Fanuzzi v. Bank of the Rockies et al
ORDER GRANTING 24 Defendants' Joint Motion to Dismiss for Lack of Jurisdiction; DENYING 30 Defendant Bank of the Rockies N.A.'s Motions for Entry of Inspection and for Writ of Assistance; and FINDING AS MOOT 15 Bank of the Rockies N.A.'s Motion for Judgment on the Pleadings and 32 Plaintiff's Motion to Dismiss. This case is DISMISSED in its entirety. Signed by Magistrate Carolyn S Ostby on 11/2/2011. (Hard copy mailed via USPS to Plaintiff Fanuzzi.) (POC, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
ORDER DISMISSING CASE
BANK OF THE ROCKIES N.A.,
JOEL E. GUTHALS, MICHAEL
Plaintiff John Fanuzzi filed this pro se action against the abovenamed Defendants on June 8, 2011. His Complaint is lengthy – 83
pages. In addition, he attached his 12-page affidavit to the Complaint.
The Defendants have answered the Complaint. Now pending before
the Court are the following motions:
(1) Defendants’ Motion for Judgment on the Pleadings (Court Doc.
(2) Defendants’ Motion to Dismiss for Lack of Jurisdiction (Court
(3) Defendant Bank of the Rockies’ Motion to Compel Plaintiff to
Allow Entry to and Inspection of Real Property, Expedite
Entry and Inspection, Writ of Assistance (Court Doc. 30); and
(4) Plaintiff’s Motion for Voluntary Dismissal of Complaint (Court
Fanuzzi’s Complaint is titled: “R.I.C.O. Fraud, Bank Fraud.
Conspiracy/Obstruction of Justice. Tax Fraud, Money Laundering,
Wire Fraud, Perjury, U.S. Patriot Act Title III.” Court Doc. 1 at 1.
Although Fanuzzi names no federal or state officials as defendants,
Fanuzzi alleges that the action “involves constitutional charges,
grounds ... and challenges the constitutional violations of state and
federal law, procedure and practice (emphasis in original) by state and
federal officials and officers of the court.” Id. at 1. His Complaint then
continues with a recitation of matters apparently copied from Internet
sites and quoted from other cases. There are few references to the
The Complaint is disjointed and difficult to understand. It does
not conform with Fed. R. Civ. P. 8(a)(2), which requires that a claim for
relief contain “a short and plain statement of the claim showing that
the pleader is entitled to relief.” It attempts to state five “grounds:”
(1) Ground 1 is identified as “patriot act domestic terrorist,”
fraud/bank fraud, and procedural due process. Id. at 2. But what
then follows is not a statement about the claims against the
Defendants but rather 64 pages of single-spaced quotations from
various cases and Internet sites. Id. at 2-67.
(2) Ground 2 is identified as a R.I.C.O. claim. Although this
“ground” does include some conclusory statements about
Defendants,1 it does not contain any detailed allegations about
what each Defendant did to allegedly give rise to a R.I.C.O. claim.
Like “ground” 1, it includes many pages of quotations from other
cases. Id. at 67-70.
(3) Ground 3 is identified as “Bank Fraud, Mortgage Fraud in
State Court Proceedings” but contains no allegations against the
Defendants, only quotes from other cases or sources. Id. at 70-74.
(4) Ground 4 is identified as “Due Process Violations.” Id. at 74.
It is entirely quotations from other cases, except for a conclusory
paragraph that contains no explanation of Defendants’ alleged
actions. Id. at 78.
(5) Ground 5 is identified as “Jurisdiction in State Court
Violations.” Id. at 79. Curiously for a plaintiff, it challenges the
jurisdiction of the Court. It states that this Court is “being
jurisdictionally challenged and full disclosure of the true
jurisdiction of this Court is now being demanded....” Id. at 79-80.
For example, this “ground” begins: “Defendant(s) have by their
acts/actions, past behavior(s) Racketeering in State Court Proceedings
including the State in this case as well including Judges an (sic) their
bar friends collection attorneys.”
It makes no reference to the Defendants’ conduct.2
Fanuzzi’s attached 12-page affidavit sheds some light on his
allegations. See Court Doc. 1-2. In the affidavit, he states that he
started a company in 1982 called Golden Ratio Woodworks, Inc. In
1997, his company obtained a building loan from The Bank of the
Rockies. Fanuzzi dealt with the Bank’s president, Mike Grove, in
obtaining this loan. Id. at 2-3.
In 2006, the Bank turned down Fanuzzi’s request for a $500,000
operating loan, which Fanuzzi contends the Bank had promised to
extend. Id. at 4. In 2007, Fanuzzi met with Michael Strang, the Bank’s
Senior Commercial Loan Officer. According to Fanuzzi, Strang
misrepresented some papers to be signed and, as a result, the Bank
was able to foreclose on collateral and put Golden Ratio Woodworks,
Inc, out of business. Fanuzzi alleges that the Bank intentionally
concealed and withheld material facts, and used undue influence and
duress to get him to sign the papers. Id. at 6-8. Fanuzzi seeks
The Complaint concludes with a lengthy paragraph captioned
“Example Case Summary of Damages.” Id. at 81-82. Because it does
not mention a Defendant by name, it is difficult to determine if this is
an “example” from another case or a claim for damages in this case.
$30,000,000 in damages. Id. at 10.
Defendant Guthals generally denies the allegations of the
Complaint, admitting only that the Bank did foreclose on the property
owned by Golden Ratio Woodworks, Inc. Court Doc. 7 at 1-6. Guthals
also raises several affirmative defenses, including lack of subject
matter jurisdiction, Plaintiff’s lack of capacity to pursue the damages
sought, and failure to state a claim. Defendant Grove filed a similar
answer. Court Doc. 10.
In addition to filing an answer similar to the answers of Guthals
and Groves, Defendant Bank of the Rockies, N.A., filed a counterclaim.
The counterclaim alleges two counts: (1) unlawful detainer and
trespass; and (2) money owed under overdraft protection agreements
for NSF checks. Court Doc. 11 at 9-15. The Bank seeks a variety of
remedies, including restitution and possession of property, lost rents
and profits, damages for wrongful occupancy, punitive damages,
injunctive relief, an order permitting entry and inspection of property,
costs, disbursements and attorneys fees. Id. at 16-17.
Fanuzzi filed an “Answer to All Defendant(s) Answers” and an
answer to the counterclaim but, similar to the Complaint, it is 31
single-spaced pages of materials taken from other cases or from the
Internet. See Court Doc. 13.
On September 26, 2011, Fanuzzi filed a document styled “Ex
Parte Motion for Voluntary Dismissal of Complaint.” Court Doc. 32. In
it, he states that he “filed for bankruptcy on September 22nd....” Id. at
Defendants’ Motion to Dismiss for Lack of Jurisdiction
Before a federal court may hear an action, it must be satisfied
that it has subject matter jurisdiction. The Court can take no action
absent jurisdiction. See FW/PBS, Inc. v. City of Dallas, 493 U.S. 215,
231 (1990); United Investors Life Ins. Co. v. Waddell & Reed Inc., 360
F.3d 960, 966-67 (9th Cir. 2004). The United States Supreme Court
has described the parameters of federal court jurisdiction as follows:
Federal courts are courts of limited jurisdiction. They
possess only that power authorized by Constitution and
statute, which is not to be expanded by judicial decree. It is
to be presumed that a cause lies outside this limited
jurisdiction, and the burden of establishing the contrary
rests upon the party asserting jurisdiction.
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).
Accordingly, the Court first will address Defendants’ Motion to
Dismiss for Lack of Jurisdiction. The Court may do so even though
Fanuzzi has filed for bankruptcy protection because the automatic stay
(11 U.S.C. § 362(a)) does not prevent a plaintiff/debtor from continuing
to prosecute his own claims. See In re Palmdale Hills Property, LLC,
654 F.3d 868, 875 (9th Cir. 2011).
Although given extra time to do so, Fanuzzi has not responded to
this jurisdictional motion. Fanuzzi’s failure to file a substantive
response may be deemed an admission that the motion is well-taken.
See Local Rule 7.1(d)(1)(B).
“Where a defendant in its motion to dismiss under [Rule 12(b)(1)]
asserts[, as here,] that the allegations in the complaint are insufficient
to establish subject matter jurisdiction as a matter of law (to be
distinguished from a claim that the allegations on which jurisdiction
depends are not true as a matter of fact), [the Court] take[s] the
allegations in the plaintiff’s complaint as true.” Whisnant v. United
States, 400 F.3d 1177, 1179 (9th Cir. 2005) (citing Wolfe v. Strankman,
392 F.3d 358, 362 (9th Cir. 2004)); see also Savage v. Glendale Union
High Sch., 343 F.3d 1036, 1039 n.2 (9th Cir. 2003) (explaining that
“attacks on jurisdiction can be either facial, confining the inquiry to
allegations in the complaint, or factual, permitting the court to look
beyond the complaint.”). A court’s review must focus on the allegations
of the complaint, and construe the allegations in the light most
favorable to the plaintiffs. Love v. United States, 915 F.3d 1242, 1245
(9th Cir. 1989).
Defendants correctly argue that it is a plaintiff’s duty to plead
sufficient facts to establish federal court jurisdiction. Hertz Corp. v.
Friend, 130 S. Ct. 1181, 1194-95 (2010). Although pro se pleadings are
held to a less stringent standard than those prepared by attorneys, pro
se parties are not relieved of the obligation to allege sufficient facts to
support a proper legal claim. Brazil v. U.S. Dept. of Navy, 66 F.3d 193,
199 (9th Cir. 1995). A pro se litigant is not excused from knowing the
most basic pleading requirements. American Ass’n of Naturopathic
Physicians v. Hayhurst, 227 F.3d 1104, 1107-08 (9th Cir. 2000).
Two possible bases for jurisdiction must be considered here:
diversity jurisdiction and federal question jurisdiction. Fanuzzi does
not allege that the Court has diversity jurisdiction, and the Court
concludes that it does not. Fanuzzi states that he is a resident of
Montana (Court Doc. 1 at 2), and at least one of the Defendants is also
a citizen and resident of Montana. See Court Doc. 25 at 5-6.
Defendants’ brief carefully explains why they conclude that there
clearly is no diversity jurisdiction. Id.
Fanuzzi does contend that the Court has subject matter
jurisdiction under seven Constitutional provisions and at least seven
statutory provisions. Court Doc. 1 at 1-2. Whether federal question
jurisdiction exists is governed by the “well-pleaded complaint” rule
which provides that “federal jurisdiction exists only when a federal
question is presented on the face of the plaintiff’s properly pleaded
complaint.” Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 475
(1998). Fanuzzi’s Complaint fails this test for several reasons, set forth
First, Fanuzzi’s Complaint itself sheds little light on what claims
he is making against each of the named Defendants or what facts might
support any such claims. Although Defendants clearly detailed these
deficiencies in their brief (Court Doc. 25 at 7-22), Fanuzzi responded
only by filing his own “Ex Parte Motion For Voluntary Dismissal of
Complaint.” (Court Doc. 32).
Although Fanuzzi’s affidavit does provide some information about
the basic events that give rise to this action, Fanuzzi must have
standing to raise the claims that are suggested in his affidavit.
FW/PBS, Inc. v. City of Dallas, 493 U.S. at 230-31. All of Fanuzzi’s
contentions in his affidavit appear to arise in connection with the
Defendants’ loan transactions with Fanuzzi’s business. As Defendants
argue in their brief in support of their motion for judgment on the
pleadings (to which Fanuzzi did not respond), Fanuzzi has no standing
to raise such issues. See Court Doc. 16 at 11-12. It is a general precept
of corporate law that a shareholder of a corporation does not have an
individual right of action for damages based solely on an injury to the
corporation. See Gaff v. Federal Deposit Ins. Corp., 814 F.2d 311, 315
(6th Cir. 1987); Sherman v. British Leyland Motors, Ltd., 601 F.2d 429,
439-40 (9th Cir. 1979). And, although there are circumstances where a
corporate shareholder may sue to recover for a RICO violation, Fanuzzi
has not attempted to make the required fact-specific showing. See Maiz
v. Virani, 253 F.3d 641, 654-55 (11th Cir. 2001); Sparling v. Hoffman
Constr. Co., 864 F.2d 635, 640-41 (9th Cir. 1988). Again, Fanuzzi did
not respond to Defendants’ jurisdictional challenges other than by filing
his own motion to dismiss this case.
A plaintiff properly invokes § 1331 federal question jurisdiction
when he pleads a colorable claim “arising under” the Constitution or
laws of the United States. Bell v. Hood, 327 U.S. 678, 681-85 (1946).
“[F]ederal question jurisdiction exists only when a federal question is
presented on the face of the plaintiff’s properly pleaded complaint.”
California ex rel. Sacramento Metro. Air Quality Management Dist. v.
United States, 215 F.3d 1005, 1014 (9th Cir. 2000) (citation omitted).
Here, Fanuzzi has not presented a colorable claim arising under
the Constitution or laws of the United States. Fanuzzi’s asserted bases
for invoking the Court’s subject matter jurisdiction are not supported
by the allegations in the Complaint. Simply providing a long list of
federal statutes and constitutional provisions, without a coherent
statement of how those provisions were violated or who exactly violated
them, is not sufficient for this Court to presume it has jurisdiction.
Merely making reference to a federal statute or to the Constitution,
without more, is insufficient to demonstrate a colorable claim “arising
under” the Constitution. See Arbaugh v. Y & H Corporation, 546 U.S.
500, 513-14 (2006).
Accordingly, for the reasons set forth above, the Court will grant
the Defendants’ motion to dismiss for lack of subject matter
jurisdiction. Although the Court has the discretion to allow a plaintiff
to amend his Complaint to address the jurisdictional concerns, the
Court finds no reason to do so where Fanuzzi has not opposed the
Defendants’ motion and has himself moved the Court to dismiss his
III. Defendant Bank of the Rockies’ Motion to Compel Plaintiff
to Allow Entry to and Inspection of Real Property,
Expedite Entry and Inspection, Writ of Assistance
The Court next will address the Defendant Bank’s motion to
compel, allow inspection of the property, and writ of assistance. See
Court Doc. 30. Before proceeding to discuss the substance of this
motion, the Court must be satisfied that there is a claim pending over
which the Court has jurisdiction. Having concluded that Fanuzzi’s
Complaint must be dismissed for lack of jurisdiction, the Court must
consider whether it has jurisdiction over the Bank’s counterclaim.
As to the basis for the Court’s jurisdiction, the Bank states: “If
this Court has jurisdiction over Fanuzzi’s Complaint filed herein, which
Bank denies, this Court has pendent jurisdiction over this
Counterclaim under 28 U.S.C. § 1367 ....” Court Doc. 11 at 8. Thus,
the Bank acknowledges that jurisdiction over its counterclaim is
dependent on a finding of jurisdiction over Fanuzzi’s Complaint.
It is generally agreed that if a court determines that there is no
basis for federal jurisdiction over plaintiff’s original claim, then it
cannot proceed to adjudicate a compulsory counterclaim that does not
have an independent jurisdictional basis. Wright & Miller, Federal
Prac. & Pro., § 1414. See also DHL Corp. v. Loomis Courier Service,
Inc., 522 F.2d 982, 985 (9th Cir. 1975). The Bank does not contend that
there is an independent basis for jurisdiction over its counterclaims,
nor can the Court identify one. Having no jurisdiction to proceed, the
Court must also dismiss the counterclaim. In doing so, the Court is
mindful that its decisions herein do not violate the automatic stay
because the decisions do not impact the merits of Fanuzzi’s claims or
the Bank’s counterclaims. See Dean V. TransWorld Airlines, Inc., 72
F.3d 754, 756 (9th Cir. 1995).
Accordingly, the Court HEREBY ORDERS:
(1) Defendants’ Joint Motion to Dismiss Due to Lack of
Jurisdiction (Court Doc. 24) is GRANTED.
(2) Defendant Bank of the Rockies N.A’s Motions for Entry and
Inspection and for Writ of Assistance (Court Doc. 30) is DENIED for
lack of jurisdiction.
(3) Having concluded that it is without subject matter
jurisdiction, this case is DISMISSED in its entirety. All other pending
motions are MOOT.
DATED this 2nd day of November, 2011.
/S/ Carolyn S. Ostby
United States Magistrate Judge
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