Jenkins v. MTGLQ Investors ( 2007 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES CO URT O F APPEALS
February 9, 2007
FO R TH E TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
LYNN ALLAN JENKINS, I,
Plaintiff-Appellant,
v. Nos. 05-4057, 05-4237 & 05-4287
(D.C. No. 03-CV-148-TC)
M TG LQ INVESTO RS; (D. Utah)
JOHN DOES 1-10,
Defendants-Appellees.
U N ITED STA TES O F A M ER ICA,
Plaintiff-Appellee,
v. No. 06-4051
(D.C. No. 97-CV-95-DAK)
LYNN ALLAN JENKINS, I, (D. Utah)
Defendant-Appellant,
M TG LQ INVESTO RS,
Defendant-Appellee,
and
129.97 ACR ES O F LA N D , M O RE OR
LESS, SITUATED IN DAVIS
C OU N TY , STA TE O F U TA H ;
ED W IN M . H IG LEY ; C AR L B OW N;
B.C. PRO PERTIES,
Defendants.
OR D ER AND JUDGM ENT *
Before HO LM ES, M cKA Y, and BROR BY, Circuit Judges.
Plaintiff-appellant Lynn Jenkins, proceeding pro se, has four pending
appeals, three of which, Nos. 05-4057, 05-4237, and 05-4287, arise from one
action and have been consolidated. The fourth appeal, No. 06-4051, arises from a
related matter, and we have combined it with the consolidated appeals for
dispositional purposes only. Because M r. Jenkins appears pro se, we review his
pleadings and other papers liberally and hold them to a less stringent standard
than those drafted by attorneys. See Hall v. Bellmon, 935 F.2d 1106, 1110 & n.3
(10th Cir. 1991). W e have jurisdiction over all four appeals under 28 U.S.C.
§ 1291, and we affirm all of the district courts’ decisions at issue. W e also
propose filing restrictions on M r. Jenkins based on his litigation conduct in case
No. 06-4051.
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument. This order and judgment is
not binding precedent, except under the doctrines of law of the case, res judicata,
and collateral estoppel. It may be cited, however, for its persuasive value
consistent w ith Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
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The Consolidated Appeals: Nos. 05-4057, 05-4237, and 05-4287
The consolidated appeals arise from a quiet title action M r. Jenkins filed in
Utah state district court concerning 22.59 acres of real property in Syracuse,
Utah. In support of his claim that he was holder of fee title to the land, he alleged
that he had pledged the land as security for a loan obtained by a third party from
the predecessor in interest of defendant-appellee M TGLQ Investors, a D elaw are
limited partnership in the business of purchasing and collecting unpaid loans.
Based on that pledge, he claimed to be an “accommodation party” under Utah
law, and based on that status, he asserted that M TGLQ’s refusal of his tender of a
payoff amount effected a discharge of the debt, thus clearing title.
M r. Jenkins did not serve a summons or a copy of the complaint on
M TGLQ. Instead, he attempted to effectuate service by serving the Utah Division
of Corporations and Commercial Code (Division) based on Utah Code Ann.
§ 48-2a-907(4), by which a foreign limited partnership “transacting business” in
Utah without registration appoints the director of the Division as its agent for
service of process. He did so despite the fact that whether or not M TGLQ was
“transacting business” in Utah, as that term is defined under Utah law, was at
issue in pending litigation between the parties in another Utah judicial district,
and despite his familiarity with M TGLQ from the litigation that underlies the
appeal we have combined with the consolidated appeals. He then obtained a
default judgment against M TGLQ for nearly $2,000,000.
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Several months later M TGLQ learned of M r. Jenkins’s lawsuit after
receiving a foreclosure report that disclosed a judgment lien against certain real
property. M TGLQ then removed the state suit to federal court under 28 U.S.C.
§ 1441(a) based on diversity of citizenship and successfully moved to set aside
the default judgment under Fed. R. Civ. P. 60(b) based on the defective service.
In setting aside the default judgment, the district court found, among other things,
that M TGLQ was not transacting business in Utah as that term is defined under
Utah law and that service on the Division was improper. The court also denied
M r. Jenkins’s motion to dismiss or strike, which essentially was a motion to
rem and. From that interlocutory order M r. Jenkins filed an appeal, which we
dismissed for lack of jurisdiction. See Jenkins v. M TG LQ Inv., No. 04-4107
(10th Cir. Aug. 20, 2004) (order dismissing appeal).
Thereafter, the district court granted M TGLQ’s motion to dismiss the case
for failure to state a claim upon which relief can be granted, concluding, among
other things, that M r. Jenkins lacked standing because he had sold the property in
question prior to filing suit and because he was not an accommodation party
under Utah law. Finding the filing of the case and its continued prosecution to be
frivolous and abusive, the district court assessed a $1,000 sanction against
M r. Jenkins under Fed. R. Civ. P. 11 and later awarded $15,000 in attorney’s fees
to M TGLQ. The court also issued orders of contempt to M r. Jenkins for failing to
abide by the court’s order to sign papers necessary to vacate and set aside invalid
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judgments he had filed or domesticated against M TGLQ in foreign jurisdictions
that were based on the default judgment. The court eventually remanded him to
the custody of the United States M arshals for his continued refusal to sign the
necessary papers but, several weeks later, granted his motion for release from
custody due to his declining mental and physical health. The court also denied
M r. Jenkins’s motions for a stay of appeal and a new trial.
The consolidated appeals arise from the orders discussed above. For the
reasons stated below , we affirm all of those decisions.
In his appellate brief, M r. Jenkins argues that removal was improper
because M TGLQ did not establish complete diversity of citizenship. He did not
raise this issue in the district court, but because it is jurisdictional, we must
review it. See Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir.
1974). W e review the propriety of removal de novo. M artin v. Franklin Capital
Corp., 251 F.3d 1284, 1289 (10th Cir. 2001).
In Carden v. Arkoma Associates, the Supreme Court held that the
citizenship of a limited partnership for diversity purposes depends on the
citizenship of all its members and left to Congress the task of extending the
corporation-citizenship rule of 28 U.S.C. § 1332(c) 1 to unincorporated entities.
1
Section 1332(c) provides in relevant part that for purposes of diversity
jurisdiction, “a corporation shall be deemed to be a citizen of any State by which
it has been incorporated and of the State where it has its principal place of
(continued...)
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494 U.S. 185, 195-97 (1990). In order to effect removal under 28 U.S.C.
§ 1441(a) based on diversity of citizenship, therefore, a limited partnership must
show that the citizenship of all its general and limited partners is diverse from the
plaintiff. 2
In its original notice of removal, M TGLQ pleaded its citizenship as a
limited partnership organized under Delaware law and having its principal place
of business in New York. Acknowledging that the statement was defective
because it failed to account for the citizenship of all its partners, M TGLQ has
filed with this court a motion to amend its notice of removal. See 28 U.S.C.
§ 1653 (permitting amendment of defective jurisdictional allegations in either the
district or appellate court); Penteco Corp. Ltd. P’ship— 1985A v. Union Gas Sys.,
Inc., 929 F.2d 1519, 1523 (10th Cir. 1991) (recognizing this court’s power to
permit a party to supply omitted jurisdictional facts on appeal but declining to do
so where the record suggested a possible lack of diversity). The motion to amend,
which is well-supported with documentary evidence, indicates that none of
M TGLQ’s component entities that are capable of citizenship for diversity
purposes are citizens of the state of U tah, the state of w hich M r. Jenkins is a
1
(...continued)
business.” 28 U.S.C. § 1332(c)(1).
2
In addition to completely diverse citizenship, diversity jurisdiction also
requires that there be more than $75,000 in controversy. 28 U.S.C. § 1132(a).
The amount of the default judgment indicates that this requirement is met.
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citizen. M r. Jenkins has not opposed the motion or otherwise provided any
coherent argument that the amended jurisdictional allegations are untrue.
Accordingly, we grant the motion to amend the notice of removal and conclude
that removal based on diversity of citizenship was proper.
M r. Jenkins also argues that under the Rooker-Feldman doctrine, 3 the
district court lacked power to set aside the default judgment entered by the state
court. This argument evidences a fundamental misunderstanding of both
Rooker-Feldman and removal. Under 28 U.S.C. § 1257(a), “[f]inal judgments or
decrees rendered by the highest court of a State in which a decision could be had,
may be reviewed by the Supreme Court by writ of certiorari.” “The
Rooker-Feldman doctrine arose out of this statute, and provides that only the
Supreme Court has jurisdiction to hear appeals from final state court judgments.”
Bear v. Patton, 451 F.3d 639, 641 (10th Cir. 2006). Proper removal does not
constitute an appeal, de facto or otherwise, of the state court proceedings but a
continuation of them. See Freeman v. Bee Mach. Co., 319 U.S. 448, 452 (1943)
(“The jurisdiction exercised on removal is original not appellate.”). Thus, the
Rooker-Feldman doctrine has no application to a properly removed case where, as
here, there is no attack on a separate and final state-court judgment.
3
The doctrine takes its name from tw o Supreme Court cases, Rooker v.
Fidelity Trust Co., 263 U.S. 413 (1923), and District of Columbia Court of
Appeals v. Feldman, 460 U.S. 462 (1983).
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Several courts have implicitly approved of removal even after a state court
has entered a default judgment. See Murray v. Ford M otor Co., 770 F.2d 461,
463, 465 (5th Cir. 1985) (per curiam) (affirming order entered after removal that
set aside default judgment); Butner v. Neustadter, 324 F.2d 783, 785-87 (9th Cir.
1963) (reversing order entered after removal that denied motion to set aside
default judgment); M unsey v. Testworth Labs., 227 F.2d 902, 903 (6th Cir. 1955)
(per curiam) (affirming order entered after removal that set aside default
judgment); Cady v. Associated Colonies, 119 F. 420, 423 (C.C.N.D. Cal. 1902)
(vacating default judgment after removal where service on secretary of state was
not valid constructive service as to foreign corporation that was not doing
business in the state). Because, as the district court concluded, M TGLQ was
never properly served with a copy of the summons, which is “the sine qua non
directing an individual or entity to participate in a civil action or forgo procedural
or substantive rights” absent waiver of service, M urphy Bros., Inc. v. M ichetti
Pipe Stringing, Inc., 526 U.S. 344, 351 (1999), the thirty-day period for filing a
notice of removal set forth in 28 U.S.C. § 1446(b) never started to run, see id.
at 350 (“one becomes a party officially, and is required to take action in that
capacity, only upon service of a summons or other authority-asserting measure
stating the time within which the party served must appear and defend”).
M TGLQ’s notice of removal therefore was timely despite being filed more than
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three months after entry of the default judgment and more than eight months after
M r. Jenkins filed his complaint.
After removal, M TGLQ had the “right to the opinion of the Federal court
. . . as to the validity of the service of process [in the state court].” M ech.
Appliance Co. v. Castleman, 215 U.S. 437, 441 (1910); see also Silva v. City of
M adison, 69 F.3d 1368, 1376 (7th Cir. 1995) (filing notice of removal does not
waive challenge to the sufficiency of service in state court) (citing M orris & Co.
v. Skandinavia Ins. Co., 279 U.S. 405, 409 (1929)). The district court then could
set aside the default judgment under Fed. R. Civ. P. 55(c) and 60(b). See Fed. R.
Civ. P. 81(c) (federal rules of civil procedure “apply to civil actions removed to
the United States district courts from the state courts and govern procedure after
removal”); cf. 28 U.S.C. § 1450 (all orders entered prior to removal “shall remain
in full force and effect until dissolved or modified by the district court”).
As to the merits of the district court’s order setting aside the default
judgment, M r. Jenkins makes only the barest mention of the court’s determination
that service on the Division was improper because M TGLQ was not transacting
business in Utah within the meaning of Utah law. Because he has not advanced
any reasoned argument that service was proper under Utah law, we do not
consider that issue. See Am. Airlines v. Christensen, 967 F.2d 410, 415 n.8
(10th Cir. 1992).
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M r. Jenkins argues for the first time on appeal that by setting aside the
default judgment, the district court violated the Full Faith and Credit Clause,
see U.S. Const. art. IV, § 1. Because he did not raise this nonjurisdictional issue
in the district court, he has w aived it. See Pittsburg County Rural Water Dist.
No. 7 v. City of M cAlester, 358 F.3d 694, 708 & n.4 (10th Cir. 2004) (Full Faith
and Credit issue not jurisdictional); Walker v. M ather (In re Walker), 959 F.2d
894, 896 (10th Cir. 1992) (failure to present issue to district court ordinarily
results in waiver). Furthermore, he has not raised any issues concerning any of
the district court’s other orders. Accordingly, he has waived all other
nonjurisdictional issues decided by the district court. See State Farm Fire & Cas.
Co. v. M hoon, 31 F.3d 979, 984 n.7 (10th Cir. 1994) (failure to raise issue in
opening appellate brief waives that issue).
Appeal No. 06-4051
W e set out the lengthy factual background and procedural history of this
case in our order and judgment dismissing the last of M r. Jenkins’s four prior
appeals and need not repeat it here. See United States v. 129.97 Acres of Land,
118 F. App’x 407 (10th Cir. 2004) (unpublished) (Jenkins IV). Suffice it to say
that none of his prior appeals had any merit, and his third and fourth appeals were
dismissed as frivolous, see id. at 409; United States v. 129.97 Acres of Land,
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51 F. App’x 851, 852 (10th Cir. 2002) (Jenkins III). 4 Pertinent to this fifth
appeal, we imposed monetary sanctions in Jenkins IV under Rule 38 of the
Federal Rules of Appellate Procedure and remanded the matter to the district
court for a determination of reasonable attorney’s fees. See Jenkins IV,
118 F. App’x at 409. W e also cautioned M r. Jenkins that if he persisted in filing
frivolous appeals or reasserting issues already ruled upon in prior litigation, his
ability to proceed pro se in the federal courts of this circuit w ould be restricted.
Id. On remand, the district court ordered M r. Jenkins to pay $3,631.50 in
attorney’s fees to M TGLQ, and M r. Jenkins has taken this appeal.
Notwithstanding our specific warning, M r. Jenkins once again revisits the
merits of the underlying case in his appellate brief. He also lists other issues that
he contends this court must determine. But those issues concern the merits of the
consolidated appeals we discussed above. Furthermore, those issues are not
properly presented because they lack any supporting argument. See Am. Airlines,
967 F.2d at 415 n.8. Finally, M r. Jenkins has not taken issue with the amount of
the sanctions determined by the district court. Accordingly, he has waived the
4
In Jenkins III we granted M TGLQ’s motion for sanctions for filing a
frivolous appeal and remanded for a determination of reasonable attorney’s fees,
which the district court found was $3,379.50. See Jenkins IV, 118 F. App’x
at 408 (discussing sanctions in Jenkins III). Our dispositions of the other two
appeals are Jenkins v. Babbitt, No. 00-4057, 2000 W L 1773236 (10th Cir. Dec. 4,
2000) (unpublished), which was a related case, and United States v. 129.97 Acres
of Land, No. 99-4122, 2000 W L 766280 (10th Cir. June 14, 2000) (unpublished).
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issue, see Mhoon, 31 F.3d at 984 n.7, and we affirm the amount of sanctions.
Because we find this appeal frivolous and M r. Jenkins’s pattern of litigation
activity manifestly abusive, we conclude that filing restrictions are necessary.
“The right of access to the courts is neither absolute nor unconditional, and
there is no constitutional right of access to the courts to prosecute an action that is
frivolous or malicious.” Winslow v. Hunter (In re Winslow), 17 F.3d 314, 315
(10th Cir. 1994) (per curiam) (quotation and alteration omitted). “[W]here, as
here, a party has engaged in a pattern of litigation activity which is manifestly
abusive, restrictions are appropriate.” Id. (quotation omitted). Therefore, subject
to M r. Jenkins’s opportunity to object, as described below, we impose the
following reasonable filing restrictions on future filings in this court by
M r. Jenkins “commensurate with our inherent power to enter orders ‘necessary or
appropriate’ in aid of our jurisdiction.” Id. (quoting 28 U.S.C. § 1651(a)).
M r. Jenkins is ENJOINED from proceeding as a petitioner in an original
proceeding or as an appellant in this court unless he is represented by a licensed
attorney admitted to practice in this court or unless he first obtains permission to
proceed pro se. To obtain permission to proceed pro se, M r. Jenkins must take
the follow ing steps:
1. File a petition with the clerk of this court requesting leave to file a
pro se action;
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2. Include in the petition the following information:
A. A list of all lawsuits currently pending or filed previously with
this court, including the name, number, and citation, if applicable, of each case,
and the current status or disposition of the appeal or original proceeding; and
B. A list apprising this court of all outstanding injunctions or orders
limiting M r. Jenkins’s access to federal court, including orders and injunctions
requiring him to seek leave to file matters pro se or requiring him to be
represented by an attorney, including the name, number, and citation, if
applicable, of all such orders or injunctions; and
3. File with the clerk a notarized affidavit, in proper legal form, which
recites the issues M r. Jenkins seeks to present, including a short discussion of the
legal basis asserted therefor, and describing with particularity the order being
challenged. The affidavit also must certify, to the best of M r. Jenkins’s
knowledge, that the legal arguments being raised are not frivolous or made in bad
faith, that they are warranted by existing law or a good faith argument for the
extension, modification, or reversal of existing law, that the appeal or other
proceeding is not interposed for any improper purpose such as delay or to
needlessly increase the cost of litigation, and that he will comply with all
appellate and local rules of this court.
These documents shall be submitted to the clerk of the court, who shall
forward them to the Chief Judge or her designee for review to determine whether
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to permit an appeal. W ithout the approval of the Chief Judge or her designee, the
matter will be dismissed. If the Chief Judge or her designee approves the filing,
an order shall be entered indicating that the appeal shall proceed in accordance
with the Federal Rules of A ppellate Procedure and the Tenth Circuit Rules.
M r. Jenkins shall have ten days from the date of this order to file written
objections to these proposed sanctions. See Winslow, 17 F.3d at 316. The
response shall be limited to fifteen pages. See id. If M r. Jenkins does not file
objections, the filing restrictions shall take effect twenty days from the date of
this order, and the filing restrictions shall apply to any matter filed after that time.
Id. at 316-17. If M r. Jenkins does file timely objections, these sanctions shall not
take effect until after this court has ruled on those objections.
Conclusion
The district courts’ orders are A FFIRM ED in all four appeals. M TGLQ’s
motion to amend its notice of removal is GRANTED, and the action underlying
the consolidated appeals is REM ANDED to the district court for the limited
purpose of permitting M TGLQ to file an amended notice of removal in
substantially the same form as provided in Exhibit C to the motion. All other
pending motions are DENIED as moot.
Entered for the Court
W ade Brorby
Circuit Judge
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