United States District Court, W.D. North Carolina, Asheville Division
BRIAN HOGAN, on his own behalf, as representative of all class members who are similarly situated, and as parent and next friend of H.H., both on her own behalf and as representative of all class members who are similarly situated, Plaintiffs,
CHEROKEE COUNTY, et al., Defendants.
Reidinger United States District Judge
MATTER is before the Court on the Partial Motion to
Dismiss by Defendants Cherokee County, Cherokee Department of
Social Services, Scott Lindsay in his official capacity, and
Cindy Palmer in her official capacity [Doc. 9]; the
Magistrate Judge's Memorandum and Recommendation [Doc.
20] regarding the disposition of that motion; and the
Plaintiffs' Objections to the Memorandum and
Recommendation [Docs. 21, 21-2].
to 28 U.S.C. § 636(b) and the standing Orders of
Designation of this Court, the Honorable W. Carleton Metcalf,
United States Magistrate Judge, was designated to consider
the Defendants' motion and to submit a recommendation for
February 28, 2019, the Magistrate Judge filed a Memorandum
and Recommendation in this case containing conclusions of law
in support of a recommendation regarding the partial motion
to dismiss. [Doc. 20]. On March 14, 2019, the Plaintiffs
timely filed Objections to the Memorandum and Recommendation
and 70 pages of exhibits thereto. [Docs. 21, 21-1, 21-2].
careful consideration of the Memorandum and Recommendation
and the Plaintiffs' Objections thereto, including all the
documents submitted therewith, the Court finds that the
Magistrate Judge's proposed conclusions of law are
correct and consistent with current case law.
the Plaintiffs presented new arguments related to the
constructive fraud issue in the Objections, however, the
Court briefly addresses those new arguments here. The
Magistrate Judge recommended that Plaintiffs'
constructive fraud claim be dismissed because Plaintiffs'
allegations did not support the existence of the requisite
“confidential or fiduciary relationship” between
Plaintiffs and the Cherokee County Department of Social
Services and its agents and employees. [Doc. 20 at 18-19]. In
the Objections, the Plaintiffs, for the first time, argue
“[t]here is a final state court declaratory judgment
establishing that County DSS agents and parents with whom
they deal have a special, confidential relationship for
constructive fraud purposes.” [Doc. 21 at 1]. A party
should not present new theories or arguments in objections to
a magistrate judge's memorandum and recommendation.
Contravest Inc. v. Mt. Hawley Ins. Co., 273
F.Supp.3d 607, 620 (D.S.C. Mar. 31, 2017). “Instead,
parties should fully plead their claims, and fully advance
their arguments, at all stages of litigation, unless they are
prepared to waive them. Thus, the court is not obligated to
consider new arguments raised by a party for the first time
in objections to the magistrate's report. While the court
has the power to address such arguments, that power lies
within the court's sound discretion.” Id.
(internal quotation marks and citations omitted).
the Plaintiff's untimeliness in the presentation of this
theory, it is without merit. The declaratory judgment
referred to by the Plaintiff was entered in Michael
Mathieu v. Shaless Greenlee, 18-CVD-46, Cherokee County,
District Court Division (the “Mathieu
Action”). [Docs. 21- 1 at 11-15]. The Mathieu Action
was a child custody dispute between the biological father,
Mathieu, and mother, Greenlee, of a minor child that involved
a Custody and Visitation Agreement (CVA) signed by Greenlee
that was similar to the one at issue in the instant case.
Based on the CVA, the minor child was removed from
Greenlee's custody. [See Doc. 21-1 at 3]. On
February 28, 2018, proceedings were held in the Mathieu
Action related, in part, to a “plea for declaratory
judgment” regarding the legality of the CVA.
[See Doc. 1-1; Doc. 21-1 at 11]. Defendants Scott
Lindsey and Cindy Palmer were called by Greenlee to testify
in the Mathieu Action regarding their knowledge and use of
the CVA in the Mathieu Case, as well as in certain limited
respects regarding the Cherokee County Department of Social
Services' (CCDSS) use of CVAs, generally. [See
Doc. 1-1 at 74, 116-122].
March 14, 2018, the Honorable Tessa Sellers, District Court
Judge Presiding, entered a Declaratory Judgment in which she
held, based on the particular facts of the Mathieu Action,
that a special relationship of trust of confidence existed
between Greenlee and the CCDDS, and, as such, the elements of
constructive fraud were met “[a]s it pertains to the
CVA in this case.” [Doc. 21-1 at 22]. In the
Plaintiff's Objections before this Court, Plaintiff
argues “[t]he issues of whether there was a
confidential relationship between Plaintiffs and Defendants
and whether Defendants committed fraud by getting a
biological parent to execute a CVA have already been decided
by the Cherokee County District Court in a related
case.” [Doc. 21-2 at 4]. Therefore, Plaintiffs
continue, Defendants are collaterally estopped from
re-litigating the fraud issue before this Court. [Doc. 21-2
at 4-10]. Further, the Plaintiffs contend comity requires
this Court to uphold the Declaratory Judgment entered in the
Mathieu Action. [Doc. 21-2 at 10-12].
preliminary matter, the Court notes that the District Court
in the Mathieu Action did not decide anything as between the
Plaintiffs and Defendants in this instant case. The parties
to this case were not parties to the Mathieu Action. For
collateral estoppel to apply, the party against whom the
other party seeks to apply it must have been a party to the
previous proceeding or in privity with a party from the
previous proceeding. See Universal Furniture Int'l,
Inc. v. Frankel, 835 F.Supp.2d 35, 41 (M.D. N.C. Dec.
29, 2011). “The test for privity is ‘whether the
interests of one party are so identified with the interests
of another that representation by one party is representation
of the other's legal right.” Id. (quoting
Weinberger v. Tucker, 510 F.3d 486, 491 (4th Cir.
2007)). Further, for collateral estoppel to apply, Plaintiffs
must also show that Defendants “had a full and fair
opportunity to litigate the issue or fact in the prior
proceeding.” Id. (citing In re Microsoft
Corp. Antitrust Litig., 355 F.3d 322, 326 (4th Cir.
Defendants in the instant case were not parties to the
Mathieu Action or in privity with a party to the Mathieu
Action. Namely, the interests of Defendants Palmer and
Lindsay in providing relatively limited fact witness
testimony in the Mathieu Action cannot be said to be
“so identified with the interests of” any party
to that case such that such party was representing the legal
rights of these Defendants. Additionally, the limited
testimony by Defendants Palmer and Lindsay as elicited by the
attorneys to the parties to the Mathieu Action was certainly
not a “full and fair opportunity” to litigate all
the issues in the instant case.
the Court's decision here does implicate principles of
comity. The Declaratory Judgment entered by Judge Sellers in
the Mathieu Action remains undisturbed.
the Court hereby overrules the Plaintiffs' Objections and
accepts the Magistrate Judge's recommendation regarding
the partial motion to dismiss.
IS, THEREFORE, ORDERED that the Plaintiffs'
Objections to the Memorandum and Recommendation [Doc. 21] are
OVERRULED; the Memorandum and Recommendation
[Doc. 20] is ACCEPTED; and the
Defendants' Partial Motion to ...