Court Opinion

ID: 4213885
Source: CourtListenerOpinion
Date Created: 2017-10-23 16:02:46.972275+00
Date Added: 2024-06-11T09:27:51.632626
License: Public Domain

FILED
                                                                      United States Court of Appeals
                      UNITED STATES COURT OF APPEALS                          Tenth Circuit

                             FOR THE TENTH CIRCUIT                         October 23, 2017
                         _________________________________
                                                                          Elisabeth A. Shumaker
                                                                              Clerk of Court
KENTON W. STEPHENS,

      Plaintiff - Appellant,

v.                                                          No. 17-4002
                                                   (D.C. No. 1:15-CV-00108-RJS)
ALLIANT TECHSYSTEMS                                           (D. Utah)
CORPORATION; FIDELITY
INVESTMENTS INSTITUTIONAL
OPERATIONAL COMPANY,

      Defendants - Appellees.
                      _________________________________

                             ORDER AND JUDGMENT*
                         _________________________________

Before HARTZ, McKAY, and MATHESON, Circuit Judges.
                  _________________________________

      Kenton Stephens sued Alliant Techsystems Corporation and Fidelity

Investments Institutional Operational Company over a dispute related to the

distribution of his retirement benefits. Stephens appeals the district court’s order

overruling his objections to various rulings by the magistrate judge, granting

      *
        After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
summary judgment in favor of the defendants, and denying his motion to amend his

complaint. We affirm.

                                   I. Background

      Stephens is a member of a defined benefit retirement plan that Alliant

maintains and which Fidelity services. Fidelity began sending Stephens monthly

benefit checks in 2009. But rather than cash the checks, Stephens returned the

unopened envelopes to Fidelity. Apparently Stephens believed a Qualified Domestic

Relations Order (QDRO) entered in his Utah divorce case rendered him liable for any

amounts intended for his ex-wife (who was awarded a portion of the benefits) but

accidently mailed to him. This went on until late 2014, when Fidelity sent Stephens

a check for $152,890.38, representing a lump-sum payment for all benefits due up to

that point. Fidelity filed a corresponding 1099-R form with the IRS reflecting its

lump-sum distribution. As with the prior distributions, Stephens returned the

unopened envelope containing the check to Fidelity.

      Believing Fidelity was wrong to file the 1099-R form, Stephens sued the

defendants in the District of Utah. He sought, among other things, an ex parte

hearing1 and an order that the 1099-R form was “null and void” because no money

      1
         The same day Stephens filed his complaint requesting an ex parte hearing, he
filed a separate motion requesting the same relief. The magistrate judge denied the
motion and the district court overruled Stephens’ objection to the ruling. Stephens
makes a passing reference to the issue in the “statement of the case” section of his
opening brief, but he does not revisit it in the “argument” section or make any real
argument that the district court erred. This is not enough to preserve an issue for
appellate review. Colo. Outfitters Ass’n v. Hickenlooper, 823 F.3d 537, 546 n.8
(10th Cir. 2016).
                                          2
was actually distributed. R. Vol. I at 17. After the defendants answered his

complaint, Stephens moved to file a reply to their answer and requested a change of

venue to the District of Minnesota. The magistrate judge denied both requests, and

later recommended granting summary judgment in favor of the defendants and

denying Stephens’ motion to amend his complaint. The district court overruled

Stephens’ objections to the magistrate judge’s rulings and adopted her

recommendations.

                               II. Preliminary Matters

      Before reaching the merits of Stephens’ appeal, we resolve his pending

motions. Stephens has filed (1) a motion for certain judges to recuse, (2) a motion

for an order requiring defense counsel to name any unidentified clients, (3) a petition

(and amended petition) for initial hearing en banc, and (4) a motion to sanction the

defendants because their attorneys did not file an updated entry of appearance

reflecting a change of address. These motions are denied.

      First, we deny Stephens’ motion for recusal. “To avoid the appearance of

injustice,” Stephens asks “Judge Scott Math[e]son and any other members of the

Court who have important connections to Utah culture” including “members of the

[Mormon] Church” to recuse. Mot. to Bar Utah Related Judges at 1 (Aug. 8, 2017).

Although a judge must “disqualify himself in any proceeding in which his

impartiality might reasonably be questioned,” 28 U.S.C. § 455(a), he also has “a duty

to sit when there is no legitimate reason to recuse,” Bryce v. Episcopal Church in the

Diocese of Colo., 289 F.3d 648, 659 (10th Cir. 2002) (internal quotation marks

                                           3
omitted). “The test is whether a reasonable person, knowing all the relevant facts,

would harbor doubts about the judge’s impartiality.” Id. (internal quotation marks

omitted). Membership in a group—including a church—is generally not enough to

meet this standard. See id. at 660. In this case, no reasonable person knowing the

relevant facts would doubt the impartiality of any judge on this panel.

        Second, we deny Stephens’ request for an order requiring defense counsel

“identify any undeclared and/or unidentified client[s].” Mot. to Identify Clients at 1

(Aug. 8, 2017). Stephens cites no authority for such an order and we are aware of

none.

        Third, Stephens filed his petition for initial hearing en banc well after the

deadline.2 He asks us to disregard the late filing because he is proceeding without an

attorney, but pro se parties must follow the same rules of procedure as other litigants,

Garrett v. Selby Connor Maddux & Janer, 425 F.3d 836, 840 (10th Cir. 2005). We

therefore deny Stephens’ petition, but he remains free to seek a rehearing en banc if

he chooses.

        Fourth, any failure to notify Stephens of defense counsel’s new address does

not warrant sanctions, so we deny this request as well.

        2
        “A petition that an appeal be heard initially en banc must be filed by the date
when the appellee’s brief is due.” Fed. R. App. P. 35(c). The defendants’ brief was
due on June 26, 2017, but Stephens did not file his petition until August 31, 2017.
                                             4
                                      III. Analysis

                     A. Motion to Reply to Defendants’ Answer

      Shortly after the defendants filed their answer, Stephens moved to file a reply.

The magistrate judge denied the motion and the district court overruled Stephens’

objection to her ruling. The district court did not abuse its discretion.

      When a magistrate judge rules on a nondispositive matter, the district court

“must consider timely objections and modify or set aside any part of the order that is

clearly erroneous or is contrary to law.” Fed. R. Civ. P. 72(a). The clearly erroneous

standard requires the district court to affirm unless the evidence as a whole leaves it

“with the definite and firm conviction that a mistake has been committed.” Allen v.

Sybase, Inc., 468 F.3d 642, 658 (10th Cir. 2006) (internal quotation marks omitted).

We, in turn, review the district court’s ruling for abuse of discretion. Id. at 659.

      Stephens argues he should have been allowed to file a reply because the

defendants’ answer contained counterclaims. The Federal Rules of Civil Procedure

allow “an answer to a counterclaim designated as a counterclaim.”

Fed. R. Civ. P. 7(a)(3). But our review of the defendants’ answer reveals no

designated counterclaims. Instead, the answer consists of a paragraph-by-paragraph

discussion of the allegations in Stephens’ complaint, including whether the

defendants admit or deny each allegation, and a list of defenses. Because the answer

asserts no counterclaims, the district court did not abuse its discretion by refusing to

allow Stephens to file a reply.

                                            5
                           B. Motion for Change of Venue

      Stephens moved to transfer this case to the District of Minnesota on grounds

this would be more convenient for witnesses and serve the interest of justice. The

magistrate judge denied Stephens’ motion and the district court overruled Stephens’

objection. It did not abuse its discretion.

      A court may transfer an action to another district where it could have been

brought “[f]or the convenience of parties and witnesses, in the interest of justice.”

28 U.S.C. § 1404(a). But courts have considerable discretion in determining whether

or not to grant a transfer. See Palace Expl. Co. v. Petroleum Dev. Co., 316 F.3d

1110, 1121 (10th Cir. 2003) (“This court will not overturn [a transfer] decision unless

it was a clear abuse of discretion.”).

      The magistrate judge denied Stephens’ transfer request because Stephens lives

in Utah, he filed this case in the District of Utah, the case involves actions that

occurred in Utah, and the court may be required to apply the QDRO, which was

issued under Utah law. These were appropriate considerations. See Emp’rs Mut.

Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1167-68, 1170 (10th Cir. 2010)

(describing the general preference for the plaintiff’s choice of forum and for local

courts deciding questions of local law). Stephens argues a transfer would be more

convenient for witnesses, but he neither identifies the witnesses he refers to nor

explains the importance of their testimony. See id. at 1169. Stephens also claims he

cannot get a fair proceeding in Utah, but this argument is based on an alleged

conspiracy—for which Stephens gives no persuasive evidence—involving the district

                                              6
court, the IRS, a United States senator, unidentified “members of Utah’s domina[nt]

culture,” and the White House. R. Vol. I at 120. Under the circumstances, the

district court did not abuse its discretion by overruling Stephens’ objection to the

magistrate judge’s ruling.

                                C. Summary Judgment

       Stephens argues the district court erred by granting summary judgment in

favor of the defendants. We review this ruling de novo. See Felkins v. City of

Lakewood, 774 F.3d 647, 650 (10th Cir. 2014). A party is entitled to summary

judgment if it “shows that there is no genuine dispute as to any material fact and [it]

is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).

       The district court found that Stephens raised three claims in his complaint:

(1) a claim for declaratory judgment that the 1099-R form the defendants filed with

the IRS was void, (2) a fraud claim, and (3) a claim the defendants violated the

Employee Retirement Income Security Act (ERISA). The court concluded it lacked

jurisdiction over Stephens’ declaratory judgment claim, that he failed to allege or

submit evidence showing the elements of fraud were met, and that Stephens provided

no legal or factual support for his suggestion that the defendants violated ERISA.

       We agree with the district court that it lacked jurisdiction to void the 1099-R

form. The Declaratory Judgment Act allows courts to “declare the rights and other

legal relations” of parties within its jurisdiction, but not “with respect to [f]ederal

                                             7
taxes.”3 28 U.S.C. § 2201(a). Stephens argues that even if the district court could

not void the 1099-R form, it should have entered an order stating he did not receive

any income from the defendants in 2014. But the only purpose of such an order

would be to determine Stephens’ tax liability, which the district court lacked

authority to do. See Sterling Consulting Corp. v. United States, 245 F.3d 1161, 1166

(10th Cir. 2001) (“[T]here are no relevant exceptions under the Declaratory Judgment

Act that permit the district court to determine [a party’s] tax liabilities.”).

       Stephens does not specifically address the district court’s rulings on his fraud

and ERISA claims. Instead, he makes a more general argument that summary

judgment was inappropriate because there were several disputed facts. But Stephens

does not identify the facts he refers to. And the question is not whether there are any

disputed facts, but whether there is a genuine dispute of material fact, meaning a fact

essential to the disposition of the claim, J.V. v. Albuquerque Pub. Schs., 813 F.3d

1289, 1295 (10th Cir. 2016). Because Stephens has identified no material facts in

dispute, we affirm the district court’s order granting summary judgment in favor of

the defendants.

                         D. Motion to File Amended Complaint

       After the defendants moved for summary judgment, Stephens sought to amend

his complaint to add a claim that parts of the QDRO violated ERISA. On the

magistrate judge’s recommendation, the district court denied Stephens’ request

because it found his proposed amendment would be futile. We see no error.

       3
           There are exceptions to this prohibition, but they do not apply here.
                                              8
      Courts should freely give leave to amend when justice requires it.

Fed. R. Civ. P. 15(a)(2). But courts may deny leave to amend a complaint when the

proposed amendment would be futile, meaning the amended complaint would be

subject to dismissal. Full Life Hospice, LLC v. Sebelius, 709 F.3d 1012, 1018

(10th Cir. 2013). We review the decision to deny leave to amend for abuse of

discretion, but when the reason for the denial “is futility, we review de novo the legal

basis for the finding of futility.” Jones v. Norton, 809 F.3d 564, 579 (10th Cir.

2015), cert. denied, 137 S. Ct. 197 (2016).

      Stephens’ proposed amendment raised an additional claim that parts of the

QDRO violated ERISA. To remedy this violation, Stephens asked the district court

to adopt a prior QDRO (with certain modifications) and enter various orders to

implement it. The district court found it could not give Stephens the relief he sought

because (1) the Utah state court that entered the QDRO explicitly reserved

jurisdiction to modify it, see R. Vol. I at 357, and (2) QDROs are not subject to

ERISA’s preemption provision, see 29 U.S.C. § 1144(b)(7). Stephens does not

meaningfully contest either point. Additionally, the QDRO was part of Stephens’

divorce decree, see R. Vol. I at 353, and Stephens fails to explain why the “domestic

relations exception” to federal jurisdiction did not prevent the district court from

modifying and reissuing a part of his divorce decree, see Leathers v. Leathers,

856 F.3d 729, 756 (10th Cir. 2017) (“The domestic relations exception divests federal

courts of the power to issue [or modify] divorce . . . decrees.”).

                                            9
       In short, we have no basis to conclude the district court erred by denying

Stephens’ motion to amend his complaint.

                               E. Constitutional Claims

       For the first time on appeal, Stephens argues that each of the district court’s

rulings violated his constitutional right to equal protection. But “[w]e generally

don’t address arguments presented for the first time on appeal.” United States v.

Nelson, 868 F.3d 885, 891 (10th Cir. 2017) (internal quotation marks omitted). For

this reason, and because Stephens’ argument is no more than a series of conclusory

statements without legal authority, we decline to address it. See Champagne Metals

v. Ken-Mac Metals, Inc., 458 F.3d 1073, 1092 (10th Cir. 2006) (declining to address

an issue when the appellant made “no real argument (other than conclusory

statements that the district court erred) and cite[d] no legal authority in support of its

position”).

                                     IV. Conclusion

       We affirm the district court’s order. We also deny Stephens’ motion for

recusal, his motion for an order requiring defense counsel to name unidentified

clients, his petition (and amended petition) for initial hearing en banc, and his motion

for sanctions.

                                             Entered for the Court

                                             Monroe G. McKay
                                             Circuit Judge

                                            10