Grayson Hare, Jr. v. Shirley Simpson , 621 F. App'x 748 ( 2015 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-1382
GRAYSON L. HARE, JR.,
Plaintiff - Appellant,
v.
SHIRLEY J. SIMPSON; BARBARA A. BURNS; PAULINE E. GIMA;
GILBERT G. MALONE; DOES 1-10,
Defendants - Appellees.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. J. Frederick Motz, Senior District
Judge. (1:13-cv-01981-JFM)
Argued: March 26, 2015 Decided: August 7, 2015
Before GREGORY, KEENAN, and WYNN, Circuit Judges.
Affirmed in part, reversed in part, and remanded by unpublished
opinion. Judge Gregory wrote the opinion, in which Judge Keenan
and Judge Wynn joined.
ARGUED: K. Ross Powell, UNIVERSITY OF VIRGINIA SCHOOL OF LAW,
Charlottesville, Virginia, for Appellant. Leo Wallace,
Stewartstown, Pennsylvania; Russell Karpook, COHAN, WEST &
KARPOOK, PC, Baltimore, Maryland, for Appellees. ON BRIEF:
Stephen L. Braga, Brian Walsh, Third Year Law Student, Appellate
Litigation Clinic, UNIVERSITY OF VIRGINIA SCHOOL OF LAW,
Charlottesville, Virginia, for Appellant.
Unpublished opinions are not binding precedent in this circuit.
2
GREGORY, Circuit Judge:
Grayson Hare, Jr., a pro se Maryland litigant, has sued
four Pennsylvania residents for forgery, aiding and abetting
fraud, intentional infliction of emotional distress, and civil
conspiracy. Defendants-Appellees are Hare’s step-sister,
Shirley Simpson; Simpson’s attorney, Gilbert Malone; Malone’s
paralegal, Pauline Gima; and Simpson’s real estate broker,
Barbara Burns. Essentially, Hare alleges that Appellees
conspired to produce counterfeit powers of attorney for Hare’s
parents, which Simpson used to confine Hare’s father to a
nursing home, to restrict communication between the two, and to
liquidate property without giving Hare his share. The district
court dismissed the case on res judicata grounds. For the
reasons that follow, we affirm dismissal of the claims against
Burns and Gima from the case, as well as Hare’s claims against
all Appellees for intentional infliction of emotional distress.
However, we reverse the district court’s determination that res
judicata bars Hare’s remaining claims against Simpson and Malone
and remand the case for further proceedings consistent with this
opinion.
I.
Hare’s first amended complaint (“complaint”) alleges that
in 2006, shortly after their mother suffered a stroke, Simpson
3
left Hare’s father in his Maryland home without adequate care
before subsequently admitting him to a nursing home in
Pennsylvania. According to Hare, Simpson was able to use her
personal relationships with the facility’s leadership to
restrict Hare’s communication with and access to his father,
including in one instance having Hare removed from the property.
Hare further alleges that around this same time, Appellees
conspired to produce counterfeit powers of attorney for both
parents back-dated to 2002. 1 Hare maintains that Simpson had
existing relationships with Malone and Gima, who together
created the fraudulent documents. Armed with the counterfeit
powers of attorney, Hare alleges that in 2007, Simpson worked
with Burns to sell the parents’ residence without their
knowledge or consent. Hare claims that he is entitled to half
of these proceeds pursuant to a 1995 deed conveying the property
to him and Simpson as tenants in common. 2
Hare says he became aware of this conspiracy in 2010, two
years after his parents passed away. After his parents’ death,
1
The complaint also alleges that Malone created fraudulent
estate planning documents. See J.A. 17. This allegation does
not appear related to the primary relief that Hare seeks, which
is his half of the 1995-deeded property that was sold in 2007.
See J.A. 20.
2
The deed was executed but not recorded by Hare and
Simpson’s parents, who also reserved a life estate and the
continuing power to sell the property during their lifetime.
4
Simpson was appointed personal representative of their estate on
November 3, 2008. Simpson avers that it was only in discharging
these duties that she discovered the 1995 deed. In January
2009, Simpson filed an action in Baltimore County Circuit Court
in her capacity as representative of the estate seeking a
declaratory judgment on the validity of the deed. Hare filed a
counter-complaint alleging that the deed was valid, that Simpson
had breached her duties to the Hares and to the estate, and also
requesting an accounting of her actions in that capacity. Hare
v. Simpson, No. 1385, at *3-4 (Md. Ct. Spec. App. Apr. 15,
2014). After a hearing on both parties’ motions for partial
summary judgment, the court declared the deed valid. Id. at *4.
All other remaining issues from Hare’s counter-complaint were
reserved for trial on July 26, 2010, but the trial was continued
until July 26, 2012. Id. at *4-5.
In the years between when the Baltimore action was
initiated and when the trial took place, Hare pursued litigation
in Pennsylvania. He filed a will contest in the Court of Common
Pleas of York County, Pennsylvania Orphans’ Court, along with a
petition for accounting. Simpson filed her formal accounting on
September 13, 2011, and Hare his objections on October 18, 2011.
On October 19, 2011, the Pennsylvania court dismissed Hare’s
objections and affirmed the accounting, writing in its one-page
adjudication that: “Grayson L. Hare, Sr. executed a Power of
5
Attorney in favor of Shirley J. Simpson July 26, 2002.” J.A.
36. On June 26, 2012, the Baltimore action came back before the
circuit court. Ruling on Hare’s counter-complaint, the court
decided in pertinent part that the issues had been previously
litigated and brought to final judgment in Pennsylvania. Hare,
No. 1385, at *5-6.
Hare next pursued relief in federal court, first attempting
to bring suit against Appellees in federal district court in
California, which was dismissed for lack of personal
jurisdiction over the defendants. Hare then filed his complaint
in this case on July 9, 2013. Less than a year later, on April
15, 2014, the Maryland Court of Special Appeals affirmed the
decision of the Baltimore County Circuit Court based on claim
preclusion, in part because Simpson appeared in the same
representative capacity in the Pennsylvania and Maryland
actions. Hare, No. 1385, at *7-12.
Hare’s federal complaint contains four counts: forgery,
aiding and abetting fraud, intentional infliction of emotional
distress, and civil conspiracy. Burns moved to dismiss the
case, and Simpson, Malone, and Gima filed a separate motion to
dismiss. The district court ruled in favor of Appellees,
holding without further explanation “that the claims asserted by
plaintiff are barred by the doctrine of res judicata since they
were resolved in litigation in the Court of Common Pleas of York
6
County, Pennsylvania Orphans’ Court.” J.A. 138. Hare now
timely appeals from this decision.
II.
We review a grant of a motion to dismiss for failure to
state a claim de novo. E.I. du Pont de Nemours & Co. v. Kolon
Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011). In assessing
the propriety of a Rule 12(b)(6) ruling, we accept the factual
allegations in the complaint as true and may also properly take
judicial notice of matters of public record. Philips v. Pitt
Cty. Mem’l Hosp., 572 F.3d 176, 180 (4th Cir. 2009). The
complaint’s factual allegations, however, “‘must be enough to
raise a right to relief above the speculative level’ and have
‘enough facts to state a claim to relief that is plausible on
its face.’” Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555, 570 (2007)).
A.
We must at the outset affirm the dismissal of the claims
against Burns and Gima. While the district court ostensibly
relied on claim preclusion, see infra, we may affirm its
decision on any grounds apparent from the record. United States
v. Smith, 395 F.3d 516, 519 (4th Cir. 2005). Here, Hare has
simply failed to plead a set of facts supporting any claim for
relief against either of these Appellees. Burns is twice-
7
mentioned in the complaint, first as having listed Hare’s
parents’ residence for sale “in furtherance of the objectives of
the conspiracy.” J.A. 14. Hare further accuses Burns of having
“concealed the existence of the unrecorded 1995 deed from the
purchaser of the Hares’ residence.” J.A. 15 (emphasis added).
Even less detail is provided about Gima’s alleged role; Hare
merely asserts she “assisted in the production of fraudulent
powers of attorney.” J.A. 13. A well-pled complaint must offer
more than “naked assertions devoid of further factual
enhancement.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(brackets and internal quotation marks omitted). Without more
detail alleging a plausible claim for relief, we find these
fleeting mentions of Burns and Gima insufficient to state a
claim against them as a matter of law.
B.
We also find that Hare has failed to state a claim for
intentional infliction of emotional distress (IIED). The
complaint states that “physical and emotional damage” was
“directly caused by . . . prevent[ing] plaintiff from having
free and unmonitored communications with his father and by
denying plaintiff medical information concerning his father’s
condition and treatment.” J.A. 18. This count appears to
allege harm inflicted on Hare either while he was in
Pennsylvania or California. See J.A. 14; see also J.A. 65-67.
8
Under the rule of lex loci delicti, Hare’s IIED claim is
therefore evaluated under the substantive tort law of those
states. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487,
496 (1941); Hauch v. Connor, 453 A.2d 1207, 1209 (Md. 1983)
(affirming that Maryland “adhere[s] to the rule that the
substantive tort law of the state where the wrong occurs
governs”). But regardless of whether the alleged harm occurred
in Pennsylvania, California, or both, Hare’s IIED claim requires
a plausible allegation of severe or extreme emotional distress. 3
See Taylor v. Albert Einstein Med. Ctr., 754 A.2d 650, 652 (Pa.
2000); Hughes v. Pair, 209 P.3d 963, 976 (Cal. 2009). His
complaint, however, offers nothing more than a bare allegation
of “emotional harm and distress.” J.A. 18. We find, once more,
such detail insufficient to state his IIED claim as a matter of
law.
III.
We next consider whether Hare’s remaining claims of
forgery, aiding and abetting fraud, and civil conspiracy were in
fact “barred by the doctrine of res judicata since they were
resolved in litigation in the [Pennsylvania Orphans’ Court].”
3
Although Pennsylvania has not officially recognized the
tort of IIED, it recognizes the “minimum elements necessary to
sustain such a cause of action” as those set forth in Section 46
of the Restatement (Second) of Torts. Taylor, 754 A.2d at 652.
9
J.A. 138. It is unclear whether the district court was
referring to “true res judicata,” also known as claim
preclusion, 18 Charles Alan Wright & Arthur R. Miller, Federal
Practice & Procedure § 4402 (2d ed. 2015), or if it was
referring to collateral estoppel, also known as issue
preclusion. We consider both doctrines in turn, and determine
neither precludes Hare’s remaining claims against Simpson and
Malone.
As Hare rightly points out, claim preclusion is no
obstacle. Under Pennsylvania law, 4 claim preclusion dictates
that “[a]ny final, valid judgment on the merits by a court of
competent jurisdiction precludes any future suit between the
parties or their privies on the same cause of action.” Balent
v. City of Wilkes-Barre, 669 A.2d 309, 313 (Pa. 1995). Here,
the parties in the instant case are different from those in the
Pennsylvania litigation. As the record shows, Malone was not a
party to the action in the Orphans’ Court. Moreover, Hare’s
complaint names Simpson in her personal capacity, whereas she
appeared before the Orphans’ Court as “Power of Attorney of the
Estate.” See J.A. 52-53. As an estate representative, Simpson
4
We “are bound under the Full Faith and Credit statute,
28 U.S.C. § 1738, to apply the law of the rendering state to
determine whether and to what extent the state court judgment
should have preclusive effect in the federal action.” Davenport
v. N.C. Dep’t of Transp., 3 F.3d 89, 92 (4th Cir. 1993).
10
was not in privity with herself in her personal capacity. See
Blum v. Goldman, 79 A.2d 248, 251 (Pa. 1951) (finding claim
preclusion “does not generally apply where a party appears in
two proceedings in different capacities”); Sec. Trust Co. v.
Feist, 5 A.2d 119, 122 (Pa. 1939). Given this lack of identity
of the parties, the district court erred insofar as it relied on
grounds of claim preclusion. 5
Appellees similarly cannot prevail on grounds of issue
preclusion. 6 As formulated by the Pennsylvania Supreme Court,
issue preclusion applies where “1) the issues in the two actions
are sufficiently similar and sufficiently material to justify
invoking the doctrine; 2) the issue was actually litigated in
the first action; and 3) a final judgment on the specific issue
5 This lack of privity distinguishes our case from In re
Lare’s Estate, 257 A.2d 556 (Pa. 1969), which Appellees seek to
rely on for the proposition that a judicial confirmation of an
accounting “is res adjudicata as to all items contained therein
as well as to all questions which could have been raised
concerning such items.” Id. at 563. There, the parties to the
instant action and previous accounting were the same, thus
fulfilling the requirements of the claim preclusion doctrine.
We further note that, if Lare applies in the issue
preclusion context, it is only because the court explained that
the alleged claim of impropriety “was before th[e] Court
previously.” Id. Even though it was not “[e]xplicitly
discuss[ed]” in the court’s opinion, id., the issue in question
had been actually litigated, unlike the validity of the deed in
our case. See infra.
6 Appellees have asked us to affirm the district court’s
decision on the basis of issue preclusion with regard to
Appellee Malone, but not Simpson. Appellees Br. at 9, 15.
11
in question was issued in the first action.” Commonwealth. v.
Holder, 805 A.2d 499, 502 (Pa. 2002). Regarding the second
factor, “[a]n issue is actually litigated when it is properly
raised, submitted for determination, and then actually
determined.” Id. at 502-03. Here, Appellees’ counsel admitted
at oral argument that the legitimacy of the power of attorney
“was not litigated” in Pennsylvania. Oral Argument at 24:17.
In light of this concession, we cannot affirm the district
court’s dismissal of the case on the basis of issue preclusion.
Even without Appellees’ counsel’s candor, we agree with
Hare that the record before the district court did not support
the conclusion that the issue was in fact litigated in the
Orphans’ Court. Although not a Rule 12(b) defense, we have
permitted the assertion of res judicata in a motion to dismiss
when the defense can be judged from the face of the complaint.
See Andrews v. Daw, 201 F.3d 521, 524 n.1 (4th Cir. 2000). In
this case, it is not the complaint that is the obstacle to
evaluating a preclusion defense, but the scant information
contained in the Pennsylvania judgment. In its one-page
adjudication, the court wrote that an audit of the Hare Sr.
estate was called, and objections “were filed and dismissed by
the Court and the account was closed the same day.” J.A. 52.
The court continued: “Grayson L. Hare, Sr. executed a Power of
Attorney in favor of Shirley J. Simpson July 26, 2002.” J.A.
12
52. Such lack of detail is all the more reason why adjudication
of this affirmative defense is ill-suited at this stage in the
litigation. There is simply no indication about whether the
court entertained any allegation that the power of attorney was
forged or fraudulent. 7 Of course, after oral argument, we now
know that the court did not.
Appellees’ argument on brief, that we should nevertheless
consider the power of attorney’s validity as having been
litigated because its legitimacy was “implicit” in the Orphans’
Court’s confirmation of Simpson’s accounting, is further
unavailing. See Holder, 805 A.2d at 502-03 (explaining that an
issue is “actually litigated” when it is “properly raised,
submitted for determination, and then actually determined”).
Nor can Appellees rely on the idea that the Pennsylvania forum
afforded Hare “a full and fair opportunity” to litigate the
issue. The question is not whether Hare, generally speaking,
could have raised his claim that the power of attorney was
7Appellees further contend that “[a]lthough the record does
not disclose what issues were raised by Hare’s objections, it
does not really matter.” Appellees Br. 20. For support, they
cite to a Third Circuit decision where the court determined that
a party could be deemed to have actually litigated an issue when
a default judgment was entered against him as a sanction for
bad-faith conduct in discovery. In re Docteroff, 133 F.3d 210,
215 (3d Cir. 1997). Without support for this same proposition
in Pennsylvania law, not to mention inconclusive evidence of bad
faith on the part of Hare, Appellees’ argument in this regard
also fails.
13
forged. This approach confuses claim preclusion and issue
preclusion. R/S Fin. Corp. v. Kovalchick, 716 A.2d 1228, 1230
(Pa. 1998) (explaining that claim preclusion applies to claims
that “could have been litigated during the first proceeding if
they were part of the same cause of action”). When courts
include as a criteria of issue preclusion that a litigant must
have had a “full and fair opportunity” to litigate the issue,
this inquiry presupposes the actual litigation requirement, and
further asks whether there exist other reasons of fairness
“permit[ting] defeat of an otherwise valid claim of preclusion.” 8
Wright & Miller, supra, § 4423. In other words, Appellees
cannot eschew the actual litigation requirement.
IV.
In so holding for Hare, we of course respect the animating
principles behind both preclusion doctrines, including the need
to protect against the burden of repetitious litigation and to
promote judicial economy. See Kovalchick, 716 A.2d at 1230.
But, as presented by the record before us, Appellees have
conceded and/or failed to meet the necessary elements under
8
These fairness concerns may arise in cases of nonmutual
preclusion, where there is differing incentive to litigate
vigorously in the first action, or where there are substantial
differences in the procedures available in different actions.
See generally Wright & Miller, supra, § 4423.
14
Pennsylvania law for either claim or issue preclusion. We
therefore affirm the district court in part and reverse in part
and remand the case for further proceedings consistent with this
opinion. 9
AFFIRMED IN PART,
REVERSED IN PART,
AND REMANDED
9 Appellees also challenge for the first time on appeal
whether Hare brings his claims beyond the applicable statute of
limitations, an issue better addressed by the district court.
15