Bowers et al v. Denali State Bank et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
GERALD L. BOWERS,
Plaintiff,
v.
DENALI STATE BANK and FIRST
NATIONAL BANK ALASKA,
Defendants.
Case No. 4:21-cv-00007-SLG-MMS
ORDER RE REPORT AND RECOMMENDATION
Before the Court at Docket 29 is Defendants Denali State Bank, Denali
Bankcorporation, Inc., Lundgren, Weaver, Pletnikoff, Heckman, and Hines’ Motion
to Dismiss. Plaintiffs responded in opposition at Docket 35 to which Denali
Defendants replied at Docket 41. Also before the Court at Docket 37 is Defendants
First National Bank Alaska, Betsy Lawer, Jerry Walker, and Bill Refrew’s Joinder
and Motion to Dismiss. Plaintiffs responded in opposition at Docket 39,
Defendants replied in support of the motion at Docket 43, and Plaintiffs filed a
notice regarding both sets of Defendants’ replies at Docket 44.
Also before the Court at Docket 51 is FNBA Defendants’ Motion to Enforce
Orders on Service. Denali Defendants joined the motion at Docket 54. Plaintiffs
responded in opposition at Dockets 57 and 58. FNBA Defendants filed a reply in
support of the motion at Docket 60; Denali Defendants filed a reply in support of
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the motion at Docket 61. Plaintiffs filed supplemental objections at Dockets 64 and
65.
These motions were referred to the Honorable Magistrate Judge Deborah
M. Smith. At Docket 67, Judge Smith issued a Report and Recommendation, in
which she recommended that the Denali Defendants’ motion to dismiss at Docket
29 be granted and the FNBA Defendants’ motion to enforce orders of service at
Docket 51 be granted in part. Plaintiffs filed objections to the Report and
Recommendation at Docket 69; FNBA Defendants filed a response to Plaintiffs’
objections at Docket 72; and Plaintiffs filed a reply to the FNBA Defendants’
response at Docket 75. Denali Defendants filed a response to Plaintiffs’ objections
at Docket 73; and Plaintiffs filed a reply to the Denali Defendants’ response at
Docket 76.
The matter is now before this Court pursuant to 28 U.S.C. § 636(b)(1). That
statute provides that a district court “may accept, reject, or modify, in whole or in
part, the findings or recommendations made by the magistrate judge.”1 A court is
to “make a de novo determination of those portions of the magistrate judge’s report
or specified proposed findings or recommendations to which objection is made.” 2
But as to those topics on which no objections are filed, “[n]either the Constitution
1 28 U.S.C. § 636(b)(1).
2 Id.
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nor [28 U.S.C. § 636(b)(1)] requires a district judge to review, de novo, findings
and recommendations that the parties themselves accept as correct.”3
When reviewing a Rule 12(b)(6) motion, a court considers only the pleadings
and documents incorporated into the pleadings by reference, as well as matters
on which a court may take judicial notice.4 “To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as true, to ‘state a claim
to relief that is plausible on its face.’”5 A claim is plausible on its face “when the
plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.”6 “Factual
allegations must be enough to raise a right to relief above a speculative level[.]”7
However, “the tenet that a court accept as true all of the allegations contained in a
complaint is inapplicable to legal conclusions.”8 As such, “[a] pleading that offers
‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of
action will not do.’”9
3 United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003); see also Thomas v. Arn,
474 U.S. 140, 150 (1985) (“It does not appear that Congress intended to require district court
review of a magistrate’s factual or legal conclusions, under a de novo or any other standard,
when neither party objects to those findings.”).
4 Metzler Inv. GMBH v. Corinthian Colls., Inc., 540 F.3d 1049, 1061 (9th Cir. 2008) (citing Tellabs,
Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007)).
5 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)).
6 Id. (citing Twombly, 550 U.S. at 556).
7 Twombly, 550 U.S. at 555.
8 Iqbal, 556 U.S. at 678.
9 Id. (quoting Twombly, 550 U.S. at 555).
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“Dismissal without leave to amend is improper unless it is clear . . . that the
complaint could not be saved by any amendment.”10 However, “a district court
does not err in denying leave to amend where the amendment would be futile.”11
In determining whether amendment would be futile, a court examines whether the
complaint could be amended to cure the defect requiring dismissal “without
contradicting any of the allegations of [the] original complaint.”12
First, the Court finds that the claims of the entity Plaintiffs (i.e. all Plaintiffs
except Mr. Bowers) should be dismissed because they do not have an attorney.
This is because an entity such as an LLC or a corporation must be represented by
an attorney in federal court.13 However, Mr. Bowers has indicated that he may
“retain an attorney to represent the artificial entity plaintiffs.” Accordingly, the
dismissal of the entity Plaintiffs from this case will be without prejudice to permit
these Plaintiffs to obtain legal representation in this action prior to the filing of an
amended complaint as discussed below.
Second, the Court finds that Plaintiff have not effectuated valid service upon
any of the individual defendants. As the Magistrate Judge correctly explained,
10 Missouri ex rel. Koster v. Harris, 847 F.3d 646, 655–56 (9th Cir. 2017) (quoting Thinket Ink Info
Res., Inc. v. Sun Microsystems, Inc., 368 F.3d 1053, 1061 (9th Cir. 2004)).
11 Id. at 656 (quoting Thinket Ink Info Res., Inc., 368 F.3d at 1061).
12 Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990).
13 Rowland v. California Men’s Colony, 506 U.S. 194, 201–02 (1993) (holding that “a corporation
may appear in the federal courts only through licensed counsel”); D-Beam Ltd. P’ship v. Roller
Derby Skates, Inc., 366 F.3d 972, 973 (9th Cir. 2004) (“It is a longstanding rule that ‘[c]orporations
and other unincorporated associations must appear in court through an attorney’” (quoting In re
Am. W. Airlines, 40 F.3d 1058, 1059 (9th Cir. 1994))).
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service must be in accordance with Federal Rule of Civil Procedure 4. “Blanket
mailings to groupings of defendants at businesses addresses is wholly insufficient”
and is not in accordance with Rule 4.14 It appears that Mr. Bowers disagrees as
to the sufficiency of this process and does not intend to perform any other service
of the complaint or other filings upon these individual defendants . Accordingly,
pursuant to Rule 4(m), all claims against the individual defendants will be
dismissed without prejudice.15
Third, with respect to the allegations that Denali State Bank did not have a
valid state business license, the Court adopts the Magistrate Judge’s analysis that
this does not state a valid claim under RICO and, to the extent the lack of a license
began prior to the limitations period and continued to 2019, it does not constitute
a new injury under the injury discovery rule. Likewise, the Court adopts the
Magistrate Judge’s rejection of the claims against Denali for levying funds, the
claims against Yukon Title Company, the Alaska State Court System, and the
Federal District Court for the District of Alaska in connection with their unexplained
roles in an apparent foreclosure of a house on Eton Boulevard. Likewise, the Court
adopts the Magistrate Judge’s analysis and finds that the Amended Complaint fails
to state a viable cause of action against Tanana Chiefs Conference or Key Bank.
14 Docket 38 at 6.
15 Timeliness of service is governed by Federal Rule of Civil Procedure 4(m), which provides that
“[i]f a defendant is not served within 90 days after the complaint is filed, the court—on motion or
on its own after notice to the plaintiff—must dismiss the action without prejudice against that
defendant or order that service be made within a specified time. But if the plaintiff shows good
cause for the failure, the court must extend the time for service for an appropriate period.”
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Fourth, the Court addresses whether Plaintiff Bowers has stated a plausible
cause of action under RICO against Denali State Bank or FNBA. On de novo
review, the Court adopts the Magistrate Judge’s statement of facts.16 The Court
finds that the applicable statute of limitations for RICO civil enforcement actions is
four years.17 And the Court agrees with the Magistrate Judge that the alleged
racketeering activity must be pleaded with particularity.18 The Court adopts the
Magistrate Judge’s analysis insofar as the judge determined that many of the
alleged “improprieties” fall outside of the four year statute of limitations, and should
be dismissed for that reason.19 The Amended Complaint does allege several
“improprieties” that are ongoing, and thus might fall within the statute of limitations.
But the Amended Complaint fails to adequately allege how these alleged acts fall
within the injury discovery rule. As explained by the Supreme Court and quoted
by the Magistrate Judge, “[two elements characterize an overt act which will restart
the statute of limitations: 1) it must be a new and independent act that is not merely
a reaffirmation of a previous act; and 2) it must inflict new and accumulating injury
on the plaintiff.”20 The Amended Complaint does not adequately address either of
these elements with respect to each alleged impropriety that might arguably fall
16 Docket 67 at 3-4.
17 Agency Holding Corp. v. Molley-Duff & Associates, 483 U.S. 143, 156 (1987).
18 Docket 67 at 7–8, citing Lancaster Cnty. Hosp. v. Antelope Hosp. Dist., 940 F. 2d 397, 405 (9th
Cir. 1993).
19 See Docket 67 at 10 (listing paragraphs).
20 Docket 67 at 7 (quoting Agency Holding Corp., 483 U.S. at 156.).
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within the statute of limitations; each of these elements must be pleaded with
particularity. Therefore, the Amended Complaint will be dismissed.
Plaintiffs’ objection to the Report and Recommendation identifies a letter
from December 2018, which they maintain “trigger[s] the accrual rule domino effect
for another previous four year window of accumulated RICO Offenses.”21 But for
the reasons set forth by Denali Defendants in their response to those objections,
the Court finds that the letter constitutes a continuation of previous collection
efforts and is not a new and independent act sufficient to restart the limitations
period.22
However, the Court will accord to Mr. Bowers the opportunity to file a Second
Amended Complaint in an attempt to remedy these deficiencies. A Second
Amended Complaint shall, at a minimum, clearly indicate the precise injury to each
plaintiff caused by each defendant, shall clearly state the precise date on which
each plaintiff knew or should have known of that alleged injury having been caused
by each defendant to that plaintiff, and plausibly allege facts that if proven, would
entitle that plaintiff to relief. Any entity plaintiff must be represented by a licensed
attorney.
As explained in the Magistrate Judge’s Report and Recommendation, a civil
RICO plaintiff must allege plausible facts that if proven true would show: 1)
21 Docket 69 at 3.
22 Docket 73 at 7. See also Docket 72 at 2-3 (“As a matter of law, the Magistrate properly
concluded the December 20, 2018 letter did not restart a new or separate accrual period.”).
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conduct; 2) of an enterprise;23 3) through a pattern;24 4) of racketeering activity;25
5) that causes injury to the plaintiff’s business or property.26 A pattern of
racketeering activity requires at least two predicate acts that creates a threat of
continuing criminal activity.27 A plaintiff must show that the alleged injury to
business or property was caused by the conduct that constitutes the RICO
violation.28 Lastly, a plaintiff’s allegations must be in accordance with the four-year
statute of limitations for RICO civil enforcement and the injury discovery rule;29 and
plead with particularity as required by Rule 9 of Federal Civil Procedure.
IT IS THEREFORE ORDERED:
1. On de novo review, the Court ADOPTS the Report and Recommendati on
at Docket 67 as to the Statement of Facts and as set forth above.
2. FNBA Defendants’ Motion to Enforce Orders at on Service at Docket 51
is GRANTED as follows: FNBA Defendants and Denali Defendants
may return or destroy the received boxes of blanket mailings in this case;
all claims against individual defendants are DISMISSED WITHOUT
23 18 U.S.C. § 1961(4).
24 18 U.S.C. §1961(5).
25 18 U.S.C. § 1961(1).
26 Living Designs, Inc. v. E.I. Dupont de Nemours & Co., 431 F.3d 353, 361 (9th Cir. 2005); accord
Grimmett v. Brown; 75 F. 3d 506, 510 (1996).
27 H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 237–38 (1989).
28 Canyon County v. Syngenta Seeds, Inc., 519 F.3d 969, 975 (9th Cir. 2008) (quoting Sedima,
S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985).
29 Agency Holding Corp, 483 U.S. at 156; Grimmett, F.3d at 511.
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PREJUDICE for lack of service in accordance with Rule 4(m) of Federal
Civil Procedure.
3. The entity plaintiffs (Bowers Investment Company LLC, Bower’s Office
Products Inc., Yukon Maxi-Storage, and Bowers General Construction)
cannot be represented by a self-represented plaintiff and are each
DISMISSED WITHOUT PREJUDICE.
4. All claims against Yukon Title Company, the Alaska State Court System,
the Federal District Court for the District of Alaska, the Tanana Chiefs
Conference, and Key Bank are DISMISSED WITHOUT PREJUDICE for
failure to state a viable claim for relief.
5. In light of the foregoing, the case caption is amended as set forth at the
outset of this order.
6. The Denali Defendants’ Motion to Dismiss at Docket 29 and the FNBA
Defendants’ Motion to Dismiss at Docket 37 are each GRANTED. The
Amended Complaint is DISMISSED WITHOUT PREJUDICE for failure
to state a claim upon which relief can be granted; however, the Court
grants leave to amend.
7. Plaintiff Gerald L. Bowers has 30 days from the date of this Order to
file one of the following:
a. Amended Complaint, in which Mr. Bowers would restate some or
all of his claims after correcting each of the deficiencies in
accordance with this order; OR
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b. Notice of Voluntary Dismissal, which would inform the Court that
Mr. Bowers no longer wishes to pursue his lawsuit and result in the
dismissal of the entire action.
8. An amended complaint will replace the prior complaint in its entirety. 30
An amended complaint must include all of the claims Mr. Bowers seeks
to bring. Any claims not included in the amended complaint will be
considered waived.
9. If Mr. Bowers does not file either an Amended Complaint or a Notice of
Voluntary Dismissal within 30 days of the date of this Order this case
will be DISMISSED WITH PREJUDICE.
10. Each litigant is responsible for keeping a copy of each document filed
with the Court. When a litigant mails a document to the Court, the litigant
receives a Notice of Electronic Filing (“NEF”) from the Court that indicates
when that document was filed on the docket and the docket number of
the document. Copies of documents that have been filed with the Court
may be obtained from the Clerk’s Office for $0.50 per page. In the event
of special circumstances or serious financial need, a party may file a
motion asking for the cost of copies to be waived or reduced.
11. At all times, Mr. Bowers must keep the Court informed of any change
of address. Such notice shall be titled “NOTICE OF CHANGE OF
30 See Fed. R. Civ. P. 15; Local Civil Rule 15.1.
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ADDRESS.” This notice must not include any requests for any other
relief, and it must be served on any Defendant’s attorney who makes an
appearance in this case. Failure to file a notice of change of address
may result in the dismissal of this case under Rule 41(b) of the Federal
Rules of Civil Procedure.
12. The Clerk of Court is directed to send Mr. Bowers the following forms
with this Order: (1) AO Pro Se 1 Complaint for a Civil Case; (2) AKD
PS09, Notice of Voluntary Dismissal; (3) form PS23, Notice of Change of
Address; and (4) the District Court’s handbook, “REPRESENTING
YOURSELF IN ALASKA’S FEDERAL COURT.”
DATED this 28th day of October, 2021 at Anchorage, Alaska.
/s/ Sharon L. Gleason
UNITED STATES DISTRICT JUDGE
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