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Neal v. Neal

United States District Court, D. Arizona

March 13, 2018

Richard Leland Neal, Plaintiff,
B Marc Neal, et al., Defendants.


          Douglas L. Rayes United States District Judge

         Before the Court are the following: Defendants' motion to dismiss (Doc. 38), Plaintiff's motion for leave to file a second amended complaint (Doc. 43), Defendants' motion to strike (Doc. 60), and Plaintiff's motion for leave to file a second motion for default judgment (Doc. 84). For the following reasons, the Court grants Defendants' motion to dismiss and denies the remaining motions.

         I. Background

         This case concerns the Claude K. Neal Family Trust (“Trust”), a revocable trust created by Plaintiff Richard Leland Neal's parents, Claude and Rita Neal (individually, “Claude” and “Rita, ” and collectively “Trustors”) on August 15, 1972. (Doc. 27 ¶¶ 15, 17-18, 20.) The Trust established that, at the death of either Trustor, the Trust estate would be divided into two sub-trusts: Trust A and Trust B. (Doc. 27-1 at 22.) These sub-trusts both were amendable and revocable while the Trustors were living. The beneficiaries of the Trust were the Trustors' two sons, Plaintiff and Defendant B. Marc Neal (“Marc”), but only upon the death of the surviving Trustor. (Id. at 25.)

         On August 19, 1988, the Trustors amended the Trust to provide that Plaintiff would forfeit his entire interest under the Trust if he litigated over the Trust in any way. The amendment also removed Plaintiff as a successor trustee and reduced his interest in the Trust to 25%. (Id. at 38-40.)

         Claude passed away on August 2, 1989 and, as a result, sub-trusts A and B were created. (Doc. 27 ¶ 17.) At this point, Trust A remained revocable and amendable and Trust B became irrevocable and unamendable. (Doc. 27-1 at 23-24, 31.) On October 25, 2001, Rita amended Trust A to remove Plaintiff as a beneficiary, leaving Plaintiff with a potential 25% interest in Trust B only.[1] (Doc. 27-1 at 42-43.) Rita later passed away on September 27, 2015. (Doc. 27 ¶ 18.) Accordingly, on October, 26, 2015, Marc, though counsel and in his capacity as trustee of Trust B, sent a letter to Plaintiff providing certain information required by Arizona law. (Doc. 27-1 at 2-3); see A.R.S. § 14-10813.

         II. Procedural History

         Plaintiff accuses Marc and Marc's two sons, Defendants Richard Wayne Neal (“Richard”) and Michael Kenneth Neal (“Michael”), of violating the federal Racketeer Influenced and Corrupt Organizations (“RICO”) Act through their management of Trust assets. He also accuses Marc and Richard of breaching their fiduciary duties under the Trust. (Doc. 27.) Plaintiff initiated this action in December 2016 (Doc. 9), and from there the proceedings snowballed.

         In March 2017, Plaintiff filed a motion for a temporary restraining order (“TRO”), in which he asked the Court to temporarily enjoin Marc and Michael from removing a billboard from Trust property. (Doc. 16.) The Court held a telephonic conference on March 13, 2017 to discuss Plaintiff's TRO request. During that conference, the parties stipulated that Defendants would take no legal action to have the billboard removed until this litigation is resolved, thereby mooting Plaintiff's motion for a TRO. (Doc. 19.) Nonetheless, Plaintiff subsequently filed a motion for preliminary injunction seeking the same relief that the parties had stipulated to during the March 13, 2017 telephonic conference. (Doc. 20.) The Court denied the motion as moot. (Doc. 22.)

         On April 6, 2017, Defendants moved to dismiss Plaintiff's complaint, arguing that Plaintiff's breach of fiduciary duty claim is barred by the statute of limitations, the complaint failed to state plausible RICO claims, and Plaintiff lacks standing to assert any claim related to the Trust. (Doc. 24.) Prior to filing their motion, Defendants conferred with Plaintiff to determine whether an amendment could avoid the need for a motion to dismiss, but concluded that Plaintiff's proposed amendments did not remedy the defects Defendants had identified. (Doc. 24-1 at 3-4.) Nonetheless, instead of responding to Defendants' motion to dismiss, Plaintiff filed his amended complaint as a matter of course. (Doc. 27.)

         On April 26, 2017, the Court extended Defendants' deadline for filing a reply in support of their motion to dismiss. The Court also extended Defendants' deadline for responding to Plaintiff's amended complaint until fourteen days after the Court ruled on the motion to dismiss. (Doc. 29.) Later, on May 2, 2017, the Court denied Defendants' first motion to dismiss as moot in light of the filing of Plaintiff's amended complaint. (Doc. 30.)

         On May 15, 2017, Defendants timely lodged a proposed enlarged motion to dismiss the amended complaint and concurrently moved for leave to exceed the page limits. (Docs. 34-36.) The Court granted Defendants' motion to exceed the page limits two days later and directed the Clerk of the Court to file the lodged motion. (Docs. 37-38.) Instead of responding to Defendants' motion to dismiss, however, Plaintiff moved for leave to file yet another amended complaint. (Doc. 43.)

         Around this time, Plaintiff also filed a series of meritless motions. First, on May 4, 2017, Plaintiff moved for a preliminary injunction to enjoin Defendants “from conducting activities that would injure or damage [him] directly or indirectly in any way, shape, or form, until such time as [his] cause of action . . . can be heard.” (Doc. 32.) Later, on June 26, 2017, Plaintiff filed another motion for a TRO, this time asking the Court to order Defendants to continue paying his rent and utility bills. (Doc. 52.) The next day, Plaintiff filed a “Motion For Exemption to Amended Red Line Comparison or As An Alternative A Motion for An Extension of Time to Leave and Amend Red Line Comparison, ” which the Court later interpreted as a veiled motion to file a third amended complaint. (Docs. 53, 54 at 2.)

         Further complicating matters, on June 17, 2017, non-party Patricia Lewis filed a motion to intervene in this action. (Doc. 48.) Lewis argued that she is a judgment creditor in a state court lawsuit against Plaintiff, and that resolution of this action in her absence could adversely affect her ability to recover state court judgment against Plaintiff. (Id.)

         On June 30, 2017, the Court issued an order denying all three of Plaintiff's motions and advising Plaintiff that, although he is self-represented, he still must follow the same rules of procedure that govern all other litigants. (Doc. 54.) Given Plaintiff's pattern of meritless filings, and in an effort to avoid further docket congestion, the Court ordered that Plaintiff shall not file another motion for injunctive relief, leave to amend, or similar type of motion without first seeking leave of Court. (Id. at 3.)

         Shortly after the Court issued its order, Plaintiff filed an untimely response to Defendants' motion to dismiss. (Doc. 57.) Defendants, in turn, moved to strike Plaintiff's untimely response. (Doc. 60.) Then, on July 24, 2017, Plaintiff filed a motion for default judgment, arguing that Defendants should be defaulted because they did not file an answer to the amended complaint. (Doc. 64.)

         On July 26, 2017, the Court denied Plaintiff's motion for default judgment. The Court explained that Defendants timely responded to the amended complaint by filing a motion to dismiss, and that Defendants would be required to file an answer only if their motion to dismiss is denied. (Doc. 65.) In that order, the Court also expressed concerns about the number of mostly meritless motions being filed. “To prevent the docket from becoming more unruly than it already is, ” the Court ordered that “the parties may complete ...

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