IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA
August 28, 2009
DAVID PRADO, PLAINTIFF,
CHASE HOME FINANCIAL, DEFENDANT.
ORDER AND FINDINGS AND RECOMMENDATIONS
This case came before the court on April 3, 2009, for hearing of defendant's motion to dismiss plaintiff's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) (Doc. No. 6). S. Christopher Yoo, Esq. appeared telephonically for defendant Chase Home Finance, LLC, erroneously sued as Chase Home Financial. Plaintiff, who is proceeding pro se in this action, made no appearance at the hearing.*fn1
Upon consideration of all written materials filed in connection with the motion, the arguments at the hearing, and the entire file, the undersigned recommends that defendant's motion be granted and this action be dismissed with prejudice.
Plaintiff filed his fee-paid verified complaint in this action on February 5, 2009. Therein, he alleged fraud, usury, abuse of process, intentional infliction of emotional distress and trespass apparently in connection with a mortgage loan taken out by plaintiff and subsequent foreclosure proceedings. (Doc. No. 1.) On February 26, 2009 defendant Chase Home Finance filed its motion to dismiss (Doc. No. 6) along with a Request for Judicial Notice of documents appearing in the public record related to the Deed of Trust on the subject property.*fn2 (Doc. No. 7.) Plaintiff filed no written opposition to the motion to dismiss. Counsel for defendant filed a timely reply, noting plaintiff's failure to file opposition. (Doc. No. 9 at 2.)
In his complaint plaintiff alleges in conclusory fashion that defendant Chase Home Finance, and its employees, failed to disclose and concealed facts from plaintiff that they had a duty to disclose and made misrepresentations to plaintiff that influenced his conduct. (Compl. at 3-4.) Plaintiff appears to allege that defendant Chase Home Finance charged him a usurious rate of interest and used its superior skill and experience in the area of home loans to defraud him. (Compl. at 5.) Finally, plaintiff also appears to allege that defendant trespassed on his property (apparently in connection with foreclosure proceedings) and asks this court to enjoin any eviction or foreclosure proceedings. (Id. at 6-8.) Based on these vague allegations, plaintiff's complaint purports to state causes of action for fraud, usury, abuse of process, intentional infliction of emotional distress and trespass. In addition to the injunctive relief noted above, the complaint seeks general and damages totaling $4,000,000.00. (Id. at 10.)
Defendant seeks dismissal of plaintiff's claims pursuant to Federal Rule of Civil Procedure 12(b)(6) on the grounds that plaintiff has simply failed to allege facts sufficient to state a cognizable claim with respect to any of his purported causes of action. Specifically, defendant observes that plaintiff's complaint "consists of a hodgepodge of incoherent claims with virtually no supporting factual allegations" all apparently stemming from a Deed of Trust encumbering plaintiff's Vallejo property. (Mot. at 1.) Defendant argues that there are no allegations of: what representations were allegedly made by Chase Home Finance; that plaintiff justifiably relied on such representations, specific intrusions or trespasses by defendant or of any viable theory of recovery against defendant Chase. Defendant argues that under the governing legal standards, plaintiff's complaint fails to state any cognizable claim and should be dismissed with prejudice.*fn3
As noted above, plaintiff filed no opposition to the pending motion and failed to appear at the hearing.
LEGAL STANDARDS APPLICABLE TO DEFENDANT'S MOTION
The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal sufficiency of the complaint. N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). "Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). A plaintiff is required to allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, , 127 S.Ct. 1955, 1974 (2007). Thus, a defendant's Rule 12(b)(6) motion challenges the court's ability to grant any relief on the plaintiff's claims, even if the plaintiff's allegations are true.
In determining whether a complaint states a claim on which relief may be granted, the court accepts as true the allegations in the complaint and construes the allegations in the light most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1989). In general, pro se complaints are held to less stringent standards than formal pleadings drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520-21 (1972). However, the court need not assume the truth of legal conclusions cast in the form of factual allegations. W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). The court is permitted to consider material which is properly submitted as part of the complaint, documents not physically attached to the complaint if their authenticity is not contested and the plaintiff's complaint necessarily relies on them, and matters of public record. Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001).
Federal Rule of Civil Procedure 9, titled "Pleading Special Matters," provides as follows with regard to claims of "Fraud, Mistake, Condition of the Mind":
In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally.
Fed. R. Civ. P. 9(b). "Rule 9(b) serves not only to give notice to defendants of the specific fraudulent conduct against which they must defend, but also 'to deter the filing of complaints as a pretext for the discovery of unknown wrongs, to protect [defendants] from the harm that comes from being subject to fraud charges, and to prohibit plaintiffs from unilaterally imposing upon the court, the parties and society enormous social and economic costs absent some factual basis.'" Bly-Magee v. California, 236 F.3d 1014, 1018 (9th Cir. 2001) (quoting In re Stac Elec. Sec. Litig., 89 F.3d 1399, 1405 (9th Cir. 1996)). Accordingly, pursuant to Rule 9(b), a plaintiff at a minimum must plead evidentiary facts such as the time, place, persons, statements and explanations of why allegedly misleading statements are misleading. In re GlenFed, Inc. Sec. Litig., 42 F. 3d 1541, 1547 n.7 (9th Cir. 1994); see also Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003); Fecht v. Price Co., 70 F.3d 1078, 1082 (9th Cir. 1995).*fn4
Plaintiff's conclusory allegation of fraud is insufficient under Rules 9(b) and 12(b)(6) of the Federal Rule of Civil Procedure. As noted above, Rule 9(b) requires a party to "state with particularity the circumstances constituting fraud." This, plaintiff has failed to do. The court may dismiss a fraud claim when its allegations fail to meet the required pleading standard. Vess, 317 F.3d at 1107; see also Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997) ("fraud allegations must be accompanied by 'the who, what, when, where, and how' of the misconduct alleged"). The same principle applies under California law. Tarmann v. State Farm Mutual Auto. Ins. Co., 2 Cal. App. 4th 153, 157 (1991). Plaintiff has failed to state a cognizable fraud claim.
Plaintiff has also failed to state a cognizable claim for usury. The essential elements of such a claim under California law are: the transaction must be a loan or forbearance; the interest to be paid must exceed the statutory maximum; the loan and interest must be absolutely repayable by the borrower; and the lender must have the willful intent to enter into a usurious transaction. Ghirardo v. Antonioli, 8 Cal. 4th 791, 798 (1994); WRI Opportunity Loans II LLC v. Cooper, 154 Cal. App. 4th 525, 533 (2007). There is a rebuttable presumption that a transaction is not usurious. Ghirardo, 8 Cal. 4th at 798-99. Here, plaintiff's complaint fails to allege any facts addressing the essential elements of a usury claim. Rather, he merely provides a legal definition of the word. (Compl. at 4.) As such, he has failed to state a cognizable claim. See Jiramoree v. Homeq Servicing, et al., No. CV 08-07511 SJO (Ex), 2009 WL 605817, *1-2 (C.D. Cal. Mar. 9, 2009) (dismissing plaintiff's usury cause action for failure to state a claim stemming from a foreclosure following his default on his mortgage loan).
Plaintiff has also failed to state a cognizable claim for abuse of process. In order to state a cognizable claim for the tort of abuse of process under California law a plaintiff must allege that the defendant used the legal process against plaintiff with an ulterior motive and through a willful act of using the legal process in a manner not proper in the regular conduct of the proceedings. Rusheen v. Cohen, 37 Cal. 4th 1048, 1057 (2006); Booker v. Roundtree, 155 Cal. App. 4th 1366, 1371 (2007). The essence of the tort of abuse of process lies in the misuse of the power of the court for the purpose of perpetrating an injustice. In his complaint plaintiff does not even allege that defendant Chase Home Finance used any legal process nor does he identify any such legal process. (Compl. at 5.) Rather, he alleges only that the defendants "have A (sic) documented history of the illegal and unauthorized use of their superior LAW (sic), experience and skills to harm unsuspecting individuals seeking to protect themselves." (Compl. at 5) (emphasis in original). Such vague and conclusory allegations that do not address the essential elements of a tort claim for abuse of process are clearly insufficient and fail to state a cognizable claim.
Plaintiff has also failed to state a cognizable claim for intentional infliction of emotional distress. To state a claim for intentional infliction of emotional distress under California law a plaintiff must allege: (1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) plaintiff's suffering of severe or extreme emotional distress; (3) and actual and proximate causation of the emotional distress by the defendant's outrageous conduct. Christensen v. Superior Court, 54 Cal. 3d 868, 903 (1991); Cervantez v. J.C. Penney Co., 24 Cal. 3d 579, 593 (1979). Plaintiff's complaint does not allege facts suggesting that any conduct engaged in by defendant Chase Home Finance was extreme or outrageous nor does the complaint allege facts showing that defendant acted with the requisite intent or that plaintiff has suffered severe or extreme emotional distress as a result of defendant's conduct. (Compl. at 6.) In light of the foregoing, the court concludes that plaintiff's complaint fails to state a cognizable claim for intentional infliction of emotional distress.
Similarly, plaintiff has failed to state a cognizable claim for trespass. California law requires that in order to state a claim for trespass a plaintiff must allege that: plaintiff was in lawful possession of the real property; defendant engaged in a wrongful physical invasion or intrusion on the property; and damages were proximately caused to plaintiff by defendant's intrusion on the property. See Smith v. Cap Concrete, Inc., 133 Cal. App. 3d 769, 774-75 (1982). In order to maintain an action for trespass, a plaintiff must be in actual possession of the property or have a present right of possession. Miller and Starr, 6 California Real Estate § 16:29 (3d Ed. Supp. 2009). In his complaint, plaintiff has failed to allege facts addressing these essential elements of a civil trespass claim. (Compl. at 6-7.) Plaintiff has not alleged his ownership or lawful possession of the property in question, nor has he alleged a specific intrusion by defendant Chase Home Finance or any damage incurred thereby. Accordingly, this claim should be dismissed as well.
Finally, the deficiencies of the complaint make it apparent that plaintiff is not entitled to injunctive relief. "The proper legal standard for preliminary injunctive relief requires a party to demonstrate 'that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.'" Stormans v. Selecky, 571 F.3d 960, 978 (9th Cir. 2009) (quoting Winter v. Natural Res. Def. Council, ___ U.S. ___, 129 S.Ct. 365, 374 (2008)). Plaintiff's request for injunctive relief is premised on his flawed substantive claims. For the reasons set forth above with respect to those claims, plaintiff has failed to demonstrate that he is likely to succeed on the merits, that the balance of equities tips in his favor or that an injunction is in the public interest. Accordingly, his sixth cause of action, seeking injunctive relief, should be dismissed as well.
The undersigned has carefully considered whether plaintiff may amend his complaint to state any claim upon which relief can be granted. "Valid reasons for denying leave to amend include undue delay, bad faith, prejudice, and futility." California Architectural Bldg. Prod. v. Franciscan Ceramics, 818 F.2d 1466, 1472 (9th Cir. 1988). See also Klamath-Lake Pharm. Ass'n v. Klamath Med. Serv. Bureau, 701 F.2d 1276, 1293 (9th Cir. 1983) (holding that, while leave to amend shall be freely given, the court does not have to allow futile amendments). Leave to amend would clearly be futile in this instance given the deficiencies of plaintiff's complaint discussed above. Accordingly, the undersigned will recommend that this action be dismissed with prejudice.
For the reasons set forth above, IT IS HEREBY ORDERED that defendant's request for judicial notice (Doc. No. 7) is granted; and
IT IS RECOMMENDED that:
1. Defendant's motion to dismiss (Doc. No. 6) be granted pursuant to Federal Rule of Civil Procedure 12(b)(6); and
2. This action be dismissed with prejudice.
These findings and recommendations will be submitted to the United States District Judge assigned to this case, pursuant to the provisions of 28 U.S.C. § 636(b)(l). Within fifteen days after being served with these findings and recommendations, any party may file and serve written objections with the court. A document containing objections should be titled "Objections to Magistrate Judge's Findings and Recommendations." Any reply to objections shall be filed and served within five days after the objections are served. The parties are advised that failure to file objections within the specified time may, under certain circumstances, waive the right to appeal the District Court's order. See Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).