Keeler v. City of San Diego
| Decision Date | 05 May 2014 |
| Docket Number | Case No. 13-cv-3144-W(BGS) |
| Court | U.S. District Court — Southern District of California |
| Parties | ETTA KEELER, Plaintiff, v. CITY OF SAN DIEGO, Defendant. |
On December 23, 2013, Plaintiff Etta Keeler commenced this action against Defendant City of San Diego, asserting that Defendant violated the Takings Clause of the Fifth Amendment of the U.S. Constitution by allegedly taking a protected property interest in a judgment lien. Defendant now moves to dismiss Plaintiff's complaint under Federal Rule of Civil Procedure 12(b)(6). Plaintiff opposes.
The Court decides the matter on the papers submitted and without oral argument. See Civ. L.R. 7.1(d.1). For the following reasons, the Court GRANTS WITH LEAVE TO AMEND Defendant's motion to dismiss.
Plaintiff worked as an Executive Director at the Girls' Club in Logan Heights. (Compl. ¶ 8.) During her employment at the Girls' Club, Plaintiff would "routinely make large cash loans to the Girls' Club and then await repayment when the grants [from the Department of Education] arrived later in the year." (Id. ¶ 9.) However, during her final year of employment, Plaintiff "found herself unable to front the money needed," and decided to "mortgage[] her personal residence" to ensure that the Girls' Club would receive adequate funding. (Id.)
Following a change in the Girls' Club leadership in 2007, Plaintiff was fired. (Compl. ¶ 10.) She also alleges that "[h]er loans were never repaid, she was denied her severance package, and she never received a dime of her retirement." (Id.) A bank also initiated foreclosure proceedings against Plaintiff's home for the unpaid mortgage used to provide funds to the Girls' Club. (Id.) Consequently, Plaintiff commenced a lawsuit against the Girls' Club in the Superior Court, and on February 22, 2010, that court rendered a judgment in favor of Plaintiff for $171,480.37. (Id. ¶ 11.) Thereafter, Plaintiff filed her abstract of judgment and obtained a "valid lien" against the Girls' Club's building ("Club Building"). (Id.) Plaintiff "soon learned that after she had in fact filed and recorded her lien, the City had acquired the Club Building without satisfying the lien." (Id.) She alleges that "[d]espite repeated claims and attempts at communication[,] the City is still refusing to honor her lien." (Id.)
Defendant "acquired the Club Building by operation of the original long-term ground lease agreement" entered into in 1958 between the Girls' Club and Defendant. (Compl. ¶ 12.) The lease was for the "then-undeveloped lot at 606 South 30th Street, upon which the Girls' Club independently raised the money for, and built the Club Building." (Id.) According to Plaintiff, under paragraphs 4 and 5 of the lease, "the Girls' Club was the owner of the improvements, including the Club Building, up to and until termination of the Lease." (Id.) "Following termination of the lease, the Girls'Club 'surrender[ed] to City the premises with improvements,' which the 'City may remove, sell, or destroy.'" (Id.)
There is disputed information regarding when the lease was terminated and when the possessory rights to the Club Building transferred to Defendant. Plaintiff alleges that following litigation surrounding the acquisition of the Girls' Club facility, a valid writ of possession was issued on April 14, 2010, and shortly thereafter, the San Diego Sheriff's Department completed a lock out of the property and "turned possession of the Property over [sic] representatives of the City's Parks and Recreation Departement on April 20, 2010." (Compl. ¶ 13.) In its motion, Defendant states that it served the Girls' Club with a 30-day notice of termination on October 7, 2009, contending that the Club Building became Defendant's property upon the termination of the lease on November 17, 2009, and that Defendant having had obtained a writ to gain possession of the property is irrelevant. (Def.'s Mot. 2:19-28.)
As of the date when Plaintiff filed her complaint, she maintains that the judgment lien on the property has not been satisfied. (Compl. ¶ 14.)
On December 23, 2013, Plaintiff commenced this action against Defendant. She asserts a single claim against Defendant for violation of the Takings Clause of the Fifth Amendment of the U.S. Constitution, and contends that she is entitled to "just compensation" as a result of the alleged "unlawful taking" of her judgment lien. Defendant now moves to dismiss the complaint. Plaintiff opposes.
The court must dismiss a cause of action for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The court must accept all allegations of material fact as true and construe them in light most favorable to the nonmoving party. Cedars-Sanai Med. Ctr. v. Nat'l League of Postmasters of U.S., 497 F.3d 972, 975 (9th Cir. 2007). Materialallegations, even if doubtful in fact, are assumed to be true. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). However, the court need not "necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003) (internal quotation marks omitted). In fact, the court does not need to accept any legal conclusions as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
"While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (internal citations omitted). Instead, the allegations in the complaint "must be enough to raise a right to relief above the speculative level." Id. Thus, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 570). "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. "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. A complaint may be dismissed as a matter of law either for lack of a cognizable legal theory or for insufficient facts under a cognizable theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984).
Generally, courts may not consider material outside the complaint when ruling on a motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). However, documents specifically identified in the complaint whose authenticity is not questioned by parties may also be considered. Fecht v. Price Co., 70 F.3d 1078, 1080 n.1 (9th Cir. 1995) (). Moreover, the court may consider the full text of those documents, even when the complaint quotes only selected portions. Id. It may also considermaterial properly subject to judicial notice without converting the motion into one for summary judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994).
Under the Takings Clause of the Fifth Amendment, the government may not take "property . . . for public use, without just compensation." U.S. Const. amend. V; Daniel v. Cnty. of Santa Barbara, 288 F.3d 375, 380 (9th Cir. 2002). The Takings Clause is applied to the states through the Fourteenth Amendment. Daniel, 288 F.3d at 380. It "does not prohibit the taking of private property, but instead places a condition on the exercise of that power." First English Evangelical Lutheran Church of Glendale v. Cnty. of Los Angeles, 482 U.S. 304, 314 (1987). The Takings Clause "is designed not to limit the governmental interference with property rights per se, but rather to secure compensation in the event of otherwise proper interference amounting to a taking." Id. at 315 (emphasis in original). The Supreme Court has emphasized the clause's role in "bar[ring] Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." Armstrong v. United States, 364 U.S. 40, 49 (1960).
Property interests are not created or defined by the Constitution. Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1001 (1984). "Rather they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law—rules or understandings that secure certain benefits and that support claims of entitlement to those benefits." Bd. of Regents of State Colleges v. Roth, 408 U.S. 564, 577 (1972); see also Richmond Elks Hall Ass'n v. Richmond Redevelopment Agency, 561 F.2d 1327, 1331 (9th Cir. 1977) (). "Consequently, state law determining when a right vests such that a property interest is recognized is crucial to ascertaining . . . whether there has been a taking of property without just compensation." Sw. Diversified, Inc. v. City of Bisbane, 652 F. Supp. 788, 796 (N.D. Cal. 1986). "But a mere unilateral expectation or an abstract need is not a property interest entitled to protection." Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 161 (1980).
The parties take diametrically opposite positions regarding whether judgment liens are...
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