US v. Schiefen

• Decision Date: 20 September 1995
• Docket Number: No. CIV 94-4243.,CIV 94-4243.
• Citation: 926 F. Supp. 877
• Parties: UNITED STATES of America, Plaintiff, v. Jerome T. SCHIEFEN; Estate of Barbara M. Schiefen; South Lincoln Rural Water System, Inc.; David Schiefen; Krautco, Uninc; See Corp.; Defendants.
• Court: U.S. District Court — District of South Dakota

926 F. Supp. 877

UNITED STATES of America, Plaintiff, v. Jerome T. SCHIEFEN; Estate of Barbara M. Schiefen; South Lincoln Rural Water System, Inc.; David Schiefen; Krautco, Uninc; See Corp.; Defendants.

No. CIV 94-4243.

United States District Court, D. South Dakota, Southern Division.

September 20, 1995.

COPYRIGHT MATERIAL OMITTED

Steven Gordon Ahrendt, U.S. Attorney's Office, Sioux Falls, SD, for Plaintiff.

Jerome T. Schiefen, Hudson, SD, pro se.

Barbara Schiefen, Hudson, SD, pro se.

South Lincoln Rural Water, Canton, SD, pro se.

David Schiefen, Hartford, SD, pro se.

Krautco, Uninc., Hudson, SD, pro se.

See Corp., for defendant.

MEMORANDUM OPINION AND ORDER

PIERSOL, District Judge.

In 1970, Defendant Jerome T. Schiefen Schiefen and his wife, Barbara M. Schiefen,¹ borrowed $53,500.00 from the Farmers Home Administration FmHA, securing payment with a mortgage on real property located in Lincoln County, South Dakota. Schiefen and his wife defaulted on the note and the United States filed suit to foreclose the secured property, as provided by the terms of the promissory note, on October 25, 1994. Doc. 1. The original complaint was returned unserved. Doc. 5.

On January 18, 1995, the United States filed an amended complaint² identical to the original complaint with the exception that the government included a claim by the Internal Revenue Service for taxes, interest and penalties owed in the amount of $30,607.20. Doc. 6 at IV. Service of the amended complaint was made on January 20, 1995. Doc. 8, 9 & 10. Schiefen³ filed an answer to the amended complaint, along with an Affidavit of Revocation and Rescission of Signature, on February 6, 1995. Doc. 12, 13. The United States then filed a Motion to Strike Answer, Doc. 17. A series of motions by both parties followed. The Court will consider them in turn.

MOTION TO STRIKE ANSWER

The United States moves to strike the answer of Defendant Schiefen on three grounds: (1) that the pleadings fail "the mandate that all pleadings be simple, concise, and direct," citing Fed.R.Civ.P. 8(e); (2) that the pleadings fail to state a claim upon which relief can be granted, citing Fed.R.Civ.P. 12(b)(6); and (3) that the pleadings are immaterial, impertinent and scandalous, citing Fed.R.Civ.P. 12(f). Doc. 17. Schiefen filed a Demand to Strike Plaintiffs sic Motion to Strike Answer, Doc. 28, and supporting brief, Doc. 29.⁴

Mr. Schiefen's Answer is a lengthy array of defenses to this foreclosure action. Schiefen first pleads that this Court lacks jurisdiction because the United States is bankrupt and may, therefore, not institute civil or criminal actions⁵ against anyone. Doc. 12 at I. Schiefen also pleads that this Court lacks jurisdiction over the claim for delinquent taxes, first, because the federal government only has jurisdiction over territories and Schiefen is a citizen of a state,⁶ and, second, because the right to labor is a right protected by the Constitution and, therefore, not taxable by the Federal government. Doc. 12 at 4-5. Schiefen also pleads insufficient consideration securing the promissory note which is the subject of this suit because, Schiefen alleges, the FmHA loaned funds by "creating `money' of INtangible sic value by a bookkeeping entry." Doc. 12 at 10. Schiefen's allegations of fraud in the making of the promissory note, impossibility of performance, lack of informed consent in the making of the note, unjust enrichment, and an equal protection violation are, likewise, based on the theory that United States currency is "irredeemable, unbacked paper." Doc. 12 at 10-13. Schiefen further alleges that the contract is unenforceable as unconscionable under South Dakota law, citing S.D.C.L. § 57A-2-302. Doc. 12 at 14. In addition, Schiefen denies signing the promissory note with a bona fide signature.⁷ Doc. 12 at 15-16. Finally, Schiefen maintains that he is not in default on the note because the annual statement of loan account contains no dollar signs and, therefore, the loan has no value. Doc. 12 at 18 & Ex. A. Schiefen supports his arguments with a number of authorities, cited out of context and misinterpreted. Mr. Schiefen also provided the Court with an Affidavit tracing how he came to understand the theories he propounds. Doc. 11.⁸

The Court finds that Schiefen's Answer is largely unresponsive to the Amended Complaint in this case and does not conform to the requirements of Fed.R.Civ.P. 8(e). I further find that where a bona fide legal theory has been stated (i.e., misrepresentation, unconscionability, lack of jurisdiction), those theories have little legal or factual basis and are not sufficient to state a claim upon which relief may be granted.⁹ Fed. R.Civ.P. 12(b)(6). For example, Schiefen's argument that United States currency is unbacked paper has been rejected by numerous courts. Nixon v. Phillipoff, 615 F.Supp. 890, 893-94 (N.D.Ind.1985) (discussing history of federal reserve notes as legal tender). Therefore, the government's Motion to Strike Answer is granted and Defendant's Answer is stricken.

MOTION FOR PROTECTIVE ORDER

In his Answer, Mr. Schiefen requests discovery of several documents which Schiefen contends are necessary to demonstrate the government's jurisdiction over Mr. Schiefen in the instant foreclosure.¹⁰ Doc. 12 at 9. In a separate filing, Schiefen moves for discovery of an assortment of FmHA, IRS, United States Marshal Service and FBI documents. Doc. 37.¹¹ The government objects to Schiefen's requests on the grounds that these documents do not exist and requests a protective order or stay of discovery. Doc. 19. Defendant responds with a Motion to Strike Plaintiffs sic Motion, Doc. 27.

Defendant's Request for Production of Documents includes items such as:

If the person that allegedly served the papers is a U.S. Marshal, then he is a part of the U.S. National Central Bureau (U.S. Government Manual), therefore he is representing a foreign agency and must be registered as such, therefore we demand a copy of his foreign registration and a copy of his GREEN CARD.

Doc. 37 at 2. I find these requests are not reasonably calculated to lead to the discovery of admissible evidence. In addition, these requests are burdensome and oppressive, and, in most instances, to be for documents that do not exist and, in some instances, do not make any sense. For this reason, Defendant's request for production is denied. The government's Objection to Request for Production of Documents and Motion for Protective Order, Doc. 19, and Defendant's Demand That Plaintiffs Motion to Strike Request for Admissions and Plaintiff Objection to Request For Admissions be Denied And To Strike Plaintiffs Motion and Request, Doc. 27, are denied as moot.

MOTION TO DISMISS

Defendant Schiefen moves to dismiss this action on the grounds that the government has failed to respond to his Request for Admissions, his Request for Production of Documents, and his challenge to jurisdiction. Doc. 38. Schiefen argues that such failure constitutes a default of this action. The Court, by this Order, denies Schiefen's Request for Production of Documents for the reasons stated in the previous section.

With regard to Schiefen's Request for Admissions, Doc. 39, such requests are deemed admitted if the party to whom the admission is directed does not object within 30 days. Fed.R.Civ.P. 36(a). The request for admissions is dated February 1, 1995, but was not filed with the Court until March 13, 1995. Because it appears from the Court filings that the Motion to Dismiss was filed by Schiefen at the same time that he filed his Request for Admission, the Motion to Dismiss is premature. In addition, I find that the government received the Request for Admissions sometime after February 1, 1995, the filing date on Docket Entry 39, and filed a timely objection to the Request for Admissions on February 10, 1995. Doc. 21. The admissions are not deemed admitted.

Second, the government moves to strike the request for admissions as premature and as defective in form. Doc. 21. Schiefen filed a Motion to Strike Plaintiffs Motion and Request, Doc. 27, and supporting brief, Doc. 30. Rule 36 provides, in pertinent part, "Without leave of court or written stipulation, requests for admission may not be served before the time specified in Rule 26(d)." Fed.R.Civ.P. 36(a). Rule 26(d) prohibits discovery prior to the planning meeting required by Rule 26(f). No Rule 26(f) meeting has been scheduled due to the pending motion for summary judgment. Doc. 20 at 2. The Court finds that the Request for Admissions is premature and no further response is now required to Defendant's Request for Admissions.

The Court finds that the admissions are not defective in form. A request for admission must set forth its requests in a simple and direct manner which can be admitted or denied without explanation. 8A Wright, Miller & Marcus § 2258 (1994). The request for admissions substantially follows that format.

The rule permitting requests for admissions is "intended to expedite the trial and to relieve the parties of the cost of proving facts that will not be disputed at trial, the truth of which is known to the parties or can be ascertained by reasonable inquiry." 8A Wright, Miller & Marcus § 2252 (1994). A party may request admission of "the truth of any matters within the scope of Rule 26(b)(1)," Rule 36(a), including admission of facts bearing on the jurisdiction of the court, 8A Wright, Miller & Marcus § 2254 (1994). While the scope of Rule 36 is normally extremely broad, I find that these requests are frivolous. The requested admissions deal with a variety of subjects: "That the fringed flag in the United States District Court for the District of South Dakota Southern Division means it is not a Art III court," Doc. 39 at ¶ 10; "That all Federal Judges are unregistered foreign agents." Doc. 39 at ¶ 20; and "The United States Constitution does not allow statutory law," Doc. 39 at ¶ 48. The proposed...