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Mumma v. High-Spec

December 2, 2009


The opinion of the court was delivered by: Sylvia H. Rambo United States District Judge

Judge Sylvia H. Rambo


The captioned case, characterized as a shareholder's derivative action, was filed by Plaintiff Robert M. Mumma, II ("Robert"), against Defendants Barbara McK. Mumma ("Barbara") and Lisa Mumma Morgan ("Lisa"), their attorney James L.S. Bowdish, and two defunct closely-held corporations-the Kim Company, and High-Spec, Inc. ("High-Spec"). This case is the latest in a family feud spanning more than two decades and involving state and federal courts in Pennsylvania and Florida. Robert's case involves a collection of facts patched together in a Frankenstein-like gallimaufry of the various cases filed by and between these family members. Before the court are motions to dismiss filed by Defendant James Bowdish, (Doc. 4), and High Spec, Barbara, Lisa, and Kim Company, (Doc. 7), respectively.

While the court is required to take every fact pled in Robert's complaint as true, the court is faced with the somewhat unique situation where a plaintiff has made statements, which he has labeled as "facts," that are directly contradicted by documents that are matters of public record. Of course, federal pleading is not alchemy whereby a plaintiff can assert whatever selective version of events he wishes in a complaint and it simply becomes true because it is listed as a "fact." Nonetheless, for the purposes of deciding this motion it is not necessary, nor permissible, for the court to judge Robert's version of reality. Even if everything that Robert alleges is true, the court finds that his claims are barred by the statute of limitations. The court makes this finding based on the facts as alleged in his complaint, as well as matters that are indisputably part of the public record. Accordingly, the court will first set out those matters that are part of the public record, and will then address the facts as alleged in Robert's complaint.

I. Background

The court takes judicial notice of the following facts.*fn1 On April 2, 1986, Robert M. Mumma, ("Robert, Sr."), the paterfamilias of the Mumma family, died testate. (Doc. 11-2, Mumma v. Mumma, No. 66 Equity 1988, slip. op. ¶ 1 (C.P. Mar. 24, 1992)(Sheely, P.J.)("66 Equity 1988").) Included in Robert Sr.'s estate was a company called the Kim Company, which was partially owned by Pennsylvania Supply Company, as well as other shareholders, including Robert, Barbara, and Lisa. (Id. ¶3b, 3f.) For reasons that are irrelevant to the proceedings presently before the court, the shareholders of the Kim Company decided to dissolve and liquidate the company. The assets of the Kim Company were transferred to a tenants-in-common agreement called MRA I, which was signed by Robert and others on December 19, 1986. (Id. at ¶ 37.) In addressing the effect of MRA I, Judge Sheely concluded in 66 Equity 1988 that " MRA I . . . [was] validly executed on December 19, 1986." (Id. at p. 23.)

The other half of the story involves a Florida corporation called High-Spec that was 50% owned by Robert and 50% owned by Robert, Sr. See Mumma v. Mumma, 780 So.2d 1001, 1002 (Fla. Dist. Ct. App. 2001). After Robert, Sr.'s death, Barbara and Lisa, as executors of Robert, Sr.'s estate, filed a complaint seeking dissolution of High-Spec. They asserted that High-Spec was a deadlocked corporation, and that Robert had improperly conveyed real estate owned by High-Spec to himself for no consideration. Id. In 1993, a Florida trial court entered a partial final-judgment finding that Robert had illegally distributed property to himself, and that he was liable to High-Spec for $450,000 plus prejudgment interest. Id. The Florida trial court dissolved High-Spec. Id. at 1003. The court also found that High-Spec owed MRA I $415,229.28. (Doc. 10-3, Mumma v. Mumma, No. 89-503 CA, slip op. ¶ 3B (Fla. Cir. Ct., Jul. 26, 1993).) This amount stems from a loan that was made by the Kim Company to High-Spec in 1985, and is central to the allegations in the litigation presently before the court. The amount owed by High-Spec to MRA I was later reduced to $330,320.91 by an order granting in part and denying in part Robert's motion to alter and amend the judgment. (Doc. 10-5, Mumma v. Mumma, No. 89-503 CA, slip op. ¶ 3(b) (Fla. Cir. Ct., Feb. 28, 1994).) Following various appeals, on February 17, 2006, the Florida Circuit Court entered an amended final judgment. (Doc. 10-10, Mumma v. Mumma, No. 89-503 CA, slip op., (Fla. Cir. Ct., Feb. 16, 2006). Specifically, the court reaffirmed its earlier judgment that High-Spec was required to pay MRA I, but it again modified the amount to a new amount of $330,329.51. (Id., slip op. ¶ 25(B).) In that order, the Florida Circuit Court also appointed a receiver to wind-down, pay the debts and obligations of High-Spec, and distribute its assets. (Id., ¶ 27(a).) Although various aspects of the Florida Circuit Court's order remain on appeal with the state appellate courts in Florida, the amount due to MRA I is not on appeal. On April 28, 2009, the Florida Circuit Court issued an order requiring the receiver to pay to MRA I $330,320.91*fn2 "as soon as possible." (Doc. 10-15, Mumma v. Mumma, No. 89-503 CA, slip op. at order (Fla. Cir. Ct., Apr. 28, 2009).) According to Robert, this latest order-requiring the receiver to pay High-Spec as soon as possible-is now on appeal. (Doc. 1, ¶ 17.)

With this background in mind, all of which the court will consider in ruling on Defendants' motions to dismiss because it comes from sources that are unquestionably a part of the public record, see Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993)("To decide a motion to dismiss, courts generally consider only the allegations contained in the complaint, exhibits attached to the complaint and matters of public record"), the court now turns to the allegations made by Robert in his complaint.

Robert alleges in his complaint that, on September 3, 1985, Kim Company loaned $184,135.34 to High-Spec, which it has never repaid. (Doc. 1, ¶ 14). Robert alleges that the "Kim Company has never been a party to the Florida litigation, has never received notice and an opportunity to be heard about its rights . . . and has never been permitted to challenge the validity of MRA I." (Id. ¶ 18.)

Robert contends that both Barbara and Lisa "acted fraudulently in the creation of MRA I," and that the documents submitted by them to support their claims of control of Kim Company "were forgeries and constituted fraud on the Courts." (Id. ¶¶ 19-20.) Specifically, Robert avers that Barbara and Lisa "failed to produce an original of the [MRA I agreements] allegedly signed by the parties and which Judge Sheely found to be 'binding' on Plaintiff," and that although MRA I appears to bear his signature, that he never signed it. (Id. ¶¶ 22-23.) Robert asserts that he "first confirmed the fraudulent forgeries in December 2005, when he found the original documents." (Id. ¶ 27.) Ultimately, Robert contends that "there was never any valid and enforceable agreement that the Kim Company assets (including but not limited to Kim Company's loan to High-Spec, Inc.) were or had been transferred to MRA I, and any testimony or evidence to that effect was based on fraudulent forgeries." (Id. ¶ 28.)

Robert asserts that Defendants Lisa, Barbara, and James Bowdish, their current attorney in the Florida litigation, induced the court to use its state's powers of legal compulsion to deprive the Kim Company of its property interest in the debt owed to it by High-Spec. (Id., ¶ 31), and that these actions have or will deprive the Kim Company of its property rights without due process of law in violation of the Fifth and Fourteenth Amendments to the United States Constitution. (Id. at ¶ 38.) Robert also alleges that Defendants have engaged in a civil conspiracy to deprive the Kim Company of its property interest, (Id. ¶ 39), and that they tortiously interfered with High-Spec's contractual obligation to repay the loan to the Kim Company. (Id. ¶ 40.)

B. Procedural History

Robert filed his complaint on July 27, 2009. (Doc. 1.) Presently before the court are: (1) Defendant Bowdish's motion to dismiss, (Doc. 4); and, (2) Defendants High-Spec, Kim Company, Barbara McK. Mumma, and Lisa Mumma Morgan's motion to dismiss, (Doc. 7). On September 9, 2009, Robert filed his brief in opposition to Defendant Bowdish's motion to dismiss, (Doc. 14), and, on September 21, 2009, filed his brief in opposition to the other Defendants' motion to dismiss. (Doc. 17.) Defendants filed their reply briefs on September 15, 2009, (Doc. 15), and September 28, ...

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