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McAllister v. Dispute Prevention and Resolution, Inc.

United States District Court, D. Hawaii

November 8, 2019

WILLIS C. MCALLISTER, Plaintiff,
v.
DISPUTE PREVENTION AND RESOLUTION, INC., et al., Defendants.

          ORDER (1) GRANTING APPLICATION TO PROCEED WITHOUT PREPAYMENT OF FEES OR COSTS; AND (2) DISMISSING ACTION WITH LEAVE TO AMEND.[1]

          Derrick K. Watson United States District Judge.

         On September 11, 2019, Plaintiff Willis McAllister, proceeding pro se, filed an application to proceed in forma pauperis (“IFP Application”) and a civil complaint against Defendants Dispute Prevention and Resolution, Inc. (DPR); Keith Hunter; Stefan Reinke; and Kelly Bryant. Dkt. Nos. 1, 6, 13.[2] On November 1, 2019, the Court issued an Order (Dkt. No. 11), concluding that this Court was divested of jurisdiction to review the IFP Application or screen the complaint by virtue of McAllister having appealed to the Ninth Circuit Court of Appeals, challenging this Court's decision to deny McAllister's motion for recusal. Dkt. No. 7. After further consideration, McAllister's appeal does not divest this Court of jurisdiction, and the Court's November 1, 2019 order to the contrary is vacated.[3]

         Because the IFP Application reflects that McAllister does not have the ability to pay the filing fee in this case, the Court GRANTS the IFP Application. However, because McAllister does not allege a claim in his Complaint, this action is DISMISSED with leave to amend.[4]

         I. The IFP Application

         Federal courts can authorize the commencement of any suit without prepayment of fees or security by a person who submits an affidavit that demonstrates an inability to pay. See 28 U.S.C. § 1915(a)(1). While Section 1915(a) does not require a litigant to demonstrate absolute destitution, Adkins v. E.I. Du Pont de Nemours & Co., 335 U.S. 331, 339 (1948), the applicant must nonetheless show that he is “unable to pay such fees or give security therefor, ” 28 U.S.C. § 1915(a).

         Here, McAllister has made the required showing under Section 1915(a). In the Amended IFP Application, Dkt. No. 13, McAllister states that he receives $1, 011 per month in Social Security benefits. Further, McAllister states that he receives no other income, has $45 in a checking or savings account, and owns no automobile, real property, or financial instruments. In light of these figures, McAllister's income falls below the poverty threshold identified by the Department of Health and Human Services' (“HHS”) 2019 Poverty Guidelines. See HHS Poverty Guidelines, available at https://aspe.hhs.gov/poverty-guidelines. In addition, McAllister has insufficient assets to provide security. As a result, the Court GRANTS the Amended IFP Application, Dkt. No. 13.

         II. Screening

         The Court liberally construes the pro se Complaint. Eldridge v. Block, 832 F.2d 1132, 1137 (9th Cir. 1987). However, the Court cannot act as counsel for a pro se litigant, such as by supplying the essential elements of a claim. Pliler v. Ford, 542 U.S. 225, 231 (2004); Ivey v. Bd. of Regents of Univ. of Alaska, 673 F.2d 266, 268 (9th Cir. 1982).

         In the Complaint, Dkt. No. 1, McAllister asserts that in an underlying employment discrimination case, [5] the court issued a February 22, 2018 order, enforcing an arbitration agreement and requiring the parties to arbitrate all claims. See Dkt. No. 1, ¶ 7.2; Order, McAllister v. Hertz Global Holdings, Inc., No. 1:17-cv-147 (D. Haw. Feb. 22, 2018), ECF No. 68 [hereinafter “Hertz”]. McAllister alleges that a contract was thereby formed, the parties to which included himself and the defendants named in the underlying action. Dkt. No. 1, ¶ 7.2. The Arbitration Administrator and Arbitrator were, respectively, Defendants DPR and Stefan M. Reinke. See Dkt. No. 1, ¶ 7.3; Dkt. Nos. 1-1, 1-7.

         On July 1, 2019, Defendant Keith Hunter, President of DPR, sent a letter to the parties in the underlying case, informing them that DPR and Reinke had “made the decision to withdraw” and that they would “refund in full all deposits received.” Dkt. No. 1-7. By withdrawing, McAllister alleges Hunter and Reinke “breached their contract to Arbitrate this matter.” Dkt. No. 1, ¶ 7.9. McAllister then filed a motion requesting sanctions in the underlying proceedings. Dkt. No. 1-8. The motion was denied because, the court reasoned, it “lack[ed] jurisdiction” to intervene. Dkt. No. 1-9 at 1. McAllister's lawsuit in Hertz remains stayed pending the completion of arbitration.

         In this case, McAllister asserts two claims: (1) breach of contract and (2) violation of 42 U.S.C. Section 1981(a). Although arbitral immunity does not apply in this case, [6] neither claim is viable.

         A. Breach of Contract

         To sustain a claim for breach of contract, a plaintiff must allege: (1) the existence of a contract;[7] (2) plaintiff's performance; (3) defendant's failure to perform an obligation under the contract; and (4) damages as a result of failure to perform. See Calipjo v. Purdy, 439 P.3d 218, 225 (Haw. 2019).

         First, the Complaint does not contain factual allegations to suggest the existence of a contract. Rather, McAllister alleges in conclusory fashion that a contract was formed between himself and the defendants in the underlying action. Dkt. No. 1, ¶ 7.2. The fact that the Hertz Court found there was a valid arbitration agreement between McAllister and certain defendants in Hertz does not mean that a contract was formed between ...


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