United States District Court, E.D. Missouri, Eastern Division
DONALD W. BAUER, et al., Plaintiffs,
BETTY A. LAUTH, et al., Defendants.
MEMORANDUM AND ORDER
A. SHAW UNITED STATES DISTRICT JUDGE.
matter is before the Court on several motions to dismiss.
Defendants Stephen R. Ryan and Ryan, Bennet and Radloff (the
“Ryan Defendants”) move that the claims against
them be dismissed because the Court lacks subject matter
jurisdiction. The Ryan Defendants also argue that the Court
lacks personal jurisdiction as to them; plaintiffs'
Complaint fails to state a claim; and plaintiffs'
allegations are barred by the doctrine of collateral
estoppel. Defendants Edward T. Graham, Jr. and Beavers,
Graham & Calvert (the “Graham Defendants”),
defendants First Mid Illinois & Trust, National
Association, Doug Kopplin, Unknown Employee and/or Unknown
Employees of First Mid Illinois Bank & Trust, National
Association, and Mary Jane Klitzing (the “First Mid
Illinois Defendants”),  and defendants Betty A. Lauth,
Carol Heilman, Rose Zimmer, Ralph F. Bauer, Ruth Smith, and
Mary Jane Klitzing as Executrix for the Estate of Paul C.
Bauer (the “Lauth Defendants”) also filed motions
to dismiss arguing, among other things, that the Court does
not have subject matter jurisdiction to hear this dispute.
Plaintiffs Donald W. Bauer, Lauretta D. Bauer, Karla Dale
Bauer, and David W. Bauer, who are proceeding pro
se, oppose the motions.For the following reasons, the
Court will dismiss this cause of action because the Court
does not have subject matter jurisdiction.
pending before the Court is the Ryan Defendants' Rule 11
motion for sanctions against plaintiffs. Plaintiffs oppose
the motion, which is fully briefed and ripe for
review. As discussed infra, the Court
will grant, in part, the Ryan Defendants' motion for
allegations in the Complaint arise from foreclosure
proceedings that took place in Effingham County, Illinois
beginning in 2001. According to the Complaint, in 1978
plaintiffs Donald W. Bauer and Lauretta D. Bauer gave two
promissory notes and one mortgage to Ralph E. Bauer and L.
Marie Bauer, Donald W. Bauer's parents. Plaintiffs allege
that Ralph E. Bauer and L. Marie Bauer opened an escrow
account for the two promissory notes and mortgage at First
Mid Illinois Bank & Trust, but that persons at the bank
tampered with the escrow account and changed the interest
rates on the notes to higher interest rates and replaced the
payment schedule. Following the death of Ralph E. Bauer and
L. Marie Bauer, rights to the promissory notes and mortgage
were allegedly assigned to Robert L. Bauer, Linda Bauer
(n.k.a. Linda Garfield) and six of the defendants, Betty
Lauth, Carol Heilman, Rose Zimmer, Ralph F. Bauer, Ruth
Smith, and Paul C. Bauer.
in 2001, six of the assignees, Betty Lauth, Carol Heilman,
Rose Zimmer, Ralph F. Bauer, Ruth Smith, and Paul C. Bauer,
all of whom are defendants in the present litigation,
commenced foreclosure proceeding against Donald W. Bauer and
Lauretta D. Bauer and their six children in Illinois state
court. Robert L. Bauer and Linda Bauer were also named as
defendants in the suit. Litigation proceeded in state court
for many years and, according to the Complaint, judgment was
entered against plaintiffs Donald W. Bauer and Lauretta Bauer
in the amount of $250, 000.00 following a trial. Plaintiffs
allege in their Complaint that the presiding judge in the
state court proceedings made a number of errors including:
holding ex parte hearings, ruling that the tampered
escrow agreement was admissible, and allowing testimony
regarding Donald W. Bauer's supposed inheritance.
Following the entry of the judgment in Illinois state court,
plaintiffs also allege that defendants attempted to block
their redemption rights, and a “personal
judgment” has been entered against them, which
according to plaintiffs, is not allowed without a deficiency
after sale under “Illinois Mortgage Foreclosure
Law.” Doc. 1 at 13. Plaintiffs also allege that the
defendants colluded to violate the rules of evidence and
plaintiffs' due process rights, and they
“conspir[ed] to not allow [plaintiffs] to exercise
[their] rights under the Illinois Mortgage Foreclosure
Law.” Id. at 15.
on these allegations, plaintiffs Donald W. Bauer, Lauretta D.
Bauer, Karla Dale Bauer, and David W. Bauer bring three
claims against defendants Betty A. Lauth, Carol Heilman, Rose
Zimmer, Ralph F. Bauer, Mary Jane Klitzing, as the executrix
for the estate of Paul Bauer, Mary Jane Klitzing, Stephen R.
Ryan, Ryan, Bennett, & Radloff, Edward T. Graham, Jr.,
Beavers, Graham & Calvert, First Mid Illinois Bank &
Trust, Doug Kopplin, Unknown employee and/or employees of
First Mid Illinois Bank & Trust, and Ruth Smith, which
plaintiffs have entitled: “42 U.S.C. at 1983”
(Count I); Civil Conspiracy at Law (Count II); and Abuse of
Process (Count III). Plaintiffs seek over $10, 000, 000.00 in
compensatory and punitive damages. All of the defendants
move, among other things, to dismiss this action for lack of
subject matter jurisdiction.
courts are courts of limited jurisdiction.”
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
375, 377 (1994). Plaintiffs, as the side asserting
jurisdiction, bear the burden of establishing that the Court
has subject matter jurisdiction to hear the dispute. Ark.
Blue Cross & Blue Shield v. Little Rock Cardiology
Clinic, P.A., 551 F.3d 812, 816 (8th Cir. 2009) (citing
Kokkonen, 511 U.S. at 377). Subject matter
jurisdiction in federal court can be based on diversity
jurisdiction, pursuant to 28 U.S.C. §1332, or federal
question jurisdiction, pursuant to 28 U.S.C. §1331.
seek to invoke this Court's subject matter jurisdiction
on the basis of diversity jurisdiction pursuant to 28 U.S.C.
§1332. A district court has original jurisdiction over a
civil action in which the parties are citizens of different
states, and the amount in controversy exceeds $75, 000.00,
exclusive of interest and costs. 28 U.S.C. § 1332(a).
“It is well established that diversity jurisdiction
attaches only when all parties on one side of the litigation
are of a different citizenship from all of those on the
other.” Stouffer Corp. v. Breckenridge, 859
F.2d 75, 76 (8th Cir. 1988) (citing Strawbridge v.
Curtiss, 7 U.S. (3 Cranch) 267 (1806)). “Complete
diversity of citizenship exists where no defendants hold
citizenship in a state where any plaintiff holds
citizenship.” Owen Equip. & Erection v.
Kroger, 437 U.S. 365, 373 (1978). Citizenship is
determined by a person's physical presence in a state
along with an intent to remain there indefinitely. Once an
individual has established a state of citizenship, he or she
is presumed to be a citizen of that state until he or she
legally acquires a new state of citizenship. See Altimore
v. Mount Mercy College, 20 F.3d 763, 768-69 (8th Cir.
2005); see generally 15 James Wm. Moore et al.,
Moore's Federal Practice, § 102.34-
(3d ed. 2009). “The district court's determination
of citizenship for purposes of diversity is a mixed question
of law and fact, but mainly fact.” Altimore,
20 F.3d at 768.
allege that they all reside in Illinois. Plaintiffs do not
make any allegations as to their intent to remain in
Illinois. As for the defendants, plaintiffs allege that
defendants Betty Lauth, Carol Heilman, and Ralph Bauer live
in Missouri; defendant Rose Zimmer lives in Arizona;
defendant Ruth Smith lives in Colorado; and defendants Mary
Jane Litzing, executrix for the estate of Paul C. Bauer, Mary
Jane Litzing, Stephen Ryan, Ryan, Bennett & Radloff,
Edward Graham, Seavers, Graham & Calvert, First Mid
Illinois Bank & Trust, Doug Kopplin, and Unknown employee
or employees of First Mid Illinois Bank and Trust, all live
or have their businesses in Illinois.
Court has examined the Complaint and plaintiffs' joint
response in opposition to the motions to dismiss and finds
plaintiffs have failed to plead or establish that all parties
on one side of the litigation are of a different citizenship
from all of those on the other side. As a result, complete
diversity of citizenship ...