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Smith v. Wells Fargo Bank

United States District Court, M.D. North Carolina

December 17, 2014

KENNETH O. McHAM and PATRICIA D. SMITH, Plaintiffs,
v.
WELLS FARGO BANK, et al., Defendants.

MEMORANDUM OPINION, ORDER, AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

L. PATRICK AULD, 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 Complaint[1] (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' federal-law claims. Additionally, the undersigned will recommend that the Court decline supplemental jurisdiction over Plaintiffs' remaining state-law claims.

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." Nasim v. Warden, Md. House of Corr., 64 F.3d 951, 953 (4th Cir. 1995) (en banc) (internal quotation marks omitted). "Dispensing with filing fees, however, [is] not 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 against a defendant who is immune from such relief." 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 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 possibility and plausibility of entitlement to relief.'" Id . (quoting Twombly, 550 U.S. at 557). 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." Id.[2]

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., ¶¶ 49-83); and conspired to have Plaintiff McHam falsely arrested and to violate his 14th Amendment[4] 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 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). However, the law does not allow this form of representation. "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 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." Id . (internal citations omitted).

Plaintiff McHam's 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 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 federal-law claims related to Plaintiff Smith.

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 3, ¶¶ 119, 134; Docket Entry 4, ¶ 6.) 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 ...


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