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Schmidt v. United States

May 27, 2010


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


Introduction and Summary

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).

The action is part of the continuing saga involving these plaintiffs in what probably can be construed as spite litigation. The initiation of the saga involved the filing of lawsuits by the Securities and Exchange Commission (SEC) in federal court in Texas against individuals not plaintiffs herein. Apparently, however, some of the plaintiffs herein were in possession of assets subject to seizure by a court appointed receiver. A lengthy history of conduct contemptuous of the Texas federal court by Lonnie and Daniel Schmidt ensued, resulting in arrest warrants being issued, and the actual incarceration of Lonnie Schmidt for a substantial period of time. It also appears that plaintiff Daniel Schmidt was a longtime fugitive on an outstanding arrest warrant issued by the Texas federal judge. The receiver appointed in the Texas actions has sought to seize assets of the plaintiffs in order to comply with his appointing authority orders. The remaining plaintiffs allege that they were "victims" of the enforcement of the federal court orders and the appointed receiver's orders.

Defendants in these actions are grouped into two sets: the Receiver defendants (Warfield, Crawford, Murphy and Atwood) and the Federal Defendants (the United States, United States District Judge Buchmeyer, United States Marshal Antonio Amador, Deputy Marshals Timothy Ashton, Marta Fonda, Randy Ely, and SEC Attorney, Jeffrey Norris). The undersigned issued Findings and Recommendations with respect to the Receiver defendants on March 16, 2010, in which the undersigned recommended the dismissal of the Receiver defendants based on quasi-judicial immunity. The Federal Defendants make their motion on several unrelated grounds.

Plaintiffs have unduly complicated this action by bringing a conglomeration of overlapping, and even redundant, claims in which they name some or all defendants. The United States Attorney has complicated the motion insofar as no certification of scope of employment pursuant to 28 U.S.C. § 2679 has been made. This complication will be discussed below.

The Specific Motion of the United States and Federal Defendants

Presently before the court are two motions to dismiss, one filed by the United States and the other filed by defendants Ashton, Amador, Fonda, Ely and Norris on October 29, 2009. These motions 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. By order of March 16, 2010, plaintiffs' request to continue the hearing on the instant motions was denied.

Factual 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.) Jordyn Manzer is alleged to be the minor child of the Manzers.*fn1 Plaintiffs Donna and Edward Maria allege that they were falsely arrested and imprisoned in their home. (Id. at ¶ 98.)

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*fn2 , 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 remained a fugitive for a lengthy period. The Receiver has 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. (Defs.' 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.)

The claims against the United States and the Federal Defendants stem from their actions carried out to effectuate the order of Judge Buchmeyer who had found plaintiffs Lonnie and Daniel Schmidt in contempt and ordered them to be remanded into the custody of the U.S. Marshal, as well as the order to seize plaintiffs' property in connection with the receivership. Federal defendants Ashton, Amador, Fonda, and Ely are United States Marshals and Deputy Marshals. Federal defendant Norris is an attorney employed by the Securities and Exchange Commission ("SEC"). Claims against the United States in Count I are Federal Tort Claims Act claims for malicious prosecution, malicious abuse of the legal process, abuse of process, assault, battery, false arrest, false imprisonment, kidnaping, grand theft, denial of counsel, denial of speedy trial, interference with civil rights, intentional infliction of emotional distress and conspiracy. Claims against the Federal Defendants and Doe defendants are as follows:

Count II -- Bivens actions for violation of the First, Fourth, Fifth, Sixth, and Eighth Amendments to the United States Constitution;

Count III -- 42 U.S.C. § 1983 actions against unidentified California city and county officials for violations of the amendments set forth in Count II;

Count IV -- Conspiracy Claim under Bivens and § 1983;

Count V -- State law claim for Malicious Prosecution (Receiver Defendants only -- already recommended to be dismissed);

Count VI -- State law claim for Conspiracy (A mixture of Receiver defendants and Federal Defendants; to the extent it applies to Receiver defendants, this claim has been recommended to be dismissed);

Count VII -- Unlawful Search and Seizure based on California Constitution and Fourth Amendment -- "All" defendants;

Count VIII -- "Trespass for Assault and Battery" based on California Constitution and Fourth Amendment against "All" defendants;

Count IX -- False Arrest and False Imprisonment claims based on the California Constitution, Fourth Amendment, and 18 U.S.C. § 4001 (a) against "All" defendants;

Count X -- Abuse of Process -- presumably a state law claim against "All" defendants;

Count XI -- Deprivation of Due Process based on violation of the California Constitution and Fifth Amendment against "All" defendants;

Count XII -- Denial of Counsel and Speedy Trial based on the Texas Constitution and Sixth Amendment against "All" defendants;

Count XIII -- Interference with Contractual Relations, presumably a state law claim against "All" defendants;

Count XIV-- Libel and Slander, presumably a state law claim, ...

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