Kelly v. Valley Bank, Inc.

Filing 10

ORDER ADOPTING FINDINGS AND RECOMMENDATIONS 5 in full. Complaint 2 DISMISSED WITHOUT PREJUDICE. Any appeal would not be taken in good faith. Signed by Judge Donald W. Molloy on 11/8/2013. Mailed to Kelly. (TAG, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
HELENA DIVISION

FILED
NOVo 8 2013
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STEPHEN KELLY,

CV 13-57-H-DWM-RKS
Plaintiff,
ORDER

vs.
VALLEY BANK, INC.,
Defendant.

Plaintiff Stephen Kelly, appearing pro se, is suing Defendant Valley Bank
for failing to honor checks written on a business checking account and credit line.
Magistrate Judge Keith Strong entered Findings and Recommendations on
October 15,2013, recommending that Kelly's complaint be dismissed without
prejudice. (Doc. 5.) Judge Strong found that due to the pending criminal charges
against Kelly, the Court must abstain from hearing his claims.
Kelly filed timely objections to Judge Strong's Findings and
Recommendations, and is therefore entitled to de novo review of the specified
findings or recommendations to which he objects. 28 U.S.C. § 636(b)(1). Despite

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Kelly's objections, the Court agrees with Judge Strong's analysis and conclusion.
Because the parties are familiar with the factual and procedural background, it will
not be restated here.
In his objection to Judge Strong's Findings and Recommendations, Kelly

contends that (1) the existence of a pending criminal matter has no bearing on this
civil matter, (2) Judge Strong cannot deny him a certificate of appealability, and
(3) Judge Strong should not have heard this matter.
I.

Kelly first argues that abstention does not apply. As discussed by Judge
Strong, the Supreme Court has outlined the requirements for when a federal court
must abstain from granting injunctive or declaratory relief that would interfere
with pending state judicial proceedings. Younger v. Harris, 401 U.S. 37 (1971).
The four requirements for abstention include: (1) an ongoing, state initiated
proceeding; (2) the proceeding implicates important state interests; (3) the federal
plaintiff is not barred from litigating federal constitutional issues in the state
proceedings, and (4) the federal court action would enjoin the proceedings or have
the practical effect of doing so. AmerisourceBergen Corp. v. Roden, 495 F.3d
1143, 1149 (9th Cir. 2007). In his objection, Kelly fails to address his civil case as
it relates to any ofthese four requirements. Rather, Kelly contends that abstention
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should not apply in this context as Defendant Valley Bank is not the complainant
or victim in the state proceeding and that he has the right under 12 U.S.C. § 3410
to challenge the actions of his former bank. However, the four abstention
requirements do not state that the underlying parties or the causes of action must
be the same, only that the federal action would enjoin the state proceedings or
have the practical effect of doing so. If this Court were to were to decide whether
Valley Bank properly or improperly refused to honor Kelly's checks, it would
have the practical effect of enjoining the state criminal proceedings based on the
same facts. The applicability ofMaldonado v. Morales, 556 F.3d 1037 (9th Cir.
2009), cited by Kelly to refute this position, is unclear here. Ultimately, Kelly is
correct that the parties and causes of action are different in the state court,
however, the rationale of Younger and the interest of not effectively enjoining the
state proceeding call for abstention in the present case.
II.

Kelly's second objection regards Judge Strong's recoplmendation that he be
denied a certificate of appealability. Kelly contends Judge Strong has "blocked"
his case from being appealed to a higher court and that such an action is simply
not allowed. As noted by Judge Strong, Rule 24(a)(3)(A) of the Federal Rules of
Appellate Procedure provides that a district court may certify that an appeal is not
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taken in good faith. 28 U.S.C. § 1915(a)(3) further provides "[a]n appeal may not
be taken in forma pauperis ifthe trial court certifies in writing that it is not taken
in good faith." Based on the abstention analysis, Judge Strong found that an
appeal in this matter would not be taken in good faith. As clearly stated in both
the Federal Rules of Appellate Procedure and the United States Code, such a
finding is within Judge Strong's purview. Because the Court must abstain from
hearing Kelly's claims, an appeal would lack any arguable basis in law or fact.

See Neitzke v. Williams, 490 U.S. 319, 327 (1989). Therefore, any appeal of this
matter would not be taken in good faith and a certificate of appealability is denied.
III.
Finally, Kelly objects to Judge Strong ruling on this matter at all. Kelly
contends he has previously filed "an affidavit of prejudice" against Judge Strong
in a former case and that due to that, Judge Strong was required to remove himself
from the present matter. Upon review of Kelly v. Herbst, the former case cited to
by Kelly, this Court was unable to find an "affidavit of prejudice" or any filing by
Kelly regarding the propriety of Judge Strong sitting on that case or any other case
with Kelly as a party. Kelly fails to provide any other grounds as to why Judge
Strong should not be allowed to rule on his case, such as any of those listed in the
relevant portion of the United States Code. See 28 U.S.C. § 455 (listing the
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circumstances under which a judge must or may disqualify him or herself).
Based on the foregoing, IT IS ORDERED that the Findings and
Recommendations (Doc. 5) is ADOPTED IN FULL. Stephen Kelly's complaint
(Doc. 2) is DISMISSED WITHOUT PREJUDICE.
IT IS FURTHER ORDERED that a certificate of appealability is DENIED.
Dated this ~day of November, 2013.

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