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Laucks v. McVay

United States District Court, D. Rhode Island

November 3, 2016

MELINDA LAUCKS, Plaintiff,
v.
MARK MCVAY, JOHN DEACON JR., W. MARK RUSSO, JOHN A. DORSEY (Special Master), SETH SCHALOW (Special Master), MICHAEL A. SILVERSTEIN (Judge), BRIAN P. STEARNS (Judge), and BENJAMIN M. CUTCHSHAW, Defendants.

          ORDER

          John J. McConnell, Jr. United States District Judge

         Before the Court are the following thirteen motions:

• Plaintiffs Motion for Leave for Additional Amendments to Complaint to Adjust Amount for Damages and Add Yet Un-Identified Liable Party (ECF No. 30);
• Plaintiffs Motion to Amend (ECF No. 14);
• Plaintiffs Motion to Vacate State Court Decision in Case PB 13-5636 (ECF No. 36);
• Plaintiffs Motion for Default Judgment (ECF No. 52);
• Plaintiffs Emergency Motion for Instant Injunction (ECF No. 75);
• Plaintiffs Motion for Leave to Proceed In Forma Pauperis (ECF No. 66);
• Plaintiffs Motion for Reconsideration or Transfer of Venue (ECF No. 81);
• Defendants W. Mark Russo, John A. Dorsey, and Seth Schalow's Motion to Dismiss (ECF No. 5);
• Defendants Justice Michael A. Silverstein and Justice Brian P. Stern's Motion to Dismiss (ECF No. 11);
• Defendant Mark McVay's Motion to Dismiss (ECF No. 4) and Defendant John Deacon, Jr.'s Motion for Summary Judgment (ECF No. 44); and
• Defendant Mark McVay's Motion for Sanctions (ECF No. 39).

         For the reasons that follow, Plaintiffs Motions are DENIED; Defendants Russo, Dorsey, Schalow, Silverstein, and Sterns' Motions to Dismiss are GRANTED; Defendants McVay and Deacon's Motions for Summary Judgment are GRANTED; and Defendant McVay's Motion for Sanctions is DENIED. Plaintiff is ORDERED TO SHOW CAUSE within 14 days of this Order as to why the Court should not dismiss her claims against Defendant Benjamin Cutchshaw.

         I. BACKGROUND[1]

         Following a falling-out between Melinda Laucks and her former business partner, Mark McVay, their company, U.S. Textile, became the subject of litigation in Rhode Island Superior Court. (Compl. ¶ 44, ECF No. 1.) Rhode Island Superior Court Associate Justice Michael A. Silverstein placed the business under f mastership pursuant to R.I. Gen. Laws § 19-12 et. seq. during the course of the litigation, and it remains under the control of Special Master W. Mark Russo and his associates, John A. Dorsey and Seth Schalow. (Id. ¶ 46.) Shortly after this state-court order, Ms. Laucks says that she notified the Special Master of Mr. misconduct. (Id. ¶ 47.) Specifically, she alleges that she informed the court that her former partner Mr. McVay had once committed bank fraud, had pled guilty to charges of vandalism and domestic disturbance, and of a 2005 dispute she and Mr. McVay had over the ownership of U.S. Textile. (Id.) Despite these allegations, the Special Master refused to return U.S. Textile to her control. (Id.) Ms. Laucks alleges that the Special Master failed to adequately assess the evidence she presented, acted in an "extraordinarily hostile manner towards" her, and destroyed U.S. Textile's business relationships by ignoring customers. (Id. ¶¶ 51, 54.) Ms. Laucks further alleges that Justice Silverstein assisted the Special Master by restraining her from operating her business. (Id. ¶ 54.) Additionally, she alleges that Justice Silverstein falsely accused her of embezzlement and that he hurt the value of U.S. Textile by placing it in mastership. (Id. ¶¶ 54, 57.) Ms. Laucks further charges Rhode Island Superior Court Associate Justice Brian P. Stern with taking documents from her evidence packet, giving her a false impression about the outcome of her case, and working with the other Defendants to ensure that the court removed her from U.S. Textile. (Id. ¶¶ 57, 68, 69.)

         In the midst of the state court litigation, Ms. Laucks and Mr. McVay signed a Joint Release and Settlement Agreement (the "Release") giving Mr. McVay 100 percent ownership of U.S. Textile. (Id. ¶ 70.) Ms. Laucks now claims that she signed this Release due to "extreme pressure" from the Special Master and "constant fear[]" of being held in contempt of court. (Id. ¶ 59.) Ms. Laucks attempted to rescind the contract two months later, but Justice Stern found it to be enforceable. (Id. ¶ 61.) Ms. Laucks filed this federal lawsuit soon after that state-court action described above.

         In addition to her claims against her former partner Mr. McVay, the Special Masters, and the two Associate Justices of the Rhode Island Superior Court, Ms. Laucks also names as Defendants Mr. McVay's attorney, John Deacon, Jr., and an attorney for U.S. Textile's client Kolon Industries, Benjamin Cutchshaw.

         II. DISCUSSION

         A. Plaintiffs Motions

         1. Motion for Recusal - ECF No. 7

         Ms. Laucks' motion to recuse the prior, presiding judge in this matter (ECF No. 7) is DENIED AS MOOT because that judge recused himself (ECF No. 77) on October 24, 2016.

         Ms. Laucks also seeks in the same motion to "move for transfer of venue out of Rhode Island altogether" because "[i]t is not unreasonable that a possible conflict of interest may exist simply as a result of geography, social connections, and networking within the legal profession." (Id. at 2.) This request is unsupported by any facts or law and is otherwise without merit. Accordingly, Plaintiffs Motion for Recusal (ECF No. 7) is DENIED.

         2. Motion for Additional Amendments to Complaint to Adjust Amount for Damages and Add Yet Un-Identified Liable Party and Motion to Amend -ECF Nos. 14 and 30 A court may deny leave to amend where the proposed amendment is futile.

         Palmer v. Champion Mortg., 465 F.3d 24, 30 (1st Cir. 2006). Here, Ms. Laucks seeks to make the following amendments:

1. Citizens Bank Mastership Account Statements for valuation of business; Docket item 21 for actual damages incurred. Potential income and future income, had I not been removed from operations of the business, are likely significantly higher, to be derived from documents sought from Bay Logistics, GM and GM suppliers.
2. As of yet unidentified Bond underwriters per the attached REQUEST FOR DOCUMENTS

(ECF No. 30.) Ms. Laucks' first proposed amendment relates to her alleged damages. With respect to her second proposed amendment, Ms. Laucks states that she is "seeking to include additional financially-interested parties as may be revealed by the Bond documents." (Id. at 4.) Neither of these amendments would affect the merits of Ms. Laucks' case. Because the Court is granting Defendants' Motions to Dismiss and for Summary ...


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