United States v. Cabelka, Civil Action No. 7:16-cv-00126-O-BP

• Decision Date: 24 February 2017
• Docket Number: Civil Action No. 7:16-cv-00126-O-BP
• Parties: UNITED STATES OF AMERICA, Plaintiff, v. LARRY CECIL CABELKA, Defendant.
• Court: U.S. District Court — Northern District of Texas

UNITED STATES OF AMERICA, Plaintiff, v. LARRY CECIL CABELKA, Defendant.

Civil Action No. 7:16-cv-00126-O-BP

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS WICHITA FALLS DIVISION

February 24, 2017

FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

Before the Court are Cross-Defendants Logsdon Farms, Inc., Chad Logsdon, and Billy Logsdon's Motion to Dismiss Under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) and Brief in Support (ECF No. 11), filed December 14, 2016; Cross-Defendant Amanda Slate's Motion to Dismiss Under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) and Brief in Support (ECF No. 24), filed December 29, 2016; Defendant Larry C. Cabelka's Response to Motion to Dismiss (ECF No. 26), filed January 13, 2017; Cross-Defendant Rebecca Cabelka Thorpe's Motion to Dismiss Under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) and Brief in Support (ECF No. 29), filed January 23, 2017; and Defendant/Third Party Plaintiff Larry C. Cabelka's Response to Amanda Slate's Motion to Dismiss (ECF No. 30), filed January 25, 2017. United States District Judge Reed O'Connor referred this case to the undersigned for pretrial management by Order entered on February 2, 2017. ECF No. 32. A motion to dismiss for failure to state a claim is an enumerated dispositive motion to which the undersigned may only make a recommendation to Judge O'Connor. 28 U.S.C. § 636(b)(1)(A).

Based upon a full review of the relevant pleadings on file and applicable legal authorities, the undersigned RECOMMENDS that Judge O'Connor GRANT in part and DENY in part as moot Logsdon Farms, Inc., Chad Logsdon, and Billy Logsdon's Motion to Dismiss (ECF No. 11), GRANT in part and DENY in part as moot Amanda Slate's Motion to Dismiss (ECF No. 24), and dismiss Cabelka's claims against the aforementioned third-party defendants without prejudice. The undersigned further RECOMMENDS that Judge O'Connor DENY Rebecca Cabelka Thorpe's Motion to Dismiss (ECF No. 29).

I. BACKGROUND

Plaintiff United States of America ("United States") brought this action against Defendant Larry Cecil Cabelka ("Cabelka") on October 19, 2016 to reduce to judgment over $25.6 million in federal income tax liabilities. ECF No. 1 at 1, 3. On November 23, 2016, Cabelka filed his Original Answer and Crossclaim (ECF No. 7), alleging that various individuals and one company should be parties to the action. Thereafter, Logsdon Farms, Inc., Chad Logsdon, and Billy Logsdon (collectively, "the Logsdons") filed a Motion to Dismiss (ECF No. 11), Amanda Slate ("Slate") filed a Motion to Dismiss (ECF No. 24), and Rebecca Cabelka Thorpe ("Thorpe") filed a Motion to Dismiss (ECF No. 29), all asserting that dismissal of Cabelka's "crossclaims" is warranted pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6).

II. LEGAL STANDARDS

A. Pro Se Standard

Cabelka, Slate, and Thorpe are proceeding pro se. ECF Nos. 7, 24, 29. Particular to a pro se party, courts are to liberally construe the pleadings, taking all well-pleaded allegations as true. Johnson v. Atkins, 999 F.2d 99, 100 (5th Cir. 1993). "[A] pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers."Erickson v. Pardus, 551 U.S. 89, 94 (2007) (quoting Estelle v. Gamble, 429 U.S. 97, 106 (1976)). But "even a liberally-construed pro se . . . complaint must set forth facts giving rise to a claim on which relief may be granted." Levitt v. Univ. of Texas at El Paso, 847 F.2d 221, 224 (5th Cir. 1988) (citing Bounds v. Smith, 430 U.S. 817, 825 (1977)). Thus, a court inquires "whether within the universe of theoretically provable facts there exists a set which can support a cause of action under [the] complaint, indulgently read." Covington v. Cole, 528 F.2d 1365, 1370 (5th Cir. 1976).

B. Rule 14(a) Standard

Cabelka purported to assert crossclaims against various parties that were not original parties to the action brought against Cabelka, individually, by the United States. ECF No. 7; see ECF No. 1. Rule 13(g) of the Federal Rules of Civil Procedure provides that crossclaims may only be asserted by one party against a coparty. Fed. R. Civ. P. 13(g) ("A pleading may state as a crossclaim any claim by one party against a coparty . . . ."). Therefore, the Court will liberally construe Cabelka's "crossclaims" as a third-party complaint pursuant to Rule 14(a). Fed. R. Civ. P. 14(a)(1) ("A defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it.").

Under Rule 14(a), a defendant may sue "a nonparty who is or may be liable to it for all or part of the claim against it." Fed. R. Civ. P. 14(a)(1). "[I]mpleader under Rule 14 requires that the liability of the third party be dependent upon the outcome of the main claim[,]" and is appropriate "only in cases where the third party's liability [is] in some way derivative of the outcome of the main claim." United States v. Joe Grasso & Son, Inc., 380 F.2d 749, 751 (5th Cir. 1967); see also Neal v. 21st Mortg. Corp., 601 F. Supp. 2d 828, 832 n.6 (S.D. Miss. 2009) (citing United States v. Bailey, 516 F. Supp. 2d 998, 1019-20 (D. Minn. 2007) ("[A] defendant may not use Rule 14 to implead a third-party defendant who may have liability to the plaintiff instead of the defendant orin addition to the defendant.")). "Thus, separate and independent claims against a third party are not permitted under Rule 14 even if such claims arise out of the same general set of facts as plaintiff's main claim." Duke v. Compass Bank, No. 4:13-CV-1012-A, 2014 WL 879674, at *1 (N.D. Tex. Mar. 5, 2014) (citing Joe Grasso & Son, 380 F.2d at 751). "[F]actors that courts have considered in deciding whether to permit a third-party complaint include possible prejudice to the other parties, undue delay by the third party plaintiff, and whether allowing the third party complaint would further the goals of Rule 14 by eliminating duplicative suits and promoting judicial economy." Id. (citing 6 Charles Alan Wright, et al., Federal Practice and Procedure § 1443 (3d ed. 2010)); Am. Int'l Specialty Lines Ins. Co. v. 7-Eleven, Inc., No. 3:08-CV-807-M, 2009 WL 2448440, at *2 (N.D. Tex. Aug. 7, 2009); Briones v. Smith Dairy Queens, Ltd., No. V-08-48, 2008 WL 4200931, at *2 (S.D. Tex. Sept. 9, 2008)). Moreover, "the court is afforded 'wide discretion' in deciding whether to permit such third-party practice." Id. (citing McDonald v. Union Carbide Corp., 734 F.2d 182, 184 (5th Cir. 1984) (per curiam)).

C. Rule 12(b)(1) Standard

Rule 12(b)(1) of the Federal Rules of Civil Procedure allows a party to move for dismissal of a complaint based on lack of subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1). Because "[f]ederal courts are courts of limited jurisdiction[, t]hey possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citations omitted). If a Court lacks subject matter jurisdiction, it must dismiss the action. Fed. R. Civ. P. 12(h)(3). In determining whether subject matter jurisdiction exists, a court "must presume that a suit lies outside this limited jurisdiction, and the burden of establishing federal jurisdiction rests on the party seeking the federal forum." Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001). "A case is properly dismissed forlack of subject matter jurisdiction when the court lacks the statutory or constitutional power to adjudicate the case." CleanCOALition v. TXU Power, 536 F.3d 469, 473 (5th Cir. 2008) (quoting Home Builders Ass'n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (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) (citing Hitt v. City of Pasadena, 561 F.2d 606, 608 (5th Cir. 1977)). This "prevents a court without jurisdiction from prematurely dismissing a case with prejudice." Id. Dismissal for lack of subject matter jurisdiction "is not a determination of the merits and does not prevent the plaintiff from pursuing a claim in a court that does have proper jurisdiction." 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." Lowe v. ViewPoint Bank, 972 F. Supp. 2d 947, 953 (N.D. Tex. 2013) (citing 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, taken as true, sufficiently state a basis for subject matter jurisdiction." Id. (citing Paterson v. Weinberger, 644 F.2d 521, 523 (5th Cir. 1981)). "If sufficient, those allegations alone provide jurisdiction." Paterson, 644 F.2d at 523. "When evidence is presented with the motion to dismiss, the attack is 'factual' and 'no presumptive truthfulness attaches to [the] 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.'" Lowe, 972 F. Supp. 2d at 953 (quoting Williamson, 645 F.2d at 413). Here, no third-party defendants presented evidence together with their Rule 12(b)(1) motions, thus presenting a facial attack on subject matterjurisdiction not requiring resolution of matters outside of the pleadings on this issue. See id.

"Once subject matter jurisdiction is proper, the court may have ancillary jurisdiction over additional claims or parties that it may not have had...