-NLS Lefton v. GMAC Mortgage et al, No. 3:2010cv01781 - Document 5 (S.D. Cal. 2011)
Court Description: ORDER Granting Motion to Proceed in Forma Pauperis, Order of Dismissal, and Order to Show Cause re: Sanctions; the Complaint is dismissed without prejudice for failure to state a claim; if Lefton wishes to amend his Complaint, he may do so no later t han the close of business on March 17, 2011; if Lefton amends his complaint, he must at the same time file a memorandum of points and authorities, not longer than fifteen pages, showing why he should not be sanctioned; if Lefton fails to file an amen ded complaint within the time permitted, this action will be dismissed without leave to amend; if he amends but fails to show cause as ordered, the amended complaint will be dismissed with prejudice as a sanction for violation of Rule 11; Signed by Judge Larry Alan Burns on 2/23/11. (All non-registered users served via U.S. Mail Service)(kaj)
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-NLS Lefton v. GMAC Mortgage et al Doc. 5 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 GALEN LEFTON, CASE NO. 10cv1781-LAB (NLS) Plaintiff, 12 ORDER GRANTING MOTION TO PROCEED IN FORMA PAUPERIS; vs. 13 ORDER OF DISMISSAL; AND 14 15 ORDER TO SHOW CAUSE RE: SANCTIONS GMAC MORTGAGE, et al., Defendants. 16 17 18 I. Plaintiff Lefton, proceeding pro se, filed his complaint on August 25, 2010 along with 19 20 21 22 23 24 25 26 27 28 IFP Application a motion to proceed in forma pauperis (IFP). While Lefton has some assets and recently had an income of just over $500 per week, the Court finds he meets the standard to proceed IFP. The motion is therefore GRANTED. Lefton is, however, ORDERED to notify the Court promptly if his financial situation changes for the better while this action is pending—for example, if he gets a job or receives income, or his assets increase above the level his application lists. II. Mandatory Screening Under 28 U.S.C. § 1915(e)(2), the Court is obligated to dismiss this case at any time if it determines that (A) the allegation of poverty is untrue; or -1- 10cv1781 Dockets.Justia.com 1 (B) the action or appeal— 2 (I) is frivolous or malicious; 3 (ii) fails to state a claim on which relief may be granted; or 4 (iii) seeks monetary relief against a defendant who is immune from such relief. 5 As required under § 1915(e)(2)(B), the Court has reviewed the complaint in order to 6 determine whether dismissal is required. See Barren v. Harrington, 152 F.3d 1193, 1194 7 (9th Cir. 1998) (requiring, pursuant to 28 U.S.C. § 1915(e), preliminary screening of 8 complaints brought in forma pauperis). 9 Lefton seeks actual damages of $233,100, plus $699,300 in punitive damages. Lefton 10 styles himself “Petitioner” but uses undefined terms such as “Lender” and “Agent” to refer to 11 people or entities who were somehow involved in events. 12 A. The Complaint 13 The 29-page complaint is styled “ORIGINAL PETITION.” It begins by identifying 14 parties. This is followed by a “Statement of Cause” section, in which he alleges he “entered 15 into a consumer contract for the purchase of a primary residence.” 16 Defendants, “acting in concert and collusion with others, induced Petitioner to enter into a 17 predatory loan agreement with Defendant.” (Compl. 2:6–8) (sic). He also alleges “numerous 18 acts of fraud,” saying Defendants failed to give him proper notices, and “charged false fees 19 to Petitioner at settlement.” (Id., 2:8–13.) He claims the 20 This is followed by a section headed “IN BRIEF” with the subheading “(Non-factual 21 Statement of Posture and Position),” beginning “It is not the intent of Petitioner to indict the 22 entire industry” and going on to make non-specific accusations of fraud and conspiracy. 23 After this is a section headed “CAREFULLY CRAFTED CRIMINAL CONNIVANCE,” 24 subheaded “(General State of the Real Estate Industry)” and “THE BEST OF INTENTIONS.” 25 This section begins “Prior to the 1980's and 1990's ample government protections were in 26 place to protect consumers and the lending industry from precisely the disaster we now 27 /// 28 experience.” (Compl, 3:11–13.) A second subsection is subheaded “HOW IT WORKS.” -2- 10cv1781 1 This whole section purports to give a background of problems in the mortgage industry. 2 Following this is a section headed “PETITIONER WILL PROVE THE FOLLOWING,” 3 naming eleven factual or legal propositions; a section headed “PETITIONER SEEKS 4 REMEDY,” discussing remedies (most of which are not requested in the prayer for relief) and 5 including a subsection headed “PETITIONER HAS BEEN HARMED.” 6 7 8 9 After this, the complaint embarks on a section headed “STATEMENT OF CLAIM.” (Compl., 10:11.) Within this are subsections as follows: Defendants Lack Standing No evidence [sic] of Contractual Obligation 10 No Proper Evidence of Agency 11 Special Purpose Vehicle 12 Criminal Conspiracy and Theft 13 Agent Practiced Up-Selling 14 Fraudulent Inducement 15 Extra Profit on Sale of Predatory Loan Product 16 Extra Commission for Late Payments 17 Extra Income for Handling Foreclosure 18 Credit Default Swap Gambling 19 Lender Attempting to Fraudulently Collect on Void Lien 20 Lender Profit by Credit Default Swap Derivatives 21 Lender Conspired with Appraiser 22 Lender Conspired with Trustee 23 Deceptive Advertising and Other Unfair Business Practices 24 Equitable Tolling for TILA and RESPA 25 Business Practices Concerning Disregarding of Underwriting Standards 26 Low-Documentation/No-Documentation Loans 27 Easing of Underwriting Standards 28 Risk Layering -3- 10cv1781 1 Unjust Enrichment 2 Claim to Quiet Title 3 Sufficiency of Pleading 4 This is followed by another section redundantly headed “CAUSES OF ACTION,” which 5 includes the following subsections: 6 Breach of Fiduciary Duty 7 Cause of Action - Negligence/Negligence Per Se 8 Agent: Common Law Fraud 9 Petitioner Properly Averred a Claim for Breach of the Implied Covenant of Good Faith 10 and Fair Dealing 11 Cause of Action Violation of Truth in Lending Act 15 U.S.C. § 1601 et seq[.] 12 Intentional Infliction of Emotional Distress 13 Finally, the complaint closes with a section headed “PRAYER” which seeks an “emergency 14 restraining order,” a permanent injunction, quiet title, both rescission of the loan contract and 15 restitution; disgorgement of all amounts wrongfully acquired, actual damages, “pain and 16 suffering,” interest, punitive damages, attorney’s fees and costs, and any other relief the 17 Court deems just and proper. 18 B. 19 The body of the complaint is substantially identical to several other complaints filed 20 against other banks in other federal courts around the same time. The Court has been able 21 to identify at least seven cases filed earlier or around the same time: 22 • Other Complaints Moran v. American General Finance, 10cv1366-LAB (S.D.Cal., filed June 29, 2010).1 23 • 24 25 • Wyatt Geans v. Oxford Bank, 10cv13160-BAF (E.D. Mich., filed August 10, 2010). Heather Kirschen Rippere v. Wells Fargo Bank, N.A., 10cv3532-WHA 26 27 28 1 Several paragraphs of the Moran complaint are different and some of the wording is altered in ways that make little substantial difference. -4- 10cv1781 (N.D.Cal., filed August 11, 2010).2 1 2 • Edward & Renee Fisher v. Bank of America Home Loans, 10cv3079-PA (D.Or., filed August 18, 2010). • Thomas Ray v. HSBC Bank, N.A., 10cv175-MR (W.D.N.C., filed August 20, 2010). • Ned & Kelly Carlsen v. One West Bank FSB, 10cv80986-WPD (S.D.Fla., filed August 24, 2010). • Sullivan v. Quality Loan Service Corp., 10cv436-BLW (D.Id., filed August 27, 2010.) 3 4 5 6 7 8 The complaints (all also styled “ORIGINAL PETITION”)3 have, in part, been individualized 9 by filling in different plaintiffs’ and defendants’ names, contact information for the parties, and 10 amount of damages sought, and adding or omitting some sections. 11 At least four other courts have already addressed the complaints’ adequacy. In Ray, 12 Judge Reidinger denied a motion for a temporary restraining order, noting “In essence, the 13 complaint is a harangue against the lending industry with no specific allegations against 14 HSBC.” Ray v. HSBC Bank, 2010 WL 3528554, slip op. at *1 (W.D.N.Y., Sept. 3, 2010). 15 Judge Reidinger aptly described the complaint as containing “rambling, inarticulate 16 accusations against the banking industry in general,” id., and making factually inconsistent 17 allegations. For example, the order points out that the complaint makes accusations against 18 an “Agent” but doesn’t identify who or what the “Agent” is. Id. It inexplicably refers to 19 “defendants” without identifying who, other than HSBC, was a defendant. Id. Judge 20 Reidinger concluded the complaint was “most likely frivolous,” cautioned the plaintiffs about 21 sanctions under Fed. R. Civ. P. 11, and concluded “The Plaintiff is heartily encouraged to 22 consult an attorney before continuing with this litigation.” Id. at *2. 23 Similarly, in Fisher, Judge Panner issued a detailed order dismissing the complaint 24 for failing to meet the standard set forth in Fed. R. Civ. P. 8. Fisher v. Bank of America 25 Home Loans, 2010 WL 4296609 (D.Or., Oct. 21, 2009). The order pointed out the complaint 26 27 2 28 3 The Rippere complaint omits four sections included in other complaints. The Moran complaint adds “AND PETITION FOR RESTRAINING ORDER.” It includes no such petition, however, except that (like the other complaints) it includes a request for an “emergency restraining order” enjoining foreclosure. 10cv1781 -5- 1 fell far short of the pleading standard set forth in Bell Atlantic Corp. v. Twombly, 550 U.S. 2 544, 555 (2007), and Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). 2010 WL 4296609, slip 3 op. at *2 (“The sparse factual allegations, taken as true, simply do not raise any viable 4 claims.”) Among other things, the order pointed out that the complaint relied almost wholly 5 on conclusions, and failed to connect the defendant with the harm the plaintiffs claim to have 6 suffered. Id. at *2–*4. 7 8 In Carlsen, Judge Dimitrouleas granted the Defendant’s motion to dismiss in a brief order on the merits. Carlsen, 2010 WL 4123573 (S.D.Fla., Oct. 20, 2010). 9 Finally, in Sullivan, Judge Winmill, in ruling on another lender’s motion to intervene, 10 noted the same types of defects, concluding the complaint failed to allege cognizable claims, 11 and determining the complaint had to be dismissed. Sullivan, 2011 WL 124280, slip op. at 12 *5–*6 (D.Id., Jan. 11, 2011). 13 The Court agrees with these four other courts that the complaint here, which makes 14 the same allegations as the substantially identical complaints before them, fails to state a 15 claim and must therefore be dismissed. It falls far short of the pleading requirements set 16 forth in Fed. R. Civ. P. 8. 17 Besides lacking merit, it seems likely the complaint was copied from some outside 18 source, and that the plaintiffs in the seven cases mentioned above probably also copied their 19 complaints from the same source. Fed. R. Civ. P. 11(b) provides, in part: 20 22 By presenting to the court a pleading, written motion, or other paper—whether by signing, filing, submitting, or later advocating it—an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: 23 ... 24 (2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law; [and] 21 25 26 (3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery . . . . 27 28 /// -6- 10cv1781 1 Here, Lefton seems to have copied a huge amount of text almost verbatim from other 2 sources and used it as his complaint. While two complaints could legitimately be similar or 3 almost identical if the plaintiffs in each case reasonably believe they were harmed in the 4 same way, that doesn’t seem to be the case here. Here, the complaint relies on allegations, 5 legal theories and arguments Lefton apparently copied from someone else without 6 understanding what he was copying. Indeed, it is difficult to see how Lefton could even have 7 believed he understood this vague and rambling complaint. Lefton made almost no changes 8 to substantial portions of the text, including sections that obviously don’t apply to him. In fact, 9 the seven complaints in these cases even share the same typefaces, unnecessary 10 underlinings, and typographical errors. 11 Cutting and pasting text wholesale with an uncritical eye and with no regard for 12 whether the allegations are supported by facts or law is a violation of Rule 11. If that is what 13 Lefton did, Rule 11(c) allows the Court to sanction him after notice and an opportunity to be 14 heard. 15 III. Conclusion and Order 16 For the reasons explained in this order, the complaint is DISMISSED WITHOUT 17 PREJUDICE for failure to state a claim. If Lefton wishes to amend his complaint, he may do 18 so no later than the close of business on March 17, 2011. 19 If Lefton amends his complaint, he must at the same time file a memorandum of points 20 and authorities, not longer than fifteen pages, showing why he should not be sanctioned 21 under Rule 11(c) for misrepresenting that he had made an inquiry that was reasonable under 22 the circumstances, and confirmed that his factual contentions and claims met the standard 23 of Rule 11(b)(1) and (2). The page limit does not include any material attached as an exhibit 24 to the memorandum or lodged with the court. The memorandum must explain where he got 25 the text for the complaint, and what inquiries he made to confirm it was appropriate to file. 26 If Lefton consulted with an attorney or someone he thought was an attorney, he must identify 27 that person by name and provide the person’s business address or other contact information, 28 but he need not reveal any privileged communications. -7- 10cv1781 1 If Lefton fails to file an amended complaint within the time permitted, this action will 2 be dismissed without leave to amend. If he amends but fails to show cause as ordered, the 3 amended complaint will be dismissed with prejudice as a sanction for violation of Rule 11. 4 5 IT IS SO ORDERED. DATED: February 23, 2011 ___________________________________ 6 7 HONORABLE LARRY ALAN BURNS United States District Judge 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -8- 10cv1781
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