Opinion
Case No. 01-4157-JPG
October 29, 2001
MEMORANDUM OPINION AND ORDER
Before the Court are two motions to dismiss: one by defendants James E. Ryan, George Ryan and the State of Illinois (Doc. 7) with a supporting memorandum (Doc. 8) and one by defendants A.D. Van Meter and Thomas Plack (Doc. 12) also with a supporting memorandum (Doc. 13).
BACKGROUND
When reviewing a motion to dismiss, a court should view all the facts alleged in the complaint in the light most favorable to the plaintiff. Henderson v. Bolanda, 253 F.3d 928, 930 (7th Cir. 2001).
In this case, the plaintiff, Mitchell Malone, alleges that he purchased a 1997 Ford truck in October 1997 from a Du Quoin, Illinois auto dealer pursuant to a retail installment contract. (Amend. Pet. ¶ 9). Monthly payments were to be made to First of America Bank-Illinois ("the Bank"). Defendants Plack and Van Meter were officers at the Bank.
Malone alleges that on June 9, 1998, the Bank repossessed the truck from the Federal Correctional Institution in Greenville, Illinois where Malone worked. (Amend. Pet. ¶ 12). Such a repossession was authorized by 810 ILCS 5/9-503, Illinois' self-help repossession statute. Malone alleges that Plack signed an Affidavit of Repossession and presented that document to the Illinois Secretary of State (at that time George Ryan). (Amend. Pet. ¶¶ 14-15). Malone alleges that the Secretary of State then issued a Certificate of Title to the Bank on July 8, 1998. (Amend. Pet. ¶ 16). On August 5, 1998, the Bank sold the truck at a private auction. (Amend. Pet. ¶ 17). Malone further alleges that the Illinois Attorney General (at that time James Ryan) refused to investigate what Malone characterizes as a "conversion" of his property. (Amend. Pet. ¶ 13).
810 ILCS 5/9-503 was replaced by 810 ILCS 5/9-609, effective July 1, 2001. The old section and the new section are essentially the same. The old Section 9-503 provided in part:
Unless otherwise agreed a secured party has on default the right to take possession of the collateral. In taking possession a secured party may proceed without judicial process if this can be done without breach of the peace or may proceed by action.
Malone further alleges that the Bank officers, Plack and Van Meter, along with George Ryan and James Ryan, are all members of a conspiracy that was formed with the intent to commit fraud. (Amend. Pet. pp. 10-13).
In October 1998, Malone brought suit against the Bank and other parties in the Federal District Court for the Southern District of Illinois, alleging: (1) that the Bank had engaged in a scheme to defraud in violation of the Racketeer Influenced and Corrupt Organization Act ("RICO"); (2) that the Bank breached its contract with Malone regarding the automobile loan; (3) that the Bank converted Malone's personal property; and (4) that the Bank slandered Malone's credit. The Bank moved for summary judgment on all counts. On May 24, 2001 the District Court granted the Bank's motion for summary judgment as to the RICO claim. The District Court then declined to exercise supplemental jurisdiction over the remaining state law claims and dismissed those without prejudice.
While Malone's RICO claim was still pending in federal court, on March 28, 2001, Malone filed a pleading in the Circuit Court for the Twentieth Judicial Circuit of Illinois, Perry County. Malone labeled the pleading as "Petition for Declaratory Judgment In [sic] Constitutionality of 810 ILCS 5/9-503 and 625 ILCS 5/3-100, and To Establish Motion for Damages in Fraudulently Converting Automobile Titles in Violation of 42 U.S.C. § 1983 and 18 U.S.C. § 1341, 875(d)." (Doc. 2) On April 23, 2001, Malone filed another pleading, which he labeled "Motion for Declaratory Judgment on the Questions of Constitutionality," requesting that the State Court declare 810 ILCS 5/9-503 unconstitutional. (Doc. 4). On May 2, 2001, with leave of the State Court, Malone filed an amended "Petition for Declaratory Judgment. . . ." (Doc. 3). On June 7, 2001 defendants James Ryan and George Ryan removed the case to this Court (Doc. 1). The Bank defendants have consented to the removal. (Doc. 5). This Court has denied Malone's motion to remand.
Malone's "Amended Petition" (Doc. 3) and Malone's "Motion for Declaratory Judgment" (Doc. 4) are the subjects of the motions to dismiss made by the Defendants.
DISCUSSION
Malone purports to bring this action against the State of Illinois directly and against two individual state defendants, George Ryan and James Ryan, in their personal and official capacities. Malone also purports to bring this action against two officers of the Bank, Plack and Van Meter. Malone has left to the Defendants and the Court the task of sifting through an undifferentiated mass of factual allegations and legal conclusions to try to find the elements of particular claims.
With a great creative exertion, the Court might possibly deduce or infer more claims from Malone's pleadings than the Court presently addresses. Indeed, Malone's petition concludes with a list of thirteen vague and conclusory "claims."
While the Court is aware that it must liberally construe pro se pleadings, Haines v. Kerner, 404 U.S. 519, 520 (1972); Hudson v. McHugh, 148 F.3d 859, 864 (7th Cir. 1998), the Court is not obliged to craft arguments or perform necessary legal research for pro se litigants to cure substantive deficiencies. See Anderson v. Hardman, 241 F.3d 544, 545 (7th Cir. 2001); Pelfresne v. Village of Williams Bay, 917 F.2d 1017, 1023 (7th 1990).
Construing Malone's Amended Petition and Motion for Declaratory Judgment liberally, it appears that Malone is attempting to make the following claims: (1) that the State of Illinois ("the State") was negligent in training and supervising its state legislators and officials and that such negligence proximately caused Malone damages; (2) under 42 U.S.C. § 1983, that the defendants Van Meter, Plack, George Ryan and James Ryan, violated his constitutional right to due process by taking his personal property and transferring title without a hearing, and (3) that the Bank defendants and the State defendants conspired to commit common law fraud.
1. Malone's Claims for Damages Against the State of Illinois and State Officials Acting in their Official Capacity.
The State of Illinois and the State Defendants, George Ryan and James Ryan, argue that the Eleventh Amendment bars all claims for monetary damages and retroactive injunctive relief against the State and against the State Defendants in their official capacities. It does. See Will v. Michigan Dep't of State Police, 491 U.S. 58, 64-71, 109 S.Ct. 2304, 2308-12 (1989) (monetary relief); Edelman v. Jordan, 415 U.S. 651, 674, 94 S.Ct. 1347, 1361 (1974) (retroactive injunctive relief). Congress has not exercised its authority to override state immunity for suits brought under Section 1983, nor has the State of Illinois waived its immunity in this suit.
While Malone has requested damages, he has not requested any injunctive relief. Therefore, all his claims against the State of Illinois, and against George Ryan and James Ryan in their official capacities, are barred by the Eleventh Amendment.
2. Malone's Section 1983 Claims.
Applying the Eleventh Amendment does not dispose of Malone's Section 1983 claims against the Bank Defendants and the State Defendants in their personal capacities. While Section 1983 does not contain an express statute of limitations, a federal court must adopt the forum state's limitations period for personal injury claims. See Wilson v. Garcia, 471 U.S. 261, 276 (1985). The correct statute of limitations for Section 1983 actions filed in Illinois is two years as set forth in 735 ILCS § 5/13-202. Henderson v. Bolanda, 253 F.3d 928, 931 (7th Cir. 2001).
In this case, the most recent date of an alleged constitutional violation is July 8, 1998. On that date, the Secretary of State issued the Certificate of Title to the Bank. Thus, any claim under Section 1983 must have been filed no later than July 8, 2000. Malone, however, filed his initial State Court pleading on March 28, 2001. Therefore, without exception, Malone's Section 1983 claims are barred by the statute of limitations.
3. Malone's Underlying Constitutional Claim.
Malone has asked the Court to make a declaratory judgment that Illinois' self-help repossession statute is unconstitutional. The State Defendants have argued that there is no case or controversy allowing the Court to rule on the Constitutionality of the statute.
Declaratory relief may be granted only when there is an actual controversy between adverse parties. See International Harvester Co. v. Deere Co., 623 F.2d 1207, 1210 (7th Cir. 1980). Other than a claim for damages under Section 1983, Malone has not requested any relief for the alleged violation of his constitutional right to due process. In other words, apart from Malone's Section 1983 claims, which are barred by the statute of limitations, the constitutional issue raised by Malone is not part of any case or controversy. Therefore, assuming that the Court's Section 1983 Statute of Limitations analysis is correct, the State Defendants are correct that the Court need not address the merits the of Malone's underlying constitutional claim. However, even if Malone's Section 1983 claims were not barred by the applicable statute of limitations, the Court would dismiss his constitutional claims for other reasons.
First, the Court would dismiss the claims against the Bank defendants because repossession pursuant to Illinois' self-help repossession statute does not constitute state action and the defendants were not acting under the color of state law. It is well established that purely private action is immune from the restrictions of the Fourteenth Amendment. Jackson v. Metropolitan Edison Company, 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 447 (1974).
Whether a creditor's conduct constitutes action under "color of" state law within the meaning of Section 1983 and whether the conduct is "state action" under the Fourteenth Amendment is "essentially the same question." Anastasia v. Cosmopolitan National Bank, 527 F.2d 150, 153 (7th Cir. 1975).
Several of the Circuit Courts have directly addressed the question of whether a private actor's repossession pursuant to a state self-help statute constitutes state action. The Circuit Courts that have considered the issue have unanimously held that action pursuant to a self-help repossession statute does not constitute state action and that, therefore, the Fourteenth Amendment right to due process is inapposite. See Calderon v. United Furniture Co., 505 F.2d 950 (5th Cir. 1974); Brantley v. Union Bank Trust Co., 498 F.2d 365 (5th Cir.), cert. denied, 419 U.S. 1034, 95 S.Ct. 517, 42 L.Ed.2d 309 (1974); James v. Pinnix, 495 F.2d 206 (5th Cir. 1974); Turner v. Impala Motors, 503 F.2d 607 (6th Cir. 1974); Gibbs v. Titelman, 502 F.2d 1107 (3rd Cir.), cert. denied, 419 U.S. 1039, 95 S.Ct. 526, 42 L.Ed.2d 316 (1974); Nichols v. Tower Grove Bank, 497 F.2d 404 (8th Cir. 1974); Nowlin v. Professional Auto Sales, Inc., 496 F.2d 16 (8th Cir.), cert. denied, 419 U.S. 1006, 95 S.Ct. 328, 42 L.Ed.2d 283 (1974); Bichel Optical Laboratories, Inc. v. Marquette National Bank of Minneapolis, 487 F.2d 906 (8 Cir. 1974); Adams v. Southern California First National Bank, 492 F.2d 324 (9th Cir.), cert. denied, 419 U.S. 1006, 95 S.Ct. 325, 42 L.Ed.2d 282 (1974).
The Seventh Circuit has ruled on the "state action" issue in regards to similar provisions. In Anastasia v. Cosmopolitan National Bank, 527 F.2d 150 (7th Cir. 1975), the Court held that detention of personal property of hotel guests pursuant to statutory lien, without notice or hearing, did not involve "state action" for purposes of Fourteenth Amendment or Section 1983. In Phillips v. Money, 503 F.2d 990 (7th Cir. 1974), the Seventh Circuit held that detention of an automobile, pursuant to a statutory mechanic's lien by a private individual in possession of the vehicle, did not constitute "state action" within the meaning of Fourteenth Amendment.
Moreover, the Seventh Circuit has held that financial institutions and their officers do not act under the color of state law for the purposes of Section 1983 claims when they act pursuant to self-help automobile repossession procedures. See Gibson v. Dixon, 579 F.2d 1071 (7th Cir. 1978) (affirming district court's dismissal of a Section 1983 claim against a bank where the plaintiff alleged that the bank had violated the plaintiff's due process rights by repossessing his car).
Second, even if the statute of limitations did not bar Malone's Section 1983 claims against the State Defendants, the Court would dismiss the claims because the State Defendants are shielded by the doctrine of qualified immunity enunciated in Harlow v. Fitzgerald, 457 U.S. 800 (1982).
Malone apparently intends to make the following Section 1983 claims against the State Defendants: (1) that George Ryan violated Malone's constitutional right to due process by issuing title to the truck to the Bank, and (2) that James Ryan violated Malone's constitutional right to due process by failing to investigate the "conversion" of his property. Under Harlow, government officials holding discretionary positions are shielded from liability for civil damages so long as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known. Harlow, 457 U.S. at 818.
The Seventh Circuit stated in Azeez v. Fairman, 795 F.2d 1296, 1301 (7th Cir. 1987) that a right is clearly established only if the case law establishing the right is "sufficiently particularized to put potential defendants on notice that their conduct probably is unlawful." Therefore, regarding the qualified immunity issue, the question in this case is whether the State Defendants' alleged conduct was clearly unconstitutional at the time it allegedly took place.
This Court is unaware of any case holding that Illinois' repossession procedures or similar repossession procedures violate any provision of the Constitution. If such procedures are unconstitutional, it was not clear that they were unconstitutional when the relevant events in this case took place. Moreover, it is certainly not clear that James Ryan's alleged failure to investigate this matter violated Malone's constitutional rights.
To the extent that the State Defendants, George Ryan and James Ryan, are sued in their personal capacities for acting pursuant to Illinois' statutory scheme they are shielded by the doctrine of qualified immunity. Therefore, even if the statute of limitations did not bar Malone's Section 1983 claims against the State defendants, the Court would hold that the doctrine of qualified immunity applies and would dismiss the claims.
4. Malone's Claims for Conspiracy to Commit Common Law Fraud.
Defendants move to dismiss Malone's fraud claims, primarily arguing that Malone has not met the particularity requirements of Federal Rule of Civil Procedure 9 for pleading claims of fraud. Although Malone has responded to the State Defendant's motion to dismiss, Malone has not responded to this argument.
On June 27, 2001, Malone filed a "Motion to Remand to State Court." Along with that motion, Malone filed a memorandum in which he both argued in favor of remand and responded to the defendants' motions to dismiss. (Doc. 11). On July 16, 2001, Malone filed another response, this time labeled "Plaintiff's Response to Defendants' Motion to Dismiss." (Doc. 15).
In order to state a claim for conspiracy, a plaintiff must allege (1) an agreement between at least two people for the purpose of accomplishing some unlawful purpose or some lawful purpose by unlawful means, and (2) at least one tortious act by one of the co-conspirators in furtherance of the agreement. See Adcock v Brakegate, Ltd., 164 Ill.2d 54, 62, 645 N.E.2d 888, 894 (Ill.App.Ct. 1994).
In order to state a claim for common law fraud in Illinois, a plaintiff must allege: (1) a false statement of material fact; (2) the party making the statement knew or believed it to be untrue; (3) the party to whom the statement was made had a right to rely on the statement; (4) the party to whom the statement was made did rely on the statement; (5) the statement was made for the purpose of inducing the other party to act; and (6) the reliance by the person to whom the statement was made led to that person's injury. Connick v. Suzuki Motor Co., Ltd., 174 Ill.2d 482, 221 Ill.Dec. 389, 675 N.E.2d 584, 591 (Ill. 1996).
Malone has left to the Court the task of sifting through an undifferentiated mass of factual allegations and legal conclusions to try to find the fraud elements. The Court is not required to do so. Nevertheless, it is clear that Malone's allegations do not state a prima facie claim for fraud. Therefore, Malone's claims for fraud are dismissed.
CONCLUSION
For the reasons discussed above, the motion to dismiss made by the defendants, George Ryan, James Ryan, and the State of Illinois (Doc. 7) is GRANTED, and
The motion to dismiss made by the defendants, A.D. Van Meter and Thomas Plack (Doc. 12) is GRANTED.
Malone's motion for declaratory judgment (Doc. 4) is DENIED.
IT IS SO ORDERED.