Wendell Dwayne O'Neal v. Allstate Indemnity Insurance Company Inc. ( 2021 )

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[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 20-14712
Non-Argument Calendar
____________________
WENDELL DWAYNE O'NEAL,
Plaintiff-Appellant,
versus
ALLSTATE INDEMNITY INSURANCE COMPANY INC,
MORRIS BART LLC,
CLAUDE E. HUNDLEY, III,
KEITH GANN,
Attorney,
ALBERT TROUSDALE,
Attorney, et al.,
Defendants-Appellees.
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2 Opinion of the Court 20-14712
____________________
Appeal from the United States District Court
for the Northern District of Alabama
D.C. Docket No. 5:20-cv-00743-LCB
____________________
Before WILSON, BRANCH, and JULIE CARNES, Circuit Judges.
PER CURIAM:
Plaintiff Wendell O’Neal appeals a district court order dis-
missing his Second Amended Complaint for lack of subject matter
jurisdiction, imposing monetary sanctions for Plaintiff’s filing of a
frivolous case, and entering a permanent pre-filing injunction that
precludes him from making court filings without court approval.
After careful review, we affirm.
I. BACKGROUND
Plaintiff is a serial litigator, having filed more than fifty fed-
eral district court actions across the country. As documented by
the district court, Plaintiff often files an unsuccessful lawsuit, and
then files another lawsuit in a different court claiming that the
judges and attorneys from his unsuccessful case unlawfully con-
spired against him and requesting Rule 11 sanctions against oppos-
ing counsel for opposing his claims. This case follows that same
pattern.
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20-14712 Opinion of the Court 3
This is one of several lawsuits Plaintiff filed related to an au-
tomobile accident. On October 22, 2018, Plaintiff was a passenger
in a vehicle being operated by his mother, Maple McCray, when it
was struck by Geronda Gendron. Gendron did not have insurance
of her own but the vehicle she was driving was covered under a
policy issued by Allstate to another woman, Kimberly Broadnax,
that provided bodily injury coverage up to $25,000 per person.
Plaintiff’s mother was insured by Metropolitan Property & Casu-
alty Co. (MetLife) under a policy that provided up to $50,000 of
uninsured/underinsured motorist coverage.
Two weeks after the accident, Plaintiff filed suit in the
Northern District of Alabama against the driver, various insurance
companies, and insurance company adjusters alleging negligence,
misrepresentation, and fraud in a conspiracy to deny him insurance
recovery. O’Neal v. Farmers Ins. Co., 5:18-CV-1831-LCB (N.D.
Ala. Apr. 18, 2019). Following several amendments of Plaintiff’s
pleadings, the district court dismissed that action for lack of subject
matter jurisdiction, finding Plaintiff’s invocation of a host of federal
statutes were spurious and raised no federal cause of action.
Plaintiff then turned to state court, filing separate actions
against Allstate and MetLife. O’Neal v. Allstate Northbrook In-
demnity Co., CV-2019-40 (Cir. Ct. Madison Cnty. Apr. 14, 2020),
and O’Neal v. Metlife Auto & Home Ins. Agency Inc., CV-2019-47
(Cir. Ct. Madison Cnty. July 26, 2019). Plaintiff settled with Allstate
for a policy-limits payout of $25,000, and released Allstate, Gen-
dron, and the Broadnax from all claims. Eventually, MetLife
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4 Opinion of the Court 20-14712
settled and paid Plaintiff the full $50,000 available under his
mother’s uninsured motorist policy.
Despite receiving policy-limit settlements from both Allstate
and MetLife, Plaintiff filed this action against Allstate, the presiding
judge and attorneys from the state-court action, and the City of
Hunstville, Alabama, among others. He alleges the defendants
conspired to deny him full recovery under his mother’s uninsured
motorist policy. Plaintiff contends the defendants conspired to
“manufacture” a phony Allstate policy, then “concealed” that the
policy was “void” in order to deny him full recovery under the Met-
Life policy. He seeks, among other things, $1,000,000 in punitive
damages, a monetary award of $25,000 to “repay” the Allstate set-
tlement, and $90,000 to cover costs of vehicles he purchased under
the “mistaken belief” that he would still be able to pursue his claims
after settlement.
Noting the pattern of vexatious filing behavior and the ap-
parent baselessness of this lawsuit, the district court ordered Plain-
tiff to appear in open court to show cause why his case should not
be dismissed and he should not be sanctioned. Following the show
cause hearing, the district court again dismissed Plaintiff’s action
for lack of subject matter jurisdiction. The court found that
“[a]lthough the complaint is peppered with citations to federal legal
authorities, it is clear from the factual allegations and the supple-
mental documentation submitted with the complaint that, taken as
a whole, the pleadings present no substantial question of federal
law.” The court further found that it could not exercise diversity
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20-14712 Opinion of the Court 5
jurisdiction because most of the defendants are residents of Ala-
bama. Accordingly, the district court dismissed Plaintiff’s Second
Amended Complaint.1
Addressing the merits, the district court found Plaintiff is a
vexatious litigant and that this case was frivolous and brought for
an improper purpose. The court issued another show cause order
providing Plaintiff the opportunity to explain why the court should
not impose monetary sanctions and enter a pre-filing injunction re-
quiring judicial review and approval of any pro se filings. After
considering Plaintiff’s submissions, the district court imposed mon-
etary sanctions totaling $6,500. The court also permanently en-
joined Plaintiff from serving or filing new actions or other legal
documents without pre-service or pre-filing leave of court. Plaintiff
timely appealed.
II. DISCUSSION
Plaintiff appeals the dismissal of his Second Amended Com-
plaint, the imposition of monetary sanctions, and the issuance of a
pre-filing injunction. “We review dismissals for lack of subject-
matter jurisdiction de novo.” Support Working Animals, Inc. v.
Governor of Fla., 8 F.4th 1198, 1201 n.1 (11th Cir. 2021). “We
1 In addition to lack of subject matter jurisdiction, the district court also found
dismissal warranted because Plaintiff’s complaint suffers from three fatal de-
fects: (1) it is a shotgun pleading that violates Federal Rules of Civil Procedure
8(a)(2) and 10(b); (2) Plaintiff’s naked assertions of unlawful harm were insuf-
ficient to sustain a claim for relief under Rule 12 (b)(6); and (3) the complaint
fails to allege fraud with the particularity required under Rule 9(b).
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review a district court’s sanctions order for abuse of discretion.”
Amlong & Amlong, P.A. v. Denny’s, Inc., 500 F.3d 1230, 1237 (11th
Cir. 2007). We likewise review for abuse of discretion the district
court’s decision to impose a filing injunction. Miller v. Donald, 541
F.3d 1091, 1096 (11th Cir. 2008). A district court abuses its discre-
tion when it fails to apply the proper legal standards or procedures
in making the determination, bases its decision on findings of fact
that are clearly erroneous, or “commits a clear error of judgment.”
Gray ex rel. Alexander v. Bostic, 613 F.3d 1035, 1039 (11th Cir.
2010).
A. The District Court Properly Dismissed Plaintiff’s
Claims for Lack of Subject Matter Jurisdiction
The district court dismissed Plaintiff’s amended complaint
for lack of subject matter jurisdiction because it failed to allege a
substantial, nonfrivolous federal claim that would implicate the
court’s federal question jurisdiction. Plaintiff, the party seeking to
invoke a federal forum here, bears the burden of persuasion on ju-
risdictional issues. Life of the S. Ins. Co. v. Carzell, 851 F.3d 1341,
1344 (11th Cir. 2017). Plaintiff may establish subject matter juris-
diction by showing that diversity jurisdiction exists in accordance
with 28 U.S.C. § 1332(a) or by establishing federal question juris-
diction under 28 U.S.C. § 1331. Because there is not complete di-
versity of citizenship in this case, subject matter jurisdiction exists
here only if there is federal question jurisdiction.
28 U.S.C. § 1331 states that “district courts shall have origi-
nal jurisdiction of all civil actions arising under the Constitution,
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20-14712 Opinion of the Court 7
laws, or treaties of the United States.” “Such federal-question ju-
risdiction may be based on a civil action alleging a violation of the
Constitution, or asserting a federal cause of action established by a
congressionally created expressed or implied private remedy for vi-
olations of a federal statute.” Jairath v. Dyer, 154 F.3d 1280, 1282
(11th Cir. 1998). “Although the vast majority of cases that fall
within such federal-question jurisdiction are cases that arise under
federal law that creates a cause of action, in limited circumstances,
federal-question jurisdiction may also be available if a substantial,
disputed question of federal law is a necessary element of a state
cause of action.” Id.Plaintiff asserts in his Second Amended Complaint that fed-
eral question jurisdiction exists because the insurance fraud alleg-
edly perpetrated by the defendants denied him “due process and
equal protection to civil redress under the federal rules of civil pro-
cedure.” Plaintiff further asserts that subject matter jurisdiction is
conferred by the Fourth Amendment; the Fifth Amendment; the
First Amendment; Article III, Section 2 of the Constitution; 28
U.S.C. § 1331; and 42 U.S.C. §§ 1981, 1983, and 1985(3). But the
mere reference to federal law is insufficient to establish subject
matter jurisdiction—“the implicated federal issue must be substan-
tial.” Dunlap v. G&L Holding Grp., Inc., 381 F.3d 1285, 1291–92
(11th Cir. 2004) (emphasis in original). District courts may dismiss
a federal question claim for lack of subject matter jurisdiction when
“(1) the alleged claim under the Constitution or federal statutes
clearly appears to be immaterial and made solely for the purpose
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8 Opinion of the Court 20-14712
of obtaining jurisdiction; or (2) such a claim is wholly insubstantial
and frivolous.” Blue Cross & Blue Shield of Ala. v. Sanders, 138
F.3d 1347, 1352 (11th Cir. 1998) (internal quotations omitted).
The district court, “after careful review of all 421 pages of
the Second Amended Complaint,” found that Plaintiff’s “allega-
tions of federal-question jurisdiction ‘clearly appear[] to be imma-
terial and made solely for the purpose of obtaining jurisdiction’ and
are ‘wholly insubstantial and frivolous.’” Docket Entry 105 at 11–
12 (quoting Blue Cross & Blue Shield of Ala., 138 F.3d at 1352). We
agree with the district court’s thorough analysis of Plaintiff’s com-
plaint.
As the district court stated: “Sixty-five pages of factual alle-
gations can be distilled into but a few short propositions: [the] All-
state policy was ‘void,’ [Plaintiff] was entitled under his mother’s
Metlife policy to additional uninsured motorist benefits, and the
defendants, through ‘deceit, fraud, and misrepresentation,’ con-
cealed that they’d ‘manufactured’ the ‘void’ Allstate policy to deny
him further recovery under his mother’s policy.” Docket Entry 105
at 12. We concur with the district court’s assessment that Plaintiff’s
allegations “sound squarely in state contract, insurance, and tort
law.” Id. Plaintiff’s adornment of his complaint with references to
the Constitution and federal statutes does not create federal ques-
tion jurisdiction. Dunlap, 381 F.3d at 1291–92 (explaining that “fed-
eral jurisdiction is not created by the mere fact that proof of viola-
tion of a federal statute is an element of a plaintiff’s state-law cause
of action”); Barrow v. Hill, 774 F.2d 1035, 1036 (11th Cir. 1985)
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20-14712 Opinion of the Court 9
(conclusory allegations are insufficient to establish jurisdiction).
Accordingly, we affirm the district court’s dismissal of Plaintiff’s
claims for lack of subject matter jurisdiction. 2
B. The District Court Did Not Abuse Its Discretion in
Imposing Monetary Sanctions and a Pre-Filing In-
junction
The district court imposed sanctions for vexatious litigation
after conducting an exhaustive review of Plaintiff’s litigation his-
tory. The district court found that Plaintiff is a “prolific filer of abu-
sive lawsuits,” citing, among other proceedings, twenty cases filed
in the Northern District of Alabama, thirty-nine cases filed in other
federal district courts, nine cases filed in Alabama trial courts, ap-
pellate proceedings initiated in other state courts, and twenty nine
appeals taken in various federal circuit courts of appeal. The court
not only evaluated the merits of these cases, finding many meritless
and some incredible, but discerned a repeating pattern of abusive
litigation tactics employed by Plaintiff. For instance, the court
found that Plaintiff often seeks to (1) “relitigate imagined disputes
that have already been dismissed in another forum,” (2) move for
2 We further note that defendants persuasively argue that Plaintiff failed to
carry his burden to “clearly and specifically set forth facts sufficient to satisfy
Article III standing requirements.” Bochese v. Town of Ponce Inlet, 405 F.3d
964, 977 (11th Cir. 2005). How Plaintiff suffered an “injury in fact” from de-
fendants’ alleged manufacturing of a void Allstate policy when he received
policy-limit payouts under both the Allstate policy and his mother’s MetLife
uninsured motorist policy remains a mystery.
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10 Opinion of the Court 20-14712
reconsideration of issues already decided, and (3) seek Rule 11 sanc-
tions against attorneys for opposing his frivolous claims, as Plaintiff
did in this case.
Plaintiff argues that the district court abused its discretion in
imposing sanctions because his litigation record does not establish
that he is a vexatious litigant inclined to file frivolous claims and
the district court “falsified an explicit substantive finding” to the
contrary. We disagree.
The district court acted well within its discretion to sanction
Plaintiff for costly, abusive, and vexatious filing behavior. District
courts have inherent authority to sanction as well as the power to
impose Rule 11 sanctions sua sponte. Purchasing Power, LLC v.
Bluestem Brands, Inc., 851 F.3d 1218, 1223 (11th Cir. 2017); Fed. R.
Civ. P. 11(c)(3). The court properly exercised that authority here
after affording Plaintiff multiple opportunities through hearings
and briefs to show cause why he should not be sanctioned.
The record fully supports the district court’s finding that by
filing this lawsuit and moving for sanctions without an objective
basis in law, Plaintiff violated Rule 11 and that sanctions were ap-
propriate both under both Rule 11 and the district court’s inherent
powers. Despite multiple opportunities to do so, Plaintiff failed to
articulate a reasonable claim to additional uninsured motorist pay-
ments when he has already received a $50,000 policy-limit payout
from MetLife, in addition to the $25,000 policy-limit payout from
Allstate. Moreover, compounding his frivolous pleading, and con-
sistent with the pattern of vexatious filings the district court
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20-14712 Opinion of the Court 11
documented, Plaintiff again sparked unnecessary litigation by filing
frivolous sanctions motions. For instance, Plaintiff moved for sanc-
tions against the Morris Bart Law Firm, Allstate, the Huie Law
Firm, and attorney Keith Gann simply because they opposed his
frivolous claims, an action that caused needless litigation and fur-
ther wasted judicial resources. Accordingly, the district court did
not abuse its discretion in finding sanctions warranted.
As for the actual sanctions imposed, Plaintiff does not chal-
lenge the monetary sanctions totaling $6500 awarded by the dis-
trict court. We discern no abuse of discretion and affirm the mon-
etary award.
Nor did the district court’s decision to enjoin future filings
amount to an abuse of discretion. The district court found mone-
tary sanctions alone insufficient to deter Plaintiff from filing further
frivolous lawsuits and entered a permanent injunction requiring
Plaintiff to seek leave before making future pro se filings. 3
District courts have discretion to impose pre-filing screening
restrictions on litigious plaintiffs. “[F]ederal courts can protect
their dockets from abuse by frequent filers so long as the measures
taken are a reasonable response to the abuse and access to the
courts is not entirely foreclosed.” Johnson v. 27th Ave. Caraf, Inc.,
9 F.4th 1300 (11th Cir. 2021) (upholding injunction prohibiting
3 The injunction states that “The terms of this injunction do not apply to any
licensed attorney that [Plaintiff] should retain to represent him in any forum
in which the attorney is a member in good standing and eligible to practice.”
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plaintiff from filing any future ADA complaints without first ob-
taining written permission from the court); Cofield v. Ala. Public
Serv. Comm., 936 F.2d 512, 517–18 (11th Cir. 1991) (upholding in-
junction requiring plaintiff “to send all pleadings to a judge for pre-
filing approval”). The pre-filing injunction here is a reasonable re-
sponse to Plaintiff’s litigious history and does not impermissibly
foreclose Plaintiff access to the courts. It is limited to pro se filings
and allows meritorious pro se filings upon leave of court. Cofield,
936 F.2d at 518.
Plaintiff relies heavily on an unpublished Ninth Circuit deci-
sion vacating a district court order deeming Plaintiff a vexatious
litigant and imposing pre-filing restrictions. See O’Neal v. Empire
Fire & Marine Ins. Co., 735 F. App’x 352, 353 (9th Cir. 2018). There
the Ninth Circuit vacated the pre-filing restriction because “the dis-
trict court did not make explicit substantive findings as to the friv-
olousness of [Plaintiff’s] prior filings or narrowly tailor the scope of
its pre-filing order.” Id. In contrast, the district court here con-
ducted a comprehensive examination of Plaintiff’s litigation his-
tory, cited dozens of Plaintiff’s past cases, concluded that only two
had merit, and provided examples of past cases where Plaintiff fol-
lowed an abusive strategy similar to that employed in this case
(e.g., “relitigating imagined disputes that have already been dis-
missed in another forum” and moving for sanctions against any
person or entity who dares to oppose his frivolous claims).
In short, the district court here did the heavy lifting and doc-
umented Plaintiff’s abusive tactics across numerous forums over
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20-14712 Opinion of the Court 13
many years. The court’s findings justify the pre-filing injunction
imposed. Moreover, unlike the injunction vacated by the Ninth
Circuit in Empire Fire, the injunction here is tailored to address
frivolous pro se filings and does not unnecessarily preclude Plain-
tiff’s access to the courts when represented by counsel. See O’Neal
v. Empire Fire & Marine Ins. Co., Inc., No. 2:16-CV-2313-JCM-
CWH, 2018 WL 1626031, at *3 (D. Nev. Apr. 4, 2018) (enjoining
Plaintiff “from filing any new complaint, petition, or other action”
without first obtaining leaving of court). We therefore affirm the
permanent injunction requiring Plaintiff to obtain approval of any
future pro se filings.
C. Plaintiff’s Appellate Motions
True to form, Plaintiff peppered the appellate docket for this
case with ten meritless and/or irrelevant motions. Plaintiff moved
to (1) strike defendants’ responsive briefs as “scandalous,” (2) im-
pose sanctions against defendants under Fed. R. Civ. P. 11, (3) ex-
pedite a decision on the merits and his request for sanctions. See
11th Cir. Case No. 20-14712, Docket Entries 31, 57, and 59. We see
nothing improper in defendants’ briefing and this decision renders
Plaintiff’s request for an expedited decision moot. We deny each
of these motions.
Plaintiff also filed four motions requesting the Court take ju-
dicial notice of certain facts related to Plaintiff’s underlying claims
and request for sanctions against parties opposing his claims. See
11th Cir. Case No. 20-14712, Docket Entries 45, 52, 58, 60, and 61.
Fed. R. Evid. 201 “permits courts to take notice of ‘an adjudicative
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14 Opinion of the Court 20-14712
fact’ that is ‘generally known’ and ‘whose accuracy cannot reason-
ably be questioned,’ so long as it affords the parties an opportunity
to be heard on the propriety of doing so if requested.” Robinson v.
Liberty Mut. Ins. Co., 958 F.3d 1137, 1142 (11th Cir. 2020) (quoting
Fed. R. Evid. 201(a)–(b), (e)). “But Rule 201 ‘governs judicial notice
of an adjudicative fact only, not a legislative fact.’” Id. (quoting
Fed. R. Evid. 201(a)). “‘[A]djudicative facts are those developed in
a particular case,’ while ‘[l]egislative facts are established truths,
facts or pronouncements that do not change from case to case but
apply universally.’” Id. (quoting W. Ala. Women’s Ctr. v. William-
son, 900 F.3d 1310, 1316 (11th Cir. 2018) (internal quotation marks
omitted); see also Fed. R. Evid. 201(a) advisory committee’s note
to 1972 proposed rule (“Adjudicative facts are simply the facts of
the particular case.”). We may take judicial notice of a document
filed in another court only for the limited purpose of establishing
the existence of such litigation and related filings and not for the
truth of the matter asserted. United States v. Jones, 29 F.3d 1549,
1553 (11th Cir. 1994); Grayson v. Warden, Comm’r, Alabama Doc,
869 F.3d 1204, 1225 (11th Cir. 2017) (“[A] court cannot take judicial
notice of factual findings of another court.” (quoting Taylor v.
Charter Med. Corp., 162 F.3d 827, 830 (5th Cir. 1998)).
We have discretion to take judicial notice of adjudicative
facts; however, the taking of judicial notice is “a highly limited pro-
cess.” Shahar v. Bowers, 120 F.3d 211, 214 (11th Cir. 1997) (en
banc). Here, none of Plaintiff’s motions seeking judicial notice of
facts allegedly relevant to his underlying claims and his request for
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20-14712 Opinion of the Court 15
sanctions against defendants raises facts pertinent to this appeal for
which this Court may properly take judicial notice. We deny each
of these motions (Docket Entries 45, 52, 58, and 61).
Plaintiff also twice moved the Court to take judicial notice
that the appellate record is incomplete because it does not include,
among other things, a transcript of the order to show cause hearing
that preceded the district court’s sanctions order. See 11th Cir.
Case No. 20-14712, Docket Entries 54 and 56 (amended motion fur-
ther alleging the district court maliciously concealed documents).
But the hearing transcript is part of the appellate record (Docket
Entry 94) and we see no omission that renders the appellate record
incomplete. We deny each of these motions.
III. CONCLUSION
For the reasons explained above, we AFFIRM the decision
of the district court dismissing Plaintiff’s claims for lack of subject
matter jurisdiction, imposing monetary sanctions against Plaintiff,
and entering a pre-filing injunction. We DENY all pending appel-
late motions filed by Plaintiff (Docket Entries 31, 45, 52, 54, 56, 57,
58, 59, 60, and 61).