Gonzalez v. Dep't (Bureau) of Real Estate, No. 2:15-cv-2448 GEB GGH PS

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
Writing for the CourtGregory G. Hollows UNITED STATES MAGISTRATE JUDGE
Docket NumberNo. 2:15-cv-2448 GEB GGH PS
PartiesDANIEL E. GONZALEZ, Plaintiff, v. DEPARTMENT (BUREAU) OF REAL ESTATE, et al., Defendants.
Decision Date01 February 2016


No. 2:15-cv-2448 GEB GGH PS


February 1, 2016


Plaintiff, proceeding in this action pro se, has requested leave to proceed in forma pauperis pursuant to 28 U.S.C. § 1915. This proceeding was referred to this court by Local Rule 302(21), pursuant to 28 U.S.C. § 636(b)(1).

Plaintiff has submitted an affidavit making the showing required by 28 U.S.C. § 1915(a)(1). Accordingly, the request to proceed in forma pauperis will be granted.

The determination that plaintiff may proceed in forma pauperis does not complete the required inquiry. Pursuant to 28 U.S.C. § 1915(e)(2), the court is directed to dismiss the case at any time if it determines the allegation of poverty is untrue, or if the action is frivolous or malicious, fails to state a claim on which relief may be granted, or seeks monetary relief against an immune defendant.

A claim is legally frivolous when it lacks an arguable basis either in law or in fact.

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Neitzke v. Williams, 490 U.S. 319, 325 (1989); Franklin v. Murphy, 745 F.2d 1221, 1227-28 (9th Cir. 1984). The court may, therefore, dismiss a claim as frivolous where it is based on an indisputably meritless legal theory or where the factual contentions are clearly baseless. Neitzke, 490 U.S. at 327. The critical inquiry is whether a constitutional claim, however inartfully pleaded, has an arguable legal and factual basis. See Jackson v. Arizona, 885 F.2d 639, 640 (9th Cir. 1989); Franklin, 745 F.2d at 1227.

A complaint must contain more than a "formulaic recitation of the elements of a cause of action;" it must contain factual allegations sufficient to "raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 1965 (2007). "The pleading must contain something more...than...a statement of facts that merely creates a suspicion [of] a legally cognizable right of action." Id., quoting 5 C. Wright & A. Miller, Federal Practice and Procedure 1216, pp. 235-235 (3d ed. 2004). "[A] complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). "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." Id.

Pro se pleadings are liberally construed. See Haines v. Kerner, 404 U.S. 519, 520-21, 92 S. Ct. 594, 595-96 (1972); Balistreri v. Pacifica Police Dep't., 901 F.2d 696, 699 (9th Cir. 1988). Unless it is clear that no amendment can cure the defects of a complaint, a pro se plaintiff proceeding in forma pauperis is entitled to notice and an opportunity to amend before dismissal. See Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987); Franklin, 745 F.2d at 1230.

This case arises out of plaintiff's disappointment with a decision against him in state court. Plaintiff was a real estate broker licensed in California who claims defendants conspired to unconstitutionally revoke his license on December 16, 2010. Plaintiff refers to two state court judgments which precipitated the events in this case. The undersigned has reviewed the opinions from those cases which reveal the following. Plaintiff represented a buyer in the purchase of a house which fell through. The buyer sued plaintiff to recover $7,550 she had paid to plaintiff.

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The parties disputed whether this was a refundable deposit. Although plaintiff prevailed at trial, the court having found this sum to be a nonrefundable payment, the former Department of Real Estate ("DRE") initiated administrative disciplinary proceedings against plaintiff for his actions in disposing of the $7,550 without the buyer's knowledge or consent. In an accusation, the DRE found that plaintiff's actions in distributing the money to himself and to the seller's attorney constituted fraud and/or negligence and recommended suspending or revoking his license. The accusation was mailed to plaintiff and when he did not respond within the time permitted, default was entered, as well as a final decision revoking his license, based on both the default and the determination that "the accusation had been proven by clear and convincing documentary evidence." Plaintiff filed an appeal, claiming that due to a car accident resulting in physical limitations, he had been unable to pick up his mail containing the accusation and decision, but that DRE commissioner Jones had orally agreed to give notice to plaintiff's attorneys in that case. Such notice was not given, according to plaintiff, and he received no actual notice of the default or default decision. The trial court denied plaintiff's petition for writ of administrative mandamus as untimely. The appellate court affirmed. Gonzalez v. Bell, 2014 WL 787356 (Cal. Ct. App. Feb. 27, 2014) (affirmed also on the ground that the civil suit outcome did not control the administrative license process).1

In this case, plaintiff has sued numerous defendants, claiming that the state trial court decision which vindicated him should have been "obeyed" as "a final adjudication of all primary rights" and enforced in the administrative proceedings which would have resulted in a decision in his favor on the license revocation case. ECF No. 1 at 6. Plaintiff claims that defendants Wyatt, Hardy-Erich, Chase, HBSC, Stepanyan, Hickman, Resmae, Cal-Western,2 DRE, Jones, Van Driel, Sughrue, Sommers, Davi, Moran, and Bell conspired with each other to disregard the trial


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court judgment and filed a "false accusation while plaintiff was disabled and inactive," to cause his real estate license to be revoked. Id.

While the majority of the complaint is focused on these events, the latter portion of the complaint claims that defendants Chase, HSBC, Resmae, Cal-Western, "and others" conspired with defendant Jones and the DRE, using "their official position[s] in an unconstitutional manner" to retaliate against plaintiff in regard to his short sale purchase of a home on December 15, 2008. Id. at 8. Although closing was to occur on January 15, 2009, plaintiff claims that Chase Home Finance initiated foreclosure proceedings on the property on January 5, 2009, in violation of the short sale agreement, in retaliation for plaintiff's exposure of their predatory lending practices, and because he had acted as a broker in the sale of property that fell through, resulting in the lawsuit mentioned above regarding the disputed deposit payment.3 Id. at 9. The complaint additionally claims that plaintiff's attorneys, defendants Wyatt and Hardy Erich, Brown & Wilson, were negligent and engaged in fraud "by allowing the civil rights violations to occur," despite representing plaintiff's interests. Id. at 10.

Plaintiff's claims complaining of the state court judgments may be jurisdictionally barred by the Rooker-Feldman doctrine. The Rooker-Feldman doctrine occupies "narrow ground." Skinner v. Switzer, 562 U.S. 521, 131 S.Ct. 1289 (2011). "'The Rooker-Feldman doctrine provides that federal district courts lack jurisdiction to exercise appellate review over final state court judgments.'" AmerisourceBergen Corp. v. Roden, 495 F.3d 1143, 1153 (9th Cir.2007) (quoting Henrichs v. Valley View Dev., 474 F.3d 609, 613 (9th Cir.2007)). "Essentially, the doctrine bars 'state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced' from asking district courts to review and reject those judgments." Henrichs, 474 F.3d at 613 (quoting Exxon Mobile Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284, 125 S.Ct. 1517 (2005)); accord Reusser v. Wachovia Bank, N.A., 525 F.3d 855, 859 (9th Cir.2008).

The Rooker-Feldman doctrine may also apply, however, where the parties do not directly

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contest the merits of a state court decision, but file an action that constitutes a "de facto" appeal from a state court judgment. Reusser, 525 F.3d at 859. Such a de facto appeal exists where "claims raised in the federal court action are 'inextricably intertwined' with the state court's decision such that the adjudication of the federal claims would undercut the state ruling or require the district court to interpret the application of state laws or procedural rules." Id. (citation and quotation marks omitted). "Once a federal plaintiff seeks to bring a forbidden defacto appeal that federal plaintiff may not seek to litigate an issue that is 'inextricably intertwined' with the state court judicial decision from which the forbidden de facto appeal is brought." Noel v. Hall, 341 F.3d 1148, 1158 (9th Cir.2003); see also Bianchi v. Rylaarsdam, 334 F.3d 895, 900 n. 4 (9th Cir.2003) ("The Rooker-Feldman doctrine prevents lower federal courts from exercising jurisdiction over any claim that is 'inextricably intertwined' with the decision of a state court, even where the party does not directly challenge the merits of the state court's decision but rather brings an indirect challenge based on constitutional principles."). "Where the district court must hold that the state court was wrong in order to find in favor of the plaintiff, the issues presented to both courts are inextricably intertwined." Doe & Associates Law Offices v. Napolitano, 252 F.3d 1026, 1030 (9th Cir.2001).

Here, with respect to the DRE, although plaintiff does not specifically seek to overturn the state court judgment affirming the disciplinary action against him, his claims are clearly "inextricably intertwined" with that judgment because a decision in this case favorable to plaintiff would necessarily require this court to make determinations inconsistent with the state court's judgment regarding the finding that plaintiff failed to challenge...

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