Villareal et al v. Seneca Mortgage Servicing, LLC et al

Filing 35

ORDER Re: IFP Status On Appeal (ECF No. 33 ), signed by Magistrate Judge Erica P. Grosjean on 3/25/2016. This Order serves as notice to the parties and the United States Court of Appeals for the Ninth Circuit of the finding that Plaintiffs are not entitled to proceed in forma pauperis for this appeal under Federal Rule of Appellate Procedure 24(a)(3).(Fahrney, E)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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JUAN H. VILLAREAL; LORENA
VILLAREAL,

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Appeal No. 16-15447

Plaintiffs,

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Case No. 1:15-cv-01400-EPG

ORDER RE: IFP STATUS ON APPEAL
v.
(ECF No. 33)
SENECA MORTGAGE SERVICING,
LLC; U.S. BANK, N.A.; and DOES 1 –
20, inclusive,
Defendants.
By notice entered March 18, 2016, the United States Court of Appeals for the Ninth

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Circuit referred this matter to the District Court for the limited purposed of determining whether

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the in forma pauperis status of Plaintiffs Juan and Lorena Villareal should continue for this

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appeal or whether the appeal is frivolous or taken in bad faith. See 28 U.S.C. § 1915(a)(3); see

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also Hooker v. American Airlines, 302 F.3d 1091, 1092 (9th Cir. 2002).

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Permitting litigants to proceed in forma pauperis is a privilege, not a right. Franklin v.

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Murphy, 745 F.2d 1221, 1231 (9th Cir. 1984); Williams v. Field, 394 F.2d 329, 332 (9th Cir.

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1968), cert. denied, 393 U.S. 891 (1968); Williams v. Marshall, 795 F.Supp. 978, 978-79 (N.D.

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Cal. 1992). A federal court may dismiss a claim filed in forma pauperis prior to service if it is

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satisfied that the action is frivolous or malicious. 28 U.S.C. § 1915(e)(2); see Sully v. Lungren,

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842 F.Supp. 1230, 1231 (N.D. Cal. 1994). A claim is „frivolous‟ when it is without „basis in law
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or fact,‟ and „malicious‟ when it is „filed with the intention or desire to harm another.‟” Knapp v.

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Hogan, 738 F.3d 1106, 1109 (9th Cir. 2013). A finding of frivolity in this context is equivalent to

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finding a lack of good faith. Id. at 1110. A lack of good faith can be inferred where “plaintiffs

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seek to exploit the court system solely for delay or to vex defendants.” Vega v. JPMorgan Chase

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Bank, N.A., 654 F.Supp.2d 1104, 1121 (E.D. Cal. 2009).

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In its order dismissing this action, the Court found that Plaintiffs‟ claims lacked any basis

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in statutory law. (ECF No. 27.) As part of that holding, the Court took judicial notice of the fact

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that Plaintiffs had filed at least four separate bankruptcy petitions in the United States Bankruptcy

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Court for the Eastern District of California within one year, each of which was dismissed for

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failure to file the required documents. On at least two occasions, the bankruptcy petitions were

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filed shortly before dates that Defendants had noticed for the sale of property that was occupied

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by Plaintiffs and that Defendants were attempting to foreclose on.1 At the hearing on Defendants‟

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Motion to Dismiss, Plaintiffs also noted that they had a pending unlawful detainer proceeding in

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Tulare County Superior Court involving Defendant U.S. Bank and requested that the Court

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intervene and place a stay on those proceedings.

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Plaintiffs previously filed a similar suit against Defendant Seneca Mortgage alleging

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fraudulent loan modification practices while initiating foreclosure proceedings. Plaintiffs‟ claims

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in that case were similarly dismissed without leave to amend on July 9, 2015. See Villareal v.

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Seneca Mortgage Services et al., Case No. 1:14-cv-02033-MCE-GSA. In both the current case

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and in their previous case, Plaintiffs ignored multiple instructions to update their address for

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service and delayed proceedings by filing multiple and/or untimely opposition briefs. Given

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these facts, the Court finds that Plaintiffs‟ claims are frivolous because they lack a basis in fact or

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law and are not brought in good faith because they are brought to delay and vex defendants.

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Accordingly, IT IS HEREBY ORDERED that:

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1. This matter is declared frivolous;

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2. Plaintiffs are not entitled to proceed in forma pauperis in Appeal No. 16-15447, filed

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In the present case, Plaintiffs contended that the filing of their bankruptcy petitions precluded any foreclosure
proceedings from occurring.

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on March 16, 2016, under 28 U.S.C. § 1915(a)(3);

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3. This Order serves as notice to the parties and the United States Court of Appeals for

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the Ninth Circuit of the finding that Plaintiffs are not entitled to proceed in forma

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pauperis for this appeal under Federal Rule of Appellate Procedure 24(a)(3); and,

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4. The Clerk of the Court is DIRECTED to serve a copy of this Order on Plaintiffs and

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the United States Court of Appeals for the Ninth Circuit.

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IT IS SO ORDERED.
Dated:

March 25, 2016

/s/
UNITED STATES MAGISTRATE JUDGE

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