U.S. v. Martin

• Decision Date: 17 February 2005
• Docket Number: No. CIV.A. 203CV00157.,CIV.A. 203CV00157.
• Citation: 356 F.Supp.2d 621
• Parties: UNITED STATES of America, Plaintiff v. Lorenzo Grode MARTIN and Reginiald Anthony Falice, Defendants
• Court: U.S. District Court — Western District of Virginia

356 F.Supp.2d 621

UNITED STATES of America, Plaintiff v. Lorenzo Grode MARTIN and Reginiald Anthony Falice, Defendants

No. CIV.A. 203CV00157.

United States District Court, W.D. Virginia, Big Stone Gap Division.

February 17, 2005.

COPYRIGHT MATERIAL OMITTED

Thomas L. Eckert, United States Attorneys Office, Roanoke, VA, for Plaintiff.

Jeffrey Scott Hamilton, Gate City, VA, John Thadieu Harris, III, Wise, VA, for Defendant.

Lorenzo Grode Martin, Jonesville, VA, pro se.

Reginald Anthony Falice, Jonesville, VA, pro se.

MEMORANDUM OPINION

WILLIAMS, Senior District Judge.

The plaintiff, United States of America, ("Government"), has filed a complaint alleging that defendants Lorenzo Grode Martin, ("Martin"), and Reginald Anthony Falice, ("Falice"), intending to harm the creditworthiness and reputations of the named debtors, did knowingly file financing statements with the Virginia State Corporation Commission, ("Virginia SCC"), in which Martin and Falice falsely identified themselves as secured parties. (Docket Item No. 1.) This matter is before the court on Plaintiff's Motion For Summary Judgment, (Docket Item No. 45), and defendants' motions to dismiss. (Docket Item Nos. 9, 64.) Jurisdiction over this matter is based upon 28 U.S.C.A. §§ 1331, 1345, 2201, 2202 (West 1999).

I. Factual Background

Defendants are inmates serving life sentences at the United States Penitentiary in Lee County, Virginia, ("USP-Lee"). The record indicates that on October 8, 2003, Falice filed Uniform Commercial Code, ("UCC"), financing statements with the Virginia SCC in which he named himself as secured party for a debt of $8,000,000.00 allegedly owed by Patricial Conner, Robert Bruce King, Karen Williams and Clyde Hamilton. (Attachment 3 to Docket Item No. 45.) Martin is named in that financing statement as the person to whom acknowledgment of filing should be sent. The court notes that Conner is the Clerk of the Court for the U.S. Court of Appeals for the Fourth Circuit and King and Williams are judges who currently sit on the Fourth Circuit and were members of the panel that affirmed Falice's criminal conviction. The court further notes that Hamilton is a senior judge of the Fourth Circuit who also sat on the panel that affirmed Falice's criminal conviction and that Judge Williams was a member of the panel that affirmed Martin's criminal conviction.

That same day, Falice caused a second UCC financing statement to be filed with the Virginia SCC in which he named himself as the secured party for a $100,000,000.00 debt allegedly owed to him by Troy Miller, Jerry Jones and David Haas. (Attachment 3 to Docket Item No. 45.) Martin is named in the financing statement as the person to whom acknowledgment of filing should be sent. The Government has provided evidence that Miller and Jones are employed by the Bureau of Prisons, ("BOP"), at USP-Lee and Haas is a former employee of the BOP at USP-Lee who has since retired. (Attachment 4 to Docket Item No. 45.) In response to defendants' actions, the Government filed Correction Statements with the Virginia SCC as to each named debtor, incurring a cost of $140.00 in the process.

On December 31, 2003, the Government filed this action seeking (1) an injunction barring defendants from filing any financing statements with the Virginia SCC or any other lien with any public agency without prior approval of the court, (2) recovery of actual monetary damages jointly and severally against the defendants, (3) a declaration that the financing statements filed by the defendants are false, fraudulent and without legal or factual basis and (4) joint and several reimbursement of costs and fees of the guardians ad litem and for any garnishment that may issue. (Docket Item No. 1.) On January 27, 2004, defendants filed a Motion To Dismiss claiming that the court lacked jurisdiction to hear the case. (Docket Item No. 9.) On July 30, 2004, the Government filed this Motion For Summary Judgment. (Docket Item No. 45.) Although the defendants failed to submit a timely response to Plaintiff's Motion For Summary Judgment, they did file a second Motion To Dismiss on January 7, 2005, which the court considers to be their response. (Docket Item No. 65.)

II. Analysis

A. Defendant's Motions To Dismiss

Defendants' various motions to dismiss allege multiple defects in the courts assertion of jurisdiction in this case. (Docket Item Nos. 9, 35, 65.) First, defendants argue that the case should be dismissed for lack of personal jurisdiction. (Docket Item No. 9.) Next, the defendants argue that the court lacks subject matter jurisdiction over the Government's claim. (Docket Item Nos. 9, 65.) Finally, defendants argue that the United States lacks standing to bring this action. (Docket Item Nos. 9, 65.)

First, defendants argue that the case should be dismissed for lack of personal jurisdiction. (Docket Item No. 9.) Federal Rule of Civil Procedure, ("Fed. R. Civ.P."), Rule 4(k)(1)(A) provides that "[s]ervice of a summons or filing a waiver of service is effective to establish jurisdiction over the person of a defendant who could be subjected to the jurisdiction of a court of general jurisdiction in the state in which the district court is located." "`Because Rule 4(k)(1)(A) delimits the scope of effective federal service in terms of the limits on state court jurisdiction,' our inquiry into a federal court's jurisdiction pursuant to the Rule looks to the law of the state in which the federal court sits and the limits on the jurisdiction of that state's courts imposed by the Fourteenth Amendment." Ciena Corp. v. Jarrard, 203 F.3d 312, 317 (4th Cir.2000.). See also Allied Towing Corp. v. Great Eastern Petroleum Corp., 642 F.Supp. 1339, 1353 (E.D.Va.1986) ("The valid exercise of in personam jurisdiction by a federal district court over a nonresident defendant depends upon the proper service of process on the defendant and upon the defendant's amenability to suit in forum state").

First, the court must determine whether the Government effected adequate service of process upon the defendants. Fed.R.Civ.P. 4(e)(1) provides that:

Unless otherwise provided by federal law, service upon an individual from whom a waiver has not been obtained and filed... may be effected in any judicial district of the United States ...pursuant to the law of the state in which the district court is located, or in which service is effected, for the service of a summons upon the defendant in an action brought in the courts of general jurisdiction of the State.

Fed.R.Civ.P. Rule 4(e)(1).

Regardless of whether the Government effected adequate service of process upon the defendants under Virginia law, the defendants' actions in responding to the Government's complaint clearly constituted a waiver of process in this case. In Gilpin v. Joyce, 257 Va. 579, 581, 515 S.E.2d 124(1999) (citation omitted), the Supreme Court of Virginia held that:

`An appearance for any other purpose than questioning the jurisdiction of the court — because there was no service of process, or the process was defective, or the action was commenced in the wrong county, or the like — is general and not special, although accompanied by the claim that the appearance is only special.' ... A general appearance `is a waiver of process, equivalent to personal service of process, and confers jurisdiction of the person on the court.'

Gilpin, 257 Va. 579, 581, 515 S.E.2d 124. Here, the record shows that on January 27, 2004, defendants filed a "special appearance" contesting jurisdiction, (Docket Item No. 9), which was accompanied by an answer to the Government's complaint. (Docket Item No. 8.) The defendants' answer listed several grounds of defense, including lack of jurisdiction, breach of fiduciary duty, fraud and nondisclosure. (Docket Item No. 8.) This answer was subsequently followed by defendants' second answer, filed February 11, 2004, (Docket Item No. 14), and the answers of defendants' guardians ad litem, filed February 18 and 23, 2004. (Docket Item Nos. 19, 20.) Therefore, by responding to the merits of the Government's claim, defendants waived their right to service of process and submitted to the court's assertion of jurisdiction in this case. See Nixon v. Rowland, 192 Va. 47, 50, 63 S.E.2d 757 (1951). Finally, because all of the relevant actions occurred in Virginia, and because defendants themselves are residents of Virginia, the court need not address whether a Virginia state courts assertion of personal jurisdiction in this case would pose a conflict with the Fourteenth Amendment.¹

Next, the defendants argue that the court lacks subject matter jurisdiction over the Government's claim. (Docket Item Nos. 9, 65.) When considering a Federal Rule of Civil Procedure, ("Fed. R. Civ.P."), 12(b)(1) motion to dismiss for lack of subject matter jurisdiction "the court should consider `whether plaintiff'[s] allegations, standing alone and taken as true plead[ed] jurisdiction and a meritorious cause of action.'" Bane v. Va. Dep't of Corrs., 110 F.Supp.2d 469, 470 (W.D.Va.2000) (quoting Dickey v. Greene, 729 F.2d 957, 958 (4th Cir.1984)). In its complaint, the Government lists several different statutes which it contends provides the court with subject matter jurisdiction: 28 U.S.C. §§ 1331, 1345, 2201, 2202 and Fed.R.Civ.P. Rule 65. (Docket Item No. 1.) Title 28 U.S.C.A. § 1345 provides that "[e]xcept as otherwise provided by Act of Congress, the district courts shall have original jurisdiction of all civil actions, suits or proceedings commenced by the United States, or by any agency or officer thereof expressly authorized to sue by Act of Congress." 28 U.S.C.A. § 1345 (West 1999.) Because this is a civil action instituted by the United States, the court has subject matter jurisdiction over the claim.

Finally, defendants argue that the United States lacks standing to bring this action. (Docket Item Nos. 9, 65.) In this respect, the defendants argue that the United States is a...