United States District Court, E.D. Texas, Sherman Division
PEGGIE J. COATS
UNITED STATES OF AMERICA
MEMORANDUM ADOPTING IN PART AND REJECTING IN PART
REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE
L. MAZZANT UNITED STATES DISTRICT JUDGE.
for consideration the report of the United States Magistrate
Judge in this action, this matter having been heretofore
referred to the Magistrate Judge pursuant to 28 U.S.C. §
636. On November 9, 2018, the report of the Magistrate Judge
(“the Report”) (Dkt. #50) was entered containing
proposed findings of fact and recommendations that
Defendant's Motion to Dismiss Third Amended Complaint
(Dkt. #36) and Plaintiff's Motion for Judgment on the
Pleadings (Dkt. #42) both be denied. Defendant filed
objections to the report on December 14, 2018 (Dkt. #59). The
Court adopts in part and rejects in part the Report.
underlying facts of this case have previously been set forth
in the Magistrate Judge's report; as such, the Court sets
forth only those facts pertinent to the Government's
August 10, 2017, Plaintiff filed suit against the Government,
seeking “an order to quiet title and remove the
illegal, invalid and unenforceable lien on the
property” located at 737 Snowshill Trail, Coppell,
Texas 75019 (the “Coppell Property”) (Dkt. #1).
Several years prior to the instant suit, Plaintiff's
husband was charged with two violations of 18
U.S.C. § 1341, Mail Fraud, in a two-count information in
April 2009. United States v. Andrew Robert Coats,
No. 4:09-cr-47 (Dkt. #1) (E.D. Tex. 2009). Plaintiff and her
husband were alleged to have defrauded inmates' family
members with the promise of early parole for their
incarcerated family members. See id. Plaintiff's
husband entered a guilty plea on May 7, 2009, and was
sentenced to 150 months imprisonment, and ordered to pay
$949, 345.53 in restitution to the victims. Id. at
(Dkt. #11; Dkt. #42). The Government thereafter filed
judgment liens pursuant to the Mandatory Victims'
Restitution Act (“MVRA”), in Dallas County and
Panola County, Texas, locations where Plaintiff's husband
was known to hold real property interests. With respect to
these same charges, Plaintiff received and completed pretrial
diversion. Id. at (Dkt. #22 at p. 21).
28, 2010, Plaintiff purchased the Coppell Property. The Deed
of Trust for the Coppell Property identifies the borrowers as
“Peggie Coats, Joined Herein Pro Forma by Her Husband,
Andy B. Coats, ” and bears Plaintiff and her
husband's signatures (Dkt. #36, Exhibit 3 at p. 3). After
discovering the Coppell Property, the Government filed a
federal restitution judgment lien in Denton, County in July
2013. Plaintiff's Third Amended Complaint alleges that
the Government may not impose any federal judgment lien
related to her husband's criminal restitution on the
Coppell Property because such property is Plaintiff's
separate property (Dkt. #32).
Government filed its Motion to Dismiss on April 10, 2018
(Dkt. #36), Plaintiff responded on April 24, 2018 (Dkt. #38),
the Government replied on April 27, 2018 (Dkt. #39), and
Plaintiff filed a sur-reply on May 9, 2018 (Dkt. #40).
Subsequently, on June 15, 2018, Plaintiff filed a Motion for
Judgment on the Pleadings (Dkt. #42), on July 9, 2018, the
Government responded (Dkt. #46), and on July 18, 2018,
Plaintiff replied (Dkt. #48). On November 9, 2018, the
Magistrate Judge entered the Report, recommending that
Plaintiff's Motion for Judgment on the Pleadings (Dkt.
#42) and the Government's Motion to Dismiss (Dkt. #36)
each be denied, and further recommending that the issue of
whether the Coppell Property constituted Plaintiff's
separate property should be decided at summary judgment. On
November 16, 2018, the Court granted the Government's
request for an extension of time to file objections,
extending the deadline to object to December 7, 2018 (Dkt.
#52). On November 27, 2018, the Court granted Plaintiff's
request for an extension of time to file objections to the
Report, extending the deadline for all Parties to object to
December 14, 2018 (Dkt. #55). On December 12, 2018, Plaintiff
filed a Motion to Show the Court Affirmative Evidence
(Tracing of Funds), which is construed as a motion for
summary judgment (Dkt. #60; Dkt. #61). However,
Plaintiff did not file any objections to the Report. On
December 14, 2018, the Government filed Objections to the
Report (Dkt. #59). Plaintiff filed a response to these
objections on January 7, 2019 (Dkt. #62).
Federal Rules of Civil Procedure require that each claim in a
complaint include a “short and plain statement . . .
showing that the pleader is entitled to relief.”
Fed.R.Civ.P. 8(a)(2). Each claim must include enough factual
allegations “to raise a right to relief above the
speculative level.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007).
12(b)(6) motion allows a party to move for dismissal of an
action when the complaint fails to state a claim upon which
relief can be granted. Fed.R.Civ.P. 12(b)(6). When
considering a motion to dismiss under Rule 12(b)(6), the
Court must accept as true all well-pleaded facts in the
plaintiff's complaint and view those facts in the light
most favorable to the plaintiff. Bowlby v. City of
Aberdeen, 681 F.3d 215, 219 (5th Cir. 2012). The Court
may consider “the complaint, any documents attached to
the complaint, and any documents attached to the motion to
dismiss that are central to the claim and referenced by the
complaint.” Lone Star Fund V (U.S.), L.P. v.
Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010).
The Court must then determine whether the complaint states a
claim for relief that is plausible on its face.
‘“A claim has facial plausibility when the
plaintiff pleads factual content that allows the [C]ourt to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.'” Gonzalez v.
Kay, 577 F.3d 600, 603 (5th Cir. 2009) (quoting
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
“But where the well-pleaded facts do not permit the
[C]ourt to infer more than the mere possibility of
misconduct, the complaint has alleged-but it has not
‘show[n]'-‘that the pleader is entitled to
relief.'” Iqbal, 556 U.S. at 679 (quoting
Iqbal, the Supreme Court established a two-step
approach for assessing the sufficiency of a complaint in the
context of a Rule 12(b)(6) motion. First, the Court should
identify and disregard conclusory allegations, for they are
“not entitled to the assumption of truth.”
Iqbal, 556 U.S. at 664. Second, the Court
“consider[s] the factual allegations in [the complaint]
to determine if they plausibly suggest an entitlement to
relief.” Id. “This standard
‘simply calls for enough facts to raise a reasonable
expectation that discovery will reveal evidence of the
necessary claims or elements.'” Morgan v.
Hubert, 335 Fed.Appx. 466, 470 (5th Cir. 2009) (citation
omitted). This evaluation will “be a context-specific
task that requires the reviewing court to draw on its
judicial experience and common sense.” Iqbal,
556 U.S. at 679.
“[t]o survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its
face.”' Id. at 678 (quoting
Twombly, 550 U.S. at 570).
who files timely written objections to a magistrate
judge's report and recommendation is entitled to a de
novo review of those findings or recommendations to which the
party specifically objects. 28 U.S.C. § 636(b)(1)(C);
Report first recommended that Plaintiff's Motion for
Judgment on the pleadings be denied as premature on the basis
that the Government had yet to file an answer. No. objections
were made to this recommendation. Accordingly, these findings
and conclusions of the Magistrate Judge are adopted as those
of the Court and the Motion for Judgment on the Pleadings
should be denied.
Report next recommended that the Government's Motion to
Dismiss also be denied maintaining that, taking the
Plaintiff's allegations as true, it was plausible that
the funds used to purchase the Coppell Property were
traceable to Plaintiff's separate property. The
Government objected arguing that the motion to dismiss should
be granted because, as a matter of law, the entirety of the
Coppell Property is community property. The Court agrees that
the motion to dismiss should be granted, but disagrees with
the Government's way at arriving at such conclusion.
filed suit seeking “an order to quiet title and remove
the illegal, invalid and unenforceable lien on the
property.” (Dkt. #1). The law as it stands, allows ...