United States District Court, N.D. California
September 8, 2005.
NEWORALEAN STONE, STARR MONNEY STONE, Plaintiffs,
R.E.F.S. INC., R.E.F.S. OF TEXAS INC., JOYFUL HOUSE LLC, CARLTON SUE, FRANCISCO HO, FIDELITY NATIONAL AGENCY SALES & POSTING, ALAMEDA COUNTY SHERIFF DEPARTMENT, COMMUNITY COMMERCE BANK, FIDELITY NATIONAL TITLE COMPANY, ROSIE M. PARKS, THOMAS EASTRIDGE, JED SOMIT, JESSIE SMITH, CLARA MAE SIMPSON, CITY OF OAKLAND, Defendants.
The opinion of the court was delivered by: MAXINE CHESNEY, District Judge
ORDER DENYING APPLICATION TO PROCEED IN FORMA PAUPERIS;
Before the Court is the complaint filed August 15, 2005 by
plaintiffs NewOralean Stone ("NewOralean") and Starr Monney Stone
("Starr") (jointly, "plaintiffs") against defendants R.E.F.S.
Inc., R.E.F.S. of Texas Inc., Joyful House LLC, Carlton Sue,
Francisco Ho, Fidelity National Agency Sales & Posting, Alameda
County Sheriff Department, Community Commerce Bank, Fidelity
National Title Company, Rosie M. Parks, Thomas Eastridge, Jed
Somit, Jessie Smith, Clara Mae Simpson, and City of Oakland ("defendants"), by which plaintiffs seek to set aside a
foreclosure sale and also seek an award of unspecified damages.
Also before the Court is plaintiffs' motion to proceed in forma
pauperis, filed concurrently therewith. Having read and
considered the papers filed by plaintiffs, the Court will DENY
the application to proceed in forma pauperis, and DISMISS the
action, pursuant to 28 U.S.C. § 1915(e)(2).
Plaintiffs allege that NewOralean is a resident of San
Francisco, California, and that Starr is NewOralean's daughter
and a resident of Alameda County, California. (See Compl. ¶¶ 4
and 6.) NewOralean and Starr, plaintiffs allege, are co-owners of
real property located at 8717-8719 International Boulevard, in
Oakland, California ("the property"). (See id. ¶¶ 5 and 6.)
According to plaintiffs, defendants wrongfully sold the property
on July 7, 2004 at a foreclosure sale. (See id. ¶ 35.)
Plaintiffs allege that NewOralean filed a voluntary petition
for Chapter 13 bankruptcy protection on March 18, 2004, (see
id. ¶ 27), and that on June 26, 2004, the bankruptcy court
dismissed the petition, with "a bar to refiling." (See id. ¶
29.) According to plaintiffs, NewOralean filed a timely appeal
six days later, on July 2, 2004, and requested that the appeal be
heard by the district court.*fn1 (See id. ¶ 30.)
Plaintiffs contend that the July 7, 2004 foreclosure sale was
in violation of the automatic stay triggered by NewOralean's
bankruptcy petition, and that the sale violated state law in
numerous ways. (See id. ¶¶ 35-40.) Plaintiffs further allege
that the sale occurred in an area inaccessible to persons in
wheelchairs, in violation of federal law. (See id. ¶ 39.)
Finally, plaintiffs allege that, in June 2002, defendant
Community Commerce Bank engaged in unspecified acts of "predatory
lending" and that said defendant included duplicate charges in a
"settlement statement." (See id. ¶ 62.)
Plaintiffs seek both equitable relief and damages. In
particular, with respect to the former, plaintiffs seek an order setting aside the foreclosure
sale and an order quieting title. (See id. at 15.)
Pursuant to 28 U.S.C. § 1915, "any court of the United States
may authorize the commencement, prosecution or defense of any
suit, action or proceeding, civil or criminal, or appeal therein,
without prepayment of fees or security therefor, by a person who
submits an affidavit that includes a statement of all assets such
person possesses that the person is unable to pay such fees or
give security therefor." See 28 U.S.C. § 1915(a)(1). Where such
an affidavit is filed, however, § 1915 requires the court to
dismiss the case "at any time" if the court determines that "the
allegation of poverty is untrue," the action "fails to state a
claim upon which relief may be granted," the action is "frivolous
or malicious," or the action "seeks monetary relief against a
defendant who is immune from such relief." See
28 U.S.C. § 1915(e)(2).
1. Diversity Jurisdiction
Although plaintiffs allege that the Court has diversity
jurisdiction over the instant action, (see Compl. ¶ 1), the
allegations demonstrate that plaintiffs lack the requisite
diversity of citizenship with defendants. The district courts
have original jurisdiction for civil actions where the matter in
controversy exceeds $75,000 and is between citizens of different
states. See 28 U.S.C. § 1332(a). Congress has established the
basic rule that diversity of citizenship exists under
28 U.S.C. § 1332 only when each plaintiff is a citizen of a different state
from each defendant. See Owen Equip. & Erection Co. v.
Kroger, 437 U.S. 365, 373-74 (1978). In the instant case,
plaintiffs allege that both plaintiffs and all but one defendant
are citizens of California. (See Compl. ¶¶ 4, 6-23.)
Accordingly, there is no basis for diversity jurisdiction. 2. Federal Question Jurisdiction
a. Title 11
Plaintiffs' allegation that defendants violated the bankruptcy
stay raises a federal claim under Title 11 of the United States
Code. The district courts have original jurisdiction of all civil
proceedings arising under Title 11, or arising in or related to
cases under Title 11. See 28 U.S.C. § 1334(b). "Congress used
the phrase `arising under Title 11' to describe those proceedings
that involve a cause of action created or determined by a
statutory provision of Title 11." Maitland v. Mitchell (In re
Harris Pine Mills), 44 F.3d 1431, 1435 (9th Cir. 1995). Title 11
provides generally for an automatic stay of all proceedings
against the debtor upon the debtor's filing a bankruptcy
petition, see 11 U.S.C. § 362(a); a person who willfully
violates the automatic stay is liable for damages, see
11 U.S.C. § 362(h). Here, plaintiffs allege that defendants sold the
property while a bankruptcy stay was in effect. (See Compl. ¶
35.) The claim thus arises under Title 11 and, consequently, this
Court has jurisdiction over the instant action pursuant to Title
b. Americans with Disabilities Act
Plaintiffs' allegation that the foreclosure sale occurred in an
area inaccessible to persons in wheelchairs, (see Compl. ¶ 39),
raises a federal claim under the Americans with Disabilities Act
("ADA"). The ADA grants a private right of action for injunctive
relief to "any person who is being subjected to discrimination on
the basis of [a] disability." See 42 U.S.C. § 12188(a)(1).
Accordingly, the Court has jurisdiction under the ADA as well.
B. The Merits
As noted, where a plaintiff seeks to proceed in forma pauperis,
the Court must examine the allegations to determine whether the
action states a claim. See 28 U.S.C. § 1915(e)(2)(B)(ii).
1. Foreclosure in Violation of Bankruptcy Stay
Plaintiffs' allegation that the July 7, 2004 foreclosure sale
violated the bankruptcy stay does not state a claim. The
Bankruptcy Code provides for an automatic stay of proceedings
against the property of the bankruptcy estate or against the
debtor until the property "is no longer property of the estate" or until the bankruptcy case is
closed or dismissed. See 11 U.S.C. § 362(c). The effect of the
dismissal of a bankruptcy petition is to revest the property of
the estate in the entity in which the property was vested
immediately before the commencement of the bankruptcy case. See
11 U.S.C. § 349(b)(3). Here, plaintiffs allege that NewOralean's
Chapter 13 petition was dismissed on June 26, 2004. (See Compl.
¶ 29.) As a result, the automatic stay terminated on that date.
See 11 U.S.C. § 362(c).
Although the Federal Rules of Bankruptcy Procedure allow a
debtor to request a stay pending appeal, see Fed.R.Bankr.P.
8005, there is nothing in the record to indicate that plaintiffs
obtained such a stay. Rather, the docket for NewOralean's
bankruptcy case and subsequent appeal show that a stay pending
appeal was not granted. See In re Stone, Bankruptcy Case No.
04-41493, Docket Nos. 29-36; see also In re Stone, District
Court Case No. 04-3579 CW, Docket No. 6. Consequently, the July
7, 2004 foreclosure sale did not violate the automatic stay.
See Weston v. Rodriguez (In re Joanne M. Weston),
110 B.R. 452, 456 (E.D. Cal. 1989) (holding where debtor failed to obtain
stay pending appeal, foreclosure occurring after dismissal of
bankruptcy petition did not violate automatic stay).
Accordingly, plaintiffs fail to state a claim that the
foreclosure sale violated the automatic stay, and said claim will
be dismissed for failure to state a claim.
2. Americans with Disabilities Act
Plaintiffs allege that the foreclosure sale occurred in an area
inaccessible to persons in wheelchairs, in violation of federal
law. (See Compl. ¶ 39.) Plaintiffs do not allege that either
plaintiff uses a wheelchair nor do they allege either plaintiff
suffers from any other disability of a similar nature.
The ADA provides a remedy for any person subjected to
discrimination on the basis of a disability. See
42 U.S.C. § 12188. To have standing to sue in federal court, a plaintiff must
allege an injury in fact, a causal connection between that injury
and the defendant's conduct, and a likelihood that the injury
will be redressed by a favorable decision. See Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). An
individual with a disability has standing to seek relief for any ADA violation "affecting his
specific disability." See Steger v. Franco, Inc.,
228 F.3d 889, 894 (8th Cir. 2000). Conversely, an individual does not have
standing to pursue claims that do not affect his disability.
See id. at 893; see also Moeller v. Taco Bell Corp., 2005
WL 1910925, *4 (N.D. Cal. 2005) (holding class lacked standing
where only 38 percent of class members had disability that would
result in injury when they encountered certain ADA violations).
Here, as noted, plaintiffs allege that the foreclosure sale
violated the ADA because there was no wheelchair access to the
area in which the sale was conducted. (See Compl. ¶ 39.)
Because plaintiffs do not claim to have a disability, nor do they
allege facts sufficient to demonstrate standing to assert the
rights of any disabled person who was precluded from attending
the foreclosure sale, plaintiffs have failed to establish
standing to assert an ADA claim.
Accordingly, plaintiffs fail to state a claim under the ADA and
such claim will be dismissed.
3. Predatory Lending
Plaintiffs allege that, in June 2002, defendant Community
Commerce Bank engaged in unspecified acts of "predatory lending."
(See Compl. ¶ 62.) Under the Truth In Lending Act ("TILA"),
lenders are required to disclose, inter alia, all charges
associated with the loan, see 15 U.S.C. § 1601 et seq., and
in the case of nondisclosure of such information, TILA provides a
federal cause of action against creditors who engage in such
"predatory lending tactics," see Cooper v. First Gov't
Mortgage and Investors Corp., 238 F. Supp. 2d 50, 55 (D.D.C.
2002). Although plaintiffs do not specifically reference any
statute in connection with their claim, plaintiffs' allegations
conceivably could raise a federal claim under TILA.
Any such claim, however, is barred by TILA's statute of
limitations. A claim for violation of TILA must be brought
"within one year from the date of the occurrence of the
violation." See 15 U.S.C. § 1640(e). Plaintiffs allege that a
violation occurred on or about June 10, 2002, when defendant
Community Commerce Bank "held a second escrow" and engaged in
"predatory lending" in connection therewith. (See Compl. ¶ 62.)
As noted, plaintiffs' complaint was filed August 15, 2005. Thus, any TILA claim plaintiffs may
have is time barred.*fn2
Accordingly, plaintiffs fail to state a claim under TILA
against Community Commerce Bank and any such claim will be
4. Remaining State Law Claims
Because the Court has dismissed all claims over which it has
original jurisdiction, the Court declines to exercise
supplemental jurisdiction over the remaining claims arising under
state law and will dismiss such claims without prejudice to
plaintiffs' refiling those claims in state court. See
28 U.S.C. § 1367(c)(3).
For the reasons set forth above:
1. Plaintiffs' application to proceed in forma pauperis is
2. Plaintiffs' claims against defendants R.E.F.S. Inc.,
R.E.F.S. of Texas Inc., Joyful House LLC, Carlton Sue, Francisco
Ho, Fidelity National Agency Sales & Posting, Alameda County
Sheriff Department, Community Commerce Bank, Fidelity National
Title Company, Rosie M. Parks, Thomas Eastridge, Jed Somit,
Jessie Smith, Clara Mae Simpson, and City of Oakland for
violation of the automatic stay and violation of the ADA are
3. Plaintiffs' claim against defendant Community Commerce Bank
for predatory lending in violation of TILA is hereby DISMISSED.
4. The Court declines to exercise supplemental jurisdiction
over plaintiffs' remaining state law claims against defendants,
and hereby DISMISSES such claims without prejudice to plaintiffs'
refiling them in state court.
The Clerk shall close the file.
IT IS SO ORDERED.
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