Craig McAlpine v. Porsche Cars North America Inc, et al

Filing 511129562

Craig McAlpine v. Porsche Cars North America Inc, et al

Doc. 511129562

Case: 09-10407

Document: 00511129562

Page: 1

Date Filed: 06/02/2010

IN THE UNITED STATES COURT OF APPEALS United States Court of Appeals FOR THE FIFTH CIRCUIT Fifth Circuit FILED
N o . 09-10407 June 2, 2010 Lyle W. Cayce Clerk C R A IG MCALPINE, Plaintiff­Appellant v. P O R S C H E CARS NORTH AMERICA INC; TIMOTHY COONS; MOD W O R K S INC; PORSCHE AVIATION PRODUCTS INC; GARY BUTCHER, Defendants­Appellees

A p p e a l from the United States District Court for the Northern District of Texas U S D C No. 4:06-cv-00189-Y

B e fo r e JONES, Chief Judge, and BENAVIDES and PRADO, Circuit Judges. P E R CURIAM:* C r a ig McAlpine appeals the district court's grant of summary judgment t o Porsche Cars North America, Inc., Mod Works Inc., Porsche Aviation P ro d u cts , Inc., Timothy Coons, and Gary Butcher (collectively "Defendants"). M c A lp i n e alleged that Defendants committed torts against his purported p r o p e r t y . After considering the parties' arguments, for the following reasons, we a ffir m .

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 R. 47.5, the Court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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. 09-10407 I . FACTUAL AND PROCEDURAL BACKGROUND In 1994, Dr. David McAlpine, Craig McAlpine's father, purchased all o u ts t a n d in g shares of HCC Corporation. HCC's sole asset was a Mooney PFM a ir p la n e fitted with a Porsche engine. McAlpine's father allegedly transferred h i s HCC stock in 2003 to his son as a gift. At all relevant times, HCC was r e g is te r e d as the owner of the aircraft. In the late 1990s, Porsche decided to withdraw from the aviation business a n d informed those who owned its engines that it would cease providing support a f t e r May 31, 2005. Porsche, through its employee Gary Butcher, contracted w it h Mod Works to develop a program to replace Porsche engines. Porsche a g r e e d to offset the cost of replacement to owners and, as an alternative to r e p la c e m e n t, Mod Works offered to purchase the airplanes outright. In 2002, McAlpine's father contracted with Mod Works to replace the a ir p la n e 's engine. In July 2004, McAlpine delivered the airplane to Mod Works' fa c ilit y in Punta Gorda, Florida. Upon delivery, Mod Works told McAlpine that t h e replacement process would take much longer than he expected. According t o McAlpine, when he said that he wanted to take the airplane and return it to M o d Works at a later date, Mod Works employees effectively grounded it by d r a i n i n g the oil from the engine, and Timothy Coons, Mod Works' president, t h r e a t e n e d to report McAlpine to the FAA for flying a non-airworthy plane. Two w e e k s later, Hurricane Charley struck, damaging ModWorks' facilities and the p l a n e . Approximately two years after Hurricane Charley, McAlpine attempted to retrieve the airplane from Mod Works. He found that the plane had been left o n an outdoor ramp and that the engine, gear box, propellor, avionics, and other e q u ip m e n t had been removed, leaving it unfit to fly. In 2006, McAlpine filed this action against Defendants in Texas state c o u r t , and Defendants removed it to federal court. In his amended complaint, M c A lp i n e asserted various claims against Defendants; on appeal, however, 2

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No. 09-10407 M c A l p in e abandons all claims except for conversion. As to conversion, McAlpine a lle g e d that Defendants deprived him of his right of ownership or possession of t h e airplane when Mod Works and Porsche prevented him from removing it from th e Mod Works facility. Although he initially had counsel, McAlpine ultimately p u r s u e d his claims pro se. F o llo w in g discovery, Defendants moved for summary judgment. The

d is t r ic t court granted summary judgment in favor of Defendants on the ground t h a t McAlpine lacked standing to maintain his action. The court also found that M c A lp i n e had failed to present any competent evidence that he suffered d a m a g e s as a result of Defendants' actions. McAlpine moved to amend or alter t h e district court's judgment, arguing that it did not properly consider all of the e v id e n c e relating to ownership and damages. The district court denied the m o tio n . McAlpine timely appealed. Once again represented by counsel, he raises fo u r issues before this Court: (1) whether the district held him, as a pro se lit ig a n t , to an improper standard of compliance with formal or technical rules; (2 ) whether he presented sufficient evidence to create an issue of material fact a s to whether he had standing to assert his conversion claim; (3) whether the d is t r ic t court erred in finding that he had presented no evidence of damages; and (4 ) whether the district court improperly denied his motion for a new trial. I I . JURISDICTION AND STANDARD OF REVIEW W e have jurisdiction over the final decision of the district court under 28 U .S .C . § 1291. We review the district court's grant of summary judgment de n o v o . Trinity Universal Ins. Co. v. Employers Mut. Cas. Co., 592 F.3d 687, 691 (5 t h Cir. 2010). Summary judgment is proper when "the pleadings, the discovery a n d disclosure materials on file, and any affidavits show that there is no genuine is s u e as to any material fact and that the movant is entitled to judgment as a m a t t e r of law." FED. R. CIV. P. 56(c). "A genuine issue of material fact exists 3

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No. 09-10407 w h e n the evidence is such that a reasonable jury could return a verdict for the n o n - m o v in g party." Gates v. Tex. Dep't of Protective & Regulatory Servs., 537 F .3 d 404, 417 (5th Cir. 2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 2 4 2 , 248 (1986)). W e review a district court's denial of a Rule 59(e) motion for an abuse of d is c r e tio n . Schiller v. Physicians Res. Group Inc., 342 F.3d 563, 566 (5th Cir. 2 0 0 3 ). Rule 59(e) relief is appropriate (1) where there has been an intervening c h a n g e in the controlling law; (2) where the movant presents newly discovered e v id e n c e that was previously unavailable; or (3) to correct a manifest error of law o r fact. Id. at 567. A court should not grant Rule 59(e) relief on the basis of " a rg u m e n ts which could, and should, have been made before the judgment is s u e d ," id. (quotation omitted), and should not allow a case to be argued under a new legal theory. Simon v. United States, 891 F.2d 1154, 1159 (5th Cir. 1990). I I I. ANALYSIS A. P le a d i n g Standards for Pro Se Litigants I n his opposition to Defendants' motions for summary judgment, McAlpine a tt a c h e d a notarized document purporting to show that McAlpine's father had t r a n s fe r r e d all of HCC's stock to him. McAlpine stated that HCC had dissolved a n d therefore the airplane distributed to him as the sole shareholder. McAlpine d i d not establish HCC's dissolution by affidavit or any other competent evidence. I n crafting its order, the district court accepted the purported stock transfer, but d is r e g a r d e d the claimed dissolution of HCC. Because the evidence showed that, a t most, McAlpine was the sole shareholder of a close corporation, the district c o u r t held that McAlpine did not have standing to sue on HCC's behalf. McAlpine contends that because he did not have counsel, the district court s h o u ld have considered his statements concerning HCC's dissolution as proper s u m m a r y judgment evidence. To defeat a motion for summary judgment, "an o p p o sin g party may not rely merely on allegations or denials in its own pleading; 4

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No. 09-10407 r a th e r , its response must--by affidavits or as otherwise provided in this r u le -- s e t out specific facts showing a genuine issue for trial." FED. R. CIV. P. 5 6 (e )(2 ). McAlpine argues that, because a party signing a brief certifies that "the f a c t u a l allegations [made therein] have evidentiary support," id. 11(b)(3), a pro s e party's brief, to the extent it sets out facts made on personal knowledge, s h o u ld be considered an affidavit for purposes of summary judgment. W e have previously held that "[a]lthough pro se litigants are not held to t h e same standards of compliance with formal or technical pleading rules a p p l ie d to attorneys, we have never allowed such litigants to oppose summary ju d g m e n t s by the use of unsworn materials." Gordon v. Watson, 622 F.2d 120, 1 2 3 (5th Cir. 1980) (per curiam). Contrary to McAlpine's contention, a Rule 11 s ig n a t u r e does not swear to the truth of facts in a submission to the court, but o n ly to the belief that they have or will have, after investigation, evidentiary s u p p o r t. FED. R. CIV. P. 11(b)(3). An affidavit must set out facts, made on p e r s o n a l knowledge, "that would be admissible in evidence, and show that the a f fia n t is competent to testify on the matters stated." FED. R. CIV. P. 56(e)(1). S ig n in g a pleading or brief is different from swearing to an affidavit. McAlpine relies upon Lewis v. Thigpen, 767 F.2d 252 (5th Cir. 1985), to s u p p o rt his argument that the rules of procedure should be relaxed for a pro se lit ig a n t. In Lewis, a pro se prisoner failed to timely request a jury trial in a d a m a g e s suit. Id. at 256. Our consideration of the litigant's failure to request a jury trial in a timely manner depended upon the discretionary function of the d i s tr ic t court implicit in Rule 39(b), and we ultimately remanded for a d e t e r m in a t io n of whether the pro se litigant was truly ignorant of his obligation to request a jury trial. Id. at 258­60. The discretion afforded to the district c o u r t in Lewis under Rule 39(b) is not present here. Under Rule 56(e)(2), an o p p o s in g party "may not" rely on allegations in its own pleadings and "must" set o u t "specific facts" in affidavits or the supplemental materials described in Rule 5

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No. 09-10407 5 6 ( e )(1 ). Statements made in McAlpine's responsive pleadings to a motion for s u m m a r y judgment could not establish a genuine issue of fact. The district court d id not err by holding McAlpine to the requirements of Rule 56. B. S ta n d i n g to Bring Suit M c A lp in e appeals the district court's finding that he lacked standing to p u r s u e his conversion claim because HCC owned the airplane. Standing

r e q u ir e s an injury in fact, "an invasion of a legally protected interest which is (a) c o n c r e te and particularized, and (b) actual or imminent, not conjectural or h y p o t h e t ic a l." Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992) (internal cita tion s and quotation marks omitted). " T h e party invoking federal jurisdiction bears the burden of establishing [ s ta n d in g ] ." Id. (citations omitted). McAlpine cannot meet his burden with "m e r e allegations," but must "`set forth' by affidavit or other evidence `specific fa c t s .'" Id. (quoting FED. R. CIV. P. 56(e)). That is, McAlpine must raise a g e n u in e issue of material fact as to standing. Croft v. Governor of Tex., 562 F.3d 7 3 5 , 746 (5th Cir. 2009). Although we consider the evidence in the light most fa v o ra b le to the nonmoving party, "once the moving party meets its initial b u r d e n of pointing out the absence of a genuine issue for trial, the burden is on t h e nonmoving party to come forward with competent summary judgment e v id e n c e establishing the existence of a material factual dispute." Clark v. A m e r ic a 's Favorite Chicken Co., 110 F.3d 295, 297 (5th Cir. 1997) (citation o m itted ). A t issue here is whether McAlpine personally suffered an injury in fact. D e f e n d a n t s contend, and the district court found, that the airplane belonged to H C C and that McAlpine suffered no injury himself. McAlpine argues that: (1) h e did in fact own the airplane, and (2) even if he did not own the airplane, he h a d a "right of possession" that Defendants violated.

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No. 09-10407 1. W h e t h e r McAlpine established a fact issue concerning o w n e r s h i p of the airplane

"G e n era lly , corporations have an existence separate and distinct from that o f their shareholders . . . and an individual shareholder cannot secure a personal r e c o v e r y for an alleged wrong done to a corporation . . ." Thomas v. N.A. Chase M a n h a tta n Bank, 994 F.2d 236, 243 (5th Cir. 1993) (quotation omitted). This r e m a in s true even for close corporations and sole shareholders. Id. M c A l p in e contends that he presented sufficient evidence to raise a genuine is s u e of material fact as to whether he owned the airplane. At all relevant times, H C C was the registered owner of the airplane. McAlpine and his father testified in depositions that McAlpine's father transferred ownership of HCC to McAlpine in 2003 or 2004. In response to Defendants' motions for summary judgment, M c A l p in e provided the district court with a handwritten, notarized statement b y his father purporting to transfer all HCC stock to McAlpine. Assuming that o w n e r s h ip of HCC passed from father to son, McAlpine was, at most, a s h a r e h o ld e r in HCC, which owned the airplane. Although McAlpine may have p r e s e n te d sufficient competent evidence to raise a fact issue as to the ownership o f HCC, he has not presented any evidence creating a fact issue as to the o w n e r s h ip of the airplane.1 I n the alternative, McAlpine contends that HCC was "defunct" and thus t h e aircraft automatically distributed to him as the sole shareholder of HCC. M c A lp in e did not, however, present any evidence at summary judgment that s u p p o r t e d these assertions.2 McAlpine therefore failed to "come forward with
McAlpine also argues that, because shareholders are equitable owners of a corporation's assets, as HCC's sole owner, he could have given the airplane to himself without following any corporate formalities. McAlpine did not suggest below, and he does not claim before this Court, that he actually did cause HCC to give him the airplane. A legal hypothetical, standing without factual support, cannot create a genuine fact issue. McAlpine contends that he was not required to present evidence of HCC's dissolution because it was a Delaware corporation and Delaware corporate law does not necessitate a formal dissolution. McAlpine did not raise this argument below, and it is therefore waived.
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No. 09-10407 c o m p e te n t summary judgment evidence establishing the existence of a material f a c t u a l dispute." Clark, 110 F.3d at 297 (citations omitted). 2. W h e t h e r McAlpine established a fact issue concerning his r i g h t to immediate possession of the aircraft

M c A l p in e next argues that he presented sufficient evidence to establish a fa c t issue as to his right to possess the airplane. Defendants, he contends, did n o t challenge his right to possession at summary judgment, but instead only c h a lle n g e d his ownership of the plane. Therefore, McAlpine argues that he was n o t required to set forth evidence that he had a legal right to possess the a ir p la n e , and that the district court erred by granting summary judgment to D e fe n d a n t s on the conversion claim. A s discussed above, "once the moving party meets its initial burden of p o in tin g out the absence of a genuine issue for trial, the burden is on the n o n m o v in g party to come forward with competent summary judgment evidence e s t a b lis h in g the existence of a material factual dispute." Id. (citations omitted). I n addition, "[i]f a party fails to assert a legal reason why summary judgment s h o u ld not be granted, that ground is waived and cannot be considered or raised o n appeal." Vaughner v. Pulito, 804 F.2d 873, 878 n.2 (5th Cir. 1986) (citation o m itted ). D e f e n d a n t s ' motions for summary judgment, and their briefs in support, c o v e r e d more than McAlpine claims. Defendants generally denied McAlpine's s t a n d in g to bring suit, not merely as an owner of the airplane. With McAlpine's la c k of evidence in support of standing thereby "point[ed] out," McAlpine had an o b lig a tio n to set out facts showing a genuine fact issue. Celotex Corp. v. Catrett, 4 7 7 U.S. 317, 325 (1986). A right to possession is an incident of an interest in property at the time o f its conversion. Jones v. Boswell, 250 S.W.3d 140, 143­44 (Tex.

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No. 09-10407 A p p .-- E a s t la n d 2008, no pet.).3 As discussed above, however, McAlpine did not r a is e a fact issue as to whether he owned the airplane or had legal possession of it . Nor did he claim, or present evidence to the effect that he held a lien or any o t h e r interest in the property that would entitle him to its immediate possession. T h e r e f o r e , he failed to create a fact issue, and Defendants are entitled to s u m m a r y judgment.4 C. T h e Motion to Alter or Amend the District Court's Judgment F in a lly , McAlpine argues that the district court erred by denying his m o t io n to alter or amend the judgment under Rule 59(e) despite his presentation o f newly discovered evidence and the need to correct a clear error of law. In his m o t i o n to alter or amend the judgment, McAlpine raised several arguments c o n c e r n in g what he considered to be the district court's failure to take into a c c o u n t all of the evidence in the light most favorable to him at summary ju d g m e n t . He accused Defendants of perjury, malice, and acting in bad faith. H e also accused the court of failing to enforce Defendants' discovery obligations, im p r o p e r ly granting a protective order in favor of Defendants, and allowing two o f his attorneys to withdraw from his representation without his signed consent a n d without hearings. In an appendix to his motion, he presented photographs a lle g e d ly showing damage to the airplane that had not been part of the summary ju d g m e n t record and deposition testimony concerning his fraud and

m is r e p r e s e n ta tio n claims, which are not part of this appeal. The district court found that McAlpine failed to present any new evidence

In addition, as McAlpine notes, such a right may be established by actual possession at the time of the conversion. Gardner v. Jones, 570 S.W.2d 198, 200­01 (Tex. App.--Houston [1st Dist.] 1978, no writ). However, in this case, the alleged conversion occurred after McAlpine transferred possession of the airplane. Because the district court did not err when it found that McAlpine did not have standing to pursue his conversion claim, we do not address the district court's determination that McAlpine presented no evidence of damages stemming from Defendants' alleged actions.
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No. 09-10407 t h a t had been unavailable at the time of summary judgment and continued to fa il to present any competent evidence of his ownership of the airplane. M c A lp in e concedes that his Rule 59(e) motion presented only one piece of "new" e v id e n c e : deposition testimony that allegedly supports Porsche's involvement in t h e alleged conversion of the plane, and the continuation of the retrofitting p r o g r a m after Hurricane Charley. Porsche, however, never contested its

in v o lv e m e n t in the program. The record also supports the continuation of the r e t r o fit t in g program. Neither fact, however, supports McAlpine's fraud and m i s r e p r e s e n t a t io n claims, which he premised on the inadequacy of the r e tr o fitt in g s performed after Hurricane Charley. McAlpine also contends that he was due Rule 59(e) relief to correct a " m a n ife s t ly unjust" result. He argues that the district court clearly erred by fin d in g that he did not have standing because the district court (1) improperly r e lie d on FAA registration data, (2) ignored evidence that HCC had become d e f u n c t , and (3) ignored evidence of damages. As to McAlpine's first argument, a lt h o u g h the summary judgment order mentions the airplane's FAA r e g is tr a t io n , it relies on the absence of evidence set forth by McAlpine. As to his s e c o n d , McAlpine brought forth no evidence that HCC had dissolved, but only m a d e an assertion in a brief in opposition to summary judgment. And as to his t h ir d , McAlpine misstates the district court's finding at summary judgment, as it found that McAlpine had not presented any competent evidence that he had s u ffe r e d damages as a result of Defendants' actions. McAlpine's motion to alter or amend the judgment merely recapitulated h is prior arguments and claims, while accusing the district court and Defendants o f improper conduct. The court did not abuse its discretion by denying it. I V . CONCLUSION M c A lp i n e failed to produce sufficient evidence to raise a triable issue of fa c t concerning his standing to bring this suit. The district court correctly 10

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No. 09-10407 g r a n te d summary judgment to Defendants and did not abuse its discretion in d e n y in g McAlpine's Rule 59(e) motion. For these reasons, we AFFIRM.

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