TETON MILLWORK SALES, a Wyoming corporation v. Roger SCHLOSSBERG
No. 07-8091
United States Court of Appeals, Tenth Circuit
Feb. 10, 2009
311 Fed. Appx. 145
Standing alone, Mr. Pulido-Vasquez‘s consent is sufficient for us to determine that the search was legal. See id. at 1118 (“If, at the conclusion of a traffic stop a driver voluntarily consents to further questioning, no seizure takes place and ‘the Fourth Amendment‘s strictures are not implicated.‘“). There is, however, an alternative basis for that conclusion—a reasonable suspicion of unlawful activity. “A variety of factors may contribute to the formation of an objectively reasonable suspicion of illegal activity. Among those factors . . . are having no proof of ownership of the vehicle, having no proof of authority to operate the vehicle, and inconsistent statements about destination.” United States v. Hunnicutt, 135 F.3d 1345, 1349 (10th Cir.1998).
Notwithstanding any misunderstanding and ambiguity attributable to language difficulties, Trooper Epperly was presented with two individuals with different stories—one claiming that he dropped off Mr. Pulido-Vasquez‘s mother with his sister at her apartment and the other claiming that Mr. Pulido-Vasquez‘s mother was left with his uncle at his house. Other circumstances apparent to Trooper Epperly included the lack of luggage (even though the men claimed to be taking an overnight trip), the absence of information on permission to drive the Explorer, Mr. Medina‘s failure to state Mr. Pulido-Vasquez‘s full name, and a key ring with only one key on it (which the officer believed could be indicative of a vehicle used to transport drugs). Taken together, these factors could raise an experienced officer‘s reasonable suspicion that the men were involved in criminal activity.
III. CONCLUSION
Under our precedents, Trooper Epperly‘s initial stop of the Explorer for violation of
AFFIRMED.
Charles Michael Aron, Galen B. Woelk, Aron & Hennig, LLP, Laramie, WY, for Plaintiff-Appellant.
Amanda M. Gundlac, Gary R. Scott, Hirst & Applegate, Cheyenne, WY, for Defendant-Appellee.
Before KELLY, EBEL, and GORSUCH, Circuit Judges.
PAUL J. KELLY, JR., Circuit Judge.
Plaintiff-Appellant, Teton Millwork Sales (“TMS“), appeals from the district court‘s order granting Defendant-Appellee Roger Schlossberg‘s motion to dismiss the action based upon absolute judicial immunity and lack of personal jurisdiction. As Mr. Schlossberg now consents to personal jurisdiction, Aplee. Br. at 1, the issue on appeal is whether the district court properly dismissed the claim pursuant to
Background
The present case arises from contentious divorce proceedings in a West Virginia Family Court, in which Mary Palencar sought and secured a divorce from her husband, Michael Palencar. During the divorce proceedings, the court appointed Mr. Schlossberg as receiver to collect assets in which Mr. Palencar held an owner-
vested with actual legal and equitable title to and the right to obtain record title to and/or liens upon and/or actual physical custody and possession of all of the assets of the Respondent Michael Palencar (whether held by the said Respondent, either alone or jointly with any other person or entity, in his own name or in the name of any alias . . . or in the name of any other entity, including . . . Teton Millwork Sales).
Aplt.App. 69. In order to give Mr. Schlossberg the powers necessary to carry out his receivership, the West Virginia court expressly contemplated that he would act outside the state of West Virginia. Therefore, the court “authorized and directed” Mr. Schlossberg to “take such action as may appear necessary or desirable to obtain ancillary jurisdiction of these proceedings in such other States . . . as may appear appropriate.” Aplt.App. 70-71.
Apparently, Mr. Schlossberg then proceeded to use this authority to seize the assets of TMS, a corporation in which Mr. Palencar was a twenty-five percent shareholder. Once TMS learned that its assets had been seized, it brought suit in Wyoming state court, asserting that Mr. Schlossberg committed abuse of process and fraud. Aplt.App. 1-10. TMS alleged that Mr. Schlossberg exceeded his authority by seizing TMS‘s assets in Wyoming, as well as its proprietary information and mail, even though he knew that Mr. Palencar was only a twenty-five percent shareholder in TMS and that there was no evidence to justify piercing the corporate veil of TMS. Aplt.App. 2 ¶ 21; 4 ¶¶ 38, 40-41, 44. TMS‘s complaint also alleged that Mr. Schlossberg falsely represented to various third parties that he had legal authority to seize TMS‘s assets in Wyoming, while intentionally failing to mention that he was required to but had not obtained ancillary jurisdiction in Wyoming. Aplt.App. 8 ¶¶ 78, 84, 86. According to the complaint, Mr. Schlossberg never obtained ancillary jurisdiction in Wyoming by securing a Wyoming court order prior to making these seizures. Aplt.App. 5 ¶¶ 47, 49, 51, 54. TMS also alleged that Mr. Schlossberg threatened TMS‘s agents with financial penalties if they accepted instructions from TMS and provided them with incomplete and misleading documents relating to his legal authority to seize TMS‘s assets. Aplt.App. 8 ¶ 79; 9 ¶¶ 88-89.
After removing the case to federal district court, Mr. Schlossberg filed a motion to dismiss under
Discussion
I. The Barton Doctrine
As an initial matter, we note that we have subject matter jurisdiction even
The dissent disagrees, pointing to the language in Barton distinguishing “claims aris[ing] against the receiver as such, whilst acting under the powers conferred on him, whether for labor performed . . . or for injury to persons or property” from claims against the receiver for “tak[ing] possession of property belonging to another” that are exempted under the ultra vires exception. Id. The dissent argues that this case falls within the first of these two classes of cases—and is therefore subject to the Barton doctrine—because Mr. Schlossberg was acting within the scope of his authority. In reaching the conclusion that Mr. Schlossberg acted within his authority, the dissent merely looks to the fact that the West Virginia court had issued a valid order granting Mr. Schlossberg extensive authority. However, simply looking at the facial validity of the order to seize Mr. Palencar‘s assets does not adequately deal with the fact, as fully discussed below, that TMS “allege[d] at the outset facts demonstrating,” In re Lowenbraun, 453 F.3d 314, 322 (6th Cir. 2006), that Mr. Schlossberg acted beyond the scope of his authority by wrongfully seizing assets that did not belong to Palencar. See In re Triple S Restaurants, Inc., 519 F.3d 575, 578 (6th Cir.2008) (stating that Barton would not apply if the trustee acted “outside the scope of his authority“).
This case is distinguishable from the cases cited by the dissent because none of them involved an outside party who claimed that their assets had been wrongfully been seized. See id. at 578 (involving a suit by the general counsel of a debtor corporation against the trustee for outrage and intentional infliction of emotional distress); In re Lowenbraun, 453 F.3d at 316 (involving a suit by one of the parties to a divorce proceeding against the trustee for libel, slander, abuse of process, wrongful use of civil proceedings, and outrage); In re Crown Vantage, Inc., 421 F.3d 963, 967-70 (9th Cir.2005) (involving a claim by a party to a settlement agreement against the trustee for violation of the settlement agreement); Muratore v. Darr, 375 F.3d 140, 142-43 (1st Cir.2004) (involving a suit by the owner of a debtor corporation against the trustee for, inter alia, abuse of process and negligence); Carter v. Rodgers, 220 F.3d 1249, 1252 (11th Cir.2000) (involving a suit by a debtor against the trustee for breach of fiduciary duties). Construing the language in Barton regarding “claims aris[ing] against the receiver as such, whilst acting under the powers conferred on him,” 104 U.S. at 134, as broadly as the dissent does—so that it reaches even the claim of an independent third party whose assets were (allegedly) wrongfully seized—would render Barton‘s ultra vires exception null and void. We decline to read one sentence in Barton so
II. Motion to Dismiss for Failure to State a Claim
We review de novo a district court‘s dismissal pursuant to
“In reviewing a Rule 12(b)(6) motion to dismiss, our first step is to review the factual allegations that should have been considered by the district court.” Alvarado v. KOB-TV, L.L.C., 493 F.3d 1210, 1215 (10th Cir.2007). On a
Turning to the application of these standards, we note that the district court could not consider certain materials beyond the complaint for purposes of the
It is well established that judges and judicial officials enjoy absolute immu-
The quasi-judicial immunity of a court-appointed receiver, however, is not limitless. In order to be immune, the receiver must act within the scope of his authority in carrying out a court order. Turney, 898 F.2d at 1474 (stating that “absolute immunity extended only to acts prescribed” by the court order); T & W Inv. Co., 588 F.2d at 802-03 (analyzing whether the receiver was in fact following the orders of the court); see Davis v. Bayless, 70 F.3d 367, 373 (5th Cir.1995) (stating that court-appointed receivers share absolute immunity as long as they act “in good faith and within the scope of the authority granted“); Roland v. Phillips, 19 F.3d 552, 555 (11th Cir.1994) (“Like judges, these officials must be acting within the scope of their authority.“); Kermit Constr. Corp. v. Banco Credito Y Ahorro Ponceno, 547 F.2d 1, 3 (1st Cir.1976) (stating that absolute immunity extends to a court-appointed receiver who “faithfully and carefully carries out” a court order); see also New Alaska Dev. Corp. v. Guetschow, 869 F.2d 1298, 1303 (9th Cir.1989). Furthermore, because the “quasi-judicial” immunity of individuals such as court-appointed receivers is a derivative of judicial immunity, there is no immunity if the court or the receiver acts “in the ‘clear absence of all jurisdiction.‘” Turney, 898 F.2d at 1474 (quoting Stump, 435 U.S. at 357); see Whitesel, 222 F.3d at 868-69 (concluding that non-judicial officers did not act in clear absence of all jurisdiction); Davis, 70 F.3d at 373 (stating that the judge must not be acting in clear absence of all jurisdiction); Guetschow, 869 F.2d at 1303-04 (inquiring as to whether the court and the receiver acted beyond the scope of their jurisdiction); see also Cok v. Cosentino, 876 F.2d 1, 3 (1st Cir.1989).
The issue in this case, then, is whether the complaint sets forth a claim, plausible on its face, that Mr. Schlossberg is not entitled to absolute immunity. As TMS reminds us, the district court was required to view the facts in its favor. Aplt. Br. at 28; KT & G Corp., 535 F.3d at 1133-34. Given that we also must accept all well-pleaded facts alleged as true, we find that TMS has satisfied this standard. The complaint alleges facts that, on their face, show that Mr. Schlossberg does not enjoy absolute immunity.
First, the complaint alleges that Mr. Schlossberg exceeded the scope of his authority by seizing all of TMS‘s assets. According to the complaint, Mr. Schlossberg seized TMS‘s assets and mail even though
Second, the complaint alleges that Mr. Schlossberg exceeded the scope of his authority by committing fraud. In order to adequately allege fraud, “a party must state with particularity the circumstances constituting fraud.”
The foregoing analysis certainly does not resolve the issue of whether Mr. Schlossberg will ultimately enjoy absolute immunity. Because we are reviewing the grant of a motion to dismiss, we need only decide whether the complaint states sufficient facts such that it is plausible that Mr. Schlossberg does not enjoy absolute immunity. While in many cases it may be clear on a motion to dismiss whether absolute immunity applies, in this case that issue must be resolved in further proceedings, once the parties have had the opportunity to develop the facts through discovery. Here, looking solely to permissible materials at the motion to dismiss stage, we conclude that TMS has adequately pleaded that Mr. Schlossberg was not “acting in accordance with and under the protection of a court order.” T & W Invest. Co., 588 F.2d at 802.
We REVERSE and REMAND for further proceedings consistent with this order and judgment.
EBEL, Circuit Judge, Dissenting.
I respectfully dissent, because I believe that the Barton doctrine does apply in this case, and thus that the district court lacked jurisdiction over TMS‘s lawsuit.
The Barton doctrine holds that before suit may be brought against a receiver for acts performed in the receiver‘s “official capacity,” “leave of the court by which [the receiver] was appointed must be obtained.”1 See Barton v. Barbour, 104 U.S. 126, 128 (1881) (citing Davis v. Gray, 16 Wall. 203, 83 U.S. 203, 218 (1872) (explaining that an appointing court “will not allow [a receiver] to be used touching the property in his charge, nor for any malfeasance as to the parties, or others, without its consent,” and citing cases)); see also Springer v. Infinity Group Co., No. 98-5182, 1999 WL 651391, at *1 (10th Cir. Aug. 26, 1999) (unpublished).2
The doctrine, which is a “jurisdictional fact” in federal court, see Barton, 104 U.S. at 131, applies to lawsuits arising from “acts done in the [receiver‘s or] trustee‘s official capacity and within the [receiver‘s or] trustee‘s authority as an officer of the court.” In re Triple S Restaurants, Inc., 519 F.3d 575, 578 (6th Cir.2008) (quotation omitted); see also Springer, 1999 WL 651391, at *1 (affirming application of the doctrine to a lawsuit that sought relief “for acts [a bankruptcy trustee] did in his official capacity as trustee“); In re Crown Vantage, 421 F.3d 963, 970-71 (9th Cir. 2005) (explaining that the doctrine applies when the lawsuit is “for acts done in the [receiver‘s] official capacity“); Muratore v. Darr, 375 F.3d 140, 145 (1st Cir.2004) (applying the doctrine where “[t]he different counts in [the plaintiff‘s] complaint all allege [the trustee‘s] misconduct in discharging his trustee‘s administrative responsibilities“); Carter v. Rodgers, 220 F.3d 1249, 1252 (11th Cir.2000) (observing that the Barton rule is triggered by lawsuits “for acts done in the actor‘s official capacity“).
The majority rightly points out that under Barton, “if, by mistake or wrongfully, the receiver takes possession of property
Yet immediately after announcing the ultra vires exception to the rule, the Barton Court distinguished, from that exception, cases in which “claims arise against the receiver as such, while acting under the powers conferred on him, whether for labor performed, for supplies and materials furnished, or for injury to persons or property.” Barton, 104 U.S. at 134 (emphasis added). What the Supreme Court appears to be saying is that ordinarily an assignee who wrongfully takes possession of property of another may be sued, but when the assignee is acting pursuant to a receivership order of another court, either the claim of wrongful taking must be brought in the receivership court or permission from the receivership court must be obtained to bring the suit elsewhere.
Federal courts analyzing subject-matter jurisdiction under the doctrine thus have looked to whether, in the conduct at issue, receivers or trustees acted “within the context of” their court-appointed role to “re-cover[] assets for the estate,” Triple S Restaurants, 519 F.3d at 578; “were acting within the scope of their duties,” In re Lowenbraun, 453 F.3d 314, 322 (6th Cir. 2006); allegedly committed torts “unrelated to and outside the scope of the bankruptcy proceeding,” Muratore, 375 F.3d at 147 (quotation omitted); or allegedly engaged in misfeasance “stemming from their official bankruptcy duties,” Carter, 220 F.3d at 1253. See also Muratore, 375 F.3d at 147-48 (refusing to recognize a “generalized tort exception to the Barton doctrine“); Lowenbraun, 453 F.3d at 322 (adopting a presumption that “acts were part of the trustee‘s [court-ordered] duties unless Plaintiff initially alleges at the outset facts demonstrating otherwise“).
Our determination of whether the district court lacked subject-matter jurisdiction over TMS‘s lawsuit thus turns simply on the question of whether the lawsuit arises from actions that Roger Schlossberg (“Schlossberg“) performed within the authority of his court-appointed role as a receiver. The West Virginia Family Court, which appointed Schlossberg during the Michael Palencar (“Palencar“) divorce proceeding, explained that authority and role as follows. Having in a February 2003 order “adjudged and ordered” that Schlossberg “shall seize any assets that [Palencar] has an ownership interest therein” (Aplt.App. at 26 (emphasis added)), the court in January of 2004 issued an amended order that recited and affirmed the terms of the February 2003 order and added,
It was and remains the intention of the Court by the aforesaid appointment of Roger Schlossberg both as Trustee and as Special Receiver that [Schlossberg] be vested with the broadest possible powers of a Trustee or Receiver acting within the equitable power of this Court and the common law of this State to investigate the financial and other affairs of [Palencar] and to be vested with actual legal and equitable title to and the right to obtain record title to and/or liens upon and/or actual physical custody and possession of all of the assets of [Palencar] (whether held by [Palencar], either alone or jointly with any other person or entity, in his own name or in the name of any
alias . . . or in the name of any other entity, including, inter alia, . . . Teton Millwork Sales) as is required to satisfy by sale, liquidation or other execution the aforesaid Judgment and all of the other Orders heretofore entered in these proceedings and as hereafter may be entered with respect to the existing and prospective obligations of [Palencar].
The family court went on, in the amended order, to “take note” that certain of Palencar‘s assets were located outside of West Virginia and perhaps outside of the United States. (Id. at 70.) The court explained, “[i]n order to give full force and effect to the powers herein granted to the Trustee/Special Receiver, it is the express contemplation of this Court that [Schlossberg] shall act outside the territorial limitations of this State.” (Id. at 70.) The court then ordered that Schlossberg‘s appointment as Trustee and Special Receiver, “for those purposes and with those powers above-explicated,” be “ratified and confirmed,” and further “[o]rdered, that [Schlossberg] expressly is authorized and directed forthwith to take such action as may appear necessary or desirable to obtain ancillary jurisdiction of these proceedings in such other States of the United States . . . as may appear appropriate.” (Id.)
The West Virginia Family Court clearly intended for Schlossberg to have the broadest possible authority to act on its already broad orders, and for him to act outside West Virginia—including in seizing the mail and the assets of TMS, which the court named specifically in its order. Furthermore, the order directed Schlossberg to seize not simply assets that Palencar held unilaterally and in his own name, but also “any assets” in which he “ha[d] an ownership interest,” including assets held “jointly with any other person or entity, in his own name or in the name of any alias . . . or in the name of any other entity, including, inter alia, . . . Teton Millwork Sales.” (Id. at 26, 29.)
As the majority opinion makes clear, TMS‘s complaint alleged not that Schlossberg was acting outside the context of this expansive court-appointed role, nor that he committed torts unrelated to and beyond the scope of that role, but rather that he engaged in misfeasance stemming from his broad official duties. See Triple S Restaurants, 519 F.3d at 578; Muratore, 375 F.3d at 147; Carter, 220 F.3d at 1253. Thus, TMS alleged that “Schlossberg seized TMS‘s assets and mail even though he knew that Mr. Palencar was only a twenty-five percent shareholder in TMS and that there were no grounds to pierce the corporate veil“; that Schlossberg misrepresented to TMS employees that he was “in a position of judicial authority over Teton and . . . vested with title to all the assets, property, mail, and confidential business and corporate information of Teton“; and that Schlossberg misrepresented to TMS employees that they “were forbidden from accepting instructions from Teton, and that [they] would be subject to financial penalties if they should do so.” (O & J at 12-13 (quotations omitted).)
The majority concludes that these allegations demonstrate “that Schlossberg acted beyond the scope of his authority by wrongfully seizing assets that did not belong to Palencar.” (Id. at 5.) Yet that conclusion fails to account for the plain language of the order, which authorized and directed Schlossberg to seize not only
The majority objects that a judicial order that would authorize such a seizure would be illegal, because TMS was not a party to the divorce proceeding that produced the order. (O & J at 12, citing cases.) Indeed, much—if not most—of TMS‘s complaint is similarly devoted simply to alleging that the West Virginia Family Court did not have jurisdiction over TMS, and thus could not legitimately order Schlossberg to seize TMS‘s mail or assets (so that Schlossberg, in turn, was not acting pursuant to a valid court order when he did seize that mail and those assets). (See Compl. ¶¶ 17-20, 25-35, 38-40, 45-54, 62-70 (Aplt.App.1-5).) However, the Jefferson County, West Virginia, Circuit Court had already decided in Palencar‘s and TMS‘s 2005 lawsuit against Judge Wertman, who appointed Schlossberg, that the family court acted within its jurisdiction in issuing the orders appointing Schlossberg and directing him to act as it did. (Aplt.App. at 102-107.) Having failed to appeal the West Virginia Circuit Court‘s decision, TMS may not now relitigate, on the ground that it is a putatively “independent third party” (see O & J at 6), the issue of whether the family court had jurisdiction to order Schlossberg to seize TMS‘s assets.4 See In re Scrivner, 535 F.3d 1258, 1266 (10th Cir.2008) (summarizing the doctrine of issue preclusion).
For our purposes, the dispositive facts are simply that the family court issued orders appointing Schlossberg Special Receiver and directing him to act; those orders were adjudicated valid in a case to which TMS was a party and which TMS did not appeal; and according to the allegations in the Complaint, Schlossberg performed the expansive duties—including seizing “any assets that [Palencar] has an ownership interest therein“—that the orders directed him to perform. If, while thus “acting under the powers conferred on him,” Schlossberg allegedly committed torts or other misfeasance resulting in “injury to persons or property,” Barton, 104 U.S. at 134, the Barton doctrine dictates that TMS must procure the permission of the West Virginia Family Court before it may sue Schlossberg outside that forum.
At oral argument, counsel for TMS suggested that Barton should not apply in this case because the res that Schlossberg held in his role as receiver has now been fully distributed. Our sister circuits that have
Without the requirement [imposed by the Barton doctrine], trusteeship will become a more irksome duty, and so it will be harder for courts to find competent people to appoint as trustees. Trustees will have to pay higher malpractice premiums, and this will make the administration of the bankruptcy laws more expensive. . . . Furthermore, requiring that leave to sue be sought enables [appointing] judges to monitor the work of the trustees more effectively. It does this by compelling suits growing out of that work to be as it were prefiled before the [appointing] judge . . . ; this helps the judge decide whether to approve this trustee in a subsequent case. In re Linton, 136 F.3d 544, 545 (7th Cir. 1998); see also Crown Vantage, 421 F.3d at 972; Carter, 220 F.3d at 1252-53. I agree with this reasoning, and would hold that if the doctrine otherwise applies, as it does in this case, it applies even when a “case has been closed and the assets are no longer in the trustee‘s [or receiver‘s] hands.”5 Muratore, 375 F.3d at 147.
I would vacate the district court‘s order and remand with instructions for the district court to dismiss TMS‘s lawsuit for lack of subject-matter jurisdiction. Therefore, I would not reach the