Filed: May 22, 2015
Latest Update: Mar. 02, 2020
Summary: ELD-026 NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ No. 15-1271 _ KEITH DOUGHERTY; KEITH DOUGHERTY INVESTMENTS & CONSULTING LLC (SMLLC) ASSIGNEE OF BILL'S MECHANICAL AND WELDING, (Fictitious Name) SOLE PROPRIETOR LARRY RUNK, II v. ERIE INSURANCE EXCHANGE, also known as Erie Insurance; GREG GARRITY, Erie Agent; JIM BURKHOLDER; ROBERT SIMMONDS, Erie Investigator; NICOLE R. GEHRET, Erie Sr. Liability Adjuster; R. G. SMITH, Cumberland County Insurance Fraud Investigator;
Summary: ELD-026 NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ No. 15-1271 _ KEITH DOUGHERTY; KEITH DOUGHERTY INVESTMENTS & CONSULTING LLC (SMLLC) ASSIGNEE OF BILL'S MECHANICAL AND WELDING, (Fictitious Name) SOLE PROPRIETOR LARRY RUNK, II v. ERIE INSURANCE EXCHANGE, also known as Erie Insurance; GREG GARRITY, Erie Agent; JIM BURKHOLDER; ROBERT SIMMONDS, Erie Investigator; NICOLE R. GEHRET, Erie Sr. Liability Adjuster; R. G. SMITH, Cumberland County Insurance Fraud Investigator; C..
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ELD-026 NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 15-1271
___________
KEITH DOUGHERTY; KEITH DOUGHERTY INVESTMENTS &
CONSULTING LLC (SMLLC) ASSIGNEE OF BILL'S MECHANICAL AND
WELDING, (Fictitious Name) SOLE PROPRIETOR LARRY RUNK, II
v.
ERIE INSURANCE EXCHANGE, also known as Erie Insurance;
GREG GARRITY, Erie Agent; JIM BURKHOLDER;
ROBERT SIMMONDS, Erie Investigator;
NICOLE R. GEHRET, Erie Sr. Liability Adjuster;
R. G. SMITH, Cumberland County Insurance Fraud Investigator;
CUMBERLAND INSURANCE FRAUD UNIT
Keith Dougherty;
Larry Runk, II,
Appellants
____________________________________
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Civ. No. 1-14-cv-00480)
District Judge: Honorable J. Frederick Motz
____________________________________
Submitted for Possible Summary Action
Pursuant to Third Circuit LAR 27.4 and I.O.P. 10.6
April 30, 2015
Before: RENDELL, SLOVITER and GREENBERG, Circuit Judges
(Opinion filed: May 22, 2015)
_________
O P I N I O N*
_________
PER CURIAM
Keith Dougherty and Larry Runk II appeal from the order of the District Court
denying reconsideration of its dismissal of their complaint. We will affirm.
I.
In Dougherty’s appeal at C.A. No. 15-1123, we separately address his attempt to
assert a claim that Runk purportedly assigned to him. This appeal concerns one of
Dougherty’s attempts to represent Runk’s interests more directly. In this case, Dougherty
and Runk filed suit pro se under 42 U.S.C. § 1983 and later filed an amended complaint
(which, like all their other joint filings, appears to have been prepared by Dougherty).
The amended complaint is premised on a dispute between Runk and Erie Insurance
Exchange (“Erie Insurance”) regarding insurance claims that Runk submitted following
an automobile accident and on an apparently related Pennsylvania criminal proceeding in
which Runk is being prosecuted for insurance fraud. 1
Plaintiffs named as defendants Erie Insurance, certain of its employees, the
Cumberland County, Pennsylvania, District Attorney Insurance Fraud Unit, and one of its
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
1
Runk has been charged with insurance fraud, theft by deception and other offenses in
the Pennsylvania Court of Common Pleas for Cumberland County at No. CP-21-CR-
0001189-2014. Those charges remain pending.
2
investigators. (Plaintiffs’ filings in this Court also purport to identify as defendants the
Cumberland County Chief Deputy District Attorney and two state-court judges, but they
were not parties to this proceeding in the District Court.) The amended complaint is not a
model of clarity, but plaintiffs appear to allege that Erie Insurance conspired with
Cumberland County investigators to bring unfounded charges against Runk in order to
coerce him into accepting an undervalued settlement of his claims and that the Insurance
Fraud Unit has denied him due process by conducting an inadequate investigation and by
pressuring him to plead guilty to a “legally impossible” crime. The amended complaint
requests $5 million in damages and injunctive relief, apparently against Runk’s continued
prosecution.
As for Dougherty’s alleged interest in this dispute, the amended complaint alleges
that Dougherty and Runk “have engaged in long term business dealings” and that Runk
“has been forced to seek Keith Dougherty’s assistance in protecting his/their mutual
rights in the Courts of PA” because Runk has been mistreated by lawyers in the past.
(ECF No. 5 at 8-9 ¶¶ 8, 9.) The amended complaint further alleges that Dougherty has
“purchased” Runk’s claim against Erie Insurance (id. at 13 ¶ 20), and it attaches the same
agreement between Dougherty and Runk that we address in C.A. No. 15-1123 (ECF No.
5-1 at 58-60).
Several defendants moved to dismiss the amended complaint on the grounds, inter
alia, that it fails to state a claim and that the purported assignment of Runk’s claim
against Erie Insurance to Dougherty is champertous. The District Court dismissed the
amended complaint with prejudice for failure to state a claim, and then later denied by
3
text-only orders plaintiffs’ several post-judgment motions, including their motions for
reconsideration and to disqualify the District Judge. Both Dougherty and Runk appeal
from those rulings. 2
II.
In dismissing the amended complaint, the District Court focused on Dougherty
and noted that Runk’s purported assignment of his claim to Dougherty appears to be
champertous. That assignment is indeed champertous for the reasons we explain in C.A.
No. 15-1123, so Dougherty is not permitted to litigate any claims that Runk may have
against Erie Insurance. Dougherty also does not have standing to challenge Runk’s
alleged denial of due process in his ongoing criminal proceeding. We will affirm the
dismissal of the amended complaint as to Dougherty for these reasons.
As for Runk, the District Court did not identify his potential claims but, having
done so ourselves, we agree that the amended complaint does not set forth a plausible
claim for relief. 3 Plaintiffs already have amended their complaint once and nothing
2
We have jurisdiction under 28 U.S.C. § 1291. Plaintiffs’ appeal from the order denying
reconsideration brings up for review the underlying order dismissing the amended
complaint. See Long v. Atl. City Police Dep’t, 670 F.3d 436, 446 n.20 (3d Cir. 2012).
We exercise plenary review over the dismissal of a complaint under Rule 12(b)(6) and
ask whether it “contain[s] sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face.” Capogrosso v. Sup. Ct. of N.J.,
588 F.3d 180, 184 (3d
Cir. 2009) (per curiam) (quotation marks omitted). In doing so, we may review certain
documents attached to the complaint. See Mayer v. Belichick,
605 F.3d 223, 230 (3d Cir.
2010). To the extent that plaintiffs’ filings can be read to challenge the District Judge’s
denial of their post-judgment motion for disqualification, we review that ruling for abuse
of discretion and discern none here. See United States v. Ciavarella,
716 F.3d 705, 717
n.4 (3d Cir. 2013), cert. denied,
134 S. Ct. 1491 (2014).
3
Plaintiffs’ allegations are largely conclusory and inadequate on their face but, even if
properly supported, they still would fail to state a claim as a matter of law. Runk’s only
4
contained in their amended complaint or their filings on appeal suggests that Runk could
further amend the complaint to assert a plausible claim. Thus, we will affirm the
dismissal of the amended complaint as to Runk for failure to state a claim.
We close by noting one concern. The style and content of plaintiffs’ joint filings
suggest that they were prepared by Dougherty. Although Runk apparently has adopted
them as his own by signing them, it appears that Dougherty may be engaging in the
unauthorized practice of law. 4 Thus, it may be that Dougherty’s apparent advice has led
Runk astray and jeopardized whatever claims Runk may legitimately have against Erie
conceivable federal claim against Erie Insurance would appear to be that it conspired
with the Insurance Fraud Unit to maliciously prosecute him without probable cause in
violation of his Fourth Amendment rights. See Johnson v. Knorr, 477 F.3d 75, 81-82 (3d
Cir. 2007). One of the elements of such a claim is the termination of the proceeding in
the accused’s favor, see
id., and Runk has not alleged and cannot allege that here. Runk’s
claims for damages against the Insurance Fraud Unit fails for the same reason. Finally,
as for Runk’s apparent request for an injunction against his prosecution, federal courts
“must not intervene by way of either injunction or declaratory judgment in a pending
state criminal prosecution” absent exceptional circumstances not alleged here. Kugler v.
Helfant,
421 U.S. 117, 123 (1975) (discussing Younger v. Harris,
401 U.S. 37 (1971)).
4
Both the Erie Insurance defendants and the District Court raised this concern, and we
share it. The agreement between Dougherty and Runk states that Dougherty will provide
Runk with “recommendations and representation in the efforts to collect bad debt” with
the “specific intent” of instituting legal proceedings (ECF No. 5-1 at 58), and the
amended complaint alleges that Dougherty is assisting Runk “in protecting his/their
mutual rights in the Courts of PA” (ECF No. 5 at 8-9 ¶ 9). In addition, plaintiffs have
attached to their motion for a preliminary injunction in this Court the transcript of an
August 28, 2014 hearing in Runk’s criminal proceeding. At the hearing, the Cumberland
County Chief Deputy District Attorney informed the trial court that Dougherty (who was
present in the courtroom) had been “injecting himself in this case in filing motions” and
that “I am going to tell you right now, he is under investigation for unauthorized practice
of law. Mr. Runk is seriously in jeopardy from his advice.” (Mot. for Preliminary
Injunction, “Transcript” at 5-6.) We express no opinion on whether Dougherty in fact
has engaged in the unauthorized practice of law.
5
Insurance (an issue on which we express no opinion). The District Court noted
Dougherty’s apparent unauthorized practice of law but did not take any measures to
protect Runk’s potential rights. We see no need to do so now because Runk has long
been on notice of these concerns and has filed nothing personally in either the District
Court or this one disavowing Dougherty’s filings or attempting to assert anything other
than the claims contained therein. If Runk believes that he has legitimate claims to assert
in the future, he would be well advised to assert them without Dougherty’s assistance.
See Dougherty v. Snyder, 469 F. App’x 71, 73 (3d Cir. 2012) (per curiam) (noting that
Dougherty’s legal arguments “serve only to demonstrate the wisdom” of the requirement
that business entities be represented by counsel in federal court).
III.
For these reasons, we will affirm the judgment of the District Court. Appellants’
motions pending in this Court are denied. 5
5
We have reviewed the arguments contained in appellants’ various filings, including
their arguments that the assignment of Dougherty’s prior appeals to certain panels of this
Court was the product of a “political conspiracy” to deny his claims, and conclude that
they lack merit for reasons that do not require discussion.
6
