Peterson v. Saperstein

FILED
United States Court of Appeals
Tenth Circuit
February 27, 2008
UNITED STATES COURT OF APPEALS Elisabeth A. Shumaker
Clerk of Court
FOR THE TENTH CIRCUIT
JAY H. PETERSON,
Plaintiff-Appellant,
v. No. 06-4314
(D.C. No. 2:05-CV-900-TS)
HERSCHEL J. SAPERSTEIN; (D. Utah)
RAY QUINNEY & NEBEKER;
STEVEN W. CALL; CHARLES
FOOTE; CRAIG MCQUARRIE;
CBIZ & MAYER HOFFMAN
MCCANN; CATHERINE FULLER;
JOHN C. HALERUD; MICHAEL T.
MILLER,
Defendants-Appellees.
ORDER AND JUDGMENT *
Before BRISCOE, BALDOCK, and LUCERO, Circuit Judges.
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist 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not binding precedent, except under the doctrines of law of the case, res judicata,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.
Jay H. Peterson brought this civil suit alleging claims under the Racketeer
Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-68, and
several pendent state-law claims. 1 The district court dismissed the suit and later
denied Peterson’s motion to alter or amend judgment pursuant to Federal Rule of
Civil Procedure 59. Peterson now appeals. Exercising jurisdiction pursuant to
28 U.S.C. § 1291, we AFFIRM.
We will not repeat in detail the long history behind this suit, which has
been recited in connection with several appeals brought by Peterson in related
proceedings. See Peterson v. United States, 239 F. App’x 428 (10th Cir. 2007);
In re Peterson, 6 F. App’x 837 (10th Cir. 2001); FTC v. Peterson, 3 F. App’x 780
(10th Cir. 2001). Peterson’s business was put into receivership after the Federal
Trade Commission (“FTC”) initiated proceedings against him for deceptive trade
practices. Eventually, a settlement agreement was executed and incorporated in a
court order, establishing a refund program for the relief of Peterson’s customers
administered by the Receiver. Upon completion of the refund program, the
district court approved the Receiver’s final report. Consistent with the terms of
the settlement agreement, the court discharged the Receiver and his counsel and
1
The day after filing this suit, Peterson commenced an essentially identical
“protective action” in state court, which was promptly removed to federal court
and consolidated with this suit. He has not challenged either the removal or the
consolidation. We therefore refer to this as a single case.
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accountants (the defendants in the present suit) from any liability associated with
the handling of the receivership. Peterson did not appeal that order.
Several years later, Peterson brought this action collaterally attacking the
conduct of the receivership and seeking treble damages in the amount of $180
million, fees, costs, and any other appropriate relief. The district court granted
defendants’ motion to dismiss, holding that: (1) based on the settlement
agreement and orders implementing it, as well as the final disposition of the
receivership action, res judicata precluded Peterson’s claims; (2) the action was
barred by the statute of limitations; and (3) Peterson failed to state a claim for
relief. Peterson timely moved to alter or amend the judgment of dismissal under
Rule 59, and, after that motion was denied, timely commenced this appeal. 2 See
Fed. R. App. P. 4(a)(4)(A)(iv).
We review the district court’s dismissal of the case on res judicata grounds
de novo, Sil-Flo, Inc. v. SFHC, Inc., 917 F.2d 1507, 1520 (10th Cir. 1990), and
its denial of the Rule 59 motion for abuse of discretion, Phelps v. Hamilton,
2
Peterson thereafter filed additional post-judgment motions, but these had no
effect on the appeal taken from the denial of his Rule 59 motion. Successive
post-judgment motions do not combine to perpetuate the time for appeal, Okon v.
Comm’r, 26 F.3d 1025, 1026 (10th Cir. 1994), and thus a proper appeal after the
denial of a Rule 59 motion is not affected by the filing of subsequent post-trial
motions, see Mullen v. Household Bank-Fed. Sav. Bank, 867 F.2d 586, 587 n.1
(10th Cir. 1989). Disposition of the later-filed motions would not be subject to
review absent a separate or amended notice of appeal directed thereto. As
Peterson has not filed such a notice of appeal, we have jurisdiction to consider
only the underlying judgment and the denial of his initial Rule 59 motion.
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122 F.3d 1309, 1324 (10th Cir. 1997). Peterson argues that, under principles of
contract law, his prospective release of liability through the settlement agreement
is invalid insofar as it relates to claims based on intentional torts and gross
negligence. Without expressing any opinion on the application of that contract
precept to the settlement agreement here, we note that it has nothing to do with
the principle of res judicata invoked by the district court based on the final
disposition of the receivership proceeding, in which Peterson was a party.
“RICO is many things, but it is not an exception to res judicata.” In re
Met-L-Wood Corp., 861 F.2d 1012, 1016 (7th Cir. 1988); see also Fox v.
Maulding, 112 F.3d 453, 456-60 (10th Cir. 1997) (affirming dismissal of RICO
action on basis of res judicata). Accordingly, if a party fails to raise objections or
defenses at the proper time in one case, he “cannot be allowed to mount a
collateral attack on [an] otherwise valid and final [judgment] and the rights
established therein by subsequently raising those defenses in the disguise of civil
RICO claims.” Henry v. Farmer City State Bank, 808 F.2d 1228, 1237 (7th Cir.
1986); see Fox, 112 F.3d at 457-58 (holding res judicata barred RICO claims that
could have been raised in a prior foreclosure action because they “would impair
rights that were established in the [prior] action”).
Peterson alleges that those operating the receivership did so improperly to
“loot” his business of its cash and assets, and he seeks treble damages for the
“appraised value of the destroyed company.” As previously noted, however,
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Peterson did not raise these objections in the receivership proceedings, nor did he
appeal the order dismissing any and all claims against the defendants. 3 He is, in
short, mounting a collateral attack on the handling and disposition of the
receivership proceeding. This he may not do, even under the auspices of a RICO
action. The district court therefore correctly concluded that Peterson’s underlying
claims were barred, and did not abuse its discretion in finding no reason why its
judgment should be altered under Rule 59.
Peterson objects to the district court’s consideration of materials outside
the pleadings and the lack of an opportunity to file opposing materials under
Federal Rule of Civil Procedure 56. The court’s decision to dismiss Peterson’s
claims, however, was based on court orders that were properly considered for this
purpose. See 5B Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 1357 (3d ed. 2004) (noting that “[n]umerous cases [involving
dismissal on the pleadings] . . . have allowed consideration of . . . items subject to
judicial notice, matters of public record, orders, [and] items appearing in the
record of the case . . . without converting the motion into one for summary
3
In August 2001, the district court issued an order stating that “after notice
and absent objection,” it intended to release the Receiver and his agents from any
and all claims. Finding that by April 2002 it had received no objections, the court
discharged the Receiver and his agents of all claims.
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judgment”). Peterson also argues that he was entitled to summary judgment on
the merits, but, again, his claims are barred by res judicata. 4
In addition, Peterson contends that the district court should have granted
his motion for recusal. Because he filed the motion for recusal after his Rule 59
motion, and he has not separately appealed the denial of that recusal motion, we
lack jurisdiction to consider the matter. Peterson also insists the district court
should have ordered defendants to undergo lie detector testing, but this odd
discovery request is moot in light of the legally conclusive res judicata defense.
Finally, defendants seek an award of attorney fees under Federal Rule of
Appellate Procedure 38. They did not, however, comply with Rule 38’s directive
to proceed by “a separately filed motion.” Fed. R. App. P. 38. As the Advisory
Committee Note to the 1994 Amendments to the Rule explains:
[B]efore a court of appeals may impose sanctions, the person to be
sanctioned must have notice and an opportunity to respond. . . . A
separately filed motion requesting sanctions constitutes notice. A
statement inserted in a party’s brief that the party moves for
4
There may be, as the district court indicated, other fatal legal defects in
Peterson’s underlying case. We note that although he summarily alleges that
defendants looted and destroyed his business, he does not identify a single
specific act of financial wrongdoing, much less a pattern of such acts. We have
previously affirmed the dismissal of RICO claims pled with a similar lack of
specificity. See, e.g., Andrews v. Heaton, 483 F.3d 1070, 1076 (10th Cir. 2007);
Farlow v. Peat, Marwick, Mitchell & Co., 956 F.2d 982, 989 (10th Cir. 1992). It
also appears that Peterson was aware of his injury, i.e., the liquidation and
adverse distribution of the assets of his business, well before the final termination
of the receivership and thus more than four years before this suit, which would
put his claims outside the RICO statute of limitations. See Cory v. Aztec Steel
Bldg., Inc., 468 F.3d 1226, 1234 (10th Cir. 2006).
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sanctions is not sufficient notice. Requests in briefs for sanctions
have become so commonplace that it is unrealistic to expect careful
responses to such requests without any indication that the court is
actually contemplating such measures. Only a motion . . . is
sufficient.
Because defendants’ request is procedurally deficient, we decline to entertain it.
See, e.g., Higgins v. Vortex Fishing Sys., Inc., 379 F.3d 701, 709 (9th Cir. 2004);
Delta W. Group, LLC v. Ruth E. Fertel, Inc., 164 F. App’x 650, 656 n.8
(10th Cir. 2005) (noting “it is insufficient to make such a request [for attorney
fees] in a party’s brief”) (unpublished).
The judgment of the district court is AFFIRMED.
ENTERED FOR THE COURT
Carlos F. Lucero
Circuit Judge
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