Chau et al v. Ball et al

Filing 10

MEMORANDUM OPINION & ORDER: 1) Pla's 5 MOTION to Amend/Correct Dft's Address on Pla's 1 Complaint is GRANTED; 2) Plas' 8 MOTION to Enlarge Time to File a Response as to Dft's 8 MOTION to Dismiss is DENIED. 3) Df ts' 7 Motion to Dismiss is GRANTED IN PART w/ respect to Counts I, II, IV, V, VI and VII and DENIED IN PART w/ respect to Count III; and 4) On the Court's own motion, Plas shall SHOW CAUSE no later than 4/18/2014 why Count III should not be dismissed for the reasons set forth above. Signed by Judge Joseph M. Hood on 03/28/2014. (KLB) cc: COR, Pro se Plas via US Mail.

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
ALAN UT CHAU, et al.,

)
)
)
)
)
)
)
)
)
)

Plaintiffs,
v.
KENTON L. BALL, et al.,
Defendants.

Civil Case No.
5:13-cv-233-JMH

MEMORANDUM OPINION & ORDER

***

This matter is before the Court on several motions.

As an

initial matter, Plaintiff’s Motion to Amend/Correct Defendant’s
Address on Plaintiff’s Complaint [DE 5] will be GRANTED.

The

Court has considered, as well, Plaintiffs’ Motion to Enlarge
Time to file a Response to Defendants’ Motion to Dismiss [DE 8]
and concludes that it is not merited.

Plaintiffs’ have not, in

the time elapsed since filing that motion, proffered a response
nor is the Court persuaded, considering the weaknesses noted in
the Complaint that one would be of particular use in evaluating
this matter.
will

be

Accordingly, Plaintiffs’ Motion to Enlarge Time

DENIED

Defendants’

[DE

Motion

8].
to

Finally,

Dismiss

[DE

motion, evaluated the Complaint.

the

Court

7],

and

has

has,

considered,
on

its

own

Having done so, the Court

concludes that Defendants’ Motion to Dismiss shall be GRANTED IN

PART with respect to Counts I, II, IV, V, VI, and VII and DENIED
IN PART with respect to Count III.

On the Court’s own motion,

however, Plaintiffs must SHOW CAUSE why Count III should not be
dismissed for the reasons set forth below.

As the relevant

aspects of Plaintiffs’ Complaint have been set forth c
I.
For purposes of a motion to dismiss, the Court must take
all

of

the

factual

allegations

in

the

complaint

as

true.

Ashcroft v. Igbal, 556 U.S. 662, 677–78 (2009). To survive a
motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to state a claim to relief that is
plausible on its face. Id. A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for
the misconduct alleged. Id. Threadbare recitals of the elements
of a cause of action, supported by mere conclusory statements,
do

not

suffice.

allegations,

a

Id.

court

When
should

there
assume

are

well-pleaded

their

veracity

factual
and

then

determine whether they plausibly give rise to an entitlement to
relief. Id. at 1950. A legal conclusion couched as a factual
allegation need not be accepted as true on a motion to dismiss,
nor

are

recitations

of

the

elements

of

a

cause

of

action

sufficient. Fritz v. Charter Township of Comstock, 592 F.3d 718,
722 (6th Cir. 2010).
II.
Many

of

Plaintiffs’

claim

may

well

be

barred

by

the

doctrine of res judicata for Defendant Perry Dunn and timebarred with respect to all defendants, as Defendants argue in
their Motion to Dismiss, but the Court need not reach those
issues as the Complaint may be dealt with quite simply because
Plaintiffs fail to state any claim on any grounds.
In Count I, Plaintiffs aver a violation of the Racketeer
Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1962(c),
1962(d),

and

1964(c).

They

aver

that

the

defendants,

all

individuals and, the Court presumes, employees of First Federal
Bank, devised and participated in a scheme to defraud borrowers
of funds or to secure them for their own uses at substantially
reduced prices.
Federal

Bank

As the Chaus aver, the defendants caused First

to

extend

loans

which,

“because

of

the

meager

resources of the borrowers and/or the exorbitant terms of the
loans,”

could

not

be

repaid.

The

Chaus

theorize

that

the

borrower’s financial resources were first substantially depleted
through fraudulent loan terms and, secondly, “this bleeding of
financial resources is intended to and often does permit First
Federal Bank or another conspirator to obtain the property at

discounted cost through foreclosure.”

[DE 1 at 11.]

In Count

II, Plaintiffs aver these Defendants fraudulently induced them
to enter into the loan agreements in violation of state law.
Without making any determination with respect to the other
elements of the claims in Counts I or II, both of which are
premised
failed

on
to

reliance

on

fraud,

the

identify
such

Court

any

concludes

that

intentional

misrepresentations

Plaintiffs

have

misrepresentations

by

Plaintiffs

detriment which could form the basis of the claims.

to

or

their

Fraud must

be pleaded with particularity, see Fed. R. Civ. P. 9(b), and the
failure to do so is fatal to one’s claim.

See Yuhasz v. Brush

Wellman, Inc., 341 F.3d 559, 563 (6th Cir. 2003) (quoting Coffey
v.

Foamex

L.P.,

2

F.3d

157,

161-162

(6th

Cir.

1993)).

Accordingly, these claims will be dismissed.
In

Count

III,

Plaintiffs

aver

that

defects

in

the

bargaining process precluded any meaningful choice by Plaintiffs
and

render

the

enforcement

of

the

contracts

unconscionable.

Specifically, they aver that the lender permitted no counsel
except

its

own

to

be

present

for

the

negotiations

for

and

closing of certain loans; failed to provide an interpreter or
documents in Plaintiffs’ native tongue, Vietnamese; engaged in
high pressure sales pitches and did not, considering Plaintiffs’
language barrier, permit sufficient time to read and understand

the loan documents; and offered “onerous, oppressive, and onesided” terms which bore no reasonable relation to the business
risks involved or to the fair market value of services to be
performed.

There is little to be said.

The lender is not a

party to this matter, and Plaintiffs do not seek to pierce the
corporate veil, for example, in order to reach the individual
defendants..
Corporation,

As
135

taught
F.3d

in

Forsythe

1069,

1074

v.

(6th

Bancboston

Cir.

1997)

Mortgage
(internal

quotation marks and citations omitted) (interpreting Kentucky
law), “the notion of unconscionability is an elusive one. An
unconscionable

contract

is

a

contract

which

no

man

in

his

senses, not under delusion, would make, on the one hand, and
which no fair and honest man would accept, on the other. The
doctrine of unconscionability is only used in rare instances,
such as when a party abuses its right to contract freely.”

No

matter the situation, there is no case law which suggests that a
party claiming unconscionability may use the doctrine to draw in
and

make

responsible

others

who

were

never

a

party

to

the

contract or to remedy what may be, at its heart, a bad deal for
one of the parties.

Accordingly, this claim will be dismissed

as well unless Plainiffs can show cause why it should not be.
In

Count

IV,

Plaintiffs

aver

a

violation

of

the

Equal

Credit Opportunity Act, 15 U.S.C. § 1691, and KRS § 30A.410,

contending that Defendants discriminated against Plaintiff with
respect to the availability and terms and conditions of credit
on

the

basis

of

national

origin

for

“failing

to

provide

adequate, licensed, and qualified translators and documents in
[Plaintiffs’]
relevant
appoint

native

part,

§

language.”

30A.410

qualified

In

directs

interpreters

what

must

Kentucky

in

be

state

certain

the

only

courts

situations

to
with

respect to proceedings before them. Section 30A.410 does not
make

any

requirement

of

lenders

or

their

employees.

Accordingly, Plaintiffs’ claim fails and shall be dismissed with
prejudice.
In Count V, Plaintiffs aver a violation of the Real Estate
Settlement Procedures Act (RESPA), 12 U.S.C. § 2601(1).

Count

VI avers a violation of the Truth-in-Lending Act (TILA), 15
U.S.C. § 1639(b)(1).

RESPA and TILA apply only to residential

consumer credit transactions, not the extension of credit made
“primarily

for

business

involving

extensions

purposes”

of

or

credit

“[c]redit

primarily

transactions

for

business,

commercial, or agricultural purposes.” 12 U.S.C. § 2606(a)(1);
15 U.S.C. §§ 1602(b) and 1603(1); 12 C.F.R. § 226.2(a); see
Sherlock
732146,

v.
*3

Herdelin,
(E.D.

Pa.

Civ.
Mar.

Action
17,

No.

2008).

04-cv-3438,
As

2008

Plaintiffs

WL

aver

violations of the requirements of these statutes in relationship

to loans secured by mortgages on real properties which the Court
may

reasonably

infer

from

averments

in

the

Complaint

to

be

investment properties of some nature – and not residential in
nature – these statutes are not applicable. Plaintiffs fail to
state a claim under RESPA and TILA, and these claims shall be
dismissed.
Finally, Plaintiffs’ Count VII avers a civil conspiracy to
injure Plaintiffs.
articulate

claim

To the extent that Plaintiff has failed to
for

any

of

the

torts

averred

in

Counts

I

through VI, this claim fails for lack of an action which can
serve as the object of the conspiracy.
claims

are

viable

for

the

reasons

Since none of those

stated

above,

the

civil

conspiracy claim must fail as well.
III.
For all of the reasons stated above, the Court concludes
that

Plaintiffs’

claims

should

be

dismissed

and

that

relief

should be provided as follows.
Accordingly, IT IS ORDERED:
(1)

That Plaintiff’s Motion to Amend/Correct Defendant’s
Address on Plaintiff’s Complaint [DE 5] is GRANTED;

(2)

That

Plaintiffs’

Motion

to

Enlarge

Time

to

file

a

Response to Defendants’ Motion to Dismiss [DE 8] is
DENIED
(3)

That Defendants’ Motion to Dismiss [DE 7] is GRANTED
IN PART with respect to Counts I, II, IV, V, VI, and
VII and DENIED IN PART with respect to Count III; and

(4)

That, on the Court’s own motion, Plaintiffs shall SHOW
CAUSE
should

no later than
not

be

April 18, 2014,

dismissed

for

above.
This the 28th day of March, 2014.

the

why Count III

reasons

set

forth