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George Gehron v. Assured Lender Services; Best Reward Credit Union; First Franklin

November 17, 2011

GEORGE GEHRON,
PLAINTIFF,
v.
ASSURED LENDER SERVICES; BEST REWARD CREDIT UNION; FIRST FRANKLIN FINANCIAL CORPORATION; FRANKLIN MORTGAGE CAPITOL CORPORATION; MERRILL LYNCH & CO.; SELECT PORTFOLIO SERVICING, INC.' CUMANENT; VANTAGE FEDERAL CREDIT UNION; VANTAGE FINANCIAL CREDIT UNION; BEST EMPLOYEES FEDERAL CREDIT UNION; REWARD ONE CREDIT UNION; FAIRBANKS CAPITAL CORPORATION; FIRST AMERICAN TITLE INSURANCE COMPANY; EQUICREDIT CORPORATION OF AMERICA; ORION FINANCIAL GROUP, INC.; MERSCORP, INC., (MORTGAGE ELECTRONIC REGISTRATION SYSTEMS - MERS); BANK OF AMERICA; CITIFINANCIAL MORTGAGE, DEFENDANTS.



The opinion of the court was delivered by: Hayes, Judge:

ORDER

The matter before the Court is the Amended Motion for Leave to Proceed in Forma Pauperis ("Motion to Proceed IFP") (ECF No. 5).

On October 12, 2011, Plaintiff George Gehron, proceeding pro se, initiated this action by filing a Complaint in this Court. (ECF No. 1). On October 12, 2011, Plaintiff also filed the Motion to Proceed IFP which was denied. (ECF Nos. 2, 3). On October 25, 2011, Plaintiff filed an Amended Motion to Proceed IFP. (ECF No. 5).

On October 27, 2011, Plaintiff filed a Declaration in support of Plaintiff's New Complaint. (ECF No. 8). On November 10, 2011, Plaintiff filed an Ex Parte Notice of Peremptory Challenge of Judge William Q. Hayes & Declaration of Bias Under California Code of Civil Procedure section 170.6.*fn1 (ECF No. 9).

I. Motion to Proceed IFP

All parties instituting a civil action, suit, or proceeding in a district court of the United States, other than a petition for writ of habeas corpus, must pay a filing fee of $350.00. 28 U.S.C. § 1914(a). An action may proceed despite a party's failure to pay only if the party is granted leave to proceed in forma pauperis pursuant to 28 U.S.C. § 1915(a). See Rodriguez v. Cook, 169 F.3d 1176, 1177 (9th Cir. 1999). "To proceed in forma pauperis is a privilege not a right." Smart v. Heinze, 347 F.2d 114, 116 (9th Cir. 1965).

In his accompanying affidavit, Plaintiff states that he is not employed, but he currently receives $1,500.00 per month from "business." (ECF No. 5 at 2). Plaintiff states that he has a checking account with a balance of $125.70 and $5,000.00 in a retirement account. In addition, Plaintiff owns a 1999 Ford Expedition automobile. Plaintiff also owns his "main home & 2 rental homes" but asserts that the loans are "upside down." Id. at 3. Plaintiff supports himself, his wife, and his three children and asserts that payments of "utilities and food alone per month use the entire $1,500 business income." Id. Plaintiff states that he has $31,000 in credit card debt in addition to the "upside down" loans. Id.

The Court has reviewed Plaintiff's affidavit and finds that it is sufficient to show that Plaintiff is unable to pay the fees or post securities required to maintain this action. The Court grants the Motion to Proceed IFP pursuant to 28 U.S.C. § 1915(a).

II. Initial Screening Pursuant to 28 U.S.C. § 1915(e)(2)(B)

After granting IFP status, the Court must dismiss the case if the case "fails to state a claim on which relief may be granted." 28 U.S.C. § 1915(e)(2)(B); Barren v. Harrington, 152 F.3d 1193, 1194 (9th Cir. 1998) (noting that § 1915(e)(2) "parallels the language of Federal Rule of Civil Procedure 12(b)(6)"). The standard used to evaluate whether a Complaint state a claim is a liberal one, particularly when the action has been filed pro se. See Estelle v. Gamble, 429 U.S. 97, 97 (1976). However, even a "liberal interpretation ... may not supply elements of the claim that were not initially pled." Ivey v. Bd. of Regents of the Univ. of Alaska, 673 F.2d 266, 268 (9th Cir. 1982).

Federal Rule of Civil Procedure 8(a) provides: "A pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Dismissal is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory. See Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). To sufficiently state a claim to relief, a complaint "does not need detailed factual allegations" but the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). "[A] plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. (quoting Fed. R. Civ. P. 8(a)(2)). When considering a motion to dismiss, a court must accept as true all "well-pleaded factual allegations." Ashcroft v. Iqbal, __ U.S. __, 129 S. Ct. 1937, 1950 (2009). However, a court is not "required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

A. Allegations of the Complaint

This case involves property located at 717 Old Stage Road, Fallbrook, CA 92028. On October 27, 1999, Plaintiff George Gehron and Cheryl Gehron signed a promissory note in the amount of $129,600 payable to First Franklin Financial Corporation which was secured by a deed of trust. On October 27, 1999, Plaintiff signed a balloon rider payable to First Franklin Financial Corporation which was secured by a deed of trust. On October 17, 2003, Plaintiff and Cheryl Gehron signed a promissory note in the amount of $200,000 payable to Vantage which was secured by a deed of trust. On October 29, 2003, the deed was recorded and it listed First American Title as the trustee. On May 27, 2004, a deed of trust was recorded in the amount of $130,000 payable to Vantage and listing Vantage as the trustee; however, "Cheryl Gehron [had] reluctantly and unwillingly signed hers and her husband's names...." (ECF No. 1 at 41). Plaintiff was not provided with a copy of the deed of trust.

Plaintiff resided in the home for seven years. Id. at 21. Plaintiff received a notice of default dated September 27, 2010 which contained "false information regarding an 'Advance By The Beneficiary In Payment of Vantage'" one month before a substitution of trustee was filed. Id. at 24. On March 21, 2011, a notice of trustee's sale was executed by an agent of Assured Lender Services, Inc. as trustee for Best Reward Credit Union. The foreclosure "is related to an alleged Home Equity Line of Credit Loan which was not even signed by Plaintiff, even though it was notarized as such." Id. "[W]ithout a validly signed Deed, there is no agreement regarding the same and ...


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