Court Opinion

ID: 195034
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:30:42+00
Date Added: 2024-06-11T13:09:26.685594
License: Public Domain

UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT

                                           

No. 93-1419

                   DAVID E. AND JEAN E. KUEHL,

                     Plaintiffs, Appellants,

                                v.

          FEDERAL DEPOSIT INSURANCE CORPORATION, ET AL.,

                      Defendants, Appellees.

                                           

           APPEAL FROM THE UNITED STATES DISTRICT COURT

                FOR THE DISTRICT OF NEW HAMPSHIRE

        [Hon. Juan M. Perez-Gimenez,* U.S. District Judge]
                                                         

                                           

                              Before

                      Boudin, Circuit Judge,
                                           
           Coffin and Campbell, Senior Circuit Judges.
                                                     

                                           

  Alex Komaridis for appellants.
                
  Richard E. Mills for appellees.
                  

                                           

                        November 17, 1993
                                           

                  

*Of the District of Puerto Rico, sitting by designation.

     COFFIN,  Senior Circuit Judge.  The district court dismissed
                                  

plaintiffs'  43-page,  358-paragraph  complaint  because  of  its

failure  to conform to the  concise pleading requirements of Rule

8(a) of the Federal Rules of Civil Procedure.  Plaintiffs contend

that the court erred in  doing so, and in failing to give them an

opportunity to file an amended complaint.  We cannot say that the

district court abused its discretion and, accordingly, affirm the

dismissal.

                     I. Procedural Background
                                             

     Plaintiffs David and Jean Kuehl originally filed this lender

liability lawsuit in state court, seeking damages from  two banks

and  numerous bank officers  and directors based  on foreclosures

against  their properties and their resulting inability to obtain

credit.   The state court complaint consisted of 19 single-spaced

typed pages containing 36 counts against 28 defendants.

     In October  1991, the two  banks were taken over  by federal

agencies, and the action was removed to federal court.  Following

a status conference  in early February  1992, a magistrate  judge

ordered  plaintiffs to submit  "an amended complaint"  to conform

the pleadings  to the concise  pleading requirements  of Fed.  R.

Civ.  P. 8(a).1   The  order noted  the  magistrate's expectation

that "a review of the  proposed amended complaint and the results

                    

1 The relevant portion of Rule 8(a) states:

     A pleading which  sets forth a claim  for relief .  . .
     shall contain . . . (2)  a short and plain statement of
     the  claim  showing  that the  pleader  is  entitled to
     relief . . . .

of  Rule 12(b)(6)  motions [to  dismiss  for failure  to state  a

claim]  will reduce  considerably  the number  of parties  in the

action."

     Several  days later, plaintiffs filed a 43-page, now double-

spaced, complaint with the  same number of counts, and  including

all of the  original defendants, plus  the two federal  agencies.

The complaint  set forth,  inter alia, eight  separate counts  of
                                     

respondeat superior, eight counts  of negligent supervision,  six

counts  of  breach of  good  faith,  three  counts of  breach  of

fiduciary duty,  three counts  of negligence,  and two  counts of

conspiracy.2

     Defendants  promptly filed motions  to dismiss.   They urged

that the entire  complaint be dismissed for failure  to provide a

                    

2 The complaint's prolixity is illustrated  by the counts alleged
against  the individual members of HomeBank's board of directors.
Two of the negligence counts were against  this group.  One count
(Count III) alleged breach of a duty to ensure that all terms and
conditions  of  loans  between  the  Kuehls  and  the  bank  were
fulfilled and  the other (Count IV)  alleged breach of  a duty to
supervise the  officers of the  bank to ensure that  the officers
fulfilled  the bank's obligations to its customers, including the
Kuehls.   The complaint  also included two  negligent supervision
counts (Counts VIII and XII) charging  these same defendants with
essentially  the  same  conduct.    The  complaint  also  alleged
multiple respondeat superior claims  against HomeBank (Counts IX,
XIII, XV,  XX) as the  responsible employer and principal  of the
officers and directors.

     The  counts  against  HomeBank's  president, Charles  Reese,
included one  for negligence (Count II), alleging that he "failed
to properly supervise his subordinates  and permitted the bank to
breach its  agreement with Kuehl,"  as well as two  for negligent
supervision (Counts  VII and XI),  alleging that he  breached his
duty   and  responsibility  to   Kuehl  by  failing   to  correct
misrepresentations made to Kuehl by Reese's subordinates.

     These examples are by no means exhaustive.

                               -3-

short  and plain  statement of  the  claims as  required by  Rule

8(a)(2), and  as ordered  by the magistrate  judge.   The motions

alternatively sought dismissal against the individual defendants,

who had  been sued  only in their  official capacities,  and also

challenged certain counts as  failing to state claims upon  which

relief could be granted.

     Plaintiffs objected  to  the  motions,  asserting  that  the

complaint did conform to the  requirements of Rule 8(a), and that

every count stated a  viable cause of action.  They  did not seek

leave to further amend the complaint.

     On July 23, 1992, the magistrate judge issued his Report and

Recommendation  calling for dismissal of the complaint because it

violated  Rule  8(a).    He  found  that,  despite  the  explicit

directions  in his February  order, plaintiffs had  "proceeded to

file a verbose and redundant complaint containing the same number

of counts as  the original."  He  noted that several counts  were

nearly  identical  to  each  other,  several  other  counts  were

ambiguous as to  which defendant was  named, and "[t]he  possible

substance of the claim is hidden in prolixity."

     The  Kuehls filed an objection to the recommended dismissal,

complaining that no consideration had been given to the merits of

their  claims  or  to  their  "right" to  further  amend.    This

complaint  was their  first in  the federal format,  they pointed

out, and Fed. R. Civ. P. 15(a) allows a party one amendment "as a

                               -4-

matter  of course"  before  a  responsive  pleading  is  served.3

Plaintiffs did  not, as  part of their  objection, seek  leave to

amend or submit a proposed amended complaint.

     Plaintiffs did  attempt to file  a motion to amend  in early

September, attaching  a proposed  amended complaint.   They  also

filed a dismissal without prejudice  of all claims against the 21

defendants  who were  directors  of  the two  banks.   The  court

refused the motion to amend,  however, because plaintiffs had not

sought concurrence from the defendants, as required by Local Rule

11.   No  subsequent attempt  was made  to obtain  concurrence or

refile the pleading.

     On September 25,  1992, the district  court issued an  order

adopting the magistrate judge's recommendation that the complaint

be dismissed  in its entirety.   The court noted  that plaintiffs

had failed to file an amended  complaint meeting the requirements

of  Rule  8(a), as  ordered,  "even  after  the Magistrate  Judge

gratuitiously  gave plaintiffs rather specific guidance as to how

the complaint should be amended."

     Plaintiffs filed a Motion for Reconsideration, stating that,

in  attempting to  balance the  various  federal pleading  rules,

"[p]laintiffs' attorney unintentionally  violated Rule 8(a)"  and

                    

3 The relevant portion of Fed. R. Civ. P. 15(a) states:

          A party  may amend the  party's pleading once
          as a matter  of course at  any time before  a
          responsive   pleading  is  served  .  .  .  .
          Otherwise  a  party  may  amend  the  party's
          pleading only by leave of court or by written
          consent of the adverse party; and leave shall
          be freely given when justice so requires.

                               -5-

that dismissal with  prejudice was too harsh a  penalty under the

circumstances.  For the first time, plaintiffs submitted a proper

request  for permission to  amend their complaint,  although they

did  not submit  a proposed  new complaint.   The  district court

denied the  motion for reconsideration  on March 12, 1993.   This

appeal followed.

     The Kuehls now  attack the dismissal on two  fronts.  First,

they claim that they are  absolutely entitled to another round of

repleading under  Rule 15(a)  because  they have  filed only  one

federal  complaint  and  defendants  have  not  filed  responsive

pleadings.4   Second, they argue  that the deficiencies  of their

complaint were  not so severe  as to warrant a  dismissal without

the opportunity to amend.

                      II. The Right to Amend
                                            

     Under Rule 81(c) of the Federal Rules of Civil Procedure, an

action that is  removed from state to  federal court need not  be

repled "unless  the court so  orders."  The Kuehls  maintain that

their  original  federal  complaint  was   a  repleading  ordered

pursuant  to Rule  81(c), but  that --  contrary to  the district

court's conclusion --  that redrafting did not use  up their Rule

15(a) right to amend their complaint once as a matter of course.

     We  can  agree,   generally,  with  the  principle   that  a

repleading  ordered  under  Rule  81(c)  does  not  automatically

deprive the plaintiff of the  one-time option to amend granted by

                    

4  It is well established in this circuit that motions to dismiss
are  not responsive pleadings.  See Correa-Martinez v. Arrillaga-
                                                                 
Belendez, 903 F.2d 49, 59 n.8 (1st Cir. 1990).
        

                               -6-

Rule  15(a).   This  seems particularly  so  when the  repleading

involves  simply a  change of  format  to fit  the federal  court

model.

     In  this  case,  however,  the magistrate  judge  explicitly

ordered  an  amended  complaint  that  was  intended  to  contain
                    

substantive  changes to  meet  Rule  8(a)'s  requirements.    The

plaintiffs,  therefore,   had  a   chance   to  make   meaningful

modifications to  their complaint  and, indeed,  were given  some

advice about how to do so.  They point to no authority supporting

the proposition that they are entitled,  as a matter of right, to
                                                             

a second chance to improve the substance of their complaint.  The

fact that plaintiffs squandered their one  guaranteed opportunity

by making only stylistic changes does not yield them another.

                    III. Too Tough a Sanction?
                                              

     A district court has the power to dismiss a complaint when a

plaintiff fails  to  comply  with  the  Federal  Rules  of  Civil

Procedure, including  Rule 8(a)(2)'s "short and  plain statement"

requirement.  Vakalis v. Shawmut Corp., 925 F.2d 34, 36 (1st Cir.
                                      

1991); Mangan v.  Weinberger, 848 F.2d 909, 911  (8th Cir. 1988).
                            

See Fed.  R. Civ. P. 41(b).  Its decision  to do so is reviewable
   

only  for abuse  of discretion.   Mangan,  848 F.2d  at 911;  HMG
                                                                 

Property Investors v. Parque Indus. Rio Canas, 847 F.2d 908, 916-
                                             

17 (1st Cir. 1988). 

     Plaintiffs  now acknowledge  a technical  violation of  Rule

8(a),  conceding that  their complaint  is  excessively long  and

unnecessarily redundant.    They claim,  however, that  dismissal

                               -7-

with  prejudice  is  too  drastic a  sanction  because  this  was

"unintentional  error" on the  part of plaintiffs'  attorney, who

believed that it was essential to plead in detail in light of the

magistrate's  stated  expectation that  many defendants  and some

claims  would be  dismissed.   By  drafting  counts in  numerous,

short, separate  paragraphs, plaintiffs explain,  they sought  to

permit any dismissed  counts to be excised without  affecting the

remainder of the claims or the complaint as a whole.

     Were plaintiffs'  confessed overdrafting their only  sin, we

would be  inclined to  agree that dismissal  was an  overly harsh

penalty.  Our federal rules  promote the disposition of claims on

the merits rather than on  the basis of technicalities, see Foman
                                                                 

v.  Davis, 371  U.S. 178,  181-82  (1962), and  courts should  be
         

reluctant  to  impose  a dismissal  with  prejudice  for  a rules

violation that  is neither persistent nor vexatious, particularly

without some review of the merits.

     These  plaintiffs are  culpable  for  more  than  simply  an

overwritten  complaint, however.   Their faulty pleading  was not

their  first,  but  an  amended version  that  had  changed  only

superficially  from the state  court complaint, despite  an order

that  it conform  to the  concise pleading  requirements  of Rule
                                 

8(a).  Additionally,  the magistrate judge had  fairly explicitly

telegraphed   that   the   number   of   defendants   should   be

"considerably" reduced. Instead, plaintiffs added two more.  When

plaintiffs  finally  attempted six  weeks after  the magistrate's

decision to file a motion to  amend, they failed to follow  local

                               -8-

rules.   At no time did they properly  offer the court a proposed

amended complaint to cure the deficiencies.

     Thus, by the time the district court acted on the magistrate

judge's recommendation, it  had before it a flouted  order and no

indication that plaintiffs were  ready to conform to Rule  8(a)'s

requirements.  Their one apparent attempt to comply -- the motion

that ran  afoul of  Local Rule  11 --  had been  abandoned.   And

defendants  already had  expended considerable  time  and expense

responding  to   the  defective   complaint.     See  Newman   v.
                                                            

Commonwealth  of  Mass., 115  F.R.D.  341,  344 (D.  Mass.  1987)
                       

(recognizing  role of  "`pragmatic matters,'"  such  as time  and

expense for defendants  and court, in deciding  whether complaint

should be dismissed).

     In these  circumstances, the  district  court's decision  to

dismiss, though  very severe,  does not strike  us as  beyond the

pale.   It is  well settled that  the question on  review "is not

whether we would have imposed a more lenient penalty had we  been

sitting in the  trial judge's place, but whether  the trial judge

abused his discretion  in imposing the penalty he  did."  Spiller
                                                                 

v. U.S.V. Laboratories, Inc., 842  F.2d 535, 537 (1st Cir. 1988).
                            

We believe  this decision was  within the wide boundaries  of the

court's discretion.  See 5 Charles A. Wright &  Arthur R. Miller,
                        

Federal Practice and Procedure    1217, at 178 (1990) ("[I]n some
                              

circumstances if a party fails or  refuses to file an amended and

simplified pleading or does not exercise good faith in purporting

to do so, the severe sanction of a dismissal on the merits may be

                               -9-

warranted."); see also Jones v. Winnepesaukee Realty, 990 F.2d 1,
                                                    

5 (1st Cir. 1993) ("Trial judges enjoy great latitude in carrying

out case-management functions.")

     The order of dismissal is therefore affirmed.
                                                 

                               -10-