Grayham et al v. Fannie Mae Corporation et al

Filing 71

ORDER: Granting Motion for Judgment on the Pleadings 43 and Motions to Dismiss 40 and 39 . Plaintiff's Motion to Dismiss Counterclaims 31 is denied. Plaintiffs' Motions to Amend 50 and 70 are denied. All other pending motions are denied as moot and this action is dismissed. Signed on 1/8/2012 by U.S. District Judge Michael R. Hogan. (jw)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
EUGENE DIVISION
TIMOTHY GRAYHAM, ANGELINA GRAYHAM
ALEXANDRIA GRAYHAM, AUSTIN GRAYHAM
AARON GRAYHAM,
Civil No. ll-6l94-HO

Plaintiffs,

ORDER

v.
FANNIE MAE CORPORATION, REAL
PROPERTY MANAGEMENT CORPORATION,
REAL PROPERTY MANAGEMENT PORTLAND,
Defendants.

Plaintiffs bring this action asserting violation of their
rights as tenants in foreclosure.
on June 9, 2011.

Plaintiffs filed their complaint

After some issues with service, defendant Fannie

Mae filed an answer on October 11,

2011 asserting affirmative

defenses of no private cause of action under the Protecting Tenants
1 - ORDER

at Foreclosure Act

(PTFA) and claim preclusion.

On October 31,

2011, plaintiffs filed a motion to dismiss defendant Fannie Mae's

"counterclaims."
Defendar.ts

Real

Property Management

Corporation

and

Real

Property Management Portland filed motions to dismiss on November
14,

2011.

On November 16,

2011,

defendant Fannie Mae filed a

motion for judgment on the pleadings.

Instead of responding to

those motions, plaintiffs filed a motion to amend their complaint
on December 7, 2011.'
The court initially set oral argument on the motions against
the complaint, but vacated argument until a determination could be
made on the motion to amend.

Plaintiffs' subsequent pleadings and

lack of formal responses to the dispositive motions demonstrate
that oral argument is not necessary and that the complaint should
be dismissed for the reason stated below.
'rhe operative complaint

(#2)

alleges in support of the first

claim:
On or about June 29, 2010, and currently, Fannie Mae
Corporation, Real Property Management Corporation a~d
Real
Property Management
Portland,
did knowingly
[violate] plaintiff's federal rights as bona fide
[tenants] in foreclosure.
Plaintiffs have suffered monetary and property loss.
Plaintiffs have suffered by not having use of the
quiet, enjoyment of their home.
The Complaint alleges in support of the second claim:
'Plaintiffs again moved to amend on January 3, 2011, to change
the caption to reflect that plaintiffs Austin and Aaron Graham are
minors represented by their parents, plaintiffs Timothy and Angela
Graham. This motion appears to be prodded by defendants response
to the motion to amend although plaintiffs have not filed a reply
in support of the original motion to amend.
2 - ORDER

On or about June 29, 2010, and currently, defendants
retaliated against plaintiffs by threateni~g
evictio~ when plaintiff's invoked their federal rights.
Plaintiffs have suffered by not having use of t~e
quiet eLjoyment of their home.
Plaintiffs have suffered monetary and property
losses.

have

And the complaint alleges in support of the third claim:
On or about June 29,2010, and currently, defendants
have caused seri6us health and safety conditions.
Plaintiffs have suffered by not having use of the
Quiet enjoyment of their home.
Plaintiffs have suffered monetary and property
losses.
Plaintiffs have suffered physical and emotional
losses.
Plaintiffs have suffered public embarrassment.
All defendants assert lack of subject matter jurisdiction and
failure to state a claim due to a lack of private cause of action
under the PTFA.

In addition, defendant Fannie Mae asserts claim

preclusion

defendant

and

Real

Property

Management

asserts

insufficient service of process.
In the motion to amend (#50), plaintiff submits a proposed
amended complaint with various attachments including exhibit 17 4
which

is

a

stipulated order

regarding

a

residential

eviction

complaint filed by Fannie Mae in Deschutes County. The stipulation,
approved by Circuit Court for the State of Oregon, for the County
of Deschutes, demonstrates that plaintiffs Timothy and Angelina
Graham agreed to an order of immediate restitution of the subject
premises with a stay of execution until October 11, 2011.

Fannie

Mae asserts that the appropriate time to raise the protections of
the PTFA was during the FED proceedings.
The PTFA is a federal law that provides protections to bona
3

ORDER

fide tenants of property subject to foreclosure.
Div. A, Title VII,

§

702.

Pub.L. 111-22,

The PTFA's provisions do not create a

federal claims either explicitly or implicitly. See Wescom Credit
Union,

2010 WL 4916578, at *3. The district court in

Deutsche Bank Nat. Trust Co., 2010 WL 2179885

(N.D.Cal. May 26,

2010), analyzed the congressional record and text of the PTFA, and
concluded that no private right of enforcement was implied. 2010 WL
2179885,

at *3.

Specifically,

the Nativi court quoted Senator

Gil1ibrand's statement that the PTFA was intended "to give local
governments and States the tools they need to tackle this iousing
crisis."

2009)

(quoting 155 Congo

Rec.

(statement of Sen. Gillibrand)).

S5096-7

(daily ed. May 5,

Additionally, by its plain

text, the PTFA is focused on providing additional or supplemental
protections to state or local laws. See Pub.L. No. 111·-22,
123 Stat. 1660 (2009)

§

702,

("[Njothing under this section shall affect

the requirements for termination of any Federal-or State-subsidized
tenancy or of any State or local law that provides longer time
periods or other additional protections for tenants.

U

).

The PTFA's provisions requiring that notice be given ninety
days in advance and preventing termination of a bona fide lease
unless a purchaser will occupy the unit as a primary residence.
offer plaintiffs a federal defense to an unlawful detainer action
where the party bringing the FED complaint fails to comply with
these requirements.

A federal defense, however, does not support

federal-question jurisdiction. Valles v. Ivy Hill Corp., 410 F.3d
1071, 1075 (9th Cir. 2005).

4 - ORDER

As a result, not only do plaintiffs

fail to allege a cause of action in the operative complaint,
plaintiffs fail to allege a basis for jurisdiction in this court.
Defendant Fannie Mae is correct that the protections afforded
plaintiffs by the PTFA should have been raised in the FED action.
The court also agrees,

for the reasons stated in defendant

Property Management, Incorporated's motion and supporting documents
(#39),

that plaintiffs failed to provide sufficient service of

process on that defendant.
In plaintiff's proposed amended complaint, plaintiffs still
plead claims under the PTFA and add allegations of violation of the
Fifth and Fourteenth Amendments to the United States Constitution.
Plaintiffs also add allegations regarding other federal
which do not provide a cause of action.

See 16 U.S.C.

s~atutes

§

1692

(Congressional Findings and declaration of purpose regarding debt
collection practices); 18 U.S.C.
extortion) .

§

875 (criminal statute regarding

Plaintiffs also add allegations regarding state law

claims of negligence for failure to comply with duties imposed by
state and federal law.
As to plaintiff's purported Fifth and Fourteenth Amendment
claims, The Constitution's protections apply in general only to
action by the government. National Collegiate Athletic Assn. v.
Tarkanian, 488 U.S. 179, 191 (1988). The Constitution structures
the national government, confines its actions, and, in regard to
certain individual liberties and other specified matters, confines
the actions of the States.

Wi th a few exceptions, such as the

provisions of the Thirteenth Amendment, constitutional guarantees

5 - ORDER

of individual liberty and equal protection do not apply to the
actions of private entities. Id.; Flagg Bros., Inc. v. Brooks, 436
U.S. 149, 156 (1978).

Accordingly, plaintiff cannot assert claims

based on violations of the United States Constitution.

Moreover,

plaintiffs fail to allege a cause of action for violation of any
purported constitutional rights such as under 42 U.S.C.
Accordingly, plaintiff's proposed amended complaint

§

1983.

so lacks 'a

jurisdictional basis and amendment would therefore be futile.

CONCLUSION
For the reasons stated above, the motions for judgment on the
pleadings

(#43)

and to dismiss

addition,

plaintiff's motion to dismiss counterclaims

(#40

and #39)

are granted.
(#31)

In
is

denied and plaintiffs' motions to amend (#50 and #70) are denied.
All other pending motions are denied as moot and this action is
dismissed.
DATED this

day of January, 2012.

e

6 - ORDER