McZeal v. Solon House, LLC et al, No. 3:2024cv02971 - Document 34 (N.D. Cal. 2024)
Court Description: ORDER GRANTING MOTION TO DISMISS; DENYING MOTION TO STRIKE; DENYING MOTION TO DISQUALIFY. Signed by Judge William H. Orrick on 10/28/2024. (jmd, COURT STAFF) (Filed on 10/28/2024)Any non-CM/ECF Participants have been served by First Class Mail to the addresses of record listed on the Notice of Electronic Filing (NEF)
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ALFRED MCZEAL, Plaintiff, 8 9 10 United States District Court Northern District of California 11 Case No. 24-cv-02971-WHO v. SOLON HOUSE, LLC, et al., Defendants. ORDER GRANTING MOTION TO DISMISS; DENYING MOTION TO STRIKE; DENYING MOTION TO DISQUALIFY Re: Dkt. Nos. 9, 27, 29 12 13 Plaintiff Alfred McZeal asserts a range of claims that stem from what he believes is a “void 14 judgment” entered by the San Francisco Superior Court in September 2020. Complaint, Dkt. No. 15 1. That judgment granted a motion to quiet title on a property (“Property”) that McZeal believes 16 was and is his. The motion seeking the judgment was filed by attorney Stephen McDonagh (a 17 defendant in this action) on behalf of Bennet Hong, who was appointed by the Superior Court as a 18 successor to defendant Del Prado Family Trust (both Hong and the Trust are named as defendants 19 in this action). Compl., Ex. 1 (“Order Quieting Title,” referred to herein a “Quiet Title 20 Judgment”). The Quiet Title Judgment determined that a grant deed purportedly transferring the 21 Property from the Del Prado Family Trust (signed by Rene Del Prado) to McZeal was void 22 because Rene Del Prado did not have the power to transfer the property. Quiet Title Judgment ¶ 3. 23 Therefore, the Superior Court determined that title in the Property was quieted in the name of 24 defendant “Bennett Hong, Successor Trustee of the Del Prado Family Trust.” Id. 25 Also named as defendants in this action are Solon House LLC and three individuals who 26 are related to Solon House LLC; Jian Feng Chen, Bradford Hwang, and Kelly Ruiman Chen 27 (collectively “Solon House defendants”). Compl. at pg. 9. McZeal does not plead facts regarding 28 acts by the Solon House defendants. The Solon House defendants assert that Solon House 1 purchased the Property in December 2020, after the Quiet Title Judgment was entered. Motion to 2 Dismiss (“MTD,” Dkt. No. 9-1) at 3. They have moved to dismiss. The only bases identified by McZeal to support his challenge to the Quiet Title Judgment 3 4 are: (1) he was never “served with process” regarding the motion to quiet title or, presumably, 5 with the Quiet Title Judgment; and (2) the failure to provide service was to ensure that he would 6 be deprived of his right to appear to contest the motion for quiet title. McZeal alleges that the 7 defendants conspired and intentionally failed to provide service and due process to him. Compl. 8 ¶¶ 9-12. He seeks to void the Quiet Title Judgment and obtain damages for the deprivation of his 9 property, his emotional distress, and violation of “constitutional rights.” Id. ¶ 6. He asserts claims United States District Court Northern District of California 10 for: 11 • “void judgment” due to lack of service that violated his due process rights; 12 • violation of civil rights under 42 U.S.C. § 1983, because defendants McDonagh and Hong 13 acted “under color of law” to pursue the Quiet Title Action and conspired to deprive 14 McZeal of his rights to equal protection and due process; 15 • McZeal of his property, due process and equal protection rights based on racial animus; 16 17 • • violation of 42 U.S.C. § 1981, because defendants took acts to interfere with McZeal’s contractual rights with the Del Prado Family Trust; 20 21 violation of civil rights under 42 U.S.C. § 1986, because of defendants’ conspiracy and failure to prevent McZeal from losing his property; 18 19 violation of civil rights under 42 U.S.C. § 1985, because defendants conspired to deprive • violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO,” 18 U.S.C. § 22 1961 et seq.) because defendants engaged in wire, mail and “judicial” fraud to secure the 23 Quiet Title Judgment; 24 • “cancellation of written instrument” to void the Quiet Title Judgment under California Civil Code § 3412; 25 26 • “quiet title” under California Civil Code § 760.020; 27 • “constructive trust” under California Civil Code §§ 2223, 2224; 28 • fraudulent misrepresentations, based on unidentified misrepresentations; and 2 • 1 2 Compl. Dkt. No. 1. Solon House, LLC – represented by defendant McDonagh – moves to dismiss, arguing that 3 United States District Court Northern District of California claims for “equitable estoppel” and “unjust enrichment” and “declaratory judgment.” 4 McZeal lacks standing to contest the Quiet Title Judgment, his claims fail to meet the heightened 5 pleading requirements of Federal Rule of Civil Procedure 9(b), and his claims are barred by the 6 statute of limitations. Dkt. No. 9. That motion is joined by defendants Jian Feng Chen and Kelly 7 Ruiman Chen. Dkt. No. 11. McZeal opposes and moves to strike the motion, claiming the motion 8 was not properly served and failed to comply with the Northern District Civil Local Rules. He 9 also argues, on the merits, that he has adequately pleaded his claims and they are not barred by the 10 statute of limitations. Oppo. to MTD, Dkt. No. 26; Motion to Strike, Dkt. No. 27. He moves to 11 disqualify defendant McDonagh from representing other defendants as that raises impermissible 12 conflicts of interest. Motion to Disqualify, Dkt. No. 29. As discussed below, the claims asserted by McZeal are barred on their face by the Rooker- 13 14 Feldman doctrine and the statute of limitations. Even though Hong, the Trust, and McDonagh 15 individually have not moved to dismiss, it is clear that the claims against them fail for the same 16 reasons discussed in this Order. Defendants’ motion to dismiss is GRANTED and the Complaint 17 is DISMISSED WITH PREJUDICE against all defendants. McZeal’s motions to strike and 18 disqualify are DENIED. DISCUSSION 19 20 21 I. MOTION TO STRIKE McZeal moves to strike or deny the motion to dismiss because: (1) the motion was not 22 properly served on him; and (2) because defendants violated the Civil Local Rule requiring a 23 moving party to file a proposed order. Dkt. No. 27. This motion is DENIED. 24 McZeal opposed the motion to dismiss on its merits, and indeed filed affirmative motions 25 of his own. Assuming that there was a technical defect in the service of defendants’ motion to 26 dismiss on McZeal, there was no harm or prejudice to McZeal that would justify striking the 27 motion. Likewise, the failure to file a proposed order with defendants’ initial motion as required 28 by the Northern District’s Local Rules does justify striking the motion to dismiss. That 3 1 requirement is meant to save the Court’s time. No harm or prejudice resulted to McZeal.1 2 Accordingly, I will consider all arguments raised by both plaintiff and defendants on their merits. 3 II. McZeal moves to disqualify defendant McDonagh from representing the Solon House 4 5 defendants, arguing that there is an “inherent conflict of interest” based on McZeal’s allegations 6 that McDonagh engaged in “significant misconduct” giving rise to this action and as a result “his 7 continued representation of other defendants compromises the integrity of the proceedings and 8 unfairly prejudices the Plaintiff.” Dkt. No. 29. District courts have inherent authority to disqualify counsel. See United States v. Wunsch, 9 United States District Court Northern District of California MOTION TO DISQUALIFY 10 84 F.3d 1110, 1114 (9th Cir. 1996). Civil Local Rule 11-4(a)(1) mandates that every attorney who 11 appears before this court “comply with the standards of professional conduct required of the 12 members of the State Bar of California.” Civil L.R. 11-4(a)(1). However, “[b]ecause of their 13 susceptibility to tactical abuse, [m]otions to disqualify counsel are strongly disfavored” and 14 “should be subjected to particularly strict judicial scrutiny.” Oracle Am., Inc. v. Innovative Tech. 15 Distrib., LLC, 11-CV-01043-LHK, 2011 WL 2940313, at *4 (N.D. Cal. July 20, 2011) (quotation 16 marks omitted). Similarly, courts must be cognizant of the “substantial hardship” and the 17 “monetary and other costs of finding a replacement” on parties whose counsel is disqualified. 18 Gregori v. Bank of Am., 207 Cal. App. 3d 291, 300 (Ct. App. 1989). McZeal’s motion to disqualify McDonagh from representing the Solon House defendants 19 20 is DENIED. As explained below, each of McZeal’s causes of action fails as a matter of law 21 concerning all defendants. There are no apparent conflicts between McDonagh and the Solon 22 House defendants that call into question the ability of McDonagh to represent his clients or that 23 justify interfering with the Solon House defendants’ selection of McDonagh to represent them. 24 Any prejudice from disqualification would impact the Solon House defendants, not McZeal. 25 26 27 28 For the same reasons, McZeal’s arguments that the joinder by defendants Jian Feng Chen and Kelly Ruiman Chen was similarly procedurally defective, Dkt. No. 28 are rejected. 4 1 1 2 III. MOTION TO DISMISS A. Barred by Rooker-Feldman Doctrine As an initial matter, the majority of McZeal’s causes of action, as well as the main remedy 3 he seeks, are barred as a matter of law by the Rooker-Feldman doctrine, which bars federal district 4 5 courts “from exercising subject matter jurisdiction over a suit that is a de facto appeal from a state court judgment.” Kougasian v. TMSL, Inc., 359 F.3d 1136, 1139 (9th Cir. 2004). “[W]hen a 6 losing plaintiff in state court brings a suit in federal district court asserting as legal wrongs the 7 allegedly erroneous legal rulings of the state court and seeks to vacate or set aside the judgment of 8 that court, the federal suit is a forbidden de facto appeal.” Noel v. Hall, 341 F.3d 1148, 1156 (9th 9 Cir. 2003). The Rooker-Feldman doctrine applies even when the state court judgment is not made 10 by the highest state court. See Worldwide Church of God v. McNair, 805 F.2d 888, 893 n.3 (9th 11 United States District Court Northern District of California Cir. 1986). However, while a litigant cannot collaterally attack or void a judgment from a state 12 court that is final, the Rooker-Feldman doctrine will not bar a subsequent action against parties for 13 procuring a state court judgment based on extrinsic fraud. Kougasian, 359 F.3d at 1139. 14 15 Here, all challenges to the Superior Court’s Quiet Title Judgment – including allegations that it is void based on failures of proper service and notice to McZeal – are barred. The only 16 bases McZeal asserts for his attempts to challenge the Quiet Title Judgment are that: (1) he was 17 not properly served with notice of the Quiet Title proceedings so he could contest the cancellation 18 of the grant deed McZeal received from the former occupant of the Property (Rene Del Prado); 19 and (2) the only reason the Superior Court entered the Quiet Title Judgment was based on the 20 conspiracy of Hong (the court appointed trustee) and his attorney, McDonagh, “to manipulate 21 legal and procedural mechanisms with the intent to deprive Plaintiff of his property without his 22 knowledge or consent,” violating his constitutional rights to due process and equal protection. 23 Compl. at 1. 24 These are challenges that could have been and in fact were raised before the California 25 Courts. The Quiet Title Judgment was entered by the Superior Court on September 2, 2020. 26 Compl. Ex 1. According to the state court docket, attached as Exhibit 2 to the Complaint, the state 27 court action was initiated in April 2019 with a petition to remove a trustee of the Del Prado Family 28 5 1 Trust. Hong was appointed the successor trustee by the Superior Court in October 2019. Id. 2 Rene Del Prado attempted to stay proceedings repeatedly, and Hong (as court appointed trustee) 3 filed the petition to quiet title in January 2020, securing relief from the automatic bankruptcy stay 4 in April 2020. Id. On May 28, 2020, McZeal entered an appearance in the action and filed a 5 “notice of stay of proceedings.” Id. He obviously was well aware of the pendency of the action to 6 Quiet Title by May 2020. The petition to Quiet Title was heard by the Superior Court on August 7 17, 2020 and granted on September 1, 2020, and the Judgment was entered on September 2, 2020. 8 Id. United States District Court Northern District of California 9 McZeal had notice of the proceedings and was able to file documents in that case. On 10 September 24, 2020, shortly after the entry of the Quiet Title Judgment, McZeal filed an 11 application to “set aside” the Quiet Title Judgment that voided his grant deed. See Motion to 12 Dismiss, Ex. B. He raised the exact same arguments he raises here, that he was not personally 13 served with process and as a result was unaware of the Judgment. Id.; see also Declaration of 14 Stephen B. McDonagh (Dkt. No. 9-2), Ex. B. 15 McZeal’s allegation in the Complaint that he became “aware of the full judgment around 16 11/20/2022 while searching court records,” Compl. pg. 3, is contradicted by his own filings in 17 Superior Court, including a Notice of Appearance on September 22, 2020, and the filing of the 18 application challenging the Quiet Title Judgment on September 24, 2020. 19 B. Finally, defendants assert and McZeal does not dispute that on February 24, 2021, he filed a 20 Notice of Appeal challenging the Quiet Title Judgment. MTD at 2 (citing Ex. C). McDonagh Decl., Ex. 21 McZeal’s causes of action for “void judgment,” to quiet title, for a constructive trust over 22 the Property, for cancellation of written instrument regarding the Property, declaratory judgment 23 that the Property is his, and request to void the Quiet Title Judgment and convey the Property back 24 to him in a constructive trust or otherwise are all DISMISSED WITHOUT LEAVE TO AMEND, 25 as they are a collateral attack on the Quiet Title Judgment entered by the Superior Court and 26 barred by Rooker-Feldman. The remaining substantive claims –fraudulent securing of the 27 Judgment, negligent misrepresentations, violations of civil rights and RICO – could be seen as 28 similarly barred because they all hinge on the same conduct that could have been and should have 6 United States District Court Northern District of California 1 been challenged through the available state court procedures. But if the fraud and constitutional 2 violation claims are not directly barred by the Rooker-Feldman – including that Hong and 3 McDonagh secured the Quiet Title Judgment by fraud – the claims are still barred as a matter of 4 law for the reasons discussed below.2 5 B. 6 The fraud-based causes of action have a three-year statute of limitations. See Cal. Code of Barred by Statute of Limitations 7 Civil Procedure § 338(d); see also Platt Elec. Supply, Inc. v. EOFF Elec., Inc., 522 F.3d 1049, 8 1054 (9th Cir. 2008). As noted above, by September 20, 2020, McZeal was alleging that 9 McDonagh and Hong engaged in the same conduct complained of here, that they conspired to 10 deprive him of the Property by failing to serve him with process and notice of the action to Quiet 11 Title and thereby secured the Quiet Title Judgment. McDonagh Decl., Ex. B (9/20/2020 12 Application to Set-Aside Order to Quiet Title). Therefore, this action should have been filed by 13 September 2023. It was not filed until May 2024. All claims sounding in fraud are barred as a 14 matter of law by the statute of limitations. The same is true to the extent McZeal is alleging a civil conspiracy to defraud him of the 15 16 Property. The applicable statute of limitations for a civil conspiracy claim is the statute of 17 limitations for the underlying claim. See, e.g., Keating-Traynor v. AC Square, Inc., C08-02907- 18 MHP, 2008 WL 3915169 (N.D. Cal. Aug. 22, 2008) aff’d sub nom. Keating-Traynor v. AC 19 Square, 343 F. App’x 214 (9th Cir. 2009). Therefore, the same three-year statute of limitations 20 that applies to the fraud causes of action applies to the conspiracy to defraud causes of action. All fraud-based claims are DISMISSED WITHOUT LEAVE because they are barred on 21 22 their face by the statute of limitations. 23 C. 24 Finally, each of McZeal’s constitutional violation claims fail as a matter of law. 25 42 U.S.C. § 1983. McZeal attempts to state a series of claims based on alleged 26 No State Action for Constitutional Claims constitutional deprivation of his rights to contract, rights to due process, and rights to equal 27 28 McZeal’s causes of action for equitable estoppel and unjust enrichment are remedies that fail as a matter of law because all substantive claims fail as a matter of law. 7 2 United States District Court Northern District of California 1 protection under 42 U.S.C. §1983. However, “[t]o state a claim under § 1983, a plaintiff must 2 allege two essential elements: (1) that a right secured by the Constitution or laws of the United 3 States was violated, and (2) that the alleged violation was committed by a person acting under the 4 color of State law.” Long v. Cty. of Los Angeles, 442 F.3d 1178, 1185 (9th Cir. 2006). McZeal 5 has not alleged any constitutional violations. His only complaints are lack of service of process 6 and notice in the Quiet Title proceeding, but as discussed above he received both notice and 7 process in the state court proceeding.3 And even if some plausible constitutional violation could 8 have been asserted, there are no facts supporting that any of the defendants were “acting under 9 color of law” as required. Simply being court-appointed trustee and seeking relief on behalf of a 10 trust is not acting under color of law.4 Nor is being an attorney seeking relief on behalf of a client 11 in state court.5 McZeal’s Section 1983 claims fail as a matter of law. 42 U.S.C. § 1985. 42 U.S.C. § 1985 contains three substantive provisions. Section 12 13 1985(1) applies only to federal officers and does not apply in this case. Canlis v. San Joaquin 14 Sheriff’s Posse Comitatus, 641 F.2d 711, 717 (9th Cir. 1981). Section 1985(3) requires that 15 plaintiff be deprived of constitutional rights due to class-based animus. Pennington Manistee 16 Town Ctr. v. City of Glendale, 227 F.3d 1090, 1095 (9th Cir. 2000). Section 1985(2) covers 17 conspiracies to deprive persons of their constitutional rights. To state a claim under this sub- 18 section, a plaintiff must show “(1) a conspiracy between two or more persons, (2) to deter a 19 20 21 22 23 24 25 26 27 28 3 The availability of an adequate state post-deprivation remedy precludes relief on a constitutional denial of due process claim because it provides. See Zinermon v. Burch, 494 U.S. 113, 128 (1990). Here McZeal could and did seek relief through state court procedures available to challenge and appeal the Quiet Title Judgment. That defeats a denial of due process argument as a matter of law. 4 See, e.g., Brooks v. Atwood, No. CV 15-7724-JFW(E), 2016 WL 11746817, at *6 (C.D. Cal. May 13, 2016), report and recommendation adopted, No. CV 15-7724-JFW(E), 2016 WL 11746767 (C.D. Cal. June 20, 2016) (“Defendants’ alleged actions with respect to the prosecution of probate proceedings and estate-related litigation concerning real property do not encompass the exercise of powers traditionally reserved exclusively to the state”); Witte v. Young, No. 2:14-CV2439-TLN-EFB, 2015 WL 5232681, at *4 (E.D. Cal. Sept. 8, 2015) (“court appointed personal representatives of estates are not state actors for purposes of § 1983”). 5 See Polk County v. Dodson, 454 U.S. 312, 318 n. 7 (1981) (an attorney does not act under the color of state law for the purposes of 42 U.S.C. § 1983 when performing the traditional role of an attorney). 8 United States District Court Northern District of California 1 witness by force, intimidation or threat from attending court or testifying freely in any pending 2 matter, which (3) results in injury to the plaintiff.” Head v. Wilkie, 936 F.3d 1007, 1010 (9th Cir. 3 2019). 4 In addition to the failure to allege an actionable deprivation of civil rights (discussed 5 above), McZeal also fails to provide any facts to substantiate the alleged conspiracy, such as when 6 and how the agreement to deprive him of his rights took place, or any acts that defendants took in 7 furtherance of the conspiracy. Conclusory allegations of conspiracy like those in the Complaint 8 fail to state a claim. Webster v. Bronson, 402 F. App’x 280, 282 (9th Cir. 2010); Delacruz v. State 9 Bar of California, No. 16-CV-06858-BLF, 2018 WL 3077750, at *12 (N.D. Cal. Mar. 12, 2018); 10 Scott v. Diesman, No. CV 09-7215-GHK PLA, 2010 WL 1194228, at *9 (C.D. Cal. Mar. 23, 11 2010). The conspiracy-based claim fails for multiple reasons as a matter of law.6 42 U.S.C. § 1986. Section 1986 imposes liability on those who know of and fail to 12 13 prevent others from conspiring to deprive someone of their civil rights. A section 1986 claim is 14 predicated upon a valid 42 U.S.C. section 1985 claim. Usher v. City of Los Angeles, 828 F.2d 15 556, 561 (9th Cir. 1987). Because McZeal’s section 1985 claim fails, so does his section 1986 16 claim. 17 42 U.S.C. § 1981. Section 1981 promises that “[a]ll persons . . . shall have the same right . 18 . . to make and enforce contracts, to sue, be parties, [and] give evidence . . . as is enjoyed by white 19 citizens.” 42 U.S.C. § 1981. Section 1981 prohibits racial discrimination by private actors. See 20 Johnson v. Ry. Express Agency, Inc., 421 U.S. 454, 459-60 (1975); Evans v. McKay, 869 F.2d 21 1341, 1344 (9th Cir. 1989). But it only prohibits intentional discrimination in connection with 22 contracts. See Gen. Bldg. Contractors Ass’n, Inc. v. Pennsylvania, 458 U.S. 375, 391 (1982). 23 Here, while McZeal asserts that he is African American, there is no allegation that any defendant 24 knew that or otherwise took action based on McZeal’s race. Moreover, the only contract at issue 25 is one that the Superior Court found was void (the grant deed), and the Superior Court’s 26 determination that the grant deed was void cannot form a basis for a Section 1981 claim against 27 28 6 McZeal’s RICO conspiracy claims fails for the same reason. 9 1 these defendants.7 CONCLUSION 2 McZeal’s motion to strike and motion to disqualify are DENIED. The multiple defects in 3 4 the claims asserted by McZeal require me to GRANT the motion to dismiss. Those multiple 5 defects are apparent from the face of the claims and cannot be overcome with the allegations of 6 additional facts. Therefore, defendants’ motion to dismiss is GRANTED WITH PREJUDICE. 7 Judgment will be entered in favor of defendants. The Clerk shall close this case. IT IS SO ORDERED. 8 9 Dated: October 28, 2024 10 United States District Court Northern District of California 11 William H. Orrick United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 McZeal’s claims that he was deprived of equal protection under the law fail for the same reason. 10
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