Kham v. Executive Tr. Servs., LLC

• Decision Date: 20 March 2012
• Docket Number: CASE NO. CV F 12-0321 LJO BAM
• Parties: KIMLYN KHAM, Plaintiff, v. EXECUTIVE TRUSTEE SERVICES, LLC, et al., Defendants.
• Court: U.S. District Court — Eastern District of California

KIMLYN KHAM, Plaintiff,

v.EXECUTIVE TRUSTEE SERVICES, LLC, et al., Defendants.

CASE NO. CV F 12-0321 LJO BAM

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

Dated: March 20, 2012

ORDER TO DISMISS

(Doc. 10.)

INTRODUCTION

Defendants GMAC Mortgage, LLC ("GMAC") and Executive Trustee Services, LLC ("ETS") seek to dismiss as legally barred pro se plaintiff Kimlyn Kham's ("Ms. Kham's") claims arising from her loan default for and foreclosure of her Modesto property ("property"). This Court construes Ms. Kham's action as an attempt to thwart, delay or complicate post-foreclosure matters. For the reasons discussed below, this Court DISMISSES this action based on the absence of Ms. Kham's credible claims and VACATES the April 10, 2012 hearing set by GMAC and ETS (collectively "defendants").

BACKGROUND¹

Ms. Kham's Loans And Property Foreclosure

On May 3, 2006, Ms. Kham obtained a $308,000 refinance loan from GreenPoint Mortgage Funding, Inc. ("GreenPoint"), which was secured by a deed of trust ("DOT") on the property. Ms. Kham also obtained from GreenPoint a home equity line of credit with a $38,500 limit and which was secured by a deed of trust.

In 2009, Ms. Kham defaulted on the refinance loan. On May 21, 2009, Mortgage Electronic Registration Systems, Inc. ("MERS"), the DOT beneficiary, substituted ETS as DOT trustee. On August 24, 2009, ETS recorded a notice of trustee's sale for the property.²

In an assignment recorded on January 5, 2010, MERS assigned all beneficial interest under the DOT to GMAC.

On October 8, 2010, ETS recorded a second notice of trustee's sale for the property. GMAC acquired the property at June 29, 2011 trustee's sale.

Bankruptcy And Other Delays

On October 19, 2009, nearly two months after the first notice of trustee's sale of the property, Ms. Kham filed a chapter 13 bankruptcy which was dismissed on November 30, 2009 due to Ms. Kham's failure to file documents.

During December 2009 to February 28, 2011, Ms. Kham filed 16 additional chapter 13 bankruptcies, each of which was dismissed for failure to prosecute. The bankruptcy court's March 9, 2011 order barred Mr. Kham to file another bankruptcy for four years.

On March 31, 2010, Ms. Kham purported to quitclaim her interest in the property to herself and Top to Bottom Cleaning Service ("Top to Bottom").

On September 28, 2011, Darren Kham filed a chapter 13 bankruptcy and used the property as his address. The bankruptcy court's October 18, 2011 order noted that Darren Kham "is one of a groupof individuals all purporting to be doing business as Top to Bottom Cleaning Services who have, collectively, filed forty-seven cases within the past twenty-four months, and forty-five of these cases have been dismissed because of the debtor's failure to timely prosecute the respective case." Most of the bankruptcy schedules of individuals purporting to do business at Top to Bottom included the property as a debtor asset.

A month after the foreclosure sale, Franklin Rosario ("Mr. Rosario"), Ms. Kham's Top to Bottom partner, initiated a bankruptcy adversary proceeding against GMAC and ETS to claim the foreclosure sale was invalid because it violated his bankruptcy's automatic stay. Mr. Rosario's amended adversary complaint alleges that prior to the foreclosure sale, he notified defendants that the property "was in bankruptcy" and that he went to the June 29, 2011 trustee's sale and provided his bankruptcy paperwork to the auctioneer prior to the trustee' sale. Mr. Rosario's amended adversary complaint was dismissed on September 27, 2011.

Ms. Kham's Claims

The complaint challenges the foreclosure sale's validity in that the DOT "has been cured" and "GMAC acquired certain cured assets and liabilities" of GreenPoint. The complaint alleges California tort and statutory claims which will be discussed below.

DISCUSSION

Sua Sponte Dismissal

Defendants characterize the complaint as "an attempt to delay the consequences of the foreclosure sale" given the complaint's failure "to allege a factual basis for any viable cause of action."

"A trial court may dismiss a claim sua sponte under Fed.R.Civ.P. 12(b)(6). . . . Such dismissal may be made without notice where the claimant cannot possibly win relief." Omar v. Sea-Land Service, Inc., 813 F.2d 986, 991 (9th Cir. 1987); see Wong v. Bell, 642 F.2d 359, 361-362 (9th Cir. 1981). Sua sponte dismissal may be made before process is served on defendants. Neitzke v. Williams, 490 U.S. 319, 324 (1989) (dismissals under 28 U.S.C. § 1915(d) are often made sua sponte); Franklin v. Murphy, 745 F.2d 1221, 1226 (9th Cir. 1984) (court may dismiss frivolous in forma pauperis action sua sponte prior to service of process on defendants).

"When a federal court reviews the sufficiency of a complaint, before the reception of anyevidence either by affidavit or admissions, its task is necessarily a limited one. The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Scheurer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683 (1974); Gilligan v. Jamco Development Corp., 108 F.3d 246, 249 (9th Cir. 1997). A F.R.Civ.P. 12(b)(6) dismissal is proper where there is either a "lack of a cognizable legal theory" or "the absence of sufficient facts alleged under a cognizable legal theory." Balisteri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990); Graehling v. Village of Lombard, Ill., 58 F.3d 295, 297 (7th Cir. 1995).

In addressing dismissal, a court must: (1) construe the complaint in the light most favorable to the plaintiff; (2) accept all well-pleaded factual allegations as true; and (3) determine whether plaintiff can prove any set of facts to support a claim that would merit relief. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-338 (9th Cir. 1996). Nonetheless, a court is not required "to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Sciences Securities Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (citation omitted). A court "need not assume the truth of legal conclusions cast in the form of factual allegations," U.S. ex rel. Chunie v. Ringrose, 788 F.2d 638, 643, n. 2 (9th Cir.1986), and a court must not "assume that the [plaintiff] can prove facts that it has not alleged or that the defendants have violated . . . laws in ways that have not been alleged." Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897 (1983). A court need not permit an attempt to amend if "it is clear that the complaint could not be saved by an amendment." Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005).

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." Bell Atl. Corp. v. Twombly, 550 U.S. 554,127 S. Ct. 1955, 1964-65 (2007) (internal citations omitted). Moreover, a court "will dismiss any claim that, even when construed in the light most favorable to plaintiff, fails to plead sufficiently all required elements of a cause of action." Student Loan Marketing Ass'n v. Hanes, 181 F.R.D. 629, 634 (S.D. Cal. 1998). In practice, a complaint "must contain either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory." Twombly, 550 U.S. at 562, 127 S.Ct. at 1969 (quoting Car Carriers, Inc. v.Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir. 1984)).

In Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937,1949 (2009), the U.S. Supreme Court explained:

. . . a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." . . . 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. . . . 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. (Citations omitted.)

After discussing Iqbal, the Ninth Circuit Court of Appeals summarized: "In sum, for a complaint to survive [dismissal], the non-conclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. U.S. Secret Service, 572 F.3d 962, 989 (9th Cir. 2009) (quoting Iqbal, 556 U.S. 662, 129 S.Ct. at 1949).

The U.S. Supreme Court applies a "two-prong approach" to address dismissal:

First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. . . . Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. . . . Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. . . . But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not "show[n]"-"that the pleader is entitled to relief." Fed. Rule Civ. Proc. 8(a)(2).

In keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.

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