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Azizkhan v. First Franklin Loan Servicing

June 3, 2010

KIAMARS AZIZKHAN, PLAINTIFF,
v.
FIRST FRANKLIN LOAN SERVICING; FIRST FRANKLIN FINANCIAL CORPORATION; CAL-WESTERN RECONVEYANCE CORPORATION; BANK OF AMERICA, NATIONAL ASSOCIATION AS SUCCESSOR BY MERGER TO LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR FIRST FRANKLIN MORTGAGE LOAN TRUST, MORTGAGE LOAN ASSET BACKED CERTIFICATES, SERIES 2007-FF2; MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INC.; ANCHOR FINANCIAL MORTGAGE COMPANY, INC.; RYAN N. SMITH; AND DOES 1-20 INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge

ORDER DISMISSING PLAINTIFF'S FEDERAL CLAIMS AND DECLINING SUPPLEMENTAL JURISDICTION OVER STATE LAW CLAIMS AND DENYING DEFENDANTS' MOTION FOR RULE 11 SANCTIONS*fn1

Defendants Home Loan Services, Inc d/b/a First Franklin Loan Servicing, First Franklin Financial Corporation, Bank of America, National Association, and Mortgage Electronic Registration Systems, Inc. ("Defendants") move to dismiss Plaintiff's first amended complaint under Federal Rule of Civil Procedure 12(b)(6). (Docket No. 14.) Defendants also filed a motion for sanctions under Federal Rule of Civil Procedure 11(c), seeking an award of $11,405 in attorneys' fees. (Docket No. 16.) Plaintiff opposes Defendants' motion for sanctions and filed a Statement of Non-Opposition to Defendants' dismissal motion. (Docket Nos. 28, 30.)

I. Dismissal of Plaintiff's Federal Claims

Plaintiff's Statement of Non-Opposition states that he "does not oppose" Defendants' dismissal motion "insofar as it relates to [his] Eighth Cause of Action under the Real Estate Settlement Procedures Act, 12 U.S.C. §2605 ("RESPA") and [his] Ninth Cause of Action under the Truth in Lending Act, 15 U.S.C. §1604 ("TILA")...." (Statement of Non-Opposition 2:2-10.) Further, "Plaintiff... requests that all claims against all Defendants... be dismissed, without prejudice, or in the alternative, that Plaintiff be granted leave to amend his First Amended Complaint in this matter so as to remove the Causes of Action under TILA and RESPA which had previously been plead [sic] by the Plaintiff...." (Id. 2:11-14.) Plaintiff also argues that "[w]hen the federal claims that served as the basis for the Court's original jurisdiction are eliminated, either through dismissal... or by [amendment]," the court should "decline to assert supplemental jurisdiction over the remaining state law causes of action, and dismiss them without prejudice...." (Id. 2:24-3:3.)

In accordance with Plaintiff's Statement of Non-Opposition, Plaintiff's TILA and RESPA claims are dismissed.

II. Defendants' Rule 11 Motion

Defendants argue they are entitled to an award of attorneys' fees because Plaintiff's counsel failed to comply with Rule 11(b)'s requirements. Specifically, Defendants contend Plaintiff's first amended complaint was "filed for purposes of delay [and] to avoid the hearing of Defendants' Motion to Dismiss the original complaint." (Mot. for Sanctions 5:8-10.) Defendants further argue that Plaintiff's first amended complaint "does not differ significantly from the original [c]omplaint" and does not "state a claim upon which relief can be granted...." (Id. 5:9-12.) Plaintiff counters that "[w]hile Plaintiff's counsel admits that her pleadings in this matter have been, at times, somewhat 'inartfully' pled, these instances are certainly not tantamount to the bad faith and wilful disobedience to the Court's Orders as contemplated under the subject Rules and applicable authorities, so as to justify the imposition of the most extreme sanction in the form of attorneys fees payable to an opposing party." (Opp'n to Mot. for Sanctions 3:2-7.)

"Rule 11 authorizes a court to impose a sanction on any attorney, law firm, or party that brings a claim for an improper purpose or without support in law or evidence." Sneller v. City of Bainbridge Island, --- F.3d ----, 2010 WL 2076805, at *2 (9th Cir. May 25, 2010). Specifically, Rule 11(b) provides in pertinent part:

By presenting to the court a pleading... ---whether by signing, filing, submitting, or later advocating it---an attorney... certifies that to the best of the person's knowledge, information, and belief, formed after inquiry reasonable under the circumstances:

(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;

(2) the claims... and other legal contentions are warranted by existing law or by non-frivolous argument for extending, modifying, or reversing existing law or for establishing new law;

(3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support afer a Fed. R. Civ. P. 11(b). As explained by the Ninth Circuit, under Rule 11:

[a]n attorney has a duty prior to filing a complaint not only to conduct a reasonable factual investigation, but also to perform adequate legal research that confirms whether the theoretical underpinnings of the complaint are warranted by existing law or a good faith argument for an extension, modification or reversal of existing law. One of the fundamental purposes of Rule 11 is to reduce frivolous claims, defenses or ...


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