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Cornforth v. Fidelity Investments

United States District Court, W.D. Oklahoma

February 16, 2017




         Before the Court is Defendant Fidelity Investments' Motion for Judgment on the Pleadings. (Doc. 34). For the reasons that follow, that Motion is GRANTED.


         Defendant asks this Court to enter judgment on the pleadings against Plaintiff Richard Cornforth, proceeding pro se, on the bases of issue and claim preclusion, failure to state a claim, and the Rooker-Feldman doctrine. Because the Court agrees that Plaintiff's claims are barred by claim preclusion due to two earlier Florida state court judgments, the Court need not address Defendant's remaining arguments.

         This dispute began with Plaintiff's divorce proceedings in an Oklahoma County District Court. That court awarded Plaintiff's ex-wife maintenance, which Plaintiff apparently failed to pay. The Oklahoma state court then issued a series of judgments, restraining orders, a qualified domestic relations order (allocating one of Plaintiff's accounts with Fidelity to his ex-wife), and a series of garnishments directed to Plaintiff's other accounts with Fidelity. In short, these orders essentially barred Plaintiff's access to his Fidelity accounts and compelled Fidelity to pay the funds in those accounts over to Plaintiff's ex-wife.

         Plaintiff then filed two separate lawsuits against Fidelity in Volusia County, Florida.

         (Doc. 33, Ex. 3; Doc. 34, Ex. 4). Both of these lawsuits featured Plaintiff's allegations that Fidelity was in some way perpetrating fraud upon him by abiding by the Oklahoma County District Court's Order and refusing to pay him out of his accounts. The first case (Cornforth I) was resolved in May 2014 when a Florida court granted summary judgment in favor of Fidelity on all claims. (Doc. 33, Ex. 6). Recognizing the impact of the Oklahoma divorce proceedings, the Florida court found that there were

presently in effect one or more valid orders and judgments of the District Court of Oklahoma County, Oklahoma, expressly requiring Fidelity to withhold all annuity payments with respect to Plaintiff's annuity, and that Fidelity is therefore excused, as a matter of law, from the legal obligations it would otherwise have to make such payments.

(Id. at 3).

         Plaintiff's second suit against Fidelity (Cornforth II), which was resolved in December 2014 and concerned the same failures to pay that had been at issue in Cornforth I, ended in summary judgment being entered against Plaintiff. (Doc. 33, Ex. 11). Again, the Court acknowledged that Fidelity was under a legal duty to retain control over Plaintiff's accounts and recognized that the orders and judgments of the District Court of Oklahoma County required “Fidelity, a garnishee in the Oklahoma case to withhold, sell, or transfer ownership of the Annuity, Investment Account, and AOL Account . . . in order to satisfy various judgments, and writs of garnishment levied against Mr. Cornforth, and his assets, in Oklahoma, and stemming from the Oklahoma case . . .” (Doc. 33, Ex. 11, at 3). Fidelity, the court found, had good reason not to pay Plaintiff: it “acted lawfully, reasonably, and appropriately in complying with the Oklahoma orders.” (Id.). At in any event, Plaintiff's claims were barred by res judicata because “the same issues, disputes, and causes of action were raised, could have been raised, or were otherwise litigated by the same parties” in Cornforth I. (Id.).

         This time, Plaintiff has paired his fraud claim, brought under 18 U.S.C. § 1341, with an allegation of a RICO violation under 18 U.S.C. § 1962. Plaintiff's new RICO claim, however, is immaterial to the preclusion analysis: this case is for all intents and purposes the same as Cornforth I and Cornforth II, and thus demands dismissal under Federal Rule of Civil Procedure 12(c).

         A motion under Rule 12(c) is evaluated the same as a motion under Rule 12(b). See, e.g., BV Jordanelle, LLC v Old Republic Nat'l Title Ins. Co., 830 F.3d 1195, 1200 (10th Cir. 2016). Thus the standards applicable to a Rule 12(b)(6) motion govern Fidelity's preclusion arguments, [1] meaning Plaintiff's “complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Further, the Court can consider the impact of the earlier state court judgments on this case; under Rule 12(b)(6), when a “document is referred to in the complaint and is central to the plaintiff's claim a defendant may submit an indisputably authentic copy to the court to be considered on a motion to dismiss.” GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997).

         Further, “facts subject to judicial notice may be considered in a Rule 12(b)(6) motion without converting the motion to dismiss into a motion for summary judgment, ” and the Court may “take judicial notice of its own files and records, as well as facts which are a matter of public record.” Tal v. Hogan, 453 F.3d 1244, 1265 n.24 (10th Cir. 2006). The Court has reviewed both the complaints and orders granting summary judgment against Plaintiff from the earlier Florida cases and thus takes judicial notice of those proceedings.

         Plaintiff's new suit is merely a reiteration of his old. Because federal courts must “give preclusive effect to state-court judgments when the courts of the State from which the judgments emerged would do so, ” it is Florida law that mandates dismissal of this suit. Fundamentalist Church of Jesus Christ of Latter-Day Saints v. ...

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