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Tompkins v. Lifeway Christian Resources

United States District Court, D. New Mexico

December 19, 2018

L. KIRK TOMPKINS and SUSIE TOMPKINS, Plaintiffs,
v.
LIFEWAY CHRISTIAN RESOURCES OF THE SOUTHERN BAPTIST CONVENTION; THOM RAINER, President of Lifeway; JERRY L. RHYNE, C.F.O. of Lifeway; LARRY D. CANNON, Sec. of Lifeway; DAVID WEEKLEY, Director of Glorieta 2.0, Inc.; TERRY LOOPER, Director of Glorieta 2.0, Inc.; LEONARD RUSSO, Director of Glorieta 2.0, Inc.; ANTHONY SCOTT, Executive Director of Glorieta 2.0, Inc.; HAL HILL, Consulting Director of Glorieta 2.0, Inc.; LINDA K. DEAN, Trustee of Lifeway; and JEFF WARD, Director of Finance and Administration of Glorieta 2.0, Inc., Defendants.

          MEMORANDUM OPINION AND ORDER

          ROBERT C. BRACK SENIOR U.S. DISTRICT JUDGE

         Defendant LifeWay Christian Resources (LifeWay) owned land in New Mexico where it hosted Christian conferences, retreats, and camps. From 1997 through 2013, Kirk and Susie Tompkins (Plaintiffs) leased a single lot of LifeWay's land and made improvements to the land. The parties' lease agreement provided that: (1) when the lease expired, LifeWay had sole discretion to renew or terminate the lease; (2) if LifeWay terminated the lease, it had the option to buy any improvements; and (3) if LifeWay chose not to buy the improvements, Plaintiffs could either remove them or ownership of the improvements would pass to LifeWay.

         In June 2013, LifeWay contracted to sell its New Mexico property to Defendant Glorieta 2.0, Inc. (Glorieta 2.0). Lifeway gave Plaintiffs notice on September 11, 2013, that when Plaintiffs' lease expired on September 30, 2013, the lease would not be renewed and LifeWay would not buy the improvements. Plaintiffs filed suit in federal court and asked the court to stop (and later to reverse) the sale of the property to Glorieta 2.0. On March 31, 2015, Judge Browning dismissed Plaintiffs' lawsuit, and the Tenth Circuit later affirmed that decision.

         In 2017, Plaintiffs filed a second lawsuit seeking damages, which is currently before this Court. Plaintiffs now seek leave to file a Second Amended Complaint. Defendants ask the Court to deny the motion to amend and grant Defendants summary judgment on Counts I through III of Plaintiffs' first Amended Complaint. Because the Court finds that Plaintiffs' claims are barred by claim preclusion and they have failed to state a claim on which relief may been granted, the Court will deny Plaintiffs' motion to amend, grant Defendants' motion for summary judgment, and dismiss this case with prejudice.

         I. Legal Standards

         Plaintiffs' “pro se . . . pleadings are to be construed liberally and held to a less stringent standard than formal pleadings drafted by lawyers . . . .” Garrett v. Selby Connor Maddux & Janer, 425 F.3d 836, 840 (10th Cir. 2005) (quoting Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991) (internal citations omitted)). The Court may not, however, “serv[e] as the litigant[s'] attorney in constructing arguments and searching the record.” Id. (citing Hall, 935 F.2d at 1110).

         A. Motion to Amend Standard

         Rule 15 allows a party to amend its pleading once as a matter of course in limited circumstances. Fed.R.Civ.P. 15(a)(1). Otherwise, a party may only amend its pleading with “opposing party's written consent or the court's leave.” Fed.R.Civ.P. 15(a)(2). Rule 15 directs that leave shall be freely given “when justice so requires.” Id. “The purpose of the Rule is to provide litigants ‘the maximum opportunity for each claim to be decided on its merits rather than on procedural niceties.'” Minter v. Prime Equip. Co., 451 F.3d 1196, 1204 (10th Cir. 2006) (quoting Hardin v. Manitowoc-Forsythe Corp., 691 F.2d 449, 456 (10th Cir. 1982)) (internal citation omitted). A court may deny a motion for leave to amend where there has been “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. . . .” Id. (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)).

         “A proposed amendment is futile if the complaint, as amended, would be subject to dismissal.” Gohier v. Enright, 186 F.3d 1216, 1218 (10th Cir. 1999) (citing Jefferson Cty. Sch. Dist. No. R-1 v. Moody's Investor's Servs., Inc., 175 F.3d 848, 859 (10th Cir. 1999)). “The futility question is functionally equivalent to the question whether a complaint may be dismissed for failure to state a claim . . . .” Id. (citations omitted). In reviewing a motion to dismiss under Fed.R.Civ.P. 12(b)(6), the Court “must accept all the well-pleaded allegations of the complaint as true and must construe them in the light most favorable to the plaintiff.” In re Gold Res. Corp. Sec. Litig., 776 F.3d 1103, 1108 (10th Cir. 2015) (quotation omitted). To survive a motion to dismiss, the complaint does not need to contain “detailed factual allegations, ” but it “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 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007)).

         B. Summary Judgment Standard of Review

         Summary judgment is appropriate when the Court, viewing the record in the light most favorable to the nonmoving party, determines “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see also Garrison v. Gambro, Inc., 428 F.3d 933, 935 (10th Cir. 2005). A fact is “material” if it could influence the determination of the suit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute over a material fact is “genuine” if a reasonable trier of fact could return a verdict for either party. Id. The moving party bears the initial responsibility of “show[ing] that there is an absence of evidence to support the nonmoving party's case.” Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir. 1991) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)).

         Once the moving party meets this burden, Rule 56(e) “requires the nonmoving party to go beyond the pleadings and by [their] own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial.” Celotex, 477 U.S. at 324 (quotation marks omitted). The party opposing a motion for summary judgment “must set forth specific facts showing that there is a genuine issue for trial as to those dispositive matters for which it carries the burden of proof.” Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir. 1990) (citing Celotex, 477 U.S. at 324). Rule 56(c) provides that “[a] party asserting that a fact . . . is genuinely disputed must support the assertion by . . . citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials . . . .” Fed.R.Civ.P. 56(c)(1)(A). The respondent may not simply “rest on mere allegations or denials of his pleadings.” Anderson, 477 U.S. at 259. Nor can a party “avoid summary judgment by repeating conclusory opinions, allegations unsupported by specific facts, or speculation.” Colony Nat'l Ins. Co. v. Omer, No. 07-2123-JAR, 2008 WL 2309005, at *1 (D. Kan. June 2, 2008) (citing Fed.R.Civ.P. 56(e); Argo v. Blue Cross & Blue Shield of Kan., Inc., 452 F.3d 1193, 1199 (10th Cir. 2006)). “In a response to a motion for summary judgment, a party cannot rest on ignorance of facts, on speculation, or on suspicion and may not escape summary judgment in the mere hope that something will turn up at trial.” Conaway v. Smith, 853 F.2d 789, 794 (10th Cir. 1988) (citations omitted).

         II. Background

         Before laying out the relevant facts and procedural background of the case, it is necessary for the Court to resolve the parties' disputed facts to the extent they will inform the Court's ruling on summary judgment.

         A. Resolution of Disputed Facts

         1.Undisputed Material Facts

         Plaintiffs agree with Defendants' statements in Material Facts Nos. 1, 15-17 and 24; thus, these facts are admitted as undisputed. (See Doc. 81 at 16, 21-22.)

         Plaintiffs dispute the remaining 26 of Defendants' 31 Material Facts, but the majority of Plaintiffs' responses are comprised of conclusory and unsupported legal conclusions without citations to the record. (See Id. at 16-23.) Specifically, Plaintiffs “disagree with” Defendants' Material Facts Nos. 2, 4, 5, 10, 13, 18-21, 23, and 25-31. Plaintiffs fail, however, to reference any portion of the record in response to these facts. (See id.) Because Plaintiffs fail to specifically controvert the facts asserted with citations to the record, the Court deems these facts to be undisputed. See D.N.M. LR-Civ. 56.1(b) (providing that the Court will deem the movant's material facts undisputed unless the non-moving party specifically controverts those facts).

         While Plaintiffs cite to the record in response to Material Facts Nos. 3, 7-9, 11-12 and 14 (see Id. at 16-21), the cited material does not specifically controvert the facts alleged. Moreover, Plaintiffs' responses are primarily comprised of argument, conjecture, and legal conclusions. Accordingly, the Court deems these facts to be undisputed.

         2.Disputed Facts

         Plaintiffs present evidence to show that a genuine dispute exists about Defendants' Material Fact No. 6-whether LifeWay operated the Glorieta Conference Center (GCC) at a loss. (See Docs. 78 at 4; 81 at 18 (citing Doc. 72-3); 82 at 3.) The Court finds, however, that this fact is immaterial to its determination of this lawsuit.

         Plaintiffs' responses to Material Facts Nos. 22 and 31 help clarify their intent in Count III of their First and Second Amended Complaints, and the Court will discuss them in some detail. First, Defendants discuss in Material Fact No. 22 that after Judge Browning dismissed the 2013 lawsuit[1] (Tompkins v. Exec. Comm. of the S. Baptist Convention, 13cv0840-JB/RHS, 2015 WL 1568375 (D.N.M. Mar. 31, 2015) (the “Tompkins I March 2015 Order”)), Plaintiffs appealed to the Tenth Circuit. (See Doc. 78 at 7 (citing Tompkins v. Lifeway Christian Res. of the S. Baptist Convention, 671 Fed.Appx. 1034 (10th Cir. 2016) (“Tompkins II”)).) Relevant to Material Fact No. 22, the Tenth Circuit disagreed with Plaintiffs' contention on appeal “that their complaint contained a plausible claim of” either procedural or substantive unconscionability in the terms of the lease agreement between Plaintiffs and LifeWay. Tompkins II, 671 Fed.Appx. at 1036 (noting that “[a]lthough the terms of the leases at issue operated to the detriment of the Tompkins, the operative complaint does not contain allegations suggesting procedural unconscionability[, ] . . . [n]or have” Plaintiffs sufficiently shown substantive unconscionability). Plaintiffs respond to Material Fact No. 22 by alleging that their court-appointed counsel “incorrectly pled” the unconscionable contract theory to the Tenth Circuit, and their intent was to assert that the Glorieta 2.0 “contract, originally referenced in a ‘Donor Group Letter'” was unconscionable. (Doc. 81 at 22 (citing Docs. 81-13; 81-14; 72-5).) It is unclear what contract Plaintiffs reference here, as the Donor Group Letter references two potential contracts-one for Glorieta 2.0 to buy GCC, and the other a discussion of an offer for Glorieta 2.0 to potentially enter into a contract to buy Plaintiffs' home. (See Doc. 81-13 (discussing LifeWay's decision to sell GCC and the leaseholders' options once their leases expire, including one alternative “that would allow [Plaintiffs] to sell the existing improvements to” Glorieta 2.0).) Regardless, the Court finds that this distinction-insofar as it concerns Plaintiffs' intent before the Tenth Circuit-is immaterial to its determination of these motions.

         In Material Fact No. 31, Defendants state that Plaintiffs now reassert, in Count III of their Amended Complaint (see Doc. 20 at ¶¶ 65-78 (the “First Amended Complaint”)), [2] “claims that LifeWay's sale of the [GCC] was improper, and that their ground lease with LifeWay was unconscionable.” (Doc. 78 at 9.) Plaintiffs dispute this fact and clarify that “the LifeWay lease is not alleged unconscionable.” (Doc. 81 at 23.) Plaintiffs do not dispute that Count III asserts a claim that the GCC sale contract was unconscionable. (Id.) The Court notes that Count III may also be construed to assert a claim that an offer LifeWay and Glorieta 2.0 presented to Plaintiffs (the “2015 Offer”) to buy their home for $84, 999 was unconscionable because it would unjustly enrich Defendants at Plaintiffs' expense. (See Docs. 20 ¶¶ 67, 77; 72-1 ¶¶ 47 (asserting that Glorieta 2.0 “knowingly benefited at Plaintiffs['] expense reaping great value pursuant to an unconscionable contract if not fairly compensated for Private Property”), 57 (asserting that “Plaintiffs' complaint adequately presents a claim to declare LifeWay's presentation of [Glorieta 2.0] contract to Plaintiffs void on the basis of Unconscionability”); 81-1 ¶ 14.) The Court will consider both interpretations of Count III in this Opinion.

         B. Factual and Procedural Background [3]

         Until 2013, LifeWay owned the GCC, a 2, 400-acre facility in New Mexico where LifeWay organized Christian conferences and other events. (Doc. 78 at 3 ¶ 1.) For many years, LifeWay entered into ground leases with individuals wherein LifeWay leased portions of the GCC property that were “not . . . needed for immediate development, ” and the individuals were allowed to construct and maintain “homes and other improvements to be used and operated in accordance with the plans and purposes of” GCC. (Doc. 78-D at 1; see also Docs. 78 at 4 ¶ 2; 78-E at 3 ¶ 10.) In 1997, Plaintiffs entered into a ground lease agreement with LifeWay, which the parties renewed several times over the years. (See Docs. 78-C; 78-D.) Pursuant to the lease agreement, LifeWay retained ownership of the land and Plaintiffs owned the improvements they constructed on the land.[4] (See Doc. 78 at 4 ¶ 2; see also Doc. 78-D at 4-5.) The lease agreement provided that LifeWay retained the sole discretion both to sell the land and/or to decline to renew the lease. (See Doc. 78 at 4 ¶ 3; see also Doc. 78-D at 4-5.) If LifeWay declined to renew the lease with Plaintiffs, the terms of the lease agreement allowed LifeWay to buy the improvements. (See Doc. 78 at 4 ¶ 4; see also Doc. 78-D at 4-5.) In the event LifeWay declined to buy the improvements, Plaintiffs would have six months to remove the improvements or ownership of the improvements would pass to LifeWay. (See Doc. 78 at 4 ¶ 4; see also Doc. 78-D at 4-5.)

         In June 2013, LifeWay agreed to sell GCC to Glorieta 2.0 for $1.00. (See Docs. 78 at 5 ¶ 9; 78-E at 3 ¶ 8.) Plaintiffs, who believed that the sale of GCC violated their rights, filed the Tompkins I lawsuit in September 2013, seeking to stop (and later to reverse) the sale. (See Docs. 78 at 5 ¶ 10; Tompkins I, Doc. 1.) Plaintiffs named 128 defendants, including all but two of the individuals and/or entities who are defendants in the current lawsuit. (See Doc. 78 at 5 ¶ 10; Tompkins 1, Doc. 1.) LifeWay wrote to Plaintiffs on September 11, 2013, after the sale closed, “and informed them that their lease would not be renewed after it expired on September 30, 2013, that LifeWay would not be purchasing the improvements, and that Plaintiffs would have six months after expiration to remove the improvements should they choose to do so.” (Doc. 78 at 5 ¶ 11 (citing Doc. 78-G).)

         The Tompkins I court dismissed with prejudice 113 of the named defendants, leaving many of the same defendants Plaintiffs sue in the current lawsuit, including Defendants Rainer, Rhyne, Cannon, Looper, Weekley, Russo, LifeWay, and Glorieta 2.0. (See Tompkins I, Doc. 102.) Plaintiffs filed a Third Amended Complaint. (Tompkins I, Doc. 125.) The Tompkins I defendants filed motions to dismiss. (See Tompkins I, Docs. 131; 137; 139.) Judge Browning dismissed Plaintiffs' 2013 claims in two separate opinions. First, Judge Browning dismissed Plaintiffs' third amended complaint as to Defendants Weekley, Russo, and Looper on the basis that the court lacked general or specific personal jurisdiction over them.[5] (See Tompkins I, Docs. 172 at 33 ¶ 32, 42 ¶ 60, 45 ¶ 79, 47 ¶¶ 87-88, 77-78 ¶¶ 1, 3, 5; 178 at 13-14; 186 at 5 n.1.)

         Second, the court dismissed the remainder of Plaintiffs' third amended complaint in the Tompkins I March 2015 Order. See 2015 WL 1568375. With respect to the remaining individual defendants (Rainer, Rhyne, and Cannon), the court dismissed all three of Plaintiffs' claims for failure to state a claim. See Id. at *4-7. With respect to the corporate defendants (LifeWay and Glorieta 2.0), the court found that Plaintiffs lacked standing to assert the first two counts, and failed to state a claim in the third count. See Id. at *7-11.

         Plaintiffs appealed to the Tenth Circuit[6] and “raised the additional argument that the ground lease between them and LifeWay was an unconscionable contract under New Mexico law.” (See Doc. 78 at 7 ¶ 22.) See also Tompkins II, 671 Fed.Appx. at 1036. The Tenth Circuit affirmed Judge Browning's rulings and rejected Plaintiffs' claim that the lease was unconscionable. See id.

         On April 20, 2015, shortly after Judge Browning dismissed Plaintiffs' claims, LifeWay's General Counsel, Defendant Cannon, sent Plaintiffs a letter offering to purchase Plaintiffs' home on the GCC property for $84, 999 (the 2015 Offer). (See Doc. 72-1 ¶ 30.) Plaintiffs believe the 2015 Offer was drafted by LifeWay and Glorieta 2.0's leadership, including Defendants Weekley, Looper, Russo, Rainer, Rhyne, and Cannon. (Id. at 18 ¶ 38.) Defendants Hill and Scott also approached Plaintiffs about LifeWay's 2015 Offer. (Id. at 15-16 ΒΆ 31.) ...


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