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Fleming v. Sims

United States District Court, D. Colorado

February 28, 2019



          William J. Martínez, United States District Judge

         This matter is before the Court on United States Magistrate Judge N. Reid Neureiter's Recommendation dated October 31, 2018 (the “Recommendation”; ECF No. 237), which recommended that this Court (1) enter default judgment in favor of Plaintiff Richard Max Fleming (“Plaintiff”) and against Defendant LDS Financial Charter Services Co.; and (2) grant in part and deny in part Plaintiff's motion for damages (“Motion for Damages”; ECF No. 219). The Recommendation is incorporated herein by reference. See 28 U.S.C. § 636(b)(1)(B); Fed.R.Civ.P. 72(b). Plaintiff filed a timely Objection to the Recommendation (“Objection”; ECF No. 240).

         For the reasons set forth below, the Recommendation is adopted in part, adopted as modified in part, and rejected in part, Plaintiff's Motion for Damages is denied, Plaintiff's Objection is overruled, Defendant Larry Sims's improper objection is vacated, and Plaintiff is ordered to show cause why judgment should not be entered against him.


         When a magistrate judge issues a recommendation on a dispositive matter, Federal Rule of Civil Procedure 72(b)(3) requires that the district judge “determine de novo any part of the magistrate judge's [recommendation] that has been properly objected to.” An objection to a recommendation is properly made if it is both timely and specific. United States v. 2121 East 30th St., 73 F.3d 1057, 1059 (10th Cir. 1996). An objection is sufficiently specific if it “enables the district judge to focus attention on those issues-factual and legal-that are at the heart of the parties' dispute.” Id. In conducting its review, “[t]he district court judge may accept, reject, or modify the recommendation; receive further evidence; or return the matter to the magistrate judge with instructions.” Fed.R.Civ.P. 72(b)(3).

         In considering the Recommendation, the Court is also mindful of Plaintiff's pro se status, and accordingly, reads his pleadings and filings liberally. Haines v. Kerner, 404 U.S. 519, 520-21 (1972); Trackwell v. United States, 472 F.3d 1242, 1243 (10th Cir. 2007). The Court, however, cannot act as advocate for Plaintiff, who must still comply with the fundamental requirements of the Federal Rules of Civil Procedure. See Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991); see also Ledbetter v. City of Topeka, 318 F.3d 1183, 1188 (10th Cir. 2003). As previously noted, Plaintiff holds himself out as an “M.D., J.D., ” thus it appears he has earned a law degree. (ECF No. 1 at 1.) If Plaintiff is a lawyer, he may not be “automatically subject to the very liberal standards afforded to a non-attorney pro se plaintiff because an attorney is presumed to have a knowledge of the legal system and need less protections from the court.” Richards v. Duke Univ., 480 F.Supp.2d 222, 234 (D.D.C. 2007).

         The question addressed by the Recommendation is whether the Court should grant default judgment. Default must enter against a party who fails to appear or otherwise defend a lawsuit. Fed.R.Civ.P. 55(a). Pursuant to Rule 55(b)(1), default judgment must be entered by the Clerk of Court if the claim is for “a sum certain”; in all other cases, “the party must apply to the court for a default judgment.” Fed.R.Civ.P. 55(b)(2). “[D]efault judgment must normally be viewed as available only when the adversary process has been halted because of an essentially unresponsive party. In that instance, the diligent party must be protected lest he be faced with interminable delay and continued uncertainty as to his rights. The default judgment remedy serves as such a protection.” In re Rains, 946 F.2d 731, 732-33 (10th Cir. 1991) (internal quotation marks and citation omitted).

         “Even after [entry of] default, however, it remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law.” Bricklayers & Trowel Trades Int'l Pension Fund v. Denver Marble Co., 2019 WL 399228, at *1 (D. Colo. Jan. 31, 2019). Additionally, a court need not accept conclusory allegations. Moffett v. Halliburton Energy Servs., Inc., 291 F.3d 1227, 1232 (10th Cir. 2002). Although “[s]pecific facts are not necessary” in order to state a claim, Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)), the well-pleaded facts must “permit the court to infer more than the mere possibility of misconduct.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (internal quotation marks omitted).

         Moreover, “entry of a default judgment is committed to the sound discretion of the district court.” Tripodi v. Welch, 810 F.3d 761, 764 (10th Cir. 2016); see also Greenwich Ins. Co. v. Daniel Law Firm, 2008 WL 793606, at *2 (D. Colo. Mar. 22, 2008) (“[A] party is not entitled to a default judgment as of right; rather the entry of a default judgment is entrusted to the ‘sound judicial discretion' of the court.”). Therefore, and in conjunction with Plaintiff's timely Objection to the Recommendation, this Court will review the issues before it de novo.


         This dispute revolves around a $250, 000 grant and $3, 800 rental payment Plaintiff alleges was promised to him by Defendants LDS Financial Charter Service Co. (“LDS”), Blactino Entertainment (“Blactino”), Larry D. Sims (“Larry Sims”), and Jeffery Sims (“Jeffery Sims”) (collectively, “Defendants”). At the outset, the Court notes that there is nothing that Plaintiff submits or that the Court can consider in the case's current default judgment posture that explains how the parties met, [1] what LDS and Blactino are, how discussions about the $250, 000 grant and $3, 800 rental payment came about, how Plaintiff came to believe the Defendants had the resources to give Plaintiff such funds, what is the nature of the parties' relationship, among other things. From the Court's perspective, the alleged contract regarding the $250, 000 grant and the $3, 800 rental payment appeared ex nihilo on June 28, 2017.

         The record provides that on that date, LDS sent Plaintiff the following document:

         (Image Omitted)

         (The “Grant”; ECF No. 146-1 at 4-5.)

         Plaintiff wrote on the Grant the last four digits of his social security number, stated that he was a “heart, cancer” doctor, and signed the document.[2] (Id.) Plaintiff then faxed the document back to Defendants the same day and provided them with his banking information. (ECF No. 146 at 2.) Plaintiff alleges that the Grant was for the “licensing and promotion of breast cancer and [a] heart disease patent.” (Id.) Plaintiff also claims that in addition to the Grant, Defendants promised to pay for a month of Plaintiff's apartment rent, which amounted to $3, 800 (“Rent Payment”). (Id.) Over the next few days, Plaintiff started sending Defendants a torrent of e-mails and faxes inquiring about payment. (See, e.g., ECF No. 146-1 at 7-16.)

         By July 2, 2017, Defendants had not tendered any money to Plaintiff, and instead “reported that there were power outages, which set them behind several days.” (ECF No. 146 at 2.) Defendants “then posted on their website that Jeffrey Sims, brother of CEO Larry D. Sims[, ] was hospitalized.” (Id.) According to Plaintiff, Jeffrey Sims was taken to the emergency room on July 7, 2017, but was never hospitalized. (Id.) Plaintiff claims to have “sent several faxes and emails to confirm the guarantee of the [c]ontractually [a]greed to monies and on each occasion plaintiff was assured that the error was on the defendant's end and not the plaintiffs [sic] and that the funds were GUARANTEED TO COME TO PLAINTIFF.”[3] (Id. (emphasis in original).)

         Plaintiff also alleges that Larry Sims repeatedly promised to submit the Rent Payment directly to the manager of Plaintiff's apartment complex (the “Apartment Manager”). (Id.) During a telephone call between Larry Sims, Plaintiff, and the Apartment Manager, Larry Sims allegedly promised that “he was overnighting a check for $3800 for rent payment including late fees and would send the rest of the $250, 000 electronically the following week, but wanted to make certain the rent would be taken care of without delay to avoid eviction of plaintiff.” (Id. at 3.)

         On July 13, 2017, the Apartment Manager sent a fax to Larry Sims inquiring about the funds. (Id.; see ECF No. 146-1 at 22.) Blactino responded with a fax, stating that Larry Sims was “unable to address this or any matter, due to a serious car accident he was in, he or [sic] CEO is now in a COMA, and I as is this office is trying to retrace his action(s) so that we MAY complete them.”[4] (Id. at 24 (emphasis in original).) In addition, Blactino asked the property manager for the amount of rent that it needed to pay. (Id.) The property manager wrote on the fax her name, number, and the amount due, and sent the document back to Blactino. (Id.)

         In response, Jeffery Sims sent a fax to the Apartment Manager that stated, in pertinent part, as follows:

[Blactino's Letterhead]
I have received you [sic] FAX and it was very RUDE, you were told the FACTS of our CEO, and all you can think about is your money...fine since you feel that you have an AGREEMENT with Mr. [Larry] Sims/CEO, upon his issue at hand I am in control and I have now CANCELLED the loan(s)/grant(s), et. al, and any matter concerning that of you or [Plaintiff] had with company...PLEASE understand DO NOT CONTACT THIS COMPANY, BLACTINO[, ] or any of its holdings again we are DONE. . . .
Mr. Jeffery R. Sims (Brother), Acting CEO for that of Larry D. Sims, until he is well to proceed.

(Id. at 25 (emphasis in original).) Plaintiff claims that this fax “breach[ed] the contract agreement of the Grant and Rent [P]ayment monies.” (ECF No. 146 at 3.) Moreover, Plaintiff asserts that “[p]ursuant to the [m]edical [r]ecords departments and the E.R.s of Parkview and St. Mary Cowin Hospitals[, ] Mr. Larry D. Sims was not and had not been hospitalized for a coma or anything else.” (Id. at 4.)

         On July 14, 2017, Plaintiff resumed his barrage of e-mails and faxes to Defendants, demanding funds for the Grant and Rent Payment. (See, e.g., ECF No. 146-1 at 26-30.) Two days later, Jeffery Sims responded saying that he had “cancelled any and all matters [Plaintiff] had with [Larry Sims] before his accident and any and all matters concerning the grant/loan.” (Id. at 29 (emphasis omitted).) Plaintiff alleges that he was “evicted for failure to pay rent after detrimentally, reasonably, and foreseeably relying upon the guaranteed rental payment and grant.” (ECF No. 146 at 4 (emphasis omitted).) Plaintiff notified the Colorado Attorney General's office, the Pueblo County District Attorney's office, the FBI, and the website, Ripoff Report. (Id. at 5.) According to Plaintiff, “[D]efendants sent a fax to the rental office threatening [P]laintiff for posting the complaint” on Ripoff Report. (Id.)


         The procedural history of this case is not easily summarized, but a brief recitation of events will be helpful.[5] On July 27, 2017, Plaintiff, proceeding pro se, filed suit against several defendants (not entirely congruent with the current group of Defendants) for breach of contract, promissory estoppel, fraud, and assault. (ECF No. 1.) After being ordered to cure certain pleading deficiencies (ECF No. 5), Plaintiff filed an amended complaint (ECF No. 26) that alleged that those defendants guaranteed him a grant of $250, 000 for the licensing and promotion of a patent associated with breast cancer and heart disease research, and agreed to make a $3, 800 rent payment for him, but failed to make either payment. (Id. at 3-5.)

         An avalanche of filings ensued, including at least 15 motions by Plaintiff for entry of default, default judgment, and related relief. (See ECF Nos. 66-67, 70, 72, 78-80, 82, 84, 89, 92, 94, 99, 115.) Plaintiff was eventually given leave to file a second amended complaint (“Second Amended Complaint”; ECF No. 146), which he did on January 25, 2018.

         The Magistrate Judge held a Scheduling Conference on May 3, 2018, at which Defendants were given until June 4, 2018, to answer or otherwise respond to Plaintiff's Second Amended Complaint.[6] (ECF No. 191 at 4.) The Magistrate Judge also gave LDS and Blactino until June 4, 2018, to retain counsel. (Id.) An Order to Show Cause was entered, and a Show Cause Hearing and Status Conference was set for June 11, 2018. (ECF No. 193.) Defendants were ordered to show cause why default judgment should not enter against them pursuant to Rule 55 for their failure to answer or otherwise respond to Plaintiff's Second Amended Complaint, and for LDS and Blactino's failure to retain counsel. (Id.)

         Defendants did not appear on June 11, 2018 for the Show Cause Hearing, nor did they answer or otherwise respond to Plaintiff's Second Amended Complaint. (ECF No. 202.) Accordingly, that day, the Magistrate Judge recommended that judgment be entered against Defendants as a sanction for their failure to comply with the court's orders and the federal and local rules of civil procedure. (ECF No. 203.)

         On August 21, 2018, this Court adopted the recommendation in its entirety, and referred the matter back to the Magistrate Judge for a recommendation as to the scope and content of the default judgment to be entered against the Defendants. (ECF No. 217.) The Clerk of Court then entered a Rule 55(a) default ...

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