Opinion
C/A 1:21-1613-MGL-SVH
01-25-2022
Brett-Andrew House of Nelson, Petitioner, v. Kurt Beckenhauer, Sarah Coleman, Susan Piloni, Joshua Dougherty, and Jessica Waggoner, Respondents.
REPORT AND RECOMMENDATION
Shiva V. Hodges United States Magistrate Judge
Brett Andrew Nelson (“Petitioner” or “Plaintiff”), proceeding pro se, filed a petition to confirm an arbitration award against Kurt Beckenhauer, Sarah Coleman, Susan Piloni, Joshua Dougherty, and Jessica Waggoner (collectively, “Respondents”). Pursuant to the provisions of 28 U.S.C. § 636(b)(1)(B) and Local Civ. Rule 73.02(B)(2)(e) (D.S.C.), the undersigned is authorized to review such filings for relief and submit findings and recommendations to the district judge.
The undersigned rejects Petitioner's argument that “[b]ecause this is a post-trial summary motion process the assignment of a magistrate pursuant to 28 U.S.C. § 636 (b)(1)(A) is prohibited. Magistrates are only permitted to be assigned to pre-trial matters that are not summary.” [ECF No. 1 at 7]. Here, Petitioner has filed a motion, seeking to proceed in forma pauperis. [See ECF No. 2]. As discussed more above, pursuant 28 U.S.C. § 1915(e)(2)(B)(i), (ii), 28 U.S.C. § 636(b)(1)(B), and Local Civ. Rule 73.02(B)(2)(e) (D.S.C.), the undersigned has the authority to review Petitioner's filings and issue a report and recommendation to the district judge, recommending dismissal of Petitioner's filings, where the filings are frivolous, malicious, or fail to state a claim upon which relief may be granted. Petitioner has failed to provide evidence or argument, nor is the court aware of any, as to why he should be exempt from this process in this instance.
I. Factual and Procedural Background
Petitioner asserts that “around May 23, 2018, Plaintiff and Respondents entered into [a] binding and sealed covenant/contract, ” that contained an arbitration clause. [ECF No. 1 at 1-3]. Following an alleged breach of that contract, Petitioner initiated arbitration; however, Respondents failed to participate. See Id. Brett “Eeon” Jones (“Jones”), arbitrator of the dispute, entered a final arbitration order that appears to award Petitioner at least thirty million dollars from Respondents. [See ECF No. 1-2 at 22, see also ECF No. 1-1]. Petitioner attaches the purported final arbitration order award and underlying contract entitled “Lawful Claim of Title, Will, Execution of Will, Declaration of Status, Appointment of Trustees and Standing Orders for Same.” [ECF No. 1-1, ECF No. 1-2, ECF No. 1-3].
Petitioner states that “[b]ecause of the harassment and retaliation by Respondents, ” he “was forced to move to Aiken South Carolina has effectively claimed residence therein.” [ECF No. 1 at 4]. Because Petitioner alleges Respondents reside in Colorado [see ECF No. 1-1 at 2], this court has jurisdiction pursuant to 28 U.S.C. § 1332(a)(1).
II. Discussion
A. Standard of Review
Petitioner filed his petition pursuant to 28 U.S.C. § 1915, which permits an indigent litigant to commence an action in federal court without prepaying the administrative costs of proceeding with the lawsuit. To protect against possible abuses of this privilege, the statute allows a district court to dismiss a case upon a finding that the action fails to state a claim on which relief may be granted or is frivolous or malicious. 28 U.S.C. § 1915(e)(2)(B)(i), (ii). A finding of frivolity can be made where the complaint lacks an arguable basis either in law or in fact. Denton v. Hernandez, 504 U.S. 25, 31 (1992). A claim based on a meritless legal theory may be dismissed sua sponte under 28 U.S.C. § 1915(e)(2)(B). See Neitzke v. Williams, 490 U.S. 319, 327 (1989).
A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Pro se complaints are held to a less stringent standard than those drafted by attorneys. Gordon v. Leeke, 574 F.2d 1147, 1151 (4th Cir. 1978). In evaluating a pro se complaint, the plaintiff's allegations are assumed to be true. Fine v. City of N.Y., 529 F.2d 70, 74 (2d Cir. 1975). The mandated liberal construction afforded to pro se pleadings means that if the court can reasonably read the pleadings to state a valid claim on which the plaintiff could prevail, it should do so. A federal court is charged with liberally construing a complaint filed by a pro se litigant to allow the development of a potentially meritorious case. Erickson v. Pardus, 551 U.S. 89, 94 (2007).
The requirement of liberal construction does not mean that the court can ignore a clear failure in the pleading to allege facts that set forth a claim currently cognizable in a federal district court. Weller v. Dep't of Soc. Servs., 901 F.2d 387, 390-91 (4th Cir. 1990). Although the court must liberally construe a pro se complaint, the United States Supreme Court has made it clear a plaintiff must do more than make conclusory statements to state a claim. See Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Rather, the complaint must contain sufficient factual matter, accepted as true, to state a claim that is plausible on its face, and the reviewing court need only accept as true the complaint's factual allegations, not its legal conclusions. Iqbal, 556 U.S. at 678-79.
B. Analysis
1. Previous Litigation
The undersigned notes that Petitioner has another petition pending before this court in Brett-Andrew v. Burgemeister, C/A No. 21-1292-MGL (“Burgemeister”). In Burgemeister, Petitioner also seeks to enforce an alleged arbitration award, albeit against different individuals. In Burgemeister and here, Petitioner has filed identical underlying contracts that allegedly form the basis of the arbitration award and, also in both cases, the final arbitration award was entered by arbitrators associated with an entity known as Sitcomm Arbitration Association (“SAA”). The undersigned entered a report and recommendation in Burgemeister, which remains pending before the district judge, recommending dismissal of that case with prejudice and further recommending that, “given Petitioner's history, in the event he files another such case in this court, sanctions be entered against him.” [See Burgemeister, ECF No. 11].
A district court may take judicial notice of materials in the court's own files from prior proceedings. See Colonial Penn Ins. Co. v. Coil, 887 F.2d 1236, 1239 (4th Cir. 1989) (noting that the most frequent use of judicial notice is in noticing the content of court records); Fletcher v. Bryan, 175 F.2d 716, 717 (4th Cir. 1949).
As outlined in that recommendation, Petitioner has filed multiple lawsuits in other courts, many based on the same alleged underlying contract as is found here and some resulting in warnings and restrictions being levied against Petitioner. See, e.g., Brett-Andrew: House of Nelson v. Jackson, C/A No. 1:20-069-H-BU, 2021 WL 409999, at *1 (N.D. Tex. Feb. 5, 2021) (dismissing for lack of subject-matter jurisdiction Petitioner's action seeking to confirm an alleged $20,000,000 arbitration award against Burgemeister respondents); Nelson v. Talbot et al., C/A No. 1:19-03643-LTB-GPG, 2020 WL 9432992 (D. Colo. March 6, 2020) (same); Brett Andrew: House of Nelson v. Talbot, C/A No. 20-01053-LTB-GPG, 2020 WL 7064561 (D. Colo. Dec. 1, 2020), aff'd sub nom. Andrew v. Talbot, 833 Fed.Appx. 473 (10th Cir. 2021) (same); see also Brett Andrew: House of Nelson v. Babcock, C/A No. 20-03506-GPG, 2020 WL 7064564, at *2-4 (D. Colo. Nov. 30, 2020), aff'd sub nom. Andrew v. Babcock, 834 Fed.Appx. 471 (10th Cir. 2021) (summarizing Petitioner's litigation history in Colorado and imposing filing restrictions). As recently noted by one such court:
Plaintiff is a seasoned and prolific filer of abusive and meritless lawsuits against these Defendants and other Colorado officials. Since 2017, Plaintiff has brought at least 34 lawsuits against Colorado state court judges and state courts. None have been successful. Indeed, one Colorado state court has sanctioned Plaintiff and issued a pre-filing injunction because of his abusive and frivolous filings there. Moreover, Plaintiff has filed multiple lawsuits seeking to confirm the same or similar bogus “arbitration awards” issued by Sitcomm. Every case has been dismissed, with some judges issuing Plaintiff stern warnings to stop his frivolous pursuit. Now Plaintiff has brought his campaign against these Defendants to this Court.Nelson v. Jackson, C/A No. 3:20-28-CAR, Dkt. No. 58 at 8-9 (footnotes omitted) (M.D. Ga. Jan. 21, 2021).
The undersigned additionally notes that Jones, the Sitcomm arbitrator that issued the alleged final arbitration award Petitioner is seeking to enforce here, is also no stranger to federal litigation concerning awards he has drafted. See, e.g., Domino v. Barr, C/A No. 20-2583 (ECT/BRT), 2021 WL 1795762, at *1 (D. Minn. Feb. 8, 2021), report and recommendation adopted sub nom. Domino v. Garland, C/A No. 20-2583 (ECT/BRT), 2021 WL 1221188 (D. Minn. Apr. 1, 2021). It appears in Domino another petitioner sought, and failed, to enforce an alleged final arbitration award based on the same or similar theory of recovery as presented here:
Domino's theory of recovery is complicated when examined in detail, but relatively straightforward in broad strokes. Domino alleges that the issuance of a birth certificate amounts, in effect, to an implied contract between the subject of the birth certificate and the federal government. That implied contract-as implemented through the Uniform Commercial Code, the Federal Arbitration Act, and other written law-includes a mandatory arbitration provision, with decisions of the appointed arbitrator binding upon all parties to the contract. Domino, believing the government to be in violation of the implied contract, appointed Brett “Eeon” Jones as arbitrator of the dispute. Jones, in turn, notified the government of the supposed breach and afforded the government an opportunity to respond to the allegations. When the government demurred, Jones entered an arbitration award conferring immunity from criminal prosecution and a substantial monetary award upon Domino. Now, Domino asks that this Court enforce the arbitration agreement drafted by Jones.See Id. at *1 (dismissing petition as frivolous pursuant 28 U.S.C. § 1915A(b)).
In short, courts around the country have repeatedly dismissed attempts by Petitioner and others like him in their efforts to enforce sham arbitration awards issued by Sitcomm arbitrators. See, e.g., Harvey v. United States, 845 Fed.Appx. 923, 925 & n.1 (Fed. Cir. 2021) (dismissing claim to enforce Sitcomm arbitration award, finding no valid underlying contract, and noting “numerous federal courts have expressed serious concerns regarding Sitcomm Arbitration Association”); Johnson v. Pennymac Loan Servs., LLC, C/A No. 3:19-837 (DJN), 2020 WL 5371347, at *3 (E.D. Va. Sept. 8, 2020 (“. . . the Court has previously expressed great skepticism about the validity of SAA as an arbitration entity. This case has deepened that skepticism. Indeed, courts around the country have expressed doubts regarding SAA's validity.”) (citations omitted)); Teverbaugh v. Lima One Cap., LLC, C/A No. 2:19-MC-159-KS-MTP, 2020 WL 448259, at *2 (S.D.Miss. Jan. 28, 2020) (“First, the Final Award was issued by [SAA]. The award recites no particular findings of wrongdoing on the part of Lima One and, as one court has described a quite similar award by SAA, it is ‘a bizarre jumble of inconsistent, nonsensical word salad.'” (citations omitted)); see also Castro v. Bank of New York Mellon, C/A No. 3:20-264-MOC-DSC, 2020 WL 2542864, at *1 (W.D. N.C. May 19, 2020) (“many institutions have recently been experiencing an influx of fake arbitration awards like the one here [issued by SAA]. This scam is being perpetrated across the country, and numerous courts have recognized that these purported awards are unenforceable”) (collecting cases)).
With this background in mind, the undersigned turns to the specific arbitration award Petitioner seeks to enforce in this case.
2. Instant Litigation
Under the Federal Arbitration Act (“FAA”), a court may confirm an arbitration award “[i]f the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration. . . .” 9 U.S.C. § 9. To obtain confirmation of an award, the statute requires the moving party to file (1) the agreement, (2) the award, and (3) each notice, affidavit, or other paper used to confirm, modify or correct the award. 9 U.S.C. § 13. This allows the court to determine whether a valid arbitration agreement and award exist upon which it can base its judgment. See United Cmty. Bank v. Arruarana, C/A No. 1:10-248, 2011 WL 2748722, at *2 (W.D. N.C. July 13, 2011) (“Without the filings required by § 13, the Court is unable to conclude from the record that a valid arbitration agreement and award exist and therefore is unable to determine whether the Petitioner is entitled to judgment as a matter of law.”).
Petitioner has filed what he claims is the agreement between the parties that contains an arbitration clause. [ECF No. 1-3]. Petitioner alleges Respondents breached the terms of this contract where they “were obligated to perform to the promises under the terms of the Agreement and immediately and unconditionally cease with the administration of Claimants estate to which Respondents are trustees.” [ECF No. 1 at 2]. In the alleged contact, Petitioner appears, in part, to announce entitlement to an estate and related trust located in Colorado. [ECF No. 1-3 at 2 (“Claimant hereby instantly and irrevocably claims and exercises Claimant's birthright . . . .”)]. However, the document is difficult to understand and names as “trustees” that are required to act, hundreds of groups of people such as “all courts, ” “the state of Colorado, “the United Nations, ” and “all military branches of all governments.” See Id. at 4-7. Notably, Respondents are not named or referenced, and the only signatory to the document is Petitioner, along with various witnesses. See Id. at 20.
In short, nothing on the face of this document indicates Respondents legally entered into any agreement with Petitioner, including any agreement to arbitrate. See Grant v. Magnolia Manor-Greenwood, Inc., 678 S.E.2d 435, 438 (S.C. 2009) (“In order to have a valid and enforceable contract, there must be a meeting of the minds between the parties with regard to all essential and material terms of the contract.”); see also Adkins v. Lab. Ready, Inc., 303 F.3d 496, 501 (4th Cir. 2002) (“It is clear that even though arbitration has a favored place, there still must be an underlying agreement between the parties to arbitrate. Whether a party agreed to arbitrate a particular dispute is a question of state law governing contract formation.”) (citations omitted).
There are additional concerns with Petitioner's attempts to enforce the alleged final arbitration order, some discussed by the undersigned in Burgemeister, concerns the undersigned need not reiterate here. It is sufficient that Petitioner has wholly failed to plausibly allege or show in the documentation submitted that he and Respondents entered into any agreement at any time including any agreement to arbitrate.
Petitioner has failed to meet the requirements of 9 U.S.C. § 13 or otherwise indicate that his current efforts to enforce the alleged final arbitration order are not frivolous. Petitioner again brings an action where there is still no valid, enforceable contract or arbitration agreement. Accordingly, the undersigned recommends summary dismissal of Petitioner's case.
III. Conclusion and Recommendation
Based on the above, the undersigned recommends the district court dismiss this action with prejudice, see Goode v. Cent. Va. Legal Aid Soc'y, Inc., 807 F.3d 619, 630 (4th Cir. 2015), and deny Petitioner's pending motion to proceed in forma pauperis as moot. The undersigned further recommends that given Petitioner's history, sanctions be entered against him and/or he be barred from bringing any further action of any kind in forma pauperis and/or without prior court approval. See Fed. R. Civ. P. 11(b)(2) and (c)(1).
IT IS SO RECOMMENDED.
Notice of Right to File Objections to Report and Recommendation
The parties are advised that they may file specific written objections to this Report and Recommendation with the District Judge. Objections must specifically identify the portions of the Report and Recommendation to which objections are made and the basis for such objections. “[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must ‘only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'” Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed.R.Civ.P. 72 advisory committee's note).
Specific written objections must be filed within fourteen (14) days of the date of service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); see Fed. R. Civ. P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5 may be accomplished by mailing objections to:
Robin L. Blume, Clerk
United States District Court
901 Richland Street
Columbia, South Carolina 29201
Failure to timely file specific written objections to this Report and Recommendation will result in waiver of the right to appeal from a judgment of the District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984).