Dupree v. Powers

IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

MYRTLE DUPREE, §

§

Plaintiff, §

§ No. 3:23-cv-1479-N-BN

V. § (consolidated with

§ No. 3:23-cv-1480-N-BN)

TOM POWERS AND RUSHMORE §

LOAN MANAGEMENT SERVICES, §

LLC §

§

Defendants. §

MEMORANDUM OPINION AND ORDER REOPENING CLOSED CASE,

DENYING COURT-APPOINTED COUNSEL, AND REQUIRING BRIEFING

Appellant Myrtle Dupree (“Ms. Dupree”) appealed two rulings of the United

States Bankruptcy Court for the Northern District of Texas.

Both rulings appear to be the United States bankruptcy judge’s decision to

dismiss Ms. Dupree’s bankruptcy case and the related adversary proceeding because

Ms. Dupree failed to comply with the bankruptcy court’s order to retain new counsel.

See -1479, Dkt. No. 1-1 at 5; -1480, Dkt. No. 1-1 at 4.

The appeals were consolidated, and Chief United States District Judge David

C. Godbey referred the consolidated appeals to the undersigned United States

magistrate judge for pretrial management under 28 U.S.C. § 636(b).

After carefully considering the April 15, 2025 amended joint status report [Dkt.

No. 47] ordered by the Court, see Dkt. Nos. 45 & 46, the Court REOPENS this

administratively closed case, DENIES Ms. Dupree’s current request for court-

appointed counsel as to the appeals, and ORDERS the parties to file briefing to

further the district court’s disposition of the Ms. Dupree’s appeals from the

bankruptcy court, as further explained below.

Applicable Background

The undersigned entered findings of fact and conclusions of law recommending

that, because the Court repeatedly warned Ms. Dupree of possible dismissal for

failure to comply, the Court should sua sponte dismiss the consolidated appeals

without prejudice under its inherent authority and Federal Rule of Civil Procedure

41(b) based on Ms. Dupree’s failure to comply with the Court’s orders and to have

counsel appear on her behalf and the Court should deny as moot Appellee Rushmore

Loan Management Services, LLC’s Motion to Dismiss for Want of Prosecution [Dkt.

No. 23] (the “FCR”).

Based on Ms. Dupree’s response to the FCR, see Dkt. No. 24, Chief Judge

Godbey re-referred this matter to the undersigned to consider what, if any, effect

those objections have on the FCR and to enter appropriate orders or

recommendations, see Dkt. No. 25.

The Court then directed Rushmore to respond to Ms. Dupree’s objections,

including her arguments regarding appointing a guardian ad litem and/or an

attorney. See Dkt. No. 26.

After reviewing the objections and Rushmore’s response [Dkt. No. 28],

including its argument that an individual other than Ms. Dupree or her son, Alfred

Dupree (“Mr. Dupree”), filed the objections, the Court set this matter for an in-person

hearing, see Dkt. Nos. 29 & 30.

Mr. Dupree, Appellee Tom Powers, and Rushmore’s counsel attended the

hearing on September 19, 2024. See Dkt. No. 31.

At that hearing, Mr. Dupree informed the Court that he has a durable power

of attorney over Ms. Dupree, who he characterized as having some capacity issues;

that Ms. Dupree defers to Mr. Dupree to take care of matters for her; that he has at

least informally served as her representative; that, as to some filings in this matter,

he prepared them with assistance from other individuals who are not attorneys; that

the family lacks funds to retain an attorney; and that he would like the Court to

appoint an attorney ad litem.

Rushmore represented that it would not oppose the Court granting that

request and informed the Court that at least one individual who assisted Mr. Dupree

has taken advantage of elderly individuals, like Ms. Dupree, and that this proceeding

(including presumably in the bankruptcy court) has been riddled with competency

and capacity concerns.

Mr. Powers also stated that he would not oppose the appointment of someone

to look at this case on behalf of Ms. Dupree.

After the hearing, Mr. Dupree submitted a financial affidavit on behalf of Ms.

Dupree, as the Court ordered. see Dkt. Nos. 32-34, & 37.

Considering this background, the Court withdrew the FCR and granted Ms.

Dupree leave to proceed in forma pauperis through an order entered on February 27,

2025 [Dkt. No. 45]; that order also administratively closed this case to allow an

opportunity to sort out specified issues and required the parties who attended the

September 19 hearing to meet and confer and file a joint status report.

Discussion

I. The Court denies Ms. Dupree’s request for court-appointed counsel as

to her appeals from the bankruptcy court.

As clarified at the September 19 hearing, although the term was used in filings

purportedly made by Ms. Dupree, appointment of a guardian ad litem is not sought,

just a court-appointed attorney (or attorney ad litem).

The roles of a guardian ad litem and an attorney ad litem differ,

and we must consider each separately. A guardian ad litem is, in a sense,

an officer of the court. “[He] is not simply counsel to one party in the

litigation, but instead plays a hybrid role, advising one or more parties

as well as the court.” As one court explained, “[T]he [incompetent

person] is always the ward of every court wherein his rights or property

are brought into jeopardy, and is entitled to the most jealous care that

no injustice be done him. The guardian ad litem is appointed merely to

aid and to enable the court to perform that duty of protection.” An

attorney ad litem, in contrast, serves no special function. He performs

the same services as any attorney – giving advice, doing research, and

conducting litigation – only for [an incompetent person] rather than for

[a competent one].

duPont v. S. Nat’l Bank of Hous., Tex., 771 F.2d 874, 882 (5th Cir. 1985) (citations

omitted); see also Gibbs v. Gibbs, 210 F.3d 491, 506 (5th Cir. 2000) (“[T]he guardian

ad litem acting in the capacity as an attorney for the minor is in no better position

than an attorney retained by any litigant under normal circumstances.” (citing

Kollsman v. Cohen, 996 F.2d 702, 706 (4th Cir. 1993))); Kollsman, 996 F.2d at 706

(“The guardian ad litem’s presence is necessitated by the litigation and it is his duty

to determine policy regarding litigation. The guardian ad litem is frequently not an

attorney and if legal services are required, he must seek and employ counsel. Counsel

obtained thereby on behalf of a ward or incompetent is in no different circumstance

from counsel for any other litigant.” (citations omitted)).

And, “[a]s a general matter, ‘a federal court cannot appoint a guardian ad litem

in an action in which the infant or incompetent already is represented by someone

who is considered appropriate under the law of the forum state.’” Rice ex rel. CIR v.

Cornerstone Hosp. of W. Monroe, L.L.C., 589 F. App’x 688, 691 (5th Cir. 2014) (per

curiam) (quoting 6A CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE,

FEDERAL PRACTICE AND PROCEDURE § 1570, p. 665 (2010); citing T.W. & M.W. by Enk

v. Brophy, 124 F.3d 893, 895-96 (7th Cir. 1997)).

This tracks Federal Rule of Civil Procedure 17(c)(1), which provides a list of

representatives who “may sue or defend on behalf of a minor or incompetent person”:

“a general guardian”; “a committee”; “a conservator”; or a “like fiduciary.” FED. R. CIV.

P. 17(c)(1).

But Rule 17(c) further “empowers a federal court to appoint a next friend if the

[incompetent person’s] legal representative is unable or refuses to act.” CIR, 589 F.

App’x at 691 (quoting Susan R.M. by Charles L.M. v. Ne. Indep. Sch. Dist., 818 F.2d

455, 458 (5th Cir. 1987); citing Ad Hoc Comm. of Concerned Teachers v. Greenburgh

No. 11 Union Free Sch. Dist., 873 F.2d 25, 29 (2d Cir. 1989) (Rule 17(c) “gives a federal

court power to authorize someone other than a lawful representative to sue on behalf

of an infant or incompetent person where that representative is unable, unwilling or

refuses to act or has interests which conflict with those of the infant or

incompetent.”)); accord Gaddis v. United States, 381 F.3d 444, 453 (5th Cir. 2004) (en

banc) (“It is clear in this Circuit that Rule 17(c) authorizes and mandates that district

courts appoint a guardian ad litem in the situation where the interests of the

[incompetent person’s] general representatives … may conflict with the interests of

the person … who might otherwise be represented by such general representatives.”

(citations omitted)).

In this regard, the record here is not exactly clear. But it does seem that Mr.

Dupree may have some authority under Texas law to act on behalf of Ms. Dupree.

And Mr. Dupree neither appears unable, nor has refused, to act as Ms. Dupree’s

representative. A conflict of interest is not apparent. Nor have the Appellees objected

to Mr. Dupree acting as a representative for Ms. Dupree.

But appointment of counsel for an indigent litigant in a matter like this is

easier said than done.

First, “[t]here is no absolute right to an attorney in [a civil] cases.” Nickols v.

Morris, 705 F. Supp. 2d 579, 584 (N.D. Tex. 2010).

So Ms. Dupree “has no right to the automatic appointment of counsel.” Morgan

v. Richards, No. 21-10931, 2023 WL 6121775, at *2 (5th Cir. Sept. 19, 2023) (per

curiam) (citing Cupit v. Jones, 835 F.2d 82, 86 (5th Cir. 1987)); see also Naranjo v.

Thompson, 809 F.3d 793, 799 (5th Cir. 2015) (“[A] pro se litigant, “even if

demonstrably indigent, is not entitled to appointed counsel as a matter of right.”

(citing Ulmer v. Chancellor, 691 F.2d 209, 212 (5th Cir. 1982))).

And a court is only “required to appoint counsel for an indigent [litigant] in a

civil lawsuit [if] there exist exceptional circumstances warranting such an

appointment.” Tampico v. Martinez, 987 F.3d 387, 392 (5th Cir. 2021) (per curiam)

(citing Naranjo, 809 F.3d at 799).

“[F]actors that should be considered in determining whether exceptional

circumstances warrant the appointment of counsel” include “1. the type and

complexity of the case; 2. the [litigant’s] ability adequately to present and investigate

his case; 3. the presence of evidence which largely consists of conflicting testimony so

as to require skill in presentation of evidence and in cross-examination; and 4. the

likelihood that appointment will benefit the [parties and] the court … by ‘shortening

the trial and assisting in just determination.’” Id. (quoting Parker v. Carpenter, 978

F.2d 190, 193 (5th Cir. 1992)).

In sum, the Court’s ability to appoint counsel for indigent individuals is limited

by statutory authority, as set out above.

But that ability is also constrained by reality. That is because a judge in this

federal district cannot compel an attorney to take a pro bono appointment.

As the Court set out in the February 27 order,

while the undersigned has carefully considered the appointment of

counsel for Ms. Dupree, the Court has yet to successfully persuade an

attorney to take on her case.

But the undersigned is also not convinced that the record now

before the Court reflects that exceptional circumstances exist. That is

because it’s not apparent that appointment of counsel would benefit the

Court as to these consolidated appeals. While, at the September 19

hearing, Appellants seemed to support the notion that appointment of

counsel could benefit the parties and the bankruptcy court as to the

underlying proceeding, it was less clear whether appointing counsel

would further this proceeding – in the district court. For example, is

there a meritorious ground to reverse the bankruptcy court or, instead,

should that court be summarily affirmed? As to this (and other points),

the record is just not developed.

Accordingly, the Court would benefit from hearing further from

the Appellees, including Mr. Powers, the Chapter 13 Trustee….

And the participants from the September 19 hearing – Mr.

Dupree, Mr. Powers, and counsel for Rushmore – are ORDERED to meet

and confer in person or over the phone, by March 31, 2025, to discuss

all matters addressed above and any related matters, including a basis,

if any, for the Court to appoint counsel for Ms. Dupree as to these

consolidated appeals only. Counsel for Rushmore shall initiate this

meeting. And, on behalf of the participants, counsel for Rushmore must

file a joint status report by April 14, 2025.

Dkt. No. 45 at 7-9.

The amended joint status report [Dkt. No. 47] contains several paragraphs

discussing a prior foreclosure lawsuit, in which a default judgment was entered

against the Duprees, see id., ¶¶ 4-7, but spends little time addressing the issues the

Court raised, see id., ¶ 2 (“While Mr. Dupree believes he has various meritorious

grounds that would entitle a reversal of the bankruptcy court’s rulings, neither the

Trustee nor Rushmore believe the bankruptcy court should be reversed.”).

And, through an email sent after the parties’ meeting (and attached to the

report), Mr. Dupree contends that his retention of Rufus Hampton “to represent [him]

in this lawsuit” (it’s unclear whether Mr. Dupree means that he retained Hampton

in the foreclosure lawsuit, the underlying bankruptcy proceeding, its related

adversary proceeding, or these appeals) and alleged service issues in the prior

foreclosure matter support appointing counsel for Ms. Dupree for these appeals. Dkt.

No. 47-1 at 2-4.

The Court cannot agree with Mr. Dupree. No arguments advanced through the

amended joint status report show that exceptional circumstances warrant the

appointment of counsel for Ms. Dupree as to these appeals at this time.

But the Court could consider appointment of counsel again, at a subsequent

stage of this proceeding, at which point it would consider whether the facts of the case

through that stage show that exceptional circumstances warrant appointment of

counsel. See, e.g., Morgan, 2023 WL 6121775, at *2 (“indicat[ing] that appointment of

counsel may be required at later stages of litigation even if it was not appropriate at

the motions stage” and “that the district court should [consider] the facts anew at

each stage, especially the trial stage” (citations omitted)).

II. The Court requires the parties to file briefs to address the pending

appeals.

As to these appeals, the district court confronts a discrete issue: whether the

bankruptcy court’s decision to dismiss Ms. Dupree’s proceedings for failure to follow

the court’s order to retain counsel was an abuse of discretion. See Matter of

Dolleslager, 618 F.2d 322, 324-26 (5th Cir. 1980); Dorsey v. U.S. Dep’t of Educ., 528

B.R. 137, 147-49 (E.D. La. 2015); Anamarc Enters., Inc. v. Diaz, Civ. A. No. 15-0876,

Bankr. Adversary No. 14-3028, 2015 WL 4658723, at *3-*5 (S.D. Tex. Aug. 5, 2015).

“Matters within a bankruptcy judge’s discretion are reviewed for an abuse of

discretion,” and “[a] bankruptcy court abuses its discretion when it (1) applies an

improper legal standard, which is reviewed de novo, or (2) bases its decision on

findings of fact that are clearly erroneous.” Anamarc Enters., 2015 WL 4658723, at

*3 (citations omitted; district court’s reviewing, under the standards of Federal Rule

of Civil Procedure 41(b), the dismissal of an “adversary proceeding with prejudice

based on Anamarc’s failure to comply with the Amended Scheduling Order’s

requirement that it obtain ‘duly authorized counsel’ by” a date certain).

To the extent that Rule 41(b) applies to both dismissals, see id. (noting that the

rule is “applicable to adversary proceedings pursuant to Bankruptcy Rule 7041”);

FED. R. BANKR. P. 7041 (“Fed. R. Civ. P. 41 applies in an adversary proceeding.”), a

dismissal under Rule 41(b) may be with or without prejudice, see Long v. Simmons,

77 F.3d 878, 879-80 (5th Cir. 1996).

Although “[l]esser sanctions such as fines or dismissal without prejudice

are usually appropriate before dismissing with prejudice, ... a Rule 41(b)

dismissal is appropriate where there is ‘a clear record of delay or

contumacious conduct by the plaintiff and when lesser sanctions would

not serve the best interests of justice.’”

Nottingham v. Warden, Bill Clements Unit, 837 F.3d 438, 441 (5th Cir. 2016) (quoting

Bryson v. United States, 553 F.3d 402, 403 (5th Cir. 2008) (per curiam) (quoting Callip

v. Harris Cnty. Child Welfare Dep’t, 757 F.2d 1513, 1521 (5th Cir. 1985))); see also

Long, 77 F.3d at 880 (a dismissal with prejudice is appropriate only if the failure to

comply with the court order was the result of purposeful delay or contumacious

conduct and the imposition of lesser sanctions would be futile); cf. Nottingham, 837

F.3d at 442 (noting that “lesser sanctions” may “‘include assessments of fines, costs,

or damages against the plaintiff, conditional dismissal, dismissal without prejudice,

and explicit warnings’” (quoting Thrasher v. City of Amarillo, 709 F.3d 509, 514 (5th

Cir. 2013))).

While a court may not explicitly label a dismissal with prejudice, a dismissal

still may operate as one with prejudice. For example, “[w]hen a dismissal is without

prejudice but ‘the applicable statute of limitations probably bars future litigation,’”

that dismissal operates as – i.e., it is reviewed as – “a dismissal with prejudice.”

Griggs v. S.G.E. Mgmt., L.L.C., 905 F.3d 835, 844 (5th Cir. 2018) (quoting

Nottingham, 837 F.3d at 441); see also Wright v. LBA Hospitality, 754 F. App’x 298,

300 (5th Cir. 2019) (per curiam) (affirming dismissal under Rule 41(b) – potentially

effectively with prejudice – where “[t]he district court had warned Wright of the

consequences and ‘allowed [her] a second chance at obtaining service’” but she

“disregarded that clear and reasonable order”).

And whether a dismissal is without prejudice or, rather, either explicitly or

effectively with prejudice frames the reviewing court’s decision as to whether that

dismissal – considering the record that supports it – qualifies as an abuse of

discretion. See Dolleslager, 618 F.2d at 324-25 (“The established rule in this circuit is

that dismissal [of an action effectively with prejudice] under [Rule 41(b)], for failure

to comply with an order of the court is appropriate only where there is a clear record

of delay or contumacious conduct and lesser sanctions would not serve the best

interests of justice. In general, this Court has made it clear that lesser sanctions

normally will suffice, and except in the most flagrant circumstances, the trial court

ought not to resort to sanctions which deprive the litigant of his opportunity to pursue

his claim. We must therefore determine whether the present record discloses such a

pattern of delay, flagrant circumstances or contumacious conduct that no sanction

other than dismissal is appropriate to serve the interests of justice.” (cleaned up));

see, e.g., Dorsey, 528 B.R. at 148-49; Anamarc Enters., 2015 WL 4658723, at *3-*5.

Considering these legal standards, the undersigned will require the parties to

apply them (and all other applicable authority) to the record that was before the

bankruptcy court to prepare briefs to assist the district court’s determination whether

the bankruptcy court abused its discretion when it dismissed Ms. Dupree’s

bankruptcy proceedings, the first determination being whether those dismissals are

effectively with prejudice.

A brief on behalf of Ms. Dupree shall be filed by May 23, 2025. And, regardless

of whether Ms. Dupree files a brief, Rushmore and Powell shall file a brief by June

9, 2025.

The failure to comply with any part of this order may result in the imposition

of sanctions, see FED. R. Civ. P. 16(f), and may lead to dismissal of this case for failure

to prosecute pursuant to Rule 41(b).

Conclusion

The Court REOPENS this administratively closed case, DENIES Ms. Dupree

court-appointed counsel at this time, and ORDERS each side to file a brief to assist

the district court’s determination whether the bankruptcy court abused its discretion

when it dismissed Ms. Dupree’s bankruptcy proceedings. Ms. Dupree’s brief shall be

filed by May 238, 2025. And the Appellees’ brief shall be filed by June 9, 2025.

SO ORDERED.

DATED: April 238, 2025 :

DAVID L. HORAN

UNITED STATES MAGISTRATE JUDGE

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