MEMORANDUM AND ORDER
ALLEN SHARP, Chief Judge.
This cause is before the court on six motions to dismiss of the various defendants.
All defendants challenge the merits of the claim presented in plaintiffs complaint and request that this action be dismissed pursuant to F.R.Civ.P. 12(b)(1) for lack of jurisdiction over the subject matter and/or F.R.Civ.P. 12(b)(6) for failing to state a claim upon which relief can be granted. For the reasons stated below, all of the claims against all of the defendants are dismissed pursuant to F.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted.
I.
The facts underlying this suit are as follows. On or about September 30, 1974, plaintiff entered into a real estate mortgage agreement with the First National Bank of Rochester (First National) for the sum of $31,400.00. Thereafter, plaintiff procured additional loans from the State Exchange Bank (State Exchange Bank) in Culver, Indiana. On August 16, 1978, he borrowed the sums of $70,000 and $20,000 and on November 24, 1978, he borrowed the sum of $6,500 from State Exchange Bank. Subsequently, these loans, evidenced by separate promissory notes, were consolidated and on November 27, 1981 additional collateral was acquired to secure repayment on the loans. Plaintiff did not repay the loan according to its terms and on October 5, 1983, State Exchange Bank commenced legal proceedings to foreclose the mortgages given as security for the loan and to collect any unpaid balance.
Suit was instituted in the Fulton County Circuit Court, Cause No. 83-289,
State Exchange Bank v. Larry J. Rynearson and Bethany A. Rynearson and First National Bank of Rochester, Indiana.
First National was named defendant in the foreclosure action because it held the first mortgage on the real estate in question. It filed a cross-claim to protect its first mortgage interest.
The Fulton County Circuit Court entered judgment for State Exchange Bank on February 14, 1984 and ordered that the mortgages sued upon by State Exchange Bank and First National be foreclosed. Pursuant to this order, plaintiffs property was sold by sheriffs sale on April 23, 1984 to James J. Fritts.
On April 18, 1984 plaintiff, Larry Rynearson, filed a complaint in this court alleging a cause of action under the following statutes: 18 U.S.C. § 241; 18 U.S.C. § 242; 42 U.S.C. § 1983; 42 U.S.C. § 1985; 42
U.S.C. § 1986; 28 U.S.C. § 1331; and 28 U.S.C. § 1343. Plaintiff claims the defendant banks and their officers and agents breached contracts with the plaintiff regarding the loan of money (Count One), perpetrated a fraud on the plaintiff under the loan contracts (Count Two), charged usurious interest notes on the monies loaned (Count Three), and conspired against the plaintiff to take actions to harm him (Count Four). All four counts of plaintiffs complain stem from a primary claim that defendants did not actually loan plaintiff lawful or legal tender but merely granted him “bank credit.” Plaintiff “demands that the judgments of State Exchange Bank and First National in Cause # C 83-289 in the Fulton County Court be declared ‘ultra vires’ illegal, null and void and dismissed with prejudice,” and further seeks compensatory, exemplary and punitive damages.
In his amended complaint, plaintiff claims that defendant, Dale L. Cramer, an alleged officer or agent of State Exchange Bank conspired with newly named defendant, Edward T. Ummel (Ummel), an attorney alleged to have prosecuted a foreclosure action against the plaintiff on behalf of State Exchange Bank and newly named defendant, James T. Fritts (Fritts), the alleged purchaser of plaintiff’s foreclosed property at a Sheriff’s Sale, to deprive plaintiff of his property, under color of law, despite having received notice of this pending lawsuit. Plaintiff further alleges Cramer maliciously conspired with Ummel to have the Fulton County (Indiana) REMC shut off the electrical power to plaintiff’s property which had been foreclosed. Moreover, contemporaneous with the filing of this lawsuit, plaintiff filed documents called “Common Law Liens” against the real property of the defendants. Jurisdiction of this court is predicated upon 28 U.S.C. § 1331 and § 1343.
II.
The complaint purports to state an action cognizable under 42 U.S.C. §§ 1983, 1985 and 1986 against the named defendants. The court will address first the section 1983 claims. In order to state a claim under 42 U.S.C. § 1983, a complaint must allege a deprivation of rights, privileges or immunities secured by the Constitution or laws of the United States effected under state law.
Parratt v. Taylor,
451 U.S. 527, 535, 101 S.Ct. 1908, 1912, 68 L.Ed.2d 420 (1981). Having carefully reviewed the pleadings in this case, this court concludes that plaintiff’s complaint is deficient in these two elements. Plaintiff has not alleged a deprivation of a right, privilege or immunity arising under the Constitution or laws of the United States in Counts One, Two, or Three nor has he specifically alleged state action in connection with these imputed deprivations.
This action includes a large cast of defendants with varying degrees of involvement in the conduct forming the basis of this complaint. Plaintiff’s causes of action are all attempts to void his obligation to repay certain loans from State Exchange Bank and to recover loan interest previously paid on the ground that the monies he received did not constitute legal tender and were therefore insufficient consideration for his promise to repay. Plaintiff did not allege that there was any state action involved in the loan activity nor could he make such an allegation. Even though the bank is an entity subject to regulation by the state, such regulation does not convert the bank’s private loan actions to state action.
Jackson v. Metropolitan Edison
Co.,
419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477 (1974).
Free access — add to your briefcase to read the full text and ask questions with AI
MEMORANDUM AND ORDER
ALLEN SHARP, Chief Judge.
This cause is before the court on six motions to dismiss of the various defendants.
All defendants challenge the merits of the claim presented in plaintiffs complaint and request that this action be dismissed pursuant to F.R.Civ.P. 12(b)(1) for lack of jurisdiction over the subject matter and/or F.R.Civ.P. 12(b)(6) for failing to state a claim upon which relief can be granted. For the reasons stated below, all of the claims against all of the defendants are dismissed pursuant to F.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted.
I.
The facts underlying this suit are as follows. On or about September 30, 1974, plaintiff entered into a real estate mortgage agreement with the First National Bank of Rochester (First National) for the sum of $31,400.00. Thereafter, plaintiff procured additional loans from the State Exchange Bank (State Exchange Bank) in Culver, Indiana. On August 16, 1978, he borrowed the sums of $70,000 and $20,000 and on November 24, 1978, he borrowed the sum of $6,500 from State Exchange Bank. Subsequently, these loans, evidenced by separate promissory notes, were consolidated and on November 27, 1981 additional collateral was acquired to secure repayment on the loans. Plaintiff did not repay the loan according to its terms and on October 5, 1983, State Exchange Bank commenced legal proceedings to foreclose the mortgages given as security for the loan and to collect any unpaid balance.
Suit was instituted in the Fulton County Circuit Court, Cause No. 83-289,
State Exchange Bank v. Larry J. Rynearson and Bethany A. Rynearson and First National Bank of Rochester, Indiana.
First National was named defendant in the foreclosure action because it held the first mortgage on the real estate in question. It filed a cross-claim to protect its first mortgage interest.
The Fulton County Circuit Court entered judgment for State Exchange Bank on February 14, 1984 and ordered that the mortgages sued upon by State Exchange Bank and First National be foreclosed. Pursuant to this order, plaintiffs property was sold by sheriffs sale on April 23, 1984 to James J. Fritts.
On April 18, 1984 plaintiff, Larry Rynearson, filed a complaint in this court alleging a cause of action under the following statutes: 18 U.S.C. § 241; 18 U.S.C. § 242; 42 U.S.C. § 1983; 42 U.S.C. § 1985; 42
U.S.C. § 1986; 28 U.S.C. § 1331; and 28 U.S.C. § 1343. Plaintiff claims the defendant banks and their officers and agents breached contracts with the plaintiff regarding the loan of money (Count One), perpetrated a fraud on the plaintiff under the loan contracts (Count Two), charged usurious interest notes on the monies loaned (Count Three), and conspired against the plaintiff to take actions to harm him (Count Four). All four counts of plaintiffs complain stem from a primary claim that defendants did not actually loan plaintiff lawful or legal tender but merely granted him “bank credit.” Plaintiff “demands that the judgments of State Exchange Bank and First National in Cause # C 83-289 in the Fulton County Court be declared ‘ultra vires’ illegal, null and void and dismissed with prejudice,” and further seeks compensatory, exemplary and punitive damages.
In his amended complaint, plaintiff claims that defendant, Dale L. Cramer, an alleged officer or agent of State Exchange Bank conspired with newly named defendant, Edward T. Ummel (Ummel), an attorney alleged to have prosecuted a foreclosure action against the plaintiff on behalf of State Exchange Bank and newly named defendant, James T. Fritts (Fritts), the alleged purchaser of plaintiff’s foreclosed property at a Sheriff’s Sale, to deprive plaintiff of his property, under color of law, despite having received notice of this pending lawsuit. Plaintiff further alleges Cramer maliciously conspired with Ummel to have the Fulton County (Indiana) REMC shut off the electrical power to plaintiff’s property which had been foreclosed. Moreover, contemporaneous with the filing of this lawsuit, plaintiff filed documents called “Common Law Liens” against the real property of the defendants. Jurisdiction of this court is predicated upon 28 U.S.C. § 1331 and § 1343.
II.
The complaint purports to state an action cognizable under 42 U.S.C. §§ 1983, 1985 and 1986 against the named defendants. The court will address first the section 1983 claims. In order to state a claim under 42 U.S.C. § 1983, a complaint must allege a deprivation of rights, privileges or immunities secured by the Constitution or laws of the United States effected under state law.
Parratt v. Taylor,
451 U.S. 527, 535, 101 S.Ct. 1908, 1912, 68 L.Ed.2d 420 (1981). Having carefully reviewed the pleadings in this case, this court concludes that plaintiff’s complaint is deficient in these two elements. Plaintiff has not alleged a deprivation of a right, privilege or immunity arising under the Constitution or laws of the United States in Counts One, Two, or Three nor has he specifically alleged state action in connection with these imputed deprivations.
This action includes a large cast of defendants with varying degrees of involvement in the conduct forming the basis of this complaint. Plaintiff’s causes of action are all attempts to void his obligation to repay certain loans from State Exchange Bank and to recover loan interest previously paid on the ground that the monies he received did not constitute legal tender and were therefore insufficient consideration for his promise to repay. Plaintiff did not allege that there was any state action involved in the loan activity nor could he make such an allegation. Even though the bank is an entity subject to regulation by the state, such regulation does not convert the bank’s private loan actions to state action.
Jackson v. Metropolitan Edison
Co.,
419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477 (1974). Indeed, a state’s acquiescence in banking practices does not make those practices acts under color of state law.
Fletcher v. Rhode Island Hospital First National Bank,
496 F.2d 927 (1st Cir.)
cert. denied,
419 U.S. 1001, 95 S.Ct. 320, 42 L.Ed.2d 277 (1974). Therefore, any acts of the defendant banks, their officers and agents complained of by plaintiff were not committed by persons “acting under color of state law.”
Plaintiff’s complaint further demonstrates that he is trying to collaterally attack the legal proceedings instituted by State Exchange Bank in the Circuit Court of Fulton County, Cause No. C 83-289, to foreclose the mortgages given as security for such loans. He, again, seeks to find liability on the part of the defendant banks, their officers and agents for their role in these activities. The court, however, finds no merit to this argument. The use of legal proceedings in a state court to collect unpaid loans is not action under color of state law.
Flagg Brothers, Inc. v. Brooks,
436 U.S. 149, 98 S.Ct. 1729, 56 L.Ed.2d 185 (1978);
Bloomer Shippers Association v. Illinois Central Gulf Railroad Company,
655 F.2d 772, 776 (7th Cir.1981). More specifically, a suit to foreclose and sell land in execution of a judgment does not constitute state action.
Earnest v. Lowentritt,
690 F.2d 1198, 1201 (5th Cir.1982).
Moreover, plaintiff fails to allege, with any degree of specificity, the manner in which the individual defendants deprived him of any constitutional right. It is a well established principle of law in this circuit that to recover damages under 42 U.S.C. § 1983, a plaintiff must establish a defendant’s
personal
responsibility for the claimed deprivation of a constitutional right.
Wellman v. Faulkner,
715 F.2d 269, 275 (7th Cir.1983);
Duncan v. Duckworth,
644 F.2d 653, 655 (7th Cir.1981);
Sulie v. Duckworth,
583 F.Supp. 995, 999 (N.D.Ind.1984). This requirement is satisfied only “if [the defendant] acts or fails to act with a deliberate or reckless disregard of plaintiff’s constitutional rights, or if the constitutional deprivation occurs at [defendant’s] direction or with [defendant’s] knowledge and consent.”
Wellman v. Faulkner,
715 F.2d at 275.
In the portion of plaintiff’s complaint labeled “Factual Background” (See complaint, Section IV, pp. 4-11), plaintiff does make allegations with respect to some of the individual defendants. He contends that Albert M. Price represented to him that First National was loaning the sum of $31,500.00 at an interest rate rate of 872%. He further alleges that Jack L. Carpenter represented that State Exchange Bank was loaning to him the sums of $70,000.00, $20,-000.00 and $6,500.00, at the rates of 972%, 10% and 10% respectively. Plaintiff also states that Jack L. Carpenter and Robert W. Manuwal coerced him into consolidating his loans at State Exchange Bank and advancing additional collateral to secure repayments on the loans. None of these allegations evidence a situation in which any particular defendant participates in any deprivation of plaintiff’s constitutional rights.
Counts One, Two, Three or Four of plaintiff’s complaint also fail to state a claim under 42 U.S.C. § 1985.
Section 42
U.S.C. § 1985 is derived from section 2 of the Ku Klux Klan Act of 1871. It creates a cause of action based on a conspiracy which deprives one of access to justice or equal protection of law. The only section of § 1985 upon which plaintiff could conceivably base his complaint is section (3) which prevents conspiracies which deprive persons of equal protection or other rights and privileges. To state a cáuse of action under section 1985(3), a complaint must allege that the acts complained of were the product of racial or class based animus.
Griffin v.
Breckenridge, 403 U.S. 88, 100-02, 91 S.Ct. 1790, 1797-98, 29 L.Ed.2d 338 (1971);
Bell v. City of Milwaukee,
746 F.2d 1205, 1233 (7th Cir.1984). The only conceivable argument plaintiff may rely on is that of bias toward plaintiff and others because of their economic views, status or activities. However, conspiracies motivated by this form of bias are not covered by § 1985(3).
See United Brotherhood of Carpenters and Joiners of America, Local 610, AFL-CIO v. Scott,
463 U.S. 825, 103 S.Ct. 3352, 3360-61, 77 L.Ed.2d 1049 (1983) (a conspiracy to deny non-union employees and employers of the protection of civil and criminal laws is not covered by § 1985(3) where the conspiracy was motivated by bias against the economic views, status and activities of non-union persons). Because this complaint contains no allegations of racial or class based animus, the 42 U.S.C. '§ 1985(3) claim is unsupportable and will be dismissed.
In addition, plaintiff purports to allege a claim under 42 U.S.C. § 1986. No claim lies under 42 U.S.C. § 1986 in the absence of a valid claim under 42 U.S.C. § 1985.
Bell,
746 F.2d at 1233;
Williams v. St. Joseph Hospital,
629 F.2d 448, 451-52 (7th Cir.1980). Thus, dismissal of the 42 U.S.C. § 1985(3) claim also requires dismissal of the 42 U.S.C. § 1986 claim.
Finally, in paragraph 23 of the complaint, plaintiff has alleged that defendants State Exchange Bank and Jack L. Carpenter violated the disclosure provisions of the Truth in Lending Act 15 U.S.C. § 1601
et seq.
Plaintiff, as proof of such allegation, attached copies of disclosure
statements as Exhibit G. However, such exhibit clearly shows that the disclosures were made on August 16, 1978. Any claim plaintiff might have had regarding disclosure is now time-barred by the one year statute of limitations contained in Title 15 U.S.C. § 1640(e). Therefore, plaintiff has failed to state a claim for relief under the Federal Truth in Lending Act.
III.
The court notes the following statements made by plaintiff in his Affidavit in Opposition to Motion to Dismiss filed May 18, 1984:
m. The Doctrine of Absolute Immunity, as applied to judges, exists only when the judge acts within his jurisdiction. There are numerous Supreme Court decisions on this. See
Randall v. Brigham,
74 U.S. [7 Wall] 523, 19 L.Ed. 285 or 9 S.Ct. Digest 746.
n. Judge Allen Sharp would therefore, become liable to the Plaintiff for civil damages, if he acted without jurisdiction and dismissed this case without first having preserved the right of trial by jury under the 7th amendment he swore to uphold.
Plaintiff is here advised that this court will not tolerate any threats or forms of intimidation on the part of any party before it. This court has carefully examined the record in this case and has applied well established legal principles. As discussed above, the complaint in this case contains glaring deficiencies. Plaintiff is clearly dissatisfied with the outcome of the suit brought against him by State Exchange Bank in the Circuit Court of Fulton County. However, appropriate methods existed by which he could have challenged that judgment in the court system of the state of Indiana. This court will not allow the improper use of the civil rights statutes to hinder these defendants in carrying out their rights pursuant to a valid state court judgment and will not permit an end run around state appellate procedures.
Accordingly, it is the order of this court that, pursuant to F.R.Civ.P. 12(b)(6), the motions to dismiss of all the defendants are GRANTED; plaintiffs claims under 42 U.S.C. § 1983, 42 U.S.C. § 1985(3), 42 U.S.C. § 1986 and 15 U.S.C. § 1601
et seq.,
stated in plaintiffs original complaint as incorporated in plaintiffs amended complaint and paragraphs 10 through 19 of plaintiffs amended complaint are DISMISSED. It is further ordered that costs be assessed against plaintiff. SO ORDERED. Enter February 20, 1985.