Bruce Bandy v. Fifth Third Bank , 519 F. App'x 900 ( 2013 )

NOT RECOMMENDED FOR PUBLICATION
File Name: 13a0257n.06
No. 11-4184
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
BRUCE BANDY; BARBARA ANTHONY; LISA )
ASHBY; JERALD BAKER; ROBERT BAKER; ) FILED
RUTHELLA BARR; ANTHONY BLOGNA; RITA ) Mar 13, 2013
BRODNIK; STANLEY BRODNIK; LORETTA BUNSEY; )
DEBORAH S. HUNT, Clerk
KATHRYN CERBIN; ANTHONY CHAMPA; ROBERT )
COUFALIK; CHARLES CROUT; BERTHA )
MYNARSKY; JOHN DAUER; JOHN DIPRE; JOHN )
DRAGAN; MARCIA EHRESMANN; KENNETH )
ENGLERT; EDWARD ESCHMAN; ELAIN FATICA; ) ON APPEAL FROM THE UNITED
KEVIN FITZPATRICK; RICHARD FLOYD; LEONA ) STATES DISTRICT COURT FOR
FRANKS; DAVID GRUEL; JAMES HENLEY; ROBERT ) THE NORTHERN DISTRICT OF
L. HESTON; AUBREY HOWARD; ROBERT JOYCE; ) OHIO
IRA KATZ; THOMAS KRENA; NANCY LEONHARD; )
GAIL LYTHOS; EDWARD MICKEY; VICTOR )
MILLER; GERTHA MOORE; MARILYN MYERS; )
ROBERT NEUBERT; CLARENCE OHL; FRANCIS )
PATE; ROBERT PROSEN; KATHRYN RINELLA; )
CLARENCE ROGERS; HORST SCHULTZ; MARY )
STENNER; DANIEL VALVODA; JOHN VARGO; )
GRAZINA VARNELIS; LEO VERKAMP; CAROLYN )
WASOLOSKI; DALE DUERR; FLORA FYE; JAMES )
STOOPS; ALLAN BOYLE; DELLA BOYLE; NADINE )
BREISCH; GIZELLA POULOS; PATRICK SMITH; )
CHARLIE VERKAMP; DIANE VERKAMP; RAYMOND )
VERKAMP; CAROLYN WEIGAND; MICHAEL R. )
WEIGAND; HAROLD WEST; WESLEY WILCOX; )
MARY JANE WILCOX, )
)
Plaintiffs-Appellants, )
)
v. )
)
FIFTH THIRD BANK; PARK NATIONAL BANK; U.S. )
BANK, as the corporate successor, other, Star Bank, N.A. )
other, Firstar Bank, N.A. )
)
Defendants-Appellees. )
)
No. 11-4184
Bandy, et al. v. Fifth Third Bank, et al.
Before: MARTIN, NORRIS, and SILER, Circuit Judges.
SILER, Circuit Judge. The plaintiffs, victims of a Ponzi scheme, appeal from the district
court’s judgment for the defendants, a group of financial institutions that held and disbursed funds
associated with the scheme. This appeal emerges from the fourth lawsuit brought by a group of
victims, and this particular group draws its identity, as distinct from other groups of victims, from
the characteristic that none of the group allegedly issued the checks in question. Appeals from the
first three lawsuits were heard and decided together in Metz v. Unizan Bank, 649 F.3d 492 (6th Cir.
2011), before the instant case had received a final appealable order. For the reasons detailed below,
we AFFIRM the judgment of the district court.
I.
The plaintiffs alleged, in relevant part, various acts of fraud, fraudulent concealment, and
conspiracy to commit fraud and various related breaches of Ohio’s statutory enactment of the
Uniform Commercial Code (“U.C.C.”), but the operative complaint did not overtly state U.C.C.
conversion claims. The plaintiffs appeal three separate orders by the district court: two granting the
defendants’ motions to dismiss under Federal Rule of Civil Procedure 12(b)(6) and one denying the
plaintiffs’ motion for reconsideration of the first dismissal and for leave to file a third amended
complaint.
A. Dismissals of the Plaintiffs’ Claims
We review a district court’s Rule 12(b)(6) dismissal of claims de novo. Ind. State Dist.
Council of Laborers & HOD Carriers Pension & Welfare Fund v. Omnicare, Inc., 583 F.3d 935, 942
(6th Cir. 2009). We apply Ohio law in accordance with the controlling decisions of its highest court.
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Ziegler v. IBP Hog Market, Inc., 249 F.3d 509, 517 (6th Cir. 2001). In the absence of such
decisions, we must “ascertain from all available data, including the decisional law of the state’s
lower courts, what the state’s highest court would decide if faced with the issue.” Id.The plaintiffs focus their appeal on the argument that their second amended complaint, the
operative complaint in the case, presented sufficient facts and allegations to have stated U.C.C.
conversion claims. Additionally, the plaintiffs assert that the statute of limitations for such U.C.C.
conversion claims may be tolled according to Ohio Revised Code § 2305.09, a statutory discovery
rule. These arguments fail.
Acknowledging that their second amended complaint contains no overt U.C.C. conversion
claims, the plaintiffs nonetheless contend that such claims should have been construed by the court
and opposing parties based on the facts and allegations pled.1 Apparently relying on Conley v.
Gibson, 355 U.S. 41 (1957), the plaintiffs represent that the failure to designate any U.C.C.
conversion claims should be understood as a mere “misstep” and promptly forgiven. However, the
plaintiffs appear to miss that the Conley holding upon which they rely has been abrogated. See Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 561-63 (2007). Indeed, under contemporary federal pleading
standards, a complaint must contain “a short and plain statement of the claim showing that the
1
As an alternative argument, Fifth Third Bank, one of the defendants, insists that the
plaintiffs have expressly denied that their pleadings contain a conversion claim and have thus
conceded the issue of conversion in its entirety. This is only partly true. The full quotation (partially
omitted by Fifth Third Bank) reads as follows: “This is not a conversion claim, but it qualifies as
‘wrongful taking of property’ in accordance with R.C. 2305.09.” As we stated in Metz,
“[c]onversion and the wrongful taking of personal property are interchangeable terms.” Metz, 649
F.3d at 497 n.1.
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pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), and “sufficient factual matter, accepted as true,
to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Twombly, 550 U.S. at 570).
The plaintiffs’ argument would require us to assemble parts of the operative complaint,
drafted by an attorney, to construct the U.C.C. claims. The plaintiffs rely on Minger v. Green, 239
F.3d 793 (6th Cir. 2001), and urge us to remember that “the Rules require that we do not rely solely
on labels in a complaint, but that we probe deeper and examine the substance of the complaint.” Id.
at 799. While the Minger court addressed claims by a pro se plaintiff, whose claims received a more
liberal construction, see Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam), the principle that
a court should look beyond labels and conclusions certainly applies more generally, see Twombly,
550 U.S. at 555 (describing a plaintiff’s obligation as providing “more than labels and conclusions”).
Nonetheless, the principle offers little help for the plaintiffs, where looking beyond labels and
conclusions brings no U.C.C. conversion claims into view.
The plaintiffs would have us cobble together several disparate lines from their second
amended complaint that they claim demonstrate that the plaintiffs were not the issuers of the checks.
Most of the plaintiffs’ references sound only generally, but they do specifically direct us to paragraph
38 of their second amended complaint, which alleges that the perpetrator of the Ponzi scheme
executed a number of checks “for the benefit of each one of these Plaintiffs . . . and transferred that
check either to the broker or to one of Carpenter’s alter ego corporations.” The plaintiffs reason that,
under the standard for evaluating Rule 12(b)(6) motions to dismiss that takes all factual allegations
as true, this quoted text establishes that the named plaintiffs were not issuers of the checks. They
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Bandy, et al. v. Fifth Third Bank, et al.
reason somewhat amazingly that, since non-issuers of checks are not barred by Ohio Revised Code
§ 1303.60 from bringing a conversion claim, they obviously must have been bringing a conversion
claim. Of course, as a factual matter, this argument ignores that the plaintiffs allege at another point
in their second amended complaint that all of the plaintiffs were the issuers of the checks (though
now on appeal they claim this statement was only “poorly drafted hyperbole”). Moreover, we reject
the plaintiffs’ ill-conceived argument that we must declare the existence of a claim simply because
the plaintiffs may belong to a class that is not barred from bringing such a claim.
Even if the operative complaint sufficiently demonstrates that the plaintiffs were not barred
from bringing a claim, it does not follow that they did bring the claim. The plaintiffs have included
neither a “short and plain statement of the claim” nor sufficient facts to create even a “suspicion” of
a cause of action. See Twombly, 550 U.S. at 555. The second amended complaint, if intended to
advance U.C.C. conversion claims, reflects far more than a simple “misstep.” While courts may
grant relief to plaintiffs who plead adequate facts but fail to attach a perfunctory legal label, we do
not require a district court to construct a golem cause of action from the spare parts it finds. The
district court properly granted the defendants’ motions to dismiss.
Even if we somehow construed U.C.C. conversion causes of action from the plaintiffs’
second amended complaint, such claims would still be dismissed based on the statute of limitations.
The plaintiffs severely misconstrue our holding in Metz–that Ohio Revised Code § 1303.60 bars
issuers and acceptors of instruments from bringing U.C.C. conversion claims–as binding authority
that non-issuers and non-acceptors of instruments may bring a claim for U.C.C. conversion and apply
the discovery rule to toll the statute of limitations. If the plaintiffs are indeed not “issuers or
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acceptors” of the checks, they are not statutorily barred from bringing suit in the first place, but that
does not mean they benefit from discovery rule tolling. Taking the plaintiffs’ reasoning to its
ultimate end, there would be two separate causes of action for U.C.C. conversion in Ohio: one that
applies to “issuers and acceptors” of an instrument but has no discovery rule, and one that applies
to non-issuers and non-acceptors and has a discovery rule. That result cannot be right because the
first cause of action would be statutorily barred by section 1303.60 and the second would contravene
Ohio precedent, which finds the discovery rule not applicable to any U.C.C. conversion claims. See
Mattlin Holding, L.L.C. v. First City Bank, 937 N.E.2d 1087, 1088-89 (Ohio Ct. App. 2010) (holding
that a plaintiff, who happened to be the issuer of the checks in question, could not use a discovery
rule to toll the statute of limitations for a U.C.C. conversion claim).
B. Denial of the Plaintiffs’ Motion to Reconsider2
We review the district court’s denial of a motion to reconsider for abuse of discretion where
reconsideration involves no summary judgment disposition. Gage Prods. Co. v. Henkel Corp., 393
F.3d 629, 637 (6th Cir. 2004). When reconsideration involves a summary judgment disposition, the
issues are reviewed de novo. Id.As in the trial court, the plaintiffs’ argument here simply repackages their arguments relative
to the first motion to dismiss. In effect, the plaintiffs attempt a “double” appeal: first, that the court
2
The plaintiffs’ notice of appeal also lists the denial of a motion for leave to file a third
amended complaint as part of the appeal. They failed, however, to brief this argument. As we have
consistently held, “[i]ssues adverted to in a perfunctory manner, unaccompanied by some effort at
developed argumentation, are deemed waived.” McPherson v. Kelsey, 125 F.3d 989, 995-96 (6th
Cir. 1997) (quotation marks and internal citation omitted).
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should not have dismissed the defendants and, second, that the court should not have denied their
motion to reconsider dismissing the defendants. We find no error.
AFFIRMED.
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