Galka v. Grover

• Decision Date: 16 August 2011
• Docket Number: Case No. 2:11-CV-10271
• Parties: EDWARD CHRISTOPHER GALKA, Plaintiff, v. LAURA GROVER, ET AL., Defendants.
• Court: U.S. District Court — Eastern District of Michigan

EDWARD CHRISTOPHER GALKA, Plaintiff,

v.LAURA GROVER, ET AL., Defendants.

Case No. 2:11-CV-10271

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

Dated: August 16, 2011

HON. GEORGE CARAM STEEH

ORDER DENYING PLAINTIFF'S MOTION FOR APPOINTMENT OF COUNSEL [#15],

GRANTING DEFENDANTS' MOTION TO DISMISS T#81 AND DISMISSING ACTION

I. INTRODUCTION

Plaintiff, proceeding pro se, filed the instant action on January 21, 2011. In his complaint, plaintiff alleges that defendants violated his Fourth and Fourteenth Amendment rights under Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971)¹ (count I) when they refused to provide plaintiff an in-person hearing concerning the acceleration of a United States Department ofAgriculture (USDA) mortgage on his home located in Washington Township, Michigan. Plaintiff also raises a breach of contract claim (count II) alleging that the USDA breached the parties' contract by failing to provide plaintiff an in-person hearing with respect to accelerating the mortgage. Additionally, plaintiff claims that defendants harassed, misused and abused their power by initiating a "frivolous" investigation of plaintiff's property, and pursuing foreclosure rather than less extreme remedies (count III), and alleges intentional infliction of emotional distress based on defendants harassment and fraudulent acceleration of plaintiff's mortgage (count IV). Lastly, plaintiff alleges that defendants committed fraud by denying plaintiff the opportunity to participate in investigations or hearings that pertain to his property (count V).

Defendants filed a motion to dismiss on April 8, 2011. Defendants submit this court should dismiss all five counts pursuant to Federal Rule of Civil Procedure 12(b)(1), (5)² , and (6) for various reasons discussed below. On June 3, 2011, plaintiff filed a response to defendants' motion to dismiss and on June 20, 2011, defendants filed a reply to plaintiff's response. Pursuant to Rule 7.1(f)(2) of the Local Rules of the United States District Court for the Eastern District of Michigan, no oral argument is required as this matter is ripe for decision.

II. FACTUAL BACKGROUND

Essentially, plaintiff's allegations comprise the factual background for this motion. Sometime in May of 2008, plaintiff contacted the Rural Housing Service (RHS) of theUSDA to acquire a mortgage on a home he wanted to purchase.³ (Compl. ¶ 8) In August 2008, after resolving a few credit issues, the USDA approved plaintiff for a $212,000 mortgage and plaintiff's offer on the property in Washington Township, Michigan for $185,000 was accepted by the bank. (Id. at ¶¶ 9-12)

Plaintiff claims that he contacted Grover at the USDA and she informed him that in order to be eligible for the USDA's loan program he had to obtain a property inspection report, termite inspection report and other items at his own expense. Defendant Grover also arranged for an appraisal of the property. After plaintiff submitted all the required reports, defendant Grover informed him that the USDA would not authorize the loan because the inspection report revealed that a new roof was needed at a cost of $13,500 and the property was appraised only for $191,000. (Id. at ¶ 15)

In late November 2008, plaintiff appealed for a second appraisal. (Id. at ¶ 18) In late December 2008, after plaintiff was told by his realtor that the bank was relisting the property due to the appraisal delay, plaintiff told defendant Grover of his intention to file a complaint against her due to the delays with the appraisal process. (Id. at ¶ 20-21) Thereafter, plaintiff contacted Director Richard Anderson to complain and Anderson arranged for the appraisal process to be expedited. In mid-January 2009, defendants Grover and Harris told plaintiff that the second appraisal calculated the same price and that plaintiff would not be able to purchase the property. (Id. at ¶ 23) After negotiatingwith the bank, plaintiff obtained a lower purchase price on the property. The new price was $167,000 and plaintiff closed on the loan in March 2009. (Id. at ¶ 25-27)

In mid April 2009, plaintiff learned that defendants Grover and Anderson were investigating a termite inspection report that plaintiff provided. (Id. at ¶ 28) In late June 2009, defendant Grover contacted plaintiff to inspect the work performed on plaintiff's property as a condition before releasing additional funds to plaintiff's repair escrow account. (Id. at ¶30) Subsequently, defendant Grover and a representative from the USDA Office of the Inspector General (OIG) visited the property as part of the investigation for the termite inspection report. (Id.) At the end of the meeting, the representative from OIG "agreed that the complaint was frivolous" and stated that the matter was considered closed, because the home had no termites or rodent infestation. (Id.)

In July 2009, defendant Grover informed plaintiff that his mortgage would be accelerated and the property foreclosed because the OIG and USDA were unable to verify plaintiff's employment and the termite inspection report. (Id.) Plaintiff claims that he was up-to-date with his monthly payments on the loan. On July 24, 2009, plaintiff received a letter from defendant Smith stating that foreclosure proceedings were being initiated. (Id. at ¶ 33) On August 5, 2009 the Office of General Counsel authorized USDA to accelerate plaintiff's loan for non-monetary default. (Id.at ¶ 35) On September 3, 2009, plaintiff's request for reconsideration was denied by RHS and plaintiff appealed the decision. (Id. at ¶ 37) The matter was referred to a National Appeals Division (NAD) Hearing Officer and plaintiff retained counsel. (Id. at ¶ 39)

During prehearing conferences, plaintiff's counsel told the NAD hearing officer that plaintiff was suffering from Post Traumatic Stress Syndrome (PTSS) from his tenure in Operation Iraqi Freedom and would not be able to attend the hearing. (Id. at ¶ 39) Plaintiff's counsel requested postponing the hearing until plaintiff could participate. (Id.) The NAD hearing officer denied the request and scheduled the hearing for February 12, 2010. (Id.) In early February 2010, plaintiff's counsel could no longer represent plaintiff due to health concerns and an overwhelming schedule. (Id. at ¶ 40) Plaintiff contacted the hearing officer by certified fax to postpone the hearing by 60 days because plaintiff was receiving in-patient treatment for PTSS. (Id. at ¶ 41) The hearing officer postponed the first pre-trial hearing by five days until February 17, 2010. (Id. at ¶ 42) On February 17, 2010, without plaintiff being present, the hearing officer scheduled the second pre-trial hearing for March 5, 2010 and plaintiff again requested a postponement. (Id. at ¶ 43-44) The hearing officer proceeded with the second pre-trial hearing without plaintiff being present and scheduled the official hearing for March 19, 2010. (Id.at ¶ 45) On March 19, 2010, the hearing officer conducted the hearing in absentia and upheld the RHS decision to accelerate the mortgage. (Id.at ¶ 46)

Plaintiff filed for a Director Review regarding the March 19, 2010 hearing that was conducted in absentia and was notified in late April 2010 by the RHS Director that the decision would be upheld. (Id. at ¶¶ 47, 49)

III. REQUEST FOR COUNSEL

On June 6, 2011, plaintiff filed a motion for appointment of counsel. In a civil case, appointment of counsel is not a constitutional right. Lavado v. Keohane, 992 F.2d 601, 605 (6th Cir. 1993). Rather, it is a privilege that is justified only by exceptionalcircumstances. Id. at 606. The court is to examine the complexity of the factual and legal issues involved, as well as the abilities of the plaintiff to represent himself. Id. Upon review of the various filings submitted by both parties, the court concludes there are no exceptional circumstances warranting appointment of counsel. Moreover, the court has no funds for appointment and compensation of counsel in civil actions such as this. Plaintiff's motion for appointment of counsel is DENIED.

IV. DEFENDANTS' MOTION TO DISMISS

A. Standard of Review

Federal Rule of Civil Procedure 12(b)(1) authorizes a party to challenge the court's subject matter jurisdiction. Defendants' motion to dismiss is a factual attack on the court's subject matter jurisdiction. In analyzing the motion

[t]here is no presumption that the factual allegations set forth in the complaint are true and the court is "free to weigh the evidence and satisfy itself as to the existence of its power to hear the case." [United States v. Ritchie, 15 F.3d 592, 598 (6th Cir. 1994), cert. denied, 513 U.S. 868 (1994)]. The court has wide discretion to consider materials outside the pleadings in assessing the validity of its jurisdiction. Ohio Nat'l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir. 1990). The plaintiff bears the burden of demonstrating subject matter jurisdiction. RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d 1125, 1134 (6th Cir. 1996).

Ashley v. United States, 37 F. Supp.2d 1027, 1029 (W.D. Mich. 1997). "A court lacking jurisdiction cannot render judgment but must dismiss the cause at any stage of the proceedings in which it becomes apparent that jurisdiction is lacking." Sweeton v. Brown, 27 F.3d 1162, 1169 (6th Cir. 1994) (quoting United States v. Siviglia, 688 F.2d 832, 835 (10th Cir. 1981), cert. denied, 461 U.S. 918 (1983)).

Federal Rule of Civil Procedure 12(b)(6) allows the court to make an assessment as to whether the plaintiff has stated a claim upon which relief may be granted. See Fed. R. Civ. P. 12(b)(6). "Federal Rule of Civil Procedure 8(a)(2) requires only 'a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to 'give the defendant fair notice of what the ... claim is and the grounds upon which it rests.'" Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citing Conley v. Gibson, 355 U.S. 41, 47 ...