United States District Court, N.D. California
November 10, 2005.
ASCHILEW JEMBER, FEREDE NEGASH, LEILTI MESFIN, AND LUNCH BOX RESTAURANT Plaintiffs,
DOWNEY SAVINGS AND LOAN ASSOCIATION F.A., WORLD LENDING GROUP, BANK OF THE WEST, SHUMEY MAMO, HAYWARD R. COOK, JR., JENNIFER LARGET, MIGUEL MONERO, EDWARD GUNTHER, AND BARBARA BRANN, Defendants.
The opinion of the court was delivered by: WILLIAM ALSUP, District Judge
ORDER (1) GRANTING JUDGMENT ON PLEADINGS AS TO FEDERAL CLAIMS;
(2) DISMISSING ALL CLAIMS AGAINST UNSERVED DEFENDANTS; AND (3)
REMANDING STATE CLAIMS
In this civil-rights action, defendants have filed three
separate motions to dismiss the complaint pursuant to FRCP
12(b)(6). Because answers have already been filed, this order
shall treat these as motions for judgment on the pleadings
pursuant to FRCP 12(c). Judgment for defendants is GRANTED as
to plaintiffs' federal claims. As the Court declines to exercise
supplemental jurisdiction over the remaining claims under state
law, these are REMANDED.
Plaintiffs, acting pro se, filed their complaint in Alameda
County Superior Court on January 25, 2005. The complaint alleged:
(1) deprivation of equal rights in violation of 42 U.S.C. 1981;
(2) retaliation; (3) criminal conspiracy; (4) deprivation of
civil rights in violation of California Civil Code § 51; (5) defamation; (6)
invasion of privacy; (7) punitive damages; (8) breach of
contract; and (9) request for temporary restraining order and
permanent injunction. Defendants removed the action on February
This lawsuit appears to concern the refinancing of a loan to
one or more plaintiffs. Defendant Downey Savings and Loan was the
lender. Defendant World Lending Group was the loan broker.
(Defendants argue that plaintiff Aschilew Jember does not have
standing because the only two signatories to this loan were
Ferede Negash and his wife Leilti Mesfin.) Plaintiffs Ferede
Negash and Leilti Mesfin, doing business as the Lunch Box
Restaurant, also had an unrelated bank account with defendant
Bank of the West. Their dispute with Bank of the West appears to
be completely separate from the refinancing transaction. Each of
these defendants, on behalf of themselves and their employees
also individually named as defendants, now separately move to
dismiss the complaint.
It is difficult to discern exactly what the factual allegations
are. Around February 2004, plaintiffs made arrangements with
employees of World Lending Group to refinance a property at 460
Leigh Avenue in San Jose, California (Compl. ¶ 7). Around April
26, 2004, plaintiffs entered into a contract with Downey Savings
and Loan for a principal loan in the amount of $390,000 (id. ¶¶
8-9). This agreement included a "right to cancel" the loan on or
about April 30, 2004, which was exercised by Downey Savings and
Loan and World Lending Group on May 11, 2004 (id. ¶¶ 11-12).
The parties entered into a second loan agreement for the amount
of $401,760 "with consent," after which plaintiffs demanded
immediate cancellation; defendants refused and continued "to
manipulate the loan in violation of plaintiffs' rights and in
breach of the contract" (id. ¶¶ 13-14). The loan documents were
not appended as exhibits to the complaint. In an apparently
separate dispute that seems to raise no federal question,
defendant Bank of the West is accused of taking money "from the
Lunch Box Restaurant account which [total] over $10,1000.00 [sic]
from September 2004 to the present."
Defendants are collectively alleged to have "breached
contractual agreements" and violated plaintiffs' constitutional
rights "by their discriminatory policies and based on
discriminatory practices" (id. ¶ 20). Plaintiffs further accuse
defendants of having "an established policy and bank practices to [sic] designed to
discriminate [against] minority people" (id. ¶ 21).
"After the pleadings are closed but within such time as not to
delay the trial, any party may move for judgment on the
pleadings." FRCP 12(c). A motion for judgment on the pleadings is
evaluated according to virtually the same legal standard as a
motion to dismiss pursuant to FRCP 12(b)(6), in that the
pleadings are construed in the light most favorable to the
non-moving party. Brennan v. Concord EFS, Inc.,
369 F. Supp.2d 1127, 1130-31 (N.D. Cal. 2005). "Conclusory allegations of law
and unwarranted inferences" are insufficient to defeat a Rule 12
motion. Epstein v. Washington Energy Co., 83 F.3d 1136, 1140
(9th Cir. 1996). As to factual allegations, those of the
non-moving party are accepted as true, while the allegations of
the moving party are assumed to be false. Hal Roach Studios,
Inc. v. Richard Feiner and Co., 896 F.2d 1542, 1550 (9th Cir.
1990). Judgment on the pleadings is proper when the moving party
clearly establishes on the face of the pleadings that no material
issue of fact remains to be resolved and that it is entitled to
judgment as a matter of law." Ibid. Matters outside the
pleadings should not be considered; otherwise, the motion must be
treated as a summary judgment motion. FRCP 12(c). No matters
outside the pleadings were considered here.
This order will focus on plaintiffs' claims under federal law.
Plaintiffs' first claim alleges a civil-rights violation under
42 U.S.C. 1981. This section provides in relevant part:
"All persons within the jurisdiction of the United
States shall have the same right in every State and
Territory to make and enforce contracts . . . as is
enjoyed by white citizens, and shall be subject to
like punishment, pains, penalties, taxes, licenses,
and exactions of every kind, and to no other. . . .
The rights protected by this section are protected
against impairment by nongovernmental discrimination
and impairment under color of State law."
Although § 1981 encompasses private as well as governmental
action, it still requires proof of intentional racial
discrimination. Gen. Bldg. Contractors Ass'n v. Pennsylvania,
458 U.S. 375
, 387-88 (1982). Here, the factual allegations
concerning defendants' policies of racial discrimination are
sparse. Aside from conclusory allegations that one or more
defendants had policies "designed to discriminate [against]
minority people," the complaint contains no further information as to which defendant(s) had discriminatory policies
or what those policies were (Compl. ¶ 21). This is insufficient
to defeat a Rule 12 motion.
Plaintiffs' third claim alleges criminal conspiracy in
violation of 42 U.S.C. §§ 1981, 1983 and 1985. Section 1983
"Every person who, under color of any statute,
ordinance, regulation, custom, or usage, of any State
or Territory or the District of Columbia, subjects,
or causes to be subjected, any citizen of the United
States or other person within the jurisdiction
thereof to the deprivation of any rights, privileges,
or immunities secured by the Constitution and laws,
shall be liable to the party injured."
Section 1985(3) prohibits conspiring for the purpose of depriving
a person or class of persons of the rights and privileges
belonging to a citizen of the United States. Putting aside the
problem that there is no alleged act "under color of state law,"
the complaint failed to allege sufficient facts to state a claim
under either section. See Sykes v. State of Calif. (Dep't of
Motor Vehicles), 497 F.2d 197
, 200 (9th Cir. 1974) (enumerating
the factors which must be alleged under both § 1983 and § 1985).
In any event, plaintiffs own allegations suggest that the
"right to cancel" provision applied to the first agreement for
$390,000, not the second agreement for $401,760 (id. ¶ 11).
Furthermore, the complaint alleges that the second loan agreement
was executed "with consent" (id. ¶ 13). Nowhere is it alleged
that plaintiffs were denied their alleged "right to cancel" the
agreement they voluntarily entered or otherwise treated
differently on the basis of race.
For the foregoing reasons, judgment for defendants is GRANTED
as to plaintiffs' claims under federal law. Pursuant to
28 U.S.C. 1367(c)(3), the Court declines to exercise supplemental
jurisdiction over plaintiffs' remaining claims arising under
state law. These claims are immediately REMANDED to the
Superior Court for Alameda County. As to defendants Shumey Mamo,
Hayward R. Cook, Jr., Jennifer Larget and Edward Gunther, for
whom there is no valid proof of service on file, the complaint is
DISMISSED in its entirety.
IT IS SO ORDERED.
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