Brambila et al v. Reo Bay Area, LP et al

Filing 17

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS AND GRANTING LEAVE TO AMEND, any amended complaint is due 9/30/11. (SI, COURT STAFF) (Filed on 9/8/2011) Modified on 9/9/2011 (ysS, COURT STAFF). (Additional attachment(s) added on 9/9/2011: # 1 Envelope) (tf, COURT STAFF).

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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United States District Court
For the Northern District of California

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PEDRO A. BRAMBILA, and
DOMINGA BRAMBILA,

No. C 11-03202 SI
ORDER GRANTING DEFENDANT’S
MOTION TO DISMISS AND GRANTING
LEAVE TO AMEND

Plaintiffs,
v.
REO BAY AREA, LP; ROBIN
TRIPALDI; KIMBALL, TIREY,
& ST. JOHN LLP; DOES 1
THROUGH 10,
Defendants.

/

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Defendant’s motion to dismiss the complaint is scheduled for a hearing on September 9, 2011.
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Pursuant to Civil Local Rule 7-1(b), the Court determines that the motions are appropriate for resolution
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without oral argument, and VACATES the hearing. For the reasons set forth below, the Court GRANTS
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the defendants’ motion to dismiss the complaint, and GRANTS plaintiff limited leave to amend. If the
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plaintiff wishes to file an amended complaint, the amended complaint must be filed no later than
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September 30, 2011.
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BACKGROUND
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This case involves the sale of a foreclosed home located at 410 Madera Street, Brentwood,
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California to defendant REO Bay Area, LP (“REO”). On June 28, 2011, plaintiffs Pedro Brambila and
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Dominga Brambila filed this lawsuit pro se against defendants REO; Robin Tripaldi; Kimball, Tirey &
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St. John LLP (“KTS”); as well as John Does 1 through 10. Plaintiffs allege violations of 42 U.S.C. §
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1983, the Fair Debt Collections Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”), as well as various
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state law claims. Defendant KTS is a law firm representing defendant REO in this matter, and defendant

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Robin Tripaldi is an attorney at KTS. KTS and Tripaldi represented REO in an unlawful detainer action

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against plaintiffs regarding the subject property in Superior Court of California, County of Contra Costa.

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Plaintiffs bought the property via a deed of trust dated January 26, 2006. Complaint, Exhibit A

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at 1 (“Deed of Trust”). In the Deed of Trust, plaintiffs were named as borrowers, while “Countrywide

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Bank, N.A.” is named as lender, and “Recontrust Company, N.A.” is named as trustee. Id. at 2.

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Notably, neither Countrywide Bank nor Recontrust Company was named as a party to this action,

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though many of the allegations of the Complaint are directed against them. See, e.g., Compl., ¶¶ 4, 5,

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10, 11, 12, 16, 21. The Deed of Trust references a promissory note also signed January 26, 2006, stating

United States District Court
For the Northern District of California

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borrower-plaintiffs owed lender (Countrywide Bank) $465,600.00. Complaint, Exhibit A at 2.

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Following the purchase, plaintiffs began to fall behind on payment. Plaintiffs attach a “Notice

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of Default and Election to Sell Under Deed of Trust” mailed by Recontrust and recorded in the Contra

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Costa County Recorder Office on July 30, 2009. Complaint, Exhibit G at 1. The Notice of Default lists

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the amount owed by plaintiffs as $38,834.21 as of July 28, 2009. Id. Plaintiffs admit in their Complaint

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that “we have been unable to make the monthly payments on the subject property for some time now.”

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Compl. ¶ 11. On May 10, 2010, the premises were sold by Recontrust to REO at a trustee’s sale for

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value. Complaint, Exhibit B at 1 (“Trustee’s Deed Upon Sale.” ) The Trustee’s Deed Upon Sale lists

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the Trustee as Recontrust Company, N.A. and the Grantee as REO Bay Area, LP. Id. It lists the unpaid

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debt at $539,420.81, and the amount paid by REO to Recontrust at $248,000.00. Id. Further, it states

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that, “This conveyance is made pursuant to the powers conferred upon Trustee [Recontrust] by the Deed

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of Trust executed by Pedro Brambila and Dominga Brambila, Husband and Wife as Joint Tenants, as

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Trustor, recorded on 02/01/2006.” Id. It also notes that REO was the highest bidder, and that, “The

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Grantee [REO] herein was not the beneficiary.” Id. The document is signed by an Assistant Secretary

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to Recontrust, Abrahim Bartamian, on May 10, 2010. It was then notarized on May 18, 2010.

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After purchasing the premises, REO retained defendant law firm KTS to evict plaintiffs who,

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defendants alleged, were still occupying and in possession of the premises. Def.’s Mot. Dismiss at 1.

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On February 23, 2011, KTS filed an unlawful detainer complaint (“UD”) against plaintiffs on behalf

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of REO in the Superior Court of California, Contra Costa-County, Delta-Pittsburg Judicial Division.

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Request for Judicial Notice (“RJN”), Ex. 1.1 Defendant Robin Tripaldi is an attorney who was

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employed by KTS at the time the eviction was filed, and signed the UD complaint. RJN, Ex. 1 at 7.

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The Brambilas filed a pro se answer to the UD on March 4, 2011. RJN, Ex. 2. On June 1, 2011, a court

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trial of the UD was held, and REO was awarded judgment of possession of the premises, $7,495.00 in

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hold-over damages and $420.00 in costs. RJN, Ex. 3. The Brambilas were not present at the trial. Id.

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On June 28, 2011, plaintiffs filed this action alleging two federal claims -- violations of 42

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U.S.C. § 1983 and the FDCPA -- as well as various state law claims. Defendants filed a motion to

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United States District Court
For the Northern District of California

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dismiss the complaint on August 5, 2011. Opposition to the motion was filed August 13, 2011, and the

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defendants filed a reply on August 17, 2011.

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LEGAL STANDARD
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Subject Matter Jurisdiction

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Federal courts are courts of limited jurisdiction, possessing only that power authorized by

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Constitution and statute. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). In most

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cases, such as the one presented here, subject matter jurisdiction is conferred upon a federal district

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court if the action raises a federal question, 28 U.S.C. § 1331, or if there is diversity jurisdiction. 28

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U.S.C. § 1332.

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Under Federal Rule of Civil Procedure 12(h)(3), a district court must dismiss an action if it

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determines at any time that it lacks subject matter jurisdiction. Federal Courts are required sua sponte

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to examine jurisdictional issues. Bernhardt v. County of Los Angeles, 279 F.3d 862, 868 (9th Cir. Cal.

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2002).

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The Court GRANTS defendant’s request for judicial notice of Exhibits 1, 2, and 3, all Superior
Court of California documents relating to the unlawful detainer action.

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II.

Failure to State a Claim

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Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it

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fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss,

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the 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, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007). This "facial

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plausibility" standard requires the plaintiff to allege facts that add up to "more than a sheer possibility

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that a defendant has acted unlawfully." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949, 173 L. Ed. 2d 868

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(2009). While courts do not require "heightened fact pleading of specifics," a plaintiff must allege facts

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sufficient to "raise a right to relief above the speculative level." Twombly, 550 U.S. at 544, 555.

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For the Northern District of California

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In deciding whether the plaintiff has stated a claim upon which relief can be granted, the court

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must assume that the plaintiff's allegations are true and must draw all reasonable inferences in the

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plaintiff's favor. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the

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court is not required to accept as true "allegations that are merely conclusory, unwarranted deductions

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of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).

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Pro se complaints are held to "less stringent standards than formal pleadings drafted by lawyers."

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Haines v. Kerner, 404 U.S. 519, 520, 92 S. Ct. 594, 30 L. Ed. 2d 652 (1972). Where a plaintiff is

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proceeding pro se, the Court has an obligation to construe the pleadings liberally and to afford the

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plaintiff the benefit of any doubt. Bretz v. Kelman, 773 F.2d 1026, 1027 n.1 (9th Cir. 1985) (en banc).

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However, pro se pleadings must still allege facts sufficient to allow a reviewing court to determine

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whether a claim has been stated. Ivey v. Bd. of Regents of Univ. of Alaska, 673 F.2d 266, 268 (9th Cir.

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1982).

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If the Court dismisses the complaint, it must then decide whether to grant leave to amend. The

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Ninth Circuit has "repeatedly held that a district court should grant leave to amend even if no request

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to amend the pleading was made, unless it determines that the pleading could not possibly be cured by

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the allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (citations and internal

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quotation marks omitted). Dismissal of a pro se complaint without leave to amend is proper only if it

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is "absolutely clear that the deficiencies of the complaint could not be cured by amendment." Noll v.

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Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987) (quoting Broughton v. Cutter Labs., 622 F.2d 458, 460

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(9th Cir. 1980)).

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DISCUSSION

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Plaintiffs allege two federal law claims and several state law claims. Neither of plaintiffs’

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federal law claims is legally cognizable. Accordingly, those claims are dismissed, with leave to amend

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the second (the FDCPA claim). Plaintiff’s remaining state law claims, including, inter alia, the actions

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for quiet title and wrongful foreclosure, are DISMISSED for lack of subject matter jurisdiction, with

United States District Court
For the Northern District of California

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limited leave to amend.

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I.

The Federal Claims

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A.

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Plaintiffs allege violation of 42 U.S.C. § 1983. Compl. ¶ 1. The gist of this claim is that

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defendants purchased the property and pursued the unlawful detainer action without authority to do so.

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Compl. ¶¶ 69, 71, 73, 77, 79, 82.

First Claim: Violation of 42 U.S.C. § 1983

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Defendants argue that the plaintiffs cannot bring a claim for violation of 42 U.S.C. § 1983

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against them because they are not state actors. The Court agrees. Section 1983 imposes liability only

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where a person acts “under color” of a state “statute, ordinance, regulation, custom, or usage.” 42

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U.S.C. § 1983; Richardson v. McKnight, 521 U.S. 399, 403 (1997). In order to state a claim under 42

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U.S.C. § 1983, plaintiffs must show two essential elements: (1) that the defendants acted under color

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of state law; and (2) that the defendants caused them to be deprived of a right secured by the

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Constitution and laws of the United States. Howerton v. Gabica, 708 F.2d 380 (9th Circ. 1983).2 As

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such, the offending party must generally be a “state actor” for liability to attach. Wyatt v. Cole, 504 U.S.

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The Court need not reach the second question, as to whether any of plaintiffs were actually
deprived of any constitutional rights.

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158, 161 (1992).

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Here, the defendants are private entities that were not acting under the color of state law. Even

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reading the complaint in a light most favorable to plaintiff, no allegations are made that suggest any

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defendant is a state actor. From the briefing papers and California Secretary of State website, it appears

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REO Bay Area, LP is a limited partnership registered in California on May 5, 2009. Kimball, Tirey,

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and St. John LLP is a limited liability partnership law firm located in Los Angeles, California. Robin

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Tripaldi appears to be an attorney employed with KTS. None could be considered state actor, nor does

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plaintiff allege as much.
There are limited situations in which private parties may be held liable under § 1983 when

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United States District Court
For the Northern District of California

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acting under color of state law. See Lugar v. Edmonson Oil Co., 457 U.S. 922, 937 (1982). Plaintiffs

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here, however, make no claim such action occurred. The only action that plaintiffs describe that could,

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in light most favorable to plaintiffs, be characterized as potential state action, is the unlawful detainer

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suit brought in state court. This precise argument was rejected, however, in Haw v. Wash. Mut. Bank,

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2010 U.S. Dist. LEXIS 18277 (E.D.Cal. Mar. 1, 2010) (Damrell, J.) (dismissing similar complaint for

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lack of jurisdiction):

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Use of the unlawful detainer process standing alone does not transform acts
by a private party into acts under color of law for purposes of § 1983. See
Hohensee v. Dailey, 383 F. Supp. 6, 9 (M.D. Pa. 1974) ("The mere fact that
an individual utilizes state process against another does not make the actor's
conduct cognizable as state action."); see also Deal v. Newport Datsun, Ltd.,
706 F.2d 141 (4th Cir. 1983) (affirming a district court's dismissal of an
action on the grounds that a landlord's commencement of an ejectment
proceeding did not constitute state action); Miller v. Hartwood Apartments,
Ltd., 689 F.2d 1239, 1242 (5th Cir. 1982) ("There is no cause of action under
the Civil Rights Act if a case is private litigation in which the state does no
more than furnish the forum and has no interest in the outcome."); cf.
Howerton v. Gabica, 708 F.2d 380 (9th Cir. 1983) (finding state action in an
eviction context when a police officer accompanied landlord when serving
eviction notice, privately approached tenants, and recommended that they
leave, creating the appearance that the police sanctioned the eviction).

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Id. at *4. The same facts apply here - the use of the state forum for an unlawful detainer suit does not
constitute state action as required by 42 U.S.C. § 1983.
The Court concludes that there is no showing that any of the named defendants are state actors,
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nor were their actions committed under color of state law. As such, the Court GRANTS defendant’s

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motion to dismiss the 42 U.S.C. § 1983 claim, without leave to amend.

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B.

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Plaintiffs’ second federal claim alleges that defendants violated 15 U.S.C. § 1692 et seq., the Fair

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Debt Collections Practices Act. Compl. ¶¶ 21, 36, 42, 44, 72, 81, 82, 114. The FDCPA protects

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consumers from the use of abusive, deceptive, and unfair debt collection practices by “debt collectors.”

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15 U.S.C. § 1692(a). The plaintiffs argue, inter alia, that defendants violated plaintiffs’ rights under

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the FDCPA “by presenting themselves as a party who has a right to enforce the original note, although

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United States District Court
For the Northern District of California

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their undisclosed-third-party-note-buyer clearly is not now, nor have they ever been a co-signer on the

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original note.” Compl. ¶ 81. They further allege violation of the FDCPA due to fraud. Compl. ¶ 82.

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The defendants argue that they are not “debt collectors” as defined by the statute, and thus the

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statute does not reach them. Def’s Mot. Dismiss at 6. Instead, they contend, they are bona fide

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purchasers for value of the premises. The Court need not reach this second claim, as it agrees with the

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first.

Second Claim: The FDCPA Claim

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The statute defines “debt collector” as “any person who uses any instrumentality of interstate

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commerce or the mails in any business the principal purpose of which is the collection of any debts, or

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who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be

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owed or due another.” 15 U.S.C. § 1692a(5). The plaintiffs here do not make any allegations that the

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defendants fit within this definition. The defendants did not seek collection upon any debts owed to

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themselves or others. Instead, they simply commenced -- and successfully litigated -- an unlawful

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detainer action against plaintiffs with respect to possession of the premises. While plaintiffs may have

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debt obligations related to their mortgage, defendants here are unrelated to that transaction. If plaintiff

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chooses to file an amended complaint, it must sufficiently demonstrate that the named defendants fall

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under the category of “debt collectors.” 15 U.S.C. § 1692a(5).

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Accordingly, the Court GRANTS defendants’ motion to dismiss the FDCPA claim. Leave to

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amend is granted since plaintiffs are pro se. However, as set forth above, any amended complaint must

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sufficiently allege both that the defendants can be defined as debt collectors as defined in 16 U.S.C. §

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1692a(6), and sufficiently allege substantive violations of the FDCPA in order to survive subsequent

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motions to dismiss.

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II.

State Law Claims
Dismissal of the 42 U.S.C. § 1983 and 16 U.S.C. § 1692 claims leave the complaint devoid of

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any federal claims. As such, no federal question jurisdiction remains per 28 U.S.C. § 1331. The

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complaint further fails to allege any facts that would support diversity jurisdiction per 28 U.S.C. § 1332.

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United States District Court
For the Northern District of California

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The remaining claims are all state law claims, including claims for quiet title, fraud, and wrongful

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foreclosure. The Court declines to exercise supplemental jurisdiction over the remaining state law claims

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at this time. See 28 U.S.C. § 1367(c).

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CONCLUSION

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For the reasons stated above, the Court GRANTS defendant’s motion to dismiss the complaint,

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and GRANTS plaintiff limited leave to amend in accordance with this order. Any amended complaint

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must be filed by September 30, 2011.

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IT IS SO ORDERED.

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Dated: September 8, 2011.
SUSAN ILLSTON
United States District Judge

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