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Brian Kenner, et al v. Erin Kelly

February 21, 2012

BRIAN KENNER, ET AL.,
PLAINTIFFS,
v.
ERIN KELLY, ET AL.,
DEFENDANTS.



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

ORDER GRANTING CAPITAL ONE'S MOTION TO DISMISS [Docket No. 14]

Presently before the Court is Defendant Capital One's Motion to Dismiss. (Docket No. 14.) For the reasons stated below, the Motion is GRANTED.

BACKGROUND

In October 2010, Plaintiffs Brian Kenner and Kathleen Kenner (husband and wife) filed suit against individual Internal Revenue Service employees David Alito, Charlotte Becerra, Patricia Blizzard, C. John Crawford, Erin Kelly, Mindy Meigs, Mary Kay Pittner, Jennifer Plasky, Carol Rose, and Sylvia Shaughnessy ("IRS Defendants"), as well as Barbara Dunn and Lacy Dunn and Do ("First RICO Action"). (Kenner v. Kelly, 10-CV-2105 AJB (WVG), Docket No. 1.) The complaint alleged that the IRS Defendants engaged in unauthorized collection actions by accepting payment of settlement funds, by their offer in compromise, and by improperly collecting settlement funds, in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq.

When the First RICO Action was filed, it was assigned to Judge Barry T. Moskowitz. The district court later transferred the action to Judge Anthony J. Battaglia. (Id., Docket No. 61.) On May 27, 2011, Judge Battaglia granted the IRS Defendants' motion to dismiss, and entered judgment. (Id., Docket Nos. 64, 65.) On June 21, 2011, Plaintiffs filed a Notice of Appeal challenging the order granting the motion to dismiss. (Id., Docket No. 66.) The appeal is currently pending before the Ninth Circuit. (See Kenner v. Kelly, No. 11-56062 (9th Cir.).)

On July 12, 2011, Plaintiffs filed a new action in district court, which is similar to the First RICO Action ("Second RICO Action"). (See Kenner v. Kelly, 11-CV-1538 AJB (WVG), Docket No. 1.) On August 9, 2011, this action was transferred to Judge Battaglia pursuant to the Court's low number rule. (Id., Docket No. 13.) On August 11, 2011, this action was stayed pending resolution of the appeal of the First RICO Action. (Id., Docket No. 15.)

Concerning Plaintiffs' allegations against Capital One, Plaintiffs had a property interest in 17550 Harrison Park Road, Julian, California. (Compl. ¶ 91.) Capital One attempted to institute a non-judicial foreclosure proceeding sixty days before Plaintiffs' appellate brief deadline in the appeal of the First RICO Action. (Compl. ¶¶ 38(a), 69(a).) Capital One was not a party to the First RICO Action. On September 26, 2011, a trustee's sale was held pursuant to a Deed of Trust executed by Plaintiffs on April 9, 2007. (Capital One RJN [Docket No. 14-2], Exh. A.)*fn1

On October 14, 2011, Plaintiffs filed the present action in the San Diego County Superior Court against the IRS Defendants*fn2 in their individual capacities, Capital One, Judge Battaglia, and Judge Moskowitz. (Docket No. 1.) As to Capital One, Plaintiffs assert four causes of action: (1) conspiracy to violate the Bane Act, CAL. CIV. CODE § 52.1; (2) conspiracy to abuse process; (3) conversion; and (4) intentional interference with economic relationships. The United States and the IRS Defendants removed this action on October 31, 2011.

Presently before the Court is Capital One's Motion to Dismiss. Being fully briefed, the Court finds the Motion suitable for determination on the papers without oral argument, pursuant to Civil Local Rule 7.1.d.1.

DISCUSSION

Under Federal Rule of Civil Procedure 12(b)(6), dismissal is appropriate if, taking all factual allegations as true, the complaint fails to state a plausible claim for relief on its face. FED. R. CIV. P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556-57 (2007); see also Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (requiring plaintiff to plead factual content that provides "more than a sheer possibility that a defendant has acted unlawfully"). Under this standard, dismissal is appropriate if the complaint fails to state enough facts to raise a reasonable expectation that discovery will reveal evidence of the matter complained of, or if the complaint lacks a cognizable legal theory under which relief may be granted. Twombly, 550 U.S.at 556.

Each of Plaintiffs' causes of action against Capital One will be addressed in turn.

I. CONSPIRACY TO VIOLATE THE BANE ACT

In the fourth cause of action, Plaintiffs allege conspiracy to violate the Bane Act against Capital One, claiming that Capital One-conspiring with Judge Battaglia-attempted to foreclose on Plaintiffs' property in order to disrupt ...


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