Vongsvirates v. Rushmore Loan Mgmt. Servs.

Decision Date19 February 2021
Docket NumberCase No. 1:21-cv-00012-NONE-SAB
CourtU.S. District Court — Eastern District of California
PartiesVICHAI VONGSVIRATES, Plaintiff, v. RUSHMORE LOAN MANAGEMENT SERVICES, Defendant.

FINDINGS AND RECOMMENDATIONS RECOMMENDING DISMISSING ACTION FOR FAILURE TO STATE A CLAIM AND FAILURE TO COMPLY AND FAILURE TO PROSECUTE

OBJECTIONS DUE WITHIN THIRTY DAYS

Vichai Vongsvirates ("Plaintiff") is proceeding in this action pro se and in forma pauperis. On January 8, 2021, a screening order issued finding that Plaintiff had failed to state a cognizable claim and granting Plaintiff leave to file an amended complaint within thirty days. (ECF No. 4.) More than thirty days have passed and Plaintiff has not filed an amended complaint or sought an extension of time to do so. For the reasons discussed below, the Court recommends that Plaintiff's complaint be dismissed for failure to state a claim and this action be dismissed for Plaintiff's failure to comply with the January 8, 2021 screening order and failure to prosecute.

I.SCREENING STANDARD

Notwithstanding any filing fee, the court shall dismiss a case if at any time the Court determines that the complaint "(i) is frivolous or malicious; (ii) fails to state a claim on which relief may be granted; or (iii) seeks monetary relief against a defendant who is immune from such relief." 28 U.S.C. § 1915(e)(2); see Lopez v. Smith, 203 F.3d 1122, 1129 (9th Cir. 2000) (section 1915(e) applies to all in forma pauperis complaints, not just those filed by prisoners); Calhoun v. Stahl, 254 F.3d 845 (9th Cir. 2001) (dismissal required of in forma pauperis proceedings which seek monetary relief from immune defendants); Cato v. United States, 70 F.3d 1103, 1106 (9th Cir. 1995) (district court has discretion to dismiss in forma pauperis complaint under 28 U.S.C. § 1915(e)); Barren v. Harrington, 152 F.3d 1193 (9th Cir. 1998) (affirming sua sponte dismissal for failure to state a claim). The Court exercises its discretion to screen the plaintiff's complaint in this action to determine if it "(i) is frivolous or malicious; (ii) fails to state a claim on which relief may be granted; or (iii) seeks monetary relief against a defendant who is immune from such relief." 28 U.S.C. § 1915(e)(2).

In determining whether a complaint fails to state a claim, the Court uses the same pleading standard used under Federal Rule of Civil Procedure 8(a). A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief. . . ." Fed. R. Civ. P. 8(a)(2). Detailed factual allegations are not required, but "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

In reviewing the pro se complaint, the Court is to liberally construe the pleadings and accept as true all factual allegations contained in the complaint. Erickson v. Pardus, 551 U.S. 89, 94 (2007).

II.ALLEGATIONS IN COMPLAINT

The Court accepts Plaintiff's allegations in the complaint as true only for the purpose of the sua sponte screening requirement under 28 U.S.C. § 1915.

Plaintiff brings this action against Rushmore Loan Management Services on the basis offederal question and diversity jurisdiction. (Compl. 3, 4.1) Plaintiff alleges that he is a citizen of California and that Rushmore Loan Management Services is a corporation under the laws of Texas with its principal place of business in Texas. (Id.) Plaintiff alleges that due to the mortgage disaster around 2011 the note and deed of trust have taken "divergent paths" causing a cloud on the title to property at 74507 Letzring Lane in Bakersfield, California. (Id. at 4.) Plaintiff has been suffering from prostate and spinal cancer for the past year and has been in and out of surgery, chemotherapy, radiation treatment, and on heavy pain medication. (Id.) Plaintiff contends that there have been improper mortgage company procedures, both servicing through an independent broker and otherwise, and improper noticing of the mortgage note and deed activities. (Id. at 4-5.) He asserts that due to the cloud on the title of the property there is no definitive claim of ownership of the note because of the divergent paths taken by the note and deed of trust. (Id. at 5.) Plaintiff asserts that since there is no valid trustee deed Defendant's claim to the property is null and void. (Id.)

Plaintiff brings this action alleging violations of 42 U.S.C. § 264(e), 42 C.F.R. § 70.2, 5 U.S.C. § 553(b)(3)(b) and is seeking criminal penalties under 18 U.S.C §§ 3559, 3571; 42 U.S.C. §§ 243, 268, 271; and 42 C.F.R. § 70.18. (Compl. 3.) He also states that the improper mortgage company procedures denied him of due process and this action is for fraud, negligence, and misrepresentation. (Id. at 5.) Plaintiff is seeking monetary and punitive damages in the amount of $400,000.00. (Id.)

Based upon review of the exhibits that are attached to the complaint, the subject property was sold at a trustee sale on November 23, 2020, and the proceeds exceeded the amount of the foreclosure and indebtedness that was owed to the foreclosing beneficiary. (Notice of Surplus Proceeds, ECF No. 1 at 9.) On December 4, 2020, Plaintiff was served with a notice that the property had been purchased at a trust deed foreclosure sale in accordance with section 2924 of the California Civil Code on November 23, 2020 and they had three days if a tenant and ninety days if a former owner to quit and deliver up possession of the property. (Three and Ninety DayNotice to Quit, ECF No. 1 at 14.)

III.DISCUSSION

Plaintiff's complaint fails to allege sufficient facts to state a plausible claim in this action for the reasons discussed below.

A. Federal Question Jurisdiction

The complaint states that federal question jurisdiction exists in this action. Federal courts are courts of limited jurisdiction and their power to adjudicate is limited to that granted by Congress. U.S. v. Sumner, 226 F.3d 1005, 1009 (9th Cir. 2000). Pursuant to 28 U.S. C. § 1331, federal courts have original jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States. "A case 'arises under' federal law either where federal law creates the cause of action or where the vindication of a right under state law necessarily turns on some construction of federal law." Republican Party of Guam v. Gutierrez, 277 F.3d 1086, 1088 (9th Cir. 2002) (internal punctuation omitted) (quoting Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 8-9 (1983) (citations omitted)). "[T]he presence or absence of federal-question jurisdiction is governed by the 'well-pleaded complaint rule,' which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Republican Party of Guam, 277 F.3d at 1089 (citations omitted).

For the reasons discussed below, Plaintiff's complaint fails to allege facts to state a claim based on any violation of his constitutional rights or federal law.

1. 42 U.S.C. § 264(e)

Plaintiff brings this action under 42 U.S.C. § 264 which addresses regulations to control communicable diseases. Specifically, Plaintiff cites to subsection e which states, "Nothing in this section or section 266 of this title, or the regulations promulgated under such sections, may be construed as superseding any provision under State law (including regulations and including provisions established by political subdivisions of States), except to the extent that such a provision conflicts with an exercise of Federal authority under this section or section 266 of thistitle." Section 266 authorizes the Secretary to provide regulations and to quarantine persons to protect the military and naval forces and war workers of the United States during times of war. 42 U.S.C. § 266. Section 264 does not apply to the claims raised in this action.

2. 42 C.F.R. § 70.2

Similarly, 42 C.F.R. § 70.2 provides that when the Director of the Centers for Disease Control and Prevention determines that measures taken by state health authorities are insufficient to prevent the spread of any communicable disease, he or she may take any measures necessary to prevent the spread of the disease. This section does not apply to the claims raised in this action.

3. 5 U.S.C. § 553(b)(3)(B)

The next section relied on by Plaintiff is 5 U.S.C. § 553(b)(3)(B) which addresses the general notice of proposed rulemaking which is inapplicable here.

4. Criminal Penalties

Plaintiff seeks criminal penalties under 18 U.S.C §§ 3559, 3571; 42 U.S.C. §§ 243, 268, 271; and 42 C.F.R. § 70.18. "[T]he fact that a federal statute has been violated and some person harmed does not automatically give rise to a private cause of action in favor of that person." Touche Ross & Co. v. Redington, 442 U.S. 560, 568 (1979) (quoting Cannon v. University of Chicago, 441 U.S. 677, 688 (1979). Rather, the court is to consider Congress intended to create the private right of action in the statute and begins with the language of the statute itself. Touche Ross & Co., 442 U.S. at 568. "Civil causes of action ... do not generally lie under the criminal statutes contained in Title 18 of the United States Code." Del Elmer; Zachay v. Metzger, 967 F. Supp. 398, 403 (S.D. Cal. 1997). Here, the sections cited under Title 18 address sentencing and fines for criminal offenses and do not set forth a private cause of action or imply that a cause of action exists to allow Plaintiff to seek a remedy in this action.

Similarly, the public health statutes cited by Plaintiff do not imply that a private cause of action exists nor are they related to Plaintiff's claims regarding the title to the subject property. Section 243 addresses the cooperation between state and federal agencies in controlling epidemics of disease and provides for...

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