Cohen v. Navarro
Filing
15
MEMORANDUM OPINION. Signed by Judge Richard G. Andrews on 3/19/2019. (nms)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
JEFFREY COHEN ,
Plaintiff,
: Civ. No. 17-1352-RGA
V.
JEFFREY MICELI and JOHN TINSLEY, :
Defendants.
Jeffrey Cohen , FCI Hazelton , Bruceton Mills, West Virginia . Pro Se Plaintiff.
MEMORANDUM OPINION
March (7., 2019
Wilmington, Delaware
Plaintiff Jeffrey Cohen , an inmate at FCI Hazelton in Bruceton Mills, West
Virginia , filed this action as a combined Rule 60(d) independent action for relief from
judgment based on fraud on the court and complaint for damages and
declaratory/injunctive relief raising 42 U.S.C. § 1983 claims and supplemental state law
claims . (D.I. 1). Plaintiff appears prose and has been granted leave to proceed in
forma pauperis. (D .I. 6) . The Court dismissed the original complaint and gave
Plaintiff leave to amend. (D .I. 10, 11). An Amended Complaint was filed on May 29 ,
2018 . (D.I. 13). The Court reviews and screens the Amended Complaint pursuant to
28 U.S.C. § 1915(e)(2)(B) and§ 1915A(b).
I.
BACKGROUND
Plaintiff alleges violations of the United States Constitution pursuant to 42 U.S.C.
§ 1983, and he raises state law claims . The Amended Complaint states jurisdiction is
proper pursuant to 28 U.S.C. § 1332 (diversity of citizenship) and 28 U.S.C. § 1343 (civil
rights). 1 The original complaint named Delaware's Insurance Commissioner as the
sole defendant. The Amended Complaint names two different defendants, Jeffrey
Miceli and John Tinsley. Count I alleges violations of Plaintiff's right to procedural due
,m 58-63) ; Count II alleges conspiracy (id. at ,m 64-65) ; Count Ill
alleges unjust enrichment (id. at ,m 66-67) ; and Count IV alleges negligence/gross
process (D.I. 13 at
negligence (id. at ,r,r 68-74).
1
At a minimum , there is federal question jurisdiction over Count I. See 28 U.S.C.
§ 1331.
1
Plaintiff is the founder of Indemnity Insurance Corporation , RRG ("IIC").2 (D .I.
13 at ,I 3). He owns 39.6 percent of IIC personally, and the remaining interest is
owned through Plaintiffs 100 percent ownership interest of RB Entertainment Ventures ,
LLC ("RBE") which owned 99 percent of IIC. (D .I. 13 at ,I 15 and n.2) . IIC is a risk
retention group domiciled in Delaware . Cohen v. Stewart, 2014 WL 2574550 , at *1 (D.
Md . June 5, 2014) . IDG Companies , LLC ("IDG") is an affiliated company owned by
Plaintiff. Id.
Miceli is described as a private practice attorney who is "special counsel to and
supervising counsel for the Delaware Insurance Commissioner. " (D .I. 13 at ,I 4) . He
is also described as "a representative of the IIC Receivership who maintains
considerable authority on behalf of the State of Delaware ," who "operates as the
Attorney-in-fact and Attorney-at-law on behalf of IIC and the Receivership ." (Id.) .
Tinsley is described as the "owner and President of several private entities that
provide regulatory services to various state insurance departments. " He and his firms
are appointed receivers of IIC. "He maintains considerable authority on behalf of the
State of Delaware ," and he has been labeled the "Shadow Commissioner" of Delaware.
(Id. at ,I 5) . The Court notes that the Delaware Insurance Commissioner describes
2
Plaintiff was indicted and charged with fifteen counts of wire fraud , five counts of
aggravated identity theft, two counts of money laundering , five counts of making false
statements to an insurance regulator, and four counts of obstructing justice. United
States v. Cohen , 2015 WL 4641072 (D . Md . Aug , 3, 2015) . He pied guilty on June 5,
2015 , to wire fraud , aggravated identity theft, making false statements to an insurance
regulator, and obstructing justice. Id. After he was sentenced on December 10, 2015 ,
to a term of 240 months imprisonment, Plaintiff appealed . See United States v. Cohen ,
Crim. No. 14-310-GLR (D . Md .) (D .I. 590). The United States Court of Appeals for the
Fourth Circuit dismissed all contentions of error, except for a Sixth Amendment issue
and an Apprendi issue, and affirmed the district court's ruling on both issues. See
United States v. Cohen , 888 F.3d 667 (4th Cir. 2018) . He has filed a§ 2255 petition in
the crim inal case. See Cohen , Crim. No. 14-310-GLR at D.I. 685.
2
Tinsley as Special Deputy - Examinations for the Delaware Department of Insurance.
See https://Captive.delaware.gov/ (last visited March 18, 2019). It is not clear how
current the website is , as it refers to the former Insurance Commissioner.
"After uncovering evidence that [Plaintiff] had comm itted fraud in his capacity as
[IIC's] CEO and that [IIC] might be insolvent, the Delaware Insurance Commissioner[]
petitioned the Court of Chancery for a seizure order." Cohen v. State ex. rel Stewart,
89 A.3d 65 , 68 (Del. 2014) . On May 30 , 2013 , the Court of Chancery entered a
confidential seizure and injunction order that vested the Commissioner with title to all I IC
property. Cohen v. Stewart, 2014 WL 2574550 , at *1 (D . Md . June 5, 2014) . On
November 6, 2013 , the Commissioner filed a petition for the entry of a rehabilitation and
injunction order with the consent of IIC's board . Cohen v. Stewart, 2014 WL 2574550 ,
at *1. On November 7, 2013 , the Court of Chancery entered the order, placed IIC into
receivership , and appointed the Commissioner as the receiver. 3 Id.
3
Plaintiff has filed numerous cases related to the receivership action . On March
4, 2014, Plaintiff filed suit in the United States District Court for the District of Maryland
seeking injunctive relief to recover funds he alleged were unlawfully and improperly
seized as part of the IIC receivership because they were outside the receivership's
scope. The motion was denied on June 5, 2014 for failure to show the likelihood of
success on the merits due to want of jurisdiction and on abstention grounds. Cohen v.
Stewart, 2014 WL 2574550 . On March 13, 2014 , Plaintiff commenced a second action
in the United States District Court for the District of Maryland raising claims related to
the Delaware receivership . Cohen v. INS Consultants, Inc. , 2015 WL 847473 (D . Md .
Feb . 25 , 2015) . The matter was dismissed on February 25 , 2015 for want of
jurisdiction. Id. at *1. On February 13, 2015, Plaintiff commenced a third action in the
United States District Court for the District of Maryland raising claims related to the
Delaware receivership . The case was dismissed on April 2, 2015 . Cohen v. Bealuk,
No. 15-470 (D . Md .) (D .I. 1), aff'd, 624 F. App'x 84 (4 th Cir. 2015) . On October 3, 2016,
Plaintiff filed an action in this Court raising claims under 42 U.S.C. § 1983 as well as
supplemental claims all related to C.A. No. 8601 . Cohen v. Birrane , Civ. No. 16-893RGA (D . Del.) . The case was dismissed on June 23 , 2017. Cohen v. Birrane , 2017 WL
2709566 (D. Del. June 23 , 2017) . On October 31 , 2016 , Plaintiff filed a purported
independent action under Rule 60(d) in the Eastern District of Pennsylvan ia, Cohen v.
Tinsley, Misc. No. 16-210-EGS (E.D. Pa .), again raising claims related to C.A. No.
3
Plaintiff appealed to the Delaware Supreme Court challenging multiple orders.
Cohen v. State ex. rel Stewart, 89 A.3d at 68 . "Central to [the] appeal [was] whether
the delinquency proceedings [for IIC] violated the constitutional due process rights of[]
Jeffrey B. Cohen. " Id. Plaintiff had also filed a motion for emergency relief in the
Court of Chancery on December 31 , 2013. See C.A. No. 8601 at BL-549 .4 On April
9, 2014, the Delaware Supreme Court affirmed the Court of Chancery's rulings , holding
that Plaintiff was given notice of the allegations against him and a fair opportunity to
present his side of the dispute, and concluded there were no violations of his right to
due process . Cohen v. State ex. rel Stewart, 89 A.3d at 68-69 .
In the meantime , on July 26 , 2013 and January 16, 2014 , verified petitions for
liquidation were filed in C.A. No. 8601. See In the Matter of the Rehabilitation of
Indemnity Ins. Corp., RRG , 2014 WL 1154057, at *3, *8 (Del. Ch . Mar. 21 , 2014) . On
April 10, 2014 , the day after the Delaware Supreme Court ruled on the Plaintiff's due
process claims , the Court of Chancery entered the liquidation order. Cohen v. Stewart,
2014 WL 2574550 , at *1. Plaintiff appealed the order, but it was dismissed after he
failed to prosecute the appeal. See Cohen v. State, 100 A.3d 1020, 2014 WL 4384796
(Del. 2014) (table) .
The Amended Complaint alleges that Defendants , acting under color of state law,
orchestrated the liqu idation of IIC. The IIC Delaware receivership action is currently
pending in the Court of Chancery of the State of Delaware , In the Matter of the
8601. The miscellaneous matter was dismissed on April 5, 2017 . Cohen v. Tinsley,
2017 WL 1333370 (E.D . Pa. Apr. 5, 2017) .
4
"BL-549" is how Bloomberg Law designates docket items on court dockets.
4
Liquidation of Indemnity Insurance Corporation, RRG, C.A. No. 8601 . Plaintiff is not a
party to C.A. No. 8601 , although he has sought to intervene in the matter. (D .I. 13 at ,i
15). The motion to intervene was recently denied . In the Matter of the Liquidation of
Indemnity Ins. Corp., RRG, 2018 WL 6431747 (Del. Ch . Dec. 6, 2018) .
Plaintiff alleges Defendants, acting under color of law, violated his right to a full
and fair hearing. (D.I. 13 at IV.C.) . On August 13, 2013 , RB Entertainment Ventures ,
or RBE , moved to intervene in C.A. No. 8601 and stated that IIC was not insolvent.
(Id. at ,i 16). One week later, the Court of Chancery held a hearing on the motion to
intervene. (Id. at ,i 17). During the hearing , the Court of Chancery stated that a future
hearing would litigate the solvency of IIC. (/d.). The Court of Chancery den ied the
motion to intervene and "confirmed that RBE did 'not contest the substance of
particularized and verified allegations ."' (Id. at ,i 18). Plaintiff alleges the Court's
ruling left him with no ability to conduct discovery or assert evidence to challenge the
averments of the defendants. (Id.) . He argues Defendants convinced the Court of
Chancery that evidentiary hearings were not necessary, that Miceli argued to convince
the Court of Chancery to block all discovery from Plaintiff, and Defendants' arguments
caused the Court of Chancery to rule that he would not have an opportunity to present
argument or evidence in C.A. No. 8601 . (Id. at ,i,i 19-21 ).
Plaintiff alleges that when the Court of Chancery ruled that IIC was insolvent and
granted the petition for liquidation , the Court evaporated his property interests without
permitting him to challenge the averments related to the financial condition of IIC or his
other companies. (Id. at ,i 22) . Plaintiff filed claims against the receivership as a
creditor and main stakeholder. (Id. at ,I 23) . He alleges that unnamed counsel for the
5
Receiver asserted on October 18, 2017, that Plaintiff lacked standing to challenge the
Receiver's assertions and had no rights to assert against the estate. (Id.) .
The Amended Complaint alleges that Defendants , acting under co lor of state law,
orchestrated the liquidation of IIC for financial gain . (Id. at ,i IV.A. , ,i 8) . Plaintiff
alleges Defendants have paid themselves almost $10 million in fees from the cash
reserves of his companies , including IIC. (Id. at ,i 8) . The Amended Complaint
alleges Tinsley submitted testimony in C.A. No. 8601 to the Court of Chancery that IIC
was operating in a "Hazardous Financial Condition ," and "Miceli alleged the same
averments through testimony." (Id. at ,i,i 9, 11 ). Plaintiff alleges that as a result, the
Court of Chancery seized and liquidated the assets of most of Plaintiff's companies
including IIC and IDG. (Id. at ,i 12.) The Amended Complaint alleges that
Defendants' averments were false and intentionally misrepresented the facts known to
them. (Id. at IV.B., ,i 13).
Plaintiff alleges that Defendants orchestrated a plan to fictitiously overvalue IIC's
claim reserves to thwart an opportunity to successfully save the company. (Id. at
IV.D.). Plaintiff alleges that prior to the receivership , IIC's claims were managed
successfully, and when IIC was taken over by Defendants for the period ending June
30 , 2013 , "its actuary reported that $20 .3 million was a 'reasonable estimate for the
Company's unpaid policyholder claim obligations ."' (Id. at ,i 26) . He alleges that
following the $20 .3 million opinion , adversarial counsel stated that "IIC was properly
reserved at $20 million ." (Id. at ,i 27) . Plaintiff alleges that prior to his "banishment,"
he had entertained an offer dated June 20 , 2013 (D .I. 13 at 33) to sell 49 percent of IIC
and IDG for $25 million , but after his banishment, Defendants controlled the
negotiations and successfully enjoined Plaintiff from communication with the suitor.
6
(Id. at ,I 28) . Plaintiff alleges Defendants knew that the deal would resolve all
regulatory concerns and terminate lucrative income streams to them , so they
manufactured evidence to create a concern for the suitor regarding IIC claim reserves .
(Id. at ,I,I 29-35). Plaintiff alleges Defendants used the evidence to adjust the figures
and to create a new actuarial analysis which they submitted to the Court of Chancery as
a reason that IIC was insolvent. (Id. at ,I,I 35-36) . Plaintiff alleges that the new
actuarial report resulted in the suitor's withdrawal of its acquisition offer. (Id. at ,I 37).
Plaintiff alleges Defendants orchestrated an unlawful reason to support the
liquidation of IIC and to avoid any evidentiary hearings into their assertions. (Id. at ,I
IV.E.). Plaintiff alleges, "Defendants coerced [IIC's two] remaining board members to
consent to liquidation because the [suitor] deal was quashed , [and used] the
authorization [to] submit to the [Court of Chancery] that liquidation was proper and
statutorily called for. (Id. at ,I 38) . He alleges that Miceli testified in the Court of
Chancery that "consent is to be relied upon ," and indicated to the Court that a hearing
was not necessary, based upon the consent. (Id. at ,I,I 42-43).
Plaintiff alleges that post-deprivation relief is unavailable and inadequate. (Id. at
IV.F.). Plaintiff filed appeals in the Delaware Supreme Court, and it affirmed the Court
of Chancery's finding and rulings . (Id. at ,I 45) . Plaintiff alleges that the "Court did not
take up the issue regarding the violation of [his] due process rights regarding the
submission of false information by defendants [and] did [not] make any findings
regarding his due process rights to a full and fair hearing or the deprivation of certain
property interests caused by the conduct of the defendants." (Id. at ,I 46). He alleges
that another appeal he filed was dismissed following his failure to respond to a show
cause notice that he never received because he was incarcerated . (Id. at ,I 47). He
7
alleges that none of the numerous actions filed by him have been decided on the merits.
(Id. at ,I 48).
Plaintiff alleges there are continuing violations and specifically refers to a Ju ly 14,
2017 letter and an October 2, 2017 certification , when Miceli certified that IIC was
insolvent, lacked valid assets , and was underreserved . (Id. at ,I,I 51 , 54 , 56) . Plaintiff
alleges the false information again prevented him from procuring a full and fair hearing
in the Court of Chancery. (Id. at ,I 54) . Plaintiff also alleges that Miceli provided
testimony in the form of sworn responses to discovery on September 5, 2017 and
October 24, 2017 , regarding IIC's insolvency, lack of assets, and underreserving of
claims. (Id. at ,I,I 55 , 57) .
Plaintiff seeks declaratory and injunctive relief, as well as compensatory
damages and punitive damages. The injunctive relief sought includes "enjoin[ing]
further utilization of the false information by Defendants." (D . I. 13 at 17).
II.
LEGAL STANDARDS
A federal court may properly dismiss an action sua sponte under the screen ing
provisions of 28 U.S.C. § 1915(e)(2)(B) and§ 1915A(b) if "the action is frivolous or
malicious, fails to state a claim upon which relief may be granted , or seeks monetary
relief from a defendant who is immune from such relief." Ba// v. Famiglio , 726 F.3d
448 , 452 (3d Cir. 2013) ; see also 28 U.S.C. § 1915(e)(2) (in forma pauperis actions) ; 28
U.S.C. § 1915A (actions in which prisoner seeks redress from a governmental
defendant). The Court must accept all factual allegations in a complaint as true and
take them in the light most favorable to a pro se plaintiff. Phillips v. County of
Allegheny, 515 F.3d 224 , 229 (3d Cir. 2008) ; Erickson v. Pardus, 551 U.S. 89 , 93
(2007) . Because Plaintiff proceeds prose, his pleading is liberally construed and his
8
complaint, "however inartfully pleaded , must be held to less stringent standards than
formal pleadings drafted by lawyers ." Erickson v. Pardus , 551 U.S. at 94.
An action is frivolous if it "lacks an arguable basis either in law or in fact. "
Neitzke v. Williams , 490 U.S. 319 , 325 (1989) . Under 28 U.S.C. § 1915(e)(2)(B)(i) and
§ 1915A(b)(1 ), a court may dismiss a complaint as frivolous if it is "based on an
indisputably meritless legal theory" or a "clearly baseless" or "fantastic or delusional"
factual scenario . Neitzke , 490 U.S. at 327-28 ; Wilson v. Rackmi/1, 878 F.2d 772 , 774
(3d Cir. 1989).
The legal standard for dismissing a complaint for failure to state a claim pursuant
to§ 1915(e)(2)(B)(ii) and § 1915A(b)(1) is identical to the legal standard used when
ruling on Rule 12(b)(6) motions . Tourscher v. McCullough , 184 F.3d 236 , 240 (3d Cir.
1999). However, before dismissing a complaint or claims for failure to state a claim
upon which relief may be granted pursuant to the screening provisions of 28 U.S.C . §§
1915 and 1915A, the Court must grant Plaintiff leave to amend his complaint unless
amendment would be inequitable or futile . See Grayson v. Mayview State Hosp. , 293
F.3d 103, 114 (3d Cir. 2002).
Under Rule 12(b)(6), a motion to dismiss may be granted only if, accepting the
well-pleaded allegations in the complaint as true and viewing them in the light most
favorable to the plaintiff, a court concludes that those allegations "could not raise a
claim of entitlement to relief." Bell At/. Corp. v. Twombly, 550 U.S. 544 , 558 (2007) .
"Though 'detailed factual allegations' are not required , a complaint must do more than
simply provide 'labels and conclusions' or 'a formulaic recitation of the elements of a
9
cause of action. "' Davis v. Abington Mem1 Hosp. , 765 F.3d 236 , 241 (3d Cir. 2014)
(quoting Twombly, 550 U.S . at 555) . In addition , a plaintiff must plead facts sufficient
to show that a claim has substantive plausibility. See Johnson v. City of Shelby,
_U.S._, 135 S.Ct. 346 , 347 (2014). A complaint may not be dismissed , however, for
imperfect statements of the legal theory supporting the claim asserted . See id. at 346 .
When reviewing the sufficiency of a complaint, a court should follow a three-step
process: (1) consider the elements necessary to state a claim; (2) identify allegations
that are merely conclusions and therefore are not well-pleaded factual allegations ; and
(3) accept any well-pleaded factual allegations as true and determine whether they
plausibly state a claim . See Connelly v. Lane Constr. Corp., 809 F.3d 780 , 787 (3d
Cir. 2016) ; Williams v. BASF Catalysts LLC, 765 F.3d 306 , 315 (3d Cir. 2014).
Deciding whether a claim is plausible will be a "context-specific task that requires the
reviewing court to draw on its judicial experience and common sense ." Ashcroft v.
Iqbal, 556 U.S. 662 , 679 (2009).
Ill.
DISCUSSION
A.
Abstention
The Amended Complaint states , "Nothing herein asks the Court to review any
state court decisions. The issues to be decided do not conflict with the Receivership"
of IIC pending in C.A. No. 8601 . (D .I. 13 at ,i 2) . "Success in this Court still requires
the advancement of a judgment in other courts to possibly affect the Receivership ."
(/d.) . In the May 8, 2018 Memorandum Opinion and Order, the Court dismissed for
want of jurisdiction, and, in the alternative , abstained from Count I under the Younger
abstention doctrine. (D.I. 11).
10
Under the Younger abstention doctrine, a federal district court must abstain from
hearing a federal case which interferes with certain state proceedings. See Younger v.
Harris, 401 U.S. 37 (1971 ). The Court may ra ise the issue of Younger abstention sua
sponte . O'Neill v. City of Philadelphia , 32 F.3d 785 , 786 n.1 (3d Cir. 1994). Under
Younger, federal courts are prevented from enjoining pending state proceedings absent
extraordinary circumstances.5 Middlesex Cty. Ethics Comm. v. Garden State Bar
Assn , 457 U.S. 423 , 437 (1982). Abstention is appropriate only when : (1) there are
ongoing state proceedings that are judicial in nature; (2) the state proceedings implicate
important state interests; and (3) the state proceedings provide an adequate opportunity
to raise the federal claims. Lazaridis v. Wehmer, 591 F.3d 666 , 670 (3d Cir. 2010) .
The doctrine applies to proceedings until all appellate remedies have been exhausted ,
unless the matter falls within one of the Youngerexceptions .6 Huffman v. Pursue Ltd. ,
420 U.S. 592 , 608 (1975) .
The Court takes judicial notice that the IIC Receivership proceedings remain
pending in the Court of Chancery. And Plaintiff continues to participate in them , as
evidenced by, for example , BL-1203 , filed March 7, 2019 , entitled , "Pro Se Jeffrey
5
The abstention doctrine as defined in Younger v. Harris , 401 U.S. 37 (1971 ),
provides that federal courts are not to interfere with pending state criminal proceed ings.
The Younger doctrine has been extended to civil cases and state administrative
proceedings . Middlesex Cty. Ethics Comm. v. Garden State Bar Assn , 457 U.S. 423
(1982) ; Huffman v. Pursue Ltd., 420 U.S. 592 (1975) .
6
Exceptions to the Younger doctrine exist where irreparable injury is "both great
and immediate ," Younger, 401 U.S. at 46 , where the state law is "flagrantly and patently
violative of express constitutional prohibitions ," id. at 53 , or where there is a showing of
"'" bad faith , harassment, or .. . other unusual circumstances that would call for
equitable relief. " Id. at 54 .
11
Cohen's First Supplemental Complaint for Equitable Relief to the U.S. District Court of
Maryland. " The relief sought in the Amended Complaint includes injunctive relief that
appears to implicate the receivership proceedings . In particular, Plaintiff seeks to
"enjoin the further utilization of the false information ." It is within the Court of
Chancery's purview to resolve the issue of whether information provided to it is false .
Moreover, when viewing the allegations as a whole , it is evident that Plaintiff seeks
rulings from this Court as a means to intervene in the Court of Chancery proceedings or
to set aside earlier rulings .
As to the second element, Delaware has an important state interest in regulating
the insurance industry and protecting the interests of policyholders and creditors from
delinquent insurers.
As to the third element, the Court takes judicial notice of the numerous cases
filed by Plaintiff in conjunction with the allegations raised in the Complaint. See n.3,
supra . As noted in this Court's May 8, 2018 Memorandum Opinion and Order, Plaintiff
has had many opportunities to appeal decisions of the Court of Chancery or to file
independent actions in Delaware Courts. (See D.I. 10 at 13). Plaintiff's allegations
indicate that there are issues in the Receivership action that have yet to be resolved , as,
for example,_while his motion to intervene has been denied , the case is not over, and
the possibility of appeal is not exhausted .
The Amended Complaint alleges that in its rulings , Delaware Supreme Court did
not "take up the issue regarding the violation of [his] due process rights" regarding false
information, the right to a full and fair hearing , or the deprivation of property interests.
(D.I. 13 at ,i 46). To the contrary, in its April 9, 2014 decision , the Delaware Supreme
Court reviewed Plaintiff's claims of violations of his constitutional rights , noting that
12
Plaintiff "raises a multitude of due process claims ," and, after carefully examining the
record , concluded that Plaintiff was given notice of the allegations against him and a fair
opportunity to present his side of the dispute. Cohen , 89 A.3d at 86 .
Plaintiff has an adequate opportunity to raise his federal claims in state court.
Indeed , he has raised many claims in the Delaware Courts and , of course , he may also
raise claims brought under Delaware law in the Delaware State courts. See Lazaridis,
591 F.3d at 670 . Nothing indicates that the Delaware courts are inadequate for
addressing any of Plaintiff's claims. When Delaware Courts rule against Plaintiff, that
does not make them inadequate. For these reasons, abstention is appropriate .
8.
Statute of Limitations; Immunity
The Court previously dismissed Plaintiff's§ 1983 claims and negligence/gross
negligence claims as time-barred . Nothing has changed since the May 8, 2018 ruling .
(See D.I. 10, 11 ). In the Amended Complaint, Plaintiff added new claims of conspiracy
and unjust enrichment that allegedly occurred during the same time.
Count I raises due process claims under 42 U.S.C. § 1983 and Count IV raises
negligence and gross negligence claims . In Delaware , negligence and gross
negligence claims are subject to a two-year limitations period . See 10 Del. C. § 8119.
Similarly, for purposes of the statute of limitations, 42 U.S.C. §1983 claims are
characterized as personal injury actions and are also subject to a two year limitation
period . Wilson v. Garcia , 471 U.S. 261 , 275 (1983) ; see 10 Del. C. § 8119 ; Johnson v.
Cullen , 925 F. Supp . 244, 248 (D. Del. 1996).
Count II alleges conspiracy and Count Ill alleges unjust enrichment. The Court
construes the conspiracy claim as arising under Delaware law. To the extent Plaintiff
intended to raise a§ 1983 conspiracy claim, it has a two year limitation period as
13
discussed above . For civil conspiracy and unjust enrichment under Delaware law, the
limitation period is three years. See 10 Del. C. § 8106 ; Medtronic Vascula r, Inc. v.
Advanced Cardiovascular Sys., Inc., 2005 WL 46553 , at *4 (D . Del. Jan . 5, 2005), affd,
182 F. App'x 994 (2006) (unjust enrichment subject to three year limitation period) . In
Delaware, personal injury claims accrue at the time of the injury, Nardo v. Guido
DeAscanis & Sons, Inc., 254 A.2d 254 , 256 (Del. Super. 1969), while§ 1983 claims
accrue "when the plaintiff knew or should have known of the injury upon which its action
is based ," Sameric Corp. v. City of Philadelphia , 142 F.3d 582 , 599 (3d Cir. 1998).
The statute of limitations is an affirmative defense that generally must be raised
by the defendant, and it is waived if not properly raised . See Benak ex rel. Alliance
Premier Growth Fund v. Alliance Capital Mgmt. L.P. , 435 F.3d 396 , 400 n.14 (3d Cir.
2006) ; Fassett v. Delta Kappa Epsilon, 807 F .2d 1150, 1167 (3d Cir. 1986). "[W)here
the statute of limitations defense is obvious from the face of the complaint and no
development of the factual record is required to determine whether dismissal is
appropriate , sua sponte dismissal under 28 U.S.C. § 1915 is permissible ." Davis v.
Gauby, 408 F. App'x 524 , 526 (3d Cir. 2010) (quoting Fogle v. Pierson , 435 F.3d 1252,
1258 (10 th Cir. 2006)) .
As determined in the May 8, 2018 Memorandum Opinion , under the "mailbox
rule ," Plaintiff filed his original complaint on September 13, 2017. (See D.I. 10 at 18
n.11 ). All claims that accrued prior to September 13, 2014 are time-barred by two and
three year limitations period. These are the overwhelming majority of Plaintiff's claims .
The remaining allegations , which refer to events that occurred in 2017 (D .I. 13 at
54 , 55 , 56 , 57) as continuing violations , are discussed below.
14
,m 23 ,
The Amended Complaint refers to acts taken after September 13, 2014 . For
example , the Amended Complaint alleges that on October 18, 2017, counsel for the
receiver asserted that Plaintiff had no rights and/or standing to challenge the receiver's
assertions . (0 .1. 13 at ,I 23) . Paragraph 23 is not directed to any conduct of either
named defendant.
The Amended Complaint contains a "Continuing Violations" Section , Section V ,
presumably in an effort to avoid a determination that Plaintiff's claims are time-barred .
This section alleges in a conclusory manner that Defendants continue a persistent
pattern of affirmative conduct to deprive Plaintiff of his rights . Under a continuing
violation theory, if a defendant engages in a continual course of conduct and a plaintiff's
action is timely as to any act in that course of conduct, the plaintiff may be permitted to
litigate violations that are part of the course of conduct. Van Heest v. McNeilab, Inc.,
624 F. Supp. 891 , 896 (D . Del. 1985). A "continu ing violation is occasioned by
continual unlawful acts, not continual ill effects from an original violation. " See
Sandutch v. Muraski, 684 F.2d 252 , 254 (3d Cir. 1982).
Tinsley is not mentioned any of the paragraphs in the Continuing Violation
Section. Nor is Miceli mentioned in Paragraphs 52 and 53 . However, Paragraphs 54
through 57 allege that Miceli provided false information and false discovery responses
in a July 14, 2017 letter and an October 2, 2017 certification , when Miceli certified that
IIC was insolvent, lacked valid assets, and was underreserved , and on September 5,
2017 and October 24 , 2017 , when he provided "testimony" for discovery responses in
Indemnity Ins. Corp. RRG v. Cohen , C.A. No. 8985-CB (Del. Ch .).
Plaintiff alleges that that Miceli is a private attorney retained to represent the
Delaware Insurance Commissioner in his capacity as receiver for IIC. "It is well-settled
15
that an attorney does not act under color of state law simply by virtue of representing a
state actor as a client. . . ." Anderson v. Perhacs , 2013 WL 1336124, at *4 tyi./.D . Pa .
Mar. 29 , 2013) (citing Angelico v. Lehigh Valley Hosp ., 184 F.3d 268 , 277 (3d Cir.
1999). Maceli's representation , alone , does not render him a "person acting under
color of state law" under§ 1983. See Polk Cty. v. Dodson, 454 U.S. 312 , 325 (1981) (a
private attorney, even if appointed and paid for by the state, is not acting under color of
state law when performing his function as counsel)) ; Yoder v. MacMain Law Group,
LLC, 691 F. App 'x 59 (3d Cir. 2017) (rejecting plaintiff's argument that private attorney
who represented police department is subject to§ 1983 liability) . Hence, the§ 1983
claims raised against him are not cognizable .
Even if Miceli is considered a state actor, he has absolute immunity from his
actions, under both common law and § 1983 law, for his actions during the judicial
process , including immunity for statements made as a witness or as counsel. See
Briscoe v. LaHue, 460 U.S. 325 , 334-42 (1983) (discussing common law immunity for
participants, witnesses (even when a witness perjures himself) , and counsel , and
extending witness immunity to§ 1983 claims) ; see also Dollard v. Callery, 185 A.3d 694
(Del. Super. 2018) (discussing absolute immunity from civil suits) .7 Finally, while all the
claims against Tinsley are time-barred , he too is similarly immune from suit for the
averments he provided in the Court of Chancery action .
7
It also appears that the claims against Miceli are barred by Delaware's absolute
privilege doctrine. See AGC Networks, Inc. v. Relevante, Inc., 2015 WL 1517419, at *3
(D . Del. 2015) (quoting Barker v. Huang, 610 A.2d 1341 , 1349 (Del. 1992) ("to the
extent that such statements were made in the course of judicial proceedings , they are
privileged , regardless of the tort theory by which the plaintiff seeks to impose liability")) .
16
Plaintiff was given an opportunity to amend , yet failed to plead cognizable claims.
Upon careful review of the allegations and based upon its analysis, the Court finds
amendment futile . See Farnan v. Davis, 371 U.S. 178, 182 (1962) (The court may
curtail or deny a request for leave to amend where there is "repeated failure to cure
deficiencies by amendments previously allowed " and there would be "futility of
amendment. "). The Amended Complaint will be dismissed as legally frivolous pursuant
to 28 U.S.C. § 1915(e)(2)(B)(i) and § 1915A(b)(1 ).
IV.
CONCLUSION
For the above reasons , the Court will abstain under the Younger abstention
doctrine and , in the alternative , dismiss the Amended Complaint as legally frivolous
pursuant to 28 U.S.C. § 1915(e)(2)(B)(i) and§ 1915A(b)(1 ).
Plaintiff Cohen filed a similar complaint in No. 16-893-RGA, naming four or five
other individuals as Defendants. See Cohen v. Birrane, 2017 WL 2709566 , *3 (D.Del.
June 23 , 2017). The Court dismissed the federal claims as legally frivolous . (Id. at
*6). The claims were time-barred and subject to Younger abstention . The original
complaint in this case was dismissed for multiple reasons , including Younger abstention
and the statute of limitations. (D.I. 10 & 11). I nevertheless gave Plaintiff the
opportunity to amend . At this time , the Court concludes that permitting amendment
would be futile .
I also note that there is an element of harassment to Plaintiff's actions . This is
not the first time he has tried to sue Tinsley. On September 14, 2016 , Plaintiff sued
John Tinsley Regulatory Insurance Services , Inc., seeking damages and an injunction ,
in the District of Maryland . The case was dismissed on October 5, 2016 , for improper
venue . See Cohen v. John Tinsley Regulatory Ins. Servs. , Inc., 2016 WL 5818427
17
(D.Md . Oct. 5, 2016) . Thereafter, Plaintiff sued John Tinsley and Regulatory Insurance
Services, Inc., in the Eastern District of Pennsylvania . The case was dismissed on
April 5, 2017, on the basis, I think, that no claim was stated . See Cohen v. Tinsley,
2017 WL 1333370 (E.D .Pa. Apr. 5, 2017) . The Amended Complaint in this case was
filed on May 29 , 2018 . Nor is it the first time that he has brought a frivolous suit in this
District based on the same underlying transactions. I dismissed the claims in the
original complaint as being legally frivolous . (D.I. 10 at 15, 20 , 21-22 ; D.I. 11).
previously dismissed a different lawsuit against other defendants as frivolous. See
Cohen v. Birrane , 2017 WL 2709566 , *6 (D .Del. June 23 , 2017) .
An appropriate order will be entered.
18
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