Opinion ID: 3061795
Heading Depth: 2
Heading Rank: 1

Heading: Breach of Contract Litigation in State Court

Text: Paletti’s claims arise out of: (1) a 1990 real estate contract in which Paletti and his brother Mark Paletti agreed to purchase a marina in Dixie County, Florida from Yellow Jacket Marina and Richard E. Corbin, and (2) the subsequent state court litigation between the contracting parties in Florida’s Third Judicial Circuit Court in Dixie County (“the breach of contract action”). John A. Barley was the attorney for Yellow Jacket Marina and Corbin in the state court litigation. 1 Although both Timothy and Mark Paletti were plaintiffs in the district court, only Timothy Paletti filed a notice of appeal. Mark Paletti did not sign the notice of appeal and has not otherwise made any intent to appeal known. Accordingly, to the extent Timothy Paletti attempts to bring this appeal on behalf of his brother, Mark Paletti is not a party to this appeal. See Theriault v. Silber, 579 F.2d 302, 302 n.1 (5th Cir. 1978) (explaining that a pro se party’s notice of appeal “is effective only for himself”). When we refer to Paletti, we mean Timothy Paletti. 2 The state court proceedings were protracted and involved a bench trial, multiple judgments and several state court appeals. In 1996, after a bench trial, then-plaintiffs Yellow Jacket Marina and Corbin obtained a judgment in their favor (“the 1996 final judgment”). This verdict was overturned on appeal in 1999. See Paletti v. Corbin, 742 So.2d 343 (Fla. Dist. Ct. App. 1999). Finally, after a July 2001 jury trial on the remaining claims, the state court entered an October 2002 final judgment of $683,917 in damages for breach of contract against the Palettis and in favor of Yellow Jacket Marina and Corbin (“the October 2002 final judgment”). The Florida First District Court of Appeal affirmed the judgment in September 2004. See Paletti v. Corbin, 894 So. 2d 249 (Fla. Dist. Ct. App. 2004). B. The Palettis’ Wrongful Execution Litigation in State Court Between 1996 and 1999, while the 1996 final judgment was on appeal, county sheriffs began conducting execution sales of real property owned (at least in part) by the Palettis in several Florida counties, including Pinellas, Alachua and Gilchrist counties. The Palettis challenged these execution sales in the underlying state court breach of contact action, alleging counter-claims of wrongful execution and seeking declaratory relief and cancellation and recision of the sheriffs’ sales. The Palettis’ counterclaims named Yellow Jacket Marina, John Barley and John A. Barley & Associates, P.A. as counter-defendants and third- party defendants. 3 Catherine, Edward and Jason Francis (“the Francises”) were the current owners of one of the properties sold. First American Title Insurance Company had issued a title insurance policy in favor of the Francises. Because the Palettis’ state court claims clouded their title, the Francises filed a claim under the policy. First American Title Insurance Company retained counsel to represent the Francises. Thereafter, the Francises intervened in the state court action. On May 3, 2006, the state court granted third-party defendant Barley’s motion for summary judgment on the Palettis’ wrongful execution claims. The state court concluded, inter alia, that because the October 2002 final judgment had been entered and affirmed on appeal, the doctrines of law of the case and res judicata barred the Palettis from challenging the executions and any claim for recision, cancellation or declaratory relief was moot. The state court entered final judgment in favor of Yellow Jacket Marina, Barley and Barley’s law firm.2 On April 25, 2008, the First District Court of Appeal dismissed the Palettis’ appeal, 2 A schedule attached to the state court’s final judgment listed the four Sheriff’s deeds and one Sheriff’s sale at issue: (1) Sheriff’s deed by the Alachua County Sheriff dated October 21, 1998, signed October 27, 1998 and recorded in OR Book 2198 Page 1897 on October 28, 1998; (2) Sheriff’s deed by the Gilchrist County Sheriff dated October 28, 1998, signed November 30, 1998 and recorded in OR Book 278 Page 626 on December 1, 1998; (3) Sheriff’s deed by the Alachua County Sheriff dated October 21, 1998, signed October 27, 1998 and recorded in OR Book 2198 Page 1895 on October 28, 1998; (4) Sheriff’s deed by the Gilchrist County Sheriff dated March 9, 1999 and recorded in OR Book 283 Page 480 on March 17, 1999; and (5) October 20, 1998 Sheriff’s sale of interests in the Palettis in property at 1431 22nd Avenue North, St. Petersburg, Pinellas County, Florida. 4 ending the Palettis’ challenge to the executions. Paletti v. Yellow Jacket Marina, Inc., 980 So. 2d 494 (Fla. Dist. Ct. App. 2008). C. Timothy Paletti’s Bankruptcy Meanwhile, on October 27, 2006, Timothy Paletti filed a voluntary petition for Chapter 7 bankruptcy. On February 2, 2007, defendant Barley filed a complaint objecting to the discharge of the October 2002 judgment debt, arguing that it was nondischargable under 11 U.S.C. § 523(a)(2)(A). After an October 4, 2007 hearing, the bankruptcy court granted Paletti’s motion to dismiss the adversary action. On January 23, 2008, the bankruptcy court discharged Paletti’s debt for the breach of contract damages awarded to Yellow Jacket Marina and Corbin. Apparently, Paletti had previously filed for bankruptcy in 1996, but the Palettis’ district court pleadings provide little information about this earlier bankruptcy. D. Federal Court Action On September 30, 2008, the Palettis, proceeding pro se, filed their initial pleading in the U.S. District Court for the Northern District of Florida, entitled “Notice of Appeal,” which purported to appeal several orders from the Florida First District Court of Appeal relating to the Dixie County breach of contract action. A magistrate judge directed the Palettis to file an amended complaint, 5 warning them that the federal courts do not act as an appeals court for state court decisions. In response, the Palettis filed an amended complaint against Defendants Yellow Jacket Marina, Inc., Corbin, Barley, the Francises and First American Title Insurance Company. The amended complaint alleged claims under 42 U.S.C. §§ 1983, 1985 and 1986; 18 U.S.C. §§ 241 and 242; 11 U.S.C. § 362; and Florida law.3 According to the Palettis’ amended complaint, the defendants, among other things: (1) conspired to wrongly execute judgment liens against the Palettis’ property, resulting in unlawful foreclosures and sheriffs’ sales from 1997 to 1999; (2) conducted armed home invasions of the Palettis’ property; (3) transported stolen property across state lines; (4) maliciously engaged in ex parte communications with state court judges; (5) slandered titles to their property; (6) filed fraudulent documents; (7) fraudulently transferred real and personal property prior to filing for their own bankruptcy; (8) intervened in bad faith in the state 3 On appeal, Paletti makes no mention of 18 U.S.C. §§ 241 and 242, which are criminal statutes that do not provide a private right of action. Paletti’s appeal brief does contain passing references to 11 U.S.C. § 632, but he does not make any substantive argument challenging the dismissal of this particular claim. See Smith v. Sec’y, Dep’t of Corrs., 572 F.3d 1327, 1342 n.8 (11th Cir. 2009) (“Failure to offer any argument on an issue in a brief abandons that issue.”); Greenbriar, Ltd. v. City of Alabaster, 881 F.2d 1570, 1573 n.6 (11th Cir. 1989) (stating that passing references to issues in an appeal brief are insufficient to raise a claim on appeal, abandoning the claim). Accordingly, we do not address these claims on appeal. 6 court litigation; and (9) prepared title insurance policies in bad faith. The Palettis also alleged that between November 2006 and April 2007, defendants Corbin and Barley obtained ex parte orders in Dixie, Gilchrist and Alachua Counties “causing ‘unreasonable search and seizure’ . . . violating [the] Constitutional Homestead of Timothy M Paletti . . . .” The Palettis’ amended complaint sought a jury trial “For Damages on Wrongful Executions Conducted Under Color of Law[.]” The Palettis also filed a “Petition for Declaratory Judgment,” citing 28 U.S.C. § 2201, asking for (1) declaratory judgment as to six pieces of real estate owned by the Palettis which they alleged were subject to execution and forced sale in violation of Florida’s Homestead Act and the federal stay in bankruptcy,4 (2) sanctions and the appointment of a federal prosecutor to investigate the criminal accusations against the defendants; and (3) the return of the six properties to their possession. In a reply brief, the Palettis clarified that they sought declaratory judgment regarding (1) the jurisdiction and authority of the federal bankruptcy 4 The Palettis listed: (1) a home at 1431 22nd Avenue North, St. Petersburg, Florida; (2) a home at 750 N.W. 34th Street in Gainesville, Florida in Alachua County, which was subject to execution by the Sheriff on October 28, 1998; (3) a residential/professional townhome at 430 N.E. 1st Avenue in High Springs, Florida in Alachua County, for which Defendant Barley obtained a third alias writ of possession on April 25, 2007; (4) home and land at 8960-8962 N.E. 90th Avenue in High Springs, Florida in Gilchrist County subject to Sheriff’s execution in May 1999; (5) land at 8640 N.E. 60th Street, High Springs, Florida in Gilchrist County which was the subject of a Sheriff’s deed in October 1998; (6) the marina and restaurant in Dixie County. 7 court, and (2) “the matters and conflicting orders of the state court rendered to the lower tribunal of records after the automatic federal stay of proceedings . . . .” The defendants filed motions to dismiss, arguing, among other things, that (1) the Palettis’ complaint failed to state a civil rights claim because the defendants were private parties not acting under color of law; and (2) the district court lacked subject matter jurisdiction to review the Florida state courts’ judgments.5 A magistrate judge issued a report (“R&R”) recommending the defendants’ motions be granted and that the Palettis’ action be dismissed. The R&R determined that the Palettis’s amended complaint: (1) did not allege any facts suggesting the defendants acted under color of state law; (2) failed to identify any constitutional right or federal law the defendants violated; and (3) raised “a matter for state court determination, as it concerns a breach of contract related to a real property transaction that has been embroiled in state court for nearly two 5 Because the Francis defendants attached copies of court records to their motion to dismiss, the magistrate judge issued on order converting the motion to dismiss to a motion for summary judgment and advising the Palettis of their obligation under Federal Rule of Civil Procedure 56 to respond to the summary judgment motion with evidentiary materials. Additionally, defendant First American Title Insurance Company filed a motion for summary judgment, arguing that all of its actions were taken pursuant to contractual obligations and that the Palettis had failed to state a claim against it. 8 decades.” The R&R also concluded that the Palettis’ request for declaratory judgment was barred by the Rooker-Feldman doctrine.6 Over the Palettis’ objection, the district court adopted the R&R, granted the defendant’s motions and denied the Palettis’ request for declaratory judgment. Timothy Paletti filed this appeal.