Opinion
Case No. 2:00-CV-776C
June 25, 2001.
ORDER
Plaintiff Earl Pagel has filed this 42 U.S.C. § 1983 suit against Bank United of Texas, FSB ("Bank United") (his mortgage company), Lundberg Associates ("Lundberg") (Bank United's law firm), Default-to-New Mortgage, Inc. (an unrelated mortgage broker), and Newgate Mortgage (an unrelated mortgage holder) (collectively "Defendants"), alleging that Defendants violated his Fourteenth Amendment Due Process rights by failing to adhere to Pagel's Chapter Eleven bankruptcy reorganization plan and by attempting to foreclose on Pagel's property. The court referred the matter to United States Magistrate Judge David Nuffer who, on March 6, 2001, issued a Report and Recommendation. Also on March 6, 2001, Judge Nuffer issued a separate order denying Mr. Pagel's motion for class certification, motion to amend complaint, and request for default judgment.
The court has now reviewed de novo the relevant materials and agrees with the conclusions reached by Judge Nuffer. Accordingly, both the Report and Recommendation and order of March 6, 2001, are adopted as the orders of the court. Further, as discussed below, Mr. Pagel's motion to reconsider and motion for appointment of counsel are denied.
Discussion
I. Report and Recommendation of March 6, 2001
A. Motion to dismiss as against Defendants Bank United and Lundberg Associates
On November 10, 2000, Defendant Lundberg Associates ("Lundberg") filed a motion to dismiss. On December 6, 2000, Defendant Bank United also filed a motion to dismiss. Both motions to dismiss allege that Mr. Pagel has failed to state a claim under 42 U.S.C. § 1983.
42 U.S.C. § 1983 provides relief for violations of federal law only if those violations are committed "under color of state law." In his Report and Recommendation, Judge Nuffer found that "none of [Bank United or Lundberg's] alleged actions fall under color of state law, or are fairly attributable to the state." (Report and Recommendation of March 6, 2001 (hereinafter "RR") at 2-3.) The private use of statutory power of foreclosure procedures does not constitute "state action" for purposes of § 1983. See Schroder v. Volcker, 646 F. Supp. 132, 135 (D.Colo. 1986), aff'd 864 F.2d 97 (10th Cir. 1988). Judge Nuffer further found that the other assertions in Mr. Pagel's complaint — which allege "fraudulent actions," "illegal actions," and "rebellious and ungovernable discrimination" on the part of Defendants — are neither supported by specific factual allegations nor connected to any state action. (RR at 3.)
In response to the Report and Recommendation, Mr. Pagel filed a motion to file a supplemental complaint. Judge Nuffer reviewed this motion as if it were a motion to amend complaint filed under Rule 15 of the Federal Rules of Civil Procedure. In his order of March 6, 2001, Judge Nuffer ruled that Mr. Pagel's proposed amended complaint did not contain any support for continued federal jurisdiction.
"[A] court may deny a motion for leave to amend a complaint based on futility if the amendment could not withstand a motion to dismiss . . . or would be vulnerable to affirmative defenses." See Dahn v. United States, No. 93-C-953, 1996 WL 652787, at *2 (D.Utah Aug. 30, 1996) (citations omitted); accord Ketchum v. Cruz, 961 F.2d 916, 920 (10th Cir. 1992) ("The district court was clearly justified in denying the motion to amend if the proposed amendment could not have withstood a motion to dismiss or otherwise failed to state a claim.").
Besides general references, without citation, to federal banking regulations, Mr. Pagel's amended complaint invokes federal jurisdiction only by asserting that Defendants' actions violated the Eighth Amendment:
The actions of the Defendants to delay a payoff upon closing, and refusing to provide same for an additional 50 days, constitutes maliciously cruel and unusual punishment in that they allowed interest and unnecessary expenses to run. The Plaintiff's Eighth Amendment rights were violated by the Defendants' negligence and fraud.
(Proposed Supp. Complaint at 4.) The court is aware of no decisions holding that negligently allowing "interest and unnecessary expenses to run" constitutes a violation of the Eighth Amendment, and Mr. Pagel has not cited any such cases. Moreover, even were this to constitute an Eighth Amendment violation had the action been performed under color of state law, the Defendants in this case are not state actors and therefore not subject to the restraints of the Eighth Amendment. Because the amendments to his complaint are futile, Mr. Pagel's motion to file a supplemental complaint is DENIED.
B. Dismissal as against Defendant Newgate Mortgage
At page thirteen of his original complaint, Mr. Pagel states "Plaintiff does not hold Defendant Newgate Mortgage liable . . ." (Compl. at 13.) Judge Nuffer therefore dismissed Mr. Pagel's claims against Newgate Mortgage. (RR at 4.) Mr. Pagel has not opposed this dismissal.
The court has now reviewed the relevant materials and agrees with the conclusions reached by Judge Nuffer. Accordingly, the Report and Recommendation is adopted as the order of the court, and Mr. Pagel's claims against Defendants Bank United, Lundberg Associates, and Newgate Mortgage are DISMISSED.
Although Judge Nuffer's ruling on the following motions was issued as part of an order, the court will treat the order as if it were a Report and Recommendation.
A. Motion for class certification
Mr. Pagel's complaint seeks to certify a class of "hundreds of elderly, naive, and poorly educated citizens [that] have likely lost their homes to these Defendants' illegal dealings." (Judge Nuffer Order of March 6, 2001 (hereinafter "March 6 Order"), at 2.) As Judge Nuffer correctly found in his order of March 6, 2001, this class is too vague, indefinite, and speculative to be capable of identification. Accordingly, Mr. Pagel's motion to certify a class is DENIED.
B. Motion for default against Defendant Default to New Mortgage
On January 4 and March 8, 2001, Mr. Pagel filed motion(s) requesting entry of default judgment, in the amount of $18,447.36, against Defendant Default to New Mortgage. Judge Nuffer denied this motion on the grounds that Pagel filed a copy of the return of service, rather than the original. (See March 6 Order at 3.) On April 3, 2001, Mr. Pagel refiled his request for entry of default judgment against Default to New Mortgage, this time with an original affidavit of service.
Although it appears as though Default to New Mortgage has never filed an answer or otherwise appeared in this case, Mr. Pagel has not yet received, nor has he filed for, a default certificate from the Clerk of the Court. Without a default certificate against Default to New Mortgage, the court cannot grant Mr. Pagel's motion for default. Accordingly, Mr. Pagel's motion for default is DENIED without prejudice.
C. Motion to reconsider
In response to Judge Nuffer's Report and Recommendation, which recommended that Mr. Pagel's motion to amend complaint be denied, Mr. Pagel filed a motion for reconsideration on March 16, 2001. On a motion to reconsider under Rule 60(b) of the Federal Rules of Civil Procedure, "relief . . . is extraordinary and may only be granted in exceptional circumstances." Bud Brooks Trucking v. Bill Hodges Trucking, 909 F.2d 1437, 1440 (10th Cir. 1990). As grounds for reconsideration, Mr. Pagel, who represents himself in this case, asserts that (1) his complaint should be held to less stringent standards than attorney-drafted complaints because, inter alia, he is a pro-se plaintiff and his prison does not have a civil law library available to inmates (Mr. Pagel is an inmate incarcerated at the Utah State Prison in Draper, Utah), and (2) he will amend his complaint to alleges that Bank United and Lundberg acted under "color of state law" because they are regulated by the FDIC.
Neither of these claimed grounds for relief represent such "exceptional circumstances" required for relief under Rule 60(b). As to Mr. Pagel's first grounds for relief, it is true that prisons are obligated to provide prisoners with adequate law libraries or assistance from legal professionals so that they may file writs of habeas corpus or civil rights actions challenging the conditions of their confinement. See Ramos v. Lamm, 639 F.2d 559, 583 (10th Cir. 1980); Bee v. Utah State Prison, 823 F.2d 397, 398 (10th Cir. 1987). However, "a state has no affirmative constitutional obligation to assist inmates in general civil matters." See Carper v. Deland, 54 F.3d 613, 616-17 (10th Cir. 1995) (dismissing prisoner's civil suit). Lack of access to law library facilities, therefore, does not excuse Mr. Pagel's continued failure to state a federal claim in his complaint.
As to Mr. Pagel's second grounds for relief, adding language to the complaint that certain Defendants are regulated by the FDIC will not fix the deficiencies in Mr. Pagel's complaint. "The mere fact that a business is subject to state regulation does not by itself convert its action into that of the State for purposes of the Fourteenth Amendment." Jackson v. Metropolitan Edison Co., 419 U.S. 345, 350 (1974). A bank's purchase of FDIC insurance or its pursuit of non-judicial foreclosures does not constitute state action. See Rannels v. Meridian Bancorp., Inc., 718 F. Supp. 10, 12-13 (E.D.Pa. 1989); Barrerra v. Security Bldg. Inv. Corp., 519 F.2d 1166, 1169 (5th Cir. 1975).
Accordingly, Mr. Pagel's motion to reconsider is DENIED.
III. Motion for appointment of counsel
Finally, on April 4, 2001, Mr. Pagel filed a motion for appointment of counsel, seeking assistance from the court in locating an attorney to help him with his case. As discussed above, it appears as though Mr. Pagel's claims may be largely without merit. Accordingly, Mr. Pagel's motion for appointment of counsel is DENIED.
Order
Defendants Bank United and Lundberg Associates's motions to dismiss are GRANTED; further, Mr. Pagel's claims against Defendant Newgate Mortgage are DISMISSED. Mr. Pagel's motion to file a supplemental complaint, motion to certify a class, motion to reconsider, and motion for appointment of counsel are all DENIED; Mr. Pagel's motion for default against Defendant Default to New Mortgage is DENIED without prejudice.
BY THE COURT: