Court Opinion

ID: 5129272
Source: CourtListenerOpinion
Date Created: 2021-11-24 17:00:42.946345+00
Date Added: 2024-06-11T08:23:11.443600
License: Public Domain

Appellate Case: 21-4031     Document: 010110610030       Date Filed: 11/24/2021     Page: 1
                                                                                   FILED
                                                                       United States Court of Appeals
                       UNITED STATES COURT OF APPEALS                          Tenth Circuit

                              FOR THE TENTH CIRCUIT                        November 24, 2021
                          _________________________________
                                                                          Christopher M. Wolpert
                                                                              Clerk of Court
  TRAVIS CRACRAFT,

        Plaintiff - Appellant,

  v.                                                          No. 21-4031
                                                      (D.C. No. 2:19-CV-00397-TC)
  UTAH VALLEY UNIVERSITY; JARED                                 (D. Utah)
  LESSER, d/b/a JL Home Design,

        Defendants - Appellees.
                       _________________________________

                              ORDER AND JUDGMENT*
                          _________________________________

 Before HARTZ, McHUGH, and CARSON, Circuit Judges.
                   _________________________________

       Travis Cracraft, appearing pro se, appeals the district court’s order dismissing

 his complaint as time-barred and inadequately pled. He also appeals the order

 denying his post-judgment motions to reopen and for leave to amend his complaint.

 Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

       *
         After examining the briefs and appellate record, this panel has determined
 unanimously to honor the parties’ request for a decision on the briefs without oral
 argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
 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 This order and judgment is not binding precedent,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.
Appellate Case: 21-4031    Document: 010110610030       Date Filed: 11/24/2021     Page: 2

                                     I.   Background

       Cracraft filed this lawsuit against Utah Valley University (UVU) and Jared

 Lesser, asserting claims against both defendants for violation of the Racketeer

 Influenced and Corrupt Organizations (RICO) Act, 18 U.S.C. §§ 1962, 1964(c),

 stemming from their alleged theft of his intellectual property.1 He filed an amended

 complaint about a year later. The following summary is derived from the allegations

 in the amended complaint, and in the proposed second amended complaint he

 submitted with the motion to amend filed in response to UVU’s motion to dismiss.

 Because Cracraft does not appeal the dismissal of his claim against Lesser, we focus

 on his allegations against UVU and discuss the allegations against Lesser only to

 provide context.

       Cracraft was a student at UVU from 2003 through 2012. He alleged that UVU

 stole an algorithm he wrote in response to an exam question in 2003, an algorithm

 that his instructor recognized was “novel.” R. at 24. An algorithm “derived from”

 the one he wrote was patented in South Korea by Samsung a few months later and in

 the United States in 2008. Id. He alleged that Samsung obtained the 2003 patent

 after purchasing the algorithm from UVU. Sometime after allegedly stealing the

 algorithm, UVU allegedly attempted to bribe Cracraft to stop criticizing UVU in

 ways that hurt its accreditation.

       1
         This is Cracraft’s second lawsuit asserting RICO claims against UVU and
 Lesser. He filed the first suit in February 2019, but he voluntarily dismissed it
 without prejudice after UVU filed a motion to dismiss on many of the same grounds
 it sought dismissal of the complaint at issue here.
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       Meanwhile, from 2004 to 2007, Cracraft worked for Lesser and his company

 (collectively Lesser) as a house plan designer. In 2006, he signed a document “back-

 dated” to 2002, acknowledging that any intellectual property he developed belonged

 to Lesser. R. at 25. Soon thereafter, Cracraft revealed in response to a UVU survey

 about his employment that his employer owned the intellectual property he developed

 in the scope of his employment. He alleged that “[a]fter reasonable discovery and

 investigation,” he would show that Lesser fraudulently represented to Samsung or

 UVU that he (Lesser) owned the intellectual property rights to the algorithm and sold

 those rights to Samsung or UVU. R. at 91.

       In 2007, Lesser purchased an office building and a house with cash. He put

 one of the properties in the name of a shell company that “exist[ed] to hide assets that

 [he] obtained illegitimately.” R. at 26.

       Between 2006 and 2011, UVU required Cracraft to “relinquish the intellectual

 property rights to the work [he] submit[ted]” for certain required courses, id., a

 practice he claimed constituted a “pattern of intellectual property theft by extortion,”

 R. at 27. In 2006 campus police searched him before one of those classes and he

 speculated that the reason for the search was to prevent the demand for intellectual

 property from being recorded.

       In 2012, Cracraft received an email about a mandatory pre-graduation meeting

 to be held in March 2012. At the meeting, Dan Van Woerkom, who said he worked

 for the Utah State Attorney General’s Office as counsel for UVU, gave Cracraft a

 document he was required to sign in order to graduate. Cracraft signed the

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 document, which he could not read in the dimly lit meeting room and which he now

 believes was a backdated affidavit to establish prior invention dates under federal

 regulations governing patent applications. He alleged that the threat to block his

 graduation unless he signed the document was extortion. He further alleged that the

 meeting was evidence that UVU and Lesser, whom Van Woerkom had defended

 “against allegations of intellectual property theft,” “conspired” to “retroactively and

 fraudulently legitimize their theft . . . so they could pretend they’d acquired” the

 algorithm legally. R. at 28 (internal quotation marks omitted).

       In April 2016, Cracraft sent an email to a paralegal with UVU’s Office of

 General Counsel describing what happened at the March 2012 meeting. In response,

 UVU denied knowledge of the meeting and the Van Woerkom document, and further

 indicated that Van Woerkom had no connection with UVU. Cracraft alleged UVU

 and/or the Utah Attorney General’s Office “must have intentionally given Mr. Van

 Woerkom . . . an email account attached to [UVU’s] domain name for the purpose of

 committing wire fraud to lure [Cracraft] to [the] meeting . . . [and] extort a signature

 from [him].” Id. This, Cracraft alleged, “demonstrate[d] knowledge of guilt” and

 that UVU was “still endeavoring to hide” its theft of his algorithm. Id.

       UVU moved to dismiss the claim against it under Fed. R. Civ. P. 12(b)(6) as

 barred by the statute of limitations and for failure to plead a plausible RICO claim

 with the specificity required under Fed. R. Civ. P. 9(b). In response, Cracraft

 maintained his claim was timely under the injury discovery rule and sought leave to

 file the proposed second amended complaint to cure the pleading deficiencies.

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        The district court dismissed the complaint as both time-barred and

 inadequately pled, and it denied the motion to amend as futile, concluding that the

 proposed second amended complaint still did not satisfy the heightened pleading

 standards required for a civil RICO claim. In its dismissal order, the court indicated

 that it declined to consider Cracraft’s reply in support of his motion to amend

 because it was thirty days late and he did not seek leave to file an untimely reply.

 After the court entered judgment, Cracraft moved to reopen the case and to amend

 the complaint. The district court denied both motions. He now appeals.

                                     II.    Discussion

    1. Dismissal Order

        Cracraft first contends the district court erred by dismissing the complaint and

 denying his motion to amend in lieu of dismissal. We conclude the court correctly

 dismissed the complaint as time-barred. Accordingly, we need not address Cracraft’s

 arguments that the court erred by dismissing the complaint as inadequately pled and

 denying his motion to amend, which was aimed at curing the pleading deficiencies.

        We review the district court’s Rule 12(b)(6) dismissal de novo. Brooks v.

 Mentor Worldwide LLC, 985 F.3d 1272, 1278 (10th Cir. 2021), cert. denied, 2021

 WL 5167929 (U.S. Nov. 8, 2021) (No. 20-1822). To survive a motion to dismiss, a

 complaint must plead facts sufficient “to state a claim to relief that is plausible on its

 face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks

 omitted). In conducting our review, we accept all well-pleaded factual allegations as

 true, view them in the light most favorable to the plaintiff, and draw all reasonable

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 inferences in his favor. Brooks, 985 F.3d at 1281. Because Cracraft is proceeding

 pro se, we construe his pleadings liberally. Hall v. Bellmon, 935 F.2d 1106, 1110

 (10th Cir. 1991). But the liberal-construction rule does not relieve him of his burden

 to plead a legally cognizable claim. Id.

          Although the statute of limitations is an affirmative defense, see Fed. R. Civ.

 P. 8(c)(1), a district court may dismiss a complaint as time-barred under Rule

 12(b)(6) if “the complaint itself admits all the elements of the affirmative defense by

 alleging the factual basis for those elements.” Fernandez v. Clean House, LLC,

 883 F.3d 1296, 1299 (10th Cir. 2018). We review de novo whether a district court

 properly applied a statute of limitations, including its determination of the accrual

 date. Nelson v. State Farm Mut. Auto. Ins. Co., 419 F.3d 1117, 1119 (10th Cir.

 2005).

          The statute of limitations for civil RICO claims is four years from either the

 discovery of the injury or the date the injury occurred. See Dummar v. Lummis,

 543 F.3d 614, 621 (10th Cir. 2008). A RICO “injury” is the “harm from the predicate

 acts that constitute racketeering activity.” Robert L. Kroenlein Tr. ex rel. Alden v.

 Kirchhefer, 764 F.3d 1268, 1277 (10th Cir. 2014) (internal quotation marks omitted).

          Under the injury-discovery rule “the injury is deemed to be discovered when,

 in the exercise of reasonable diligence, it could have been discovered.” Id. at 1275

 (internal quotation marks omitted). The rule applies “only in the exceptional case

 where a reasonably diligent plaintiff could not immediately know of the injury and

 the cause.” Id. at 1276 (internal quotation marks omitted). The clock starts when

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 “the plaintiff either has actual or inquiry notice of the injury.” Id. at 1280. The

 reasonably diligent plaintiff “standard is an objective one.” Id. at 1281. Under that

 standard, “[a] plaintiff is on inquiry notice whenever circumstances exist that would

 lead a reasonable plaintiff of ordinary intelligence, through the exercise of reasonable

 due diligence, to discover his or her injury.” Id. at 1280 (brackets and internal

 quotation marks omitted). “The plaintiff need not discover all elements of the

 [defendants’] fraudulent scheme to be on notice of the potential of fraud.” Id.

       Here, based on the allegations in Cracraft’s complaints, the district court

 determined that the predicate acts underlying his claim against UVU were theft of

 intellectual property, bribery, extortion, and wire fraud. The court further determined

 that those acts and the injury they caused occurred between 2003 and 2012. The

 court then found as a matter of law that had he exercised due diligence, Cracraft

 would have known of his injury no later than March 2012, after his meeting with Van

 Woerkom. And, because he did not file his complaint until 2019, the court concluded

 his claim was barred under both the injury-occurrence and the injury-discovery rules.

       Cracraft does not dispute that the injury occurred between 2003 and 2012 and

 that his claim is barred under the injury-occurrence rule. Instead, he contends the

 district court erred in concluding his claim was barred under the injury-discovery rule

 because a reasonable plaintiff would not have discovered the claim until April 2016,

 when he received UVU’s response to his inquiry about the meeting. We disagree.

       The combination of events between 2003 and 2012 would have put a

 reasonably diligent plaintiff on inquiry notice of the injury no later than the date of

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 the March 2012 meeting. That Cracraft sent his email inquiry to UVU in 2016

 demonstrates as much, given that nothing in his pleadings suggests he learned any

 new information between 2012 and 2016 that prompted his inquiry. Thus, in 2012,

 Cracraft had a duty to investigate. See id. (“Once a plaintiff has inquiry notice of

 facts that would suggest to a reasonable person that he has been injured, the plaintiff

 has a duty to commence a diligent investigation concerning that injury.”). And he

 had four years from that date—or until March 2016—“to determine the proper person

 against whom to file suit” and to file his complaint. Id. at 1279.

       Cracraft’s assertion that he did not have all the information he needed to file

 his claim until the April 2016 email exchange with UVU—about a month after the

 limitations period expired—does not save his claim. The critical date for inquiry-

 notice purposes is the date the plaintiff knows of his injury, not the date when he

 starts investigating his claim or when he learns all the facts he needs to establish the

 elements of the claim. See Dummar, 543 F.3d at 621 (it is the “discovery of the

 injury, not discovery of the other elements of a claim” that “starts the clock” (internal

 quotation marks omitted)); Kroenlein, 764 F.3d at 1279 (“the clock started ticking

 even though the victim did not definitively know the precise identity of those who

 caused his injury”). Thus, Cracraft was on inquiry notice by March 2012—when a

 reasonably diligent plaintiff would have discovered his injury—despite his failure to

 meaningfully investigate his claim until it was too late. See Kroenlein, 764 F.3d at

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 1280 (“[W]hen a RICO plaintiff makes no inquiry once the duty arises, knowledge

 will be imputed as of the date the duty arose.” (internal quotation marks omitted)).2

       We are not persuaded otherwise by Cracraft’s contention that the district court

 should have tolled the limitations period based on UVU’s alleged concealment of its

 conspiracy with Lesser. Initially, Cracraft did not present this theory in the district

 court, and he has given us no reason to make an exception to “the principle that

 issues not presented below are forfeited on appeal.” United States v. Jarvis, 499 F.3d

 1196, 1201-02 (10th Cir. 2007). Thus, we need not consider his new argument. See,

 e.g., Lyons v. Jefferson Bank & Tr., 994 F.2d 716, 724 (10th Cir. 1993).3 Further,

 Cracraft’s fraudulent concealment theory is just a repackaged challenge to the district

 court’s inquiry-notice determination, which we have already rejected. See Dummar,

 543 F.3d at 621 (explaining that a civil RICO claim can be equitably tolled by

       2
          On appeal, Cracraft maintains he made earlier efforts to investigate his
 claims, but he concedes his complaints did not allege facts about his pre-2016
 investigation. Thus, we cannot use this new allegation as a basis for overturning the
 district court’s ruling. See Verlo v. Martinez, 820 F.3d 1113, 1125 (10th Cir. 2016)
 (noting that “[a]n appellate court may not consider facts which were not before the
 district court at the time of the challenged ruling” (ellipsis and internal quotation
 marks omitted)). In any event, the date he started investigating his potential claim is
 immaterial—the issue is when a reasonably diligent plaintiff would have discovered
 the injury, thus triggering the duty to investigate.
       3
          Cracraft’s assertions in his opposition to the motion to dismiss that UVU
 conspired with Lesser to hide its wrongdoing did not preserve his argument that the
 statute of limitations was equitably tolled by fraudulent concealment. See Lyons,
 994 F.2d at 721-22 (a vague reference to a point in district court is insufficient to
 preserve an argument more fully presented on appeal). Nor did his injury-discovery
 and inquiry-notice arguments preserve his fraudulent concealment argument. See id.
 at 722 (raising a related argument in district court does not preserve the new
 argument for appeal).
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  fraudulent concealment when the defendants successfully concealed their conduct

  and the plaintiff “did not know or by the exercise of due diligence could not have

  known that he might have a cause of action” (internal quotation marks omitted)).

         We decline to consider Cracraft’s one-paragraph argument that “the statute of

  limitations had not elapsed because of continuing tort,” Aplt. Opening Br. at 16

  (capitalization omitted), for three reasons. First, he did not raise it in district court,

  so he did not preserve it for appeal. See Lyons, 994 F.2d at 724. Second, it is purely

  speculative. See Aplt. Opening Br. at 16 (alleging that “it is plausible to suspect that

  [Samsung, UVU and Lesser] continued to be unjustly enriched by regular payments

  of royalties generated by the patent on [Cracraft’s] algorithm,” and that it “is likely to

  have continued until the patent expired”). Third, he cited no supporting authority.

  See Fed. R. App. P. 28(a)(8)(A) (requiring authorities supporting each argument);

  Bronson v. Swensen, 500 F.3d 1099, 1104 (10th Cir. 2007) (declining to consider

  inadequately presented arguments).

         Finally, Cracraft contends the district court should have allowed him to file a

  Second Amended Complaint instead of dismissing his claim. But the court denied

  the motion to further amend as futile because the proposed amendments were

  insufficient to cure the pleading deficiencies in the First Amended Complaint under

  the heightened pleading standards for a RICO claim. Cracraft did not claim, either in

  district court or on appeal, that the proposed amendments would have resolved the

  statute of limitations problem, so there would have been no basis for the district court

  to permit him to amend the complaint in lieu of dismissing it on statute of limitations

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  grounds. And, having concluded the court correctly dismissed the claim as time-

  barred, we need not address the propriety of either its dismissal based on pleading

  deficiencies or the denial of the motion to amend as futile.

     2. Denial of Post-Judgment Motions

        We also reject Cracraft’s challenges to the district court’s order denying his

  post-judgment motions to reopen the case and to amend the complaint.

        Filing an amended complaint after judgment has entered is impermissible

  “until judgment is set aside or vacated pursuant to Fed. R. Civ. P. 59(e) or 60(b).”

  The Tool Box, Inc. v. Ogden City Corp., 419 F.3d 1084, 1087 (10th Cir. 2005)

  (internal quotation marks omitted).4 Cracraft cited Rule 60(b)(1) and (6) as the basis

  for his motion to reopen, but the district court analyzed it under both Rule 60(b) and

  Rule 59(e). Whether construed as a Rule 59(e) or Rule 60(b) motion, we review the

  district court’s denial of the motion for abuse of discretion. See Walters v. Wal-Mart

  Stores, Inc., 703 F.3d 1167, 1172 (10th Cir. 2013). We also apply the abuse of

  discretion standard in reviewing the denial of Cracraft’s post-judgment motion to

  amend the complaint. See The Tool Box, 419 F.3d at 1086-87.

        A district court may grant relief under Rule 60(b) “as justice requires” but

  “such relief is extraordinary and may only be granted in exceptional circumstances.”

  Servants of the Paraclete v. Does, 204 F.3d 1005, 1009 (10th Cir. 2000) (internal

  quotation marks omitted). “Grounds warranting a motion to reconsider include (1) an

        4
          The liberality of Fed. R. Civ. P. 15 does not apply after judgment has been
  entered. The Tool Box, 419 F.3d at 1087-88.
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  intervening change in the controlling law, (2) new evidence previously unavailable,

  and (3) the need to correct clear error or prevent manifest injustice.” Id. at 1012.

  Such motions may not be used to “revisit issues already addressed or advance

  arguments that could have been raised in prior briefing.” Id. And when a post-

  judgment motion to amend advances new arguments or relies on facts that were

  available when the plaintiff filed the original complaint, it “is subject to denial.”

  Alpenglow Botanicals, LLC v. United States, 894 F.3d 1187, 1203 (10th Cir. 2018)

  (internal quotation marks omitted).

        Cracraft moved to reopen the case so that he could file a Fourteenth

  Amendment due process claim, and he reiterated and elaborated on some of the

  arguments he made in opposing dismissal. Cracraft also challenged the court’s

  refusal to consider his reply, contending that his untimely filing was the result of his

  having captioned it incorrectly, which he claimed was the result of mistake,

  inadvertence, or excusable neglect. His separate motion to amend, like the one he

  filed with his opposition to the motion to dismiss, sought to amend the complaint to

  cure the pleading deficiencies that led to the district court’s dismissal of this claim as

  inadequately pled.

        The district court denied the motion to reopen because (1) Cracraft’s proposed

  new claim was based on facts that were available when he filed the original

  complaint, (2) he did not establish that relief was warranted under either Rule 59(e)

  or Rule 60(b), and (3) “[e]ven given [his] pro se status, a denial of his request to

  remedy the consequences of his procedural missteps and failure to recognize the

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  nature of claims available to him is not fundamentally unfair.” R. at 268. With

  respect to his argument that the court should reopen the case because its refusal to

  consider his reply was based on his having captioned it incorrectly, the court

  explained that the circumstances he described did not warrant relief under Rule

  60(b)(1). And, having denied the motion to reopen, the court denied the motion to

  amend as moot.

        Cracraft’s arguments about his post-judgment motions reiterate the arguments

  he made below and do not address the bases for the district court’s ruling. We

  therefore cannot conclude the district court abused its discretion here. The district

  court’s reasons for denying the motion to reopen were sound, and unless it granted

  that motion, post-judgment amendment of the complaint was not permitted. See The

  Tool Box, 419 F.3d at 1087.

                                    III.   Conclusion

        We affirm the district court’s judgment. We need not rule on Cracraft’s

  motions to amend his reply brief because he withdrew them.

                                              Entered for the Court

                                              Carolyn B. McHugh
                                              Circuit Judge

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