Shuler v. Infinity Property & Casualty et al
MEMORANDUM OPINION. Signed by Judge Abdul K Kallon on 03/29/13. (CVA)
2013 Mar-29 PM 02:49
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
INFINITY PROPERTY & CASUALTY,
Case No. 2:11-cv-3443-TMP
The magistrate judge has filed two reports and recommendations in this action with respect
to various motions to dismiss. On May 18, 2012, he filed his first report and recommendation
(Doc. 25), making certain recommendations with respect to motions to dismiss filed by defendants
Laura Nettles (Doc. 8), Wayne Morse (Doc. 9), American Express and NCO Financial Systems, Inc.
(Doc. 10), and Infinity Insurance Company, Tobin Lunsford, and Pamela Jenkins (Doc. 15). After
the magistrate judge filed his report and recommendation, plaintiff Carol Shuler filed her objections
on May 29, 2012 (Doc. 28), to which defendant Nettles responded on June 12, 2012. (Doc. 30). On
July 9, 2012, plaintiff filed a motion for leave to amend her complaint. (Doc. 33).
The filing of the motion for leave to amend the complaint required the magistrate judge to
revisit the recommendations made in his first report and recommendation in light of the new factual
allegations contained in the proposed amended complaint. In doing so, the magistrate judge filed
his Order and Amended Report and Recommendation (Doc. 41) on December 11, 2012, which
granted the plaintiff’s motion for leave to amend the complaint and made further and additional
recommendations concerning the pending motions to dismiss. A few days later, the magistrate judge
filed a corrected recommendation to correct an inadvertent oversight in Doc. 41 (See Doc. 43).1 On
December 26, 2012, defendant Nettles filed her objections to the December 11, 2012 report and
recommendation. (Doc. 44). No other party filed objections.2
Defendant Angie Ingram also filed a motion to dismiss the plaintiff’s original complaint on
October 17, 2011 (Doc. 7), which, because it was supported by materials outside the pleadings, the
magistrate judge treated as a motion for summary judgment and so notified the parties on May 14,
2012. Plaintiff Shuler filed her opposition to the motion on May 29, 2012. (Doc. 27). The
magistrate judge filed his report and recommendation concerning defendant Ingram’s motion for
summary judgment on December 11, 2012. (Doc. 42). To date, no party has filed objections with
respect to this report and recommendation.
Because objections were filed by plaintiff (with respect to the first report and
recommendation) and by defendant Nettles (with respect to the December 11, 2012 report and
recommendation), the magistrate judge directed the clerk to randomly draw a district judge to review
the objections. This memorandum opinion does so now.
I. Standard of Review
Pursuant to 28 U.S.C. § 636(b)(1), a party may file objections to a magistrate judge’s report
and recommendation within fourteen days after being served with a copy of it. If objections are filed,
The docket sheet incorrectly states that Doc. 43 was filed to correct errors in Doc. 42. In
fact, Doc. 43 recites clearly that it is intended to correct mistakes in Doc. 41.
The tortured procedural history of this case became even more complicated when, on
February 27, 2013, plaintiff Carol Shuler filed her motion to stay proceedings in this case alleging
that she had not been served with the court filings in December (Docs. 41, 42, and 43) and, thus, had
not had a chance to object to the reports and recommendations. The magistrate judge held a hearing
on the motion on March 8, 2013, and granted the plaintiff additional time to March 25, 2013, to file
objections to Docs. 41, 42, and 43. Even so, plaintiff has filed no objections.
“[a] judge of the court shall make a de novo determination of those portions of the report or specified
proposed findings of fact or recommendations to which objection is made.” 28 U.S.C. § 636(b)(1).
Portions of a report and recommendation to which specific objections are made are reviewed under
a de novo standard. However, those portions to which no objection is filed are reviewed only for
clear error. As one court has explained:
Parties to a dispute upon which a Report and Recommendation has been made are
invited to file objections to that Report and Recommendation. 28 U.S.C.
§ 636(b)(1)(B) (“Within ten days after being served with a copy, any party may serve
and file written objections to such proposed findings and recommendations as
provided by rules of court.”). Under this system, when a party makes a timely and
specific objection to a portion of the Report and Recommendation, the district court
is obliged to engage in a de novo review of the issues raised on objection. Id. (“A
judge of the court shall make a de novo determination of those portions of the report
or specified proposed findings or recommendations to which objection is made.”)
(emphasis added); United States v. Raddatz, 447 U.S. 667, 674, 100 S. Ct. 2406, 65
L. Ed. 2d 424 (1980); Nettles, 677 F.2d at 409. However, issues upon which no
specific objections are raised do not so require de novo review; the district court may
therefore “accept, reject, or modify, in whole or in part, the findings or
recommendations made by the magistrate judge[,]” applying a clearly erroneous
standard. 28 U.S.C. § 636(b)(1); Nettles, 677 F.2d at 409 (“[T]he failure of a party
to file written objections to proposed findings and recommendations in a magistrate’s
report ... shall bar the party from a de novo determination by the district judge of an
issue covered in the report.”); see Liberty Am. Ins. Group, Inc. v. WestPoint
Underwriters, L.L.C., 199 F.Supp. 2d 1271, 1276 (M.D.Fla. 2001) (“[T]he district
court will review those portions of the R & R that are not objected [to] under a
clearly erroneous standard.”); Am. Charities for Reasonable Fundraising Regulation,
Inc. v. Pinellas County, 278 F.Supp. 2d 1301, 1307 (M.D.Fla. 2003) (“[W]hen no
timely and specific objections are filed, case law indicates that the court should
review the findings using a clearly erroneous standard.”); Lombardo v. United States,
222 F.Supp.2d 1367, 1369 (S.D.Fla. 2002); Gropp v. United Airlines, Inc., 817
F.Supp. 1558, 1561–62 (M.D.Fla. 1993); Chamblee v. Schweiker, 518 F.Supp. 519,
520 (N.D.Ga. 1981) (“[W]hen [a] party is notified of [the] right to object to the
magistrate's report ... and fails to do so, he or she has waived this right to de novo
consideration of the issues raised in the case ... [and] use of a standard of review
more closely akin to the rule 52 ‘clearly erroneous' standard is appropriate.”).
Tauber v. Barnhart, 438 F. Supp. 2d 1366, 1373 (N.D. Ga. 2006); Garvey v. Vaughn, 993 F.2d 776,
779 n. 9 (11th Cir.1993); Capdevielle v. Astrue, 2012 WL 503617 (M.D. Fla. Feb. 15, 2012).
II. Review of Recommendations without Objections
Several aspects of the reports and recommendations filed by the magistrate judge are not the
subject of objections by any party. As such, the court reviews those portions under a “clearly
erroneous” standard. First, no objections were filed with respect to the report and recommendation
filed December 11, 2012, in which the magistrate judge recommended that defendant Angie
Ingram’s motion for summary judgment be granted and the action against her dismissed. (Doc. 42).
There, the magistrate judge analyzed Ingram’s motion both under Rule 12(b)(6) for failure to state
a claim (while excluding from consideration the materials submitted in support of the motion) and
Rule 56, as a motion for summary judgment supported by the proffered materials. Doing so, he
found, alternatively, that the complaint as amended failed to allege sufficient facts to allow a
plausible inference that Ingram participated in a conspiracy to discharge plaintiff from her job at
Infinity and that plaintiff’s prior deposition testimony in an earlier lawsuit simply failed to link
Ingram to any alleged conspiracy.
The court has reviewed these findings by the magistrate judge and cannot conclude that they
are clearly erroneous. Whether considered under Rule 12(b)(6) or Rule 56, the plaintiff’s pleadings
fail to plausibly allege that Ingram participated in a conspiracy against her, and the evidence likewise
fails to show any link to Ingram. Accordingly, the report (Doc. 42) concerning dismissal of
plaintiff’s claims against Ingram is due to be ADOPTED, and the recommendation of dismissal with
prejudice is ACCEPTED. By separate order the court will grant defendant Ingram’s motion (Doc. 7)
and dismiss the plaintiff’s claims against her with prejudice.
Next, the magistrate judge also has recommended granting the motion to dismiss by
defendant Wayne Morse. Plaintiff concedes that she has not sufficiently pleaded a claim against
Morse, so the magistrate judge’s recommendation is ADOPTED and ACCEPTED. Defendant
Morse’s motion to dismiss (Doc. 9) will be GRANTED by separate order and the claims against him
dismissed with prejudice.
The magistrate judge also has recommended dismissing defendant Gregory Kees for want
of service of process under Rule 4(m) of the Federal Rules of Civil Procedure. Plaintiff has not
objected to this recommendation, and because it is not clearly erroneous, it too will be ADOPTED
and ACCEPTED, and Kees will be dismissed without prejudice by separate order.
III. Review of Plaintiff’s Objections
After the magistrate judge filed his first report and recommendation on May 18, 2012,
plaintiff filed her timely objections to the recommendation that the claims against defendants Nettles,
American Express, NCO Financial, Jenkins, and Lunsford be dismissed for failure to sufficiently
allege a conspiracy underlying the claims against them. Based on the objections and the plaintiff’s
motion for leave to amend the complaint to add further factual allegations, the magistrate judge filed
his Order and Amended Report and Recommendation3 on December 11, 2012, changing his
recommendation with respect to the claims against defendant Nettles, while reaffirming his
In addition to amending his previous report and recommendation, the Order granted in part
and denied in part the plaintiff’s motion for leave to amend the complaint. The magistrate granted
the motion insofar as the motion corrected the name of plaintiff’s employer to Infinity Insurance
Company, added a new claim for disability discrimination against Infinity, and added further factual
allegations in support of the claims against defendant Nettles. The magistrate denied the remainder
of the motion as futile. Because the extended deadline for filing objections has expired and plaintiff
has not filed any objections to the December 11, 2012 Order and Amended Report and
Recommendation, the Order denying in part the plaintiff’s motion for leave to amend the complaint
is not before the court for review.
recommendation to dismiss claims against American Express, NCO Financial, Jenkins, and
Lunsford. Plaintiff has not objected to the December 11, 2012 amended report and recommendation.
Plaintiff’s objections to the original May report and recommendation raise three points4:
(1) that the magistrate judge considered evidentiary materials outside the pleadings with respect to
the motions to dismiss by American Express and NCO Financial without converting the motions to
motions for summary judgment5; (2) the magistrate judge erroneously read portions of the complaint
to allege claims only against defendant Infinity, and not against its employees, Jenkins and Lunsford,
when plaintiff intended to allege the claims against Infinity and its employees; and (3) the magistrate
judge incorrectly concluded that plaintiff failed to allege sufficiently under Twombly/Iqbal the
conspiracy-based claims against American Express and NCO Financial. The court has reviewed
each of these objections de novo, as discussed in detail below.
A. Failure to Convert to Summary Judgment
Plaintiff argues that, like the motion to dismiss by Angie Ingram, American Express and
NCO Financial’s motion to dismiss included materials outside the pleadings. She points out that the
motion “quot[es] directly from documents” in plaintiff’s FDCPA lawsuit, which she says was the
precipitating cause of the conspiracy against her. Having reviewed plaintiff’s original complaint and
proposed amendment to the complaint, it is clear that the magistrate judge’s analysis under
Twombly/Iqbal was grounded entirely on the sufficiency of the factual allegations in plaintiff’s
Plaintiff also objected to the magistrate judge’s finding that the conspiracy claim against
Nettles was barred because Nettles was acting within her attorney-client relationship. This objection
was mooted by the magistrate judge’s reversal of his recommendation that the claims against Nettles
Plaintiff also asserts the same argument with respect to defendant Nettles’ motion to
dismiss. However, because the magistrate judge reversed his recommendation and no longer
recommends granting Nettles’ motion, plaintiff’s objection as to Nettles is MOOT.
pleadings, not on matters outside the pleadings. The magistrate judge effectively excluded the
outside matters in assessing whether plaintiff sufficiently pleaded in her complaint facts from which
an inference could be drawn of a plausible conspiracy claim against American Express and NCO
Financial. Rule 12(d) states, “If, on a motion under Rule 12(b)(6) or 12(c), matters outside the
pleadings are presented to and not excluded by the court, the motion must be treated as one for
summary judgment under Rule 56.” (Italics added). The nature of the Twombly/Iqbal analysis used
by the magistrate judge focused entirely on the factual sufficiency of the allegations of the complaint.
It does not compare evidence from another source. Because the magistrate judge correctly
determined that the facts, as plaintiff pleaded them, simply did not push her allegations of conspiracy
by American Express and NCO Financial over the line from the speculative to the plausible, it is
clear that the magistrate judge did not rely on any information or evidence offered in the motion to
dismiss. Nothing in the report and recommendation suggests that the magistrate judge relied on
anything but the facts of the complaint. Thus, the matters outside the pleadings were effectively
excluded by the court and there was no requirement that the motion to dismiss be converted to a
Rule 56 motion. Accordingly, this objection is OVERRULED.
B. Original Complaint Misread
Next, plaintiff asserts that the magistrate judge misread her complaint as alleging certain
claims against defendant Infinity alone when, in fact, she intended to assert the claims against
Infinity and its employees, Lunsford and Jenkins. In particular, she contends that she intended to
plead Count Five of her complaint against Infinity, Lunsford, and Jenkins together, alleging a claim
under 42 U.S.C. § 1985(2) for a conspiracy to retaliate against her for filing a FDCPA claim. The
magistrate judge read that count, however, to name as defendants only “Infinity” and the
“legal/financial defendants,” not the employees of Infinity.
Having reviewed the complaint, the report and recommendation, and the objections de novo,
the court is persuaded that, even if the magistrate judge misread Count Five, it still fails to
sufficiently allege a conspiracy claim against Jenkins and Lunsford, therefore, dismissal as to these
two defendants remains proper. The Twombly/Iqbal pleading standard requires the plaintiff to plead
facts, not suspicions or guesses, from which the court can plausibly infer that the named defendants
knowingly engaged in a conspiracy designed to harm the plaintiff. Although Jenkins and Lunsford
had some supervisory authority over plaintiff, plaintiff pleads no other factual allegations from which
the court can infer that Jenkins and Lunsford personally and knowingly joined a conspiracy with the
purpose of harming the plaintiff. Plaintiff’s theory is that defendant Nettles, a lawyer representing
a defendant sued by plaintiff in the FDCPA case, called her friend at Infinity, lawyer Erin May, and
persuaded her to cause plaintiff’s termination. Even assuming this to be true, there are no facts
pleaded from which to infer that Lunsford and Jenkins personally were aware of this effort or agreed
to participate in it. It is just as likely that they acted based on their own judgment of plaintiff’s work
performance or were directed by superiors to take steps against plaintiff without any knowledge of
her FDCPA case or its connection to Infinity. The complaint must plead facts that make a plausible
claim, not a mere speculative one, and as to Lunsford and Jenkins, the complaint fails to do so.
The court agrees with the magistrate judge’s report and recommendation that plaintiff has
not sufficiently pled a civil-rights conspiracy claim under § 1985(2) against Lunsford and Jenkins.
Therefore, the court will ADOPT the report, and, to the extent a claim can be read into Count Five
against them, the court will DISMISS it by separate order.
C. Conspiracy Sufficiently Pled Against American Express and NCO
Plaintiff’s third objection is that the magistrate judge incorrectly concluded that the factual
allegations of the complaint (now amended) failed to sufficiently allege that American Express and
NCO Financial participated in a conspiracy to have plaintiff discharged from Infinity because she
sued them in her FDCPA lawsuit. Having reviewed de novo the complaint, amended complaint,
report and recommendation, and plaintiff’s objections, the court agrees with the magistrate judge that
the plaintiff has failed to allege sufficient facts to state a conspiracy claim against American Express
As the magistrate judge pointed out, plaintiff’s theory alleges that she and her husband, Roger
Shuler, sued American Express and NCO Financial in an action alleging a violation of the Fair Debt
Collection Practices Act. American Express and NCO were represented in that action by attorney
Laura Nettles. Plaintiff hypothesizes that Nettles contacted someone at plaintiff’s employer, Infinity,
and persuaded them to discharge plaintiff in retaliation for having sued her clients, American
Express and NCO. The allegations of the complaint are nothing more than hypotheses. While
certain “facts” are alleged — that plaintiff sued American Express and NCO, which were represented
by Nettles; Nettles was a friend of an attorney at Infinity, Erin May; and that during the course of the
lawsuit, plaintiff was disciplined and, ultimately, terminated from Infinity — but these facts alone,
even if assumed true, do not plausibly allege that American Express and NCO knowingly engaged
in or approved of any effort to have Infinity discharge plaintiff.
Under § 1985(2), liability is predicated on knowing participation in conspiracy to intimidate
a witness in a federal proceeding. “It is by now axiomatic that a conspiracy requires a meeting of
the minds between two or more persons to accomplish a common and unlawful plan.” McAndrew
v. Lockheed Martin Corp., 206 F.3d 1031, 1036 (11th Cir. 2000), citing Bivens Gardens Office
Bldg., Inc. v. Barnett Banks Inc., 140 F.3d 898, 912 (11th Cir.1998) (explaining that a civil
conspiracy ordinarily requires “an agreement between two or more people to achieve an illegal
objective, an overt act in furtherance of that illegal objective, and a resulting injury to the plaintiff”).
Implicit in the nature of a conspiratorial agreement is the requirement that the participants knowingly
and deliberately participate. There is no “meeting of the minds” to carry out some objective unless
one does so consciously and knowingly. Thus, to be liable for a conspiracy, the putative defendant
must know that some object or goal is being sought and agree to participate in the effort.
Further, under the Twombly/Iqbal pleading standards, there must be factual allegations from
which a plausible inference of that deliberate choice can be drawn. The facts alleged here by
plaintiff simply do not allow that plausible inference. The court may not speculate that American
Express and NCO knew what Nettles is alleged to have done, or that they agreed to it or authorized
it. The fact that Nettles represented American Express and NCO does not mean that American
Express and NCO knew what Nettles is alleged to have done. The mere fact that Nettles was their
attorney does not allow the inference that they knew in advance that she would contact someone at
Infinity to influence Infinity to terminate plaintiff’s employment. Without some reasonable factual
basis for such an allegation, the court cannot say that plaintiff has pleaded a plausible conspiracy
claim against Nettles’s clients.
Because the factual allegations of the complaint do not support a plausible claim of a
§ 1985(2) conspiracy involving American Express and NCO, the plaintiff’s objections to this portion
of the magistrate judge’s report and recommendation are OVERRULED, and the report and
recommendation is ADOPTED and ACCEPTED. The motion to dismiss on behalf of American
Express and NCO Financial will be GRANTED by separate order and the claims against them
dismissed with prejudice.
IV. Review of Defendant Nettles’ Objections
Following the magistrate judge’s filing of his Order and Amended Report and
Recommendation on December 11, 2012, Laura Nettles objected to the recommendation that her
motion to dismiss be denied. The magistrate judge noted that while he originally recommended that
Nettles’ motion be granted, the amended complaint filed by the plaintiff explicitly alleged that
“Laura Nettles and/or other officials at the LGW law firm communicated with their close associates
at Infinity Insurance Company to set off a conspiracy....” He concluded that this sufficiently alleged
facts under Twombly/Iqbal to allow a plausible inference that Nettles participated in a conspiracy
to cause plaintiff to lose her job in retaliation for having filed the FDCPA lawsuit against her clients.
On December 26, 2012, Nettles filed her objections to the Amended Report and Recommendation.
The court first notes that it cannot consider the materials and exhibits annexed to the
objections when reviewing the recommendation of the magistrate judge. The issue the magistrate
judge addressed is whether, on the factual allegations in the amended complaint, a sufficient factual
basis existed for finding that plaintiff had alleged a plausible conspiracy involving Nettles to retaliate
against plaintiff. It may well be the case that plaintiff will not be able to produce evidence
supporting her factual allegations, but, on a motion to dismiss, the allegations must be presumed
Turning to the facts alleged by the plaintiff, the complaint as amended asserts that Nettles
represented clients adverse to the plaintiff in a lawsuit prosecuted by plaintiff, that Nettles knew a
lawyer employed at Infinity (plaintiff’s employer) named Erin May, that plaintiff received a warning
letter just two days after she and her husband met with their lawyers to discuss discovery issues then
active in their case against Nettles’ clients, and that only a few days later she was terminated from
her employment. Most importantly for purposes of meeting the Twombly/Iqbal standard, plaintiff
alleges explicitly that Nettles “communicated... with [her] close associates at Infinity... to set off a
conspiracy...” against her. Despite the court’s skepticism that the plaintiff will be able to actually
prove these allegations, the amended complain sufficiently alleges facts supporting the allegation
of a conspiracy involving Nettles.
Nettles argues that because the magistrate judge’s Order and Amended Report and
Recommendation found that plaintiff had not sufficiently alleged that Infinity was involved in a
conspiracy with Nettles, this effectively eliminated the possibility that she was involved. The
problem with the plaintiff’s allegations against Infinity is that she failed to specifically identify any
employee at Infinity that Nettles allegedly communicated with. Absent the identification of the
“contact” at Infinity, the complaint does not plausibly link Infinity to the conspiracy. This does not
mean, however, that Infinity was not involved; it just means the plaintiff did not allege it sufficiently
to show her “entitlement to relief” against Infinity under the Twombly/Iqbal standard. On the other
hand, plaintiff explicitly alleged that Nettles (or someone at her direction) communicated with an
unnamed person at Infinity, sufficiently asserting as a fact that Nettles was involved. Again, despite
the court’s skepticism, this is enough to get beyond the pleading stage of the case. Whether plaintiff
can ultimately prove with evidence what she alleges as fact is a matter for the court to address on a
summary judgment motion.
The court agrees, therefore, with the magistrate judge’s recommendation that defendant
Nettles’ motion to dismiss be DENIED. Her objections are OVERRULED and her motion will be
DENIED by a separate order.
To clarify what claims the court is dismissing, the court summarizes its rulings as
1. Defendant Angie Ingram’s motion for summary judgment (Doc. 7) will be GRANTED
and all claims against her will be DISMISSED WITH PREJUDICE.
2. Defendant Wayne Morse’s motion to dismiss (Doc. 9) will be GRANTED and all
claims against him will be DISMISSED WITH PREJUDICE.
3. Defendant Gregory Kees will be DISMISSED WITHOUT PREJUDICE for want of
service of process under Rule 4(m).
4. The motion to dismiss on behalf of defendants American Express and NCO Financial
(Doc. 10) will be GRANTED and all claims against them will be DISMISSED WITH
5. Defendant Laura Nettles’ motion to dismiss (Doc. 8) will be DENIED, and plaintiff’s
claims of a conspiracy to retaliate under 42 U.S.C. § 1985(2) (Count Five) and for tortious
interference with her business relationship with her employer, Infinity Insurance Co. (Count
Eight), can proceed against Nettles.
6. The motion to dismiss on behalf of defendants Tobin Lunsford and Pamela Jenkins
(Doc. 15) will be GRANTED and all claims against them will be DISMISSED WITH
7. Defendant Infinity Insurance Company’s motion to dismiss (Doc. 15) will be
GRANTED IN PART as to Counts Five and Six of the amended complaint and DISMISSED
WITH PREJUDICE as to those counts, but DENIED IN PART as to Counts One, Two, Three,
Four, and Seven.6
A separate Order incorporating these rulings will be entered.
DONE this 29th day of March, 2013.
ABDUL K. KALLON
UNITED STATES DISTRICT JUDGE
The magistrate judge’s recommendation in Doc. 43 is ambiguous in that it can be read as
suggesting the Counts One, Two, Three, Four, and Seven can proceed against defendants Lunsford
and Jenkins, as well as against Infinity. It is clear, however, that these counts allege various forms
of employment discrimination which can be asserted only against the “employer,” Infinity. Reading
the recommendation with this in mind, the ambiguity is eliminated because the magistrate judge
recommended that these counts proceed “insofar as Infinity Insurance Company is the named
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