Aguilera v. Bigham

ELI AGUILERA, Plaintiff, v. KIM BIGHAM, Defendant.

No. 2:15-cv-1781-KJM-EFB PS

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

August 30, 2016

FINDINGS AND RECOMMENDATIONS

This case is before the court on defendant's motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) (ECF No. 7) and plaintiff's several motions which include a motion for default judgment (ECF No. 24), motion for judgment on the pleadings (ECF No. 38), multiple motions for summary judgment (ECF Nos. 35, 42, 51); motion to introduce evidence (ECF No. 48); and motion for injunctive relief (ECF No. 56).¹ For the following reasons, defendant's motion to dismiss must be granted, and plaintiff's several motions denied.²

I. Plaintiff's Motion for Default Judgment

Federal Rule of Civil Procedure 55(a) provides that "[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure isshown by affidavit or otherwise, the clerk must enter the party's default." Entry of default against a defendant cuts off that defendant's right to appear in the action or to present evidence. Clifton v. Tomb, 21 F.2d 893, 897 (4th Cir. 1927).

Here, the clerk of court did not enter defendant's default, and therefore defendant was not in default at the time she filed her motion to dismiss. Further, the court cannot enter default once the defendant has filed her responsive pleading. See Horton v. Sierra Conservation Ctr., 2010 WL 743849, at *1 (E.D. Cal. Mar. 1, 2010) (citing Mitchell v. Brown & Williamson Tobacco Corp., 294 F.3d 1309, 1317 (11th Cir. 2002)); Direct Mail Specialists, Inc. v. Eclat Computerized Technologies, Inc., 840 F.2d 685, 689 (9th Cir. 1988) (no default can be entered if defendant has filed a response indicating its intent to defend the action).

As defendant has filed a responsive pleading, plaintiff's motion for default judgment must be denied.

II. Defendant's Motion to Dismiss

Defendant moves to dismiss all of plaintiff's claims pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF No. 7. As explained below, plaintiff's complaint fails to allege sufficient factual allegations to state a claim for relief and must therefore be dismissed.

A. Factual Background

Plaintiff Eli Aguilera obtained a loan from Stearns Lending, Inc. ("Stearns") to purchase real property located at 672 Ware Court, Benicia, California 94510 (the "property"). Def.'s Request for Judicial Notice, Ex. 1 (ECF No. 8-1);³ Compl. (ECF No. 1) ¶ 7. Plaintiff refers to this loan throughout the complaint as "loan number: 0005275615, for property at 672 Ware Court, Benicia, California." Id. Although the complaint is far from clear, apparently the loan went into default and plaintiff disputes whether any amount remained owing on the loan. For reasons not fully explained in the complaint, plaintiff sues defendant Kim Bigham, who is the Senior Vice President and Loan Administration Servicing Manager for LoanCare, LLC, the entitythat services the loan on behalf of Stearns. ECF No. 1 ¶ 2; ECF No. 11 at 9.⁴ As discussed below, the underlying premise of plaintiff's claims against Bigham is that plaintiff sent Bigham correspondence (characterized by plaintiff as notices) which somehow imposed contractual obligations on Bigham and that subsequent efforts to collect on the loan or foreclose on the property breached those obligations. ECF No. 1, ¶ 12. According to plaintiff the "notice" to Bigham "was a binding, self-executing contract between I the Claimant and Defendant." Id., ¶ 12.

Therefore, the complaint alleges, the loan obligation is "fraudulent" and that defendant is attempting to take plaintiff's property by creating counterfeit documents. Id. ¶¶ 7, 8. Plaintiff claims that he no longer owes any amount due on the loan and that any security interest in the property was "irrevocably conveyed to" him. Id. at 4-6.⁵ Plaintiff contends that the debt and security interest in the property were extinguished by defendant's breach of a contract. Id.

The alleged contractual relationship purportedly arose out of three separate documents that plaintiff sent to defendant. Id. The first document demanded that defendant validate the debt within 21 days and cease all collection efforts until "validation of the purported debt . . . ." ECF No. 11 at 16-20. The second document, which claims to be a "Notice of Fault in Dishonor," states that defendant failed to timely respond to the initial correspondence and therefore plaintiff "now deems the instrument(s) have been Dishonored." Id. at 23. The document further provides that defendant has three additional days to respond, and that a failure to respond will result in a concession that the balance due on the loan is $0.00, any security interest in the property "is irrevocably conveyed to" plaintiff, and that defendant waives "any and all claims, rights, immunities and defenses." Id. The last document purports to notify defendant that she failed to

/////timely respond to the prior documents and as a result she "acquiesces to the terms and conditions stipulated in the Notice of Fault in Dishonor." Id. at 33.

Plaintiff contends that these "formally executed instruments" constituted a "binding, self-executing contract between" plaintiff and defendant. ECF No. 1 ¶ 12. He further claims that defendant breached the terms of contract by failing "to provide full reconveyance of said property." Id. ¶ 3. He also alleges that defendant uttered "counterfeit obligations or securities," engaged in mail fraud, and violated his constitutional rights by "threatening to invade and forcefully" take his property. Id. ¶¶ 7-8.

B. Rule 12(b)(6) Standard

To survive dismissal for failure to state a claim pursuant to Rule 12(b)(6), 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 Atl. Corp. v. Twombly, 550 U.S. 544, 555 (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. 235-236 (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, 678 (2009) (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Dismissal is appropriate based either on the lack of cognizable legal theories or the lack of pleading sufficient facts to support cognizable legal theories. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).

In considering a motion to dismiss, the court must accept as true the allegations of the complaint in question, Hospital Bldg. Co. v. Rex Hosp. Trs., 425 U.S. 738, 740 (1976), construe the pleading in the light most favorable to the party opposing the motion, and resolve all doubts in the pleader's favor. Jenkins v. McKeithem, 395 U.S. 411, 421, reh'g denied, 396 U.S. 869 (1969). The court will "presume that general allegations embrace those specific facts that are

/////necessary to support the claim.'" Nat'l Org. for Women, Inc. v. Scheidler, 510 U.S. 249, 256 (1994) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)).

Pro se pleadings are held to a less stringent standard than those drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520 (1972); Bretz v. Kelman, 773 F.2d 1026, 1027 n.1 (9th Cir. 1985). The Ninth Circuit has held that the less stringent standard for pro se parties is now higher in light of Iqbal and Twombly, but the court still continues to construe pro se filings liberally. Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010). However, the court's liberal interpretation of a pro se litigant's pleading may not supply essential elements of a claim that are not pled. Pena v. Gardner, 976 F.2d 469, 471 (9th Cir. 1992); Ivey v. Bd. of Regents of Univ. of Alaska, 673 F.2d 266, 268 (9th Cir. 1982). Furthermore, "[t]he court is not required to accept legal conclusions cast in the form of factual allegations if those conclusions cannot reasonably be drawn from the facts alleged." Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994). Neither need the court accept unreasonable inferences, or unwarranted deductions of fact. W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981).

In deciding a Rule 12(b)(6) motion to dismiss, the court may consider facts established by exhibits attached to the complaint. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987). The court may also consider facts which may be judicially noticed, Mullis v. U.S. Bankr. Ct., 828 F.2d 1385, 1388 (9th Cir. 1987), and matters of public record, including pleadings, orders, and other papers filed with the court, Mack v. South Bay Beer Distribs., 798 F.2d 1279, 1282 (9th Cir. 1986).

C. Discussion

Plaintiff lists on the caption page of the complaint claims for: (1) breach of contract; (2) invading personal liberty; (3) invading personal security; (4) invading pursuit of happiness; (5) violation of the United States Constitution; (6) and violation of federal law. ECF No. 1 at 1. Defendant's motion to dismiss argues that plaintiff has failed to allege facts to state any claim for relief.

Defendant first argues that there is no contractual relationship between the parties and therefore plaintiff cannot state a claim for breach of contract. ECF No. 7 at 5. Indeed, plaintiff'sallegations fail to establish the most fundamental elements of a contract; i.e. that there has been an offer and acceptance with objective manifestations by the parties of an intent to be bound. Plaintiff's entire complaint is predicated on defenda...