Hoelscher et al v. Miller's First Insurance Co. et al
ORDER. State and Non-State Defendants' motions to dismiss, [Docs. ## 9, 38], are GRANTED, and Non-State Defendants' motion for sanctions, [Doc. # 40], is DENIED. Due to the disposition of these motions, Plaintiffs' motion for a protective order, [Doc. # 49], is DENIED as moot. This case is hereby DISMISSED, with prejudice. Signed on 6/23/14 by District Judge Nanette K. Laughrey. (Matthes, Renea)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
MICHAEL A. HOELSCHER, et al.,
MILLER’S FIRST INSURANCE CO., et
Defendants Missouri Department of Insurance, Financial Institutions, and
Professional Registration (“the Department”), John Huff, Matt Barton, and Carol Harden,
in their individual and official capacities as officers of the Department (collectively,
“State Defendants”), move to dismiss the Complaint of pro se Plaintiffs Michael
Hoelscher, Theresa Hoelscher, and C.M. Hoelscher, a minor. [Doc. # 9]. Also pending
are Defendants George Milnor, Miller’s Classified Insurance Company, Miller’s First
Insurance Company, Mike Haymart, G & C Adjusting Services, LLC, Wayne
Bernskoetter, Wayne Bernskoetter Construction, Victor Sapp, Sapp Home Pro, Inc., Jeff
Sapp, Jude Markway, and Jude Markway Construction (collectively, “Non-State
Defendants”)’s motion to dismiss, [Doc. # 38], and motion for sanctions, [Doc. # 40], as
well as Plaintiffs’ motion for a protective order, [Doc. # 49]. For the reasons set forth
below, State and Non-State Defendants’ motions to dismiss are GRANTED and Non1
State Defendants’ motion for sanctions is DENIED. Due to the disposition of these
motions, Plaintiffs’ motion for a protective order is DENIED as moot, and this case is
DISMISSED, with prejudice.
This case is another in a series of lawsuits initiated by Plaintiffs concerning the
repair of Plaintiffs’ residence following a fire that occurred in 2002. On February 28,
2013, the most recent of these suits was dismissed without prejudice by this Court for
lack of subject matter jurisdiction, failure to comply with the pleading requirements of
Rule 8(a), and because it was apparent from the face of the pleadings that Plaintiffs’
claims were barred by the applicable statutes of limitations. Plaintiffs appealed this
decision, and the Court of Appeals affirmed on the ground that Plaintiffs’ federal claims
were time-barred and this Court did not abuse its discretion in declining to exercise
supplemental jurisdiction over Plaintiffs’ state law claims. Hoelscher v. Huff, 547 F.
App’x 805, 806 (8th Cir. 2013).
The substantive allegations in the present iteration of Plaintiffs’ Complaint are the
same as before and the parties, with the exception of the addition of Matt Barton, are
identical. The Complaint is also, once again, nearly indecipherable. As best as can be
determined from this document, Plaintiffs’ claims generally concern the allegedly
deficient repair work performed on their home following the fire in 2002, as well as their
insurer’s alleged failure to pay sums due under the insurance policy in effect at that time.
In addition, at some point in 2003, Plaintiffs pursued administrative grievances with the
Department against the various insurance companies and contractors involved in
repairing their home. According to the Complaint, Plaintiffs also attempted to reinitiate
this administrative adjudication process in June of 2013. The State Defendants are
named as a result of Plaintiffs’ apparent dissatisfaction with the results of these
Motions to Dismiss
With the exception of Plaintiffs’ claim under the Americans with Disabilities Act
of 1990 (“ADA”), which is discussed below, Plaintiffs’ claims are premised on the same
federal statutory and constitutional provisions as those dismissed by this Court in 2013.
As a result, State Defendants argue that these claims should be dismissed because it has
previously been determined that Plaintiffs’ federal claims are time-barred and the
doctrine of issue preclusion prevents Plaintiffs from relitigating this question.
[I]ssue preclusion has five elements: (1) the party sought to be precluded in
the second suit must have been a party, or in privity with a party, to the
original lawsuit; (2) the issue sought to be precluded must be the same as
the issue involved in the prior action; (3) the issue sought to be precluded
must have been actually litigated in the prior action; (4) the issue sought to
be precluded must have been determined by a valid and final judgment; and
(5) the determination in the prior action must have been essential to the
Sandy Lake Band of Miss. Chippewa v. United States, 714 F.3d 1098, 1102-03 (8th Cir.
2013). This doctrine “preclud[es] parties from contesting matters that they have had a
full and fair opportunity to litigate,” in order to “protect against the expense and vexation
attending multiple lawsuits, conserv[e] judicial resources, and foste[r] reliance on judicial
action by minimizing the possibility of inconsistent decisions.” Taylor v. Sturgell, 553
U.S. 880, 892 (2008) (quotations omitted).
To the extent that Plaintiffs’ Complaint reasserts those federal claims that were
previously dismissed as time-barred, these five elements are plainly satisfied here.
Plaintiffs had a full and fair opportunity to litigate whether the relevant statutes of
limitations barred their federal claims and the issue was resolved by a valid and final
judgment against them. Plaintiffs argue that the addition of Matt Barton, the Director of
the Department’s Division of Consumer Affairs, and the fact that certain individual
defendants are sued in their official, rather than individual, capacities, or vice versa,
prevents the application of this doctrine. However, the addition of this defendant, as well
as whether the defendants are sued in their individual or official capacities, has no effect
on the limitations period as applied to Plaintiffs’ claims. The first element of issue
preclusion, and the only element that concerns the parties to either suit, is satisfied
because Plaintiffs, the parties to be precluded, were all parties to the prior suit.
Plaintiffs also argue, for the first time, that their claims are not time-barred
because the alleged wrongs at issue are continuous and create a fresh injury from day to
day, which can, in limited circumstances, toll the limitations period. Alternatively,
Plaintiffs argue that their claims are premised on fraud and, as such, the statute of
limitations does not begin to run until their injuries were sustained and capable of
However, almost all of the allegations on which Plaintiffs rely for their continuing
tort and fraud arguments were known to them, and in fact asserted in their pleading, when
the statute of limitations issue was previously litigated. Because this matter was resolved
by a valid and final judgment, Plaintiffs are barred from raising new arguments that could
have been made in the earlier proceeding in an attempt to reach a different result. See,
e.g., Reynaga v. Sun Studs, Inc., 97 F. App’x 729, 730 (9th Cir. 2004) (“Litigants may not
have a second opportunity to prove a fact or make an argument relating to an issue
previously decided.”); Yamaha Corp. of Am. v. United States, 961 F.2d 245, 254 (D.C.
Cir. 1992) (“[O]nce an issue is raised and determined, it is the entire issue that is
precluded, not just the particular arguments raised in support of it in the first case.”), cert.
denied, 506 U.S. 1078 (1993); Sec. Indus. Ass’n v. Bd. of Governors of Fed. Reserve Sys.,
900 F.2d 360, 364 (D.C. Cir. 1990) (“[P]reclusion because of a prior adjudication results
from the resolution of a question in issue, not from the litigation of specific arguments
directed to the issue.”); Restatement (Second) of Judgments § 27 (1982), cmt. c (“[I]f the
[precluded] issue was one of law, new arguments may not be presented to obtain a
different determination of that issue.”).
The only new allegations asserted by Plaintiffs, specifically the resubmission of
their administrative claims in June of 2013, provide no basis for tolling the limitations
period. Plaintiffs present no authority or persuasive argument that suggests the
resubmission of an administrative grievance based on the same alleged harm somehow
restarts the limitations period. Courts regularly reject such obvious, procedural ploys
aimed at tolling a statute of limitations. See, e.g., Biby v. Kansas City Life Ins. Co., 629
F.2d 1289, 1294 (8th Cir. 1980). As previously determined, and as Plaintiffs’ concede in
their brief in opposition to State Defendants’ motion to dismiss, Plaintiffs’ alleged
injuries were known to them no later than December of 2004. Hoelscher, 547 F. App’x
at 806; [Doc. # 45 at 36] (“Granted, the allegations make clear in Hoelschers’ II asserted
claims and damages were known to them in 2004 . . . .”). Plaintiffs’ resubmission of their
administrative claims in June of 2013 provides no cause to toll the long-expired
limitations period in this case.
Finally, Plaintiffs maintain that issue preclusion does not apply because the
present Complaint is brought under a different theory, specifically the ADA. Although
the basis for Plaintiffs’ invocation of this statute is not entirely clear, even assuming
Plaintiffs’ allegations could be construed as stating a claim under this statute, the claim
would be time-barred. “When a federal law has no statute of limitations, courts may
borrow the most closely analogous state statute of limitations, unless doing so would
frustrate the policy embodied in the federal law.” Gaona v. Town & Country Credit, 324
F.3d 1050, 1054 (8th Cir. 2003). Applying this principle, the Eighth Circuit has held that
the relevant state statute of limitations for personal injury actions applies to claims arising
under the ADA. Id. at 1055-56. Under Missouri law, the statute of limitations on claims
for personal injury is five years, Mo. Rev. Stat. § 516.120, and Plaintiffs’ ADA claims
are, accordingly, subject to the same limitations period. See Gaylor v. GS Brentwood
LLC, No. 4:11-CV-506 CAS, 2011 WL 5079588, at *4-5 (E.D. Mo. Oct. 25, 2011).
As has previously been determined, Plaintiffs were aware of their alleged injuries,
which even in the earlier suit included extensive claims regarding mental impairments
and disability-based discrimination that largely mirror their present allegations, see, e.g.,
[Case No. 2:12-CV-04291-NKL, Docs. ## 1-2 at 1, 10, 12-13, 16; 1-5 at 4, 7-8], no later
than December of 2004. [Case No. 2:12-CV-04291-NKL, Doc. # 99 at 7]; Hoelscher,
547 F. App’x at 806. Thus, Plaintiffs’ ADA claims, like Plaintiffs’ other federal claims,
Consequently, there is no federal question remaining in this case. The Court
further declines to exercise supplemental jurisdiction over Plaintiffs’ remaining state law
claims, see 28 U.S.C. § 1367(c)(3), and it is undisputed that complete diversity does not
exist. Accordingly, this case, in its entirety, must be dismissed.
Motion for Sanctions
Non-State Defendants move for sanctions against Plaintiffs in the form of a
permanent injunction that would preclude Plaintiffs from filing in any U.S. District Court
any new complaint, pleading, or motion regarding the subject matter of the 2002 fire,
resulting insurance claims, and related actions of Non-State Defendants. It is wellestablished that courts may prospectively restrict an abusive litigant’s right to file
pleadings without prepayment of fees and costs in order to ensure that resources are
allocated in a manner that best serves the interests of justice. See, e.g., In re McDonald,
489 U.S. 180, 184 (1989); Hurt v. Soc. Sec. Admin., 544 F.3d 308, 310 (D.C. Cir. 2008).
In at least one instance, a judge in the Western District of Missouri has issued a
permanent injunction against all filings in a manner analogous to that urged by Non-State
Defendants in this case. Pankey v. Webster, 816 F. Supp. 553, 563 (W.D. Mo. 1993)
(permanently enjoining the plaintiff from filing any complaint, pleading, or motion on
behalf of a particular third-party). At the same time, however, courts have recognized
that a blanket filing restriction is “an extreme measure,” Pankey, 816 F. Supp. at 563, that
should be resorted to only in cases involving “an especially abusive pattern” of frivolous
or malicious filings, Hurt, 544 F.3d at 309. See also Chambers v. NASCO, Inc., 501 U.S.
32, 43 (ruling that a court’s inherent powers “ought to be exercised with great caution”).
At this time, Plaintiffs’ conduct has not yet proven so egregious as to justify the
imposition of a permanent injunction. Although Plaintiffs’ current Complaint is subject
to dismissal for reasons similar to the first, the fact that the earlier dismissal was without
prejudice may have inadvertently encouraged this refilling. In particular, taking into
account Plaintiffs’ pro se status, it is not entirely unreasonable for Plaintiffs to have
believed that their continuing tort argument might constitute a new theory that would
prevent the application of issue preclusion. The relevant precedent, cited by both parties,
holds that, with respect to subject matter jurisdiction, issue preclusion will not bar “the
same claim under a different theory and jurisdictional basis.” Kulinski v. Medtronic BioMedicus, Inc., 112 F.3d 368, 373 (8th Cir. 1997). While those more familiar with the law
may understand that the term theory, as used here, refers to a theory of relief, as opposed
to merely a different legal argument that could have been asserted in the prior suit, this
distinction may not be as readily apparent to those with less experience or training.
Considering the particular circumstances of this case, the Court cannot conclude that the
extreme measure of a permanent, prospective filing restriction is necessary or appropriate
at this time.
However, there does appear to be a pattern of frivolous filings elsewhere, possibly
with the intent to harass. If this pattern continues, the Court may revisit the possibility of
a permanent injunction, as well as the full complement of sanctions within the Court’s
inherent powers, see Chambers, 501 U.S. 45-46, in order to ensure an effective allocation
of limited judicial resources and protect the defendants from abusive litigation. At a
minimum, it will be an appropriate consideration in any future attempt in this Court to
obtain in forma pauperis status.
For the reasons set forth above, State and Non-State Defendants’ motions to
dismiss, [Docs. ## 9, 38], are GRANTED, and Non-State Defendants’ motion for
sanctions, [Doc. # 40], is DENIED. Due to the disposition of these motions, Plaintiffs’
motion for a protective order, [Doc. # 49], is DENIED as moot. This case is hereby
DISMISSED, with prejudice.
s/ NANETTE K. LAUGHREY
NANETTE K. LAUGHREY
United States District Judge
Dated: June 23, 2014
Jefferson City, Missouri
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