Opinion
Case No. 6:01-cv-579-Orl-22KRS
November 13, 2001
REPORT AND RECOMMENDATION
TO THE UNITED STATES DISTRICT COURT
This cause came on for consideration without oral argument on the Motion for Sanctions Under Rule 11 filed by the United States on behalf of the named defendants in this case. (Doc. No. 13). The plaintiff, Charles Dewey Tobias, Jr., did not respond to this motion, despite the Court's notice to him on two occasions that a response should be filed. (Doc. Nos. 14 18). I have reviewed all of the documents in the Court's file, as well as the file in Tobias v. O'Neal, 6:00-cv-1083-Orl-22C. This motion has been referred to me for decision or issuance of a report and recommendation, as necessary. (Doc. No. 17). For the reasons stated herein, I recommend that the motion be granted.
I. PROCEDURAL HISTORY.
In August 2000, Tobias filed a complaint against Van E. O'Neal, an agent with the Internal Revenue Service ("IRS"), in the Eighteenth Judicial Circuit Court. (Case No. 6:01-cv-1083-Orl-22C, Doc. No. 2). In that complaint, Tobias alleged that O'Neal filed three Notices of Federal Tax Liens against him in Seminole County, Florida. Tobias contested the validity of the liens under Florida Statute § 713.21. ( Id.). O'Neal caused the case to be removed to this Court. ( Id., Doc. No. 1). Thereafter, the Honorable Anne C. Conway, the presiding United States District Judge, determined that the claim against O'Neal was, in essence, a claim against the United States ( Id., Doc. No. 19). She dismissed Tobias' claim with prejudice because the United States had not waived sovereign immunity to permit suit against it pursuant to section 713.21. ( Id.).
Copies of the Notice of Federal Tax Lien attached to the complaint reflect that the liens were lodged against Charles D. and Kay M. Tobias.
On April 21, 2001, Tobias filed the complaint in the instant case in the Eighteenth Judicial Circuit. (Doc. No. 2). He names as the defendants the three liens that were the subject of his earlier complaint, two additional Notices of Federal Tax Liens filed in Seminole County, Florida against him, and "John/Jane Doe," with service on this individual defendant to be made to the Secretary of the Treasury. He alleges that the defendant liens are fraudulent, citing Florida Statute § 713.31, and that they should be discharged pursuant to Florida Statute § 713.21. ( Id.). Once again, the defendants removed the case to this Court. (Doc. No. 1). On July 18, 2001, Judge Conway granted a motion to dismiss, but retained jurisdiction to rule on the Motion for Sanctions Under Rule 11 filed by the United States on behalf of the defendants. (Doc. No. 16).
Both Judge Conway and I gave Tobias notice that sanctions could be awarded against him if the Rule 11 motion were granted. (Doc. Nos. 14 18). I gave him until August 13, 2001 to file a response to the Rule 11 motion. (Doc. No. 18). Tobias did not file a response to the Rule 11 motion. However, on August 14, 2001, he filed a document entitled "Third Administrative Notice of Error and Demand to Release/Remand; Notice of Non-Acceptance and No Agreement; Notice of Damage by Affidavit." (Doc. No. 19).
II. STANDARD OF REVIEW.
Rule 11 sanctions are properly assessed "(1) when a party files a pleading that has no reasonable factual basis; (2) when the party files a pleading that is based on a legal theory that has no reasonable chance of success and that cannot be advanced as a reasonable argument to change existing law; or (3) when the party files a pleading in bad faith for an improper purpose."Massengale v. Ray, No. 00-13904, 2001 WL 1172691, at *3 (11th Cir. Oct. 4, 2001) (quoting Worldwide Primates, Inc. v. McGreal, 87 F.3d 1252, 1254 (11th Cir. 1996)). A court ruling on a motion for Rule 11 sanctions must make "a two-step inquiry as to (1) whether the party's claims are objectively frivolous; and (2) whether the person who signed the pleadings should have been aware that they were frivolous." Baker v. Alderman, 158 F.3d 516, 524 (11th Cir. 1998). If the court finds that the party failed to make a reasonable inquiry, then sanctions are warranted "despite the [party's] good faith belief that the claims were sound." Worldwide Primates, Inc., 87 F.3d at 1254. A district court's decision to award Rule 11 sanctions is reviewed for abuse of discretion. Massengale, 2001 WL 1172691, at *3.
III. ANALYSIS.
A. Tobias's Claim is Objectively Frivolous.
Tobias alleges in this case that the Notices of Federal Tax Lien filed against him were fraudulent pursuant to Florida Statute § 713.31 and should be discharged pursuant to Florida Statute § 713.21. In his earlier complaint, Tobias alleged that the Notice of Tax Lien must be discharged pursuant to section 713.21. Both sections 713.21 and 713.31 are part of the Florida statutory provisions addressing construction liens. See Fla. Stat. Ch. 713, Part I ("Construction Liens"). "Lienor" for purposes of chapter 713 is defined to mean a contractor, a subcontractor, a sub-subcontractor, a laborer, a materialman, or a person who performs services as an architect, landscape architect, interior designer, engineer, or surveyor and mapper. Nothing in these provisions supports Tobias's assertion that these statutes apply to liens filed by the IRS, an agency not within the definition of lienors governed by these statutory provisions.
Moreover, despite the differing descriptions of the defendants, both of Tobias's complaints in this Court are, in essence, claims against the United States. In the earlier case, the named defendant was Van O'Neal, a IRS agent. In her order dismissing that case, Judge Conway held that a suit against an IRS employee in his official capacity was a suit against the United States, which suit was barred by sovereign immunity. In the instant case, one of the named defendants is Jane/John Doe, who was to be served in care of the Secretary of the Treasury. Once again, this attempt to sue an employee of the Department of the Treasury, of which the IRS is a part, is, in essence, a suit against the United States. As such, the claim is barred by the doctrine of sovereign immunity for the same reasons Judge Conway found Tobias's earlier claim under section 713.21 to be barred.
Accordingly, I find that Tobias's claim in this case is objectively frivolous.
B. Reasonable Inquiry Would Have Revealed to Tobias that His Claim Was Objectively Frivolous.
There is no evidence that Tobias is an attorney or that he has any legal education. Nevertheless, reasonable inquiry would have revealed to Tobias that his claim was objectively frivolous.
Tobias had direct notice through Judge Conway's order of dismissal in the earlier case that claims against an employee of an agency of the United States, in the employee's official capacity, were, in essence, claims against the United States. Judge Conway's order put Tobias on notice that a claim against the United States could not be brought unless the United States expressly consented to be sued on the claim. Tobias is also aware of a decision by the Honorable Steven D. Merryday, United States District Judge, holding that a suit for violation of Florida Statutes §§ 713.21 and 713.22 against an employee of the IRS acting in his official capacity is barred by sovereign immunity; Tobias attached a copy of this decision to his Third Administrative Notice of Error filed in this case. (Doc. No. 19 (attaching opinion in Hokanson v. O'Neal, Case No. 8:00-CV-639-T-23F (Merryday, J.)]). Other publicly-available opinions by judges of this Court agree with Judges Conway's and Merryday's analyses. See, e.g., Evans v. O'Neal, No. 3:00-CV-949-J-25TJC, 2001 WL 846499 (M.D. Fla. May 17, 2001)(Adams, J.); Huang v. O'Neal, No. 6:01CV135-ORL-28JGG, 2001 WL 752589 (M.D. Fla. April 17, 2001)(Antoon, J.); Slayback v. O'Neal, No. 6:01-CV-171-ORL19JGG, 2001 WL 361597 (M.D. Fla. Mar. 5, 2001)(Fawsett, J.); Joseph v. O'Neal, No. 6:00-CV-1423-ORL-31A, 2000 WL 33155887 (M.D. Fla. Dec. 20, 2000)(Presnell, J.); Militello v. O'Neal, No. 8:00-CV-1635-T-17A, 2000 WL 1607319 (M.D. Fla. Sept 29, 2000)(Kovachevich, J.); Busby v. O'Neal, No. 6:00-CV-392-ORL-31A, 2000 WL 1058976 (M.D. Fla. June 28, 2000)(Presnell, J.; Spaulding, M.J.).
In the documents filed in this case, Tobias argues that the United States and its agents waived sovereign immunity by filing liens against him in Seminole County. (Doc. No. 19). He cites no legal authority for this proposition. Reasonable inquiry would have disclosed that this argument is not based on a legal theory that has a reasonable chance of success and that the theory cannot be advanced as a reasonable argument to change existing law.
Therefore, I conclude that reasonable inquiry would have disclosed to Tobias that his claim was objectively frivolous.
C. Tobias Filed This Complaint in Bad Faith.
There is also evidence that Tobias filed this complaint in bad faith. In Militello, Judge Kovachevich observed that cases such as the instant one appear "to be identical to a group of tax protest cases moving through state and federal courts contemporaneously." 2000 WL 1607319, at * 1. This observation is supported in this case by the published decision of the Honorable Arthur B. Briskman, United States Bankruptcy Judge, with respect to Tobias's filing for bankruptcy relief in 1995. In re Tobias, 200 B.R. 412 (M.D. Fla. 1996). In the bankruptcy case, Judge Briskman ordered Tobias and his wife, Kay M. Tobias, to file proof of filing tax returns for the years 1993 and 1994. In derogation of Judge Briskman's order, Tobias and his wife filed affidavits entitled "Actual and Constructive Notice of Declaration" in lieu of tax returns. Judge Briskman gave Tobias and his wife another opportunity to file tax returns for the years 1993 and 1994, but they refused to do so. As a result, Judge Briskman found that Tobias and his wife "lacked good faith in the filing of this bankruptcy case," and he dismissed the case. Id. at 413-15.
Judge Briskman's description of Tobias's actions in his bankruptcy case support a finding that Tobias has objections to filing income tax returns. His complaints in this case and the earlier case filed in this Court also appear to arise from protests against the payment of income taxes, rather than from a good faith belief that the law supports the claims that he has made. Based on the totality of these circumstances, I conclude that he filed the complaint in this case in bad faith.
D. Appropriate Sanctions.
A pro se litigant is subject to sanctions under Rule 11. Schramek v. Jones, 161 F.R.D. 119, 121 (M.D. Fla. 1995). "The goal of Rule 11 sanctions is to `reduce frivolous claims, defenses, or motions, and to deter costly meritless maneuvers.'" Massengale, 2001 WL 1172691, at *3 (quoting Donaldson v. Clark, 819 F.2d 1551, 1556 (11th Cir. 1987) (en banc)).
The United States suggests that a monetary sanction is the most effective means to deter Tobias from filing future frivolous complaints. However, a monetary sanction is not effective unless it can be collected. There is no evidence in the record that Tobias has the ability to pay a monetary sanction or that, even if he does, he would abide by an order requiring that he pay such a sanction.
In this circuit, a court must consider the part/s financial ability to pay in determining whether monetary sanctions should be imposed for violation of Rule 11. Baker, 158 F.3d at 529.
Therefore, I determine that the most effective way to ensure that Tobias does not file frivolous lawsuits in this Court is to preclude him from filing future complaints unless he has obtained leave of this Court to file a complaint pro se or the complaint is filed on his behalf by an attorney who is a member of the bar of this Court. This sanction has been used in other cases in this circuit. See, e.g., Martin-Trigona v. Shaw, 986 F.2d 1384, 1387-88 (11th Cir. 1993); In re Busby, 231 B.R. 363 (M.D. Fla. 1998); Schramek, 161 F.R.D. at 122. This sanction is an appropriate way to deter the filing of future, frivolous claims without precluding Tobias's right of access to the Court with respect to claims that can be filed in compliance with the requirements of Rule 11. See Martin-Trigona, 986 F.2d 1387.
IV. RECOMMENDATION.
For the reasons stated herein, I respectfully recommend that the Court GRANT the Motion for Sanctions (Doc. No. 13). I further recommend that the Court prohibit Tobias from filing any complaints in the United States District Court for the Middle District of Florida unless he is represented by counsel admitted to the bar of this Court or he obtains leave of court to file a complaint pro se.
Failure to file written objections to the proposed findings and recommendations contained in this report within ten (10) days from the date of its filing shall bar an aggrieved party from attacking the factual findings on appeal.
Recommended.