Malasky v. Esposito
| Decision Date | 02 January 2019 |
| Docket Number | Case No. 16-cv-04102-DMR |
| Parties | HENRY MALASKY, Plaintiff, v. SANDRA ESPOSITO, et al., Defendants. |
| Court | U.S. District Court — Northern District of California |
Pro se Plaintiff Henry Malasky sues his ex-wife, Sandra Esposito; his two adult sons, Martin Malasky and Garrett Malasky; and two attorneys, Basil Plastiras and Robert A. Julian, who represented his ex-wife and sons in connection with prior legal disputes. Plaintiff claims that Defendants engaged in "theft" of over $70,000 in escrow funds. The court previously dismissed Plaintiff's amended complaint with prejudice as to Plastiras and Julian. The court dismissed the amended complaint without prejudice as to Esposito, Martin Malasky, and Garrett Malasky, and granted Plaintiff leave to file a second amended complaint against Esposito, Martin Malasky, and Garrett Malasky. [Docket No. 59.] Plaintiff filed a second amended complaint ("SAC") on October 11, 2018, again naming Esposito, Martin Malasky, Garrett Malasky, Plastiras, and Julian as Defendants. [Docket No. 61.]
Defendants now separately move to dismiss the SAC. [Docket Nos. 62 (Plastiras's Mot.), 63 (Julian's Mot.), 64 (Martin Malasky and Garrett Malasky's Mot.), 66 (Esposito's Mot).] These motions are suitable for resolution without oral argument pursuant to Civil Local Rule 7-1(b). For the following reasons, the SAC is dismissed with prejudice as to all Defendants.
Plaintiff makes the following allegations in the SAC, all of which are taken as true for purposes of this motion. See Erickson v. Pardus, 552 U.S. 89, 94 (2007) (per curiam). Prior to 2010, Plaintiff was married to Esposito. The couple had three children, including Martin and Garrett Malasky (for clarity, the court refers to them as "Martin" and "Garrett"; together, the "sons") and a daughter, Lucia Malasky. Plaintiff and Esposito owned a home in Tiburon, California (the "Tiburon house"). FAC ¶¶ 25-26. Plaintiff alleges that at some point during their marriage he "and/or" Esposito "became personally obligated for the 'parents' share' of certain student loans used" by the sons for their education, but that they were never obligated to pay the "'students' share'" of the student loans. The "students' share" of the loans was owed solely by Martin and Garrett. Id. at ¶¶ 27-29 (emphases in original).
Plaintiff alleges that at some point prior to May 17, 2010, a "disgruntled attorney, Lippenberger," started threatening to sue Plaintiff and Esposito for allegedly unpaid legal services and "claimed he would seize any equity in the Tiburon house and any other assets" of the couple. Id. at ¶ 30. Additionally, the IRS "started pressuring" Plaintiff and Esposito "as to past due federal taxes on a jointly-owned business and/or on other federal taxes" they owed. Id. at ¶ 31. Plaintiff believed that Lippenberger and the IRS could seize any equity in the Tiburon house and any of the couple's other assets. Id. at ¶¶ 30, 31.
On May 17, 2010, Esposito convinced Plaintiff to set aside some of the equity in the Tiburon house "as a funding mechanism to pay the 'parents' share' of the student loans." Based on Esposito's representations, Plaintiff agreed to sign "promissory note(s) and deed(s) of trust" secured by the Tiburon house to the sons' benefit as said "funding mechanism." Id. at ¶ 32. Plaintiff now believes that Esposito "concealed her intent to have [P]laintiff pay money to [Martin and/or Garrett] as a 'gift' rather than as a funding mechanism" for the parents' share of the student loans "and/or that [Esposito] coerced [P]laintiff to sign the promissory note(s) and deed(s) of trust based on the threats from Lippenberger and/or uncertainties in their financial futures (e.g. due to debts owed to the IRS) and/or health." Id. at ¶ 33. Plaintiff signed the promissory note(s) and deed(s) of trust in favor of Martin and Garrett on May 17, 2010. Id. at ¶ 35. Only Plaintiff and Esposito signed the promissory note(s) and deed(s) of trust secured by the Tiburon house, and Plaintiff alleges that Martin and Garrett provided no consideration for the promissory note(s) anddeed(s) of trust. Id. at ¶¶ 36, 37.
Esposito commenced divorce proceedings against Plaintiff on October 22, 2010 in Marin County Superior Court. The court approved a marital settlement agreement ("MSA") between Plaintiff and Esposito on October 7, 2013. Id. at ¶¶ 39, 41. Pursuant to the MSA, Plaintiff received sole title to the Tiburon house and assumed the parents' share of the sons' student loans for which Plaintiff and Esposito were originally obligated. The agreement allowed Plaintiff to "challenge or contest the promissory notes" to Martin and/or Garrett "and/or other obligations imposed" on Plaintiff. Id. at ¶¶ 41-43. The MSA required Plaintiff to "create a new method to fund the 'parents' share' of the student loans different than the previously-created promissory note(s) and deed(s) of trust" secured by the Tiburon house, but "did not create any new obligation with respect to the funding mechanism related to the 2010 promissory note(s) or deed(s) of trust; did not create any obligation to pay on the 'students' share" of the students [sic] loans; and did not create any new 'debt' owed by [P]laintiff" to Martin and/or Garrett. Id. at ¶¶ 44-45.
In accordance with the MSA, Plaintiff agreed to a separate funding mechanism with a third party to pay off the parents' share of the student loans and began making payments to the third party. Id. at ¶ 47. Given this separate funding mechanism, Plaintiff believed that the promissory note(s) and deed(s) of trust secured by the Tiburon house were no longer necessary as an alternative funding mechanism. In January 2014, Plaintiff listed the Tiburon house for sale and asked the sons to release the promissory note(s) and deed(s) of trust securing the Tiburon house. Id. at ¶¶ 48-50. Plaintiff emailed his request to Martin and Garrett because he did not have their addresses. The sons never responded to Plaintiff's request. Id. at ¶ 51.
Plaintiff alleges that he was in communication with Plastiras prior to the close of escrow on the Tiburon house. In a letter dated February 21, 2014, Plastiras informed Plaintiff that his office "represents the interests of Martin Malasky, Garrett Malasky and Lucia Malasky in connection with the collection of a Deed of Trust and Promissory Note signed by Henry Malasky on May 17, 2010." Id. at ¶ 52. Following this correspondence, Plaintiff alleges that he stopped trying to communicate with the sons and "instead conducted all negotiations about the pending 2014 escrow and the 2010 promissory notes and deeds of trust with" Plastiras. Id.
Plaintiff alleges that Plastiras "told the escrow officer and [P]laintiff that the sons . . . would release the notes and deeds of trust prior to close of escrow and/or the funds from the notes would be deposited in that attorney's trust account until the disputes were resolved[.]" Id. at ¶ 53. However, "[j]ust before the close of escrow around April 4, 2014," Martin and Garrett "refused to release the previously-executed promissory note(s) and deed(s) of trust," and instead demanded the escrow funds based on the promissory notes and deeds of trust, "contrary to representations by" Plastiras. Id. at ¶ 55. After the close of escrow, Martin and Garrett received $70,005.48 in escrow funds "to which they had no legal claim," an amount that has increased due to interest "and/or other expenses incurred by [P]laintiff." Id. at ¶ 56. Plaintiff alleges that the escrow funds unjustly enriched the sons because "no 'debts' existed to obligate [P]laintiff for those funds and/or because [P]laintiff revoked the 'gifts' if any there were [sic]" to the sons prior to the close of escrow. Id. at ¶ 57.
Based on Plastiras's February 21, 2014 letter and other communications from Plastiras, Plaintiff alleges that he reasonably believed that Plastiras was representing Martin and Garrett as their attorney or agent. However, "[m]any months later," Plastiras signed a declaration in state court in which he denied representing the sons and stated that he only represented Esposito. Id. at ¶ 54.
Plaintiff alleges that Julian is an attorney who "has been acting as the debt collector for defendants . . .; as the debt collector for his law firm(s) as an alleged creditor(s); and/or as an alleged creditor himself." Id. at ¶ 2 (emphasis in original). Plaintiff alleges that Julian and/or his law firm "have been providing legal services to the other defendants in this amended complaint, apparently on a 'pro bono' (i.e. without charge) basis," including Esposito, Martin, and/or Garrett. Id. Plaintiff alleges that Esposito, Martin, and Garrett appear to be "alleged 'creditor[s]' within the meaning of the [Fair Debt Collection Practices Act] due to the intentional acts from Feb. 2014 onward" by Esposito, Martin, and Garrett and/or Plastiras. Id. at ¶¶ 3-5. He alleges that Defendants, "acting in concert, have attempted and are still attempting to collect and keep alleged 'debts' from [P]laintiff by improper collection methods, and/or to engage in fraud, extortion, theft and/or robbery to obtain and keep [P]laintiff's escrow funds for their own purposes (e.g. withoutpaying the parents' share of the student loans)." Id. at ¶ 60. Plaintiff denies owing anything to "any defendant at all relevant times." Id. at ¶ 1; see also ¶ 8.
Plaintiff brings five claims for relief: 1) a Fair Debt Collections Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq. claim for "improper collection efforts"; 2) a claim for violation of the RICO statute, 18 U.S.C. §§ 1961-1968; 3) fraud; 4) declaratory judgment pursuant to California Code of Civil Procedure section 1060; and 5) retaliation.
Plaintiff initiated the present action on July 21, 2016, and filed an amended complaint ("FAC") on November 8, 2016. [Docket No. 12.] Defendants Plastiras...
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