC, have filed a motion to dismiss the complaint [R. 56] and plaintiffs James and Sandra Lattanzio have filed their response opposing the motion. [R. 63] The time to file a reply in further support has now elapsed. LR 7.1(c).

The Court concludes the motion to dismiss must be granted because the moving defendants' failure to assert the affirmative defenses of release and issue/claim preclusion in their Answers to the plaintiffs' Complaint did not result in their waiver; the Lattanzios's procedural defenses to the enforceability of the Mutual Release are barred by preclusion principles; and the Lattanzios's substantive claims under state and federal law fall within the scope of the Mutual Release.

I. Factual Background

In their Complaint, the Lattanzios allege that on August 15, 2008, they rented a horse barn and pastures from Mahogany Hill Farm, LLC, through its agent, Thomas Ackerman. They further allege that one month later Ackerman began stalking Sandra and the couple's minor daughter, and on October 30, 2008, Ackerman told the plaintiffs that he was increasing the monthly rental due by $500 and they would be required to prepay utility expenses. In early November, Ackerman caused an agisters lien to be filed against plaintiffs' personal property, and thereafter barred the couple from entering on the property, preventing them from caring for or feeding the horses located in the barn. On November 10, 2008, the Lattanzios filed suit against Ackerman and Mahogany Hill in the Circuit Court of Boyle County, Kentucky. Lattanzio v. Ackerman, No. 08-CI-571, Boyle Circuit Court.

The parties thereafter executed a release on December 23, 2008 to resolve the claims between them. The Mutual Release provides: ... each of the parties hereto... do hereby... release... the other and their respective agents, servants... from, any and all claims, actions, causes of action... whatsoever each may now have on account of, or in any way growing out of, those facts which form the basis of such civil action by which arise as a result of any such claims known, or unknown,... sustained as a result... of any facts alleged in such litigation, or which could be alleged therein, or which arise from any prior dealings and/or transactions between the parties... ¹

[R. 56-3 at 3] The Mutual Release was drafted by Ephraim Helton, counsel for Ackerman and Mahogany Hill Farm, and was signed by James Lattanzio "individually and on behalf of Galen Academy, James Lattanzio and Sandra Lattanzio," and by Ackerman "individually and on behalf Mahogany Hill Farm, LLC."

The next day, on December 24, 2008, the Lattanzios filed a motion to "supplement" their previously-filed motions for contempt in the Boyle Circuit Court, in which they alleged that they executed the Mutual Release under duress. On December 29, 2008, Ackerman and Mahogany Hill Farm filed a Motion to Dismiss in the Lattanz-ios's case before the Boyle Circuit Court on the strength of the Mutual Release.

However, before a hearing on that motion, on January 9, 2009, the Lattanzios filed their Complaint in this action, alleging civil RICO violations and a conspiracy to violate their constitutional rights by Ackerman, Helton, various state and county officials, and James Lattanzio's ex-wife who resides in Maryland. [R. 2] The Lattanzios further sought injunctive relief against "intimidation," [R. 5] and to remove the still-pending state court proceedings to this Court because "the two cases are intertwined, (originating from the same acts)," [R. 6] This Court denied both motions on primarily procedural grounds. [R. 7, 8]

Helton filed his Answer to the Complaint on February 5, 2009, in which he denied participation in any conspiracy regarding the Lattanzios and noting that he acted solely in a representative capacity for Ackerman. The Answer does not refer to the preexisting state court litigation nor the December 23, 2008, Mutual Release. [R. 11] "

On February 12, 2009, the Boyle Circuit Court entered an Order dismissing the Lattanzios's claims in light of the Mutual Release, presumably entered shortly after the hearing on Helton's Motion to Dismiss, which the Lattanzios did not attend. In doing so, the court expressly found: !!!

2. That the Mutual Release executed by the Plaintiffs and the Defendants which has been filed of record herein, is a valid release, as a matter of law, and there is no evidence to support the Plaintiff's contention that said mutual release was executed under duress, coercion, or the result of fraud. The Plaintiffs and the Defendants each released the claims which they had against the other in the Mutual Release and there is sufficient consideration to enforce the Mutual Release.

[R. 56-3 at 1-2] Upon that finding, the Boyle Circuit Court dismissed the case with prejudice.

Four days later, on February 16, 2009, Ackerman and Mahogany Hill Farm filed their Answer to the Complaint in this case. Their Answer closely tracks the language of Helton's Answer, similarly denying par- ticipation in any conspiracy with government officials. The Answer likewise makes no reference to the recently-concluded state court litigation or the December 23, 2008, Mutual Release. [R. 13]

Although the moving defendants were, as early as December 23, 2008, armed with a Mutual Release apparently broad enough to cover the claims asserted in this proceeding, as well as with a February 12, 2009, state court order dismissing the Lattanzios's claims with prejudice, the moving defendants made no effort to utilize these tools defensively in this proceeding prior to the filing of their December 18, 2009, Motion to Dismiss. [R. 56] The motion does not identify the civil rule under which they wish to have their motion considered, and does not clearly indicate with respect to each claim between each party whether dismissal is sought based upon a theory of release, claim preclusion, issue preclusion, or on the merits, each a distinct legal principle. Nonetheless, the Court ultimately concludes that the prior state court adjudication and the Mutual Release collectively bar the assertion of the claims asserted herein.

II. Discussion

A. The Defendants did not waive the defenses of release or res judicata.

As a threshold matter, none of the moving defendants asserted the affirmative defenses of release or res judicata in their Answer to the Complaint. [R. 11, 13] The Federal Rules of Civil Procedure plainly require that:

In responding to a pleading, a party must affirmatively state any avoidance or affirmative defense, including:

...

release;

res judicata;...

Fed.R.Civ.P. 8(c). The rule is mandatory and should not be lightly disregarded. Some courts have strictly enforced Rule 8(c)'s requirement, holding that failure to timely assert an affirmative defense in an answer or at an early stage of litigation results in its waiver. See Castro v. Chicago Housing Auth., 360 F.3d 721, 735 (7th Cir.2004) ("if a defendant does not raise defenses at the time of filing an answer, those defenses are deemed waived.... if Rule 8(c) is not to become a nullity, we must not countenance attempts to invoke such defenses at the eleventh hour, without excuse and without adequate notice to the plaintiff."); Youren v. Tintic School Dist, 343 F.3d 1296, 1302 (10th Cir.2003); Radford Trust v. First Unum Life Ins. Co. of America, 321 F.Supp.2d 226, 242-43 (D.Mass.2004) (refusing to consider release as affirmative defense where no exception to rule of waiver applied). The fact that a plaintiff may be aware of the settlement agreement itself is irrelevant—it is the plaintiffs notice of the defendant's intention to rely upon the settlement as a defense to a claim in pending litigation which Rule 8(c) seeks to ensure.

Nonetheless, other courts have held that a failure to comply with Rule 8(c) does not necessarily result in a waiver. As our sister court has recently noted,

Such a failure, however, is not necessarily fatal. "Failure to raise an affirmative defense by responsive pleading does not always result in waiver." The purpose of Fed. R. Civ. Proc. 8(c) is to place the opposing party on notice of the affirmative defense so she can effectively respond to it. This is not a situation where Defendant attempted to raise the defense on the eve of trial. Plaintiff had ample opportunity to consider and fully respond to this defense in its summary judgment opposition. While Defendant should have been more diligent in raising this defense, the Court does notbelieve Plaintiff has been prejudiced by Defendant's failure to raise [it] earlier in these proceedings.

Grego v. Meijer, Inc., 239 F.Supp.2d 676, 683-84 (W.D.Ky.2002) (internal citations omitted) (citing Smith v. Sushka, 117 F.3d 965, 969 (6th Cir.1997)). This more permissive approach has been followed in the Sixth Circuit with respect to such defenses in appropriate circumstances. Westwood Chemical Co., Inc. v. Kulick, 656 F.2d 1224, 1227-28 (6th Cir.1981).

In the present case, although the moving defendants inexplicably delayed in their assertion of the defense, (1) the plaintiffs were aware of the release and explicitly referred to it in their Complaint; (2) the defendants' motion to dismiss based upon the release was filed well before the close of discovery in this matter; (3) the plaintiffs have not alleged any prejudice or asserted waiver in...