Court Opinion

ID: 988424
Source: CourtListenerOpinion
Date Created: 2013-07-03 22:52:06.582357+00
Date Added: 2024-06-11T15:26:41.306201
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

ALLEN A. IZADPANAH,
Plaintiff-Appellant,

87 AIDANT LIMITED PARTNERSHIP;
FRED A. PAGE; TERRY PAGE;
DOUGLAS STUP; EARL M. CUNARD;
JANICE A. CUNARD; CRAFT
INDUSTRIES, for the Benefit of Rudy
Delsack,
                                      No. 95-1163
Appellants,

v.

EDWARD GROSS; ROBERT A. HUMMEL;
FEDERAL COMPUTER CORPORATION;
CHARLES CROWE; AIDANT,
INCORPORATED,
Defendants-Appellees.

ALLEN A. IZADPANAH,
Plaintiff-Appellee,

v.

EDWARD GROSS; ROBERT A. HUMMEL;
CHARLES CROWE; AIDANT,
                                      No. 95-1246
INCORPORATED,
Defendants-Appellants,

and

FEDERAL COMPUTER CORPORATION,
Defendant.
Appeals from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Claude M. Hilton, District Judge.
(CA-94-1150-A)

Argued: December 4, 1995

Decided: January 30, 1996

Before ERVIN, Chief Judge, and WIDENER
and WILKINS, Circuit Judges.

_________________________________________________________________

Affirmed in part and remanded in part by unpublished per curiam
opinion.

_________________________________________________________________

COUNSEL

ARGUED: William S. Burroughs, Jr., Alexandria, Virginia; Walter
Theodore Charlton, Arlington, Virginia, for Appellants. Edward
Gross, GROSS & ASSOCIATES, Fairfax, Virginia, for Appellees.
ON BRIEF: Joel A. DeBoe, Arlington, Virginia, for Appellants.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit.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

_________________________________________________________________

OPINION

PER CURIAM:

Allen A. Izadpanah brought suit against Edward Gross, Robert A.
Hummel, Aidant, Incorporated (Aidant), Federal Computer Corpora-
tion (FCC), and Charles Crowe (collectively, "Defendants"), seeking

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to overturn a court-ordered sale of his stock in Aidant and to recover
damages for an alleged fraud on a state court, violations of civil rights
under 42 U.S.C.A. §§ 1983, 1985 (West 1994), violations of § 10 of
the Securities Exchange Act of 1934, 15 U.S.C.A.§ 78j(b) (West
1981), and Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-
5 (1995), and violations of Virginia securities laws. The district court
granted summary judgment against Izadpanah on all claims, but it
denied a motion by Defendants for sanctions. We affirm the grant of
summary judgment against Izadpanah, but remand for reconsideration
of sanctions.

I.

In May 1991, as a result of negotiations to settle an outstanding
judgment against him as a guarantor of a debt owed by Aidant,1 Izad-
panah entered into a consent judgment in favor of Sirex USA, Incor-
porated (Sirex). After several unsuccessful collection attempts, Sirex
executed documents transferring its rights in the judgment to FCC in
July 1991. FCC filed a Motion to Turnover Property with the Fairfax
County Circuit Court in August 1991, and the court ordered the sale
of Izadpanah's stock in Aidant with the proceeds to be applied to the
consent judgment. Izadpanah subsequently filed a motion to vacate
the sale, arguing that the state court did not have jurisdiction over the
stock. The state court rejected Izadpanah's argument, and the
Supreme Court of Virginia affirmed.

Izadpanah then filed this action in the district court, asserting a
conspiracy between Crowe, Hummel, and Gross, acting both individ-
ually and through Aidant and FCC, to deprive him of his stock in
Aidant and to gain complete control of that company. He alleged that,
as a part of this conspiracy, Defendants committed a fraud on the state
court by inducing him to enter into the consent judgment without dis-
closing that FCC had actually purchased the rights to the judgment
from Sirex prior to May 1991. He also argued that Defendants con-
spired to deprive him of his stock without due process of law and that
_________________________________________________________________
1 Crowe and Hummel were shareholders in Aidant and apparently con-
trolled its board of directors. FCC--controlled by Hummel--was also a
shareholder in Aidant. When the guaranty agreement was signed in 1988,
Izadpanah was an officer and director of Aidant.

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the court-ordered sale of his stock in Aidant violated federal and state
securities laws. The district court granted summary judgment against
Izadpanah on the grounds that it did not have jurisdiction to review
decisions by state courts; that Izadpanah's civil rights and securities
claims were barred by the applicable statutes of limitation; and, fur-
ther, that all of the claims were precluded by Virginia principles of
res judicata and collateral estoppel applied under the full faith and
credit statute, 28 U.S.C.A. § 1738 (West 1994). The district court
refused to impose sanctions against Izadpanah, however, finding that
the action was not frivolous.

II.

On appeal, Izadpanah2 concedes that the district court did not have
jurisdiction to review the state court decision for fraud on the court.3
He argues, however, that the district court improperly granted sum-
mary judgment in favor of Defendants on his claims under §§ 1983
and 1985 as well as § 78j(b) and Rule 10b-5. After carefully consider-
ing the arguments of counsel and reviewing the record, we affirm the
grant of summary judgment for the reasons adequately stated by the
district court in its memorandum opinion. Izadpanah v. Gross, No.
94-1150 (E.D. Va. Nov. 1, 1994).
_________________________________________________________________
2 Izadpanah assigned part of his rights to any judgment collected in this
case to another entity, the 87 Aidant Limited Partnership. This partner-
ship and several of its limited partners filed an application to intervene
against Defendants below, see Fed. R. Civ. P. 24, but the district court
granted summary judgment against Izadpanah before ruling on the appli-
cation. The purported intervenors then filed a notice of appearance as
intervenors with this court. Because the district court never ruled on the
application to intervene, we treat the notice of appearance as a motion for
leave to intervene and grant the motion. Since the intervenors merely
have adopted the legal arguments advanced by Izadpanah, for ease of
discussion we analyze the case by reference to the original parties.

3 In his initial brief to this court, Izadpanah continued to argue that the
district court had jurisdiction to review the state court decision for fraud.
He abruptly withdrew this claim in his reply brief, however, stating,
"Plaintiff has concluded that [this] argument is incorrect."
Appellants/Cross-Appellees' Reply and Answering Brief at 2.

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III.

On cross appeal, Defendants argue that the district court abused its
discretion by refusing to order sanctions under Federal Rule of Civil
Procedure 11. Generally, the decision to impose sanctions is within
the broad discretion of the district court and will not be reversed on
appeal absent an abuse of that discretion. See Cooter & Gell v. Hart-
marx Corp., 496 U.S. 384, 405 (1990). On appeal, however, Izad-
panah conceded that his claim that a district court has jurisdiction to
review a state court decision originated in a failure to properly con-
sider District of Columbia Court of Appeals v. Feldman, 460 U.S. 462
(1983), which precludes such review. Because the district court did
not have the benefit of this concession, we remand this claim to the
district court to determine whether sanctions should be imposed for
bringing this cause of action.

AFFIRMED IN PART; REMANDED IN PART

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