Davis v. Bayless

UNITED STATES COURT OF APPEALS

For the Fifth Circuit

No. 94-20552

LANA RYAN DAVIS and LORI DAVIS,

Plaintiffs-Appellants,

VERSUS

BOBBIE G. BAYLESS, BAYLESS & STOKES

and BURTA RHODES RABORN,

Defendants-Appellees.

Appeal from the United States District Court

for the Southern District of Texas

November 22, 1995

BEFORE LAY1, DUHÉ and DeMOSS, Circuit Judges.

DeMOSS, Circuit Judge:

Plaintiffs Lana and Lori Davis appeal from rule 12(b)(6) dismissal

of their complaint alleging claims for damages under federal and state

law and seeking preliminary injunctive relief. Review of rule 12(b)(6)

dismissal is de novo and dismissal should not be affirmed unless it

appears that plaintiffs can prove no set of facts in support of their

claims that would entitle them to relief. Blackburn v. City of

Marshall, 42 F.3d 925, 931 (5th Cir. 1995). For purposes of review,

plaintiffs' factual allegations must be accepted as true. Id.

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Circuit Judge of the Eighth Circuit, sitting by

designation.

RELEVANT FACTS

Defendant Burta Rhodes Raborn is a court appointed receiver over

the non-exempt assets of Dr. Gerald Johnson and his estranged wife

June. Dr. Johnson is the judgment-debtor on an $11,360,000 malpractice

judgment entered by the 133rd Judicial District Court of Harris County,

Texas in 1982. Defendant Bobbie G. Bayless is counsel for Mr. and Mrs.

Earl Newsome, the judgment-creditors in the malpractice action.

Bayless & Stokes is the law firm in which Ms. Bayless is a partner.

Plaintiff Lana Ryan Davis is employed by and romantically involved with

Dr. Johnson. At all times relevant to this suit, Dr. Johnson, who is

separated from his wife, was staying with Lana Davis in her Houston

home. Plaintiff Lori Davis is Lana Davis' daughter. She shared the

residence with Lana Davis and Johnson.

Attempts to satisfy the Newsome judgment have been repeatedly

frustrated. For example, Raborn's receivership was abated in 1986 when

a settlement was reached, but had to be reinstated in May 1993 after

Johnson breached the settlement agreement. Satisfaction was also

interrupted by Johnson's bankruptcy. In denying Johnson a discharge,

the bankruptcy judge pointedly commented on Johnson's "nefarious

machinations" to avoid payment of the Newsome judgment, characterizing

Johnson's "fanciful account" of failed investments with "imaginary

friends" as being indicative of fraud, perjury and forgery.

On July 14, 1993, Bayless met Johnson at the Davis home to search

for assets that could be applied to the Newsome judgment. Johnson

consented to a limited search for his assets. The facts alleged by

Davis, which must be accepted as true, suggest that Johnson's consent

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was invalid.2 During the search both Lana Davis and her daughter Lori

Davis returned home and were distressed to find Bayless in the home.

Davis alleges that Bayless rifled her underwear drawer, read her

personal mail and refused to leave. Davis also claims that Bayless

eventually left with several pair of Lana Davis' underwear. Defendants

Raborn, Bayless and Bayless & Stokes respond that Bayless' search of

Johnson's residence was an attempt to satisfy the Newsome judgment and

was authorized by the state court's order appointing Raborn receiver,

which allowed the receiver to take possession of Johnson's non-exempt

property and required Johnson to cooperate by providing access to

places where such property might be located.

In November 1993, pursuant to a turnover petition, the state court

authorized the receiver to take possession of the contents of storage

facilities held in the name of Dr. Johnson or other named persons

associated with him, including Lana Davis and her children. The

November order also instructed named storage facilities to turn over

documentation that would allow the receiver to determine whether

Johnson had an interest in the contents of the storage rooms at those

facilities. In December 1993, the court issued a supplemental order

specifically identifying a particular storage unit leased to Davis'

adult daughter, Carrie Goff. Pursuant to those orders Raborn and

Bayless thereafter searched the Goff storage unit and seized several

items of value, including $5,600 cash, several items of jewelry which

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Davis alleges (1) that Bayless attempted to obtain her consent

by phone "through Johnson" and that she refused; (2) that Bayless then

coerced Johnson's consent to search by threatening to have Raborn (as

receiver) terminate Davis' employment with Johnson; (3) that Bayless'

search extended beyond the authorization given and continued after

consent was withdrawn; and (4) that Johnson lacked authority to

consent.

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Davis claims belonged to her mother and grandmother, and an oil

painting. The Davises are not party to the state court receivership

action and received no notice that an order allowing search of their

property had been issued. Defendants acknowledge that the property is

being held by the receiver, but allege that it is clearly identifiable

as Johnson's from documents in the Johnson divorce proceeding. In an

order dated December 7, 1993, the state court also authorized Raborn or

her agent to take possession of the contents of safe deposit boxes held

by Johnson or other named individuals, including Davis and her

children. No search or seizure has been conducted pursuant to this

last order.

PROCEDURAL HISTORY

The Davises filed this action in February 1994. Their amended

complaint alleges that Raborn, Bayless and Bayless & Stokes conspired

under color of state law to deprive them of protected liberty and

property interests without due process of law. The complaint alleges

violations of Article 1 § 10 and the First, Fourth and Fourteenth

Amendments to the United States Constitution, and statutory violations

under 42 U.S.C. §§ 1983 and 1985. The Davises also sought preliminary

injunctive relief to enjoin the defendants from seizing or disposing of

property belonging to the Davises during the pendency of the suit.

Finally, the complaint states a number of pendant state law claims,

including invasion of privacy, conversion, civil conspiracy,

intentional infliction of emotional distress, abuse of process,

trespass and violation of Article 1 § 19 of the Texas Constitution,

which guarantees due process of law.

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Defendants filed a 12(b)(6) motion, arguing that they were

entitled to absolute judicial immunity from the Davises' claims. With

that motion, defendants filed a request that the court take judicial

notice of the state court orders authorizing the receiver's actions.

The Davises responded and submitted the affidavits of Dr. Johnson and

Lana Davis. Taking judicial notice of the state court orders, the

district court granted defendants' motion.3

THE DISTRICT COURT'S DISPOSITION

The district court's brief order purports to dismiss the entire

complaint, but expressly decides only two issues: (1) that a court

appointed receiver is entitled to share in the appointing judge's

absolute judicial immunity and (2) that alleged misappropriation of

property or funds by a receiver does not state a constitutional claim

for deprivation of due process when state law affords adequate post-

deprivation remedies. On its face, the order appears to address only

Raborn's liability for federal law claims. We have assumed for

purposes of review that the district court intended to extend these

principles to the other defendants and to the Davises' state law

claims.

JUDICIAL IMMUNITY

Court appointed receivers act as arms of the court and are

entitled to share the appointing judge's absolute immunity provided

3

Although not raised by the parties, we note that the district

court did not err by dismissing pursuant to rule 12(b)(6) rather than

treating the motion as one for summary judgment. Federal courts are

permitted to refer to matters of public record when deciding a 12(b)(6)

motion to dismiss. Cinel v. Connick, 15 F.3d 1338, 1343 n.6 (5th Cir.

1994). Further, the presence of affidavits in the record that were not

relied upon by the district court does not convert the motion to

dismiss into one for summary judgment. Ware v. Associated Milk

Producers, Inc., 614 F.2d 413, 415 (5th Cir. 1980).

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that the challenged actions are taken in good faith and within the

scope of the authority granted to the receiver. New Alaska Dev. Corp.

v. Guetschow, 869 F.2d 1298, 1303 (9th Cir. 1989); Property Management

& Investments, Inc. v. Lewis, 752 F. 2d 599, 602-03 (11th Cir. 1985);

T & W Investment Co. v. Kurtz, 588 F.2d 801, 802 (10th Cir. 1978);

Kermit Contr. v. Banco Credito Y Ahorro Ponceno, 547 F.2d 1, 3 (1st

Cir. 1976); Bradford Audio Corp. v. Pious, 392 F.2d 67, 72 (2d Cir.

1968); see also Boullion v. McClanahan, 639 F.2d 213 (5th Cir. 1981)

(recognizing derived judicial immunity for bankruptcy trustees who act

under the supervision of and subject to the orders of the bankruptcy

court). Because a receiver's immunity is derivative of the appointing

judge's judicial immunity, it must depend, in part, upon whether the

state court was acting within its judicial discretion.

Jurisdiction of the State Court to Enter the Receivership Orders

Judges are afforded absolute immunity when they (1) perform a

normal judicial function; unless they are (2) acting in the clear

absence of all jurisdiction. Stump v. Sparkman, 98 S. Ct. 1099, 1105-

06 (1978). For purposes of immunity, the judge's jurisdiction is

construed broadly and a judge is not deprived of immunity "because the

action he took was in error, was done maliciously, or was in excess of

his authority; rather, he will be subject to liability only when he has

acted in the `clear absence of all jurisdiction.'" Id. at 1105.

Because "`some of the most difficult and embarrassing questions which

a judicial officer is called upon to consider and determine relate to

his jurisdiction,'" the proper inquiry is not whether the judge

actually had jurisdiction, or even whether the court exceeded its

jurisdictional authority, but whether the challenged actions were

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obviously taken outside the scope of the judge's power. Id. at 1105

(quoting Bradley v. Fisher, 13 Wall. 335, 352 (1872)).

The Davises argue that defendants Raborn and Bayless are not

entitled to immunity because the state court exceeded its authority by

ordering the search and seizure of the Davises' property when the

Davises were not party to the Newsome litigation. The Davises cite

several Texas cases which collectively stand for the proposition that

receivers cannot take custody of property in the possession of

strangers to the suit. Ex parte Harvill, 415 S.W.2d 174 (Tex. 1967);

Ex parte Britton, 92 S.W.2d 224 (Tex. 1936); Ex parte Renfro, 273 S.W.

813 (Tex. 1925). Harvill, Britton and Renfro all involve contempt

proceedings brought by the receiver against third parties and are

expressly inapplicable to situations in which the third party is an

agent of the debtor or is conspiring with the debtor to avoid the debt.

Harvill, 415 S.W.2d at 177; Britton, 92 S.W.2d at 227; Renfro, 273

S.W. 814. More importantly, those cases predate the Texas Turnover

Statute, TEX. CIV. PRAC. & REM. CODE ANN. § 31.002 (Vernon 1986 & Supp.

1991) (formerly TEX, CIV. REV. STAT. ANN. art. 3827a (Vernon Supp. 1980)).

Under the Texas Turnover Statute, courts may authorize the

receiver to take control of property that is in the possession of the

debtor or is subject to his control. Beaumont Bank, N.A. v. Buller,

806 S.W.2d 223, 227 (Tex. 1991). Texas state courts of general

jurisdiction can issue and enforce turnover orders against third

parties when necessary to obtain non-exempt property of the judgment

creditor. See TEX. CIV. PRAC. & REM. CODE ANN. § 31.002; Beaumont Bank,

806 S.W.2d 223, 227 (Tex. 1991); Norsul Oil & Mining Ltd. v. Commercial

Equip. Leasing Co., 703 S.W.2d 345 (Tex. App.--San Antonio 1985, no

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writ). When, as occasionally happens, the enforcement of a turnover

order yields to the receivership property in which a third party has an

adverse claim, the aggrieved third party may seek recourse in either

the receivership court or any other Texas court of proper jurisdiction

and venue. E.g., Campbell v. Wood, 811 S.W.2d 753 (Tex. App.--Houston

[1st Dist.] 1991, no writ).

The state court did not expressly authorize Raborn to search the

Davis home. That search and alleged seizure apparently was conducted

under the general order allowing Raborn to take possession of Johnson's

property. The state court did not act in the clear absence of all

jurisdiction by issuing the general order. Although the state court

orders authorizing search of the storage units and safe deposit boxes

do not expressly limit the property subject to seizure to that

belonging to Johnson, we are convinced that in light of the above

principles, the state court was not acting in the "clear absence of all

jurisdiction."

Raborn's Immunity as Receiver

Next the Davises argue that Raborn is not entitled to derivative

judicial immunity because she was acting beyond the scope of her

authority as receiver of Johnson's assets. Under Texas law, court

appointed receivers may administer the property and "perform other acts

in regard to the property as authorized by the court." TEX. CIV. PRAC &

REM. CODE ANN. § 64.031 (West 1986). Because court orders expressly

authorized Raborn to enter the storage unit, she was acting within the

scope of her authority as to that search. See Boullion v. McClanahan,

639 F.2d 213, 214 (5th Cir. 1981) (because trustee, "as an arm of the

[c]ourt, sought and obtained court approval of his actions, he is

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entitled to derived immunity"). The search of the Davis home, where

Johnson was temporarily resident, is supported by the state court's

general order appointing Raborn, which authorized her to take

possession of Johnson's non-exempt assets and required Johnson to

cooperate with the receiver's efforts, on pain of contempt. Further,

it is clear that Raborn was not personally present during the search at

Davis' home, and there is no allegation that Raborn instructed Bayless

to seize Lana Davis' underwear or any other property belonging to the

Davises. Additionally, there is no allegation that Raborn has

converted any property for her personal use or that the property has

not been accounted for in the receivership.

We are troubled by the fact that Raborn may have allowed Bayless,

the attorney for the judgment-creditors, to carry out certain functions

assigned by court order to the receiver. Texas law apparently

disfavors, but does not prohibit, such reliance by a receiver on

counsel for one of the parties to the receivership proceeding. See

Kitchens v. Gassaway, 128 S.W. 679 (Civ. App. 1910, no writ); see also

63 TEX. JUR. 3d Receivers § 97 at 171-72 (1989). Nonetheless, we

conclude that that relationship alone is insufficient to abrogate

Raborn's immunity. See Boullion, 639 F.2d 213, 214 (5th Cir. 1981)

(trustee entitled to derivative immunity on claims involving negligent

selection of an appraiser). The pleadings clearly demonstrate Raborn's

entitlement to immunity on the face of the pleadings and she is immune

from suit for damages on the Davises' federal law claims. Raborn's

entitlement to immunity from suit on Davises' state law claims is a

matter of state, not federal, law and requires the same result as to

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the Davises' state law claims. Byrd v. Woodruff, 891 S.W.2d 689 (Tex.

App.--Dallas 1994, writ denied).

Bayless and Bayless & Stokes' Immunity

The Davises argue that any immunity afforded to Raborn does not

extend to Bayless or the law firm. Private individuals who conspire

with state officials are not entitled to share in the judges' immunity

from suit. Sparks v. Duval County Ranch Co., Inc., 604 F.2d 976 (5th

Cir. 1979) (the doctrine of judicial immunity for persons who conspire

with judges is without foundation in either reason or authority), cert.

denied, 100 S. Ct. 1336 (1980). Bayless contends, without citation,

that she is nonetheless entitled to immunity because she was acting as

an agent of and on behalf of the receiver, rather than as a co-

conspirator. On the basis of the pleadings, we find that proposition

highly improbable. Bayless' first duty was to her client, the

judgment-creditors, and to satisfaction of the Johnson judgment.

Indeed, her role as counsel for one of the parties to the receivership

proceeding would have prohibited the state court from appointing

Bayless as the receiver. TEX. CIV. PRAC. & REM. CODE ANN. § 64.021 (Vernon

1986). The Supreme Court has said that absolute immunity should be

extended no further than its justification warrants. Harlow v.

Fitzgerald, 102 S. Ct. 2727, 2734 (1982). Texas has likewise refused

to extend derivative judicial immunity any further than necessary.

Byrd v. Woodruff, 891 S.W.2d 689 (Tex. App.--Dallas 1994, no writ).

Bayless offers no factual support for her conclusory allegation

that she was acting as Raborn's agent, rather than in her capacity as

the judgment-creditors' attorney. Even assuming that Bayless was

Raborn's agent, the Davises allege that Bayless seized women's

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underwear, which would clearly have exceeded the scope of the

receiver's authority to take possession of Dr. Johnson's property.

Because the pleadings indicate that Bayless may have exceeded the

authority afforded to the receiver, the district court's dismissal of

the Davises' damage claims against Bayless and Bayless & Stokes, if not

supported by any other ground, must be reversed.

PARRATT-HUDSON DOCTRINE: ADEQUATE STATE LAW REMEDIES

The district court also relied upon the availability of state law

remedies in its decision to dismiss the complaint. "Under the

Parratt/Hudson doctrine, a state actor's random and unauthorized

deprivation of a plaintiff's property does not result in a violation of

procedural due process rights if the state provides an adequate post-

deprivation remedy." Alexander v. Ieyoub, 62 F.3d 709, 712 (5th Cir.

1995); see Hudson v. Palmer, 104 S. Ct. 3194, 3202-05 (1984); Parratt

v. Taylor, 101 S. Ct. 1908, 1913-17 (1981), overruled on other grounds,

Daniels v. Williams, 106 S. Ct. 662 (1986). The doctrine rests on the

premise that because the state is unable to predict random and

unauthorized conduct, pre-deprivation remedies are infeasible. See

Zinerman v. Burch, 110 S. Ct. 975, 985-86 (1990). In such a case, the

provision of adequate state law post-deprivation remedies provides all

the due process that is required. Id.

Conduct is not random and unauthorized when the state has

expressly delegated the power and authority to effect the very

deprivation complained about. See Zinermon, 110 S. Ct. at 989. Thus,

at least as to the search of the storage facility and the order

authorizing search of safe deposit boxes, it cannot be said that the

defendants' conduct was random or unauthorized and pre-deprivation

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provision of notice and hearing to the parties specifically named in

the state court's orders was feasible. As to the search of the storage

room, Parratt-Hudson does not bar the Davises' claims. Further, the

Parratt-Hudson doctrine can only be applied to negate an alleged

violation of procedural due process. Augustine v. Doe, 740 F.2d 322,

326-27 (5th Cir. 1984). The Davises' allege that the defendants

effected a warrantless entry into the Davis home and seized personal

property in ostensible satisfaction of Johnson's debt. We are

persuaded that those allegations are sufficient to state a substantive

due process claim under the Fourth Amendment. See Augustine, 740 F.2d

at 325 (warrantless entry for purpose of arrest and seizure of

plaintiff's dog amounted to substantive due process claim such that

Parratt-Hudson was inapplicable). The Parratt-Hudson doctrine does not

negate the Davises' claims for violation of due process in violation of

the Fourth and Fourteenth Amendments.

ROOKER-FELDMAN DOCTRINE

The defendants' argument that dismissal must be affirmed on the

basis of Rooker-Feldman is also erroneous. When issues raised in a

federal court are "inextricably intertwined" with a state judgment and

the court is "in essence being called upon to review the state-court

decision," the court lacks subject matter jurisdiction to conduct such

a review. See e.g., United States v. Shepherd, 23 F.3d 923, 924 (5th

Cir. 1994); see also District of Columbia Court of Appeals v. Feldman,

103 S. Ct. 1303 (1983; Rooker v. Fidelity Trust, 44 S. Ct. 149 (1923).

However, our Circuit has not allowed the Rooker-Feldman doctrine to bar

an action in federal court when that same action would be allowed in

the state court of the rendering state. Gauthier v. Continental Diving

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Serv. Inc., 831 F. 2d 559, 561 (5th Cir. 1987) (interpreting Rooker-

Feldman in a manner consistent with the requirements of the full faith

and credit requirement). Texas courts of general jurisdiction allow

challenges to orders authorizing receivers to take possession of

receivership property or property subject to the control of the

receiver. Campbell v. Wood, 811 S.W.2d 753 (Tex. App.--Houston [1st

Dist.] 1991, no writ). The Davises' could have raised their claims in

either the 133rd Judicial District Court or any other Texas court of

proper jurisdiction and venue. Id. Therefore, Rooker-Feldman is

inapplicable to the present case.

INJUNCTIVE RELIEF

While rule 12 does not require that the district court enter

findings of fact or conclusions of law when deciding a motion to

dismiss, we have required that the district court explain its reasons

in sufficient detail to allow this Court to determine whether the

district court correctly applied the proper legal rule. See e.g.,

Wildbur v. Arco Chemical Co., 974 F.2d 631, 644 (5th Cir. 1992). When

the district court's "reasoning is vague or simply left unsaid, there

is little opportunity for effective review." McIncrow v. Harris

County, 878 F.2d 835, 836 (5th Cir. 1990). "In such cases, we have not

hesitated to remand the case for an illumination of the court's

analysis through some formal or informal statement of reasons." Id.

In this case, we are unable to discern any basis for the district

court's dismissal of the Davises' claim for injunctive relief under §

1983. Dismissal as to that claim will therefore be reversed and

remanded to the district court. We note for the purposes of remand

that "judicial immunity is not a bar to prospective injunctive relief

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against a judicial officer acting in her judicial capacity." Pulliam

v. Allen, 466 U.S. 522, 541-42 (1984); Crane v. Texas, 759 F.2d 412,

421 n.11 (5th Cir.) ("state court judges are not immune from federal

suits seeking equitable or declaratory relief"), modified in part on

other grounds, 766 F.2d 193 (5th Cir.), cert. denied, 474 U.S. 1020

(1985).

Finally, the Davises' claims that the defendants acted in

violation of Article 1 § 10 and the First Amendment are conclusory and

completely without factual support in the pleadings. Because Davis

failed to allege any factual basis for those claims, the district

court's dismissal of those claims will be affirmed. Blackburn v. City

of Marshall, 42 F.3d 925, 931 (5th Cir. 1995).

CONCLUSION

The pleadings establish that Raborn, as a court appointed

receiver, is entitled to derivative judicial immunity from the Davises'

federal and state law damage claims. Bayless and the law firm, Bayless

& Stokes, were not acting under the supervision of, and were not

accountable to, the court. Those defendants are therefore not entitled

to immunity from suit as to the Davises' federal and state law damage

claims. Dismissal as to the claims against defendants Bayless and the

law firm Bayless & Stokes is not otherwise justified on the basis of

the Hudson-Parratt or Rooker-Feldman doctrines. The district court's

order provides no meaningful basis for review of its dismissal of the

Davises' claim for preliminary injunctive relief under § 1983, which

would ordinarily survive a finding of judicial immunity.

The district court's dismissal of the Davises' claims based on

Article 1 § 10 and the First Amendment of the United States

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Constitution is AFFIRMED as to defendants Raborn, Bayless and the law

firm, Bayless & Stokes. The district court's dismissal of all damage

claims based on state or federal law against the receiver Raborn is

AFFIRMED on the basis of derived judicial immunity. The district

court's dismissal of all damage claims against Bayless and the law

firm, Bayless & Stokes, is REVERSED and REMANDED for further

development consistent with this opinion. The district court's

apparent dismissal of the Davises' claim for injunctive relief is

REVERSED and REMANDED for further development consistent with this

opinion.

AFFIRMED in part, REVERSED in part and REMANDED to the district

court.

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