Court Opinion

ID: 4416507
Source: CourtListenerOpinion
Date Created: 2019-07-13 00:00:19.890159+00
Date Added: 2024-06-11T14:51:26.533149
License: Public Domain

Case: 18-40390   Document: 00515032480     Page: 1   Date Filed: 07/12/2019

        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT
                                                            United States Court of Appeals
                                                                     Fifth Circuit

                                 No. 18-40390                      FILED
                                                               July 12, 2019
                                                              Lyle W. Cayce
GAETAN PELLETIER,                                                  Clerk

             Plaintiff – Appellant,

v.

VICTORIA AIR CONDITIONING, LIMITED; LLOYD BOEDEKER;
WARREN HEILKER,

             Defendants – Appellees.

************************************************************************

GAETAN PELLETIER,

             Plaintiff – Appellant,

v.

MARIO LEDESMA, LLOYD BOEDEKER, VICTORIA AIR CONDITIONING,
LIMITED, GAY HEILKER, ANITA HEILKER, WARREN HEILKER,
BENJAMIN F. HEILKER, DONALD H. ANDERSON,

             Defendants – Appellees.

                Appeals from the United States District Court
                     for the Southern District of Texas
                            USDC No. 6:17-CV-6
     Case: 18-40390       Document: 00515032480         Page: 2    Date Filed: 07/12/2019

                                      No. 18-40390
Before KING, ELROD, and ENGELHARDT, Circuit Judges.
PER CURIAM:*
       Gaetan Pelletier appeals the district court’s dismissal of a contract
dispute case for lack of standing. Because the district court did not clearly err
in its determination that Pelletier did not establish by a preponderance of the
evidence that he personally owned the hotel involved in the underlying
contract dispute, we AFFIRM.
                                             I.
       Pelletier, proceeding pro se, alleges that he is the owner of a hotel that
was being constructed in Texas. He raises breach of contract and other state
law claims for allegedly faulty plumbing installed in that hotel by the
appellees. This case is in federal court under diversity jurisdiction. See 28
U.S.C. § 1332.
       In the district court, the appellees moved to dismiss, contending that
Pelletier was not the owner of the hotel and therefore lacked standing to bring
the lawsuit. Instead, the appellees argued that LLCs associated with Pelletier
were the legal owners of both the hotel’s business and its physical structure.
The district court requested supplemental briefing from both parties on the
question of standing and held an evidentiary hearing on the matter. The
district court then weighed conflicting evidence and made the factual
determination that even though Pelletier was the “primary actor” for each of
the LLCs, he was not personally the owner of either the structure or the
business of the hotel.

       * Pursuant to Fifth Circuit Rule 47.5, the court has determined that this opinion
should not be published and is not precedent except under the limited circumstances set forth
in Fifth Circuit Rule 47.5.4.

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                                  No. 18-40390
      On one hand, the district court considered evidence indicating that the
LLCs owned the hotel, which included: (1) a general warranty deed, a county
appraisal, and three deeds of trust to secure loans all identifying an LLC as
the owner of the land and/or its improvements; (2) representations made by
the LLCs in previous state court proceedings that they were the owners; (3)
Pelletier’s hearing testimony, where he conflated actions that he personally
took with those that were in fact taken by the LLCs; and (4) the absence of
other documentary evidence that could have established ownership, such as
building permits, subcontracts, insurance policies, or invoices.
      On the other hand, the district court also considered a land lease
agreement between an LLC affiliated with Pelletier as the lessor and Pelletier
as the lessee, which said that the “Lessee owns the improvement structure(s).”
However, the district court concluded that the lease, when “taken together
with all the other evidence, does not show clear intent by [the LLC] to convey
real property or any improvements.”
      The district court ultimately granted the appellees’ motion to dismiss
under Rule 12(b)(1), stating:
      The Court cannot conclude Plaintiff has proven beyond a
      preponderance of the evidence that [he] is the owner of [the
      hotel]. . . . [T]here are too many instances in the public record
      where the limited liability companies are declared by Plaintiff to
      be the owners. Statements to lenders and to courts are not to be
      taken lightly. Documents that might reflect ownership are not in
      the record. The matter is just too vague for the court to find for
      Plaintiff. Therefore, Plaintiff does not have standing to sue for . . .
      the allegedly faulty plumbing.
      Pelletier filed a timely notice of appeal from that judgment, and we have
jurisdiction pursuant to 28 U.S.C. § 1291.

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                                     No. 18-40390
      But the story is not done. After filing the notice of appeal of the initial
judgment, Pelletier filed a motion to amend judgment with the district court, 1
and included several additional exhibits which he alleged evidenced his
personal ownership. The appellees opposed the motion, arguing that the new
exhibits still did not clearly establish personal ownership and noting that
many of the new exhibits were created after the evidentiary hearing, when
Pelletier had a clear motive to manufacture standing. Prior to the district
court’s ruling on that motion, Pelletier filed an amended notice of appeal,
wherein he expressed his desire to incorporate the motion to amend judgment
into his appeal, even though he expressly noted that the motion “has not yet
been ruled upon” by the district court. The district court denied the motion to
amend judgment, specifically finding that all of the “new” evidence was either
known to Pelletier before the hearing but not shared with the court or created
by or on behalf of Pelletier after the evidentiary hearing. Pelletier did not file
a notice of appeal from the order denying the motion to amend judgment any
time after that order was issued.
                                            II.
       There are thus two issues before us. First, whether an appeal of the
order denying the motion to amend judgment is properly before us; and second,
whether the district court erred by dismissing the case for lack of standing. We
address each issue in turn.
                                            1.
       We begin by addressing whether an appeal of the order denying the
motion to amend judgment is properly before us.

      1 The motion was styled as “Plaintiff’s Motion to Alter or Amend Judgment Per FRCP
59(e); Motion for Judgment as a Matter of Law Per FRCP 50(a)(2); and Motion for Relief from
a Judgement Order Per FRCP 60.” However, a Rule 50 motion is not applicable here, and
the arguments for Rule 59(e) and Rule 60 relief appear to be indistinguishable from one
another. Thus, for brevity’s sake, we refer to it as a motion to amend judgment.
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                                   No. 18-40390
      “[T]he timely filing of a notice of appeal in a civil case is a jurisdictional
requirement.” Bowles v. Russell, 551 U.S. 205, 214 (2007). The Federal Rules
of Appellate Procedure direct that the notice of appeal must be filed after the
district court has decided the issue sought to be appealed. See Fed. R. App. P.
4(a)(1) (for civil cases); Fed. R. App. P. 4(b)(1) (for criminal cases).
      In this case, Pelletier attempted to amend his notice of appeal to include
his motion to amend judgment, but he filed that amended notice of appeal
before the district court issued its order on that post-judgment motion. That is
not a proper notice of appeal from the ruling on the post-judgment motion. As
such, we lack the jurisdiction to review that decision, as well as any of the
exhibits provided therein. See Taylor v. Johnson, 257 F.3d 470, 475 (5th Cir.
2001); cf. Manrique v. United States, 137 S. Ct. 1266, 1272 (2017) (rejecting, in
a criminal case, the argument that a notice of appeal filed after the initial
judgment is rendered also “springs forward” to appeal an amended judgment).
                                         2.
      Therefore, the only question properly before us is whether the district
court erred in its initial judgment dismissing the case for lack of standing.
      We review de novo a district court’s rulings on legal questions, including
rulings on the issue of standing. Superior MRI Servs., Inc. v. All. Healthcare
Servs., Inc., 778 F.3d 502, 504 (5th Cir. 2015). However, “[a] district court's
factual findings, including those on which the court based its legal conclusions,
are reviewed for clear error.” Id. (citation omitted). “A factual finding is not
clearly erroneous if it is plausible, considering the record as a whole.” United
States v. King, 773 F.3d 48, 52 (5th Cir. 2014) (citation omitted).
      Before addressing the standing arguments, we pause to address the type
of standing that is at issue. “Standing jurisprudence contains two strands:
Article III [or constitutional] standing, which enforces the Constitution’s case-
or-controversy requirement, and prudential standing, which embodies
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                                        No. 18-40390
judicially self-imposed limits on the exercise of federal jurisdiction.” Servicios
Azucareros de Venez., C.A. v. John Deere Thibodeaux, Inc., 702 F.3d 794, 801
(5th Cir. 2012) (citation, alterations, and quotation marks omitted).                          A
dismissal for lack of constitutional standing should be granted under Rule
12(b)(1) for lack of subject matter jurisdiction, whereas a dismissal for lack of
prudential standing should be granted under Rule 12(b)(6) for failure to state
a claim. Harold H. Huggins Realty, Inc. v. FNC, Inc., 634 F.3d 787, 795 n.2
(5th Cir. 2011).
       Before the district court, and again before this court, the appellees
argued that the courts lack subject matter jurisdiction because Pelletier lacks
prudential standing.         However, as explained above, a lack of prudential
standing does not implicate subject matter jurisdiction, and the district court
appears to have granted the Rule 12(b)(1) motion to dismiss based on
constitutional standing. 2        We therefore start and end by addressing the
constitutional standing determination made by the district court.                       See id.
(noting that we must first establish that we have constitutional standing before
addressing questions of prudential standing).
       One requirement of constitutional standing is that the plaintiff must
have suffered (or be imminently threatened with suffering) the alleged injury. 3

       2 Pelletier’s pro se briefs, for their part, do not clearly identify whether his arguments
pertain to prudential or constitutional standing.

       3 The Supreme Court has noted that there is some overlap and tension between the
constitutional standing requirement that a plaintiff must show he has suffered an injury and
the prudential standing requirement that a plaintiff may not assert the legal rights of others.
See Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 127 n.3 (2014); see
also United States v. Windsor, 570 U.S. 744, 781–88 (2013) (Scalia, J., dissenting). We have
held that prudential standing requirements still apply to third-party challenges brought by
plaintiffs who otherwise have constitutional standing. See Superior MRI Servs., 778 F.3d at
506. See also 33 Charles A. Wright et al., Federal Practice & Procedure § 8343 (2d ed. April
2019 Update) (describing the tension, and noting that among all the categories of prudential
standing, “only the doctrine of third-party standing . . . still remains in the prudential
category”).
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                                       No. 18-40390
See Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 125
(2014) (citing Lujan v. Def. of Wildlife, 504 U.S. 555, 560 (1992)). To satisfy
that requirement here, Pelletier needed to establish that he, personally, was
injured by the allegedly faulty plumbing installed at the hotel. The district
court concluded that Pelletier did not make that showing, and Pelletier raises
two arguments contending that the district court erred on that point.
       First, Pelletier contends that a jury, not the court, should have resolved
the factual dispute over whether he owned the hotel. “[W]here subject matter
jurisdiction is being challenged, the trial court is free to weigh the evidence
and resolve factual disputes in order to satisfy itself that it has the power to
hear the case.” Montez v. Dep’t of Navy, 392 F.3d 147, 149 (5th Cir. 2004).
However, where the same factual dispute underlies both the subject matter
jurisdiction and the merits of the case, “the trial court must assume jurisdiction
and proceed to the merits.” Id. at 150.
       Because Pelletier did not adequately raise this argument before the
district court in any motion or proceeding that is properly before us, it is
forfeited on appeal. See United States ex rel. Vavra v. Kellogg Brown & Root,
Inc., 848 F.3d 366, 376 (5th Cir. 2017) (“[T]o preserve its argument for appeal,
the litigant must press and not merely intimate the argument before the
district court.” (citation and quotation marks omitted)). 4
       Second, Pelletier contends that the district court erred in its
determination that he did not personally own the hotel. To prevail on a factual
dispute concerning standing, “a plaintiff must prove the existence of subject-

       4 However, even if we were to consider the argument, Pelletier’s contention would be
unavailing. The merits of the case are whether the appellees breached the contract or
otherwise violated state law by installing allegedly faulty plumbing. That dispute is entirely
distinct from the dispute over whether Pelletier owns the hotel. As such, it was proper for
the district court to first determine whether it had subject matter jurisdiction by resolving
the factual question of whether Pelletier owned the hotel.
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                                 No. 18-40390
matter jurisdiction by a preponderance of the evidence and is obliged to submit
facts through some evidentiary method to sustain his burden of proof.”
Superior MRI Servs., 778 F.3d at 504 (citation and quotation marks omitted).
      As such, Pelletier carried the burden of establishing, by a preponderance
of the evidence, that he personally was the legal owner of the hotel. Under
Texas law, “[t]he general rule is that improvements become part of the land
and belong to the landowner unless there is . . . evidence showing intent of the
improver that the improvements remain personalty with the right to be
removed.” Travis Cent. Appraisal Dist. v. Signature Flight Support Corp., 140
S.W.3d 833, 838 (Tex. App.—Austin 2004, no pet.).
      Pelletier repeatedly argues—both before the district court and this
court—that the land lease agreement (between himself and an LLC that he is
associated with) is dispositive for determining that he, personally, was the
legal owner of the hotel’s physical structure.
      His argument was unpersuasive to the district court and also is to us.
The district court weighed that land lease agreement against documentary and
testimonial evidence indicating that an LLC was instead the proper legal
owner of the hotel. Significantly, that other evidence included multiple deeds
of trust, signed after the land lease agreement, in which Pelletier, acting as an
agent of the LLC, represented that the LLC was the owner of the property and
“any improvements” thereon. Also of significance, the district court found it to
be “troubling” that Pelletier, as the primary actor for the LLCs, previously
allowed those entities to represent to a Texas court that they were the owners
of the hotel in state court litigation that involved the same allegedly faulty

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                                      No. 18-40390
plumbing. 5 As the district court observed, “[s]tatements to lenders and to
courts are not taken lightly.”
       Pelletier argues that Texas state courts give substantial weight to land
lease agreements when resolving the ownership of improvements made upon
leased land. See, e.g., Bexar Appraisal Dist. v. Dee Howard Co., No. 04-96-
00085-CV, 1997 WL 30884 (Tex. App.—San Antonio Jan. 29, 1997, writ
denied). In a less convoluted case, his argument might have more traction.
However, based on the record before us, we cannot say that the district court
clearly erred in its determination that Pelletier failed to establish by a
preponderance of the evidence that he personally owned the hotel.
       Therefore, because Pelletier did not establish that he personally owned
the hotel and he offered no other valid cause of action for his personal claim
against the appellees, the district court did not err in its initial judgment
dismissing the case for lack of standing. Cf. L & F Homes & Dev., L.L.C. v.
City of Gulfport, 538 F. App’x 395, 408 (5th Cir. 2013) (unpublished) (holding
that an individual member of an LLC did not have standing to sue a third party
for economic harms allegedly suffered by the LLC because “[a] stockholder in
a corporation does not have standing to bring suit in his own name for injuries
sustained by the corporation . . . even where that individual is the sole

       5 That state litigation was brought by two LLCs associated with Pelletier and involved
the same claims of allegedly faulty plumbing at issue in this appeal. The complaint asserted
that the LLCs “are the owners of the TexInn hotel.” Originally, those LLCs were represented
by counsel. However, counsel for the LLCs later withdrew and the LLCs were notified that,
as LLCs, they were precluded from representing themselves pro se. Shortly thereafter,
Pelletier filed his pro se complaint in federal court claiming that he, personally, was the
owner of the hotel. The state court claims brought by the LLCs were subsequently dismissed
for failure to prosecute. However, the state court granted a default judgment in those
proceedings on counterclaims that were brought against the LLCs, specifically determining
that it had subject matter jurisdiction over the parties. That determination implies that the
state court understood the LLCs to have standing to sue and be sued as owners of the hotel
for matters regarding the allegedly faulty plumbing that is at issue.

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                                       No. 18-40390
shareholder of a corporation.” (citing Bellows v. Amoco Oil Co., 118 F.3d 268,
276–77 (5th Cir. 1997)).
                                        *   *      *   *
      The district court’s judgment is AFFIRMED. 6

      6   The appellees’ motion to take judicial notice of additional state court documents is
denied.
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