Johnson et al v. Villages of Bennington Property Owners Conservancy et al

Filing 13

ORDER ADOPTING REPORT AND RECOMMENDATIONS for DE 11 and denying Motion to Amend Complaint for DE 12 signed by Judge John T. Fowlkes, Jr. on 01/24/2018. (Fowlkes, John)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
______________________________________________________________________________
FRANCOIS JOHNSON and
TIA JOHNSON,

)
)
)
Plaintiffs,
)
v.
)
Case No. 2:17-cv-02260-JTF-egb
)
VILLS. OF BENNINGTON PROP.
)
OWNERS CONSERVANCY; CRYE)
LEIKE MGMT. CO.; ABDULLAH HASAN; )
WILLIAM E. MILLER & ASSOCS.; and
)
WILLIAM MILLER,
)
)
Defendants.
)
_____________________________________________________________________________
ORDER ADOPTING MAGISTRATE JUDGE’S
REPORT AND RECOMMENDATION FOR DISMISSAL AND DENYING MOTION TO
AMEND COMPLAINT
______________________________________________________________________________
Before the Court is the Report and Recommendation entered by the Magistrate Judge in
the above-styled case. (ECF No. 11.) On April 14, 2017, Plaintiffs filed their pro se Complaint,
accompanied by their Motions seeking leave to proceed in forma pauperis (“IFP”). (ECF Nos.
1, 2, & 3.) Pursuant to Administrative Order 2013-15, this case was assigned to the Magistrate
Judge for management of all pretrial matters. On November 22, 2017, the Magistrate Judge
entered an Order granting both IFP Motions. (ECF No. 10.) The Magistrate Judge subsequently
issued a Report and Recommendation on December 13, 2017, suggesting that this Court dismiss
Plaintiffs’ Complaint in its entirety for lack of subject matter jurisdiction. (ECF No. 11, 6.)
Plaintiff did not file any Objections to the Report and Recommendation, and the deadline for
doing so has passed. Plaintiffs did file an Amended Complaint on December 28, 2017. (ECF
No. 12.)

I.

FINDINGS OF FACT

Implicit in his Report and Recommendation, is the Magistrate Judge’s determination that
proposed findings of fact are not necessary in this case. Compare Fed. R. Civ. P. 72(b)(1), with
ECF No. 11. Rather, the Magistrate Judge issued his Report and Recommendation based on
Plaintiffs’ Complaint and the applicable law. The Court, for purposes of its analysis, similarly
incorporates the same as well as Plaintiffs’ Amended Complaint.
II.

LEGAL STANDARD

Pursuant to 28 U.S.C. § 636(b), magistrate judges may hear and determine any pretrial
matter pending before the Court, except various dispositive motions. 28 U.S.C. § 636(b)(1)(A).
Upon hearing a pending matter, “the magistrate judge must enter a recommended disposition,
including, if appropriate, proposed findings of fact.” Fed. R. Civ. P. 72(b)(1); see also Baker v.
Peterson, 67 F. App’x 308, 310 (6th Cir. 2003). The district court may accept, reject, or modify
the proposed findings or recommendations of the Magistrate Judge. 28 U.S.C. § 636(b)(1)(C).
Any party who disagrees with a magistrate’s proposed findings and recommendation may
file written objections to the report and recommendation. Fed. R. Civ. P. 72(b)(2). The standard
of review that is applied by the district court depends on the nature of the matter considered by
the magistrate judge. See Baker, 67 F. App’x at 310. The district court is not required to
review—under a de novo or any other standard—those aspects of the report and recommendation
to which no objection is made. Thomas v. Arn, 474 U.S. 140, 150 (1985). A district judge
should adopt the findings and rulings of the magistrate judge to which no specific objection is
filed. Brown, 47 F. Supp. 3d at 674.
Pursuant to Local Rule 4.1, service will not issue in a pro se case where the pro se
plaintiff has been granted leave to proceed IFP until the complaint has been screened under 28

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U.S.C. § 1915(e)(2)(B).

LR 4.1(b).

Courts must screen IFP complaints and dismiss any

complaint, or portion thereof, if the allegation of poverty is untrue or if the action (i) is frivolous
or malicious, (ii) fails to state a claim on which relief may be granted, or (iii) seeks monetary
relief against a defendant who is immune from such relief. 28 U.S.C. § 1915(e)(2). To state a
claim, courts hold as follows:
[A] complaint must contain a short and plain statement of the claim showing that
the pleader is entitled to relief. A complaint must have enough facts to state a
claim to relief that is plausible on its face. A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.
Davidson v. Fed. Bureau of Prisons, No. 17-5429, 2017 U.S. App. LEXIS 24272, at *6 (6th Cir.
Nov. 29, 2017).
Additionally, Courts must remain conscious that pro se pleadings, though not free from basic
pleading requirements, are “held ‘to less stringent standards than formal pleadings drafted by
lawyers,’ and should therefore be liberally construed.” Williams v. Curtin, 631 F.3d 380, 383
(6th Cir. 2011) (quoting Martin v. Overton, 391 F.3d 710, 712 (6th Cir. 2004)).
III.

ANALYSIS

Upon de novo review of the Magistrate Judge’s Report and Recommendation, this Court
agrees with the Magistrate Judge’s recommendation to dismiss Plaintiff’s original Complaint for
lack of subject matter jurisdiction. A federal district court has original jurisdiction of all civil
actions “arising under the Constitution, laws, or treaties of the United States”, i.e., federalquestion jurisdiction, or “where the matter in controversy exceeds the sum or value of $75,000,
exclusive of interest and costs, and is between . . . citizens of different states”, i.e., diversity
jurisdiction. 28 U.S.C. §§ 1331–1332.

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The Court agrees with the Magistrate Judge’s determination that Plaintiffs’ original
Complaint should be dismissed for lack of subject-matter jurisdiction.

As noted by the

Magistrate Judge, Plaintiffs’ original Complaint does not present a federal question. (ECF No.
11, 5.) Whether a claim presents a federal question is determined by looking to what appears in
the plaintiff's statement of his own claim. Taylor v. Anderson, 234 U.S. 74, 75-76 (1914). Here,
Plaintiffs’ Complaint does not cite the Constitution, laws, or treaties of the United States but,
rather, generally cites the federal-question statute. Accordingly, Plaintiffs’ Complaint fails to
demonstrate that this Court retains federal-question jurisdiction over the instant matter.
Moreover, Plaintiffs’ Complaint fails to demonstrate the presence of diversity
jurisdiction. Diversity Jurisdiction requires, in part, complete diversity between all plaintiffs and
all defendants. Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89 (2005) (citation omitted). Here,
however, Plaintiff has not alleged diversity of citizenship amongst any of the parties to the
present case. Thus, this Court agrees with the Magistrate Judge’s recommendation to dismiss
this action in its entirety for failure to state a claim for lack of subject matter jurisdiction.
Motion to Amend Complaint
Since the filing of Plaintiffs’ original Complaint, Plaintiffs filed an Amended Complaint.
(ECF No. 12.) The Court additionally construes the filing as Plaintiffs’ Motion to Amend
Complaint. Under Fed. R. Civ. P. 15(a), a party may amend its pleading once as a matter of
course within 21 days after serving it and in all other cases, the court should freely give leave
when justice so requires. See Fed. R. Civ. P. 15(a); see also LaFountain, 716 F.3d at 951. For
example, a motion to amend a complaint should be denied if the amendment would be futile.
Foman v. Davis, 371 U.S. 178, 182 (1962).

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Here, the Court finds that Plaintiffs’ Motion to Amend Complaint should be denied
because allowance of the amendment would be futile. In their Amended Complaint, Plaintiffs
attempt to fix insufficiencies in their original Complaint, as found by the Magistrate Judge.
(Compare ECF No. 11, with ECF No. 12.) Specifically, the Amended Complaint supplements or
modifies Plaintiffs’ discrimination claims and false statement claim, while adding a contract ultra
vires claim and racketeering allegation.
The Court finds that Plaintiffs’ Amended Complaint does not adequately state a claim for
relief under the Fair Housing Act. Plaintiffs assert a general claim for discrimination under the
Fair Housing Act and a specific claim alleging age discrimination by Defendants against
Plaintiffs. The only factual support Plaintiffs give for the assertion is their submission that their
neighbors, who are retired and more senior to Plaintiffs, are allowed exceptions. (ECF No. 12,
6:2.)

Plaintiffs neither specify what exceptions nor provide any other supporting facts.

Accordingly, the Court concludes that Plaintiff’s Amended Complaint, as to this issue, is
insufficient to state a plausible claim to relief and, thus, allowance of the Amended Complaint
would be futile.
Next, the Court finds that Plaintiffs’ Amended Complaint fails to adequately state a claim
that Defendants violated 31 U.S.C. § 3802, otherwise known as the Program Fraud Civil
Remedies (“PFCRA”). “The PFCRA was enacted to allow federal agencies to recover penalties
and assessments from individuals who have obtained benefits or payments from the government
by making false or fraudulent claims.” 31 U.S.C. § 3102; see also Bolden v. McCabe, Weisberg
& Conway, LLC, No. DKC 13-1265, 2014 U.S. Dist. LEXIS 32453, at *6 (D. Md. Mar. 13,
2014). To be certain, the PFCRA “was not enacted for citizens to utilize as a cause of action
against an administrative agency.” Ellis v. Dep't of Veterans' Affairs, No. CV-05-257-RHW,

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2006 U.S. Dist. LEXIS 6061, at *3 (E.D. Wash Jan. 27, 2006). Here, Plaintiffs are private
citizens, and no Defendant is a federal department or agency. Accordingly, Plaintiffs do not state
a plausible entitlement to relief under this cause of action, and thus, their Amended Complaint
must be denied as futile on the claim.
The Court also finds that Plaintiffs do not adequately state a claim showing entitlement to
relief on their contract ultra vires claim. Plaintiffs assert that the home owner contract at issue is
in violation of the Doctrine of Ultra Vires because the Villages of Bennington Property Owners
Conservancy Contract was created as part of a mortgage contract by Wells Fargo Bank that
loaned its credit. (ECF No. 12, 4.) As a result, Plaintiffs contend, the contract is void. (Id. at 6.)
Contract ultra vires occurs when a corporation contracts outside the object of its creation as
defined in the law of its organization, and therefore beyond the powers conferred upon it by the
legislature. Central Transp. Co. v. Pullman's Palace Car Co., 139 U.S. 24, 59 (1891). A
contract ultra vires is unlawful and wholly void. Pullman's Palace Car Co., 139 U.S. at 60.
Plaintiffs claim that the Villages of Bennington Property Owners Conservancy Contract
is ultra vires is of no avail. Plaintiffs have not provided sufficient facts for this Court to conclude
that the instant allegation states a plausible claim to relief. Other than the conclusory assertion
that Wells Fargo Bank loaned its credit, Plaintiff’s provide no other support for their claim.
Accordingly, this Court finds that allowance of Plaintiffs’ Amended Complaint, on this point,
would be futile because the Complaint does not provide a short and plain statement of the claim
showing a plausible entitlement to relief.
Lastly, the Court finds that Plaintiffs’ Amended Complaint does not adequately state a
claim for racketeering. Plaintiffs assert that Defendants wrongfully used the mail services to
charge and collect money from Plaintiffs, given the contract, as Plaintiffs allege, is ultra vires.

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(ECF No. 12, 7:34–35.) This contention, however, in unpersuasive in light of the Court’s finding
that Plaintiffs’ allegations that the Villages of Bennington Property Owners Conservancy
Contract is ultra vires is insufficient to state claim for relief
IV.

CONCLUSION

Upon de novo review, the Court hereby ADOPTS the Magistrate Judge’s Report and
Recommendation to DISMISS this action in its entirety and DENIES Plaintiffs’ Motion to
Amend Complaint.

IT IS SO ORDERED on this 24th day of January 2018.

s/John T. Fowlkes, Jr.
John T. Fowlkes, Jr.
United States District Judge

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