Peli Popovich Hunt et al v. Horwitz Cron and Armstrong LLP et al
Filing
84
MINUTES OF Motion Hearing held before Judge Christina A. Snyder: The Court GRANTS Defendant United States of America's Motion to Dismiss 53 , Defendants Miller and Lev's Motion to Dismiss 54 , Defendants Goodrich and Gould's Motion t o Dismiss 55 , and Defendants Pearlson, Selth, Weintraub & Selth APC's Motion to Dismiss 58 . Moreover, plaintiff has not demonstrated that she could cure the deficiencies identified herein and in the Court's prior order granting defendan ts' motions to dismiss, for despite the Court's detailed instructions, plaintiff has failed to allege facts supporting viable claims for relief. Accordingly, dismissal is WITH PREJUDICE as to defendants' United States of America, W&S, Selth, Pearlson, Goodrich, Gould, Miller, and Lev. In addition, the Court declines to exercise supplemental jurisdiction over plaintiff's remaining claims against defendants HC&A and Armstrong. Accordingly, these claims are dismissed without prejudice. The Clerk is directed to close the file. (MD JS-6. Case Terminated) Court Reporter: Laura Elias. (gk)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
JS-6
Case No.
CV 12-7866 CAS (RZx)
Title
PELI POPVICH HUNT, ET AL. V. HORWITZ, CRON AND
ARMSTRONG LLP, ET AL.
Present: The Honorable
Date
July 8, 2013
CHRISTINA A. SNYDER
Catherine Jeang
Deputy Clerk
Laura Elias
Court Reporter / Recorder
N/A
Tape No.
Attorneys Present for Plaintiffs:
Attorneys Present for Defendants
Franklin Jeffries
John Armstrong
James Selth
Paul Pearlson
David Gould
David Kupetz
Sekret Sneed
Proceedings:
DEFENDANT UNITED STATES OF AMERICA’S MOTION TO
DISMISS (filed May 28, 2013) [53]
DEFENDANTS MILLER AND LEV’S MOTION TO DISMISS
(filed May 28, 2013) [54]
DEFENDANTS’ GOODRICH AND GOULD’S MOTION TO
DISMISS (filed May 28, 2013) [55]
DEFENDANTS’ PEARLSON, SELTH, WEINTRAUB & SELTH
APC’S MOTION TO DISMISS (filed May 28, 2013) [58]
I.
INTRODUCTION
On September 12, 2012, plaintiff Peli Popovich Hunt, an individual and as Trustee
of the Robert and Peli Hunt Living Trust (“Living Trust”), filed the instant action against
defendants Horwitz, Cron & Armstrong, LLP (“HC&A”), Weintraub & Selth APC
(“W&S”), United States Bankruptcy Judge Ernest M. Robles (“Judge Robles”), John R.
Armstrong (“Armstrong”), David M. Goodrich (“Goodrich”), Elissa D. Miller (“Miller”),
Paul R. Pearlson (“Pearlson”), Daniel A. Lev (“Lev”), David Gould (“Gould”), and
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
JS-6
Case No.
CV 12-7866 CAS (RZx)
Date
July 8, 2013
Title
PELI POPVICH HUNT, ET AL. V. HORWITZ, CRON AND
ARMSTRONG LLP, ET AL.
James R. Selth (“Selth”).1 On January 3, 2013, plaintiff filed her first amended complaint
(“FAC”). On February 8, 2013, defendants Armstrong and HC&A filed an answer to her
amended complaint.
On March 8, 2013, the United States of America substituted into this action in
place of Judge Robles. Dkt. No. 29.
On April 8, 2013, after a hearing, the Court granted defendants Goodrich and
Gould, W&S, Selth, and Pearlson, and Miller and Lev’s motions to dismiss plaintiff’s
FAC. Dkt. No. 42. The Court granted defendant United States of America’s motion to
dismiss on April 19, 2013. Dkt. No. 43.
On May 13, 2013, plaintiff filed the operative Second Amended Complaint
(“SAC”), alleging the same four claims for (1) violation of her civil rights under 42
U.S.C. § 1983; (2) declaratory relief; (3) state law conspiracy; and (4) state law
professional negligence as were contained in their FAC.
On May 28, 2013, all defendants except for Armstrong and HC&A moved to
dismiss plaintiff’s SAC. On June 27, plaintiff filed oppositions to the four motions to
dismiss. The Court held a hearing on July 8. After considering the parties’ arguments,
the Court finds and concludes as follows.
II.
BACKGROUND
At the outset, the Court notes the material allegations in plaintiff’s SAC are nearly
identical to those contained in her FAC; plaintiff’s additional allegations concern events
that long predated the instant litigation and are largely irrelevant to the merits of these
motions.
In brief, plaintiff Hunt alleges that she is the widow of Dr. Robert W. Hunt and the
Trustee of the Living Trust. SAC ¶ 132. Dr. Hunt was the former owner of Robert W.
1
For ease of discussion, the Court will refer to Hunt as “plaintiff” notwithstanding
her instigation of this suit on behalf of herself and as Trustee of the Living Trust.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
JS-6
Case No.
CV 12-7866 CAS (RZx)
Date
July 8, 2013
Title
PELI POPVICH HUNT, ET AL. V. HORWITZ, CRON AND
ARMSTRONG LLP, ET AL.
Hunt, M.D., a Medical Corporation (the “Corporation”). Id. ¶ 139. Upon his death, Dr.
Hunt left plaintiff his medical practice, accounts receivables, and medical offices to the
Living Trust. Id. ¶ 132.
After plaintiff assumed possession over the Corporation, a variety of disputes over
compensation arose between plaintiff and a number of physicians working at the
Corporation, leading to litigation in the Los Angeles Superior Court. Id. ¶ 3. Hunt and
the Corporation were represented by defendants HC&A and Armstrong, and the
physicians were represented by defendants W&S, Selth, and Pearlson. Id. ¶¶ 4–10. On
October 14, 2011, a judgment awarding over $3 million in favor of the physicians was
entered in the Los Angeles County Superior Court. Defs. W&S, et al.’s Request for
Judicial Notice (“RJN”) Ex. 11 at 61–66.2
On November 23, 2011, both plaintiff and the Corporation filed for Chapter 11
bankruptcy. See RJN, Exs. 1, 2. Bankruptcy Judge Ernest M. Robles appointed
defendant Miller as Chapter 11 trustee in plaintiff’s bankruptcy case and defendant Lev
as defendant Miller’s counsel. See RJN Exs. 3, 5. Judge Robles appointed defendant
Goodrich as Chapter 11 trustee in the Corporation’s bankruptcy case and defendant
Gould as defendant Goodrich’s counsel. See RJN Exs. 4, 6. After the trustees raised
their concerns that Hunt was mismanaging or concealing the assets of each estate, Judge
Robles granted Miller and Goodrich’s motions to convert each bankruptcy case from
Chapter 11 to Chapter 7. See RJN Exs. 7, 9. Plaintiff alleges that Miller and Goodrich
violated 11 U.S.C. § 322 and Fed. R. Bankr. P. 9006 by failing to timely fix bonds or
accept the appointments. SAC ¶ 94.
On May 4, 2012, defendant Pearlson filed a proof of claim seeking to enforce the
$3 million judgment for the physicians. Hunt moved to disallow the claim, but Judge
Robles overruled her objection. Id. ¶ 108; see RJN Ex. 13. On September 5, 2012, a
hearing was held regarding the sale of real assets of the Living Trust, in particular the sale
of the Corporation’s commercial property in Torrance (the “Torrance property”). SAC
2
The Court previously granted defendants’ request for judicial notice pursuant to
Fed. R. Evid. 201. See Dkt. No. 43, n. 2. For the reasons set forth therein, the Court
again finds it appropriate to grant defendants’ request here.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
JS-6
Case No.
CV 12-7866 CAS (RZx)
Date
July 8, 2013
Title
PELI POPVICH HUNT, ET AL. V. HORWITZ, CRON AND
ARMSTRONG LLP, ET AL.
¶ 103. As in her first complaint, plaintiff alleges that defendants Miller and Goodrich
acted outside the scope of their authority as bankruptcy trustees by confiscating accounts
receivables and selling assets of the Living Trust. Id. ¶ 96. It appears that plaintiff
objected to the sale of the Torrance property on the grounds that she held a deed to the
property, but Judge Robles sustained defendants’ authenticity objection to evidence
proffered by plaintiff in support of her claim of ownership. Id. ¶ 103.3
The gravamen of plaintiff’s complaint, as in their FAC, is that defendants
conspired to violate Hunt’s constitutional rights, discriminating against her on the basis
of race, gender, and age. Id. ¶ 81. Plaintiff also alleges that defendants have acted under
color of California and federal law to confiscate and sell their property impermissibly.
Id. ¶ 82.
III.
LEGAL STANDARD
A Rule 12(b)(6) motion tests the legal sufficiency of the claims asserted in a
complaint. “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not
need detailed factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of his
‘entitlement to relief’ requires more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007). “[F]actual allegations must be enough to raise a
right to relief above the speculative level.” Id.
In considering a motion pursuant to Rule 12(b)(6), a court must accept as true all
material allegations in the complaint, as well as all reasonable inferences to be drawn
from them. Pareto v. F.D.I.C., 139 F.3d 696, 699 (9th Cir. 1998). The complaint must be
read in the light most favorable to the nonmoving party. Sprewell v. Golden State
Warriors, 266 F.3d 979, 988 (9th Cir. 2001); Parks Sch. of Bus., Inc. v. Symington, 51
F.3d 1480, 1484 (9th Cir. 1995). However, “[i]n keeping with these principles a court
considering a motion to dismiss can choose to begin by identifying pleadings that,
3
Plaintiff has appealed a number of these orders, and to date, her many appeals
remain pending. See In re: Robert W. Hunt, MD, Case Nos. CV 12-8619, 12-7483, and
12-8619; In Re: Peli Popovich Hunt, Case Nos. CV 12-6600, 12-8493, 13-2709.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
JS-6
Case No.
CV 12-7866 CAS (RZx)
Date
July 8, 2013
Title
PELI POPVICH HUNT, ET AL. V. HORWITZ, CRON AND
ARMSTRONG LLP, ET AL.
because they are no more than conclusions, are not entitled to the assumption of truth.
While legal conclusions can provide the framework of a complaint, they must be
supported by factual allegations.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950
(2009); Moss v. United States Secret Service, 572 F.3d 962, 969 (9th Cir. 2009) (“[F]or a
complaint to survive a motion to dismiss, the non-conclusory ‘factual content,’ and
reasonable inferences from that content, must be plausibly suggestive of a claim entitling
the plaintiff to relief.”) (citing Twombly and Iqbal); Sprewell, 266 F.3d at 988; W.
Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). Ultimately, “[d]etermining
whether a complaint states a plausible claim for relief will . . . be a context-specific task
that requires the reviewing court to draw on its judicial experience and common sense.”
Iqbal, 129 S.Ct. at 1950.
Furthermore, unless a court converts a Rule 12(b)(6) motion into a motion for
summary judgment, a court cannot consider material outside of the complaint (e.g., facts
presented in briefs, affidavits, or discovery materials). In re American Cont’l
Corp./Lincoln Sav. & Loan Sec. Litig., 102 F.3d 1524, 1537 (9th Cir. 1996), rev’d on
other grounds sub nom Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523
U.S. 26 (1998). A court may, however, consider exhibits submitted with or alleged in the
complaint and matters that may be judicially noticed pursuant to Federal Rule of
Evidence 201. In re Silicon Graphics Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir. 1999);
Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001).
For all of these reasons, it is only under extraordinary circumstances that dismissal
is proper under Rule 12(b)(6). United States v. City of Redwood City, 640 F.2d 963, 966
(9th Cir. 1981).
As a general rule, leave to amend a complaint which has been dismissed should be
freely granted. Fed. R. Civ. P. 15(a). However, leave to amend may be denied when “the
court determines that the allegation of other facts consistent with the challenged pleading
could not possibly cure the deficiency.” Schreiber Distrib. Co. v. Serv-Well Furniture
Co., 806 F.2d 1393, 1401 (9th Cir. 1986); see Lopez v. Smith, 203 F.3d 1122, 1127 (9th
Cir. 2000).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
JS-6
Case No.
CV 12-7866 CAS (RZx)
Title
PELI POPVICH HUNT, ET AL. V. HORWITZ, CRON AND
ARMSTRONG LLP, ET AL.
IV.
Date
July 8, 2013
ANALYSIS
As with plaintiff’s FAC, the Court finds that the majority of plaintiff’s claims fail
on three separate grounds. First, the Court lacks subject matter jurisdiction over all
claims asserted against defendants Miller, Lev, Goodrich, and Gould. Second, even if the
Court had subject matter jurisdiction, these defendants are shielded by the doctrine of
quasi-judicial immunity (or absolute judicial immunity in the case of Judge Robles).
Third, in addition to the foregoing deficiencies, plaintiff fails to state a claim upon which
relief may be granted.
A.
Subject Matter Jurisdiction
Defendants Miller, Lev, Goodrich, and Gould are the trustees and their attorneys in
the two underlying bankruptcy proceedings. As the Court found before, it lacks subject
matter jurisdiction over plaintiff’s claims against these individuals under the Barton
doctrine. See Barton v. Barbour, 104 U.S. 126 (1881).
The Supreme Court established over a century ago that “before suit is brought
against a receiver leave of the court by which he was appointed must be obtained.” Id.
This doctrine applies with equal force in the bankruptcy context, where “a party must
first obtain leave of the bankruptcy court before it initiates an action in another forum
against a bankruptcy trustee or other officer appointed by the bankruptcy court for acts
done in the officer’s official capacity.” In re Crown Vantage, Inc., 421 F.3d 963, 970
(9th Cir. 2005). If a party fails to obtain leave of court before initiating an action in
another forum, then the other forum lacks subject matter jurisdiction. Id.
There is a narrow exception to the Barton doctrine codified at 28 U.S.C. § 959(a),
which provides that “[t]rustees, receivers or managers of any property, including debtors
in possession, may be sued, without leave of the court appointing them, with respect to
any of their acts or transactions in carrying on business connected with such property.”
By its plain terms, this exception applies only if the “officer is actually operating the
business, and only to acts or transactions in conducting the debtor’s business in the
ordinary sense of the words or in pursuing that business as an operating enterprise.” In re
Crown Vantage, 421 F.3d at 971–72 (quotation omitted). The exception does not apply
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
JS-6
Case No.
CV 12-7866 CAS (RZx)
Date
July 8, 2013
Title
PELI POPVICH HUNT, ET AL. V. HORWITZ, CRON AND
ARMSTRONG LLP, ET AL.
when the transactions merely involve the administration or liquidation of the bankruptcy
estate. Id. at 972.
The Court again finds that the Barton doctrine deprives this Court of subject matter
jurisdiction over plaintiff’s claims. First, Hunt attempted but failed to obtain leave from
the bankruptcy court before filing the instant action; Judge Robles denied plaintiff’s
motion for leave to file an adversary proceeding on September 24, 2012. Defs.’ Miller
and Lev’s RJN, Ex A.
Second, plaintiff have not alleged facts sufficient to avail herself of the exception
set forth in 28 U.S.C. § 959(a). As before, plaintiff alleges no facts indicating that
defendants were engaged in anything other than the administration and liquidation of
plaintiff’s assets, which are protected activities under the Barton doctrine. In this regard,
plaintiff’s remedy is via the appeals process, not a collateral attack to their ongoing
bankruptcy proceedings. Accordingly, the Court finds that it lacks subject matter
jurisdiction over plaintiff’s claims against defendants Miller, Lev, Goodrich, and Gould.
B.
Judicial Immunity
Plaintiff alleges that Judge Robles committed various state law torts as the
presiding judge in the underlying bankruptcy proceedings. However, the Court again
finds that Judge Robles is immune from suit on these claims, in accordance with the wellsettled principle that judges are absolutely immune from suits brought as a result of their
judicial acts. Forrester v. White, 484 U.S. 219, 225–26 (1988). “This immunity applies
however erroneous the act may have been, and however injurious in its consequences it
may have proved to the plaintiff.” Moore v. Brewster, 96 F.3d 1240, 1244 (9th Cir.
1993) (citations and quotations omitted). Thus, a party “may challenge . . . prior rulings
only via appeal, not by suing judges.” In re Thomas, 508 F.3d 1225, 1227 (9th Cir.
2007).
Absolute immunity will not attach in two limited circumstances—first, where a
judge commits “nonjudicial acts, i.e., actions not taken in the judge’s judicial capacity”;
and second, where a judge acts “in the complete absence of all jurisdiction.” Mireles v.
Waco, 502 U.S. 9, 9–10 (1991). Neither of these circumstances applies here.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
JS-6
Case No.
CV 12-7866 CAS (RZx)
Date
July 8, 2013
Title
PELI POPVICH HUNT, ET AL. V. HORWITZ, CRON AND
ARMSTRONG LLP, ET AL.
First, plaintiff does not allege that Judge Robles committed “nonjudicial” acts. To
determine whether an act is a judicial one, the Court examines whether:
(1) the precise act is a normal judicial function; (2) the events occurred in the
judge’s chambers; (3) the controversy centered around a case then pending before
the judge; and (4) the events at issue arose directly and immediately out of a
confrontation with the judge in his or her official capacity.
Duvall v. County of Kitsap, 260 F.3d 1124, 1133 (9th Cir. 2001). Here, plaintiff’s
allegations concern rulings that Judge Robles made in a case then pending before him,
which are a normal judicial function for a bankruptcy judge. As in her FAC, plaintiff
again fails to plead any plausible allegations demonstrating that Judge Robles acted in a
manner injurious to plaintiff outside of the context of a judicial proceeding. Accordingly,
the Court finds that Judge Robles’s alleged actions were judicial in nature.
Second, plaintiff does not allege Judge Robles acted in the complete absence of all
jurisdiction. “A clear absence of jurisdiction means a clear lack of all subject matter
jurisdiction.” Mullis v. United States Bankruptcy Court, 828 F.2d 1385, 1389 (9th Cir.
1987). Merely acting in “excess” of a court’s jurisdiction is not sufficient to defeat a
judge’s judicial immunity. Id. Plaintiff’s SAC is devoid of allegations that could
plausibly be construed as establishing that Judge Robles acted outside of his subject
matter jurisdiction as a duly-appointed bankruptcy judge, and certainly not in the
“complete absence of jurisdiction.” Accordingly, the Court concludes that the United
States is absolutely immune from liability for the alleged judicial acts of Judge Robles.
C.
Quasi-Judicial Immunity
Defendants Goodrich, Gould, Miller, and Lev also argue that this case should be
dismissed because they are entitled to quasi-judicial immunity as court-appointed trustees
and attorneys for the trustees. The Court agrees. Because defendants were acting within
the scope of their authority and pursuant to court order, they are entitled to quasi-judicial
immunity.
Quasi-judicial immunity extends to non-judicial officers who either perform
“functions that are judicial in nature” or “have a sufficiently close nexus to the
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
JS-6
Case No.
CV 12-7866 CAS (RZx)
Date
July 8, 2013
Title
PELI POPVICH HUNT, ET AL. V. HORWITZ, CRON AND
ARMSTRONG LLP, ET AL.
adjudicative process.” In re Castillo, 297 F.3d 940, 948 (9th Cir. 2002). In determining
whether a function is judicial in nature, courts focus on the “ultimate act” rather than the
constituent parts of the act. Ashelman v. Pope, 793 F.2d 1072, 1078 (9th Cir. 1986)
(finding that bankruptcy trustee’s scheduling and convening of an adjudicatory hearing
was an ultimate act). This immunity has been extended to both the bankruptcy trustees
and their attorneys who act within their scope of authority and pursuant to court order.
See In re Harris, 590 F.3d 730, 742 (9th Cir. 2009); Mullis v. U.S. Bankruptcy Court for
Dist. of Nevada, 828 F.2d 1385, 1390 (9th Cir. 1987) (“The trustee . . . derives his
immunity from the judge who appointed him.”).
For quasi-judicial immunity to apply, a bankruptcy trustee or his attorney must
satisfy the following elements: (1) the acts at issue were within the scope of the trustee’s
authority; (2) the debtor had notice of the proposed acts; (3) the trustee candidly disclosed
the proposed acts to the bankruptcy court; and (4) the bankruptcy court approved the acts.
In re Harris, 590 F.3d at 742; see also Bennett v. Williams, 892 F.2d 822, 823 (9th Cir.
1989).
Here, the Court again concludes that defendants Goodrich, Gould, Miller, and Lev
are entitled to quasi-judicial immunity. Based on plaintiff’s nearly identical allegations
and the judicially-noticed documents before the Court, defendants demonstrate that all
four elements noted above are met.
First, plaintiff does not plausibly allege that defendants have acted outside their
scope of authority. Defendants Goodrich and Miller were court-appointed trustees who
had the duty to investigate plaintiff’s financial affairs and administer the assets of each
estate. Thus, their confiscation of the accounts receivables and sale of assets of the
Living Trust as alleged in the complaint, including the sale of the Torrance property,
were actions within the scope of their duties as trustees. Second, plaintiff received notice
of defendants’ handling of her estate through the bankruptcy court proceedings. SAC ¶¶
20–22, 43–45. Third, defendants continually disclosed information regarding plaintiff’s
assets and estate to Judge Robles. Id. In particular, defendants Goodrich and Miller
disclosed the sale of the Torrance Property at the September 5, 2012 hearing. Id. ¶ 50.
Fourth, Judge Robles approved the sale of the Torrance property, as well as various other
acts by defendants Goodrich and Miller that plaintiff complains of here. Id. ¶ 50, 69.
Accordingly, because all four elements are met, the Court finds that defendants Goodrich,
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
JS-6
Case No.
CV 12-7866 CAS (RZx)
Date
July 8, 2013
Title
PELI POPVICH HUNT, ET AL. V. HORWITZ, CRON AND
ARMSTRONG LLP, ET AL.
Gould, Miller, and Lev are shielded by quasi-judicial immunity, barring plaintiff’s claims
asserted against them.4
D.
Failure to State a Claim
In addition to the foregoing deficiencies, the Court finds that plaintiff also fails to
state a claim against defendants Miller, Lev, Gould, and Goodrich, as well as defendants
W&S, Selth, and Pearlson.
1.
42 U.S.C. § 1983
As in her FAC, plaintiff alleges in her SAC that defendants intentionally
discriminated against her on the basis of her race, gender, and age, in violation of her
rights under the Equal Protection Clause, Due Process Clause, and First, Fifth, and
Fourteenth Amendments of the U.S. Constitution. All moving defendants argue that
plaintiff has failed to sufficiently state a claim under § 1983. The Court agrees.
To state a claim under § 1983, a plaintiff must (1) allege the violation of a right
secured by the U.S. Constitution and laws of the United States, and (2) demonstrate that
the alleged deprivation was committed by a person acting under color of state law. West
v. Atkins, 487 U.S. 42, 48 (1988). An individual acts “under color of state law” when he
has exercised power “possessed by virtue of state law and made possible only because the
wrongdoer is clothed with the authority of state law.” United States v. Classic, 313 U.S.
229, 326 (1941). Thus, “a defendant in a § 1983 suit acts under color of state law when
he abuses the position given to him by the State.” West, 487 U.S. at 48.
Plaintiff’s repeated allegations that each defendant, except for HC&A and
Armstrong, were “acting under color of state law,” are implausible, conclusory, and
insufficient to state a claim under section 1983. As the Court found before, defendants
4
For the reasons set forth in the Court’s prior order dismissing plaintiff’s FAC, the
Court rejects plaintiff’s contention that defendants Goodrich and Miller had no authority
from the outset to act as plaintiff’s trustees because defendants failed to post security
within five days of being selected, in violation of 11 U.S.C. § 322(a)
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
JS-6
Case No.
CV 12-7866 CAS (RZx)
Date
July 8, 2013
Title
PELI POPVICH HUNT, ET AL. V. HORWITZ, CRON AND
ARMSTRONG LLP, ET AL.
Miller, Lev, Gould, and Goodrich were court-appointed individuals entrusted with the
responsibility of overseeing plaintiff’s federal bankruptcy proceedings, and defendants
W&S, Selth and Pearlson were attorneys that the disaffected physicians hired to represent
them in litigation against plaintiff. See Dkt. No. 43 at 11. None of the named defendants
in the instant case was employed by any state entity (as opposed to federal) or held duties
arising from a position provided to them by a state entity. Plaintiff’s conclusory
allegations to the contrary are insufficient to support a claim under section 1983, and
accordingly, the Court dismisses plaintiff’s section 1983 claim.5
2.
State Law Conspiracy
As in her FAC, plaintiff alleges a claim for state law conspiracy. However,
California does not recognize a separate, stand-alone cause of action for civil conspiracy.
Entertainment Research Group, Inc. v. Genesis Creative Group, Inc., 122 F.3d 1211,
1228 (9th Cir. 1997); see also Kidron v. Movie Acquisition Corp., 40 Cal. App. 4th 1571,
1581 (1995). Instead, there must be an underlying tort or civil wrong serving as the basis
for liability. Id. To state a claim for conspiracy under California law, therefore, a
plaintiff must allege “(1) the formation and operation of the conspiracy, (2) the wrongful
act or acts done pursuant thereto, and (3) the damage resulting from such act or acts.”
Cellular Plus, Inc. v. Superior Court, 14 Cal. App. 4th 1224, 1236 (1993).
The Court finds that plaintiff has failed to allege sufficient facts to support the
requisite wrongful act or acts committed by the named defendants underlying the
conspiracy. Plaintiff’s implausible allegation that defendants “conspired” amongst
themselves during the bankruptcy proceedings in order to receive kick-backs in the form
of costs and attorneys fees, SAC ¶¶ 117–121, is wholly unsupported. Indeed, plaintiff’s
allegations demonstrate that defendants were concerned with the efficient administration
of the bankruptcy estates, which are not “wrongful acts” that can give rise a civil
conspiracy claim. Moreover, plaintiff fails to allege any specific damages resulting from
5
Plaintiff also asserts a second claim for declaratory relief, which largely restates
the same facts as in plaintiff’s section 1983 claim. Because the Court finds that plaintiff
has failed to state a claim under section 1983, the Court also dismisses plaintiff’s
declaratory relief claim.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
JS-6
Case No.
CV 12-7866 CAS (RZx)
Date
July 8, 2013
Title
PELI POPVICH HUNT, ET AL. V. HORWITZ, CRON AND
ARMSTRONG LLP, ET AL.
the alleged conspiracy beyond “an injury to [plaintiff] in property, person, and fiduciary
duty,” SAC ¶ 122, which is insufficient to state a claim for conspiracy. Accordingly, the
Court dismisses plaintiff’s state law conspiracy claim.
3.
Professional Malpractice
Plaintiff alleges that defendants HC&A, Armstrong, Miller, Lev, Goodrich, and
Gould provided legal assistance that “was far less than reasonable compared to those of
the community.” SAC ¶ 124. As before, defendants Miller, Lev, Goodrich, and Gould
move to dismiss this claim based on their lack of an attorney-client relationship with
plaintiff.
Plaintiff again fails to allege the existence of an attorney-client relationship with
defendants Miller, Lev, Goodrich, and Gould, which defeats her claim asserted against
them. See Blue Water Sunset, LLC v. Markowitz, 192 Cal. App. 4th 477, 487 (2011).
Plaintiff has not corrected this deficiency from her FAC, nor does it appear that plaintiff
could do so. Defendants Miller and Goodrich were trustees appointed by the bankruptcy
court to administer plaintiff’s estate, and defendants Lev and Gould were attorneys
approved by the court to represent defendants Miller and Goodrich, respectively. None
of the duties held by defendants Miller, Lev, Goodrich, and Gould amount to an attorneyclient relationship with plaintiff. Accordingly, the Court grants defendants Miller, Lev,
Goodrich, and Gould motion to dismiss plaintiff’s legal malpractice claim.
Plaintiff also asserts this claim against non-moving defendants Armstrong and
HC&A, the attorney and his law firm who represented plaintiff in the state court
litigation. Although it is difficult to discern from plaintiff’s SAC, this appears to be the
only claim asserted against them.6 Because the Court is dismissing all federal claims over
which the Court has original jurisdiction, the Court declines to exercise jurisdiction over
plaintiff’s remaining state law claim for professional negligence against Armstrong and
HC&A. Acri v. Varian Associates, Inc., 114 F.3d 999, 1001 (9th Cir. 1997) (“[I]n the
6
To the extent that plaintiff also seeks to name HC&A and Armstrong to her
section 1983 claim, the Court sua sponte dismisses this claim for the same reasons
articulated herein with respect to the moving defendants.
CV-90 (06/04)
CIVIL MINUTES - GENERAL
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
JS-6
Case No.
CV 12-7866 CAS (RZx)
Date
July 8, 2013
Title
PELI POPVICH HUNT, ET AL. V. HORWITZ, CRON AND
ARMSTRONG LLP, ET AL.
usual case in which all federal-law claims are eliminated before the trial, the balance of
factors will point toward declining to exercise jurisdiction over the remaining state-law
claims[.]” ) (citations and alterations omitted). Accordingly, the Court dismisses
plaintiff’s remaining claims against HC&A and Armstrong.
V.
CONCLUSION
In accordance with the foregoing, the Court GRANTS defendants’ United States of
America; W&S, Selth, and Pearlson; Goodrich and Gould; and Miller and Lev’s motions
to dismiss plaintiff’s claims. Moreover, plaintiff has not demonstrated that she could
cure the deficiencies identified herein and in the Court’s prior order granting defendants’
motions to dismiss, for despite the Court’s detailed instructions, plaintiff has failed to
allege facts supporting viable claims for relief. Accordingly, dismissal is WITH
PREJUDICE as to defendants’ United States of America, W&S, Selth, Pearlson,
Goodrich, Gould, Miller, and Lev.
In addition, the Court declines to exercise supplemental jurisdiction over plaintiff’s
remaining claims against defendants HC&A and Armstrong. Accordingly, these claims
are dismissed without prejudice. The Clerk is directed to close the file.
IT IS SO ORDERED.
00
Initials of Preparer
CV-90 (06/04)
CIVIL MINUTES - GENERAL
:
16
CMJ
Page 13 of 13
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