Kucherov v. MTC Financial Inc et al

Filing 20

ORDER by Judge Benjamin H. Settle granting in part and denying in part 16 Motion to Dismiss for Failure to State a Claim.(TG)

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1 2 3 4 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA 5 6 7 LEONID KUCHEROV, 8 9 10 CASE NO. C17-5050BHS Plaintiff, ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION DISMISS v. MTC FINANCIAL INC., et al., 11 Defendants. 12 13 This matter comes before the Court on Defendants’ motion to dismiss pursuant to 14 Fed. R. Civ. P. 12(b)(6). Dkt. 16. The Court has considered the pleadings filed in support 15 of and in opposition to the motion and the remainder of the file and hereby rules as 16 follows: 17 18 I. BACKGROUND On January 25, 2017, Plaintiff filed his complaint in this action. Dkt. 3. This is the 19 second time that Plaintiff has brought these very claims in relation to Defendants’ 20 foreclosure on the property at 1391 NW 7th Avenue, Camas, WA. In Kucherov v. MTC 21 Financial, et al., Case No. 16-05276BHS (“Kucherov I”), the Court dismissed Plaintiff’s 22 claims, some with prejudice and some without. Kucherov I, Dkt. 23. The Court granted ORDER - 1 1 Plaintiff leave to amend those claims that were dismissed without prejudice. Id. After the 2 deadline to amend had passed and Plaintiff had failed to amend his complaint, the Court 3 entered judgment and closed the case. Id., Dkt. 24. Plaintiff’s present complaint reasserts 4 the claims from Kucherov I that were expressly dismissed without prejudice. 5 Additionally, Plaintiff previously removed an unlawful detainer case that involved 6 the same property before it was remanded to state court for lack of jurisdiction. See OWB 7 REO, LLC v. Kucherov, C16-5565RBL (W.D. Wash. 2016), Dkts. 1, 4; OWB REO, LLC 8 v. Kucherov, Clark Co. Case No. 16-2-01107-5 (“OWB REO”). 9 On March 23, 2017, Defendants moved to dismiss Plaintiff’s present complaint. 10 Dkt. 16. On April 4, 2017, Plaintiff filed an overlength response to Defendants’ motion, 11 but did so in the wrong case. See Kucherov I, Dkt. 34. 1 On May 3, 2017, Defendants filed 12 a reply. Dkt. 18. On May 16, 2016, Plaintiff filed a surreply, which was labelled as 13 another response. Dkt. 19. 14 II. DISCUSSION 15 A. Legal Standard 16 Motions to dismiss brought under Fed. R. Civ. P. 12(b)(6) may be based on either 17 the lack of a cognizable legal theory or the absence of sufficient facts alleged under such 18 19 1 The Court denies Defendants’ motion to strike this pleading, notwithstanding its 20 improper filing and its substantial violation of the Court’s local rules on the length of motions and responsive pleadings. The Court notes that the bulk of the filing consists merely of large 21 quotations from the complaint, and Plaintiff’s substantive briefing appears to fall within the page limits. Nonetheless, the Court refers Plaintiff to the Western District of Washington’s Local Civil Rules and warns that overlength filings will not be tolerated in the future. See W.D. Wash Local 22 Rules LCR 7(e). ORDER - 2 1 a theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). Material 2 allegations are taken as admitted and the complaint is construed in the plaintiff’s favor. 3 Keniston v. Roberts, 717 F.2d 1295, 1301 (9th Cir. 1983). To survive a motion to dismiss, 4 the complaint does not require detailed factual allegations but must provide the grounds 5 for entitlement to relief and not merely a “formulaic recitation” of the elements of a cause 6 of action. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A plaintiff must allege 7 “enough facts to state a claim to relief that is plausible on its face.” Id. at 570. 8 “As a general rule, a district court may not consider any material beyond the 9 pleadings in ruling on a Rule 12(b)(6) motion.” Lee v. City of Los Angeles, 250 F.3d 668, 10 688 (9th Cir. 2001) (internal quotation marks omitted). However, the Court may consider 11 documents beyond the complaint “if the documents’ authenticity . . . is not contested and 12 the plaintiff’s complaint necessarily relies on them.” Id. (internal quotation marks 13 omitted). Also, “under Fed. R. Evid. 201, a court may take judicial notice of matters of 14 public record.” Id. at 689 (internal quotation marks omitted). 15 In the event that dismissal is warranted, the Court will grant Plaintiff leave to 16 amend unless amendment would be futile. Eminence Capital, LLC v. Aspeon, Inc., 316 17 F.3d 1048, 1052 (9th Cir. 2003). “[D]ismissal [without leave to amend] is proper only if 18 it is absolutely clear that the deficiencies of the complaint could not be cured by 19 amendment.” Broughton v. Cutter Labs., 622 F.2d 458, 460 (9th Cir. 1980). 20 B. Effect of Kucherov I 21 Defendant first seeks dismissal by arguing that this action is barred by the Court’s 22 previous order in Kucherov I denying Plaintiff’s motion for relief from judgment. Dkt. 16 ORDER - 3 1 at pp. 6–7. See also Kucherov I, Dkt. 33. The Court notes that it was within the Court’s 2 power to dismiss Plaintiff’s claims with prejudice pursuant to Fed. R. Civ. P. 41(b). See 3 Yourish v. California Amplifier, 191 F.3d 983, 986 (9th Cir. 1999). However, the Court 4 never did so. “The difference between a dismissal under Rule 12(b)(6) and one under 5 Rule 41(b) is not merely formal.” Edwards v. Marin Park, Inc., 356 F.3d 1058, 1065 (9th 6 Cir. 2004). Had the Court dismissed Plaintiff’s claims in Kucherov I pursuant to Rule 7 41(b), it could have determined that the claims should be dismissed with prejudice as a 8 sanction for failure to timely prosecute the case. Alternatively, even in the order granting 9 the motion to dismiss, the Court could have stated that failure to amend within the time 10 established by the order would result in dismissal with prejudice. See Edwards v. Marin 11 Park, Inc., 356 F.3d 1058, 1064 (9th Cir. 2004) (after a plaintiff’s failure to amend within 12 60 days “the district court should have taken the election not to amend at face value, 13 entered a final judgment dismissing all claims with prejudice, and allowed the case to 14 come to us on appeal in that posture.”). 15 As it stands, the Court never informed Plaintiff that failure to file an amended 16 complaint in Kucherov I would result in automatic dismissal with prejudice. The Court 17 considers this inadequate to have placed Plaintiff, a pro se litigant, on notice that the 18 automatic dismissal contemplated by the Court’s order in Kucherov I would bar Plaintiff 19 from re-filing the claims that the order had expressly dismissed without prejudice. 20 C. Rooker-Feldman Doctrine 21 Defendants also moved for dismissal under the Rooker-Feldman doctrine. The 22 Rooker-Feldman doctrine prevents the Court from hearing de facto appeals of state-court ORDER - 4 1 judgments. See Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923); D.C. Ct. of Appeals v. 2 Feldman, 460 U.S. 462 (1983); Bianchi v. Rylaarsdam, 334 F.3d 895 (9th Cir. 2003). “A 3 federal action constitutes such a de facto appeal where ‘claims raised in the federal court 4 action are ‘inextricably intertwined’ with the state court’s decision such that the 5 adjudication of the federal claims would undercut the state ruling or require the district 6 court to interpret the application of state laws or procedural rules.’” Reusser v. Wachovia 7 Bank, N.A., 525 F.3d 855, 859 (9th Cir. 2008) (quoting Bianchi, 334 F.3d at 898). 8 The Court agrees that the Rooker-Feldman doctrine prohibits Plaintiff from 9 attempting to collaterally attack the state court’s decision in the unlawful detainer action 10 of OWB REO. See Dkt. 16-1 at pp. 3–21. To the extent that Plaintiff seeks to cancel any 11 foreclosure sale of the property on the basis that Defendant OWB REO, LLC is not 12 licensed as a contractor, failed to pay taxes, or violated the Washington “anti-flip statute,” 13 these claims are identical to Plaintiff’s arguments and seek the same relief rejected by the 14 state court in OWB REO. See id.; Dkt. 3 at p. 12– 14, 16–17, 22, 25–28, 32–35. 15 Therefore, these claims are dismissed. 16 D. Adequacy of Factual Allegations 17 Defendants also argue that, “[t]o the extent the Complaint in this case differs from 18 the complaint that the Court dismissed in Kucherov I and the Proposed Amended 19 Complaint that the Court denied Kucherov leave to file, those differences do not warrant 20 allowing this case to go forward.” Dkt. 16 at 7. To support this argument, Defendants 21 argue that Plaintiff has only added a single substantive amendment to the present 22 complaint. Specifically, Defendants argue that the only new factual allegation is that they ORDER - 5 1 supposedly informed Plaintiff by letter that his construction loan was paid in full on 2 January 16, 2007. See Dkt. 3 at pp. 8–9, 16, 18. 3 The Defendants are correct if the Court compares the present complaint with the 4 proposed amendments that the Court refused to allow Plaintiff to file in Kucherov I. See 5 Kucherov I, Dkts. 28, 33. However, the Court’s order of dismissal for failure to state a 6 claim in Kucherov I was not based on Plaintiff’s proposed amended complaint, nor did 7 the Court consider whether Plaintiff’s proposed amendments cured the first complaint’s 8 deficiencies when it denied the motion for relief from a final judgment. Plaintiff’s present 9 complaint includes numerous allegations that were absent from the complaint the Court 10 dismissed in Kucherov I. Defendants’ motion to dismiss fails, for the most part, to offer 11 any substantive analysis on how these changes fall short of curing the deficiencies of the 12 complaint in Kucherov I. Absent such analysis by Defendants, and having already 13 determined that the claims in Kucherov I were not dismissed with prejudice, the Court 14 will not parse through Plaintiff’s complaint in this action to assess sua sponte which 15 claims are viable. 16 Defendants do offer analysis on how Plaintiff has failed to state a viable claim to 17 vacate the foreclosure sale of the subject property. They argue that Plaintiff has waived 18 his right to challenge the completed foreclosure sale. Dkt. 16 at 8–10. Under Washington 19 law, the doctrine of waiver “preclude[s] an action by a party to set aside a completed 20 trustee’s sale whenever the party (1) received notice of the right to enjoin the trustee’s 21 sale, (2) had actual or constructive knowledge of a defense to foreclosure prior to the 22 sale, and (3) failed to bring an action to enjoin the sale.” Merry v. Nw. Tr. Servs., Inc., ORDER - 6 1 188 Wn. App. 174, 193 (2015) (quoting Joseph L. Hoffmann, Comment, Court Actions 2 Contesting the Nonjudicial Foreclosure of Deeds of Trust in Washington, 59 Wash. L. 3 Rev. 323, 335 (1984)). 4 The Court agrees that the waiver doctrine prevents Plaintiff from setting aside the 5 completed foreclosure sale. Kucherov I was filed prior to the foreclosure sale making it 6 clear that Plaintiff had sufficient notice to try to enjoin the sale. Examination of Kucherov 7 I also shows that, prior to the sale, Plaintiff already had knowledge of the nearly identical 8 claims he is once again bringing in this action. Finally, Plaintiff failed to prosecute 9 Kucherov I or otherwise seek to enjoin the sale, despite the Court granting him leave to 10 amend in order to cure his deficient complaint. Accordingly, to the extent that Plaintiff 11 seeks to vacate the completed foreclosure sale, his claims are dismissed. Moreover, 12 because amendments to the present complaint cannot change the fact that Plaintiff waived 13 his right to enjoin the foreclosure sale, the dismissal is with prejudice and without leave 14 to amend. Defendants’ motion to dismiss is otherwise denied to the extent they cursorily 15 argue that the allegations that have been added since the Court dismissed Kucherov I fail 16 to state a claim. 17 18 III. ORDER Accordingly, Defendants’ motion to strike (Dkt. 16) is GRANTED in part and 19 DENIED in part as follows: 20 (1) Defendants’ motion to dismiss Plaintiff’s claim for “Declaratory Relief to 21 Vacate the Sale” and his requests to vacate the sale based on allegations that OWB REO, 22 ORDER - 7 1 LLC is not licensed as a contractor, failed to pay taxes, or violated the Washington State 2 “anti-flip statute” is GRANTED and those claims are DISMISSED with prejudice; 3 (2) 4 Dated this 30th day of May, 2017. 5 Defendants’ motion to dismiss is otherwise DENIED. A 6 7 BENJAMIN H. SETTLE United States District Judge 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 ORDER - 8

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