JULIE A. ROBINSON, District Judge.
Plaintiff Southern Star Central Gas Pipeline, Inc. ("Southern Star") brings this diversity action against Phillip G. Cline seeking a declaratory judgment that its gas storage lease on Cline's property remains in full force and effect. Southern Star additionally alleges that Cline slandered the title to its property by filing a false affidavit declaring the lease was void. Cline brings a counterclaim against Southern Star seeking termination of Southern Star's gas storage lease and the oil and gas lease, and alleging that Southern Star negligently and intentionally inflicted emotional distress. Cline also lists as a separate count a claim for punitive damages.
This matter is before the Court on Southern Star's Motion for Partial Judgment on the Pleadings (Doc. 14). Southern Star seeks a judgment on Cline's claims of negligent and intentional infliction of emotional distress and request for punitive damages. In Cline's Response to Southern Star's motion, he moves for partial judgment on the pleadings, requesting judgment on Southern Star's slander of title claim (Doc. 16).
For the reasons explained below, the Court grants Southern Star's request to dismiss Cline's negligent and intentional infliction of emotional distress claims and the punitive damages request. The Court denies without prejudice Cline's request to dismiss Southern Star's slander of title claim. Southern Star may file a motion for leave to amend its complaint pursuant to Federal Rule of Civil Procedure 15(a) and D. Kan. Rule 15.1(a)(2).
The court reviews a Rule 12(c) motion under the same standard that governs a Rule 12(b)(6) motion.
Unless stated otherwise, the following facts are alleged by the parties in their Complaint and Counterclaim. The Court will draw all reasonable factual inferences in favor of the nonmoving parties.
Predecessors of Southern Star and Cline executed a gas storage and oil and gas lease on property owned by Cline's predecessors in Jefferson County, Kansas. The lease bound all successors and assigns of the original parties. The lease entitles Southern Star to an extension of the lease as long as the property is necessary or convenient for its underground natural gas storage field. Southern Star began using the natural gas storage field approximately sixty years ago. The disputed leasehold remains an integral part of Southern Star's underground natural gas storage field.
This is the third lawsuit relating to the disputed lease. The first dispute arose in 1995 when Cline challenged Southern Star's lease by alleging that Southern Star's failure to make rental payments invalidated the lease. The suit was settled when the parties stipulated that if Southern Star timely made rental payments the lease would remain in effect. The second dispute arose in 2003. Cline again challenged the lease's validity, this time asserting that Southern Star's failure to provide free natural gas invalidated the lease. He also asserted claims of conversion and intentional infliction of emotional distress. The district court granted summary judgment in favor of Southern Star on all claims, and the Tenth Circuit affirmed.
Cline now asserts that Southern Star did not timely render the 2005 and 2006 rental payments, voiding its lease. Southern Star asserts that a clerical error delayed Cline's rental payments. When Cline received the 2005 and 2006 rental payments from Southern Star on May 25, 2007, he returned them to Southern Star. Cline asserts that he returned the payments to Southern Star because he considered the lease void. He further alleges that Southern Star gave the checks to the Kansas State Treasury Department without telling the agency that Cline had intentionally returned the checks. Cline has since refused to accept the 2007, 2008, and 2009 rental payments.
After Southern Star failed to pay the 2005 and 2006 rental fees, Cline alleges he
Cline states that Southern Star's failure to pay its lease obligation caused him intense feelings of helplessness and vulnerability. The emotional feelings Cline experienced aggravated his Post Traumatic Stress Disorder ("PTSD"), which he acquired during his Vietnam combat experience. Cline is considered completely disabled.
Southern Star filed a Motion for Partial Judgment on the Pleadings on August 5, 2010. Southern Star asserts in its accompanying memorandum that Cline did not state a valid claim for negligent infliction of emotional distress and that the intentional infliction of emotional distress claim is barred by the statute of limitations. In the alternative, Southern Star asserts that Cline did not state a valid claim for intentional infliction of emotional distress. Southern Star also requests that the Court deny Cline's request for punitive damages, because such damages cannot be granted absent a valid tort.
In his response to Southern Star's motion, Cline asserts that Southern Star fails to allege sufficient facts to support its slander of title claim. He claims Southern Star did not allege sufficient facts to support that he filed his affidavit maliciously and that the Southern Star failed to allege sufficient damages. Cline moves for dismissal of Southern Star's slander of title claim.
Southern Star first argues that Cline failed to allege sufficient facts to support his claim of negligent infliction of emotional distress because he failed to allege a physical injury. Negligent infliction of emotional distress requires a sufficient physical injury.
Count III of Cline's counterclaim alleges "Emotional Distress Damages," without specifying whether Southern Star acted intentionally or negligently.
Southern Star asserts that Cline's intentional infliction of emotional distress claim is barred by the statute of limitations. Southern Star argues the claim accrued no later than May of 2007 and, therefore, is barred by the two-year statute of limitations. Cline does not argue that he filed the suit within the statute of limitations. Rather, Cline argues that the statute of limitations should either be tolled or not enforced. First, Cline asserts the Court should toll the statute because he did not understand his cause of action during the limitations period and thus, was legally incapacitated. Second, Cline asserts that enforcing the statute of limitations against him would lead to "an intolerable perversion of justice."
Because Cline does not dispute that he filed his claim beyond the two-year statute of limitations, if the Court concludes he does not suffer from legal incapacitation and that justice is not dis-served by enforcing the statute, Cline's intentional infliction of emotional distress claim is barred by the statute of limitations.
Generally, a plaintiff must bring a claim for intentional infliction of emotional distress within two years of the conduct causing substantial injury.
Cline asserts that he did not fully understand his cause of action, thus, the Court should toll the statute of limitations.
Cline additionally argues that the Court commits an "intolerable perversion of justice" by enforcing the statute of limitations in light of his PTSD.
Even if the statute of limitations did not bar the claim, Southern Star argues that Cline has failed to sufficiently allege facts that give rise to a claim for intentional infliction of emotional distress. Southern Star asserts that Cline failed to allege conduct that was extreme and outrageous and that the emotional distress Cline suffered was not extreme and severe.
Intentional infliction of emotional distress comprises four elements: (1) the challenged conduct was intentional or performed with reckless disregard for the plaintiff; (2) the conduct was extreme and outrageous; (3) a causal connection exists between the conduct and the plaintiff's mental distress; (4) the plaintiff's mental distress was extreme and severe.
Southern Star asserts that its failure to timely pay $80 worth of lease payments does not rise to the level of extreme and outrageous conduct. In response to this assertion, Cline argues that an average member of the community would find
Southern Star asserts that its conduct does not rise to the level of extreme and outrageous, citing a number of cases in which courts applying Kansas precedent have concluded conduct was not extreme and outrageous. These include: an instance where a lawyer settled a claim without consulting a client,
Next, Southern Star argues that Cline's emotional distress does not rise to the level of extreme and severe. Cline counters by asserting that he has suffered long-term stress associated with litigation in addition to feelings of helplessness and vulnerability.
Cline's emotional symptoms of helplessness, vulnerability, and stress closely resemble the types of emotional symptoms the Kansas Supreme Court recently reiterated are inadequate to meet the requirement of severe and extreme distress.
Southern Star asserts that, absent a viable tort, the Court must also dismiss Cline's punitive damages claim. Cline asserts that Southern Star sent the rental checks to the State Treasurer without informing the Treasurer that Cline had refused the payments, which justifies punitive damages. In the absence of a tort, there is no basis for punitive damages.
Cline asks the Court to dismiss Southern Star's claim for slander of title, stating that Cline did not file his affidavit with malice and that Southern Star failed to allege special damages. Slander of title is defined as a "false and malicious statement... made in disparagement of a person's title ... causing him injury."
Cline contends that he filed his affidavit without malice. Southern Star asserts
Southern Star's Complaint alleges Cline damaged Southern Star by "placing in question the validity of Southern Star's valuable gas storage rights."
In its reply, Southern Star requests leave to amend its Complaint to allege special damages.
Before the Court is defendant Phillip G. Cline's Motion for Reconsideration regarding the Court's dismissal of Cline's intentional infliction of emotional distress counterclaim and request for punitive damages (Doc. 31). The Court's Memorandum and Order of November 16, 2010 found Cline's
The Court incorporates by reference the background provided in its November 16, 2010 Memorandum and Order. On April 21, 2010 Southern Star filed suit against Cline requesting damages for slander of title and a declaratory judgment that its gas storage lease on Cline's property remained in full force and effect. Cline counterclaimed for intentional infliction of emotional distress, punitive damages, and requested a termination of Southern Star's gas storage lease. Southern Star filed a Motion for Partial Judgment on the Pleadings requesting dismissal of the emotional distress claim and the claim for punitive damages. Cline filed a Motion for Partial Judgment on the Pleadings requesting dismissal of Southern Star's slander of title claim. In a Memorandum and Order filed on November 16, 2010, this Court granted Southern Star's motion and dismissed Cline's intentional infliction of emotional distress claim and punitive damage claim (Doc. 28). The Court further granted Southern Star leave to amend its complaint in regards to the slander of title action.
Southern Star filed an Amended Complaint (Doc. 38) and removed the slander of title claim. Southern Star contended in its original Complaint that it received notice from Cline in April of 2010 of the affidavit Cline filed in May of 2007 with Jefferson County challenging Southern Star's lease. While conducting discovery, Southern Star found a letter in its files received from Cline in July of 2007, which contained a copy of the affidavit. Southern Star determined that this earlier notice put the slander of title claim outside the statute of limitations and dropped the slander of title claim. Cline subsequently filed the instant motion.
Cline filed this motion under Fed. R. Civ. Pro. 46, which permits an objection to an order or ruling during trial; its use is not appropriate at this phase in the litigation. D. Kan. Rule 7.3(a) allows a party to seek reconsideration of a dispositive order under Rule 59(e) or 60. A motion to alter or amend judgment pursuant to Rule 59(e) may be granted only if the moving party can establish: (1) an intervening change in the controlling law; (2) the availability of new evidence that could not have been obtained previously through the exercise of due diligence; or (3) the need to correct clear error or prevent manifest injustice.
By contrast, Rule 60(b) is "an extraordinary procedure permitting the court that entered judgment to grant relief therefrom upon a showing of good cause within the rule."
Subsection (b)(6) is mutually exclusive to the other categories of relief enumerated in Rule 60(b),
Cline argues that Southern Star made untrue statements constituting willful fraud in the filling of this suit. Specifically, Southern Star stated in its original Complaint that Cline first informed Southern Star of the affidavit recorded with Jefferson County in April of 2010. Cline states he was angered by this statement because he knew Southern Star was intentionally misleading the Court. Cline asserts that Southern Star filed the suit in bad faith. He further asserts he has suffered sleep loss and a lack of concentration because of Southern Star's actions. While the standards under Rule 59 and Rule 60 are similar, the Court addresses Cline's arguments under each rule separately. Because the Court finds no justification for altering its previous order dismissing the intentional infliction of emotional distress claim, Cline has no basis on which to claim punitive damages.
Cline's motion can be read as raising two justifications for altering or amending the judgment under Rule 59: the need to correct clear error or prevent manifest injustice and the discovery of new evidence. Cline argues that Southern Star filed this case based on untrue statements that intentionally caused him emotional distress. This argument, however, does not comport with the allegations set forth in Cline's counterclaim. Cline's counterclaim alleged Southern Star inflicted emotional distress on Cline by refusing to timely make the lease payments and refusing to provide him with free natural gas. Cline did not allege that Southern Star intended to cause him emotional distress by filing this suit. Rule 59 does not permit Cline to present this new legal theory.
Additionally, the Court did not err in finding that Cline did not plead facts to support the elements of his claim of intentional infliction of emotional distress. Cline newly contends that his loss of sleep proves compensable mental distress. However, the Kansas Supreme Court has stated sleeplessness is inadequate to satisfy the severe mental distress element.
Cline suggests that Southern Star's admission that it had received the July 3, 2007 letter constitutes new evidence justifying reconsideration. However, this argument fails for the same reasons identified above. Cline's counterclaim centered on emotional distress originating from Southern Star's failure to make lease payments and provide free gas. Cline's counterclaim did not assert emotional distress from the filing of this suit. Therefore, the newly discovered letter does not bolster Cline's initial allegations nor does it alter the time when the statute of limitations began to run. Further, even assuming Southern Star did willfully hide the letter and file the suit in bad faith, Cline still has not alleged facts to support severe mental distress. Cline has failed to meet the standard for altering or amending the judgment under Rule 59.
Cline suggests that newly discovered evidence or fraud on the part of Southern Star justifies amending the judgment pursuant to Rule 60(b)(3). For the reasons stated above, Southern Star's discovery of the earlier letter does not bolster Cline's counterclaim and thus, does not constitute new evidence. Further, Cline has not met his burden to allege facts that would demonstrate Southern Star intentionally hid the letter and thus committed a fraud or misrepresentation. Under Rule 60, the moving party must "by adequate proof, clearly substantiate" the opposing party's fraud or misrepresentation.