Court Opinion

ID: 4424400
Source: CourtListenerOpinion
Date Created: 2019-08-09 17:00:39.208874+00
Date Added: 2024-06-11T14:51:24.112797
License: Public Domain

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

                            FOR THE TENTH CIRCUIT                          August 9, 2019
                        _________________________________
                                                                        Elisabeth A. Shumaker
                                                                            Clerk of Court
 L. KIRK TOMPKINS; SUSIE
 TOMPKINS,

       Plaintiffs - Appellants,

 v.                                                         No. 18-2187
                                                (D.C. No. 1:17-CV-00460-RB-KRS)
 LIFEWAY CHRISTIAN RESOURCES                                 (D. N.M.)
 OF THE SOUTHERN BAPTIST
 CONVENTION; THOM RAINER,
 President of Lifeway; JERRY L. RHYNE,
 C.F.O. of Lifeway; LARRY D. CANNON,
 Sec. of Lifeway; DAVID WEEKLEY,
 Director of Glorieta 2.0, Inc.; TERRY
 LOOPER, Director of Glorieta 2.0, Inc.;
 LEONARD RUSSO, Director of Glorieta
 2.0, Inc.; ANTHONY SCOTT, Executive
 Director of Glorieta 2.0, Inc.; HAL HILL,
 Consulting Director of Glorieta 2.0, Inc.;
 LINDA K. DEAN, Trustee of Lifeway;
 JEFF WARD, Director of Finance and
 Administration of Glorieta 2.0, Inc.,

       Defendants - Appellees.
                      _________________________________

                            ORDER AND JUDGMENT*
                        _________________________________

Before MATHESON, McKAY, and PHILLIPS, Circuit Judges.

      *
        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 This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral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.
                        _________________________________

      L. Kirk Tompkins and Susie Tompkins (Tompkinses), appearing pro se, appeal

the district court’s orders dismissing their action with prejudice and denying leave to

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

the district court’s orders and grant defendants-appellees’ motion for sanctions.

                                    I. Background

      This is the Tompkinses second suit against many of the same defendants and

arising from the 2013 sale of the 2,400-acre Glorieta Conference Center (GCC) in

New Mexico. The Tompkinses had a ground lease for a single lot at GCC on which

stood a house they owned (Aspen Property). Their lease provided that when it ended,

the lessor, defendant LifeWay Christian Resources of the Southern Baptist

Convention (LifeWay), had the sole option to renew the lease, and if Lifeway did not

renew the lease, LifeWay had the option to purchase any improvements on the lot.

The lease further provided that if LifeWay did not exercise the purchase option, the

Tompkinses had six months to remove any improvements, and if they failed to do so,

they would surrender all right and title to the improvements to LifeWay.

      When LifeWay decided to sell GCC to defendant Glorieta 2.0, Inc. (for $1.00),

it did not renew the Tompkinses’ lease or exercise its purchase option to buy their

house. The Tompkinses did not remove the house from the lot but instead filed a

lawsuit in federal court, asserting three claims (violation of corporate charter,

constitution, and bylaws; fraudulent conveyance; and breach of implied contract)

against a number of defendants, including LifeWay, Glorieta 2.0, and some of their

                                            2
directors and officers. The court dismissed the suit for various reasons, including

lack of personal jurisdiction, lack of Article III standing, and failure to state a claim

for relief. See Tompkins v. Exec. Comm. of the S. Baptist Convention,

No. CIV 13-0840 JB/CG, 2015 WL 1568375 (D.N.M. Mar. 31, 2015) (Tompkins I).

The Tompkinses appealed. After appointing counsel for them and hearing oral

argument, we affirmed. See Tompkins v. Lifeway Christian Res. of the S. Baptist

Convention, 671 F. App’x 1034 (10th Cir. 2016) (Tompkins II).

       While their appeal was pending, LifeWay offered the Tompkinses $84,999 in

exchange for a release and an agreement to dismiss their appeal (Purchase Offer).

According to the Purchase Offer, this amount was the same as Glorieta 2.0 had

offered the Tompkinses for the improvements in 2013, at the time Glorieta 2.0

purchased GCC.1 The Tompkinses refused the Purchase Offer, which was allegedly

well below market value.

       Soon after we decided Tompkins II, the Tompkinses, again pro se, filed a

second action in federal court against LifeWay, Glorieta 2.0, and a number of their

officers and directors, some of whom were defendants in Tompkins I. Defendants

filed motions to dismiss, which the district court granted in part. The district court

dismissed claims four and five of the Tompkinses’ first amended complaint for

failure to state a claim, but without prejudice to the filing of a second amended

       1
        According to the Purchase Offer, LifeWay still owned the lots of those
lessees who had not already sold their improvements to Glorieta 2.0.
                                            3
complaint addressing the deficiencies in those claims.2 The district court denied the

motions to dismiss claims one, two, and three without prejudice to defendants filing a

motion for summary judgment addressing the same issues.

      The Tompkinses sought leave to file a second amended complaint. Proposed

claims one, two, and three were substantially similar to the first three claims in their

first amended complaint, but proposed claims four and five were new. In claim four,

the Tompkinses asserted that defendants engaged in “bid rigging” in violation of a

provision of the Sherman Antitrust Act, 15 U.S.C. § 1. They alleged that LifeWay’s

decision not to exercise its option to purchase the Aspen Property was designed to

leave Glorieta 2.0 as the only bidder for that property and led to the allegedly

low-ball Purchase Offer (and the identical offer Glorieta 2.0 had initially made to

purchase the Aspen Property when it acquired GCC), thereby unreasonably limiting

competition. In proposed claim five, the Tompkinses asserted that Lifeway and three

of its officers (defendants Rainer, Rhyne, and Cannon) breached their fiduciary

duties by failing to perform needed maintenance and repairs at GCC and by

fraudulently conveying GCC to Glorieta 2.0.

      Defendants moved for summary judgment and opposed the motion to file the

second amended complaint. The district court granted summary judgment and denied

the motion to amend. The court first ruled that all claims against defendants

      2
        Claim four was for breach of fiduciary duty regarding toxic waste allegedly
dumped on GCC, and claim five, labelled “Extortion and Malice Aforethought,” R.,
Vol. 2 at 47, concerned the treatment of the Tompkinses’ trustee, who, for security
purposes, remained living at the Aspen Property after their lease expired.
                                            4
Weekley, Russo, and Looper were barred by issue preclusion, explaining that in

Tompkins I, the district court had determined it lacked personal jurisdiction over

those defendants and that a ruling on personal jurisdiction operates as a decision on

the merits of the jurisdictional question for preclusion purposes. Next, the court

determined that the Tompkinses’ claims against the remaining individual defendants

(Rainer, Rhyne, Cannon, Scott, Hill, Ward, and Dean) were barred by claim

preclusion.3

      Turning to LifeWay and Glorieta 2.0, the district court ruled that with two

exceptions, all claims against them were barred by claim preclusion. The first

excepted claim was part of claim three that the court construed as a claim for

unconscionable contract based on the Purchase Offer. The court concluded that the

Tompkinses failed to state a claim for unconscionable contract because the Purchase

Offer was not a contract but a settlement offer, and because the Tompkinses refused

it, there was no contract that could be deemed unconscionable.

      3
         “The doctrine of res judicata, or claim preclusion, will prevent a party from
litigating a legal claim that was or could have been the subject of a previously issued
final judgment.” Lenox MacLaren Surgical Corp. v. Medtronic, Inc., 847 F.3d 1221,
1239 (10th Cir. 2017) (internal quotation marks omitted). One element of claim
preclusion is that there was “a final judgment on the merits in an earlier action.” Id.
(brackets and internal quotation marks omitted). “In contrast to claim preclusion,
issue preclusion bars a party from relitigating an issue once it has suffered an adverse
determination on the issue, even if the issue arises when the party is pursuing or
defending against a different claim.” Park Lake Res. Ltd. Liab. Co. v. U.S. Dep’t of
Agric., 378 F.3d 1132, 1136 (10th Cir. 2004). One element of issue preclusion is that
“the prior action has been finally adjudicated on the merits.” Id. (internal quotation
marks omitted).
                                           5
      The second claim excepted from the district court’s preclusion analysis

regarding LifeWay and Glorieta 2.0 was the bid-rigging claim, which the court

construed as a claim that those two defendants colluded to agree that LifeWay would

not exercise its purchase option on the Aspen Property, which led to the low-ball

offers by Glorieta 2.0 in 2013 and by LifeWay in the 2015 Purchase Offer. The court

determined that the Tompkinses failed to state a Sherman Act claim for bid-rigging

because they did not plead facts plausibly showing defendants “‘had a conscious

commitment to a common scheme designed to achieve an unlawful objective,’” or

that any supposed agreement affected competition rather than “‘a single market

participant like [the Tompkinses].’” R., Vol. 7 at 44 (quoting Ruotolo v. Fannie Mae,

933 F. Supp. 2d 512, 520 (S.D.N.Y. 2013)). The court further ruled that the

Tompkinses lacked standing to bring a Sherman Act claim because none of their

allegations showed that defendants’ alleged conspiracy harmed the relevant market as

a whole, but “only that they were individually harmed because Glorieta 2.0 offered

them less than market value for their home.” Id. at 45.

      Based on these rulings, the district court dismissed the action with prejudice.

The Tompkinses appeal.

                                   II. Discussion

                                A. Scope of Review

      Because the Tompkinses represent themselves, we afford their filings a liberal

construction, but we cannot act as their advocate. Yang v. Archuleta, 525 F.3d 925,

927 n.1 (10th Cir. 2008). But even viewed with that solicitude, the bulk of the

                                          6
Tompkinses’s appellate brief4 consists primarily of arguments about the merits of

their claims or contentions of district-court error that relate to the merits of their

claims. We discern no challenge to the district court’s dismissal of claims four and

five of their first amended complaint. They have therefore waived appellate review

of those rulings. See State Farm Fire & Cas. Co. v. Mhoon, 31 F.3d 979, 984 n.7

(10th Cir. 1994) (explaining that issue not raised in opening brief is waived). They

have also waived appellate review of issues or arguments insufficiently raised in their

opening brief. See Becker v. Kroll, 494 F.3d 904, 913 (10th Cir. 2007) (“An issue or

argument insufficiently raised in the opening brief is deemed waived.”). Under this

standard, and by construing their brief very liberally, we discern only four

sufficiently-raised assertions of error regarding the district court’s dispositive rulings

on the motions for summary judgment and leave to amend. After setting out our

standard of review, we turn to those four assertions.

                                 B. Standard of Review

       We review a district court’s summary-judgment ruling de novo. See Fields v.

City of Tulsa, 753 F.3d 1000, 1008 (10th Cir. 2014). We review a denial of leave to

amend for abuse of discretion. Id. at 1012. But where, as here, a district court denies

“leave to amend because it determined that amendment would be futile, our review

for abuse of discretion includes de novo review of the legal basis for the finding of

futility.” Id. (internal quotation marks omitted). “A proposed amendment is futile if

       4
       The Tompkinses filed only an opening appellate brief. They affirmatively
waived filing a reply brief.
                                             7
the complaint, as amended, would be subject to dismissal.” Id. (internal quotation

marks omitted).

                                     C. Analysis

         Assertion 1. The Tompkinses assert they were deprived of discovery, which

hampered their effort to oppose the motion for summary judgment. They claim that

through discovery, they would have obtained “evidence of meetings, agreements, and

contracts,” and that interrogatories would have “provide[d] proof of additional

damages.” Aplt. Br. at 22. They have not explained, nor do we see, how this

information was relevant to anything other than the merits of their claims that

defendants acted improperly in the sale of GCC to Glorieta 2.0—claims that were

dismissed on preclusion principles. Nor do they explain how information they might

have obtained through discovery would have shown that the Purchase Offer, which

the Tompkinses refused, was even a contract, let alone unconscionable. Finally, the

district court granted summary judgment on their bid-rigging claim for a variety of

alternative reasons, including (1) their failure to show that any supposed agreement

affected competition rather than the Tompkinses alone, and (2) lack of standing

because none of their allegations showed that defendants’ alleged conspiracy harmed

the relevant market as a whole rather than them individually. The Tompkinses have

not explained, nor do we see, how discoverable information would have led to a

different result on their bid-rigging claim. Assertion 1, therefore, is wholly without

merit.

                                           8
      Assertion 2. The Tompkinses contend that the district court erred in

concluding that evidence concerning the financial condition of LifeWay and

Glorieta 2.0 was immaterial to its summary-judgment ruling. But the Tompkinses

have not explained, nor do we see, how this evidence is material to the district court’s

rulings on issue preclusion, claim preclusion, or the failure to state a claim for an

unconscionable contract or bid-rigging. Assertion 2 is wholly without merit.

      Assertion 3. The Tompkinses argue that the district court’s dismissal of their

proposed bid-rigging claim was erroneously based on the notion that private parties

cannot bring an antitrust suit. But this was not a basis for the district court’s ruling

on the bid-rigging claim. The Tompkinses appear to have interpreted the district

court’s discussion of a market-harm requirement, as both an element of an antitrust

claim and as a standing requirement, to be a conclusion that private parties such as

the Tompkinses cannot bring an antitrust claim. In fact, the district court explicitly

recognized that although the Tompkinses pleaded their bid-rigging claim under the

Sherman Act, which does not provide a private right of action, they had a private

right of action under a provision of the Clayton Act, 15 U.S.C. § 15(a). See R.,

Vol. 7 at 42 n.9. Assertion 3, therefore, wholly lacks merit.

      Assertion 4. The Tompkinses argue that the dismissal in Tompkins I was not a

final judgment on the merits because some claims were dismissed for lack of

jurisdiction or standing, and therefore claim preclusion is inapplicable. This

assertion wholly lacks merit.

                                            9
       The Tompkins I court dismissed the claims against defendants Weekley,

Russo, and Looper based on lack of personal jurisdiction, which, as the district court

in this case correctly explained to the Tompkinses, constituted a judgment on the

merits of the jurisdictional issue. See Park Lake Res. Ltd. Liab. Co. v. U.S. Dep’t of

Agric., 378 F.3d 1132, 1136 (10th Cir. 2004) (explaining that “dismissals for lack of

jurisdiction preclude relitigation of the issues determined in ruling on the jurisdiction

question” (internal quotation marks omitted)); Matosantos Commer. Corp. v.

Applebee’s Int’l, Inc., 245 F.3d 1203, 1209 (10th Cir. 2001) (“Although the dismissal

for lack of personal jurisdiction in the [previous federal-court action] does not have

res judicata effect, it does have collateral estoppel effect, preventing the relitigation

of issues decided in the [previous action].”).

       The Tompkins I court also ruled that the Tompkinses lacked Article III

standing to bring claims of corporate malfeasance against LifeWay and Glorieta 2.0.

Because “standing is a jurisdictional mandate,” Brereton v. Bountiful City Corp.,

434 F.3d 1213, 1216 (10th Cir. 2006), Tompkins I’s standing ruling could be entitled

to preclusive effect under the doctrine of issue preclusion, not claim preclusion, see

id. at 1219 (“The preclusive effect [of a standing ruling] is one of issue

preclusion (collateral estoppel) rather than claim preclusion (res judicata).”). But in

determining that Tompkins I was a final judgment on the merits, the district court in

this case did not rely on Tompkins I’s standing ruling. Instead, the district court

looked to Tompkins I’s determination that the Tompkinses failed to state a claim for

relief (1) on their claims against the individual defendants over which the court had

                                            10
personal jurisdiction and (2) for breach of contract against LifeWay and Glorieta 2.0.

The district court’s conclusion about the finality of those rulings for purposes of

claim preclusion was correct. See Stan Lee Media, Inc. v. Walt Disney Co., 774 F.3d
1292, 1298 (10th Cir. 2014) (explaining that for claim-preclusion purposes, a

“dismissal for failure to plead a viable cause of action is a decision on the merits

under [every] circuit’s law”).

                                 III. Motion for Sanctions

         Defendants have filed a motion for sanctions under Fed. R. App. P. 38, arguing

that this appeal is frivolous. They seek attorney fees, single or double costs, or both.

Absent such an award, they ask for at least an admonishment that the Tompkinses

refrain from filing another lawsuit asserting further claims against them based on the

sale of the GCC or LifeWay’s decision not to renew the Tompkinses’ lease.

         Rule 38 provides that “[i]f a court of appeals determines that an appeal is

frivolous, it may, after a separately filed motion or notice from the court and

reasonable opportunity to respond, award just damages and single or double costs to

the appellee.” An appeal is frivolous “when the result is obvious, or the appellant’s

arguments of error are wholly without merit.” Braley v. Campbell, 832 F.2d 1504,

1510 (10th Cir. 1987) (internal quotation marks omitted). “[J]ust damages” includes

attorney fees. Id. “The fact that [a party] is a pro se litigant does not prohibit the

court from imposing sanctions.” Haworth v. Royal, 347 F.3d 1189, 1192 (10th Cir.

2003).

                                            11
      The Tompkinses have responded to the motion for sanctions but offer no

meritorious argument that their appeal was not frivolous. They contend that they

have never received a judgment “on the merits” of their claims; instead, their claims

have been “dismissed on legal technicalities.” Aplt. Rebuttal to Mot. for Sanctions

at 3. As we have discussed, the law is clear that dismissals for lack of personal

jurisdiction and failure to state a claim for relief are judgments on the merits for

issue- and claim-preclusion purposes, respectively.

      The Tompkinses also assert that an order in Tompkins I and our decision in

Tompkins II led them to reasonably believe they could refile their claims “with a new

properly pled action representing only themselves as pro se litigants and not

representing the rights of others.” Id. at 5. But the Tompkins I order they rely on

was one denying a motion to strike a third amended complaint as a sanction. The

later, operative dismissal order in Tompkins I, which we affirmed in

Tompkins II, concluded that the Tompkinses lacked standing to bring claims of

corporate malfeasance against entities they had no stake in. Nothing in their

amended complaint or proposed second amended complaint in this case suggested

that their relationship to LifeWay or Glorieta 2.0 had changed such that they had

gained standing.

      Finally, the Tompkinses suggest that a court should not sanction pro se

litigants under Rule 38 unless the court considers the “totality of the circumstances,”

including whether an appellant is pro se, id. at 7 (internal quotation marks omitted),

and finds “objective and unquestionable frivolity,” id. at 8 (internal quotation marks

                                           12
omitted). We decline to adopt these standards as a general rule, but we find they are

met in this case. In considering whether to grant sanctions under Rule 38, we have

taken the Tompkinses’ pro se status into account and conclude that it does not require

us to deny the motion for sanctions. And our view that this appeal has no arguable

merit is the result of objective analysis that has led us to the conclusion that the

appeal is unquestionably frivolous.

       Having rejected the Tompkinses’ arguments, we grant defendants’ motion for

sanctions pursuant to Rule 38. We award defendants double costs contingent upon

the filing of a verified motion for costs. We also award defendants just damages

arising from this appeal. To facilitate our determination of just damages, defendants

shall file a supplement to their motion for sanctions no later than fourteen days after

the filing date of this order and judgment. Defendants should describe in general

terms the amount and nature of the legal fees they incurred in defending this appeal,

including whether any legal fees or hours were discounted, but they need not provide

an itemization of the tasks taken or the fees requested. The Tompkinses may respond

to the supplement no later than fourteen days after it is filed. The court will take the

supplement and any response to it under advisement and assess just damages by

separate order. In addition, we caution the Tompkinses that if they continue to file

pro se actions or pleadings in federal court arising out of the same dispute,

restrictions may be imposed on their ability to proceed pro se in the federal courts of

this circuit.

                                            13
                                   IV. Conclusion

      The district court’s orders are affirmed. We grant defendants-appellees’

motion for sanctions, and the parties shall proceed as instructed above.

                                           Entered for the Court

                                           Gregory A. Phillips
                                           Circuit Judge

                                          14