Sheppard v. King et al

Filing 47

ORDER GRANTING 43 Motion to Dismiss ; DENYING 10 Motion for Summary Judgment; GRANTING 11 Motion to Dismiss for Failure to State a Claim; DENYING 12 Motion for Sanctions. In light of the foregoing, the Court ORDERS that Defendants David C. Alford and Arcelia Loves motion to dismiss (Dkt. 11) is GRANTED; Judge Ronald B. Kings motion to dismiss (Dkt. 43) is GRANTED; Sheppards motion for summary judgment (Dkt. 10) is DENIED; and Defendants Alford and Defendant Loves motion for sanctions (Dkt. 12) is DENIED. Signed by Judge Robert Pitman. (jgb)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
WACO DIVISION
WILFRED SHEPPARD,
Plaintiff,
v.
JUDGE RONALD B. KING,
DAVID C. ALFORD, and
ARCELIA LOVE,
Defendants.

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6:16-CV-144 RP

ORDER
On May 31, 2016 Plaintiff Wilfred Sheppard filed this action, which he entitles a “Petition
for Fraud upon the Court.” (Dkt. 1). While not an appeal from a ruling of the bankruptcy court,
Sheppard identifies himself as “Plaintiff-Appellant” and indicates that he seeks a review of a
proceeding before the bankruptcy court to determine whether fraud upon the court occurred.
Now pending before the Court are four motions: Sheppard’s motion for summary judgment
for his claim of fraud on the court (Dkt. 10); Defendants David C. Alford and Areclia Love’s
motion to dismiss (Dkt. 11); Defendants Alford and Defendant Love’s motion for sanctions (Dkt.
12); and Judge Ronald B. King’s motion to dismiss (Dkt. 43). After reviewing these motions, their
respective responses and replies, the relevant case law, and the entire record in this case, the Court
issues the following order.
I. BACKGROUND
This is one of four different actions to come before this Court regarding a dispute between
Sheppard and Love. 1 In October 2014, Love filed suit in the 146th Judicial District Court of Bell
County, Texas alleging Sheppard had committed multiple breaches of fiduciary duty arising out of a
1

Nos. 6:16-cv-077, 6:16-cv-144, 6:16-cv-148, and 6:16-cv-169.

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partnership Love says she entered with Sheppard. (Compl., Dkt. 1, at 80). Sheppard failed to timely
respond to the lawsuit and the state court entered a final default judgment, awarding Love actual
damages of $350,000 and exemplary damages of $700,000 (Id.). Sheppard did not appeal this
judgment. (Id.).
Sheppard filed for Chapter 7 bankruptcy on June 18, 2015. (Id. at 81). Sheppard’s schedules
and statement of financial affairs omitted any present or former interest in the partnership with
Love. (Id.). After learning of the bankruptcy proceeding, Love filed an adversary claim on November
23, 2015, alleging that the judgment Sheppard owed to her was not dischargeable in bankruptcy.
(Id.). Sheppard filed a motion for summary judgment with respect to Love’s claim, but it was denied
on April 19, 2016. (Id. at 97). On May 24, 2016, the bankruptcy court held a hearing in which it
determined that Sheppard’s debt to Love was not dischargeable; the court entered an order to that
effect the following day. (Id. at 99-101).
Now, by way of a separate civil suit, Sheppard seeks to challenge the rulings made in his
bankruptcy proceeding to argue that they were made due to “fraud upon the court.” (Id. at 1). In
short, he argues that Judge Ronald B. King committed fraud on the court in ruling on Love’s claims
within his bankruptcy proceeding, that Alford committed fraud on the court by misrepresenting or
fabricating evidence, and that Love perjured testimony to help further this fraud. (Id. at 2–4). There
are two pending motions to dismiss these claims, which the Court will address first.
II. MOTION TO DISMISS STANDARD
When evaluating a motion to dismiss for failure to state a claim under Rule 12(b)(6), “[t]he
‘court accepts all well-pleaded facts as true, viewing them in the light most favorable to the
plaintiff.’” In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (quoting Martin K. Eby
Constr. Co. v. Dall. Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004)). Although Federal Rule of
Civil Procedure 8 mandates only that a pleading contain a “short and plain statement of the claim

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showing that the pleader is entitled to relief,” this standard demands more than unadorned
accusations, “labels and conclusions,” “a formulaic recitation of the elements of a cause of action,”
or “naked assertion[s]” devoid of “further factual enhancement.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007). Rather, a complaint must contain sufficient factual matter, accepted as true, to
“state a claim to relief that is plausible on its face.” Id. at 570. The court must initially identify
allegations in the complaint that are no more than legal conclusions or “[t]hreadbare recitals of a
cause of action’s elements,” then assume the veracity of well-pleaded factual allegations and
“determine whether they plausibly give rise to an entitlement to relief.” Ashcroft v. Iqbal, 556 U.S. 662,
678 79 (2009). “[W]here the well-pleaded facts do not permit the court to infer more than the mere
possibility of misconduct, the complaint has alleged—but it has not ‘show[n]’—‘that the pleader is
entitled to relief.’” Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)).
III. DISCUSSION
In his complaint, 2 Sheppard alleges that each of Defendants committed fraud upon the court
during his Chapter 7 bankruptcy proceeding, No. 15-60492-RBK, in the United States Bankruptcy
Court for the Western District of Texas. (Compl., Dkt. 1, at 6). First, Sheppard alleges that Alford,
Love’s attorney in the bankruptcy action, misrepresented evidence to suggest that a partnership
existed between Love and Sheppard. (Id. at 6–7). Sheppard alleges that at trial, Alford provided no
evidence of a partnership between Love and Sheppard, yet represented that a partnership existed to
the court.
Second, Sheppard alleges that Love lied when testifying under oath. Specifically, Sheppard
alleges that Love falsely testified that certain “bank account information and reports were mailed to
a P.O. Box owned by Sheppard.” (Id. at 8). On cross-examination, Love purportedly admitted that
two of the exhibits submitted by her attorney were mailed to the address for her business, and “that
Sheppard’s complaint is styled as a brief rather than as a traditional complaint, thus the Court primarily relies on
Sheppard’s “Statement of Relevant Facts” for relevant factual allegations. (Compl., Dkt. 1, at 6–10).

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neither her [n]or her attorney produced any P.O. Box info for Sheppard in the exhibits offered as
evidence.” (Id. at 8).
Finally, Sheppard alleges that Judge King demonstrated bias against him throughout his
adjudication of Love’s claims within Sheppard’s bankruptcy proceeding. (Id. at 9). Sheppard alleges
the following actions demonstrate Judge King’s bias against him:
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Judge King ignored the fact that Love had perjured her testimony and relied
“heavily on it to formulate evidence against Sheppard”;
Judge King twice denied Sheppard’s motion to dismiss based on Love’s
perjured testimony;
Judge King ruled in favor of Love despite her perjured testimony;
Judge King vacated an order for Sheppard’s Chapter 7 discharge on
December 11, 2015;
Judge King denied Sheppard’s initial motion for summary judgment without
conducting a trial on December 21, 2016;
Judge King denied every motion for summary judgment and motion to
dismiss filed by Sheppard thereafter; and
“Judge King ruled on this case December 11, 2015 prior to a trial on the
merits and consent of parties.”

(Id. at 9).
As already mentioned, Defendants Alford and Love have moved to dismiss Sheppard’s claim
of fraud upon the court pursuant to Federal Rule of Civil Procedure 12(b)(6) on the basis that he has
failed to state a claim for which relief can be granted. They argue that fraud upon the court
encompasses only the most egregious misconduct, and that the allegations in Sheppard’s complaint
fail to meet that demanding standard. Further, they contend that Sheppard’s real goal is to challenge
the merits of the state court judgment, the merits of which are irrelevant to whether he has stated a
claim for fraud on the court.
Judge King has also moved to dismiss Sheppard’s claim, but based on the doctrine of judicial
immunity. He argues that the acts that Sheppard alleges form the basis of Sheppard’s claim were
carried out within the scope of his judicial discretion, rendering him immune from liability.

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For the most part, Sheppard’s responses to these motions to dismiss consist of his
reiteration of the arguments made in his complaint. His chief focus, however, is on what he terms,
the “[e]lephant in the room”—the fact that he provided evidence to the bankruptcy court that he
was not in a partnership with Love, thus the state court default judgment was erroneous. (Pl’s. Resp.
to Alford and Love Mot. to Dismiss, Dkt. 27, at 1). He argues that Judge King’s failure to take this
into account renders Judge King’s rulings erroneous as a matter of law, and demonstrates that those
rulings were based on bias, false statements, or perjured testimony.
Based on these arguments, the Court will first consider whether Sheppard has adequately
stated a claim for fraud upon the court against Alford, Love, and Judge King. If Sheppard has
adequately alleged such a claim against Judge King, the Court will then consider whether Judge King
is entitled to immunity. Finally, the Court will briefly address Sheppard’s remaining arguments
regarding the absence of a partnership between him and Love.
A. Fraud on the Court
A claim for fraud upon the court may be considered as part of an independent civil action.
See Fed. R. Civ. P. 60(d)(1)-(3) (“This rule does not limit a court’s power to: . . . entertain an
independent action to relieve a party from a judgment, order, or proceeding; . . . [or] set aside a
judgment for fraud on the court.”); United States v. Buck, 281 F.3d 1336, 1342 (10th Cir. 2002) (noting
that “[t]here are no formal requirements for asserting a claim of fraud on the court,” but also
acknowledging that an independent action is an appropriate procedural mechanism for such a
claim).
“To establish fraud on the court, ‘it is necessary to show an unconscionable plan or scheme
which is designed to improperly influence the court in its decision.’” First Nat’l Bank of Louisville v.
Lustig, 96 F.3d 1554, 1573 (5th Cir. 1996) (quoting Rozier v. Ford Motor Co., 573 F.2d 1332, 1338 (5th
Cir. 1978)); see also Buck, 281 F.3d at 1342 (“Fraud on the court . . . is fraud which is directed to the

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judicial machinery itself and is not fraud between the parties or fraudulent documents, false
statements or perjury”). Thus, “[g]enerally speaking, only the most egregious misconduct, such as
bribery of a judge or members of a jury, or the fabrication of evidence by a party in which an
attorney is implicated, will constitute a fraud on the court.” Fierro v. Johnson, 197 F.3d 147, 154 (5th
Cir. 1999) (quoting Lustig, 96 F.3d at 1573). “Less egregious misconduct, such as nondisclosure to
the court of facts allegedly pertinent to the matter before it, will not ordinarily rise to the level of
fraud on the court,” id. (quoting Lustig, 96 F.3d at 1573), meaning that “perjury by a witness is
[usually] not enough to constitute fraud upon the court,” Herring v. United States, 424 F.3d 384, 390
(3d Cir. 2005)
While the Fifth Circuit has not specifically addressed what elements must be proven for a
claim of fraud upon the court, the Third Circuit has explained that such claim requires: “(1) an
intentional fraud; (2) by an officer of the court; (3) which is directed at the court itself; and (4) in fact
deceives the court.” Id. at 386. Other courts have determined that a claim for fraud on the court
“must also touch on the public interest in a way that fraud between individual parties generally does
not.” Fox ex rel. Fox v. Elk Run Coal Co., 739 F.3d 131, 136 (4th Cir. 2014).
The court now applies these standards to Sheppard’s factual allegations.
1. Defendant David Alford
The complaint alleges that Defendant Alford misrepresented evidence by stating that Love
and Sheppard were in a partnership, but also that he offered no evidence of that partnership and
fabricated evidence by allowing Love to testify that she had a partnership with Sheppard. Sheppard
fails to plausibly allege, however, that this conduct was actually fraudulent. Certainly, it is clear that
Sheppard believes that he never entered into a partnership with Love. But Sheppard does not
plausibly allege that Alford knew that no partnership existed between Love and Sheppard, rather than

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that Alford mistakenly believed that a partnership existed. 3 See Fierro, 197 F.3d at 154–56 (holding that
where attorney is not aware of false nature of testimony, nondisclosure of falsity cannot establish
fraud on the court).
Importantly, Sheppard also fails to plausibly allege that this misrepresentation actually
deceived the bankruptcy court or that the court relied on the misrepresentation in its rulings. The
issue before the bankruptcy court was whether Sheppard’s debt to Love, ordered by a state court
through default judgment, was non-dischargeable debt. The issue that Sheppard raises—whether he
was Love’s business partner—is relevant only to the merits of the state court ruling, not to the
dischargeability of his debt. Cf. Matter of Gober, 100 F.3d 1195, 1208 n.14 (5th Cir. 1996) (noting that
“collateral attack on [a] state court judgment itself is no defense to a § 523(a) dischargeability
proceeding”). Thus, regardless of whether Alford’s conduct deceived the bankruptcy court, the
bankruptcy court could have still ruled against Sheppard regarding non-dischargeability.
At most, the conduct Sheppard alleges Alford engaged in consisted of Alford both making
and allowing his client to make a false statement regarding a partnership between Love and
Sheppard. The issue of whether a partnership existed was not, however, before the bankruptcy
court. Thus, the Court concludes that Alford’s alleged conduct is not an unconscionable scheme or
egregious misconduct and does not rise to the level of fraud on the court.
2. Defendant Arcelia Love
Defendant Arcelia Love is not an attorney, nor is she otherwise an officer of the court. Thus,
her conduct cannot constitute fraud upon the court. See Fierro, 197 F.3d at 154 (stating that a claim
for fraud on the court “allows a judgment to be attacked on the basis of intrinsic fraud that results
from corrupt conduct by officers of the court” and holding that false statements by police officers
could not constitute fraud on the court).
It is also quite possible that Alford correctly believed that a partnership existed between Love and Sheppard, but at this
stage the Court accepts the allegations in the complaint as true.
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3. Judge Ronald B. King
Sheppard primarily argues that Judge King demonstrated bias against him by ruling against
him on numerous occasions. Sheppard fails to plausibly allege an unconscionable scheme against
him, rather than the conduct of a Judge who has disagreed with him. For example, Sheppard says
that Judge King “has abused his discretion by ruling against Sheppard to appease the personal
interest of the opposing party.” (Compl., Dkt. 1, at 12). Yet Sheppard fails to identify any reason or
scheme that would motivate Judge King to rule against him in connection with the numerous
instances where he argues the Judge exhibited bias or prejudice. Even if Judge King incorrectly
applied the law to reach erroneous outcomes in any of these instances, that conduct is not a
sufficient basis for a claim of fraud on the court.
The only alleged scheme that Sheppard even argues was a factor in some of Judge King’s
decision-making is the perjured testimony of Defendant Love and the misrepresentation of
Defendant Alford. But as the Court previously explained, Sheppard has failed to plausibly allege that
the Judge relied on this conduct in any way—while Sheppard conclusorily asserts that Judge King
relied on this testimony, the issue of whether Sheppard and Love were in a partnership was not
before the bankruptcy court. Further, even if Judge King had relied on the perjured testimony, such
testimony is insufficient to support a claim of fraud on the court, particularly here, where Sheppard
suggests he was able to cross-examine Love regarding her perjured testimony and gain admissions
indicating it to be untrue.
Accordingly, the court finds it clear that the conduct Sheppard complains of does not rise to
the level of fraud on the court. Specifically, none of the alleged wrongdoing he has identified
involves the sort of egregious behavior or unconscionable plan that the cause of action of fraud on
the court is aimed at addressing.

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Further, with respect to all defendants, the public interest weighs in favor of dismissing
Sheppard’s claims. While the vast majority of cases involving claims of fraud on the court arise
months or years after the original fraud occurred and long after the original case was closed,
Sheppard’s bankruptcy case has appeals still pending. To the extent that any unconscionable scheme
did occur at the bankruptcy court (and based on the allegations here, it did not), Sheppard has the
ability to directly appeal the relevant rulings and demonstrate how the bankruptcy court was
deceived or was involved in a fraudulent scheme. Thus, the public interest in judicial economy
weighs in favor of allowing the existing bankruptcy appeal to be exhausted before this Court
entertains a separate action alleging fraud on the court.
Because the Court concludes that none of the conduct alleged by Sheppard rises to the
egregious level sufficient to adequately state a fraud on the court claim, his claims will be dismissed.
As a result, the court need not address Judge King’s argument that his alleged misconduct is
insulated by the doctrine of judicial immunity.
B. Absence of a Partnership
In addition to his arguments regarding fraud on the court, Sheppard spends much of his
complaint and other filings in this case arguing that he did not have a partnership with Defendant
Love. As he acknowledges, a state court “default judgment . . . awarded $1 million in damages to
[Defendant Love] for alleged [p]artnership fiduciary violations.” (Compl., Dkt. 1, at 11). Regardless
of whether Love and Sheppard had a partnership, neither this Court nor the bankruptcy court have
jurisdiction to review the ruling of the state court. Matter of Reitnauer, 152 F.3d 341, 343 (5th Cir.
1998) (“[F]ederal courts do not have the power to modify or reverse state court judgments”). Thus,
to the extent Sheppard makes a claim premised on the absence of a partnership with Love, this
claim is dismissed.

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IV. MOTION FOR SUMMARY JUDGMENT
Sheppard filed a motion for summary judgment in this case on June 13, 2015, requesting the
Court remedy the failure by the bankruptcy court “to properly administer justice.” (Mot. for Summ.
J., Dkt. 10, at 12). As the Court finds that Sheppard’s complaint does not state a claim for which
relief can be granted, it also denies his motion for summary judgment.
V. MOTION FOR SANCTIONS
In addition to their motion to dismiss Plaintiff’s claims, Defendants Alford and Love have
filed a motion for sanctions against Sheppard for violations of Federal Rule of Civil Procedure 11.
Rule 11(b) provides:
By presenting to the court a pleading, written motion, or other paper—whether by
signing, filing, submitting, or later advocating it—an attorney or unrepresented party
certifies that to the best of the person’s knowledge, information, and belief, formed
after an inquiry reasonable under the circumstances:
(1) it is not being presented for any improper purpose, such as to harass, cause
unnecessary delay, or needlessly increase the cost of litigation;
(2) the claims, defenses, and other legal contentions are warranted by existing law
or by a nonfrivolous argument for extending, modifying, or reversing existing
law or for establishing new law;
(3) the factual contentions have evidentiary support or, if specifically so
identified, will likely have evidentiary support after a reasonable opportunity for
further investigation or discovery; and
(4) the denials of factual contentions are warranted on the evidence or, if
specifically so identified, are reasonably based on belief or a lack of information.
Fed. R. Civ. P. 11(b). If “the court determines that Rule 11(b) has been violated, the court may
impose an appropriate sanction on any attorney, law firm, or party that violated the rule.” Fed. R.
Civ. P. 11(c)(1).
Here, Defendants Alford and Love argue that Sheppard’s claims for fraud upon the court
were unwarranted by existing law, unsupported by any nonfrivilous argument for extending the law,
presented for an improper purpose, and lacked evidentiary support.
First, the Court disagrees with defendants that Sheppard’s action for fraud upon the court
was for an improper purpose, or “clearly intended for the purposes of harassment, causing
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unnecessary delay, and needlessly increasing the cost of litigation.” (Mot. for Sanctions, Dkt. 12, at
3). Instead, the Court finds it more likely that Sheppard, as a pro se litigant, is simply trying his best
to obtain relief from what he feels was a wrongfully decided state-court judgment. While the avenues
through which Sheppard has sought relief may have been improper, the Court cannot agree that the
purpose or motive of his actions was necessarily improper.
Second, while the Court generally agrees that Sheppard’s arguments were unwarranted under
existing law and that his claims lacked evidentiary and factual support, it is hesitant to conclude that
Sheppard did not make his claims to the best of his “knowledge, information, and belief, formed
after an inquiry reasonable under the circumstances.” See Fed. R. Civ. P. 11(b). The relief Sheppard
has sought from this Court necessarily involved analysis of several complex legal issues, and the
Court finds it difficult, given Sheppard’s pro se status, to conclude that his mistakes and
misunderstandings were unreasonable. The Court warns Sheppard, however, that it has the ability to
enter sanctions in the future without a motion by defendants. See Fed. R. Civ. P. 11(c)(3). Thus, to
the extent that Sheppard re-raises arguments that the Court has rejected via this order or other
future orders, it will be far less likely to consider his behavior reasonable.
IV. CONCLUSION
In light of the foregoing, the Court ORDERS that Defendants David C. Alford and Arcelia
Love’s motion to dismiss (Dkt. 11) is GRANTED; Judge Ronald B. King’s motion to dismiss (Dkt.
43) is GRANTED; Sheppard’s motion for summary judgment (Dkt. 10) is DENIED; and
Defendants Alford and Defendant Love’s motion for sanctions (Dkt. 12) is DENIED.
SIGNED on December 14, 2016.

ROBERT PITMAN
UNITED STATES DISTRICT JUDGE

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