Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Jonathan Edward Reed v. Val-Chris Investments

December 5, 2011

JONATHAN EDWARD REED,
PLAINTIFF,
v.
VAL-CHRIS INVESTMENTS, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Hon. Roger T. BenitezUnited States District Judge

ORDER GRANTING MOTION TO DISMISS AND REMANDING TO STATE COURT [Dkt. No. 9]

Defendants removed this action from state court based on Federal Question jurisdiction. (Dkt. No. 1.) Defendants Val-Chris Investments, Inc. ("Val-Chris"), Advance Inheritance, LLC ("AI"), Marion Lawrence, and James Leestma filed a motion to dismiss Plaintiff Jonathan Edward Reed's Complaint.*fn1 (Dkt. No. 9.) Having considered the parties' briefing on the motion, the Court GRANTS the motion to dismiss as to Plaintiff's federal claims, declines to exercise supplemental jurisdiction over Plaintiff's state law claims, and REMANDS the case to state court.

BACKGROUND*fn2

Plaintiff asserts violations of federal law resulting from two transactions he entered into with Defendants. The first transaction was an advance on Plaintiff's inheritance. (Compl. ¶ 63.) Under the terms of the transaction, Plaintiff assigned a portion of his interest in his father's Estate to AI in exchange for $35,000. (Compl. ¶ 56; Compl., Ex. 5, ¶ 1.) AI would receive $42,000 if the Estate was distributed before July 30, 2010 and $50,000 if the Estate was distributed after July 30, 2010. (Compl., Ex. 5 ¶ 1.) Under the terms of the assignment, AI could not recover any unpaid portion of the assigned amount from Plaintiff. (Compl., Ex. 5.) The assignment was signed by Plaintiff on February 17, 2010 and signed by Leestma as President of AI on February 23, 2010. (Id.) The assignment was filed with the probate court on February 25, 2010. (Id.)

The second transaction was between Plaintiff's father's Estate and Val-Chris. "The Estate of Ronald P. Reed" was identified as the "Borrower" and Plaintiff signed as "Jonathan Edward Reed, Administrator." (Compl., Ex. 10.) The note was signed on April 7, 2010 for $85,000 and secured by the Estate's property at 6432 Radio Drive, San Diego, California, 92114. The note was later transferred from Val-Chris to Marion. (Compl., Ex. 12.)

DISCUSSION

Under Federal Rule of Civil Procedure 12(b)(6), a motion to dismiss is meritorious if, taking all factual allegations as true, the complaint fails to state a plausible claim for relief on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556-57 (2007). The plausibility standard means that the complaint must state enough facts to raise a reasonable expectation that discovery will uncover evidence of the matter. Id. at 556.

In ruling on a motion to dismiss, the Court is generally limited to the allegations of the complaint. Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 925 (9th Cir. 2001). However, the Court may consider documents attached to the complaint, documents upon which the complaint relies, and documents properly the subject of judicial notice. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990) (documents attached to the complaint); Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006) (documents upon which the complaint relies); MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (1986) (judicial notice).

Particularly relevant to Plaintiff's Complaint, the Court is not required "to accept as true a legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009) (quoting Twombly, 550 U.S. at 555). Nor does the Court "assume the truth of legal conclusions merely because they are cast in the form of factual allegations. Therefore, conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (internal quotation marks and citations omitted).

Plaintiff asserts fifteen claims for relief. Three of these claims arise under federal law: (1) first claim for relief for violation of and rescission under the Truth and Lending Act ("TILA"), 15 U.S.C. § 1601 et seq., against AI; (2) third claim for relief for violation of TILA against Val-Chris and Marion; and (3) eleventh claim for relief for violation of the Federal Fair Debt Collection Practices Act ("FDCPA") against Val-Chris.

Because the Court finds these federal claims must be dismissed and declines to exercise supplemental jurisdiction over the remaining state law claims, the Court does not reach the merits of Plaintiff's state law claims. Carlsbad Tech., Inc. v. HIF BIO, Inc., 556 U.S. 635, 129 S. Ct. 1862, 1866 (2009) (noting that the district court may decline to exercise supplemental jurisdiction over state law claims if the "district court has dismissed all claims over which it has original jurisdiction").

I. TILA Claims

In moving to dismiss Plaintiff's first and third claims for relief under TILA, Defendants argue that the two transactions at issue are not subject to the requirements of TILA, including its requirements with regard to rescission. The Court agrees.

As to the first transaction between Plaintiff and AI, Plaintiff asks the Court to characterize a non-recourse advance on his inheritance as a consumer loan subject to the requirements of TILA. As evident by both parties' lack of citation to authority on this issue, the Court acknowledges the absence of case law addressing whether such a transaction is subject to TILA. However, the Court finds that the transaction between Plaintiff and AI was not a loan ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.