Mullins v. Hallmark Data Systems, LLC

• Citation: 511 F.Supp.2d 928
• Decision Date: 07 September 2007
• Docket Number: No. 05 C 2654.,05 C 2654.
• Parties: Brenda MULLINS, Plaintiff, v. HALLMARK DATA SYSTEMS, LLC, Defendant.
• Court: U.S. District Court — Northern District of Illinois

511 F.Supp.2d 928

Brenda MULLINS, Plaintiff, v. HALLMARK DATA SYSTEMS, LLC, Defendant.

No. 05 C 2654.

United States District Court, N.D. Illinois, Eastern Division.

September 7, 2007.

COPYRIGHT MATERIAL OMITTED

Jon Zimring, Duane Morris LLC, Chicago, IL, for Plaintiff.

Robert Lance Witcher, Josef S. Glynias, Blackwell Sanders Peper Martin, LLP, St. Louis, MO, Marcela D Sanchez, Vincent P. Schmeltz, III, Mayer, Brown, Rowe & Maw LLP, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

JEFFREY COLE, United States Magistrate Judge.

I. INTRODUCTION

28 U.S.C. § 1915(e)(2)(A) provides that "[t]he court shall dismiss the case at any time if the court determines that ... the allegation of poverty [in an in forma pauperis application] is untrue...." The statute leaves the judge with no choice. Thomas v. Gen. Motors Acceptance Corp., 288 F.3d 305, 306 (7th Cir. 2002); Mathis v. N.Y. Life Insurance, 133 F.3d 546, 547 (7th Cir.1998). The only discretion the court has is whether to dismiss the case with or without prejudice.¹ However, as Chief Judge Easterbrook has said in another, but not unrelated context, "[p]laintiffs who attempt to deceive federal judges ... cannot expect favorable treatment on matters of discretion." Campbell v. Clarke, 481 F.3d 967 (7th Cir.2007).

Ms. Mullins concedes that her in forma pauperis application and affidavit contained answers that incorrectly omitted information regarding almost $20,000 in salary and interests in certain real property. She insists, however, that she meant not to mislead anyone; her excuses are many. The question is whether her explanations are credible or whether her IFP application was perjurious. Thomas, 288 F.3d at 306.

"The legal system offers many ways to deal with problems; perjury is not among them." Escamilla v. Jungwirth, 426 F.3d 868, 870 (7th Cir.2005). Compare Cannon-Stokes v. Potter, 453 F.3d 446, 448 (7th Cir.2006)(Easterbrook, J.)(judicial estoppel raises the costs of lying thereby inducing debtors to be more truthful in their bankruptcy filings). Indeed, so uncompromising is the law's insistence that participants in judicial proceedings must be truthful, that even exclusionary rules designed to protect constitutional rights give way in the face of perjury. See Harris v. New York, 401 U.S. 222, 91 S.Ct. 643, 28 L.Ed.2d 1 (1971); Waller v. United States, 347 U.S. 62, 65, 74 S.Ct. 354, 98 L.Ed. 503 (1954). Perjury, Judge Posner has said, "committed in the course of legal proceedings is a fraud on the court, and it is arguable that a litigant who defrauds the court should not be permitted to continue to press his case." Allen v. Chicago Transit Authority, 317 F.3d 696, 703 (7th Cir.2003). This is such a case.

II. BACKGROUND

A. Plaintiff's Complaint and In Forma Pauperis Applications

On May 4 and July 5, 2005, Ms. Mullins, filed two pro se complaints against Hallmark Data Systems, LLC; one alleging employment discrimination and the other retaliation. The earlier case was assigned to Judge Holderman. The July complaint was assigned to Judge Darrah. Along with each complaint, Ms. Mullins filed a Motion for Appointment of Counsel and an Application for Leave to Proceed In Forma Pauperis. (No. 05-2654, Dkt. # 5; No. 05-2658, Dkt. # 8). The applications required the completion of form financial affidavits designed for use by non-lawyers and which twice prominently warned the applicant that the answers were being given under the penalty of perjury. The first warning appears on page 1 immediately before the first question. It provides that Ms. Mullins is "answer[ing] the following questions under penalty of perjury." (Underscoring in original). The second warning appears immediately above Ms. Mullins's signature. It is impossible to overlook. It states: "I declare under penalty of perjury that the above information is true and correct. I understand that pursuant to 28 U.S.C. § 1915(e)(2)(A), the court shall dismiss this case at, anytime if the court determines that my allegation of poverty is untrue."

In her form financial affidavits, Ms. Mullins swore that neither she, nor anyone else living at her address "own[ed] any real estate (houses, apartments, condominiums, cooperatives, two-flats, three-flats, etc.)." She also swore that, aside from the $1424 per month she was earning from her then current employer, she had not received more than $200 a month in salary or wages in the last year. In fact, Ms. Mullins was employed by Hallmark until November 12, 2004 and had earned almost $20,000 in that period.

Taking Ms. Mullins at her word, Judge Holderman granted Ms. Mullins's motion for the appointment of counsel, but ordered Ms. Mullins to pay the $250 filing fee before June 30, 2005. She did so. The case was later reassigned to Judge Kendall, who consolidated the discrimination and retaliation suits on April 13, 2006. At this point in the proceedings, I had been assigned to supervise discovery, which proceeded only haltingly. This was due, not to any fault of Ms. Mullins's appointed counsel, but her own lack of cooperation. (Dkt.# 32). It reached the point that. Hallmark filed a motion to dismiss for failure to prosecute under Fed.R.Civ.P. 41(b). Thereafter, the parties consented to my jurisdiction, and the case was reassigned to me.

The truthfulness of Ms. Mullins's IFP answers was called into question when she filed for bankruptcy protection on April 8, 2006. (In re Brenda Mullins, No. 06-B3891). In her schedule of assets, Ms. Mullins disclosed that she owned an interest in a single-family house located at 11935 South State Street in Chicago ("the State St. Property").² (Defendant's Memorandum to the Court, Ex. A.) This interest was not disclosed in her IFP applications.³

B.

The Motion to Dismiss Under Section 1915(e)(2)(A)

Shortly thereafter, Hallmark filed a Motion to Dismiss the complaint on the grounds that Ms. Mullins was untruthful in her IFP Affidavits regarding her lack of any property interest or income other than from her then-current employer.⁴ Contrary to Ms. Mullins's denial of any real estate ownership, Hallmark attached exhibits consisting of the deed and four mortgages taken against a property located at 127 E. 119th Street in Chicago ("119th St. Property") — a property other than the State St. property revealed in Ms. Mullins's bankruptcy filings.⁵ (Memorandum in Support of Defendant's Motion to Dismiss, Exs. A-E). In addition, Hallmark attached as exhibits copies of Ms. Mullins's 2003, 2004, and 2005 federal income tax returns, in which she claimed deductions for property tax and mortgage interest paid on the 119th St. property. (Id., Exs. F-H). Finally Hallmark pointed out that Ms. Mullins had earned $19,500 in salary from it during the period in which she swore she had not earned more than $200.

In response, Ms. Mullins conceded that she "made three specific omissions on her initial IFP applications": the failure to disclose her interests in the 119th St. property; the failure to disclose her interest in the State St. property, and her failure to disclose almost $20,000 in income from Hallmark. (Plaintiff's Response, at 3-4). Ms. Mullins had a miscellany of excuses. Some were made in her affidavit in response to the motion to dismiss; others evolved at the evidentiary hearing on October 4, 2006, at which she was represented by counsel whom I had appointed for her for purposes of the hearing and responding to the motion to dismiss, her prior counsel having been given leave to withdraw.

Among the excuses were: Ms. Mullins did not think she had to disclose the $19,500 in income from Hallmark since Hallmark and/or the court knew what it paid her; she did not think she had to disclose the $19,500 because she did not have access to the money in May 2005 as all of it had been spent on household expenses; she thought she had to disclose the money since everyone should have known, and in any event, it was excludable by virtue of instructions from the Illinois Department of Unemployment Compensation; she was unaware of her property interests; she did not understand the simple questions on the IFP form; she did not read the questions very carefully; she was upset when she filled out the forms; she was "morally" convinced that she did not have an interest in one of the properties; she did not understand that she had an ownership interest in the properties even though she repeatedly took deductions relating to the 119th St. property on her federal income tax returns; she did not understand that being a mortgagor signified an ownership interest in property; and she did not have "complete ownership" in one of the properties and therefore did not think her fractional interest had to be disclosed and in any event the value of her share was small.

All of these post hoc justifications depend on Ms. Mullins's credibility. Making credibility judgments about anyone is often a tricky business. Demeanor can be an important component of the calculus. United States v. Biggs, 491 F.3d 616, 621 (7th Cir.2007); Julian v. Bartley, 495 F.3d 487, 493-94 (7th Cir.2007). Cf. Uttecht v. Brown, ____, U.S. ___, 127 S.Ct. 2218, 2223, 167 L.Ed.2d 1014 (2007)(demeanor of jurors); Rice v. Collins, 546 U.S. 333, 343, 126 S.Ct. 969, 163 L.Ed.2d 824 (2006)(prosecutor's demeanor). Indeed, the demeanor of a witness may satisfy the trier of fact not only that the witness' testimony is not true, but that the truth is the opposite of his story. See NLRB v. Walton. Mfg. Co., 369 U.S. 404, 408, 82 S.Ct. 853, 7 L.Ed.2d 829 (1962); Anderson v. Bessemer City, N. C., 470 U.S. 564, 575, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985).⁶ In the instant case, Ms. Mullins's overall demeanor was inconsistent with truthfulness. She was natural and relaxed when talking about routine and undisputed matters. Her demeanor changed markedly when pressed about the reasons for her exclusions on her IFP forms or when her explanations were in any way challenged. She then became annoyed, defensive, and...