Dunn v. Marrelli , 3 F. App'x 710 ( 2001 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
JAN 10 2001
TENTH CIRCUIT
PATRICK FISHER
Clerk
MINDY K. DUNN; JEFFEREY C.
DUNN,
Plaintiffs - Appellants, No. 99-4185
vs. (D.C. No. 98-CV-205)
(D. Utah)
RODNEY G. MARRELLI; W. VAL
OVESON; JOE B. PACHECO;
RICHARD MCKEOWN; PAM
HENDRICKSON; BLAINE SMITH;
MARK LONG; GALE FRANCIS;
RICHARD EVANS; CRAIG
FOTHERINGHAM; GARY HANSEN;
J. D. HEATON; PHILLIP JONES;
RICHARD KIRKLAND; GIL
WILLIAMS; DORIS WOSNIAK,
Defendants - Appellees.
ORDER AND JUDGMENT *
Before BALDOCK, EBEL, and KELLY, Circuit Judges.
Plaintiffs-Appellants Mindy K. Dunn and Jefferey C. Dunn appeal the
district court’s denial of their request for prejudgment interest, dismissal of their
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. This court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
§ 1983 claim against various state government officials, and denial of their
motion to alter or amend judgment. Our jurisdiction arises under 28 U.S.C. §
1291 and we reverse in part and remand. 1
I. Background
The Utah State Tax Commission (the “Commission”), pursuant to the Utah
Illegal Drug Stamp Act (the “Act”), Utah Code Ann. § 59-19-101 to 59, made a
tax assessment against Jeffrey Dunn on March 23, 1994, and against his wife,
Mindy Dunn, on April 6, 1994. In connection therewith, the Commission placed
liens against the Dunns’ real property. Aplt. App. at 130; see also Utah Code
Ann. § 59-1-302.1. Such liens create a security interest in the state. See Bates v.
United States , 974 F.2d 1234, 1236 (10th Cir. 1992) (holding that a tax lien
pursuant to 26 U.S.C. § 6321, which is substantively identical to U.C.A. § 59-1-
302.1, “is a security established by statute which the government may avail itself
in the event of default in payment”). Also on March 23, 1994, the Commission,
through various of its employees, conducted searches of the Dunns’ residence
1
We deny the Defendants-Appellees’ (hereinafter “Defendants”) request
that we take judicial notice of the Commission’s Warrant for Delinquent Tax and
the state district court’s Execution and Praecipe. See Boone v. Carlsbad
Bancorp., Inc., 972 F.2d 1545, 1549 n.1 (10th Cir. 1992) (“We will not review
this complaint, however, because it was not before the district court when the
various rulings at issue were made.”).
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and Mindy Dunn’s business. The Commission seized much of the Dunns’
personal property, business inventory, and money.
The Dunns challenged the tax assessments before the Commission. During
the pendency of this proceeding, Assistant Attorney General Gale K. Francis
consented to the Dunns’ sale of their real property on the condition that the
proceeds from the sale be deposited with the Commission to replace the liens
upon the real property. Aplt. App. at 130. In a letter to the Dunns’ real estate
agent dated May 5, 1994, Mr. Francis promised that “all deposits which have
been paid to the Tax Commission [by the Dunns] would be subject to refund at
the statutory rate (currently 6%) of interest,” if the Dunns were successful in
challenging the tax assessments. Id. at 129-130. Thereafter, the Dunns deposited
approximately $340,000 with the Commission. Aplt. Br. at 5; Aplt. Reply Br. at
4. As with the real estate, the Commission’s interest in the money could only
have been in the nature of a security interest. Indeed, the district court
recognized the Commission’s interest as such. Aplt. App at 65.
Three years later, the Dunns filed a § 1983 action in federal district court.
The Dunns sought declaratory and injunctive relief against the Commissioners
and Executive Director of the Commission 2
in their official capacities, and
The Commissioners sued were Val Oveson, Joe Pacheco, Richard
2
McKeown, Pam Hendrickson. The Executive Director sued was Rodney Marrelli.
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monetary damages against various Commission employees 3
and Mr. Francis in
their individual capacities. As for the Commission employees and Mr. Francis,
the Dunns alleged the following:
36. On or about March 23, 1994, the individual defendants set forth
herein, acting under color of state law and in concert and conspiracy
with each other and others, authorized and conducted unreasonable
and warrantless searches and seizures of Plaintiffs’ home and
businesses in Park City, Utah.
37. During, and as part of, the unreasonable and warrantless
searches and seizures, Defendants seized virtually all of Plaintiffs’
furniture and other personal property, including personal effects,
from their home. Defendants also ransacked Plaintiff Mindy K.
Dunn’s Animal Crackers Toy Store and seized toy inventory, cash
and other personal property.
Aplt. App. at 19.
In an order dated May 13, 1999, the district court granted the Dunns
summary judgment on their claim for injunctive and declaratory relief. The
district court held the Act to be unconstitutional and ordered the return of the
Dunns’ personal property and money. The district court did not, however, award
the Dunns prejudgment interest. In response to the Dunns’ subsequent motion to
alter or amend the judgment, the district court once again refused to award
prejudgment interest. Aplt. App. at 157. The district court “believe[d] that the
3
Those defendants are Blain Smith, Mark Long, Richard Evans, Craig
Fotheringham, Gary Hansen, J.D. Heaton, Phillip Jones, Richard Kirkland, Gil
Williams, and Doris Wosniak.
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policy set forth in Utah Code Ann. § 59-1-402(6)(a) [was] appropriate and the
same logic should apply to the case at hand.” Id.In the same order, the district court dismissed the Dunns’ complaint against
Mr. Francis and the Commission employees under 12(c) of the Federal Rules of
Civil Procedure. The district court held that the Dunns failed to allege facts
showing that these defendants authorized or participated in the searches and
seizures, and failed to “set forth any evidence of a conspiracy . . . .” Aplt. App.
at 64.
On appeal, the Dunns assert that the district court: (1) abused its
discretion in denying their application for prejudgment interest;(2) erred in
dismissing their § 1983 claim against the Commission employees and Mr. Francis
under Fed. R. Civ. P. 12(c); and (3) abused its discretion in denying the Dunns’
motion to alter or amend the judgment. We address each argument in turn.
II. Discussion
A. Prejudgment Interest Claim
Because the Eleventh Amendment bars suits for retroactive monetary
damages that must be paid from the state treasury, Edelman v. Jordan , 415 U.S.
651, 663-60 (1974), we must determine whether the money the Dunns deposited
with the Commission was placed in an interest bearing account, as Mr. Francis’s
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letter suggests, or whether the Commission would have to pay the Dunns out of
the state treasury. While the Dunns assert that interest in fact accrued, Aplt. Br.
at 13, there is nothing in the record to substantiate this claim. Moreover, at oral
argument, counsel for the Dunns and for Defendants stated that they did not know
whether the money was placed in an interest bearing account. We must therefore
remand this issue to the district court for further factual findings.
We reject the argument that the Dunns’ claim should be denied because
they did not “argue specifically for prejudgment interest until after the court
entered judgment on the parties’ dispositive motions.” Aplee. Br. at 10 (emphasis
added). The Dunns requested interest in their complaint, Aplt. App. at 19, and in
their motion for summary judgment for injunctive and declaratory relief. Aplt.
Supp. App. at 10.
B. Claims Against the Commission Employees and Mr. Francis
The district court erred in dismissing the Dunns’ complaint against the
Commission employees and Mr. Francis under Rule 12(c). We review the district
court’s dismissal de novo, under the standards applicable to Fed. R. Civ. P.
12(b)(6). Ramirez v. Dept. of Corrections, 222 F.3d 1238, 1240 (10th Cir. 2000).
We are also mindful of Fed. R. Civ. P. 8(a), requiring only a “short and plain
statement of the claim showing that the pleader is entitled to relief . . . .” We
address the non-conspiracy and conspiracy claims separately.
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1. Non-Conspiracy Claims
“For supervisory liability [in a § 1983 action], plaintiffs must demonstrate
an affirmative link between the supervisor’s conduct and the constitutional
deprivation.” Snell v. Tunnell, 920 F.2d 673, 700 (10th Cir. 1990). To establish
an affirmative link, “[p]laintiffs must show that a supervisory defendant,
expressly or otherwise, authorized, supervised, or participated in conduct which
caused the constitutional deprivation.” Id. As for the liability of defendants
acting in non-supervisory capacities, “there must be cause in fact between the
conduct complained of and the constitutional deprivation.” Id.After reviewing the complaint, accepting all well-pleaded allegations as
true, and construing the complaint in a light most favorable to the Dunns, we
cannot say that it appears “beyond doubt that [the Dunns] can prove no set of
facts in support of [their] claim.” Ramirez, 222 F.3d at 1240 (internal quotations
and citations omitted). The Dunns alleged that Mr. Francis and the Commission
employees conducted warrantless searches of their residence and business and
warrantless seizures of their personal property, inventory, and money. If proven
at trial, these actions could constitute a violation of the Dunns’ constitutional
rights. Furthermore, the Dunns alleged the requisite link between the defendants’
conduct and the alleged constitutional deprivation. The Dunns’ alleged that the
defendants authorized and conducted the searches and seizures, clearly tying the
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defendants, whether in a supervisory or non-supervisory capacity, to the execution
of the warrantless searches and seizures. Cf. Snell, 920 F.2d at 700; Durre v.
Dempsey, 869 F.2d 543, 548 (10th Cir. 1989) (“Plaintiff alleged defendant . . .
instigated and directed the beating of plaintiff by several other inmates in the
presence of defendant . . . .”).
We reject the argument that the Dunns’ complaint was subject to a
heightened pleading standard because the Commission employees and Mr. Francis
pled qualified immunity in defense. Aplee. Br. at 19-20. “[A] heightened
pleading standard” is appropriate only when “a defendant asserts a qualified
immunity defense in a Fed. R. Civ. P. 12(c) motion . . . ” Ramirez, 222 F.3d at
1241; accord Breidenbach v. Bolish, 126 F.3d 1288, 1291 (10th Cir. 1997). But
see Crawford-El v. Britton, 523 U.S. 574, 595 (1998). Here, the Defendants’
Rule 12(c) motion is void of any reference to qualified immunity. The Dunns’
complaint was therefore not subject to this heightened pleading standard at least
at this point. We express no opinion on the need for an amended complaint
should a pretrial motion asserting a qualified immunity defense be filed.
Finally, we reject Defendants’ extraordinary argument that the searches and
seizures were necessarily constitutional because they were conducted pursuant to
a state statute that was constitutional at that time. The mere fact that the Act was
in existence says nothing about the constitutionality of the searches and seizures
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under the Fourth Amendment.
2. Conspiracy Claims
To state a valid § 1983 conspiracy claim, “a plaintiff must allege specific
facts showing an agreement and concerted action amongst the defendants.”
Tonkovich v. Kansas Board of Regents, 159 F.3d 504, 533 (10th Cir. 1998). The
Dunns stated a valid § 1983 conspiracy claim by alleging that the Commission
employees and Mr. Francis acted in “concert” and in “conspiracy with each other
and others.” Aplt. App. at 19. The Dunns complaint also implies the existence of
an agreement. In Snell, we reversed the district court’s grant of summary
judgment against the plaintiffs’ § 1983 conspiracy claim. We explained that to
show the existence of an agreement, “it simply must be shown that there was a
single plan, the essential nature and general scope of which [was] know[n] to
each person who is to be held responsible for its consequences.” 920 F.2d at 702(internal quotations and citations omitted). Applying this standard to the Dunns’
complaint, we hold that the Dunns sufficiently pled the existence of an agreement.
The Dunns sufficiently alleged that there was a single plan: the searches and
seizures. The Dunns also sufficiently pled that the Commission employees and
Mr. Francis knew of the nature and scope of the searches and seizures by alleging
that they were involved in the authorization and execution thereof.
C. Motion to Alter or Amend Judgment
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In light of the above holdings, we need not address whether the district
court abused its discretion in denying the Dunn’s motion to alter or amend the
judgment.
Reversed in part and remanded.
Entered for the Court
Paul J. Kelly, Jr.
Circuit Judge
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