Gomez v. Neely et al

Filing 22

MEMORANDUM OPINION AND ORDER directing 1) The plaintiff's 17 Objections to the Proposed Findings and Recommendations are overruled; 2) The plaintiff's 18 motion for leave to amend the complaint is denied; 3) The magistrate judge's 16 Proposed Findings and Recommendation are adopted and incorporated herein in full; 4) The defendants' 5 motion to dismiss is granted; and 5) This civil action is hereby dismissed and stricken from the docket of the court. Signed by Judge John T. Copenhaver, Jr. on 9/26/2018. (cc: counsel of record; any unrepresented parties) (kp)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
MARK GOMEZ,
Plaintiff,
v.

Civil Action No. 2:17-cv-04105

RICHARD F. NEELY,
MICHAEL O. CALLAGHAN, and
CHRISTOPHER MACCORKLE SMITH,
Defendants.

MEMORANDUM OPINION AND ORDER
This action was previously referred to the Honorable
Dwane L. Tinsley, United States Magistrate Judge, who submitted
his Proposed Findings and Recommendation (“PF&R”) pursuant to
the provisions of 28 U.S.C. § 636(b)(1)(B) on July 31, 2018.
The magistrate judge recommends that the defendants’ motion to
dismiss be granted.

On August 16, 2018, the plaintiff filed

objections to the PF&R (“Objection”), to which defendants filed
a response, followed by plaintiff’s reply.

Also pending is

plaintiff’s motion requesting leave to amend the complaint,
filed with his Objection.

I.

Relevant Factual History

On October 3, 2017, the pro se plaintiff filed the
complaint in this action against the defendants alleging
violations of the civil provisions of the Racketeer Influenced
and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et
seq., along with various state law claims.

This case arises in

part from an alleged agreement between the plaintiff and
Christopher MacCorkle Smith (“Smith”), an owner of A.C.R.
Promotions, Inc. (“A.C.R.”) in which plaintiff would lobby the
State Athletic Commission.

A.C.R. and Smith subsequently hired

Richard Neely as their attorney and filed a lawsuit in this
court against the State Athletic Commission, claiming violations
of the civil RICO Act.
06026.

Smith v. Allred et al., No. 2:15-cv-

That action was settled out of court for $550,000.00 and

a dismissal order was entered by the court on June 29, 2016.
Plaintiff argues that A.C.R. promised him one-third of the
settlement distribution of that lawsuit.
Smith v. Allred settled when the West Virginia Bureau
of Risk and Insurance Management (“BRIM”), which handles
insurance claims against state agencies, paid the $550,000.00 to
Smith, his wife Andrea Gomez Smith (who is plaintiff’s sister),
and A.C.R.

Plaintiff claims that he received none of the

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settlement distribution from Smith v. Allred and that past
agreements entitled him to one-third of it.
Consequently, on June 27, 2017, plaintiff filed a
lawsuit in the Circuit Court of Kanawha County against A.C.R.
for breach of contract and unjust enrichment and demanded
payment of $83,333.33 for unpaid lobbying fees, represented by
his alleged one-third interest in the $550,000.00 after
deduction of a 50 percent attorney fee plus costs.

Gomez v.

A.C.R. Promotions, Inc., No. 17-C-858 (Kanawha Cty. Cir. Ct.).
The state court proceeding was soon dismissed on October 30,
2017, on the ground that plaintiff’s breach of contract and
unjust enrichment claims were barred by the statute of frauds.
In this case the pro se plaintiff makes much of a
matter that is simply irrelevant both to this case and the state
court case.

That is, for some reason Mr. Neely introduced in

the state court case what was purported to be an agreed order of
dismissal in the Smith v. Allred case, though it was not shown
as signed by the federal judge, bearing date of June 21, 2016.
That unsigned “order” mistakenly stated in the body but not the
caption that one of the settling “plaintiffs” was Andrea Gomez
Smith, who was never a party to it.

This unsigned order was a

proposed agreed order of dismissal of Smith v. Allred, filed
through the online federal filing system (“PACER”) on June 21,
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2016.

Actually, an order of dismissal was signed by the federal

judge in Smith v. Allred and entered on June 29, 2016, which
made no mention of Andrea Gomez Smith.

The magistrate judge

quite correctly found that the unsigned order and its filing in
the federal PACER system did not merit an amendment.
15, at 4.

ECF No.

Nor does it merit any further consideration in this

case.
Nevertheless, another event in the state court
proceeding spawned in part this action.

In that case, Mr. Neely

referred to plaintiff as a “n’er-do-well, convicted felon, and
disbarred lawyer.”

Plaintiff then filed this action in which he

claims those comments are the basis of his defamation claim
against Mr. Neely, and he adds a civil RICO claim against Mr.
Neely, his law partner, Michael Callaghan, and Smith.

These

allegations, together with related state law claims, make up the
present case.

II.

Standard of Review

“The Federal Magistrates Act requires a district court
to ‘make a de novo determination of those portions of the
[magistrate judge’s] report or specified proposed findings or
recommendations to which objection is made.’”

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Diamond v.

Colonial Life & Accident Ins. Co., 416 F.3d 310, 315 (4th Cir.
2005) (emphasis in original)(quoting 28 U.S.C. 636(b)(1)).

III. Discussion

The plaintiff first uses the Objection, not to object
to specific findings of the magistrate judge’s PF&R, but to
argue the reasons he believes this court should grant him leave
to file an amended complaint.

ECF No. 17.

Along with his

Objection, the plaintiff has filed a “Rule 15 Request,” asking
the court to reconsider the magistrate judge’s order denying
leave to amend his complaint.

ECF No. 18.

This motion appears

to be one for leave to amend by adding one or more new causes of
action.

Motion to Amend the Complaint

Rule 15(a)(2) of the Federal Rules of Civil Procedure
provides that leave shall be freely given where justice so
requires.

However, the court may deny leave to amend where the

amendment would be futile.

See e.g., Edwards v. City of

Goldsboro, 178 F.3d 231, 242 (4th Cir. 1999); Frank M.
McDermott, Ltd. v. Moretz, 898 F.2d 418, 420-21 (4th Cir. 1990)
(no error in denying amendment when the claim sought to be

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pleaded by amendment would be subject to dismissal under Rule
12(b)(6)).
The plaintiff filed a Freedom of Information Act
(“FOIA”) request with BRIM for documents pertaining to the
settlement of the Smith v. Allred civil RICO case.
at 3.

ECF No. 17,

BRIM provided the plaintiff with three documents: the

“Receipt,” the “Release in Full of All Claims” (the “Release”),
and the “Agreed Order of Dismissal” (the legitimate dismissal
order entered by the court on June 29, 2016).

Id.

The text of the Release names and includes Andrea
Gomez Smith as one of the plaintiffs, who acknowledge their
awareness of the effect of the release as provided therein.

The

Release states that the federal case would be dismissed and that
Christopher Smith, Andrea Smith, and A.C.R. would receive
$550,000.00 in settlement funds.

The Receipt notes that

Christopher Smith and Andrea Gomez Smith, individually and on
behalf of A.C.R., acknowledge the receipt of the $550,000.00.
Both Christopher and Andrea Smith signed these documents before
a West Virginia Notary Public who took the acknowledgment of
their signatures.

Id. at 4.

The plaintiff here states that the captions of each
the Release and the Receipt were framed as pleadings but were
not filed with the Clerk of this court.
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This, plaintiff claims,

indicates that BRIM was unaware that it had paid the settlement
funds to a non-party.

Id.

However, the FOIA request did

reveal, as indicated above, that BRIM had the true order of
dismissal in Smith v. Allred that did not include Andrea Gomez
Smith’s name in either the caption or the text.

ECF No. 18, Ex.

1, at 9.
Out of these facts, the plaintiff hopes to amend his
complaint to bolster his RICO predicate claim of obstruction of
justice in Count 10 of the complaint by including allegations of
perjury against Andrea and Christopher Smith for signing the
Receipt, as well as the Release which he erroneously believes
was accompanied by affidavits that in reality were merely short
form certificates that attested to their signatures before the
Notary.

See W. Va. Code § 39-4-16(4); ECF No. 17, at 4.

Plaintiff also attempts to bring additional false statement
claims to support existing mail and wire fraud counts and a new
wire fraud count, which he argues arise out of those signatures
and the filing of the unsigned order in the PACER system.
at 5-6.

Id.

Moreover, plaintiff seeks to include a subornation of

perjury charge against Mr. Neely for procuring those signatures.
Id. at 4-6.

But, of course, there were no affidavits and,

hence, neither perjury or subornation of perjury.

Finally, the

plaintiff wishes to include a wire fraud count in the complaint

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against Mr. Neely, who he claims devised a scheme to defraud by
having Andrea Smith and Christopher Smith sign what he
mistakenly calls the “affidavits” in the Release, as well as the
Receipt, in order to improperly enrich Andrea Gomez Smith from
the settlement funds.

Id. at 5-6.

The magistrate judge properly evaluated the requisite
elements of a civil RICO claim, most notably, that the plaintiff
must allege two predicate acts.

See PF&R 7-12.

Nothing that

the plaintiff has noted would support his civil RICO claim here.
The settlement in Smith v. Allred was with Christopher
Smith and A.C.R. Promotions, Inc., an entity that the magistrate
judge found was owned by Smith.

PF&R 2.

In the defendants’

response to the Objection, it is asserted that A.C.R. was owned
in equal shares by Christopher Smith and Andrea Smith.
20, at 3.

ECF No.

No evidence is offered to support that assertion.

Regardless of the actual ownership share, recipients of a
settlement may divide the proceeds as they see fit.

Whether the

plaintiff was entitled to any of it is determinable without
regard to who actually received the money.

In this instance,

plaintiff’s application to the state court for a share has
already been adjudicated and it was denied.
Ultimately, the facts the plaintiff seeks to introduce
do not represent illegal actions on the part of the defendants
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and cannot support the claims he hopes to add to the complaint.
If the plaintiff were allowed to amend his complaint in the
manner he desires, the claims would not be able to survive a
motion to dismiss.

Accordingly, the court denies the

plaintiff’s motion for leave to amend his complaint because the
amendments would be futile.

Objection to the PF&R

The plaintiff objects to the findings of the PF&R,
though he fails to raise the specific bases of the objections.
To the extent the court may discern to what the objections are
referring in the PF&R and the bases for the objections, the
court considers them except insofar as the ruling on those
matters has already been foreclosed by the previous discussion.
The plaintiff objects to the magistrate judge’s
finding that the omnibus clause of 18 U.S.C. § 1503, a criminal
obstruction of justice statute, could not be used by the
plaintiff to support his civil RICO claim by challenging filings
and actions by the defendants in other civil actions.
No. 17, at 6; PF&R 8-10.

See ECF

However, the magistrate judge

thoroughly and accurately laid out his reasons for finding that
“the plaintiff’s allegations against the defendants do not
constitute obstruction of justice as defined in 18 U.S.C. § 1503
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and, thus, the plaintiff has not reasonably alleged predicate
acts sufficient to support a plausible civil RICO violation
under that statute.”

PF&R 10.

This objection is without merit.

Plaintiff also objects to the magistrate judge’s
refusal to address any claims of promissory estoppel.
17 at 6-7.

ECF No.

Plaintiff argues “[s]omeone has to be responsible

for the unpaid lobbying fees, and if not ACR, then Richard F.
Neely for his taking of Mark Gomez’s intellectual property
without compensation or Christopher MacCorkle Smith for his
unjust enrichment and benefit from Mark Gomez’s lobbying
efforts.”

Id. at 7.

The state court has ruled on related

issues and denied plaintiff relief.

Furthermore, the plaintiff

misstates the magistrate judge’s ruling.

The magistrate judge

declined to address defendants’ argument concerning collateral
estoppel.

There are no allegations of promissory estoppel in

the pleadings.

This objection, too, is meritless.

Accordingly, it is ORDERED as follows:
1. The plaintiff’s objections to the PF&R are overruled.
2. The plaintiff’s motion for leave to amend the complaint is
denied.
3. The magistrate judge’s Proposed Findings and Recommendation
are adopted and incorporated herein in full.
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4. The defendants’ motion to dismiss is granted.
5. This civil action is hereby dismissed and stricken from the
docket of the court.
The Clerk is directed to transmit copies of this
memorandum opinion and order to all counsel of record and to any
unrepresented parties.
Enter: September 26, 2018

John T. Copenhaver, Jr.
United States District Judge

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