United States District Court, E.D. California
DANIEL E. GONZALEZ, Plaintiff,
DEPARTMENT (BUREAU) OF REAL ESTATE., et al, Defendants.
ORDER AND FINDINGS AND RECOMMENDATIONS
GREGORY G. HOLLOWS UNITED STATES MAGISTRATE JUDGE
matter, originally filed on November 24, 2015, has a long and
complicated procedural history. Plaintiff's initial
complaint named seventeen defendants including the Department
of Real Estate [“DRE”], an agency of the State,
seven (7) employees of the DRE in both their personal and
professional capacities, four (4) financial entities engaged
in mortgage services, and two (2) law firms. The claims
included the Sherman Act, the Americans with Disabilities Act
[“ADA”], civil rights violations, and negligent
and intentional infliction of emotional distress, all arising
out of action taken to revoke plaintiff's professional
license on December 16, 2010, for which he sought declaratory
and injunctive relief as well as damages. ECF No. 1.
February 1, 2016, the court granted plaintiff's motion to
proceed in forma pauperis, but dismissed his initial
complaint without prejudice for, inter alia, failure to
contain factual allegations sufficient to raise a right to
relief above the speculative level citing Bell Atlantic
Corp. v. Twombly, 550 U.S. 544 (2007), ECF No. 3 at 2
and expressing concern that the action could be barred
pursuant to the Rooker-Feldman doctrine which
prohibits lower federal courts from exercising jurisdiction
where any such action could interfere with a state court
decision, id. at 5 as well as other bars to elements
of the litigation such exercise. Id. at 7.
April 1, 2016 plaintiff filed his First Amended Complaint
against a reduced number of defendants, dropping all of the
mortgage investment companies and many of the individual
defendants alleging only civil rights violations,
falsification of records and perjury, anti-trust violations,
and a new claim for violations of California's Bane Act.
ECF No. 6.
14, 2016, again acting on its own, the court recommended
dismissal of the First Amended Complaint for failure to cure
the deficiencies identified in its original Order, but after
reviewing objections filed by the plaintiff, vacated the
findings and recommendations to allow the defendants to make
an appearance and directed that the defendants be served. ECF
October 12, 2016 the court issued an Order and Findings and
Recommendations responding to plaintiff's ex parte
application for permission to conduct limited discovery, for
a stay or temporary injunction on a pending state action, and
for extended pages for a memorandum in support of a
preliminary injunction motion. The court noted that only two
defendants have been served with process. In its ruling the
court required additional information regarding the need for
limited early discovery based upon the health of a potential
witness, denied the injunction request for lack of notice and
failure to provide other support required, and indicated
plaintiff's unlikelihood of success on this issue given
the Anti-Injunction Act, 28 U.S.C. section 2283, and denied
the request for extended page limits. ECF No. 22.
October 27, 2016 the court ordered that plaintiff to serve
declarations regarding the need for early discovery on the
previously served defendants. ECF No. 24.
November 15, 2016 the court issued an order granting early
discovery on the basis of written questions to be posed to
witness Robert Schaldach. ECF No. 28.
November 22, 2016 defendant employees of the DRE moved to
dismiss the action, ECF No. 30, and on November 29, 2016
defendant Narine Stepanyan also filed such a motion. ECF No.
33. On January 17, 2017 the court issued a minute order
rescheduling the hearing on these motions from January 19,
2017 to February 2, 2017. ECF No. 36. That hearing was held,
the parties discussed the pending motions with the court, and
the matters were submitted. ECF No. 42.
February 6, 2017, the court issued Findings and
Recommendations that the motions to dismiss should be denied
except that the DRE should be dismissed on Eleventh Amendment
immunity grounds. ECF No. 43. The District Court adopted the
Recommendations on March 8, 2017. ECF No. 46.
employee defendants answered the Complaint on March 9, 2017.
ECF No. 47.
March 22, 2017 private defendant Narine Stepanyan filed a new
motion to dismiss which was set for hearing on May 4, 2016.
ECF No. 49. Plaintiff followed with a Motion to Strike
defenses submitted by the DRE defendants to be heard on the
same date as his earlier motion. ECF No. 50.
April 3, 2017 plaintiff filed a Motion to Strike DRE's
defenses to be heard together with the earlier pending
motions. ECF No. 51.
April 6, 2017 plaintiff filed a motion for extended time to
answer interrogatories propounded by the DRE defendants, ECF
No. 53, to which the state defendants filed a Statement of
Non-Opposition on April 19, 2017 thereby granting plaintiff
an additional 28 days to respond to this discovery. ECF No.
April 12, 2017 plaintiff filed a Motion for Leave to File an
Amended Complaint noticed for hearing on May 19, 2017. ECF
Motions to Dismiss, plaintiff's Motions to Strike the DRE
defendants' Answer and its Affirmative Defenses, and
plaintiff's Motion to file another Amended Complaint, all
of which were vacated from the court's calendar and taken
under submission. These are the subjects of this Order.
engaged in a real estate action with defendant Stepanyan. ECF
No. 6 at ¶ 18. A dispute arose between them concerning
payment of a 10% auction fee from funds deposited by
Stepanyan, “over and above” the sales price of
the property in which Stepanyan accused plaintiff of fraud
and breach of fiduciary duties insofar as she alleged a
wrongful taking/appropriation of the deposited escrow fee.
Id. at ¶ 30.
actions were filed in Sacramento Superior Court regarding
this dispute. Plaintiff prevailed in a small claims action in
which the presiding judge found that Stepanyan had wrongfully
backed out of the real estate deal at issue, and that
plaintiff had not engaged in wrongdoing. Id. at
¶¶ 39, 40. A later small claims action filed by
Stepanyan was adjudicated in plaintiff's favor due to the
judgment in the earlier small claims action. Id. at
importance here, the DRE instituted license revocation
proceedings against plaintiff Gonzalez and
“coerced” Stepanyan into providing a false
recorded statement in support. Id. at ¶ 43. The
Complaint seems to allege, sub silentio, that the
claims resemble, or perhaps are identical to, the ones filed
in small claims court by Stepanyan, and apparenty recommended
suspending or revoking plaintiff's license. The
accusation was mailed to plaintiff, but having suffered an
injury that left him disabled, he had closed his office and
did not receive the document. Id. at ¶¶
47, 48, 51, and when he did not respond within the time
permitted, default was entered against him on December 16,
2010. Id. at ¶ 52. A final decision revoking
his license resulted, based on accusations of fraud,
misrepresentation, dishonesty and “other
disparagements” Id. at ¶ 58. Plaintiff
filed an appeal (administrative mandamus) in the Superior
Court, on February 22, 2011. Id. at ¶ 57. The
Superior Court denied plaintiff's petition on the basis
of untimeliness, Id. at ¶ 67 and plaintiff
appealed to the Third District Court of Appel, which affirmed
the Superior Court on February 27, 2014 in Gonzalez v.
Bell, 2014 WL 787356 (Cal.Ct.App. Feb. 27, 2014), and
added that the outcome of the civil suits did not control the
administrative license revocation process. Id. at
also filed a civil claim under the State Tort Claims Act
against the DRE on April 11, 2011. Id. at ¶ 61,
and a law suit against Stepanyan, her attorneys Hickman
Wyatt, HSBC Financial and investigator Jones in which he
asserted claims similar to, but not identical with, the
claims in this federal lawsuit. Id. at ¶ 68.
That Superior Court action is denoted S.C. No.
34-2011-112097, and the amended complaint on file in that
action appears as attachment 1 to ECF No. 31 in this action.
hearing before this court it was revealed that Stepanyan was
the only defendant remaining in that state litigation but the
parties were unclear as to whether the action had been
stayed, or trial had just been continued.
DEFENDANT STEPANYAN'S MOTION TO DISMISS THE ...