Witkin v. Sloan

          FINDINGS AND RECOMMENDATIONS

          EDMUND F. BRENNAN, UNITED STATES MAGISTRATE JUDGE

         Plaintiff is a state prisoner proceeding without counsel in this action brought under 42 U.S.C. § 1983. His motion to proceed in forma pauperis (“IFP”) pursuant 28 U.S.C. § 1915 was granted on October 3, 2017. ECF No. 7. Defendants now seek dismissal of the action, arguing that plaintiff's allegation of poverty was false. ECF No. 30-1. For the reasons that follow, the motion must be granted.

         I. Background

         In his motion to proceed IFP, plaintiff declared, under penalty of perjury, that he had received no income in the prior 12 months, had no valuable property, and had no assets. ECF No. 2 at 1-2. Plaintiff signed the motion on December 5, 2016, and it was filed on December 19, 2016. Id. An officer from his institution of incarceration (California State Prison, Solano) signed the “certificate” portion of the IFP application, indicating that, during the prior six months, plaintiff's trust account had an average monthly balance of $0 and average monthly deposits of $0. Id. at 2. The attached trust account statement showed that, on December 1, 2016, plaintiff had received into his trust account a settlement check for $4, 722.77, but that the same day the entirety of the amount was debited from his account for various restitution fines and other obligations. Id. at 3.

         Defendants present evidence that plaintiff hid assets from the court in his IFP application. First, defendants point to an August 12, 2016 settlement in Witkin v. Swarthout, No. 2:13-cv-01931-GEB-KJN.^[1] The record in that case shows that plaintiff agreed to settle the case for $10, 625. ECF No. 30-2 at 7. Plaintiff agreed to use “approximately $4, 700” of the settlement amount to pay off his restitution fines and asked that the remaining money be forwarded to his mother. Id. at 7-8. Defendants' evidence shows that a check for $5, 666.09 was issued to Elena Witkin on November 9, 2016. Id. at 21.

         The court also takes judicial notice of the November 1, 2016 settlement conference in Witkin v. Solis, No. 1:12-cv-01256-AWI-MJS, in which plaintiff agreed to settle the case for $1, 200. ECF No. 30-2 at 17. Defendants' evidence shows that a check for $1, 200 was issued to Elena Witkin on January 27, 2017. Id. at 23.

         Lastly, the court grants defendants' request for judicial notice of the January 27, 2017 “Notice of Proof of Availability of Funds for Plaintiff's Deposition of Dr. B. Barnett” in Witkin v. Lotersztain, No. 2:15-cv-00638-MCE-KJN. ECF No. 30-2 at 25-27. That filing shows checking and savings accounts held by “the Witkin Family Trust” at Schools Financial Credit Union holding $12, 205.10 in assets and $6, 200.76 in debts (a car loan and a credit card) for the statement period of December 1, 2016 through December 31, 2016.

         In his verified opposition, plaintiff does not dispute any of the evidence presented by defendants. Instead, he claims it shows his honesty in the IFP application. According to plaintiff, the evidence shows that he did not have any settlement funds under his control at the time he executed the application because he had directed the $5, 666.09 payment be made to his mother four months earlier. (Plaintiff does not address the $1, 200 settlement payment but presumably would argue that he did not have control over these funds either, because they were paid to his mother over a month after he submitted the IFP application.). According to plaintiff, he “owed his parents about $44, 000 borrowed for legal expenses related to his incarceration and wanted to start paying them back since they weren't working anymore.” ECF No. 31 at 4.

         Plaintiff claims that he does not own or control the assets in the Witkin Family Trust. Id. at 5. Instead, he states that his parents were willing to loan him money (presumably from that account) to pay for the deposition in Lotersztain. Id.

         II. The Motion to Dismiss

         Defendants seek dismissal of the case with prejudice under 28 U.S.C. § 1915(e)(2)(A), which provides: “[n]otwithstanding any filing fee, or any portion thereof, that may have been paid, the court shall dismiss the case at any time if the court determines that the allegation of poverty is untrue[.]” The statute was amended in April of 1996; it had previously provided that the court “may dismiss the case if the allegation of poverty is untrue[.]” 28 U.S.C. § 1915(e) (1996) (emphasis added).

         Section 1915(e)(2)(A) regards procedures to be followed after an individual has applied for, and been granted, permission to proceed IFP under 28 U.S.C. § 1915(a). Section 1915(a) allows a person to proceed IFP after submitting to the court an affidavit that includes a statement of all of the person's assets and a statement that the person cannot pay the filing fee. Additionally, a prisoner seeking to proceed IFP must also submit a certified copy of their prison trust account statement for the six months prior to the filing of the complaint. 28 U.S.C. § 1915(a)(2). An IFP affidavit “is sufficient where it alleges that the affiant cannot pay the court costs and still afford the necessities of life.” Escobedo v. Applebees, 787 F.3d 1226, 1234 (9th Cir. 2015) (considering the impact of the filing fee on the budget of the applicant in determining that she should have been granted IFP status). Where the IFP applicant is a prisoner, however, courts recognize that most necessary life expenses are covered by the government. Kennedy v. Huibregtse, 831 F.3d 441, 443 (7th Cir. 2016) (noting that plaintiff's entire $2000 in assets were available to him to pay for his lawsuit because the prison paid for his food, clothing, shelter, and medical care).

         In this district, plaintiffs generally seek IFP status by submitting a form application. E.D. Cal. Website, http://www.caed.uscourts.gov/caednew/index.cfm/forms/civil/ (last checked October 10, 2019). Relevant to this case, the form asks the applicant to list all income from the prior 12 months, any money in a bank account, and any other assets of value. The form concludes with the following declaration, above the applicant's signature: “I declare under penalty of perjury that the above information is true and understand that a false statement may result in a dismissal of my claims.”

         Plaintiff completed and signed the 2002 version of this application. ECF No. 2. (The form was revised in 2010). He averred that, in the past 12 months, he had not received any money from any source. Id. at 1. He further averred that he had no money in any bank account and owned no other valuable property or assets. Id. at 2. Plaintiff included the required certification and trust account statement. Id. at 2-4. The trust account statement showed that plaintiff had received income from a settlement on December 1, 2016 (four days before plaintiff signed the IFP affidavit) totaling $4, 722.77 but that the entire amount had been applied to satisfy his restitution obligations on the same day. Id. at 3. Because the affidavit and trust statement indicated ...