Carter v. Bank of America et al

Filing 4

ORDER and FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Dale A. Drozd on 5/19/2011. Court orders plaintiff's 2 Motion to Proceed In Forma Pauperis is DENIED without prejudice and RECOMMENDS plaintiff's 1 Complaint be dismissed without leave to amend and this action be dismissed. Within 14 days after being served with these F/Rs, plaintiff may file written Objections with Court. (Marciel, M)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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RONALD D. CARTER,

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Plaintiff,

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v.
BANK OF AMERICA, INC., et al.,

ORDER AND FINDINGS AND
RECOMMENDATIONS

Defendants.

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No. CIV S-10-1238 JAM DAD PS

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This matter was referred to the undersigned in accordance with Local Rule

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302(c)(21) and 28 U.S.C. § 636(b)(1). Plaintiff has requested leave to proceed in forma pauperis

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pursuant to 28 U.S.C. § 1915.

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Plaintiff however has submitted an incomplete in forma pauperis application.

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Specifically, plaintiff indicated in his in forma pauperis application that he is not currently

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employed. Plaintiff has not, however, provide the requested information regarding his last

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employment. Plaintiff also indicated in his application that he received disability or workers

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compensation payments within the past twelve months, but did not state the amount received or

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how much he expected to continue to receive. Plaintiff’s in forma pauper application will

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therefore be denied without prejudice to filing a completed in forma pauperis application.

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Moreover, under 28 U.S.C. § 1915(e)(2), the court is required to dismiss an in
forma pauperis case at any time if the plaintiff’s allegations of poverty is untrue or if the action is
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frivolous or malicious, fails to state a claim on which relief may be granted, or seeks monetary

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relief against an immune defendant. To state a claim on which relief may be granted, the

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plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl.

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Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is frivolous when it lacks an arguable

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basis either in law or in fact. Neitzke v. Williams, 490 U.S. 319, 325 (1989); Balistreri v.

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Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990).

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In considering whether a complaint states a cognizable claim, the court accepts as

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true the material allegations in the complaint and construes the allegations in the light most

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favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Hosp. Bldg. Co.

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v. Trustees of Rex Hosp., 425 U.S. 738, 740 (1976); Love v. United States, 915 F.2d 1242, 1245

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(9th Cir. 1989). Pro se pleadings are held to a less stringent standard than those drafted by

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lawyers. Haines v. Kerner, 404 U.S. 519, 520 (1972). However, the court need not accept as

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true conclusory allegations, unreasonable inferences, or unwarranted deductions of fact. Western

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Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981).

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The minimum requirements for a civil complaint in federal court are as follows:

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A pleading which sets forth a claim for relief . . . shall contain (1) a
short and plain statement of the grounds upon which the court’s
jurisdiction depends . . . , (2) a short and plain statement of the
claim showing that the pleader is entitled to relief, and (3) a
demand for judgment for the relief the pleader seeks.

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Fed. R. Civ. P. 8(a).

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Although the Federal Rules of Civil Procedure adopt a flexible pleading policy, a

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complaint must give the defendant fair notice of the plaintiff’s claims and must allege facts that

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state the elements of each claim plainly and succinctly. Fed. R. Civ. P. 8(a)(2); Jones v.

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Community Redev. Agency, 733 F.2d 646, 649 (9th Cir. 1984). “A pleading that offers ‘labels

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and conclusions’ or ‘a formulaic recitation of the elements of cause of action will not do.’ Nor

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does a complaint suffice if it tenders ‘naked assertions’ devoid of ‘further factual

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enhancements.’” Ashcroft v. Iqbal, --- U.S.---, ---, 129 S. Ct. 1937, 1949 (2009) (quoting
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Twombly, 550 U.S. at 555, 557. A plaintiff must allege with at least some degree of particularity

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overt acts which the defendants engaged in that support the plaintiff’s claims. Jones, 733 F.2d at

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649. A complaint must also contain “a short and plain statement of the grounds for the court’s

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jurisdiction” and “a demand for the relief sought.” Fed. R. Civ. P. 8(a)(1) & 8(a)(3).

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Here, plaintiff’s complaint is deficient in several respects. First, plaintiff’s

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complaint does not contain a short and plain statement of the grounds upon which the court’s

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jurisdiction depends, a short and plain statement of the claim showing that the plaintiff is entitled

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to relief, or a demand for judgment for the relief plaintiff seeks.

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Second, in his complaint plaintiff alleges that Bank of America allowed Stephanie

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J. Carter to borrow $53,000 against the estate of plaintiff’s father while concealing the loan from

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the heirs of the estate in violation of Regulation Z of the Truth In Lending Act. (Compl. (Doc.

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No. 1.) at 1.) The Truth in Lending Act (“TILA”) is a consumer protection statute that aims to

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“avoid the uninformed use of credit.” 15 U.S.C. § 1601(a). TILA “has the broad purpose of

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promoting ‘the informed use of credit’ by assuring ‘meaningful disclosure of credit terms’ to

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consumers.” Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 559 (1980) (quoting 15 U.S.C. §

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1601). Plaintiff does not allege that he was a party to the loan between Bank of America and

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Stephanie Carter. In this regard, plaintiff doe not appear to be a consumer of credit or a borrower

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protected under TILA in connection with the alleged transaction. TILA confers a statutory

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“‘right of action only on a borrower in a suit against the borrower’s creditor.’” Hernandez v.

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HomEq Servicing, No. 1:10cv01484 OWW DLB, 2010 WL 5059673, *3 (E.D. Cal. Dec. 6,

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2010) (quoting Talley v. Deutsche Bank Trust Co., Civil No. 07-4984 (RBK), 2008 WL

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4606302, *2 (D. N.J. Oct. 15, 2008)). See also Davidson v. Countrywide Home Loans, Inc., No.

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09-CV-2694-IEG (JMA), 2011 WL 1157569, *5 (S.D. Cal. Mar. 29, 2011) (“KAP was not the

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borrower, and therefore has no standing to assert a TILA claim.”); Wilson v. JPMorgan Chase

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Bank, NA., No. CIV. 2:09-863 WBS GGH, 2010 WL 2574032, *6 (E.D. Cal. June 25, 2010)

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(holding that plaintiff had no standing to request rescission or damages under TILA on loan
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between her deceased husband and defendant because she was “not a party to the loan contract

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and therefore is not an ‘obligor’ or ‘consumer’ with the right to rescind under TILA.”); Johnson

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v. First Fed. Bank of Cal., Nos. C 08-01796 PVT, C 08-00264 PVT, 2008 WL 270509, *4 (N.D.

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Cal. July 8, 2008) (holding that a party who was not listed as a borrower on the loan was not a

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“consumer” under TILA and therefore had no standing to bring a TILA claim.)1

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Third, in his complaint plaintiff also alleges that the loan Stephanie Carter

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obtained against plaintiff’s father’s estate is “causing that estate to be encumbered in a probate

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matter[.]” (Compl. (Doc. No. 1) at 2.) The United States Supreme Court has recognized a

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probate exception to otherwise proper federal jurisdiction. See Markham v. Allen, 326 U.S.

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490, 494 (1946); accord Marshall v. Marshall, 547 U.S. 293, 308 (2006). The probate exception

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proscribes a federal court from “‘disturb[ing] or affect[ing] the possession of property in the

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custody of a state court.’” Marshall, 547 U.S. at 311 (modification in original) (quoting

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Markham, 326 U.S. at 494). In Marshall, the Supreme Court specifically defined the scope of

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this limited exception to jurisdiction, holding that “the probate exception reserves to state probate

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courts the probate or annulment of a will and the administration of a decedent’s estate; it also

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precludes federal courts from endeavoring to dispose of property that is in the custody of a state

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probate court. But it does not bar federal courts from adjudicating matters outside those confines

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and otherwise within federal jurisdiction.” Id. at 311-12. See also Thomas v. Artists Rights

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Enforcement Corp. ( In re Kendricks), 572 F. Supp.2d 1194, 1198 (C.D. Cal. 2008) (“Causes of

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action ‘merely related’ to probate matters are not within the probate exception.”). Thus, a federal

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district court may not exercise jurisdiction to: (1) probate or annul a will, (2) administer a

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Moreover, the only reference made by plaintiff in his complaint to a specific date is his
allegation that on March 13, 2008, a court set aside the deed Stephanie Carter obtained in
connection with the allegedly fraudulent loan. (Compl. (Doc. No. 1) at 2-3.) Plaintiff is advised
that the statute of limitations for a TILA damages claim is one year from the occurrence of the
violation. 15 U.S.C. § 1640(e). The complaint pending before the court in this action was not
filed until May 20, 2010.
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decedent’s estate, or (3) dispose of property that is in the custody of a state probate court. See

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Three Keys Ltd. v. SR Utility Holding Co., 540 F.3d 220, 227 (3d Cir. 2008).

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Finally, plaintiff makes repeated conclusory allegations of fraud throughout his

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complaint without providing factual support for those allegations. (Compl. (Doc. No. 1) at 1-3.)

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Where a plaintiff has raised claims of fraud, “the circumstances constituting fraud ... shall be

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stated with particularity.” Fed. R. Civ. P. 9(b). “Rule 9(b) serves not only to give notice to

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defendants of the specific fraudulent conduct against which they must defend, but also ‘to deter

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the filing of complaints as a pretext for the discovery of unknown wrongs, to protect [defendants]

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from the harm that comes from being subject to fraud charges, and to prohibit plaintiffs from

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unilaterally imposing upon the court, the parties and society enormous social and economic costs

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absent some factual basis.’” Bly–Magee v. California, 236 F.3d 1014, 1018 (9th Cir. 2001)

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(quoting In re Stac Elec. Sec. Litig., 89 F.3d 1399, 1405 (9th Cir. 1996)). Pursuant to Rule 9(b),

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a plaintiff alleging fraud at a minimum must plead evidentiary facts such as the time, place,

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persons, statements and explanations of why allegedly misleading statements are misleading. In

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re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1547 n.7 (9th Cir. 1994); see also Vess v. Ciba–Geigy

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Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003); Fecht v. Price Co., 70 F.3d 1078, 1082 (9th

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Cir. 1995).2 Here, plaintiff has failed to plead the minimum evidentiary facts required under

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Rule 9(b).

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The undersigned notes that in a September 22, 2010 letter to the court, plaintiff

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stated that he “filed a case with the Superior Court but lost” and thereafter “filed an appeal to the

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Third Appellate District Court of Appeal.” (Doc. No. 3.) While the precise claims presented and

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resolution of plaintiff’s state court case are unclear, plaintiff is advised that under the Rooker-

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Feldman doctrine, federal district courts lack jurisdiction to review alleged errors in state court

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Likewise, “[u]nder California law, the ‘indispensable elements of a fraud claim include
a false representation, knowledge of its falsity, intent to defraud, justifiable reliance, and
damages.’” Vess, 317 F.3d at 1105 (quoting Moore v. Brewster, 96 F.3d 1240, 1245 (9th Cir.
1996)).
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decisions. Dist. of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 476 (1983) (holding

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that review of state court determinations can be obtained only in the United States Supreme

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Court). The doctrine applies to “cases of the kind from which the doctrine acquired its name:

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cases brought by state-court losers complaining of injuries caused by state-court judgments

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rendered before the district court proceedings commenced and inviting district court review and

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rejection of those judgments.” Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280,

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284 (2005). “The purpose of the doctrine is to protect state judgments from collateral federal

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attack.” Doe & Assocs. Law Offices v. Napolitano, 252 F.3d 1026, 1030 (9th Cir. 2001).

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Pursuant to this doctrine, a federal district court is prohibited from exercising subject matter

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jurisdiction over a suit that is “a de facto appeal” from a state court judgment. Kougasian v.

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TMSL, Inc., 359 F.3d 1136, 1139 (9th Cir. 2004). A federal district court may not examine

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claims that are inextricably intertwined with state court decisions, “even where the party does not

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directly challenge the merits of the state court’s decision but rather brings an indirect challenge

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based on constitutional principles.” Bianchi v. Rylaarsdam, 334 F.3d 895, 900 n.4 (9th Cir.

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2003). See also Ignacio v. Judges of U.S. Court of Appeals, 453 F.3d 1160, 1165-66 (9th Cir.

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2006) (affirming district court’s dismissal of the case “because the complaint is nothing more

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than another attack on the California superior court’s determination in [plaintiff’s] domestic

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case”).

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For all of the reasons set forth above, plaintiff’s complaint fails to satisfy the

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minimum requirements for a civil complaint in federal court and does not state a cognizable

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claim. Accordingly, plaintiff’s complaint will be dismissed for failure to state a claim.

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The undersigned has carefully considered whether plaintiff may amend his

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complaint to state a claim upon which relief can be granted. “Valid reasons for denying leave to

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amend include undue delay, bad faith, prejudice, and futility.” California Architectural Bldg.

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Prod. v. Franciscan Ceramics, 818 F.2d 1466, 1472 (9th Cir. 1988). See also Klamath-Lake

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Pharm. Ass’n v. Klamath Med. Serv. Bureau, 701 F.2d 1276, 1293 (9th Cir. 1983) (holding that
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while leave to amend shall be freely given, the court does not have to allow futile amendments).

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In light of the obvious deficiencies of plaintiff’s complaint noted above, the court finds that it

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would be futile to grant plaintiff leave to amend.

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Accordingly, IT IS HEREBY ORDERED that plaintiff’s May 20, 2010
application to proceed in forma pauperis (Doc. No. 2) is denied without prejudice.

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IT IS RECOMMENDED that:

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1. Plaintiff’s May 20, 2010 complaint (Doc. No. 1) be dismissed without leave to

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amend; and
2. This action be dismissed.
These findings and recommendations will be submitted to the United States

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District Judge assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1). Within

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fourteen (14) days after being served with these findings and recommendations, plaintiff may file

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written objections with the court. A document containing objections should be titled “Objections

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to Magistrate Judge’s Findings and Recommendations.” Plaintiff is advised that failure to file

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objections within the specified time may, under certain circumstances, waive the right to appeal

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the District Court’s order. See Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).

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DATED: May 19, 2011.

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