Filed: Nov. 27, 2013
Latest Update: Mar. 02, 2020
Summary: Case: 12-20592 Document: 00512455262 Page: 1 Date Filed: 11/27/2013 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit FILED No. 12-20592 November 27, 2013 Lyle W. Cayce SEAN ORTEGA, Clerk Plaintiff – Appellant v. YOUNG AGAIN PRODUCTS, INCORPORATED; IVEY MASON; ROGER MASON; FREEMAN & FREEMAN, P.C.; THOMAS FREEMAN; MARK FREEMAN; MARGARET MAXWELL MCCLURE, Defendants – Appellees Appeal from the United States District Court for the Southern Distr
Summary: Case: 12-20592 Document: 00512455262 Page: 1 Date Filed: 11/27/2013 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit FILED No. 12-20592 November 27, 2013 Lyle W. Cayce SEAN ORTEGA, Clerk Plaintiff – Appellant v. YOUNG AGAIN PRODUCTS, INCORPORATED; IVEY MASON; ROGER MASON; FREEMAN & FREEMAN, P.C.; THOMAS FREEMAN; MARK FREEMAN; MARGARET MAXWELL MCCLURE, Defendants – Appellees Appeal from the United States District Court for the Southern Distri..
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Case: 12-20592 Document: 00512455262 Page: 1 Date Filed: 11/27/2013
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 12-20592 November 27, 2013
Lyle W. Cayce
SEAN ORTEGA, Clerk
Plaintiff – Appellant
v.
YOUNG AGAIN PRODUCTS, INCORPORATED;
IVEY MASON; ROGER MASON; FREEMAN & FREEMAN, P.C.;
THOMAS FREEMAN; MARK FREEMAN;
MARGARET MAXWELL MCCLURE,
Defendants – Appellees
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:12-CV-1
Before JOLLY, JONES, and BARKSDALE, Circuit Judges.
EDITH H. JONES, Circuit Judge:*
In March 2009, Defendant Young Again Products, Inc. (“YAP”) won a
judgment for trademark and copyright infringement in Maryland against John
Acord (“Acord”) and his mother Marcella Ortega (“Marcella”). YAP registered
the judgment in Texas in June 2009 and obtained two writs to execute on the
judgment—one for each defendant. Based on information that they owned an
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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No. 12-20592
interest in property at 1935 Cattle Drive in Magnolia, United States Marshals
levied execution on the property on August 29, 2009, seizing cash, silver bars,
and a collection of World War II memorabilia. Exactly two years after the
Marshals levied execution, Appellant Sean Ortega (“Sean”)—Acord’s brother
and Marcella’s son—filed this action in Texas state court, complaining that
YAP, YAP’s owners, YAP’s attorneys in Maryland, and YAP’s attorney in Texas
(collectively “Appellees”) wrongfully executed on Sean’s property rather than
on property belonging to his brother or mother.
Appellees removed the case to federal district court and moved for partial
dismissal based on qualified immunity, summary judgment, and sanctions
pursuant to Rule 13 of the Texas Rules of Civil Procedure. The district court
denied Sean’s motion to remand and granted Appellees’ three motions. Sean
timely appealed the district court’s orders. For the following reasons, we
AFFIRM.
DISCUSSION
We review the district court’s denial of Sean’s motion to remand, grant
of Appellees’ motion to dismiss based on qualified immunity, and grant of
Appellees’ motion for summary judgment de novo. See DePree v. Saunders,
588 F.3d 282, 286 (5th Cir. 2009); La. ex. rel. Caldwell v. Allstate Ins. Co.,
536 F.3d 418, 425 (5th Cir. 2008); Brown v. Miller,
519 F.3d 231, 236 (5th Cir.
2008). Additionally, we review the district court’s decision to assess sanctions
for abuse of discretion and its underlying findings of fact for clear error. U.S.
v. Iqbal,
684 F.3d 507, 510 (5th Cir. 2012).
1. Motion to Remand
Appellees removed Sean’s lawsuit to federal district court pursuant to
28 U.S.C. § 1441. Although YAP’s in-state counsel, Appellee Margaret
McClure (“McClure”) is a Texas resident, Appellees asserted that Sean had
improperly joined her as a defendant when no cause of action could lie against
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No. 12-20592
her because of the Texas qualified immunity doctrine. Sean’s motion to
remand contended that the qualified immunity doctrine did not protect
McClure from liability for her assistance in the unlawful seizure of his
property. 1 The applicability of Texas’s qualified immunity doctrine depends
on the kind of conduct at issue, “not on whether the [attorney’s] conduct was
meritorious in the context of the underlying lawsuit.” Alpert v. Crain, Caton
& James, P.C., 178 S.W.3d 398, 406 (Tex. App.–Houston [1st Dist.] 2005, pet.
denied). An attorney cannot be held liable to a third party for conduct
requiring the “office, professional training, skill, and authority of an attorney.”
Miller v. Stonehenge/Fasa-Tex., JDC, L.P.,
993 F. Supp. 461, 464 (N.D. Tex.
1998). Focusing on the kind of conduct at issue here, “the execution of a writ
constitutes the legitimate performance of [McClure’s] duties” as a lawyer,
FinServ Casualty Corp. v. Settlement Funding, L.L.C.,
724 F. Supp. 2d 662,
676 (S.D. Tex. 2010), even if “execution itself may have been wrongful,”
Id. at
673. See also Renfroe v. Jones & Assocs.,
947 S.W.2d 285, 288 (Tex. App.–Fort
Worth 1997, writ denied) (affirming summary judgment for law firm because
attorneys’s allegedly wrongful acts of preparing and filing their client’s
application for writ of garnishment “was within the context of discharging their
duties in representing their clients”). Because Sean seeks recovery from
McClure for actions that she took within the context of her “office, professional
training, skill, and authority [as] an attorney,”
Miller, 993 F. Supp. at 464, the
1 Sean asserts that the district court should have applied Maryland law instead of
Texas law in ruling on his motion to remand. A federal court sitting in diversity applies the
choice-of-law rules of the forum state. See Caton v. Leach Corp., 896 F.2d 939, 942 (5th Cir.
1990). Texas, the forum state, follows the “most significant relationship” approach in choice-
of-law analyses. Hughes Wood Prods., Inc. v. Wagner,
18 S.W.3d 202, 205 (Tex. 2000).
Because this action concerns the seizure of property from a house in Texas pursuant to writs
of execution issued by a Texas state court, Texas has the most significant relationship to this
dispute, as opposed to Maryland.
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Texas qualified immunity doctrine precludes him from recovering for such
actions.
2. Attorney Appellees’ Motion to Dismiss
In ruling on Appellees’ motion to dismiss, the district court found that
qualified immunity not only required the court to deny Sean’s motion to
remand but also to grant Appellees’ motion to dismiss the attorney
defendants—Freeman & Freeman, P.C., Thomas Freeman, Mark Freeman,
and McClure. On appeal, Sean raises only one challenge to the district court’s
order granting the motion to dismiss: the district court erroneously granted the
motion because Sean adequately pleaded a “fraud on the court” claim against
the attorney defendants, which qualifies as an exception to Texas’ qualified
immunity doctrine. Assuming arguendo that Sean did plead a claim for fraud
on the court as opposed to a claim for common law fraud, 2 there is no indication
in the record that he made a fraud-on-the-court argument before the district
court in the context of Appellees’ motion to dismiss. It appears that the first
time Sean made this argument was in response to Appellees’ motion for
summary judgment, which Sean filed several months after the district court
granted Appellees’ motion to dismiss. Sean’s untimely mention of this theory
afforded no opportunity for the district court to consider it and thus failed to
preserve that theory for appellate review. It is well established in this circuit
2 As noted by Appellees, Sean appears to assert only a claim for common law fraud,
which is a distinct concept from a claim for fraud on the court. See Wilson v. Johns-Manville
Sales Corp., 873 F.2d 869, 872 (5th Cir. 1989). Although Sean’s allegations in the complaint
essentially mirror the elements of a simple fraud claim, it can hardly be said that they “[gave]
the defendant[s] fair notice” of a claim for fraud on the court. Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555,
127 S. Ct. 1955,
167 L. Ed. 2d 929 (2007) (internal quotation marks
omitted) (quoting Conley v. Gibson,
355 U.S. 41, 47,
78 S. Ct. 99,
2 L. Ed. 2d 80 (1957)).
Compare Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am.,
341 S.W.3d 323, 337
(Tex. 2011) (listing the elements of fraud under Texas law) with First Nat’l Bank of Louisville
v. Lustig,
96 F.3d 1554, 1573 (5th Cir. 1996) (“To establish fraud on the court, it is necessary
to show an unconscionable plan or scheme which is designed to improperly influence the court
in its decision.” (internal quotation marks omitted)).
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that “arguments not raised before the district court are waived and cannot be
raised for the first time on appeal.” LeMaire v. La. Dept. of Transp. & Dev.,
480 F.3d 383, 387 (5th Cir. 2007). Accordingly, we find that Sean waived his
right to challenge the district court’s order on these grounds.
3. Non-Attorney Appellees’ Motion for Summary Judgment
After the district court dismissed the attorney defendants from Sean’s
suit, the remaining defendants—YAP, Ivey Mason, and Roger Mason—moved
for summary judgment on all ten of Sean’s claims. The district court granted
the motion for nine of the ten claims on statute of limitations grounds and
granted summary judgment on the remaining claim for “fraud and
misrepresentation” because Sean had not stated a claim for fraud.
To determine whether a claim is barred by the relevant statute of
limitations, a court must first determine when the claim accrued. The district
court found that Sean’s claims accrued on August 29, 2009, the date Sean
claims his personal property was seized. However, Sean argues that his
conversion claim, and only that claim, accrued on a later date. Generally, a
conversion claim accrues, and the limitations period begins to run, “at the time
of the unlawful taking.” Pipes v. Hemingway, 358 S.W.3d 438, 450 (Tex. App.–
Dallas 2012, no pet.). Sean relies on a Texas Court of Appeals opinion
indicating that a conversion claim does not accrue at the time of the taking if
the taking in itself is not unlawful and argues that under this exception the
general rule of accrual does not apply to his conversion claim. See Carpenter
v. Carpenter, No. 02-11-00266-CV,
2012 WL 2579498 at *2 (Tex. App.–Fort
Worth July 5, 2012, pet. denied). Not only has Sean never alleged that
Appellees’ taking of his property was lawful, but he has repeatedly asserted,
even as of the date of the taking, that the seizure of his property by the United
States Marshals was in direct conflict with his right to immediate possession.
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Clearly, Sean’s claim for conversion accrued on the date of seizure—August 29,
2009.
Nine of Sean’s ten claims—intrusion on seclusion, trespass to real
property, trespass to personal property, theft of property, conversion, abuse of
process, wrongful execution, tortious interference with contract, and
replevin—have a two-year statute of limitations under Texas law. See Tex.
Civ. Prac. & Rem. Code § 16.003(a); Mellon v. McCormick, 17 S.W.3d 432, 435
n.1 (Tex. App.–Houston [1st Dist.] 2000, no pet.) (tortious interference with
contract); Matlock v. McCormick,
948 S.W.2d 308, 311 (Tex. App. –San Antonio
1997, no pet.) (invasion of privacy); Patrick v. Howard,
904 S.W.2d 941, 943-44
(Tex. App.–Austin 1995, no pet.) (abuse of process). To comply with a statute
of limitations, a plaintiff must file his lawsuit and serve the lawsuit on the
defendant within the limitations period. Slagle v. Prickett,
345 S.W.3d 693,
697 (Tex. App.–El Paso 2011, no pet.). “However, if the plaintiff files suit
within the limitations period but does not serve the defendant until after
limitations has expired, his suit may not be time barred if the plaintiff
exercised diligence in effecting service . . . .”
Id. (citing Gant v. DeLeon,
786 S.W.2d 259, 260 (Tex. 1990)). A plaintiff’s diligence is determined by:
“(1) whether the plaintiff acted as an ordinarily prudent person would have
acted under the same or similar circumstances; and (2) whether the plaintiff
acted diligently up until the time the defendant was served.” Zacharie v. U.S.
Nat. Resources, Inc.,
94 S.W.3d 748, 754 (Tex. App.–San Antonio 2002, no pet.).
Sean filed his original complaint in state court on August 29, 2011,
exactly two years after the property seizure that forms the basis of this action.
Sean never served his original complaint on Appellees. On November 29, 2011,
Sean filed a first amended complaint in state court. He served the first
amended complaint on Appellees on various dates throughout December 2011.
Assuming arguendo that Sean has a valid excuse for not serving Appellees
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before early October 2011, 3 he fails to explain what steps he took between early
October and early December to diligently obtain service; he offers only excuses
for his lack thereof. See Slagle, 345 S.W.3d at 698 (“[W]hen a defendant
complains of lack of due diligence in service of process, the plaintiff must
explain what steps he took to obtain service, not explain why he did nothing.”).
The district court did not abuse its discretion in concluding that all of Sean’s
claims other than for fraud are barred by the relevant two-year Texas statute
of limitations.
As to Sean’s claim for “fraud and misrepresentation,” Sean argues that
the claim is not for common law fraud but rather is for fraud on the court. He
offers only two cases from other jurisdictions in support of his argument that
a claim for fraud on the court is a cognizable claim for damages under Texas
law, but neither of these actually supports his argument. 4 He failed to state a
cognizable claim as a matter of law. Accordingly, the district court did not err
in granting summary judgment for the non-attorney defendants.
3 When Sean filed his original complaint in Texas district court on August 29, 2011,
the intake clerk indicated that the service documents would be mailed to his attorney, Rocky
Pilgrim. However, Rocky Pilgrim learned in “early October” that the intake clerk for the
Texas district court had mistakenly not charged the service fee or mailed the documents to
Rocky Pilgrim despite the fact that service had been requested.
4 Sean asserts that the Tenth Circuit recognized fraud on the court as a tort through
which damages may be collected in Robinson v. Volkswagenwerk AG, 56 F.3d 1268 (10th Cir.
1995), but that conclusion is found nowhere in Robinson. Moreover, Sean quotes extensively
from the Sixth Circuit’s fraud on the court analysis in Okros v. Angelo Iafrate Const. Co.,
298 F. App’x 419, 427-28 (6th Cir. 2008). However, the Okros court never characterized fraud
on the court as a cognizable claim for damages, as Sean asks the court to do here.
Furthermore, Okros is distinguishable from the instant case in that the fraud-on-the-court
claim in Okros involved potentially deceptive averments that the plaintiff’s attorney made to
the court during the course of trial, but Sean wishes this court to characterize as fraud on the
court statements that Appellees made outside of court to United States Marshals before this
case ever began.
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4. Motion for Sanctions
Appellees filed a motion for sanctions on the basis that Sean’s pleadings
violated Texas Rule of Civil Procedure 13. After conducting a hearing on the
motion, the district court found that Sean’s allegations that Appellees caused
“severe damage” to his property and prevented him from being able to sell his
house, causing Sean to lose the property in foreclosure, were clearly false. The
district court granted the Rule 13 motion and awarded Appellees $2,000 in
sanctions jointly and severally against Sean and his attorney. Sean argues
that the district court lacked grounds on which to grant the motion for
sanctions and abused its discretion in finding his lawsuit was filed for an
improper purpose.
Federal courts have the authority to issue sanctions under Texas state
law when a party commits a sanctionable act in a state court action that is
later removed to federal court. Tompkins v. Cyr, 202 F.3d 770, 787 (5th Cir.
2000). Under Rule 13, a court may impose sanctions for a groundless pleading
brought in bad faith or to harass an opposing party. Tex. R. Civ. P. 13. It is
clear that Sean’s complaint contained allegations that he knew were false. On
January 5, 2010, Sean signed a settlement statement confirming that he and
his mother had sold the house at 1935 Cattle Drive. The allegation that he
subsequently pled about losing the house to foreclosure was obviously false.
Sean also alleged in the complaint that Appellees caused severe damage to his
house. This, too, appears to be a blatant misrepresentation to the court
because three weeks before filing the complaint Sean signed an affidavit in
another suit attesting that his home had sustained little damage except for a
messy kitchen. Given Sean’s flagrant misrepresentations, the district court
did not abuse its discretion in granting Appellees’ Rule 13 motion.
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CONCLUSION
Based on the foregoing, the district court’s denial of Sean’s motion to
remand and grant of Appellees’ motions to dismiss, for summary judgment,
and for sanctions are AFFIRMED.
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