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Chavez v. Wynar

United States District Court, N.D. California, San Jose Division

November 8, 2019

ROAHN WYNAR and DOES 1-100, Defendants.



         Before the Court is Defendant Roahn Wynar's (“Wynar”) motion to dismiss Plaintiffs' second amended complaint. ECF No. 73. Having considered the submissions of the parties, the relevant law, and the record in this case, the Court GRANTS in part and DENIES in part Wynar's motion to dismiss. Id.

         I. BACKGROUND

         A. Factual Background

         1. Life Savers Concepts Association, Inc., Background

         In July 2012, Reverend Nigel Johnson founded an organization called Life Savers Concepts Association, Inc. (“Life Savers”). ECF No. 70 (“SAC”) ¶ 1. The purpose of Life Savers was to assist low-income homeowners throughout Northern California combat foreclosures during the financial crisis. Id. Life Savers' business model was to enter into membership agreements with homeowners, whereby members transferred claims related to the members' home loans to Life Savers. Id. ¶ 3. Life Savers then brought suit against the lenders who threatened to foreclose the members' properties. Id. ¶ 6. Most members also transferred five percent ownership interest in their homes to Life Savers. Id. ¶ 3. Between March 2013 and December 2015, Life Savers assigned all of its acquired rights to Larry Brown (“Brown”). Id. ¶¶ 4, 5. “Based on these assignments, Brown claims to hold a 5 percent ownership interest in each of the properties that secured the home loans of the members.” Id. ¶ 5. The Office of the Monterey County District Attorney and the FBI have investigated Life Savers for fraud since at least 2014. Id. ¶¶ 7, 9. Plaintiffs in the instant case-Lupita Chavez (“Lupita”), Rito Chavez (“Rito”), Raquel Chavez (“Raquel”), and Esequiel Lombera (“Esequiel”)[1]-are alleged to be employees of Life Savers. Id. ¶¶ 24, 41-42.

         2. The FBI's Execution of a Search Warrant

         On the morning of July 11, 2017, at around 9:20 a.m., Wynar and several other FBI agents executed a search warrant on Life Savers' Sunnyvale, California offices. Id. ¶¶ 23, 25. Wynar knocked on the door to the Life Savers offices. Id. ¶ 24. Three of the Plaintiffs, Lupita, Rito, and Raquel, “who all reside in the adjoining living quarters[, ] were dressing or still in bed.” Id. Eventually, Raquel answered the door. Id. Wynar and the FBI team entered the Life Savers offices and attempted to open various office doors, but the office doors were locked. Id. ¶ 25. Wynar asked why the office doors were locked and who else was present in the offices. Id. Raquel replied that the office doors were locked because Life Savers did not open until 11:00 a.m., and Raquel indicated that the three other Plaintiffs were also present in the offices. Id. Wynar asked Raquel why Raquel had been sleeping in the Life Savers offices, and Raquel explained that each of the Plaintiffs had resided in the offices for approximately three years. Id. ¶ 26. Wynar was initially surprised and alarmed when Raquel explained to Wynar that Plaintiffs lived in the offices. Id. Raquel also informed Wynar that one of the other Plaintiffs, Esequiel, “had special needs and was mentally deficient, ” and that Esequiel “was taking medication and under the care of a doctor.” Id. ¶¶ 29, 30.

         At some point during the conversation between Raquel and Wynar, 30 FBI agents entered the Life Savers offices with guns drawn. Id. ¶ 27. Wynar produced “a folded piece of paper from his pocket” and informed Raquel that the FBI was there “to execute a search warrant for documents and computers related to Life Savers.” Id. Wynar told Raquel that Wynar would provide a copy of the search warrant to Raquel later. Id.

         Eventually, Raquel called out for the other three Plaintiffs to emerge from their rooms. Id. ¶ 32. Lupita emerged from her room “not completely dressed and barefoot.” Id. Lupita requested permission to return to her room to retrieve her blouse and shoes, and Lupita was initially instructed to wait. Id. “After some time, ” Lupita was permitted to return to her room and fully clothe herself in the presence of male FBI agent, who accompanied Lupita to the room. Id. ¶ 33.

         Wynar and the FBI agents trained weapons on Plaintiffs. Id. ¶ 35. Wynar requested keys to the Life Savers offices from Raquel, and Raquel delivered Wynar a set of keys. Id. ¶ 34. Wynar then requested handcuffs from another agent, who allegedly told Wynar that handcuffs were not necessary but nonetheless complied with Wynar's request. Id. Wynar handcuffed Rito and Esequiel. Id. ¶¶ 36, 37. Rito alleges that Wynar grabbed him “with excessive force, twisting his hands and handcuffing him with his hands behind his back and ordered him to face the wall.” Id. ¶ 37. Similarly, Esequiel alleges that Wynar grabbed him “with great force, pushed him against the wall with force, twisted his arm, searched and handcuffed him with his hands behind his back and ordered him to face the wall.” Id. ¶ 36.

         After Rito and Esequiel were handcuffed, approximately 20 more FBI agents entered the Life Savers offices. Id. Wynar pointed a gun at Rito and Esequiel after Rito and Esequiel were already handcuffed. Id. ¶ 92. This conduct caused Rito and Esequiel to feel “that they were going to be shot at any moment.” Id. ¶ 40. The agents then began to perform a search of the Life Savers offices. Id. ¶ 36. Rito and Esequiel allege that their handcuffs “were tight.” Id. ¶ 38. Rito and Esequiel also allege that they “were cramping, thirsty, and needed to use the bathroom.” Id. ¶ 39.

         The FBI prevented any of the Plaintiffs from leaving, kept Rito and Esequiel handcuffed and facing the wall, and prevented the Plaintiffs from using their cell phones or office phones. Id. ¶ 42. At some point, Raquel asked whether she could use the bathroom, and Wynar instructed her to wait. Id. ¶ 46. Raquel repeated the request approximately fifteen minutes later, and a third time approximately an hour later. Id. Wynar permitted Raquel to use the bathroom upon the third request. Id. By that time, Rito and Esequiel had been handcuffed for over 30 minutes. Id.

         Plaintiffs allege that the search concluded at around 10:00 a.m., approximately 20 minutes after the search began. Id. ¶¶ 43, 97. Rito and Esequiel remained handcuffed for some unspecified period after the search concluded, id. ¶ 47, but the two Plaintiffs' handcuffs were eventually removed, id. ¶ 48. Wynar then ordered the Plaintiffs to join Wynar and an IRS agent named “Arlette” at the front desk of the Life Savers offices. Id. Wynar instructed another FBI agent to take identification from Rito, Lupita, and Esequiel. Id. Wynar also informed Lupita that she still could not use her cell phone. Id. ¶ 49.

         Rito and Esequiel were then questioned by Wynar and others. Id. ¶¶ 50-54, 93. Eventually, Lupita, Rito, and Esequiel “were instructed to leave.” Id. ¶ 54. Rito was permitted to take Raquel's cell phone. Id. ¶ 63. However, Raquel herself “was prevented from leaving and told to sit down.” Id. ¶ 54. Rito lingered nearby and eventually checked on the status of Raquel, at which point Wynar informed Rito that “there was nothing to be worried about.” Id. ¶ 55. As Rito departed from the Life Savers offices, Rito learned that five Life Savers members “who were coming to the office” had been questioned by FBI agents and told that Life Savers was a scam. Id. ¶ 57.

         Raquel was questioned by Wynar and Arlette concerning potential fraud involving Life Savers. Id. ¶¶ 58-61. Four other FBI agents accompanied Raquel, Wynar, and Arlette in the room, and these agents held weapons. Id. ¶ 65. As the questioning of Raquel concluded, Rito received a phone call from Brown on Raquel's cell phone. Id. ¶ 63. Rito entered the room in which Raquel was located and attempted to provide Raquel with the cell phone. Id. Wynar became irate when Wynar learned that Brown had contacted Rito. Id. Wynar explained that the FBI “was doing this simultaneously at other places, ” and Rito had not wanted Brown to learn of the FBI's investigation. Id.

         Before Wynar and other FBI agents departed, Wynar returned Raquel's keys to Raquel. Id. ¶ 66. Wynar also provided Raquel with copies of the search warrant and a “Receipt for Property, ” which listed the items that the agents had removed from the premises. Id. As a result of the search, Rito became depressed and “sought psychological treatment.” Id. ¶¶ 68-69. Additionally, Esequiel “was hospitalized for several weeks” and suffered from PTSD following the search. Id. ¶¶ 70-72.

         B. Procedural History

         On April 15, 2018, Plaintiffs filed an initial complaint. ECF No. 1. In addition to Wynar, Plaintiffs' complaint stated causes of action against Alicia Cox (an investigator for the Office of the Monterey County District Attorney) and the FBI. Id. Further, the complaint included Life Savers itself as a Plaintiff. Id. On August 27, 2018, the FBI filed a motion to dismiss the complaint. ECF No. 24. On October 12, 2018, Wynar also filed a motion to dismiss the complaint. ECF No. 36. The Court held a case management conference on October 17, 2018, and at the conference, Plaintiffs moved to dismiss Alicia Cox without prejudice. ECF No. 40. The Court granted Plaintiff's motion to dismiss Alicia Cox. ECF No. 41.

         On October 17, 2018, the Court ordered Plaintiffs to either oppose the motions to dismiss filed by Wynar and the FBI or amend Plaintiffs' complaint by November 13, 2018. Id. On November 16, 2018, Wynar and the FBI filed a joint reply brief that noted that Plaintiffs had failed to either oppose the motions to dismiss or amend the complaint by the Court's November 13, 2018 deadline. ECF No. 42. Later in the same day, November 16, 2018, the parties filed a stipulation to extend the deadline for Plaintiffs to file an amended complaint to November 16, 2018. ECF No. 43. The Court granted the stipulation. ECF No. 45.

         Thus, on November 16, 2018, Plaintiffs filed a first amended complaint (“FAC”). ECF No. 44 (“FAC”). In the FAC, Plaintiffs no longer named the FBI as a defendant, which left Wynar and the unidentified Doe individuals as the only defendants. FAC ¶¶ 11-16.

         On December 6, 2018, Wynar filed a motion to dismiss the FAC. ECF No. 47. On January 7, 2019, Plaintiffs filed an opposition. ECF No. 53. On February 12, 2019, Wynar filed a reply. ECF No. 59.

         On May 16, 2019, the Court granted in part and denied in part the motion to dismiss the FAC. ECF No. 67. In the previous order, the Court dismissed all of Life Savers' claims with prejudice. Id. at 7-8, 12. The Court also dismissed with prejudice Plaintiffs' official capacity claims and Plaintiffs' Fourteenth Amendment claims. Id. at 7-8. The Court then analyzed Plaintiffs' Bivens claims for violations of the Fourth and Fifth Amendments. The Court dismissed without prejudice Plaintiffs' First Amendment and Fifth Amendment Bivens claims. Id. at 14-15. The Court also dismissed without prejudice the Fourth Amendment Bivens claims of Rito, Lupita, and Esequiel. Id. at 17. By contrast, the Court denied without prejudice the motion to dismiss Raquel's Fourth Amendment Bivens claim. Id.

         In the wake of the Court's order, on June 17, 2019, Plaintiffs filed a second amended complaint (“SAC”). SAC. In the SAC, Plaintiffs allege Fourth Amendment and Fifth Amendment Bivens claims against Wynar. Id. ¶¶ 85-149. On July 15, 2019, Wynar filed the instant motion to dismiss the SAC. ECF No. 73 (“Mot.”). On August 15, 2019, Plaintiffs opposed the motion, ECF No. 76 (“Opp.”), and on August 29, 2019, Wynar replied, ECF No. 79 (“Reply”).

         The Court notes that, pursuant to the parties' stipulation to extend the briefing deadlines, Plaintiffs' opposition was due on August 14, 2019. ECF No. 75. However, Plaintiffs' opposition was not filed until August 15, 2019. ECF Nos. 76, 76-1. The opposition was therefore untimely. Nonetheless, the Court considers Plaintiffs' opposition for the purpose of resolving the instant motion to dismiss.


         A. Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(6)

         Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include “a short and plain statement of the claim showing that the pleader is entitled to relief.” A complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). The U.S. Supreme Court has held that Rule 8(a) requires a plaintiff to plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (internal quotation marks omitted). For purposes of ruling on a Rule 12(b)(6) motion, the Court “accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).

         The Court, however, need not accept as true allegations contradicted by judicially noticeable facts, see Shwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000), and it “may look beyond the plaintiff's complaint to matters of public record” without converting the Rule 12(b)(6) motion into a motion for summary judgment, Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir. 1995). Nor must the Court “assume the truth of legal conclusions merely because they are cast in the form of factual allegations.” Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (per curiam) (internal quotation marks omitted). Mere “conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004).

         B. Leave to Amend

         If the Court determines that a complaint should be dismissed, it must then decide whether to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “shall be freely given when justice so requires, ” bearing in mind “the underlying purpose of Rule 15 to facilitate decisions on the merits, rather than on the pleadings or technicalities.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alterations and internal quotation marks omitted). When dismissing a complaint for failure to state a claim, “a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Id. at 1130 (internal quotation marks omitted). Accordingly, leave to amend generally shall be denied only if allowing amendment would unduly prejudice the opposing party, cause undue delay, or be futile, or if the moving party has acted in bad faith. Leadsinger, Inc. v. BMG Music Publ'g, 512 F.3d 522, 532 (9th Cir. 2008).

         III. ...

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