Roohan v. Nationstar Mortgage et al

Filing 3

ORDER (1) Denying 2 Motion to Proceed in Forma Pauperis Pursuant to 28 U.S.C. §1915(a); and Dismissing the Complaint Without Prejudice for Failure to State a Claim Pursuant to 28 U.S.C. §1915(e)(2)(B)(ii). The Court hereby: (1) denies P laintiff's Motion for leave to Proceed IFP, pursuant to 28 U.S.C. § 1915(a); (2) dismisses this action without prejudice pursuant to 28 U.S.C. § 1915(e)(2)(B)(ii), for failing to state a claim upon which 11 U.S.C. § 362(k)(1) reli ef can be granted; and (3) grants Plaintiff 45 days from the date this order is filed to a. File an amended Complaint which cures all the deficiencies described in this Order; and b. Either pay the filing fee, or file a new motion to proceed in forma pauperis in accordance with this Order. Signed by Judge John A. Houston on 3/21/2018. (All non-registered users served via U.S. Mail Service)(rmc)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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Case No.: 17cv01876 JAH-JLB
JAMES R. ROOHAN,

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ORDER:
Plaintiff,

v.

1. DENYING MOTION TO
PROCEED IN FORMA PAUPERIS
PURSUANT TO 28 U.S.C. §1915(a)
[Doc. No. 2];

NATIONAL MORTGAGE, et. al.

AND

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Defendants.

2. DISMISSING THE COMPLAINT
WITHOUT PREJUDICE FOR
FAILURE TO STATE A CLAIM
PURSUANT TO 28 U.S.C.
§1915(e)(2)(B)(ii) [Doc. No. 1]

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This matter comes before the Court on motion for leave to proceed in forma pauperis

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(“IFP”). On September 9, 2017, the Court received the Complaint signed by James Roohan,

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proceeding pro se (“Plaintiff”), suing on behalf of himself against National Mortgage,

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Clear Recon Corp, Sage Home Mortgage, and Rachel Callahan (collectively

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“Defendants”). On the same day, Plaintiff filed a motion for leave to proceed in forma

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pauperis, pursuant to 28 U.S.C. § 1915(a).

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After a careful review of the record, and for the reasons set forth below, the Court

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(1) DENIES Plaintiff’s motion for leave to proceed IFP, [Doc. No. 2]; (2) DISMISSES

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the action without prejudice; and (3) GRANTS Plaintiff forty-five (45) days leave to file

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an Amended Complaint which cures all the deficiencies described in this Order.

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I. Motion for Leave to Proceed IFP

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All parties instituting any civil action, suit, or proceeding in a district court of the

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United States, except an application for writ of habeas corpus, must pay a filing fee of

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$400. This includes a $350 statutory fee and an administrative fee of $50. See U.S.C. §

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1914(a); Judicial Conference of Fees, District Court Misc. Fee Schedule, § 14 [eff. Dec. 1,

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2014]. The action may proceed despite a plaintiff’s failure to prepay the entire fee only if

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he is granted leave to proceed IFP pursuant to 28 U.S.C. § 1915(a). See Andrews v.

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Cervantes, 492 F.3d 1047, 1051 (9th Cir. 2007); Rodriguez v. Cook, 169 F.3d 1176, 1177

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(9th Cir. 1999). Courts grant leave to file an IFP when plaintiffs submit an affidavit,

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including a statement of all of their assets, showing the inability to pay the statutory filing

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fee. See 28 U.S.C. § 1915(a).

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Plaintiff, James Roohan, has submitted an application to proceed in district court

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without paying fees or costs. See Doc. No. 2 at 2. Plaintiff indicates that his gross pay is

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between $1700 and $1900 per month, and his take-home pay is the same. He lists $100 in

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cash or in a checking or savings account. Id. at 1, 2. Plaintiff also indicates that he does not

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own an automobile, real estate, stock, bond, security, trust, jewelry, art work, or other

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financial instrument or thing of value and has regular monthly expenses i.e., housing

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utilities, credit cards, food, and medical. Id. at 2. Plaintiff has a seventeen-year-old daughter

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who depends on him for support and has miscellaneous credit card debt of $15,000. Id.

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Although Plaintiff provides a general list, he fails to itemize specific dollar amounts

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for each monthly expense as required under paragraph 2 on page 2 of the application. Id.

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These omissions render the application incomplete and insufficient for the Court to issue a

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determination as to Plaintiff’s ability to pay the filing fee required to pursue the instant

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action. As such, Plaintiff’s motion for leave to proceed in forma pauperis is DENIED

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without prejudice.

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II.

Sua Sponte Screening Pursuant to 28 U.S.C. § 1915(e)(2)(B)

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A. Standard of Review

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Plaintiff seeks leave to proceed IFP, pursuant to 28 U.S.C. § 1915(a). Accordingly,

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his Complaint is subject to sua sponte review, and mandatory dismissal, if it is “frivolous,

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malicious, . . . [or] fail[s] to state a claim upon which relief may be granted.” See 28 U.S.C.

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§ 1915(e)(2)(B); Coleman v. Tollefson, 135 S. Ct. 1759, 1763 (2015). “[S]ection 1915(e)

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not only permits, but requires, a district court to dismiss an in forma pauperis complaint

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that fails to state a claim.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc).

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The standard under § 1915(e)(2)(B)(ii) is the same as the Federal Rule of Civil

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Procedure 12(b)(6) standard for failure to state a claim. Watison v. Carter, 668 F.3d 1108,

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1112 (9th Cir. 2012). To survive dismissal, the complaint must contain “a short and plain

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statement of the claim that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).

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“A claim has facial plausibility when the plaintiff pleads factual content that allows the

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

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alleged.” See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Detailed factual allegations are

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not required, but “[t]hreadbare recitals of the elements of a cause of action, supported by

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mere conclusory statements, do not suffice.” Ashcroft, 556 U.S. at 678 (2009) (citing Bell

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Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “Determining whether a complaint

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states a plausible claim for relief [is] . . . a context-specific task that requires the reviewing

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court to draw on its judicial experience and common sense.” Id. Thus, under Rule 8(a)(2),

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a Plaintiff is required to plead more than an unadorned accusation. Id.

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Furthermore, “in alleging fraud or mistake, a party must state with particularity the

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circumstances constituting fraud or mistake. Malice, intent, knowledge, and other

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conditions of a person’s mind may be alleged generally.” See Fed. R. Civ. P. 9(b). “‘The

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circumstances constituting [an] alleged fraud’ must be ‘specific enough to give defendants

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notice of the particular misconduct so that they can defend against the charge and not just
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deny that they have done anything wrong.’” Screen Capital Int’l Corp. v. Library Asset

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Acquisition Co., 510 B.R. 266, 274 (C.D. Cal. 2014). Thus, “[t]o avoid dismissal for

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inadequacy under Rule 9(b), [the] complaint would need to state the time, place, and

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specific content of the false representations as well as the identities of the parties to the

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misrepresentation.” Sanford v. MemberWorks, Inc., 625 F.3d 550, 558 (9th Cir. 2010).

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While courts are to construe pro se papers and pleadings liberally, it may not “supply

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essential elements of claims that were not initially pled.” Ivey v. Board of Regents of the

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University of Alaska, 673 F.2d 266, 268 (9th Cir. 1982).

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B. Plaintiff’s Allegations

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Plaintiff alleges Defendants unlawfully sold his real estate while under protection of

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federal bankruptcy law. The Court construes this as a claim against Defendants under 11

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U.S.C. § 362(a) of the Bankruptcy Code. Section 362(a)(3) provides that the filing of a

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bankruptcy petition operates as a stay against . . . any act to obtain possession of property

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of the estate or of property from the estate or to exercise control over property of the estate.”

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An automatic stay is designed to “protect debtors from all collection efforts [all harassment,

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and all foreclosure actions] while they attempt to regain their financial footing.” In re

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Schwartz, 954 F.2d 569, 571 (9th Cir. 1992).

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The “automatic stay is self-executing and is effective upon the filing of a

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[bankruptcy] petition.” In re LPM Corp., 269 B.R. at 220, aff’d, 300 F.3d at 1134 (9th Cir.

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2002). Further, an automatic stay “protects property of the estate until (1) it is no longer

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property of the estate or (2) the bankruptcy proceeding is closed, dismissed, or a debtor’s

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discharge is either granted or denied.” See 11 USC § 362(c); In re LPM Corp., 269 B.R. at

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220-21. Moreover, “the bankruptcy court may lift, modify, or vacate the automatic stay if

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good cause exists.” See USC § 362(d); In re LPM Corp., 269 B.R. at 220-21.

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To state a claim for a violation of an automatic stay, Plaintiff must show a willful

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violation of the creditor. See 11 USC § 362(h); Eskanos & Adler, P.C. v. Leetien, 309 F.3d

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1210, 1215 (9th Cir. 2002). A willful violation requires that a party allege sufficient facts

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to show that the creditor knew of the automatic stay and intentionally violated the stay. In
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re Peralta, 317 B.R. 381, 389 (B.A.P. 9TH Cir. 2004). No specific intent is required; a good

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faith belief that the stay is not being violated is irrelevant to whether the act was ‘willful.’

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Id. At the conclusion of a bankruptcy case, the automatic stay is terminated. In re Weston,

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110 B.R. 452, 456, 457 (E.D. Cal. 1989), aff’d, 967 F.2d 596 (9th Cir. 1992). Accordingly,

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any foreclosure taking place after the dismissal of a bankruptcy case does not violate

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Section 362. Id.

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Here, Plaintiff alleges the “unlawful sale of real estate by . . . defendants while under

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. . . protection [of] federal bankruptcy laws.” Doc. No. 1 at 4. Plaintiff further provides that

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his “. . . property . . . was fraudulently put up for sale . . . when there was a stay in place

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cancelling the alleged sale.”

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Because Plaintiff’s “circumstances constitut[e] [an] alleged fraud, [his claim] must

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be specific enough to give defendants notice of the particular misconduct so that they can

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defend against the charge and not just deny that they have done anything wrong.” Screen

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Capital Int’l Corp., 510 B.R. at 274. Further, the Complaint fails to provide the role each

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Defendant played or “details on the specific misrepresentation involved in the fraudulent

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scheme.” Sipe v. Countrywide Bank, 690 F. Supp. 2d 1141, 1157 (E.D. Cal. 2010). These

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particular facts must be adequately alleged in order for the Defendants to properly defend

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against the charge. Without properly alleging a claim, Plaintiff cannot bring a claim “under

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Rule 8, much less meet the heightened pleading requirements . . . under Rule 9.” Screen

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Capital Int’l Corp., 510 B.R. at 267.

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Plaintiff is required to plead more than an unadorned accusation that the Defendants

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violated the automatic stay. See Ashcroft, 556, U.S. 662, 678 (2009). Doc. No. 1 at 3.

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Plaintiff does not provide the date on which the bankruptcy petition was filed nor the date

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on which an automatic stay was issued. The Complaint makes no mention of whether

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Defendants were given notice of the automatic stay, the date of the Trustee’s Deed of Sale,

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or the date on which the “bankruptcy proceeding [was] closed, dismissed, or [plaintiff’s]

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discharge [was] either granted or denied.” See In re LPM Corp., 269 B.R. at 220-21.

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These facts are essential to a claim for relief and the Court will not “supply essential

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elements of claims that were not initially pled.” Ivey, 673 F.2d at 268. As in Ashcroft,

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Plaintiff here fails to “plead factual content that allows the [C]ourt to draw the reasonable

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inference that the defendant is liable for the misconduct alleged” in the Complaint. 556

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U.S. at 678. In these circumstances, claims are dismissed in their entirety. Screen Capital

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Int’l Corp., 510 B.R. at 267. The Court, therefore, DISMISSES Plaintiff’s Complaint,

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[Doc. No. 1], for failure to state a viable claim upon which relief may be granted.

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C. Leave to Amend

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A pro se litigant must be given leave to amend their pleading to state a claim unless

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it is absolutely clear the deficiencies cannot be cured by amendment. See Lopez, 203 F.3d

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at 1130 (noting that leave to amend should be granted when a complaint is dismissed under

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28 U.S.C. § 1915(e) “if it appears at all possible that the plaintiff can correct the defect[.]”).

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Therefore, while the Court finds Plaintiff’s Complaint factually deficient, it will provide

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Plaintiff with leave to amend to cure the pleading deficiencies discussed in this Order. See

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Akhtar v. Mesa, 698 F.3d 1202, 1212 (9th Cir. 2012) (citing Ferdik v. Bonzelet, 963 F.2d

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1258, 1261 (9th Cir. 1992)).

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III.

Conclusion and Order

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This Court DISMISSES this action sua sponte without prejudice due to Plaintiff’s

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failure to state a claim upon which relief may be granted. To avoid dismissal with prejudice,

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Plaintiff must amend his Complaint and either pay the $400 filing fee or submit adequate

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proof of his inability to pay the filing fee forty-five (45) days from the date of this filing.

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If Plaintiff fails to do so, this case shall remain dismissed with prejudice and without further

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Order of the Court.

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Based on the foregoing, the Court HEREBY:

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(1) DENIES Plaintiff’s Motion for leave to Proceed IFP, pursuant to 28 U.S.C. §

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1915(a);

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(2) DISMISSES this action without prejudice pursuant to 28 U.S.C. §

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1915(e)(2)(B)(ii), for failing to state a claim upon which 11 U.S.C. § 362(k)(1)

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relief can be granted, [Doc. No. 1]; and

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(3) GRANTS Plaintiff forty-five (45) days from the date this order is filed to
a. File an amended Complaint which cures all the deficiencies described in this
Order; and
b. Either pay the filing fee, or file a new motion to proceed in forma pauperis
in accordance with this Order.

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IT IS SO ORDERED

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DATED: March 21, 2018

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_________________________________
HON. JOHN A. HOUSTON
UNITED STATES DISTRICT JUDGE

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