Terrado v. U.S. Bank National Association et al

Filing 44

ORDER (1) GRANTING DEFENDANT'S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT WITHOUT LEAVE TO AMEND, AND (2) RULING ON PLAINTIFF'S MOTIONS TO STRIKE re 33 , 38 , 43 - Signed by JUDGE DERRICK K. WATSON on 3/8/2019. For the reasons set forth herein, U.S. Banks Motion to Dismiss the First Amended Complaint, Dkt. No. 33, is GRANTED, and the claims in this case are DISMISSED WITHOUT PREJUDICE for lack of subject matter jurisdiction. Terrado's First Mot ion to Strike, Dkt. No. 38, is DENIED, and Terrado's Second Motion to Strike, Dkt. No. 43, is DENIED in part and DENIED AS MOOT in part. The Clerk is instructed to enter Judgment, pursuant to this Order, in favor of Defendant U.S. Bank National Association. The Clerk is then instructed to close this case. (emt, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAI‘I

ESTELITA T. TERRADO,

Case No. 18-cv-00148-DKW-RLP

Plaintiff,

ORDER (1) GRANTING
DEFENDANT’S MOTION TO
DISMISS THE FIRST AMENDED
COMPLAINT WITHOUT LEAVE
TO AMEND, AND (2) RULING ON
PLAINTIFF’S MOTIONS TO
STRIKE

vs.
U.S. BANK NATIONAL
ASSOCIATION,
Defendant.

On July 17, 2018, Plaintiff Estelita T. Terrado, proceeding pro se, filed a
First Amended Complaint (FAC) against Defendant U.S. Bank National
Association (“U.S. Bank”), alleging that U.S. Bank had fraudulently and
maliciously deprived her of her real and personal property and willfully caused her
aunt to fall. Terrado sought the return of her real property, compensatory and
punitive damages, and injunctive relief. On December 27, 2018, U.S. Bank
moved to dismiss the FAC on various grounds, including the applicability of the
Rooker-Feldman doctrine and res judicata. Because the claims and relief sought
in the FAC are either barred by the Rooker-Feldman doctrine or because Terrado
lacks standing with respect to her aunt’s fall, the Motion to Dismiss is GRANTED,
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and the FAC is DISMISSED for lack of subject matter jurisdiction. Because
amendment would be futile, Terrado is not entitled to leave to amend. Terrado’s
motions to strike are denied or denied as moot.
BACKGROUND
Terrado filed the FAC on July 17, 2018. Dkt. No. 16. Therein, Terrado
alleged three causes of action. First, the loss of real and personal property in
violation of Article I, Section 10 of the U.S. Constitution and the Fifth
Amendment. Second, willful conduct causing her aunt to fall after the removal of
Terrado’s furniture from her home. Third, interference with a contract between
her and the original bank that held a mortgage on her real property. Liberally,
construing the FAC, apart from the claims brought under the Constitution, it
appears that Terrado’s claims sound in fraud, negligence, and tortious interference
with contract. Among other things, Terrado seeks the return of her real property,
compensation for any damages caused to the same and her personal property,
nullification of U.S. Bank’s ownership of the real property, and $7 million in
punitive damages.
Summons was issued the same day as the filing of the FAC. Dkt. No. 17.
On August 30, 2018, Terrado moved for entry of default. Dkt. No. 19. Soon
thereafter, the U.S. Magistrate Judge assigned to this proceeding denied Terrado’s
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request for entry of default, explaining that Terrado had failed to follow the
requirements for service by certified mail. Dkt. No. 21.1 A week later, Terrado
filed a second request for entry of default, Dkt. No. 22, which the U.S. Magistrate
Judge denied for the same reasons set forth in his earlier order, Dkt. No. 23. On
October 2, 2018, Terrado again moved for entry of default, Dkt. No. 24, which the
Magistrate Judge, again, denied for the reasons already on the record, Dkt. No. 25.
On October 15, 2018, Terrado moved for entry of default for a fourth time. Dkt.
No. 26. Soon thereafter, the Magistrate Judge denied this request for entry of
default, explaining, inter alia, that the proof Terrado submitted showed that
certified mail had been sent to U.S. Bank prior to the Magistrate Judge authorizing
such service. Dkt. No. 27. On October 31, 2018, Terrado filed a motion in
which she stated that she was attempting to obtain relief for U.S. Bank’s failure to
answer or defend itself and appeared to attach a receipt showing that certified mail
was sent to U.S. Bank on October 27, 2018. Dkt. No. 28. The Magistrate Judge
denied that motion for the reasons in the record. Dkt. No. 29. On November 14,
2018, Terrado filed a motion in which she appeared to ask the Magistrate Judge to
review a Federal Rule of Civil Procedure and a State statutory provision relevant to

1

On July 17, 2018, the U.S. Magistrate Judge authorized Terrado to serve U.S. Bank by certified
mail. Dkt. No. 15.
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service. Dkt. No. 30. The Magistrate Judge denied that motion, construing it as
a request for reconsideration of the Magistrate Judge’s prior orders. Dkt. No. 31.
A little over a month later, the Magistrate Judge vacated a scheduling
conference because U.S. Bank had not appeared in this action, and instructed
Terrado to file an appropriate request for entry of default, noting, inter alia, that
Terrado’s prior motion did not include a return receipt from U.S. Bank. Dkt. No.
32. A day later, on December 27, 2018, U.S. Bank appeared in this action by
filing the Motion to Dismiss. Dkt. No. 33. A hearing was then set on the
Motion to Dismiss for February 22, 2019 (“the Motion Hearing”). Dkt. No. 34.
On January 29, 2019, Terrado filed a “Motion to Strike Defendant[’s] Answer in
the Alternative Enter Default Judgment” (“the First Motion to Strike”). Dkt. No.
38. Other than the First Motion to Strike, Terrado did not file a response to the
Motion to Dismiss. U.S. Bank was ordered to respond to the First Motion to
Strike by February 13, 2019, Dkt. No. 39, and, on February 14, 2019, U.S. Bank
filed a response in opposition, Dkt. No. 40.2 As scheduled, the Motion Hearing
took place on February 22, 2019. Dkt. No. 42. While counsel for U.S. Bank
attended the Motion Hearing, Terrado did not appear, despite the Court attempting

2

U.S. Bank filed a corrected response in opposition on February 15, 2019. Dkt. No. 41.
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to reach her at the telephone number listed on CM/ECF for her. Id. Finally, on
February 25, 2019, Terrado filed a “Motion to Strike” U.S. Bank’s response in
opposition to the First Motion to Strike (“the Second Motion to Strike”). Dkt.
No. 43.
STANDARD OF REVIEW
I.

Subject Matter Jurisdiction
Here, U.S. Bank argues that the Rooker-Feldman doctrine prevents Terrado

from bringing some or all of her claims. “The Rooker-Feldman doctrine
recognizes that federal district courts generally lack subject matter jurisdiction to
review state court judgments.” Fontana Empire Ctr., LLC v. City of Fontana,
307 F.3d 987, 992 (9th Cir. 2002) (citing Dist. of Columbia Court of Appeals v.
Feldman, 460 U.S. 462 (1983); Rooker v. Fid. Trust Co., 263 U.S. 413 (1923)).
The Court, therefore, construes this argument as one challenging the Court’s
subject matter jurisdiction, which is properly brought under Federal Rule of Civil
Procedure 12(b)(1). See Fed.R.Civ.P. 12(b)(1) (concerning lack of subject matter
jurisdiction); see also Murray v. Dep’t of Consumer & Bus. Services, 2010 WL

5

3604657, at *9 n.4 (D.Or. Aug. 12, 2010) (applying Rule 12(b)(1) principles to a
Rooker-Feldman argument).
When presented with an argument under Rule 12(b)(1), “the district court is
ordinarily free to hear evidence regarding jurisdiction and to rule on that issue prior
to trial, resolving factual disputes where necessary.” Augustine v. United States,
704 F.2d 1074, 1077 (9th Cir. 1983). Where the court considers evidence outside
the pleadings for this purpose, “[n]o presumptive truthfulness attaches to plaintiff’s
allegations, and the existence of disputed material facts will not preclude the trial
court from evaluating for itself the merits of jurisdictional claims.” Id.
II.

Pro Se Status
Because Terrado is proceeding pro se, the Court liberally construes her

filings. Eldridge v. Block, 832 F.2d 1132, 1137 (9th Cir. 1987). With that in
mind, “[u]nless it is absolutely clear that no amendment can cure the defect . . . a
pro se litigant is entitled to notice of the complaint’s deficiencies and an
opportunity to amend prior to dismissal of the action.” Lucas v. Dep’t of Corr.,
66 F.3d 245, 248 (9th Cir. 1995).
A court, however, may deny leave to amend where, inter alia, further
amendment would be futile. E.g., Gardner v. Martino, 563 F.3d 981, 990 (9th

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Cir. 2009); Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 (9th Cir.
2008).
DISCUSSION
U.S. Bank moves for dismissal of all causes of action asserted in the FAC
with prejudice. It does so, in part, relying on the Rooker-Feldman doctrine. The
Court addresses this issue first because it is jurisdictional. The Court then
addresses any claims that are not barred by Rooker-Feldman.
I.

Rooker-Feldman
The Ninth Circuit Court of Appeals has described the Rooker-Feldman

doctrine as follows:
Rooker-Feldman is a powerful doctrine that prevents federal courts
from second-guessing state court decisions by barring the lower
federal courts from hearing de facto appeals from state-court
judgments: If claims raised in the federal court action are ‘inextricably
intertwined’ with the state court’s decision such that the adjudication
of the federal claims would undercut the state ruling or require the
district court to interpret the application of state laws or procedural
rules, then the federal complaint must be dismissed for lack of subject
matter jurisdiction.
Bianchi v. Rylaarsdam, 334 F.3d 895, 898 (9th Cir. 2003). “Essentially, the
doctrine bars state-court losers complaining of injuries caused by state-court
judgments rendered before the district court proceedings commenced from asking
district courts to review and reject those judgments.” Henrichs v. Valley View
7

Dev., 474 F.3d 609, 613 (9th Cir. 2007) (quotation omitted). However,
“[p]reclusion, not Rooker-Feldman, applies when a federal plaintiff complains of
an injury that was not caused by the state court, but which the state court has
previously failed to rectify.” Id. at 614 (quotation and internal quotation omitted).
Here, the causes of action asserted in the FAC concern, in all but one
respect, the foreclosure of Terrado’s property by U.S. Bank.3 Principally, through
those causes of action, Terrado seeks to have the property returned to her and for
U.S. Bank’s ownership of the same to be nullified. A problem for Terrado, in
seeking such relief, is that a State court has already confirmed and approved the
sale of the property to U.S. Bank.
Notably, attached to the Motion to Dismiss are various documents from a
case before the First Circuit Court of the State of Hawaii. Because these
documents concern the property at issue in this case, they are from a judicial

3

In the FAC, Terrado does not specifically identify her property, such as by providing its address.
Instead, the FAC only alleges that the property at issue in this case is Terrado’s home, and
Terrado uses the property to provide care to the elderly. FAC at ¶ 2. In the Motion to Dismiss,
U.S. Bank identifies a property at 91-545 Fort Weaver Road, Ewa Beach, Hawaii as the property
at issue in this case. Dkt. No. 33-1 at 2. That level of specificity, though, is not contained in
the FAC. Nevertheless, the failure to specifically identify the subject property in the FAC is of
no moment. Notably, Terrado has never argued that the property identified in the Motion to
Dismiss (and the documents attached thereto) is not the subject property of her FAC. Given that
the Rooker-Feldman analysis is one conducted under Rule 12(b)(1), and this Court may resolve
factual disputes thereunder, the lack of a factual dispute on this issue provides the Court ample
reason to find that the property at issue in the FAC is the property identified in the Motion to
Dismiss and the documents attached thereto.
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proceeding in the State of Hawaii, and there has been no dispute that the
documents are from a relevant State case, the Court takes judicial notice of the
documents from the First Circuit Court (Dkt. Nos. 33-4 to 33-11). See U.S. ex
rel. Robinson Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th
Cir. 1992) (explaining that a court “may take notice of proceedings in other courts,
both within and without the federal judicial system, if those proceedings have a
direct relation to matters at issue.”) (quotation omitted).
The case is Carolina Domingo v. Estelita Tabisula Terrado, S.P. No. 08-10202; a case in which U.S. Bank intervened. See, e.g., Dkt. No. 33-11. Among
other things in that proceeding, in November 2016, the First Circuit Court entered
an Amended Order and an Amended Judgment approving and confirming the sale
of Terrado’s property to U.S. Bank by way of offset for amounts owing to U.S.
Bank. Dkt. No. 33-10 at 4-5; Dkt. No. 33-11. The Amended Order further
provided that, upon conveyance of the property to U.S. Bank, U.S. Bank would be
entitled to immediate and exclusive possession of the property. Dkt. No. 33-10 at
6.
Generally, therefore, Terrado cannot now in this Court ask for the decision
of the First Circuit Court to be effectively overturned by taking the property away
from U.S. Bank and returning it to her. See Bianchi, 334 F.3d at 898.
9

Nonetheless, although Terrado has not filed a substantive response to the Motion to
Dismiss, liberally construing the FAC, it suggests that the principal injury Terrado
alleges (the loss of her home) was caused, at least in part, not by the First Circuit
Court, but by U.S. Bank’s conduct in “submitting false documents” and
“interfer[ing] with [Terrado’s] contract with the original bank[.]” FAC at ¶¶ 17,
20.4
In that regard, the Ninth Circuit has explained that, when the focus of a
claim “is not on whether a state court committed legal error, but rather on a
wrongful act by the adverse party,” a claim may not be barred by Rooker-Feldman.
Reusser v. Wachovia Bank, N.A., 525 F.3d 855, 859 (9th Cir. 2008) (quotation
omitted). However, the Ninth Circuit also explained that, when the alleged
wrongful acts have already been addressed in State court, any claim focused upon
them would still be barred by Rooker-Feldman. Id. at 859-860.
As an initial matter, the FAC’s allegations concerning purported false
documents and contract interference do not fall within the exception outlined
above for wrongful acts. Instead, they represent an attempted end-run around the
Rooker-Feldman bar by laying the blame for the First Circuit Court’s orders and

4

Terrado’s “original bank” appears to be “BNC Mortgage.” See FAC at ¶¶ 4, 6.
10

judgment on U.S. Bank with conclusory allegations that unidentified documents
were false in some unspecified way or that a contract was interfered with in an
unspecified manner. As discussed more below, these allegations go to the heart
of the First Circuit Court’s ruling that U.S. Bank was entitled to immediate and
exclusive possession of the real property. The allegations are, thus, not the type
that fall within the exception. See Guinn v. Apartment Owners Ass’n of Makaha
Valley Towers Bd. of Directors, 2015 WL 855151, at *7 (D. Haw. Feb. 27, 2015)
(explaining that the exception does not apply to fraud that “goes to the heart of the
issues that were before the state court.”).
In any event, even if the Court were willing to assume that the exception
could be applicable, here, U.S. Bank’s alleged wrongful acts of submitting false
documents and interfering with Terrado’s contract with her original bank (BNC
Mortgage) were addressed by the First Circuit Court. Notably, the First Circuit
Court found that the mortgage on the property had been assigned to U.S. Bank by
the nominee for BNC Mortgage and U.S. Bank was entitled to foreclose on the
property. See Dkt. No. 33-7 at 3 (¶ 3), 6 (¶ 4). The allegations were also
addressed by the First Circuit Court, in confirming the sale of the property, when
the judge found that U.S. Bank was entitled to immediate and exclusive possession
of the same. See Dkt. No. 33-10 at 4 (¶ 8). Moreover, Terrado appeared at the
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hearing on the motion for confirmation of sale. Id. at 2-3.

As a result, in

asserting claims focusing upon U.S. Bank allegedly submitting false documents
and interfering with a contract, Terrado is still asking this Court to review the
rulings of the First Circuit Court. Therefore, those claims are barred by RookerFeldman. Reusser, 525 F.3d at 860.
The same is true of Terrado’s claims brought under the U.S. Constitution
related to her home. These claims, framed as constitutional, likewise challenge
the same First Circuit Court rulings described above. This Court is prohibited
from such review of a State court decision. See Feldman, 460 U.S. at 483 n.16.
Terrado’s claims related to her personal property are also barred by RookerFeldman. In the FAC, Terrado asks for an injunction directing U.S. Bank to pay
her for any damage done to her furniture (as well as her home). FAC at ¶ 21.
However, to the extent any damage has been done, it is an injury that flows from
the judgment of the First Circuit Court approving the sale of the property to U.S.
Bank. Notably, in the Amended Order approving the sale, the First Circuit Court
ordered that U.S. Bank could dispose of any personal property remaining in
Terrado’s home. Dkt. No. 33-10 at 6 (¶ 7(b)). Thus, any damage to the real
property or the personal property therein (such as Terrado’s furniture) is irrelevant
due to the First Circuit Court’s Amended Order approving the sale of the real
12

property to U.S. Bank and authorizing U.S. Bank to dispose of any personal
property therein. As a result, any claims in this regard are barred. See Henrichs,
474 F.3d at 613.5
The only claim asserted in the FAC that is not barred by the RookerFeldman doctrine is the second cause of action, which alleges that U.S. Bank’s acts
or omissions caused Terrado’s aunt to fall when Terrado’s furniture was removed
from the property. Terrado alleges that removing the furniture caused her aunt to
become disoriented and fall, U.S. Bank expected her 90-year-old aunt to sit on the
ground, and U.S. Bank acted willfully and sadistically. Although any damage
done to Terrado’s furniture is of little consequence due to U.S. Bank being
authorized by the First Circuit Court to dispose of it, the same cannot be said of
any allegedly tortious conduct by U.S. Bank toward Terrado’s aunt. In addition,
based on the current record before this Court, U.S. Bank’s allegedly tortious
conduct has not been addressed by the First Circuit Court and it is not inextricably
intertwined with any of the State court’s rulings. As a result, the Court further
addresses this claim below.

5

The same is true for Terrado’s request for an injunction “compensating” her for the
“humiliation” of living in a friend’s garage. See FAC at ¶ 22. The only reason Terrado is not
living in her former property is due to the rulings, orders, and judgment of the First Circuit
Court. Therefore, this request, whether it is viewed as injunctive or monetary, is also barred.
13

II.

Standing
In the Motion to Dismiss, U.S. Bank argues, among other things, that

Terrado does not have standing to assert a claim based upon her aunt’s fall. Dkt.
No. 33-1 at 12-13. This Court agrees. Put simply, the FAC does not allege any
injury that Terrado suffered traceable to the conduct alleged in the second cause of
action.6 As a result, she does not have standing to assert that claim, see Friends of
the Earth, Inc. v. Laidlaw Envtl. Services (TOC), Inc., 528 U.S. 167, 180-181
(2000) (explaining that, to satisfy constitutional standing requirements, a plaintiff
must, inter alia, show an injury in fact that is “fairly traceable to the challenged
action of the defendant”), and thus, the claim must be dismissed due to a lack of
subject matter jurisdiction, see City of Oakland v. Lynch, 798 F.3d 1159, 1163 (9th
Cir. 2015) (stating that constitutional standing concerns a court’s subject matter
jurisdiction).
III.

No Leave to Amend
As mentioned earlier, leave to amend should not be allowed when

amendment would be futile. Here, amendment of all of Terrado’s claims would
be futile. First, in light of the documents from the proceeding before the First

6

Rather, the FAC alleges that Terrado’s aunt suffered “head trauma and injuries.” FAC at ¶ 14.
14

Circuit Court, none of Terrado’s claims related to her real and personal property
can be cured by amendment because they are foreclosed by the Rooker-Feldman
doctrine. Second, amendment cannot cure Terrado’s sole remaining claim,
concerning her aunt’s alleged fall, because Terrado has not suffered an injury in
fact traceable to the alleged conduct. As a result, the Court declines to allow
Terrado leave to amend the FAC.7
IV.

Dismissal is Without Prejudice
Because the Court has found, for various reasons, a lack of subject matter

jurisdiction over each of Terrado’s claims, dismissal is without prejudice. See
Freeman v. Oakland Unified Sch. Dist., 179 F.3d 846, 847 (9th Cir. 1999)
(“Dismissals for lack of jurisdiction should be without prejudice so that a plaintiff
may reassert [her] claims in a competent court.”) (quotation and ellipsis omitted);
Albrecht v. Demuniz, 315 F. App’x 654, 654 (9th Cir. 2009) (“Dismissals under the
Rooker-Feldman doctrine and for lack of standing are dismissals for lack of subject
matter jurisdiction, and thus should be without prejudice.”) (citations omitted).

7

The Court notes that Terrado has also not requested leave to amend the FAC.
15

V.

Terrado’s Motions to Strike
In the First Motion to Strike, Terrado requests that “the defendant’s answer”

be stricken. It appears that Terrado believes the “answer” should be stricken
because it was untimely. See generally Dkt. No. 38. The Court DENIES the
First Motion to Strike. Principally, there is only one defendant in this case, U.S.
Bank, and it has not filed an answer. Instead, as Federal Rule of Civil Procedure
12 allows, U.S. Bank filed the instant Motion to Dismiss. Because Terrado is
proceeding pro se, to the extent her request to strike is directed toward the Motion
to Dismiss, rather than an answer, the First Motion to Strike is still meritless, as
Terrado provides no explanation as to why the Motion to Dismiss was untimely
filed.8
In the Second Motion to Strike, Terrado appears to make two requests.
“First and foremost,” she appears to request that U.S. Bank’s response in
opposition to the First Motion to Strike be stricken. See Dkt. No. 43 at 1. Even
if the Court were willing to assume that U.S. Bank’s response was filed a day or

8

The Court notes that, although it is difficult to decipher, in the First Motion to Strike, Terrado
appears to assert that either an “answer” was filed on July 19, 2018, or U.S. Bank acknowledged
receipt of service on July 19, 2018. See Dkt. No. 38. To the extent Terrado means the former,
it is untrue–an answer has not been filed yet and the Motion to Dismiss was filed on December
27, 2018. To the extent Terrado means the latter, she cites to nothing in the record suggesting
that U.S. Bank acknowledged receipt of service on July 19, 2018, two days after the FAC was
filed.
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two days after the deadline imposed, in light of the Court’s ruling above that the
First Motion to Strike is meritless, Terrado’s first request in the Second Motion to
Strike is moot. Terrado also appears to request entry of default judgment against
U.S. Bank for purportedly taking six months to file an answer. See id. at 1-2.
To the extent this is a regurgitation of the arguments in the First Motion to Strike,
they are denied for the same reasons set forth above. To the extent Terrado raises
any new arguments, they are, again, entirely unsupported by anything in the
record. As a result, the Second Motion to Strike is DENIED, in part, and
DENIED AS MOOT, in part.
CONCLUSION
For the reasons set forth herein, U.S. Bank’s Motion to Dismiss the First
Amended Complaint, Dkt. No. 33, is GRANTED, and the claims in this case are
DISMISSED WITHOUT PREJUDICE for lack of subject matter jurisdiction.
Terrado’s First Motion to Strike, Dkt. No. 38, is DENIED, and Terrado’s Second
Motion to Strike, Dkt. No. 43, is DENIED in part and DENIED AS MOOT in part.
The Clerk is instructed to enter Judgment, pursuant to this Order, in favor of

17

Defendant U.S. Bank National Association. The Clerk is then instructed to close
this case.
IT IS SO ORDERED.
DATED: March 8, 2019 at Honolulu, Hawai‘i.

Estelita T. Terrado v. U.S. Bank National Association;
Civil No. 18-00148 DKW-RLP; ORDER (1) GRANTING DEFENDANT’S
MOTION TO DISMISS THE FIRST AMENDED COMPLAINT WITHOUT
LEAVE TO AMEND, AND (2) RULING ON PLAINTIFF’S MOTIONS TO
STRIKE

18