Mitchell v. CNO Financial Group Inc, et al

Filing 71

ORDER by Magistrate Judge William P. Lynch granting in part and denying in part 33 Motion to Amend. Amended Complaint, in compliance with this Order, must be filed within ten days. (mej)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
TEDDY RANDALL MITCHELL,
Plaintiff,
v.

CV 16-1072 WPL/KK

CNO FINANCIAL GROUP, INC.
d/b/a Bankers Life and Casualty, and
JEFFREY A. HAKES,
Defendants.

ORDER GRANTING IN PART AND DENYING IN PART
MOTION TO AMEND
Plaintiff Teddy Mitchell, proceeding pro se, filed an opposed motion to amend the
complaint (Doc. 33) and a memorandum purportedly pursuant to Federal Rule of Civil Procedure
19 justifying the joinder of Brad Davis as an additional pro se plaintiff (Doc. 34). Defendants
filed a response on January 10, 2017 (Doc. 35), but Mitchell has filed neither a reply nor a notice
of briefing complete. See D.N.M.LR-Civ. 7.4(e) (“Upon completion of briefing, the movant must
file a notice certifying that the motion is ready for decision and identifying the motion and all
related filings by date of filing and docket number.”) Mitchell wants to amend his complaint to
include an additional pro se plaintiff, Davis, who also signed the proposed amended complaint,
and to add additional facts. The Defendants oppose the motion because, they contend, Mitchell
would be representing Davis and thus practicing law without a license, and because the motion
lacks good cause. Having reviewed the motion and the relevant law, I grant in part and deny in
part the motion to amend.

Mitchell’s motion to amend is governed by Federal Rule of Civil Procedure 15(a).1 After
a responsive pleading has been served, a party may amend his pleadings only by leave of court or
with written consent from the opposing party. FED. R. CIV. P. 15(a)(2). “The court should freely
give leave [to amend] when justice so requires.” Id. A court may refuse to grant leave to amend
when the opposing party shows undue delay, undue prejudice, bad faith or dilatory motive,
failure to cure deficiencies by previously granted amendments, or futility of amendment. Frank
v. U.S. West, Inc., 3 F. 3d 1357, 1365 (10th Cir. 1993). “A proposed amendment is futile if the
complaint, as amended, would be subject to dismissal.” Jefferson Cty. Sch. Dist. No. R-1 v.
Moody’s Inv’rs Servs., Inc., 175 F.3d 848, 859 (10th Cir. 1999).
While Rule 8(a)(2) provides that a pleading must contain “a short and plain statement of
the claim showing that the pleader is entitled to relief,” the Supreme Court clarified this standard
in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009).
Khalik v. United Air Lines, 671 F.3d 1188, 1190 (10th Cir. 2012). While the Twombly/Iqbal
standard does not require significantly heightened fact-pleading in a complaint, the standard is
more than a minimal change from prior jurisprudence and is instead a middle ground. Id. at
1191. Under this standard, to withstand a motion to dismiss, a complaint must contain sufficient
factual allegations, accepted as true, “to state a claim for relief that is plausible on its face.” Id. at
1190 (quoting Twombly, 550 U.S. at 670). A court must first identify those allegations in the
complaint that are not entitled to the assumption of truth. Id. Thus, allegations which are legal
conclusions, bare assertions, conclusory statements or “‘a formulaic recitation of the elements of
a cause of action’ will not suffice.” Id. at 1191 (quoting Twombly, 550 U.S. at 555). The court
must then determine “whether the remaining, factual allegations plausibly suggest the defendant
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The scheduling order allowed Mitchell to file a motion to amend, pursuant to Rule 15(a)(2), no
later than December 28, 2016. (Doc. 24.) This motion is timely filed.

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is liable.” Id. In determining whether a complaint states a plausible claim for relief, the court will
consider the nature and specificity of the allegations based on the claims asserted in the case. Id.
Because Mitchell is a pro se litigant, I must construe his pleadings liberally and hold
them to a less stringent standard than is required of a party represented by counsel. See
Weinbaum v. City of Las Cruces, 541 F.3d 1017, 1029 (10th Cir. 2008) (citing Hall v. Bellmon,
935 F.2d 1106, 1110 (10th Cir. 1991)). Liberal construction requires courts to make some
allowance for a pro se litigant’s “failure to cite proper legal authority, his confusion of various
legal theories, his poor syntax and sentence construction, or his unfamiliarity with pleading
requirements.” Garrett v. Selby Connor Maddux & Janer, 425 F.3d 836, 840 (10th Cir. 2005)
(quoting Hall, 935 F.2d at 1110) (alterations omitted). However, “the court cannot take on the
responsibility of serving as the litigant’s attorney in constructing arguments and searching the
record.” Id.
As an initial matter, I note that the Plaintiffs assert diversity jurisdiction pursuant to 28
U.S.C. § 1332. (Doc. 33 at 12.) It is immaterial whether Defendant Jeffrey Hakes is a citizen of
New Mexico or of Indiana because the Plaintiffs bring federal claims. Thus, I exercise federal
question jurisdiction pursuant to 28 U.S.C. § 1331.
Additionally, Plaintiffs appear to assert criminal claims, including a charge of federal tax
evasion against Hakes. “[A] private citizen lacks a judicially cognizable interest in the
prosecution or nonprosecution of another” and cannot base a claim for which relief can be
granted on criminal statutes. Diamond v. Charles, 476 U.S. 54, 64 (1986) (quotation omitted).
No amount of factual amendment will convert these claims from criminal charges into a civil
cause of action. To the extent that Plaintiffs attempt to assert criminal claims in this case, the
motion to amend is denied.

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There are three general categories of claims brought on behalf of both Plaintiffs in the
proposed amended complaint: federal civil rights and employment claims, state employment
claims, and common law claims. (See generally Doc. 33.) I address each in turn.
To prove a claim for deprivation of rights under 42 U.S.C. § 1983, Mitchell and Davis
must show prove that 1) someone acting under color of law 2) deprived them of “any rights,
privileges, or immunities secured by the Constitution and laws.” The proposed amended
complaint does not include an allegation of any action taken by any person who could be
construed as acting under color of law. That is, no one purportedly acted with state authority.
Because the proposed amended complaint lacks this critical element, it would not survive a
motion to dismiss. Accordingly, the motion to amend is denied as to this claim.
Mitchell and Davis also attempt to bring a claim under 42 U.S.C. § 1981. Section 1981
prohibits “racial discrimination [and] retaliation against those who oppose it.” U. of Tex. S.W.
Med. Ctr. v. Nassar, --- U.S. ---, ---, 133 S. Ct. 2517, 2529 (2013) (citing CBOCS West, Inc. v.
Humphries, 553 U.S. 442, 445 (2008)). To establish a claim under § 1981, Plaintiffs must show
that they are 1) members of a racial minority; 2) that the defendants intended to discriminate on
the basis of race; and 3) that the discrimination concerned an activity enumerated by the statute,
such as the ability to make and enforce contracts, enjoy the full and equal benefit of the laws, etc.
Shawl v. Dillard’s Inc., 17 F. App’x 908, 910-11 (10th Cir. 2001) (unpublished); Mian v.
Donaldson, Lufkin & Jenrette Secs. Corp., 7 F.3d 1085, 1087 (2d Cir. 1993). The Plaintiffs
allege that they are both white men (Doc. 33 at 18) and are thus not members of a racial
minority. Because the Plaintiffs do not allege the first element of a § 1981 claim, their claim fails
as a matter of law. The motion to amend is thus denied as to this claim.

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Next, Mitchell and Davis purport to bring gender or sex based discrimination claims
under Title VII of the Civil Rights Act of 1964. (See Doc. 33 at 15.) I construe this as a claim
brought under 42 U.S.C. § 2000e-5 for sex based discrimination of the disparate treatment type
in violation of § 2000e-2 and discrimination for making charges of or opposing purportedly
unlawful employment practices in violation of § 2000e-3.
As for claims pursuant to § 2000e-2, “[i]t is unlawful for employers to deprive an
individual of employment opportunities based on his . . . sex.” Daniels v. United Parcel Serv.,
Inc., 701 F.3d 620, 627 (10th Cir. 2012). When, as is generally the case, a plaintiff “cannot
produce direct evidence of discrimination, . . . the burden-shifting framework announced in
McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-05 . . . (1972), applies.” Id. The plaintiff
bears the burden of establishing a prima facie case of discrimination by showing 1) membership
in a protected class, 2) an adverse employment action, and 3) that the adverse employment action
took place under circumstances giving rise to an inference of discrimination. Id. (citing EEOC v.
PVNF, LLC, 487 F.3d 790, 800 (10th Cir. 2007)). The burden then shifts to the employer to
assert a legitimate, nondiscriminatory reason for its actions. Id. If such a showing is made, the
burden shifts back to the plaintiff to produce evidence that the stated nondiscriminatory reason is
mere pretext for discriminatory animus. Id.
At this stage, however, the question is whether the proposed amended complaint presents
sufficient factual allegations to establish a prima facie case of discrimination. Mitchell and
Davis, both men, allege that they were treated differently than a similarly situated female
employee. Mitchell alleges that the female employee was held to a lower standard, was given
preferential treatment in her schedule, was not required to follow the same licensing
requirements, was given preferential treatment in terms of “leads” and travel reimbursement, and

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was given a more favorable compensation package. (Doc. 33 at 14-18.) Davis alleges that the
female employee was not required to follow the same licensing requirements, was given a more
favorable compensation package, was given preferential treatment in her schedule, and was
given preferential treatment in terms of “leads” and travel reimbursement. (Id. at 16-18.) The
adverse employment action, allegedly, is that Plaintiffs were not given the same opportunity to
make as much money as the female employee and that Mitchell was either forced to quit or was
fired.
The Defendants do not address the merits of the amended complaint in their response to
the motion to amend, and thus have offered no reason to conclude that this rather meager factual
predicate is insufficient to sustain the motion to amend as to the Plaintiffs’ claims under 42
U.S.C. § 2000e-2. As to these claims, the motion to amend is granted.
Section 2000e-3 prohibits employers from discriminating against or retaliating against
employees for, among other things, reporting unlawful employment practices. 42 U.S.C.
§ 2000e-3. To establish a retaliation claim under this section, each Plaintiff must show that “(1)
[]he engaged in protected opposition to Title VII discrimination or participated in a Title VII
proceeding; (2) []he suffered an adverse employment action contemporaneous with or
subsequent to such opposition or participation; and (3) there is a causal connection between the
protected activity and the adverse employment action.” Cole v. Ruidoso Mun. Schs., 43 F.3d
1373, 1381 (10th Cir. 1994).
Mitchell alleges that he was ultimately discharged or forced to quit after filing multiple
notices, complaints, or grievances about the disparate treatment between himself and the female
employee. This seems to meet the basic factual predicate for a prima facie case of retaliation.
However, there is no mention anywhere in the amended complaint of an adverse employment

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action against Davis that resulted from his protected Title VII activity of reporting or
complaining about gender discrimination. Because Davis does not allege an adverse employment
action, he has not met the elements of a retaliation claim. The motion to amend is therefore
granted as to Mitchell’s retaliation claim and denied as to Davis’s retaliation claim.
The Plaintiffs also purport to bring state law claims in the amended complaint.
Mitchell alleges that he was not paid his final check, made a demand within hours or days
of his departure from employment, and still has not been paid. (Doc. 33 at 22-23.) There are no
similar claims laid out for Davis. Indeed, in the “Damages Table,” the “Pay Roll Not Paid”
column for Davis reads “$0.00.” (Doc. 33 at 13.) Section 50-4-4 of the New Mexico Statutes
states that “[w]henever an employer discharges an employee, the unpaid wages or compensation
of such employee, if a fixed and definite amount, and not based on a task, piece, commission
basis or other method of calculation, shall, upon demand become due immediately, and the
employer shall pay such wages to the employee within five days of such discharge.” NMSA
§ 50-4-4(A). Subsection (C) of the statute allows an employee to bring a civil action if
subsection (A) is violated. While it is unclear whether Mitchell resigned or was discharged, that
is a matter to be hashed out further in the process. To the extent that the motion to amend seeks
to include a claim under § 50-4-4 for Mitchell, the motion to amend is granted. To the extent it
seeks to include such a claim for Davis, the motion to amend is denied.
The Plaintiffs appear to bring claims pursuant to NMSA § 50-4-5, which fixes the time
for final wage payments when an employee, who does not have a written contract, quits or
resigns. Section 50-4-5 does not expressly give employees a private cause of action if their
wages are not paid in accordance with the statute. Additionally, Plaintiffs do not argue that they
quit employment, but appear to contend that they were discharged. Under the circumstances, I do

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not see sufficient factual or legal contention to sustain a claim under § 50-4-5. To the extent that
the Plaintiffs attempt to bring such claims in the proposed amended complaint, the motion to
amend is denied.
Plaintiffs also allege that they were fraudulently induced into employment with the
Defendants because Hakes told the Plaintiffs that they would earn six figure salaries, work easy
hours, and have flexible schedules. The Defendants do not raise any defense or argument against
allowing this claim to proceed. I find that Plaintiffs have presented sufficient factual information
to allow the employment fraud-in-the-inducement claims to go forward. The motion to amend is
granted as to this claim.
As discussed above, the motion to amend is granted in part and denied in part. The
remaining claims are as follows: Mitchell retains claims under 42 U.S.C. § 2000e-2, 42 U.S.C.
§ 2000e-3, NMSA § 50-4-4, and common law employment fraud; Davis retains claims under 42
U.S.C. § 2000e-2 and common law employment fraud. Plaintiffs must file an amended complaint
including only the claims approved herein within ten days of the entry of this Order.
As Mitchell does not appear to be an attorney, I remind him that he may neither represent
nor sign on behalf of anyone else. 28 U.S.C. § 1654 (“non-attorney pro se litigants cannot
represent other pro se parties”). This also means that Mitchell may not draft the section of the
amended complaint that deals with Davis’s claims, and may not advise Davis on this process.
While Mitchell or Davis may join in the other’s pleading, they must represent themselves
individually. Failure to comply with this requirement may result in filings being struck for being
improper, in Rule 11 sanctions on the basis of practicing law without a license, or in other
sanctions appropriate under the circumstances. Mitchell and Davis are explicitly put on notice
that the unauthorized practice of law will not be tolerated.

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Additionally, I remind Mitchell and Davis that while they are privileged to proceed pro se
in this case, they may also consider retaining counsel. Mitchell has already violated the Federal
Rules of Civil Procedure and the Local Rules. (See, e.g., Doc. 57 (failure to comply with Federal
Rule of Civil Procedure 26(a)); Doc. 58 (failure to comply with Federal Rule of Civil Procedure
37(a) and Local Rule 7.1(a)); and Doc. 66 (failure to comply with Federal Rule of Civil
Procedure 37(a) and Local Rule 7.1(a)).) There is only one set of rules applicable to this case,
and they apply equally to parties represented by counsel and those that proceed pro se. See
Ogden v. San Juan Cty., 32 F.3d 452, 455 (10th Cir. 1994). Continued failure to comply with the
Rules may result in adverse rulings or other consequences of noncompliance.
It is so ordered.

____________________________
William P. Lynch
United States Magistrate Judge

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