Tomas Menchaca and Wife, Irma Menchaca v. Chrysler Credit Corporation

INGRAHAM, Circuit Judge:

This appeal emerges from a dispute surrounding the presence of the defendant police officers during the course of a repossession of plaintiffs’ automobile by agents of defendant Chrysler Credit Corporation. Plaintiffs’ civil rights complaint under 42 U.S.C. § 1983 was the subject of a motion to dismiss for lack of the requisite subject matter jurisdiction. The district court held a hearing and found that the necessary state action element was missing. Accordingly, the motion was granted and the complaint dismissed. Plaintiffs timely appealed to this court seeking reversal of the district court judgment. We affirm.¹

In December 1974, plaintiffs Tomas and Irma Menchaca purchased a 1975 Chrysler Cordoba automobile which was financed under a retail installment agreement with defendant Chrysler Credit Corporation (Chrysler). The contract included the usual acceleration clause and a provision permitting Chrysler to retake the automobile in the event of default by the plaintiffs.² At this time, plaintiffs also purchased two insurance policies that were included in the same installment agreement. One policy covered physical damage to the automobile. There is a dispute as to what the other policy covered; plaintiffs claimed the policy was disability insurance, however, Chrysler contended it was credit life insurance. In any event, the resolution of that dispute between the Menchacas and Chrysler is not in issue in this lawsuit.³

Subsequently, in August 1977, plaintiffs became two months delinquent on their obligation to make installment payments. Sometime around August 25,. 1977, defendant Norman Clark, an agent for collection, went to plaintiffs’ home in Laredo, Texas, to seek payment of the past due amounts. He spoke with Mrs. Menchaca and informed her that the automobile would be repossessed on the following Monday at noon if both payments were not received by then. It appears from the record that Mrs. Menchaca did not tell Mr. Menchaca about the visit from defendant Clark.

At this time, Mr. Menchaca was unemployed due to a disabling injury he suffered while at work. Mrs. Menchaca was employed at Autophones of Laredo, earning approximately $90 per week. Mr. Menchaca’s workmen’s compensation benefits were $77 per week and the couple was receiving food stamp assistance. The Menchacas, parents of four children, were unquestionably experiencing financial difficulties in trying to meet the approximately $175 per month note payments.

On that following Monday noon, August 29, 1977, two men arrived in a pickup truck equipped with a winch and proceeded to ready the Menchacas’ car for towing. It is undisputed that the Menchacas’ automobile was parked on the public street at that time. Upon, noticing this event, Mr. Menchaca rushed out to try and prevent the repossession. Apparently some rather loud and abusive language was spoken by Mr. Menchaca, which eventually resulted in the defendant police officers being summoned to check out the disturbance.

Meanwhile, Mrs. Menchaca phoned her attorney, who would not be able to arrive until about 2 P.M. She explained this to the men and to the defendant police officers. One of the men showed Officer Blume the repossession papers and told her and the Menchacas that they could not wait for two hours until the Menchacas’ attorney arrived. The Menchacas were informed by Officer Blume that repossession was a civil matter and that the only reason the police were there was to quiet a reported disturbance. Mr. Menchaca was informed that he could be arrested if he continued to use loud, and abusive language and create a breach of the peace.

The situation became somewhat less volatile and the officers left. The car was still hooked to the winch; however, the men remained for five minutes or so while Mr. Menchaca removed from the car some possessions, including a CB radio and antenna. Subsequently, the men left with the Menchacas’ automobile in tow.

The Menchacas brought this action under 42 U.S.C. § 1983 against all the defendants, alleging a conspiracy to deny them their rights, privileges and immunities under the Fourteenth Amendment to the United States Constitution. They sought damages, injunctive relief requiring return of the car pending the outcome of the suit, attorney’s fees and costs. The district court granted the injunction; however, that order was modified to require merely that defendant Chrysler not dispose of the vehicle until the court granted its approval.

Defendant Chrysler filed a motion to dismiss, challenging the district court’s subject matter jurisdiction. The court held a full evidentiary hearing in which both plaintiffs and three of the defendants gave oral testimony under direct and cross examination. At the close of the hearing, the district court found, based on its evaluation of the testimony of all the witnesses, that there was no conspiracy between the officers and the men seeking to repossess the automobile. Moreover, the court could find no other indicia of state involvement,⁴ and hence no state action as jurisdictionally required under 42 U.S.C. § 1983. Accordingly, the motion was granted and the action was dismissed as to all parties.

Plaintiffs have appealed and they argue numerous errors in the district court proceeding. While we are not unmindful of the points that plaintiffs raise, we conclude that the existence of state action was a question central to the district court’s own jurisdiction to hear the case.- It was thus within the province of the court to decide the merits of that issue, and the district court did not err when it found no state action and dismissed the complaint. We therefore need not consider the other issues raised.

In order for plaintiffs to maintain this claim under 42 U.S.C. § 1983 there are two essential elements which they must show. First, that defendants have deprived them of a right secured by the Constitution and the laws of the United States; second, that this deprivation has occurred while the defendants were acting under color of law.⁵ Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 155, 98 S.Ct. 1729, 1733, 56 L.Ed.2d 185, 193 (1978). Plaintiffs alleged in their complaint that they were deprived of rights, privileges and immunities secured by the Fourteenth Amendment of the United States Constitution when defendants repossessed their car without judicial notice and a hearing. Additionally, plaintiffs alleged that officers Palacios, Blume and, vicariously, the City of Laredo, acted in concert with defendant Chrysler to deprive them of those rights without due process of law.

Despite plaintiffs’ allegations of multiple bases of jurisdiction in their origi-. nal complaint, the parties agree that the sole basis of jurisdiction that could support this claim is 42 U.S.C. § 1983. As such, the existence of the “under color of law” element of the claim, i. e., state action, is required in order to invoke the district court’s jurisdiction., Wye therefore must limit our initial inquiry to that narrow question. Adding another dimension to this inquiry, however, plaintiffs claim that the district court holding that there was no state action denied plaintiffs their Seventh Amendment right to a jury trial. We disagree.

It is axiomatic that a district court may inquire into the basis of its subject matter jurisdiction at any stage of the proceedings. See 13 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3522 (1975). A fortiori a motion to dismiss under Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction must include an inquiry by the court into its own jurisdiction.

A “facial attack” on the complaint requires the court merely to look and see if plaintiff has sufficiently alleged a basis of subject matter jurisdiction, and the allegations in his complaint are taken as true for the purposes of the motion. Mortensen v. First Federal Savings & Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977). A “factual attack,” however, challenges the existence of subject matter jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such as testimony and affidavits, are considered. Id. Moreover, a “factual attack” under Rule 12(b)(1) may occur at any stage of the proceedings, and plaintiff bears the burden of proof that jurisdiction does in fact exist. Id. at 891—92; McLain v. Real Estate Board of New Orleans, Inc., 583 F.2d 1315, 1318 n. 1 (5th Cir. 1978), vacated and remanded on other grounds, - U.S. -, 100 S.Ct. 502, 62 L.Ed.2d 441 (1980). See 5 C. Wright & A. Miller, Federal Practice and Procedure § 1350, at 555 (1969). Accord, Thornhill Publishing Co. v. General Telephone & Electronics Corp., 594 F.2d 730, 733 (9th Cir. 1979).

In the instant case the district court held a hearing on October 5, 1977, on defendant Chrysler’s motion to dismiss for lack of subject matter jurisdiction, at which time testimony was heard from both plaintiffs, both defendant police officers and defendant Norman Clark. Some of the facts were disputed. In particular, both officers vehemently denied that either of them ever told either of the plaintiffs that defendant Chrysler’s agents had a right to repossess the automobile or that Mr. Menchaca would be arrested if he resisted. In fact, Officer Blume testified, and was corroborated by Officer Palacios and the plaintiffs themselves, that she told the plaintiffs that repossession was a civil matter which did not concern the police. The defendant police officers’ sole reason for being there was to answer a complaint on a disturbance relating to loud and abusive language by Mr. Menchaca.

The plaintiffs testified, albeit inconsistently at times, that they gave up possession of the car because the police had led them to believe they had no choice. Defendants admitted that Mr. Menchaca was informed that he would be arrested for breach of the peace if he continued using loud and abusive language. However, defendants Palacios and Blume both denied that Blume ever told -Mr. Menchaca that he had to relinquish possession of the automobile. The police were there merely to calm a disturbance.

At the close of the hearing, the district court issued its memorandum and order dismissing the complaint for lack of jurisdiction, finding no state action. One of plaintiffs’ arguments on this appeal is that they were denied their Seventh Amendment right to a jury trial when the court made that finding. In Rosemound Sand & Gravel Co. v. Lambert Sand & Gravel Co., 469 F.2d 416 (5th Cir. 1972), the court noted: “Rose-mound urges that it was denied its Seventh Amendment right to a trial by jury because of the trial judge’s decision on the jurisdictional question. The short answer is that there has been no denial of this right because questions of jurisdiction are properly within the ambit of the court’s authority.” Id. at 418. See 5 C. Wright & A. Miller, supra, § 1350, at 556-58. Plaintiffs’ argument is without merit.

While it may be contended that the district court could have awaited “determination of the merits either by the court on a summary judgment motion or by the fact finder at trial,” id. at 558, the court was not bound to do so. Gilbert v. David, 235 U.S. 561, 35 S.Ct. 164, 59 L.Ed. 360 (1915). We do not believe the court abused its discretion to decide the merits of the jurisdictional issue, especially since all parties had testified and little else, if anything, remained to be presented to the court for its consideration.

The dissent suggests that since one party (Chrysler) moved for dismissal under Rule 12(b)(1) and another party (Norman Clark) moved for dismissal under Rule 12(b)(6), the district court should not have weighed the evidence necessary to determine the facts supporting its jurisdiction and that it should have been determined by the factfinder in a trial on the merits. The dissent overlooks the fact that absent some form of concerted conduct on the part of the police officers, there was no jurisdiction to support any other claims against the remaining defendants. Although the allegations of a complaint are taken as true in a challenge to a plaintiff’s right to any relief, they may be tested by extraneous evidence when the court’s jurisdiction is attacked. If the allegations do not survive the jurisdictional attack, then there is no jurisdiction even to consider the other claims, much less to entertain a Rule 12(b)(6) motion to dismiss those claims.

We wish to emphasize that this case was not treated by the district court as a summary pretrial disposition as the dissent contends. As noted earlier, plaintiffs’ counsel called five witnesses to testify at the October 5, 1977 hearing, four of whom were present at the original scene, including the plaintiffs themselves. With the exception of the defendant Chrysler’s repossession agents, there were no other potential witnesses with firsthand knowledge who could later add anything to what was adduced at that hearing. The trial court heard on both direct and cross-examination every witness offered by the plaintiffs and observed the demeanor, candor and responsiveness of all the witnesses. Numerous exhibits were received into evidence. Plaintiffs had every opportunity to convince the court that the defendant police officers had acted in concert with defendant Chrysler’s agents. Plaintiffs were unconvincing⁶ and hence the critical element state action was absent, thus depriving the district court of subject matter jurisdiction to hear any portion of the claim. We agree with the dissent’s contention that police intervention and aid in this repossession by defendant Chrysler’s agents would constitute state action; however, the testimony failed to show such intervention and aid. We are supported by earlier decisions of this court in Calderon v. United Furniture Co., 505 F.2d 950 (5th Cir. 1974), and White v. Scrivner Corp., 594 F.2d 140 (5th Cir. 1979).

The remainder of plaintiffs’ arguments need not be addressed. The district court found that there was no state action and, accordingly, granted defendant Chrysler’s motion to dismiss for lack of subject matter jurisdiction. This issue is dispositive of the appeal, and finding no error in the district court holding, the judgment is

AFFIRMED.

1 . Although vicarious liability was originally urged by plaintiffs as a point of law germane to the outcome of this appeal, none of the parties dispute the fact that under Monell v. Dept. of Social Services, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978), the City of Laredo could not be vicariously liable since there was no governmental custom, plan or scheme to provide official assistance or aid in the repossession of automobiles by private parties pursuant to their private contractual arrangements. Moreover, our disposition of this appeal speaks to the district court’s subject matter jurisdiction. The issue of the vicarious liability of the City of Laredo is only a collateral matter inso-’ far as the complaint was dismissed as to all parties for lack of jurisdiction.

2 . Paragraph 2 of the installment contract provided:

If Buyer defaults in any payment Seller shall have the right, at its election, to declare the unpaid portion of the Total of Payments under this contract to be immediately due and payable, together with any other amount for which Buyer shall have been obligated hereunder. In any such event, Seller, its agents or representatives, may enter the premises where the property may be and take immediate possession of the property including any equipment or accessories, and Seller may take possession of any other items in the property at the time of repossession, and hold them without liability until demanded by Buyer.

3 . At oral argument counsel for Chrysler informed us that this dispute over the insurance agreement is the subject of another action pending in the Texas state courts.

4 . It was undisputed that the officers had never been involved in an automobile repossession, had never met the Menchacas, and had never met the repossession men. Moreover, there was no evidence of any history of police department “cooperation” with repossession agents and no evidence of any pre-arranged plan between any of the defendants and the police.

5 . 42 U.S.C. § 1983 provides:

Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.

6 . For example, we note the inconsistency in the plaintiffs’ own versions of an alleged threat made by Officer Blume, by way of the following colloquy between Mr. Menchaca and defendant Chrysler’s counsel:

Q: Now, this last statement that you made, that the reason that you didn’t continue to argue about the car was because Officer Blume had told these other gentlemen that if you gave them any more trouble, just call them and they’d come and pick you up?

A: That’s right. That’s the exact words.

Q: Your wife didn’t testify to that, did she?

A: No, sir, she didn’t.

Q: Did she hear it?

A: She did.

Q: Then why didn’t she testify to it?

A: That’s her story. I don’t know. I’m saying what I said.

Q: Don’t you think this is rather crucial to your case?

A: Well, sir, what she said is her story, and what I said is my story.

Q: And the fact that they are not the same, doesn’t that bother you?

A: It doesn’t bother me because it’s the truth.

Q: Her story or your story?

A: My story, her story too.

Q: Even though they are different?

A: Whatever, it’s still the truth.

Supplemental Record at 111-12.