Court Opinion

ID: 1008642
Source: CourtListenerOpinion
Date Created: 2013-07-04 19:43:26.383835+00
Date Added: 2024-06-11T12:30:55.755749
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

JEFFREY L. TIBBETTS,                    
                 Plaintiff-Appellant,
                 v.
YALE CORPORATION, a/k/a The
President and Fellows of Yale;
RICHARD LEVIN, Individual and
Official capacity; DOROTHY
ROBINSON, Individual and Official
capacity; HAROLD A. ROSE,
Individual and Official capacity;
WOMBLE, CARLYLE, SANDRIDGE AND
RICE LAW FIRM; USA GROUP
FOUNDATION; WILLIAM DOYLE;
WIGGIN & DANA,
               Defendants-Appellees,
                and                        No. 01-1863

JOHN ROWLAND, Individual and
Official capacity; JODI RELL,
Individual and Official capacity;
KURT SCHMOKE, Individual and
Official capacity; FRANCES BEINECKE,
Individual and Official capacity;
DIANA BROOKS, Individual and
Official capacity; JOSE CABRANES,
Individual and Official capacity;
BENJAMIN CARSON, Individual and
Official capacity; SUSAN CROWN,
Individual and Official capacity;
CHARLES ELLIS, Individual and
Official capacity; RICHARD FRANKE,
Individual and Official capacity;
                                        
2                  TIBBETTS v. YALE CORPORATION

RUBY HEARN, Individual and Official    
capacity; JOHN LEE, Individual and
Official capacity; VICTORIA
MATTHEWS, Individual and Official
capacity; JOHN PEPPER, Individual
and Official capacity; HENRY           
SCHACHT, Individual and Official
capacity; JOSEPH MULLINIX, Official
Capacity; BILL STEMPEL, Individual
and Official capacity,
                         Defendants.
                                       
           Appeal from the United States District Court
        for the Eastern District of Virginia, at Alexandria.
            Albert V. Bryan, Jr., Senior District Judge.
                         (CA-00-2004-A)

                      Argued: June 5, 2002

                   Decided: September 26, 2002

  Before MICHAEL, Circuit Judge, Robert R. BEEZER, Senior
 Circuit Judge of the United States Court of Appeals for the Ninth
 Circuit, sitting by designation, and Benson Everett LEGG, United
    States District Judge for the District of Maryland, sitting by
                              designation.

Affirmed by unpublished opinion. Judge Legg wrote the opinion, in
which Judge Michael and Senior Judge Beezer joined.

                           COUNSEL

ARGUED: John M. DiJoseph, KAVRUKOV & DIJOSEPH, L.L.P.,
Arlington, Virginia, for Appellant. Philip Browder Morris, MORRIS
                     TIBBETTS v. YALE CORPORATION                         3
& MORRIS, Richmond, Virginia; Richard Albert Simpson, ROSS,
DIXON & BELL, L.L.P., Washington, D.C.; David Armistead Greer,
HOFHEIMER & NUSBAUM, P.C., Norfolk, Virginia, for Appellees.
ON BRIEF: Mary Helen Sears, M.H. SEARS LAW FIRM CHAR-
TERED, Washington, D.C.; David E. Jones, LAW OFFICE OF
DAVID JONES, Fairfax, Virginia, for Appellant. Michael R. Ward,
MORRIS & MORRIS, Richmond, Virginia, for Appellees.

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                                OPINION

LEGG, District Judge:

   Plaintiff Jeffrey Tibbetts appeals a district court order dismissing
his Complaint under FRCP 12(b)(6) and denying his request to file
a Second Amended Complaint. We agree, in relevant part, with the
district court’s conclusions, and, accordingly, affirm.

                                     I.

   In 1987, Yale University charged Jeffrey Tibbetts with plagiarism
and suspended him from its Divinity School. J.A. 182. In 1992, Yale
dismissed the charges and allowed Tibbetts to graduate. J.A. 60.

   In 1995, Jeffrey Tibbetts brought the first of five pro se lawsuits
that he has filed against Yale University and various Yale employees.
These lawsuits generally allege defamation and interference with pro-
spective business advantage stemming from the suspension.1 Tibbetts
also contends that Yale’s abusive litigation tactics during the lawsuits
drained his finances and forced him to file for bankruptcy in 1998.
  1
   Not counting the instant appeal, three of Tibbetts’ suits are still pend-
ing.
4                    TIBBETTS v. YALE CORPORATION
J.A. 41. The bankruptcy proceedings and Yale’s part in them lie at the
heart of this appeal.

   On January 8, 1998, Tibbetts filed a Voluntary Petition for Bank-
ruptcy under Chapter 7 of the U.S. Bankruptcy Code.2 Tibbetts listed
Yale as an unsecured creditor for a $11,230 loan that Yale extended
to him while he was a student.3 J.A. 25. Tibbetts and a university offi-
cial later concluded that this debt was not, in fact, owed to Yale
because Yale had assigned the loan and no longer held the paper. J.A.
123. Tibbetts subsequently filed an amended schedule of creditors
deleting Yale. Yale also figured in Tibbetts’ bankruptcy on the asset
side of the ledger, as he listed his lawsuits against the University as
assets.4

  As part of the Chapter 7 liquidation, the bankruptcy court
appointed a trustee to marshal Tibbetts’ assets. After negotiations, the
Trustee and Yale agreed to settle Tibbetts’ lawsuits against the uni-
versity. The settlement provided that Yale would "pay the Trustee
$4,000 in return for a full and complete release of any and all claims
made by Tibbetts or the Trustee against Yale and related others." J.A.
104. Tibbetts does not allege that the Trustee acted in bad faith in
negotiating this settlement.

  Tibbetts was loathe to relinquish his lawsuits, however. He filed a
Motion to Convert his bankruptcy proceeding from Chapter 7 to
Chapter 13.5 The bankruptcy court granted his motion on March 14,
1998. J.A. 42.
    2
     A Chapter 7 case focuses on liquidating the debtor’s assets to pay the
creditors. The trustee collects the non-exempt property of the debtor,
converts that property to cash, and distributes the cash to the creditors.
   3
     Tibbetts listed Yale as a creditor on Schedule F of his bankruptcy
petition.
   4
     Tibbetts listed his lawsuits against Yale as assets on Schedules B and
C of his bankruptcy petition.
   5
     A Chapter 13 bankruptcy reorganizes the debtor’s assets instead of
liquidating them as is the case in Chapter 7. In Chapter 13, the debtor
retains its assets and makes payments to creditors pursuant to a court
approved plan.
                     TIBBETTS v. YALE CORPORATION                         5
   Tibbetts did not list Yale as a creditor on his Chapter 13 petition.
J.A. 18, 108, Reply Brief at 9. On May 11, 1998, however, Yale sub-
mitted a proof of claim for $580.18 ("the bursar claim"), which Tib-
betts allegedly owed for transactions occurring between September
1990 and February 1991.6 J.A. 126.

   On July 14, 1998, Yale, joined by United Student Aid Funds
("USAF"),7 one of Tibbetts’ student loan providers, filed a Joint
Motion to Reconvert the bankruptcy back to Chapter 7. Yale and
USAF argued that Tibbetts had not proposed a confirmable Chapter
13 reorganization plan because Tibbetts’ income exceeded his
expenses by only $212.00 per month, and Tibbetts’ proposed reorga-
nization did not provide for repayment of his student loans.8 J.A. 130.

   On October 22, 1998, following briefing and a hearing, Tibbetts
requested the court to dismiss his bankruptcy petition altogether. J.A.
29. On November 30, 1998, the court granted the request. The dis-
missal order was not docketed until December 2, 1998, however. J.A.
168, 183.

   On December 1, 2000, Tibbetts, again acting pro se, filed the
instant suit in the Eastern District of Virginia. Tibbetts’ Complaint
alleges that Yale, its attorneys, and other defendants committed vari-
ous torts in the course of the bankruptcy litigation itself. His Com-
plaint asserts claims for, inter alia, abuse of process, malicious
prosecution, and vexatious suit. Boiled down to basics, Tibbetts con-
tends that Yale’s Motion to Reconvert was an abusive litigation tactic
and fraud on the bankruptcy court.
  6
    Tibbetts asserts that Yale’s possible claim to this $580.18 is barred by
Connecticut’s statute of limitations.
  7
    USAF filed a proof of claim in the amount of $17,028.99.
  8
    As part of a Chapter 13 bankruptcy, the debtor must formulate a
Chapter 13 plan that provides for payment of his creditors. The Chapter
13 plan is subject to judicial confirmation. In determining whether the
plan is "confirmable," the court looks to a number of factors including
whether the debtor has sufficient disposable income to fund the proposed
plan.
6                    TIBBETTS v. YALE CORPORATION
   The procedural history of the present case is as follows. On March
28, 2001, Tibbetts filed his First Amended Complaint. J.A. 20. In
early May, 2001, Defendants moved to dismiss. J.A. 35a-d, 35e-g, 35
ddd-ggg. On May 8th, Tibbetts filed a Motion for Leave to Amend
his complaint, which was dismissed without prejudice on May 18th.
J.A. 7, 9. The court scheduled a hearing on Defendants’ motions to
dismiss for June 15, 2001. On June 8th, Tibbetts again filed a Motion
for Leave to Amend Complaint. His proposed amendments, if
allowed, would have added (i) factual support for the abuse of pro-
cess, malicious prosecution, and vexatious suit counts; (ii) new counts
for breach of contract and "malicious defense"; and (iii) USAF as a
defendant in place of USA Group Foundation. J.A. 55-56. On June
18th, the district court dismissed the case with prejudice, denying Tib-
betts leave to amend without elaboration. J.A. 182-87.

                                   II.

   Tibbetts first contends that the district court erred in dismissing his
Complaint under FRCP 12(b)(6). Our review of this issue is de novo.
Stuart Circle Hospital Corp. v. Aetna Health Management, 995 F.2d
500 (4th Cir. 1993). Like the district court, we must assume all facts
pled by Tibbetts to be true. Mylan Labs, Inc. v. Matkari, 7 F.3d 1130,
1134 (4th Cir. 1993).

                                   A.

   Tibbetts’ First Amended Complaint contends that Defendants
engaged in malicious prosecution and abuse of process by filing the
Motion to Reconvert the lawsuit from a Chapter 13 reorganization to
a Chapter 7 liquidation. The district court dismissed the abuse of pro-
cess and malicious prosecution counts on the grounds that: (i) the stat-
ute of limitations barred the counts; and (ii) Tibbetts failed to allege
a prima facie case on either count. J.A. 184-86. We need not decide
whether the statute of limitations bars the counts9 because we find that
    9
   There is a dispute over what date the U.S. Bankruptcy Court "ren-
dered" its Order dismissing Tibbetts’ bankruptcy petition, thereby trig-
gering the statute of limitations. Appellees contend that the accrual date
is November 30, 1998, the date on which the bankruptcy judge signed
                      TIBBETTS v. YALE CORPORATION                          7
the Complaint failed to allege a prima facie case of either malicious
prosecution or abuse of process. Accordingly, the district court prop-
erly dismissed these counts under FRCP 12(b)(6).

   We note as a threshold matter that both malicious prosecution and
abuse of process claims require some sort of "process." To be poten-
tially guilty of malicious prosecution, Defendants must have initiated
a "proceeding" against Tibbetts. See Tomai-Minogue v. State Farm
Mut. Auto. Ins. Co., 770 F.2d 1228, 1236-37 (4th Cir. 1985). To be
liable for abuse of process, Defendants must have used "process not
proper in the regular prosecution of proceedings." See Triangle Auto
Action, Inc. v. Cash, 380 S.E.2d 649, 650 (Va. 1989).

  It is an open question whether the filing of a motion to reconvert
constitutes process.10 We need not decide this issue, however, because
we find that Tibbetts’ Complaint cannot satisfy the other elements of
a prima facie case for malicious prosecution or abuse of process.

                                     1.

  A prima facie case for malicious prosecution requires that: (i) the
defendants instituted a prior proceeding against the plaintiff; (ii) the

the Order dismissing Tibbetts’ bankruptcy petition. Tibbetts contends
that the accrual date is December 2, 1998, the date on which the Order
was stamped, entered on the docket, and made part of the public record.
It appears that December 2, 1998 is the preferable date. Nevertheless,
because the malicious prosecution and abuse of process claims are fatally
flawed, the Court need not decide the statute of limitations issue.
   10
      Tibbetts contends that the filing of a motion to reconvert is the equiv-
alent of process because it is a "contested matter" under the Federal
Bankruptcy Rules. Accordingly, the motion is served in the same manner
as service of a summons and complaint, and it has all the "attributes of
a lawsuit." Defendants disagree, contending that the filing of a motion to
reconvert is not the equivalent of process because the motion does not
institute a new proceeding. Defendants cite to Black’s Law Dictionary,
which defines process as "any means used by the court to acquire or
exercise jurisdiction over a person or over specific property." In this
case, Tibbetts had already consented to the jurisdiction of the bankruptcy
court when he initially filed for Chapter 7 protection.
8                    TIBBETTS v. YALE CORPORATION
proceeding was instituted without probable cause; (iii) the proceeding
was instituted with malice; (iv) the underlying proceeding terminated
in the plaintiff’s favor; and (v) the plaintiff sustained special damages
as a result of the proceeding. See Tomai-Minogue, 770 F.2d at 1236-
37.

   Tibbetts is unable to satisfy the fifth element requiring special dam-
ages.11 Under Virginia law, a showing of special damages means
"proof of a special loss or unusual hardship resulting from the mali-
cious prosecution," and "‘excludes secondary consequences that are
common and often unavoidable. . . .’" Ayyildiz v. Kidd, 266 S.E.2d
108, 111 (Va. 1980) (citing O’Toole v. Franklin, 569 P.2d 561, 563
(Or. 1977)); Ely v. Whitlock, et al., 385 S.E.2d 893, 895-96 (Va.
1989).

   In Ayyildiz, a doctor brought a malicious prosecution claim against
a former patient who had unsuccessfully sued him for malpractice.
266 S.E.2d 108. The doctor claimed that he had suffered special inju-
ries including "costs to defend the malpractice action, injury to his
professional reputation and good name, [and] the loss of present and
future earnings and profits from his profession." Id. at 111. The Vir-
ginia Supreme Court affirmed the dismissal of the suit on the grounds
that the doctor had suffered no injury "that would not stem normally
from a medical malpractice suit." Id. at 112. Specifically, the court
held that the inconvenience of defending a meritless malpractice
action did not qualify as special damages because such an injury was
common to any physician who had to defend a malpractice suit. Id.

   Tibbetts claims that Yale’s Motion to Reconvert caused the follow-
ing special injuries: (i) his property right in his lawsuit was "seized";
(ii) he was unable to obtain relief from his pressing debts; and (iii) he
could not rectify his "financial situation" with state and federal stu-
dent loan authorities. It is difficult to analyze Tibbetts’ contentions.
He is apparently arguing that Yale, by filing the Motion to Reconvert,
interfered with his ability to pursue a Chapter 13 reorganization,
    11
    We make no decision on whether the allegations in Tibbetts’ Com-
plaint were sufficient to allege the other four elements required of a mali-
cious prosecution claim.
                     TIBBETTS v. YALE CORPORATION                       9
attempted to seize control of his lawsuits by settling them, and frus-
trated his efforts to resolve his financial problems.

   These injuries simply do not amount to a "special injury." By filing
for bankruptcy, a debtor necessarily subjects himself to the bank-
ruptcy court, whose procedures may be invoked by creditors with
either acknowledged or disputed claims. The delays and uncertainty
occasioned by motions practice in the bankruptcy court are common
consequences attending bankruptcy cases. Bankruptcy is, after all, an
adversary proceeding, in which creditors are entitled to a voice. Tib-
betts’ argument also fails to acknowledge that he, himself, terminated
the bankruptcy proceedings before the bankruptcy court had ruled on
the Motion to Reconvert.12 Accordingly, we conclude that the district
court properly dismissed Tibbetts’ malicious prosecution claim under
FRCP 12(b)(6) because he failed to allege a special injury.

                                    2.

   Abuse of process is "the wrongful use of process after it has been
issued." Triangle Auto Action, 380 S.E.2d at 650 (emphasis in origi-
nal); see also Donohoe Construction Co., Inc. v. Mount Vernon
Assoc., 369 S.E.2d 857, 862 (Va. 1988) ("The gravamen of the tort
lies in the abuse or perversion of the process after it has been
issued."). The elements of a prima facie case of abuse of process are:
(i) existence of an ulterior motive, and (ii) an act in the use of process
not proper in the regular prosecution of the proceedings. Triangle
Auto Action, 380 S.E.2d at 650.

   Tibbetts contends that Yale filed the Motion to Reconvert with the
ulterior motive of forcing "an unfair settlement" and liquidating Tib-
betts’ lawsuit against the University. Appellant’s Brief at 25. He fur-
ther contends that Yale’s improper use of the Motion (which Tibbetts
contends is "process") is evidenced by: (i) the submission of a time-
barred claim (the bursar’s claim); (ii) the purchase of claims from
other creditors; (iii) the submission of false and misleading informa-
  12
    Because Tibbetts dismissed his bankruptcy case, the Motion to
Reconvert did not terminate in his favor as required by Tomai-Minogue
v. State Farm Mut. Auto. Ins. Co., 770 F.2d 1228, 1236-37 (4th Cir.
1985).
10                   TIBBETTS v. YALE CORPORATION
tion to extend the statute of limitations on the time-barred claim; (iv)
misrepresentations that amounted to a false bankruptcy claim; (v) the
misuse of the Trustee to liquidate Tibbetts’ assets; (vi) the filing of
a motion not in the best interest of the creditors; and (vii) the filing
of a motion not in the best interest of the U.S. Government. Id. at 25-
26.

   Tibbetts’ allegations are insufficient to satisfy the second element
of an abuse of process claim, which requires "some ‘perversion of
regularly-issued process to accomplish some ulterior purpose for
which the procedure was not intended.’" Triangle Auto Auction, 380
S.E.2d at 651 (citing Donohoe, 369 S.E.2d at 862). As stated in Dono-
hoe, "[a] legitimate use of process to its authorized conclusion, even
when carried out with bad intention, is not" abuse of process. 369
S.E.2d at 862.

   In Donohoe, Mount Vernon Associates alleged that Donohoe Con-
struction had filed a mechanic’s lien on Mount Vernon’s nursing
home, which Donohoe had built, with the ulterior motive of obtaining
concessions on construction disputes. 369 S.E.2d at 860. Mount Ver-
non presented evidence that Donohoe knew or should have known
that the lien was invalid, but nonetheless filed the lien to force Mount
Vernon to the bargaining table.

   The Virginia Supreme Court rejected Mount Vernon’s claim
despite evidence of Donohoe’s bad intent in filing the lien. There was
insufficient evidence, concluded the court, that after filing the lien
Donohoe engaged in any "act in the use of the process not proper in
the regular prosecution of the proceeding," as required by the second
element of an abuse of process claim. Id. at 862-63.

   Similar to Donohoe, Tibbetts’ allegations are directed at Yale’s
allegedly improper motives for filing the Motion to Reconvert. Tib-
betts fails to allege that Yale’s prosecution of its motion was irregular.
Accordingly, the district court properly dismissed this count under
FRCP 12(b)(6).
                       TIBBETTS v. YALE CORPORATION                        11
                                      B.

   We next turn to Count Five of Tibbetts’ Complaint, alleging that
Yale’s Motion to Reconvert amounted to vexatious litigation in viola-
tion of Connecticut law.13

   Applying the well established principle that a court, sitting in
diversity, must apply the substantive law of the state where the injury
occurred, the district court dismissed this count on the grounds that
the alleged tort (the filing of the Motion to Reconvert) occurred in
Virginia. Accordingly, the court reasoned, Virginia substantive law,
and not Connecticut law, should apply.

   On appeal, Tibbetts contends that the tort, in fact, occurred in Con-
necticut because Yale and the other appellees conspired in Connecti-
cut to file the motions in the Eastern District of Virginia. We find
Tibbetts’ argument to be without merit. Tibbetts complains of a
wrong inflicted by the filing of the Motion to Reconvert. The Motion
to Reconvert was filed in Virginia. Connecticut does not become the
place of injury even if the appellees planned filing the motion while
in Connecticut. Accordingly, the district court properly dismissed
Count Five on the grounds that Connecticut law is inapplicable.

                                     III.

   Tibbetts next contends that the district court was wrong to deny his
Motion for Leave to File a Second Amended Complaint, especially
given his pro se status. We disagree.
  13
    Connecticut law provides that:
       [a]ny person who commences and prosecutes any civil action or
       complaint against another, in his own name or the name of oth-
       ers, or asserts a defense to any civil action or complaint com-
       menced and prosecuted by another (1) without probable cause,
       shall pay such other person double damages, or (2) without prob-
       able cause, and with a malicious intent unjustly to vex and trou-
       ble such other person, shall pay him treble damages.
Conn. Gen. Stat. §52-568 (2002).
12                   TIBBETTS v. YALE CORPORATION
   Appellate review of the denial of a motion for leave to amend is
governed by the abuse of discretion standard. Foman v. Davis, 371
U.S. 178, 182 (1962); Pittson Co. v. United States, 199 F.3d 694, 705
(4th Cir. 1999). This standard of review "mandates a significant mea-
sure of appellate deference to the judgment calls of trial courts."
United States v. Pittman, 209 F.3d 314, 316 (4th Cir. 2000).

   As a general rule, a district court should deny a motion to amend
only "‘when the amendment would be prejudicial to the opposing
party, there has been bad faith on the part of the moving party, or the
amendment would be futile.’" HCMF Corp. v. Allen, 238 F.3d 273,
276 (4th Cir. 2001); see also Gordon v. Leeke, 574 F.2d 1147, 1152-
53 (4th Cir. 1978) (a pro se litigant is entitled to the opportunity to
amend his pleadings if he has alleged a potentially meritorious cause
of action). An examination of Tibbetts’ proposed new counts for
breach of contract and "malicious defense" reveals that they would be
futile if filed.

   The additional facts asserted in the proposed Second Amended
Complaint would not cure the fatal defects in the malicious prosecu-
tion, abuse of process, and vexatious suit counts. These facts do not
supply a special injury, or establish the improper use of process, or
make Connecticut law applicable. Accordingly, the district court was
correct in declining to allow Tibbetts to add the new but irrelevant
allegations.

   Tibbetts also sought to add a count for breach of contract. This
count arises out of Chapter 11 of Yale’s Student Handbook, entitled
"Free Expression, Peaceful Dissent, and Demonstrations," which
states that Yale has an "overriding commitment to free expression."
Tibbetts contends that this handbook was a contract between Yale and
its students, and that Yale breached the contract by attempting to
force him back into Chapter 7 where the Trustee would settle his
suits. Tibbetts’ theory is that Yale, by plotting to terminate suits criti-
cal of the university, was endeavoring to stifle his free expression and
peaceful dissent.

   This claim is without merit. Chapter 11 of the Student Handbook
is not a contract, but merely a university policy promoting free
expression. Yale breached no contractual obligation to Tibbetts by
                    TIBBETTS v. YALE CORPORATION                    13
defending against his lawsuits and ultimately seeking to settle them.
Furthermore, it is worth noting that the Trustee, not Yale, crafted the
settlement agreement. In a Chapter 7 liquidation, the Trustee is vested
with complete control over the liquidation of assets. Tibbetts makes
no claim that the Trustee acted in bad faith.

   Tibbetts also sought to add a count for "malicious defense" under
Connecticut law. Tibbetts appears to argue that the Motion to Recon-
vert filed in the bankruptcy case amounts to an improper, backdoor
effort by Yale and its attorneys to defend the Connecticut lawsuits.
Tibbetts claims that Yale and its attorneys are, therefore, culpable of
"malicious defense" under Connecticut General Statute § 52-568 cited
in footnote 13. We doubt whether the Connecticut statute could be
stretched so far. We need not decide this issue, however, because as
stated supra p. 11, Connecticut law is inapplicable to a Motion to
Reconvert filed in Virginia.

   For the aforementioned reasons, Tibbetts’ proposed amendments
would have been futile. Accordingly, the district court properly
denied Tibbetts’ Motion for Leave to File a Second Amended Com-
plaint.

                           CONCLUSION

   For the reasons stated herein, the judgment of the district court is
affirmed.

                                                          AFFIRMED