MCHAM, et al v. WELLS FARGO BANK et al

Filing 5

MEMORANDUM OPINION, ORDER, AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE signed by MAG/JUDGE L. PATRICK AULD on 12/17/2014. Plaintiff McHam's alleged power of attorney does not permit him to litigate on behalf of Plaintiff Smith . In addition, Plaintiff McHam has failed to state a claim for false arrest on his own behalf. Finally, the Court should decline supplemental jurisdiction over Plaintiffs' remaining state-law claims.ORDERED that Plaintiffs' Motion to Proceed In Forma Pauperis is granted. RECOMMENDED that Plaintiff Smith's federal claims be dismissed for lack of subject matter jurisdiction, that Plaintiff McHam's claims be dismissed for failure to state a claim, and that supplemental jurisdiction over any state-law claims be declined pursuant to 28 U.S.C. § 1367(c)(3).(Taylor, Abby)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
KENNETH O. MCHAM and
PATRICIA D. SMITH,

)
)
)
)
)
)
)
)
)
)

Plaintiffs,
v.
WELLS FARGO BANK, et al.,
Defendants.

1:14CV997

MEMORANDUM OPINION, ORDER, AND RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
This case comes before the Court on Plaintiffs’ Application to
Proceed In Forma Pauperis (Docket Entry 1) in conjunction with
their pro se Complaint (Docket Entry 3) and an Amended Complaint1
(Docket Entry 4).

The Court will grant Plaintiffs’ Application

(Docket Entry 1) for the limited purpose of recommending dismissal
of

this

action

pursuant

to

28

U.S.C.

§

1915(e)(2)(B)

for

frivolousness and failure to state a claim of Plaintiffs’ federallaw claims.

Additionally, the undersigned will recommend that the

Court decline supplemental jurisdiction over Plaintiffs’ remaining
state-law claims.

1

Plaintiffs filed an Amended Complaint on December 5, 2014.
The Amended Complaint includes additional factual allegations
against Defendants, but omits many claims and allegations from the
original Complaint.
Therefore, the undersigned understands the
Amended Complaint to represent an addition to rather than a
substitution for, the original Complaint, and will treat it
accordingly. Plaintiffs currently have the right to amend their
pleadings once as a matter of course, see Fed. R. Civ. P. 15(a)(1),
so the undersigned will accept Plaintiffs’ Amended Complaint.

LEGAL BACKGROUND
“The federal in forma pauperis statute, first enacted in 1892
[and now codified at 28 U.S.C. § 1915], is intended to guarantee
that no citizen shall be denied access to the courts solely because
his poverty makes it impossible for him to pay or secure the
costs.”
Cir.

Nasim v. Warden, Md. House of Corr., 64 F.3d 951, 953 (4th

1995)

(en

banc)

(internal

“Dispensing

with

filing

fees,

quotation

however,

[is]

marks
not

omitted).

without

its

problems. . . . In particular, litigants suing in forma pauperis
d[o] not need to balance the prospects of successfully obtaining
relief against the administrative costs of bringing suit.” Nagy v.
FMC Butner, 376 F.3d 252, 255 (4th Cir. 2004).

To address this

concern, the in forma pauperis statute provides that “the court
shall dismiss the case at any time if the court determines . . .
(B) the action . . . (i) is frivolous or malicious; (ii) fails to
state a claim on which relief may be granted; or (iii) seeks
monetary relief
relief.”

against

a

defendant

who

is

immune

from

such

28 U.S.C. § 1915(e)(2).

As to the first of these grounds, the United States Supreme
Court has explained that “a complaint, containing as it does both
factual allegations and legal conclusions, is frivolous where it
lacks an arguable basis either in law or in fact.”

Neitzke v.

Williams, 490 U.S. 319, 325 (1989).

In assessing such matters,

this Court may “apply common sense.”

Nasim, 64 F.3d at 954; see

2

also Nagy, 376 F.3d at 256 (“The word frivolous is inherently
elastic and not susceptible to categorical definition.”

(internal

quotation marks omitted)).
As to the second ground, a plaintiff “fails to state a claim
upon which relief may be granted,” 28 U.S.C. § 1915(e)(2)(B)(ii),
when the complaint does not “contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on
its face.’”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal

citations omitted) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)). “Where a complaint pleads facts that are ‘merely
consistent with’ a defendant’s liability, it ‘stops short of the
line

between

relief.’”

possibility

and

plausibility

of

‘entitlement

Id. (quoting Twombly, 550 U.S. at 557).

to

This standard

“demands more than an unadorned, the-defendant-unlawfully-harmed-me
accusation.”

Id.

In other words, “the tenet that a court must

accept as true all of the allegations contained in a complaint is
inapplicable to legal conclusions.”

2

Id.2

Although the Supreme Court has reiterated that “[a] document
filed pro se is to be liberally construed and a pro se complaint,
however inartfully pleaded, must be held to less stringent
standards than formal pleadings drafted by lawyers,” Erickson v.
Pardus, 551 U.S. 89, 94 (2007) (internal citations and quotation
marks omitted), the United States Court of Appeals for the Fourth
Circuit has “not read Erickson to undermine Twombly’s requirement
that a pleading contain more than labels and conclusions,”
Giarratano v. Johnson, 521 F.3d 298, 304 n.5 (4th Cir. 2008)
(internal quotation marks omitted) (dismissing pro se complaint).
3

ANALYSIS
Plaintiffs’ case stems from allegations that Defendant Wells
Fargo (then named Wachovia Bank) and some of its employees engaged
in

a

conspiracy

to

withdraw

and misuse

funds

from

Plaintiff

Patricia D. Smith’s bank accounts, and that local law enforcement
prevented Plaintiff Kenneth O. McHam from stopping Defendants.
(See Docket Entries 3, 4.)3

Plaintiffs appear to allege that

Defendants: violated 18 U.S.C. §§ 1344, 241, 371, in relation to
Plaintiff Smith’s bank account (see, e.g., Docket Entry 3, ¶¶ 18,
28, 30); violated Plaintiff Smith’s civil rights under the 14th
Amendment - actionable under 42 U.S.C. § 1983 (see, e.g., id., ¶¶
114, 119, 133); conspired to interfere with Plaintiff Smith’s civil
rights under 42 U.S.C. § 1985(2) (id., ¶ 84); committed various
state-common-law torts against Plaintiff Smith (see, e.g., ¶¶ 4983); and conspired to have Plaintiff McHam falsely arrested and to
violate his 14th Amendment4 rights - actionable under 42 U.S.C.
§ 1983 (id., ¶¶ 119, 134; Docket Entry 4, ¶ 6).

For the reasons

that follow, the Court should dismiss Plaintiffs’ federal-law
claims for frivolousness and failure to state a claim, and the

3

Although the Complaint and Amended Complaint allege
violations of constitutional rights, neither names any state actors
as defendants. (See Docket Entries 3, 4.)
4

The undersigned assumes Plaintiff McHam means his Fourth
Amendment rights as incorporated against the States by the
Fourteenth Amendment. See Rogers v. Pendleton, 249 F.3d 279, 294
(4th Cir. 2001) (noting that a false arrest claim essentially
alleges a violation of one’s Fourth Amendment rights).
4

Court should decline to exercise supplemental jurisdiction over
Plaintiffs’ remaining state-law claims.
A.

Frivolousness
At the outset, Plaintiff McHam purports to pro se represent

himself and Plaintiff Smith in this case;5 Plaintiff McHam, and not
Plaintiff Smith, signed the Complaint and Amended Complaint. (See
Docket Entries 3 at 4, 46; Docket Entry 4 at 3.)

Plaintiff McHam

claims to have an executed power of attorney over Plaintiff Smith,
(see Docket Entry 3 at 1; Docket Entry 3-1 at 31-33), and wrote on
the Pro Se Complaint Form “(POA)” next to his name and below
Plaintiff Smith’s (Docket Entry 3 at 1).
allow this

form

of

representation.

However, the law does not
“Litigants

in

civil

and

criminal actions and parties in bankruptcy proceedings before this
Court, except parties appearing pro se, must be represented by at
least one attorney who is a member of the bar of this Court.”
M.D.N.C.

LR

83.1(c)(1).

In

other

words:

“[a]n

individual

unquestionably has the right to litigate his own claims in federal
court . . ., however, [that right] does not create a coordinate
right to litigate for others.”

Myers v. Loudoun Cnty. Pub. Sch.,

418 F.3d 395, 400 (4th Cir. 2005) (emphasis in original) (citing,
inter alia, 28 U.S.C. § 1654).

“The reasoning behind this rule is

5

The undersigned cannot find a record of a “Kenneth O. McHam”
authorized to appear in this Court, and nothing appears in the
voluminous filings to suggest Plaintiff McHam holds a license to
practice law and/or possesses permission to appear as an attorney
in this Court.
5

two-fold: it protects the rights of those before the court and
jealously guards the judiciary's authority to govern those who
practice in its courtrooms.”
Plaintiff

McHam’s

Id. (internal citations omitted).

executed

power

of

attorney

does

not

supersede these well-established principles, and district courts in
this Circuit have uniformly precluded non-attorneys from litigating
matters in other’s names despite claiming power of attorney.

See

Normand v. Reynolds, No. 5:13-CV-222-F, 2013 WL 2467987, at *1 n.1
(E.D.N.C. June 7, 2013) (unpublished) (noting that the plaintiff’s
attempt to litigate via a power of attorney provided an alternate
ground for dismissal); SEC v. White, No. 8:11-944-HMH-KFM, 2011 WL
1544202, at *3 (D.S.C. Apr. 22, 2011) (unpublished) (prohibiting
the defendant from allowing his wife to sign motions on his behalf
despite an executed power of attorney); Umstead v. Chase Manhattan
Mortg. Corp., No. 7:04CV747, 2005 WL 2233554, at *2 (W.D. Va. Sept.
13, 2005) (unpublished) (ruling that, despite possessing a power of
attorney, “M. Umstead, as a lay person without a license to
practice, cannot represent J. Umstead in this action”).

As such,

Plaintiff McHam lacks standing to sue for Plaintiff Smith, and this
Court does not have subject matter jurisdiction over the claims
asserted on behalf of Plaintiff Smith.

See Penland Fin. Servs.,

Inc. v. Select Fin. Servs., LLC, No. 6:08–3864–HMH–WMC, 2008 WL
5279638, at *3 (D.S.C. Dec. 18, 2008) (unpublished) (“[B]ecause
Charles

Penland

may

not

litigate

6

pro

se

the

rights

of

the

corporation,

he

lacks

standing

to

bring

this

action;

and,

therefore, this court does not have subject matter jurisdiction
over this action.”), aff'd, 315 Fed. Appx. 456 (4th Cir. 2009);
Smith v. County of Pickens, No. 8:08-0196-RBH, 2008 WL 4200595, at
*2 (D.S.C. Sept. 8, 2008) (unpublished) (“If Wertz may not litigate
pro se the rights of Smith, then it appears that Wertz lacks
standing to bring this action; and, therefore, this Court does not
have subject matter jurisdiction over this action.”).
Plaintiff McHam’s lack of standing renders the claims asserted
on behalf of Plaintiff Smith “frivolous [because they] lack[] an
arguable basis [] in law,” Neitzke, 490 U.S. at 325.

See Padilla

v. Enzor, 279 Fed. Appx. 606, 615 (10th Cir. 2008) (“The district
court dismissed this claim as frivolous holding [the plaintiff]
does

not

have

‘standing

to

raise

a

claim

on

behalf

of

the

prisoners’ families.’ We agree.”); Cummings v. Baker, 130 Fed.
Appx. 446, 447 (11th Cir. 2005) (“Because . . . [the plaintiff]
does not have standing to bring a § 1983 claim on behalf of
‘similarly situated individuals,’ the district court did not err
when it dismissed his claim as frivolous.”).6

Therefore, the Court

should dismiss for want of subject matter jurisdiction all federallaw claims related to Plaintiff Smith.

6

In any event, the Court has an independent obligation to
examine the existence of subject matter jurisdiction. Arbaugh v.
Y&H Corp., 546 U.S. 500, 514 (2006).
7

B.

Failure to State a Claim
The only federal-law-based claims Plaintiff McHam alleges

Defendants committed upon him concerns a purported false arrest actionable under 42 U.S.C. § 1983.
Docket Entry 4, ¶ 6.)

(Docket Entry 3, ¶¶ 119, 134;

The Court should dismiss Plaintiff McHam’s

claims of false arrest due to failure to state a claim for two
reasons. First, Plaintiff McHam offers only conclusory allegations
devoid of factual matter, and second, the statute of limitations
has run on Plaintiff McHam’s first false-arrest claim.

For these

reasons, Plaintiff McHam has failed to state a claim, and the Court
should dismiss his federal-law claim(s).
To state a claim for false arrest, Plaintiff McHam must allege
that the police arrested him without a warrant and without probable
cause to believe that he had committed a crime.

See Miller v.

Prince George’s Cnty, Md., 475 F.3d 621, 627 (4th Cir. 2007).

As

to the statute of limitations, although Plaintiff McHam’s Section
1983 claim originates from federal law, the statute of limitations
comes from state law, in this case three years.

National Adver.

Co. v. City of Raleigh, 947 F.2d 1158, 1161-62 (4th Cir. 1991).
Having

established

the

length

of

the

limitation

period,

the

question then becomes when Plaintiff McHam’s period began to run
for the instant false arrest claim(s).
“[T]he accrual date of a § 1983 cause of action is a question
of federal law . . . conforming in general to common-law tort

8

principles.

Under those principles, it is the standard rule that

accrual occurs when the plaintiff has a complete and present cause
of action . . . ."

Wallace v. Kato, 549 U.S. 384, 388 (2007).

However, the Supreme Court has recognized that false imprisonment
or arrest claims present unique situations, and have held that the
limitation period for a false arrest or imprisonment claim run from
when the alleged false imprisonment or arrest end.
In

this

“unadorned,

case,

Plaintiff

McHam

states

nothing

the-defendant-unlawfully-harmed-me

Iqbal, 556 U.S. at 678.

Id. at 389.
more

than

accusation[s].”

In his first claim, Plaintiff McHam

alleges that, in August of 2006, Defendants paid and conspired with
a former police chief to have him falsely arrested to stop him from
filing criminal charges against Defendants.
¶ 119.)

(Docket Entry 3,

Plaintiff McHam’s pleadings also state that Defendants

convinced a former police chief to falsely arrest Plaintiff McHam
and that one of the Defendants and the police chief enjoyed a
friendly relationship.

(Id., ¶ 134.)

In his second claim of false

arrest, Plaintiff McHam states that Defendants conspired with a
police officer to arrest him in November of 2013.
¶ 6.)

(Docket Entry 4,

These allegations do not “state a claim to relief that is

plausible on its face.”
550 U.S. at 570).
allegations

to

Iqbal, 556 U.S. at 678 (quoting Twombly,

Plaintiff does not include sufficient factual

“nudge[]

[his]

claims

conceivable to plausible . . . .”

9

across

the

line

from

Twombly, 550 U.S. at 570.

Moreover, Plaintiff McHam failed to allege that the police lacked
a warrant and/or probable cause to arrest him either time.

As it

stands, Plaintiff has only made conclusory allegations of his
alleged false arrests and the Court should dismiss Plaintiff
McHam’s claims of false arrest for failure to state a claim.
In addition, Plaintiff McHam’s first claim of false arrest,
from August of 2006, fails as a matter of law in light of the
statute of limitations.

Although Plaintiff McHam does not state

when any custody related to the false arrest ended, information
contained in his previous lawsuit reflects that such custody ended
at least in 2007. See McHam v. City of Winston-Salem, No. 1:07-cv602, (Docket Entry 1 at 12) (M.D.N.C.) (stating that a highway
patrol officer gave Plaintiff McHam a ticket in April of 2007).7
Therefore, the statute of limitations for Plaintiff’s August-2006false-arrest claim expired, at the latest, in 2010, and he did not
file this case until 2014 - four years later.

The Court should

dismiss Plaintiff McHam’s claim for false arrest in August of 2006
for its patent untimeliness.
C.

Supplemental Jurisdiction
Because the undersigned has recommended dismissal of all of

Plaintiffs’ federal-law claims and only state-law claims remain,
the undersigned will additionally recommend that the Court decline

7

The Court may take judicial notice of public records when
considering a motion to dismiss. See Philips v. County Memorial
Hosp., 572 F.3d 176, 180 (4th Cir. 2009).
10

to exercise supplemental jurisdiction over Plaintiffs’ remaining
state-law

claims.

Magistrate

judges

regularly

evaluate

and

recommend such action as part of the initial in forma pauperis
review.
3207252,

See, e.g., Sims v. Nichols, No. 3:12-CV-0205, 2013 WL
at

*13

(N.D.N.Y.

May

18,

2013)

(unpublished),

recommendation adopted in part, 2013 WL 3207129 (N.D.N.Y. June 24,
2013)

(unpublished);

11-cv-099-JL,

2011

WL

Daoud

v.

Manchester

5837126, at

*4

Police

(D.N.H.

Dep’t,

Oct.

25,

No.
2011)

(unpublished), recommendation adopted, 2011 WL 5837124 (D.N.H. Nov.
19, 2011) (unpublished).

Federal courts possess jurisdiction to

hear certain state-law claims - even after the original basis for
federal jurisdiction disappears.

28 U.S.C. § 1367.

law does not mandate retention of jurisdiction.

However, the

See Shanaghan v.

Cahill, 58 F.3d 106, 110 (4th Cir. 1995) (“[T]rial courts enjoy
wide latitude in determining whether or not to retain jurisdiction
over

state

claims

extinguished.”).

when

all

federal

claims

have

been

In deciding whether to retain jurisdiction,

courts have considered various factors, including: the convenience
and fairness to the parties, the existence of any underlying issues
of federal policy, comity, and considerations of judicial economy.
See id.
In reviewing the factors, remand represents the best course of
action in this case. In particular, upon the dismissal of all
federal-law claims in the early stages of the litigation, remand to

11

state court best promotes the values of economy, convenience,
fairness, and comity.

See Carnegie-Mellon Univ. v. Cohill, 484

U.S. 343, 350 n.7 (1988) (“[I]n the usual case in which all
federal-law claims are eliminated before trial, the balance of
factors to be considered . . . - judicial economy, convenience,
fairness, and comity - will point toward declining to exercise
jurisdiction over the remaining state-law claims.”).

Therefore,

pursuant to 28 U.S.C. § 1367(c)(3), the Court should decline to
exercise

supplemental

jurisdiction

over

Plaintiffs’

state-law

claims, and dismiss them without prejudice to allow filing in state
court.
CONCLUSION
Plaintiff McHam’s alleged power of attorney does not permit
him to litigate on behalf of Plaintiff Smith.

In addition,

Plaintiff McHam has failed to state a claim for false arrest on his
own

behalf.

Finally,

the

Court

should

decline

supplemental

jurisdiction over Plaintiffs’ remaining state-law claims.
IT IS THEREFORE ORDERED that Plaintiffs’ Motion to Proceed In
Forma Pauperis is granted.

12

IT IS RECOMMENDED that Plaintiff Smith’s federal claims be
dismissed for lack of subject matter jurisdiction, that Plaintiff
McHam’s claims be dismissed for failure to state a claim, and that
supplemental jurisdiction over any state-law claims be declined
pursuant to 28 U.S.C. § 1367(c)(3).

/s/ L. Patrick Auld
L. Patrick Auld
United States Magistrate Judge
December 17, 2014

13