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Schmidt v. United States

March 16, 2010

LONNIE G. SCHMIDT, ET AL., PLAINTIFFS,
v.
UNITED STATES OF AMERICA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Gregory G. Hollows U. S. Magistrate Judge

ORDER AND FINDINGS AND RECOMMENDATIONS

This action, in which plaintiffs are proceeding pro se, has been referred to the undersigned pursuant to E.D. Cal. L.R. 302(c)(21). Presently before the court are three motions to dismiss which were taken under submission without a hearing on December 3, 2009, and without oppositions having been filed. On December 4, 2009, plaintiffs filed a motion to continue the hearing to January 28, 2010, indicating that they now had counsel to represent them. The motion was signed and filed by plaintiffs only without a notice of substitution filed by counsel pursuant to E. D. Local Rule 182.

On December 11, 2009, plaintiffs were directed to file a notice of substitution and oppositions to the three pending motions by December 18, 2009, if they intended to proceed with counsel. Plaintiffs filed oppositions to the motions to dismiss on December 18th, but did not file any substitution of counsel, and still have not done so. The motion to dismiss, filed by defendants Warfield, Crawford, Murphy and Atwood ("Receiver Defendants"), on July 13, 2009, will be addressed by these findings and recommendations. The motions by the other defendants will be addressed in a separate opinion. Also before the court is plaintiffs' motion to strike the motion to dismiss, filed September 16, 2009.

Upon review of the motion, the documents in support, and the oppositions, and good cause appearing therefor, THE COURT FINDS AS FOLLOWS.

BACKGROUND

Plaintiffs are Lonnie Schmidt and his family members who allege that defendants conspired against them to maliciously prosecute six of the nine plaintiffs by misusing and abusing the legal process, and falsely arrested and imprisoned them. Other allegations include assault, battery and kidnaping of Lonnie Schmidt, denial of Lonnie Schmidt's trial rights, including denial of counsel, denial of speedy trial, false imprisonment and interference with his civil rights. Also alleged is unlawful seizure of personal and business property belonging to Lonnie and Connie Schmidt. Plaintiffs Daniel and Rebecca Schmidt claim unlawful search and seizure of real, personal and business property. Plaintiffs Donald and Deborah Manzer claim wrongful slander of title, abuse of process, malicious prosecution and extortion. (Compl. at ¶ 2.)

These claims arise out of another litigation by the Securities and Exchange Commission in the Northern District of Texas against non-parties James and David Edwards for securities fraud. (Def.'s Mot. at 5, dkt. #10.) These defendants were convicted, and defendant Warfield was appointed Receiver by defendant Judge Buchmeyer*fn1 , who entered the "Receivership Order" on March 25, 2002. (Id., Ex. 2, dkt. #10.) Actions taken pursuant to this Order are denominated as being taken by the "Receivership Court."

Defendants Crawford, Murphy and Atwood were hired as Warfield's staff. They traced $282,405 in stolen investor funds to Lonnie Schmidt. (Id.) Schmidt was ordered before the Receivership Court and ordered to turn over the funds or testify as to their disposition. He refused, was held in contempt, and remained a fugitive for two and a half years. Even after his apprehension, he appealed the contempt order and refused to provide deposition testimony regarding these assets. Lonnie Schmidt filed numerous filings in the Receivership Court, causing the court to direct the Receiver not to respond until ordered to do so by the court.

Lonnie's son, Daniel, also a plaintiff in this action, was found to be a signatory with his father on the account receiving the stolen funds. He was found in contempt and ordered to appear, but remains a fugitive at this time. The Receiver now traced a total of $727,405 to Lonnie and Daniel Schmidt and obtained final judgments for this amount. Without evidence that the Schmidts were no longer in possession of these funds, the Receivership Court placed the Schmidts' assets in control of the Receiver. The Receivership Order permitted the Receiver to take control of Receivership assets, records, property, and to remove persons who interfere with the Receiver from the property, and to secure property and other assets. (Def.s' Mot., Ex. 3, dkt. #10.) The order also prohibited Lonnie Schmidt and his family from filing other actions involving the Receivership matter. Specifically, the court ruled:

All persons, including Lonnie Schmidt, Daniel Schmidt, and their agents, employees, attorneys, family members, and all persons in active concert of participation with them, who receive actual notice of this Order by personal service or otherwise, are enjoined from in any way interfering with the operation of this Receivership or in any way disturbing the Receivership Assets and from filing or prosecuting any actions or proceedings which involve the Receiver or which affect the Receivership Assets, specifically including any proceeding initiated pursuant to the United States Bankruptcy Code, except with the prior permission of this Court. Any actions so authorized to determine disputes relating to Receivership Assets shall be filed in this Court.

(Defs.' Mot., dkt. #10, Ex. 3 at ¶ 4.) (Emphasis added.)

Despite that order, Lonnie Schmidt has filed numerous lawsuits concerning the matters raised in the Receivership Court proceedings, including three appeals to the Fifth Circuit, and another complaint in this court. See Schmidt v. Buchmeyer, Civ.S.03-1902 MCE PAN.

DISCUSSION

I. Plaintiffs' Ex parte Motion to ...


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