Gonzalez v. Department (Bureau) of Real Estate et al

Filing 7

FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Gregory G. Hollows on 6/13/2016 RECOMMENDING that this action be dismissed for lack of jurisdiction; and the Clerk be directed to close this case; Referred to Judge Garland E. Burrell, Jr.; Objections due within 14 days after being served with these F & R's. (Reader, L)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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DANIEL E. GONZALEZ,

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No. 2:15-cv-2448 GEB GGH PS

Plaintiff,
v.

FINDINGS AND RECOMMENDATIONS

DEPARTMENT (BUREAU) OF REAL
ESTATE, et al.,
Defendants.

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Plaintiff is proceeding in this action pro se and in forma pauperis pursuant to 28 U.S.C. §

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1915. This proceeding was referred to this court by Local Rule 302(21), pursuant to 28 U.S.C. §

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636(b)(1).

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By order of February 1, 2016, plaintiff was informed of the deficiencies in his complaint

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and directed to file an amended complaint. The amended complaint, filed April 1, 2016, is now

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before the court. Because plaintiff has not cured the deficiencies as set forth in great detail in the

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screening order, the undersigned now recommends that this action be dismissed. The facts and

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authority provided in the previous order will be repeated here as they pertain to the amended

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complaint, and any new allegations will be addressed.

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The determination that plaintiff may proceed in forma pauperis does not complete the
required inquiry. Pursuant to 28 U.S.C. § 1915(e)(2), the court is directed to dismiss the case at
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any time if it determines the allegation of poverty is untrue, or if the action is frivolous or

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malicious, fails to state a claim on which relief may be granted, or seeks monetary relief against

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an immune defendant.

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A claim is legally frivolous when it lacks an arguable basis either in law or in fact.

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Neitzke v. Williams, 490 U.S. 319, 325 (1989); Franklin v. Murphy, 745 F.2d 1221, 1227-28 (9th

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Cir. 1984). The court may, therefore, dismiss a claim as frivolous where it is based on an

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indisputably meritless legal theory or where the factual contentions are clearly baseless. Neitzke,

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490 U.S. at 327. The critical inquiry is whether a constitutional claim, however inartfully

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pleaded, has an arguable legal and factual basis. See Jackson v. Arizona, 885 F.2d 639, 640 (9th

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Cir. 1989); Franklin, 745 F.2d at 1227.

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A complaint must contain more than a “formulaic recitation of the elements of a cause of

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action;” it must contain factual allegations sufficient to “raise a right to relief above the

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speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 1965 (2007).

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“The pleading must contain something more...than...a statement of facts that merely creates a

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suspicion [of] a legally cognizable right of action.” Id., quoting 5 C. Wright & A. Miller, Federal

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Practice and Procedure 1216, pp. 235-235 (3d ed. 2004). “[A] complaint must contain sufficient

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factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft

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v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570, 127

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S.Ct. 1955). “A claim has facial plausibility when the plaintiff pleads factual content that allows

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the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”

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Id.

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Pro se pleadings are liberally construed. See Haines v. Kerner, 404 U.S. 519, 520-21, 92

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S. Ct. 594, 595-96 (1972); Balistreri v. Pacifica Police Dep’t., 901 F.2d 696, 699 (9th Cir. 1988).

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Unless it is clear that no amendment can cure the defects of a complaint, a pro se plaintiff

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proceeding in forma pauperis is entitled to notice and an opportunity to amend before dismissal.

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See Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987); Franklin, 745 F.2d at 1230.

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This case arises out of plaintiff’s disappointment with a decision against him in state
court. Plaintiff was a real estate broker licensed in California who claims defendants conspired to
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unconstitutionally revoke his license on December 16, 2010. Plaintiff refers to two state court

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judgments which precipitated the events in this case. The undersigned has reviewed the opinions

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from those cases which reveal the following. Plaintiff represented a buyer in the purchase of a

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house which fell through. The buyer sued plaintiff to recover $7,550 she had paid to plaintiff.

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The parties disputed whether this was a refundable deposit. Although plaintiff prevailed at trial

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on or around June 14, 2010, the court having found this sum to be a nonrefundable payment, the

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former Department of Real Estate1 (“DRE”) initiated administrative disciplinary proceedings

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against plaintiff on or about October 12, 2010, for his actions in disposing of the $7,550 without

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the buyer’s knowledge or consent. In an accusation, the DRE found that plaintiff’s actions in

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distributing the money to himself and to the seller’s attorney constituted fraud and/or negligence

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and recommended suspending or revoking his license. The accusation was mailed to plaintiff and

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when he did not respond within the time permitted, default was entered, and then a final decision

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revoking his license, based on both the default and the determination that “the accusation had

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been proven by clear and convincing documentary evidence.” Plaintiff filed an appeal, claiming

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that due to a car accident resulting in physical limitations, he had been unable to pick up his mail

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containing the accusation and decision, but that DRE commissioner Jones had orally agreed to

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give notice to plaintiff’s attorneys in that case. Such notice was not given, according to plaintiff,

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and he received no actual notice of the default or default decision. The trial court denied

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plaintiff’s petition for writ of administrative mandamus as untimely. The appellate court

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affirmed. Gonzalez v. Bell, 2014 WL 787356 (Cal. Ct. App. Feb. 27, 2014) (affirmed also on the

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ground that the civil suit outcome did not control the administrative license process).2

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In this case, plaintiff has sued numerous defendants. In his amended complaint, he

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continues to claim that the state trial court decision vindicated him, and failed to find “fault,

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fraud, dishonesty or misappropriation” by him. (ECF No. 6 at 8.) Instead, plaintiff claims that

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This department was renamed the California Bureau of Real Estate on July 1, 2013. Gonzalez
v. Bell, 2014 WL 787356, at * 1 n. 1 (Cal. Ct. App. Feb. 27, 2014).
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This court takes judicial notice of the state court opinion. A court may take judicial notice of
court records. See MGIC Indem. Co. v. Weisman, 803 F.2d 500, 505 (9th Cir. 1986); United
States v. Wilson, 631 F.2d 118, 119 (9th Cir. 1980).
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defendants in this action were unhappy with that result and initiated administrative proceedings to

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revoke his realtor’s license. (Id. at 9.) Plaintiff claims that defendants Stepanyan, Jones, Van

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Driel, Sughrue, Sommers, and Moran conspired with each other to “make a false memorandum

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and file a false accusation impeached by the Judgment as perjury.” Id.

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In his amended complaint, plaintiff has added allegations pertaining to a state court action

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he filed against defendant Stepanyan and some former defendants in state court in 2011. 3 It

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appears that this state court action may be currently pending.

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Plaintiff’s claims complaining of the state court judgments may be jurisdictionally barred
by the Rooker-Feldman doctrine. The Rooker–Feldman doctrine occupies “narrow ground.”

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Skinner v. Switzer, 562 U.S. 521, 131 S.Ct. 1289 (2011). “‘The Rooker–Feldman doctrine

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provides that federal district courts lack jurisdiction to exercise appellate review over final state

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court judgments.’” AmerisourceBergen Corp. v. Roden, 495 F.3d 1143, 1153 (9th Cir.2007)

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(quoting Henrichs v. Valley View Dev., 474 F.3d 609, 613 (9th Cir.2007)). “Essentially, the

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doctrine bars ‘state-court losers complaining of injuries caused by state-court judgments rendered

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before the district court proceedings commenced’ from asking district courts to review and reject

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those judgments.” Henrichs, 474 F.3d at 613 (quoting Exxon Mobile Corp. v. Saudi Basic Indus.

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Corp., 544 U.S. 280, 284, 125 S.Ct. 1517 (2005)); accord Reusser v. Wachovia Bank, N.A., 525

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F.3d 855, 859 (9th Cir.2008).

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The Rooker–Feldman doctrine may also apply, however, where the parties do not directly

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contest the merits of a state court decision, but file an action that constitutes a “de facto” appeal

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from a state court judgment. Reusser, 525 F.3d at 859. Such a de facto appeal exists where

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“claims raised in the federal court action are ‘inextricably intertwined’ with the state court's

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decision such that the adjudication of the federal claims would undercut the state ruling or require

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the district court to interpret the application of state laws or procedural rules.” Id. (citation and

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quotation marks omitted). “Once a federal plaintiff seeks to bring a forbidden defacto appeal ...,

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that federal plaintiff may not seek to litigate an issue that is ‘inextricably intertwined’ with the

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In his amended complaint, plaintiff has eliminated any claim for conspiracy to retaliate in
regard to his short sale purchase of a home on December 15, 2008. (ECF No. 1 at 8-10.)
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state court judicial decision from which the forbidden de facto appeal is brought.” Noel v. Hall,

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341 F.3d 1148, 1158 (9th Cir.2003); see also Bianchi v. Rylaarsdam, 334 F.3d 895, 900 n. 4 (9th

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Cir.2003) (“The Rooker–Feldman doctrine prevents lower federal courts from exercising

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jurisdiction over any claim that is ‘inextricably intertwined’ with the decision of a state court,

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even where the party does not directly challenge the merits of the state court's decision but rather

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brings an indirect challenge based on constitutional principles.”). “Where the district court must

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hold that the state court was wrong in order to find in favor of the plaintiff, the issues presented to

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both courts are inextricably intertwined.” Doe & Associates Law Offices v. Napolitano, 252 F.3d

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1026, 1030 (9th Cir.2001). The point at which to draw the Rooker-Feldman line is not always

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clear, see Exxon Mobile v. Saudi Basic Industries Corp, 544 U.S. 280 (2005) (independent claim

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in federal court not barred although it involved aspects of state court decision), but the Ninth

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Circuit has fairly recently held after review of pertinent authority that so called conspiracy claims

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which dispute the result of a previous state court action due to alleged improper actions of parties

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to that previous action are barred by Rooker-Feldman. Cooper v. Ramos, 704 F.3d 772, 782-83

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(9th Cir. 2012).

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Here, although plaintiff does not specifically seek to overturn the state court judgment

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affirming the disciplinary action against him, his claims are clearly “inextricably intertwined”

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with that judgment because a decision in this case favorable to plaintiff would necessarily require

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this court to make determinations inconsistent with the state court's judgment regarding the

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finding that plaintiff failed to challenge the default decision within the time period allowed, and

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his petition was untimely, as well as the finding by the DRE that plaintiff committed fraud and/or

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negligence in directing the seller’s attorney to make disbursements from the payment made by the

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buyer. The judicially noticed facts, as set forth above, show that plaintiff’s petition for writ of

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mandamus appealing an administrative decision revoking plaintiff’s real estate license based on

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his default was denied by the trial court, and that decision was affirmed by the California Court of

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Appeals. That decision has not been disturbed.

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Because the state administrative tribunal found that plaintiff had defaulted in the
administrative proceedings, and that the allegations of fraud and negligence in the accusation had
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been proved by clear and convincing documentary evidence, resulting in the revocation of his real

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estate license, it necessarily follows that defendants here who were involved in those proceedings

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did not engage in a conspiracy to cause this result but acted in a legal fashion. Plaintiff’s claims

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in this action would require this court to make findings contrary to these determinations made by

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the state administrative tribunal and state courts. For instance, plaintiff’s claims premised on

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violations of the Fourth, Fifth, Ninth4 and Fourteenth Amendments of the Constitution, the Civil

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Rights Act, 42 U.S.C. § 1983, and the Sherman Act, if meritorious, would all require this court to

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determine that defendants had no right to take disciplinary action against a licensee such as

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plaintiff who had previously been exonerated from wrongdoing related to licensing activities, and

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that defendants revoked his license without lawful cause. Accordingly, such causes of action are

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“inextricably intertwined” with the prior state court conviction and, therefore, are barred under

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the Rooker–Feldman doctrine. Doe & Associates Law Offices, 252 F.3d at 1030; Cooper, supra. .

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In the second portion of the amended complaint, plaintiff makes allegations surrounding a

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state court action which he claims he filed on October 11, 2011, and which appears to be

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currently pending. He continues to claim that defendant Stepanyan conspired with former

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defendant Hickman and defendant Jones to “to make the false memorandum used to falsely

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accuse Plaintiff Gonzalez, wrongful[ly] revoke Plaintiff Gonzalez’s license, and intentionally

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inflict the unconstitutional harm and damages done under color of state law.” ECF No. 6 at 12.

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In this manner, plaintiff continues to complain about actions which were already adjudicated

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adversely to him in the prior state court action which is now concluded. It appears that plaintiff

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may have filed this second state court action to complain of the outcome of the first state court

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action. As such, these new claims are really a repeat of plaintiff’s original claims which were

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previously adjudicated in state court and are therefore barred by Rooker-Feldman. In fact,

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plaintiff expressly concedes that he filed two separate government claims against defendants in

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state court, on April 11, 2011 and May 4, 2014, which were both subsequently rejected. (ECF

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The Ninth Amendment does not provide for a private right of action. Nakanwagi v. Tenet
Healthcare Corp., 2016 WL 2851439, *5 (D. Az. May 16, 2016). “[T]he ninth amendment does
not confer substantive rights in addition to those conferred by other portions of our governing
law.” Gibson v. Matthews, 926 F.2d 532, 537 (6th Cir. 1991).
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No. 6 at 2, ¶¶ 2, 3.)
Moreover, this more recent legal action set forth by plaintiff in the second portion of his

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complaint and which may be still pending in state court, serves only to distract from the issues by

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attempting to create new claims based on a pending rather than a concluded state court action,

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which are in fact not at all new. Ordinarily, the Rooker-Feldman bar would not apply to pending

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state court actions. However, all of the enumerated claims listed in the amended complaint

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pertain to defendants’ actions in prosecuting plaintiff and revoking his real estate license, which is

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the action that is concluded and barred by Rooker-Feldman. See ECF No. 6 at 18-22. Plaintiff

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cannot avoid the Rooker-Feldman bar by asserting claims based on yet another state court action

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which happens to be still pending, and then asserting the same claims based on that action which

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were already decided in a previously concluded state court action.

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The undersigned finds that this entire action is barred by the Rooker-Feldman doctrine and

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should be dismissed. The undersigned has considered whether plaintiff may amend the pleading

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

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to 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) (while leave to

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amend shall be freely given, the court does not have to allow futile amendments). In light of the

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fact that plaintiff was thoroughly instructed as to all deficiencies in the original complaint but has

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been unable to cure these jurisdictional defects, it appears that permitting him to amend a second

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time would be futile.

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Good cause appearing, IT IS RECOMMENDED that:

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1. This action be dismissed for lack of jurisdiction; and

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2. The Clerk be directed to close this case.

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These findings and recommendations are submitted to the United States District Judge

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assigned to the case, pursuant to the provisions of Title 28 U.S.C. § 636(b)(l). Within fourteen

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(14) days after being served with these findings and recommendations, any party may file written

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objections with the court and serve a copy on all parties. Such a document should be captioned
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“Objections to Magistrate Judge’s Findings and Recommendations.” Plaintiff is advised that

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failure to file objections within the specified time may waive the right to appeal the District

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

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Dated: June 13, 2016

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/s/ Gregory G. Hollows

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UNITED STATES MAGISTRATE JUDGE

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GGH:076/Gonzalez2448.fr

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